This article needs a complete rewrite. Its: -poorly written and structured overall -contains seemingly dozens of redundant points; after every argument in the "for" section there is the counterargument- WHICH IS JUST REPEATED AGAIN IN THE "AGAINST" SECTION WHICH THEN INCLUDED THE COUNTERCOUNTERARGUMENT. -included untrue generalizations such as "the main argument of flat tax proponents is..." or "proponents of the flat tax sometimes" -Is never specific and has no outside sources. This looks like a third grade essay. -This is a big issue. It can be structured better than "arguments for" and "arguments against", which is again a really juvenile way of formatting this type of information. The topic could instead be structured into more useful categories like "flat tax collection" (about the various methods that have been proposed to collect such a tax), "effect on tax revenue", "distribution of revenue between social classes", "moral arguments", "effect on tax fraud" (discussing on how flat taxes in other countries have lead to more people reporting their income), "tax simplification", "historical economic effects" (laying facts on how flat taxes have effected national economies, etc. -basically, this whole article is an embarassing piece of crap. I plan on working on it tonight.
god i'm done for today. I added a lot of good shit on different proposed flat tax implementations, but somebody needs to clean it up.
Good expansion of pro and con -- and still NPOV.
May I suggest, though, that we list a couple of the major flat tax proposals and then separately describe what advocates say about them? User:Ed Poor, who is unbiased as he opposes all taxes equally!
It looks like SimonP and I hit this one at the same time, but with similar outlooks on the subject. His made it on line first while my mouse decided to freeze, so I've only done a bit of editing for now. Eclecticology
A note to add that would be insightful (and also should be shown in the graduated tax article) would be a mention of graduated tax brackets and what percentage of governmental income typically comes from the different brackets. In a graduated tax country, does the wealthiest tax bracket pay 50% of income tax receipts, or 10%? This could help illustrate the arguments. Tempshill 03:22, 30 Oct 2003 (UTC)
This article is currently a collection of unsourced arguments by random Wikipedians. Cite sources — Wikipedia is not a discussion forum for your opinions. Every argument of the form "supporters say" and "opponents say" should be excised and replace with a direct citation of a prominent sources (newspapers, politicians, economists...) making that argument. (Who argued it, and where and when?)
Without citations, it is impossible to assess the neutrality of the article. (Is it neutral, or is it giving misleading prominence to arguments that only appear in far left/right fringe outlet X?) It's also not very useful — why should anyone care about the opinions of random Wikipedians without any indication of how representative they are? —Steven G. Johnson 18:22, Nov 15, 2004 (UTC)
> Every argument of the form "supporters say" and "opponents say" should be excised
Only up to a point. When dealing with something as fundamental as flat versus progressive taxation, it does seem reasonable to me to talk about proponents and opponents, without necessarily identifying particular camps. Most countries have groups which support one sort of taxation against another. Identifying that it is the GOP of the FT or whoever in the context of such basic topics is not necessarily of much use. To stick an NPOV banner on it is way over the top.
"The replacement of a progressive tax system with a flat tax system reduces taxes for the richest people in society. This, of course, is a powerful argument in favor, if one happens to be, or to represent, one of the richest people in society. Since these people control many opinion-forming organisations, including newspapers, television channels, and political parties, many such organisations advocate a flat rate tax."
- This doesn't sound quite neutral to me.
LOL, i totally agree. How is a neutrality banner added again? I can't believe someone cared little enough about wikipedia's reputation to put that statement in the "Arguments for" section
give the wealthy ample opportunities to game the system. It is quite possible that many wealthy few households would pay more under a flat tax, especially a flat tax that replaced payroll taxes and premiums for social insuraces, as well as the income tax. But at the end of the day, should we deny ourselves the benefits of a flat tax, simply because a few thousand Bill Gates and Michael Jacksons might pay less tax? Beware of public policy driven by envy. 202.36.179.65 01:10, 29 April 2006 (UTC)
Doesn't Iceland have a flat tax too?
Yes it does, more or less. Iceland has a flat income tax of about 38% with a fixed deduction. However income above (approx) 67K USD is taxed at an extra 4% so the tax level is not totally flat.
"avances economies" don't have a flat tax? What does that mean? It should be defined what "advanced" means because the word itself does not imply anything other than a notion of superiority, which is in this case very POV.
