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At 2/9/09 06:43 PM, Al6200 wrote: With a 20% rate, if you make 50k a year, then you pay no taxes.

What are you on? With a 20% tax rate, if I make 50k a year, I'm paying $10k in taxes. That's from YOUR CHART.

If you make 60k a year, then you pay $2000 in taxes.

$14K, again, YOUR CHART.

Note that you post-tax income goes up $8000. The increase in post tax income is the same no matter how much your income is.

How can my income be increased after it's been taxed?

This would probably replace social security.

But the payout is just the same, which means we'd still be in the same issue we're in now in terms of more people drawing out than are paying in.

People would vote for it because it creates a constant incentive to increase one's income, at any income level.

No, it does not. It sends the message that the government is going to tax you more for making a livable wage than they used to.

Yeah. It's called a negative income TAX. If you make $50,000 or more (on a 20% rate), then you pay more in taxes then you get back.

Then what is my motivation or incentive for wanting to make more than 50K?

This is pretty much the way it is today, because people who make $60,000 a year pay payroll taxes, income taxes, social security, etc.

So the only thing this would be doing is just putting it all on one line of my paycheck instead of six? Whoopee, I'm still paying as much but now I don't get to read HOW my government is

To be honest I really don't understand what you're point is.

You presented a chart for supporting evidence that showed how little you know about the argument you're putting forth.

You also have a viewpoint on this matter than is conflict with itself, in that on one hand you say that it's a great thing that will give people more money after they've already been taxed, but on the other hand, you highlight the fact that this is really no different than social security, itself a flawed system.

At 2/9/09 07:32 PM, Proteas wrote:

What are you on? With a 20% tax rate, if I make 50k a year, I'm paying $10k in taxes. That's from YOUR CHART.

My chart uses a 40% rate. And to avoid further mishaps in the future, here is the formula I'm using:

Amount Paid in Taxes = 40% of Income - 10,000

So if you make $50,000, then you pay $20,000 minus $10,000 a year, which is $10,000. If you make no money than you get a check for $10,000.

$14K, again, YOUR CHART.

My chart uses a 40% rate.

How can my income be increased after it's been taxed?

If you're income increases by $10,000 - then your post tax income increases by $6,000 if there is a 40% flat tax.

But the payout is just the same, which means we'd still be in the same issue we're in now in terms of more people drawing out than are paying in.

Not everyone gets paid social security.

No, it does not. It sends the message that the government is going to tax you more for making a livable wage than they used to.

Are you opposed to the negative income tax because it is less progressive than normal taxes.

Then what is my motivation or incentive for wanting to make more than 50K?

For every extra $10,000 you make, you get to keep $6,000 (under a 40% rate). There is nothing special about 50k, except that under a 20% rate that's the "break even" point, under which you start to pay more in taxes then you get from the grant.

So the only thing this would be doing is just putting it all on one line of my paycheck instead of six? Whoopee, I'm still paying as much but now I don't get to read HOW my government is

My point was that people who make $60,000 a year already pay significant taxes. In fact if you are filing singly that is a 25% tax rate.

You presented a chart for supporting evidence that showed how little you know about the argument you're putting forth.

Okay, and your point is... Do you oppose the negative income tax because you think it's too progressive? Not progressive enough?

You also have a viewpoint on this matter than is conflict with itself, in that on one hand you say that it's a great thing that will give people more money after they've already been taxed, but on the other hand, you highlight the fact that this is really no different than social security, itself a flawed system.

The idea is that the curve of post-tax income is linear and progressive. That is really the whole advantage of the system.

At 2/9/09 07:56 PM, Al6200 wrote: My chart uses a 40% rate. And to avoid further mishaps in the future, here is the formula I'm using:

10K =/= 40% of 50K, it equals 20%.

If it was a 40%, the number would be $20K in taxes.

My chart uses a 40% rate.

Check your math.

If you're income increases by $10,000 - then your post tax income increases by $6,000 if there is a 40% flat tax.

My income would not increase because of this, because the 10 grand I would get from the government would not be counted as earned income. It's a tax credit, a rebate, a GIFT.

