Questioning Obama's Critics: Why the Dislike?

[stewartcs]

Because the more money one has, the more resources one uses, and that naturally means less resources for others.

How exactly does one use more resources simply because one makes more money?

Steve Forbes and others have proposed a flat tax for everyone, i.e. everyone pays 15% or so. But is that fair. Is it fair for someone making $10,000 per year to pay $1500 in taxes, as compared to someone who makes $1,000,000 and pays $15,000 in taxes. Well if they both want to buy the same $20,000 car - the poor guy cannot afford, but the rich guy can pay cash.

The guy making $10,000/year shouldn't be buying the same car as the guy making $1,000,000.

What about health care. Something like cancer treatment or organ replacement might cost $30,000 to $100,000. The rich guy can afford to pay cash, but the poor guy cannot. The rich guy can afford a nice insurance policy at $1000/mo, but the poor guy cannot.

That's why it's called insurance. Everyone pays a little into the system (proportionately) and in the event that one needs it insurance covers it. Everyone will not have cancer or need an organ replacement.

How does the economy ensure that all meet a certain standard of living, or should it?

Again, your assumption is that those who make more money use more of the infrastructure.

Should we just provides goods and services based on the ability to pay?

Should we fix the expenditures on health care and do a lottery system, e.g. limit the number of treatments available and then allow patients who need that treatment to draw from a lottery?

Or should the economy (society) simply eliminate the bottom 5, 10, 20% of the population because the other 95%, 90%, 80% decide they don't want to support them?

Let’s say that half of the people in the US decided not to work anymore and therefore did not contribute to the system. Under your ideals, they would be able to benefit from the other 50% of the people who chose to work. Is that fair?

If so, then what if the other 50% said to hell with it and decided not to work too? How would that system work?

CS

 

[Greg Bernhardt]

In life there will always be "winners" and "losers". As long as everyone has access to food, shelter, education and healthcare I don't see the problem.

 

[WarPhalange]

All of which could have been provided for with an equal tax burden...so what's your point?

It could have been provided with an equal tax burden, except for the part where poor people can't afford food.

BTW I used to clean toilets and pick up trash as one of the many jobs I had while paying my way through school.

CS

So you were lazy and had no initiative until someone handed you your degree? That's fascinating.

 

[WarPhalange]

In life there will always be "winners" and "losers". As long as everyone has access to food, shelter, education and healthcare I don't see the problem.

So you're okay with scaled taxation?

 

[rootX]

Please elaborate since you apparently know my life better than I.

CS

I think you should have worded it differently. Overall, You are essentially talking about efficieny and equality and you are right in that. But, that statement is meaningless. Without society, you wouldn't be even here. If you worked, those jobs were provided by the society. You cannot go anywhere without that society. In some countries, if your parents are poor that means you and all your children would be poor.

 

[Astronuc]

How exactly does one use more resources simply because one makes more money?

Bigger houses - which require more materials and energy. Bigger cars. More travel.

With respect to disproportionate - wages are disproportionate. Why not pay everyone the same rate, and let everyone do whatever job they want. I think a CEO making 100, 200 or 300 times the lowest paid person is ridiculous. CEO's are risking their money, they use other people's capital - e.g. Richard Fuld at Lehman Brothers who earned nearly $500 million over the last 8 years.

Let’s say that half of the people in the US decided not to work anymore and therefore did not contribute to the system. Under your ideals, they would be able to benefit from the other 50% of the people who chose to work. Is that fair?

If so, then what if the other 50% said to hell with it and decided not to work too? How would that system work?

I don't think that would ever be the case. People who don't want to work should not receive support for doing nothing. Anyone who can work needs to be working a minimum amount.

BTW - I think the system needs to be fairer. I'm just trying to find a consensus on fairness. What is fair?

 

[stewartcs]

Yeah, "something illegal". The point is that the system is wishy washy enough that you can never prove something illegal took place or that despicable practices are still legal.

Not true.

