Flat tax

[SMP]

Question 62974

This doesn't really add anything to the discussion of flat tax, but CPM's response reminded me of this scene from South Park.

http://www.southparkstudios.com/clips/1 ... a-big-deal

[Waldorf and Sauron]

In response to Marguerite's wealth distribution graph, I thought it looked wrong, but I couldn't find a response until now. Lo and behold, here's an interesting response by the (conservative!) tax foundation, explaining how that chart is terribly deceptive. The tax foundation's pulled their article (probably for political reasons) but there's a mirror here.

[Marduk]

Yeah, pretty much every link that she posted was very simplistic rhetoric, and I don't think did justice to the conservative argument. The board is one source that I get conservative information from, and I was rather disappointed with her answer.

But seriously, are there people around (here) who support a flat tax?

[Dragon Lady]

But seriously, are there people around (here) who support a flat tax?

My knowingly incomplete tax-logic considered it a good idea until I read CPM's answer. Then I decided that I really just don't know what to do with taxes except make them simpler! Please?

[thebigcheese]

But seriously, are there people around (here) who support a flat tax?

My knowingly incomplete tax-logic considered it a good idea until I read CPM's answer. Then I decided that I really just don't know what to do with taxes except make them simpler! Please?

Exactly. I think the idea of a flat tax appeals to most people (it seems so...FAIR!) until they actually realize the implications of it for both the government and the people. It's pretty much a bad idea all around.

[Tao]

Eh, I'm not so sure that the tax system we currently have is as close to the very heart of Christian principles as some would like to think. Yes, the rich get taxed more in principle, but they also have more opportunities to get out of paying those taxes. A friend of the family got a job losing money for a man on his horse ranch, as it was more beneficial as a tax write-off than if the owner played things more reasonably. (Best job ever, by the way.) The middle-to-low end of the scale often can't afford someone who has been through the library of tax laws to apply each and every break they qualify for, and thus end up paying more. (More than they should, I have no idea on numbers to know if it is 'more' relative to the rich who maximize all loopholes).

As CPM mentioned, any tax will bring liminal families across the poverty threshold, and a flat tax will have a larger range of families that do it than the current system. I'm not sure how exactly that is unfair, as fairness as I understand it deals with equality of treatment, those on the edges of any tax bracket are going to feel things are unfair. If a flat tax demands the forfeiture of charity, then of course it is worse than any system that allows for it. But I'm still not convinced that a flat tax, (or, rather, a flat-er tax) couldn't be implemented that wouldn't be a significant step upward.

Also of note: tax incentives are one of the most direct ways the government has to direct their constituents, a flat tax would seriously curtail such influence, for better or worse.

[thebigcheese]

But I'm still not convinced that a flat tax, (or, rather, a flat-er tax) couldn't be implemented that wouldn't be a significant step upward.

Flattening the tax brackets basically means you have to do one of three things: raise taxes for the poorest people, lower taxes for the middle-to-highest income people, or some combination of both. Here's what I want to know: which of those options makes for this significant step upward that you suggest? It seems to me that you're either going to burden the poor or severely underfund the government (which already has an overspending problem). Either way, I think the poorest people lose.

[wired]

I think a flat tax, for the world we live in now, is a horrific idea. If everyone had an initial endowment that was totally equal and had similar inputs throughout life, I think a flat tax would be fantastic, but that won't happen (and I don't think I'd like a gov't to make that happen....).

[Dragon Lady]

or severely underfund the government (which already has an overspending problem).

Then perhaps part of the solution is to correct the government's spending habits?

I admit, I really don't know a whole lot about politics and such, but it really bugs me that the government is almost always in debt. A lot of debt. I feel it sets a very poor example for individual Americans.

