Flat Tax

[Sklar]

I'm honestly curious about this. What would be the pros and cons of just having a nationwide flat tax to replace the current federal taxes that we have?

 

[AlteredEgo]

It might help people with financial planning, that's for sure.

 

[DC_DEEP]

I would be in favor of flat tax, if it also eliminated all tax breaks and shelters and loopholes. Most of those are geared toward breaks for the upper brackets, anyway.

 

[Matthew]

Absolutely against. Those who profit more should pay more. It's ludicrous to expect me and Bill Gates to pay the same amount.

 

[DC_DEEP]

Absolutely against. Those who profit more should pay more. It's ludicrous to expect me and Bill Gates to pay the same amount.

I hope either you or I misread the OP. I was thinking along the lines of a flat tax rate, rather than a flat tax. I would gladly pay a flat 10%, if Billy Gates also had to pay a flat 10% with no shelters or deductions.

 

[invisibleman]

I hope either you or I misread the OP. I was thinking along the lines of a flat tax rate, rather than a flat tax. I would gladly pay a flat 10%, if Billy Gates also had to pay a flat 10% with no shelters or deductions.

Kind of like tithing (<===in Christianspeak===>) 10% to the Lord. I think that the government should tax nothing more than what God gets. 1 to 9 percent. Max. :smile:

 

[mindseye]

I would never support a truly flat tax. 10% of Bill Gates's income is a lot of money, but wouldn't put Mr. Gates at any risk of eviction or starvation or make him have to choose between paying his taxes or paying for his medication. On the other hand, a person who is already in poverty would be burdened by having to tithe to the government. Currently 12.7% of the US population are below the federal poverty line. (source)

I'd be open to the idea of an almost-flat tax that exempts, say, the lowest 15% of wage-earners.

 

[B_big dirigible]

Modern government surveillance only became necessary when personal income tax was made permanent in 1913. Before that, there was no reason for the government to know where you lived, who you worked for, who you hired, what you kept in your bank account, what your legal name was, who you were married to, where you sent your kids to school, or even whether you were dead or alive. The greatest quantum jump in personal liberty easily attainable would come from the entire abolishment of personal income tax. The government still has to run on money, so it would have to come from somewhere else, perhaps a whopping sales tax, or increased excise taxes on certain goods (as we have now, but most of them are hidden and you don't know about them). "Tax reform" just fiddles with the details of an inherently despotic system, without any possibility of actually fixing it.

Trying to improve the tax structure by eliminating "loopholes" increases government revenue short-term, for sure, but also cripples business. And since most government revenue from taxes (income, sales, employment/FICA, inventory, estate, excise, windfall, etc) and duties (licenses, imports, exports, etc) depends on business activity (except maybe estate tax, which mainly depends on someone dying), anything which cripples business also cripples revenue. Contrariwise, nearly anything which enhances business activity increases tax revenue - the entire rationale for occasional lowering of tax rates. So are business investments "loopholes"? Without those, there's no new business and not a lot of expansion of old business. Is a Christmas bonus to the employees a "loophole"? How about tax breaks for hiring the handicapped (so long as they fall in special approved classes of government-recognized handicap - a lousy system, but probably better than nothing). "Loopholes"?

 

[rubberwilli]

Would donations to charities be considered a loop-hole? If you're going to do away with those you'll need to ramp up the socialism nationally to compensate for the lost revenue and the lost non-profit organizations who will loose their revenue streams from donations. You'd see theaters, museums, orchestras, hospitals, and many other public goods disappear.

Granted, the vast majority of donations are supposedly not motivated by tax interests, but it certainly doesn't hurt them either.

 

[TheBeast]

I hope either you or I misread the OP. I was thinking along the lines of a flat tax rate, rather than a flat tax. I would gladly pay a flat 10%, if Billy Gates also had to pay a flat 10% with no shelters or deductions.

Versus now Billy gates paying 50+ percent and you now paying 25, 15, or 10?

 

[DC_DEEP]

Versus now Billy gates paying 50+ percent and you now paying 25, 15, or 10?

That's interesting, how did you get a copy of my last 1040 to know what bracket I'm in?

Not to mention that with his kind of income, he has the opportunity for many many many tax shelters that lower income individuals do not have.

 

[PacknThick]

Absolutely against. Those who profit more should pay more. It's ludicrous to expect me and Bill Gates to pay the same amount.

Maybe then people will have greater goals and have the urge to want to make more money. Not that I'm rich, but why should I pay more just b/c I busted my ass getting to where I am now and making good $ while others complain about it. Once again, im not rich but its something to want to be, after all its a ladder with slips and falls. The ladder will always be there.

 

[Matthew]

Maybe then people will have greater goals and have the urge to want to make more money. Not that I'm rich, but why should I pay more just b/c I busted my ass getting to where I am now and making good $ while others complain about it. Once again, im not rich but its something to want to be, after all its a ladder with slips and falls. The ladder will always be there.

In my personal experience, the hardest working people I've known have been the poorest.

