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Forum Post: The Flat Tax Is Unfair

Posted 7 years ago on Oct. 11, 2011, 11:09 a.m. EST by LongLostAndLooking (74) from Portland, OR
This content is user submitted and not an official statement

…For the simple reason that a loaf of bread costs the same for everyone, rich or poor.

There’s a fixed cost of living. You have to eat. You need shelter. You need water. These things are not negotiable and there’s a price you pay for them in America.

A flat tax assumes that everyone gets paid more than they need to buy those basic necessities, which is a convenient assumption for those that are rich and less so for those that aren’t because it isn’t even remotely true.

Right now, minimum wage is $7.25 per hour. 5% of the workforce (or 3.6 million people) get the minimum wage ($15,080 per year) or less every year, and of that group, most (2.6 million) are getting less than minimum wage. [1]

40 hours per week, 52 weeks per year, that works out to be $15,080 per year. Assume a 4 week month and they bring home approximately $1160 per month before taxes. Some months will be more, some less, but we’ll use 4 weeks for this.

The average rent nationally was $755. [2]

The average residential electric bill is $104.52. [3]

The average residential water bill was $40 per month nearly ten years ago. [4]

Let's say it's $51 per month now. [5]

The cheapest individual plan I could find on Verizon's website was about $40 per month. [6]

If you're going to have a job, you have to be able to get to it.

The average fuel consumption in the US is 581 gallons per year, which works out to 48.4 gallons per month. [7]

Poor people can't afford hybrids or usually even cars that are running right, so let's assume they're driving a gas guzzler that's getting considerably worse mileage than the average. We'll use the average for these calculations, but those obviously will be way below what their actual costs are.

The US average retail price for gasoline on 10/03/2011 is $3.43 per gallon. [8]

So, that means that the average US expenditure for gasoline is $166 per month.

Then you've got car insurance. The average was $795 back in 2007. It's probably higher today, but we'll use that number. Say $66.25 per month. [9]

Do you really think someone earning so little can pay cash for a car? I don't either. Assume they financed it for about $150 per month.

Or they can get a bus pass in Seattle Washington for about what they're spending on gasoline. Say $171 per month.

Then there are groceries. The average US grocery bill was $5,340 back in 2005/2006. [10]

It's much higher now but let's use the low number anyway. $445 per month, assume that's a family of 4, so about $111.25 per month per person. It's much higher today, but we'll go with that.

I couldn't find a good number for a national average garbage bill, so I left that off.

So, let's see what we've got...

$1160

  • 755.00 Rent
  • 104.52 Electricity
  • 51.00 Water (assume sewer is wrapped into that)
  • 40.00 Phone
  • 111.25 Food
  • 171.00 Bus pass =-$72.77*

*Note, that doesn't include garbage.

So, after basic survival necessities, they OWE $72.77 per month more than they have.

Remember, that’s before taxes, and despite what the Republicans have been saying, the poor do in fact pay taxes. Social Security is 6.2%, so decrease the pay of people earning minimum wage by $71.92 more, which means that they owe $144.69 more than they make already.

Sources:

  1. US Bureau of Labor Statistics - Characteristics of Minimum Wage Workers: 2009: http://www.bls.gov/cps/minwage2009.htm

  2. US Census Bureau – American Housing Survey: http://www.census.gov/hhes/www/housing/ahs/ahsfaq.html

  3. US Energy Information Administration – Electricity Explained – Data & Statistics: http://www.eia.gov/energyexplained/index.cfm?page=electricity_home#tab2

  4. Wikipedia - Water supply and sanitation in the United States: http://en.wikipedia.org/wiki/Water_supply_and_sanitation_in_the_United_States

  5. http://www.leakbird.com/running-toilets/the-average-monthly-household-water-bill-5100-water-facts-and-running-toilets-leakbirdx

  6. Verizon: http://www.verizonwireless.com/b2c/store/controller?item=planFirst&action=viewPlanOverview

  7. Environmental Protection Agency - Emission Facts: Average Annual Emissions and Fuel Consumption for Passenger Cars and Light Trucks: http://www.epa.gov/oms/consumer/f00013.htm

