A populist tax proposal

Discussion in 'Economy' started by Supposn, Jun 9, 2017.

  1. Supposn
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    Supposn VIP Member

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    A populist tax proposal.

    Refer to
    federal revenue sources pie graph - Google Search

    Sources of federal government’s revenues, 3-year average 2009 – 2011.
    44.21% Individual income taxes.
    39% Social Security taxes, (employees and employers each pay 7.65% of payroll based taxes).
    8% Corporate taxes.
    ///////////////////////////

    FICA is the most regressive federal tax. It’s most particularly a burden upon the working poor and their dependents.

    I’m a proponent that the half of the payroll’s 12.4 earmarked for Social Security, and the entire 2.9% earmarked for Medicare, be revenue neutrally transformed from a payroll to what would effectively be a 4.55% general sales tax and enable revenue neutral reduction of our income taxing of individuals. (The transformation itself would effectively be reduction of taxes upon enterprises by 4.55% of their payrolls).

    [Individual’s taxable incomes could be reduced by a finite amount per taxpayer and dependent. that finite amount should be pegged to a cost-price index number and annually monitored. To the amount of per capita incomes reduced threshold incomes, the numbers of income earners subject to individual income taxes would be reduced and our progressive tax rates would be somewhat more “flatten”].

    This proposal would not increase net taxes upon the working poor and their dependents; it would increase the federal revenues available for Social Security and Medicare; it would increase both the federal taxes amounts and their proportions to the incomes paid by those earning greater than median incomes; it would recover some of the revenues we now lose due to income tax evasion.

    This would be of net benefit to our economic and social wellbeing to the extent of the per capita taxable income treshold amount is reduced. Hopefully states would increase their benefits for the unemployed poor; to the extent that they would fail to do so, this proposal would be somewhat detrimental to unemployed poor dependent upon benefits granted by their states.

    Respectfully, Supposn
     
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    Last edited: Jun 9, 2017
  2. anotherlife
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    anotherlife Gold Member

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    Theoretically, this may look good, but who will vote for it or implement it? The graph speaks for itself. Those who can pay for lawyers contribute 8 %. Those who can't, contribute 44 %. The US tax code will not change until enough of the US individuals implode. In fact, even then it will not change, it will be just no occupants left in the 44 % slice and it will look like Mexico.
     
  3. Old Yeller
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    Old Yeller Gold Member

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    If Trump can force any kind of "meaningful" Tax reform through those 500 Congressional loons he will be the True American Hero that I had hoped for.

    I would love to see FED workers (but active Military and Police) go into SS only and not GOVT golden pension. Go after Federal Pension(s) while at it. Cut it, cut it, cut it. $268Bil goes to whom? How many? How much?

    upload_2017-6-9_11-50-44.png
     
  4. Supposn
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    Supposn VIP Member

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    anotherlife, I would suppose that USA’s enterprises’ aggregate payrolls are equal or greater than the net incomes they report tax purposes; (i.e. tax reduction equal to 4.55% reduction of their payrolls is a very direct substantial reduction of their corporate income taxes. Although this policy does not reduce most middle or lower income earners’ net taxes, it does increase the taxes of those that now illegally and/or legally evade paying income taxes upon their actual (rather than what they reported for tax purposes as) their net incomes. That’s an increase rather than a decrease of government’s actual net tax revenues.

    It increases rather decreases federal tax revenues for all purposes including Medicare and Social Security retirement which are of greater proportional benefit to persons of lesser rather than those of greater net incomes.

    It conspicuously would refute the never true, (i.e. the canard) contending the poor do not pay taxes. There are those that will be pleased due to the sales tax being earmarked for government’s existing social programs and thus emphasizing the relationships between those programs and the taxes that fund them.

    I believe those same political factions will eventually be displeased when they realize taxpayers are more supportive of taxes specifically earmarked to fund programs that they more approve of and are paid by all rather than only employees and employers.

    That’s why although conservatives should ostensibly approve of sales taxes earmarked for government’s existing social programs and reduce income rates, (if they realize how it weakens their political positions), they’ll do whatever they can to prevent such a tax bill from passing.

    Respectfully, Supposn
     

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