Dems should endorse flat tax

[queeg]

http://www.chooseflattax.com

Short, sweet, simple---no bs

I would however like to see the same tax rate applied to imports ---ALL IMPORTS including intelectual type imports that get all these companies processing checks in India and the like.

The time has come for the Democratic party to take some serious looks at proposals to completely change the American government--Let the Repugs be the party of unchanging repression.

This flat tax is suggested and trumpeted by Steve Forbes, but I see NO reason that a genuine good idea cant be run with in a party willing to listen and take action of the good ideas of EITHER party---again let the Repugs be the party of Old government and refusal, while we become the party of the future.

$35,000 -filing jointly with 2 kids under 16
refund of $1,898.00

sound reasonable---try the tax calculator on the site to see how you fare before just regurgitating NO,NO,NO,NO like a broken record

[GetTheRightVote]

1. It is to easy for the wealthy to get out of paying taxes with loop holes

No way, I vote no to flat taxes

[Maple]

2. A flat tax

wouldn't have any loopholes

[BrendaStarr]

42. Drop the credit for the real estate interest.

It would be the only fair way.

[1932]

73. How about a progressive tax rate with no loopholes? For fairness's sake.

A flat tax and no loopholes don't neccessarily go together and progressive rates with fewer loopholes aren't mutually exclusive.

[oscar111]

3. 27% tax on everything a poor man buys? No good.

before WW2, only the top ten percent paid income tax. IIRC.

Clark, in his run for the prez, suggested a highly similar plan.

Oh, and also nix the current flat tax, the sales tax.
Why should a homeless man pay ten dollars tax on a yearly income of a hundred ? He needs every penny. He deserves every penny. And more besides.

=================
banish all flat tax.
==================

Only progresssive taxes wanted by me.

Hope i convinced you, mon amigo.

[queeg]

6. obviously you havent even looked at it.

Typical Knee-Jerk reaction

The tax is 17 percent, and does not even kick in for a family below 45,000 or so----think you can live with that---and as far as sales tax, this is NOT a sales tax. Nor is it VAT tax. this is just the April 15 tax. ---you want lower sales tax, you bitch at your state government---ours in 8 3/4 percent here in texas, and about to go to 9 1/2 if the idiots get their way.

[The Magistrate]

11. That Number, Sir

Would bring in nowhere near enough, applied to wage income, to replace the current income tax revenues.

A sixth part tariff on all articles imported is an interesting proposition; it would be an increase on some and a reduction on others. Calculating the value of services performed off-shore, such as customer relations and check processing, would be a source of unending delight for the cynical, but it would need to be done to tax the result.

If you are looking for a radical tax plan for the Party, Sir, a superior one would be to eliminate the difference between tax rates on wages and on capital gains, with an exemption to the later for sale of a primary home, or transactions relating to a retirement account or pension plan. For garnish, remove the cap on F.I.C.A. applicsation to earnings, and apply it to any exercise of stock options given as compensation to management, and to other non-wage perquisites of executive life....

[ProfessorGAC]

51. You Are Correct, Sir

The number needs to be around 28% if the first $45k is excluded. That however, requires ZERO deductions of any kind. (Dependent care excepted.)

My revenue neutral plan calls for the first $40k exempt, per household, and a 26.5% rate which should bring in exactly the same amount as the gov't takes in today. 17% would create a GROSS shorfall. Deficits would be EPIC.
The Professor

[evlbstrd]

13. Douche!

No text really required, but I must reiterate: Douche!

[Maple]

7. Show us what you make

Send us X %

Anyone making below a set level...no tax at all.

[1932]

74. Clark's proposal would have lowered Clark's and Theresa Heinz's inc. tax.

His plan was to start income tax at $50,000 but not touch capital gains or dividend tax.

Many super-wealthy people make almost no earned income and get all their income from capital gains and dividend income.

[Tweed]

4. NO NO NO NO NO!

[queeg]

8. Typical Knee Jerk reaction

Did you even see if you would pay less?

[expatriot]

17. how's this for a typical knee jerk reaction....

What would a flat tax do for tax revenue? Who cares if you'd pay less?

What do you have against progressive tax brackets? I could launch into a defense right now but I have to go to bed. It is past time already.

[Telly Savalas]

62. Progressive tax brackets are too complicated.

Maybe you're a fancy-schmancy tax lawyer, but after I've computed taxable income it's just SO HARD to flip through the tax booklet to see what I owe. Not only to I have to find my taxable income in the left hand column, but BIG GOVERNMENT forces me to look at the corresponding tax next to it. Then you know what I have to do? I have to write it down on my tax form! It's too complicated! A flat tax would be so much more simple!

[ProfessorGAC]

67. It's "Hard Work" Reading A Table, Isn't It?

Good one, Telly.
The Professor

[ProfessorGAC]

56. The Proposal Is Economically Flawed

I've done work on tax rate proposals for many years. There's no knee-jerk in my reaction.

This proposal is NOT revenue neutral and will result in shortfalls to the gov't of epic proportions. The rate is not nearly high enough, even if ALL deductions of any kind were eliminated. 17% is nearly 11% short of what would be needed, and that's if the exemption was maintained at $42k, not $45k.

There are lots of folks here who know quite a lot about fiscal policy and economics. You need to lend more credence to the opinions.
The Professor

[Tweed]

72. I don't care about paying less

I care about other people paying more.

