Fair Tax

[Jadow]

I'm not for this fair tax (sales tax) however I do support a Flat tax like Steve Forbes has proposed.

 

[Dissipate]

Originally posted by: EatSpam

Originally posted by: Dissipate

Originally posted by: EatSpam

Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?

Bill Gates isn't hurting for money. If he's not the world's richest man, he's in the top five. Employees are a pre-tax business expense, so if Bill Gates got a tax cut to increase his vast personal wealth, I doubt he'd have a change of hiring habits. If Bill Gates got another tax cut, he'd probably just buy more stock or another house or do nothing with it at all.

I have to ask though: Why do you think the rich guy needs more money so he can invest and create jobs? By definition, rich guys have an abundance of wealth, and with it, excellent credit. Why doesn't the rich guy just open or expand a business with his existing abudance of wealth and excellent credit? Why should he? Where's the profit? How are the middle and lower classes going to find money to make his expansion worthwhile? The rich guy might as well stick his tax cut in the stock market. This is what I see as the falacy of Supply-Side economics.

Contrast to the alternative. Give the tax cut entirely to the middle and lower classes. The lower and middle classes spend lots of money - if you give them more, they'll spend more. They don't have this abundance of extra funds that the rich guy does - they have more unfulfilled wants. In this case, what does the rich guy do? He uses his existing abundance of wealth and excellent credit and opens or expands his business because he wants some of that money that the lower and middle class have. Makes more sense in my head.

If that makes sense in your head, I feel sorry for you.

Well, what's wrong with what I said there? Why am I totally backwards on supplyside econ? Help me drink the koolaid.

This has nothing to do with supply side economics (something that I don't subscribe to), and everything to do with your complete ignorance of what a stock market is, how capital formation is necessary for economic growth, and your illogical conclusions regarding taxing the rich.

First of all, do you even know what a stock market is or what goes on in a stock market? A stock market is where a company sells its shares in order to raise capital so it can expand, grow and *gasp* (get ready for the incredible part) quite possibly hire new employees. Hence, when a rich person(or anyone else) invests in the stock market they are indirectly creating jobs and opportunities for people within those companies.

Now let's talk about capital formation 101. When someone saves up money and starts a business (possibly a Rich Evil Greedy Capitalist (TM) ) what are they doing? They are putting off current consumption for future rewards. In other words, they are putting off consuming what they could now, and investing their money into capital and labor in order to get profits down the road. Of course, in order for this process to even take place, the businessman has to be able to save enough money in order to invest in the new business. The workers on the other hand do the opposite. They get paid immediately for their labor. If everyone was middle class and lived from paycheck to paycheck, there wouldn't be any capital accumulation necessary for starting new businesses. Hence, wealth accumulation and *gasp* inequality is necessary and desirable in any economic system. The more wealth accumulation you remove from the economic system, the more the economy will become stagnate and the fewer new bussinesses will be started.

The government for the most part is a waste of money. The current round of pork spending is a good example. In fact, not only it is it a waste of money, but it is actually a detriment to society (i.e. the government uses a lot of its funds for regulatory agencies that harass businesses and citizens in general, costing billions in compliance costs and mental anguish). Once this is recognized, it becomes quite puzzling as to why one would advocate tax cuts for the middle class and not the "rich." Tax cuts (or even tax elimination) should be reaped by everyone no matter their status/role is in society.

 

[Whoozyerdaddy]

Originally posted by: ironwing

Originally posted by: Whoozyerdaddy

Remember... Right now 22 cents of every dollar that anyone spends... rich or poor... goes to the IRS. Even on groceries.

Eliminate all federal taxes and the cost of goods nd services drops by 22%. Throw in the sales tax and you're right back where you started. So for starters, the cost of goods and services stays more or less the same.

Now... Since all federal taxes are eliminated, the poor no longer have to pay ANY tax. No income tax and most importantly, no payroll tax. Payroll tax is the biggest tax burden on the poor. Now it's gone. They now have more to spend on goods and services (which have not increased in cost!) Sounds pretty good right? Now add in to all that a prebate check to help them effectively avoid paying tax. This plan is great for the working poor.

