# Is the "Robin Hood" solution really fair?



## Just a Guy (Mar 27, 2012)

As Mae West said, "I've been rich, I've been poor...I prefer being rich." 

As oil, the dollar, the economy, etc. tank goverments are, once again looking towards stealing from the rich to throw crumbs to the poor (probably while keeping the majority for themselves of course). 

Is this really the riht solution?

I work closely with the poor, I've been dead broke and in debt, I've also made a fair amount of money which I'm sure is being eyed by the government for the "good of everyone".

So, is this really a fair way to go?


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## JordoR (Aug 20, 2013)

Quite honestly I've never really agreed with the "tiered" income tax rate system - taxing the higher income earners more just because they make a good living doesn't sit right with me. A lot of people disagree, but I would much prefer a flat tax rate for all income earners (some sort of average between the rates, say 30%).

By the percentage alone, the higher earners still pay more taxes but aren't penalized further by increasing the rate higher and higher.

Also, the whole stealing from the rich to give crumbs to the poor doesn't always quite work. You will always have a certain demographic for whatever reason who don't want to work or feel they are entitled to live for free off taxpayer/government funds. We live in a society where there are programs/options in place for one to get the education they want (if they want) for whatever position they desire (within reason).

Anyway, end rant. :emptiness:


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## Guban (Jul 5, 2011)

A flat tax seems like the fair thing to do. It also makes taxes simpler and much easier to understand. That being said, I suspect a flat tax just won't be able to generate the same amount of revenue as a graduated, "progressive" tax system. Someone who is making a lot of money is capable, although perhaps not willing and happy, of paying a higher percentage of their income. 

The idea of crumbs is all relative too. In Canada, it seems that the social welfare system is sufficient to allow people to get by. As JordoR indicated above, these "crumbs" are enough for a fraction of the demographic. Is it fair? No. The option is to have even more people freezing in the cold, or living in even more misery, or turning to crime. The crumbs are enough to encourage many people to tow the societal line, and live within societal norms.


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## atrp2biz (Sep 22, 2010)

Although Alberta implements a flat provincial income tax, I have no issues with a more progressive system. It comes down to the utility of the marginal dollar. In reverse, it is the lost utility of the marginal tax dollar. We're in a fairly flat part of the curve so I wouldn't be too fussed with tiered rates. If it's between a PST and tiered income taxes, I would prefer the latter. A regressive sales tax is simply too punitive for those trying to make ends meet (re: broke but not broken).


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## Ethan (Aug 8, 2010)

Who is John Galt?


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## Rusty O'Toole (Feb 1, 2012)

It's all right for kindergarten. Take away Sally's candy and give it to the other kids.

Other than that, it is a disaster.

Study the history of a successful, prosperous country and you will find that anybody is allowed to make a buck and keep most of it. There will be a legal system that is clear and honest and efficient. Work is honoured, not working makes you a bum.

When you see a country where work is for suckers, the cops are for sale, and government is a way to steal from your neighbors you see a country on the skids.


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## HaroldCrump (Jun 10, 2009)

This whole progressive-taxation-income-redistribution rhetoric can gone to crazy lengths now.
Pumped up by misguided socialists turned economists like Piketty, the war cry has been taken up by elite champagne socialist leaders like Obama & Hollande.

The idea that appropriating the fruits of labor of high income earners, and the returns of risk for successful investors can somehow create lasting social justice is silly.
We are now in a world with anemic growth and erosion of real income for large sections of the population in every country.
It is fashionably easy to blame the "rich".

Robin Hood analogy is not correct in this case.

A lot of issues are structural - caused by the socio-democratic welfare states set up in the post War era.
What we are living in now are the decaying remnants of that economic system.
These welfare states can no longer be sustained, and have become fetters to growth.
They are now causing the same issues that they were intended to solve.

The ruins of welfare state need to be dismantled to free up both capital and labor to foster growth.


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## sags (May 15, 2010)

The countries with the highest ratings to live, the highest rated education and healthcare systems are socio-democratic countries.


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## HaroldCrump (Jun 10, 2009)

Good luck moving there.
They are all closed, anti-immigration, anti-trade countries.

And if they are the touchstone for social democratic capitalism, then I suppose we should close our borders, cancel all the free trade deals, and tax everyone 80% of income.