[zalinda]

5. Well, I would be really screwed

and I make so little money that I qualify for medicaid. My income from a small business, is mostly wiped away from my expenses. But, none of that would be taken into consideration. And, of course, the people who make out the best is the rich.....again. If the rich people and corporations paid their fair share, the rest of us wouldn't have to pay so much.

zalinda

[punpirate]

9. It's a horrible idea...

... and has been hashed around here many, many, many times.

Why do you think one of the craziest (and richest) men in the country is in favor of a flat tax? Because it will do him good, not the rest of us.

The only problem with the present system is that Congress has larded it up with tax benefits for corporations and abandoned a true progressive tax system in the early `80s. Our problems stem from that time, and for those reasons.

Short, sour, all bs.

[queeg]

10. Typical Obstructionist thought--nt

[punpirate]

18. Disagreeing with someone is...

not obstructionist. Now, you've pissed me off. You hand someone a link to a site supported by the right wing and tell me I ought to jump on the bandwagon because you think it's a good idea, and then you excuse the fact that it's supported by the very wealthy, and then ignore the obvious.

Are you aware that there are two purposes to this--not only to reduce the taxation on the wealthy and shift taxation to the middle class, but to also starve government--reducing tax revenues to the point that they only support defense? That latter aim is accomplished by selling the people on false numbers.

Now, here's a link for you--it's the Citizens for Tax Justice analysis of Steve Forbe's plan:

http://www.ctj.org/html/forbesd.htm

[queeg]

24. Let me piss you off more

I think any plan where millionaires actually pay taxes to be a good one--- I wan this government and hopefully a Democratic one next go around to explore why the wealthiest american pay less than a fair share of the taxes of this nation.

Perhaps you are a millionaire who pays no taxes---perhaps you are one of those fancy pants florida residents with three houses and 3 bankruptcies---I think you might be scared because if something like this were to happen YOU night have to actually pay tax? It's the rich SOB's like you bringing this country dow--so why not pay a little tax huh?

[punpirate]

31. I suggest you find...

... and read Robert Cay Johnston's Perfectly Legal. (On edit, I say read it because it corroborates what I've said previously about Congress and its tendency over the last twenty-five years to skew the tax system in favor of the very rich.)

And, you're under some misapprehension about me being a millionaire who pays no taxes. The reason I say what I do is because I understand the tax system--and its history--far better than someone who tripped over Forbes' ideas yesterday and got suckered by them--probably because he thinks, erroneously, that he's going to save a few bucks.

Cheers.

[muriel_volestrangler]

59. So, your problem is with tax emptions, not progressive taxation

If you think that millionaires aren't paying their share, then why try a system which limits the amount they might pay? Obviously, if they're paying less than they ought to, it must be becasue they are using exemptions to decrease the amount of income that is subject to tax.

So the cure is to get rid of the exemptions. Decreasing the top tax rate doesn't make millionaires pay more tax on its own. It would only do so if you abolished the loopholes. So, abolish the loopholes, and use a progressive tax system as well.

[alarcojon]

70. Abolish the loopholes AND use a progressive tax system

If we can abolish (or at least minimize) the loopholes for the wealthy and super-wealthy with a flat tax, why wouldn't we be able to do it with a progressive tax? The numbers would have to be determined by competent economists, but make the poor pay no tax, the lower middle class a small amount, the upper middle class more, the wealthy more, the mega-wealthy more.

I suspect the problem is with the feasibility of closing the loopholes for the wealthy.

[1932]

75. Millionaires already have flat tax. Top bracket starts at roughly150-300k

depending on whether you're married. For someone making millions, what happens below 150k doesn't really matter too much. So, to them, it might as well be a flat tax, and it goes from 150k to ifinity.

If we had brackets that increased even in tiny increments above 1,000,000, we could have lower rates on incomes below 1,000,000.

And what would really make a difference would be progressive rates on captial gains and dividends.

[rman]

55. you sound like a broken record. n/t

[OneBlueSky]

12. progressive taxation good . . . regressive taxation bad . . . n/t

.

[spindoctor]

14. My first reaction was no way, but after giving it some thought...

...your proposal might have some merit.

First of all, a flat tax is still a percentage, so the higher incomes will still be contributing more.

Secondly, this could be the basis for a tax system that is so simple that there will be no room for loopholes.
This might lead to a higher revenue, even though everybody ends up having to pay less. The difference being that now EVERYBODY pays.

You also bring up a good point about outsourcing. Profit from outsourcing is money taken away from Americans and put in the pockets of a small group of shareholders.

Does anybody have some decent numbers to support pro and con arguments?

[expatriot]

21. the idea that revenue would increase is insane.

it is the biggest libertarian lie in the book.... "if people were taxed less they'd spend the extra money and it would help the expand the economy."

When governments tax a trillion dollars in taxes.... what do they do with that money? They spend it... paying salaries to federal employees, buying computers and pencils, it all gets spent and the money circulates back into the economy just as if individuals had kept it. It does not affect HOW MUCH money is spent but rather WHO spends the money and for what. The bull about "what right does the government have to take me money?" is such crap also... taxation is NOT theft... it is both an insurance policy and an investment.... the more money you make and the more property you own the more you have at stake in the perpetuation of a stable civil society, if there was a societal collapse the only money to be made would be in the drug trade and gun running... much like Afghanistan. Social spending ensures social security (lower case). Now I really have to go to bed.

[spindoctor]

32. No, no, I am not talking about 'trickle down' schemes

Simple tax revenue. How much money do we currently lose in evasive constructions and Caribbean shelters?

I am looking at the possibility that flat tax might be part of an illusive tax reform.

