Flat Tax

Would You Support a Flat Tax in America

  • Yes

    Votes: 23 71.9%
  • No

    Votes: 5 15.6%
  • Undecided

    Votes: 2 6.3%
  • Don't Care

    Votes: 2 6.3%

  • Total voters
    32
Originally posted by gop_jeff
I totally agree. Flat (or "proportionate tax) at 15%, excluding the first X amount of earned income, X being whatever the national poverty level is. So if the poverty level is $12,000/yr, your first $12,000 is exempted. The only other deduction I would allow is mortgage interest on your primary home. Nothing else. It would not raise taxes on the poor, but it would significantly lower everyone else's taxes.

Vote me in 2004!!! :thup:

Ok Jeff, now you're are closer to me. I'd raise the 'no tax' to 18k per person in household, but do away with the deduction for the house. Also all other deductions for business, with the caveat they too are on a flat tax, no excapes.
 
... and those who can't provide for themselves under a 13% tax rate get to choose to pay more, and the gov't takes care of them?

I may have jumped in late.
 
Originally posted by MtnBiker
Why are you calling Pale Rider an asshole?

And it really doesn't matter that you added a cute little smiley face.

Flasher thinks he's being cool when he says crap like this at an inappropriate time. Really he's been relegated to the board idiot and geek.
 
I voted undecided because I need to do a little more research although I am definitely in the camp of we are being robbed by Washington. Tax rates in the 30 percentile? PUHLEEEEASE! That is simple extortion. I'm more concerned with so called "hidden" taxes such as gas tax, telephone tax etc. etc. and the biggest thief of them all STATE SALES TAX. I bet when its all said and done if you calculate what you pay in fed and state income tax plus sales tax 50% of one's income is taken by taxes. Heck I read somewhere that the average American actually doesn't put any money in his pocket until April every year if they were to take taxes out for the whole year in the beginning of the year. That's outrageous.
 
Originally posted by crazy canadian
... and those who can't provide for themselves under a 13% tax rate get to choose to pay more, and the gov't takes care of them?

I may have jumped in late.

No. This is not a nanny-state country. Want the government to take care of you? Move to China, North Korea, or Vietnam. They will provide you with everything they can, which may or may not be everything you need.
 
Originally posted by Kathianne
Ok Jeff, now you're are closer to me. I'd raise the 'no tax' to 18k per person in household, but do away with the deduction for the house. Also all other deductions for business, with the caveat they too are on a flat tax, no excapes.

$12K, $18K... again, whatever the poverty level is. If the poverty level changes, so should the exemption.

The reason I kept the house interest deduction in there is because I believe that people should be given every oppurtunity to own their own home. It also effectively raises your non-taxable income considerably.

I agree that corporate taxation on 100% of profits be taxed at a comparable flat rate.
 
Originally posted by Kathianne
It's regressive. A flat 18% on an income of 25k is a much higher tax than 18% 90k. The tax on the former comes out of necessities, while the latter is expendible income. The higher the income, the less the 18% really is. It's the whole problem with sales taxes, gasoline taxes, etc.

Ahem - 18 percent of one is the same ratio as 18 percent of one million. But let's work with 15 percent because I've misplaced my calculator. A person with an income of $20,000 would pay $3,500 income tax at 15 percent. A person with an income of $200,000 would pay $35,000. Each has lost the same percentage of his income to taxes.

A flat tax cannot be regressive as it affects everyone equally. You are confusing the effects of a flat tax with that of sales taxes or other "value-added" taxes. Let's assume that person A, making $20,000, spends half that on groceries in a year. Further assume that the sales tax rate is eight percent. Person A pays $800 sales tax on the $10,000 expenditure. The $800 represents four percent of person A's total income. Now assume that person B, making $200,000 also spends $10,000 per annum on groceries. He pays the same $800 in sales tax, but that represents a mere .004 percent of his annual income, or less than one half of one percent. Arguably, that is a regressive tax as it taxes those at lower incomes at a higher percentage rate than the wealthy.