"After World War I, a progressive income tax was introduced in the majority of countries to fund increased government spending for social programmes and, in particular, large scale wars. In more recent years it has become apparent that very high tax rates for the highest income classes (at one point, Sweden had a top rate of 90% income tax) are useless: the taxpayers, especially the rich and mobile ones, evade these taxes. Arthur Laffer therefore predicted that lowering tax rates would actually increase tax returns"
The extract above is highly biased in it's assumptions to Swedish high taxes being "useless".
Read the article below to see how effect they've been,
http://www.monbiot.com/archives/2005/01/11/punitive-and-it-works/ A Guardian article by George Monbiot, on the Swedish tax system. It focuses on it's positive effect to the country’s economic competitiveness, while at the same time reducing inequality. The article cites sources such as the United Nations Development Programme; Human Development Report 2004, the US Department of Labor Bureau of Labor Statistics (1960-1998), The Economist, 2004. Pocket World in Figures, 2005 edition and the Institute of Social Analysis http://www.columbia.edu/~sr793/papers.html.
Thanks for the link, I have modified the text. -- Rob 14:23, 21 September 2005 (UTC)
This article (as with a number of Wiki articles) is currently somewhat US centric. Although some aspects of it are applicable to other countries, many of the examples and a number of the arguments (e.g. the claims with regards to the complexity of the US tax code, food stamps etc) are not, or at least not directly (perhaps the tax code of other countries is complex, but how complex etc) 60.234.141.76 12:55, 24 August 2005 (UTC)
One problem with this article is that it mixes many different concepts such as progressive tax, tax deductions and capital gains tax in ways that are often unspecified and confusing. Seano1 02:26, 5 September 2005 (UTC)
There are quite a few spelling errors in this article - don't have time to correct them myself. Ben Finn 18:59, 8 September 2005 (UTC)
I have deleted the sentence "It was only under the influence of Karl Marx and related thinkers in the nineteenth century that progressive income tax was introduced, which was seen as more just." as this is entirely ahistorical. As noted in Income_Tax, the introduction of a progressive income tax in Britain preceded Marx's birth by 20 years, and income tax in the US didn't become significantly progressive until WWI. Ramon123 09:52, 18 September 2005 (UTC)
Sorry about this, it was done from memory (always dangerous). I just expanded the text some more again, this time with the newspaper article next to me. -- Rob 09:11, 20 September 2005 (UTC)
"Currently, the German tax system is the most complex tax system in the world." Source, please? Deltabeignet 23:12, 19 September 2005 (UTC)
I copied this from other pages but I now see that none of them give a source, and the Taxation in Germany article presents it as "Germans themselves assume that...". So I reworded it and added a link to that article. -- Rob 09:13, 20 September 2005 (UTC)
A good article I thought. I had a comment which I thought I would add to the text (not knowing much about wikipedia) but have found out is more appropriate here. Do with it what you will.
"Race to the bottom": this phenomenon certainly has some force, though if the end result were complete social collapse as described above then the political incentive to lower taxes for the rich would be absent, which would nullify the argument. It is unclear how the effect would be stronger with flat taxes than with progressive taxes. For developing nations to be harmed, it must be the case that there is a stratum of people in the developed country who benefit from the flat tax, and that some people in the developing country have the option of moving into this stratum in the developed country (with greater incentive to do so), reducing the developing country's ability to tax them. But the taxable, rich, mobile people in the developing country would be in general members of the middle class if they relocated to the developed country, which is precisely the class that is unlikely to benefit from a flat tax rate.
CSMR 03:52, 20 September 2005 (UTC)
Through tax deductions, the state can stimulate investments in, e.g., renewable energies or other things it considers worthwhile. In a flat tax system without deductions, the state no longer has this option. What a nonsense, stimulate investments in? I would say investments would then not be (or less) hindered by government interference, as the real value of those investments do then become clear for entrepreneurs. It's the opposite that is true, that taxes of any sort are a hindrance for allowing the right investments being made. Intangible 19:13, 14 October 2005 (UTC)
I (who wrote this) was talking about tax deductions, that can be used to make some investments more worthwhile. Whether these are the right kind of investments is of course a matter of opinion. -- Rob 08:05, 17 October 2005 (UTC)
This article seems to be somewhat biased in favour of flat tax. As someone who is trying to make himself more aware of both the pros AND the cons, this article strikes me as being very one-sided. The Arguments In Favour section is much longer and more detailes than the Arguments Against section, for example.
