Taxes

This is somewhat inspired from Rachel's post about child tax deductions and partly from the comments in there. Long story short, here's Rachel's objection to child tax credits:

Here’s a debate question: is it fair for people to pay less tax simply because they have chosen to have children? I’m sure you can guess where I stand (I say it’s bullshit), but I’m curious to hear logical, sound defenses of this policy. Yeah, if I had kids, I’d take the deduction, but I don’t think I’d feel comfortable saying it’s actually “fair” that the day I popped a baby out I suddenly deserved to pay less tax than the day I did before.

The comments generally steer around the following ideas:

It's fair, because...
- The children pay into social programs later in life.
- It saves money on social programs by encouraging parents to take care of the children (my take, by the way).

It's not fair, so we should...
- Flat tax! Make everyone pay some percentage (funny how it's always a far lower percentage than what we'd actually pay if we went with this, by the way - it wouldn't be 3%, people).
- Sales tax! That way people notice the tax and start encouraging the government to tax less.

I'm going to state the obvious right here and now - one problem we don't have in this country is people not realizing they should be taxed less. If we actually had that problem, we wouldn't be running up trillions of dollars in debt. The trouble we're having is that there is a big disconnect between what our country takes in taxes and what the people think the government should provide for them. Furthermore, the trouble with sales taxes is they are extremely regressive. Think about it for a sec - if you're poor, you're probably spending damn near 100% of your income on goods and services. If you're rich, you're probably spending a lot less and saving a lot more, and why not? If you're making $1,000,000 a year, how much of that can you spend? That's why we have an income tax - strange as it sounds, it's a little more fair for everyone.

This brings me to the problem of a flat tax. In order for a flat tax to work, you have to assume that the government is not providing any services to the poor. Why? Well, if we are providing services to the poor (health care, food stamps, housing, etc.), all we're doing is taking money from them that we'd probably they rather use on actually getting themselves out of poverty. Pretty simple, right? I mean, think about it for a sec. You're poor. We're giving you money so your life doesn't completely suck. Then, we're going to take your money so we can... be fair? How does that help you not spend our money again? It's the same reason we have a child tax credit - letting someone keep a few grand a year so they have a better chance of taking care of their children beats the hell out of the government spending tens of thousands of dollars for each child that ends up in foster care or in an orphanage somewhere. It's also the same reason that I think it's 15,000 shades of stupid that we tax Social Security.

Now, if you want to argue that eliminating social services would be nice, well, yeah, it would be nice, but it's not going to happen anytime soon. So, as long as we're doing that, let's not knee-cap people that are receiving aid by throwing a flat tax in there that would only force them to need more aid to pay the tax and would keep them on aid longer because we're taxing their ability to get out of it.