Flat Tax

[kerrywins]

doesn't it basically mean, that rich people will end up paying less in tax...and poorer people will end up paying more in taxes?
and this is always brushed over with "it will be so much simplier this way"...?

[Cary]

1. Yes

[Claire Beth]

2. yes

that's exactly what it means.

[calico1]

3. Yes. But a lot of people think "flat tax"

and it sounds fair. This was something Steve Forbes pushed when he was running.

[chiburb]

4. Yes. n/t

[Momgonepostal]

5. I think when Steve Forbes was running around pushing this...

... his idea was to exempt the first $15K or so of a person's income. Still, it seems like lower and middle income people would have tax increases, while the wealthy would get a discount. The masses would never go for that.

I do like the idea of simplifying the tax payment process, but am pretty skeptical about a flat tax.

[Tyler Durden]

8. Correct! Back when there were still a couple of NEWS REPORTERS....

...one asked Forbes that since the flat tax he espoused would save him personally close to three quarters of a MILLION DOLLARS, wasn't it a little self serving to be touting said tax? He replied, "What's your question?"

The reporter closed the interview in disgust.

[Cleita]

6. One thing to keep in mind.

If we went to flat tax, we would have to insist on no loopholes, no credits and a basic deduction for everyone. I would make the deduction $30,000 a year. This would exempt poor and working class poor people from paying any income taxes. What should the percentage of the tax over $30,000 be? Should it be what it takes to balance the budget even if it's as high as 50%? This is the only way to get the bazillionaires to pay up. Of course there is so much of the tax code that would have to be reformed to make sure the rich don't find ways of getting our of paying their percentage, otherwise the country would be left bankrupt.

[SoCalDem]

13. "Flat-tax" is the economic equivalent of "partial-birth abortion" or

"death-tax"... Buzz words...and they are meaningless..


If everyone's "money" was dumped in a pile and was all accounted for, it "might" work, but we all know it does not work that way.. The richies out there who rake in tons of loot from "investments" will always be able to hide their assets..

and

the flat tax does not address the issue of FICA and state taxes..Those bad-boys would still come out of the weekly paycheck..

People who draw a weekly or twice-monthly paycheck will always take it in the shorts, because OUR MONEY is always easy to track..It's cut-and-dried.. We have no control over what we make, so our income is always prey for the "fixers"..

With a flat tax, the "ordinary folks" will lose their exemptions, their home interest deductions, their charity deductions, because most will not be able to even file a long form..

Unless the first 50-75K was totally exempted (never happen), this is the most unfair tax of all to the middle class..

[Cleita]

15. I'm pretty much in agreement with you.

I am in favor of progressive taxes, like we once had, with the upper echelon incomes paying a higher percentage of taxes. I was saying that if the GOP government tried to push for it, there should be some very hard tax codes written into it to protect the poor and the middle class.

[chiburb]

7. IMPORTANT! MUST READ!!!

An explanation of exactly what Bushies economic plan is really about, and the dangers it holds for all of us:

Snip:

The President’s ownership initiative hasn’t featured prominently in the media coverage of the campaign, which, strictly from a news perspective, is understandable: he hasn’t announced many specific proposals to back up his talk. But in downplaying the Bush Administration’s economic agenda the media is missing one of the biggest domestic stories of the 2004 campaign. When the President pledges to create an “era of ownership,” he is not talking merely about encouraging people to buy their own homes and start small businesses. To conservative Republicans who understand his coded language, he is also talking about extending and expanding the tax cuts he introduced in his first term; he is talking about allowing wealthy Americans to shelter much of their income from the I.R.S.; about using the tax code to curtail the government’s role in health care and retirement saving; and, ultimately, about a vision that has entranced but eluded conservatives for decades: the abolition of the graduated income tax and its replacement with a levy that is simpler, flatter, and more favorable to rich people.

