Stereotypes associated with Libertarianism and Ron Paul

I want people to pay in proportional to what pays out-the fallacy is assuming that wages are a direct indication of how much society is paying out to a given person.

The higher you are on the social ladder, the more you're benefiting from the people beneath you.

You want to punish people for earning money and making money. Thus disencintivizing them to try to make money or to strive for anything because they will be punished for success?

This notion always irritated me. How does taxation punish making money? You never end up with less money by making more money. Every dollar you make adds to your total wealth (even if it's not a full dollar that's added). The tax code is deliberately organized so that it's impossible to have taxes jump such that more gross income will result in less net income.

Personally I think the income Tax is problematic and the flat tax is too easily exploitable I would suggest a Fair Tax.

^^ At the borders of the tax brackets it does work that way.

You make less money at the bottom rung of paying taxes just above the exemption line than if you were impoverished and below it. (And when you're below it, you can get every assistance and handout program under the sun) At the highest two brackets, just below the border of the highest bracket makes more net money than just above the border of the highest bracket.

Admittedly the effect is very narrow statistically but it does happen.

^ The Flat Tax is the only truly fair tax. Everyone pays the same proportion regardless. (And ideally would not have deductions or loopholes of any kind.)

edited 24th Mar '11 9:06:18 AM by MajorTom

No it doesn't. You only get taxed at a higher rate for the money made in the higher tax bracket.

As an example, if you pay 10% for the under $10,000 tax bracket, 20% in the $10,000-100,000 tax bracket, and 30% on the 100,000+ tax bracket, then someone who made $500,000's taxes would look like this:

$10,000 taxed at 10%
$90,000 ($100,000 - $10,000) taxed at 20%
$400,000 ($500,000 - $90,000 - $10,000) taxed at 30%

When you move up to a higher tax bracket, only the income in that higher bracket is taxed at the higher rate.

Now there is another inherent flaw with the incometax. it implies that you do not have a right to the money you earn. in essence "We are just letting you use our money".

^^^Except that a Flat Tax is not fair. It seems fair, because everyone's paying a percentage of their earnings but remember that your earnings is not your livings. Poor people end up struggling desperately in order to make ends meat, whereas the rich get all that extra income and stock up in retirement accounts and "investments" that just make them get even more money for doing nothing.

"Hey, that's how the system works dude, are you suggesting that we shouldn't reward investment?" No of course not-I'm saying that suggesting that someone who spends over 90% of their income just on living expenses shouldn't be given the same burden as someone who spends roughly half.

Edit: That being said, if ALL loopholes were closed, then with an arbitrarily low percentage of income tax, it might still end up being more favorable for the poor than the current situation-however, there's no reason why loopholes being closed has to come from a flat-tax.

^Try justifying that logic without the presupposed axiom that taxes are bad and get back to us on it. Obviously, when you go in with the mindset that "It's the government unlawfully taking your money away!" then you can find all sorts of ways to explain the situation as that.

You don't have the right to the money you earn if you earn it with the government's assistance, because the government's assistance (aka the existence of society) is predicated on the idea of people paying into it.

edited 24th Mar '11 9:14:42 AM by TheyCallMeTomu

It's payment for services rendered. The government provides lots of services (you have a say in what services, via representational government), and the citizens pay for them. If you don't like the services being provided and/or how much you have to pay for them, you can choose to either try to change it (by voting) or leave the country and renounce your citizenship.

edited 24th Mar '11 9:13:49 AM by NativeJovian

Didn't I state previously that I don't support the Flat Tax? But rather the Fair Tax sounds a great deal better then the Income Tax? A Flat Tax is too exploitable and dodgy.

Native Jovian that is a love it or leave it mentality. Entitlement programs work like such "If you don't buy our product or service we will find you and coerce you into buying it under the threat of force" I never consented to a certain facet of the government someone else never consented to something I may have consented to should they be forced in to the same camp?

edited 3rd Apr '11 1:50:56 PM by tnu1138

Ninjas be trippin.

^^As much as I'm a huge fan of the Social Contract Theory, I acknowledge that "renouncing your citizenship" is really easier said than done. But I manage to rationalize that fact by being a Right To Die advocate.

edited 24th Mar '11 9:15:41 AM by TheyCallMeTomu

How is it exploitable? Say a flat tax exists where everyone above a certain amount (because at the practical level there is a level of income where it will cost more to collect those taxes than you could possibly receive) pays 20%. The system has no loopholes, no deductions of any kind.