[thebigcheese]

Of course. I don't think there's any question that the government needs to cut spending right now. The problem is, those cuts are going to hurt somebody and certain politicians are unwilling to make those bold changes because they will be horrendously unpopular. Cutting the budget for Medicare and Medicaid? That's going to be a firestorm, if and when it ever happens. Cutting the defense budget? Not gonna happen while there's still a war going on. But that's an issue for another day. We're talking about taxes here. Instituting a flat tax in America would just be hurting us more, when we're already bleeding.

As for the ideal world, I'm not sure. Seems like it would be really hard to balance your budget and make your people happy with a flat tax.

[Dr. Smeed]

I think a flat tax is an excellent idea and that CPM's answer relied too much on "christian principles" than fact, ignoring that if we are to talk about "christian principles" we should realize that the Lord instituted a flat tax... I realize that the government can't be run by or like the Church, but when tithing works and our current tax system is so crazy, I think it's compelling evidence we should try something else.

If being poor simply meant having enough money to "put food on the table, pay rent, and buy simple clothing" then I might agree, but every experience I had on my mission, and now in my current job, has soured me to that. The fact is, I have never met anyone who has had to decide "whether they pay rent, buy food, or buy clothing." The choice that people make is between rent and food or an X-box and a new game every week, DirecTV, Nike shoes, McDonalds for dinner, iPhone, an APX alarm system... It is never as simple as "do I pay rent in a place I can afford or buy the basic necessities of life?" The choice is between necessities and luxuries. Just about every house I went into in the ghettoes of North Seattle had a video game system or two, a nice TV, and loads of CDs and fast-food containers strewn around the house. Their kids would come home with new X-box games and with more expensive clothes than I ever had. Then we would be expected to be the personal envoys to the Bishops to get free food for them. Not cool. I grew up poor, but my parents never had to choose between food, rent, and their kids going to school naked! We just didn't eat out, have electronics beyond the stereo and TV my dad bought in 1979, or have more than one car. We lived within our means, cutting out luxuries, so we were living well under the poverty line but I couldn't tell.

I have yet to hear of an objection to a flat tax that doesn't try to prey on the strong emotions we tie to "equality" and "fairness." You want to talk about simplistic rhetoric, every time I hear someone tell me to "have some compassion" my simplistic rhetoricometer goes into red alert. Rich people are just as much people as poor people. They have emotions and feelings and rights as well. Why are we constantly trying to screw them over? Is it because we immediately associate wealth with the rich constantly screwing the poor? I think it is. It is wealth envy, so we try to unfairly level the playing field by handicapping successful people.

As much as I hate the system, it is based on competition, and rewards for those who are the smartest and most creative. The more handicaps you put on those, the more quickly it degenerates from smartest and most creative to most devious and crooked. Commerce turns from a game where people compete to produce a better product, to competing to get around government regulations most invisibly. To paraphrase a famous monarch, the more the government tightens its grip, the more rich people will slip through their fingers.

If the two hypothetical families in CPMs example were real, I would expect both families to make some cuts, not penalize one family for being well off just to make the other family feel better about themselves. It is a reality in this country that you can better your station, a stone-cold reality. Ignoring that is just as dangerous as ignoring that poverty is also a reality. I am currently living under the poverty line and, looking at my paychecks, paying right around ten percent of my gross income in taxes. I am not hurting, going back to the idea of living within my means. Even with a car, a baby, and student loans I am not having to choose between food and rent. I live in a place I can afford and I buy food I can afford. It is not that hard. I could not care less about getting an income tax refund, I don't need it. In fact if it will help the country to give it up I will gladly do so. I hate tax season because it makes me feel like I am not contributing anything. I will pay a flat tax, because no matter how much I make I will be paying the same proportion of my income.

While we're at it, why don't we try the current tax system with grocery stores? Charge rich people insane amounts of money for a loaf of bread and not only give poor people free bread, but give them an exorbitant refund as well! This is an imperfect metaphor, as a flat tax will charge people a proportion rather than a flat rate (which I agree would be grossly unfair) but a straight across-the-board tax of, let's just throw out a number, ten percent would go a long way in increasing revenue and discouraging cheats (tax shelters, offshore accounts, etc.)

