Can someone please give us a rational argument why implementing a Flat Tax system in America is not fair? We don’t know if we can continue posting without thoroughly understanding this issue first. From a percentage basis, each person pays an equal amount of their income towards taxes, and from an absolute basis, richer people pay more!
Why don’t we just start taxing people according to height? The shorter you are, the more you have to pay! Brilliant idea, thanks. Here’s a commentary from a site that really got me thinking about the word “comrade” and the phrase “melt your pots for bullets.”
Those of you rich folks in the top 39.6% tax bracket (~$400,000 and higher) need to stop whining. You don’t get to whine. I hope this administration taxes the beejesus out of you all…it’s time you paid your fair share and get with the program. It’s only fair the wealthy pay more out of their millions and billions of dollars to subsidize the rest of us who need it the most. We are struggling in this recession and it’s time to fix the problem – by taxing the rich!
Gee whiz, last I checked, we live in America not North Korea. Why people believe it’s fair to tax one class of citizen a higher percentage than another confuses us. Is this not a pure form of discrimination? Fine, let’s agree that anybody below the poverty line of $25,000 for a family of four ($10,000 for a single person) are exempt from all income taxation.
Here’s a reasonable 15% Flat Tax Example:
“Poor” Man Income: $50,000 / year.
“Rich” Man Income: $1,000,000 / year.
How much does the poor and rich man pay as a percentage of their income? 15% each = equality!
How much tax does the poor man pay in absolute dollars? $7,500.
How much tax does the rich man pay in absolute dollars? $ 150,000
———-> The rich man earns 20X more than the poor man, but also pays 20X more than poor man in taxes! Equality!
Let’s put a twist to this example. Let’s say the rich man is a 50 year old ER doctor who saves lives every single day. He spent 15 years after high school studying, and $300,000 in tuition to become a doctor. Is it right to reward this doctor who studied harder than most of the population with a higher tax rate just because he makes $1 million a year?
One could argue this doctor deserves a tax holiday, or should spend regressively less on his taxes. But then, the honorable $50,000/yr school teacher says she’s helping people too, and should pay less taxes as well. It gets complicated, but not with a flat tax!
LET’S STOP DISCRIMINATING AGAINST PEOPLE
Should we tax everybody who makes more than us an even greater amount than we are taxed to help subsidize our own living? Should I buy the domain name: “Financial Socialist Samurai of America?” We are craving for rational reasons from the personal finance community as to why the flat tax is not fair. Everybody understands racism and bigotry is bad. Why then do we accept discriminating against income levels?
Mathematically, the flat tax makes perfect sense and expunges words such as “should, fair, subsidize” from the tax argument. What the government has is a serious spending problem, and Obama needs to hire Financial Samurai as an economic advisor. The first thing we’ll tell him is the mother of all personal finance advice: spend less than you earn!
We have a monster budget deficit due to reckless spending and this must stop. The second thing we’ll tell Obama is: discrimination is illegal! Damn, maybe we shouldn’t have revealed the secrets, for now it’ll be hard to make millions from the government.
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Updated on 12/8/2015: After leaving Corporate America and making little money in 2012 and 2013 from a lot of money a decade before, and now back to making a decent chunk of change with my online media business and various consulting gigs, I’ve got to say that my feelings about a flat tax have not changed. A flat tax above a certain poverty level by individual and family count is absolutely the fair and simplest way to go to not only collect more tax revenue, but to also simplify the tax filing process.
Because tax rates are so high for those who make over $200,000 a year, there is a lot more tax avoidance. For those who make their money through W2 wages, there is also less of a desire to work as long or as hard once you have to start paying 40%-50% of your income to the government. Let’s simplify the tax system and get everybody to pay their fair share.