Argument FOR Flat Tax.

[Train]

Originally posted by: rahvin
The flat tax proposal is a ponsy scheme to shift the tax burden to the middle and upper middle class. Any flat tax proposal is going to take 30%+ of the average wage earner's income while dropping taxes on the high dollar earners significantly. I've seen more bogus figures and assumptions is supporting these proposals than practically any other.

You might have an argument if those people werent already paying way ABOVE 30% of thier income on taxes anyways. Even middle class people are paying up to 50% of thier money in taxes if you add them all up. (Sales, Property, Income, SS, Medicare, etc)

 

[morrisbj]

Originally posted by: PlatinumGold
Why a flat tax?

lets face it, we will pay taxes. Gross government spending (federal, state, Municipal and county spending) / GDP will be close to 40%. if 40% of GDP is spent by the Government, where do you think they are getting that money? the biggest problem i have with our current tax system is, even very moral and ethical people have no qualms about finding cracks in the system in order to avoid taxes. it has become a thing where, those that pay their fair share are just stupid or underprivileged and those in the "KNOW" don't pay their fair share.

the system makes encourages this type of thinking.

i post this because i feel it is not only my responsibility but also a privilege for me to pay my share of taxes.

A good tax system will be 1. equitable (debatable), 2. easy to understand 3. easy to enforce.

#1 is debatable and i'll deal with it last.

2 and 3 just make sense. how much money do we spend maintaining the IRS every year? not only is there an IRS but there are also tax collections and generations departments in ever state, city and municipal governments.

but more importantly. a flat tax system with no tax BREAKS will get rid of this idea that SOME are getting away with something and will encourage everyone to just do their duty.

1. equitable, i also believe that tax systems should be somewhat regressive. it seems unreasonable to require someone making 20k / year to pay the same percentage as someone making 90k / year. if for no other reason than because it keeps them passive.

The problem with your argument is that you contradict yourself. A flat tax is a tax form in which every person's income is taxed at the same rate. Therefore underpriveledged families pay an even larger portion of the tax burden, and it makes a larger impact on them. Let's say that I make $30,000 a year and there is some CEO who is making $3,000,000 a year. Under your 40% flat tax idea, here is what happens

I pay $12,000 and am left with only $18,000 to pay for housing, transportation, clothing, food, utilities, etc.

CEO Pays $1,200,000 and is left with $1,800,000 to live his still wealthy lifestyle, in his mansion with his exotic cars and fancy meals, his suits that cost more than my car, etc.

The last thing you say is that you think it should be somewhat regressive (progressive if the correct term, but I understand what you are getting at). However, a progressive tax system is what we currently have. It works better than a flat tax, but still has it's issues. Under this system it would look something more like this (tax brackets are guesses, because I don't have them memorized)

I pay ~25% income tax on my $30,000 for a tax bill of $7,500 allowing me $22,500 dollars to live on. With $4,500 more dollars, my quality of life improves dramatically.

CEO pays 40% still (although I believe the top US tax bracket is 39%), leaving him his $1,800,000. He is making in excess of $500,000 a year after taxes, his quality of living is completely unimpeded.

The reason people (either wealthy or gullible) support a flat tax is because the rich want it, and they know how to make it sounds appealing to people. The only group this benefits are the very wealthiest members of society. To make a flat tax work, the rate would have to be in the 35% range to make up for the lost money from the people currently higher than that. So everyone who really NEEDS more money gets more taken away, and those who already have all the money get to keep a larger percent.

 

[morrisbj]

Originally posted by: charrison
a flat tax of around 10% on all income would be enough to replace the revenues from the current income tax code.

How is that possible? 10% is lower than the lowest current tax bracket (except for those below the federal poverty line, who pay none). I would love to pay only 10%, but you need to be realistic. And if you are going to make such outrageous claims, I think you need to back that one up with a link that has no partisan leanings.

 

[charrison]

Originally posted by: morrisbj

Originally posted by: charrison
a flat tax of around 10% on all income would be enough to replace the revenues from the current income tax code.

