Quote from: BitMagic on November 04, 2011, 05:45:16 AM

My problem with flat taxes is the boilerplate: a 9% income tax on someone who spends 80% of their income on basic housing and food is a big freaking deal. a 9% tax on someone who spends 1% of their income on basic housing and food is meaningless. This is problematic.

Good point. A flat tax would be the most "fair" by ratio relative to income, but not according to an individual's share of the whole. And it is problematic in the long-term; the poor (and middle classes) perpetually struggle harder to survive and the wealthy lose their social support structure which is composed of the former.

Quote from: notme on November 04, 2011, 06:11:16 AM

I've usually heard this proposed along with a pre-bate check on goods up to the poverty line, so basic necessities. Then we are only taxed on the extra we consume.

Yes, basically the American Fair Tax proposal.

Quote from: BitMagic on November 04, 2011, 04:02:08 PM

At what point do you set the "poverty line"? I know how it's set here in the US. So you tax someone who spends 89% of their income on food, rent and health, but not someone who spends 90%?

I've never looked into how the poverty level is determined; I'd guess it's determined on a statistically-derived basis - can you provide an explanation or link?

Quote from: BitMagic on November 04, 2011, 04:02:08 PM

What if you earned it by siphoning CPU cycles using embedded javascript code? What if you were exploiting child labor in China (where it's legal), and your customers didn't know? In short, does it matter how you earned it to deserve it? Who decides and enforces that?

Exactly. That's the core issue that I'm concerned about: the management. As it stands, management has control over both creation of the rules and enforcement. Human fallibility as the wildcard has historically led to abuse of that situation for individual or oligarchic gain. Bitcoin has the potential to function as more than just money, offering a means to temper less-than-reasonable human traits...

Quote from: BitMagic on November 04, 2011, 06:49:58 PM

Oh, I was saying that someone just under the poverty line (90%) gets a full prebate on their "flat-distributed" % tax. Someone just over it (89%) get's absolutely no benefit. This is my argument for graduated taxes.

Instead of graduated taxation, what about graduated support up to a minimum threshold? This is effectively negative income tax, a key element of which is elimination of minimum wage laws. Note that it would exacerbate existing problems if introduced in conjunction with current welfare programs. A possible solution could be citizen election to participate in only one system or the other, or a mandatory shift over time using the same binary method.

Note this criticism:

Quote

"... workers would decrease labor supply (employment) by two to four weeks per year because of the guarantee of income equal to the poverty level."

It should be pointed out that, despite workers essentially taking an extra 2-4 weeks of vacation per year, they're still part of the work force. In addition, the extra time off provides the chance for people to relax and recuperate - health benefits have been noted from periodic vacationing. Those willing to sustain themselves at that minimum level are free to do so while an incentive to work is still maintained. Any interested in exceeding that baseline are just as free to do so.

Meanwhile, the reporting responsibility can fall to businesses alone. It could be left up to the individual to request the government supplement, possibly through the respective employer(s). Policing ~30 million businesses in the US is much more reasonable and effective than an order of magnitude above that number in individual citizens, not counting illegal immigrants (which is an entirely different issue).

The benefits to elimination of minimum wage laws are multiple: for one, businesses gain the flexibility to pay free market rates; those businesses are also free to hire as many employees as realistically needed without minimum wage associated legislation-induced fiscal distortions, creating more jobs; employees still receive a baseline income.

There are some who will still slip through the cracks, but the opportunity will be readily present in a more robust system - at least until the robot invasion takes all the menial jobs.

Quote from: BitMagic on November 04, 2011, 10:27:02 PM

In addition, my point was that control over someone's financial life (the way unregulated banking, retail, and massive corporations maintain with discretion over pensions, loans, and property they own) can destroy lives as thoroughly as violence. This is why we have federal regulations regarding finance, and those regulations need to be funded.

Again, the issue here is management; an unbiased, purely objective regulator experiencing no benefit from illegitimate actions would keep the existing system working - but humans are still part of it. So is another layer of regulation to make sure the regulators are doing their jobs really necessary? Wouldn't it make more sense to change the system's structure to support effective regulation rather than add another layer of the same?