• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!
  • Welcome to our archives. No new posts are allowed here.

Flat Tax: One Simple Rate

ChristopherHall

Active member
Joined
Oct 1, 2005
Messages
320
Reaction score
10
Gender
Male
Political Leaning
Centrist
BREAKING THE CODE
http://www.opinionjournal.com/extra/?id=110007139

One Simple Rate
A flat tax would unleash a stupendous economic boom.

BY STEVE FORBES
Sunday, August 21, 2005 12:01 a.m. EDT

A major domestic battle looms this fall, when tax reform--a centerpiece of the president's bold domestic agenda--will finally be on the table. The President's Advisory Panel on Federal Tax Reform is expected to release its findings by the end of September. After the political shellacking the White House took on Social Security, the administration will be strongly tempted to take a conciliatory path that supports only superficial reforms, essentially preserving the status quo of our hideous income tax code.

Such a course would have perilous consequences, economically and politically. In fact, the administration has an opportunity here to boldly retake the initiative, to recover lost political support and thrust an already decent economy into high gear and, at the same time, make America better able to meet intensifying competition from China, India and others. How? By junking the entire federal income tax code and starting over with a flat tax. A growing number of countries are doing this--and so should we.

The current system is beyond redemption, a beast whose complexity, confusion and outright unfairness have corrupted our economy and society. Americans waste more than $200 billion and over six billion hours each year filling out tax forms. They engage in all kinds of useless economic activity intended to take advantage of the code's maze of deductions and to reduce taxes--from deducting donations of old socks to making unwanted investments. The waste of brainpower--at a time of increasing global competition--is incalculable.

The code corrupts our system of government by encouraging the crassest political conduct and by creating a massive, intrusive federal bureaucracy. One-sixth of the private-sector employees in Washington are employed by the lobbying industry. Half their efforts are directed at wangling changes in the tax code. Few people realize that our health-care system, with its runaway costs, is, in fact, the ultimate product of the tax-code distortion in our economy. And last, but most definitely not least, we simply pay too much in tax. When you take into account all the taxes, fees and tolls paid to the government, the typical American pays somewhere around half or more of his income in taxes. Why do we the people accept this?

My flat tax plan has one simple rate, on the federal level: 17% on personal income and 17% on corporate profits. There would be generous exemptions for individuals: $13,200 for each adult; $4,000 for each child or dependent, and a refundable tax credit of $1,000 per child 16 or younger. A family of four would pay no federal income tax on its first $46,165 of income. Exemptions for a family of six--mom, dad, four kids--would be $65,930. No anti-risk-taking capital gains levy; the capital gains tax would go to zero. The abusive Alternative Minimum (really maximum) Tax would be abolished. No more death tax: You'd leave the world unmolested by the IRS. No taxation without respiration!

Corporate profits would be taxed at a rate of 17%. Companies could expense all investments at once: no more depreciation schedules. If these instant write-offs produce a loss, that could be carried forward to use against future profits for as many years as necessary to use it up. And businesses would be taxed only on income made in the U.S.

The economic boom the flat tax would unleash would be stupendous, ushering in a long-term, noninflationary expansion of historic proportions. The current expansion would pale in comparison. Once again, we would be the clear global leader in high-tech and medical innovations--unlike today, when our lead, thanks in no small part to the tax code, is now under increasing assault.

How would a flat tax do this? What so many "experts" can't grasp is that taxes are not only a means of raising revenue for governments but also a price and a burden. The tax you pay on income is the price you pay for working; the tax on profits is the price you pay for being successful, and the levy on capital gains is the price you pay for taking risks that work out. When you lower the price of good things, such as productive work, success and risk taking, you get more of them. The flat tax does that dramatically.

Experience demonstrates time and time again--the Harding-Coolidge tax cuts of the 1920s, the Kennedy cuts of the '60s, the Reagan cuts of the '80s and the Bush reductions of 2003--that lower tax rates lead to more economic activity, which leads to more government revenue. Fiscal Associates of Alexandria, Va., an economic consulting firm, did an analysis of the flat tax. Its findings: Between 2005 and 2015, the Forbes Flat Tax Plan would generate $56 billion more in new government revenue than the current income tax. More important, an estimated $6 trillion in additional assets would be created, an immense boost to our nation's balance sheet. This study also predicts that that flat tax would lead to nearly 3.5 million new jobs by 2011--jobs that otherwise would not exist.

