6 Responses to hypothesis – blue22

1. exactlysimilar29 says:

   January 26, 2022 at 9:08 AM

   Can taxation of any group be considered immoral?

   Reply
2. davidbdale says:

   January 29, 2022 at 3:28 PM

   This is fascinating, blue. I hope it’s something you’re passionate about (and that you haven’t written about it in the past). I’m eager for you to use the opportunity to learn something new, perhaps change your mind.
   1. The tax rate.
   —Let’s start out by being more specific. There are countless tax rates. You mean the United States federal income tax rate administered by the IRS.
   2. The tax rate and the wealthy.
   —The two things don’t necessarily have anything to do with one another. I presume from what you say later in the list that here you mean: “The tendency of the wealthy to underpay their federal income taxes.” That may or may not be a feature of the tax RATE.
   3. A flat tax rate to stop the wealthy from dodging taxes.
   —To be clear, a “flat tax rate” wouldn’t prevent anybody from dodging taxes. Whether everybody is required to pay the same rate or whether the rate differs according to income, people who dodge taxes will dodge taxes regardless of the rate.
   4. A change in the tax system is necessary to create a fairer monetary environment.
   —Now you’re changing the subject. Or dodging the subject. Didn’t you already identify the flat tax as the “change in the tax system” you were recommending, and didn’t you already identify “to eliminate tax dodging” as the “creation of a fairer environment”?
   5. An overhaul of the tax system is necessary to make sure everyone pays their fair share and create a better monetary environment.
   —You’re back-tracking again, getting less specific instead of more specific. Is your “overhaul” different from the establishment of a flat tax? Is “making sure everyone pays their fair share” different from “a fairer environment” or “eliminating tax dodging”?
   6. An overhaul of the tax system is necessary in order to stop the wealthy from abusing loopholes to avoid paying their fair share, as well as an implementation of a flat tax rate in order to create a fairer tax percentage between different income groups.
   —I’m still a big fan of your enterprise, blue. I applaud you for tackling tax unfairness as a topic. I just want to help you focus clearly.

   You’re apparently making two separate proposals:
   —overhaul the tax system
   —implement a flat tax rate

   THE OVERHAUL
   —Its purpose would be to eliminate “the wealthy from abusing loopholes.”
   ——Does this mean eliminating loopholes?
   ——Or do you favor loopholes but condemn their abuse?
   ——If they have legitimate uses, are they loopholes?

   PAYING THEIR FAIR SHARE
   —You will have to somehow establish what you mean by a “fair share.”
   —Is it the same thing for everyone who earns an income?

   FLAT TAX RATE
   —You say it will “create a fairer tax percentage between different income groups”
   —Does that mean every “income group” should pay the same percentage of their income in taxes?
   —For a person barely scraping by, 15% of her income may be the difference between seeing a doctor and going untreated.
   —For a person making millions, 15% of her income may be the difference between buying a small Greek island and buying a big Greek island. Is that what you mean by a “fair tax percentage”?

   When you think about “the rich getting richer,” do you mean “they have a massive salary,” or “the value of their assets has skyrocketed”? I don’t know if Jeff Bezos pays himself a salary. He might not have any “income” to tax. But his stock doubled in value during the pandemic, so he “made,” I don’t know, a trillion dollars. Should he owe 15% of that to the IRS? It wasn’t income. He didn’t sell the stock and convert it to cash. He’s not actually wealthier, is he, technically? The value of his assets could go to $0 tomorrow. Your bank account won’t. Your income is income and gets taxed. His isn’t. What’s fair?

   I’m eager to work with you on this, blue. It may be a more complex argument than you thought.

   Like all feedback, blue, this is meant to begin a conversation.
   I’m waiting to hear your reply.

   Reply
3. davidbdale says:

   January 31, 2022 at 12:52 PM

   No Reply, blue?
   I’m disappointed. I gave you class time to respond!

   Reply
   • davidbdale says:

     February 1, 2022 at 1:01 PM

     Sent reminder text.

     Reply
4. blue2228 says:

   February 1, 2022 at 9:08 PM

   Sorry for the late reply.

   I am a business major, and I have always found economics and money a very interesting topic. However, it is a topic that I, myself, wish to learn more about. I feel that my knowledge of taxes is lacking. I chose my topic based upon something my accounting professor said a week or so back about how he finds the taxation of bigger companies a very interesting subject. Upon doing some research, I found that the use of stocks is a big way that the rich get out of paying the proper amount of taxes in a multitude of different ways. When I was thinking about my hypothesis, I was juggling the problem as well as a potential solution. A flat tax rate would eliminate a lot of issues within the rich taxation topic, but would generate many issues in other parts of the economy. I think that that is why I find money and the economy so interesting, because of how every decision will affect everything. I plan on doing more research to come up with a more well thought out solution. I said “Fair share” as a general term, because a lot of people have different ideas of what the fair share should be. From memory, Bezos payed a minuscule amount compared to his wealth. I think it was under 1 percent, and much of that was likely avoided using these loopholes. Many would agree that that is far too little. Obviously there are other factors in Bezos wealth, like capital and such that I would need to consider. I think I am shifting more towards the “Overhaul the tax system” topic rather than the implementation of a flat tax rate. However, there is still much more complex data and facts to look into, as well as more specificity into how exactly the wealthy get out of paying taxes so that a more well rounded conclusion can be reached for this paper. I am looking forward to the challenge of figuring this out over the coming months.

   Reply
   • davidbdale says:

     February 1, 2022 at 10:15 PM

     My favorite observation from your Reply above is, “I think that that is why I find money and the economy so interesting, because of how every decision will affect everything.”

     As the IRS has repeatedly discovered, there’s virtually no way to write tax laws strict enough to frustrate cheating and avoidance. But there’s always hope that you’ll come up with a solution.

     You’ll have to find your own comfort level with your hypothesis, of course, but I would caution you in one way early. Don’t even try to tackle something as broad as “overhaul the tax code” in 3000 words. It will be hard enough to argue persuasively for a flat tax in just a few pages. So, think narrow. Find ONE small aspect of the tax code that would compel big businesses to pay more than they do now, and consider that a major accomplishment.

     Your thoughts?

     Reply