| The United States Income Tax should be reformed into a modern FLAT TAX system... |
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Asked 221 days ago
by xoandre  United States |
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About
Opinionated, Eccentric, Pathologically Meticulous, Political, Progressive, Anti-Religious, Native American
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5 Points
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I've harped about this for a long time. A 10% flat tax with no loop holes for everybody from those that receive welfare to the pressie and everybody in between. That goes to the fed gov. A, anywhere from 2% to 5%, sales tax goes to the states. They would all have more money then they would know what to do with.
How would revenues work out compared to the current system?
I mentioned something like that a few years ago and even forwarded a letter to a representative in DC. The suggestion was an escalating Flat Tax, starting at 5% and ending with 15%, spread out over specific wage earning scale. $250,000 was the higher end of the scale. Plus, a flat 15% Sales and Service Tax on all goods and Services, except food and medicines. Obviously, they would have to keep the higher taxes on Alcohol, Tobacco, and Petroleum products. I mentioned this to another individual at work and he said that they would never go for it because of money "raked" in by Capital Gains tax, some kind of Investment Tax and money earned by just about everyone, what ever the reason. It was also mentioned that if one was to receive $200,00, you would have to pay taxes on that money. If you gave someone else $100,00, they would have to pay taxes on that amount, even though taxes were paid on that money by the first person. Double taxation. Basically, I understood it to mean, that if there was a flat tax, the government could not continue to keep coming up with new ways to tax the people. I did a quick search and came up with one site with an opinion on the Flat Tax: http://www.heritage.org/research/taxes/bg1866.cfm
"Escalating flat tax" is an oxymoron. From the link you cited, "All flat tax proposals have a single rate."
Modern? Is there any country who does this yet?
Check out this article - http://www.businessweek.com/magazine/content/05_39/b3952079.htm
It is not modern, it is regressive. No developed country does it.
Flat taxes on consumption can be regressive, but most flat tax proposals are on income. Many flat tax proposals subtract $10,000 - $20,000 before applying the flat percentage to income, making them progressive, not regressive.
Regressive taxes like the VAT are used in many countries:
http://en.wikipedia.org/wiki/Value_added_tax#Tax_rates
USA is running the "modern" flat tax right now.
Not unless you meaninglessly redefine the flat tax. Flat taxes can be completely described in a short sentence, such as "14% of income earned above $15,000 in one calendar year". No tax brackets, no other exemptions.
A flat tax will treat all citizens equally. That is why the politicians in Washington will never allow this to happen.
If I could be Emperor of the US for a day, this would be on of the policies I would enact.
This comment has been moderated down. (Show Comment)
ohh,i don't know.
http://global-cell-phones.com/
Flat taxes are called regressive for a reason. They put a heavier burden on those less able to bear it. Ten percent of not enough to live on is outrageous, while it is nothing to a billionaire. Won't change his or her lifestyle a bit.
Generally, those that make $50,000 or less a year are in the category that you refer to as "less able to bear it". For those individuals a flat tax exemption should be applied. For those above that level, it should be a escalating scale with a cap at some point.
In other words, something very similar to what we have now.
Please explain how you figure the monstrosity of a tax code we have now is similar to a flat tax system?
Three tax brackets--15%, 35%, and 50%. A complete forgiveness for less than x dollars. That is what we have. Then get rid of all the exceptions. That is what you describe.
No dauguy, with a flat tax the money would be taxed at the time of receipt and there would be no need to file a return at the end of the year. When, where and however you came into the receipt of money, through wages or profit, the amount would be taxed at that time. Again, no need of filing a tax return at the end of the year. Social Security and Disability Compensation Taxes would primarily be taken out of "wages earned".
You said a flat tax exemption should be applied for incomes below a certain level, and there would be an escalating scale up to a cap. Then you said the tax is withheld at the time of receipt, with no need to file a return.
These two concepts cannot both apply. Without knowing the total tax year income, you can't know if it is within the exemption, or where it falls on the escalating scale. Therefore you can't know how much tax to withhold at the time of receipt. A year-end accounting and a return is absolutely necessary.
I originally was of the frame of mind to have an escalating scale, based on the projected earnings of an individual and prorated through-out the year. Final settlement to be resolved at the end-of-the-year. But the idea was debunked by people that I was talking with at the time. There are sites that explain it better than I can:
Flat Tax Information
http://www.heritage.org/research/taxes/bg1866.cfm
The concept of withholding is gone with a Flat Tax. They just take it and deposit it in the US Treasury, pay check by pay check, or earnings transaction.
Flat Tax Book/ Free Download to Adobe Reader.
http://www.hoover.org/publications/books/3602666.html
I'm familiar with flat tax proposals. I was just asking about the obvious conflict in your descriptions.
That isw a pretty idea mathematically, and useless in the real world. There are too many people who don't work for a definite wage. And where do corporations fall on this scale? Under the law, they are actual entities. Can you really see Goldman-Sachs paying a flat tax? That would indeed be the second American tax revolution.
Flat taxes on income above a certain level are not regressive by any stretch of the imagination, but are indeed progressive. Perhaps you have the flat tax confused with the "fair tax" proposal, which has been called regressive in the past, but isn't anymore:
http://www.fairtax.org/calculator
The key words being "on income above a certain level." American flat-taxers generally mean "on all income." This is an old proposal, one as old as the income tax, and has always been considered regressive.
All current flat income tax proposals subtract poverty-level income and are not even remotely regressive. If it is fair to call progressive taxes "regressive" because their ancestors were, then it is fair to call Americans "slave traders" or Germans "Nazis". Of course it's unfair.
Hey, modern Americans ARE slave traders:
http://www.msnbc.msn.com/id/22083762/
Heck, just do a google search.
It may be a smaller percentage of people than in the past, but it hasn't stopped. So it IS fair to call modern Americans (some of them, just like some of them up until the Civil War) 'slave traders.' Bad analogy, dude! :)
It's a perfect analogy, dude! About the same percentage of modern Americans are slaveowners as modern Fair Tax proposals are regressive. Do you own slaves? I'm guessing not.