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Originally Posted by NCB
Herein lies the problem. Americans don;t like being told what they need to do. Whether you mean to or not, your argument is that people in upper incomes should stop bitching and pay their taxes dutifully like good little sheep because they have make more then the plumber making 40,000.
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They're already being told to pay taxes. How is this any different? Is your point that nobody should be exempt from taxation? The idea is for there to be a fair tax burden. Now it can be argued that there already is a fair tax burden, I don't personally agree with that, but the case could be made. Another goal is simplification of the tax code.
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Originally Posted by KMA-628
Well, first, as was already pointed out, what you describe is not a "Flat Tax". Basically, you are describing the current system, with different numbers.
You do not mention deductions? Leave them out or leave them in?
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Just to clear this up, because you seem to misunderstand: Your proposal is not a flat tax. There is not "only one tax rate", but several.
I do, however, agree with you about the part about not needing a tax accountant in order to do taxes.
One of the ideas behind a true "Flate Tax" is that everybody would have the same tax return and it would be postcard-sized.
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Well actually, I already did mention deductions in this thread and I said there wouldn't be any. This is
exactly the same as a flat tax except there is a single income exemption (it would be called a deduction in the current system's terminology: income that is exempt from taxation). That's what I've been saying the whole time but everyone's just telling me how it's not a flat tax. I know. It's not exactly a flat tax. Take a flat tax, and make some amount of income exempt from taxation. Taxes could theoretically still be filed on a postcard.
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Also, just giving this a cursery going-over, I don't see the math working out. I think this idea would fall far short of current revenues.
Mainly because you have the "rich" paying less under your system than they do under our current system. Kinda hard to prove unless you do an in-depth model based on how many people reside at what income level.
Also, is this per person? What if two people are married? What about kids? What about "head of household"?
You should also note: As capital gains tax rates went down, the amount of money received by the gov't from capital gains taxes have gone up. Historically, you can watch the shift as equilibrium was attempted. No sources, only my own research which I have put together in an Excel graph--if you want to see it PM me--I collected the data and then made a visual chart that helped my understand the trend even more (and yes I did it just for fun). It is very interesting to see how capital gains revenues reacted to capital gains tax rates....if you look really close, you can see how we have almost achieved an "ideal" number (i.e. any more results in a loss in revenue and any less results in a loss of revenue).
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I disagree that the rich are paying less. With no more deductions and loopholes, the final percentage of income could easily be more. I already gave the example of the Kerrys who would be paying more in my example. Yes, my optimal idea is per-person. No filing jointly, no need for any other terminology. I don't think marriage or non-marriage status should be relevant to your dealings with the federal government.
Regarding capital gains, I'm not an expert, but fool.com says: "If your ordinary income tax bracket is greater than 15%:...Capital Gains on assets held for more than a year are taxed at a reduced tax rate of 20%...Capital Gains on assets held for more than five years are taxed at a reduced rate of 18%, but only if the assets were purchased on or after January 1, 2001." This is not that much different from my example which again is just an example and could be tweaked.
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From your second post:
What if I want 3 new PS2 games per week? Who are you to tell me I shouldn't? If I do my job well, I am successful at it, why should you dictate how my money is spent?
What about kids?
We pay a lot for the upkeep of these little monsters, getting a bit off of the taxes is very helpful.
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I simply can't understand what logic could possibly lead everyone to think I'm telling people what to do. All I said is that anyone could comfortably survive with the exempt income. What you do with the rest of your money is completely irrelevant. After you pay your 0-24% (or whatever) of income as tax, you can do whatever the hell you want with the rest of it. This is already what you do. You pay your tax, you do what you want with the rest of your money. In that sense, this proposal is no different. The kid deduction is the same as all the other deductions: eliminated. I don't think tax policy should be used to encourage people to live their lives one way or another. As has already been pointed out, some people agree, some people disagree, which I also admitted is one reason this might not be adopted.