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Flat tax?

  1. Apr 12, 2005 #1
    U. S. corporations paid 60% of the budget 50 years ago compared to 16% today. Would a flat tax introduce a more fair distribution? (Another example of corporate rights overtaking individual rights.)
     
  2. jcsd
  3. Apr 12, 2005 #2

    Pengwuino

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    Im pretty sure thats wrong as i believe the top 10% of US citizens (which includes corporations) pay roughly 60% of US taxes. And a flat tax wouldnt really hurt corporations because a corporation doesnt really buy anything from anyone unless its for resale (if you resell a product, you dont pay the tax, the final reseller is responsible for collecting the sales tax; ie. wal-mart or best buy or your local small business owner).

    Scratch that. Richest 30% pay 60% of US taxes.... wait let me go find some more detailed data.

    Ok scratch all of this, I got someone playing the bongos inside my head and i cant concentrate enough to find the figures.
     
    Last edited: Apr 12, 2005
  4. Apr 12, 2005 #3

    SOS2008

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    A flat tax is still problematic if applied to income taxes for the self employed--believe me, they can show no income far too easily. But corporations--that needs to be dealt with to compensate for this, especially those that want to show earnings/good performance to their stock holders. But as long as Dubya is around you can forget it.
     
  5. Apr 12, 2005 #4

    GENIERE

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    Coorporations don't pay taxes, the tax plus the expense of the corporation's proof of compliance is passed along to the consumer. It's simply a hidden sales tax, bad for the consumer, bad for economic growth and bites the low income earner where it hurts the most.
     
  6. Apr 12, 2005 #5

    Pengwuino

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    So if you reduce taxes for businesses, you create economic growth eh geniere? (fall into my trap please :D)
     
  7. Apr 12, 2005 #6

    GENIERE

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    Why play games? Got a point - make it.
     
  8. Apr 13, 2005 #7

    Kerrie

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    honestly, i don't think the lower waged american would go for a flat tax rate because it would mean doing away with deductions such as educational credits, dependents, and child care deductions-all that helps increase tax refunds.
     
    Last edited: Apr 13, 2005
  9. Apr 13, 2005 #8
    Does anyone have a scheme that would simplify and balance taxation?
     
  10. Apr 13, 2005 #9

    Pengwuino

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    no real tax on cooperations means lower prices for the people, woo woo
     
  11. Apr 13, 2005 #10

    Pengwuino

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    Everyone does. Does a perfect one exist? no. Does one stand out above the rest? no. A flat tax, or 'consumption tax' or 'value added tax', is used widely in Europe. The draw back of this is that the lower-classes are hit hardest by this as they have to pay a good 15-25% more in taxes. Another is that low-income people cant get any credits or tax cuts like people in America do so they pay their fair shair (which with modern era federal budgets would be painful as hell). Advantage htough is that wealthy cant get the credits or cuts either like in America so they pay their fair shair (and no, theres no conceivable way to help the poor out in a flat tax situation unless you start asking everyone what their income is on every purchase hehe).

    The US income tax system of course brings in all these tax cuts and credits and benefits and what not. So advantage, poor get credits and cuts, disadvantage rich get credits and cuts (I hesitate to call it a disadvantage that the rich get credits and cuts because it seems unfair to call that a bad thing when i immediately say its good for another thing. So im basically going off the popular anti-evil-coporation/business view of looking at things). You also have a massive system that collects the income taxes (IRS) which is another government organization (which means more wasted money/time).

    So you really dont have many choices and no choice is obviously better then the other.
     
  12. Apr 13, 2005 #11

    BobG

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    Corporate taxes are a flat tax. The tax is passed on to consumers in higher prices and becomes a virtual hidden sales tax, even for those products normally exempt from sales tax. If you want a truly progressive tax system, eliminating all corporate taxes and sales taxes and just rely on income tax.

    The fairness of a progressive system as compared to a flat tax is a little dubious, but I think there has to be some progression built into your tax rates - it's smart even if not necessarily the fairest system. It's easier to pry money from people with incomes well above subsistence levels than from someone barely getting by.

    More important is that the tax rates bring in as much as the government spends. Giving a tax cut while running a deficit is a lie. Either cut services or increase taxes so people can feel the impact of government decisions now instead of letting the impact sneak up years down the road.
     
  13. Apr 13, 2005 #12

    loseyourname

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    As others have pointed out, corporate taxes are simply expenses passed on to the consumer. Taxing them more isn't going to help anybody that buys from them. Unless you obtain all of your goods and services from small propietorships, you'll see no benefit. The other thing to consider is that corporations are collections of individuals. There is no such thing as 'corporate rights v. individual rights.' If corporate taxes were not passed on to the consumer, then corporate employees and stockholders would simply have their incomes taxed twice, which is hardly what I would call "more fair." Heck, this even happens to some extent to small business owners. Taxing the money they make lowers the amount they are able to spend on employees. While I highly doubt eliminating all taxation on business owners would result in their paying their employees more, doing so might create a few more jobs here and there, in which case additional income tax revenue would come in anyway. Of course, having self-employed people exempt from all taxation would still be seen as unfair, even if it did result in more jobs and more tax revenue (who knows whether or not it even would). It seems that all taxation is going to be unfair whether we like it or not. The only truly fair system that could be implemented is one in which user fees were used as the source of revenue, rather than taxes (the way public authorities that own toll roads and bridges do), but then we'd have the dilemma that people who couldn't afford it wouldn't receive any government services.
     