But in reality, who cares? We're all going to be dead someday anyway, and the Lord will do away with money in the millennium etc. and we won't have to worry about all of this crap.

[Waldorf and Sauron]

we should realize that the Lord instituted a flat tax...

...of 100%.

[Dr. Smeed]

Exactly. 100%, 10%, what is the difference?

[Waldorf and Sauron]

....what isn't the difference?

[Dragon Lady]

Currently the Lord only requires 10% of our increase. No need to willfully misinterpret.

[Waldorf and Sauron]

Not true. The Lord requires 10% through tithing. He requires 100% through consecration. Both are in effect.

[Dragon Lady]

Monetarily he requires 10%. It is not expected that you consecrate all of your money to the church right now. I am allowed to spend my money after tithing on a Wii or a new car or to pay down my mortgage. I am not required to give it back. We are asked to also give to fast offerings and to the other church funds, but it is not required.

We asked to consecrate our time, talents and skills. But the Law of Consecration is not in effect right now.

[Marduk]

Dragon Lady, the Law of Consecration absolutely is still in effect. Just because it isn't a temple-recommend question doesn't mean it isn't in effect.

Dr. Smeed, the argument against a flat tax isn't nearly as simplistic as you mentioned, nor is our current tax code anywhere near as hostile to top earners as you seem to think. The top marginal tax rate is at 28%. That means, with ZERO deductions, and making 1 million a year, you'd still recieve 720,000 of that (this is an oversimplification, as it doesn't include property tax, sales tax, social security, etc., but the root point is the same.)

As to the former point, any argument about tax rates has to discuss whether or not it is "fair." Since fair is an entirely subjective term, the discussion becomes fairly abstract. You argue that a flat tax would be more "fair," and I disagree. There's not really a question that the same ratio of payment made at lower incomes is more lifestyle-changing than that same ratio is at higher income levels. Also, it seems part of your argument comes from a conception that there really is no poor, just people who spend their money poorly. I disagree, and have lived in a family that has struggled to put food on the table. We did not have ANY electronics (my older brothers used to go over to friends' houses to play Nintendo) and lived in a small apartment as a family of eight. We dressed in clothes purchased from second-hand stores, and everything the younger kids wore were hand-me-downs. Your assumption that the choice those in poverty have is "The choice...between necessities and luxuries" is wrong, dead wrong. I know this because I have lived it. I'm sure there are many who do make poor choices. But their are many who simply don't have the income to cover food, clothing, shelter and medical expenses.

You say that the argument against a flat tax depends on preying on emotions tied to "equality" and "fairness." I would ask how an argument FOR a flat tax does not do those things.

Your argument for it basically boils down to a third-party ad hominem attack on people below the poverty line. I would absolutely LOVE to have this discussion with you. I would RELISH it. But you're really going to have to do better than that.

[Dragon Lady]

Law of Consecration says that we give all of our increase to the Church and that it is divvied back out according to need. So… if I gave all of my increase to the bishop right now, he'd pay all my bills for me? And give me the food I need?

[Waldorf and Sauron]

We asked to consecrate our time, talents and skills.

DL: That's not all. We covenant to consecrate "everything" with which the Lord has blessed us, not to the church itself but to the cause of the church. You have the freedom to spend it on whatever you want, but your responsibility is to the Lord, for it is all the Lord's property. It is up to you to choose the wisest way to use your time, talents, and property to the Lord's ends. Certainly the Lord intends for us to have a degree of recreation in our lives, but (in my understanding) excessive consumerism and materialism violates the law of consecration.

Right now, the law of consecration/united order is not currently institutionalized in the church. It has been in the past — that doesn't mean that the covenant and law went away! The Lord requires us all to covenant to personally devote everything to his work and cause.

Marduk: The law of consecration is implicitly a temple recommend question, if you have already been through the temple.