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Fairer form of taxes for all citizens

Taxes to be fair, should be based on percentages of money earned, so that no group in society can claim they are being victimized by it e.g. 10%, so that someone earning a £100, would pay £10 and someone earning a £1,000, would pay a £100.

There would be no allowances for anyone because everybody needs to pay out something for their work, whether it is transport, food, clothing or tools and this includes employees, bosses (machinery/ canteen/ haulage etc) and the self employed.

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    Mar 15 2012: Capital gains tax should not be less than income tax. It should be included with tax.
    Businesses should not pay less tax than wage and salary earners.
    Why, business it just leads to an unfair concentration of wealth.

    I am open to progressive tax rates, but not excessive maximum rates.

    I'm happy to pay a greater rate than someone earning $40k. However, in Australia the middle class who get educated and work hard end up pay the highest tax rates because it is wage and salary based not investment income that have lower tax rates etc. I pay nearly 50% tax on every dollar extra I earn through salary. A business owner pays 30%. An investor pays 25% if they hold the asset > 1 year. Unfair. No wonder we have a concentration of wealth.

    Suggest Sales tax 15%
    First step income (all sorts including capital gains) 10%
    Next step 20%
    Next step 30%

    If businesses are refunded the sales tax they should pay an extra 5% tax compared to consumers.

    Suggest the tax rate should be progressive based on income and net wealth. Not just income.
    The high income are not necessarily wealthy. You can earn $250k and be very comfortable, but still be paying off your first house and student loans. Good income. Very comfortable but not really wealthy. Others inherit or own considerable assets. They are the wealthy.

    There should be a safety net. I disagree with work for the dole. Unemployment benefits should be enough to do better than just survive, but significantly lower than the minimum wage, to maintain the incentive to work. Perhaps the unempolyment benefit reduces to a minimum level over time.

    Why pay reasonable safety net, because those without paid work will end up in crime if the benefit is 0 or very very low. You reinforce an underclass mentality. Outsiders. End up in Jail, costing us money, taking our stuff etc.

    No issue with voluntary paid work for the dole. this should be a slightly higher rate and focus on developing skills. Not just the intern freebee labour culture,
  • Mar 15 2012: I like your points, especially the last two as they are very sensible. Crime is reduced by paying people something, rather than nothing (takes away the desperation). I also agree that it should be below the minimum wage to act as an incentive to work and gain luxuries, rather than necessities. I also agree about voluntary work and incentives again. You are also right about the intern labour culture as not worth the air its written on (been there, seen it, fell for it twice, just to get away from boring routine).
  • Feb 21 2012: Well that is clearer than Krisztian's attempts to explain himself but maybe that is because English isn't his first language, so translation of concepts maybe more difficult.

    Well, in answer to your question, there is such a thing as exemption. If I don't have a car, why should I pay road tax. If I don't have kids, why pay for education? People who are self-employed (in the UK anyway) are allowed tax relief because of the expenses of their job, unlike somebody who works in a factory, for somebody else. Then there is tax relief for the factory boss, to set up their business and keep it running. The way things are run isn't how they have to be run. All that is needed is a little bit of thought about the situation. I don't know how things work elsewhere in the world but in The UK you can have allowances made,depending upon your particular circumstances. You've already pointed out how it isn't fair, so this is an answer to make it more so.

    If you still think I'm missing something, please point out what and how, so that this issue can be resolved (Life is experiment based upon theory - nothing is watertight or change (mental / physical) couldn't and wouldn't occur).
  • Feb 20 2012: Everything is taxed from hamburgers to roads. I presume what you are saying is that where you live, there isn't a blanket cover for road users, so that everyone pays the same rate? I live in Britain and don't drive. Also you seem to be taking the attitude it should be the way it is, rather than the simplification I'm proposing. So what is the reason it is different where you are? What are the road tax laws based on exactly (Tell me this and we've got a basis for discussion as it is I'm missing data you seem to be aware of).
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      Feb 20 2012: look, i see no point in repeating myself. i can't explain it any better.
    • Feb 20 2012: Tony,

      Allow me to (try and) simplify Krisztian's comments:

      Why isn't the transaction for road use (or any publically funded venture) the same as the transaction for a hamburger? Why can I not play a flat rate on what I use?

      An eaiser example: I paid for my house. I use my house. I pay property taxes which pay for education system. I have no kids in education system.

      Even if I paid a flat rate income tax, it still is not fair that I pay taxes for schools that I do not use. Similarly, even if we paid a flat rate income tax, it would still be unfair that somebody could possibly be paying more absolute dollars in taxes (which fund roads, for example) than someone else, but is using the roads substantially less (a work at home entrepeneur v. an assembly line worker that commutes 25 miles to the factory everyday, for example).

      All of this is to say that your premise - a flat rate would guarantee 'fairness' - is faulty and only works if you define 'fairness' as a 'flat rate tax system', in which case your argument is circular.. and still faulty.

