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pShould the US move toward a flat tax?

#11 •

HughAkston

v Yes
ABSOLUTELY!!!!! The first $25,000 a person earns is tax free. This helps the poor and the working poor. After that first $25,000, EVERYBODY pays 18%. No charity deduction. No home mortgage interest deduction. No I got an itch on my butt deduction. No deductions or loopholes of any kind should be allowed. Interest and dividends are treated as ordinary income as well. The reason why people claim "the rich" don't pay their fair share is because of all the deductions and loopholes. Let's eliminate all deductions and loopholes. Let's treat all income the same. Now that's fair.
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    #36 •
    HughAkston
    !
    @AceLuby I just thew some numbers out there to make a point. There has to be an initial dollar amount a person can earn that is exempt from taxation and a certain dollar amount for every dependent to pay for life's basic needs. After that threshold, people should pay a flat percentage of income from any and all sources. Everybody was PO'd when they learned Romney paid 14% on millions of dividend income. Let's treat all forms of income the same so we don't have that issue. Let's stop carryovers of losses. Let's also stop depreciation, buy a piece of equipment for your business.......it gets treated as an expense for that year. Let's keep everything straight and simple.
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    #41 •
    AceLuby
    !
    @HughAkston All those things you suggest are things we can do now. We don't need a flat tax to make the system simpler, we need political will.
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    #52 •
    RobertJHarsh
    !
    The rate needs to be about 19% to 25% but it is still a good idea. Let's kill off ALL deductions. And while we're at it, let's get rid of the corporate income tax and make capital gains flat at 5% across the board.
  • #60 •
    HughAkston
    !
    @AceLuby At present, we cannot make the current tax system simpler. The only way we can make the tax system fair is to abolish the current tax code and replace it. Consider the following .......... the Estonia Taxation Act of 2002 contains 43,370 words. The entire Canadian tax code is close to 1 million words. Just the instructions for IRS Form 1040 contains 178,096 words! As of 2010, the US Tax Code contained 71,684 pages. If you want a copy of all those regulations to line your bird cage, the Government Printing Office will charge you $1,028 per copy! We can't fix this. We can't make it simpler. If we ever hope to live in a prosperous country again, we have to scrap the current code and replace it.
  • #62 •
    HughAkston
    !
    @RobertJHarsh I think the corporate tax rate should be the same flat rate that everybody pays. I also think capital gains should be taxed as ordinary income. That being said, the tax rate as a percentage should be low enough that it wouldn't matter. Income is income without regard to the source. The more rules and exceptions we create will always lead to preferential tax treatment for some at the expense of others.
  • #177 •
    Quantummist
    !
    Actually I'm for a Sales Tax based system... It's the Only system that would tax criminal, black and drug markets... It would allow anyone to simple not play by going off the gird and living a self sufficient life off the land... The Rich would pay the highest amounts as they spend on luxury items and the poor far less as Food Stuffs would be non taxable ... No one would be exempt, and the free market would control the spending of the government ... There would be no need for the billions spent on the IRS and 90% of the existing system could be cut out like a cancer.. What you Earn is what you receive in your check and everyone has skin in the game... Everyone would see every time they buy a product exactly what portion of their money is being taken to run the government....
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    #241 •
    AceLuby
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    @HughAkston I've never had any issue filing my taxes and don't know anyone who has... the biggest problem of the tax code is that we have been using it as a way to pay back donors instead of spending because the GOP has decided that spending = bad and tax cuts = good. THIS is why it's so complicated. The system itself is actually fine if our politicians used it the way it was supposed to be used and didn't bastardize it for political gain. Changing the system won't fix that problem and it would only be a matter of time before the simple 'flat tax' system turned out the same.
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    #242 •
    AceLuby
    !
    @Quantummist Sales taxes won't tax the black market and hurts aggregate demand. Smaller aggregate demand means higher unemployment. It would also just be a matter of time before carve outs occurred to benefit those that help the politicians. The system isn't the problem, it's the people using the system for political gain.
  • #243 •
    Quantummist
    !
    @AceLuby .. Sales Tax would absolutely tax the black market... because sooner or later those that earn moneys in a black market will spend those moneys in the free market... A Black Market does not exist in a vacuum and it would be Federally Illegal to buy or sale in the black market ... So while it would still be an issue as it is there is no capture of the black market, drug markets, under the table payments... But All of those people will end up buying a pair of shoes, and suit, pants, and all other products and services at which time the Federal Tax on their black market gains in captured... If the Percentage of taxation is based on Budget on say a 4 year update cycle the tax can be a variable rate .. Those that spend great sums of money would pay the largest amounts but Everyone would have Skin in the Game... And Individuals could avoid any Federal Taxes if they Choose to drop off the grid, become self sufficient, and not participate in commerce... It allows Each Individual control of their tax loads...

