Well written Shocker. You make some great points!

Shock did make some good points. If anyone remembers, oh so long ago, was that my objection that the underlying attitude is that if you DON'T make a lot of money you are lazy or stoooopid. This was my problem with it all along.

At any rate, I like Rkz idea of a flat tax. This means flat tax...no high paid tax preparers finding loopholes to save the rich thousands of dollars, and no reward for popping out babies to afford the poor a giant refund of money which they did not initially pay.

So, you see, I am really for equality for the masses, not just those who can afford it, not just those who have the knowledge to fudge it, and not just those who play the system and reap the benefits of people like me: the middle class.

I have said it before and I'll say it again: the middle class is disappearing, and a country without a middle class cannot sustain itself.

Can I ask a question about flat tax please.

If you want everyone to pay the same rate of tax, does that mean you'll raise it a bit for the lower incomes and lower it for higher?

If that's the case, and your country already has massive poverty problems associated with minimum wage earners etc, how do you think that will be recieved?

They would be just as much in control of a flat tax, and just as able to put in loopholes, but the poor still wouldn't, and now they'd be paying more.

Thats' why it will never, ever, ever get anywhere within a thousand miles of even being considered.
It would wreck the whole system and ruin millions of people's lives. Some things look good "on paper" . . .

That makes no sense... The poor would pay less in taxes than they do now.
Most poor pay most of their taxes in sales tax and would pay less due to having less income and the poor and middle class are those who support the flat tax the most when it is discussed.
It is the rich, who would end-up paying the most in increases because of the elimination of loopholes and shelters, who fight it and put the most spin against it during those discussions.
Because something is difficult does not mean one does not try. As a Libertarian, all I believe in is an uphill battle. This past election shows that many things one does not believe is possible are often just around the corner.
NOTHING is impossible as long as one never gives in to that pathetic word for losers.
A flat tax is a "Flat Tax"... there are no loopholes, 2% or 10%, that is IT, no matter WHAT, come Armageddon, cancer, three arms, the boogie man or a "religious institution".
Income is income or paying for something is paying for something, end of story.
Again, I don't care how you do it. (yes that includes your kids damn education, your housing and food, etc, etc, etc...)

Whilst we in the UK have a sliding scale for income tax, we also have a huge number of tax allowances, concessions, tax-credits & rebates etc. And although I am a committed socialist, I too favour the concept of a flat-rate tax.

10% - 15% of income (earned or otherwise). No allowances, consessions, tax-write-offs. Not only would it generate as much as the present system it would save on all those civil servants in the Inland Revenue whose sole duty it is to check all those allowances....

Oh, and I would apply it to corporations too....

(back in the 70's, it was said that, because of clever use of tax avoidance schemes, the secretaries at Shell UK headquarters paid more in tax than Shell UK itself did)

Oh, I agree, any corp/sports team/etc that pays a salary to anyone = fair salary.
No one has a right to say squat.

It is the height of ignorance and envy to bitch about what someone else makes.

Wouldn't that still make it difficult for someone to break out of a poverty cycle though?

Please explain how.

I'm asking the question. Don't you think it would make it harder for someone to actually get ahead in your country, knowing what your health care system is like just for starters.

That has nothing to do with revamping our tax system... OT red herring.

In my above statement I showed how it would make it easier for the poor to do better under a flat-tax system.

In theory your system seems good rkz, but I don't think it would work in practice for reasons like health care etc.

Maybe it would though. You could be right.

Please tell me how health care has anything to do with this?

health care is expensive. If it's not subsidised by the government then how will low wage earners afford it? Work it out for yourself rkz. You're talking about taking away a lot of funding for things like health care, vet care, aged care, roads, parks and wildlife etc.

Where do you think the money for that comes from? Do you think people are going to say, 'oh yeah, and I've got to go spend some money on that park down the street today, even though my son is sick and needs medication.'