  8. US Energy Information Administration - Weekly U.S. Retail Gasoline Prices, Regular Grade. Accessed from the www on October 11, 2011 @ http://www.eia.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

  9. Compuquotes.com – Average Car Insurance (US): http://www.compuquotes.com/average-costs-of-insurance.html#auto

  10. CNN Money - Shave $150 a week off your grocery bill: http://money.cnn.com/2005/12/20/pf/grocerybills_startmoney_0601/index.htm

48 Comments

48 Comments


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[-] 5 points by LongLostAndLooking (74) from Portland, OR 7 years ago

Because one of the platforms ("demands") being attributed to OWS includes a demand for the flat tax (fair tax) or whatever it is they're calling it.

That "flat tax" is Tea Party Libertarian bullshit designed to keep trickle down economics going and trickle down economics is what's killing America.

We need to make sure that we get rid of it.

[-] 1 points by EndTheFedNow (692) 7 years ago

Maybe you would like this flat tax (kicks back $$$ to the lowest earners)

Negative income tax Main article: Negative income tax

The negative income tax (NIT), which Milton Friedman proposed in his 1962 book Capitalism and Freedom, is a type of flat tax. The basic idea is the same as a flat tax with personal deductions, except that when deductions exceed income, the taxable income is allowed to become negative rather than being set to zero. The flat tax rate is then applied to the resulting "negative income," resulting in a "negative income tax" the government owes the household, unlike the usual "positive" income tax, which the household owes the government.

For example, let the flat rate be 20%, and let the deductions be $20,000 per adult and $7,000 per dependent. Under such a system, a family of four making $54,000 a year would owe no tax. A family of four making $74,000 a year would owe tax amounting to 0.20 × (74,000 − 54,000) = $4,000, as under a flat tax with deductions. But families of four earning less than $54,000 per year would owe a "negative" amount of tax (that is, it would receive money from the government). For example, if it earned $34,000 a year, it would receive a check for $4,000.

[-] 1 points by Lork (285) 7 years ago

The only problem is that it severely encourages "welfare mommas" and the poor would rightfully be blamed for that one. Are you a Quiverfull by any chance?

Just raise taxes on the rich back to when this country was sane (Far far FAR away from the Bush and Obama Era), ease the burden on the middle class and have the poor pay no taxes!

[-] -3 points by theworker (6) 7 years ago

If we continue to attack the rich with taxes, they will continue to move jobs over seas. That's killing america.

[-] 4 points by OneVoiceInMany (91) 7 years ago

The jobs are already overseas. Where have you been?

[-] 3 points by theworker (6) 7 years ago

We need to raise taxes on imported goods, to help level the playing field. Or we will never get our jobs back.

[-] 2 points by LongLostAndLooking (74) from Portland, OR 7 years ago

Stop subsidizing oil. The whole reason they manufacture things overseas is because labor PLUS shipping costs are lower. The problem is that it really isn't. It just seems like it is because the US Government subsidizes oil. $41 BILLION per year.

Budget hawks: Does US need to give gas and oil companies $41 billion a year? - http://www.csmonitor.com/USA/Politics/2011/0309/Budget-hawks-Does-US-need-to-give-gas-and-oil-companies-41-billion-a-year/%28page%29/2

Stop paying their shipping costs with our tax dollars. Make it less expensive to make the thing where you're going to use it.

[-] 2 points by Democracydriven (658) 7 years ago

That's a fear tactic. They have been moving jobs of shore 30+ years. The unions we a favorite to blame, Lazy American were always go for blaming. This was when there was no competition overseas for their products. They were undercutting American competitors and making more profits while blaming American workers I say if they want to move overseas, get the fuck out! They are selling us out anyway, let’s cut to the chase and start boycotting their products.

[-] 2 points by LongLostAndLooking (74) from Portland, OR 7 years ago

That's bull. They used to pay 91% on all income over $200,000, and not only did we pay down the debt, they were some of the most prosperous decades in history.

