Flat Tax Rate. (1 Viewer)

[Vahl]

If you read the bottom, the purpose of the article was just to show another side of the story.
The american health care system has many problems, but it's not like it is trumped in every way by every other system.

It is trumped by the most basic factor: access. You have to pay in the US for prompt service and medication. Most 'advanced' nations: this problem doesn't exist. ie access is granted to all equally rather than on the basis of wealth and willingness to pay.

 

[Not-That-Bright]

Yes that is true, and I fully support that.. But at the same time a fully funded universal health care system has its own problems too... the major one being costs.

 

[katie_tully]

From what I've read myself, and after discussing this with the bf's brother (who is in economics) - I'd have to say I disagree with a Flat Tax Rate.
Improve the current tax system, not inforce a new system.

 

[Not-That-Bright]

Yes, but do you outrightly think it's an entirely stupid idea that has no positive benefits?
There are negative's (most haven't actually been brought up here...).
I'm rather shocked at how one sided alot of people's responses to this idea have been.

 

[Vahl]

Yes that is true, and I fully support that.. But at the same time a fully funded universal health care system has its own problems too... the major one being costs.

Actually a well managed system is more efficient than a market based private health care system. Because hierarchies are simpler(that is, not repeated in several companies etc) . The one advantage of a market based system is that health care is rationed out and costs are low. But if a fair distribution system is set in place fully funded government health care is very attractive. Making emergency and other necessary treatments free and quotaless whilst placing quotas on other objects (say, 1 pair of glasses each year etc) above which the user has to pay and not funding uneccessary treatments such as cosmetic surgery, the system becomes easily managable. Especially if doctors are kept on a leash, ie employed by the government so that their fees etc can be kept to a minimum and costs can be more accurately predicted.

 

[katie_tully]

With a flat tax, higher earners still pay more tax than lower earners, but everyone pays the same proportion of their income in taxes. If the rate were 30%, for example, somebody with a taxable income of $30,000 per annum would pay $9,000 tax, and somebody with a taxable income of $60,000 would pay $18,000.

Yeah... but you're still paying a shitload in tax. $9000 in tax when you're earning $30,000?

Website FOR flat tax rate
http://www.cis.org.au/Publications/policymonographs/pm66.pdf

Dunno.. sounds good in theory and all, but the three examples they used were Latvia, Estonia and Russia...three countries who's economy arent exactly desirable...

 

[absolution*]

I cant believe this thread is still alive. Tsssk. It is the most profoundly stupid economic notion ever.

 

[katie_tully]

NTB, I think my main problem with it, is that it has not been implemented in a western society yet, it's basically still a trial system. The benefits are all based on theory - sure it's been implemented in Latvia, Estonia and Russia, but, Estonia, Latvia and Russia wtf?

The current system works, although it probably has alot of room for improvement. The notion of paying a same proportion sounds good, but when you're earning less and are being deducted the same percentage rate as a higher income earner, you're paying a shatload.

30% when you're on 20,000-30,000, as opposed to 30% when you're on 100,000+.

 

[absolution*]

NTB, I think my main problem with it, is that it has not been implemented in a western society yet, it's basically still a trial system. The benefits are all based on theory - sure it's been implemented in Latvia, Estonia and Russia, but, Estonia, Latvia and Russia wtf?

Id also like to point out that the countries/independent states mentioned were all previously communist states and as such needed low taxes because a) people werent making enough money for taxation revenue make any sizable contribution b) economic growth is low and needed a boost. Neither of these situations applies to Australia. You are a dropkick. Go buy a textbook and read it, then, realising how truly stupid you are, go jump off a cliff.

 

[katie_tully]

I didn't do economics or commerce in 11/12, however I read...But I'm still trying to grasp the concept of how having a flat tax rate improves government revenue??

 

[absolution*]

I didn't do economics or commerce in 11/12, however I read...But I'm still trying to grasp the concept of how having a flat tax rate improves government revenue??

It doesnt....

 

[absolution*]

Few problems.

1. Stimulating growth leads to inflationary pressures which leads to the RBA and government being forced to enforce contractionary monetary policy. Through monetary policy this would involve raising interest rates which would effectively offset any tax cut margin.

