Flat tax

Superfreak said:
I have posted the following several times before, but here it goes again....

"It is time for this country to become fiscally responsible. The national debt has increased every fiscal year since 1960. What has happened to the responsibility of the two parties? Both like to point the blame at the other, but in reality neither have been responsible fiscally. It is time for a change. Let’s begin with our tax code. It should be simple enough that the average person can understand it. It should not be filled with thousands of loopholes and deductions. Let us push for the flat tax with a standard deduction and nothing more.

Start with a standard deduction of $30k (adjusted for inflation annually) for each adult and then tax every dollar over that $30k at 20%. This is simple, easy to understand, fair and progressive. It protects the low-income individuals and couples from paying federal income taxes. It provides the middle-income families a lower effective tax rate than the wealthy. This plan would encompass ALL income, including earned income, capital gains and dividend income.

A person making $30k pays an effective rate of 0%.

A person making $50k pays an effective rate of 8%.

A person making $100k pays an effective rate of 14%.

A person making $200k pays en effective rate of 17%.

A person making $1mm pays an effective rate of 19.4%

Everyone has the same deduction and takes it. Which causes the effective tax rate to increase the more you make.

To reduce the national debt I would propose we add an additional temporary bracket to the flat tax. Every dollar over $1 million (again adjusted for inflation annually) would be taxed at 30% rather than 20%. The additional 10% would be mandated to pay down the debt.
It is our responsibility to pay our own way and not dump trillions of dollars of debt on future generations. We need to begin electing leaders that are fiscally responsible. The future of our nation depends upon it. We are our own worst enemy. It will be our ever-increasing debt that leads to our demise. We must act now. "
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30k is too low. Consequently, a lot of middle-class people would end up paying more on their Federal income taxe than they currently do. I'd say 40 or 45k is a better starting point.
 
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Thor said:
30k is too low. Consequently, a lot of middle-class people would end up paying more on their Federal income taxe than they currently do. I'd say 40 or 45k is a better starting point.
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What? It is much higher of a break than middle income families get today. For a couple the first $60k would be tax free. I don't know about you, but I do not know many middle income families that currently are able to deduct $60k of their earnings from their tax liability.
 
Thor said:
OK, I assumed you meant 30k regardless of martial status.

60k deduction is very generous.
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you assumed that despite the

"Start with a standard deduction of $30k (adjusted for inflation annually) for each adult "

LOL... you read it too fast.
 
take away mortgage deductions and you will tank real estate by 50% immediately. nobody will buy anymore.
 
Chapdog said:
take away mortgage deductions and you will tank real estate by 50% immediately. nobody will buy anymore.
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Bull pucky.

What is saved on taxes by deducting mortgage interest does not, in the vast majority of cases, make the difference between affording a house or not affording it. The mortgage deduction is nothing more than a "see we're helping people buy houses" political tool.

Besides, the savings in tax burden by raising the standard deduction from its current level to $30K per adult will WAY more than offset the removal of mortgage deductions.
 
Good Luck said:
Bull pucky.

What is saved on taxes by deducting mortgage interest does not, in the vast majority of cases, make the difference between affording a house or not affording it. The mortgage deduction is nothing more than a "see we're helping people buy houses" political tool.

Besides, the savings in tax burden by raising the standard deduction from its current level to $30K per adult will WAY more than offset the removal of mortgage deductions.
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What he said.
 
Good Luck said:
Bull pucky.

What is saved on taxes by deducting mortgage interest does not, in the vast majority of cases, make the difference between affording a house or not affording it. The mortgage deduction is nothing more than a "see we're helping people buy houses" political tool.

Besides, the savings in tax burden by raising the standard deduction from its current level to $30K per adult will WAY more than offset the removal of mortgage deductions.
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Exactly... to add to that... not only will it more than offset the deduction, but it will provide more capital so that more of the lower middle income families can put money aside for equity.
 
Of course you Damo and SF you know that I will probably be disagreeing with you somewhere else in just a few minutes. But for now you are both remarkably intelligent.
 
Socrtease said:
Of course you Damo and SF you know that I will probably be disagreeing with you somewhere else in just a few minutes. But for now you are both remarkably intelligent.
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Yes. Amazingly so. I've also noticed how much your intelligence improves when we are agreeing.
 
Chapdog said:
take away mortgage deductions and you will tank real estate by 50% immediately. nobody will buy anymore.
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Try this...

http://www.hrblock.com/taxes/tax_calculators/index.html

I just did a fake $60k invest for a married couple filing joint.... I gave them $20k in itemized deductions (including $15k for mortgage). They still owed about $4200 in federal taxes. Under my plan... it would have been zero.

Which means they could take that extra $4200 and pay down their mortgage or use it for other bills.

Another example I did was a joint filing with $240k in income, $55k in itemized deductions. Total taxes owed under current system... approximately $40,625. Under my plan.... $36000. Again, you save about $4600.

Joint couple making $280k... same thing... gave them $65k in deductions.... taxes under current plan $51450. Under mine.... $44000.
 
im in favor of anything that actually acknowledges that people living in the coasts pay higher percent of tax for the EXACT SAME indexed living standard.

Until then its just more rubbish gimmicky plans.
 
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