The Uncensored Tax Plan

[Uncensored2008]

Reading is for the mental.

When Murray Rothbard initially proposed this in the 1980's, he set the threshold at $100K - but 50 years of inflation, the most insidious of taxes, have reduced the wealth of average Americans by half. This is why I included an index for inflation, which he had not.

If we get another Joe Biden and the buying power of the dollar declines to half of what it is today, the threshold doubles to compensate.

 

[ttwtt78640]

Murray Rothbard did a rigorous breakdown and conclusively demonstrated that revenue would increase, because those with high incomes at the time were averaging about a 10% tax rate.

Currently, less than half of income is taxed at all. The difference in a flat tax is that all income from all sources above the threshold is taxed.

Convincing congress critters to get rid of the ‘social engineering’, which is currently the bulk of our (80K pages of?) FIT code, is highly unlikely.

I generally agree with the idea of eliminating all itemized deductions and having a more generous (truly) standard deduction and a single (flat) taxation rate, but adjusting (reducing) taxable income based on how or upon who it’s later spent is a ‘tradition’ insisted upon by (too) many lobbyists.

 

[Uncensored2008]

His plan would generate about 1.4 trillion compared to current individual tax revenue of 2.2 trillion, but that assumes high income earners will not change their behavior under the new tax plan.

I'd love to see your math?

If deductions and exemptions currently make the rate paid on total income for those earning $500K around 10% - which it is, then 300*.4=120 vs. 500*.1=50

The Libertarian plan ends exemptions and deductions.

 

[Uncensored2008]

Sweet. My salary will be 199,999, and I dont want a penny more! It's just enough, but not excessive.

Good luck with that.

 

[aociswundumho]

The Libertarian plan ends exemptions and deductions.

There is nothing "libertarian" about ass-raping the most productive members of society. See post 16.

 

[rickc]

I propose a one line tax code:

All Income of individuals in excess of $200,000 shall be taxed at a rate of 40%. Income below the threshold is not taxed. There shall be no exemptions, deductions, loopholes, adjustments, or any other attempt to alter said tax. Congress shall adjust the threshold to keep pace with inflation every ten years.

Provide rational reasons to oppose this.

All income includes capital gains right?

All income both earned and unearned!

 

[Uncensored2008]

I just love the idea, it will help pay for the bloated military budget while taking away school lunches for poor kids.

Besides, you can't take Grandmas retirement by taxing her social security check, and what fun it that?

 

[Uncensored2008]

So...the OP's plan would supercharge our current deficit spending.

The federal government spends money on a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing. In fiscal year (FY) 2024, the government spent $6.75 trillion, which was more than it collected (revenue), resulting in a deficit.​

​

Fiscal Data Explains Federal Spending

Check out @FiscalService Fiscal Data’s new federal spending page! #FederalSpending

fiscaldata.treasury.gov

I question the math.

And add in 57,000 IRS agents who would no longer be drawing government salaries.

 

[Peter]

The problem with all of these plans is they loot the most productive people in society to bankroll idiot politicians who’ll burn the money on pet projects, vote-buying schemes, or outright stupidity. It comes down to capital allocation - and politicians are objectively awful at it. If they weren’t, central planning wouldn’t be the historical disaster that it is.

Would you prefer the super rich control everything?
They're completely unelected and in your libatarian world completely unacountable so why would they feel any obligation to not be utter bastards?

 

[j brown's body]

His plan would generate about 1.4 trillion compared to current individual tax revenue of 2.2 trillion, but that assumes high income earners will not change their behavior under the new tax plan.

And that they actually pay their taxes, which is by no means a given.

 

[Uncensored2008]

The problem with all of these plans is they loot the most productive people in society to bankroll idiot politicians who’ll burn the money on pet projects, vote-buying schemes, or outright stupidity. It comes down to capital allocation - and politicians are objectively awful at it. If they weren’t, central planning wouldn’t be the historical disaster that it is.

I would argue that the American middle class are the most productive people in society.

Further, for the high income earners, we are only talking about 3%

It's amusing, most of my life the objections I've heard are from the left that flat tax protects the rich. It's unique to get a "flat tax soaks the rich" argument.

 

[TheDoctorWasIn]

When Murray Rothbard initially proposed this in the 1980's, he set the threshold at $100K - but 50 years of inflation, the most insidious of taxes, have reduced the wealth of average Americans by half. This is why I included an index for inflation, which he had not.

If we get another Joe Biden and the buying power of the dollar declines to half of what it is today, the threshold doubles to compensate.

And here I thought you had had an original thought. Should've known better.

I'd love to see your math?

If deductions and exemptions currently make the rate paid on total income for those earning $500K around 10% - which it is, then 300*.4=120 vs. 500*.1=50

The Libertarian plan ends exemptions and deductions.

People earning $500,000 pay an effective tax rate of around 25% in 2025 - the same effective rate they'd have under "your" plan.

 

[Uncensored2008]

Even assuming we're just talking about the income tax side of things, people making in excess of $200k often end up paying more than 40% as it is between payroll taxes, state taxes, and federal taxes. So with the rich paying less and the <$200k earners paying $0, don't you think you'll run into a deficit? Musk is gonna have to do a lot more firings to make it work.

The top marginal rate is 37%

And that is on net income. Net income is the game. By exempting 50,60, or 70% of income from taxation the total taxes paid are often between 10-15% of income.

