Comments by "Wojtek The Bear" (@wojtekthebear4958) on "Would a Flat Tax Be More Fair? | 5 Minute Video" video.

  1. Because public goods need to be funded? It's not a hard concept.
    3
  2. garrett boyaci I feel like your trying to twist my words. No, I am saying that the government is more efficient at creating and maintaining public goods than the private sector due to many factors. Think about it this way, if someone gave you a service for free and then asked for a small payment, though not paying it wouldn't affect your use of the service at all, would you pay for it? Of course not. This is what's known as the free rider problem. No one is willing to pay for a free service, and, if the roads aren't exclusive to paying customers only, a defining trait of a public good, then whoever runs said goods won't profit from it and then there would be no incentive for said road network. The government gets around this by taxing gasoline as a way to pay for the roads. What if private companies made a whole road network based on toll roads, getting rid of their use as a public good? Well, as creating a road costs a crap ton and, similar to railroads, the government can't have fifty billion of them going everywhere, monopolies will naturally form. Obviously as monopolies are the lack of competition and the demand for roads is incredibly inelastic, the monopolies can charge outrageous tolls and little can be done. They also have little reason to make sure the roads are fully maintained as there's no one competing with them. If you don't think this will help, look at just about every utility company ever. Isn't it strange how most regions only have one electric company, one garbage company, and one water company? Also isn't it strange that 99% of governments decide to create the road network themselves instead of using private companies if this was a more efficient system?
    2
  3. garrett boyaci I already answered this. Because it benefits society, which, in turn, benefits you.  I've also already given specific examples of this, and have more to spare. While I understand your position through those quotes, they in no way made it any more credible, especially since its just the same person being quoted each time. I was tempted to say this when you cited Mises but decided not to, so I'll say it here. Perhaps you should diversify your readings when it comes to economics. I (mostly) don't have a problem with Austrian economics, but it is a fringe school of economics at best. It would be best if you at least got the core ideas from the other schools of economics before you solely devote yourself to that one school, even if you end up disliking all the others anyway. That way you understand the argument in favor of, say, allowing the government to fund projects through taxation, even if you don't agree with them.
    2
  4. Only people who don't understand the tax system try to stay below brackets. After all, when one enters a higher bracket, only the income in that bracket is taxed at that level. That's why there's a difference between one's tax rate in a tax bracket and their marginal tax rate (total tax rate). So if I earn $15,000 a year, and the first bracket is 5% from 0-$10,000 and 10% >$15,000 I am taxed at 5% for my first $10,000, which is $500, and 10% for the extra $5,000, which is $500, meaning I paid $1,000 on an income of $15,000, giving me a marginal tax of 6.66%. Just to prove I'm not making this up, here's a source for my claim (https://www.fool.com/taxes/2014/09/07/how-tax-brackets-really-work-and-how-to-make-them.aspx).
    2
  5. That's not a flat tax. A flat tax is something that everyone pays the same percentage of their income on. If even one group is left out of it, it is no longer a flat tax, but a progressive tax.
    1
  6. garrett boyaci I am saying it is in society's best interest to support projects that benefit society as a whole. For instance, do you like the ability to drive to work as opposed to walking? Do you like how the roads are (usually) properly maintained? Well that only happens because of the government's involvement.
    1
  7. garrett boyaci Innovation has nothing to do with this. The only thing that matters are efficiency and the welfare of society. Innovation is far from the only thing that creates monopolies. Actually, it is the least likely to create a monopoly. What creates them are the start up costs involved and the potential dividing of the market. Let's look at a typical electric company. What do they need in order to offer their service? They need a huge building to generate electricity, a generator, proper measures installed to handle the pollution, like air scrubbers, and then power lines to run directly to their customers' houses. This only works if they can guarantee a profit from their customer base. Now another electric company also starts thinking about setting up in the area. They too need to pay the costs associated with setting up, and too need to install their own lines. The problem here is that there's no guarantee they will get a significant portion of the market share, meaning they would expect profits. As profits are everything, they just won't compete. It wouldn't be profitable for them to build a power line across an entire street just to satisfy one house after all. And I think the whole "you have no proof that it will cost you more" is directed towards monopolies, so I'll answer your claim here. Yes, yes, I do. If you have ever taken an into economics course, you will see this chart (http://www.jslon.com/AP_Economics/MicVis/fig11.9.gif). This is the graph of a market involving a monopoly. As you can see, the monopoly price at Pm is much larger than the socially optimal price of Pr. Pr is also the price for perfectly competitive markets as that's where marginal cost equals demand.