To avoid puerile and divisive debate about who would gain and who would lose, my flat tax is designed to be a tax cut for all. Because some people will only focus on what they lose in the way of deductions under the flat tax--ignoring the fact that their income tax payments would go down--my plan gives you a choice: When the flat tax is implemented, you can file your postcard return under this new, simple system, or continue to file your tax returns, with all of their mind-numbing complexity, under the old system. See for yourself which is better. I think most would conclude that the flat tax is best.

Other countries are getting the message, even if we have yet to. Hong Kong has successfully had a variation of the flat tax for 60 years. Lithuania, Latvia and Estonia enacted flat taxes in the 1990s that have been hugely successful. Russia put in a flat tax four years ago, and revenues have more than doubled in real terms. Ukraine, Slovakia, Romania, Georgia and Serbia have also successfully enacted flat taxes. How ironic that onetime Communist nations have been reaping the benefits of a flat tax before that bastion of free enterprise, the U.S.

President Bush should understand that trying to tinker with the tax beast won't work. In 1986, Ronald Reagan simplified the tax code somewhat: A number of tax shelters were eliminated and the number of tax brackets were cut to two: 28% and 15%. But the code remained intact. No sooner was the ink of Reagan's signature dry than Washington politicians slid back into their bad, old habits. Since his day, the federal income tax code has been amended 14,000 times. The tax system today is 60% larger than it was after the Reagan reforms. The flat tax's very simplicity makes such backsliding difficult: Any change would trigger a national debate. For insurance, the Forbes Flat Tax also contains a supermajority provision--taxes can't be raised unless approved by a 60% vote in both the House and Senate. Few tax boosts in recent decades have surmounted such a barrier. The usual objections to the flat tax don't hold up. The flat tax will help housing--personal incomes would go up and interest rates would go down--and boost charitable giving. Experience demonstrates that when people earn more they give more.

What about a national retail sales tax? The most prominent plan encompassing this idea proposes a sales tax of 30% to replace the income tax and payroll tax. This 30% tax poses many challenges, among them repealing the 16th Amendment, which allows Washington to impose the income tax--a lengthy, onerous process. Otherwise, we would likely end up with both an income tax and a sales tax.

The national sales tax would dramatically raise prices of many goods and services. Imagine a couple buying a new house costing, say, $200,000, coughing up an extra $60,000 in sales taxes. A new dedicated bureaucracy would be necessary to collect the tax and to disburse rebates (which the plan's advocates propose) from Uncle Sam to tens of millions of Americans every month to repay them for a portion of the sales tax they pay on food and clothing. Under the circumstances, the flat tax seems the best alternative to the current abomination.

That's why President Bush should pull a Ronald Reagan--he should demand that Congress destroy this hideous tax system, the way Reagan demanded that Mikhail Gorbachev tear down the Berlin Wall. Should the president make such a plea, the American people would surprise the Washington cynics and give him a grateful, full-throated cry of support.

Mr. Forbes, editor in chief of Forbes Magazine and president & CEO of Forbes Inc., is the author of "Flat Tax Revolution: Using a Postcard to Abolish the IRS" (Regnery, 2005).


---------------------------------------------------------------------------


What are some thoughts on the above article???
 

Canuck

Well-known member
Joined
Oct 2, 2005
Messages
849
Reaction score
0
Gender
Undisclosed
Political Leaning
Undisclosed
7,000 billion + borrowed money
your debt is too high
call in finacial services to help you get a budge

read my lips NOW NEW TAXES

watch how the bush tax break, becomes america's heart break.
 

Kandahar

Enemy Combatant
DP Veteran
Joined
Jul 20, 2005
Messages
20,688
Reaction score
7,320
Location
Washington, DC
Gender
Male
Political Leaning
Liberal
I agree completely. Steve Forbes' plan would be a BIG improvement over the current abomination. This is one of the most significant, most important steps we can take to improving the long-term economic health of our nation.
 

ChristopherHall

Active member
Joined
Oct 1, 2005
Messages
320
Reaction score
10
Gender
Male
Political Leaning
Centrist
Canuck said:
7,000 billion + borrowed money
your debt is too high
call in finacial services to help you get a budge

read my lips NOW NEW TAXES

watch how the bush tax break, becomes america's heart break.

The Flat Tax would close specialized corporate exemptions. It would also increase compliance due to simplicity. This would mean more revenue without proposing new taxes.
 