Moreover, a hard tax percentage is down right stupid.

Why?

5% of $200 per week is NOT the same as 5% of $2000 per week. Bread costs the same no matter how much or little you make.

For someone making $200/week, $20 is the difference between a meal or starving that day. For someone making $2000/week, $200 is nowhere near crucial. So to say it's "fair" to have both parties pay 5% tax is ludicrous.

5% is 5%. That's why it is fair.

Bread is subsidized to those less fortunate by way of welfare programs for those who REALLY need it.

I grew up in a family of 5 with only one income of my grandfather who sold used cars for a living. We never missed a meal, or had government assistance. We did miss out on vacations, video games, designer clothes, etc.

CS

 

[Astronuc]

In life there will always be "winners" and "losers". As long as everyone has access to food, shelter, education and healthcare I don't see the problem.

That's true - but the problem is - who pays the bill for education and healthcare?

The big crisis still looming in Medicare. The economy just is not generating the resources to pay for the medical care of the baby boom generation. And social security won't provide much. BTW - I don't plan on taking SS - nor do I plan on retiring. I'd just as pass along my SS to my kids' SS accounts.

 

[stewartcs]

So you were lazy and had no initiative until someone handed you your degree? That's fascinating.

That makes absolutely no since. If anything it proved that I had initiative and wasn't lazy since I was trying to advance my career to something I wanted by getting a degree.

If I am happy with cleaning toilets and collecting trash, then my goals are simply different. You are imply that everyone has the same goals...they do not. If the guy cleaning toilets and picking up trash wants to have the same things in life that I want, he needs to earn them, not get them at someone else’s expense.

CS

 

[stewartcs]

I think you should have worded it differently. Overall, You are essentially talking about efficieny and equality and you are right in that. But, that statement is meaningless. Without society, you wouldn't be even here. If you worked, those jobs were provided by the society. You cannot go anywhere without that society. In some countries, if your parents are poor that means you and all your children would be poor.

So without society I would not exist?

I don't see what society's role in providing jobs has to do with everyone in the society being taxed equally?

I don't live in some countries, I live in the US. As such my perceptions and comments are directed toward the US economy.

CS

 

[CaptainQuasar]

The problem with taxing those who make more money than others is that it is not fair. It is unfair since they have to pay more taxes. You're essentially being penalized for being successful.

I think it's pretty cavalier to off-the-cuff say that's unfair. Wealthier people usually acquire proportionally greater benefit from the government and government action than do less wealthy people.

If you own a company that has a fleet of freight trucks you are benefiting substantially more from the federal highway system and state and municipal road maintenance than is the person who simply drives to work every day - or even than a trucker. Or, if you're someone who has ten million or a hundred million dollars in investments and business equity, you're benefiting much more in absolute dollar terms from the recent government stabilization and management of the financial system, compared to someone with 100k in investments and a mortgage of a few hundred thousand.

In fact it seems to me that often people who are wealthier and/or conservatives are most resentful when some government or political measure really, actually benefits everyone fairly evenly and their greater wealth doesn't garner them proportionally greater benefits.

⚛​

 

[turbo]

5% is 5%. That's why it is fair.

A flat tax is regressive because poorer people have less disposable income, and have little room to establish a cushion of savings for emergencies (water heater crapped out, furnace blower died, etc). People making higher incomes should pay higher percentages to support the system under which they are profiting. It's only fair.

I grew up in a family of 6 with one wage-earner making barely over minimum wage. From the age of 14, I worked full-time every summer, and took every handy-man job I could during school breaks so that I could pay for college. I got no financial aid for college, and I supplemented my full-time summer jobs by buying and selling musical instruments, and playing frat parties and such on weekends. I never had enough money at the first of the school year to cover costs, so I scrambled to cover food and other expenses throughout the year. Later on, I worked my way into some pretty good jobs, and I never begrudged the government a cent of my taxes, especially when I maxed out on my SS contributions for year after year. I worked my tail off, but I never could have achieved the financial successes without the existence of a well-maintained infrastructure and a secure financial system, and for that I am grateful. I don't mind paying my fair share to maintain it, even now that I am disabled.