I think we need a few more people who oppose to flat tax to make a sensible contribution to the article, and I think a neutral party needs to carry out some balanced editing. It's a mess.
I'm not convinced that this is the case - certainly not in every country. Take a look at the article on Lithuania, where it's clearly stated that "in a report published by the US Department of State in June 2005, the minimum wage has not changed since June 1998 and stands at $107.50 per month, well below the poverty threshold. The average wage stands at $336.8 per month". As someone who's lived in Eastern Europe, I am definitely of the opinion that things have NOT improved for the vast majority of people in these countries since the early 1990s. In fact, for some - especially the very poor and those of pensionable age, living standards have actually worsened since the fall of Communism. Obviously I'm not advocating Communism, but I am saying that the so-called "economic miracle" that flat tax has supposedly played such a huge part in is at best an illusion, at worst a right-wing fallacy. What prevails in these countries today is a growing inequality.
This part: "the number of new firms registering in Slovakia jumped 12%." It a lopsided argument. A year before the flat tax was introduced new firms registered were (if I remember correctly) 15%. Therefore this argument is taken out of context. Besides flat tax is not the only factor in the economy.
I think this article would benifit from having a nice simple table detailing all the countries in the world (not just in the Eastern Bloc) that have a flat tax, and maybe those with proposals, listing what the rate is, an explanation of its usage etc. so that one can easily see where and how this style of taxation is being implemented. -- Sclaydonuk 14:56, 28 December 2005 (UTC)
Forbes' "Flat tax" plan is a consumption tax so is does not tax all income. It taxes spending only (income minus savings). The actual rate is also 20.5% though it is advertised as 17%. It is 17% if the tax is included as part of the base. $17 of $83 is 20.5% but 17% of $100 ($83 plus $17). I made the necessary changes.
This entry and Talk Page, often fails to appreciate the following points in favour of the flat tax:
Anyone with any experience filling out tax returns for businesses or sophisticated investors, or who has ever worked for the IRS, should appreciate how the flat tax could make life easier by many orders of magnitude. I grant it would also lead to a Great Depression among CPAs!
Nothing is ideal; adopting the flat tax raises some hard transitional problems. Banks, insurance companies, and nonprofits pose other problems not discussed here. 202.36.179.65 01:03, 29 April 2006 (UTC)
I would like to go through the following section, commenting as needed. My comments are prefaced with "FTA."
To demonstrate its benefits, proponents of flat tax use the largely former- Communist countries of Eastern Europe as examples, several of which have adopted the system. Some of these nations, particularly the Baltic Countries, have experienced exceptional economic growth in recent years. However, there is a growing concern with the effect that flat rates of taxation are having on these countries, both socially and politically, and arguments have been made that flat tax has had less influence on economic growth than previously thought.
FTA: It is indeed hard to sort out the rise in growth attributable to the flat tax regime from the rise due to end of Communism and the entry into the EU.
FTA. "Forcing" is overwrought. It is fact that western European wages are much higher than Lithuanian ones. Can we blame Lithuanians for taking advantage of their country's new EU membership and seeking to work for western European wages?
The Ministry of Labour estimated in 2004 that as many as 360,000 workers may have left the country by the end of that year, a prediction that is now thought to have been broadly accurate. The impact is already evident: in September 2004, the Lithuanian Trucking Association reported a shortage of 3,000-4,000 truck drivers. Large retail stores have also reported some difficulty in filling positions [1].
FTA: Joining the EU simply means that Lithuanian wages will have to rise. The Lithuanian native speakers are out there, but simply making higher pay in western Europe. They will return if and when Lithuanian rises sufficiently. That's the way the cookie crumbles.
FTA. This is typical of the entire former Soviet block. Wages for all will rise, but only gradually over the next several decades.
According to a report published by the US Department of State in October 2005, the minimum wage increased in 2005 to $197.50 per month (the first rise since June 1998), well below the poverty threshold. The average wage stands at $458 per month [2], [3].
FTA. A high minimum wage would only reduce the jobs on offer, and lead to more emigration. In most countries cannot afford a minimum wage above the "poverty line." It is still the case for most human beings in most economies, that they are fated to be working poor. Most of humanity is still held in thrall by the iron law of scarcity. The solution is not a rise in the minimum wage, but a negative income tax and economic growth.