My point is that if you put the 'flat rate' at a rate high enough to cover those things, low wage earners are going to suffer while the wealthy will just continue to get wealthier.

I don't believe flat tax is the answer.

How am I talking about taking anything away?
At what point did I state that the State would receive fewer taxes?... the result would be quite the opposite.
Nor did I discuss, at any time, what would be done with those taxes.
Are you sure you are reading my posts?

Per your second post (you may want to start using the Edit button), now I know you are tail-posting.
I have specifically addressed your points and how, & why, they would not happen.
I will not repeat myself other than to say the poor will pay less due to no sales tax and lower income tax and the wealthy will pay more due to no loop-holes or shelters.
Please read my posts before arguing with me... I cannot figure out why you are making assumptions without reading the posts.

I was, but I've decided to stop for today. :)

It is my opinion that it just bothers you, and many others, that the rich will not be taxed "more" than the poor.
You want a punitive tax, am I right?

Health care is expensive partly because is it subsidized by the government.

About half of all health care in the US is paid for by government and it is a terrible price shopper.

Take for example the prescription drug plan passed recently. Katkeeper notes that the price of her drugs rose to meet the amount of coverage she newly had. Yes, that's exactly how you would expect the market to operate. If the government gives you $2000 a month and says you can only spend it on prescription drugs, then the price of prescription drugs will rise to meet what people will now pay.

This is Economics 101 stuff, and sadly the healthcare companies have taken the course and government has not. You can see a smaller, but similar effect in the price of college tuition, which also rose (at 10%/year a few decades ago) to meet what government was putting into it.

The market forces do not go away simply because you use government to try to "fix" the inequities in them.

Plus, the government was explicitly prohibited from negotiating for lower prescription drug prices.

Healthcare companies have taken Lobbying 101, too.

Health care has nothing to do with how the taxes are taken initially.

http://img.photobucket.com/albums/v2...bs/hijackb.jpg

I gave my 12 year old this speech last night. She'll spring it on her very conservative civics teacher next week some time and blow her mind. (her teacher loves her willingness to argue politics even if Iraq/environmental issues create the illusion that they are always on opposite sides)

Just because you say it is the end of the story, doesn't make it so.

Take a look at the lesson of the movie "Coming To America" as an example of loopholes that will still exist with a flat tax. You probably have heard of this story. Paramount, the maker of the movie, was found to have stolen the idea for the movie from a script submitted by Art Buchwald. He was awarded damages. Even though the movie grossed over $350 million dollars, Paramount claimed there was no "net profit" made. They were able to use a fancy high priced accounting firm to show that the movie made no profit.

Those fancy high priced accounting firms are still going to be around after a flat tax, and they will work for the rich only, showing that they didn't make as much money as everyone assumes they did. Income is income for the poor, but income is not income for the rich.

Gross profit = end of story.
Earnings are earnings.

I think there is probably a lot of misunderstanding between posters here about flat tax and how it will affect poverty, rich, etc. With a flat tax, let’s just arbitrarily pick 1% for example. Currently, we have a progressive tax system, which means the more you make, the more you get taxed. Tax rates vary from 10% for the lowest earners all the way up to 35% for top earners. Amazingly, and very few people ever realize this, but this as far as I know, the only government sanctioned discrimination written into our laws. They discriminate based on income. Now, to come up with taxable income we take all taxable earnings, and we make deductions. EVERYONE is eligible to do this regardless of how rich or poor they are. You can either itemize or take a standard deduction to find what your adjusted income would be. I mean, just by giving the option of choosing between the two, the government is allowing people right there to decide how much they can deduct to get the best benefit for the tax payer. Aliantha- you are concerned with the cost of healthcare in the U.S... Well just considering the tax consequences of healthcare, and not any of the social programs to supplement healthcare (because that is an unrelated topic), just know that because EVERYONE is eligible to make deductions, there is also a deduction for qualified healthcare expenses. So even the poor who need healthcare benefit from taking this deduction so they DO pay fewer taxes. Anyways, once you've gotten your adjusted income, you can take tax credits. These nifty little things are for lots of different things. Often, tax credits are given as a means to promote certain activities among taxpayers. There is a tax credit for driving a 'green' car, credits for teachers, for research, having children, going to college, etc. Tax credits are a dollar for dollar reduction in someone’s tax liability. Again, ANYONE who qualifies can take them, regardless of their income. Credits like the Earned Income Credit though, which is typically for lower income tax payers who meet certain criteria can actually even result in a refund for the taxpayer, which means they can get back more than what they paid into the tax system... its like welfare without the stigma! All of the 'loopholes' are not simply ways to get out of paying taxes, but if you know what you are doing and understand the tax code, you can use it to your advantage to minimize your tax liability. And I feel pretty confident that everyone who has posted here tries to find ways to minimize their liability, even if not consciously- because I am sure everyone takes all of the deductions and credits they qualify for to the limits allowed.