 

[stewartcs]

Bigger houses - which require more materials and energy. Bigger cars. More travel.

True, but the government isn't paying my power or gas bill...I am from my earnings...not my neighbors. The more I use, the more I pay.

With respect to disproportionate - wages are disproportionate. Why not pay everyone the same rate, and let everyone do whatever job they want. I think a CEO making 100, 200 or 300 times the lowest paid person is ridiculous. CEO's are risking their money, they use other people's capital - e.g. Richard Fuld at Lehman Brothers who earned nearly $500 million over the last 8 years.

Because different jobs involve different factors such as risk, education, skill, etc. If everyone were paid the same there would be no (or at least less) initiative to advance one's self, let alone society.

I don't think that would ever be the case. People who don't want to work should not receive support for doing nothing. Anyone who can work needs to be working a minimum amount.

I don't either. However, this is fundamentally no different than someone who is working less and receiving more from those who are working more. It is just the extreme case where one is not making any contribution to the system.

BTW - I think the system needs to be fairer. I'm just trying to find a consensus on fairness. What is fair?

I agree that it needs to be fairer. Fairness is equality among everyone. Unfortunately, there are subjective views as to what is really "fair" in a society so it is unlikely that anyone will ever come up with a truly fair system.

CS

 

[stewartcs]

I think it's pretty cavalier to off-the-cuff say that's unfair. Wealthier people usually acquire proportionally greater benefit from the government and government action than do less wealthy people.

If you own a company that has a fleet of freight trucks you are benefiting substantially more from the federal highway system and state and municipal road maintenance than is the person who simply drives to work every day - or even than a trucker. Or, if you're someone who has ten million or a hundred million dollars in investments and business equity, you're benefiting much more in absolute dollar terms from the recent government stabilization and management of the financial system, compared to someone with 100k in investments and a mortgage of a few hundred thousand.

In fact it seems to me that often people who are wealthier and/or conservatives are most resentful when some government or political measure really, actually benefits everyone fairly evenly and their greater wealth doesn't garner them proportionally greater benefits.

⚛​

What about the guy driving the truck? Is he not benefiting directly by having a job which is being provided by the owner of said trucking company? What about the extra licensing fees the owner pays for the truck? This is all built into the system already. If this causes a disproportionate advantage, the licensing fees or whatever should be increased to compensate for it.

BTW, I just realized some of you might not have realized I'm talking about personal income tax burdens being fair here.

CS

 

[stewartcs]

A flat tax is regressive because poorer people have less disposable income, and have little room to establish a cushion of savings for emergencies (water heater crapped out, furnace blower died, etc). People making higher incomes should pay higher percentages to support the system under which they are profiting. It's only fair.

Fair to whom? The poor people yes. Do you think it is fair for the top tax bracket to be ~40%?

I grew up in a family of 6 with one wage-earner making barely over minimum wage. From the age of 14, I worked full-time every summer, and took every handy-man job I could during school breaks so that I could pay for college. I got no financial aid for college, and I supplemented my full-time summer jobs by buying and selling musical instruments, and playing frat parties and such on weekends. I never had enough money at the first of the school year to cover costs, so I scrambled to cover food and other expenses throughout the year. Later on, I worked my way into some pretty good jobs, and I never begrudged the government a cent of my taxes, especially when I maxed out on my SS contributions for year after year. I worked my tail off, but I never could have achieved the financial successes without the existence of a well-maintained infrastructure and a secure financial system, and for that I am grateful. I don't mind paying my fair share to maintain it, even now that I am disabled.

The system will still have resources to help those less fortunate. I'm not saying that government programs should be wiped out. I'm saying each individual should be paying the same tax rate. There will still be money in the system for those who need it since everyone will still be paying taxes. The only thing that will change is all of the frivolous government spending on programs that don't work or are not needed.