Canuck

Well-known member
Joined
Oct 2, 2005
Messages
849
Reaction score
0
Gender
Undisclosed
Political Leaning
Undisclosed
Poverty is a universal problem, as is inequality. The world's 500 richest people, according to U.N. statistics, have as much income as the world's poorest 416 million.

how you gona tax
the middle class Is going bye bye

how much do you want to tax the 500 richest people
america cant pay it's debt
is adding in excess of 500 billion a year to that debt
and is bringing in illegally milions of mexicans chinese among others
your borders are so lose you could slip a 1000 mega ton icbm
into the country fire it before you could do anything about it

wake up America before it is finally to late
you have a madman at the controls who is borrowing 500 billion more each year to fight in iraq, so americans can drive around in 1/2 ton trucks and 5000 lb suv trucks
is there no hope for America
 

Iriemon

Banned
DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
ChristopherHall said:
BREAKING THE CODE
http://www.opinionjournal.com/extra/?id=110007139

One Simple Rate
A flat tax would unleash a stupendous economic boom.

BY STEVE FORBES
Sunday, August 21, 2005 12:01 a.m. EDT

What are some thoughts on the above article???

Forbes has been pushing this loony idea for decades. Actually, its not that loony for billionaires like him, his tax obligations would be reduced dramatically and the tax burden would be pushed down to the middle class.

There are two concept here -- tax rates and tax code complexity. They are not very related. The tax code is not complicated because it has a progressive tax structure. It is complicated because of all the exemptions, deductions, and loopholes. You do not need a flat tax rate to make the tax code simpler. Conversely, simply making a "flat" tax rate makes the code no simpler at all. To make the tax code simpler, get rid of all the exemptions and deductions and loopholes. Problem is, people like being able to write off their home mortgage payments and 401ks.

The second concept is the tax rate. We have historically had a progressive tax rate -- the more money you make the higher rate you pay. (Actually, the SS tax, which brings in 40% of Govt revenue, is very regressive -- the SS tax is a 12.6% flat tax that the very rich effectively do not pay this tax which stops applying at 90k in income) Everyone can have a personal view on how progressive of flat the tax rates should be. But imposing a flat tax with reduce the tax obligation the very wealthy (like Forbes) pay and move it to the middle classes.

While his assertion that lower taxes increase economic performance has some arguable merit as a theoritical concept, many other factors affect an economy more than the tax rate -- economic performance was no better in the 80s or 00s (when the tax rate was lower) than it was in the 70s or 90s (when taxes were higher).

Finally, his proposed 17% rate is far too low if he is talking about replacing all taxes. The Govt spent 2.3 trillion in 2004 and Gross national income was around 10 trillion, and with the exemptions he proposes the revenue will be much less than 1.7 trillion, far less than the 2.3 million spent.

My guess is that Forbes wants to make the income tax flat and keep the regessive SS tax in place. Can't blame him for acting in his self interest
 

SouthernDemocrat

Pragmatist
DP Veteran
Joined
Jun 23, 2005
Messages
23,615
Reaction score
14,656
Location
KC
Gender
Male
Political Leaning
Moderate
Pie in the sky.

Why don't we have a 10% flat tax, maybe 5% flat tax? Because it would not raise enough money to fund the government, thats why. In order for a flat tax to raise enough money to fund public spending, you would have to have a rate of much higher than 17% which in the end would be a TAX INCREASE on everyone other than the richest of the rich Americans. That is why good old blue blood Forbes wants one so much because it would be a colossal tax cut for him and his buddies. Of course, that money has to be made up somewhere and where you do think it would have to be made up? If you guessed the Middle Class, then you are right.

You cant just invent what ever fair sounding tax system that you want to have, you have to have a tax rate that actually raises enough money to fund the government.

We had huge growth in the 90s under a progressive tax system. In fact, the economy could not have grown any faster than it did.
 

Kandahar

Enemy Combatant
DP Veteran
Joined
Jul 20, 2005
Messages
20,688
Reaction score
7,320
Location
Washington, DC
Gender
Male
Political Leaning
Liberal
Iriemon said:
Forbes has been pushing this loony idea for decades. Actually, its not that loony for billionaires like him, his tax obligations would be reduced dramatically and the tax burden would be pushed down to the middle class.

"Tax burden" is relative. The middle class would also pay significantly less in taxes.

