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Comment by kaitnieks | Hacker News Reader

I live in eastern Europe and there is one thing that might be relevant. The flat tax here is actually progressive tax in disguise. We have something that could be called non-taxable minimal amount (sorry, I'm not an economist) which is let's say 80 Latvian gold coins (Lgc); the average salary is 400 Lgc; the income tax + social tax is roughly 32% from the amount that remains after non-taxable minimum is substracted. So effectively it would be 0% for people with 80 Lgc salary; 26% for people with average salary; 29% for people with 1000 Lgc salary.

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The U.S. flat tax proposals contain similar measures. Some even include a negative tax provision for low incomes.

How long does it take you to compute and then fill out the forms for your taxes? Also, do you have to declare bank accounts held outside the country?

If you're employed then you don't have to do any form filling at all. It's responsibility of your employer to pay all the taxes and you only get the amount after taxes in your bank account. Typically accountants do all the computing.

There is an exception, self-employed people. They do have to fill in forms and compute everything but their taxes are flat, there is no non-taxable minimum. They have less total tax % but also less perks (no paid vacations or sick days etc)

Update: no, we don't have to declare foreign bank accounts afaik. It might change this year because they just started taxing income from capital gains which will cause some headache for me personally.

Latvia isn't really in Eastern Europe, is it?

http://en.wikipedia.org/wiki/Eastern_Europe#The_Baltic_state...

"The Baltic states , Baltic Nations or Baltic countries are three countries in Northern Europe.."

http://en.wikipedia.org/wiki/Baltic_states

Sometimes Baltic states are considered Northern Europe, sometimes Eastern Europe. In any case article mentions Estonia as well.

You gotta love politicians. The discussion is about Europe's Flat Tax.

But katinieks says no, it's really a progressive tax because of all the "tweaking" the politicians have done.

Assuming this is correct, what do reasonable people do? Call it a flat tax and add in "but it's not really" every time it's mentioned? Call it a flat tax and have the _real_ flat tax idea be tarnished by what they've done and called flat?

Not trying to get in on the discussion. As a guy who watches people talk about problems, politics always amazes me in that the language very seldom matches the underlying reality. This makes every honest political discussion a tricky search for definitions. As a side note, I've found once you get the definitions done, most people are not that far apart.

All suggestions for a flat tax I've heard includes a deduction in the beginning. That's hardly tweaking, but certainly not completely flat either. I guess flat is meant to mean flat except for the part that's zero.

I don't know. Honestly, I don't.

It's kind of like the "free market" discussion. Perhaps there never can be a free market? Perhaps the term is so abstract that it doesn't in fact exist anywhere and has never existed?

I support a flax tax in principle. The problem is that once we start indexing the tax to the size of the purchase, or excluding certain purchases, or giving money back? Well, I might or might not support it, but whatever the case, it's not really a flat tax then, right?

1. This is a flat income tax, not a flat sales tax.

2. Sales taxes are regressive.

3. As a general rule, if a concept is simple enough for you to support on principle, the only real-world plausible implementations will be much, much more complicated.

Yes, the problem is that things become much more complicated very quickly, and all real-world implementations do not match theory.

What that means is that principles matter. Taking this back to my original point, and follow-up point, which had nothing to do with taxes: problem solving is many times a search for definitions. Once definitions are agreed on, all solutions become a matter of applying various principles in various degrees. Real-world solutions never match the terms that the original problem is presented in. In fact, good solutions usually involve creation of a new language.

But without mutual clearly-understood terms, you never get there.

I would say that a very large part of modern politics is defining (subverting?) the terms people use.

"Abortion" or "Women's rights"?

I'd also point out that law is in many ways like software, if you try to do a large number of things for a huge audience, the number of edge-cases that must be addressed can quickly become overwhelming.

Unfortunately national governments don't generally have the luxury of just targeting a niche audience or creating different products for different people like a startup might, so there's inherently some complexity in the process, thus room for mistakes.

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