Numbers! Somebody give me some numbers!

[Selatius]

15. Time for some number crunching...

If I'm living alone, and I made 15,000, I only pay $306.00 in federal income taxes.

If I'm living alone, and I made 20,000, I only pay $1,156.00 in federal income taxes.

If I'm living alone, and I made 25,000, I only pay $2,006.00 in federal income taxes.

If I'm married filing jointly and made 30,000, I only pay $612.00 in federal income taxes.

If I'm married filing jointly and made 40,000, I only pay $2,312.00 in federal income taxes.

If I'm married filing jointly and made 50,000, I only pay $4,012.00 in federal income taxes.

If I'm married filing jointly and made 60,000, I only pay $5,712.00 in federal income taxes.

If I'm a corporate entity and file as single and pulled in 1 billion in net income, I pay $169,997,756.00.

If I'm a corporate entity and file as single and pulled in 10 billion in net income, I pay $1,699,997,756.00.

If I'm a corporate entity and file as single and pulled in 20 million in net income, I pay $3,397,756.00.

If I'm a corporate entity and file as single and pulled in 50 million in net income, I pay $8,497,756.00.

You fill in the rest.

[aquart]

16. Bad ideas never die, do they?

Most people figured out it was a scam that only benefited the rich. That's why ol' Steve isn't president.

How are you with that flat earth thing?

[punpirate]

23. Well, Friedman says we now live on a flat earth...

... and when is Tom Friedman ever wrong?

It is, indeed, a scam of just massive proportions. Corporations are just drooling over it because many of the legislative plans proposed eliminating corporate taxes as an adjunct of the flat tax.

But, I beg to differ on Forbes--he isn't president just because of that--he isn't because he's also a friggin' wackadoo.

It's worth remembering at this juncture that Thomas Jefferson was about the first person in this country to figure out the relationship between taxation and democracy. He said in a letter that a taxation system, "rising geometrically," was the only way to keep the wealthy aristocracy from seizing control of the country. And, if experience is worth anything, he must have been right, because the less that corporations and the wealthy have been taxed, the more control they've usurped by using their wealth to that end.

Cheers.

[aquart]

35. Oddly, the one thing our patrician founding fathers didn't want

Was to create an aristocracy. I thank our first George, our real George, the man so great he would not be king. George Washington, Mr. President.

I love those men. All of them. Sniping, disagreeing, creating a government that functioned by compromise, not fiat. I bless their quarrelsome hearts.

[punpirate]

36. That's why the Constitution is as it is...

... they'd seen plenty of how that aristocracy actually operated. By graft, collusion and sucking up to an all-powerful single leader.

The aristocracy wanted to hang onto feudalism for all their worth--you can see a lot of that in the Hamilton branch of the Federalists. And we can see today that this ambition hasn't changed over the years. Much of what the conservatives have obtained in the last twenty to twenty-five years has pushed us closer to a very modern kind of feudalism. Welcome to the serfs `r us economy.

[DemBones DemBones]

19. No, we should oppose it because it's a regressive tax. nt

[Spider Jerusalem]

20. This is a VERY bad idea.

The current tax system is far from perfect, but a flat tax is hardly a good replacement. It would result in reduced revenues at a time when there are already massive deficits; under the current system of progressive taxation, those in the upper bracket (above $321K/year) pay 35% of their income, those in the next-lowest (above $148K & under $321K) pay 33%, those earning $68K-$148K pay 28%; these simple numbers SHOULD tell you that there will be some significant fall-off in revenues if EVERYONE is taxed at 27%.

The only people I've met who think a flat tax is anything like a good idea are those who are ignorant of how the tax system in this country actually works, who have been suckered by the propaganda of people like Steve Forbes; or else those for whom selfish personal interest trumps the national interest, and who fail to understand the many positive benefits afforded by tax revenues. You know, I don't CARE if my tax rate would be lower under a flat-tax system; the bottom line is that the COUNTRY would be worse off.

[spindoctor]

25. Those numbers don't tell me anything

What percentage of total revenue is collected in the top brackets?

More importantly, how much revenue is currently lost in the top bracket?

Although tax reform is not on the top of my priority list, I do think that it is something that needs to be done. If we CAN make flat tax work as part of that reform (and I'm just wondering what the flat % would be at this time), it might be a brilliant strategy. A "be careful what you wish for" kinda deal.

[Spider Jerusalem]

29. About forty percent of tax revenues...

come from the top ONE percent of income earners.

Perhaps THAT tells you something.

[spindoctor]

33. Yikes

That would do it.

[punpirate]

48. Here's something further to consider...

... in this context. With the tax system as it is (and remember that the wealthy are in favor of a flat tax system, which benefits them even more), as of 2000 (and it's gotten worse since then because of Bush's tax cuts), the top 1% of the population have more accrued wealth than the bottom 90%.

As of this moment, that disparity is probably about top 1%/bottom 93%.

This top 1% and the corporations supplying their wealth are the entities who control your government for their own gain. Is that at all democratic?

Cheers.

[AlwaysQuestion]

58. You're good

You've an answer for all who oppose progressive taxation here and what you say makes sense to me. Thus, it must follow that you must be thinking clearly.

[RUMMYisFROSTED]

63. Thanks for making this point.

Pay 40%
Own 90%




Edit to add: It is THE Big Lie(Coverup?) that CorpoMedia will never tell you.

[AlienGirl]

22. Flat tax would kill me. I tried the flat tax calculator...

Making $16K, the kids live most of the year with their dad and I don't pay child support, I end up owing $476.00. There is NO WAY I could come up with that chunk of money all at once to pay my taxes, and also afford food and rent. The flat tax would kill me.

