>>>So, consider three families of four. One earns $40,000 a year (I think that's actually above the federal poverty limit, but I sure wouldn't want to live on 40K), one earns $120,000 a year, and third earns $1,500,000 a year.
>>>
>>>Family 1 pays $4,000 of taxes, leaving them $36,000 to live on.
>>>
>>>Family 2 pays $12,000 of taxes, leaving them $108,000 to live on.
>>>
>>>Family 3 pays $150,000 of taxes, leaving them $1,350,000 to live on.
>>>
>>>Surely you can see that for family 1, the impact of the taxes in terms of their ability to survive is much, much larger than for the other two families.
>>>
>>>Tamar
>>
>>First of all, I'd expect there to be an exemption limit. Secondly, how is this then different from the complicated scenario that now exists? I think a flat tax based on gross income is far fairer to everyone.
>>
>>I certainly don't see the point in trying to even things out so that all three of your families above have to be brought down to the lowest common denominator. However you structure it, your family 3 will always have more (a lot more) to live on than families 1 and 2. At least this way, family 3 pays what the tax law expects. No tax shelters, and no hiding income. Gross is simply what comes in. It's when you start complicating things with loopholes and net incomes etc that things begin to go awry.
>
>I'm not suggesting that the tax system can fully even things out, or that it should. But I believe that we form societies (which lead to governments) in order to share the costs of living together and make everyone's life better. That's why we have roads, and trash collection, and schools, and lots of other things that work much better when we do them together than when we do them separately.
>
>I think those who have more have an obligation to carry more of the burden of these common costs, so I believe in progressive taxation.
>
>Clearly, in the scenario, family 3 is going to come out much better all around, but a well-structured tax system (and that's not what we have now) will ask them to pay a higher proportion of income than the guy in the middle. The one at the bottom should be paying nothing or a token amount (because people value what they pay for more than what they get for free).
>
>Tamar

Ok, I don't have a lot of argument with that, as long as the progressive tax is based on gross, and not net of loopholes and tax shelters. However, I think a flat tax, being much simpler, would have a much better chance of being administered properly, and as such would be more likely to work smoothly.