Owl For President

Saturday, April 23, 2011

Why a flat tax makes absolutely no sense, and the government is not like our family when it comes to monetary policy

The Republicans are very good at packaging misinformation as truth. For example, they constantly bring up the saw, "well, families have to stay within their budget, why not the government?" A few reasons.

1.Families don't print their own money, set their monetary policy or wage wars on their neighbors.

2.Families don't have to worry that if they don't spend money, their children will die.

3.Families redistribute their wealth without laws to force it. Dad goes out and makes ALL the money (traditionally) and then GIVES it to everyone else in his family. Talk about entitlements! The Government, given it's own perogatives, would NOT give any money to it's "children." Nor does private industry just "give" it's money to it's employees, it must be wrested from them, usually with strikes and union deals.

4.Regressive taxes tax the poor far more then the rich. Here's why. Let's say everyone pays the same tax, and it's only on sales (as opposed to a progressive tax that makes it so the more you have the more you pay). Someone that makes 1000 a month and someone that makes 10,000 go to the store to purchase a doohickey for 100 dollars. There is a 10% flat tax. So, the Rich person pays the same as the the poor person. however, 10$ is 1/100th of person 1's monthly check, and it is only 1/1000th of the other person's income per month. Now, in sales, it would be very complicated to end this sort of regressive taxation of labor, but NOT in the area of INCOME tax, where it is quite easy to avoid such a hyper-unfair system of taxation.

Now, if the economy was set up so there was a relatively even distribution of millionaires to poor folks, this would not be as crucial to maintaining a free, fair and open society. But, that is not the case. Here, 1% owns 48% of the country's wealth, so a flat tax would simply allow this small minority with such vast wealth to just save more of it, spirit it out of the country, and contribute eventually to hyper-inflation, food riots and unemployment (like now). The money is not "theirs" it is the result of worker labor, and when workers are totally alienated and estranged....they revolt.

1 comment:

Jonathan said...

I think FICA should be a flat tax, but it is not. Rich people pay less because the 7.65% tax does not have to be paid for income above $106,800. Funny how Republicans never advocate a flat FICA tax.