Perry Proposes a Flat Tax

[Sheilbh]

Please elaborate.

Standard points about cost of living taking up a greater proportional share of lower incomes than higher ones.

[Admiral Yi]

Standard points about cost of living taking up a greater proportional share of lower incomes than higher ones.

That argument explains a low rate for very low incomes, but not for multiple, increasing rates above that subsistence level.

[Neil]

Standard points about cost of living taking up a greater proportional share of lower incomes than higher ones.

That argument explains a low rate for very low incomes, but not for multiple, increasing rates above that subsistence level.

From each according to his means.

[Sheilbh]

That argument explains a low rate for very low incomes, but not for multiple, increasing rates above that subsistence level.

Roughly what Neil says.  Also the goal is protection of people on low incomes - that's far more than subsistence.

[Neil]

That argument explains a low rate for very low incomes, but not for multiple, increasing rates above that subsistence level.

Roughly what Neil says.  Also the goal is protection of people on low incomes - that's far more than subsistence.

I don't know if I'd call it 'protection', since the only thing they're being protected from is an unnecessarily large share of the tax burden.

[Admiral Yi]

Roughly what Neil says.  Also the goal is protection of people on low incomes - that's far more than subsistence.

You can call it subsistence, you can call it living, you can call it whatever you want, but at some point in the income spectrum it fails to explain the motivation for tax progressivity.

And Neil's argument works great if you start from the premise that all productive activity is the property of the state, less so if you start from the premise that it is the property of the individual who engaged in the activity.

[Zoupa]

Standard points about cost of living taking up a greater proportional share of lower incomes than higher ones.

That argument explains a low rate for very low incomes, but not for multiple, increasing rates above that subsistence level.

Because the govt needs money in order to provide essential services?

[Neil]

And Neil's argument works great if you start from the premise that all productive activity is the property of the state, less so if you start from the premise that it is the property of the individual who engaged in the activity.

Neil's argument works great because we've decided that any and all economic activities have a social component, and every citizen owes a debt to their tribe.  Those who have more can contribute more to the common good.  So long as man creates societies, people will always owe a debt to those societies.

[Ideologue]

Roughly what Neil says.  Also the goal is protection of people on low incomes - that's far more than subsistence.

You can call it subsistence, you can call it living, you can call it whatever you want, but at some point in the income spectrum it fails to explain the motivation for tax progressivity.

And Neil's argument works great if you start from the premise that all productive activity is the property of the state, less so if you start from the premise that it is the property of the individual who engaged in the activity.

I like the first premise.  It gives everything I say a sound logical basis.

And it's to a certain degree true, since no one has ever done anything on their own, and even less so in a modern economy.

[Admiral Yi]

Those who have more can contribute more to the common good.

This is either a reformulation of Shelf's argument, in that poorer people are unable to contribute more, or a restatement of your own, that income belongs to the group and the burden of proof for justifying retention lies on the individual.

[Neil]

Those who have more can contribute more to the common good.

or a restatement of your own, that income belongs to the group and the burden of proof for justifying retention lies on the individual.

I think you're excluding the middle here.

[Admiral Yi]

I think you're excluding the middle here.

I don't follow.

[Neil]

I think you're excluding the middle here.

I don't follow.

There's an area between all income belongs to the individual and all income belongs to the group.

[Sheilbh]

You can call it subsistence, you can call it living, you can call it whatever you want, but at some point in the income spectrum it fails to explain the motivation for tax progressivity.

Well Perry's flat tax wouldn't really be flat, I'd argue it's a form of progressive taxation in its way.  Albeit a remarkably stupid form.

Subsistence has a very specific connotation of providing a bare minimum.  I don't think that's part of the argument for a progressive tax system anywhere.  Though I think if you were to mark just a point then that would be somewhat arbitrary a progressive system tries to mitigate that.

And Neil's argument works great if you start from the premise that all productive activity is the property of the state, less so if you start from the premise that it is the property of the individual who engaged in the activity.

I think this is philosophising with little relevance to reality.  How does one account for the state's role in 'productive activitiy'?  What weight do you give to transport or communications infrastructure, or the education of the workforce and all the other things? 

My starting premise would be that a society is a good thing, the state is an important part of that.  It keeps the peace and should enable trade.  So the state's provision of services is part of a functioning society necessary for productive activity.  In addition I think tax is a positive good in that it binds the state to the people, I think there has to be some sort of dialogue between governed and government that doesn't need to happen if you've simply got petro-dollars or the like.

So the issue isn't some fundamentalist position on productive activity but which services does a society want and how do they pay for them.  That's what motivates a flat tax system, or a progressive tax, or child tax credits.  But I think Neil's point is basically from the view that it's simply fairer, which is a choice.  It isn't, however, necessarily about punishing the rich.  The 90%+ top tax rate that we had a few years ago was about punishing the rich - that was a choice made by that government.  Normal tax rates aren't.

[Neil]

Well Perry's flat tax wouldn't really be flat, I'd argue it's a form of progressive taxation in its way.  Albeit a remarkably stupid form.

Perry's policies are just attempts to reduce revenue so that they have an excuse to cut services.