US Tax System

[Gawain 0]

Kallend responded to one of my posts where he specifically noted that a "Fair Tax" would not be good, compared to a "Flat Tax".

I honestly do not know enough about the real idea behind the "Fair Tax", but I understand that Neal Boortz has written a very thorough book on it. What I do know, is that it is a National Sales Tax, based on the premise that the income tax is gone. Certain essentials are not taxed (like food and clothing). So, your lifestyle truly determines how much taxes you pay. There are those that would point out issues about non-deductibility of mortgage interest, but you pay more to the bank despite the deduction. Find info from Dave Ramsey about the real merits and math of owning a home outright.

As for the Flat Tax, it's self-explanatory. A flat income tax rate, across the board. I don't know the proposals that have been advocated in detail, but I believe the standard deductions would apply.

Then there's the current progressive tax system with all our obstacles, rules, mazes, traps, etc.

So, which one lights your fire? I like the fair tax, but only if the 16th Amendment is repealed. Otherwise, the flat tax.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[TheAnvil 0]

I support kind of a hybrid. I like the idea of a flat tax, but only if it's kept at a low level in conjunction with a national retail sales tax which would exempt gasoline and groceries.

Vinny the Anvil
Post Traumatic Didn't Make The Lakers Syndrome is REAL
JACKASS POWER!!!!!!

[BillyVance 35]

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I support kind of a hybrid. I like the idea of a flat tax, but only if it's kept at a low level in conjunction with a national retail sales tax which would exempt gasoline and groceries.

if they exempt gasoline, then they'd have to find another way to fund highway repair/maintenance and new road projects...

"Mediocre people don't like high achievers, and high achievers don't like mediocre people." - SIX TIME National Champion coach Nick Saban

[Andrewwhyte 1]

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I support kind of a hybrid. I like the idea of a flat tax, but only if it's kept at a low level in conjunction with a national retail sales tax which would exempt gasoline and groceries.

What about books? You can't tax reading! And children's clothes, are you going to unfairly penalize poor kids so they don't have warm boots in the winter?
If you don't tax groceries what about snacks? Where is the line? is 4oz of juice grocery or snack? 5oz? 4.9?
The only way to bring in a sales tax is to apply it to absolutely everything; all goods, all services are taxed the same. That way there is no unintended economic distortions. If some group needs to be subsidized (poor, elderly, children, etc) then it needs to be done in a completely different program. The main effect of exemptions is to employ civil servants keeping track of what fits into what category. Each retailer must spend time and money keeping it straight as well. It is grossly inefficient.

[TheAnvil 0]

I don't think it so difficult to implement - no more so than the current code. I'm against having taxes collected from gasoline specifically placed towards one particular line of accounting.

Vinny the Anvil
Post Traumatic Didn't Make The Lakers Syndrome is REAL
JACKASS POWER!!!!!!

[Andrewwhyte 1]

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I don't think it so difficult to implement - no more so than the current code.

Not exactly a gold star standard for comparison.
When the value added national sales tax came in in Canada there were exemptions for groceries, not snacks, and not gasoline. The existing provincial retail taxes had a completely different list of exemptions (children's clothes, school supplies etc.) the result is a lot of work for the private sector, endless lobbying from everyone else who wants an exemption, and two audits a year (one from each level of gov).
BTW the government that brought in the GST was reduced to 2 (count 'em) seats from 180ish in the next election. I suspect that lesson has not been missed by the members of the US congress.

[billvon 3,116]

>I'm against having taxes collected from gasoline specifically placed
>towards one particular line of accounting.

Fair enough. If you wanted to support the highway system fairly without indirect taxes, an entry/exit fee (using RFID's) could work. A typical commute would cost around $25.

[kelpdiver 2]

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>I'm against having taxes collected from gasoline specifically placed
>towards one particular line of accounting.

Fair enough. If you wanted to support the highway system fairly without indirect taxes, an entry/exit fee (using RFID's) could work. A typical commute would cost around $25.

Boy would that change lead to unpredictable changes in behavior. I think I'd be sure to pump up my bicycle tires ahead of time.

[kelpdiver 2]

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There are those that would point out issues about non-deductibility of mortgage interest, but you pay more to the bank despite the deduction. Find info from Dave Ramsey about the real merits and math of owning a home outright.

You got 700,000$ sitting around to buy a house?

If you think the last 6 months haven't showed the chaotic results of mildly lowered housing prices, let's see what happens when you crush them by removing the tax incentives towards home ownership (something I subsidize for you folks).

[billvon 3,116]

>Boy would that change lead to unpredictable changes in behavior.

Not so unpredictable, I think. Toll roads have been around for a long time.

[rehmwa 2]

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>I'm against having taxes collected from gasoline specifically placed
>towards one particular line of accounting.