Tucker

[queeg]

26. so file as head of household---tax--ZERO

and what do you pay now?

[AlienGirl]

28. Now, I get a refund

IIRC it was about $300.

I can't file as "head of household" because I am not financially supporting anyone else.

Tucker

[Warren DeMontague]

27. Hey Queeg-- have you LOST YOUR MARBLES?

Sorry, I just couldn't resist.

I can't believe I'm the first one to say that!!!

Anyway, I will support a flat tax when capitalism (which I believe in, by the way) doesn't make the rich richer and the poor poorer, essentially by default. In other words, never... because the playing field isn't level.

[queeg]

39. Marbles in hand and eating strawberries---nt

[Luminous Animal]

30. I ran some numbers quickly

on some of my clients (I'm their accountant). I have one client whose business nets (pre-tax) about 50 thousand a year, she is a single mom with two kids and about 25% percent of her income is spent on consumables; a flat tax of 25% would equal $3125.00 plus $6200.00 FICA (she's self-employed and pays both employee and employer rate for FICA) for a total of $9325.00 ... a little over 18.5% of her income. I have another client whose business income nets (pre-tax) $160,000.00 per year. She has one kid and, again, spends about 25% on consumables and with a flat tax rate of 25% would pay $10,000.00 plus $11,160.00 FICA (on the first $90,000.00.. rounding up) for a total of $21,160.00 a little less than 13.5% of income. Then, I have a client whose income is $500,000.00 and he has no children. 15% is spent on consumables, a flat tax of 25% would equal $18,750.00 plus $11,160.00 FICA (on the first $90,000.00.. rounding up) for a total of $29,910.00... or under 6% of his income.

Now let's imagine a fabulously wealthy person, let's say that person makes $3 million dollars a year and let's imagine that she spends 25% of her income on consumables ($750,000.00...WOW!) paying a 25% flat tax rate equaling $187,500.00 plus $11,160.00 FICA for a total of $198,660.00. This person would be paying a little over 6.5% of her income. Even if a person making $3 million dollars a year was able to spend half that on consumables, her effective tax rate would be less than 13%. 5.5% less than the person making $50,000.00 a year.

A flat tax is a horribly regressive tax.



(edited for clarity, I hope)

[sweetheart]

34. computerize a progressive flat tax

I think the problem you face, is that the folk you're chatting to cannot
design large scale computer systems, and are not able to consider how
new technologies can play to create a progressive flat tax.

An individual has one or more bank accounts with debit and credit cards.
When these cards get used, a positive identity is established. The
electronic payment system "knows" who is standing there at the cash
register. It as well knows the merchant and the class of items being
purchased, such as consumables/food/rent/clothes, or grande frappiattos.

In real-time, it is possible for the payment network to assess the tax
based on the individual's tax profile and charge it in real-time at the
Point of Sale.

Similarly, when a corporation is paying salaries or dividends to
individuals, the same payment network can as well deduct its transaction
tax.

So this is i lot more complex than steve forbes flat tax, because it is
a way to make the flat tax progressive. It is a way for mortgage
payments to be taxed lower for individuals in some income brackets.
It is a way for poor persons to be not taxed.

Ahhh., but what about cash? Well, cash gets the maximum tax rate
when you withdraw it from the ATM. Banks and electronic payments
are ubiquitous, and if they are implicit in the tax system, cash is
an end-around that can be de-incentivized.

What is gained? Well, the network-tax authority would collect all
taxes in real-time, as fast as payments are made. This would involve
policing about 14,000,000 corporations, and NOT 140,000,000 individuals. So finally, the unconstitutional IRS could be taken off
the backs of individuals combined with the tax courts that violate
ones right to a jury trial and horrendous invasions of civil liberty
privacy to police the existing invasive tax regimen.

The democrats could offer a progressive alternative to a steve forbes
proposal, as "we" are technologists who are innovative and progressive..

Getting towards a paperless tax, less erosiion of civil liberties,
less waste from the tax authority, more net collections from the
authority, and the elimination of the fat waste of the paper forms
and the economic charge of burdensome complex piles of paper....
these are all things that democrats SHOULD champion..

And i wholly agree with you, that Democrats should leap in and steal
the thunder of the pukes on tax reform, by offering innovative and
technological solutions to what is really a draconian system of
grossly inefficient waste.

[rucky]

40. WOW

that's the most creative solution to taxation I've ever heard.

Cool.

Links??? or is this your brainchild?

[sweetheart]

41. brainchild

I really think the dems should jump up and offer all kinds of
quality tech tax reform solutions that are more modern and effective
than anything a repuke can design. (or conceive of).

In a recent past life, i was a "financial architect" in the city of
london, and spent a fair amount of time reseraching multinational
payment technologies that allow banks to offer mobile telephone banking
to 1 million simultaneous users. THe computers are now powerful
enough to do impressive things that the legislators are not aware of,
or uneducated to.

[spindoctor]

44. I second that!

Very interesting and original approach.

[PaulaFarrell]

50. this still seems to be a tax on what's spent?

why do you want to tax spending rather than earning? why punish people with more mouths to feed or more medecine to buy? why punish people who live hand to mouth, don't have a bank account whatever? and how do you tax cash in hand stuff?

there a several issues I have with this:

1) the invasion of privacy would be horrendous
2) the cost to business astronomical - they would have to change all their software to be able to collect this tax; the cost to government would be massive - it's not cheap to build the kind of system you to build
3) it would be an inducement against spending at a time when the ecomony ain't that great
4) it would not be fair - tax would not be generated on whether people could afford it but on how they choose to spend it

What's unconstitutional about income tax? I agree that the IRS has too much power, but why not fix the problem itself, i.e. by limiting their power.