Iriemon said:
There are two concept here -- tax rates and tax code complexity. They are not very related. The tax code is not complicated because it has a progressive tax structure. It is complicated because of all the exemptions, deductions, and loopholes. You do not need a flat tax rate to make the tax code simpler. Conversely, simply making a "flat" tax rate makes the code no simpler at all. To make the tax code simpler, get rid of all the exemptions and deductions and loopholes. Problem is, people like being able to write off their home mortgage payments and 401ks.

I agree with this in theory. I think you can have a graduated tax without having an extremely complex tax. With that said, I still think a flat tax is better. See below.

Iriemon said:
The second concept is the tax rate. We have historically had a progressive tax rate -- the more money you make the higher rate you pay. (Actually, the SS tax, which brings in 40% of Govt revenue, is very regressive -- the SS tax is a 12.6% flat tax that the very rich effectively do not pay this tax which stops applying at 90k in income)

The purpose of the SS tax, in theory, is to provide for one's retirement an amount of money so as to not drastically alter one's standard of living. It wouldn't make sense for this tax to be anything other than regressive. But we can eliminate this problem by privatizing SS.

Iriemon said:
Everyone can have a personal view on how progressive of flat the tax rates should be. But imposing a flat tax with reduce the tax obligation the very wealthy (like Forbes) pay and move it to the middle classes.

You make it sound as though the middle class will suddenly be faced with much more taxes, which is not the case. A middle-class individual earning between $29,051 - $70,350 has to pay 25% in income tax under the current system. Under Forbes' system, he'd only have to pay 17%.

Iriemon said:
While his assertion that lower taxes increase economic performance has some arguable merit as a theoritical concept, many other factors affect an economy more than the tax rate -- economic performance was no better in the 80s or 00s (when the tax rate was lower) than it was in the 70s or 90s (when taxes were higher).

I agree. But the point is that all other things being equal, a lower tax rate means more economic productivity. That's no guarantee of a booming economy; just that the economy is better off than it would be with higher taxes.

Iriemon said:
Finally, his proposed 17% rate is far too low if he is talking about replacing all taxes. The Govt spent 2.3 trillion in 2004 and Gross national income was around 10 trillion, and with the exemptions he proposes the revenue will be much less than 1.7 trillion, far less than the 2.3 million spent.

Using the "more economic productivity" line of thinking, the 17% tax rate could conceivably improve the economy enough to make up the difference. I agree that Forbes' calculations are a little optimistic, but I think we should cut a lot of federal spending anyway. So if the 17% rate falls short of the revenue goals, so be it.

Iriemon said:
My guess is that Forbes wants to make the income tax flat and keep the regessive SS tax in place. Can't blame him for acting in his self interest

Perhaps. My guess is that Forbes would want to do away with the regressive SS tax (and SS) altogether, as he is very conservative on government spending.

I really don't think many rich people are really as interested in screwing everyone else over for their own benefit as much as middle America would like to believe. Whether he's wrong or right, I think this plan was designed with the country's well-being in mind.
 

Iriemon

Banned
DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Kandahar said:
"Tax burden" is relative. The middle class would also pay significantly less in taxes.

Then who pays more? You cannot cut the tax rate on the wealthy 50% and collect the same tax revenue without someone paying more!

The purpose of the SS tax, in theory, is to provide for one's retirement an amount of money so as to not drastically alter one's standard of living. It wouldn't make sense for this tax to be anything other than regressive. But we can eliminate this problem by privatizing SS.

In theory what you say is part of the basis for SS. In practice SS tax revenues are used for pensions, disability, life insurance, and about 1/5th of the SS taxes collected (about $150 billion) are applied as general revenues the Govt spends in its general operations. It is definitely a tax, and a regressive one at that.

You make it sound as though the middle class will suddenly be faced with much more taxes, which is not the case. A middle-class individual earning between $29,051 - $70,350 has to pay 25% in income tax under the current system. Under Forbes' system, he'd only have to pay 17%.

Again, where is the differnece made up then? The poor?

I agree. But the point is that all other things being equal, a lower tax rate means more economic productivity. That's no guarantee of a booming economy; just that the economy is better off than it would be with higher taxes.

I question how true that is as an absolute proposition and I especially question how much of an effect a change makes. Empirically, the tax rate has made no difference at all over the last 3 1/2 decades. In fact the economy did better in the 60s when the tax rates where higher.