They're shipping our jobs overseas because our government is PAYING THEM to with tax credits and favorable trade agreements.

http://www.youtube.com/watch?v=aC19fEqR5bA

They're out to make money. They don't care about the health of this nation or political policies or whatever. All they care about is making money.

The system needs to make sure that the only opportunity to make money is when they're doing the right thing for America.

[-] 1 points by Lork (285) 7 years ago

You forgot to cite your argument which I will kindly do for you -

http://ntu.org/tax-basics/history-of-federal-individual-1.html

http://en.wikipedia.org/wiki/Apollo_11

To Tea Partiers - Please don't say moon rocks. Please don't. =[ We really -do- need investment to become great again.

[-] 1 points by theworker (6) 7 years ago

So then why be successful? with that high of a tax rate it will cost to much. Everyone will just get in line and wait for a hand out.

We need term limits, that would help.

[-] 2 points by LongLostAndLooking (74) from Portland, OR 7 years ago

Really? If you're only making $2 million per year instead of $10 million, you'll opt to not earn anything at all? Is that really your argument? Because that's not what people did in America between 1946 and 1970.

Right now, low taxes have allowed them to choose between hoarding their wealth or paying their workers and they've chosen to hoard their wealth in offshore accounts in tax havens like the Cayman Islands.

U.S. Subsidiaries in Offshore Tax Havens - http://www.nytimes.com/2009/01/17/business/17tax.html

"The Treasury estimates that it loses $100 billion a year in tax revenue as a result of companies shipping their income off shore" - http://www.washingtonpost.com/wp-dyn/content/article/2009/01/16/AR2009011602602.html

How Offshore Tax Havens Save Companies Billions - http://www.npr.org/2011/03/17/134619750/how-offshore-tax-havens-save-companies-billions

With a high tax rate (including taxes on offshore accounts and subsidiaries) their choice becomes one between paying their workers or paying taxes. The smart business option is to pay your workers, because if you don't the other guy who is paying his workers will steal your best and brightest out from under you. Workers with money SPEND it. That's what we need them to do. We need demand and we need savings. Neither of which is happening in this economy because of low taxes.

Americans Have Negative Savings Rate - http://www.cbsnews.com/stories/2006/02/07/business/main1293943.shtml

People can't spend and can't save what they don't have. Make employers pay their workers instead of hoarding their money in offshore accounts.

[-] 1 points by theworker (6) 7 years ago

So raise taxes on people who make over 5 million. Then they make 4 million. Then you got to raise taxes on people who make over 2 million to make up the difference. At what point do you just give up and get in line for socialized healthcare, socialized housing, jobs, food. Thats how you end up with nothing on the shelves in the store, cause the second you sell somthing for a buck you will have to give up .91 cents in taxes.

[-] 3 points by LongLostAndLooking (74) from Portland, OR 7 years ago

What??? Communism? America was communist with socialized health care and socialized housing from 1946 to 1970? Is that what you're seriously saying? Because in 1946, the upper tax bracket was 91% on incomes above $200,000. Did we have socialized housing or health care then? Any bread lines? Did people stop investing? Because I remember those decades as some of the most prosperous in history. I also remember something about us sending men to the moon and that we're the only nation on earth to have done so, or something to that effect.

On what exactly do you base your predictions (beyond someone else's fearmongering and talking points)?

[-] 1 points by rivalarrival (21) 7 years ago

Myth. What the rich will do is what everyone will do; attempt to avoid those taxes. Which is pretty simple. If your tax rate is greater than that of your employees, you simply hire more employees, enabling you to do more business. Raise taxes, give the rich a reason to part with their money, and all of a sudden, the economy starts turning around. Huh. Go figure. When people start spending their money, good things happen!

[-] 1 points by jdragonlee (119) 7 years ago

No, That's not true! They will do that anyway to make high profit. They won't find any other places like America on earth.

[-] 3 points by gallerydavid (10) 7 years ago

It's perfect example of the superbly crafted propaganda employed by the Rich to take from the Poor.