Not everyone gets paid social security.

You're right. On your system, everyone above the working age of 18 would be drawing from it, so there'd be an even bigger drain on the budget.

Are you opposed to the negative income tax because it is less progressive than normal taxes.

I'm opposed to your version of it because it's nothing more than a rehashed version of Social Security, itself a failed system.

For every extra $10,000 you make, you get to keep $6,000 (under a 40% rate).

So this system only favors people who makes less than a liveable wage.

There is nothing special about 50k, except that under a 20% rate that's the "break even" point, under which you start to pay more in taxes then you get from the grant.

So what incentive is there for me to want to make more than that?

My point was that people who make $60,000 a year already pay significant taxes. In fact if you are filing singly that is a 25% tax rate.

So you'd be reducing they're already high tax rate by 5% and STILL taking back more in taxes than they would earn from this 10K they get from the government.

Of course, there's always the simple option of couples filing separately on tax forms instead of jointly. That brings the overall declared income for the household down and shoots this whole thing right in dick.

Okay, and your point is... Do you oppose the negative income tax because you think it's too progressive? Not progressive enough?

It's not progressive at all, it's a shit idea with shit execution.

The idea is that the curve of post-tax income is linear and progressive. That is really the whole advantage of the system.

The only advantage you've shown me thus far is that I'd go from paying 20% of my paycheck deducted six different ways for taxes (which I already pay) to having one line on my paycheck equaling 20%. That's all.

At 2/9/09 07:56 PM, Al6200 wrote:

My chart uses a 40% rate. And to avoid further mishaps in the future, here is the formula I'm using:

Wait... I had to double check this.

Okay, so your chart uses 40%? Fair enough. Call me stupid, but why does it change percentages so many times? Here's how my calculator breaks it down.

- 10K the tax rate is 60%
- 20k it's 10%
- 30k it's nothing
- 40k it's 15%
- 50k it's 20%
- 60k it's 23%
- 70K it's 25%
- 80k it's 27.5%
- 90k it's 28%
- 100k it's
- 100k it's 30%
- 150k it's 33%
- 200k it's 35%
- 250k it's 36%

If you were going for a 20% flat tax (meaning EVERYBODY pays 20% regardless of income), the chart would look something more like this....

And at 40%, it would look something like this...

LOOK! I can use excel too!

At 2/9/09 10:34 PM, Proteas wrote:

At 2/9/09 07:56 PM, Al6200 wrote:

My chart uses a 40% rate. And to avoid further mishaps in the future, here is the formula I'm using:

Wait... I had to double check this.

Okay, so your chart uses 40%? Fair enough. Call me stupid, but why does it change percentages so many times? Here's how my calculator breaks it down.

The marginal (!=average) tax rate is 40%, ie, for each extra dollar you earn, you get taxed 40 cents on it.
That's why there's never an incentive problem, because for each extra dollar you earn, you get more money. Actually, there's the same incentive for making an extra 10 grand if you earn 0 or if you earn a gazillion dollars, since you'll get the same tax for that extra dollar (40 cents)

You could think of it like this: you get 10 grand, and then pay normal taxes.

your income after taxes is: 10000+before tax income * 0.4

That's why people making 25k pay no taxes (or the amount of taxes they pay equals the government subsidy), 25K*0.4= 10K, or if you want it 0% average tax rate.

At 2/9/09 10:35 PM, Proteas wrote: And at 40%, it would look something like this...

You forgot to add the subsidy, ie, the 10K

At 2/9/09 10:35 PM, Proteas wrote: And at 40%, it would look something like this...

LOOK! I can use excel too!

nah his chart uses a 25,000 dollar break even point that I don't recall him mentioning. So someone making 25,000 pays no taxes, but receives no benefits. Every dollar over 25,000 is taxes at 40%, and every dollar under 25,000 receives a tax credit, or refund, or adjustment of 40% the difference of 25,000. So 0-25,000= the arbitrary 10,000 minimum.

Not too hard to read, but al,
what about those people with losses, or negative income before taxes?