Using the "more economic productivity" line of thinking, the 17% tax rate could conceivably improve the economy enough to make up the difference. I agree that Forbes' calculations are a little optimistic, but I think we should cut a lot of federal spending anyway. So if the 17% rate falls short of the revenue goals, so be it.

Our Govt is already borrowing 1/2 trillion every year and you want to borrow more? Do you think it is right to borrow what our Govt spends and pass the cost onto the next generation?

Perhaps. My guess is that Forbes would want to do away with the regressive SS tax (and SS) altogether, as he is very conservative on government spending.

A 17% flat tax generates 1.7 trillion if applied across the board. With his exemptions I doubt it would generate $1.3 trillion. I am not signing up for any plan that calls for trillion dollar deficits every year. Sorry. It's wrong.

I really don't think many rich people are really as interested in screwing everyone else over for their own benefit as much as middle America would like to believe. Whether he's wrong or right, I think this plan was designed with the country's well-being in mind.

His plan is either 1) cut taxes for everyone even more an borrow a trillion a year. Or 2) cut taxes for the wealthy and shove them down on the middle class. Neither proposal is in the country's best interest, IMO, unless you have assets like Forbes.
 
Last edited:

SouthernDemocrat

Pragmatist
DP Veteran
Joined
Jun 23, 2005
Messages
23,615
Reaction score
14,656
Location
KC
Gender
Male
Political Leaning
Moderate
Iriemon said:
Then who pays more? You cannot cut the tax rate on the wealthy 50% and collect the same tax revenue without someone paying more!



In theory what you say is part of the basis for SS. In practice SS tax revenues are used for pensions, disability, life insurance, and about 1/5th of the SS taxes collected (about $150 billion) are applied as general revenues the Govt spends in its general operations. It is definitely a tax, and a regressive one at that.



Again, where is the differnece made up then? The poor?



I question how true that is as an absolute proposition and I especially question how much of an effect a change makes. Empirically, the tax rate has made no difference at all over the last 3 1/2 decades. In fact the economy did better in the 60s when the tax rates where higher.



Our Govt is already borrowing 1/2 trillion every year and you want to borrow more? Do you think it is right to borrow what our Govt spends and pass the cost onto the next generation?



A 17% flat tax generates 1.7 trillion if applied across the board. With his exemptions I doubt it would generate $1.3 trillion. I am not signing up for any plan that calls for trillion dollar deficits every year. Sorry. It's wrong.



His plan is either 1) cut taxes for everyone even more an borrow a trillion a year. Or 2) cut taxes for the wealthy and shove them down on the middle class. Neither proposal is in the country's best interest, IMO, unless you have assets like Forbes.

Pragmatism is lost on Ideologues. They just have it their head that you can just invent a tax rate and it will work. They want to privatize social security and they think that will make up the difference with a Flat Tax. However, they fail to realize that currently the Social Security trust fund has surpluses that actually float the debt on the general revenue side and that if you eliminate Social Security, you only make the deficit problems worse.
 

cnredd

Major General Big Lug
DP Veteran
Joined
Jul 5, 2005
Messages
8,682
Reaction score
262
Location
Philadelphia,PA
Gender
Male
Political Leaning
Slightly Conservative
Why do some people say that the current taxation lets millionaires get away with not paying as much, yet when a flat tax is suggested, they say that the millionaires will not be paying as much?...:roll:

Personally, I think the biggest benefit, which will make the entitlement politicians cry "foul", would be the shedding of the Federal payroll with the abolishment of the IRS...

Just the selling of the buildings and real estate and not having to maintain them anymore would bring in billions...
 

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
or instead of complaining we spend too much...


why not start a flat tax and another revolution.....OMG cut government programs!


yes, its starting to come togethor..
 

Iriemon

Banned
DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
128shot said:
or instead of complaining we spend too much...

why not start a flat tax and another revolution.....OMG cut government programs!

yes, its starting to come togethor..

Sounds good ... whadaya going to cut? SS? Defense? Medicare? Those are the biggest spending items the Govt has, actually interest expense is #3 but you can't cut that.
 

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
Iriemon said:
Sounds good ... whadaya going to cut? SS? Defense? Medicare? Those are the biggest spending items the Govt has, actually interest expense is #3 but you can't cut that.



and NASA, I'll keep the military, police force, firemen, but I'll cut medicare too, SS looks like a nice boot kick on out of here too...


Heartless bastard? maybe, but I did just save you a liftetime of debt.
 