Now there are three alternatives that come to mind when there is talk about revamping the tax code. The first has already been talked about in detail here so I won't spend much time. It is the flat tax. Simply put- do away with all income tax withholding, sales tax, capital gains, etc. At the end of the year, you take ALL of your earnings and multiply by 15% for example. So a person who made $10000 pays $1500 in tax for the year. (Remember no sales taxes, so it isn't as bad as some may think) and a person who is a CEO making $1 million a year in salary and benefits pays $150000. Hell that’s way more than I make in a year! And there are no deductions or credits to get people out of paying. You just pay your fair share. The second option is a National sales tax. This approach is not based on income at all, but rather on consumption. In most proposals for this plan, food is considered a tax free item, so poor people are not hurt by this. However anything else spent with disposable income would be subject to a national sales tax. Again it would be a flat rate, say the 15% again. So it is still equal in that you pay your fair share, plus I'm sure we can all agree that the wealthy have more money therefore they spend more money so they pay more tax.

The third alternative and the one that I prescribe to is called the Fair Tax. I know I've rambled a lot on this one so I will just provide a handy link to a website dedicated to the Fair Tax so that you can also learn more about this plan. In short though it takes the best of the first two alternatives and combines them into one comprehensive plan. http://www.fairtax.org/fairtax/about.htm

Nope, most of the wealthy's money sits in savings, investments and in intangibles and is not spent at all... I do not agree and most who know, would find that to be part of the current problem.

LOL ok rkzenrage that may be true but I guess I didn't say what I meant quite right either. What I meant, and what the national sales tax boils down to is that even if most of a wealthy person's wealth sits in the bank or some other investment house, they will still spend more than your average person. I will agree that there are some wealthy people that got that way by being frugal, but for the majority, they like to spend their money just as much as the next guy. Whether it be on cars, houses, fine dining, boats, etc... And even when they have money in savings, say under the current system, all that would be taxable would be interest, not the money they've accumulated. And when their money is in investments under the current system, they only get taxed on that when they sell the investments (capital gians). So even if most of their money is in savings or investments, the tax result from those holdings would largely remain unchanged.

I hope that clarified the point I tried to make on that one a little bit.

Further note (I'm not saying you don't know this, but I have run into people who didn't): The top earners are not taxed 35% on their entire income; just the part over a certain limit. Everyone gets a certain amount of income tax-free, then a certain amount taxed at 10%, then a certain amount taxed at the next level, etc, and the remainder is taxed at 35%. There is no point, based purely on the progressive tax system, at which earning a dollar more will cause your taxes to increase by more than 35 cents. Deductions, credits, AMT, etc. can do weird stuff, though.
Heh, funny. And parking stickers discriminate based on where you live.