At 2/9/09 10:45 PM, n64kid wrote: So 0-25,000= the arbitrary 10,000 minimum.

Should be 0-25,000(.4) = $10,000 government handout

At 2/9/09 10:45 PM, Der-Lowe wrote: That's why there's never an incentive problem, because for each extra dollar you earn, you get more money.

You only get more money because you're making more money, you're still being taxed at a rate of 40%, just the same as everybody else.

your income after taxes is: 10000+before tax income * 0.4

You forgot to add the subsidy, ie, the 10K

So I'm going to pay taxes on a government subsidy that's supposed to guarantee me I have tax free money to live on? This idea is getting better all the time!

At 2/9/09 10:45 PM, n64kid wrote: nah his chart uses a 25,000 dollar break even point that I don't recall him mentioning.

I see, so... the higher the tax rate, the lower the break even point. Makes sense.

what about those people with losses, or negative income before taxes?

I guess they're fucked then.

A tax cap?

Lulz for not learning from California.

At 2/9/09 11:03 PM, Proteas wrote:

At 2/9/09 10:45 PM, Der-Lowe wrote: That's why there's never an incentive problem, because for each extra dollar you earn, you get more money.

You only get more money because you're making more money, you're still being taxed at a rate of 40%, just the same as everybody else.

yep. But under current welfare programs, you make more money, and you get less.
This never happens under a unified system, and there's always an incentive to work more.
And the system works as an automatic stabilizer as well, since when economic activity slows down, the people that make less money pay less taxes or even get paid, and the people that get unemployed still get the 10K. The opposite happens during booming times, since people get jobs and make more money, the government taxes you more.
Taxes are automatically cut during recessions, and automatically raised during euphoric times, softening the business cycle. And it also spares you of the political cost of raising taxes.

your income after taxes is: 10000+before tax income * 0.4

You forgot to add the subsidy, ie, the 10K

So I'm going to pay taxes on a government subsidy that's supposed to guarantee me I have tax free money to live on? This idea is getting better all the time!

No, the subsidy is not taxed. You just have to add +10,000 on the last column, and -10,000 on the second one.

At 2/9/09 10:45 PM, n64kid wrote: nah his chart uses a 25,000 dollar break even point that I don't recall him mentioning.

I see, so... the higher the tax rate, the lower the break even point. Makes sense.

what about those people with losses, or negative income before taxes?

The plan was made for salaries, there's no way you earn negative salaries.
When I tried to translate this into an actual program, I created an income tax for interest, rent and profit.

At 2/9/09 11:14 PM, Der-Lowe wrote:

The plan was made for salaries, there's no way you earn negative salaries.
When I tried to translate this into an actual program, I created an income tax for interest, rent and profit.

What about small business owners and those salaried employees making 40,000 with a 50,000 dollar loss on investments? We must complicate this tax code! 500 new laws, 55 forms, 95 lines each, and line after line telling you to refer to a worksheet. That's the kind of tax system for me, the confusing one.

At 2/9/09 11:23 PM, n64kid wrote:

At 2/9/09 11:14 PM, Der-Lowe wrote:

The plan was made for salaries, there's no way you earn negative salaries.
When I tried to translate this into an actual program, I created an income tax for interest, rent and profit.

What about small business owners and those salaried employees making 40,000 with a 50,000 dollar loss on investments? We must complicate this tax code! 500 new laws, 55 forms, 95 lines each, and line after line telling you to refer to a worksheet. That's the kind of tax system for me, the confusing one.

lol.
Or you could just do what we do here; you pay "negative taxes", but you don't get the money right away, you get to pay less when you're making a profit.

At 2/9/09 11:30 PM, Der-Lowe wrote:

lol.
Or you could just do what we do here; you pay "negative taxes", but you don't get the money right away, you get to pay less when you're making a profit.

Cool, we have that currently here too, and likewise, the tax credit can be carried over indefinitely.

At 2/9/09 10:34 PM, Proteas wrote:

Okay, so your chart uses 40%? Fair enough. Call me stupid, but why does it change percentages so many times? Here's how my calculator breaks it down.