Iriemon

Banned
DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
128shot said:
and NASA, I'll keep the military, police force, firemen, but I'll cut medicare too, SS looks like a nice boot kick on out of here too...

Heartless bastard? maybe, but I did just save you a liftetime of debt.

LOL, fair enough, I guess the question should be what feasibly can be cut.
 

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
you will never see me wanting to increase the government of anything weither it be spending or programs :mrgreen:
 

mudd

New member
Joined
Sep 23, 2005
Messages
3
Reaction score
0
Gender
Undisclosed
Political Leaning
Liberal
Actually a flat tax of even 10% on earned and unearned income with no loopholes and to include a reasonable corporate tax (corporations not only often don't pay taxes, but also suck up a huge amount of useless corporate welfare) starting over a reasonable poverty line would dramatically INCREASE revenues.

Most of the top 5% of Americans pay a tiny percent of their income in taxes, certainly much less than 10%, and a large number of corporations pay little or no taxes either. Bush has made that situation even worse with his tax cuts for the rich.

The bogus supply-side theory that the best way to address poverty and improve the economy by giving welfare to the rich (and not taxing them is simply the other side of the same coin) is inane. That policy, followed faithfully starting with Reagan and even adhered to by Clinton (sadly) and continued to this day through Dubya has created an ever increasing gap between the 'rich' and the 'poor' and shovelled millions of Americans into poverty also at an increasing rate.

Those policies have indeed helped the ruling class in this country who control our government. The income of the top 10% has skyrocketed. And as noted, the middle-class have indeed been losing ground.

I would support a flat tax that included all earned and unearned incomes from individuals and supplied a reasonable rate on corporations. Most of us would, so why do you think one has never been passed? The elite who buy representatives and place them in government to ensure their interests will never allow such a logical change. You will never in your lifetime see a change in tax code that makes the rich pay anything close to 25%, 20% or even 10%. Never.
 

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
Thats not true, the rich are what keeping this country running. They must be pulling something somehow or a middle class wouldn't exist. No, I DO NOT BELIEVE unions are holding that ground, or any type of regulation. I believe in market forces.


Unless, you can signifanctly prove otherwise without stacking the deck.
 

ChristopherHall

Active member
Joined
Oct 1, 2005
Messages
320
Reaction score
10
Gender
Male
Political Leaning
Centrist
What many fail to see about this tax plan is that a single mother with 2 children under 16 would not pay any taxes on her first $23,200. She would only pay a flat 17% tax on the remainder. That means if this woman were making $11 dollars an hour OR below...she would be completely tax exempt. She would pay nothing. A couple filing jointly with two children under 16 would not pay any taxes on the first $36,400. That is quite a deal really. Today families aren't getting that good of a deal.

Many may ask:

Again, where is the differnece made up then? The poor?

No. Let's assume it doesn't bring in enough revenue. The difference would be made up in downsizing Government. Bush has bloated Government to massive levels. We can cut Government spending. The No Child Left Behind business is stupid and way too expensive, besides, it can't deliver. The Office of Faith Based and Community Initiatives, while dear to my heart as a deeply religious man, can go. Massive pork spending would have to be reigned in. Essentially...this plan could put the Federal Government on a diet.

However...if the plan brings a boom....that means more tax revenue. This system would be easier to police thus increasing compliance. The Government may actually make out pretty well.

Also it is important to note that businesses and corporations would also pay a flat rate of 17% on income. No more loopholes allowing multi-million or multi-billion dollar companies to weasle out of paying their fair share in taxes. Some argue that this alone would make up for the difference.

This plan is a great plan for a greater America.
 

mudd

New member
Joined
Sep 23, 2005
Messages
3
Reaction score
0
Gender
Undisclosed
Political Leaning
Liberal
The rich are turning this country into a two-tiered third-world country bit by bit. To a degree, some lowering of the American standard of living is inevitable due to globalization, however it's depressing to see us choose not to inch down carefully but rather throw ourselves head first off the cliff.

Unregulated capitalism is like a game of monopoly. At the end, everyone else washes out.