2. Stimulating growth would also lead to a further discrepancy between exports and imports as well as the terms of trade index (higher demand for imports = higher import prices), creating a larger current account deficit. The only way to stop this is to produce more goods and services locally which requires funding which will obviously be lower under a flat-tax rate.

3. Lower tax revenues would lead to less public savings, leading to a larger current account deficit which as you know, is already at the highest it has ever been at approx 7% of GDP. By OECD standards a 5.5% of GDP deficit in the current account is "unsustainable".

If i could be bothered, id think of more.

 

[katie_tully]

Good, so it's not just me ....


Maybe in Latvia it did ... but that could also be because the Latvian government didn't have any revenue to begin with, or maybe it had a trickle ... ... ...

 

[Not-That-Bright]

Absolution, you're a dropkick for outright dismissing it... It's not a matter of "open a text book", because there is alot of discussion over it, and alot of economists disagree with each other on different issues of it.

And the way that you dismissed it is flawed, interest rates would be lowered... If you can find me a source claiming that interest rates would go up under a flat-tax system, i'd be interested.

Katie tully, if you tax people to a point where they figure "why bother earning more money, I'll just be faced with more tax and for my hard work and will recieve little extra"
you are going to lower growth.

Most flat-tax systems have in place measures for people such as single-parents...

 

[absolution*]

Absolution, you're a dropkick for outright dismissing it...

Lick my balls.

ME > you

 

[Not-That-Bright]

Ok whatever tough guy.

 

[katie_tully]

Katie tully, if you tax people to a point where they figure "why bother earning more money, I'll just be faced with more tax and for my hard work and will recieve little extra"
you are going to lower growth.

Most flat-tax systems have in place measures for people such as single-parents...

Bullfuckingshit! Where is the proof for this statement? This is a god damn trial tax system, the only examples they can provide of where it's had some impact is RUSSIA AND LATVIA, FFS - two western countries that for, in Russia's case the last 50 years, have been classed as THIRD WORLD. Ex communist countries. Countries where the majority of people are low wage earners or non wage earners! Two countries where of course tax is going to raise revenue, THEY BARELY HAD ANY REVENUE TO BEGIN WITH!

Where is the proof that this system will encourage people to go out and seek higher paying jobs? Do you think the majority of people on low wages really want to be low income earners? Do you think they sit there at night and go "gee...I don't really want to earn alot of money, i'll get taxed to the hilt if i do" ... What the hell?
it isn't lowering taxes for low income people! look at the example provided! If tax is @ 30% of their income, IF YOU'RE A LOW WAGE EARNER you are going to be paying considerably MORE in tax, compared to somebody who is on a high income.

 

[absolution*]

I would like to point out the hilarity of katie_tully making more sense than NTB even though she has not done economics in the HSC and is just speaking from common sense. Brilliant stuff baby.

 

[Not-That-Bright]

I was talking about high-wage earners.
We shouldn't be encouraging ANYONE to make less money...

 

[Shuter]

Few problems.

1. Stimulating growth leads to inflationary pressures which leads to the RBA and government being forced to enforce contractionary monetary policy. Through monetary policy this would involve raising interest rates which would effectively offset any tax cut margin.

No growth does NOT equal inflation if it is matched by REAL increases in productivity (as the incentive to work harder would).

2. Stimulating growth would also lead to a further discrepancy between exports and imports as well as the terms of trade index (higher demand for imports = higher import prices), creating a larger current account deficit. The only way to stop this is to produce more goods and services locally which requires funding which will obviously be lower under a flat-tax rate.

No it wouldn't as I've already stated it should provide an incentive to be more productive which in turn INCREASES our LOCAL productivity and efficiency thereby improving the terms of trade.

Why would funding be lower under a flat tax system? We didn't nessacerily say there would be less government revenue, only the sources from and the percentage from which it's accumulated would be different, you are mixing two different policies here.

3. Lower tax revenues would lead to less public savings, leading to a larger current account deficit which as you know, is already at the highest it has ever been at approx 7% of GDP. By OECD standards a 5.5% of GDP deficit in the current account is "unsustainable".

If i could be bothered, id think of more.

again, flat tax DOES NOT equal LESS tax.