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-   -   The craze for flat taxes (http://www.physicsforums.com/showthread.php?t=544677)

 Lapidus Oct27-11 01:45 PM

The craze for flat taxes

Nice article in 'The Economist' on how Republican candidates are competing to race to the lowest point: http://www.economist.com/node/21534799

Quote:
 Flat taxes, including the 9-9-9 plan, seem to put off far more voters than they attract. Even Mr Romney’s much more modest call to cut the corporate tax rate and extend income-tax cuts dating from George Bush junior’s presidency generates more dismay than enthusiasm among voters. In fact, the only tax scheme that wins approval from most Americans is the one pushed by Mr Obama and other Democrats, to raise rates for the rich. In support of the idea, Democrats point to studies such as one out this week from the Congressional Budget Office, which found that the share of national income accruing to the richest 1% of Americans has doubled over the past 30 years, to over 20%.
With a candidate Romney/Cain/Perry and all their lunatic tax reform proposals, I can not possibly imagine how the Republicans will beat Obama next year.

There are 311 million Americans and the Republicans come up with Romney/Cain/Perry as the possible candidate for the highest office in their country. And then their one and only answer to all problems and everything is: cutting taxes.

EDIT: I doubt that these plans will make one of Republican candidates the next president of the United States.

Do you think these plans (as described in article) will have great appeal to the voters?

 Oltz Oct27-11 03:05 PM

Re: The craze for flat taxes

Quote:
 Quote by Lapidus (Post 3583630) Nice article in 'The Economist' on how Republican candidates are competing to race to the lowest point: http://www.economist.com/node/21534799 With a candidate Romney/Cain/Perry and all their lunatic tax reform proposals, I can not possibly imagine how the Republicans will beat Obama next year. There are 311 million Americans and the Republicans come up with Romney/Cain/Perry as the possible candidate for the highest office in their country. And then their one and only answer to all problems and everything is: cutting taxes. My prediction for the 2012 election: Obama wins with a even bigger margin than 2008!
You do understand that a 9% sales tax on everything that was not food, rent(or mortgage on primary residence), Utillities (Gas,electric,water NOT cable/internet or cell phone) and clothing would only apply to purchases with discretional income. Hence NO tax at all to the poor who can "hardly afford" to pay the bills.

In essence it would be a 9% tax on all non essential purchases. Who does that sound targetted at? $0.09 on top of every dollar Paris hilton spends gee sounds like a lot to me. Or How about a 20% flat tax with no deductions other then primary residence mortagage payments all interest payments and dependants and not kicking in until you hit 50k. Hmm sounds like the middle class will get to write off nearly every penny (I consider middle class 50-100K for indivduals and 80-200 for Married couples). Again looks like a rise in the effective rate at the top end and decrease at the low end with no change for the upper middle class. The key is to use the deductions and exemptions to make them progressive instead of making the rate itself progressive. Our current structure is actually more flat due to the number of shelters available. Nobody can avoid a sales tax on disposable income spending. Unless you never spend a penny, but money is worthless until you spend it.  WhoWee Oct27-11 03:07 PM Re: The craze for flat taxes Can you please clarify the specific topic of this thread?  Lapidus Oct27-11 04:42 PM Re: The craze for flat taxes Quote:  Quote by WhoWee (Post 3583768) Can you please clarify the specific topic of this thread? Sure. I think the tax plans of the Republican candidates are nuts. People are already scared by them, even before Obama has thrown on his 1 billion election campaign machine to point out to the people that these plans are nuts. I doubt that these plans will make one of these candidates the next president of the United States. Do you think these plans (as described in article) will have great appeal to the voters?  ParticleGrl Oct27-11 04:56 PM Re: The craze for flat taxes Quote:  Nobody can avoid a sales tax on disposable income spending. Unless you never spend a penny, but money is worthless until you spend it. Who spends more of their income, rich people or poor people?  ThomasT Oct27-11 05:09 PM Re: The craze for flat taxes Quote:  Quote by Lapidus (Post 3583630) Do you think these plans (as described in article) will have great appeal to the voters? No, imo.  ThomasT Oct27-11 05:10 PM Re: The craze for flat taxes Quote:  Quote by Oltz (Post 3583765) You do understand that a 9% sales tax on everything that was not food, rent(or mortgage on primary residence), Utillities (Gas,electric,water NOT cable/internet or cell phone) and clothing would only apply to purchases with discretional income. Hence NO tax at all to the poor who can "hardly afford" to pay the bills. In essence it would be a 9% tax on all non essential purchases. Who does that sound targetted at?$0.09 on top of every dollar Paris hilton spends gee sounds like a lot to me. Or How about a 20% flat tax with no deductions other then primary residence mortagage payments all interest payments and dependants and not kicking in until you hit 50k. Hmm sounds like the middle class will get to write off nearly every penny (I consider middle class 50-100K for indivduals and 80-200 for Married couples). Again looks like a rise in the effective rate at the top end and decrease at the low end with no change for the upper middle class. The key is to use the deductions and exemptions to make them progressive instead of making the rate itself progressive. Our current structure is actually more flat due to the number of shelters available. Nobody can avoid a sales tax on disposable income spending. Unless you never spend a penny, but money is worthless until you spend it.
Good, ponderable, points, imo.

 ThomasT Oct27-11 05:16 PM

Re: The craze for flat taxes

Quote:
 Quote by ParticleGrl (Post 3583944) Who spends more of their income, rich people or poor people?
Poor people, generally. But then I know people who have incomes exceeding 200K per year who spend all of it on their lifestyles. Of course, when you get into the very rich category, then these people are generally spending a relatively small percentage of their incomes/net worth while saving/investing the bulk of it.

I lost track of the point.