Loopholes for the rich - well, just fucking close them, don't scrap the whole system

I have a few ideas on tax reform myself - like get rid of the interest deduction for people/businesses renting out property - why should everyone else subsidize investors in property?

[sweetheart]

57. It is a comprehensive payment tax

A progressive flat tax would not charge for life staples, so that
the feed and medicine you're mentioning would not be taxed, just like
it is not taxed in european VAT. That is why i call it "progressive"!!

You complain about the invasion of privacy of some real-time computers,
and yet you don't mind sending in complex forms every year explaining
all your income sources and expenses... i think you're clueless as to
what privacy is, if that is your defense.

2) The cost to business is manageable, as it is very similar to what is
called in banking "CLS" continuously linked settlement. It is already
done today, and not some rocket science thing. I could build such a
system myself, redundant, hardened and deployed nationwide for 100million
dollars.

3) A progressive sales tax is not economically limiting, and we note that
you are defending blatant consumerism as the basis of your economics.
It is a fair tax, where the people who HAVE the money are taxed when
it changes hands. Countries in europe that are using flat taxes have
higher economic growth than the USA anyways... so your argument is bunk.

4) It is inherenlty fair to tax people who "HAVE" the money when they
spend it.

Let me explain how the "income" portion of this network tax solution
would work to better clarify. THe computer network would know your
previous year's "income", exactly like the paper-system today. Given
this basis for your income, it would generate "this year's" brackets
based on last year's income... and when you purchased a new stereo
system, you'd get your tax bracket's rates at the point of sale.

What is unconstitutional about the IRS system? The constitution
guarantees a trial by jury. THis is overridden in the tax courts of
the IRS. The constitution provides illegal search and seizure,
whereas the tax authorities have draconian search and seizure powers
that operate outside of the legitimate court system. I guess you
don't consider those bill of rights things like trial by jury much
consideration.

The CURRENT system is not progressive. The rich avoid paying tax,
and the poor are put to the squeeze... and just another round of
paper fiddling will not fix anything, as much as "close the loopholes"
sounds dramatic.

The point to tax is when money changes hands. This is always between
bank accounts except for petty cash economy. Your interest rate
deduction could be implmeneted in a computerized tax system, by
simply taxing the payment when it happens... but the need to file
massive forms for previous years, to pay an army of tax advisors,
tax accountants and all that crap is just overhead that burdens all
the persons in an economy... and it is waste, pure and simple.

[PaulaFarrell]

71. Still regressive

You cannot claim a tax is progressive just because it exempts certain things, it is simply a regressive (or neutral) tax that doesn't apply to all things. A progressive tax increases with increased wealth. That is it's definition. So the current system IS progressive, even if some people get out of paying.

Just to clarify, I did say that if the IRS has too much power, that should be rectified. That doesn't make income tax unconstitutional, just the way it's carried out.

Your system would not know last year's 'income', it would know last year's expenditure. It would not know if the number of your dependents has increased or whether you've lost your job and are living on your savings, or whether you've had to sell your car to buy food. In fact, any system of taxing all sales (excluding medecine and food as you've said) is essentially double taxation on high-value items like cars, where you're taxed when you buy it, and then taxed again when you spend the money you get for selling it.

Thanks for calling me clueless. Really elevates the debate. The vast majority of people file very simple income tax forms. You don't have to give a record of your expenditures except as they relate to itemised deductions. Don't want the government to know? Don't itemise. But the system you're describing sounds like one where the US govt would know every single purchase made by you, and when, and where. Supermarket databases have already been used in criminal cases. You really sure you want the government to know every single place youi go and what you do there? I don't. You also propose to penalise cash purchases. I mean, what the hell is that about? Why do you want to coerce people into living on plastic if they don't want to?

VAT does apply to food in some EU countries, BTW. But it certainly hasn't replaced income tax.

So you can build a system for 100 million dollars (I call that expensive by the way). How much will it cost to link every single little mom and pop shop in the country to that system? Many of whom by the way, aren't even computerised.

I am not defending blatant consumerism. I am anti-consumerism to be honest. So maybe I shouldn't have included the objection about dampening spending, except for the fact that the US ecomony is teetering at the moment, and something like this would probably finish it off.

It is not a fair tax, because rich people like the Gates and the walmart clan can just keep accumulating money without paying their share. And suppose they choose to bu an island with it? How is the tax going to be collected on that? Suppose they suddenly decide to buy everything in cayman or somewhere else? How do you propose to tax that money? They would do very well (and it probably wouldn't take them long to figure this out) by collecting all their inomce tax-free in the US, and then living abroad in a country where there is very little sales/expenditure tax. Talk abbout one free ride. Any plan that ditches income tax is a very good way of putting more money in the hands of the rich.


I don't see how closing loopholes is 'paper fiddling'. I know it wouldn't be easy because all the corporations and rich people would be against it, but that doesn't mean it couldn't be done.

[sweetheart]

84. Progressive

A transaction tax is not a sales tax. You're discussing a sales tax.
It would be on payroll as well, and given that it would know you're
"income", it would be able to adjust rates for more income, the very
definition of progressive.

Payroll is a transaction, don't forget, and a comprehensive transaction
tax would charge across the economy based on progressive rates.