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## uptoolate (Oct 9, 2011)

Have never had a problem paying my taxes although some days I sure wish I had more of a say how the money was spent.


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## gibor365 (Apr 1, 2011)

JordoR said:


> but I would much prefer a flat tax rate for all income earners (some sort of average between the rates, say 30%).


Me too! There are many countries that already have flat tax rate

Country or territory	Flat tax rate
Abkhazia[28]	10%
Albania[29][30][31]	10%
Andorra[32]	10%
Anguilla[33]	3%
Belarus[31]	12%
Belize[34]	25%
Bolivia[31]	13%
Bosnia and Herzegovina[35][36]	10%
Bulgaria[31][37]	10%
East Timor[38]	10%
Estonia[31][39][40][41]	21%
Georgia[31][41][42]	20%
Greenland[43]	37 to 46% (depending on the municipality)
Grenada[44]	30%
Guernsey[31][45]	20%
Guyana[46]	33.33%
Hungary[31]	16%
Jamaica[31]	25%
Jersey[31][47]	20%
Kazakhstan[31][48]	10%
Kyrgyzstan[45][49]	10%
Latvia[31][41]	25%
Lithuania[31][41][50]	15%
Macedonia[31][45][51]	10%
Madagascar[31]	22%
Mauritius[31][45]	15%
Mongolia[52]	10%
Montenegro[31][53]	9%
Nagorno-Karabakh[54]	5%
Romania[31][41]	16%
Russia[31][41][55]	13%
Saint Helena[56]	25%
Saudi Arabia[31]	2.5% zakat (citizens of GCC countries)
20% income tax (foreigners)
Serbia[31][57]	12%
Seychelles[31]	15%
South Ossetia[58]	12%
Transnistria[59]	10%
Trinidad and Tobago[31]	25%
Turkmenistan[60]	10%
Tuvalu[61]	30%
Ukraine	15%

and it's beneficial to economy


> The Russian Federation is a considered a prime case of the success of a flat tax; the real revenues from its Personal Income Tax rose by 25.2% in the first year after the Federation introduced a flat tax, followed by a 24.6% increase in the second year, and a 15.2% increase in the third year





> former communist states of Eastern Europe have benefited from the adoption of a flat tax. Some of these nations have experienced strong economic growth of 6% and higher in recent years[when?][citation needed], particularly the Baltic countries, who experience exceptional GDP growth of around 10% yearly.


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## nathan79 (Feb 21, 2011)

I don't think there should be any income tax on the first 20K earned. I think a flat tax could work for amounts above that. The rate would need to be set carefully to avoid hurting the middle class, which could have disastrous consequences in this economy.


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## sags (May 15, 2010)

A flat tax on income from all sources and with no deductions ?


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## Eclectic12 (Oct 20, 2010)

gibor said:


> ... Bolivia[31]	13% ...
> and it's beneficial to economy ...


Odd ... for the supposedly better tax setup, the trend is for my Bolivian relatives to get their siblings to Canada.


Cheers


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## Eclectic12 (Oct 20, 2010)

gibor said:


> Me too! There are many countries that already have flat tax rate
> 
> Country or territory	Flat tax rate
> ... Bolivia[31]	13% ...
> and it's beneficial to economy


Odd that my Bolivian relatives haven't caught on to the benefits and are trying to bring their siblings here ... :biggrin:


Cheers


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## 30seconds (Jan 11, 2014)

How what are those countries sales tax? Would having a flat income tax but a higher sales tax possibly be more "fair". People with high incomes wont be "penalized" for making more money then the next guy like it is now. People who choose to spend more money will off set this. I guess that wouldn't be all that great for the capitalist society we live in though?


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## Guban (Jul 5, 2011)

Very interesting list of countries gibor. I note that most of them are developing countries, so I wonder when they will "progress" to a tax system like we have: a progressive one?  I think that wasn't the point you were trying to make, but it is the conclusion that I draw from your list.


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## peterk (May 16, 2010)

I don't think the way we tax matters all that much, just that the overall government spending and revenues are far far too high. Chop it back by 75% and who cares whether it's a flat tax or a progressive tax. If the rates were 5% on the poor and 10% on the rich and you actually saw some value from your dollars spent then no one would complain.

Someone said, "Socialism is a luxury item, purchased with Capitalism." Robin Hood-ing only works so long as there are rich to steal from.


