perfidy

Over in the comments, I have been getting back in the game as it were, reentering the great game of blogging.

Ross made the perceptive comment that Social Security taxes and payroll taxes are way too high. (Of course, all taxes are way too high...) And also that the burden of these taxes falls largely on the the lower reaches of the income scale. When you add income and payroll taxes together, according to Ross' numbers it means that we already have, effectively, a flat tax.

Ross, being a liberal, draws exactly the wrong conclusions from this insight. (Ross, I don't think an unbiased observer would include you in "us poor folks" any more than me, or even Johno for that matter.)

So, the various income groups in this country end up paying about the same percentage of their income to the government - just under a third. That's sick. It's even more sick when you realize that that percentage only includes direct taxes on income. Both the rich and the poor pay significantly more than that. The rich get nailed on investment taxes, and on luxury taxes. The poor get nailed on FICA, sales taxes and sin taxes. Everyone gets nailed on taxes on corporations that affect the costs of goods and services. It is not an exaggeration to say that most Americans pay somewhere around half of their income in taxes to the government. Only the very rich and the very poor escape this.

Ross says:

Super-kean-fine, government revenue needs to drop. I say we start with the folks at the bottom.

No, we reduce taxes for everyone. Nothing else is fair. No one deserves to have their tax burden completely relieved while others continue to pay. We are all citizens.

Elections are bought and paid for by people in the top income brackets. Explain to me why they shouldn't be responsible for most of the bills when they come due.

First, because that's not true. And second, we're all citizens, equal under the law.

As outlined in the posting, we already have a flat tax system when you take the social security system into account. Poor folks pay it, rich folks don't.

Yes, but a singularly stupid, Byzantine and labor intensive flat tax that has uncounted loopholes, exceptions and complicated rules. A flat tax system that wastes millions of man hours and probably billions of dollars in compliance costs. If it actually was a 30% flat tax, it would be a reasonable law with the rate set too high.

Bottom line is, you either favor a progressive system of taxation or you don't. Right now we use what is effectively a flat tax system, but we pretend it's progressive.

Only the mildest from of progressive (regressive) taxation is acceptable. Parts of the current tax structure are flat taxes, parts are not. The complexity of the system is one of its greatest flaws.

So you don't have a problem with a guy making 25k a year paying 5k in federal taxes, while a guy making 100k a year pays 20k?

That 5k means everything to the guy making 25k a year. He can't afford a damn thing in his life. You either think that's a situation that should be addressed, or you don't.

No, I don't. The $500k guy makes five times as much, pays five times as much. That's fair. If, every time anyone in this country earns a fiver, he gives one dollar to the government, that's fair. Naturally, the people who earn more will pay more. You can't say, "but that other guy really, really needs it." I really need that $20k. It's not exactly chickenfeed to me, or to you. However, I am willing to largely relieve him of the burden of paying taxes, so long as he follows exactly the same rules as me.

One other thing -- GOP loves to talk about distributing the "burden" of taxes. How about the distribution of "pain" in an economy like this one? Do you think the pain of a shit economy should be evenly distributed too?

Despite much wailing, the economy even in the recent recession was not bad by historical standards. And it is not right to hit someone in the head just because the guy next to him has a headache.

I have never argued that everyone should pay the same amount of taxes, merely that the rules should be uniform and simple. In a just society, the same rules apply to everyone. This includes taxation. If someone making $50k pays 20%, and someone making $1m pays 20%, that's fair. Seeing as all the SS revenue goes into the general fund anyway, it should be eliminated. Sales taxes should never be deployed on a Federal level, as they are a little too regressive even for me.

One Federal tax for individuals. Flat rate, 20% or less, with deductions for yourself, spouse, children, mortgage interest and any money put into savings like 401k. Same rules for everyone, but the deductions would benefit the lower income earners proportionally more. Fair, but would not penalize marriage or homeownership, or investment. And when you factor in the deductions I mentioned, the lowest income earners would pay a lower effective percentage.

If I was only paying $20k in taxes, it would be an extra $20k in my pocket. I could do a lot with that. You'd want to structure the deductions to more or less zero out the taxes of those making less than about 25k. Though no one should pay no taxes, there should be a limit - even as low as a couple hundred dollars - but everyone should pay. But, for the guy making $500k, those same deductions would effect his tax burden much less proportionally. He'd actually be paying close to the 20%.

And in any event, fairness, to me, is largely based on being under the same rules. In a game of basketball, fairly refereed, I would get my ass kicked by Michael Jordan. That doesn't mean I'm being discriminated against, screwed by the system, or otherwise abused. And, to bring in another point I raised in the comments to another post, the tax withholding system has got to go. The tax-withholding scheme is the only thing that keeps us from a revolution. It was implemented in WWII as a means for getting money into the war machine more efficiently. But its primary effect has been to confuse the public on the nature of the effect of taxation. Instead of writing a check to the government for taxes every year or even every quarter, many people get the delicious feeling of receiving a big check from the treasury, like the Treasury is the fairy godmother or something.

Even though I know how terribly much I give to the gubmint, on an emotional level I'm still thinking, "Cool, $800!" It is the government giving back some of the money it took -without even paying me interest.

It makes the tax process relatively painless. But it shouldn't be, as a practical matter. Writing a check for 30% of your income on April 15 would wake most people up to the reality of taxation. Even for those on the lower end of the scale, that's likely larger than any check they've ever written before. It's easy to approve of government plans to spend money when it's spending money that you never had any real perception of having, since it was never in your bank account, never earned you interest, etc.

The central fact is that it is wrong to pay half your income in taxes. It is wrong that we have this completely fubared tax system that takes even intelligent non-tax attorneys or CPAs hours of skull sweat and worry to comply with. It is wrong that the IRS can screw with your life, and the burden of proof is on you, not the government. You have to prove your innocence! And because the tax code is some complex, it is easy for self serving lobbyists and politicians to fiddle with it for their own purposes. Sick, sick, sick, all of it.

We cannot legislate equality, and it is foolish to attempt it. Especially with the tax code. The most we can hope for is to create a fair system, where everyone has to obey the same rules, and let them have at it. Some, due to hard-won skills or God given talents, will do well, and make millions. Others, due to lack of foresight, deficit of ambition, or lower than average intelligence will do less well. Some people will manage to do both. So let it be. Take a buck out of every five they make, whether they're going up the scale or down.