Tax Policy Wednesday
Starting today, this blog will act as a forum for discussion about federal tax policy in the U.S. every Wednesday. Feel free to chime in with comments, questions, or criticisms of the tax system. I will start us off with a topic, but feel free to discuss anything about tax that interests you. Only two requirements: discussion is to be American-focused; and (I can't stress this enough) NO STATE TAX posts.
So here's an idea that Scarlet Panda has been throwing around: No more marginal tax rates. Set the tax rate at 30-40% (a historical low rate, even at 40%) across the board and provide for a stadard deduction for the first $75,000 of income. It's a regressive system, but the poor and middle class take home every penny of income (not counting state taxes).
So what do you think? I know tax policy is quite popular with my readership, so if the comment section on this post gets to full, I'll put another thread up. Enjoy!
So here's an idea that Scarlet Panda has been throwing around: No more marginal tax rates. Set the tax rate at 30-40% (a historical low rate, even at 40%) across the board and provide for a stadard deduction for the first $75,000 of income. It's a regressive system, but the poor and middle class take home every penny of income (not counting state taxes).
So what do you think? I know tax policy is quite popular with my readership, so if the comment section on this post gets to full, I'll put another thread up. Enjoy!
posted by Fishfrog at 5:44 PM
11 Comments:
Okay, this will get me labeled as a hippy-dippy liberal, I'm sure, but....paying taxes is more than a responsibility, it's a good thing and something that we should be proud and happy to do. Paying taxes unites us all and we all spend for the benefit of all. If we exempt people from the system, then we lose that community endeavor. It's good for us as human beings to strive to a collective goal that's higher than any one of us could reach, and taxes are a vital means to that end.
That's a really interesting perspective, actually. (hippie) I had never thought of the sense of union a person has with others who are working towrad a common goal. I think this is slightly different from your view, but what about the sense of community you get knowing that you are going through the same process as others. It's akin to the sense of connectedness that lawyers feel with each other, knowing that they have all been through the same initiation. Paying taxes is a sort of initiation into the American community. Interesting point, Matt.
First, I don't think my system is technically regressive, since it taxes everyone at the same rate. A regressive tax would say that you pay a lower rate of tax as your income gets higher. Mine is a flat tax.
Second, Matt makes an interesting point about paying taxes as a positive common human endeavor. I hadn't thought of it. A question: should that privilege be shared by all, even those who are so poor that they receive significant stuff back from the goverment through a wealth redistribution system (medicaid, welfare, food stamps, etc.)?
If you tax them and then give them money back, they're part of the community endeavor. On the other hand, they actually lose money because of the administrative costs.
For the middle class, it's less clear, because what they get from the government is not as much like cash.
Although I can also see the value of the community endeavor behind paying taxes, I can't help but wonder if it really has that big of an influence. Do people really believe that they are contributing to the common good, or do they feel that they are just shouldering a personal burden (and inconvenience) that they would rather due without? It seems to me that the typical reaction to tax hikes are an indication that people tend towards the latter point of view. You can talk about connectedness and common goals all you want, but in modern America greed wins out anyday.
Panda, I may be wrong, but isn't a flat tax considered a regressive tax?
I think panda's right. A flat tax is neither regressive nor progressive, although it is somewhat progressive in her implementation, because the lower income people aren't paying any taxes. I do very much agree w/fishfrog regarding the law experience, btw. As for SP's questions, I would tend to prefer that some amount, even a token amount, be extended to the poor, even if there are losses due to administrative costs. I would hope that the experience would instill some sense of community and, in particular, responsibility in the person. It's less degrading, I would hope, if you contribute to the country instead of sucking on its teats. I do agree with Nell - people bitch and moan about taxes, but it's important because it's still something that frames us as being Americans. It's kinda like working with an asshole - sure, it sucks, but you do bond with other people about it, and you know that working with the person gets the job done.
EVERYBODY should pay taxes. Period.
I agree with Matt. I also think that If you have a group of people not paying any of the taxes, but using much of the services, than you are going to create even more division between the haves and have-nots. Below are oversimplistic examples, but hopefully you can get my point.
Example 1 - If I'm a "have" and I work hard to make my money, why should I pay for aid and programs to help the lazy have-nots people? They are just free loaders.
Example 2 - Alternatively, if I'm a have-not and I don't pay anything, then I have no ownership over the programs designed to make my life better. Without ownership, I can have no feeling of pride or worth. With out contribution, I am not a part of the discussion, so when the haves decide to cut Program Helpful I have no say. My voice means nothing. I mean nothing.
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Ok. New system: On the first $75,000 of income, you pay 0.1%. A flat tax on everything above that.
Now THAT'S progressive. I like the system for two reasons: First, it satisfies the touchy-feely liberals who want welfare moms to finance their welfare payments out of an ephemeral sense of "community" and "togetherness." Secondly, it's almost identical to your original policy, which I whole-heartedly supported. You are indeed the Great Compromiser (new campaign slogan?).
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