FTA. And no such proof is possible. Causation requires controlled experiments, impossible for national tax policy.
A study by the IMF showed for instance that sharp increases in Russian GDP growth and tax revenue around the time of the introduction of a 13% flat tax were not the result of the tax reform, but of a sharp increase in oil prices, strong real wage growth and an intensification in the prosecution of tax evasion [4].
FTA. Policy reality is often the very opposite of a controlled experiment.
FTA. A flat tax must be designed so as to replace the VAT and social insurance premiums, not just the income tax. Most European households pay more in VAT and social insurance premiums than they do in income tax (this is even true in the USA: at least 40% of American households pay more FICA and sales taxes than they owe in Federal income tax). Employers should be allowed to credit social insurance premiums against their flat tax liabilities. Otherwise, the flat tax will rightly be seen as regressive.
To all of you out there: the devil's in the details! A flat tax can be a wonderful thing, but it is easy here as elsewhere to crash and burn.
I thought others may find this article on flat taxes interesting [8] and may wish to incorporate some of its information into the article. Remember 16:23, 18 October 2006 (UTC)
We may want to add something about the "Fair Flat Tax Act" in the U.S. Senate - not sure if there is a house bill. We may also want to add something about the flat tax sponsored by Michael Burgess in the House. It has the most cosponsors of any Flat tax bill in U.S. congress. Morphh (talk) 15:51, 24 October 2006 (UTC)
I wanted to comment on the discussion of "fairness" in this article. I find reading through this article way to many POV to what is fair or unfair. Personally, I don't think the term should be used at all in the article as it is completely subjective. The article should explain the aspects of the tax and not add POV labels. For example.. the entire section on "fairness" - should be relabeled something like "Tax burden" that discusses how opponents feel that the current system is more progressive then a flat tax. Quickly describe that a progressive tax would tax higher income earners at a higher tax rate... The proponents would add that flat tax proposals include income brackets that provide some progressive steps but also removes loopholes that are used by wealthy under the current system. As another example - is there any value in calling the dividend tax "unfair". Just describe the impact - a flat tax would eliminate the double taxation on income from stock dividends and realized capital gains. This would improve economic growth.. blah blah blah. Describe the issues, show the points, but do not affix labels to what is "fair" - this is for the reader to determine. Ok.. off my soap box. :-) Morphh (talk) 18:41, 11 November 2006 (UTC)
As a non-economist, I find the term very opaque.
I am removing the reference to "double taxation" from this section, as that is not a generally accepted term for dividend taxes, but a pejorative rhetorical device applied to various kinds of taxes (e.g., estate tax, capital gains) by those who oppose them. Djcastel 15:08, 6 December 2006 (UTC)
Yikes - this section is terrible. Why are we posing questions? "may be all well and good"... This reads like a blog entry. I'm busy at the moment, so perhaps someone else could take a look at this. I also wanted to state that I really dislike the format of For/Against. It would be more encyclopedic to address each issue as a whole. For example, a section on "Simplification" should cover pros/cons of that issue. Morphh (talk) 15:47, 21 December 2006 (UTC)
I've moved the below section from the article as I think it is a WP:Troll magnet, U.S. centric, and not appropriate for the Flat tax article. It is a random group of criticisms / rebuttals with no form. If there is a particular criticism that merits inclusion, then it should included in the body of the article. I also don't know what Flat tax bill they're talking about here. In the rebuttal, they make statements that contradict the most supported flat tax bill (flat tax option - Freedom Flat Tax (H.R.1040) by Michael Burgess). Morphh (talk) 14:34, 16 May 2007 (UTC)
There is a heated debate within Libertarian and Conservative circles between advocates of the Flat Tax and advocates of the FairTax (national retail sales tax). Advocates of the FairTax are concerned that the Flat Tax:
Proponents of the flat respond by noting:
The comment(s) below were originally left at Talk:Flat tax/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.