Current Tax system:
Goods: $1.00
Cost w/o tax: $0.78 (accepting your 22% for sake of argument)
Gov revenue from sale of goods: $0.22
Gov revenue independent of sale of goods: ~$0.15-$0.35
(Based on personal income tax and assumption taxpayer spends all post-tax income).
Total Gov revenues per dollar of income: $0.37 - $0.57

"Fair" Tax system:
Goods including tax: $1.00
Gov revenue: $0.22
Total gov revenue per dollar of income: $0.22
(Based on personal income tax and assumption taxpayer spends all income).

The Fair tax system will not replace current revenues.

That's not quite right. The $.15-$.35 is already calculated into the embedded tax of $.22 in the retail item. It's not added to it.

The $.22 comes from adding up the payroll and other taxes associated with all the employees and suppliers involved in the supply chain that brings that product to market.

This has been analyzed by economists up one side and down the other. The 23% is not an arbritrary figure. It would be revenue neutral.

 

[Whoozyerdaddy]

Ok... The two arguments I see popping up consistantly are:

1. The rich spend a smaller percentage of their income than the middle class or the poor and will most likely choose to invest their money. (Sounds like the same class warfare non-sense that exists under the current system if you ask me)

Bingo! The rich will still spend money in America. Lots of it. They will also invest a lot of money. This is a GOOD thing. Investment creates jobs. More jobs mean more people making money equals more people speding money. The conservative estimates are that the Fair Tax will double the size of the US economy over the next 15 years. The authors of the plan (yeah I know...) say that economists are predicting that the US economy will grow by 10.5% in the first year, exports will rise by 26% and capital investment will rise by 70%.

Think about it, the US becomes the most corporate tax friendly zone on earth. All those businesses and all the jobs associated with them that have moved over seas to avoid the punative tax system in the US will come back. And they'll bring more with them. Foreign manufacturers who want to compete on an equal cost footing with US goods will have to manufacture their products inside the US. By eliminating the embedded tax on US produced exports, those goods will have a competitive advantage in overseas markets. US exports rise.


2. Fraud or evasion.

We have so much fraud and evasion under our current system that this hardly seems like a valid argument. Nobody is calling this plan perfect. There is no such thing as a perfect plan to collect revenue. Right now, under our current system we only collect about 75% of all the tax that we KNOW is owed. That doesn't include all the income taxes not being collected from the black market / underground economy that currently exists. Fraud and evasion will exist under any tax plan you create. Right now the average tax payer coughs up $2000 a year to cover the fraud and evasion in the current system. That doesnt sound fair does it? Nope, but that's the way it is. If there is a tax, people will cheat on it. Sorry...

Bowfinger
First, the average person does NOT have more money to spend. To suggest otherwise requires we somehow get something for nothing. In fact, if they're planning to collect enough sales tax to balance the budget, the average person must have less to spend. That's the only way the numbers can add up.

If you didn't have to pay income tax or payroll tax your paycheck would be considerably larger. Therefore you have more money to spend. People will still pay taxes (through consumption instead of income) but their overall buying power will increase as they will have more money to spend on goods and services that cost the same as they do now.

This plan is not being created to solve all the economic problems of the country. (Although it could be argued that the net effects of economic growth predicted by economists as a result of the plan would go a long way toward that end) It is designed to replace our current system. Revenue neutral. Nothing more, nothing less. We'll still be in deficit. Social Security and medicare will still be going bankrupt. It's not a panacea.

Bowfinger
I don't buy it. Regardless of whether new goods cost effectively the same as before -- a premise I don't really buy, but let's go with it for now -- the fact is new goods will now cost about 23% more relative to the price of used goods. This will inevitably shift purchasing patterns to more used and illicit goods, and fewer new goods. Thanks to supply and demand, the cost of used & illicit goods will rise, but the equilibrium point will still be more favorable to used (i.e., non-taxed) goods compared to the balance today. This drop in new goods sales will lead to production cutbacks and reduced employment.

Good points. Here's the deal. Existing used items under our current plan already have an embedded tax advantage in their price. So there isn't any more advantage to buying used than there is new. Remember, right now all new purchases carry a 22% embedded tax in them. This doesn't change under the new plan. (except it's 23% - big whoop)

Let's look at cars. If you buy a new car today you pay the embedded tax of 22%. That percentage is derived by calculating all of the taxes that were involved in the production and bringing to market of that vehicle. You effectively paid the tax when you bought the vehicle new.