Negative numbers mean that you get a check from the government. Like I said, the amount that you pay in taxes is exactly equal to:

40% of your income - $10,000

If the number you get is negative, then you should receive a check from the government instead of

At 2/9/09 11:30 PM, Der-Lowe wrote:

lol.
Or you could just do what we do here; you pay "negative taxes", but you don't get the money right away, you get to pay less when you're making a profit.

I'll admit that I don't like this idea. I think that the negative income tax grant should work to reduce the severity of business cycle by giving people more when the economy is bad, and less when it is worse. Also, I like the negative income tax because it not only gives the poor enough money to survive, it gives them money that they could invest, spend on education, etc. It actually provides a route to escape poverty.

But one idea that I REALLY do like is tying the size of the grant to the GDP, so as it increases people get larger grants.

---

But more generally, do you support the negative income tax? I read about it in Samuelson's book on economics, and it seemed like a clever idea. The other drawback I considered is that rich people might pay fewer taxes under the program then they would normally. But because the system is simpler, rich people would have fewer loopholes to exploit (which the democrats create because they think it's funny to make a Republican vote against a tax credit for efficient light bulbs which is totally impossible to enforce).

The other drawback is that some people become moochers. But in reality you really can't create a decent safety net without taking that risk. And I'd like to have a safety net, even if it means people are slightly lazier.

At 2/9/09 11:14 PM, Der-Lowe wrote: This never happens under a unified system, and there's always an incentive to work more.

... I'm still waiting for someone to explain this incentive to me. Because the way I see it, the 10k in question is free regardless of the condition the economy is in, and you lose it through taxation at the $25K and $50K marks on 40% and 20% taxes respectively.

Either way, something like only favors people who make less than 50K a year, meaning the 30% of the population that earns above 50K annually wind up paying for the 70% that earns less than that.

The plan was made for salaries, there's no way you earn negative salaries.

Unless you get fired, in which case...

At 2/10/09 12:18 AM, Proteas wrote:

... I'm still waiting for someone to explain this incentive to me. Because the way I see it, the 10k in question is free regardless of the condition the economy is in, and you lose it through taxation at the $25K and $50K marks on 40% and 20% taxes respectively.

You lose it, and you pay more in taxes. But you do this no matter how much money you make. The idea is that as your income increases your post tax income increases at a constant rate.

Either way, something like only favors people who make less than 50K a year, meaning the 30% of the population that earns above 50K annually wind up paying for the 70% that earns less than that.

That's why its a considered a tax policy and a safety net / welfare system.

Unless you get fired, in which case...

Your salary is zero. Not negative.

Which sort of reminds me of a futurama joke. Fry pulls into the fast food drive through, "Can I have a hamburger and a small fry". And then the cashier says "For only 5 cents less, I could downgrade that to a super small". Then Fry is like "Yeah, that's a great deal! Wait, what?!?"

At 2/9/09 10:53 AM, thedo12 wrote:

At 2/9/09 10:43 AM, Sajberhippien wrote:
One additional note though: Even though some people might choose not to work and live on 10k/year, most people wouldn't want to do that. Some people that right now CAN'T work due to bad economic situation (not having enough money for a home or transports or hygiene and so on) might get enough money to live an acceptable life and from there try to get a better life via the jobs they can actually apply for. Also, students would really get an easier time finishing their studies, and so provide the market with a more educated workforce.

maybe its like that were you live, but were I live welfare bums are rampant, and gving everyone 10 k a year minimum would just put that number up.
I think a better idea would be to make it so people making less then 50,000 a year dont have to pay any taxes, that way they actualy have incentive to work.