I think this article has a lot of good content but has a bit to go before GA. This article needs a good copyedit and I'd suggest some formating changes (see "Ensuring Simplification" in the Talk). Expanded the citations and write for a more worldly view. Morphh (talk) 21:33, 7 January 2007 (UTC) |
Last edited at 21:33, 7 January 2007 (UTC). Substituted at 14:47, 1 May 2016 (UTC)
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This article needs a complete rewrite. Its: -poorly written and structured overall -contains seemingly dozens of redundant points; after every argument in the "for" section there is the counterargument- WHICH IS JUST REPEATED AGAIN IN THE "AGAINST" SECTION WHICH THEN INCLUDED THE COUNTERCOUNTERARGUMENT. -included untrue generalizations such as "the main argument of flat tax proponents is..." or "proponents of the flat tax sometimes" -Is never specific and has no outside sources. This looks like a third grade essay. -This is a big issue. It can be structured better than "arguments for" and "arguments against", which is again a really juvenile way of formatting this type of information. The topic could instead be structured into more useful categories like "flat tax collection" (about the various methods that have been proposed to collect such a tax), "effect on tax revenue", "distribution of revenue between social classes", "moral arguments", "effect on tax fraud" (discussing on how flat taxes in other countries have lead to more people reporting their income), "tax simplification", "historical economic effects" (laying facts on how flat taxes have effected national economies, etc. -basically, this whole article is an embarassing piece of crap. I plan on working on it tonight.
god i'm done for today. I added a lot of good shit on different proposed flat tax implementations, but somebody needs to clean it up.
Good expansion of pro and con -- and still NPOV.
May I suggest, though, that we list a couple of the major flat tax proposals and then separately describe what advocates say about them? User:Ed Poor, who is unbiased as he opposes all taxes equally!
It looks like SimonP and I hit this one at the same time, but with similar outlooks on the subject. His made it on line first while my mouse decided to freeze, so I've only done a bit of editing for now. Eclecticology
A note to add that would be insightful (and also should be shown in the graduated tax article) would be a mention of graduated tax brackets and what percentage of governmental income typically comes from the different brackets. In a graduated tax country, does the wealthiest tax bracket pay 50% of income tax receipts, or 10%? This could help illustrate the arguments. Tempshill 03:22, 30 Oct 2003 (UTC)
This article is currently a collection of unsourced arguments by random Wikipedians. Cite sources — Wikipedia is not a discussion forum for your opinions. Every argument of the form "supporters say" and "opponents say" should be excised and replace with a direct citation of a prominent sources (newspapers, politicians, economists...) making that argument. (Who argued it, and where and when?)
Without citations, it is impossible to assess the neutrality of the article. (Is it neutral, or is it giving misleading prominence to arguments that only appear in far left/right fringe outlet X?) It's also not very useful — why should anyone care about the opinions of random Wikipedians without any indication of how representative they are? —Steven G. Johnson 18:22, Nov 15, 2004 (UTC)
> Every argument of the form "supporters say" and "opponents say" should be excised
Only up to a point. When dealing with something as fundamental as flat versus progressive taxation, it does seem reasonable to me to talk about proponents and opponents, without necessarily identifying particular camps. Most countries have groups which support one sort of taxation against another. Identifying that it is the GOP of the FT or whoever in the context of such basic topics is not necessarily of much use. To stick an NPOV banner on it is way over the top.
"The replacement of a progressive tax system with a flat tax system reduces taxes for the richest people in society. This, of course, is a powerful argument in favor, if one happens to be, or to represent, one of the richest people in society. Since these people control many opinion-forming organisations, including newspapers, television channels, and political parties, many such organisations advocate a flat rate tax."
- This doesn't sound quite neutral to me.
LOL, i totally agree. How is a neutrality banner added again? I can't believe someone cared little enough about wikipedia's reputation to put that statement in the "Arguments for" section
give the wealthy ample opportunities to game the system. It is quite possible that many wealthy few households would pay more under a flat tax, especially a flat tax that replaced payroll taxes and premiums for social insuraces, as well as the income tax. But at the end of the day, should we deny ourselves the benefits of a flat tax, simply because a few thousand Bill Gates and Michael Jacksons might pay less tax? Beware of public policy driven by envy. 202.36.179.65 01:10, 29 April 2006 (UTC)
Doesn't Iceland have a flat tax too?
Yes it does, more or less. Iceland has a flat income tax of about 38% with a fixed deduction. However income above (approx) 67K USD is taxed at an extra 4% so the tax level is not totally flat.
"avances economies" don't have a flat tax? What does that mean? It should be defined what "advanced" means because the word itself does not imply anything other than a notion of superiority, which is in this case very POV.