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## HaroldCrump (Jun 10, 2009)

^ +1. I agree, all that matters in the end, is the tax you pay as a % of your total income.

BTW, we should also take into account other taxes like retail taxes property taxes, and payroll taxes to fund welfare programs (EI, etc.)
It can be an easy political manoeuvr for a govt. to reduce income taxes, but raise EI deductions (called UI in the US, etc.), or retail taxes, etc.
Total tax burden as a % of income is what matters.


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## humble_pie (Jun 7, 2009)

Eclectic12 said:


> Odd ... for the supposedly better tax setup, the trend is for my Bolivian relatives to get their siblings to Canada



flat rate ukraine my dream country


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> ... the war cry has been taken up by elite champagne socialist leaders like Obama & Hollande



but have you truly understood françois hollande's footnote in french history?

it's not that he's any kind of champagne socialist. The real issue is that hollande has disgraced the age-old reputation of france as a lover.

france will recover. French men will rule again. But Flanby - as ex-partner ségolène royal named him, after the quivery french custard pudding called flan - is finished forever.


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## HaroldCrump (Jun 10, 2009)

So they should have elected Dominique Strauss-Kahn?
I believe at one time he was considering a run for President.


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## humble_pie (Jun 7, 2009)

they should have elected Ségolène, she ran for president in the past

france will be alright in the end, do u think the rumours about the marriage on sussex drive are very much more wholesome?


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## uptoolate (Oct 9, 2011)

Guban said:


> Very interesting list of countries gibor. I note that most of them are developing countries, so I wonder when they will "progress" to a tax system like we have: a progressive one?  I think that wasn't the point you were trying to make, but it is the conclusion that I draw from your list.


+1. 

Yes many of them seem to have much in common and as telling is the countries that are not on the list.


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## peterk (May 16, 2010)

Guban said:


> Very interesting list of countries gibor. I note that most of them are developing countries, so I wonder when they will "progress" to a tax system like we have: a progressive one?  I think that wasn't the point you were trying to make, but it is the conclusion that I draw from your list.


I think this exemplifies my "Socialism is a luxury item, purchased with Capitalism" quote. These developing countries have not figured their capitalism yet, hence cannot support the _luxurious_ tax rates required to pay for all the purchases of a successful western nation.


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## CPA Candidate (Dec 15, 2013)

Although I am certainly not a socialist, I support progressive tax systems.

Someone gave a list of countries that have flat tax systems, none of them you would ever want to live in. 

We need progressive tax systems because profit-oriented enterprises do not equally reward their employees when the company succeeds. This issue keeps getting progressively worse, just check executive pay increases over employee pay increases over the past couple of decades. A company does well and CEO gets millions in bonuses, while the average worker gets a 2% bonus. This is a major reason why the economy is sluggish, middle class consumers have pitiful wage growth while the ultra rich just get more and hoard it. Progressive tax allows some of the unfair compensation schemes to be captured and used to pay for social services to ease the burden on those that work hard but ever see the rewards. As someone with access to payroll files, I am acutely aware of how unfair and stratified compensation is within organizations.

The tax system still has a way to go; we need to tax income from property at the same rate as income from employment. The rich capitalist uses his money to earn money and pays less tax on that income that the employee who uses his brain and his hands to create wealth for himself. The capitalist then uses his larger after tax income and repeats his actions, compounding wealth at a rate an employee never could. Over time the capitalist just gets richer and richer while the employee just gets by. Often time this capitalist just came into money from family; like I will someday.


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## Guban (Jul 5, 2011)

peterk said:


> I think this exemplifies my "Socialism is a luxury item, purchased with Capitalism" quote. These developing countries have not figured their capitalism yet, hence cannot support the _luxurious_ tax rates required to pay for all the purchases of a successful western nation.


That's a very interesting quote. I think that I will steal it, and use it liberally.

Unfortunately, as Harold correctly notes, the luxurious tax rates also support other luxuries that our governments avail themselves with.


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## realist (Apr 8, 2011)

peterk said:


> Someone said, "Socialism is a luxury item, purchased with Capitalism." Robin Hood-ing only works so long as there are rich to steal from.


I would argue that the reverse is true more often than not. 

