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Simplified tax?

middleagedgamer

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Congress wants to simplify the income tax system? Well, here's an idea on how to do that:

Revoke the personal income tax in its entirety, and, in its place, have the following procedure:

Take all your income that could potentially be taxable (not all income is taxable, no matter how much of it you make, such as welfare, combat pay, etc.), subtract $4,000 for each household member (currently, the deduction is $3,650), then, subtract all money that you can prove you donated to charity (a simple receipt or proof of a cashed check will suffice this), and take 15% of that, and you have your tax liability.

For, the per capita income in the United States is $40,280. Since it's per capita, that means that we can subtract $4,000 from that, giving us $36,280 in taxable income. Assuming that the household gives $1,280 per capita to various charities, that knocks the per capita income down to $35,000. Personal income tax is $5,250.

Multiply that by the 309,000,000 people in the United States legally (the census only counts legal people), and we have yearly revenues of $1.62225 trillion. That seems a bit much, but, remember, this is grouping FICA, Medicare, and federal income tax all into one. When you factor in all that we're paying in all three of those, currently, you start to see the savings.

Doesn't that seem a LOT simpler and more manageable than the current personal income tax system?
 

tacomancer

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Congress wants to simplify the income tax system? Well, here's an idea on how to do that:

Revoke the personal income tax in its entirety, and, in its place, have the following procedure:

Take all your income that could potentially be taxable (not all income is taxable, no matter how much of it you make, such as welfare, combat pay, etc.), subtract $4,000 for each household member (currently, the deduction is $3,650), then, subtract all money that you can prove you donated to charity (a simple receipt or proof of a cashed check will suffice this), and take 15% of that, and you have your tax liability.

For, the per capita income in the United States is $40,280. Since it's per capita, that means that we can subtract $4,000 from that, giving us $36,280 in taxable income. Assuming that the household gives $1,280 per capita to various charities, that knocks the per capita income down to $35,000. Personal income tax is $5,250.

Multiply that by the 309,000,000 people in the United States legally (the census only counts legal people), and we have yearly revenues of $1.62225 trillion. That seems a bit much, but, remember, this is grouping FICA, Medicare, and federal income tax all into one. When you factor in all that we're paying in all three of those, currently, you start to see the savings.

Doesn't that seem a LOT simpler and more manageable than the current personal income tax system?

Sure it does seem simpler and more manageable, but those attributes don't mean that it would be good or useful.
 

tacomancer

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So, how would it NOT be good or useful?

Well, we will get into philosophical differences here I think. But I think a good many tax deductions are useful and this would remove them.

Specifically, this tax code looks like it would further impoverish poor people.
 
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Korimyr the Rat

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Not to mention, it isn't nearly enough to pay our government's bills.
 

middleagedgamer

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Not to mention, it isn't nearly enough to pay our government's bills.

It is if we eliminate and reduce most of our unnecessary and excessive government programs.

For example, cut the Department of Defense down to an even-steven $300 billion. That will lower government spending by $363.7 billion.

Also, get rid of Medicare and Medicaid and start advocating free market health care. That, that right there, reduces government spending by $743 billion all by itself.

Likewise, remove any departments that are not explicitly provided for in the Constitution, such as the Departments of Agriculture, Health and Human Services, Housing & Urban Development, Energy, Education, etc., and let the states handle them.

The DHHS, alone, will reduce our government spending by $78.1 billion. HUD will save us about $47.5 billion; Education $46.7 billion, and so on.

Not only that, but we have other forms of taxation besides personal income tax, including corporate tax, customs fees, excise taxes, fines paid for crimes, as well as fees paid for optional government services, such as the courts.
 

Areopagitican

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I think it's much better to have the current one where Democrats cry about being "for the common man" while they hand out tax deductibles (ostensibly, for "green" projects) to every corporation from here to General Electric and where Republicans cry about government power grabs while they sit on piles of farm subsidies.
 

tacomancer

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I think it's much better to have the current one where Democrats cry about being "for the common man" while they hand out tax deductibles (ostensibly, for "green" projects) to every corporation from here to General Electric and where Republicans cry about government power grabs while they sit on piles of farm subsidies.

I agree. They need to stop with the tax loopholes and subsidies for businesses. That is one thing I really dislike about both Dems and Repubs.

