Comments on: The Flat Tax is NOT Fair

By: Roger, the Amateur Financier

Roger, the Amateur Financier — Wed, 11 May 2011 19:19:23 +0000

@SLibertarian: I understand fully well what a flat tax is, and I definitely wasn’t trying to mislead others. My statements about a $10,000 per capita tax were meant to serve as an example of how hard it is to come up with a ‘fair’ tax system; I wasn’t saying that the flat tax proposals on the table were suggesting such a measure. As you’ll note in the rest of the article, I say that the most common flat tax proposals suggest the same percentage of income be paid by everyone (usually with a healthy exemption on the first portion of the income).

By: SLibertarian

SLibertarian — Wed, 11 May 2011 02:56:44 +0000

You’re either misunderstanding the meaning of “flat tax” or you’re purposely misleading others…

A flat tax refers to the same PERCENTAGE being paid.. not the same AMOUNT being paid.

so, set the tax rate at 20%

Make only $1,000/yr, pay $200 in taxes.

Make $1,000,000/yr, pay $200,000 in taxes.

Our current tax system has different percentages, for different income levels..
SLibertarian´s last [type] ..Life after the death of Bin Laden

By: Roger

Roger — Thu, 22 Oct 2009 07:14:24 +0000

RD, I am aware that most flat tax proposals contain exemptions, usually tied to the poverty line, which serve to make the flat tax overall progressive. In this case, the tax the Financial Samurai proposed (which inspired this post) actually does not, which is why I only addressed that point in the third to last paragraph of this post. I still question how fair a flat tax system is, even with a healthy exemption, for the same utility reasons I’ve mentioned above, but many, if not all, of my qualms would be dispelled by adding such an exemption to the flat tax proposal.

By: RD Lang

RD Lang — Tue, 20 Oct 2009 20:31:14 +0000

Most flat tax proposals include generous income exemptions for everyone, including dependent children. See Steve Forbes proposal for an example.

If the income exemption for an individual is $15,000, a married couple would pay no income tax on the first $30,000 of income. The marginal rate is the same for everyone (Forbes suggests 17%). You get the following:
Married Couple
Income = $40,000 / $1,700 tax / 4.25% effective tax rate
Income = $250,000 / $37,400 tax / 14.96% effective tax rate.

By: Roger

Roger — Mon, 12 Oct 2009 16:54:59 +0000

You’re quite welcome; it was a thought-provoking post, and so I shared my thoughts. Glad you thought they were interesting, and I’ll see you around (on your blog or mine).
Take Care,
Roger

By: Financial Samurai

Financial Samurai — Sun, 11 Oct 2009 23:12:19 +0000

Hey Roger,

Just wanted to drop by and thank you for providing your insights over at my site.

I really appreciate your thoughts and I look forward to hearing more stuff from you in the future.

Best,

Financial Samurai