CS

 

[Evo]

Stewartcs, you do know that you don't pay Social Security on wages earned above $102,000.00 annually? That means anyone making above that gets an extra 6.2% savings. And it's only that high for 2008, it's been lower every past year. Ten years ago you didn't pay Social Security on income over $68,400.00. I always reached my cap early in the year and then my net pay shot up.

http://www.ssa.gov/OACT/COLA/cbb.html

People that make a lot of money also have ways of finding tax shelters that the poor can't. I used to make over $250,000.00 annually, I don't anymore, but my ex and his new wife still make over that amount *each* and I pay more taxes than they do individually. So don't tell me the rich pay more, they don't.

 

[stewartcs]

Stewartcs, you do know that you don't pay Social Security on wages earned above $102,000.00 annually? That means anyone making above that gets an extra 6.2% savings. And it's only that high for 2008, it's been lower every past year. Ten years ago you didn't pay Social Security on income over $68,400.00. I always reached my cap early in the year and then my net pay shot up.

http://www.ssa.gov/OACT/COLA/cbb.html

Yes, I'm aware of that. However, it is not a tax break for the wealthy. The reason there is a cap each year is due to the maximum benefit that can be paid out (currently $2,185 per month) under OASDI. Those who do not contribute after the cap each year will not get any additional benefit (assuming SS even exists in the future) when they retire.

People that make a lot of money also have ways of finding tax shelters that the poor can't. I used to make over $250,000.00 annually, I don't anymore, but my ex and his new wife still make over that amount *each* and I pay more taxes than they do individually. So don't tell me the rich pay more, they don't.

This is true in a few cases, but certainly not for all. Regardless, this is just another problem in the tax code that needs to be fixed, not just repaired by shifting the tax burden around. Furthermore it does not address the central issue of fairness. Instead of allowing the "rich" people to exploit the tax code by using whatever loop-holes may or may not exist and then taxing them more to equalize it, why not just get rid of the loop-holes and tax everyone the same rate? How would that not be fair?

BTW I'm not sure what constitutes being rich but I'd appreciate any information you have on tax shelters! I've certainly not found any!

CS

 

[Evo]

I would love to get rid of the tax loop holes, and that's another issue that's been on the table. I can charge you for information on tax shelters, but believe me, with all of my savvy investments, you're better off on your own! (I have a lovely executive home on an acre of land for sale)

 

[CaptainQuasar]

Instead of allowing the "rich" people to exploit the tax code by using whatever loop-holes may or may not exist and then taxing them more to equalize it, why not just get rid of the loop-holes and tax everyone the same rate? How would that not be fair?

I'm not certain if this is a point you're specifically opposing, but I think that a progressive tax scale is fair too, because I think people at a significantly higher income level actually do benefit proportionally more from government activities.

I saw a clip today of a guy who came up to Obama and said "I'm thinking of buying a business that makes around $260,000, or more like $300,000, well say $280,000 or $270,000. So under your tax plan I'd pay more?" And I was thinking, jeez buddy, you make so much you're having trouble pinning down your own income within a forty thousand dollar range and you're complaining about having to pay a smidgeon more? (Under the http://www.taxpolicycenter.org/publications/url.cfm?ID=411749" for Obama his tax bracket would pay an average of $121 more, if I'm reading that correctly on page 30.)

[EDIT] Or, looking at that more closely, compared to the Bush tax cuts being made permanent, the average for his bracket with income of from $250K-$650K yearly would pay around $6K more per year. I assume that he'd be a good bit lower than that average but even $6K is well lower than the margin of error of his own estimate of his income.

⚛​

 

[OmCheeto]

I would love to get rid of the tax loop holes, and that's another issue that's been on the table. I can charge you for information on tax shelters, but believe me, with all of my savvy investments, you're better off on your own! (I have a lovely executive home on an acre of land for sale)

My how these threads cross over and over into one another...

