Why not have a flat tax rate for everybody. Everybody from the Poor to the rich pay the same percentage. Eliminate deductions, credits, sliding scales, loopholes, special categories, and all the other Tax Code bullchit that has to be sorted out every year at great expense and leads to some extreme tax cheating. Income is income, no matter what its source. We establish a tax rate that pays for the things we expect from the Government. If it was 20% then a middle class guy making $50,000 would pay $10,000 and a guy who makes $2.5 billion would pay $500 million a year. A poor guy making $20,000 would pay $4,000. The same percentage for everybody. You can put up numbers showing that the wealthiest pay the most total taxes, but they sure don't appear to pay the highest percentage of their total income. Talk among yourselves . . .
The biggest negative I see is all those loopholes and deductions equal some sort of investment in many instances, which creates jobs for those middle class and poor folks. I'd assume charitable giving would also take a nosedive. Although charities often are wasteful and corrupt, the government would probably assume their role, which will lead to us having to pay more taxes, and more gov't. waste and corruption. Also, that 10K and 4K is much more precious to the middle and and poor guy than the rich guys $500 mil, which I think is the point you are in fact wanting to make. I haven't given much thought to it; these are just things off the top of my head. Would probably take quite a bit of convincing to get me on board with a flat tax.
i'm all for it, as far as i can tell, it would stop the unfair punishment of the rich. i dont know really. perhaps someone can explain all the nuances of it to me.
I'd be for it as well. I was listening to some guy on the radio who is the big proponent of this, and has a book out explaining how it would work (can't remember the title). Made perfect sense to me. I was also intrigued by the notion of abolishing all taxes, except for sales tax, which would go up significantly (except for items needed by low income people, like diapers, baby food, low quality goods, etc). I think the sales tax rate would be something like 18%. Business taxes would be different, and I don't remember what the theory was there.. But this way, everyone pays taxes, and it is all tied into your consumption. Even people who make non documented incomes like illegal aliens and drug dealers will have to pay. I think the flat tax is more feasible of the two, though.
20% beats 33%. I'm in. But.......how about 15%, or even 10%? 10% of every individuals income, across the board, should be enough for the government to prosper. Right?
There are five states — Illinois, Indiana, Massachusetts, Michigan and Pennsylvania- with a "Flat tax". That was something I liked about Steve Forbes' platform. He called for replacing the income tax by a tax at the flat rate of 17% of consumption. He defined it as income minus savings, in excess of an amount determined by the type and size of the household. For example, the exempt amount for a family of four would be $42,000 per year.
I've always thought the flat tax was a good idea and would support it wholeheartedly. However, I am a much bigger proponent of the Fair Tax, which is a national sales tax, usually set around 23-25%, coupled with everyone recieving a monthly rebate check that is set to the poverty level so that the poorest among us don't pay anything. I will explain it's awesomeness later because i'm about to go out.
A flat tax, in principle, is better than what we have now. But the problem with a flat tax is that Congress would start adding exemptions before the ink on the paper was dry. In a couple of years we would be back to square one. I would prefer a national sales tax. That way there would be no exemptions and we would be able to do away with the IRS.
seems like a national sales tax would need to be so high that it would create a no-tax black market that i would happily use myself to avoid taxes. i am willing to listen to why i am stupid and this black market wouldnt happen.
I guess every proposal has its drawbacks. I don't know how high the national sales tax would have to be. As far as I know, no one has crunched the numbers, but I am fairly certain that it would be significantly less than the 33% we now pay in income tax. While that would result in an increase in prices, people's paychecks would be significantly higher too. There is always a risk of a black-market developing. Just how serious it would be is a matter of speculation. Getting involved in such a black market is dumb for a number of reasons. First, anyone involved in the black market would be running the risk of a serious prison sentence. I may be crazy but I don't think saving a few bucks is worth the risk. Secondly, the purpose of a national sales tax would be to give the tax-payer a break. A black market, if it were serious enough, would work against that by making the sales tax less effective in raising the funds needed to operate government. So anyone involved in the black market would be working against tax reform.