But I oppose a flat tax. The reason is that, contrary to popular opinion, a flat tax would not solve the problems at which it is aimed.

First - a flat tax would do little or nothing to simplfy the tax code. Currently the tax code goes into great detail to define what income is taxable and at what rates. Well, if a flat tax were imposed, the government would have to go to the same lengths to define what is to be considered income. So you end up with the same problem, only in reverse. The reason that flat tax has worked in Russia is that there is no large population of rich Russians (yet).

Consider this - let's say I'm the CEO of a large corporation. I'm pulling in ten million a year. Now the government switches to a flat tax. Fine, all I do is disguise my income. Instead of having the corporation pay me 10 mil in cash, I have it buy my 35 room mansion, pay the mortgage and I live there rent free. The corporation also stocks my bar, my refrigerator, pays my gardener, the pool guy, the cook, the driver. The corporation keeps a jet at my disposal and I can travel wherever I want whenever I want. The corporation pays for my kiddies to attend Yale, it also pays for my health insurance and life insurance. It provides me with season tickets to the baseball, basketball, hockey, golf and football events throughout the country. Do you see where this is headed?

Second - a flat tax also has ramifications for those not equipped with silver spoons. Does your employer provide health insurance? Under a flat tax that, along with all employee benefits, should be considered income. Does your employer have a credit union where you can get a loan at a favorable percentage rate? That may also be considered income. Even something as mundane as free parking at your place of employment could be considered income. Do you get travel disounts? Prescription discounts? Are you issued safety equipment?

As anyone can readily see, defining what is income will be equally convoluted as the current system of defining which income is taxable.

Third - and here's the kicker - everyone seems to think that flat tax will simplify the tax code, reduce taxes paid by low and middle income taxpayers while increasing taxes paid by the wealthy. It will do no such thing. If you currently have $50,000 of taxable income, you probably pay about 5 to 7 thousand dollars in federal income taxes. But now add all those other bennies which might count as income and your income will balloon to around $65,000. Take fifteen percent of that and tell me how you think you'll make out on this "deal".

Damned depressing, ain't it?
 
Originally posted by Merlin1047

Further assume that the sales tax rate is eight percent. Person A pays $800 sales tax on the $10,000 expenditure. The $800 represents four percent of person A's total income. Now assume that person B, making $200,000 also spends $10,000 per annum on groceries. He pays the same $800 in sales tax,

And this would be a problem? I'm missing something here. If there are NO taxes other then a flat National Sales tax, it is totally driven by consumption and the purchasing of goods. Percentages would be a moot point.

Enlighten me please

:confused:
 
Merlin, really. I get the math, even if phobic. I was speaking of the real effect.

Everyone knows I'm not a beeding heart liberal ;) , I'm basically against a flat tax, since most proponents want it 'across the board' regardless of income.

If their is a bottom and probably a ceiling, at least on individuals, I might be sold, provided all other taxes were abolished. Income tax is the least of most of our worries.
 
Originally posted by Kathianne
Merlin, really. I get the math, even if phobic. I was speaking of the real effect.

I have no doubt. Was just getting in a little teasing at your expense. I'm sure my turn is coming.
 
Originally posted by Merlin1047
I have no doubt. Was just getting in a little teasing at your expense. I'm sure my turn is coming.

Well alrighty then, I'll be watching for my opportunity.
:p:
 
Originally posted by JIHADTHIS
And this would be a problem? I'm missing something here. If there are NO taxes other then a flat National Sales tax, it is totally driven by consumption and the purchasing of goods. Percentages would be a moot point.
Enlighten me please
:confused:

The premise of taxation is equity at least that's how it's supposed to work.

Okay, let's go back to person A and the $20,000 income. I think we can agree that just about all of that income would go to things necessary to stay alive and keep a roof overhead. For the sake of simplicity, assume that person A spends all income to clothe, house and feed the family. If he pays eight percent sales tax, he pays $1,600 in tax, (eight percent of 20 thou).