We have great welfare here, and that KEEPS DOWN the number of bums. Believe it or not, many bums want a normal life and works hard to get one. However, when you have just enough money to survive, and barely enough for a weekly shower (and on top of that, many are dragged into alcoholism or drug use by the situation, and many are mentally sick and can't afford the medication despite there being a max of $230 a year), it's kind of hard to get a job. Those bums that do get help, for example by being employed by a local magazine by homeless people (actually, it's a great magazine. Many of the bums are excellent poets too.), often manage to get out of their addiction and get a home. After that, it's usually far easier for them to get a better job.
So it MIGHT put the number up (though they wouldn't be as much on the streets if they have enough money to live somewhere), but it MIGHT also put the number down. We don't know. What we do know, however, is that countries with a high amount of welfare (Sweden for example) has a much lower amount of bums compared to countries with a much more limited welfare (the US for example).

At 2/9/09 05:19 PM, JustsTrollingAlong wrote: In imaginary world, which is the only place your idea would work.
Some of us live in the real world though... you should try it out some time and then maybe you wouldn't support such idiotic ideas.

I commented his argument that he would REFUSE to earn more. I'm saying that if you get the opportunity, it's just stupid not to.

====

Also, on replacing welfare with this, you all have to realize that the cost of welfare would be lower just by the system itself. Many of those who need welfare need it because they are poor or broke, and with this system, less people would be poor or broke (or at least, not AS poor), and thus can afford more safety, more often go to the doctor before the illness is too bad (for example, checking a strong headache could reveal a just began brain tumour, instead of noticing it when the head looks like it's gotten elephantitis).

At 2/10/09 12:46 AM, Al6200 wrote: You lose it, and you pay more in taxes. But you do this no matter how much money you make. The idea is that as your income increases your post tax income increases at a constant rate.

So... this system really isn't changing anything from the way it is now?

And it's going to cover more people than social security while being no different than social security?

This is sounding better and better all the time, where do I sign up?

At 2/10/09 11:23 AM, Proteas wrote:

So... this system really isn't changing anything from the way it is now?

No. Under current income taxes, if you increase your income from $0 to $10,000 your post tax income goes up by $8,500.

If you increase your income from $10,000 to $20,000 then your post tax income goes up by $8,500.

$20,000 - $30,000 causes a post tax income increase of $8,500

$30,000 - $40,000 will cause post tax income increase of $4,500.

$8,500 is not the same number as $4,500.

Hi, I have a rather large wrench I would like to throw into your works .
You can have a simple system like you have now, but there are some major problems with it. How does it work for the self employed. Unlike a worker who goes to a job ...drives the forklift or pushes the paperwork Or passes out the food & collects the money. They have "EXPENSES" that are TAX DEDUCTABLE because it would be unfair to tax someone on earning $10,000 for making& installing your new kitchen , When they spent $7,000 on supplies. Plus you can't then just tax them for earning $3000 dollars if you remove the supplies ,because they need a truck, a shop & all the expenses that go along with that.
So that's the first problem. Second is programs...programs like registered retirement savings, Registered Educational savings, there are lot's more like first time home buyers, adult education/re-education etc.
All the flat tax ideas in the world have to take into consideration of small, medium, & large companies & all the advantages in having workers with higher pay, as opposed to low pay & higher taxes.
You need to think about revenue streams as well.
No matter how you look at the problem of taxation, there will always be areas, lots of areas, that won't fit in your 'flat tax model'

At 2/9/09 11:44 PM, Al6200 wrote:

Or you could just do what we do here; you pay "negative taxes", but you don't get the money right away, you get to pay less when you're making a profit.

I'll admit that I don't like this idea. I think that the negative income tax grant should work to reduce the severity of business cycle by giving people more when the economy is bad, and less when it is worse. Also, I like the negative income tax because it not only gives the poor enough money to survive, it gives them money that they could invest, spend on education, etc. It actually provides a route to escape poverty.

But one idea that I REALLY do like is tying the size of the grant to the GDP, so as it increases people get larger grants.

But that wouldn't make it anti-cyclical.

But more generally, do you support the negative income tax? I read about it in Samuelson's book on economics, and it seemed like a clever idea.

I read it from Frank's Microeconomics and Behavior.

The other drawback I considered is that rich people might pay fewer taxes under the program then they would normally. But because the system is simpler, rich people would have fewer loopholes to exploit (which the democrats create because they think it's funny to make a Republican vote against a tax credit for efficient light bulbs which is totally impossible to enforce).

