Flat Tax debate

[shootfighter1]

I have heard a few more politicians discussing the flat tax recently.  So...what if everyone above the poverty line paid 18-25% of their wages in tax to the federal gov.  With a flat tax, there are no deductions so creative accountants could not work their magic for the super rich.  Some experts say that a flat tax would bring in more federal revenue and still be fair to the poor because most plans would only tax above the poverty line.

http://www.heritage.org/Research/Taxes/bg1866.cfm

[w8tlftr]

I have heard a few more politicians discussing the flat tax recently.  So...what if everyone above the poverty line paid 18-25% of their wages in tax to the federal gov.  With a flat tax, there are no deductions so creative accountants could not work their magic for the super rich.  Some experts say that a flat tax would bring in more federal revenue and still be fair to the poor because most plans would only tax above the poverty line.

http://www.heritage.org/Research/Taxes/bg1866.cfm

It's a fair system and simple.

Absolutely ZERO deductions and ZERO tax credits.

Everyone pays the same percentage (unless you're under the poverty line).

The tax form would be as big as a 3x5 index card. That should make all the tree huggers happy due to all the trees that would be saved.

[Migs]

I am for it.  Finally get the people on welfare to contribute to society instead of being leeches.

[Decker]

It's a massive tax hike on the poor and a massive tax cut for the wealthy.

Is it an income tax or a consumption tax?

The Heritage Foundation is garbage.  Daniel Mitchell is insane. 

I'll look at the proposal later.  It's probably the same shit repackaged--full of promises that just don't add up.

[w8tlftr]

It's a massive tax hike on the poor and a massive tax cut for the wealthy.

Is it an income tax or a consumption tax?

The Heritage Foundation is garbage.  Daniel Mitchell is insane. 

I'll look at the proposal later.  It's probably the same shit repackaged--full of promises that just don't add up.

Decker, I can always count on you to rail against the flat tax. 

It's a much fairer system since it does not penalize income earners for being successful. There would be zero tax credits and zero deductions and more money would be pumped into the economy since people would have more disposable income to buy more useless crap they don't need.

[Decker]

Decker, I can always count on you to rail against the flat tax. 

It's a much fairer system since it does not penalize income earners for being successful. There would be zero tax credits and zero deductions and more money would be pumped into the economy since people would have more disposable income to buy more useless crap they don't need.

Securing the ability to pay, i.e., to pay without sacrificing the necessities/quality of life, is one of the reasons a flat tax should fail.  If you define fairness along those lines, the flat tax is not very good as either an income tax or a consumption (natl. sales) tax.  Which people would have more disposable income?  The rich?  They already have that.  The poor would end up paying more.  Most flat tax plans I've seen have a rate between 19-23% (consumption flat taxes are 30+%).  How is that not a crushing tax increase on the poor? 

It's not a revenue neutral tax.  The government would take a huge hit in tax revenue.  Maybe we can cut the defense budget in half to help pay for this shortfall?

Also all lobbyists will disappear from planet earth, giving up in the face of the uncorruptable flat tax.  It's goodness washes over all.

Oh there are the promises of good things and infinite growth.  And always, the supply side wish fulfillment saves the day for these dubious scams.

No thanks, I'll stick with what we got.

[w8tlftr]

Securing the ability to pay, i.e., to pay without sacrificing the necessities/quality of life, is one of the reasons a flat tax should fail.  If you define fairness along those lines, the flat tax is not very good as either an income tax or a consumption (natl. sales) tax.  Which people would have more disposable income?  The rich?  They already have that.  The poor would end up paying more.  Most flat tax plans I've seen have a rate between 19-23% (consumption flat taxes are 30+%).  How is that not a crushing tax increase on the poor? 

I define fairness as everyone paying the same percentage and why should it be 19-23 percent? Why do we have to give up so much to a government that has proven time and time again it spends the people's money poorly? People should not be penalized on success. Robbing Peter to pay Paul is still theft no matter now pretty a spin the far left wants to put on it.

It's not a revenue neutral tax.  The government would take a huge hit in tax revenue.  Maybe we can cut the defense budget in half to help pay for this shortfall?

I have no problem with the government taking a big hit in tax revenue. They could stand to learn some fiscal discipline. I'd also have no problem with big cuts to the defense budget. We should not play Team America "World Police". There are a lot of cuts to the budget that can be made.

Also all lobbyists will disappear from planet earth, giving up in the face of the uncorruptable flat tax.  It's goodness washes over all.

Lobbyists going away is a bad thing?

