How about a flat tax?

[IslandBreeze]

All this talk about the tax cuts and taxes got me thinking: what about a flat tax?

http://flattax.house.gov/

Interesting little calculator they've got...a flat tax would cut our taxes in half!

 

[IslandBreeze]

Got this from http://www.taxreform.com/flat_tax.html

Advantages: the 17% flat tax would replace the existing tax system and proposes the following:

Individuals would be initially taxed at a flat rate of 20%, falling to 17% after two years.
It would significantly reduce the tax rate for many Americans.
It would eliminate double taxation.
It would simplify tax preparation. Corporate and individuals would be able to file their returns on a ten-line postcard-size tax form.
It would encourage savings. Individuals would no longer pay tax on income from savings, capital gains, and interest income.
It would provide a strong boost to capital formation and thereby stimulate the economy.
It would reduce IRS staff and overhead and streamline tax preparation.
Corporations would be allowed to expense all their investments--no more complex depreciations.
It is a progressive tax with a flat rate on taxable income, however, the more an individual saves or invests, the lower his taxable income becomes, thus lowering his total tax payment.
Taxable income is defined as total income minus savings and investments minus a threshold income. The typical family threshold income is $36,800.
This would mean that nearly half of all households would pay no federal income tax under this plan.
It would reduce the cost of compliance from $593 Billion to an estimated $50 billion per year.
It is a simple tax that levies the same tax rate to all Americans regardless of taxable income, while reducing or eliminating income taxes for low income families

 

[Dewjunkie]

I've always been a proponent of a flat tax system, I believe it would be the simplest and most logical way of dealing with an out of control process. If everyone had to pay the same flat rate, perhaps some of the bickering over who pays less and who pays more would cease, and politicians could focus on more pressing concerns. Eliminating tax loopholes that allow ridiculous write-offs in order for the wealthy to avoid paying their share could also be beneficial.

Unfortunately, as with anything that might make life simpler and in the end would cost the wealthy more money, it is unlikely that a flat tax would ever come to pass.

 

[Morat]

A flat-tax rarely covers things like investments, which means that the rich rarely pay it. Forbes, for instance, makes several million a year, and is a big proponent of a flat-tax. Coincidentally, he'd pay nothing in taxes.

Sorry. While it looks good on paper, I'm not fond of taxes that lay an undue burden on those who can least afford it, while giving a pass to the rich.

Cammie: I suggest you look up the meanings of "progressive" and "regressive" when it applies to taxes. You're using them wrong. A tax that taxes the poor at a higher rate than the rich, because the rich have the money to invest and then live off investments, is a classic example of a regressive tax. Not, as you call it, "progressive".

 

[IslandBreeze]

Do you have sources to support your idea that the rich get richer?

And how do you figure that poor people will pay more of their income?  15% is 15%...or 20% or whatever it would be...and why do people insist on penalizing rich people for being rich?

 

[IslandBreeze]

http://www.cse.org/informed/key_template.php?issue_it=17

 

[cenimo]

A wonderful idea that will never happen, and here's why....

Flat tax laws always include a National Sales Tax that will begin at the start of the flat tax or be added later.....

Let's take a "big ticket item", car, appliance etc...
let's take a car

under the present system, we all pay a sales tax on the car

under a flat tax, we would all pay the same tax on the car, BUT, the person who drives around right now in a $300,000 Rolly Royce Corniche doesn't pay any tax at the end of the year when all is said and done, and since those people weild the power and make or influence the legislation, they just refuse to find themselves under the same tax rules as the "commoners"

Know the difference between tax avoidance and tax evasion?
5-10 years         

 

 

 

[caley]

How about no tax?
www.lp.org
www.harrybrowne.com
www.house.gov/paul

 

[IslandBreeze]

Hey, I'm okay with that, too!

 

[Morat]

Do you have sources to support your idea that the rich get richer?

I don't need it. You agree with me. You stated, quite clearly in your own post, that income from investment wouldn't be subject to taxation. Did I misread you?

Or do I have to actually point out how much of their money the rich get from investments, as opposed to direct income like a paycheck?

And how do you figure that poor people will pay more of their income? 15% is 15%...or 20% or whatever it would be...and why do people insist on penalizing rich people for being rich?