You're right, that it would not "know" about your dependents, as the
tax would be 100% implemented by computers. And if you think that's
impossible, think again about all the "visa" card signs in all the shops
the world over. It is very possible.. and 100 million is cheap when you
consider what's involved. For a reliable system, it would need to be
sited in several "war-proof" bunkers, and connected to all financial
payment networks through swtich adjunct processors, much like a complex
service on a telecoms network.

But i figure that you're not-getting the idea on purpose, because you're
exhibiting knee-jerk rejectionism that the original poster was on about
regarding any proposals for reform that are truly innovative.

In terms of privacy, having a computer deduct an instantaneious charge,
much like is done today on a debit card, what is the difference?
Are you saying that you trust your bank to invade your privacy but
your elected tax authority is not worthy of that same trust... so
only private institutions are trustworthy?

There are no ways to close the corporate loopholes, and if you ran
a corporation or two, as i have and do, you would be aware of the
tremendous leeway involved in filing corporate taxes. An expense
is just another word for a perk depending on who's judging what it
is... and this ain't changing. Have you not travelled to a fancy
resort in hawaii for a corporate opulent party and had all of it
expensed?

Under my tax idea, it would all be taxed. Under the existing rules,
it is all not taxed.. some progressiveness, eh?

I admit, there are 2 open questions, one of which you address...
what about dependents... how does this affect the progressive rates?
Good question, and i think that it would take informing the tax
registry of a household... merely how many people are living off
of an income and what their taxpayer identifiers are (so. sec.).
The comptuerized system will never know anything about you, as it
will all be computers, no human eyes.... and this is not quite the
privacy invasion that VISA has, or that most other data resellers
ahve.

The second issue, is how to deal with expensed items, like when you
went to a 5 star hotel on business and ate a fine meal with a client.
This, however, would simply be passed on to your corporation by your
expense report claim. Then does a corporation with poorer employees
pay less on the claim than one with richer employees?

I think this can be sorted, by the corporation assuming the
"beneficiary" status of the expense payment, and paying any additional
tax obligations that "it" would owe if it were the counterparty
on the expense.

WE don't have the will in congress to fix the tax code for the
nth time as democratic minority. We DO have the ability to hyjak
the republican reform momentum with innovative progressive ideas.

I'm sorry to imply you clueless, but really the politics of this
reform involve more than old thinking, and this is not clueless, but
good hearted on your part, yet it will get us nowhere... and in a way
sort of naive.

Think like a neo-dem, a democratic radical loosened from all chains
of previous convention, and if you could fix the tax code, would you
not use comptuers??? I've paid 1000's of dollars for CPA's to fill
out complex tax forms... wasted money... its time for a change and
if the democrats are too stuck in the mud to fix things then i
certainly won't fault the republicans for giving it a try. I loathe
the bastards, but at least they know the system needs an upgrade.

[rman]

54. progressive flat = contradiction in terms

it's kindof like "honest lie".

[sweetheart]

82. how about "comprehensive payment tax"

I agree that i'm not really discussing a flat tax as much as a universal
transaction tax. The one quality it shares with the flat consumption
tax is that it is univerally applied. Outside of that, the consumption
taxes they've been discussing are not universal, and do not apply to
"some" transactions. I don't see any "exempt" transactions, that all
payments are taxed.

It would basically be a huge spreadsheet table, with 1 axis being the
tax brackets and the other axis being the sorts of transactions and their
tax rates.

It is, however, as was my origina point, a very modern, technologially
hip, progressive tax idea that is bettter than anything the republicans
have on the books. We can beat them at this game of progressive
taxation evolution given computer and communications technology in 2005+

[publius_jr]

37. Aye.

For those of you criticizing the flat tax because (i) it is
not as progressive as our current tax or (ii) it would
diminish the revenues of our nation, I urge you to read the
following article by the NYT.

http://www.commondreams.org/headlines05/0605-01.htm

You may find it interesting that "[u]nder the Bush tax
cuts, the 400 taxpayers with the highest incomes - a minimum
of $87 million in 2000, the last year for which the
government will release such data - now pay income, Medicare
and Social Security taxes amounting to virtually the same
percentage of their incomes as people making $50,000 to
$75,000."  Ours is hardly a progressive tax.  In fact,
the great burden of taxes falls neither upon the very rich or
the very poor but upon the upper-middle class laborers.  Their
burden will increase significantly in the near future with
inflation pushing the Alternative Minimum Tax upon them.  But
as the great portion of their income is due to labor rather
than appreciating stock or dividends, they will pay the high
progressive rates that are everywhere advertised.  As a news
flash to the many flat tax criticisers, your beloved
progressive tax does not apply to the rich, for as they are
rich because they have many assets and much capital, the
great portion of their income is the reward of capital rather
than labor--hence exempt from the "progressive"
scheme.  The progressive tax only applies to those who are
not rich yet but are trying to get there, i.e. the laborers,
and its very presence reduces the value of their labor. 
Ironically, it is usually this person (aside from the very
rich dividend recipient or the very poor welfare recipient)
who most abhors the flat tax and loves our
"progressive" tax.

As for the matter of a flat tax diminishing our revenues, I
have two points.  One, if a flat tax did indeed have this
effect, I think there is ample bloat in D.C. that we could
cut.  Secondly, and more importantly, the revenue may not
diminish greatly under a flat tax.  The reason is the same as
in the above paragraph, namely, that the rich do not now pay
the high "progressive" rate that our current scheme
advertises.

