Across the board tax rate...fair for all?


Because what is there stopping me from converting my 4 bedroom house into a 2 bedroom. I could knock the wall out between 2 bedrooms and turn it into a third living area.

What you are proposing makes no sense. It didn’t work with window tax in the uk as they just bricked up the windows.
 
I think our tax code now is fair, as it's progressive. I think they should just drop the deductions and credits and that's that. I'm all for easy!

I don't fault anyone for taking advantage of the tax code to legally use deductions and credits to lower their tax bill. They aren't doing anything wrong.

And as far as Lebron James goes, that man gives away a lot of his money to help a lot of kids, he gets an A+ in my book for all the good he does for the community.
 
I think our tax code now is fair, as it's progressive. I think they should just drop the deductions and credits and that's that. I'm all for easy!

I don't fault anyone for taking advantage of the tax code to legally use deductions and credits to lower their tax bill. They aren't doing anything wrong.

And as far as Lebron James goes, that man gives away a lot of his money to help a lot of kids, he gets an A+ in my book for all the good he does for the community.
It’s not that anyone is doing anything wrong. It’s that it favors the wealthy.
 


I am wondering about that comment too, as my DS lives in Washington and as far as I know there is NO state income tax.

Sales taxes tend to hit lower income residents harder since they spend a higher % of their income on taxable sales. People with higher incomes generally save a much higher % of their income shielding it from sales taxes. Also the high income communities in Washington State have some of the lowest property tax rates. The low income communities here have far higher property tax rates.
 


I will admit I have not read through all the threads. While I can definitely see both sides, I wonder if by taxing higher earners more we are in essence saying as a society that mediocrity is all we should strive for. It is almost like people are punished for trying to earn more money. No it’s not fair. Life isn’t fair. But aren’t we a capitalist society where those of us in the US are lucky enough to have the freedom to try to change our circumstances if we don’t like them?

I am no way saying we shouldn’t all help out those less fortunate. Of course we should. But because someone succeeds, should we also punish them for their success?

In regards to the original post, yes it is a shame that one person has only $18,000 to live on after paying that flat tax. That is terrible. But there is nothing that prohibits that person from having the freedom to try to change their circumstance. I’m not saying it is easy and may not even be possible for them. What I am saying is that they at least have the freedom to try and change it.

I guess I just don’t think one person should be punished for their financial success because another person has not had the same success. If that’s the case, we would need to rethink our entire economic system and make it based more on a socialist model where everyone gets an equal piece of the cake. But that’s not the foundation of which the United States was found upon and succeeded upon.

So I guess I must be ok with a flat tax after all..
 
I actually do pay an (almost) flat tax with no deductions. I work for an International Organization and we are exempt from filing taxes in the country where we work if we are international staff (i.e. came here to work for the organization). This basically ensures that people aren't "punished" for working in a country with higher income tax. However, we do pay tax (though many people seem to think that we do not (even actual employees) since we don't file anything and never see the money). It is taken directly from our paycheques before we get the money. There are, I believe, two thresholds for percent deducted and it is the same for everyone (no deductions for anything). The actual amount is based on the average tax rates of the countries where our main offices are located. I know that organizations are not countries, but the flat tax/no deduction concept is what we use.
 
I am no way saying we shouldn’t all help out those less fortunate. Of course we should. But because someone succeeds, should we also punish them for their success?
If only I could be so "punished". :rolleyes:

My job will never be one where I make millions. But I've had a number of promotions and raises through my career, and the last thing on my mind is "oh, I have to pay more in taxes, maybe I should turn the raise down".

Bottom line... the government needs money to operate (how they spend that money is a different thread). Where is that money going to come from? The person making $36k/year? Or the guy making $3.6M/year?

I'd say DW & I are middle class. Our effective tax rate was <9% thanks to all the deductions and credits.

I don't think a flat tax is the answer. I think you do away with the deductions and credits, then do a progressive rate (the more you make, the higher the percentage). The tax code can be one page... a chart that says "bring in 'x' dollars" (and all income is treated the same... from an employer, investment, rental property, etc), you pay y%. It would simplify filing taxes. The trick is figuring out the value between $x and y%.
 