This has nothing to do with state taxes, other than there will be no SALT deductions, or deductions of any kind. This ends the process of Idaho paying welfare to support California and New York.

 

[Uncensored2008]

Convincing congress critters to get rid of the ‘social engineering’, which is currently the bulk of our (80K pages of?) FIT code, is highly unlikely.

I generally agree with the idea of eliminating all itemized deductions and having a more generous (truly) standard deduction and a single (flat) taxation rate, but adjusting (reducing) taxable income based on how or upon who it’s later spent is a ‘tradition’ insisted upon by (too) many lobbyists.

Social engineering is the entire purpose of the tax code. As you have pointed out, the top 20% pay virtually all income taxes as it is, so what is the point of taxing the other 30%.

Further, for the bottom 50% who already pay no income taxes, the tax scheme becomes one of welfare and bribery. Those who pay nothing in wait eagerly for for their "refunds," free money. It makes them very grateful to government. Social manipulation at it's finest.

 

[Uncensored2008]

There is nothing "libertarian" about ass-raping the most productive members of society. See post 16.

Flat tax is not a libertarian plan?

You heard it here first. folks.

Do you grasp that there is a mere 3% delta between the 37% current rate and the 40% I proposed? Further, the first $200K is is untaxed. So how is this "ass-raping?"

Ah, but we know, because no one actually pays the rates - it's all smoke and mirrors by those who can buy armies of accountants and a few Senators.

 

[Uncensored2008]

All income includes capital gains right?

All income both earned and unearned!

That's right - but not the lefts dream of taxing every stock trade, only the net gains on an annualized basis.

And what do you mean, "unearned?" Those who risk their wealth earn the returns they get.

This eliminates the concept of superior and inferior income. Everyone pays the same rate - equal justice under the law.

 

[Uncensored2008]

And here I thought you had had an original thought. Should've known better.

And here I thought you could post something other than mindless ad hom.

Just kidding, I never thought that.

People earning $500,000 pay an effective tax rate of around 25% in 2025 - the same effective rate they'd have under "your" plan.

Then what do you have to bitch about?

 

[ttwtt78640]

That's right - but not the lefts dream of taxing every stock trade, only the net gains on an annualized basis.

And what do you mean, "unearned?" Those who risk their wealth earn the returns they get.

This eliminates the concept of superior and inferior income. Everyone pays the same rate - equal justice under the law.

That (bolded above) seems to imply the (annual) taxation of unrealized capital gains. If someone buys an asset (e.g. a stock share or some real estate at fair market value, holds it for some period of time and later sells that asset at fair market value then they have only enough ‘income’ to buy that same asset at it’s current fair market value. Essentially, what’s being taxed is that asset’s inflation.

 

[rickc]

That's right - but not the lefts dream of taxing every stock trade, only the net gains on an annualized basis.

And what do you mean, "unearned?" Those who risk their wealth earn the returns they get.

This eliminates the concept of superior and inferior income. Everyone pays the same rate - equal justice under the law.

What Is Unearned Income?
Unearned income refers to any income that is earned passively, without performing work or providing a service. In contrast to earned income, which comes from wages, salaries, and business activities, unearned income is derived from investments or other sources where no labor is involved. Common examples of unearned income, or passive income, include interest from savings accounts, dividends from stocks, and rental income from properties.

 

[aociswundumho]

That (bolded above) seems to imply the (annual) taxation of unrealized capital gains. If someone buys an asset (e.g. a stock share or some real estate at fair market value, holds it for some period of time and later sells that asset at fair market value then they have only enough ‘income’ to buy that same asset at it’s current fair market value. Essentially, what’s being taxed is that asset’s inflation.

The same thing happens with realized capital gains - you get taxed for inflation.

 

[Mulefoot]

I propose a one line tax code:

All Income of individuals in excess of $200,000 shall be taxed at a rate of 40%. Income below the threshold is not taxed. There shall be no exemptions, deductions, loopholes, adjustments, or any other attempt to alter said tax. Congress shall adjust the threshold to keep pace with inflation every ten years.

Provide rational reasons to oppose this.

Because if I earn 250k at my W2 job, I will most certainly buy a cattle farm and annually write off 50k of cattle/supplies building my herd, obtaining a whopping 40% IRS contribution to my venture. I will build my herd, and pass to my heirs, as they enjoy the step up in basis and the sale of the cattle at FMV without tax.

 

[ttwtt78640]

What Is Unearned Income?
Unearned income refers to any income that is earned passively, without performing work or providing a service. In contrast to earned income, which comes from wages, salaries, and business activities, unearned income is derived from investments or other sources where no labor is involved. Common examples of unearned income, or passive income, include interest from savings accounts, dividends from stocks, and rental income from properties.

How, exactly, do landlords neither engage in business activities nor provide a service? Why are their tenants paying them?

 

[Cosmo]

The top marginal rate is 37%

That's to the IRS for regular income tax. You realize people also pay payroll taxes to Social Security and Medicare, as well as state income taxes, right?

And that is on net income. Net income is the game. By exempting 50,60, or 70% of income from taxation the total taxes paid are often between 10-15% of income.

This has nothing to do with state taxes, other than there will be no SALT deductions, or deductions of any kind. This ends the process of Idaho paying welfare to support California and New York.

 

[ttwtt78640]

The same thing happens with realized capital gains - you get taxed for inflation.

That was my point.

 

[aociswundumho]

That was my point.

Oh, sorry.