The other drawback is that some people become moochers. But in reality you really can't create a decent safety net without taking that risk. And I'd like to have a safety net, even if it means people are slightly lazier.

The thing I love about the NIT is that it really helps with getting a college degree (at least how I planned it here, where universities are free).
My system also added money to the subsidy pool, by having a child (limited to two children, so as avoid having babies for profit), having a child in elementary, in high school, and then when the person is of age, he gets a bonus for going into a technical school, and a bigger one for going to college. His bonus is in proportion to the percentage of classes he/she passes.

What really made things a lot more complicated was our social security scheme; adding the automatic salary cuts in social security tax increased the marginal tax rate to 60%.
I had made 3 income brackets, the first with 0.25 rate for the low and middle-low class, 0.375 for the middle class and 0.5 for the upper-middle and higher classes. Then I modified the Social Security scheme so as to transform it into a 20% cut, ie, three working people to support a retired person (a little less as the people working are generally better educated, and therefore have higher wages). But since this didn't seem to be enough, I invented an incentive to retire later.
The way to calculate your pension would be the average salary you had, from the age of 18 to the age of 65 multiplied by 0.82 (which is the proportion that should be kept according to law), and it would vary according to a salary index. The income grant would also be taxed by social security (except for child or education bonuses), so in the years that you were unemployed you would also be paying for your retirement. BUT if you continue to work after the age of 65, those years are included as well, but as extra income not averaged; ie, you add all the income but still divide by 47. That way, you'll get a nice bonus on retirement, and in some cases, you could retire with the same amount of money that you earned as an active worker.

The benefit would apply to Argentinian citizens and permanent residents that live in Argentina.

In order to avoid slacking, I would not give the money to the unemployed (or they would have to apply for it), but only to those who are employed or are studying.

Argentina has a 21% VAT rate, and I thought of eliminating it for construction material, education, healthcare, and basic food. I could hike it on fuel, and luxury items.

At 2/10/09 11:23 AM, Proteas wrote:

At 2/10/09 12:46 AM, Al6200 wrote: You lose it, and you pay more in taxes. But you do this no matter how much money you make. The idea is that as your income increases your post tax income increases at a constant rate.

So... this system really isn't changing anything from the way it is now?

It eliminates all other welfare plans, and makes them converge into a simpler one.

And the people never face marginal tax rates higher than 100%, like current schemes.

Here's the incentive issue explained by Frank:

Mr. Friedman's proposal was undoubtedly motivated in part by his concern for the
welfare of the least fortunate. But he was above all a pragmatist, and he emphasized the
superiority of the negative income tax over conventional welfare programs on purely
practical grounds. If the main problem of the poor is that they have too little money, he
reasoned, the simplest and cheapest solution is to give them some more. He saw no
advantage in hiring armies of bureaucrats to dispense food stamps, energy stamps, day
care stamps and rent subsidies.
As always, Mr. Friedman's policy prescriptions were shaped by his desire to minimize
adverse economic incentives, a feature that architects of earlier welfare programs had
largely ignored. Those programs, each administered by a separate bureaucracy, typically
reduced a family's benefits by some fraction of each increment in earned income. Rates
of 50 percent were common, so a family participating in four separate programs might
see its total benefits fall by $2 for each extra dollar it earned. Under the circumstances, no
formal training in economics was necessary to see that working didn't pay. In contrast,
someone who worked additional hours under Mr. Friedman's plan would always take
home additional after-tax income.

At 2/9/09 06:29 PM, Proteas wrote:

At 2/9/09 06:21 PM, Al6200 wrote: chart

So at $60k, I automatically am paying more than my benefit of $10k you claim I'm receiving.

Yeah, thanks for proving my point.

But your after tax money is higher than the guy who makes any amount under $60k, so you still get to keep more money

Though to be fair, I do not like this kind of tax plan. I'd prefer a flat% tax, with no deductions for anything, and no minimum income level. Lets use 10% as a theoretical % to show what I mean. If you make $100,000, you owe $10,000 in taxes. If you make $10,000 you owe $1,000 in taxes. If you have 9 cihldren and make $10,000 you pay $1,000 in taxes.

