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Reply #114: Heres how to explain it so even DU can understand [View All]

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sweetheart Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-17-05 10:03 AM
Response to Reply #12
114. Heres how to explain it so even DU can understand
Presuming a flat tax is implemented as a consumption tax with basic
consumables exempted. (progressively)

The one who makes 10,000 per year spends almost all their money on
necessities. As these are exempted from the tax, this person is not
taxed at all.

The one who makes 1,000,000 per year, buys a fancy car for 100,000 and
is taxed 25,000 dollars when they make that purchase. This person is
as well not taxed on basic necessities, however as they're inclined to
lavish in luxury, the tax does not cover luxury items and the person
ends up paying 200,000 dollars in tax.

The result is a fool-proof tax system, where the IRS does not focus
on individuals at all, nobody has to file a tax return ever or pay for
tax filing services. The entire thing is progressive and works at the
point of "spending". Instead of having 140,000,000 tax filing individuals,
the IRS only focuses on 14,000,000 corporate entities who remit the
sales tax. HUGE tax savings from efficiency and improved collections
cause a huge improvement in economic growth, as is evident in several
nations in europe who are now using a flat tax and observing
high economic growth rates.

But because people are stuck in the mud, and attached to filing huge
tax forms and keeping an industry of waste in business, they'd rather
forego a good idea for something wasteful.

A flat tax can be progressive... it is a fallacy to pretend that it
is only a conservative thing... it is rather a tool, like a hammer
and only the user of the tool determines whether i is progressive
or regressive.
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