I can attempt that one. "Regressive" is bad only in the sense where it's disproportionately affecting the quality of life of lower-income people.
So if I have a flat tax that only affects incomes over a certain income level, and that income level is set high enough so that a reasonable person's food, shelter, and clothing needs are met, it's a lot harder to argue that the tax is unfairly regressive, especially when you consider the flat tax above a certain income level is actually the same progressive tax we have now but with a single rung on the ladder.
The flat tax proposals, being simple and loophole free, make it more difficult (and more financially burdensome) to game, whereas the current system seems to be designed to allow people to gain by paying accountants to find loopholes. The benefits of a simplified version of the current progressive tax we have seem self-evident.
The idea is to reduce or eliminate the incentive to cheat. Fairness really doesn't factor into it much, although it could be seen as a nice side benefit. End of argument.
Personally, I'd posit that the only truly fair tax is a fixed rate, like "everyone pays $2000 annually." Everyone is entitled to the same protection under the law, and therefore should owe the same amount. Laws which don't meet the criteria that they apply to all people equally should therefore be stricken.
The next closest "fair" thing to me is a retail sales tax, provided that everyone is provided a stipend to cover the tax paid on basic living expenses. That prevents the negative effects of the regressive nature of the tax.
My personal problem with regressive policies is not that it effects peoples quality of life, rather that it affects the lives of their children. People that did not have a choice about which family they are born into.
Consider my own personal story. I come from an upper-middle class family. During high school I wasn't particularly motivated to excel academically and as a consequence didn't get particularly good grades in courses that I should have if I had invested the appropriate time and effort into studying. My parents response to this situation was to hire a tutor and force me to sit down with said tutor and study several hours a week. As a consequence I ended up getting better grades than I should have simply because my parents had the disposable income to spend on tutors. People from disadvantaged backgrounds do not get this same benefit. As a consequence I go on to university and end up getting a higher position on the totem pole because of my parents wealth. The kid who comes from a disadvantaged background and is in the same academic position as me does not get that kind of second chance.
>The next closest "fair" thing to me is a retail sales tax, provided that everyone is provided a stipend to cover the tax paid on basic living expenses.
Consumption taxes are regressive because they penalize the spenders. Bill Gates doesn't spend nearly as much money as he earns and as such pays a lower effective tax rate than someone who makes $30,000 a year and spends it all to support their family.
>Consumption taxes are regressive because they penalize the spenders. Bill Gates doesn't spend nearly as much money as he earns and as such pays a lower effective tax rate than someone who makes $30,000 a year and spends it all to support their family.
You are ignoring the part he put in about the stipend to cover tax on basic living expenses. With that included, the $30K spender will pay a much lower effective tax rate than Bill Gates.
Making a flat consumption tax progressive in practice is a very simple solved problem --- there might be other arguments against a flat consumption tax but it being regressive is not really one of them. A rebate or prebate that covers the tax up to a certain dollar amount per person solves it nicely.
You're never going to get rid of the advantages of being born into the right family. Money is a relatively minor component; your major advantage was that your parents actually cared. If the Ministry of Equality had outlawed private tutors, your parents would have tutored you themselves, still giving you an "unfair" advantage over kids with less responsible parents.
A graduated tax system where higher incomes are charged at higher marginal rates is no easier to cheat than a flat tax system. The existence of loopholes is the consequence of poor policy design rather than the tendency of taxation to be progressive.
A revenue-neutral flat tax system would ultimately require the majority of people to pay higher marginal tax rates than they do at present, and its inevitable negative effects on the quality of life of the middle classes (even if their basic needs were covered) wouldn't be balanced out by a positive impact on the quality of life of the smaller numbers of people wealthy enough to never consider budget constraints when making spending decisions.
So if I have a flat tax that only affects incomes over a certain income level, and that income level is set high enough so that a reasonable person's food, shelter, and clothing needs are met, it's a lot harder to argue that the tax is unfairly regressive, especially when you consider the flat tax above a certain income level is actually the same progressive tax we have now but with a single rung on the ladder.
The flat tax proposals, being simple and loophole free, make it more difficult (and more financially burdensome) to game, whereas the current system seems to be designed to allow people to gain by paying accountants to find loopholes. The benefits of a simplified version of the current progressive tax we have seem self-evident.
The idea is to reduce or eliminate the incentive to cheat. Fairness really doesn't factor into it much, although it could be seen as a nice side benefit. End of argument.
Personally, I'd posit that the only truly fair tax is a fixed rate, like "everyone pays $2000 annually." Everyone is entitled to the same protection under the law, and therefore should owe the same amount. Laws which don't meet the criteria that they apply to all people equally should therefore be stricken.
The next closest "fair" thing to me is a retail sales tax, provided that everyone is provided a stipend to cover the tax paid on basic living expenses. That prevents the negative effects of the regressive nature of the tax.