Higher taxes on the rich reflect that they typically benefit more greatly from government spending. Until the market starts to represent the true societal costs of things, taxes and redistribution will have to make up for that market failure. The public is subsidizing corporations to a significant degree. Despite constant complaints about how government interference hurts business, government funded infrastructure, regulation, and services reduce costs for businesses that get to use that infrastructure, don't have to pay benefits because of government healthcare, don't have to clean up their environmental messes because the taxpayer does.


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## sags (May 15, 2010)

A quote from the liberal side of the equation..............

_The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.

John Kenneth Galbraith
_


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## peterk (May 16, 2010)

realist said:


> The public is subsidizing corporations to a significant degree. Despite constant complaints about how government interference hurts business, government funded infrastructure, regulation, and services reduce costs for businesses that get to use that infrastructure, don't have to pay benefits because of government healthcare, don't have to clean up their environmental messes because the taxpayer does.


Subsidizing corporations does not mean they receive more than they pay... Only that they receive _something_, which is perfectly fine. A corporation is after all an entity that benefits the country, as is a person. Yet I hear no complaint from you that people are being subsidized too much. Some government funded infrastructure makes sense, like roads. Regulation? You'd be hard pressed to make an argument that regulations benefit companies fairly or help businesses start and thrive.

You are putting the cart before the horse. The only reason governments can even have money or exist in the first place is that brave enterprising men have taken it upon themselves to build and create in the hopes of turning a profit. Anything that a government can do that is helpful towards that end is good (building roads, protecting property rights, and not much else), almost everything else is harmful.


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## My Own Advisor (Sep 24, 2012)

peterk said:


> The only reason governments can even have money or exist in the first place is that brave enterprising men have taken it upon themselves to build and create in the hopes of turning a profit. Anything that a government can do that is helpful towards that end is good (building roads, protecting property rights, and not much else), almost everything else is harmful.


+1 

Government should be an enabler. It is not for the most part. 

I would be in favour of a flat tax.

It's worth a discussion, a good one, meaning an election issue. What society do we want? Those that succeed, do they have an obligation to sort of pay back the success they've had or this is the flat tax an incentive for more wealth creation, more entrepreneurs, and thus, eventually spending? I prefer the latter.


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## Eclectic12 (Oct 20, 2010)

peterk said:


> ... These developing countries have not figured their capitalism yet, hence cannot support the _luxurious_ tax rates required to pay for all the purchases of a successful western nation.


Is it that they have not figured it out or is it that the families that own 80% of the country are happy with the status quo?
Or combination plus other factors?


Cheers


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## Just a Guy (Mar 27, 2012)

Personally, I think the 1% as people like to call them, will always be there, no matter what kind of society you choose.

There will always be people stronger, smarter, more willing to work, whatever which will allow them to rise above the rest...

Yet we want to punish them for the benefit ones at the other end of the scale who won't/can't do what is required.

Then we tell out kids "do your best". 

Kind of a mixed message....

In the education system, I remember reading once, we spent a million dollars on kids who were at the top of the class to help them develop yet, at the same time we were spending a billion dollars on remedial programs.

We obviously don't want to encourage "the best and the brightest".


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## sags (May 15, 2010)

The 1% have always been there, but they haven't always accumulated 50% of the total wealth.

The danger of wealth inequality at these levels and rising............is there will be no incentive for the 99% to work.

Sharing a continually shrinking piece of the wealth pie, means that no matter how hard someone works or how smart they are, they are guaranteed to get a smaller piece of pie.


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## Just a Guy (Mar 27, 2012)

Or there is a big piece of pie that you can take a chunk of...


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## m3s (Apr 3, 2010)

peterk said:


> Subsidizing corporations does not mean they receive more than they pay... Only that they receive _something_, which is perfectly fine. A corporation is after all an entity that benefits the country, as is a person. Yet I hear no complaint from you that people are being subsidized too much. Some government funded infrastructure makes sense, like roads. *1. Regulation? You'd be hard pressed to make an argument that regulations benefit companies fairly or help businesses start and thrive.*
> 
> You are putting the cart before the horse. The only reason governments can even have money or exist in the first place is that brave enterprising men have taken it upon themselves to build and create in the hopes of turning a profit. *2. Anything that a government can do that is helpful towards that end is good (building roads, protecting property rights, and not much else), almost everything else is harmful.*


Such a skeleton government is an extreme ideology at the far end of the spectrum that I really doubt you'd be happy with in reality. It reeks of naivety and a narrow view of the big picture. The wild west existed before the government services came along but government allowed society to develop and progress into something more humane. Otherwise highway robbery and scalping ruled the land.