Falling wages

To compensate for falling wages, Americans have been working longer workweeks, sending a second spouse to work, taking fewer and shorter vacations, etc. This boosts income statistics for families and households -- which conservatives love to cite -- but they are somewhat unreliable, since they do not reflect falling individual incomes. One way to sidestep these statistical problems is simply to measure the aggregate gains of entire income groups during the 1980s:

Percent Increase of Combined Salaries by Income Group, unadjusted
for inflation (1980s) (9)

Income Group Percent Increase
-------------------------------------
$20,000 - 50,000 44%
200,000 - 1 million 697
Over $1 million 2,184

To put this chart in perspective, 85 percent of the American workforce was making less than $50,000 a year in the 80s. And inflation for the 80s totaled about 50 percent, which means that middle class income gains didn't even keep up with inflation. Meanwhile, the incomes of the super-rich sky-rocketed.

The following chart shows an even clearer picture of growing inequality. It shows how large a slice of the national pie for family income was received by each quintile (or 20 percent group):

Share of aggregate family income by quintile (percent) (10)

Year Lowest Second Third Fourth Fifth Top 5%
-----------------------------------------------------------
1980 5.1% 11.6 17.5 24.3 41.6 15.3
1994 4.2 10.0 15.7 23.3 46.9 20.1

Notice that the bottom 80 percent saw a shrinking slice of the pie. Even in the top quintile, all the growth was concentrated in the top 5 percent (actually the top 1 percent).


http://www.huppi.com/kangaroo/L-exploit.htm

Now this is fairly dated material and I have more current material in my files that shows an even sharper drop for the middle class and an even more steep climb for the top 5%. I'll try to find it.
 

Canuck

Well-known member
Joined
Oct 2, 2005
Messages
849
Reaction score
0
Gender
Undisclosed
Political Leaning
Undisclosed
2.7 million mid class jobs gone since 2001

look to Canada for your answers on how to build in a system of checks and balances
the American system is designed to piladge everyone so that the very few can have the good life
by and large the american people are left with less taxes but are burdened with 1/3 people living in destitution
1/3 the elite dont pay near enough taxes
and the dwindling middle class left to pick up the tab
and if it were not enough
lets open the gates for millions of illegals to grab the few remaining jobs that do exist for the poor
third world status Is being brought on to get rid of the natl debt
not to pay it off mind you but to allow america to escape paying anything it doesnt feel capable of paying
the Elite are well insulated with their billions of $
they wont even know america is a third world nation when it becomes one
 

Ether

Member
Joined
Sep 14, 2005
Messages
53
Reaction score
0
Gender
Male
Political Leaning
Private
I want to ask the supply siders a question: Is the goal to maintain revenue levels or increase economic welfare? If it's the former, then making the tax reform law revenue neutral would mean an unacceptably high rate, probably in the range of 15%-20%. I suppose you could make exemptions for low-income groups, but the difference would have to be made somewhere, and in that case it's not really a flat tax.

The real problem here is that many people want to institute a flat tax without adjusting current expenditure levels. Such a proposal will fall heavily on the poor without some form of progressivity.

If the goal is the latter of increasing economic welfare, that can only be done by reducing the tax burden. Changing the shape and form of taxes will not have much of an effect - the level is the important element which must be lowered. I think the supply-siders, the tax-simplifiers and tax-reformers, are using insufficient means to obtain their desired ends.

You need to blow up the boxes - not simply move them around.
 

ChristopherHall

Active member
Joined
Oct 1, 2005
Messages
320
Reaction score
10
Gender
Male
Political Leaning
Centrist
Flat Tax Revolution
Bremer's tax will give Iraq a competitive advantage.
©2003 Copley News Service, 11/11/2003

When I read the headline in The Washington Post that said, "Bremer imposes flat tax on Iraq," I thought how dare the administrator of the Coalition Provisional Authority "impose" a fair, simple, low tax rate on those poor Iraqi entrepreneurs and small shop owners that will promote economic growth and prosperity and give them a chance to get rich without being crushed by taxes. Actually, L. Paul Bremer didn't even impose a single-rate flat tax; he simply ordered that "the highest individual and corporate income tax rates shall not exceed 15 percent," which is perfectly consistent with lower tax rates for lower-income individuals.

What audacity Bremer demonstrated, to achieve in Iraq something we have yet to accomplish in the United States - fundamental tax reform and simplification that has worked so well in Hong Kong for years and is working for Russia under President Vladimir Putin, who cut the top rate to 13 percent.

I only wish Bremer had sealed the economic deal completely by instituting a currency board to anchor the new Iraqi dinar to hard currency reserves or to a commodity base. I agree with Steve Forbes, who said in a recent Forbes Magazine editorial that putting the Iraqi central bank in charge of managing a new floating fiat currency is a prescription for monetary instability and debasement of the new Iraqi currency.