Oh there are the promises of good things and infinite growth.  And always, the supply side wish fulfillment saves the day for these dubious scams.

No thanks, I'll stick with what we got.

The IRS accepts checks, Decker. You can always send them more money if you think you're not paying enough.

Happy Thanksgiving, buddy.

[Hereford]

It's a massive tax hike on the poor and a massive tax cut for the wealthy.

Is it an income tax or a consumption tax?

The Heritage Foundation is garbage.  Daniel Mitchell is insane. 

I'll look at the proposal later.  It's probably the same shit repackaged--full of promises that just don't add up.

Holy shit...

You mean the 'poor' having to contribute their fair share is not a good thing??

[Decker]

I define fairness as everyone paying the same percentage and why should it be 19-23 percent? Why do we have to give up so much to a government that has proven time and time again it spends the people's money poorly? People should not be penalized on success. Robbing Peter to pay Paul is still theft no matter now pretty a spin the far left wants to put on it.

That's the rate at which the tax becomes revenue neutral...allegedly.  It's an argument dependent on the magic of supplyside economics--a thoroughly discredited junk science.

I have no problem with the government taking a big hit in tax revenue. They could stand to learn some fiscal discipline. I'd also have no problem with big cuts to the defense budget. We should not play Team America "World Police". There are a lot of cuts to the budget that can be made.

Defense spending is about as corrupt and wasteful as any I've seen.  That would be #1 on my list.

Lobbyists going away is a bad thing?

No, they won't go away.  The will have the flat tax twisted to fit their ends

The IRS accepts checks, Decker. You can always send them more money if you think you're not paying enough.

Happy Thanksgiving, buddy.

Same to you Bud.  Enjoy your day off.  I wonder if the NFL games will suck again this year.  As for the IRS, I can't do it alone.  Paying one's taxes to support our great country is about as patriotic a thing you can do.  And I'm frickin Captain America on that one.

[Decker]

Holy shit...

You mean the 'poor' having to contribute their fair share is not a good thing??

Isn't it enough that the poor pay the same payroll tax as the rich?  Those payroll dollars fund the IRaq disaster, the corporate bailouts etc.

[MRDUMPLING]

It isn't a direct tax to the poor as people under the poverty line wouldn't pay it.  This progressive tax system has also been proven to be wasteful, expensive, and punitive(to everybody). 

Second, a flat tax is different than the fair tax as was discussed before.  I would like to see more info on this proposal as I'm a supporter of some sort of flat/fair tax hybrid.  This progressive system we have just isn't cutting it.

[Decker]

It isn't a direct tax to the poor as people under the poverty line wouldn't pay it.  This progressive tax system has also been proven to be wasteful, expensive, and punitive(to everybody). 

Second, a flat tax is different than the fair tax as was discussed before.  I would like to see more info on this proposal as I'm a supporter of some sort of flat/fair tax hybrid.  This progressive system we have just isn't cutting it.

So if the flat tax is an income tax, the poor are exempt?  The poor pay taxes right now.  How does the flat tax remain revenue neutral if people aren't paying it and the rich get a healthy tax cut?  How about a flat national sales tax?  How do the poor avoid paying that tax?

The Fair Tax is a scam pushed by 'grass roots' millionaires from Houston. 

[MRDUMPLING]

Under the poverty line Decker, not everybody else.  Just because you are "poor" does not exempt you from at least paying your part.  I don't understand this defense of the poor.  If you enjoy the services provided by the government, then you pay your share of those taxes.

I still don't think the Fair Tax is a scam...like I have said before I have read a couple of books on the issue...while not perfect and I by no means agree with it 100%, it is still better than what we have now.  Also, it is at least a solution to a problem. The Fair Tax is a well thought out plan that can make a difference. What do you propose?   

So because it comes from self made millionaires then the plan is a scam?

[shootfighter1]

The poor would get a better deal under the flat tax.  no taxation at all at or under the poverty line.  People making $40,000/yr would pay $8,000 in fed tax.  People making $500,000 would pay $100,000 in tax.  Why is that not fair?  People making less than $10,500/yr pay no taxes.

I wonder what % the super-rich actually pay.  If everyone paid a 20 or 22% flat tax, with no deductions or credits, would the gov really take a big hit on revenue?  Possibly not.  The super-rich take tons of deductions.  Our current tax system rapes the upper middle class.

Steve Forbes has a book our entitled "The Flat Tax Revolution"

[shootfighter1]

Businesses would save lots of $ on K-1 preparation for owners and individuals would save $ because they wouldn't have to hire people to prepare taxes.  Our current system is very wasteful.  I don't have the figures, but with all the paperwork, time spent, the huge IRS, and tax preparations, tons of $ is wasted.