1. Regulation looks after many of society's collective interests that corporations would not.. Corporations are only interested in making money, and anything beyond that is really an indirect approach to keep making more money. A world without regulation would be full of misinformation on products and ads, women and minorities would be exploited, people would work in unacceptable conditions for dirt low pay. Certainly our society would be far less healthy and safe, and the environment would be devastated only to make more money than the "competition". It would be like barbaric war without the Geneva Conventions.

I don't necessarily agree with all regulation though. I would rather let failed companies fail. On the other hand unemployment and businesses leaving the country are not in the society's best interests. I think there is a fine balance to find here and I would lean towards less regulation of the "market failures". That's much easier for me to say with a secure job and an emergency fund set aside to ditch the sinking ship the western economy is leaning toward..

2. You want to privatize the police, fire fighters, paramedics, soldiers, judges, water supply, garbage collectors etc? The problem with the brave enterprising *"men"* taking care of everything else is that their only goal is to maximize profits. Privatizing telecom after the infrastructure was established is one thing, but now there is little incentive for them modernize the infrastructure even though it would benefit our economy and society as a whole. Privatizing any key services is just a horrible idea. You can read all about the ramifications of the privatization of health care, education, military, prisons etc in the USA.

As far as "taking from the rich and giving to the poor" there are times when it can certainly benefit society imo. Kids born into poverty are not really to blame for their situation and should be given a fair chance at life imo. Leaving them to the free market is most likely to increase costs on society in the long term (crime, health costs, less value added to economy etc). Adults in poverty are a different situation but again it's all about balance.


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## gibor365 (Apr 1, 2011)

uptoolate said:


> +1.
> 
> Yes many of them seem to have much in common and as telling is the countries that are not on the list.


Not only "undeveloped" countries thinking aboyt flat tax system:
These are countries where concrete flat tax proposals are currently being considered by influential politicians or political parties.
Australia: The current leader of the Liberal Party and now Prime Minister Tony Abbott, has expressed his desire for a tax debate that includes the implementation of a flat tax system.[74] However, the then Australian Labor Party government believes that a flat tax would be detrimental to middle income earners, who would see a rise in taxation from their current levels.[75]

Also, I don't think Andorra is bad country to live 

In NA
At the state or provincial level[edit]

At the federal level, Canada and the United States tax personal income at progressive rates. In addition to the federal income tax, most states, provinces and territories in these countries also tax income. Most of them also use progressive rates, but some use a flat tax rate.



State or province

Flat tax rate




Alberta[63]

10%



Colorado[64]

4.63%



Illinois[64]

5%



Indiana[64][65]

3.4 to 6.53% (depending on the county)



Massachusetts[64]

5.3%



Michigan[64][65]

4.35 to 6.85% (depending on the city)



New Hampshire[64]

5% on dividend and interest income



North Carolina[64]

5.8%



Pennsylvania[64][65]

3.07 to 6.994% (depending on the municipality)



Tennessee[64]

6% on dividend and interest income



Utah[64]

5%


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## sags (May 15, 2010)

In order for capitalism to be successful, corporations and capitalists depend on selling something.......products or services, to people with enough money to afford the product/service.

As the pool of wealth increasingly gathers at their own feet.............to whom do they sell their wares ?

It is the consuming middle class that drive the economy, not a dozen billionaires.

The BOC lowered interest rates because they are desperate to keep debt affordable, to finance everyday spending of the masses.

If the spending stops due to inability to gain further credit, we will enter into a "default cycle" and a very deep recession.

A capitalist economy where the consumer has no capital..........doesn't work.


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## JosephK (Nov 7, 2012)

Currently, we have a progressive tax for middle class wage earners only, everyone else is basically on a flat tax already making the system somewhat regressive. If there was to be a flat tax on all sources of income with no deductions or very minimal deductions I could support it as it would be more progressive than what is currently in place. You can't have a discussion about "fairness" in tax without addressing why certain sources of income should be taxed at much more favorable rates than others. Or why it's "fair" that some people have to pay more tax to make up for others who donated the money to politicians, put their kids in hockey, etc...


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## nathan79 (Feb 21, 2011)

Nice post, JosephK.

If you're a high income earner who makes all or most of their income from wages, you probably stand to benefit from a flat tax -- which is obviously the gist of this thread.