Unfortunately though, if one of the third parties gets into power, such as libertarians or greens, they will start doing it before too long as well. That's how corruption works. Its the individuals, not the philosophy that is the problem.
 
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Korimyr the Rat

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It is if we eliminate and reduce most of our unnecessary and excessive government programs.

Good luck finding 100 million people who can agree on what's "unnecessary and excessive". I don't agree with a single one of your proposed cuts-- and for once, I suspect that the people are on my side. They might support reducing some of these programs, but most people wouldn't vote to eliminate them.

For example, cut the Department of Defense down to an even-steven $300 billion. That will lower government spending by $363.7 billion.

You just made that number up. What do you know about what the Department of Defense needs to accomplish its strategic objectives?

Also, get rid of Medicare and Medicaid and start advocating free market health care. That, that right there, reduces government spending by $743 billion all by itself.

And leaves millions of Americans with absolutely no provision for essential medicines and procedures. That is not a good policy.

Likewise, remove any departments that are not explicitly provided for in the Constitution, such as the Departments of Agriculture, Health and Human Services, Housing & Urban Development, Energy, Education, etc., and let the states handle them.

"Letting the States handle them" doesn't mean reducing the tax burden or lowering the deficit; it only means transferring the burden for these essential government functions from the Federal government to the States, many of which are already suffering from budget deficits of their own. There's no real difference between paying taxes to your State and paying them to the Federal government, except for which group of elected officials gets to do whatever they want with them.

Not only that, but we have other forms of taxation besides personal income tax, including corporate tax, customs fees, excise taxes, fines paid for crimes, as well as fees paid for optional government services, such as the courts.

And which of these taxes and fees are you not in favor of cutting?
 

liblady

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It is if we eliminate and reduce most of our unnecessary and excessive government programs.

For example, cut the Department of Defense down to an even-steven $300 billion. That will lower government spending by $363.7 billion.

Also, get rid of Medicare and Medicaid and start advocating free market health care. That, that right there, reduces government spending by $743 billion all by itself.

Likewise, remove any departments that are not explicitly provided for in the Constitution, such as the Departments of Agriculture, Health and Human Services, Housing & Urban Development, Energy, Education, etc., and let the states handle them.

The DHHS, alone, will reduce our government spending by $78.1 billion. HUD will save us about $47.5 billion; Education $46.7 billion, and so on.

Not only that, but we have other forms of taxation besides personal income tax, including corporate tax, customs fees, excise taxes, fines paid for crimes, as well as fees paid for optional government services, such as the courts.
so, just let poor and old people get sick and die. no thanks.

and it's certainly NOT in our best interest to have states handle food regulation.
 

rathi

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Making the income tax simpler is actually pretty easy. Pick 5-10 of the most crucial deductions and tax credits than get rid of the rest. Many tax credits may be a good idea on their own, but they simply aren't worth the cost of extra complexity.
 

washunut

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Congress wants to simplify the income tax system? Well, here's an idea on how to do that:

Revoke the personal income tax in its entirety, and, in its place, have the following procedure:

Take all your income that could potentially be taxable (not all income is taxable, no matter how much of it you make, such as welfare, combat pay, etc.), subtract $4,000 for each household member (currently, the deduction is $3,650), then, subtract all money that you can prove you donated to charity (a simple receipt or proof of a cashed check will suffice this), and take 15% of that, and you have your tax liability.

For, the per capita income in the United States is $40,280. Since it's per capita, that means that we can subtract $4,000 from that, giving us $36,280 in taxable income. Assuming that the household gives $1,280 per capita to various charities, that knocks the per capita income down to $35,000. Personal income tax is $5,250.

Multiply that by the 309,000,000 people in the United States legally (the census only counts legal people), and we have yearly revenues of $1.62225 trillion. That seems a bit much, but, remember, this is grouping FICA, Medicare, and federal income tax all into one. When you factor in all that we're paying in all three of those, currently, you start to see the savings.

Doesn't that seem a LOT simpler and more manageable than the current personal income tax system?

What you are describing is a version of the flay tax that has been bandied about for 20-30 years. Actually your proposal is much worse for lower income folks than what convervatives have proposed. That is because the have a greater your 4K exemption.

You may also want to consider that the government this year will spend about $3.8 trillion so your proposal leaves us with a staggering $2.2 trillion deficit.

Back to the blackboard!
 
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