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From: ems@amdahl.UUCP (E. Michael Smith)
Newsgroups: net.taxes
Subject: Re: flat vs. progressive taxes, a poll
Message-ID: <1178@amdahl.UUCP>
Date: Thu, 21-Feb-85 15:22:22 EST
Article-I.D.: amdahl.1178
Posted: Thu Feb 21 15:22:22 1985
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> I would like to take a poll (mail only please), concerning
> appropriate taxation programs.
>
The proposal that I like the most combines elements of both a flat tax
and a progressive tax.  I don't know which category I would put it in.
Probably flat tax with some deductions.  It is as follows:

Everyone pays a fixed 'flat' rate on their income. (Say 10%)  They
also receive one standard deduction.  That deduction is set to the
median (NOT mean!) of incomes reported in the prior year.  In this way
The 50% of folks who are loosing at this game don't pay to finance it.
The 50% who are winning pay a 'flat' rate on their winnings, but a
progressive rate on their total income.  The winners pay to play the game.

And know on to some political questions:

> ...                                    It seems irrational to use taxes
> to achieve economic redistribution.
The gov't takes in taxes and spends taxes.  Unless people are willing to
redistribute voluntarily, I don't see much choice.  (What is a
law demanding redistribution other than a tax...)

> 	2. We need tax laws to subsidize certain industries.
> So why must we subsidize various industries.
Say, for instance, that an (unfriendly?) gov't decided to enter
the motorcycle business and subsidized production.  Do we pack up and
leave (and pay the costs of closing down a good industry - unemployment
cost money too...) or counter by partial subsidy?  Do we allow
catastrophic colapse of a declining industry, or gracefull decay
by diminishing subsidy?  There are valid resons to subsidize.

> If someone (say a small farmer, or an auto industry) cannot operate
> at a prophet, why should I support them?
Perhaps because the cost of subsidy is less than the cost of failure.
> If there exists an essential industry, which cannot operate at a prophet,
> there must be better ways to subsidize it (rather than tax deductions).
> So far, I know of no such industry in the United States.

This is probably true.  That is it's problem.  There is nothing that the
political machine detests so much as a blatant truth of subsidy, direct
and in the open, when the alternative of hidden subsidy is available.