Quote:
Originally Posted by Derwood
both flat tax AND consumption tax hurt the poor and favor the rich. It's no wonder you favor them
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If you took the time to read what I write you would know why I prefer a flat tax or a consumption tax over our current tax code. And, the primary point of this thread is to illustrate how our current tax policy is actually a benefit to the "rich" and consequently hurts everyone else.
And one more time - a flat tax or a consumption tax could be set up to exclude taxation on the poor or basic necessities. Why do you persist in ignoring this?
---------- Post added at 04:15 PM ---------- Previous post was at 03:59 PM ----------
Quote:
Originally Posted by Charlatan
It is possible to have a progressive tax that is also simplified. The tax forms I fill out here are one page. There are very few things that can be deducted from your taxes (mostly to do with dependants -- infirm spouses and parents, children, etc.).
The tax rate goes up as you earn more. I currently pay 14% with the ceiling being 20% for someone who is making more than $320,000/year.
The rest of it is extremely simplified.
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You pay 14%? So, if a person in your situation makes $60,000/yr. they simply owe $8,400? What about social security and medicare? that is about another 15%, half paid by you and half paid by your employer, or $9,000. You pay state tax, property tax, sales tax, your employer pays unemployment insurance tax. At some point in the tax code you lose the full benefit of day care for children, child tax credit, IRA deduction, mortgage interest deduction. There is ATM. If you have medical expenses they are subject to a floor for deduction as are things like work related expenses. then there is the education credits or deductions. The average person spends hundreds of dollars to have their taxes done. Then of course we have the benefit of paying taxes each pay period before we know what our tax obligation actually is, and if it is wrong you could be subject to a penalty. Then there is a guy out there doing exactly what you do, making the exact same income and legally paying less tax because they have their situation structured different than yours. I could go on, this just scratches the surface...simple indeed.
---------- Post added at 04:22 PM ---------- Previous post was at 04:15 PM ----------
Quote:
Originally Posted by Derwood
the poor spend close to 100% of their income on consumption, while the rich spend a far lower % on consumption. In that sense, it's regressive. In terms of dollars spent, then the rich are putting more into the tax pool. It's just a matter of perspective
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Did you read the posts about our former Treasury Secretary? Simplified, the guy made a boat-load of money, legally did not pay taxes on it, legally will never have to pay taxes on it, but he can live like a king because he has the assets to do so. Under a consumption tax, he would pay taxes consistent with his lifestyle.