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I am for a Flat tax on individuals as well, but I believe it would be unconstitutional for individuals IF there was not a standard deduction for what everyone spends on food and necessities....the gvt can tax profits....they consider income profits, AFTER the amount of the standard deductions taken for people to survive.
If you are going to make that argument, then you are basically agreeing that the income tax in and of itself is unconstitutional. There is nothing in the Constitution which says that each person needs an equal amount for basic survival. Such a claim for a standard deduction is the camel's nose in the tent for the byzantine social engineering/political pay off code we now have.
I'd be happy to see a flat tax on individual income of that level - (assuming that SS and Medicare taxes are eliminated and those programs are treated as the actual welfare they really are) - on every dollar of income, no exemptions, no tax credits, etc. This should be the only source of federal tax, and all excise taxes and other forms of double and triple taxation should be eliminated.
I really don't see a societal benefit in taxing corporate profits. Dividends are taxed at the individual level - and taxed at the corporate level (double taxation). Cash kept by the business is better used for expansion of that business or as dividends to investors to reinvest elsewhere. IMO, the economy and society are better off keeping money in the private sector for job creation instead of funneling it into government expansion.
My big problem with the "flat tax" is that too many people will simply work under the table and not pay a gosh darn dime in taxes. And that will be people from every wage group. It would simply be too easy to hide income.
That is why I prefer the "Fair Tax". People don't have to declare income at all. They pay taxes when they consume. Now, many people say it is not "fair" to the lower income earners... which I disagree with, but if that is what the country feels then fine, I'm okay with any method developed that will lower the tax burden of the poor in a fair manner, which is what the pre-bate is supposed to do with the "Fair Tax", but our current tax code is designed in such a piss poor manner that it needs to be scrapped.
Immie
Then they are marginalizing themselves to where they cannot get credit to buy a house or a car due to lack of documented income, etc.
This is a red herring. The underground economy already exists and always will for people who live on the fringe. The current compliance costs for the rest of us who play by the rules far outweighs any benefit of recovering these taxes.
My big problem with the "flat tax" is that too many people will simply work under the table and not pay a gosh darn dime in taxes. And that will be people from every wage group. It would simply be too easy to hide income.
That is why I prefer the "Fair Tax". People don't have to declare income at all. They pay taxes when they consume. Now, many people say it is not "fair" to the lower income earners... which I disagree with, but if that is what the country feels then fine, I'm okay with any method developed that will lower the tax burden of the poor in a fair manner, which is what the pre-bate is supposed to do with the "Fair Tax", but our current tax code is designed in such a piss poor manner that it needs to be scrapped.
Immie
Then they are marginalizing themselves to where they cannot get credit to buy a house or a car due to lack of documented income, etc.
This is a red herring. The underground economy already exists and always will for people who live on the fringe. The current compliance costs for the rest of us who play by the rules far outweighs any benefit of recovering these taxes.
The poor don't care whether they are marginalizing themselves or not because they can't afford to borrow to buy a car anyway. The rich don't care either because they don't need to borrow or if they want to borrow, they can always prove their net worth. We in the middle? Well, we would have to decide whether to pay taxes and get loans or hide income and forgo loans.
Immie
Then they are marginalizing themselves to where they cannot get credit to buy a house or a car due to lack of documented income, etc.
This is a red herring. The underground economy already exists and always will for people who live on the fringe. The current compliance costs for the rest of us who play by the rules far outweighs any benefit of recovering these taxes.
The poor don't care whether they are marginalizing themselves or not because they can't afford to borrow to buy a car anyway. The rich don't care either because they don't need to borrow or if they want to borrow, they can always prove their net worth. We in the middle? Well, we would have to decide whether to pay taxes and get loans or hide income and forgo loans.
Immie
Red Herring. Now that we have proper documentation requirements for home loans again, most middle class people will work for reported income.
We also have LAWS against tax avoidance. It takes two to avoid taxation, and if the penalty is high enough, the person doing the paying will have a disincentive to do so.
The recent 1099 fracas is a good example of the excessive cost of government control to capture a few bad actors.
Yes, the standard deduction theoretically exists - but we have AMT and other mechanisms which cause people to lose valid deductions. It's a rigged game for political purposes.
