A modest proposal on taxes

[kaz]

I have always like the idea of a Federal Sales Tax..and eliminate the personal income tax.
The percentage would be limited to 4% or less. No deductions with food as the only exception.
This would be more than fair since the more you buy the more tax you would pay.
This would also increase the tax base to those not paying now. such as illegals, tourists, and people here on visas.

I'm with you. I like the Fair Tax. Once you start excepting food, you start the debate on what about housing and other things people need to live. The Fair Tax covers it all so you don't then start having exceptions.

 

[gallantwarrior]

You labor under the same misconception as many people. The vast majority of people on "welfare" do not remain on it for many years. Half are off welfare within a year, 70% in two years, and 90% in 5 years.

Let me explain the players here. You're a shitbrained liberal spreading propaganda to defend parasitical behavior resulting from an immoral lifestyle. I'm the human being who knows what he's talking about. It is the norm for poor people to receive $10,000 to $30,000 in welfare, aside from formal welfare benefits, for 20+ years of their life. WIC, EITC, medicare, rent and gas assistance, free daycare, free school lunches, etc. Most of these have no time limits, as there may be for things like formal welfare and unemployment benefits.

Every single mom with children, earning some, and just some, money, collects thousands of dollars in EITC every year until she no longer has children in the home, or until she earns enough money to not be poor, or lower-middle class (which rarely happens).

Don't forget that Head of Household filing status. Everyone filing as Married/Married Filing Separately/Single get the same standard exemption. In 2012 that amount was $5950 per person. Well...unless you can claim Head of Household status. Then your standard deduction amounts to $8700. Why does someone who has no marital partner but who does have dependents get that extra exemption? Again, we have government encouraging immoral life choices...just to get some kind of stupid tax break.

 

[gallantwarrior]

I have always like the idea of a Federal Sales Tax..and eliminate the personal income tax.
The percentage would be limited to 4% or less. No deductions with food as the only exception.
This would be more than fair since the more you buy the more tax you would pay.
This would also increase the tax base to those not paying now. such as illegals, tourists, and people here on visas.

It's a great idea in theory. In practice it creates its own bureaucracy with a set of rules that companies rush to find loopholes for.
And if you dont eliminate income taxes then eventually both rise. That was the experience in Europe with the VAT.

And like every other tax ever levied by government, it only starts at 4% (or whatever random number comes up). It never stays at that percentage for very long.

 

[rockhounddad]

Sounds like a great idea. Of course we also would have to change local and state taxes to reflect a fair system of taxation, because as it stands now, the lowest income earners pay two to four times the percentage of taxes based on income as the highest income earners at the state and local levels. It would be necessary to increase taxes on the highest income earners and reduce taxes on the lowest income earners. It would mean a massive change of the way taxes are collected at the state level. So what say you?

I'm not sure how changing the Federal system would change that exactly. If federal welfare accounted for federal taxes so it cancels out rather then fighting the same battle on two fronts, why would that necessarily require a change in State taxes coordinated with that?

This is the problem with those of you on the right. You want everything to be fair and equal at the federal level, but at the state level you are happy with the lowest income workers paying the bulk of the taxes while the wealthy pay next to nothing as a percentage of income. All the whining we hear about 47% of Americans paying no federal income tax, but nothing about how the rich only pay half to one quarter of the taxes that low income earners pay at the state level.

Basically what you want is a reduction in federal taxes for the wealthy while increasing taxes on those who can least afford it, and you want to leave everything the same at the state and local levels. This way, the poor would pay about 40% of their income in taxes and the wealthy would pay under 20%. It's absolutely hilarious.

Sounds like a great idea. Of course we also would have to change local and state taxes to reflect a fair system of taxation, because as it stands now, the lowest income earners pay two to four times the percentage of taxes based on income as the highest income earners at the state and local levels. It would be necessary to increase taxes on the highest income earners and reduce taxes on the lowest income earners. It would mean a massive change of the way taxes are collected at the state level. So what say you?

I'm not sure how changing the Federal system would change that exactly. If federal welfare accounted for federal taxes so it cancels out rather then fighting the same battle on two fronts, why would that necessarily require a change in State taxes coordinated with that?

This is the problem with those of you on the right. You want everything to be fair and equal at the federal level, but at the state level you are happy with the lowest income workers paying the bulk of the taxes while the wealthy pay next to nothing as a percentage of income. All the whining we hear about 47% of Americans paying no federal income tax, but nothing about how the rich only pay half to one quarter of the taxes that low income earners pay at the state level.

Basically what you want is a reduction in federal taxes for the wealthy while increasing taxes on those who can least afford it, and you want to leave everything the same at the state and local levels. This way, the poor would pay about 40% of their income in taxes and the wealthy would pay under 20%. It's absolutely hilarious.

