We Already Have a Flat Tax

B

Bonestorm

Thrillhouse
Well, almost a flat tax. Interesting piece from Citizens for Tax Justice comparing percentage of overall taxes paid to percentage of overall income earned:

It’s often claimed that the richest Americans pay a disproportionate share of taxes while those in the bottom half pay nothing. These claims ignore the many taxes that most Americans are subject to — federal payroll taxes, federal excise taxes, state and local taxes — and focus instead on just one tax, the federal personal income tax. The other taxes are mostly regressive, meaning they take a larger share of income from a poor or middle-income family than they take from a rich family.[1]

Many Americans do not have enough income to owe federal personal income taxes, but do pay these other taxes. The federal personal income tax is a progressive tax, and the combination of this tax with the other (mostly regressive) taxes results in a tax system that is, overall, just barely progressive. Total tax obligations are, on average, fairly proportional to income.
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Here's a table:

blog_taxes_share_income.jpg



Of course, simply because one cohort overall pays a proportional share of income earned by the cohort does not mean that each individual within the cohort pays a proportional share, but interesting analysis nevertheless.


http://ctj.org/ctjreports/2012/04/who_pays_taxes_in_america.php
 
State taxes in the US are often absurdly regressive. This is a good reference on the subject:

http://www.itepnet.org/whopays3.pdf

With a consumption tax, the poorest can pay a higher percentage of their income in tax than the rate of tax, because they often have debts that effectively put their consumption above their income. With the richest, on the other hand, they typically pay such a small fraction of their income on the sales tax that none of the rates I see on the chart for any of the states is above 2%.
 
What you call 'regressive', I call fair.....

Whats regressive is to have one person pay a 39% rate and his neighbor pay 15%, or 0 %.....
 
General Buck Turgidson said:
Well, almost a flat tax. Interesting piece from Citizens for Tax Justice comparing percentage of overall taxes paid to percentage of overall income earned:



Here's a table:

blog_taxes_share_income.jpg



Of course, simply because one cohort overall pays a proportional share of income earned by the cohort does not mean that each individual within the cohort pays a proportional share, but interesting analysis nevertheless.


http://ctj.org/ctjreports/2012/04/who_pays_taxes_in_america.php
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all the more reason to trash the current tax codes 70k+ pages and replace it with one simple flat tax with a standard deduction.
 
Superfreak said:
all the more reason to trash the current tax codes 70k+ pages and replace it with one simple flat tax with a standard deduction.
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Except that doing so would result in an extremely regressive overall tax scheme unless your plan is to scrap the entirety of state and local tax codes as well.
 
General Buck Turgidson said:
Except that doing so would result in an extremely regressive overall tax scheme unless your plan is to scrap the entirety of state and local tax codes as well.
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Do you think that if you tell the same lie over and over, eventually people will believe it? All serious flat tax proposals have a generous standard deduction, usually of around $40,000. This means someone making $40,000 or less would pay ZERO income tax.

Someone making $50,000 would pay the percentage (let's say 20%) on $10,000, which would be $2000, or 4% of their income.

Someone making $100,000 would pay the tax on $60,000, which would amount to $12,000, or 12% of their income.

A very well-off person who brings in $1 million/year would pay $192,000 in taxes, or 19.2% of their income.

Please explain how that is regressive. In reality, it would be a hell of a lot more PROgressive than the current tax code.
 
General Burnside said:
Do you think that if you tell the same lie over and over, eventually people will believe it? All serious flat tax proposals have a generous standard deduction, usually of around $40,000. This means someone making $40,000 or less would pay ZERO income tax.

Someone making $50,000 would pay the percentage (let's say 20%) on $10,000, which would be $2000, or 4% of their income.

Someone making $100,000 would pay the tax on $60,000, which would amount to $12,000, or 12% of their income.

A very well-off person who brings in $1 million/year would pay $192,000 in taxes, or 19.2% of their income.

Please explain how that is regressive. In reality, it would be a hell of a lot more PROgressive than the current tax code.
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Well, it depends on the amount of the deduction. My point was simply that state and local taxes are extremely regressive.
 
General Burnside said:
Do you think that if you tell the same lie over and over, eventually people will believe it? All serious flat tax proposals have a generous standard deduction, usually of around $40,000. This means someone making $40,000 or less would pay ZERO income tax.

Someone making $50,000 would pay the percentage (let's say 20%) on $10,000, which would be $2000, or 4% of their income.

Someone making $100,000 would pay the tax on $60,000, which would amount to $12,000, or 12% of their income.

A very well-off person who brings in $1 million/year would pay $192,000 in taxes, or 19.2% of their income.

Please explain how that is regressive. In reality, it would be a hell of a lot more PROgressive than the current tax code.
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Pinheads have had the lie drummed into their little mushmellons for so long, its impossible to tell them otherwise.....