In other words, do not dismiss this idea just because some
rich people like Forbes and Trump support it.  If you do, the
clever neo-con might get some other famous rich people to
support other matters they themselves actually oppose.  The
arguments I've seen against the flat tax are as silly as the
following exchange:

DAUGHTER:  Mommy, why do you so vehemently oppose world
peace.
MOM:  'Tis a matter of simple logic, hun.  First, the
rich-man Steve Forbes supports world peace.  Now, you and I
know that we are anything but rich.  Therefore, his
motivations must be opposed to ours.  Whence, it follows but
logically that we non-rich need war.
DAUGHTER:  With that type of logic, no wonder we're poor!

[queeg]

38. Beautiful---KUDOS for that---nt

[punpirate]

49. And, you might add...

... that Johnston's article does not mention the flat tax, a consumption tax, or Forbes' ideas--and doesn't advocate any of those things. What he does say is that Congress has created a tax system which is much in favor of the very wealthy. That does not automatically suggest that a flat tax, or a consumption tax, is the preferable means of solving the problem.

Now, simply, if there's a change to a flat tax, who's going to do it? The same Congress providing all these exceptions to taxation for the very wealthy and for corporations over these last many years. They aren't intending to create a system designed to be more equitable for all. Look at where their previous interests have lain.

Anyone who believes that a flat tax system is of benefit to the ordinary worker is either in cahoots with the rich or is deluded.

And, on edit, I have to ask this question once again, which none of the proponents of a flat tax have answered directly: why are the very rich so much in favor of this taxation plan? The answer is obvious, but it is being assiduously avoided by the proponents. C'mon, folks, give me a serious answer why the extremely wealthy want this so badly.

[AlwaysQuestion]

61. Yes!

Utilizing common sense. How exceedingly novel these days.

[rman]

66. "not as progressive as our current tax" LOL

The current system is regressive: tax cap, no taxes on dividends, no taxes on estates - all things that benefit the rich, who act as though they'd be poor if they'd have to pay any more taxes then they do now (which is virtually nothing).

And now people are proposing to make the system even more "non-progressive". Interesting.

[1932]

76. The burden now falls on middle class BECAUSE we have de facto flat tax.

That's what a flat tax does.

Progressive taxes spread burdens fairly by asking for a little more from people who have more money and therefor have a lower value of an additional dollar in income.

Flat taxes assume that everyone values another dollar in income the same, no matter how much income you have.

We have a top earned income rate that starts at about $300,000 for a married couple. Bush wants to cut that down to $150,000. That means that we have a flat tax on income that starts at $300,000 for two working people. That means the farther you get above that threshold, the lower your tax burden is relative to someone close to that threshold. Throw in the fact that we tax capital gains and dividens at flat rates (which is the way people who make millions get their income, unless they're actors, musicians, and professional athletes) and you have the recipe for why common dreams is reporting that the tax burden has shifted to the middle class.

And people who say they want to write into law the defacto flat tax on income are just throwing more fuel on this fire.

[donheld]

43. in a word NO!

It's far too late at night for math so at least for now NO!
How dare you give me math homework this late at night

[TomClash]

45. I'm for it if . . .

. . . every "person" pays it, including corporations. And we pass regulations and allocate money for progressive policies I want to replace the current tax policy regime.

If it is a "flat tax" why are there deductions for children and separate tax statuses for married and single? Once you have deductions, every lobbyist is going to want one.

Why not have a progressive income tax with no deductions, starting at zero and rising to 35%?

He forgets payroll taxes, a pretty big part of the federal tax equation.

[bdot]

46. I love doing my taxes each year.

I'd hate to just put a percentage and be done. I enjoy filling out all the forms and watching the numbers change back and forth.
Plus I believe the rich should be paying way more. Why force the poor to give up money they don't have when the rich have way too much.

[WinkyDink]

47. This is THE most regressive tax

Terrible idea.
It would have to start off incredibly high, and it would continually be raised (how else to pay for Bush's debts?).
No, sorry; 25% of a minimum-wage job just ain't the same as 25% of the money held by the readers of "Unique Homes" magazine. The ones who, according to Vanity Fair mag, are upset that the world is running short of yacht slips (I kid you not). Etc. ad nauseam.

IF Forbes, Bush, Trump, et al. want to really help out, they can campaign to INCREASE THEIR OWN LEVEL OF TAXATION, and leave the rest of us the hell alone!

Who could POSSIBLY believe that Forbes, who passed on the chance to promote revamping the tax system so that the wealthy would pay their fair share---you remember, some of you, back when Reagan lowered the top bracket?---would advocate ANY system other than one to keep his $$ while having others pay more of theirs?

Does P.T. Barnum also endorse this flat tax cockamamie notion? "No loop-holes"? HAHAHAHAHA! Yep, I can hear Cheney/Halliburton howling hysterically from here!

[Caution]

52. Biggest load of crap ever.

The flat tax has no hope of succeeding. Forget it. The only people this helps are the wealthy and it guarantees the type of government the right-wing is simply dying for, one where the only expenditure is defense. As a liberal I believe that the government can be a great tool for helping the average citizen and that means social programs, jobs stimulation, regulation of business all of which require tax revenue.

The whole point to a progressive system is that the poor don't get screwed by paying a higher percentage. Take this libertarian crap and shove it.

[rman]

53. So, what's wrong with progressive tax?

And shouldn't taxes also be payed over such things as dividends and estate?