 WhoWee Oct27-11 06:07 PM

Re: The craze for flat taxes

Quote:
 Quote by Lapidus (Post 3583918) Sure. I think the tax plans of the Republican candidates are nuts. People are already scared by them, even before Obama has thrown on his 1 billion election campaign machine to point out to the people that these plans are nuts. I doubt that these plans will make one of these candidates the next president of the United States. Do you think these plans (as described in article) will have great appeal to the voters?
"As described in the article" may be the greatest problem with the plans.:rolleyes: The basic idea of a flat tax is to simplify the tax code.

As for President Obama's tax plan - to raise taxes on people earning over $1 million (apparently after Chuck Schumer realized$250K wasn't a measure of "rich" in NY?) - it won't solve the problem of deficits - will it?

 ThomasT Oct27-11 06:20 PM

Re: The craze for flat taxes

Quote:
 Quote by WhoWee (Post 3584034) The basic idea of a flat tax is to simplify the tax code.
Is that even possible ... given the status quo. I don't think so.

The very rich run the country, fapp, and they, apparently, have no problem with running it into the ground, burning it out, so to speak.

Is this assessment incorrect? If so, then why?

 WhoWee Oct27-11 06:34 PM

Re: The craze for flat taxes

Quote:
 Quote by ThomasT (Post 3584062) Is that even possible ... given the status quo. I don't think so. The very rich run the country, fapp, and they, apparently, have no problem with running it into the ground, burning it out, so to speak. Is this assessment incorrect? If so, then why?
It's your opinion - it doesn't need to be correct.

 ThomasT Oct27-11 06:58 PM

Re: The craze for flat taxes

Quote:
 Quote by WhoWee (Post 3584078) It's your opinion - it doesn't need to be correct.
Sure but I'd like to get some feedback from more knowledgeable people.

Lets consider the flat tax idea first. Is this even possible?

 WhoWee Oct27-11 08:24 PM

Re: The craze for flat taxes

Quote:
 Quote by ThomasT (Post 3584111) Sure but I'd like to get some feedback from more knowledgeable people. Lets consider the flat tax idea first. Is this even possible?
I think a compromise is politically possible. Specifically a modified 3 tier flat federal income tax with a much higher cap to Social Security contributions with a reducing percentage - maybe 2% over $1 million and might look like this:$20k* to $100K @ 15%$101K to $500K @ 20%$501K+ @ 25%

*re-distribution EITC and Making Work Pay addressed and all income and benefits included

 SunnyBoyNY Oct27-11 10:31 PM

Re: The craze for flat taxes

The government has grown way too much and the spending has gone crazy. I personally know a database programmer who works in the police dept. in Albany. The dept has seven employees - five managers and two programmers.

The problem here is different-- imho the income tax should be progressive as all other taxes are strictly regressive -- if the fed government lowered the taxes to 1/2 of the current rate, no one would complain.

To your point-- the flat tax has been enacted in other countries (the czech republic, e.g.) but no economical miracle has ever happened. But what I like about the 9-9-9 is that it is easy and would wipe out the current system and its additional cost to us (like the IRS whose employees all of us pay).

It really comes to me that each government just adds tax code but does not remove it. This is a vicious spiral. It's like clogging your Windows with new a new software. At some point it will break. This is why Cain's goal is innovative and aspiring.

 mege Oct27-11 10:38 PM

Re: The craze for flat taxes

I think the 'flat tax craze' is really just a way to express the desire for a simplified tax code.

It's not being sold as a 'cure all', but it's something that many Americans seem to want - an end to exemptions. Afterall, that's the big perception, right? Rich get tons of tax breaks while the poor pay out the nose (when reality is much different). The single-proportional taxes which are proposed (in my mind a 'flat tax' would be an absolute dollar amount per person) would solve many of those issues. It doesn't really give any leg for the class warfare whiners to stand on, and provides a sense of equality to those who feel they are being overtaxed (in addition to having the extra benefit of potentially reducing government overhead via reduction of the IRS).

What is lunatic about the idea of a single proportional tax?

 DoggerDan Oct28-11 01:30 AM

Re: The craze for flat taxes

Quote:
 Quote by WhoWee (Post 3584204) I think a compromise is politically possible. Specifically a modified 3 tier flat federal income tax with a much higher cap to Social Security contributions with a reducing percentage - maybe 2% over \$1 million...
Why complicate it? Once you open the door to any complication, you open the door to ever-increasing complications. In another 50 years, it'd be right back to looking like it does today.

Every objection I've heard against Cain's 9-9-9 plan has included words to the effect they don't understand it's inclusions and exclusions. It's not complicated: https://www.supporthermancain.com/99...src/929webAD21

I have my own objections to it, but spreading misinformation about it isn't a proper response.

 Oltz Oct28-11 06:21 AM

Re: The craze for flat taxes

Quote:
 Quote by ParticleGrl (Post 3583944) Who spends more of their income, rich people or poor people?
What percent of their income do the poor spend on items that are not food ,clothing ,utilities ,rent, medication and interest?

How bout the rich?

Lets remember that eating out is a service you are paying for not the food.

If none of those expenses count then obviously the rich

 WhoWee Oct28-11 06:29 AM

Re: The craze for flat taxes

Quote:
 Quote by DoggerDan (Post 3584604) Why complicate it? Once you open the door to any complication, you open the door to ever-increasing complications. In another 50 years, it'd be right back to looking like it does today. Every objection I've heard against Cain's 9-9-9 plan has included words to the effect they don't understand it's inclusions and exclusions. It's not complicated: https://www.supporthermancain.com/99...src/929webAD21 I have my own objections to it, but spreading misinformation about it isn't a proper response.
We all know the 9-9-9 would not be set in stone.

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