Should we adopt a "formulary apportionment system" of taxation?

Discussion in 'The Red Room' started by Dinner, Aug 19, 2017.

  1. Sean the Puritan

    Sean the Puritan Endut! Hoch Hech!

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    Easiest (fair) flat tax in the world:

    1. Pick a rate, lets say, 25%.
    2. Decide on the "poverty level", then double that number. Let's say, $30K per annum is the poverty rate, so our value is $60k
    3. Take your income, subtract the value determined by Step #2. That's your taxable income. You make less than Step #2, you pay nothing. You make $160k, your taxable income is $100k
    4. Your tax is the rate in Step #1 of the value found in Step #3. So in this case, $25k.

    No deductions, exemptions, or breaks.

    The poorer you are, the less you pay. The richer you are, the more you pay.
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  2. Steal Your Face

    Steal Your Face Anti-Federalist

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    It's already fair because everyone pays equally. But I'd be okay with a cut off.
  3. Steal Your Face

    Steal Your Face Anti-Federalist

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    I like that a lot. The problem is that everyone still gets taxed for Medicare and SS.
    Last edited: Aug 20, 2017
  4. Dayton Kitchens

    Dayton Kitchens Banned

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    Maybe there should be just one tax to fund the U.S. federal government.

    Anyone miss the days when the Federal government could largely be funded by the collections from the New York Customs House.?
  5. tafkats

    tafkats scream not working because space make deaf Moderator

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    Okay, I'll bite. Why is that?
  6. Steal Your Face

    Steal Your Face Anti-Federalist

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    Everyone pays and they pay an equal amount.
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  7. K.

    K. Sober

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    You mean an absolute amount in dollars? Not a percentage of anything?

    If so, what happens to people who earn less than that amount?
  8. Ebeneezer Goode

    Ebeneezer Goode Gobshite

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    No. They pay an equal percentage.

    The only truly fair tax, economically, is PAYG, however that isn't fair in a social context and you'd need to calculate an individuals benefit from things like the military which will cost more than it's worth.

    So lets bin the concept of 'fair' and do that most horrific of things and enter mathematics into a RR thread.

    You need to go an equation where all the inputs balance the greatest good for a society.

    So, you need a decent military, so your tax base doesn't become someone else's tax base in short order.
    You need a decent health care system so you don't up one morning to discover half you tax base has died after stepping on rusty nails.
    You need some kind of social safety net so your towns and cities aren't clogged up by homeless people who haven't anything to tax, and who'll put off people buying things you tax from businesses you tax, and who employ people you tax.
    You need an education system, because uneducated buffoons don't earn that much, and so you want the next generation of tax payers to be a higher value proposition than the current one because, duh, more tax.
    You'd like some temporary economic migrants, who'll head back home after a while, mainly as they add to the immediate tax base without being a long-term draw on future costs.
    You want some R&D so you've new business sectors and businesses springing up to pay you some more taxes.
    You can't have too high a tax rate as any high-value taxpayers capable of leaving for pastures new, will. And the one who can't leave will cause you headaches by funding your opponents.

    Those are the core considerations, there are more obviously, but lets not go down TLDR road.

    You also, ideally, want your absolute income/taxation values to look like a Bell curve, with the tip somewhere in 70% income region, so you're not overly reliant on small, wealthy groups who can wield influence or smash a sizeable hole in your tax take, and you're not taxing the poorer sections of society.

    Now, you're not going to get any individual fairness out of that.
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  9. Bickendan

    Bickendan Custom Title Administrator Faceless Mook Writer

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    ^You barely avoided any actual math in the Red Room. :brood:
    I'm watching you :chris:
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  10. Sean the Puritan

    Sean the Puritan Endut! Hoch Hech!

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    @RickDeckard, you disagreed with my proposal. What's the downside?

    Poor people pay nothing, the rich get soaked. What's the problem?
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  11. Dayton Kitchens

    Dayton Kitchens Banned

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    You could eliminate those and pay for the programs out of general revenue. Flat tax rates adjusted upward to make up for the lost revenue.
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  12. RickDeckard

    RickDeckard Socialist

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    Under your proposal, either revenues are insufficient (if we set the threshold fairly high) or the very rich pay an insufficient proportion (if we set it low).
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  13. Sean the Puritan

    Sean the Puritan Endut! Hoch Hech!

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    Why not set the threshold high AND the rate high?
  14. Sean the Puritan

    Sean the Puritan Endut! Hoch Hech!

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    Plus, "revenues are insufficient" depends a lot on exactly you want to spend the money ON in the first place, so you may think the revenue insufficient, and I might think them too high.

    A quandary inherent in ANY taxation scheme, alas.
  15. tafkats

    tafkats scream not working because space make deaf Moderator

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    But they don't pay an equal amount. The guy who makes $100,000 a year pays twice as much as the guy who makes $50,000 a year.