Can you tell me where your numbers come from on the rich paying half to one quarter of the taxes that low income earners pay at the state level? Where is the information coming from that the right want to tax the poor more?

What is confusing about what you say is the GOP are actually trying to abolish state income tax or reduce it (for everyone not just rich). Also, when talking about state taxes, they are different than federal. Some states have a flat rate, some states have no income tax. Most of the states have a similar progressive tax structure as does the federal tax. It doesn't seem like lumping groups in every state together with different tax structures will give a reliable figure when who pays what tax.

Is it fair that my family effectively paid no taxes and made around 50k? Actually we got paid several thousand dollars and a rich person is in a 35% bracket? 15% if using income from investments? That isn't including that these people more than likely are employing a large amount of people, donating to charities, etc.

I really want to understand where your coming from. I want to get the logic behind the part that isn't fair. I am not here to bash so please give me that respect.

 

[Flopper]

The other disadvantage is a sales tax reduces and discourages consumption which might be a bad idea for a consumer based economy such as ours.

Besides regressiveness and discouraging consumption, sales taxes have many more disadvantages.

Sales tax is inherently more prone to fraud and complexity than an income tax. Income tax is reported by both the payer and the payee, so if one person doesn't report it, the government knows. But sales tax is reported by only one person, the one person who can keep the money if he doesn't report it. Income tax is nominally collected once per pay period, and paid once quarterly. Sales tax is collected with every transaction, often several times per day.

Sales tax also allows the government to further conceal the tax burden from the public. If it's built into prices (such as with gasoline and value-added taxes), it's hidden. If if it's not, people still tend to associate sales tax with the cost of what they're buying, not with paying taxes. And, they never see the big number of what the taxes on those numerous transactions adds up to.

Good Point. I really never considered that, I guess because I have never worked in retail.

 

[Flopper]

You labor under the same misconception as many people. The vast majority of people on "welfare" do not remain on it for many years. Half are off welfare within a year, 70% in two years, and 90% in 5 years.

Let me explain the players here. You're a shitbrained liberal spreading propaganda to defend parasitical behavior resulting from an immoral lifestyle. I'm the human being who knows what he's talking about. It is the norm for poor people to receive $10,000 to $30,000 in welfare, aside from formal welfare benefits, for 20+ years of their life. WIC, EITC, medicare, rent and gas assistance, free daycare, free school lunches, etc. Most of these have no time limits, as there may be for things like formal welfare and unemployment benefits.

Every single mom with children, earning some, and just some, money, collects thousands of dollars in EITC every year until she no longer has children in the home, or until she earns enough money to not be poor, or lower-middle class (which rarely happens).

Don't forget that Head of Household filing status. Everyone filing as Married/Married Filing Separately/Single get the same standard exemption. In 2012 that amount was $5950 per person. Well...unless you can claim Head of Household status. Then your standard deduction amounts to $8700. Why does someone who has no marital partner but who does have dependents get that extra exemption? Again, we have government encouraging immoral life choices...just to get some kind of stupid tax break.

The standard deduction is:
Single: $5,950
Married Filing Separately: $5,950
Head of Household: $8,700
Married Filing Joint: $11,900

Since the IRS does not make moral judgement, I think the reasoning is as follows. If you are claiming Head of Household, that means you have dependents and only one income to support them so you should have a larger exemption than a single person with no dependents.

A person with kids that has been divorced or deserted by their spouse would normal claim Head of Household. I would not consider this an immoral life choice.

 

[Ariux]

Since the IRS does not make moral judgement,

Since the IRS penalizes marriage, and you say that's not a moral judgement. Then Hitler didn't make moral judgement with the Jews.

 

[Flopper]

Since the IRS does not make moral judgement,

Since the IRS penalizes marriage, and you say that's not a moral judgement. Then Hitler didn't make moral judgement with the Jews.

Isn't that just a bit extreme, particular since the IRS does not penalize marriage?

Why do you say the IRS penalize marriage? If you're married you get twice the standard deduction of a single person and you get twice as many exemptions because there are twice as many people. If two single people make the same amount of money and all other factors are the same. The total amount of tax they pay should be very close to the amount they would pay if married.

A marriage couple has less expenses than when they were single. So if they choose to do so, they can earn less money and thus pay less taxes and still maintain the same standard of living. That certainly doesn't sound like a marriage penalty.

 

[inALIENable]

... A sales tax is a regressive tax. It put's more of the tax burden on the poor because the poor spend essential all their income where the wealthy spend only a small par of their income.

Sales tax is a moral way to collect government revenue. Any tax should be voluntary, like lotteries are. This is why only non-essentials should be taxed. No tax on food and any clothing items under a reasonable price (yeah, maybe that expensive suit or fancy fur coat should be taxed, and those spendy Nike shoes too). Everything else though should be taxed and would likely have to be more than 4%.