The real life % would probably not be 10%, but the concept still holds. Also, it would make figuring out how much you owe in taxes extremely simple.

At 2/10/09 11:56 AM, Durin413 wrote: I'd prefer a flat% tax, with no deductions for anything, and no minimum income level.

But that is no welfare plan.

At 2/10/09 11:39 AM, Al6200 wrote: $8,500 is not the same number as $4,500.

All you're doing is putting a number on a fact a lot Americans deal with already; the more you make, the more government takes away from you in taxes.

At 2/10/09 11:48 AM, Der-Lowe wrote: It eliminates all other welfare plans, and makes them converge into a simpler one.

But I'd still be paying out 20% of paycheck in taxes (which I already do), and instead of seeing it divided 6 different ways, it would just be one.

He saw no
advantage in hiring armies of bureaucrats to dispense food stamps, energy stamps, day
care stamps and rent subsidies.

You realize that by streamlining the welfare system like this that there's going to be a few government agencies downsized, right?

How deliciously ironic.

At 2/10/09 11:56 AM, Durin413 wrote: But your after tax money is higher than the guy who makes any amount under $60k, so you still get to keep more money

Just the same as it is now. The only difference being that everyone in this topic thinks this is an improvement on the system, when in it's not I'm still going to pay the same amount into the system as I was before, only now I'm going to be paying for all of the wage earners under $50K (70% of the working population) to get a government check instead of paying for the 12% of people over the age of 65 eligible for Social Security and the 14% percent receiving disability.

Oh yeah, I forgot to mention that now EVERYONE (including the rich) are paying a flat tax across the board, which will decrease the amount of taxes brought down by people making the most money that dems used to use to pay for the system as it stands now. So you've got fewer dollars trying to do more, like the way it is now with social security.

So I ask again, WHERE DO I SIGN UP?

At 2/10/09 12:34 PM, Proteas wrote:

All you're doing is putting a number on a fact a lot Americans deal with already; the more you make, the more government takes away from you in taxes.

Any tax scheme that isn't regressive works like that...

But I'd still be paying out 20% of paycheck in taxes (which I already do), and instead of seeing it divided 6 different ways, it would just be one.

I have a feeling that there are a lot of people who could get benefits from the government but don't because the tax system is so complicated. I'm filling out my W-4 right now, and it seems like it was written by some kind of android who had a deep hatred of everything human and understandable.

You realize that by streamlining the welfare system like this that there's going to be a few government agencies downsized, right?

How deliciously ironic.

What's ironic about that. : |

Just the same as it is now. The only difference being that everyone in this topic thinks this is an improvement on the system, when in it's not I'm still going to pay the same amount into the system as I was before, only now I'm going to be paying for all of the wage earners under $50K (70% of the working population) to get a government check instead of paying for the 12% of people over the age of 65 eligible for Social Security and the 14% percent receiving disability.

Which gives them a lot of opportunity. No? The idea is that you give poor people not just enough money to get by, but extra capital to actually let them get ahead.

Oh yeah, I forgot to mention that now EVERYONE (including the rich) are paying a flat tax across the board, which will decrease the amount of taxes brought down by people making the most money that dems used to use to pay for the system as it stands now. So you've got fewer dollars trying to do more, like the way it is now with social security.

The highest income tax rate that exists right now is 35%, so the rich will actually pay more under this system. Also with social security there is a cap on how much you can pay, so it is actually regressive for the upper middle class and upper class.

So I ask again, WHERE DO I SIGN UP?

Meh. I'm pretty sure Huckabee is the politician that's come the closest to supporting something like this.

At 2/10/09 03:58 PM, Al6200 wrote: I'm filling out my W-4 right now, and it seems like it was written by some kind of android who had a deep hatred of everything human and understandable.

That's because our government is anti-efficiency. Think about it.