They will find a seductive word or phrase, like "flat tax" , market tested and seductive to the emotional brain. Then repeat the phrase ad nauseum for 20 years or more, and eventually it becomes a fait accompli.

Most of the folks just cant get beyond the seductive sounding words to do the arithmetic, poor tired overworked sheep that they are, and they wind up voting against their own best economic interests once again based on a lie or an emotional red herring.

You really have to hand it to these guys, they are the best button pushers.

Fair sheep shearers as well. Yes sir, 3 bags full.

[-] 1 points by Lork (285) 7 years ago

http://occupywallst.org/forum/to-all-the-idiots-here-who-think-warren-buffet-is-/

I agree. If the Flat Tax rate were ever instituted it would be horrid. It would actually lead to LOWER taxes on the rich!

Example Country -

Suppose the Flat Tax did get implemented. Everybody pays 35% of their income. With the addition of living expenses, sales taxes, etc. and the stagnant or declining wages of the poor and middle class, the new 35% flat tax takes their toll on the middle class and the poor get shafted worse. The rich - untouched.

So the middle and poor class demand lower taxes. So taxes go down to 10%. Now the government LOSES money because -gasp- the rich are paying only 10% of their income! With the revenue from taxes lost, the country is forced to turn to "austerity" and the government has no money to operate their regulatory agencies and provide basic social services that conservatives love to take for granted. The government is "starved" and the condom breaks.

So it's either

A. Kill the middle class and make it just Rich and Poor.

or

B. Kill the government and turn into a full blown corporatocracy of Rich and Poor.

Either way - the rich win. The government is a condom (albeit a thin and permeable at times condom) to protect the middle and poor classes in -some- way. So they hate the government because the rich are the STD. The middle class -can- be used, but you take too much from the middle and the middle will scream to the government. Plus - damn those dirty social climbers! How dare they!? So the rich don't necessarily hate the middle class but they hate the "audacity" that the middle even exists. And the poor? Well not even the middle class gives a shit about the poor what with their "big dream to be rich someday!" so the poor are completely "harmless".

It's a great scam they're running here.

And btw - no it is not -spoiled- to demand higher rate of taxes from someone who makes $10 mil a month let alone a year. Especially since they are the same people who stole our jobs after buying our government for round after round after round of Rape Trade Agreements. Yeah that's right - RAPE TRADE!

http://occupywallst.org/forum/end-trickle-down-raise-taxes-on-the-rich-thats-the/

[-] 1 points by BadAss0830 (68) 7 years ago

I have to admit that I am not totally informed on this subject so please take it easy on me if I'm way off here...

Isn't there some logic in using the 'consumption tax' model or a national sales tax in place of income tax?

There are no loop holes, you pay at the point of sale and this would directly correlate to your earnings since people with less earning tend to buy less stuff. Those in the 1% or top 20% or whatever have much more purchasing power than the average American so they would essentially be paying more. And if a wealthy person decided to live like a pauper to avoid taxes, so be it; that would be the exception not the rule.

Like I said, I'm not up to speed on all the options. This is just one I thought might work and everyone could agree on.

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

No because we've got a capitalistic economy that's based on demand. The whole problem today is that income inequality (rich getting richer, poor getting poorer) has caused a situation where most of the consumers can't afford to buy anything that we need them to buy in order for the economy to improve.

You don't hire people because someone in Washington gave you a tax cut. You only hire people because someone wants and can afford to buy the product they'll be making. Nobody's willing or able to buy anything right now except the 6 million rich people and they can't create the kind of demand that the rest of the 297 million Americans could if they had the money the rich people are hoarding in offshore accounts.

Think about it for a minute. We eat like 3 billion pizzas every year in this country. If you believe that the rich drive the economy, that's 500 pizzas per rich person per year (or around 1.4 pizzas per day per rich person). Does that even begin to sound reasonable? Why would one rich person need hundreds of thousands of refrigerators (beyond storing a lot of leftover pizza)? Or tens of thousands of cars? Or millions of cans of Coke?