If you buy a used car today you aren't paying that 22%. (Just like under the Fair Tax) It was already paid for when the car was originally sold. If you buy it from a private seller, there is no embedded tax in the car at all. If you buy it from a used car lot the only embedded tax you pay is the tax on the salesman's commission and the tax on the car lot's taxable income from the sale. Certainly nowhere near 22% of the cost of the used car. So it's the same argument you're trying to make. It's not a problem now, so how could it be a problem under the fair tax?

This model doesn't change with the fair tax. That's the beauty of it.

 

[5LiterMustang]

Originally posted by: Dissipate

Originally posted by: EatSpam

Originally posted by: Dissipate

Originally posted by: EatSpam

Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?

Bill Gates isn't hurting for money. If he's not the world's richest man, he's in the top five. Employees are a pre-tax business expense, so if Bill Gates got a tax cut to increase his vast personal wealth, I doubt he'd have a change of hiring habits. If Bill Gates got another tax cut, he'd probably just buy more stock or another house or do nothing with it at all.

I have to ask though: Why do you think the rich guy needs more money so he can invest and create jobs? By definition, rich guys have an abundance of wealth, and with it, excellent credit. Why doesn't the rich guy just open or expand a business with his existing abudance of wealth and excellent credit? Why should he? Where's the profit? How are the middle and lower classes going to find money to make his expansion worthwhile? The rich guy might as well stick his tax cut in the stock market. This is what I see as the falacy of Supply-Side economics.

Contrast to the alternative. Give the tax cut entirely to the middle and lower classes. The lower and middle classes spend lots of money - if you give them more, they'll spend more. They don't have this abundance of extra funds that the rich guy does - they have more unfulfilled wants. In this case, what does the rich guy do? He uses his existing abundance of wealth and excellent credit and opens or expands his business because he wants some of that money that the lower and middle class have. Makes more sense in my head.

If that makes sense in your head, I feel sorry for you.

Well, what's wrong with what I said there? Why am I totally backwards on supplyside econ? Help me drink the koolaid.

This has nothing to do with supply side economics (something that I don't subscribe to), and everything to do with your complete ignorance of what a stock market is, how capital formation is necessary for economic growth, and your illogical conclusions regarding taxing the rich.

First of all, do you even know what a stock market is or what goes on in a stock market? A stock market is where a company sells its shares in order to raise capital so it can expand, grow and *gasp* (get ready for the incredible part) quite possibly hire new employees. Hence, when a rich person(or anyone else) invests in the stock market they are indirectly creating jobs and opportunities for people within those companies.

Now let's talk about capital formation 101. When someone saves up money and starts a business (possibly a Rich Evil Greedy Capitalist (TM) ) what are they doing? They are putting off current consumption for future rewards. In other words, they are putting off consuming what they could now, and investing their money into capital and labor in order to get profits down the road. Of course, in order for this process to even take place, the businessman has to be able to save enough money in order to invest in the new business. The workers on the other hand do the opposite. They get paid immediately for their labor. If everyone was middle class and lived from paycheck to paycheck, there wouldn't be any capital accumulation necessary for starting new businesses. Hence, wealth accumulation and *gasp* inequality is necessary and desirable in any economic system. The more wealth accumulation you remove from the economic system, the more the economy will become stagnate and the fewer new bussinesses will be started.

The government for the most part is a waste of money. The current round of pork spending is a good example. In fact, not only it is it a waste of money, but it is actually a detriment to society (i.e. the government uses a lot of its funds for regulatory agencies that harass businesses and citizens in general, costing billions in compliance costs and mental anguish). Once this is recognized, it becomes quite puzzling as to why one would advocate tax cuts for the middle class and not the "rich." Tax cuts (or even tax elimination) should be reaped by everyone no matter their status/role is in society.

holy crap someone else who actually understands economics? WOW, I was beginning to think I was the only one on the internet that had a clue :bowdown: my faith in humanity has been restored.

 

[ToeJam13]

Originally posted by: 5LiterMustang
Some of the things you metnioned like a monthly check are horrible ideas. Those are the HUGE drawbacks of the NST, I just dont think something like that would be good at all and it owuld lead to abuse. FLAT TAX > *

edit: value added taxes are horrible because they alter what the market would ulitmately choose via price manipulations.

