- #31
Zero
But, hey...only theb people who own the resourses see any benefit from that. Me and you might save a dollar on one, but the guy making them makes millions extra.
Is a Flat Tax the Solution for American Taxpayers?
- Context: News
- Thread starter GENIERE
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Discussion Overview
The discussion centers around the concept of a flat tax system for American taxpayers, exploring its potential benefits and drawbacks. Participants examine various proposals, including Dick Armey's 17% flat tax plan, and consider implications for different income groups, government spending, and economic growth. The conversation includes theoretical, political, and practical aspects of tax reform.
Discussion Character
- Debate/contested
- Exploratory
- Technical explanation
Main Points Raised
- Some participants note that Russia's adoption of a flat tax led to increased productivity and GDP growth, although others challenge the validity of attributing this solely to the tax change.
- Concerns are raised about the feasibility of a flat tax, particularly regarding funding for social programs and the potential impact on lower-income earners.
- One participant argues that a true flat tax would disproportionately burden low-income individuals, as they would pay the same rate as wealthier individuals without deductions.
- Another viewpoint suggests that a flat tax could simplify the tax code and reduce inefficiencies, potentially benefiting the economy.
- Several participants express skepticism about the motivations behind flat tax proposals, suggesting they may favor the wealthy at the expense of the middle class.
- There is a discussion about the need to eliminate tax loopholes, regardless of whether a flat tax or progressive tax system is maintained, to ensure fairness.
Areas of Agreement / Disagreement
Participants express a range of opinions, with no clear consensus on the merits or drawbacks of a flat tax system. Some advocate for it, while others raise significant concerns about its implications for equity and government funding.
Contextual Notes
Participants highlight various assumptions, such as the relationship between tax rates and economic growth, the impact of government spending on tax feasibility, and the complexities of tax code simplification. These assumptions remain unresolved within the discussion.
Who May Find This Useful
This discussion may be of interest to individuals exploring tax reform, economic policy, and the implications of different taxation systems on various income groups.
But, hey...only theb people who own the resourses see any benefit from that. Me and you might save a dollar on one, but the guy making them makes millions extra.
- #32
Zero
Well, in rural areas (where the average income is lower anyways, in a double whammy!), without a car you are sunk. Not only could I not have a job, but I would have to walk 5-7 hours to even apply for unemployment benefits, and walk 2 hours every time I had t cash my check. A car IS a necessity for some of us.
- #33
kyleb
or hop on a greyhound for 50$, move someplace else, and stop whining about how trapped you are. ;)
- #34
Zero
Well, how do you do that if you have a mortgage, bills, children and school, etc?
And how is that 'whining' somehow less important than some billionaire complaining that his taxes are too high to buy tha island he's always wanted?
- #35
kyleb
please don't argue in circles with me; i never once claimed that anything was "somehow less important" than anything else, it seems you are suffering from a case of fault projection here. oh and as for the mortgage, bills, children, school and the like; it's not like they just magically appeared or something. i mean i don't see how you can rightly expect me to explain how to fix every little trouble anyone ever brought upon themselves; i am always glad to help but i only have so much time avalable so i must insist on a more direct of a question and even then i can't say i am the best man to give the answer. however, there is always the choice between bending over and taking it or standing up for what you believe is right, and doing the latter is were most people will find happiness.
- #36
Zero
That's cute...blame the middle class for not being rich, and blame the poor for the need to eat...
How can you think you sound intelligent when you describe basic human needs and behavior(shelter, food, procreation) as "every little trouble" that people should stop whining about? Or are only rich people allowed to want to have children and a place to live?
- #37
damgo
So everyone's better off -- it's a Pareto dominant outcome.
- #38
russ_watters
Mentor
- 23,829
- 11,305
Don't forget to blame the rich for being successful (bastards).
Big, big problem with that: the poor spend more of their income than the rich do. So that makes a national sales tax regressive.
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- #39
kyleb
i am not blaming anybody for anything here; that seems to be your bag, and i do wish you would free yourself of it.
well how can you think anyone sounds intelligent when they can't stop whining about basic human needs and behavior long enough to achieve those rather simple goals? aside from the procreation bit anyway, which leads me to:
i made a conscious effort to avoid the situation when i did not feel i was finically capable to handle it; i lost a really good woman over that too but sacrifice is part of life. i don't see why other people should be exempted from such hardships.
seriously, i went to the same brainwashing institutions we call public schools, i have been suckered into chasing many a carrot on a stick, i have a rather intimate knowledge with how twisted and screwed up this world is; but i don't see what your point is. the best i can tell, the rich pay less a percentage on income on tax as most people; what do you have against bringing balance to that?
*edited for clarity and question highlighted in hopes that it might garner a responce.*
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- #40
Zero
Maybe you shouldn't post when you're tired (or been drinking...). I'm having a hard time understanding your exact point.