"After World War I, a progressive income tax was introduced in the majority of countries to fund increased government spending for social programmes and, in particular, large scale wars. In more recent years it has become apparent that very high tax rates for the highest income classes (at one point, Sweden had a top rate of 90% income tax) are useless: the taxpayers, especially the rich and mobile ones, evade these taxes. Arthur Laffer therefore predicted that lowering tax rates would actually increase tax returns"
The extract above is highly biased in it's assumptions to Swedish high taxes being "useless".
Read the article below to see how effect they've been,
http://www.monbiot.com/archives/2005/01/11/punitive-and-it-works/ A Guardian article by George Monbiot, on the Swedish tax system. It focuses on it's positive effect to the country’s economic competitiveness, while at the same time reducing inequality. The article cites sources such as the United Nations Development Programme; Human Development Report 2004, the US Department of Labor Bureau of Labor Statistics (1960-1998), The Economist, 2004. Pocket World in Figures, 2005 edition and the Institute of Social Analysis http://www.columbia.edu/~sr793/papers.html.
Thanks for the link, I have modified the text. -- Rob 14:23, 21 September 2005 (UTC)
This article (as with a number of Wiki articles) is currently somewhat US centric. Although some aspects of it are applicable to other countries, many of the examples and a number of the arguments (e.g. the claims with regards to the complexity of the US tax code, food stamps etc) are not, or at least not directly (perhaps the tax code of other countries is complex, but how complex etc) 60.234.141.76 12:55, 24 August 2005 (UTC)
One problem with this article is that it mixes many different concepts such as progressive tax, tax deductions and capital gains tax in ways that are often unspecified and confusing. Seano1 02:26, 5 September 2005 (UTC)
There are quite a few spelling errors in this article - don't have time to correct them myself. Ben Finn 18:59, 8 September 2005 (UTC)
I have deleted the sentence "It was only under the influence of Karl Marx and related thinkers in the nineteenth century that progressive income tax was introduced, which was seen as more just." as this is entirely ahistorical. As noted in Income_Tax, the introduction of a progressive income tax in Britain preceded Marx's birth by 20 years, and income tax in the US didn't become significantly progressive until WWI. Ramon123 09:52, 18 September 2005 (UTC)
Sorry about this, it was done from memory (always dangerous). I just expanded the text some more again, this time with the newspaper article next to me. -- Rob 09:11, 20 September 2005 (UTC)
"Currently, the German tax system is the most complex tax system in the world." Source, please? Deltabeignet 23:12, 19 September 2005 (UTC)
I copied this from other pages but I now see that none of them give a source, and the Taxation in Germany article presents it as "Germans themselves assume that...". So I reworded it and added a link to that article. -- Rob 09:13, 20 September 2005 (UTC)
A good article I thought. I had a comment which I thought I would add to the text (not knowing much about wikipedia) but have found out is more appropriate here. Do with it what you will.
"Race to the bottom": this phenomenon certainly has some force, though if the end result were complete social collapse as described above then the political incentive to lower taxes for the rich would be absent, which would nullify the argument. It is unclear how the effect would be stronger with flat taxes than with progressive taxes. For developing nations to be harmed, it must be the case that there is a stratum of people in the developed country who benefit from the flat tax, and that some people in the developing country have the option of moving into this stratum in the developed country (with greater incentive to do so), reducing the developing country's ability to tax them. But the taxable, rich, mobile people in the developing country would be in general members of the middle class if they relocated to the developed country, which is precisely the class that is unlikely to benefit from a flat tax rate.
CSMR 03:52, 20 September 2005 (UTC)
Through tax deductions, the state can stimulate investments in, e.g., renewable energies or other things it considers worthwhile. In a flat tax system without deductions, the state no longer has this option. What a nonsense, stimulate investments in? I would say investments would then not be (or less) hindered by government interference, as the real value of those investments do then become clear for entrepreneurs. It's the opposite that is true, that taxes of any sort are a hindrance for allowing the right investments being made. Intangible 19:13, 14 October 2005 (UTC)
I (who wrote this) was talking about tax deductions, that can be used to make some investments more worthwhile. Whether these are the right kind of investments is of course a matter of opinion. -- Rob 08:05, 17 October 2005 (UTC)
This article seems to be somewhat biased in favour of flat tax. As someone who is trying to make himself more aware of both the pros AND the cons, this article strikes me as being very one-sided. The Arguments In Favour section is much longer and more detailes than the Arguments Against section, for example.