The idea of a monthly cheque wasn't mine. I simply stated that it looked good on paper, but would end up being a bad idea in reality.

I don't like the idea behind a VAT because it is complex. Complex is bad. Simple is good.

 

[5LiterMustang]

Originally posted by: ToeJam13

Originally posted by: 5LiterMustang
Some of the things you metnioned like a monthly check are horrible ideas. Those are the HUGE drawbacks of the NST, I just dont think something like that would be good at all and it owuld lead to abuse. FLAT TAX > *

edit: value added taxes are horrible because they alter what the market would ulitmately choose via price manipulations.

The idea of a monthly cheque wasn't mine. I simply stated that it looked good on paper, but would end up being a bad idea in reality.

I don't like the idea behind a VAT because it is complex. Complex is bad. Simple is good.

yeah, I was just highlighting some of the problems, I knew i twasn't your idea.

 

[piasabird]

I really dislike the current form of our tax system. My main issue with it is that it is no longer working and has become so twisted that it is used as a way to benefit one group of people over another. There are so many laws about it and so many loopholes that the IRS can not even give you an answer on a question. I say make one flat tax. Nor rules, no exceptions, no special waivers. Everyone pays equally. Corporations have so many lawyers and the IRS hires an army of people to fight over who is suppose to pay what kind of tax. Most of all business law is based on either paying or not paying taxes.

I say throw all these stupid laws out the window. Make a common sense tax system. Let everyone pay XX percent with no exceptions.

It just makes sense.

I yearn for a tax system that can be cut down to a few pages.

 

[5LiterMustang]

Originally posted by: piasabird
I really dislike the current form of our tax system. My main issue with it is that it is no longer working and has become so twisted that it is used as a way to benefit one group of people over another. There are so many laws about it and so many loopholes that the IRS can not even give you an answer on a question. I say make one flat tax. Nor rules, no exceptions, no special waivers. Everyone pays equally. Corporations have so many lawyers and the IRS hires an army of people to fight over who is suppose to pay what kind of tax. Most of all business law is based on either paying or not paying taxes.

I say throw all these stupid laws out the window. Make a common sense tax system. Let everyone pay XX percent with no exceptions.

It just makes sense.

I yearn for a tax system that can be cut down to a few pages.

good post but you still need personal exemptions for those with a low income.

 

[Fern]

Originally posted by: piasabird
I really dislike the current form of our tax system. My main issue with it is that it is no longer working and has become so twisted that it is used as a way to benefit one group of people over another. There are so many laws about it and so many loopholes that the IRS can not even give you an answer on a question. I say make one flat tax. Nor rules, no exceptions, no special waivers. Everyone pays equally. Corporations have so many lawyers and the IRS hires an army of people to fight over who is suppose to pay what kind of tax. Most of all business law is based on either paying or not paying taxes.

I say throw all these stupid laws out the window. Make a common sense tax system. Let everyone pay XX percent with no exceptions.

It just makes sense.

I yearn for a tax system that can be cut down to a few pages.

It will never happen. Here's why - most "flat tax" plans are nothing more than (1) having one rate. I.e., no brackets. Having brackets does not make the tax system complicated. H3ll, a monkey can use the charts (or his software) to calulate the amount of tax correctly; and (2) elimination of itemized deductions. Nothing says you have to itemize now. If it seems to complicated just opt for the standard deduction. Problem resolved. Furthermore, itemized deduction account for few of the pages in the voluminous tax code.

The real problem is defining income. Not difficult if you get a W-2 and have no investments.

No the real complication is defining income and then those trade or business deductions, and basis.

Lets say you owned a little shop. Under the flat tax are your GROSS Sales what you are taxed? No, that w/b absurd. You must be able to deduct the cost of your products sold, rent (or depreciation if you owned the building), repairs, utilities as so forth.

When you consider all the various different types of business and diverse activities you begin to understand that the complexity of the tax code is DEFINING income, and the related expenses which should be deducted to arrive at net taxable income.

You can't tax peeps or business on gross income. Some business have very small margins. If you taxed them on gross income, well maybe 3% of gross is actuall profit after paying for product/inventory and labor. So to tax 100% of revenue would be absurd.

