Make sure you get the math right before you put this into practice. The lower tax brackets apply to everyone. A single person pays 10% on the first $8,700 they make. You, me, Warren Buffet, everybody. (Is Buffet married filing jointly? Then it’s $17,400.) If you only make $8600, then that’s all you have to worry about. It’s 15% on any money you make from $8,701 to $35,350. And higher percentages at higher amounts.
My point is that if you create a 0% bracket up to $112,124, that applies to everyone, too. Someone making $150,000 probably comes out way ahead under your scheme, because they get the first $112,124 tax free. Even if you tax the remaining ~$38,000 at 90%, he’s still paying less than he is now.
Which is not to say that the proposal wouldn’t work, but pick your numbers with all that in mind.
You do know there are a helluva lot of rich people who got rich in other forms of government? Wealthy Western countries, dirt poor countries, industrialized countries, all sorts of countries have wealthy people who live tremendously better lives than the plebes.
Really, just say you want their money because they have more, not that they benefit by giving it to you. They don’t. You benefit by them giving it to you. At least be honest about it when you’ve got a gun to someone’s head.
Flat taxes are just another way to screw the working poor. They aren’t going to tax capital gains at that rate, they aren’t going to have the payroll tax flat for all incomes, and they aren’t going to give up corporate jets and such as depreciable/deductible expenses.
The difference between death and taxes is that death doesn’t get worse for people every time Congress meets.
I don’t speak for Jas09, of course, but how those people are taxed is a matter between them and their respective governments. Hopefully, those government are striving toward a solution that lets all their citizens prosper.
On that scale, the U.S. has had a graduated tax for some time and done rather well for ourselves.
They aren’t giving anything to me. We’re both giving money to the government to be spent in ways that make both our lives better.
This bears repeating, because much of the argument for a flat tax is based on equity. But we already do each pay the same taxes. It could not be more fair than it is. I pay the same rate on the 50,000 dollar I make as anyone else, and on the 250,000 dollar as anyone else.
Flat taxers making this argument aren’t looking to be fair to all people. They’re looking to be fair to each dollar.
Wait so you want a simpler tax system and you want to achieve it by replacing an income tax system we have had for a hundred years with a national sales tax AND and an income tax system (but with fewer brackets?
The non-security/military discretionary budget is about 9% of the entire federal budget. If you have convinced yourself that we can fix our problems in any significant way by focusing on government agency costs, then you don’t know what you are talking about.
SS and Medicare taxes raise about as much revenue as the income tax.
I agree that we can have some sort of sliding scale copay for health care. If only medicare would have something like that… oh wait… Most Recent Articles
I believe federal pensions are fully funded sop it is part of the payroll cost while the employee is still working. The cost of retiree health care is included in the 13.3 billion and for the most part is supplemental to medicare.
A) Hong Kong doesn’t have a flat tax. They have an alternative maximum tax. Their lowest marginal rate is 2% their top marginal rate is 20% but your taxes are capped at 16% of your gross income.
B) Look at the jurisdictions you are talking about? There is a very specific reason that Estonia has a flat tax rate and it has nothing to do with fairness.
Noone is saying that flat taxes can’t work, we’re saying its not an improvement to the system we have had for the last 100 years and raises considerable questions of social equity.
If we could slash the budget enough, all of these problems would disappear.
In what way is a flat tax more fair than a progressive tax system?
Have you ever heard of marginal utility?
What wealthy people are paying no taxes? Do they get all their income from municipal bonds?
There are several types of flat tax but the one that people talk about the most if Milton Friedman’s model which is in fact a negative income tax model. An idea that he borrowed from another economist who initially proposed applying a negative income tax to a progressive tax system. There is nothing about the negative income tax model that makes it work better with a single tax rate rather than multiple tax rates. A large enough effectively maintains a progressivity in the tax code but its an awful lot of trouble to go through avoid having multiple brackets.
Steve Forbes has another version that exempts investment income and has a relatively small deduction, which effectively just shifts the tax burden downwards. But noone other than Dick Armey and friends takes that system seriously.
In the interests of fighting ignorance, you’re wrong. The negative tax system doesn’t have two tax rates, it has one and if your deduction results in a negative taxable income you get the negative tax back in the form of a check from the government. And if you are talking about the Steve Forbes variant, then Buffett would hardly pay any taxes at all.
What makes you especially wrong is the 20% number you tossed in there. In order to be revenue neutral (so you can compare apples to apples) that number has to be much higher depending on the exemption amount.
All of your rates are too low. We could tax the 250K+ income at 99% and it would not raise the same revenue we have now. If you wanted to tax above $1million only, you would need to tax at about 7000%. So no, you don’t have the sort of flexibility you seem to think. And there is no reason why you couldn’t tweak the brackets in much the same way. We already know how to skin this cat. What makes your way better?
The current tax rate on incomes below about 50K is close to ZERO. How much lower do you want it to be?
And 70% of the federal budget does not come from people making more than $112,124, the personal income tax maybe but social security and medicare contributions are just as big a part of the federal budget as the personal income tax. Check your sources again.
In a revenue neutral world you can’t reduce taxes on the poor while also reducing taxes on the rich. Those taxes MUST be raised somewhere or you have to admit that your system is only appealing because you intend to run huge deficits in order to tax people less.
Seems to me that you are arguing for MORE brackets, not less.
Because its mostly unnecessary and stupid.
You need to raise your standards. Not being retarded doesn’t make an argument coherent.
It makes more sense when you have much higher marginal rates. Say you owned IBM stock for 40 years and you sell it for a a gain of a million dollars. Under a more progressive system you might be hit with a tax rate of 40 or 50% for gains you accrued over 40 yearas. If you had accrued 25K in gains in each of the last 40 years your tax rate on those gains would have been closer to 25% for those gains so in an attempt at rough justice we used to exempt 50% of your gain from taxes. This lowered your bracket and reduced the income being taxed.
When we flattened the tax rates under Reagan the argument for the capital gains preference got weaker. In fact Reagan raised the capital gains rate from 20% to 28% (after having lowered it from 28 to 20 and figuring out that it doesn’t work).
Tax simplification is a reasonable goal that makes sense. Agitating for a flat tax rate and then reinserting thing to try and make it progressive again is stupid.
You might like Milton Friedman’s model, which Republicans USED to like (back when they like individual mandates) but there is no reason you can’t have a progressive tax system with the negative income tax mechanism.
Undercutting the funding mechanism for social security and medicare would be bad for those entitlements. It would turn them more into traditional forms of welfare.
Its almost impossible to make the numbers work the way they say it will while maintaining revenue neutrality. Flat tax proposals always shift taxes downwards because they are always proposed by folks at the top marginal rate.
Taxes are not extortion. The fact that you think they are probably clouds your ability to think rationally about tax policy.
He’s not whining. He’s debating in good faith, and you are unfairly ascribing motivations to him that may or may not be true. Personally, I find Rhaegar’s contributions to this thread to be the most reasonable and lucid pro-flat-tax discussion I can remember. Most flat taxers do what you accuse him of doing: jabber endlessly about fairness and ignore practical issues.