did you actually ready the whole article.

yes.
Politfact concedes that taxes are taxes.
Are you saying that payroll taxes don't count as taxes?

Or capital gains don't count as income???

Interesting question I thought of today:

Is it expected that the rich arrange their affairs in order to minimise their tax liabilities? Is it even moral for them to do so?

danivon wrote:Interesting question I thought of today:

Is it expected that the rich arrange their affairs in order to minimise their tax liabilities? Is it even moral for them to do so?

It's fair to game the system within the legal bounds, be it the super rich or the welfare recipient. It's the job of the people who make the system to make sure that there's little room to game it.
That's why i think a simple tax system would be fairer than a complex one were the tricky payer/recipient can get away with lots of stuff the honest one wouldn't even think of.

I'm not sure that a simpler tax system is that.. umm... simple to bring about.

All tax systems start off simple. So what happens? Some people find ways to work around it (gaming), so new rules are added to make it harder. Some people complain that they get unfairly caught out by a system that is too simple to account for marginal cases, so exceptions are built in.

With each change, a new set of loopholes and marginal cases arises, and the pressure is to add more fixes. Then there are times when the government decides to subsidise some activity (setting up a business?) and penalise others (smoking?), adding another level of complexity.

So when you simplify the system, which of the rules get taken out, and which loopholes and marginal cases or other unforeseen consequences come out?

It was easier in some Eastern European countries to implement things like Flat Tax, because they were able to start from a clean slate. Not so easy in long-established countries that have old tax codes.

I tried to find data for a comparison between GPD Growth (annual %) and the percentage of wealth held by the top 10% of the population. Unfortunately, the World Bank doesn't seem to keep adequate records for the US with regards to the second variable.

Bunch of Charts



Agree or disagree it's always fun to look at a bunch of charts.

Hmmm,
Lets look at 15% for each of these people.

Janitor makes 33K, then he/she would pay $4950
Millionaire makes $1,167,708 and would pay $175,156

The Janitor makes out on this deal, revenues increase. Each is paying the same percentage. To me, that is fair.

This, coupled w/ a balanced budget, would reign in spending, and make the process much more equitable.

bbausa - how can you be sure that revenues would increase?

By cutting out all deductions for everyone. I would think that this plan would please those on the left. Millionaires paying more, no loopholes, smaller IRS. Wins all around...

I don't believe that cutting out all deductions is realistic, sorry. There will always be loopholes, and the IRS may have simpler forms, but there would still be a need to combat fraud.

I'm still confused as to whether actual revenue would go up, given that of your two examples, one pays a little more tax than before, and the other about 60% of what they were before. Who do you think represents a greater cohort of the population? what about people on about $45k?

As much as I'd like to see the poorest paying less tax, I think you are offering simple solutions to complex problems.

So...
What percentage would allow for budgets to be met and equality in percentages paid in your opinion.

In flat tax? I don't know. Probably around the 20% mark, but there are a lot of variables that I can't see.

I don't think that the solution to a complex problem will be simple. A lot depends on what other taxes there are and if their rates would change, and on what the outflows of the budget are.

Talking a flat tax is always fun but I'm afraid it's all ivory tower musing here in the U.S. There are too many special interests that would, rightly or wrongly, claim that they're exceptional.

A maximum wage is also a fun notion...but I don't see it happening outside an economics classroom.

The counter-argument developing on theconservative blogsto the "those darn rich are too darn rich...let's git 'em!" meme is that even if you taxed the uber-wealthy at 100%...it wouldn't be enough to cover the existing budget. The question then becomes...who's next?

Danivon,
Are you saying that it is equitable to have people pay different percentages? Not different amounts, but different percentages.

I guess my question is: Should the poor need to help with revenue? Is it only the responsibility of the rich to solve the revenue problem?