I think we need a few more people who oppose to flat tax to make a sensible contribution to the article, and I think a neutral party needs to carry out some balanced editing. It's a mess.
I'm not convinced that this is the case - certainly not in every country. Take a look at the article on Lithuania, where it's clearly stated that "in a report published by the US Department of State in June 2005, the minimum wage has not changed since June 1998 and stands at $107.50 per month, well below the poverty threshold. The average wage stands at $336.8 per month". As someone who's lived in Eastern Europe, I am definitely of the opinion that things have NOT improved for the vast majority of people in these countries since the early 1990s. In fact, for some - especially the very poor and those of pensionable age, living standards have actually worsened since the fall of Communism. Obviously I'm not advocating Communism, but I am saying that the so-called "economic miracle" that flat tax has supposedly played such a huge part in is at best an illusion, at worst a right-wing fallacy. What prevails in these countries today is a growing inequality.
This part: "the number of new firms registering in Slovakia jumped 12%." It a lopsided argument. A year before the flat tax was introduced new firms registered were (if I remember correctly) 15%. Therefore this argument is taken out of context. Besides flat tax is not the only factor in the economy.
I think this article would benifit from having a nice simple table detailing all the countries in the world (not just in the Eastern Bloc) that have a flat tax, and maybe those with proposals, listing what the rate is, an explanation of its usage etc. so that one can easily see where and how this style of taxation is being implemented. -- Sclaydonuk 14:56, 28 December 2005 (UTC)
Forbes' "Flat tax" plan is a consumption tax so is does not tax all income. It taxes spending only (income minus savings). The actual rate is also 20.5% though it is advertised as 17%. It is 17% if the tax is included as part of the base. $17 of $83 is 20.5% but 17% of $100 ($83 plus $17). I made the necessary changes.
This entry and Talk Page, often fails to appreciate the following points in favour of the flat tax:
Anyone with any experience filling out tax returns for businesses or sophisticated investors, or who has ever worked for the IRS, should appreciate how the flat tax could make life easier by many orders of magnitude. I grant it would also lead to a Great Depression among CPAs!
Nothing is ideal; adopting the flat tax raises some hard transitional problems. Banks, insurance companies, and nonprofits pose other problems not discussed here. 202.36.179.65 01:03, 29 April 2006 (UTC)
I would like to go through the following section, commenting as needed. My comments are prefaced with "FTA."
To demonstrate its benefits, proponents of flat tax use the largely former- Communist countries of Eastern Europe as examples, several of which have adopted the system. Some of these nations, particularly the Baltic Countries, have experienced exceptional economic growth in recent years. However, there is a growing concern with the effect that flat rates of taxation are having on these countries, both socially and politically, and arguments have been made that flat tax has had less influence on economic growth than previously thought.
FTA: It is indeed hard to sort out the rise in growth attributable to the flat tax regime from the rise due to end of Communism and the entry into the EU.
FTA. "Forcing" is overwrought. It is fact that western European wages are much higher than Lithuanian ones. Can we blame Lithuanians for taking advantage of their country's new EU membership and seeking to work for western European wages?
The Ministry of Labour estimated in 2004 that as many as 360,000 workers may have left the country by the end of that year, a prediction that is now thought to have been broadly accurate. The impact is already evident: in September 2004, the Lithuanian Trucking Association reported a shortage of 3,000-4,000 truck drivers. Large retail stores have also reported some difficulty in filling positions [1].
FTA: Joining the EU simply means that Lithuanian wages will have to rise. The Lithuanian native speakers are out there, but simply making higher pay in western Europe. They will return if and when Lithuanian rises sufficiently. That's the way the cookie crumbles.
FTA. This is typical of the entire former Soviet block. Wages for all will rise, but only gradually over the next several decades.
According to a report published by the US Department of State in October 2005, the minimum wage increased in 2005 to $197.50 per month (the first rise since June 1998), well below the poverty threshold. The average wage stands at $458 per month [2], [3].
FTA. A high minimum wage would only reduce the jobs on offer, and lead to more emigration. In most countries cannot afford a minimum wage above the "poverty line." It is still the case for most human beings in most economies, that they are fated to be working poor. Most of humanity is still held in thrall by the iron law of scarcity. The solution is not a rise in the minimum wage, but a negative income tax and economic growth.