[Telly Savalas]

65. Don't bother asking.

The flat tax fetishists will just create a giant smokescreen about deductions and loopholes which have jackshit to do with the rate at which taxable income is taxed.

[Zynx]

60. Problem is that a flat 15% hurts someone making $25,000 much more

than 15% hurts someone making $500,000. A study of microeconomics would tell you that.

[dsc]

64. You are mixing up two things

Simplicity and progressivity. The reason taxes are complicated are all the deductions and exemptions that are written into law, none of which have an iota to do with progressivity. The rates are taken care of by the table in the back of the book. In any case they only covert a linear function into a piecewise linear function which is no harder to calculate (basicly you do the same type of formula three times instead of once and add the results). I think there is a legitimate case to be made for getting rid of many deductions but that is seperate from progressivity.

On edit: If you wonder what a piecewise linear function looks like print a v or a w on your paper, both are piecewise linear fucntions.

[karynnj]

68. Their tax calculator can't be right

Until you have legislation, you won't know the rate. Until there is legislation, you don't even know what they define as income. It would be naive to assume that the flat tax will pass in its purest form - with no deductions. The improvement you see is because you are comparing a pure flat tax to the graduated tax with LEGISLATED LOOPHOLES (deductions) which benefit the rich more than the poor or middle class.

Different types of income are also treated differently - I pay a lower percent on capital gains and on dividends than the highest marginal rate I pay on income. Obviously, the very wealthy who have much more of their income from these sources will have a lower tax percent than a typical middle class person.

At the lowest income levels, there is already a flat tax (ss and medicare), which they pay for the full year unlike people who go over the threshold. For the lowest income, federal income tax is zero. As a Democrat, I would not be for having these people pay an extra percent.

The flat tax argument is really for a simplified system that simply appies a % to income - with no regard to how the money is then spent. You could retain the graduated nature of the current system by applying a set of graduated percents to income. Politically, it would be a non-starter as each group will argue against the loss of their deductions.

[newportdadde]

69. I click on that link and see Forbes mug and a Trump quote.

That should be your first clue. If a RICH person(who inherited all there money and never earned it, both of them) comes up with an economic plan in general it is NOT good for normal people. I mean Forbes... Steve "Fox News Sunday, Dow up up up" Forbes is trying to sell you a tax plan think about that.

Also the revenue generated with this would not produce the same revenue as todays taxes. So let us know what we are going to cut.. it sure as hell won't be the military. The idea you like this because you pay a little less is like the idiots voting for bush because they get 500 back and then in turn spend an extra 2k on gas, health etc. DUMB.

[Pobeka]

77. No loopholes!

Yes, I'd take a flat tax with no loopholes.

The arguments for and against a flat tax all depend on whether or not loopholes are in place.

What we have now with a "progressive" tax rate, is worse than a flat tax, i.e. the rich pay less % than the middle class when you look at what they actually pay after loopholes. And the lower class gets creamed when you factor in sales tax they pay on every item.

On edit:
http://www.ctj.org/html/margfaq.htm

I recall a similar table from over a year ago, which must've included social security taxes, because it was startling to see the upper income brackets actually paid less % than the middle income brackets did.

But if this is the truth here, I'd back off supporting a flat tax.

How about a flat tax just for corporations?

[Jim__]

78. Steve Forbes, forward by Newt Gingrich

Featured quotes by: Donald Trump, Paul Gigot, Sean Hannity, Lawrence Kudlow.

Every time I listen to any of those guys, I know they're on my side.

$35,000 -filing jointly with 2 kids under 16
refund of $1,898.00

Really? What's the guarantee of that? What's the total taxes collected via this mechanism versus the total taxes collected via the current system? And, what is the basis for that estimate? And, if that estimate is incorrect, where do we make up the difference?

Don't tell me I didn't read it. The site offers to mail me the first chapter. Why don't they just let me read it online? And no, I'm not buying a book by Steve Forbes. I've heard him speak enough times to know he's full of shit.

[NancyG]

79. What happens to small businesses?

I am a glass artist and although I sell over $100,000, with the cost of materials and shows I have many deductions, and I net less than $10,000. I pay no income tax, but a fair amount of self-employment tax.

Under the Forbes plan, what happens to my business deductions? On the calculator, I would pay $12.5k. Instead of $0. I live hand-to-mouth now.

[indypaul]

80. Two major objections

as presented earlier by Mr. Forbes his flat-tax proposal
would exempt interest, dividend and capital gains from
taxation. In other words, more of the trickle down
BS from the supply siders. As described by J K Galbraith
this is NOT "trickle down" economics but more aptly
described as "horse and sparrow" economics. In other
words, if you stuff enough into the horse it will
ultimately leave something along the roadside for
the sparrow to eat. Secondly, one of the ideas mentioned
was a single post card sized tax return. What was not
mentioned, at the time, was that this would not be an
annual tax return but would be filed monthly or twelve
times a year. It has been suggested that the ability
to deduct mortgage interest on ones income tax return
adds up to 15% value to ones home. Remove that from
the picture and the housing market which some say is
now shaky would most certainly collapse and find many
instances of mortgages in excess of the market value
of many homes.

[tx_dem41]

81. So, combined with the SS tax, you are for a grossly regressive tax...

system. Are you sure you're at the right website?

[tabasco]

83. We don't have to have capitalism.

A flat tax is one step on the way to getting rid of capitalism.

The super-rich will consolidate all power and a revolution will be inevitable.

People that prefer a stable capitalistic society should plead for a progressive tax structure. But many are too short-sighted or only concerned with their personal wealth.