Didn't I just explain why tax loopholes are good the other day?

https://www.physicsforums.com/showpost.php?p=1912129&postcount=533
Bill and his family are the US economy!

and on another thread I stated my opinion on what we should do with the top "25%" companies. I know it was quite a commie post, but really, what are we talking about?

power corrupts.

money is power.

money has corrupted or society for a few years now.

time to push the reset button.

 

[mheslep]

...Steve Forbes and others have proposed a flat tax for everyone, i.e. everyone pays 15% or so. But is that fair. Is it fair for someone making $10,000 per year to pay $1500 in taxes, as compared to someone who makes $1,000,000 and pays $15,000 in taxes.

$150,000. Freudian?

 

[Ivan Seeking]

I was trying to remember all of the labels or associations applied to Obama by the right. So far I have:

Foreign Terrorist
Domestic terrorist
Black radical Christian/Muslim extremist
Elitist
Hollywood celebrity
Arab
Muslim
Liberal extremist
Socialist
Marxist
Re-distributor
End of the world omen
A complicit promoter of pedophilia
…and worst of all, a community organizer!

I almost never hear, professor of Constitutional Law; first black President of the Harvard Law Review; a person who chose public service over a cushy life in law. A person who rose to the top from the lowest of circumstances - one of the greatest American success stories of all time. Or, in the words of Colin Powell, "a transformational figure" whose election will "electrify the world".

 

[LightbulbSun]

Instead of allowing the "rich" people to exploit the tax code by using whatever loop-holes may or may not exist and then taxing them more to equalize it, why not just get rid of the loop-holes and tax everyone the same rate? How would that not be fair?

CS

Because people take in different amounts of income. That's why a universal tax rate is unfair.

 

[roam]

I was trying to remember all of the labels or associations applied to Obama by the right. So far I have:

Foreign Terrorist
Domestic terrorist
Black radical Christian/Muslim extremist
Elitist
Hollywood celebrity
Arab
Muslim
Liberal extremist
Socialist
Marxist
Re-distributor
End of the world omen
A complicit promoter of pedophilia
…and worst of all, a community organizer!

How can one be such a liberal and be a Marxist at the same time?

 

[Ivan Seeking]

Drape Measurer! According to both McCain and Palin, Obama himself has been at the White House and measured the drapes.

 

[stewartcs]

Because people take in different amounts of income. That's why a universal tax rate is unfair.

We're talking about percentages here. If the percentage is the same regardless of income it would be fair - hence the use of a percentage. If the percentage is higher because the person's income is higher it is not fair.

CS

 

[Ivan Seeking]

How can one be such a liberal and be a Marxist at the same time?

First you have to understand that Colin Powell is a wild-eyed liberal, and then that Warren Buffet and Paul Volcker are socialists. Then it all makes sense.

 

[LightbulbSun]

We're talking about percentages here. If the percentage is the same regardless of income it would be fair - hence the use of a percentage. If the percentage is higher because the person's income is higher it is not fair.

CS

I'm not sure I'm understanding your point. If the tax percentage is the same for everyone, that's going to be a bigger dent for the poor person than it will be for the rich person. That's the flaw I see in a universal tax rate.

 

[stewartcs]

I'm not sure I'm understanding your point. If the tax percentage is the same for everyone, that's going to be a bigger dent for the poor person than it will be for the rich person. That's the flaw I see in a universal tax rate.

The "dent" is the same for both since they have the same percent tax burden.

Here is an example:

Scenario 1:

Person A makes $40,000.
10% tax rate = $4,000.

Person B makes $100,000.
10% tax rate = $10,000.

Person A is "poorer" than person B. Person B is paying 250% of the actual dollar amount Person A is paying with the same flat tax rate (i.e. 250% of $4,000 = $10,000 when both pay a flat 10% tax rate).

With a 10% tax rate, the amount they pay per cent is the same. In other words both pay the same proportion of tax based on a different income.