Humans are "cash basis" taxpayers. When you get the money, or pay the expense it goes on your tax return. Simple no? Now it's completely different for businesses. Their cash flow has little or nothing to do with what's on their return. E.g., If they ship $100M of goods to Walmart in October for Xmas it counts as a sale. Even though Wallymart might not "pay" for those goods until well into the next year.

Lots of pages on how to deal with this issue "Accrual accounting" that will never disappear with a flat tax.

"Basis" is another complicated but necessary concept. Say you sold ATI stock for $50 a share. Should the entire $50 a share be taxed? Of course not. maybe you bought it (your "basis") for $52 a share. You don't any income, you have a loss. Add in stock splits and divdend reinvestment plans and it can get pretty complicated trying to figure out if you have a loss or a gain.

Hmmm.. let see, lots of rules on capital expenditure vs. expense. If you buy a building to rent out or use in your business do you deduct the full cost (even though there may or may not be a mortgage on it for many years) in that year? No, it will be used for many years so the cost is spread over many years. Same for other types of equipment (and man are there a gazzillion types of equipment develpoed by/for many different kinds of businesses/industry.

Hmm... lets see, must 11tybillion pages on defining cap expenditure for expense and defiining useful life of equipment etc.

I could go on "ad nauseum".....

I've worked on tax matters in a number of countries. There's really no such thing as a "simple tax code", and for good reason. The best that can be done is to make rules that omit individuals from having having to figure out all this stuff. These rules omit maybe $100,000 of gross proceeds sale of stock from tax, so that you don't have to bother with figureing out how much you paid for it, effects of stock splits, or whether you had a loss or gain etc.

Fern

 

[Whoozyerdaddy]

Here is a link to a chart that compares the fair tax to the flat tax and the current system.

The flat tax rocks compared to our current system in many ways. I still like the fair tax over the flat tax though. Like Fern said, a flat tax simplifies the system a little bit but it still has lots of problems. It's kind of like the lo-cal version of our current system.

 

[5LiterMustang]

Originally posted by: Whoozyerdaddy
Here is a link to a chart that compares the fair tax to the flat tax and the current system.

The flat tax rocks compared to our current system in many ways. I still like the fair tax over the flat tax though. Like Fern said, a flat tax simplifies the system a little bit but it still has lots of problems. It's kind of like the lo-cal version of our current system.

how the hell is a flat tax a low cal version of our current system? you really need to elaborate on a claim like this.

 

[Stunt]

The only truly "fair tax" is communism and anarchy.

If you want to get into the most fair taxation with our current government institutions and corporate environment, it's progressive bar none.

 

[5LiterMustang]

Originally posted by: Stunt
The only truly "fair tax" is communism and anarchy.

If you want to get into the most fair taxation with our current government institutions and corporate environment, it's progressive bar none.

uhhh the progressive tax is the MOST unfair tax

 

[Stunt]

Originally posted by: 5LiterMustang

Originally posted by: Stunt
The only truly "fair tax" is communism and anarchy.

If you want to get into the most fair taxation with our current government institutions and corporate environment, it's progressive bar none.

uhhh the progressive tax is the MOST unfair tax

Make a case and explain why...

 

[Whoozyerdaddy]

Originally posted by: 5LiterMustang

Originally posted by: Whoozyerdaddy
Here is a link to a chart that compares the fair tax to the flat tax and the current system.

The flat tax rocks compared to our current system in many ways. I still like the fair tax over the flat tax though. Like Fern said, a flat tax simplifies the system a little bit but it still has lots of problems. It's kind of like the lo-cal version of our current system.

how the hell is a flat tax a low cal version of our current system? you really need to elaborate on a claim like this.

For individuals it's a simpler system. But you still have witholding, you still have the gov in your financial biz, and for investors or business owners you still have all the headaches of determinig what "taxable income" and "profit" is.

Read Fern's post. He nailed it.

 

[5LiterMustang]

Originally posted by: Stunt

Originally posted by: 5LiterMustang

Originally posted by: Stunt
The only truly "fair tax" is communism and anarchy.

If you want to get into the most fair taxation with our current government institutions and corporate environment, it's progressive bar none.

uhhh the progressive tax is the MOST unfair tax

Make a case and explain why...

By its very nature progressive taxes are the least fair...why?

Because the harder you work, the more you contribute to society and to our economy they higher percent of your money you have to give to the government.