Do you know what disposable income is? And, once again, you said it yourself. You said that income from investments wouldn't be taxed.

A poor man makes 12,000 a year. He pays 15% in taxes (for 1800 dollars). A rich man makes 500,000 off of his trust fund. None of it is taxable under the flat tax scheme you yourself put forth.

I'm unaware how it could possibly be considered "penalizing the rich" by pointing out that how they're getting off without paying taxes.

Further, the rich use a lot more of Uncle Sam's largess than the poor. An employee needs to use the roads to get to his work, but the business owner needs the roads for many employee. A poor man uses the education system to become literate and get a job, but the business owner needs all his employees to be literate and sufficiently educated to do their jobs.

I've got assests here at home I want protected, but so does a business owner. Only more of them, and often more overseas....

See how it works?

 

[IslandBreeze]

Yup, and I don't have a problem with it.

 

[caley]

Originally posted by Morat
I don't need it. You agree with me. You stated, quite clearly in your own post, that income from investment wouldn't be subject to taxation. Did I misread you?

Or do I have to actually point out how much of their money the rich get from investments, as opposed to direct income like a paycheck?



Do you know what disposable income is? And, once again, you said it yourself. You said that income from investments wouldn't be taxed.

A poor man makes 12,000 a year. He pays 15% in taxes (for 1800 dollars). A rich man makes 500,000 off of his trust fund. None of it is taxable under the flat tax scheme you yourself put forth.

I'm unaware how it could possibly be considered "penalizing the rich" by pointing out that how they're getting off without paying taxes.

Further, the rich use a lot more of Uncle Sam's largess than the poor. An employee needs to use the roads to get to his work, but the business owner needs the roads for many employee. A poor man uses the education system to become literate and get a job, but the business owner needs all his employees to be literate and sufficiently educated to do their jobs.

I've got assests here at home I want protected, but so does a business owner. Only more of them, and often more overseas....

See how it works?

All the more reason for NO tax.

 

[datan]

even beyond collecting money, taxes are also a means of enforcing social policy. eg. you want families to have more kids? give more tax relief for subsequent children. hate drinking, smoking, etc? impose taxes on liquor and cigarettes.

 

[Morat]

Cammie: Strange. Most people feel that when people make millions of dollars a year, and yet don't pay a penny of tax, that's "unfair".

I'd personally like to know how you justify that sort of thing. I mean, when someone making 12,000 a year pays 15% of his salary as tax (more, of course, with payroll taxes), why shouldn't someone who makes 12,000,000 a year pay 15% (or more, of course, with payroll taxes).

 

[IslandBreeze]

No matter what I say, you'll twist it. *SIGH* YES rich people should have to pay taxes. If they've already been taxed on that money, NO it shouldn't have to be taxed again.

 

[kern]

Originally posted by Cammie
No matter what I say, you'll twist it. *SIGH* YES rich people should have to pay taxes. If they've already been taxed on that money, NO it shouldn't have to be taxed again.

But they haven't been taxed on that money before. If someone makes 500,000 from interest on an investment, they have never been taxed for that money before. And if money made off investments is not taxed, then that 500,000 will not be taxed as well.

-Chris

 

[IslandBreeze]

Originally posted by kern
But they haven't been taxed on that money before. If someone makes 500,000 from interest on an investment, they have never been taxed for that money before. And if money made off investments is not taxed, then that 500,000 will not be taxed as well.

-Chris

At some point, they would have had to earn money to invest...that money would have been taxed already...

 

[kern]

Originally posted by Cammie
At some point, they would have had to earn money to invest...that money would have been taxed already...

Not necessarily. Some of this money was earned years or decades ago, and the people are just living off the huge interest (and often investing most of the interest).

-Chris

 

[Morat]

At some point, they would have had to earn money to invest...that money would have been taxed already...

They could inherit. Of course, by that logic, why aren't you abolishing sales tax? Everytime I buy something, I pay a tax on it. And I've already been taxed for all my income!

And payroll taxes, and excise taxes, and well...every tax. Oops.

 

[IslandBreeze]

Originally posted by kern
Not necessarily. Some of this money was earned years or decades ago, and the people are just living off the huge interest (and often investing most of the interest).

-Chris

But the money was still taxed. Decades ago or not, why should money be double-taxed?