Given that the rich don't buy most of the stuff that we need to be bought, a national sales tax shifts the tax burden away from them to the poor and middle class who do buy most of the stuff in this country. That means the poor and middle class would pay most of the taxes.

But they already don't have enough money to buy stuff now. If they can't afford to buy it now, when it's cheaper, they'll be even less able to buy when it's more expensive because of added taxes, and consumption will decrease.

Remember that you only hire people to make product that you can sell. So if consumption decreases, you have to fire workers you don't need anymore. That increases unemployment. Increasing unemployment decreases consumption because people without jobs don't have money to buy stuff. Decreasing consumption costs jobs again. And so on and so forth.

http://www.youtube.com/watch?v=wem1XQT3JqI

[-] 1 points by gawdoftruth (3698) from Santa Barbara, CA 7 years ago

depends on how a "flat" tax is defined. If its defined via the rigid statistical manner, it is by definition the only fair tax possible.

If its defined as libertarians usually define it, its a corporate oligarchy con scam.

http://www.oligarchyusa.com/

http://www.istockanalyst.com/finance/story/5390832/some-fascinating-stats-about-our-corporate-oligarchy

http://foreignpolicyblogs.com/category/21st-century-challenges/ethicsandeconomics/

According to a 2008 article by David Rothkopf, the world’s 1,100 richest people have almost twice the assets of the poorest 2.5 billion (Rothkopf, 2008). Aside from the obvious problem – that this global elite has their hands in everything from politics to financial institutions – …

http://theprogressiveplaybook.com/2011/09/occupywallstreet-an-american-tahrir/

http://www.youtube.com/watch?v=ght22PnCXy0

http://www.huffingtonpost.com/miles-mogulescu/wisconsin-is-ground-zero_b_825321.html

http://last-lost-empire.com/blog/?tag=global-corporate-oligarchy

To the extent that we, the people, are removed from control over our lands, marketplaces, central banks, and media we are no longer empowered. In practice, those few who do control the land, central bank, media and "free market" are the real rulers of our corrupt and declining "democracy."

Due to propaganda from a corporate-owned and edited media we are kept from knowing, much less debating, the nature of our system. Due to a central bank owned by bankers, media owned by a few global concerns, and trade regime controlled by global corporations (i.e., one designed to remove the people from control over their markets and environments) the vast majority have become little more than latter-day serfs and neo-slaves upon a corporate latifundia.

To restore a semblance of effective democracy and true freedom Americans, and people around the world, need to re-educate themselves as to the true nature of their political and economic systems. Toward this end, OligarchyUSA.com is dedicated to providing old and new information, books, links, reform ideas and debates not easily found or accessed today in establishment media.

OligarchyUSA.com is but one more site and sign of the times as ground-up counter-revolutions arise around the world... all in response to a forced and freedomless globalization courtesy of a ruling global elite perfecting their top-down plutocracy and revolutions of the rich against the poor. In short, democracy is no longer effective today. For this reason, it is toward a restoration of truly effective and representative democracies, and natural freedom, that this site is dedicated.

[-] 1 points by gettro (40) 7 years ago

your copy and paste skills are almost as good as mine

[-] 1 points by Democracydriven (658) 7 years ago

Eliminate write-offs and roll the cost of doing business into the product or service. Then apply a flat tax. What do you think GE and others that pay little or no tax on billions of dollars would pay? I think the revenues from their gross income would pay a much larger portion of the tax revenue then they pay today

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

It would have to be more given that they're not paying anything now.

Exxon's Income Tax: $0 [UPDATED] - http://motherjones.com/mojo/2010/04/exxon-mobil-paid-zero-income-tax-offshore%20shelter-wal-mart-general-electric-forbes

That ONE oil company brought home $10.65 BILLION in profits in the first 90 days of this year. That's $1,370 in profit PER SECOND. They made more in profits in one second than anyone earning minimum wage brings home in a month.

Plus, they get $41 Billion in subsidies every year.

