Flat Tax(ish)

ACtually i like the no income tax at all for anyone idea! Lets have people keep there money and use it how they like and when they want. Tax all products instead, anything bought or sold tax it. Then people can spend or save accordingly how they want and keep all there money and when they want to buy something its taxed. Simple idea but im sure no one will like it.

 

I am not an accountant but I like this idea as well. Raise sales tax to 20% or whatever and give people a choice on paying taxes based on what purchases they want to make. I would like to see real guestimates what kind of revenue this would generate compared to what is brought in now. Anyone have a clue? I would think this would eliminate a bunch of pencil pushers in the Govt. as well due to only having to deal with retailers to collect from instead of the average deadbeat.

 

I'm to lazy to go find out right now but didn't Steve Forbes advocate a 10% flat tax?

 

It was 13% and you got credits up of 5,000 pre dependent if I remeber correctly.

Our economy is driven by people buying crap they want but don't need. If we raised the sales tax to 20% it would really hamper our spend everything you make system.

The tax system exists to not only generate revenue for gov't but also influence behavior of people and businesses.

 

i would be for it but it will never happen.

politicians would be giving up alot of power, it would actually be fair, would greatly add to productivity be eliminating all the energy that goes in to gaming the tax system and avoiding the taxes.

our new little state "IRAQ" will have a flat tax of 13%. seems when they decide they want to develop and promote economic growth is makes sense for them. hmmm.

 

All the wide eyed flat tax zealots advocate how "simple" a flat tax is.
The graduated rates are not what makes the tax system a nightmare.

The mess comes from defining what is income.

What money is allowed to be taxed?

Salary, capital gains, interest income, inheritances, what is taxable?

Forget howling about the rate, lets focus on what gets put on the table first.

Erich

 

Interesting. I've never heard any of the "upper class" come out strongly against it, but then many of them may. I'm all for it as a modifier to the current taxing system. Basically, I'm against the social enginering that seems to be built in and modified to suit politics de jur. And if it closes BS loopholes, well, that's all to the good... But I do not believe it will anything remotely easy or simple to do. If it's ever done at all.

>Salary, capital gains, interest income, inheritances, what is taxable?

>Forget howling about the rate, lets focus on what gets put on the >table first.

Well said...

 

well from the flat tax proposals that i have read - that is addressed. you simply add up all the money you made - salary, cap gains, interest etc and thats your income number. deduct some exemptions and multiply by X and your done.

will never ever pass in this country. the bottom far outweighs the top in votes. and in typical american fashion, they all want the benefits without having to shoulder the payments. you see it not enough to pay more at the same rate you also have to pay more at a higher rate.

as the jesse jackson likes to say "equal opportunity is not enough...we need equal results"

 

doesn't square with my logicon why the "top" would not like it.

these "alleged" loopholes etc --- i don't see them. your itemized deduction start getting phased out at $128k or so and then are dissallowed above $230ish (somewhere around there). and then if you can skirt by that you have to worry about the AMT.

as for those on the bottom now. they don't pay any income taxes, so a flat rate of 20% would be a tax increase. plus they've all been brainwashed into thinking the rich don't pay their fair share.

 

Well, my idea got one vote! I still like it and makes some sense to in regard to the govt. pencil pushers would be reduced. But no i have not entirely thought this one out.

 

editorial section of the wall street journal mentions that several former soviet boc countries have neacted a flat tax.

oh, and the 2004 index of economic freedom rankings came out

the US ranked 10th, behind

hong kong, singapore, new zealand, luxembourg, ireland, estonia, UK, denmark, switzerland

wes clark has an op ed piece detailing his tax reform:

those making $50k wont pay any income taxes and complains that right now that family must pay $1,500. what a joke

 

13% across the board. Forbes idea was that the rate went down after the momentum kicked in. 12%, 10% etc.

I'm for it. Nobody escapes it. If I do my taxes right now under 13% flat, I will KEEP more of my OWN money. We are so used to the current 'system' that is so ingrained, we think the government is doing us a favor.

You could own your own home without your government, if it wasn't for your government.

My goal is to follow the American dream and increase my income. The sky is the limit. If I hit the $200,000/year bracket under 13% flat, I still keep more of my own money. If my business grows and I reach $700,000 per year or what the hell, lets say $2,000,000 per year under 13% flat, I still keep more of my own money compared to the current system.

When the new plan shows a win for all brackets and the flat means the chopping block for IRS agents across the land, you are damn right I am for it!

 

I'm for the flat tax in theory, but I don't think that there is any practical way to "undo" the IRS. Its like a snowball rolling down a hill. I'd love to see some simplifications, for sure.

All the tax people and financial planners could find work helping the debt ridden amongst us get their financial sh*t together, and we'd be much stronger as a nation financially.

I'm interested to hear DrTax's response to this post.

Ed

 

Randal, based on your previous posts you are a Navy recruiter. Please don't take this personally, but either the Navy has really changed a lot or you the exception that proves the rule. Either way, I would suggest that you do a bit more research before commenting on public policy issues.

For example, the "Flat Tax" is actually a "Rich Republican" theory. My clients would love a 20% flat tax because many of them are paying taxes at an effective rate of 25% to 30%. A 20% rate would be party time!

Now, some people call a Flat Tax one where you disallow alll deductions and lower the tax rate to a flat 20%. This is supposed to prevent people from writting off SUVs and race cars (sic). Only problem with this proposal is that the lawyers and doctors would get a huge tax break because they normally net 50% of gross. For these folks, paying a 20% tax on gross would be a tax break. The corner grocery store owner will go to jail, however, because his pretax net is only 4% (on a good day) and if he has to pay a 20% tax on his gross -- He skips GO and heads straight to jail.

Randal and others, the simple truth is this. Our current tax system is highly progressive and is maxed out. Basically the top 50% of income earners pay almost 100% of the individual income tax. To illustrate, according to the Joint Committe on Taxation numbers, guess what is the single biggest tax shelter? At $600 BILLION, the winner is employer paid health insurance.

Sorry Randal, there is no more juice left in the lemon.

The reason the the Federal budget got balanced in the 90s was, in the words of our former fearless leader, the economy, stupid.

Why is California facing a huge shortfall? It's the economy, stupid.

So the real question that we should be asking during this election cycle is what happened to the economy during the 90s that made it so smart.

Once we understand this question, we should then take a look around and examine what we have learned and how these lessons might apply today.

As a homework assignment I'll give you this --

During the Rubin, uh I mean Clinton, administration, we had a strong dollar. Today, we have a weak dollar. Why did a strong dollar work so well, at least for a little while, in the 90s and is a weak dollar the right policy today?

I want 20 pages double spaced by tomorrow, ha!

DrTax

 

>Why did a strong dollar work so well, at least for a little while, in the 90s and is a weak dollar the right policy today?


Wow! What a complex question. Without a whole lot of research to back me up, I'll go out on a limb and state that the weak $ IS the right policy, at least in the moment. China is the 600 pound gorilla in international currency equations, and complicates the whole mess. But, the weak $ isn't helping us vis a via the crooks in OPEC at all, and that's a downside. The strong $ certainly helped the oil equation in the 90s, but hurt our exports a bit. Besides, there would be repercussions to propping the $ market today. Or am I on the wrong track here?

I haven't even touched on the bond and debt aspects - someone elses turn...