Person B, making 200 thousand spends 100 thousand feeding, clothing and housing mater, pater, and the siblings and invests or saves the other hundred thou. He pays $8,000 in sales tax.

Now that is a significantly larger amount than the tax paid by person A, but TAKEN AS A PERCENTAGE OF TOTAL INCOME, it is much less. The $8,000 paid by rich-guy B is only FOUR percent of his income.

Any sales tax impacts low income households at a greater percentage rate than high income households.

Did that help, or did I just add another layer of confusion?
 
Crystal clear. Thank you for making my point more cogently.
:cool: :clap:
 
Merlin, et al., I think you missed my point, which has been made by other flat-tax advocates. There would be a certain portion of everyone's income that would not be taxed. I advocate all income up to the poverty level. Others may advocate other levels. But no one advocates taxing someone making $5,000 a year.
Also, since when did anyone say anything about taxing benefits? As far as I have heard, only monetary income is taxed. Health insurance, as a non-monetary benefit, would not be taxed.
 
I voted in favor of the flat tax, but I would add a twist.

For starters I think the tax should be 10% deducted and sent to the treasury. April 15 is just another calendar day. No forms. Yes I know that 10 percent of poor is a bigger burden than 10 percent of rich. I don't care. I am not rich. There is already a multitude of safety nets to assist the poor. By the same token, I am closing on a home in about two weeks (woo hoo), but I would not allow any deductions to include my brand new mortgage.

The twist is a 2% National Sales Tax. The revenues from that would go to pay down the national debt. If/When we become debt free as a nation, then it can bulk up Social Security, be used to lower the 10 percent by a point or two.

In order for this to work, I see a few things that need to also happen to smooth the way.

1. A balanced budget amendment, or
2. a line item veto for the pres. I would be happy either way.

3. A method of insureing that income isn't hidden by the very wealthy. Merlin is right that there are a lot of practical "realist" issues that have to be hammered out for it to work as intended.
 
I think the 'safety nets' are overrated on this board. If you think they are not, I believe you are unsensitive. You must feel that people who have 'fallen into' one of our safety nets should be able to bounce back out more easily than is possible. That's like asking someone in the food bank line up to wake up one day and decide that this day is better than the one before, and so they should jump up, shave, (legs or face, whatever) and go get a job and contribute to society like the rest of us.

It's not that easy.

Even when a 'properly contributing member of society' falls upon hard times, you vastly underestimate the will needed to get back in the groove.

Depression, sickness, unforseen circumstances that help define us as humans, and not 'robots', are the very things that call for a less capitalistic approach (I see capitalists as people who are able to act more as robots, function as society would like), and therefor call for ideologies that treat people 'more as robots'. Sociological approach.

Unless you include both ideologies in your solution, you will not be speaking for the American people as a whole, you will only be speaking for the ones who are like you.

*Tax the poor more, and let the gov't take care of them. If you earn more, and can be responsible enough to handle your own money and take care of yourself, you get taxed less.

Does that work out with incentive? Or does that lay too much burden on the rich to 'carry' the rest of society for a capitalist? If you need the gov't more, than you pay them more money. Share hospitals and schools, etc, and the rich can keep them up. You'd have to be willing to acknoweldge the fact that you have it better than a lot of people, and be caring enough to live that way. Teach rich kids not to be snobs to poor kids. Teach people to appreciate what they have, and if need be, just be damn glad you're not in someone elses' shoes.
 
Kath is right. A flat tax would be fundamentally unfair because it favors the rich and harms the poor.

There's a difference between active income (income earned from working) and passive income (income produced by wealth).
And there's a difference between income that's used to buy necessities and income that's used to buy luxuries.

If you work your ass off and barely make enough to feed your family, you should pay a lower percentage on your income than someone who doesn't even have to work to get $1 million dollars of interest on the 20 million dollars he inherited.

We already have an aristocracy of the wealthy in this country- 1% of the population that has almost half the country's wealth. Our economic system does a lot for them. It's fair to require them to do a lot in return.
 

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