Talk:Proportional tax

Makes No Sense

How can Proportional Taxes both 'not progress from "low to high" or "high to low" as income or consumption changes' and at the same time be 'considered by some to be regressive'. This makes no sense at all. 175.138.253.168 (talk) 04:16, 12 February 2011 (UTC)

It's more to do with disposable income and cost-of-living than being objectively regressive which would be contradictory. For those below a certain wage bracket (based on C-O-L) a flat tax would be significantly detrimental compared with those above it because purchasing power drops exponentially. Some economists have suggested that there should be a progressive tax up to a certain income bracket and then a flat tax after that, however there are problems with that too, such as deadweight loss from a drop in demand after the progressive tax barrier. This is all based on memory by the way so don't quote me. 92.7.24.39 (talk) 16:32, 12 August 2011 (UTC)

I think the primary reason some call proportional taxes regressive is that they're, perhaps unknowingly, redefining the term to measure income on an tax base that is not income and computing any savings or lack of spending on taxed goods as regressive acts. They're measuring something (income) that's not taxed, thus anything that doesn't tax income is regressive under that inaccurate definition. Morphh ^(talk) 13:56, 13 August 2011 (UTC)

As an income tax, the proportional tax would be such that everyone pays the same rate. No exemptions or standard deductions. In this case a person's marginal tax rate (rate on next dollar of income) equals the effective, or average tax rate (tax paid/income). This is different than a flat tax, which usually allows a standard exemption or deduction. As a sales tax on consumption, the progressive tax is the same marginal tax rate (rate on next dollar spent). However, the effective tax rate (total sales tax paid/income) is significantly higher for those with a lower income. Thus it is "regressive". Those with a lower income pay more of their income in taxes, as a percentage. Tom Bingamen 17:59, 5 October 2011 (UTC) — Preceding unsigned comment added by Markolde (talk • contribs)

Merger proposal

The following discussion is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

---

The consensus was: "Do not merge". LK (talk) 03:09, 25 July 2012 (UTC)

---

I propose that Flat tax be merged into Proportional tax. I think that the content in the 1st article can easily be explained in the context of the 2nd article, since Flat tax and Proportional tax are synonyms. Faunas (talk) 16:39, 24 August 2011 (UTC)

• Support - (see reasons above) Faunas (talk) 16:49, 24 August 2011 (UTC) - true flat tax literally is synonymous with proportional taxes- all reasoning given above and below are assumptions made on how flat tax will look and function in order to be realistic, and as such should be noted, but are not what it is directly.
• Oppose - In a theoretical sense of a true flat tax, they're synonyms, but real world application is much different. The Flat tax article is about Flat taxes, which for most purposes and uses, are not proportional. In most legislation and application, flat taxes are progressive. The Flat tax article is about implementations of tax policy utilizing a single rate, minus exemptions. The Proportional tax article is about the distribution rate applied to any tax. So to clarify, Proportional tax is grouped with Tax incidence, Progressive and Regressive. Flat tax is grouped with Income tax, Sales tax, VAT tax and other implementations of tax policy, which could have progressive, regressive, or proportional effects of tax incidence. Morphh ^(talk) 18:33, 24 August 2011 (UTC)
• Oppose - Flat tax is the usual term for this concept. Philip Cross (talk) 19:30, 19 January 2012 (UTC)
• Comment - The article Flat Tax should be moved/renamed "Flat Rate Tax". A flat tax is one in which all those taxed pay the same dollar amount. The article states it is properly about a flat rate tax. — Preceding unsigned comment added by 205.174.187.10 (talk • contribs) This comment was added on the WikiProject Taxation page. It doesn't directly apply but this seemed the best place to put it. (Morphh)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

Major conceptual problems with the article

1. As described, the "flat tax" is actually progressive because it attempts ease the negative impact on low to moderate income groups. 2. The term flat tax is improperly used. A flat tax is a fixed dollar amount, say $10,000. Inability to pay or hardship is not an excuse. A true flat tax is a regressive tax. 3. It is likely that people want simple explanations, which is why so many people confuse flat tax (a simple term) with proportional tax (which is hard to say in an emotionaly charged, visceral response). — Preceding unsigned comment added by 209.225.96.90 (talk) 10:48, 25 October 2011 (UTC)