Bush’s tax cuts weren’t just bigger than Reagan’s: they were more strategic. During the nineteen-nineties, conservative Republicans on Capitol Hill broke with the deficit hawks in their party and rallied behind former Congressman Dick Armey’s 1994 proposal for a flat tax (which was similar to the one Steve Forbes campaigned for in 1996 and 2000). Partly because the economy was gaining strength after Bill Clinton’s 1993 tax increases, which helped balance the budget, and partly because studies showed that a flat tax would benefit the wealthy, who would see their tax rates slashed, the Republican tax cutters failed to make much progress. After George W. Bush was elected, they changed tactics. Instead of following the Reagan model and pushing for a single revolutionary reform, they promoted a series of smaller changes that would ultimately lead in the same direction. “That’s the hidden story of what is going on under Bush,” Stephen Moore said. “People like me have been advocating a flat tax for a decade. I helped Dick Armey put together his flat-tax proposal. Nobody could get it done politically. What Bush has done, in a hidden way, is move us in baby steps toward the flat tax.”

The whole, incredible New Yorker article is here:

http://www.newyorker.com/printable/?fact/040906fa_fact

[gnofg]

9. flat tax

If the rich push it, it not for the middle class's benefit

[Commendatori]

10. I don't want it, but I understand why people do...

...the current system is incomprehensible and anything but "progressive."

We will not see meaningful change to the structure of the current goatrope within our lifetimes, though.

[UdoKier]

11. That's exactly what it means.

Why do you think its main proponents are the super-rich?

[Nederland]

12. Depends

There are two reasons the rich people might end up paying more.

1) Most flat tax scheme assume that you get rid of all deductions because it goes along with the idea of the flat tax being very simple. Since most deductions are largely aimed at helping rich people, getting rid of all of them would result in a higher tax bill for the rich. However, the reality is you can't make a blanket statement about what effect a flat tax with no deductions would have on "the rich" because there is a wide difference among rich people as to how much they take advantage of the tax code (read: cheat on their taxes).

2) Many flat tax scheme have a lower limit below which you don't pay any taxes. I believe Steve Forbes had a scheme like this where you pay nothing on your first 30k earned. Such a scheme would be great for the people making under 30k because it means they would pay nothing. Forbes claimed that his proposed system was actually more progressive than the existing code, but I have no idea if that is true or not. Given how complex the current code it, I suspect its impossible to determine an accurate answer to the question.

[ogsball]

14. Taxes are extremely complicated and

the flax tax sounds like it will simplify things. What Forbes & Buchanan proposed wasn't even a true flat tax since true flat taxes are very regressive for a number of reasons.

#1 Has to do with the marginal utility of money. That is the more you have of something (including money) the less each unit of it is worth to you. That is truly only understandable to someone who has nothing and sees people with a lot apparently throwing away money on things like eating out, disposible diapers, health insurance, etc.

#2 The more money you have the more varied your assest tend to be. This deals with the real question which is what is income. If I have a house that I bought for $100k and then sell it in ten years for 1 million. Is the net difference income? What about stocks that go up? What about interest on loans I make to people? Or is income only a wage that's made from labor (the neocon definition).

#3 Do we have a social responsibility to help the poor? Or is it a dog eat dog if you don't work you don't work world? Is there some level below which you shouldn't have to pay taxes. This is a dangerous place to go because the payroll tax, which funds Social Security is very regressive now and is usually not counted as "income tax" by the Republicans. Almost everyone pays the payroll tax but a lot of folks don't pay income tax.

#4 Closely related to #1 is the value one gets from government services. Not social service but regular services like roads and police and military protection. The value to the rich is much greater than it is to the poor. What do poor people have to loose if the government is overthrown? The rich loose can loose the value of all of their assests. Or for example the police protect my $80k home and they protect my friends $250k home, who seems to get more protection? Who should pay more for that protection?


Sorry so long. This issue really sets me off.

[beyurslf]

16. Yes of course. That is why the rich love the idea.