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Old 11-23-2004, 04:03 PM   #53 (permalink)
Manx
Loser
 
You weren't asking me specifically, but I'll answer these two questions anyway.
Quote:
Originally Posted by KMA-628
1) If it is broke, who gets to fix it? Politicians as a whole fall under the "rich" category, Republican or Democrat. If the "current leaders" cannot be trusted to do it, who can? Congress is the one to propose and implement a plan, and their status won't be changing much over the next several election cycles.
Two words: Oh Well. I most certainly have no expectation that a bunch of politicians are going to "fix" the tax system. They'll change it anyway they can according to what they want. In the case of Republicans, what they want is lower taxes for the wealthy + corporations because they have an incorrect perception that the wealthy + corporations are being treated "unfairly" and because the people that will vote for them agree with that wrong perception. In the case of the Democrats, what they want is higher taxes for the wealthy + corporations because because they know that the people that support them do so because those people agree that the wealthy + corporations are not presently being treated "unfairly". Both sides will attempt to help their buddies as much as humanly possible without hurting their chances of reelection.
Quote:
2) How does this plan hurt the middle-class more. I am, by definition, middle-class. I took a very long look at the numbers and I will be better off under a consumption tax. I hear this argument over and over, but I haven't seen anything to lend credence to it (i.e. show numbers).
I honestly don't understand why the fundamental tax burden shift is not obvious to you.

Let's take two people. Person A makes $50,000 and Person B makes $500,000.

Under the current plan, A takes home approx. $40,000 a year and B takes home approx. $450,000 a year (considering B funnels his income through a corporation to decrease his tax base - i.e. a loop hole).

Under your plan, A takes home all $50,000 and B takes home all $500,000. Meanwhile, A spends $35,000 on consumption-taxable goods, minus the $18k free-zone, that leaves $17,000 in taxable money - at the very conservative 20% you have suggested, that means $3400 in taxes. Or, a 7% tax rate.

B, on the other hand, spends about $100,000 of his income on consumption-taxable goods, minus the $18k free-zone, that leaves $82,000 in taxable money - at the very conservative 20% you have suggested, that means $16,400 in taxes. Or, a 3% tax rate.

Welcome to regression.
Manx is offline  
 

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