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Progressive Taxation Idea
September 25, 2009 - 6:32pm
Here it is:
No deductions, instead everyone gets their personal deduction paid to them monthly.
IE- BC's provincial personal exemption is set to increase to $11,000. This would be a monthly transfer to individuals of $916.66.
Set a flat rate of income tax for all incomes and all income earned. Let's say 15% for BC.
The effects on income disparity are huge.
Income Transfer Tax Net
10,000 11,000 3,150 17,850
20,000 11,000 4,650 26,350
30,000 11,000 6,150 34,850
50,000 11,000 9,150 51,850
75,000 11,000 12,900 73,100
100,000 11,000 16,650 94,350
The disparity in income from 10,000 to 100,000 is reduced to 1:5.3 from 1:10.
The Individual Transfer also would allow most social assistance programs to be wound down, saving 100s of millions. It would take the stigma away from recieving social benefits from the government, and supply everyone with a base income that surpasses welfare, etc.
Politically, it should be an easy sell. You giving people money and giving then a "flat" tax.
Okay, I'll bite. Where does the money for this transfer come from?
It doesn't seem to come from the minimal tax base I see here.
The money comes from the existing budget, the amount equals the same amount in foregone taxes by having a personal exemption. Under this system, nothing is deductible.
You tax return is:
A) Income _________
B) Individual Transfer 11,000
C) Total Income (A+B) _________
D) Tax owed (C x 0.15) ___________
Okay, there's no tax base there, so that doesn't work unless you're dismantling and privatizing the vast majority of government services and functions. Clearly, you're in the wrong place.
Using the latest available stats from 2006 (BC Stats), there were 3,165,750 tax returns filed. Total Income for BC was $121,953,912,000.
This gives us:
In hindsight, 15% is below the equilibrium point. That seems to be 20.5%
That gives us
Expenses: 3165750*11000= $34.8 B
Revenue: (121.95 B+34.8 B) x 20.5% =$32.13 B
Deficit/ Surplus: -$2.68 B
Offsets in Expenses:
Social Services- $1.875 B ( Current Budget $3.5B x 70%)
Additional Revenues:
PST: $1.25B ( Current PST revenue/total income x total income + transfers)
Total Deficit/Surplus: $458.4 M
Obviously your wrong.
At 20.5% it adds revenue.
Obviously you're a waste of pixels. Move along.
Tax wealth.
Aren't you a little bit intrigued by the possibility of a guaranteed annual income replacing half a dozen bloated and inefficient bureaucracies?
I see several obstacles to the scheme put forth in this thread but I still think it's worth talking about.
What obstacles, and how would you correct them?
It does...
Current Formula:
Income:$200,000
Personal Exemption: $9,372
Spousal Exemption: $8,829
Taxable Income: $181,799
Tax Owed:
Tier 1 (5.06% on first $35,716)-$1,807.23
Tier 2 (7.7% on next $35,716)-$2,750.13
Tier 3 (10.5% on next $10,580)-$1,110.90
Tier 4 (12.29% on next $17,573)-$2,159.72
Tier 5( 14.7% on income in excess of $99,589)- $12,084.87
Total: $19,912.85
Alternate system
Income: $200,000
Individual Transfer: $9,372 (equal to personal exemption)
Taxable Income: $209,372
Tax Rate: 20.5%
Total Tax: $42,921.26
Hey smart ass.
It works extraordinary well in Sweden.
Yeah, I don't understand the need for the anger either.
Maybe some other people who know about economics can discuss this further? Paging: Stephen Gordon?!?
...not so much anger as impatience with another abstract diversion presented in a completely confused fashion once again.
For starters, if our friend here were capable of distinguishing between the various governmental levels of taxation (and the funding that is transferred between them), this might possibly develop into a useful conversation. So far, not so much.
I think your the one that is confused because tranfers between different levels of government are irrelevant to this discussion. I have proposed a taxation formula that is simplier, builds on popular tax themes in a progressive manner, is used with progressive outcomes in other nations and is possibly politically saleable. It will provide guaranteed income for all, steals the flat tax arguement from the right, increases taxes on the wealthy, ensure everyone pays some taxes and has a buy-in, and reduces income disparity by HALF.
I would think that more members/posters would be on this like flies to ....
Doctors for fair taxation
On Facebook
ETA: oops, will look for a better forum for this...
BUMP
Have the NDP said what they want to do with taxation?
nope, but this would be a good start.
In a CBC Radio broadcast yesterday, NDP House Leader, John Horgan, said that the Liberals had become overly dependent on natural resource revenues, such as natural gas, which are notorious for their volatility. He stated that this has led to the budget shortfall and cutbacks announced yesterday by the Liberals because of the large dropoff in revenues from natural gas as the price of this commodity fell sharply. Horgan said that the NDP would raise corporate tax rates, which the Liberals had lowered greatly, and did not rule out increases in other taxes in order to provide more services. He noted that taxes have largely been shifted to the middle class, as well as the poor, in the latter case, largely through increased fees. It is good to hear a politician offering a justification for raising taxes, rather than an apology, and doing so before an election. Horgan ran third to Dix in the NDP leadership campaign.
Subtext: A portion of the Liberal tax cuts were funded by the carbon tax. The NDP will now keep the carbon tax but instead of promising "revenue neutrality", some of that revenue will go to other programs.
I'm okay with that, as long as it's spent responsibly.