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- #41
Zero
Long term, the difference betwen rich and poor gets greater...how is that positive?
- #42
Zero
Hmmm...I don't blame people for their sucess. Over time, however, the money falls into fewer and fewer hands, and opportunities begin to vanish: ask any local businessman how it feels to have a WalMart Supercenter move in, cut jobs in the area, and run the little stores out of business.
- #43
kyleb
lol, neither; maybe you shouldn't be so quick to dismiss things that don't instantly click with your line of thought. i admit my dyslectica may be keeping me from properly proofreading the writing but best i can tell it is all respectable english. i would at least appreciate a response to the question that i concluded with, is that too much to ask?
- #44
Zero
Nope, it is your sentence construction that's got me snookered!
- #45
kyleb
lol, actually my dyslectica did seem have some effect on my proofreading. i caught a few errors after reading though it three more times today, maybe correcting those will help, I'll go back and do that now. 
- #46
Zero
Never mind...I hijacked the thread a bit, and I'm sorry...
- #47
kyleb
but back to the topic, i ask again:
the best i can tell, the rich pay less a percentage on income on tax as most people; what do you have against bringing balance to that?
the best i can tell, the rich pay less a percentage on income on tax as most people; what do you have against bringing balance to that?
- #48
GENIERE
Any tax can be regressive, flat, or progressive. It just depends on how its structured.
Too many loose ends on this thread, I'm out of here.
Regards
Too many loose ends on this thread, I'm out of here.
Regards
- #49
andrew14
So let me get this straight, my parents worked hard in school and got good grades, went to college, and then became lawyers making a good living just so they can pay roughly 50% of their income to the Federal government which in turn gives it to the people that slept through class and did not work hard. Does this not seem to rub against the whole American dream of freedom and making a good life for yourself and your children?
- #50
Zero
You make the mistaken assumption that the only reason that poor people are poor is because they are 'lazy'. If you seethings that way, what use is there in talking about anything else?
- #51
kyleb
there are most defiantly many reasons besides laziness, but my argument that discussing the reasons only takes time from resolving the issues. i think andrew14's point is very valid issue against taxing the wealthy harder, regardless of the fact that his argument was oversimplified. also, are you ignoring my question on purpose Zero?
and GENIERE, i still would like to hear about why you support sales tax only as opposed to income tax only; assuming you find your way back to participating in this thread that is.
and GENIERE, i still would like to hear about why you support sales tax only as opposed to income tax only; assuming you find your way back to participating in this thread that is.
- #52
Zero
Laziness is the LAST issue to address, not the first. It is very nearly an invalid place to start, which is why I dismissed it.
As far as your question: I still don't get it?
- #53
kyleb
well if you are going to argue that we should pander to lazy people as long as there are other issues to deal with, i think you have stepped out of the bounds of reasonable logic; so i suppose i withdraw my question anyway.
- #54
GENIERE
Kyleb - Just for you.
Simply a question of efficiency.
Few people could argue that the present system is efficient, needing a large bureaucracy and enforcement system. The 101,000+ pages of taxcode are convoluted and subjectively interpreted to the benifit of those that can employ experts.
To repeat, any tax system can be regressive, flat, or progressive based on how it's structured.
With a sales tax, the seller or provider of a service would be taxed. Obviously there are far fewer businesses than individuals. They simply pay a tax based on receipts as they already do in most states. IRS Bureaucracy would shrink enormously, not to mention the HR Block type industry, corporate attourneys, and corporate accountants. All of which are paid by tax dollars however indirectly. I fail to see how that helps the poor among us.
Which Agency is Larger?
----------------IRS-----------FBI-----------Border Patrol
Annual Budget---$7.8 billion--$3.0 billion--$0.7 billion
# of Employees---100,551-------11,271--------6,848
Source: Department of Treasury, Internal Revenue Service, FY 99 Budget in Brief, for FY 1998. Congressional Research Service, for FY 1997
How Big is the Tax Code?
----------------------Numberof Pages---Number of Words
Internal Revenue Code-9,471------------5.75 million
Tax Code Regulations--91,824-----------1.3 million
Total Tax Law---------101,295----------7.05 million
War and Peace---------1,444------------660,000
The Holy Bible--------1,291------------774,746
Source: Commerce Clearing House, Standard Federal Tax Reporter, 1996. Commerce Clearing House, Standard Federal Tax Reporter, 1997. The Library of Congress, Congressional Research Service
Regards
Simply a question of efficiency.
Few people could argue that the present system is efficient, needing a large bureaucracy and enforcement system. The 101,000+ pages of taxcode are convoluted and subjectively interpreted to the benifit of those that can employ experts.
To repeat, any tax system can be regressive, flat, or progressive based on how it's structured.
