Originally Posted by
John Harper
Thanks etucker1959, for explaining the downside of a flat tax. Some ideas sound simple, but just won't balance the books considering the fixed costs of a stable government and society. I really don't think anyone envisions Somalia as a "small government" utopia. We all want to drink clean water, breathe good air, work in a safe environment, have good roads, schools, hospitals, etc. Not to mention our national defense. And social safety net programs. It all costs money. What's wrong with accepting that fact?
Taxing poor people will just make them poorer, and more dependent on government help, food assistance, shelter, etc. This is where some Republicans even favor an increase in the EIC. It would be great if everyone was rich (and thin, and beautiful, and smart), but not even Jesus was able to change that situation. Income inequality has existed pretty much forever. Unfortunately, everyone needs food, shelter, healthcare, education, and security. Maslow's hierarchy of needs in action.
I actually took a couple classes in finance from Dr. Arthur Laffer at USC in the 1980's. He never promoted his theory (The Laffer Curve) as a panacea. Only to illustrate how increasing tax rates would eventually produce less revenue. This was derived from sustainable fisheries theory, aka environmental economics. Just like overfishing, there is a point where you begin to destroy the resource.
Of course, determining what "too high rates" actually are is the hard part. We know there were marginal rates at 90% or more in the 1950's, yet our economy was not stifled. And, continuing to lower upper tax rates since St. Reagan has not ever been shown to produce any boost of jobs. Only deficits. Hmm.
Capital gains rates are out of whack in a lot of areas as well. Mitt Romney pays lower tax rates than most middle class families, cause all his (investment) income is taxed at 15% IIRC. That's why his tax returns showed about 13% overall taxes paid. I'm sure he makes substantial contributions to charity, he seems like a decent fellow. The hedge fund guys use the "carried interest" laws to pay almost no taxes. Is that fair? They churn money and pay no taxes. Hmm.
Once again, complex issues require complex solutions, often involving.................compromises.
John