For example
One of my best friends makes 22k a year, not much money I think we'd all agree, his tax bill each year is 0, in fact he gets back money. Not necessarily a bad thing he does have a kid and 22k a year doesn't cut it. So he's got a negative tax rate

I make 50k a year, and pay roughly 5k/yr in taxes, or 10% of my income, I dont get money back, I dont usually get a refund

My uncle makes 125k/yr he pays roughly 30k/yr in federal taxes...not on ALL of this it is just INCOME taxes, not SS or medicare deductions...

now why should my uncle have to pay roughly 25% of his income in taxes?

Lets assume everyone here is single...

My best friend pays -10% in taxes because he usually gets back about 2k in addition to his money he paid in throughout the year.
I wind up paying about 9065 or almost 20% of my income

My uncle winds up paying 29569 or 25% of his income

Now a theortical person making 500,000 yr would pay 155532.50 or 31% of his income...

Why does it do this? because of a progressive tax, every dollar that my uncle makes above 71k he gets taxed 28% on. Every dollar the guy making 500k makes over 326k he gets taxed 35%...this is ridiculous and truly not fair

We need set deductions for everyone of say 14k (28k married filing jointly) personal exemption and 7k child deductions. EVERYONE could claim these deductions, they're not phased out at certain income levels, they're available for everyone. The EITC could still remain in effect so lower income folks get x back each year in addition to their tax burden, this way the change in tax code wont hurt them. But this way lets say my personal exemption is 14k, and my uncles personal exemption is 14k and the guy making 500k has a personal exemption of 14k, and we have a FLAT tax of 15% we all pay 15% tax on our income ABOVE 14k. The guys making more wont get penalized for making more. They'll have incentive to work harder knowing they'll make more money.

Teh same is true for corporations. IF they know they dont have a monsterous tax bill coming at them because they made money (something business are SUPPOSED TO DO) they'll be more apt to hire people, and invest in R&D.

 

[ToeJam13]

Well, here comes the big question: what is fair to whom?

To people making less than $35K per year, ever dollar of tax taken means a lot. It's the difference between eating well or eating basic. It's having a newer car that runs well, or an old junker that barely makes it to work. It's living in a cramped tenement versus a clean middle class apartment.

For somebody who earns over $500K per year, loosing one hundred thousand dollars to taxes is an annoyance. You still get to drive your Lotus and your Benz. You still get to own your multi-million dollar home with the panoramic view. You still get to eat at Morton?s steak house every Friday.

I've been to places like Beverly Hills-CA, Scottsdale-AZ and Medina-WA. Many of these people are not hurting in the slightest.

Is it fair to declare this kind of class warfare? No. Somebody is going to loose when it comes to the debate over taxes. However, the question is who is benefiting the most from the stability and functionality of our country? Where do we draw the line between paying a worthy percentage of our disposable income versus wealth redistribution?

I think that the starting point for paying taxes should be much higher than it is now. People in the lower class brackets should be exempt from paying taxes since they must struggle just to make a living. On the other hand, the rich shouldn?t be overburdened with taxes since they?re the ones paying a good chunk of it. They also should not be allowed to wiggle out of paying any taxes due to loopholes and massive deductions such as some rich people are now able to do.

Again, the tax code should be simple. Three tax brackets for three income categories: no taxes on the poor, lower taxes on the middle class, higher taxes on the upper class. Taxes on the rich should not be oppressive and taxes on the poor should not be made into credits (tax welfare).

Simple.

 

[ToeJam13]

Of course my old High School teacher had an idea to make the tax code very simple for individuals: no more deductions.

Personally, I love my deduction for the interest on my home loan. However, is that fair to people who live in apartments? What about people who invest in clean technology that benefits us all?

Now that is something to ponder. . .

 

[5LiterMustang]

Originally posted by: ToeJam13
Well, here comes the big question: what is fair to whom?

To people making less than $35K per year, ever dollar of tax taken means a lot. It's the difference between eating well or eating basic. It's having a newer car that runs well, or an old junker that barely makes it to work. It's living in a cramped tenement versus a clean middle class apartment.

For somebody who earns over $500K per year, loosing one hundred thousand dollars to taxes is an annoyance. You still get to drive your Lotus and your Benz. You still get to own your multi-million dollar home with the panoramic view. You still get to eat at Morton?s steak house every Friday.