With a sales tax, the seller or provider of a service would be taxed. Obviously there are far fewer businesses than individuals. They simply pay a tax based on receipts as they already do in most states. IRS Bureaucracy would shrink enormously, not to mention the HR Block type industry, corporate attourneys, and corporate accountants. All of which are paid by tax dollars however indirectly. I fail to see how that helps the poor among us.
Which Agency is Larger?
----------------IRS-----------FBI-----------Border Patrol
Annual Budget---$7.8 billion--$3.0 billion--$0.7 billion
# of Employees---100,551-------11,271--------6,848
Source: Department of Treasury, Internal Revenue Service, FY 99 Budget in Brief, for FY 1998. Congressional Research Service, for FY 1997
How Big is the Tax Code?
----------------------Numberof Pages---Number of Words
Internal Revenue Code-9,471------------5.75 million
Tax Code Regulations--91,824-----------1.3 million
Total Tax Law---------101,295----------7.05 million
War and Peace---------1,444------------660,000
The Holy Bible--------1,291------------774,746
Source: Commerce Clearing House, Standard Federal Tax Reporter, 1996. Commerce Clearing House, Standard Federal Tax Reporter, 1997. The Library of Congress, Congressional Research Service
Regards
- #55
kyleb
lol thanks GENIERE, i think you explained it for yourself as well though; or at least you get something out of it anyway because you made me a believer in the shift to a sales only tax system.
- #56
Tog_Neve
- 6
- 0
There are many comments I could make going back through this thread...but fortunately most were redirected later on...LOL
Kyleb -
Have heard it stated before that 90% of the tax income is paid by 10% of the population. If you check the numbers you will find that to be true. I pay about 15% income tax which if I put it at a generous $2500. Now take a person who makes $1 mill a year. They are put in the 37% tax bracket and pay $370,000. It takes 148 people making what I make to pay the same amount that one person was paying.
And if you check the IRS statistics for even last year www.irs.ustreas.gov[/URL] you will find supporting information to the same. California last year had more returns filed with incomes greater than $1mill than any other state. California was also the largest in total collection than any other state.
As far as eliminating income tax and applying a sales tax. I see that as causing more harm than good. Granted it would be a more evenly spread tax and one that would be paid by all, rich or poor...and would be more of a usage tax. OUr current system does not really take into account standards of living for different area. Someone making $50K a year in South Dakota may be living high on the hog (so to speak) while the same in NYC is barely stepping out of a box under a bridge. But yet they pay the same percentage of taxes.
However sales taxes are hard to project. Peoples spending habits change. Thus attempting to balance a budget based solely on a sales tax would be difficult. Plus if it was to high it would slow down purchasing. I would start to think hard about buying that new car if there were an extra 10% added onto it for a tax. Instead thinking of the used car for a fraction of the cost and thus paying a fraction of the tax. And as you mentioned the possible reduction in accounting staff...Lots of jobs lost there. Then if it got to high as far a sales tax is concerned you could have increase in imported good of our own products. It could get cheaper to buy that new car in Canada and bring it back into the states than it would to buy it at the local dealer. Thus also causing a possible slow down in the economy and loss of jobs as well.
Your best bet for a sales tax would be to place a small (.25-1%) across the board for goods. It is small enough to not really deter anyone from making or breaking a purchase but yet large enough to bring in a heafty chuck of change to the budget.
One site has a thing up on their page [PLAIN]www.cato.org/pubs/pas/pa-272.html[/URL]. they are talking about a 15% sales tax. That would be totally outrageous. Her in my town we pay a sales tax of 8% as it is...then tack on another 15% and that Pepsi I was buying is now up to a $1.25. That new Kia that was priced at $10K is now $12.3K. Guess what? I am going to go buy that car in a state that has lower sale tax. And jack up the price of gas more as well. Tennessee has an average sales tax of 9.35% with a state running at 7%. They have the highest average in the nation. Add another 15% onto that. Remember a while back Folks in TN stormed the capital when they were talking about raising the sales tax again...what would they do if there was another 15% added on??
Just some thoughts on it. Sales tax has some merits but overall to many drawbacks to be effective or efficient. Plus overall the impact would not be worth it. Maybe a small amount that would not even really be noticed could generate a good bit of revenue to the fed...but the fed could not rely solely on sales tax because it is not a predictable amount.
Kyleb -
I would be very interested in where you have come up with this idea? As income is increased in this country so is the tax percentage.
Have heard it stated before that 90% of the tax income is paid by 10% of the population. If you check the numbers you will find that to be true. I pay about 15% income tax which if I put it at a generous $2500. Now take a person who makes $1 mill a year. They are put in the 37% tax bracket and pay $370,000. It takes 148 people making what I make to pay the same amount that one person was paying.