But a true flat tax would treat all income the same. Imagine your capital gains being taxed at 30% (or whatever).

I might support a true flat tax where all types of income were taxed at the same rate, with no tax on the first 20K earned.


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## gibor365 (Apr 1, 2011)

nathan79 said:


> .
> 
> But a true flat tax would treat all income the same. Imagine your capital gains being taxed at 30% (or whatever).
> 
> I might support a true flat tax where all types of income were taxed at the same rate, with no tax on the first 20K earned.


I'd agree with such approach.... In this case CRA can be cut by 70-80% easily nad more money will go to more essential things than huge salaries for CRA guys (I've seen range of their wages and was shocked). CRA is a huge burocratic machine..

You won't even need to file taxes , as all info goes directly from your financial institution to the government


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## My Own Advisor (Sep 24, 2012)

The bureaucracy at CRA would shrink, a good thing. People that are confused by tax laws wouldn't be a mess anymore. You could file taxes easier or like gibor said, regulate the financial institutions using the tax code.

Simple.

I have no idea why we are not moving in this direction, other than protectionism of CRA-related jobs and self-preservation.


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## HaroldCrump (Jun 10, 2009)

JosephK said:


> Currently, we have a progressive tax for middle class wage earners only, everyone else is basically on a flat tax already making the system somewhat regressive.


Brilliantly put.
My thoughts exactly.


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## Underworld (Aug 26, 2009)

Sorry - at a slight tangent, but related to the mentality of lower income folk:

I have a growing rift with my mother, brother and step father over this. My family are vehemently anti-rich. Growing up I was taught that people driving Mercedes and BMWs are horrible people. People that play Golf are horrible.

As I've grown older I've come to realize that people that make more money than me and that are wealthier than me deserve it more. They work harder and are smarter than me. They've taken big gambles and have made the world a better place. They have built new technology, new businesses, better quality of life and more opportunity for people and made society better. Well done to them!

My family don't have the same drive as me and don't really work. A few of them are on benefits. From what I can tell, in their world, money seems to be luck based - hence the jealousy and resentment. They haven't experienced how hard it is to rise through the ranks of wealth acquisition.

In summary, I can see where they get the entitlement approach of tax the rich. Unfortunately as most things are pyramidal, more voting clout lies with the masses of lower income earners


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## Guban (Jul 5, 2011)

My Own Advisor said:


> The bureaucracy at CRA would shrink, a good thing. People that are confused by tax laws wouldn't be a mess anymore. You could file taxes easier or like gibor said, regulate the financial institutions using the tax code.
> 
> Simple.
> 
> I have no idea why we are not moving in this direction, other than protectionism of CRA-related jobs and self-preservation.


The idea of moving to a flat tax isn't necessarily the only way. I have proposed this idea to a government tax survey many years ago. I got a nice form response for my detailed suggestions.

Unknown to me was that this tax filing system is already in use. The idea is *return free filing*, and it has to be a better way. The government already knows much of tax information. For many of us, we would just log in to a secure CRA site and confirm the info, and see our tax return/balance owing. That's it. It could ask about common stuff like child care, medical, ... For people with a more complicated tax situation such as self employed with deductions, perhaps a full tax return would have to be completed, but maybe half to taxpayers would be spared the time to prepare a tax return, and people at CRA to handle tax returns would be greatly reduced. Many countries already do this, apparently.

Of course the idea of a flat tax could be combined with this return-free system, and make the whole process even easier.

BTW, it can't be the nice folks at CRA trying to preserve their jobs because it is the government legislators that would have to make the changes. In part, it is the software companies from people's misery at tax time. See:
http://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing


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## uptoolate (Oct 9, 2011)

sags said:


> In order for capitalism to be successful, corporations and capitalists depend on selling something.......products or services, to people with enough money to afford the product/service.
> 
> As the pool of wealth increasingly gathers at their own feet.............to whom do they sell their wares ?
> 
> ...


This reminded me of billionaire Nick Hausner's TED talk on the central role of consumers and the fallacy of the importance of the rich in creating jobs. There was an uproar when the TED site took the talk down. 

http://www.liveleak.com/view?i=97a_1337288515


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## Pluto (Sep 12, 2013)

I don't buy into the Robin Hood metaphor as it assumes stealing is taking place. Presumably we believe in democracy, and that implies a cost - cost to run the government, and cost to pay for what the voters presumably want. But even if we didn't believe in democracy, and had some other form of government there would still be costs that have to be paid. Also the tax as stealing metaphor is designed to portray the rich as victims. I have a difficult time drawing that conclusion. 