Budget hawks: Does US need to give gas and oil companies $41 billion a year? - http://www.csmonitor.com/USA/Politics/2011/0309/Budget-hawks-Does-US-need-to-give-gas-and-oil-compan...ies-41-billion-a-year/%28page%29/2

And they think we don't have a reason to be pissed off? Seriously?

[-] 1 points by Democracydriven (658) 7 years ago

Write offs are really a way of shifting a higher percent of taxes “per person” on to the non-wealthy. Write-offs, tax shelters, incentives etc. have always been “sold” to the public as necessary to encourage business. They actually end up being a form of socialism. We pay less for our products (you will be told) and more in income taxes (you won’t be told). When these products are exported the foreign buyers also pay less for the product and we still pay more in personal taxes to make that happen

[-] 1 points by jdragonlee (119) 7 years ago

COMMON CLAIM: Restore the tax rates on high income people! Exempt payroll tax on low income people (20K and less)!

[-] 1 points by theworker (6) 7 years ago

Top 1% pay 40% of taxes Top 10% pay 70% of taxes Bottom 50% pay nothing how is that fair. We need a flat tax, or our future generations won't want to be the best they can be. It will cost them too much in taxes. Then who will pay for all the social programs the 48% of americans are using now?

[-] 2 points by thebeastchasingitstail (1912) 7 years ago

If 1% of the people earn 40% of the income, it stands to reason they would pay 40% of the taxes, right?

And your last question should be - who will pay for all the wars we are fighting, since defense is the largest segment of the Federal budget.

Let's do a pie chart of which "segment" of income earners benefit the most from being at war & from the "prison/nationalsecurity/industrial complex" and then decide who should be taxed the most to pay for those wars.

[-] 1 points by yari (32) from Syracuse, NY 7 years ago

Hell, look at who gets better/greater police protection, garbage collection, legal protection, etc., etc., etc. The rich get better service up and down the line than the poor, even from public services that are supposedly equal. You don't have to go so far as war to see who is getting more and therefore should be paying more.

[-] 1 points by thebeastchasingitstail (1912) 7 years ago

I bet if we did a survey they and their businesses overuse the court system, as well.

[-] 1 points by rivalarrival (21) 7 years ago

That's what they should be paying. The top 1% "earns" 43% of the wealth, and pays only 38% of the income taxes. The bottom 50% earns 2.5% of the wealth.

The fact is that the top 1% owes TWICE as much as the "fair" amount owed by the bottom 50% of the population.

The middle class - roughly the 50th to 75th percentiles - is paying 7.5% MORE than their fair share of income taxes.

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

Source?

[-] 2 points by LongLostAndLooking (74) from Portland, OR 7 years ago

Try again. Quote the IRS for example.

And also include ALL taxes. Not just capital gains or income taxes. Water taxes, power taxes, phone taxes, sales tax, tag taxes (car), road taxes, gas taxes, cable taxes, sewer taxes, garbage taxes, property taxes (poor people pay their landlords property taxes in their rent), etc. Where's the accounting of who's paying those taxes?

Don't forget payroll taxes too.

I love how these "non partisan" people only count the two taxes that poor people don't pay to show how poor people don't pay taxes. Poor people don't pay capital gains taxes because they don't have any capital gains. And they can't pay income taxes because they don't earn enough to survive with the crappy pay they receive and all the other taxes they do pay.

But don't tell me they don't pay taxes when you're ignoring every single one of the most common types of non-refundable taxes.

[-] 1 points by DirtyHippie (200) 7 years ago

When you say bottom 50% pay nothing, that's a fallacy. True there is a number, maybe 42% that didn't pay federal taxes in 2009, but why do you assume they were at the bottom. Some who paid no taxes had income over 1 million. The largest group who paid no federal tax was in the $50,000 - $75,000 income range. There is data on the IRS website that shows which tax returns resulted in zero taxes owed. You've been brainwashed.

[-] 1 points by theworker (6) 7 years ago

I am in that range and please tell me the loop holes so i can save that money too. Your right GE payed no taxes last year, and got a refund. we need to fix those loop holes. but raising taxes on the rich is not the right answer.