In 1996, I chaired the National Commission on Economic Growth and Tax Reform - the Kemp Commission. We concluded that the income tax system was "impossibly complex, outrageously expensive, overly intrusive, economically destructive and manifestly unfair." Despite the significant progress on capital gains tax relief, dividends tax relief and some modest improvements on individual income tax rates and business expensing and depreciation, the Internal Revenue Service code continues to tax income multiple times and penalizes work, saving, investing and entrepreneurial risk-taking.

When the Kemp Commission issued its final report, the headline in The New York Times read, "Failings of the flat tax." Similarly, Paul Samuelson wrote in Newsweek about "The flaky flat tax." In that article he maintained that Republicans were "peddling the illusion that a flat tax will ignite a burst of economic growth that will wash our hardest choices away." He smugly concluded, "It won't."

Along those lines, William Gale of the Brookings Institute argued, "It is completely implausible that improving incentives to work, save and invest in a system that has already moved a long way in the right direction would make a significant difference to growth." Thus, he concluded, "The flat tax is fine in principle ... but could you make it function in the real - that is, messy - world of politics?" As a matter of fact, yes, as several countries are demonstrating.

Since instituting a flat 13 percent personal income tax, the old Soviet bear has been transformed into a raging bull. In 2001, income taxes rose 47 percent, 28 percent if adjusted for inflation, and in 2002 real tax revenues rose another 20 percent. During this period economic growth averaged about 4.6 percent while many other countries' economies around the world continued to stagnate or contract. Even The New York Times begrudgingly conceded, "Russia imposes flat tax on income, and its coffers swell." Before Russia adopted its flat tax, countries that had adopted a pro-growth tax system were small city-states like Hong Kong and small countries including Latvia and Estonia, all of which benefited from the flat tax.

Following the success of the Russia model, the Ukraine has recently passed legislation that would scrap a five-tier progressive tax scheme with a 13 percent flat tax.

Regional tax competition spurred by the success of the Russian flat tax has compelled Communist China to consider adopting a flat tax by reducing their 45 percent top personal income tax rate to a more reasonable 20 percent. In the 1980s, Prime Minister Margaret Thatcher and President Reagan enacted tax rate reductions that forced countries around the world to cut tax rates in order to remain competitive. It would certainly be ironic if former Soviet Russia and Communist China were the catalysts of pro-growth economic policy at the beginning of the 21st century.

With a new 15 percent maximum tax rate taking effect in January 2004, Iraq will have a competitive advantage over regional competition. In Saudi Arabia, the top income tax rate is 30 percent and the top corporate income tax rate is 45 percent. In Iran, the top income tax rate is 54 percent, as is the top corporate tax rate. And Syria has a top income tax rate of 64 percent.

In addition to their burdensome tax systems, all of these countries are not free politically; they are protectionist, and they all are marked by extreme government intervention in the economy. When full political sovereignty is returned to the Iraqis, they will be able to decide for themselves whether to continue with the pro-growth, pro-entrepreneur tax system Bremer has "imposed" on them - or to raise taxes.
 

Iriemon

Banned
DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Canuck said:
2.7 million mid class jobs gone since 2001

look to Canada for your answers on how to build in a system of checks and balances
the American system is designed to piladge everyone so that the very few can have the good life
by and large the american people are left with less taxes but are burdened with 1/3 people living in destitution
1/3 the elite dont pay near enough taxes
and the dwindling middle class left to pick up the tab
and if it were not enough
lets open the gates for millions of illegals to grab the few remaining jobs that do exist for the poor
third world status Is being brought on to get rid of the natl debt
not to pay it off mind you but to allow america to escape paying anything it doesnt feel capable of paying
the Elite are well insulated with their billions of $
they wont even know america is a third world nation when it becomes one

Canuk, you are entitled to your opinions, we are happy to debate them, but when you say the same thing over and over again, it loses impact and I think folks will start to discount what you post.
 

Iriemon

Banned
DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
ChristopherHall said:
Flat Tax Revolution
Bremer's tax will give Iraq a competitive advantage.
©2003 Copley News Service, 11/11/2003

...

When full political sovereignty is returned to the Iraqis, they will be able to decide for themselves whether to continue with the pro-growth, pro-entrepreneur tax system Bremer has "imposed" on them - or to raise taxes.

Perhaps when the author retires can go to Iraq and rely upon their social pension and health programs.
 
Top Bottom