The rich have tremendous advantages over average and poor folk, and I don't see a progressive tax structure as unfair to them. Most of us only dream of having tax problems like the rich have, and it is beyond me why they see our dream as a nightmare. 

http://business.financialpost.com/2013/04/05/tax-avoidance-becoming-bigger-than-the-u-s-economy/


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## sags (May 15, 2010)

I would bet that the rising incomes and asset increases of the ultra-wealthy are more attributable to earning money with their money, rather than hard work and enterprise.

In our society, just having money earns you more money.

Let the low income folks "borrow" a free million dollars to put in a locked in GIC for 1 year...............and they will find it easy to make money too.


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## sags (May 15, 2010)

uptoolate said:


> This reminded me of billionaire Nick Hausner's TED talk on the central role of consumers and the fallacy of the importance of the rich in creating jobs. There was an uproar when the TED site took the talk down.
> 
> http://www.liveleak.com/view?i=97a_1337288515


An excellent and simple debunking of the "job creator" myth.

If lower taxes on "income" earned through the possession of money (dividends, capital gains) create jobs..........and since wealth has pooled so dramatically at the feet of the ultra-wealthy.........where are all the jobs?

As stated in the talk........jobs are created by demand for goods and services, and if there is no demand, the jobs are not sustained and will be eliminated.

We have the example before us in Canada. Corporate taxes were lowered with the promise of job creation, yet few new jobs have been created and a host of jobs have left Canada.

I agree that taxes on the middle class are onerous. To tax physical work at a higher rate than passive income is a ridiculous concept, devised and defended by those who benefit from it. The inequity of wealth can and will continue, until it reaches a breaking point, and then capitalism will break down and a new form of society will emerge.


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## el oro (Jun 16, 2009)

Sags, you demonstrated that you don't understand the concept of double taxation in another thread. Your thinking was along the lines of "If I buy a car, I pay tax. If I sell that car to someone, he pays tax." In reality, double taxation is "I pay taxes when the megacorp, which I own a fractional share of through stocks, pays tax when it receives revenues. I pay taxes again when I take money out of my megacorp, whether through dividends or retained earnings from selling the shares/company to someone else".

If you increase corporate tax, dividends and capital gains all to match the rate of income tax, investment in Canada will likely be curtailed significantly. Translation: More jobs that can leave, will leave.

That said, I'm all for increasingly progressive taxes if the governments can demonstrate effective use of the dollars...


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## HaroldCrump (Jun 10, 2009)

Corporate taxes were not lowered in Canada to create _more_ jobs, but in the hope of keeping the jobs that are already here.
It was a desperate attempt to prevent the flight of capital to lower tax jurisdictions, such as Ireland, Iceland, Luxembourg, Barbados, etc.
The US also has a similar problem with several mega-cap hardcore American companies doing _tax-inversion_ to avoid US corporate taxes.

We can discuss, but can never know for sure, how bad the flight of capital would have been had the corporate taxes not been lowered.

We are already experiencing massive flight of capital because of our rigid labor structures (i.e. over-unionization).
Manufacturing & auto companies have said clearly that they are moving out of Canada (mainly Ontario) because of these reasons.
They have relocated to US south & mid-west, and of course Mexico.


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## tenoclock (Jan 23, 2015)

I usually observe silently, but had to pitch in here. 

It's an economic fallacy that says consumers create jobs. Consumers don't create jobs, they simply consume. That's why the name. Producers create jobs by producing what the consumers want and in the process hiring others to help them produce. You can have all the consumers with all the wealth you want by taking it away from producers, but if nobody decides to produce, then you won't have much wealth (or jobs) being created, you will just have inflation, where more people are competing to buy less and less goods available.

A reversal of the above logic does not work, since everyone consumes and will keep on consuming, maybe a bit more or less depending on the economic climate. However you need to give people incentive to produce because people are above all selfish. Societies that punish success simply stagnate. 

Consumers spend money on consumer goods (depreciating assets), producers spend money on producer goods (appreciating assets). It's not the fault of the producers that the consumers are poor and have no wealth and they should not be punished for it.


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