Person A: $4,000/$40,000 = 10%
Person B: $10,000/$100,000 = 10%


Scenario 2:

Person A makes $40,000.
10% tax rate = $4,000.

Person B makes $100,000.
30% tax rate = $30,000.

Person A is "poorer" than person B. Person B is paying 750% of the actual dollar amount that Person A is paying with a lower tax rate (i.e. 750% of $4,000 = $30,000 when person B pays a higher tax rate than person A).

With a 10% tax rate for person A and a 30% tax rate for person B, the amount they pay per cent is not same. In other words person A pays less per cent than person B pays per cent.

One can see plainly by comparing the two scenarios that person B will pay 3 times more tax than person A if person B's tax rate is 3 times more.

Question:

Which scenario seems fair to both people?

CS

 

[LightbulbSun]

The "dent" is the same for both since they have the same percent tax burden.

Here is an example:

Scenario 1:

Person A makes $40,000.
10% tax rate = $4,000.

Person B makes $100,000.
10% tax rate = $10,000.

Person A is "poorer" than person B. Person B is paying 250% of the actual dollar amount Person A is paying with the same flat tax rate (i.e. 250% of $4,000 = $10,000 when both pay a flat 10% tax rate).

With a 10% tax rate, the amount they pay per cent is the same. In other words both pay the same proportion of tax based on a different income.

Person A: $4,000/$40,000 = 10%
Person B: $10,000/$100,000 = 10%


Scenario 2:

Person A makes $40,000.
10% tax rate = $4,000.

Person B makes $100,000.
30% tax rate = $30,000.

Person A is "poorer" than person B. Person B is paying 750% of the actual dollar amount that Person A is paying with a lower tax rate (i.e. 750% of $4,000 = $30,000 when person B pays a higher tax rate than person A).

With a 10% tax rate for person A and a 30% tax rate for person B, the amount they pay per cent is not same. In other words person A pays less per cent than person B pays per cent.

One can see plainly by comparing the two scenarios that person B will pay 3 times more tax than person A if person B's tax rate is 3 times more.

Question:

Which scenario seems fair to both people?

CS

Like I said reducing person A's income to $36,000 after this tax burden is a bigger dent for them than person B's income still remaining a fairly decent $90,000 after their tax burden. Let's just say you can't live all that decently on $36,000 a year. In fact if you're that low on income, you shouldn't even be burdened by 10%. That's too high of a tax burden for people down in that threshold.

 

[Office_Shredder]

I'm always amazed that people who work super hard to make more money under the current system complain that a progressive tax system leaves no incentive to make more money, or is unfair. Ok, if you think the guy making 40k is getting off easy, then stop trying to get a job that pays 100k and settle for 40, since apparently it's so much better under the current system.

You can't possibly claim that the current graduated rate setup is unfair to the people making the most money, since if they truly thought they were getting shafted, they wouldn't bother making more money in the first place.

With regards to the dent proportion:
Everyone (and that means everyone) needs a certain standard of food, shelter, etc. to live. Let's say that costs 10 thousand dollars a year. The guy making 40k now only has (under a 10% tax) 26k left with which to better his life (on better food, better shelter, a better car, whatever). The guy making 100k now has 80k. Notice how someone has 80% of their income left, and someone has less than 2/3s of their income left.

 

[OmCheeto]

Scenario 1:

Person A makes $40,000.
after 10% flat tax income = $36,000
after rent, food, transport, utilities, disposable income = $1,000

Person B makes $100,000.
after 10% flat tax income = $90,000.
after rent, food, transport, disposable income = $55,000

Joe the Plumber makes $250,000
after 10% flat tax income = $225,000
after rent, food, transport, disposable income = $190,000

Scenario 2:

Person A makes $40,000.
after tax income @ 10% tax rate = $36,000
after rent, food, transport, utilities, disposable income = $1,000

Person B makes $100,000.
after tax income @ 30% tax rate = $70,000.
after rent, food, transport, utilities, disposable income = $35,000

Joe the Plumber makes $250,000
after tax income @ 40% tax rate = $150,000.
after rent, food, transport, utilities, disposable income = $115,000

Question:

Which scenario seems fair to these people?