If we are going to have income taxes, everybody should pay at the same rate. Period.
I think a modified flat with a lower rate for those that are truly poor but no credits or deduction for anything. We would save a bundle collecting taxes and see lot less tax fraud.I am for a Flat tax on individuals as well, but I believe it would be unconstitutional for individuals IF there was not a standard deduction for what everyone spends on food and necessities....the gvt can tax profits....they consider income profits, AFTER the amount of the standard deductions taken for people to survive.
if each person got the first 10k or so as a standard deduction for their living expenses, then taxed at the flat rate above that....it shouldn't hit the poorest on taxes that much....I think a modified flat with a lower rate for those that are truly poor but no credits or deduction for anything. We would save a bundle collecting taxes and see lot less tax fraud.I am for a Flat tax on individuals as well, but I believe it would be unconstitutional for individuals IF there was not a standard deduction for what everyone spends on food and necessities....the gvt can tax profits....they consider income profits, AFTER the amount of the standard deductions taken for people to survive.
The problem with that proposal, though, is that in order to meet revenue needs, the flat rate would have to be so high that only the wealthy would be able to make ends meet.
if each person got the first 10k or so as a standard deduction for their living expenses, then taxed at the flat rate above that....it shouldn't hit the poorest on taxes that much....I think a modified flat with a lower rate for those that are truly poor but no credits or deduction for anything. We would save a bundle collecting taxes and see lot less tax fraud.I am for a Flat tax on individuals as well, but I believe it would be unconstitutional for individuals IF there was not a standard deduction for what everyone spends on food and necessities....the gvt can tax profits....they consider income profits, AFTER the amount of the standard deductions taken for people to survive.
SS and medicare taxes need to end and to be incorporated in to the flat tax as well.... i think?
it'll take some real thinking out before it goes in to place....like all income needs to be taxed equally....capital gains, dividend income too
The problem with that proposal, though, is that in order to meet revenue needs, the flat rate would have to be so high that only the wealthy would be able to make ends meet.
It seems weird that corporations would be taxed in the first place. When a person gets money, let's tax that. I'll bet we could really stimulate the economy by eliminating corporate taxes and, if necessary, raising income taxes. That way businesses could hire more people.
Taxing a millionaire's personal take-home money isn't going to hurt the economy, but taxing the business he works for is.
Exactly. Through our tax laws, Congress attempts to influence the way we spend our money. They decided home ownership was a good thing, so we get a deduction for mortgage interest and property taxes. They want to encourage us to buy certain vehicles so we get a tax credit for buying them. Have more kids and get a tax break. Invest in foreign businesses get a tax break. The list goes on and on. Unfortunately many of these deductions do more harm than good. Do we really need to encourage people to have more kids, buy homes they can't afford, and invest abroad.if each person got the first 10k or so as a standard deduction for their living expenses, then taxed at the flat rate above that....it shouldn't hit the poorest on taxes that much....I think a modified flat with a lower rate for those that are truly poor but no credits or deduction for anything. We would save a bundle collecting taxes and see lot less tax fraud.
SS and medicare taxes need to end and to be incorporated in to the flat tax as well.... i think?
it'll take some real thinking out before it goes in to place....like all income needs to be taxed equally....capital gains, dividend income too
Just like the "Fair Tax", it will never happen because politicians and lobbyists would lose so much of the power they have.
Immie
I think eliminating the corporate income tax is a good idea. It's filled with loopholes. A large percent of the big cooperations don't pay any corporate income tax. A lot of the really small corporations transfer any profits into individual taxes. As a result over half of the corporations pay no cooperate taxes. Cooperate taxes encourage waste and debt financing as oppose to equity financing which increases risk. Finally, it's not a major part of government revenue. Corporate taxes account for only 13% of federal revenue. By eliminating corporate taxes we can eliminate the preferential treatment of dividends which is there to eliminate the double taxation on dividends. That would recover most of the lost revenue. The rest can easily be recovered through other tax deductions.It seems weird that corporations would be taxed in the first place. When a person gets money, let's tax that. I'll bet we could really stimulate the economy by eliminating corporate taxes and, if necessary, raising income taxes. That way businesses could hire more people.
Taxing a millionaire's personal take-home money isn't going to hurt the economy, but taxing the business he works for is.