I've been to places like Beverly Hills-CA, Scottsdale-AZ and Medina-WA. Many of these people are not hurting in the slightest.

Is it fair to declare this kind of class warfare? No. Somebody is going to loose when it comes to the debate over taxes. However, the question is who is benefiting the most from the stability and functionality of our country? Where do we draw the line between paying a worthy percentage of our disposable income versus wealth redistribution?

I think that the starting point for paying taxes should be much higher than it is now. People in the lower class brackets should be exempt from paying taxes since they must struggle just to make a living. On the other hand, the rich shouldn?t be overburdened with taxes since they?re the ones paying a good chunk of it. They also should not be allowed to wiggle out of paying any taxes due to loopholes and massive deductions such as some rich people are now able to do.

Again, the tax code should be simple. Three tax brackets for three income categories: no taxes on the poor, lower taxes on the middle class, higher taxes on the upper class. Taxes on the rich should not be oppressive and taxes on the poor should not be made into credits (tax welfare).

Simple.

Low income folks still pay ZERO taxes because everyone has the same deductions. Thats the beauty of the flat tax. Its not an annoyance for a rich person its money lost, taken by the government. Money they could just as easily create economic growth with, in fact more than others the upper class create jobs, wealth, and capital.

I agree on the loophole stuff too...loopholes are ridiculous something that would be eliminated with a flat tax.

 

[HomerJS]

I like the basic premise except the "Prebate check". Instead of spending more money issuing checks do the following.

Exemptions...
Unprepaired food (grocery store)
Clothing with a cap (i.e. fur coats)
Necessary medical
Auto with a cap
Housing (buy or rent) with cap

Since the poor spend the overwelming majority of disposal income on these items they are covered.

 

[5LiterMustang]

Originally posted by: HomerJS
I like the basic premise except the "Prebate check". Instead of spending more money issuing checks do the following.

Exemptions...
Unprepaired food (grocery store)
Clothing with a cap (i.e. fur coats)
Necessary medical
Auto with a cap
Housing (buy or rent) with cap

Since the poor spend the overwelming majority of disposal income on these items they are covered.

Good point but what you're doing by issueing checks each month is subsidizing their income, people begin to think they can't do it without uncle sam helping them along. This is why I like the flat tax, you earn it, but can still get a rebate at the endof the year.

 

[daclayman]

Originally posted by: HomerJS
I like the basic premise except the "Prebate check". Instead of spending more money issuing checks do the following.

Exemptions...
Unprepaired food (grocery store)
Clothing with a cap (i.e. fur coats)
Necessary medical
Auto with a cap
Housing (buy or rent) with cap

Since the poor spend the overwhelming majority of disposal income on these items they are covered.

Great, the poor are covered. ToeJam earlier posted that the rich won't feel the burn as badly as those that make less then 35k. So, this new tax system will affect the middle class the most. Middle class means ALOT of fricking people; you, me, that guy with the weird mole, etc.. This taxation will create a haves/have nots society. Lookee here:

35k/yr (for example) will be our $$ sweet spot. Americans will need to get over this 'hump' to really 'make it'. A few will and most won't. OK, the losers that couldn't make themselves better deserve to be where they are, but the ones who actually make it over 'the hump' are now taxed the same as those who make 2x, 5x, 20x more. These new 'rich' Amercians will have to work extra hard to make enough to pay the new extra taxes they now deserve. Our progressive tax system has this hump at $150,150. This crap just breeds complacency.

 

[Whoozyerdaddy]

I love how everyone aggrees that the current system needs to be lit on fire and pushed out to sea.

To tell the truth, while I prefer the Fair Tax, I would have no problem getting behind the flat tax IF it were before congress right now and IF it were generating the kind of press the Fair Tax is. But it's not.

We all seem to agree that while the FT isn't perfect (just like the Flat Tax isn't perfect), it's still a damn sight better than what we have now. It's like deciding on whether to have pizza or shlt for dinner. So... while I hate to sound like the "rah rah - go team" guy, why not go to the site, sign the petition and fire off a quick e-mail to your congressman?

 

[Zebo]

Low income folks still pay ZERO taxes because everyone has the same deductions

Really? Have you ever worked? You make one dollar and uncle sam owns 8.25% of that minimum, no rebates, no deductions, no exclusions.