+1 for socialism :ughdance:

Excellent point! That is true and in a true capitalist the rich get richer and the poor get poorer and dog eat dog! Now lets say that when you started your job at the bottom or you job to make ends meet to get to where you are now. You benefited by those that are "More Fortunate" albeit maybe not with the best of benefits but still benefits nonetheless.

America really isn't capitalist anymore its more of a blend of Socialism and Capitalism. If it was Capitalist then Government Bailout wouldn't be apart of our vocabulary. Ford, GM, and Chrysler would have been allowed to burn and been bought by the highest bidder. Notably Nissan would have bought controlling shares of Chrysler they tried to purchase a large chunk recently but it didn't happen.

A Capitalist has more recently come to refer to someone who supports Capitalism or a free market ideology.
http://en.wikipedia.org/wiki/Free_market

None of these are apart of America anymore and haven't been for a long time

Well, let's not forget that Nissan had to be bought/bailed out by Renault many years ago! But yes, I agree, America isn't truly capitalist anymore, and it hasn't been for decades. For the record, I have no objection to the wealthy helping out the less fortunate via taxes. It's not like I'm against taxation or anything like that. What irks me (and has irked me long before Obama came onto the scene), is progressive taxation, where the more you make, the greater percentage you pay. I would prefer a system where everyone pays a flat percentage of their income as income tax. So it doesn't matter if you make $10k per year or $500k, you're always going to pay the same percentage to income tax. The wealthy are still going to end up contributing more to the public treasury than lower income individuals, as n% of $500k is going to be a lot more than n% of $10k. Point being, one doesn't have to make the wealthy pay a higher percentage in order for the lower income folks to benefit from their wealth.

I totally agree flat tax would be a great idea! I would be all for that but what about inflation and the cost of living rising do you think a flat would still be effective? Would a flat tax be able to offset the rising costs?

Honestly, flat tax will not work very well when you consider fluctuating economic factors such as inflation. As a matter of fact, Flat Tax is for a perfect world scenario where everyone wouldn't be affected more or less than one another. What we really need to do is limit tax spending and eliminate or make it more difficult to acquire welfare.

Depends. The question is -- would wages rise in pace with inflation? They're supposed to, right? It's what they call 'indexing'. If wages keep pace with inflation, then it should be a wash. Let's say cost of living goes up 5%. Well, if wages also go up by 5% to match, then the dollar amount the government gets from income tax will also automatically go up by 5% without having to actually increase the tax rate. And voila, you have your offset of rising costs.

Where things get muddy is when cost of living goes up but wages don't keep pace. If everyone's cost of living goes up by 5% but their wages stay the same (wage stagnation), then everyone is effectively taking a 5% pay decrease. At that point, the revenue generated by the flat tax will not be keeping pace with inflation. But that's when one has to wonder -- why should it keep pace with inflation in such a scenario? If everyone else has to take an effective 5% wage cut, why shouldn't the government also take an effective 5% cut in revenue? What's good for the goose is good for the gander, right? If the government raises the flat tax rate by 5% to offset inflation in this scenario, then tax payers will be taking a double-hit. First their cost of living increases by 5% and they have no matching wage increase. Then the government comes and jacks up the tax rate on top of that. Talk about adding insult to injury!

This hypothetical scenario of the double-hit would make me laugh were it not so close to the truth. People are losing their jobs en masse, some people are taking pay cuts, and most people who are lucky enough to keep their jobs don't dare dream of getting actual raises. But what do politicians do? They vote themselves pay increases and raise taxes to pay for the machine known as the modern state, which keeps getting bigger and bigger.

Can't argue with that! :werd:

Again, flat tax is a perfect world scenario that doesn't work in the real world. :thumbsdown:

Must be nice to be your own boss and vote yourself a raise!
That is so wrong! I could go all day bitching about those sob's!

I don't buy that for a minute. My parents are from HongKong and most of my extended family is still there. HongKong had a flat tax system while they were under British rule (I don't know if that's still the case after they were re-absorbed into China). The tax rate was 17% across the board, if I remember correctly. It worked just fine. Just look at how prosperous HongKong is. My parents moved from HongKong to Britain (where I was born), then to Canada. I still remember the utter shock my aunts and uncles had when my parents explained to them how a progressive income tax system worked. I mean, they were screaming in horror. They were saying things like 'When everyone pays the same flat rate, everyone has an incentive to work harder to make more money, because the more money you make, the more money you keep. If the government is just going to take a bigger slice of my pie the bigger I bake it, what incentive do I have to make a bigger pie??' Mind you, they were screaming this in Cantonese, which kinda grates on the eardrums, but that's another topic altogether. ;)

Anyway, my point is simply that flat tax systems can and have worked in the real world. HongKong isn't perfect. But I'd hardly call it an economic disaster either.

Ninjaman, I forgot to ask -- if you don't like the concept of a flat tax, then what's your alternative? Do you like things the way they are (progressive taxation)? Or do you favor some other method (like abolishing income tax altogether and replacing it with a national sales tax)?

^^ Semtex, very good point about Hong Kong. It is a system that works for them, but I just don't see it being as efficient in a large nation like ours.

Anyway, I would be happy with progressive taxation as long as the government utilizes our capital wisely, which has not been the case. Then again, we vote people into positions of power that should not be there to begin with. Maybe we the people are to blame?

Now back to your plan. The major downside regarding a static tax rate for everybody is that some may be affected more than others. A 17% across the board tax may affect someone who is a hard worker but not paid well like the next Joe. In other words, a progressive tax plan is "fair" in today's non-utopian society. Now if we all made the same, like in a socialist society, then equal taxation would be perfect.

Well, we're going to have to agree to disagree on this one. If I spend the time and effort to get a higher education and work 60 hours a week, only to end up with the same take-home pay as someone who didn't bother with college and only works 30 hours a week because a bigger portion is taken out of my paycheck, I don't see how that's fair. Or let me try to put it into a slightly different perspective. When I was a kid, my dad came home one day really, really pissed. I asked him what was wrong. He said he got a promotion and a raise. Okay, so why on earth would that upset him? I mean, that's something to celebrate, right? His raise pushed him into a higher tax bracket and he ended up actually taking less money home! Now tell me how that's fair. This actually happened; it's not some hypothetical.

I do see your point about 17% affecting some more than others though. Like 17% for someone only making $12k a year would be devastating. So maybe the compromise is to institute a minimum income threshold. Something like, if you make less than $15k per year, you don't pay any taxes, period. But if you make more than that, you pay the standard n% flat tax. It would be a way of recognizing that there's a certain minimum amount that we all need in this society just to survive, and we shouldn't be taxing those who are just barely surviving. Of course, I'm sure someone will point out flaws with this idea as well. Honestly, I doubt there is such a thing as a perfect tax system that is absolutely fair to everyone under all circumstances. If a perfect tax system were possible, we'd probably already be using it! (Well, one would hope.)

Yeah I think we'll have to agree to disagree on this one, man. I understand your point about losing money when you fall into a different bracket. The solution for that would to be to broaden the tax brackets for the lower and middle class. Additionally, maybe the incentives offered (child credit, etc) can be altered?

Candidly speaking, we need to know where our money is going before we can really state what is the best course of action. I wonder if there is a resource that we can access that provides the U.S. FY budget allocations?

I'm sure it's as thick as a telephone book, so I won't bother right now, but here it is:

Budget of the United States Government: Browse Fiscal Year 2009