If only I could be so "punished". :rolleyes:

My job will never be one where I make millions. But I've had a number of promotions and raises through my career, and the last thing on my mind is "oh, I have to pay more in taxes, maybe I should turn the raise down".

Bottom line... the government needs money to operate (how they spend that money is a different thread). Where is that money going to come from? The person making $36k/year? Or the guy making $3.6M/year?

I'd say DW & I are middle class. Our effective tax rate was <9% thanks to all the deductions and credits.

I don't think a flat tax is the answer. I think you do away with the deductions and credits, then do a progressive rate (the more you make, the higher the percentage). The tax code can be one page... a chart that says "bring in 'x' dollars" (and all income is treated the same... from an employer, investment, rental property, etc), you pay y%. It would simplify filing taxes. The trick is figuring out the value between $x and y%.
Well said, everyone wants their Social Security, Medicare and most want a big military, more prisons and more border patrol. Someone has to pay for it. A big tax bill at the end of the year just means I had a good year. When you look at what you actually pay vs what your total income was before deductions, its seems pretty fair and is a lot lower than most modern countries
 
Property taxes (here called rates) based on house value is another similar issue. I believe it should be based on the number of bedrooms not the value of the house.

It makes more sense as charging based on value. Property taxes (again at least here) are used by the local council to run the city. In the absence of a user pays system for everything (which would be impossible) it makes sense to tax houses more on the number of people in them, and r number of bedrooms is a better indication of that than value.

Why should I pay more for my 4 bedroom house in our suburb than someone 2 suburbs over? We use the same roads, pools and parks, water and sewage, the same tip. Why should I carry a larger burden of that just because my house is worth more.

that is crazy- my house is 6 bedrooms and WAY smaller than other houses with 3 bedrooms. Sure I could buy a house in the next town and pay 1/4 of the taxes I pay in my town for the exact same size house/property but then you attend that towns schools and those schools are terrible- so we pay more taxes and have better schools and better things in the town, better pools, parks etc.
 
that is crazy- my house is 6 bedrooms and WAY smaller than other houses with 3 bedrooms. Sure I could buy a house in the next town and pay 1/4 of the taxes I pay in my town for the exact same size house/property but then you attend that towns schools and those schools are terrible- so we pay more taxes and have better schools and better things in the town, better pools, parks etc.

I think it is coming down to a very different city funding set up. Here the suburb you live in has nothing to do with those things
 
Our property taxes are based on the value of you home. So the only way a house in one area varies from a house in another area will be based on the market values for one over another. Take a 4 bedroom house in my area with 3,000 square feet worth $250k and drop it inside the loop (I live in the Houston area and we have three loops around the city, the Loop, the Beltway and the newest Grand Parkway. So inside the Loop is in town) and it is all of a sudden a million dollar home if it lands in the right neighborhood. Same house/floor plan/design/etc. Their dirt just costs a whole lot more than ours.
 
I think it is coming down to a very different city funding set up. Here the suburb you live in has nothing to do with those things

Here we have like 5 "towns" all included in the actual town itself and those towns vary- some good others terrible but all in the same general town- schools in one town terrible, the other 2 just alright and 2 are good. The ones in the good district pay more in taxes than the one in the terrible district- the teachers in the good district make more that the teachers in the terrible district and the kids programs in the good district are much better than the programs in the terrible district- we pay more taxes so the kids get more benefits.
 
that is crazy- my house is 6 bedrooms and WAY smaller than other houses with 3 bedrooms. Sure I could buy a house in the next town and pay 1/4 of the taxes I pay in my town for the exact same size house/property but then you attend that towns schools and those schools are terrible- so we pay more taxes and have better schools and better things in the town, better pools, parks etc.
Yeah the thing I've been struggling with is how does number of bedrooms correlate to anything? I guess I'm considering bedroom size, etc.

I mean a house could have 4 small bedrooms vs 3 slightly larger bedrooms and could also have the same number of people living in the house. Maybe in the 3 bedroom house 2 of the occupants share a room for example. Or maybe the person is living in a space that can't be legally called a bedroom but functions as one, etc. Or maybe you're like me and have 5 bedrooms but only 2 people living here at the moment.