What's ironic about that. : |

The new system would streamline welfare, thus eliminating several government agencies responsible for welfare (or so I would think). The government would have to downsize. People would be out of work. And what would be there to keep them from starving to death?

The very welfare system they got downsized over.

Which gives them a lot of opportunity. No? The idea is that you give poor people not just enough money to get by, but extra capital to actually let them get ahead.

But here's the thing; you're tripling the the number of people who are going to receive benefits while DECREASING the revenue coming in from taxes. They say that by 2025 Social Security won't be able to pay out all but 25% of the owed benefits, if we had a system like what you're talking about, the system would be bankrupt in the next few years.

The highest income tax rate that exists right now is 35%, so the rich will actually pay more under this system.

Under a flat tax, everyone pays the same regardless of income. Under a 20% system, that's a 15% loss of revenue.

Also with social security there is a cap on how much you can pay, so it is actually regressive for the upper middle class and upper class.

Regressive? As in you get taxed less as you make more money?!

At 2/10/09 04:27 PM, Proteas wrote:

That's because our government is anti-efficiency. Think about it.

Yeah. A negative income tax would be SO much more efficient and streamlined. You wouldn't even need to fill out some crazy tax form. Just report your income and you're done.

The new system would streamline welfare, thus eliminating several government agencies responsible for welfare (or so I would think). The government would have to downsize. People would be out of work. And what would be there to keep them from starving to death?

The very welfare system they got downsized over.

The people who would lose their jobs (bureaucrats and accountants, mostly), would just get jobs in private industry, which would be expanded because the government would be able to lower taxes (fewer people on the government payroll).

What you just said was an example of the broken window fallacy, which is where people think that a kid breaking a window stimulates the economy by making people replace the window. But in reality the man who had to pay to replace the window would have spent his money else where.

But here's the thing; you're tripling the the number of people who are going to receive benefits while DECREASING the revenue coming in from taxes. They say that by 2025 Social Security won't be able to pay out all but 25% of the owed benefits, if we had a system like what you're talking about, the system would be bankrupt in the next few years.

I don't know about that. This system loses money as people retire, and their income hits $0 and they only receive benefits. The social security system loses money as people retire, not just because less people are paying into the system, but because more people are getting benefits.

Under a flat tax, everyone pays the same regardless of income. Under a 20% system, that's a 15% loss of revenue.

Yeah but this is a 40% rate.

Regressive? As in you get taxed less as you make more money?!

No, as in you pay a lower percentage as you make more money. Ever wonder why the flat tax is a flat percentage, and not a flat dollar figure payed in taxes.

At 2/10/09 11:40 AM, morefngdbs wrote: Hi, I have a rather large wrench I would like to throw into your works .
You can have a simple system like you have now, but there are some major problems with it. How does it work for the self employed. Unlike a worker who goes to a job ...drives the forklift or pushes the paperwork Or passes out the food & collects the money. They have "EXPENSES" that are TAX DEDUCTABLE because it would be unfair to tax someone on earning $10,000 for making& installing your new kitchen , When they spent $7,000 on supplies. Plus you can't then just tax them for earning $3000 dollars if you remove the supplies ,because they need a truck, a shop & all the expenses that go along with that.

Explain why it would be unfair to just tax their entire income.

So that's the first problem. Second is programs...programs like registered retirement savings, Registered Educational savings, there are lot's more like first time home buyers, adult education/re-education etc.

How would these be affected in one way or another by a negative income tax?

All the flat tax ideas in the world have to take into consideration of small, medium, & large companies & all the advantages in having workers with higher pay, as opposed to low pay & higher taxes.
You need to think about revenue streams as well.

It seems like a self-employed person should pay about the same amount under this tax plan as they would under our current income tax.

No matter how you look at the problem of taxation, there will always be areas, lots of areas, that won't fit in your 'flat tax model'

Like what?

Under a flat tax system, there is a loss of revenue in the later stages of income. In the ammounts you gave us, there appears to be a benefit to the flat tax system, however as you approach higher and higher figures, this does not hold to be true.

I can use Excel too.