Want an iPad now that you don't have to pay income tax? Fine, but you'll have to pay that tax if you want a non-essential/ luxury item. And the VAT would likely be closer to 30%. Poor people shouldn't be buying non-essentials anyhow so a VAT wouldn't affect them unless they wanted it too.

The other disadvantage is a sales tax reduces and discourages consumption which might be a bad idea for a consumer based economy such as ours.

Not true if it all works out the same in the end. Who cares if $100 is taken from you on your income or whether it is collected from you when you buy that toy with your pay check this week?

And actually, spending could be encouraged by temporary VAT reductions/holidays. Want to move a bunch of cars next week? Reduce the VAT on cars that week. Same with other industries needing a temporary boost in sales.

Until tax is voluntary, this will be an immoral slave nation.

 

[buckeye45_73]

Since the IRS does not make moral judgement,

Since the IRS penalizes marriage, and you say that's not a moral judgement. Then Hitler didn't make moral judgement with the Jews.

Isn't that just a bit extreme, particular since the IRS does not penalize marriage?

Why do you say the IRS penalize marriage? If you're married you get twice the standard deduction of a single person and you get twice as many exemptions because there are twice as many people. If two single people make the same amount of money and all other factors are the same. The total amount of tax they pay should be very close to the amount they would pay if married.

A marriage couple has less expenses than when they were single. So if they choose to do so, they can earn less money and thus pay less taxes and still maintain the same standard of living. That certainly doesn't sound like a marriage penalty.

Wow, so what you're saying is that married couples, because they're married should pay more in taxes? OR take less money on the job? That's a very stupid arguement. how about a flat tax and it wont matter? i'll even throw in removing ALL deductions, sound like a plan?

 

[Ariux]

Why do you say the IRS penalize marriage? If you're married you get twice the standard deduction of a single person and you get twice as many exemptions because there are twice as many people. If two single people make the same amount of money and all other factors are the same. The total amount of tax they pay should be very close to the amount they would pay if married. ]/quote]

You are exceedingly ignorant. Married people get itemized or 2single deductions. Two single people shacking up get 2single or an HH + single (or two HH, if they're dishonest, =3+single), or an itemized + single/HH deductions. Simply put, any married couple, with a kid, who itemized has lost $8,500 in deductions, for 2011, just because they're married.

There are numerous tax breaks in the tax code, and married people are treated far worse with most of them than in the standard deduction, where at least a few years ago there was a minor effort to do away with the marriage penalty by raising MJF from the level of HH to 2single. Take the Earned Income Tax Credit, two single people can potentially claim twice as much credit as a married couple. And two single people can can far more easily collect, because they don't have to combine income which would phase them out of the credit. The EITC is not doubled far married people, not even close. Meaning, in practice, single individuals get four times as much EITC (up to about $11,000) as married individuals .

Two people shacking up have no more expenses than a married couple. And, even if two married people did have a lower cost of living, that's no excuse to penalize them. They should be rewarded for choosing a lifestyle that's beneficial to society (in regards to producing and raising children).

 

[Flopper]

... A sales tax is a regressive tax. It put's more of the tax burden on the poor because the poor spend essential all their income where the wealthy spend only a small par of their income.

Sales tax is a moral way to collect government revenue. Any tax should be voluntary, like lotteries are. This is why only non-essentials should be taxed. No tax on food and any clothing items under a reasonable price (yeah, maybe that expensive suit or fancy fur coat should be taxed, and those spendy Nike shoes too). Everything else though should be taxed and would likely have to be more than 4%.

Want an iPad now that you don't have to pay income tax? Fine, but you'll have to pay that tax if you want a non-essential/ luxury item. And the VAT would likely be closer to 30%. Poor people shouldn't be buying non-essentials anyhow so a VAT wouldn't affect them unless they wanted it too.

The other disadvantage is a sales tax reduces and discourages consumption which might be a bad idea for a consumer based economy such as ours.

Not true if it all works out the same in the end. Who cares if $100 is taken from you on your income or whether it is collected from you when you buy that toy with your pay check this week?

And actually, spending could be encouraged by temporary VAT reductions/holidays. Want to move a bunch of cars next week? Reduce the VAT on cars that week. Same with other industries needing a temporary boost in sales.

Until tax is voluntary, this will be an immoral slave nation.

You make a good point concerning excluding essentials from the sales tax as many states do, but it is still a regressive tax that put's a larger burden on the poor than the wealthy.

Putting an addition sales tax of say 4 or 5% on top state and a local sales tax which are as high as 10% will discourage retail purchases and encourage savings and purchase of tax-exempt items even thou income taxes might be reduced or eliminated.

