Speaking of taxes........
 

........I would hope that someone could logically explain to me why the "flat tax" concept is bantered about but never given a test. Does the populace not understand the meaning of percentages? Contributing a single percentage of gross income across the board is as fair as it gets and is as old as tithing. What are the arguments against a flat tax scheme?

A dollar against a donut hole says that not a single argument against will hold up to logical scrutiny.

There are actually a lot of people who are against it, I would be there would be plenty of people out of work it we adopted it. The IRS and Accountants would be heavily affected I would guess.

"In embracing a tax overhaul, Republicans will be taking on some of the most powerful interests in Washington: home builders and Realtors facing the possible loss of the mortgage interest deduction; doctors and other service providers who might have to charge sales tax; and hospitals and universities facing the loss of tax deductions for charitable contributions.

Indeed, core Republican constituents such as the home builders' lobby and the National Federation of Independent Business are already gearing up to ensure that no pure form of a national sales tax or flat tax gets enacted. The National Association of Realtors is dusting off a 1995 study by DRI/McGraw Hill that concluded that housing prices would fall 15 percent without the deduction.

A pure flat tax may be politically unrealistic because some common tax advantages are too popular to kill. With each exemption, the flat tax grows. With too many, it would fall of its own weight. Consider a 20 percent flat tax: If Congress decides to retain the earned income tax credit to counter charges that the tax hurts the working poor, the rate must bump up to 20.4 percent, according to a study by economists William G. Gale, Scott Houser and John Karl Scholz. If the powerful home building lobby saves the mortgage interest deduction and philanthropists retain the tax break for charitable contributions, the rate climbs another 1.5 percent, to 21.9 percent.

Businesses are expected to insist on maintaining the deduction for payroll taxes. If they succeed, the rate will soar to 25.1 percent. Once Congress got through all the exemptions that lobbyists would insist the country could not live without, the flat tax rate would exceed 30 percent, said Gale, a senior fellow at the Brookings Institution.

Critics say both plans would raise taxes on middle-income taxpayers, a natural byproduct of lowering taxes for the wealthiest. The flat tax, for example, would exempt investment and savings income from taxes -- lowering taxes for those who own most of those investments. A sales tax would bite hardest on those who have to spend most of their income on household expenses.

For these reasons, many lawmakers are unwilling to embrace a specific plan. Instead, the idea gaining the greatest currency is a bold -- its critics say facile -- plan to repeal the tax code and require Congress to write a new law."

http://www.cnn.com/ALLPOLITICS/1998/...cq/taylor.html

I oppose the flat tax because it would dramatically increase my taxes. I would have been in favor of it back when we were dual income, no kids, and no mortgage, but now we are single income, two kids, and a mortgage. I pay very little in federal taxes and I'd like to keep it that way.

It may seem selfish of me, and I suppose it is, but they taxed the hell out of me before, and I deserve to be able to take advantage of the tax structure now. When my kids grow up and move away, and I'm in my peak earning years, and our mortgage is paid off, they will tax the hell out of me again, so it's not like I'm on a free ride forever.

It puts much more of a burden on the poor. If you make $12,000 and they take 20%, you have $9,600 left to live on. If you make $12,000,000 you are left with $9,600,000.

The IRS and Accountants would be heavily affected I would guess...TheMercenary

I would have been in favor of it back when we were dual income, no kids, and no mortgage, but now we are single income, two kids, and a mortgage. I pay very little in federal taxes and I'd like to keep it that way.....glatt

If you make $12,000 and they take 20%, you have $9,600 left to live on. If you make $12,000,000 you are left with $9,600,000......Happy Monkey

The total number of IRS employees at all levels is approximately 115,000, making it our largest federal bureaucracy. Auditors make up 25%, collectors 15% and criminal investigators 3%. The other 57% make policy, run the computers, answer taxpayer inquiries and god only knows what else. There is talk of downsizing the IRS to 85,000 employees. The most recent IRS budget was almost $11 billion......Stand Up to the IRS
by Attorney Frederick W. Daily


Hyoi: Reducing goverment expenditure would reduce the size of the flat rate percentage. Logically, 115 thousand could adjust to the betterment of 300 million.

All flat tax proposals have one “loophole.” Households receive a generous exemp­tion based on family size. For instance, a family of four would not begin to pay tax until its annual income reached more than $30,000. For those who think the “rich” should pay a higher percentage of their income, the generous family allowance effectively creates a modest level of “progressivity.” For instance, a family with an annual income of $20,000 faces a tax rate of zero........July 7, 2005, A Brief Guide to the Flat Tax by Daniel J. Mitchell, Ph.D.

Hyoi: All plans have a minimum income level cutoff and provision for family size.


Next !

Well, there it is. Exemptions and progressive levels of taxation. Recognized as necessary in all flat tax proposals. And that's what we already have.

How long has it been since you looked at a 1040 tax table? The "level of progressivity" in flat tax schemes is practically nonexistent in comparison. Have a look at the 1040 instructions. A flat tax form might, I say might, have 9-10 lines. Post card size including instructions. No tax tables.


Next !

No, a flat tax tax table would look virtually identical. All it is for is to do the multiplication for you. The formula used to generate the table wouldn't shrink the table.

And you'd still need all the complicated instructions to determine what counts as income to input into the table.

Not in the scheme I have in mind. Once you've determined that you qualify as a taxpayer, income would be gross income....period. There would be no table at all, simply one percentage value. A fifth-grader could complete the form for you.


Next !

It's kind of pointless for us to debate a hypothetical scheme you have in your head. Once I have said scheme in front of me in black and white and I can see what it does for me, then I can comment on it.

You're right. I'll do a bit more research and get back.:redface:

Republican House Majority Leader Dick Armey and Sen. Richard Shelby have proposed a simple 17 percent flat tax plan, with no loopholes or giveaways for special interests. You could file on the postcard-sized form below. Taxpayers would no longer waste 6 billion man-hours and $192 billion just complying with our current complex tax code. The average American's federal tax burden would be reduced $1,000 per year. A family of 4, earning $33,000, would pay zero federal income tax. This is genuine tax reform, since the typical American family now pays more in total taxes than it spends on food, clothing and shelter combined.

Citizens for a Sound Economy; 1250 H St. NW #700; Washington DC 20005

Where's capital gains?

Or do you plan an even bigger giveaway to the wealthy?

At what rate would you tax capital gains? Corporate profits? The above example is for working stiffs like I was for the better part of my life. Now I'm just stiff as a result.

Something wrong with a uniform rate for ALL forms of income? That was the original question, was it not?

That's what I'm asking you. There's no line for it on your form.