The biggest problem with "flat tax" discussion is that the idea of a single tax rate and the idea of eliminating deductions and credits are in no way tied together. Removing deductions and credits could be done just as easily with progressive tax rates, and removing progressive tax rates could be done while leaving deductions and credits in place. Arguing the merits of one doesn't transfer to the other.

not so fast, mister trickster pants!
 

Discussing flat tax means we also have to consider polygamy, because the underlying principles would make us a hypocrite othewise.

But only because of the unfair nature of the head of household filing status instead of the multiple discounts one should get for each marriage.

huh? :::shoots you in the face:::

:greenface

I actually did know this (I'm an accounting studend for those who wondered) but I didn't mention it for simplicity sake. If you are in the top tax bracket, then the actual amount you will be taxed would be $97,653.00 plus 35% of the amount over $336,550.


You are right that those options are not dependent on each other nor are they mutually exclusive. As they say, only 2 things are certain in this world, death and taxes, and we can talk about the fine points for hours upon hours. I was just trying to give those who maybe didn't know much about any of the options out there a bit of a foundation and starting point so they can begin their own research into what they like and dislike about them. All of them are completely customizable and bits and pieces can come and go to fit most situations. I've heard of flat tax rate plans that are based off of all earnings, regardless. I've also heard of others where there is a generous cost of living deduction for all, anywhere up to $20000 so that the first $20000 you make isn't taxed, and then all income starting at $20000.01 is taxed at the flat rate. Personally, I like what I've seen of the Fair Tax which I linked to in my other post, but like I said, I just wanted to give at least a basic foundation so that others knew some of the options.

***Disclaimer*** the above tax rate is taken from the 2006 Single tax schedule. It could be different based on your filling status.

LOL there's a discount? Like buy one get one free? Or just 15% off your 3rd wife?

I can't answer you, Flint shot me.


But if I could reply, I'd say that while DINKs have a marriage penalty, the polygamists make out like bandits with the multiple marriages. You just have to use form 1040P, for polygamists.

:lol: Thanks glatt! oh and I hear you get an additional deduction off your state taxes if you live in Utah.

Hey man, that's unfair. So, if I were still married, and (theoretically) were ABLE to attract one more man, I'd make out in my taxes? That is discrimination towards the terminally un-mateable.

Hows the weather in here?

Just find a few illegals that want to stay in the country. You can marry them so they get a green card and you save on taxes :D

Can we not discuss taxation, and polygamy, without flying off the handle on these flights of fanciful emotionality? People don't wanna pay taxes? Boo-Hoo. I don't have the superhuman omnipotence to lump these issues into a neat package that I feel like caring about. Houston, we have a problem. These tax-mongers are hijacking a perfect discussion about automobile maintenance with their blustery hoopla about poor old granny lazy-bones and her addiction to heating oil. Go tell a bigger fool than myself. I hate America, er, I mean, I hate Americans, er, I mean, hate minorities, damnit, why do I keep saying this stuff? No! Listen to me! You are stupid and I am going to save you from yourselves, and the other guy who says he wants to save you, but really wants to teach you about the no-huggy zones.

Quit bogartin' that shit, Flint! :)

So the Federal Government will flat tax my income at 10% and the State will give up their sales tax revenue? I don't think so.

Is the state going to get a piece of the 10% flat tax to replace the sales tax money?.....and the state income tax money?......and the local income tax, they just instituted, to give property tax relief? No way.:headshake

Why not? Each state gets their percentage.

You think they'll be willing to let the Feds determine that percentage?

Why wouldn't they just determine the percentage based on the percent contribution from each state?

The Feds are who? State Senators and Reps, if I am not mistaken. Where am I?

Because some states get more back than they contribute, and if that changed they'd be in real trouble. And while I may be pissed off at some of those states 'round election time, I don't particularly want them to collapse.
But from a particular state government's perspective, the number of feds from that state is pretty small.

Representative Republic... not a Democracy.

wealth is a great motivator, perhaps the threat of only receiving in direct proportion to what you produce would be good incentive to clean up their acts.