A second problem of sales taxes as has been stated previously, is you depend on the honesty of the retailer in reporting sales. With income taxes, income is reported both by the payer and the receiving so it is harder to hide income for tax purposes.

 

[Flopper]

... A sales tax is a regressive tax. It put's more of the tax burden on the poor because the poor spend essential all their income where the wealthy spend only a small par of their income.

Sales tax is a moral way to collect government revenue. Any tax should be voluntary, like lotteries are. This is why only non-essentials should be taxed. No tax on food and any clothing items under a reasonable price (yeah, maybe that expensive suit or fancy fur coat should be taxed, and those spendy Nike shoes too). Everything else though should be taxed and would likely have to be more than 4%.

Want an iPad now that you don't have to pay income tax? Fine, but you'll have to pay that tax if you want a non-essential/ luxury item. And the VAT would likely be closer to 30%. Poor people shouldn't be buying non-essentials anyhow so a VAT wouldn't affect them unless they wanted it too.

The other disadvantage is a sales tax reduces and discourages consumption which might be a bad idea for a consumer based economy such as ours.

Not true if it all works out the same in the end. Who cares if $100 is taken from you on your income or whether it is collected from you when you buy that toy with your pay check this week?

And actually, spending could be encouraged by temporary VAT reductions/holidays. Want to move a bunch of cars next week? Reduce the VAT on cars that week. Same with other industries needing a temporary boost in sales.

Until tax is voluntary, this will be an immoral slave nation.

You make a good point concerning excluding essentials from the sales tax as many states do, but it is still a regressive tax that put's a larger burden on the poor than the wealthy.

Putting an addition sales tax of say 4 or 5% on top of state and a local sales tax which are as high as 10% will discourage retail purchases and encourage savings and purchase of tax-exempt items even thou income taxes might be reduced or eliminated.

A second problem of sales taxes as has been stated previously, is you depend on the honesty of the retailer in reporting sales. With income taxes, income is reported both by the payer and the receiving so it is harder to hide income for tax purposes.

Purchase from foreign retailers who are not required to collect sales tax for US sales, will go un-taxed and encourages people to buy outside the US.

 

[sublime]

Income tax, capital gains tax and corporate tax should be flat. 15% across the board, no deductions, no nothin'. The government should be required to live within a reasonable budget, borrowing from the fed should be illegal and deficit spending should only be allowed in a time of war with projected cutbacks in other areas to fund the war expenditure.

That simple.

 

[Flopper]

Income tax, capital gains tax and corporate tax should be flat. 15% across the board, no deductions, no nothin'. The government should be required to live within a reasonable budget, borrowing from the fed should be illegal and deficit spending should only be allowed in a time of war with projected cutbacks in other areas to fund the war expenditure.

That simple.

Yep and voters should demand that their representative act in a responsible manner; tax payers should not cheat on taxes; politicians should should serve the country not their supporters. But guest what? They don't and they never will and governments will not live within reasonable budgets. Lamenting about what should be is a waste of time.

 

[inALIENable]

We could also reduce taxes by making it illegal for politicians to bribe the voters with personal entitlements at the expense of the government, a.k.a. taxpayers. That's the number one change I would like to see in getting a handle on taxes. Once that's done, then we can talk about funding the government. Right now it's corrupt, the government, the voters, the laws, and rules, the money, the economy, everything .. it has all become so horribly corrupt and immoral. No hope. None at all. Or maybe. Transferring myself back to the civil war thread, ha.

 

[buckeye45_73]

We could also reduce taxes by making it illegal for politicians to bribe the voters with personal entitlements at the expense of the government, a.k.a. taxpayers. That's the number one change I would like to see in getting a handle on taxes. Once that's done, then we can talk about funding the government. Right now it's corrupt, the government, the voters, the laws, and rules, the money, the economy, everything .. it has all become so horribly corrupt and immoral. No hope. None at all. Or maybe. Transferring myself back to the civil war thread, ha.

I would love that, but to do that you basically have to put back in the property ownership clause, which I'd love to see, but you'll get the liberal shit storm on that. BUT maybe all those super rich liberals would buy houses for the poor liberals (nah they dont ever use their own money), but if we could get it done, it would really help out many needy families.

 

[Chris]

Obama will let the Bush tax cuts expire in December.

Problem solved.

 

[sublime]

Obama will let the Bush tax cuts expire in December.

Problem solved.

You could tax the top 1% at 100% and it won't solve the problem. Our government is too big and spends too much. It's out of control.

 

[buckeye45_73]

Obama will let the Bush tax cuts expire in December.

Problem solved.

REALLY, so liberals wont compalin about stuff anymore? IF that's the case I'd be tempted to let em expire.