Does a stimulus package work better than tax cuts for everyone?

Question

Being a nation of equal human beings, why do we have different income tax brackets? Why should anyone have to pay a higher percentage than any other person in this nation? Isn't a stimulus package that doesn't go to everyone less productive than lowering taxes to an equal amount for every person?

When times are tough why is the typical answer "go take money from someone else and give it to me"?

If i make $5,000 per year or $5,000,000 per year should I be treated any differently than any other person in this nation when it comes to taxation? Is that fair policy to charge me more or less depending on if I am prosperous?

So which is better.... a stimulus package to select Americans, or a tax break for every American (please base your anwers on the foundation this country was founded on).

Answer 1

I think this is how it should be done in america: 2% of our monthly household income should be given as national taxes. Property and sales taxes should be eliminated. To make up for this we should pay 2% of our monthly household income in state tax and 0.75% in city/local tax. To pay for education we should pay 0.25% of our monthly household income to the school cities education department. We should not have all of these different districts, but simply one district for every city or town. There should be no such thing as a tax return, this would eliminate half of the employees at the IRS and would save millions in monies payed for these salaries. If we vested more power in the state governments, then this would cut alot of the cost to run the national government operating expenses. Our senators and representatives should be payed $80,000 dollars a year plus traveling expenses and health care. The social security system should be done away with. However, our state governments should collect 0.1% of our monthly income to be set aside in a private savings account. We should eliminate our private health care companies and make a national program that pays for ALL medical expenses. To pay for this  0.2% should be taken out of our monthly income. Oil prices would lower if there were no sales taxes. Operating expenses at the federal level would lower if the unnescearry departments were cut. Our country needs major tax reformation. The tax code should only be several pages long, not several thousand! We make everything so complicated. We are to afraid of hurting someones feelings and we need to get over it and make ourselves the international powerhouse again.

Answer 2

Different income brackets are taxed in a progressive way (meaning people with higher incomes pay more taxes, and people with lower incomes pay less taxes) with the idea that people who have more income can afford to contribute more of their money to the government.

The reason the stimulus package is better for the economy currently, than a tax cut, is because the economy is in quite a slump, and one of the best ways to fix that is to give people money. If you give someone extra money, they are likely to spend that money in the economy, rather than save it. So, if a tax rebate check is handed to a person all at once, they are inclined to spend that check immediately. A tax cut on the other hand, though it would require each person to spend less on taxes, it would not prompt them to spend money in the same way that a rebate check would. Thus, a tax cut would not have the same stimulus effect on the economy.

Also, whether the government provides a stimulus package for tax payers, or a tax cut for tax payers, the only people affected are still just the tax payers in each instance. No more or less people are being affected.

When times are tough as you say, or the economy is down, the best way to fix that is always government spending or pumping money into the economy. However, this action is not taking the money from one person to give it to another per say, it is a planned and budgeted change in government spending.

I personally don't believe it is fair that some pay more for taxes than others, and many people would probably agree with me. The usual argument for this is that people should pay taxes based on the amount of government services they use. Tax policy is a topic that has long been debated. Progressive tax, regressive tax, sales tax, income tax, property tax--they are all hot topics. Since taxation is so complex, it is hard to come to a end all solution.

-Paige

Answer 3

1.  Would a flat tax percentage, applied equally and fairly to everyone, rich and poor, be considered treating everyone the same?  A 10% tax would mean that the person making $5000 would pay $500, and the person making $5,000,000 would pay $500,000.

Keep in mind that the current system has the rich paying the most taxes in an absolute sense.  However, it is very common for the rich to pay a smaller percentage than others, especially when considering the convaluted tax laws that can create tax havens.

On the other hand, a flat fee of $500 for everyone means the government doesn't get funded.  A flat fee of $20,000 would mean that plenty of people simply can't afford to pay taxes.

I also wouldn't put much credit on statistics like "The top 1% of earners in America pay 90% of federal taxes".  This says nothing about the relative percent of income that those individuals pay, and ignores the fact that this is the natural progression of things:  Lots of very poor people, a few middle class people, a few upper class people, and a very, very few extremely rich people.

2.  Would an alternative method of taxing be more fair?  What about taxing based on possessions, and not on income?  What about taxing based on purchases or services?  How high would that tax have to be in order to be effective?  Notably, this still means that the rich would probably pay more taxes than everyone else, even though the percentages would be the same for everyone.

3.  What is the purpose of the stimulus package?  It is to encourage people to spend more money, boosting the economy.

A.  Psychologically, I am more likely to take $600 that I was just handed, and spend it, than if my taxes had just been reduced by $600.  I'm not sure how well this holds for everyone else, however.

B.  The rich already have disposable income, and the $600 is unlikely to affect their decisions in what to purchase.  Because handing out $600 to everyone represents a huge expense to the government, they are trying to reduce that expense as much as possible.  

C.  Was the stimulus package really all that selective?  How many people were denied it who needed it?

4.  Everyone benefits by some levels of services provided by the government, so the government must be well-funded.

A.  Education is a good example.  A business values the fact that there are many highly educated graduates in their region to hire from.  

C.  Improvements in certain universal goods are another example.  Road improvements and other infrastructure improvements aid everyone.

D.  International treaties and negotiations are the principle reason for having a government at all, even if you want no social services.  Things like military defense or diplomatic interactions require basic funding.

5.  Would it work to tax people based on the services they use?

A.  This would get kind of crazy, but not impossibly so.  For example, all roads could be toll roads, and you pay for usage.  All parks could require a fee at the entrance.    

B.  I don't think the funding would work out well.  For example, take educational services.  All schools now require a tuition payment.  What happens for families who can't afford this?  (Let's avoid the argument about how they just shouldn't have had children.)  Should the children be denied educational opportunities?  Should they be required to find a cheaper education, which you could imagine being provided by local churches or other such institutions?  How many opportunities would be available that aren't religiously involved?  

C.  What about public institutions that you didn't really have a choice to use?  Law enforcement is a good example here.  Should they be fully funded by tickets, then?  Should we turn prisons into profitable institutions to pay for police officers and the court systems?

6.  How does this relate back to the founding ideals of the country?

A.  It's hard to equate tax law with freedom, liberty, justice, and the right to pursue happiness.  I think that a pursuit of the most fair system possible that spreads the tax burden as broadly as possible is the best option to support our founding views.  I think that basic social services, like education and health care for children, should just be provided in order to assure that everyone gets an equal opportunity to succeed.