    1
  8. garrett boyaci The graph was pure economic theory, not an empirical analysis. The socially optimal price is also the market price in a perfectly competitive market, but next to no market is perfectly competitive. This is because brand names make products non-uniform. I don't want just any shoe, I want a Nike shoe as I view their brand as superior. This means that I don't view Nike shoes to be the exact same of all other shoes, deviating from a perfectly competitive market. This is the most seen market in the world and called Monopolistic Competition (http://www.investopedia.com/terms/m/monopolisticmarket.asp?lgl=no-infinite). Perfectly competitive markets are also not profitable. As marginal benefit equals marginal cost for a firm, they are not expected to make money in the long term (though they can in the short term). Well what company is going to start if they can't profit from it? The only example of a perfectly competitive market I can think of off the top of my head is gas stations. No one really cares from which gas station they buy gas. Coincidentally gas stations don't profit from selling gas, but because from selling stuff at their convenience stores.
    1
  9. garrett boyaci No problem. Always happy to have a civil discussion.
    1
  10. GeddyMX Thanks!
    1
  11. Nah, I'm guessing his plan works similar to how ours does now. By the way, this isn't a flat tax, and it's bullcrap that he claims it is. If it were flat, everyone would be paying the same. Since he is giving tax break to the poor, this is still a progressive tax, just a simplified version. Anyway, as it works today, if you earn $54,000, you won't pay any taxes on the first $52,000, and will pay a 17% tax on the $2,000 it takes to go from $52,000 to $54,000, which would be $340. So you bring home $53,660.
    1
  12. Not entirely true. While some of the tax is placed on the consumer, not all of it is. Usually the business still bears a pretty heavy burden. After all, what does basic economic say happens when a business increases prices to offset the tax? Less of the good is demanded. This leads to a deadweight loss in the market, hurting the business too. Because of this, only the shape of the supply and demand curves really matter in determining who pays a tax.
    1
  13. I don't agree with this tax plan at all, but your criticism of it is unfair, at least if it's similar to how our tax system is already set up. I our tax system, even if you earn over the amount in that tax bracket, you still pay the percentage tax in that bracket up to the upper limit of that tax bracket. So, using this system as reference. If someone earns $75,000 a year, they would pay 0% on the first $52,800 they earn, someone everyone gets, and then 17% on the next $22,200, bringing the total tax paid to $3,774  and the marginal tax rate to 5%. This is also why the system in the video is still a progressive tax, not a flat tax, as not everyone is paying the same marginal tax rate.
    1
  14. More like because it's less distortionary on the economy. As your income rises, your spending relative to your income declines. Someone earning $20,000 a year will spend most of it just paying off ordinary expenses. This is not the case for someone earning $1,000,000. For that reason, taxing the person who earns $20,000 a year would more negatively effect the economy than taxing the $1,000,000 earner.
    1
  15. Well the main problem of this video is that they created a progressive income tax themselves. By making it so that below a certain income one doesn't pay taxes, the narrator is in effect making the marginal tax rate higher depending on income earned, which is what the hallmark of a progressive income tax. Otherwise I think the video is going with the idea that it is immoral to have people pay more solely because they make more money, but their tax plan would then make them hypocrites.
    1
  16. That wouldn't be nearly enough in taxes to pay for all the liabilities of the local, state, and federal governments.
    1
  17. On the very basic level he has the right idea. Our tax system is too complicated and should be simplified. Beyond that everything he says he stupid though. A flat tax would in no way pay for even half the expenditures of the government, meaning many things like Social Security, Medicaid, Medicare, SNAP (food stamps), funding for roads, funding for research, educational subsidies would all have to go. And you might hate programs like Social Security, but I can tell you that many poor families require Medicaid, SNAP, and WIC to meet even their most basic needs.
    1
  18. Melon Sherbert Potentially, but considering the plan is not to tax anyone under $50,000, the percentage tax would be significant higher. 
    1
  19. Hackattack Hakenson You're on the right track, but the peak of the Laffer Curve has nothing to do with this. The peak of the Laffer Curve only gives us the most possible revenue the government can earn, but, considering the narrator of this video is planning on downsizing the government, the maximum revenue doesn't really matter (http://www.bankableinsight.com/wp-content/uploads/2014/11/laffer.png). Otherwise you are correct.
    1