And if you check the IRS statistics for even last year www.irs.ustreas.gov[/URL] you will find supporting information to the same. California last year had more returns filed with incomes greater than $1mill than any other state. California was also the largest in total collection than any other state.
As far as eliminating income tax and applying a sales tax. I see that as causing more harm than good. Granted it would be a more evenly spread tax and one that would be paid by all, rich or poor...and would be more of a usage tax. OUr current system does not really take into account standards of living for different area. Someone making $50K a year in South Dakota may be living high on the hog (so to speak) while the same in NYC is barely stepping out of a box under a bridge. But yet they pay the same percentage of taxes.
However sales taxes are hard to project. Peoples spending habits change. Thus attempting to balance a budget based solely on a sales tax would be difficult. Plus if it was to high it would slow down purchasing. I would start to think hard about buying that new car if there were an extra 10% added onto it for a tax. Instead thinking of the used car for a fraction of the cost and thus paying a fraction of the tax. And as you mentioned the possible reduction in accounting staff...Lots of jobs lost there. Then if it got to high as far a sales tax is concerned you could have increase in imported good of our own products. It could get cheaper to buy that new car in Canada and bring it back into the states than it would to buy it at the local dealer. Thus also causing a possible slow down in the economy and loss of jobs as well.
Your best bet for a sales tax would be to place a small (.25-1%) across the board for goods. It is small enough to not really deter anyone from making or breaking a purchase but yet large enough to bring in a heafty chuck of change to the budget.
One site has a thing up on their page [PLAIN]www.cato.org/pubs/pas/pa-272.html[/URL]. they are talking about a 15% sales tax. That would be totally outrageous. Her in my town we pay a sales tax of 8% as it is...then tack on another 15% and that Pepsi I was buying is now up to a $1.25. That new Kia that was priced at $10K is now $12.3K. Guess what? I am going to go buy that car in a state that has lower sale tax. And jack up the price of gas more as well. Tennessee has an average sales tax of 9.35% with a state running at 7%. They have the highest average in the nation. Add another 15% onto that. Remember a while back Folks in TN stormed the capital when they were talking about raising the sales tax again...what would they do if there was another 15% added on??
Just some thoughts on it. Sales tax has some merits but overall to many drawbacks to be effective or efficient. Plus overall the impact would not be worth it. Maybe a small amount that would not even really be noticed could generate a good bit of revenue to the fed...but the fed could not rely solely on sales tax because it is not a predictable amount.
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- #57
Dissident Dan
- 236
- 1
OK, we have how much money it takes to run the IRS. How much do they take in? How much less would it cost to run the IRS with any proposed change? How much more/less would they take in with said proposed change?
- #58
kyleb
understood, but also as capital is more readily available it becomes easier to find loopholes to avoid taxation; so while they have a higher percentage on taxable income, most have a lower much lower percentage of their income being taxed; at least that is what i have seen of it. however, i am interested in the statistics you were referring to. i dug around the site a bit but failed to come up with the information in question; any chance you could you provide a more direct link?
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- #59
GlamGein
- 47
- 0
I have some questions about this flat tax if any of you are up to answering:
Why do Married people get a write-off or benefits or whatever? Please excuse my ignorance.
It doesn't seem fair that if a tax was to be equal, why should married people have to pay less?
As for Democrats not liking the idea, imagine what 17% is to a working single mother compared to the CEO of a big corporation. The CEO would have what, one less SUV or Airplane, while the mother would have less food for her child. Big difference there.
Why do Married people get a write-off or benefits or whatever? Please excuse my ignorance.
It doesn't seem fair that if a tax was to be equal, why should married people have to pay less?
As for Democrats not liking the idea, imagine what 17% is to a working single mother compared to the CEO of a big corporation. The CEO would have what, one less SUV or Airplane, while the mother would have less food for her child. Big difference there.
- #60
damgo
Like I think Njorl pointed out at the beginning of this thread, focusing on the complexity of the tax laws / cost of the IRS etc is a red herring. The amount of money they spend in trivial in comparison to the total amount of tax collected: ~2,000 billion a year. I would bet a lot of that 0.5% that goes to the IRS wouldn't be significantly affected by altering the tax code.
In any case, we can probably all agree that a simpler system with less loopholes and special provisions is desirable. Such a system could be basically identical to the current one, flat, sales, whatever.
For some background, here is one of the OMB's pages with a breakdown of US Federal revenue/spending. They are usually fairly non-partisan.
http://w3.access.gpo.gov/usbudget/fy2000/guide02.html
In any case, we can probably all agree that a simpler system with less loopholes and special provisions is desirable. Such a system could be basically identical to the current one, flat, sales, whatever.
For some background, here is one of the OMB's pages with a breakdown of US Federal revenue/spending. They are usually fairly non-partisan.
http://w3.access.gpo.gov/usbudget/fy2000/guide02.html
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