    If you're going to insist on the ideal being a system where everyone pays an equal amount, what you want is a head tax. There are roughly 245 million adults in the United States right now, and a federal budget of $3.8 million. Which means your share is roughly $15,500 per year. (More if you want to start reducing the debt.)

    Pay up.
  16. Steal Your Face

    Steal Your Face Anti-Federalist

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    They pay an equal percentage.
  17. tafkats

    tafkats scream not working because space make deaf Moderator

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    Okay, but what makes that the most fair form of taxation... more fair than everyone paying an equal amount?
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  18. Dinner

    Dinner 2012 & 2014 Master Prognosticator

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    Then you have a system where only the rich pay which is an unstable system which will go bust the moment there is a recession. Not a good idea.
  19. Sean the Puritan

    Sean the Puritan Endut! Hoch Hech!

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    I don't agree with you in the slightest on any point you just raised.
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  20. Eightball

    Eightball Fresh Meat

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    Are we running a deficit? Yes Then should taxes be lowered? No. If anything we should eliminate the Bush tax cuts. The tax set up we have with itemizing is just fine.
  21. Dinner

    Dinner 2012 & 2014 Master Prognosticator

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    Ok, so you think inequal total effective tax rates are "fair" and that having a system which relays almost exclusively on boom and bust economic cycles is some how more stable.

    I hear you say that but reality isn't on your side. This is a true or false type situation but you keep doubling down on false.

    Edit: X-8Balled.
  22. Tuttle

    Tuttle Listen kid, we're all in it together.

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    Chaos, do yourself a favor and skip it. If he didn't even get your 60k threshold, doesn't it seems a fruitless enterprise? Fact is, the above avg are still somehow inexplicably blessed with nearly 50% of americans not paying any federal income tax, and yet they haven't yet reached a majority sufficient to reward those producing with a more onerous top rate. [Top income tax rates alone are near or over 50% in places like NY and CA (fed + state inc. tax), so there's plenty of room]
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  23. Dinner

    Dinner 2012 & 2014 Master Prognosticator

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    Notice how he talks about top marginal but not actual effective tax rates? Could it be he is deliberately a lying sack of shit? The alternative is he is abominably ignorant and has no idea what he is talking about.

    Neither is good.
  24. Eightball

    Eightball Fresh Meat

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    Any system would rely on a boom or bust cycle.
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  25. Eightball

    Eightball Fresh Meat

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    Arent those who at the top rewarded already? Why do we award them more?
  26. Tuttle

    Tuttle Listen kid, we're all in it together.

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    ^ Strong economic growth rates have proven the single best way to improve opportunity and wealth of everyone producing in the US, rich and poor alike.
    Growing a bigger pie is a worthwhile goal, even though much of the growth is gobbled up by those who already have, because the have-nots also can participate in the growth.
    Shrinking the pie (or growing it slower), hurts everyone, rich and poor alike, although the poor are hurt much more by slow growth since they have less to begin with.
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  27. Dinner

    Dinner 2012 & 2014 Master Prognosticator

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    Some are a hell of a lot more robust and reliable then others.
  28. Eightball

    Eightball Fresh Meat

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    Your statement makes no sense. A slow steady growth is more sustainable. A fast growth rate leads to rampant speculation which leads to economic crashes.
  29. Eightball

    Eightball Fresh Meat

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    Nope. Any system that relies on income or consumption relies upon economic activity. The only exception would be if everyone paid a flat fee each year whether they are working or not. That ofcourse would be bad for anyone having a family.
  30. Dinner

    Dinner 2012 & 2014 Master Prognosticator

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    Let me give an example to you, it is not a perfect example but it will give you an idea of what I am speaking about. In the 1970's California voters capped property tax rates with prop 13 and as a result in the 1980's local authorities were find severe short falls in revenue especially for schools as local schools were traditionally paid for by local property tax rates. The tax receipts from property taxes were pretty much rock solid and highly predictable but now due to capped rates and valuations couldn't even keep up with inflation so over time receipts became insufficient. Many cities enacted sales taxes to help make up the shortfall but sales taxes receipts go up and down with the economy though less so than income tax receipts as even in a bad economy people still need to buy somethings.

    In the very early 90's the state tried to help by dedicating funds from the state income tax to help local school districts. The problem was income tax is the most boom and bust funding system out there; in good years you get huge returns and in bad years you get next to nothing. We are talking wild swings receipts.

    So, yes, you are right that all taxes depend upon tge economy but where you are going completely wrong is when you ignore magnitude in yearly swings in receipt totals. Yes, some forms of tax really are more predictable and more reliable while others swing a hell of a lot more.