How is that possible? 10% is lower than the lowest current tax bracket (except for those below the federal poverty line, who pay none). I would love to pay only 10%, but you need to be realistic. And if you are going to make such outrageous claims, I think you need to back that one up with a link that has no partisan leanings.

Unfortunatly I cannot find the link at this point. I will post it as soon as i find it. But there is not magic to the fact that broadening the tax base enables lower rates.

 

[ntdz]

Originally posted by: charrison

Originally posted by: morrisbj

Originally posted by: charrison
a flat tax of around 10% on all income would be enough to replace the revenues from the current income tax code.

How is that possible? 10% is lower than the lowest current tax bracket (except for those below the federal poverty line, who pay none). I would love to pay only 10%, but you need to be realistic. And if you are going to make such outrageous claims, I think you need to back that one up with a link that has no partisan leanings.

Unfortunatly I cannot find the link at this point. I will post it as soon as i find it. But there is not magic to the fact that broadening the tax base enables lower rates.

10% shouldn't be enough, our gdp is 12 trillion, that only leaves govt revenue of $1.2 trillion, unless I'm calculating wrong.

 

[charrison]

Originally posted by: ntdz

Originally posted by: charrison

Originally posted by: morrisbj

Originally posted by: charrison
a flat tax of around 10% on all income would be enough to replace the revenues from the current income tax code.

How is that possible? 10% is lower than the lowest current tax bracket (except for those below the federal poverty line, who pay none). I would love to pay only 10%, but you need to be realistic. And if you are going to make such outrageous claims, I think you need to back that one up with a link that has no partisan leanings.

Unfortunatly I cannot find the link at this point. I will post it as soon as i find it. But there is not magic to the fact that broadening the tax base enables lower rates.

10% shouldn't be enough, our gdp is 12 trillion, that only leaves govt revenue of $1.2 trillion, unless I'm calculating wrong.

That is about what the income tax brings in. Remember SS is 15% and is not counted towards the income tax.

 

[Todd33]

Originally posted by: charrison

That is about what the income tax brings in. Remember SS is 15% and is not counted towards the income tax.

If you are going to overhaul the tax code, maybe stop using the SS surplus to pay for the lack of tax revenue? Then we can stop spreading FUD about SS going bankrupt.

 

[charrison]

Originally posted by: Todd33

Originally posted by: charrison

That is about what the income tax brings in. Remember SS is 15% and is not counted towards the income tax.

If you are going to overhaul the tax code, maybe stop using the SS surplus to pay for the lack of tax revenue? Then we can stop spreading FUD about SS going bankrupt.

I am all for it, what do you want to do with the surplus? give it back to tax payers? bury it ina coffee can? invest it in the market? purchase goverment bonds with it? stuff it in private accounts?

 

[Stunt]

Flat tax is an excellent idea in principle...but when you consider taxation *should* equal expenses over the long term, you are advocating a transition from an exponential system (progressive tax) to a linear system (flat tax). This would mean the middle class would get a tax hike as the burden would be placed on them. If you were to phase flat tax in correctly (all brackets pay the same rate), it would need to be over the long term where the rich would only get the tax cuts.

Try advocating that to the general population (especially as the gap between rich and poor widens).

 

[EatSpam]

Originally posted by: charrison

Originally posted by: Todd33

Originally posted by: charrison

That is about what the income tax brings in. Remember SS is 15% and is not counted towards the income tax.

If you are going to overhaul the tax code, maybe stop using the SS surplus to pay for the lack of tax revenue? Then we can stop spreading FUD about SS going bankrupt.

I am all for it, what do you want to do with the surplus? give it back to tax payers? bury it ina coffee can? invest it in the market? purchase goverment bonds with it? stuff it in private accounts?

I'd hold the surplus and invest it either in the market or bonds.

 

[slash196]

Our tax system is hardly progressive as it is. A flat tax would be an improvement.

 

[McPhreak]

Originally posted by: Dissipate
I disagree

That author that you link has got his facts wrong.

"...since I live in New York City, where I and millions
of other hapless citizens are mulcted into paying the highest state income tax
in the nation, the highest city income tax in the country, and the highest sales
tax."