Depends on how big a Mercedes person B wants each year.

But regardless of the tax rate, I want to be Joe the plumber.

 

[stewartcs]

Like I said reducing person A's income to $36,000 after this tax burden is a bigger dent for them than person B's income still remaining a fairly decent $90,000 after their tax burden. Let's just say you can't live all that decently on $36,000 a year. In fact if you're that low on income, you shouldn't even be burdened by 10%. That's too high of a tax burden for people down in that threshold.

Living decently and fairness are not the same thing. Your argument is based off of a quality of life preference. Sure everyone (or most everyone) wants the nice cushy quality of life as someone who is rich. But is it really fair that only the rich pay for it while everyone else gets it for free?

CS

 

[stewartcs]

I'm always amazed that people who work super hard to make more money under the current system complain that a progressive tax system leaves no incentive to make more money, or is unfair. Ok, if you think the guy making 40k is getting off easy, then stop trying to get a job that pays 100k and settle for 40, since apparently it's so much better under the current system.

You can't possibly claim that the current graduated rate setup is unfair to the people making the most money, since if they truly thought they were getting shafted, they wouldn't bother making more money in the first place.

People bother to make more money so they can have things in life they desire, not so they won't get shafted.

I'm always amazed that people who work super hard to make more money under the current system complain that a progressive tax system leaves no incentive to make more money, or is unfair. Ok, if you think the guy making 40k is getting off easy, then stop trying to get a job that pays 100k and settle for 40, since apparently it's so much better under the current system.

You can't possibly claim that the current graduated rate setup is unfair to the people making the most money, since if they truly thought they were getting shafted, they wouldn't bother making more money in the first place.

With regards to the dent proportion:
Everyone (and that means everyone) needs a certain standard of food, shelter, etc. to live. Let's say that costs 10 thousand dollars a year. The guy making 40k now only has (under a 10% tax) 26k left with which to better his life (on better food, better shelter, a better car, whatever). The guy making 100k now has 80k. Notice how someone has 80% of their income left, and someone has less than 2/3s of their income left.

Again, it comes down to the quality of life one chooses and how much disposable income one desires. Is it fair that the rich guy must give his disposable income to the poor guy that did not earn it?

What if the rich guy spends 80 hrs a week working and the poor guy spends 40 hrs a week working and they get paid the same hourly rate? Is it fair that the rich guy, who traded more of his time for a better quality of life, to give some of his disposable income (and thus life) to the guy who didn't spend 80 hrs a week working?

CS

 

[stewartcs]

Scenario 1:

Person A makes $40,000.
after 10% flat tax income = $36,000
after rent, food, transport, utilities, disposable income = $1,000

Person B makes $100,000.
after 10% flat tax income = $90,000.
after rent, food, transport, disposable income = $55,000

Joe the Plumber makes $250,000
after 10% flat tax income = $225,000
after rent, food, transport, disposable income = $190,000

Scenario 2:

Person A makes $40,000.
after tax income @ 10% tax rate = $36,000
after rent, food, transport, utilities, disposable income = $1,000

Person B makes $100,000.
after tax income @ 30% tax rate = $70,000.
after rent, food, transport, utilities, disposable income = $35,000

Joe the Plumber makes $250,000
after tax income @ 40% tax rate = $150,000.
after rent, food, transport, utilities, disposable income = $115,000

Question:

Which scenario seems fair to these people?

Depends on how big a Mercedes person B wants each year.

But regardless of the tax rate, I want to be Joe the plumber.

Scenario 1 is the only fair one. It may not be desirable to the guy with $1000 bucks left over, but it is the only fair one.

The guy with $1000 bucks left over just won't have as nice a car or house or whatever as the other guys.

CS