If the DNC would tell them EXACTLY the same thing you posted, I'll bet they would be screaming how wonderful they were to come up with the plan....
 
bravo said:
Pinheads have had the lie drummed into their little mushmellons for so long, its impossible to tell them otherwise.....

If the DNC would tell them EXACTLY the same thing you posted, I'll bet they would be screaming how wonderful they were to come up with the plan....
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I've actually discussed this quite a bit with SF and I don't think his plan is all that bad, but I don't think it's perfect. As I see it the tax code should be more progressive at the top end than what you get with a flat tax and standard deduction. SF makes up for that with a tax on earnings in excess of $1 million, which helps, but I think $1 million is too high.

I misread SF's post and I apologize for any confusion this may have caused.
 
General Buck Turgidson said:
I've actually discussed this quite a bit with SF and I don't think his plan is all that bad, but I don't think it's perfect. As I see it the tax code should be more progressive at the top end than what you get with a flat tax and standard deduction. SF makes up for that with a tax on earnings in excess of $1 million, which helps, but I think $1 million is too high.

I misread SF's post and I apologize for any confusion this may have caused.
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That is fine... the structure is what I would like to see. The numbers can be moved... whether the $1mm is brought down to $500k or the rates are 17% and 32%, the goal for me is to dramatically simplify the tax code. The more simple it is, the harder it is to cheat the system (and not get caught). If we treat all income the same, then you don't end up with the super wealthy deriving the bulk of their income from lower taxed cap gains (and to an extent dividends).
 
General Buck Turgidson said:
Except that doing so would result in an extremely regressive overall tax scheme unless your plan is to scrap the entirety of state and local tax codes as well.
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General Buck Turgidson said:
Well, it depends on the amount of the deduction. My point was simply that state and local taxes are extremely regressive.
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General Buck Turgidson said:
I've actually discussed this quite a bit with SF and I don't think his plan is all that bad, but I don't think it's perfect. As I see it the tax code should be more progressive at the top end than what you get with a flat tax and standard deduction. SF makes up for that with a tax on earnings in excess of $1 million, which helps, but I think $1 million is too high.

I misread SF's post and I apologize for any confusion this may have caused.
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State and local taxes are as flat as you can get.....I'm for flat with little or no room for the social engineering rules, rates, and regulations that the Democrats love to use to force their agenda on the people, and to buy votes and voters with breaks or give 'special' consideration to those that support them or make people rely on them for goodies.

To deny thats what the tax code is used for today is to admit you have you eyes closed.....
When you're paying $5 for gas and your neighbor is getting it for free because hes "poor" , you might have your epiphany....

Success, brains or just good luck should not be penalized.....and I'm not against a helping to those that show they are doing all they can to be productive citizens....but if it goes on for generations, its time for change
 
bravo said:
State and local taxes are as flat as you can get.....I'm for flat with little or no room for the social engineering rules, rates, and regulations that the Democrats love to use to force their agenda on the people, and to buy votes and voters with breaks or give 'special' consideration to those that support them or make people rely on them for goodies.

To deny thats what the tax code is used for today is to admit you have you eyes closed.....
When you're paying $5 for gas and your neighbor is getting it for free because hes "poor" , you might have your epiphany....

Success, brains or just good luck should not be penalized.....and I'm not against a helping to those that show they are doing all they can to be productive citizens....but if it goes on for generations, its time for change
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State and local taxes are regressive. You can choose not to admit that if you want, but don't expect to be taken seriously.
 
General Buck Turgidson said:
State and local taxes are regressive. You can choose not to admit that if you want, but don't expect to be taken seriously.
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This depends on how the tax is applied. In CO, the state tax is not regressive as the same tables are applied as for Federal tax in regard to "taxable income". Local areas usually have usage tax, which can be regressive, but also can be progressive depending on usage. A frugal "rich" person could pay a lower percentage of income, one who enjoys the fruits of his labor would not.
 
General Burnside said:
Do you think that if you tell the same lie over and over, eventually people will believe it? All serious flat tax proposals have a generous standard deduction, usually of around $40,000. This means someone making $40,000 or less would pay ZERO income tax.

Someone making $50,000 would pay the percentage (let's say 20%) on $10,000, which would be $2000, or 4% of their income.

Someone making $100,000 would pay the tax on $60,000, which would amount to $12,000, or 12% of their income.

A very well-off person who brings in $1 million/year would pay $192,000 in taxes, or 19.2% of their income.

Please explain how that is regressive. In reality, it would be a hell of a lot more PROgressive than the current tax code.
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In reality, even under your fantasy scheme, the rich would end up paying even less than they do now, which is why Simplefreak approves.
 
Rune said:
In reality, even under your fantasy scheme, the rich would end up paying even less than they do now, which is why Simplefreak approves.
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Obviously your ability to comprehend is severely limited due to your head being up the Dems ass.

How would they end up paying less?
 
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