New York City has neither the highest state tax, city tax, or sales tax in the nation.

 

[Hammer67]

Being in a Democracy has nothing to do with having to pay an unfairly weighted and out of date federal Income Tax.

www.fairtax.org for some good reading, whether you agree or disagree...

 

[morrisbj]

Originally posted by: charrison
Unfortunatly I cannot find the link at this point. I will post it as soon as i find it. But there is not magic to the fact that broadening the tax base enables lower rates.

So taking that $1800 a year from people below the poverty line is going to make up for the billions saved by the richest members of society? It would take some kind of magic to accomplish that. Look, almost everyone in the US is taxed. The number who don't pay at all is negligible at best, and if you took 10% from them, it may come out to be all of $46.50.

 

[her209]

I think we should implement a "flat wage" across the board too.

 

[morrisbj]

Originally posted by: her209
I think we should implement a "flat wage" across the board too.

Well, it would certainly level the playing field. And it would actually make a flat tax a fair tax.

 

[IronMentality]

If you were poor, and we passed a flat tax system with child tax credits of around $3000 per child - and no income of productive working Americans under $41,000 was taxed, would you say NO to this system or would you rather have the current one?

..

 

[morrisbj]

Originally posted by: IronMentality
If you were poor, and we passed a flat tax system with child tax credits of around $3000 per child - and no income of productive working Americans under $41,000 was taxed, would you say NO to this system or would you rather have the current one?

..

Maybe, but it still moves the burden of taxes further down the income brackets. However, the people posting that it would work at 10% are suggesting that it is because you tax EVERYONE regardless of how small their income is. They aren't leaving space for the people who can't afford tax at all. Beyond that, they seem to think that there are somewhere in the range of 300-400 million of them (even though we don't quite have 300 million citizens period, including children), because you would need the 10% from at least that many currently untaxed people to make up the difference in the taxation on the richest.

 

[IronMentality]

No it doesn't. Poor people would have more money. Poor people would receive child tax credits. Rich people would still pay more then them in taxes. Again, if you were in that situation, NO? I want to continue paying more taxes so I pay my "fair share," or are we going to pass programs that encourage higher education for working families (both adults and kids).

Stop thinking like a social, socialist architect. It doesn't work. It never will. Let us not forget corporations pulling in billions of year are paying this same rate too. Revenue would not plummet. It would be near equal to its current intake. Such a system would also remove bloated government (including the IRS), remove all tax loopholes, and as has been shown constantly in history - economic growth would ensue and more revenue would inevitably hit the federal treasury.

 

[morrisbj]

Originally posted by: IronMentality
No it doesn't. Poor people would have more money. Poor people would receive child tax credits. Rich people would still pay more then them in taxes. Again, if you were in that situation, NO? I want to continue paying more taxes so I pay my "fair share," or are we going to pass programs that encourage higher education for working families (both adults and kids).

Stop thinking like a social, socialist architect. It doesn't work. It never will. Let us not forget corporations pulling in billions of year are paying this same rate too. Revenue would not plummet. It would be near equal to its current intake. Such a system would also remove bloated government (including the IRS), remove all tax loopholes, and as has been shown constantly in history - economic growth would ensue and more revenue would inevitably hit the federal treasury.

No matter what you say, what happens is that the upper end of the working class and the middle class still end up with a larger percentage of the overall tax burden. I never said no I wouldn't like it in that situation, but you made up a scenario and I dismissed it, then addressed what has been posted by EVERY FLAT TAX SUPPORTER EXCEPT FOR YOU.

If you make a flat tax and give corporations the same rate as everyone else, you further reduce the tax base, because they already pay a separate tax.

It may be that you created a scenario to get me to agree with your idea, but the scenario you spelled out would never happen. All the conservatives who cry about welfare already would never allow something reasonable like that to happen. As for getting rid of the IRS, couldn't happen, you could shrink it, but you still need it because you need to check that people are reporting the proper income. Also, your suggestion that changing tax structure inevitably leads to a stronger economy is debatable at best. There are very intelligent economists on both sides of the issue who continue to disagree, suggesting that there is not any proof that Reaganomics actually works.