Graph of the Day

gonzojournals said:
I don't see how a flat tax (meaning on everyone) would make people live off of the government.
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Say a sinlge person with no kids is making minimum wage. They make about $1400 per month. If welfare is $1200 per month then they are better off working as they will have more income. If you in turn tax them at 15% when they are currently not having to pay income taxes then their monthly income would drop to $1190. Now they are better off on welfare than going to work.

NOTE: I made the welfare number up. I am not sure what welfare amounts are for a single individual, but wanted to show you how raising someones taxes could encourage them to go to welfare rather than work.
 
Superfreak said:
Say a sinlge person with no kids is making minimum wage. They make about $1400 per month. If welfare is $1200 per month then they are better off working as they will have more income. If you in turn tax them at 15% when they are currently not having to pay income taxes then their monthly income would drop to $1190. Now they are better off on welfare than going to work.

NOTE: I made the welfare number up. I am not sure what welfare amounts are for a single individual, but wanted to show you how raising someones taxes could encourage them to go to welfare rather than work.
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Who said there would be welfare? :)
 
uscitizen said:
Just make 100% of health insurance premiums deductable would be a start on the personal level. that would give most of us at least a 15% cut in health insurance costs.

But you guys will be paying for my health care soon :D
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health insurance premiums are deductible already.
 
WRL said:
Yes but there are already many programs in place for terminally ill people, and I'm willing to bet the insurance companies will be willing to negotiate with this much money on the line.

The system is broken and needs a complete overhaul...
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Bankruptcy isn't a program, nor are the terminally ill the only folks impacted.
 
WRL said:
It's a consumption tax, and would hinder the largest driving factor of our economy. This really isn't the time to be screwing with the economy. We need to get our books in line before we go tinkering with complete overhauls of the governments ability to pay, or what it can pay, on it's debts.
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a flat tax is not necessarily a consumption tax. You can have a flat tax on all income sources as well. You simply eliminate all deductions other than the standard deduction. You also eliminate all loopholes. Not only is this fair, but with the standard deduction it is also progressive.

You also eliminate the need for the bulk of the IRS.... which saves money. (About $12b per year to run the IRS)
 
Superfreak said:
a flat tax is not necessarily a consumption tax. You can have a flat tax on all income sources as well. You simply eliminate all deductions other than the standard deduction. You also eliminate all loopholes. Not only is this fair, but with the standard deduction it is also progressive.

You also eliminate the need for the bulk of the IRS.... which saves money. (About $12b per year to run the IRS)
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doesn't make sense to buy homes anymore if u eliminate the mortgage deduction.

what about for people that pay state tax.. or people that live in states with larger property tax.. you going to wipe thoes deduction out 2?

what about cost of daycare.. not deducting that would be brutally hard on 2worker families.

how about investing in retirement.. investing in green home efficiencies.. etc..

i know me personally.. i make decisions based on the tax structure. i would think many do.
 
Chapdog said:
doesn't make sense to buy homes anymore if u eliminate the mortgage deduction.

what about for people that pay state tax.. or people that live in states with larger property tax.. you going to wipe thoes deduction out 2?

what about cost of daycare.. not deducting that would be brutally hard on 2worker families.

how about investing in retirement.. investing in green home efficiencies.. etc..

i know me personally.. i make decisions based on the tax structure. i would think many do.
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If you have a standard deduction of 25-30k per person, that more than makes up for the mortgage deduction adn other deductions you mention for most people. Couples would have the first 50-60k of their income tax free.

Take note when you file your taxes this year. Will you have 60k in deductions for you and your wife?
 
Superfreak said:
If you have a standard deduction of 25-30k per person, that more than makes up for the mortgage deduction adn other deductions you mention for most people. Couples would have the first 50-60k of their income tax free.

Take note when you file your taxes this year. Will you have 60k in deductions for you and your wife?
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nope. 49,900. lol
 
Chap....

Say you and your wife combine to make $250k. You would pay 20% on 190k. Which would give you an effective tax rate of 15.2%.

If you make $200k, you would pay taxes on $140k.... an effective tax rate of 14%.

See where you fall with your effective tax rate this year. Or go look at last years to see what it was.
 
Superfreak said:
Chap....

Say you and your wife combine to make $250k. You would pay 20% on 190k. Which would give you an effective tax rate of 15.2%.

If you make $200k, you would pay taxes on $140k.... an effective tax rate of 14%.

See where you fall with your effective tax rate this year. Or go look at last years to see what it was.
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this year was 10%. last year 12%, year before that like 11%. Back before home and kid was more like 18%.
 
I also do parents taxes and friends at times.. and many in my region making between 100-200k have effective rates around 10%
 
Superfreak said:
Then you will be better off under my proposal by a slim margin and without the headache of 64,000 forms having to be filled out for the IRS.

I win. :)
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lol takes me 1hour to do my taxes on turbotax. imports all my crap automatically from my financial institutions and my last years returns. i win
 
Chapdog said:
I also do parents taxes and friends at times.. and many in my region making between 100-200k have effective rates around 10%
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Thsoe making $120k or less would be paying less, those making 120-200 would pay slightly more depending on what your definition of "around 10%" means.
 
Superfreak said:
Thsoe making $120k or less would be paying less, those making 120-200 would pay slightly more depending on what your definition of "around 10%" means.
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it further penalizes people living in the expensive cities. at least now we can deduct the cost of higher mortgage, daycare, etc.. with flat tax there is no offset to the regional penalties of todays tax code.
 
Who whould buy a home without tax deductions ? Me. I paid mone off in less than 2 years and am very happy because of it. it is MINE!

A finiancial genius huh? It is stupit to pay interest to others when you don't have to.
And most only get 1/3 or so of it back on the taxes anyway.
 
Chapdog said:
it further penalizes people living in the expensive cities. at least now we can deduct the cost of higher mortgage, daycare, etc.. with flat tax there is no offset to the regional penalties of todays tax code.
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Ah, the choices we make.... sucker.
 
Yep why should someone in a lower cost of living support those in the higher cost of living areas. they can always move. That Mobile work force we used to hear promoted.
 
uscitizen said:
Who whould buy a home without tax deductions ? Me. I paid mone off in less than 2 years and am very happy because of it. it is MINE!

A finiancial genius huh? It is stupit to pay interest to others when you don't have to.
And most only get 1/3 or so of it back on the taxes anyway.
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how is 30yo couple going to pay cash for a home? even shitty small house is like 250k around here.

and btw.. for 5% that is like 3.5% after tax write offs.. on an asset thats going to increase at a 6% annual rate.. Can i have more?
 
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