FTA. And no such proof is possible. Causation requires controlled experiments, impossible for national tax policy.
A study by the IMF showed for instance that sharp increases in Russian GDP growth and tax revenue around the time of the introduction of a 13% flat tax were not the result of the tax reform, but of a sharp increase in oil prices, strong real wage growth and an intensification in the prosecution of tax evasion [4].
FTA. Policy reality is often the very opposite of a controlled experiment.
FTA. A flat tax must be designed so as to replace the VAT and social insurance premiums, not just the income tax. Most European households pay more in VAT and social insurance premiums than they do in income tax (this is even true in the USA: at least 40% of American households pay more FICA and sales taxes than they owe in Federal income tax). Employers should be allowed to credit social insurance premiums against their flat tax liabilities. Otherwise, the flat tax will rightly be seen as regressive.
To all of you out there: the devil's in the details! A flat tax can be a wonderful thing, but it is easy here as elsewhere to crash and burn.
I thought others may find this article on flat taxes interesting [8] and may wish to incorporate some of its information into the article. Remember 16:23, 18 October 2006 (UTC)
We may want to add something about the "Fair Flat Tax Act" in the U.S. Senate - not sure if there is a house bill. We may also want to add something about the flat tax sponsored by Michael Burgess in the House. It has the most cosponsors of any Flat tax bill in U.S. congress. Morphh (talk) 15:51, 24 October 2006 (UTC)
I wanted to comment on the discussion of "fairness" in this article. I find reading through this article way to many POV to what is fair or unfair. Personally, I don't think the term should be used at all in the article as it is completely subjective. The article should explain the aspects of the tax and not add POV labels. For example.. the entire section on "fairness" - should be relabeled something like "Tax burden" that discusses how opponents feel that the current system is more progressive then a flat tax. Quickly describe that a progressive tax would tax higher income earners at a higher tax rate... The proponents would add that flat tax proposals include income brackets that provide some progressive steps but also removes loopholes that are used by wealthy under the current system. As another example - is there any value in calling the dividend tax "unfair". Just describe the impact - a flat tax would eliminate the double taxation on income from stock dividends and realized capital gains. This would improve economic growth.. blah blah blah. Describe the issues, show the points, but do not affix labels to what is "fair" - this is for the reader to determine. Ok.. off my soap box. :-) Morphh (talk) 18:41, 11 November 2006 (UTC)
As a non-economist, I find the term very opaque.
I am removing the reference to "double taxation" from this section, as that is not a generally accepted term for dividend taxes, but a pejorative rhetorical device applied to various kinds of taxes (e.g., estate tax, capital gains) by those who oppose them. Djcastel 15:08, 6 December 2006 (UTC)
Yikes - this section is terrible. Why are we posing questions? "may be all well and good"... This reads like a blog entry. I'm busy at the moment, so perhaps someone else could take a look at this. I also wanted to state that I really dislike the format of For/Against. It would be more encyclopedic to address each issue as a whole. For example, a section on "Simplification" should cover pros/cons of that issue. Morphh (talk) 15:47, 21 December 2006 (UTC)
I've moved the below section from the article as I think it is a WP:Troll magnet, U.S. centric, and not appropriate for the Flat tax article. It is a random group of criticisms / rebuttals with no form. If there is a particular criticism that merits inclusion, then it should included in the body of the article. I also don't know what Flat tax bill they're talking about here. In the rebuttal, they make statements that contradict the most supported flat tax bill (flat tax option - Freedom Flat Tax (H.R.1040) by Michael Burgess). Morphh (talk) 14:34, 16 May 2007 (UTC)
There is a heated debate within Libertarian and Conservative circles between advocates of the Flat Tax and advocates of the FairTax (national retail sales tax). Advocates of the FairTax are concerned that the Flat Tax:
Proponents of the flat respond by noting:
The comment(s) below were originally left at Talk:Flat tax/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.
I think this article has a lot of good content but has a bit to go before GA. This article needs a good copyedit and I'd suggest some formating changes (see "Ensuring Simplification" in the Talk). Expanded the citations and write for a more worldly view. Morphh (talk) 21:33, 7 January 2007 (UTC) |
Last edited at 21:33, 7 January 2007 (UTC). Substituted at 14:47, 1 May 2016 (UTC)
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