Originally Posted by tonton
What would you guys say to a flat tax? On top of that, treat all income equally, be it inheritance, capital gains, profit from resale of assets, whatever. There are no "tax shelters".
All we need to do to maintain a high standard of living would then be to set a high standard deduction, like $30,000. Everybody gets a $30,000 deduction from their taxes no matter what.
It would simplify the tax code. Everybody would be equal. The flat tax rate could be tied to the budget somehow.
In my opinion, a "flat tax" ought to assess everyone equally. The US budget divided equally among taxpayers would equal about $29,000 for 2010. Everyone gets a bill: Flat tax. Pay up!
Now, the "flat tax" advocated by key Republicans in 1994 was essentially what tonton describes. Dick Armey and Richard Shelby introduced a bill that proposed a "flat"
17% tax on income after substantial personal allowances. They described the the tax code as it existed in 1994 thus:
An Unfair Tax System
Perhaps the greatest ball-and-chain on America's freedom and prosperity is the income tax. After eight decades of being "reformed," our tax system is so complex ...
- Even the Internal Revenue Service can no longer give accurate advice on it.
- The IRS sends out eight billion pages of forms and instructions each year. Laid end to end, these would stretch 28 times the circumference of the earth.
- Americans spend 5.4 billion man-hours each year calculating their taxes -- more man-hours than it takes to build every car, truck and van produced in the United States.
- The tax code puts a drag on our economy worth an estimated $232 billion a year in compliance costs, an amount equal to $900 for every man, woman, and child in the country.
Remember this was sixteen years ago. The issues have become even more egregious since then.
The flat tax will restore fairness to the tax law by treating everyone the same. No matter how much money you make, what kind of business you're in, whether or not you have a lobbyist in Washington, you will be taxed at the same rate as everyone else. While applying only the single rate to all income, the flat tax is also progressive -- thanks to the generous family allowance. A family of four earning $30,000 would pay no income tax, the same family earning $50,000 would pay 6 percent, and the family earning $200,000 would pay 14 percent. The family allowances also take millions of lower-income taxpayers off the tax rolls entirely.
Republicans were so giddy with their 1994 victory that they believed they could actually accomplish this. So what was wrong with it? It raises the same revenue for the Treasury as the existing code. It retained popular deductions like mortgage interest. It contained generous family and individual allowances. It didn't tax "the poor" one nickel. And - as they pointed out - a "flat tax" is
a progressive income tax, not
the John Galt "flat tax" that I described at the beginning of this post.
Remember what I wrote about language framing a debate. The "flat tax" isn't "flat" at all.
So why aren't we sending in a post card instead of reams of documents prepared by paid tax professionals at a cost of $billions per year? Simple. Republicans withered under blistering attacks from the shrill left. As if they didn't need any more reason, Rs deserved to be kicked out of office for that alone. Talented men and women finally in positions of leadership, with no backbone to defend the principles they held.
As an income tax, a simple "flat tax" is a superior concept to the mess we have today. What's wrong with the idea? The left's attack on the Armey - Shelby "flat tax" came down to one and only one issue - that it benefits "the rich" unfairly. Let's think about that.
The tax code we now have not only confiscates income exponentially
, it phases out deductions at higher brackets. Despite the obvious fact that this discriminates against those who earn more than others, it's all done in the name of "fairness". Is it really? Suppose you earn a lot of money - say, $250,000 like the "Super Rich" in the story above. They allegedly pay $100,000 in taxes. Sure, that's a lot, but they're left with $150,000 to scrape by. What about the ultra-super rich, who earn $250 million? Let's just say they're paying $100 million in taxes. Do you think they're worried about getting by on the $150 million left? I don't know, I don't earn quite that much, but I doubt it.
This is our progressive tax code. Has it accomplished its intended goal of "fairness", or is it simply accommodating the shrill left, whose main motivation is feeling good
that someone else is paying more than they are? Meanwhile, the broad swath of middle class remains choked with having to comply with Byzantine regulations that punishes their hard work and only serves as a deterrent to success.
Under an Armey / Shelby "flat tax", those hyper-rich with incomes of $250 million would pay $42,000,000 in taxes (forget about allowances - they're insignificant to these folks). The shrill left will cry "more tax cuts for the wealthy" as the Rs crumble into a whimpering pathetic heap. Think about that - these are people who had been paying $100 million. Do you think paying that much less will have a significant effect on their lives? If you were of the opinion that $100 million was not significant to them under our present tax scheme, why is an additional $58 million significant? Because it represents lost Treasury revenue? Wrong, since the Armey / Shelby "flat tax" is revenue-neutral. What do you think they'll do with that extra $58 million left in their checking accounts at the end of the year? How would you spend it? What do you buy when you already own too many houses, cars, boats, and toys with enough personnel on your payroll to maintain them all? Many of them will donate it.
There are only so many small islands on the market.
Think a progressive tax is "fair"? Why? Does it just make you "feel good" that the hyper-rich are wasting so much in taxes? How does that help you
, as you struggle to figure out your tax bill?
All I'm asking is that you think about it, honestly, to the extent that's possible with liberals, who are so much better at feeling than thinking.
A broad swath of middle class includes millions of people who own and operate small businesses that employ the vast majority of Americans. They are the engine that drives economic success in this country, and it's hurting. Congress's recent actions have served to throw sand in its crankcase, leaving us with widespread misery, mortgage defaults, bank failures, and pension deficits. The Federal government is running absurdly high deficits, and even Democrats have come to realize letting the Bush income tax cuts expire next year would do more harm than good. Clearly, the tax code is broken and needs to be scrapped. The "super-rich" really don't care what happens - it's the middle class that gets hurt by it.
Originally Posted by tonton
It would simplify the tax code. Everybody would be equal.
Congress has shown no willingness to treat people equally - just the opposite. The reason we'll never have a "flat tax" in my opinion is that people in power crave control
over you and I. Republican or Democrat - once elected to Congress, they're all psychopaths. The tax code is not used to raise revenue as much as it is for social engineering. This is immoral. So, for that matter, is confiscating a man's earnings or his property. The government has no business knowing what I earn.
Our income tax is a hindrance to economic success. It's wrong on so many levels.
The US economy is in bad shape, but it can
recover easily, and more quickly than anyone would believe given its current state. The only requirement is a Congress with enough resolve to make it so:It Isn't Just Lost Jobs--It's the Lost Jobs Machine
(Republican economist) Douglas Holtz-Eakin suggests a three-pronged attack. First, he would stop using the tax system to achieve social goals and change it to focus, almost obsessively, on fostering economic growth. Second, he would liberate corporations to devote more capital to jobs by curbing the use of them as "vessels for social benefits" such as health insurance, which would be provided in other ways.
A flat tax is certainly a contentious issue, but in my opinion, any
income tax is wrong. It's wrong to take from another, whether you're a bank robber or a mob called the government. It's none of your damn business how I earn my money, how I decide to invest it, what kind of house I live in or how many children I claim as dependents. The income tax should be abolished. Find another way to raise revenue. There are many, many other alternatives, all of them "fairer" than what we have now.
The flat tax rate could be tied to the budget somehow.
Yes, it should, but that's not bloody likely. The US still needs to raise revenue for its omnipresent wars to end all wars and other contingencies. You won't likely be able to ratchet up rates from one year to another, nor would that be expedient enough anyway. The US functioned for years on import duties alone, and could work for many more with a consumption based tax. I'd be all over something like a European-style value added tax - as long as it eliminates the income tax, completely, permanently, and for good.
Kill it. Drive a stake through its heart.