  • Feb 20 2012: Income tax is still paid for hamburgers and roads. What do you mean by 'absolute' value in this context - to me it doesn't seem to have any real meaning in this context? The value you place on something is purely personal. The rate you place on taxing something is purely arbitrary but percentage tax rate is not. Your point seems to revolve around desire for something, not fairness, which as always is neutral. Desire puts emphasis upon something and creates an imbalance (pos / neg) but intellect (fairness) keeps things steady (as they are).
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      Feb 20 2012: income tax is paid for hamburgers? are you sure you haven't got lost somewhere?

      simple math: suppose you earn twice as much as i do.

      say a hamburger costs USD 2. if i pay 2 bucks, i got a burger. if i pay 4, i got 2. if you pay 2, you get 1 too, just as i do.

      roads: you used the same roads as i do. but i pay USD X, and you pay USD 2X.

      see the difference? you pay more for roads, but the same amount for burgers. why?
  • Feb 20 2012: I agree, if what you mean is that higher taxes should in theory put people off buying more things as lower rates, would encourage spending 'but' there is a psychological angle to this based on addiction (lust for) and the unattainable. Value comes from rarity - whether it is something new, costing a lot of money to set up initially (birth stage) or to maintain the existence of, through preserving remains / repairing damage (old age stage): In between lies the cheap and plentiful stage, which requires less to just keep it running, now its started (mechanisms in place for production / experimentation stage over).

    This of course would not affect the percentage idea, unless it was an attempt to stop the activities of certain areas of society. People who are rich and want to lord it over other people, have an ego problem and are usually rude to those who they expect to serve them, unless they've matured as people. I only know of one millionaire who falls into this category - Gulbenkian. There is a story of someone mistaking him for a doorman because of his extravagant clothes and asking him to call a taxi for him, which he did. Somebody else might have refused, shouting 'Don't you know who I am!?!' For this he must be admired.
  • Feb 19 2012: My argument is simply that if we all pay the same percentage, then nobody can realistically complain that they are being treated unfairly (penalized by paying more than some other group or person in society). Only equal percentage allows this.
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      Feb 19 2012: why not? one can say: i receive the same services, same police protection, same roads, why would i pay more in absolute value? hamburger price is not proportional to income. why roads?
  • Feb 19 2012: Lets suspend disbelief for a moment and suppose we've reached a level of knowledge about resources and manufacture which means we no longer have to incentivise the generation of economic capita, But we humans are now so numerous we need to maximise resource efficiency. (This costs nothing in money terms but requires intelligent thought, a very rare commodity)

    We'd then need to look at ways of establishing a "norm" which is sustainable. A Tax system which encouraged people to consume just a sustainable amount of physical goods would escalate taxes on things over a certain level, while lowering or even subsidising spending which passed money between people for services and arts (creating economic, psychological and social links) without causing any environmental impact.
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    Feb 17 2012: how do we know that this proposed tax system is fairer?

    i mean, there could be other reasonings, like:

    1. we all pay the same money in the mall for a loaf of bread, regardless of the income. why not we pay a fixed amount of taxes for the same kind of services we receive from the state?

    2. why don't we tax consumption only?

    3. we could tax only "unnecessary" levels of wealth. being "necessary" is an artificial distinction, but we could make that decision nevertheless.

    it is not enough to tell what is your opinion. present your arguments.
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    Feb 17 2012: The tax system itself (minus tax loopholes and corporate lobbying for subsidies) are fair in most cases.
    The only real issues are that:
    1) The taxes are spent improperly
    2) Certain high earners (the ones who are consistently heard of in the media) complain about having to pay *any* tax.

    A equal tax rate for all wouldn't work unless you were willing to completely overhaul society and reduce government, regulation and services; Too much money would be lost and it still wouldn't be fair because the general staple costs of living are much the same for all (we all pay the same for bread, petrol etc etc) so the poorest would still be hit hardest by that idea.
    The only reasonable way that I can think of is to increase the number of tax brackets into higher incomes, each new higher category paying a higher percentage; and to simply ignore the billionaires who complain about paying it.
    Studies have shown that reducing tax rates in higher earners does not increase the number of jobs or investment into the country and such people still continue to complain even when their demands are met, so why bother.
    • Feb 19 2012: I agree with this - there is or should be an implicit social contract which recognises that high earners need society, and vice versa (as a courtesy mainly - I've yet to be convinced that wealthy people contribute anything real at all to society - its usually the reverse in that they generate inefficiency in resource use) Taxes should peak at 50% when a person earns twice the mean, (ie twice the man) and fall to zero where a person is capable of providing subsistence for two people (ie we need an-other) .

      Why not a simple sliding scale between these two limits?
    • Feb 20 2012: Xavier,

      "The tax system itself is fair in most cases"

      How? Or should I say - by what criteria is the tax system 'fair'? Almost half of America does not pay any income tax, which is the tax system I assume you are referring to. How is that 'fair'? Wealthy Americans are able to manipulate their assets to pay the lowest possible tax rate. How is that 'fair'?

      Moreover, what makes it 'fair' that the federal government taxes income at all? And if it is fair that they do so, are we certain it is the most fair or most effective form of taxation?

      And another point - the current tax system brings in roughly $1.4 trillion less than we spend a year. That is not fair. Granted, you say the taxes are not spent fairly (that is an entirely different debate), but you seem hesitant to bring spending down to these 'fair' revenue levels.

      "Ignore the billionaires complaining about it"

      The moral superiority of Socialism. You know, if it weren't for 'billionaires', you might actually have to get creative when discussing public policy.

      If you are interested in the actual effects of stifling taxation (income and other forms), look into the capital flight suffered by NYC and New York State. The problem with making a very few select people responsible for the bulk of the public treasury is that these people will either demand special privileges or will just leave.