  14. Apr 13, 2005 #13

    Pengwuino

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    You know what sucks... you cant run a government with people lol. Think about it. Tax cuts are a nice short term goal... but once the economy hits a slump, it comes back to haunt ya.

    This is why im rather sympathetic towards the wealthy class. You have 2 options to really. You can 1, cut programs. Problem with this is that what happens is peoples mail gets bombarded with "OMG OMG the government is cutting blah blah program!!!" and you get people up in arms about this. Every single program in this friggen country seems to have a dozen special interest groups representing it ready to send mail out like crazy when they lose a few dollars here and there.

    Second option is raising taxes (which is another short term goal that ends up screwing u in the end). If you raise taxes on the poor or middle class, might as well gather up congress and commit mass suicide. Or you could raise taxes on the wealthy (wealthy + business + corporations in actuality). This is why im sympathetic. The general public doesnt care if the rich have to pay. The general public wouldnt mind all the wealthies income being taken away. There faceless people who cheated and lied their way and buy cuban cigars in their free time. They are the reason your life sucks. Well of course... this is simply an unfortunate factless mindset the people have. Hell my parents were almost at the wealth/middle class barrier for a while but ****, it was because of 2 jobs, 2 side businesses, and 2 rental houses which meant worken 9-5 on weekdays only was only a dream. Kinda sad when people like my parents are told to pay for the government's splurging while being criticized for having more money then other people.

    In my opinion, program cuts are the best because raising taxes is like a person getting a new credit card. YOu know hes going to fill up that credit card to its maximum soon enough and then hes gonna get yet another one and another and another. Every new tax the government creates is like a new credit card. You know there nto going to stop. Screw the balanced budget amendment. There should be an anemendment on how much % of the GDP can equal the federal governments budget.
     
  15. Apr 13, 2005 #14

    Pengwuino

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    @Loseyourname

    I believe a coropration is actually 1 individual in the US government's eyes. It has its own SSN and it pays 1 income tax. The only thing different is that it doesnt collect SSN and can live forever. I dont think the board of a corporation really means much as far as taxation goes.

    Im starting a business and I swear taxes are going to kill me. Its incredibly unfair when i come to think about it. IF i even show a profit, its going to be very little. Then the government will get to gobble up a bunch of money. PLUS i have to pay social security for any employees i decide to get. No i dont mean the employer will... I will have to! Yes, double payments! I have to match my employees social security payments.... Incredible. Plus, if i profit $1200... theres my years income... plus of course the government gets to take their 'fair share' of it. Any other job besides owning a business gets at least $10,000 a year and its gauranteed as long as you work. No such guarantee for business owners. Grrr i dunno, im just mad :D Im crunching numbers left and right to see if my business is even worth wasting my time on lol.

    And the idea of a user tax would suck because most government services are directed towards the people who need their money the most (the poor). I mean... how many things do the wealthy use that the government funds 100% (that doesnt have its own user fees such as the dmv or post office) besides say, keeping the roads and highways together...
     
    Last edited: Apr 13, 2005
  16. Apr 13, 2005 #15

    russ_watters

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    Simplify deductions, make only a handful of tiers.
     
  17. Apr 13, 2005 #16

    Pengwuino

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    But if you increase deductions, wouldnt people start being ablet og et away with a lot more things? Like... couldnt someone deduct a rolex under a vague/simple deductation catagory of 'anything that helps your business' because they might say it helps keep time lol.
     
  18. Apr 13, 2005 #17

    loseyourname

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    I knew a business owner that deducted his car payments because he had the name of his company on the rear windshield (making the car an advertisement expense). I think Russ wants us to decrease deductions.
     
  19. Apr 14, 2005 #18

    SOS2008

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    With regard to taxing corporations, especially those that are public, if nothing else some kind of tax may help keep them a little more honest about their earnings, though the cost no doubt is passed on to the consumer.

    Tax deductions have long been used to encourage or discourage behavior such as buying a home rather than renting, having children, etc., though some of these life choices are questionable if not unfair to others, such as single people etc. A flat tax would remove influence on the market in such ways, but the idea is that a flat tax would also remove loopholes (the ability to lie about deductions, etc.).

    However, the problem of collecting the taxes remains. People who are self-employed (often business owners) can show little to no income very easily, even losses to gain refunds. It gets back to cooking the books before taxation (similar to the argument above about corporations). Another problem with collection is the large number of people who owe money to the IRS. Then those who do pay the money back, usually negotiate payments pennies to the dollar. This often is a result of people not electing proper withholdings, even W2 folks.

    Unless these other issues can be resolved in some way, a flat tax won't necessarily increase revenues collected. So far the only sure and fair collection is sales/usage taxes.
     
  20. Apr 14, 2005 #19
    What could possibly be the point of collecting a flat tax?
     
  21. Apr 14, 2005 #20
    In order to spend it!
     
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