 

[Lex]

In my personal experience, the hardest working people I've known have been the poorest.

Mine too. I don't know may lazy poor people. They work their asses off to scrape by.

It's ignorant to think that people are poor because they don't work hard.

 

[Sklar]

I hope either you or I misread the OP. I was thinking along the lines of a flat tax rate, rather than a flat tax. I would gladly pay a flat 10%, if Billy Gates also had to pay a flat 10% with no shelters or deductions.

Sorry for not being clear. I meant, for example, everyone pay a flate rate of, say, 13%. All loop holes gone. No deductions at all. Just a flat 13% of your yearly income goes to the Government.

 

[madame_zora]

I would never support a truly flat tax. 10% of Bill Gates's income is a lot of money, but wouldn't put Mr. Gates at any risk of eviction or starvation or make him have to choose between paying his taxes or paying for his medication. On the other hand, a person who is already in poverty would be burdened by having to tithe to the government. Currently 12.7% of the US population are below the federal poverty line. (source)

I'd be open to the idea of an almost-flat tax that exempts, say, the lowest 15% of wage-earners.

I am inclined to agree with this, but BD does make some salient points too.

"Tax reform" just fiddles with the details of an inherently despotic system, without any possibility of actually fixing it.

I agree with this too. While I haven't studied the issue sufficiently to offer good comments, the points you offered before this about the government inserting itself into our personal lives has always been an issue for me. I was not aware that this only occured in 1913.

I would certainly agree to increses in sales tax and some other sources with clear exposure to emlinate the need for income tax and government monitoring. Our government has not shown its ability to even monitor itself, it sure doen't need to be worrying about me.

 

[DC_DEEP]

Mine too. I don't know may lazy poor people. They work their asses off to scrape by.

It's ignorant to think that people are poor because they don't work hard.

Handsome man, that's a topic for a whole other thread: the "haves" making incorrect assumptions about the "have-nots."

For what it's worth, PacknThick, do you have any idea how hard even the best public school teachers work, and that most of them, across the country, work at near or below poverty-level salary? When I was teaching, I put in approximately 10 to 12 hours per day, 6 or 7 days a week, for $18k the first year, and $20k the second year (with the increases afterward being only about $350 more per year...) not to mention having to do continuing education (out of my own pocket)? Tell me that is lazy compared to a CEO who makes $800,000 per year in bonuses alone, simply because his company makes an obscene profit on their product?

 

[D_Bob_Crotchitch]

The alternative minimum tax is an example of how wonderfully the government constructs tax laws. It has never been indexed for inflation and now grabs the middle-class. Many members of Congress give lip service about fixing it but it's only lip service. It would cut billions of tax dollars from the coffers and they couldn't spend it to buy votes from special interests in their own states.
If something isn't done soon, we will all face astronomical tax increases to try and fund the benefits the government has promised and cannot deliver. The Comptroller of the U.S. told on 60 minutes that it would take 8 trillion dollars in todays dollars set aside and earning interest to just cover the coming increases in medicare spending. We've set aside zero. Social security is nothing but IOU's the U.S. government wrote itself. Now how many people think you can write yourself an IOU and cash it later? In 2005, 32% of tax revenue came in to cover Social Security, Medicare, and some other senior citizen programs. 37% of the entire national budget was spent on those programs. Part of the national deficit is funding these programs. I had my own pension taken from me by Congress in 1989 to keep Social Security afloat a while longer. BTW, the Civil Service Retirement System, and the Railroad Pension are also printed pieces of paper. The United States is broke. A flat 13% isn't going to cut it. Plus, the people writing the tax codes have tax shelters. Do you think they are going to give those up?

 

[D_Bob_Crotchitch]

Btw, I recently read that the average american pays almost 40% of their income in taxes. Think about it, everything from your auto to your cell phone is taxed. *gasp* There is even a tax on chocolate.

 

[Lex]

Handsome man, that's a topic for a whole other thread: the "haves" making incorrect assumptions about the "have-nots."

For what it's worth, PacknThick, do you have any idea how hard even the best public school teachers work, and that most of them, across the country, work at near or below poverty-level salary? When I was teaching, I put in approximately 10 to 12 hours per day, 6 or 7 days a week, for $18k the first year, and $20k the second year (with the increases afterward being only about $350 more per year...) not to mention having to do continuing education (out of my own pocket)? Tell me that is lazy compared to a CEO who makes $800,000 per year in bonuses alone, simply because his company makes an obscene profit on their product?

As a former teacher, I know how little they make compared to what they have to expend (you did not even mention buying your own classroom supplies when you choose to work in a poor district in order to help the most needy students).

The hardest working people I have encountered in this past year have been:

• The Hispanic custodian at my office
• A wonderul White woman at Target
• the gay black guy at the Gap
• The older "forced retiree" at Home Depot

All of these people are curteous and hard working. They do their jobs extremely well.

The fact that none of them makes over $20,000 a year has nothing to do with their not being hard working or not doing a good job.