The rate is constant and unavoidable. How can you exploit it for personal gain when you cannot change anything about the proportion you pay whatsoever? If anything the flat tax encourages the mentality of striving for success as the proportion stays the same you only need to worry about where you want to get to as opposed to worrying about taxes becoming a higher rate or more complex or whatever.

Progressive taxation schemes have been thoroughly debunked as unfair and success punitive over the last 100 years. To say nothing of the ridiculous levels of loopholes, unnecessary deductions and credits and the complicated mess the tax code became under such a scheme.

I think I remember this being discussed at lenght earlier in the thread.

Tom: Because if you raise tax, you hit the low class REALLY REALLY hard, but the rich do not even feel it if you raised it from 40% to 80%.
And what has been denbunked? That a tax system full of loopholes is outright silly and only the rich earn money on it?

edited 24th Mar '11 9:23:54 AM by del_diablo

^^ If it boiled down to the "You make more money therefore you keep more money therefore you're exploiting the poor", that's a very poor argument against a flat tax bordering on Insane Troll Logic.

^ It's been debunked that the thought the government could make more money and make it "fairer" for everyone by progressively scaling the tax system into brackets. It only sticks around in the world because it's a popular system.

Flat taxes with no loopholes or deductions would make more revenue for a government than any progressive scheme possible that has deductions and loopholes.

edited 24th Mar '11 9:26:05 AM by MajorTom

Tom: I agree. But it is also a realistic argument FOR non-flat tax.

There's an obvious solution to your example. Lower taxes accrosss the board most of the tax money these days is going to ccomplete waste.

Native Jovian that is a love it or leave it mentality.

Only if you ignore the "you can change the government by voting about it" part.

I acknowledge that "renouncing your citizenship" is really easier said than done.

So do I, but by their own logic, that's their problem. If they're not obliged to provide me entitlement programs, then I'm not obliged to provide them a minarchist state.

@Major Tom: the point is that a flat tax is a proportionally larger burden on the poor. If it takes 50% of your income just to survive, then a 20% tax is huge. If it only takes 1% of your income to survive, then a 20% tax is tiny. Unless your minimum taxation rate is fairly high (something like $100,000), it's going to be a huge burden on the poor. And, of course, at that point, the "you're punishing success" point actually becomes true — you'd be making more money by making $99,000 than you would by making $100,000, thus "punishing success" as you claim (incorrectly) about the current system.

tnu 1138: No, that is just fine silly sematics. FIRST you fix what is broken, then you can oil the cogs. You can not lower the tax first and fix the machine, because if you fail fixing the machine you have broken it. Of course, the silly argument reallies on stuff you Americans polticans won't fix.

I'm not a pollitican If I had my way Polliticans wouldn't be allowed to run for public office.

You realize that that's a contradiction in terms, right? A politician by definition is "someone who runs for office".

I know its intended as a joke. but at any rate Lawyers wouldn't be allowed.

I think he means there shouldn't be career politicians, meaning people for whom politics is their job, and thus gives them every incentive imaginable to play the system for their own benefit, not for serving the public (bonus points if they can convince the public otherwise). So yeah, I agree with him, heh.

The problem is, the only ones who can effect that policy are the career politicians, so you're asking them to get rid of their own jobs. In other words, not gonna happen.

RE: Fair Tax... if I'm correct, that's basically making all taxes a sales tax, right? No April tax return or W-2s, just pay a 30% or so federal sales tax? Sounds like it could work, though I'm sure every business in the country already has a dozen ways they'd get around that lined up...

edited 24th Mar '11 9:51:30 AM by Ratix

Ah yes found it. The problems iwth the Flat Tax were discussed on page 5.

EDIT: Also why do people when theyw ant to disregard or discredit somthing say it's "just semantics" Semantics is Serious Business because words mean things.

edited 24th Mar '11 10:46:18 AM by tnu1138

I Think I just thought something, Can I get a clarification though to make sure I'm not misunderstanding.

Earlier on this page With the idea of Flat tax, The way Major Tom said

"Say a flat tax exists where everyone above a certain amount ... pays 20%."

Does, "a Certain amount" mean above a certain amount of income?

Sorry for the interupt.

What did you think it meant something else?