    And if you did not apply tax to Food Products the impact on the Poor would be Substantially less than on the richer populations...

    The you have the added benefit of being able to slash Billion if not Trillions in dollars from the federal government because Tax Collection would occur at time of sales up the sales chain collected electronically at point of sale with seller transferring funds from direct accounts at time of setting up a DBA, LLC or Corp... This would shrink the IRS Massively, cutting the 10's of 1000's of Government Employees in the IRS and it's Enforcement division and shutting down IRS infrastructure across the US...
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    #245 •
    AceLuby
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    @Quantummist That's not taxing the black market though, it's taxing the regulated market and creates an incentive for people to use a black market, which means the black market will get bigger and would be direct competition to the regulated market.

    The biggest flaw, however, is that you create incentives for people to not spend their money on anything but what is necessary. If you understand that we are a consumer based economy do you realize what creating incentives to not participate in the economy would do to the economy as a whole? It is also regressive in nature since poor people spend all of their paychecks and would therefore be taxed at a higher rate than those who do not spend all of their money. In fact, besides this undefined notion of what's 'fair', there is nothing beneficial to society by going to a sales tax model.
  • #246 •
    Quantummist
    !
    @AceLuby And there in stands the Fundamental problem I see in your view... You see the Tax Code as a Method of Control of part or the Whole of Society... A Way to keep those with Too Much in check and Help those with Too Little ...

    I start from the view that Taxes are a necessary evil to pay for cost of required governmental services... Period... They should not have a Social Benevolence aspect to them what so ever.. They should be the Minimum amount to pay those costs the Government must pay as passed by Congress when a budget is authorized. They should not be by percentage of income variable between individuals... They should never be Used to Punish some nor Reward others... And Every Individual should have skin in the game...

    Other than a direct tax on Products and Services there is no method to capture the Billions lost by underground markets such as drugs, stolen goods and assorted criminal enterprises.. While there would indeed be Barter systems to avoid such capture of funds that would always be a small impact on the total capture of lost taxes because with very few exceptions people will Buy products and Services in the free market with money earned within those black markets.

    It should not matter if some spend All Their money or Some of Their money, It should not matter if you make 2 bucks an hour or 20k an hour the percentage of what you pay in taxes should be the same across the board. With No Regard to Social implications...
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    #247 •
    AceLuby
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    @Quantummist No, that's not where my view comes from, my view comes from a purely economic viewpoint. I agree that we need to pay for the programs we start and therefore need to tax people. What you don't understand is that my viewpoint is to maximize aggregate demand, consumer demand of private sector goods and services. Sales tax, especially as a substitute for income tax, minimizes consumer demand and creates incentive for people to save as opposed to spend. This lowers aggregate demand and will mean job losses which will lower aggregate demand more in a never ending cycle until we bottom out.

    Another thing to point out is that the percentage of what you pay in taxes would not be the same across the board, it would be directly tied with the percentage of your paycheck that you spend in the free market, meaning poor people would pay a higher percentage tax than those who have the ability to save their money. Now, you may think that I'm talking about the social implications, but I'm not, I'm talking about what affect this would have on aggregate demand.

    If the bottom 50% of people who pay little or no tax now are now being taxed at say 20%, you are taking 20% of their purchasing power away from them. Taking 20% of purchasing power away from 1/2 the country would negatively affect demand causing job losses. Now, if you apply this to everyone who spends all of their paycheck, but pay less than 20% in taxes (the vast majority of consumers), you are taking away from their purchasing power as well. Couple this with the incentive to save vs spend by those with the most amount of money and you can plainly see that we would be simply taking money that would be flowing through the economy and instead be paying that to the government.

    The goal of any sensible tax system would be to maximize aggregate demand while still being able to pay for the programs. This is why I think the most elegant solution would be to have a 3% wealth tax. It would pay for our entire budget, it would boost aggregate demand as the people who drive the economy (the consumers) would have more money to spend, and the tax isn't large enough to negatively affect people natural instinct of acquisition of wealth.