[shootfighter1]

Consumption tax would catch all people who don't report taxes, which is a huge #.  It would make immigrants, travelers, criminals, and dishonest people pay their share.  My only concern is would it encourage less spending.

[MRDUMPLING]

Consumption tax would catch all people who don't report taxes, which is a huge #.  It would make immigrants, travelers, criminals, and dishonest people pay their share.  My only concern is would it encourage less spending.

Which in turn will encourage more saving.  Not a bad thing in my book.  There are a lot of factors that obviously need to be considered.

[shootfighter1]

True, personal saving is wise and I am farily conservative...but spending encourages economic growth.  I used to view people with big cars, big houses, and material goods with disdain but I now realize, those people are spreading their wealth and supporting companies, worker's jobs and the economy by buying these things.

The problem is irresponsible people who spend when they should be saving!

[w8tlftr]

That's the rate at which the tax becomes revenue neutral...allegedly.  It's an argument dependent on the magic of supplyside economics--a thoroughly discredited junk science.
Defense spending is about as corrupt and wasteful as any I've seen.  That would be #1 on my list.

No, they won't go away.  The will have the flat tax twisted to fit their ends
Same to you Bud.  Enjoy your day off.  I wonder if the NFL games will suck again this year.  As for the IRS, I can't do it alone.  Paying one's taxes to support our great country is about as patriotic a thing you can do.  And I'm frickin Captain America on that one.

Thanks for the constructive feedback. Even though we disagree you still challenge me and make me analyze my position and principles on this matter.

Go Cowboys!!! 

[shootfighter1]

Same here, i appreciate Decker's well thought out responces.  Maybe we can get him more to the center one day 

[Dan-O]

Consumption tax would catch all people who don't report taxes, which is a huge #.  It would make immigrants, travelers, criminals, and dishonest people pay their share.  My only concern is would it encourage less spending.

I tend to think (and this is just me) that even with a slightly higher consumption tax in lieu of income tax, people would tend to spend more since they would have more disposable income on a regular basis.  People are just always gonna want that big TV, SUV, boat, waverunner, whatever else.

[Straw Man]

It's a massive tax hike on the poor and a massive tax cut for the wealthy.

Is it an income tax or a consumption tax?

The Heritage Foundation is garbage.  Daniel Mitchell is insane. 

I'll look at the proposal later.  It's probably the same shit repackaged--full of promises that just don't add up.

yeah - it's a suckers gambit.  All you have to do is look who supports (as with most stuff) to figure out if it make sense or not.

[Hereford]

Well as is typical with most things concerning taxes...

Those who actually produce want to make it at least fair, and those who consume want to get (steal via forced taxation) as much as they can from others because they themselves don't come even close to holding up their end of society.

[a_joker10]

yeah - it's a suckers gambit.  All you have to do is look who supports (as with most stuff) to figure out if it make sense or not.

I agree with Decker and Straw man on this.
Flat taxes are not a good form of taxation.
It is much better to have a higher consumption tax.
Followed by a good progressive tax system.

Rebates should be given to low income payers of the consumption tax to ensure that they are not penalized.

[Decker]

Under the poverty line Decker, not everybody else.  Just because you are "poor" does not exempt you from at least paying your part.  I don't understand this defense of the poor.  If you enjoy the services provided by the government, then you pay your share of those taxes.

I still don't think the Fair Tax is a scam...like I have said before I have read a couple of books on the issue...while not perfect and I by no means agree with it 100%, it is still better than what we have now.  Also, it is at least a solution to a problem. The Fair Tax is a well thought out plan that can make a difference. What do you propose?   

So because it comes from self made millionaires then the plan is a scam?

I do believe that all citizens should pay taxes so that they are not disenfranchised.  And that is happening. 

No matter what flat tax proposal I look at, they all come down to covering the costs of government through the 'magic' of supplyside tax cut reasoning.  That's why the flat tax plan is a scam.  Unlike Bush, many millionaires make their millions b/c they are not stupid.  The Houston grass roots people really don't give two shits about this country.  They just want more dollars in their grubby little hands.

What do I propose?  How about a graded income tax with more brackets?  How about killing corporate loopholes that permit 67% of US coporations to pay zero taxes or receive payments from the gov?

There is no magic tax that suddenly makes us all a little richer.  Unfortunately, the problem is too much wasteful spending.....that's why taxes are at the rate they are at....trillion dollar bail outs, trillion dollar wars.....