It's just a different system that's for sure for the other poster but it does leave me scratching my head.
 
Sales taxes tend to hit lower income residents harder since they spend a higher % of their income on taxable sales. People with higher incomes generally save a much higher % of their income shielding it from sales taxes. Also the high income communities in Washington State have some of the lowest property tax rates. The low income communities here have far higher property tax rates.

This touches on a point I wanted to make. Aside from the low earners paying a higher percentage of their income for basic needs, they pay a higher percentage of their income on TAXES outside of income taxes.

Taxes on alcohol, cigarettes, ammunition, gasoline, food, personal property, real estate, auto licensing, hotel stays, clothing, etc, etc, etc all consume a greater percentage of income for low earners compared to high earners. And any “fair” method of income tax needs to account for that fact.
 
This touches on a point I wanted to make. Aside from the low earners paying a higher percentage of their income for basic needs, they pay a higher percentage of their income on TAXES outside of income taxes.

Taxes on alcohol, cigarettes, ammunition, gasoline, food, personal property, real estate, auto licensing, hotel stays, clothing, etc, etc, etc all consume a greater percentage of income for low earners compared to high earners. And any “fair” method of income tax needs to account for that fact.
My husband and I have actually has a lot of discussion about flat tax rate. He's more for it and I'm more against it.

My point has largely been focused on the disproportionate amount lower income people would end up having to pay not based on their income but rather the goods, the housing, etc they need to purchase.

I'm not even thinking just the bottom of the barrel low income people but even just average middle class people.

Here we're taxed on everything with a higher tax rate for 'sin' items. So using the OP's numbers a person with $18K leftover will be buying goods, housing, etc in the same area as the person who has $1,800,000 left over. That grocery bill with a 9.5-10+% sales tax hits the $18K person overall harder than the person who has $1,800,000 left over. But even if you bumped the $18K to $50K or $75K it's a lot different than someone making $1.8M.
 
I will admit I have not read through all the threads. While I can definitely see both sides, I wonder if by taxing higher earners more we are in essence saying as a society that mediocrity is all we should strive for. It is almost like people are punished for trying to earn more money. No it’s not fair. Life isn’t fair. But aren’t we a capitalist society where those of us in the US are lucky enough to have the freedom to try to change our circumstances if we don’t like them?

I am no way saying we shouldn’t all help out those less fortunate. Of course we should. But because someone succeeds, should we also punish them for their success?

In regards to the original post, yes it is a shame that one person has only $18,000 to live on after paying that flat tax. That is terrible. But there is nothing that prohibits that person from having the freedom to try to change their circumstance. I’m not saying it is easy and may not even be possible for them. What I am saying is that they at least have the freedom to try and change it.

I guess I just don’t think one person should be punished for their financial success because another person has not had the same success. If that’s the case, we would need to rethink our entire economic system and make it based more on a socialist model where everyone gets an equal piece of the cake. But that’s not the foundation of which the United States was found upon and succeeded upon.

So I guess I must be ok with a flat tax after all..

But a progressive tax system can't be punitive. Your tax burden goes up, but never by as much as or more than your income has gone up... Even in the top bracket, you're keeping the majority of the fruits of your additional labor. I suppose, if those people don't like it, they also have the freedom to change their economic circumstance and see what life is like in the tax brackets they feel aren't being punished... but I don't see anyone rushing to do that!

A flat tax, on the other hand, does seem punitive. Again looking at the bottom of the income scale - take a family of 3 (single parent, two kids) living on $20K/year. At that income level, they'd qualify for medical assistance for the kids and about $100/mo in food stamps. Impose a flat tax on that family and it more than cancels out the assistance they're receiving. How can we, as a society, say that family is poor enough to need assistance with basic needs but then turn around and expect them to afford a $5000 tax bill?
 
Who said Lebron James had no taxable income? Google says he paid $17 million in Federal Income Tax.

My 57 bro is going to see him tonight in Indianapolis and has been looking forward to it for the last couple of weeks........tax or no tax. ;)
 

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