Discussion: Arrival and taxation

I use mozilla (phoenix) almost exclusively and haven't had any problems with this site. BTW, you need to publish your posts as well. When you hit post it saves your text, but it doesn't put it on the web page. It will only show up on the page after you use the publish button..

I think there are a few issues with flat taxes. First and foremost is that they aren't progressive, as per the earlier discussion. In fact, with regards to wealth levels, a flat tax would be regressive. Going back to previous posts, if wealth is really what we're after, income is just an indicator of wealth. Income distributions, while very uneven, are not nearly as extreme as wealth distributions. Looking at our numbers, while the top 5% earned 22% of all income, the top 5% owned somewhere around 50% of all wealth. If income is important as an indicator of wealth, rather than being the focus in and of itself, then a "fair" tax would have to be flat across wealth levels rather than income levels. By this measure a flat income tax is regressive, with wealthier people paying a lower percentage relative to wealth than poorer people.

Second, the gains are, I think, not as great as is generally perceived. Much of what you do when you're filling out your taxes is documenting and calculating income. This wouldn't change. Income can come in many forms and from many sources. There is a limit to how simple the tax codes can be regarding specifying income. Software would likely still be used to prepare this data and consultants still employed to massage it. Additionally these things will probably continue to become more automated, efficient, and user-friendly as times goes on (for both the taxpayer and the IRS). Software tax tools are already pretty good..

Third, is that it takes a major tool away from the government. You mention yourself the value of taxing certain behaviors. These incentives are used for various purposes (educational credits, promoting home ownership, promoting charitable donations, promoting long term investing, etc). There was some talk during the last Presidential campaign of providing substantial tax credits for hybrid cars. These things are succeptible to backdoor legislation, but no more so than any other laws. That's more of a general problem with the legislative system.. If this ability to tinker with the tax system were lost these incentives would also be lost, or else would have to be legislated separately. And as far as bureaucratic overhead goes, I think we're better off wrapping them all into the tax system than to have a separate data collection and payment systems for each thing that congress wants to create incentives for.