[-] 1 points by DirtyHippie (200) 7 years ago

You don't need loopholes. Our tax code is built on a series of graduated brackets with deductions and credits that are available ro those who qualify for them.

The relevant tax returns in the IRS data are for personal income tax not corporate like GE. And remember that personal income includes earned and unearned. Unearned may come from a variety of sources, like capital gains. Capital gains can be offset by capital losses.

Let's say you earned $1 million in 2009. You also had a $10 million stock portfolio that tanked in the first 3 months of the year. Following the meltdown of 2008, stocks hit their low around the end of March. If you panicked and sold at the low, you may have had substantial losses. Stocks were down by 50%. Even if you're portfolio was down by only 10%, that's $1 million which offsets your $1,000,000 in earned income so that total income = zero which means no taxes. This is obviously an oversimplifed version. I just think it's interesting that people automatically assume the 42 % or 47% or 50% who pay no taxes must be clustered at the low end of the income scale. About a quarter were in the $50,000-$75,000 range, slightly less than a quarter were in the $100,000 - $200,000 income range, Another quarter were indeed under the poverty level and their income doesn't get taxes just by using standard deductions and credits. It's a very successful propaganda piece which cynically targets the poor as lazy deadbeats looking for a handout. The IRS data is very rich in detail so you can isolate the returns that are classified as not taxable and find all of the deductions and credits that were used. But Americans aren't good at Math and aren't interested in details. So easy to just say half don't pay taxes and let your mind fill in what it wants. That's how propaganda works.

[-] 1 points by Daennera (765) from Griffith, IN 7 years ago

I'm all for a flat tax, so long as all other taxes are abolished with its implementation. No more tag fees for cars, permit fees for builders, property taxes, etc. Then it just comes down to what percent of all income does the government need to do its job adequately and efficiently.

I do believe that if you live in this country you should have to pony up for the privilege.

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

The people need to be PAID before they can give any of it to the government and the problem is that because of trickle down economics, most people don't have enough money to survive right now.

Wages are haven't risen in 10 years [13], yet every single industry out there still expects continuous growth.

Nobody's asking "HOW?" Customers don't have more money to spend because wages are flat, so how are they going to keep buying more stuff?

We’ve been in this situation before; we know how to fix it. Everybody’s complaining that the debt to GDP ratio is getting high, but they ignore the fact that it was around 30% higher after WWII, ending above 120% of GDP.

http://upload.wikimedia.org/wikipedia/commons/b/b8/US_Federal_Debt_as_Percent_of_GDP_by_President.jpg

Know how we solved that? They raised taxes on the rich.

In 1946, on every single dollar you made over $200,000 per year, you paid 91% in taxes. [14]

And it worked. The debt decreased dramatically until they started lowering taxes in the 1970’s.

According to the CPI inflation calculator, $200,000 in 1946 dollars is worth $2,317,579.49 today. [15]

So in today’s dollars, that means roughly 91% taxes on all income above $2 Million per year.

The problem today is that the richest people in our society have a choice between hoarding their money or paying their workers. Back in 1946, they had a choice between paying their workers or paying taxes. The smart business decision was to pay your workers, and that’s why people had decent paychecks they could raise a family on, retirement funds, benefits, and all the stuff we don’t have now and need.

If the upper tax bracket is really high, either the people have money to spend on all the stuff that makes the economy work (creating demand) or the US government does. Either way America wins.

Think about how it was back then, the middle class bought houses and paid them off, and could STILL afford brand new, high-tech luxuries like cars and TV's on one 40 hour a week job. The government had the money to build and fully fund schools with art departments, music departments, Olympic sized swimming pools, athletic departments, and tons of school functions. We built parks, a national highway system, bridges, an electrical grid, and airports. Plus we had a space program that sent human beings to the moon for the first time ever. All while paying down our debt in less than 30 years.

And in spite of all the rhetoric you see on TV, paying taxes did NOT discourage investment. If there was money to be made, they still went for it.

We don’t need a “flat” tax or “fair” tax or whatever the wealthiest American’s marketing and public relations teams is currently calling it. We need an exponential tax where the people at the bottom pay almost nothing (because they don’t currently have enough to live on) and the people at the top pay a lot. The greater the difference between their income and the income of least among us, the more they should pay.

We’re one people in one country. As Benjamin Franklin said, we either rise or fall together. It’s time the people at the top started acting like it.

Sources:

  1. NY Times - A Decade With No Income Gains: http://economix.blogs.nytimes.com/2009/09/10/a-decade-with-no-income-gain/

  2. Tax Foundation - U.S. Federal Individual Income Tax Rates History, 1913-2011 (Nominal and Inflation-Adjusted Brackets): http://www.taxfoundation.org/publications/show/151.html

  3. CPI Inflation Calculator: http://146.142.4.24/cgi-bin/cpicalc.pl

[-] 1 points by Daennera (765) from Griffith, IN 7 years ago

I think you kind of missed the point........

[-] 1 points by thebeastchasingitstail (1912) 7 years ago

If you like the flat tax, you're gonna lurvvve Herman Cain's 999 plan

Romeny said he thought it was a pizza, I did lol at that.

It's a sneaky way to get the bottom rung to pay 18% while the upper pays 11% and has no more capital gains tax. GENIUS!

[-] 1 points by FuManchu (619) 7 years ago

1-800-999-CAIN

[-] 1 points by notresponsible42 (64) from Jacksonville, FL 7 years ago

Good work. So what? This is not the time to bitch about a taxation system which will never happen anyway.

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

I forgot about health insurance. The average health insurance premium was $4824 per year, per person in 2009, and health care reform doesn't kick in for most people until 2012. [1]

So, insurance is about $402 per month with a $1000 deductible, but as you can see, poor people don’t have enough money to pay for basic necessities, let alone insurance, especially with a huge deductible, which is why almost all of them are uninsured.

And people want them to pay a 10-20% flat tax on top of all of that? Seriously? With what money?

  1. USA Today - Average family health insurance policy: $13,375, up 5%: http://www.usatoday.com/money/industries/health/2009-09-15-insurance-costs_N.htm
[-] 1 points by Mooks (1985) 7 years ago

You mention lots of averages but then compare that data to the lowest salaries. Poor people making $15K per year aren't going to rent an average apartment. It will be a cheaper apartment. They also won't drive as much because normally people don't commute a long distance for a minimum wage job. It is like comparing apples to oranges, except you are comparing poor people's salaries with an average life style.

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

Averages are the only data available for most of those things.

However, I did find that half of America (50%) earns LESS than $32,000 per year. Does that help?

[-] 1 points by Mooks (1985) 7 years ago

Right, so if you are going to use average monthly expenses you need to compare it to average monthly income which as you just pointed out is $32K per year, or about $2760 per month, not $1160 as you cited originally.

[-] 1 points by LongLostAndLooking (74) from Portland, OR 7 years ago

The problem is that the mean in this case isn't too far from the bottom. I work for a property management company and the cheapest apartment they offer is only about $200 less than the mean.

Groceries and other costs don't get cheaper than the mean either. So, when comparing the mean with minimum wage, most of the comparisons are in fact valid.

So, even if you don't like that I'm comparing minimum wage (which isn't the lowest wage) with the average costs of living, the fact is that the average cost is what they're forced to pay since things are often MORE expensive when you're poor.

For example, poor people don't buy Prius. They buy 88 Oldsmobiles because that's what they can afford to buy. As a result, they get crappy mileage. So their gasoline costs are higher.

You can't live on minimum wage. Morgan Spurlock tried it and failed.

Part 1: http://www.youtube.com/watch?v=yloNmBTKNIE Part 2: http://www.youtube.com/watch?v=7Gt6v01UA1c Part 3: http://www.youtube.com/watch?v=urGuAEGhMjA Part 4: http://www.youtube.com/watch?v=JOSS5NODkro Part 5: http://www.youtube.com/watch?v=VBbaBUTm5Rs

And whether or not you like my comparisons, people earning minimum wage don't have the money to pay taxes because they don't have the money to survive.