Fair enough. If you wanted to support the highway system fairly without indirect taxes, an entry/exit fee (using RFID's) could work. A typical commute would cost around $25.

Boy would that change lead to unpredictable changes in behavior. I think I'd be sure to pump up my bicycle tires ahead of time.

I think vinnie wasn't talking about roads specifically, just the weak tactic of finding additional ways to collect "extra" taxes for support of public items. The point is likely that we should collect taxes to support the entire mission and then prioritize what needs coverage and eliminate the rest.

By removing roads from the general collection fund, the government has found a way to pretend that gas taxes are 'extra' and can then take even more money.

Vinnie's note would indicate that additional income tax would more fairly allow the people to see the overall burden (eliminate the gas tax, and then compensate on the income tax) Billvon, of course, answers a completely different thing by sticking the whole 'user fee' concept - which he normally argues against, but in this case won't, of course.

Again, what is wrong with sending the people a single bill for government, rather than hiding charges anywhere and everywhere?

Collect it in a single way (income tax only, or fair tax, or whatever). And have a general fund only, no special funds - put it all in one pot, prioritize expenses top to bottom and pay down the list until you run out of money. Everything left unfunded is cancelled. Now THAT will get some responses from people. You fight to get your pet program to the top of the list, rather than just find another sneaky way to get it paid for.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[billvon 3,116]

>I think vinnie wasn't talking about roads specifically, just the weak tactic
>of finding additional ways to collect "extra" taxes for support of public
>items.

What's weak about taxing people for services they use?

>By removing roads from the general collection fund, the government
>has found a way to pretend that gas taxes are 'extra' and can then take
>even more money.

Roads are supported both by general funding AND gas taxes. Typically gas taxes cover about half of highway costs.

[rehmwa 2]

Great example in Minnesota last year.

A vote was put out to REQUIRE the license tag funds to be explicitly devoted to transportation ONLY.

OK, pass it and all those fund leave the general fund and then get committed to special (crooked) tranportation projects.

In essence, it meant we prioritized those dollars explicitly to those programs.

Guess what, all those programs that were previously funded in the general fund with that equivalent money? Were they cancelled? NO. Were the budgetted lower to ensure that net taxes weren't increased? NO. Taxes are being raised to cover them, TOO.

So, in essence, it was just a sneaky tactic to raise taxes, again.

So I understand Vinnie's comment just fine, thank you.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[rehmwa 2]

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>What's weak about taxing people for services they use?

Absolutely nothing - so I guess you would be for user fees in all aspects of government spending in addition to roads?

Isn't that antithetical to your stated politics here?


Of course, if we all just pay user fees for what we do, then we could delete the middle man (taxes and government) and get the same for cheaper.......

How do you pay a user fee for Welfare? If you get a $100 benefit, do you show up and pay the government $120 ($100 benefit + $20 administration cost) in order to get your $100 check?

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Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[rehmwa 2]

OP - Flat Tax (Flat Rate, non-progressive income)

a non-progressive tax would be take the total expenditures, and divide by the number of people, and send them each a bill for that amount - everyone pays the same "amount".

flat tax is everyone pays the same "rate" - still progressive - make more, pay more

that would a silly option though by almost anybody's perspective, except for trollery

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Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[Gawain 0]

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OP - Flat Tax (Flat Rate, non-progressive income)

a non-progressive tax would be take the total expenditures, and divide by the number of people, and send them each a bill for that amount - everyone pays the same "amount".

I was referring to the progressive rate of tax paid as salary increases (current system, 10%, 15%, 25%, 28%, 33%, 35%).

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flat tax is everyone pays the same "rate" - still progressive - make more, pay more

Flat, as in a flat rate that all wage earners pay, (example from when Forbes was running for President, 17% across the board).

edit to add link of the tax tables:http://www.irs.gov/formspubs/article/0,,id=164272,00.html

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[rehmwa 2]

I know you were. In fact, I appeciate that you clarified it in the poll.

I'm just picking nits because people think the Flat Rate is so unfair. But it could be even more twisted and continue to be based on a logical position.

(i.e., I like people to wake up to the point that the "Flat Tax Rate" is NOT one end of the spectrum as so many try to imply, rather it lies clearly in the center of the spectrum of tax options)


One end is everyone pays the same amount. The other end is only the richest guy pays for everything.

In the middle of that thing is various income based tax structures, spending based structures (e.g., the Fair Tax concept) and etc.

On another axis is where we all pay nothing in taxes and just cover our own expenses on a cost basis (user fees for all for everything).

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Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[happythoughts 0]

Milton Freedman was my favorite economist.

The federal govt should receive enough money to support only national programs like national defense and interstate highways.

Instead, the tax system isn't designed to be "fair", it is designed to provide the federal govt with a tool to control the states.

If the reason was to provide education to its children, then leave the money with the states to begin with. Instead, they take the money and give only a portion of it back.

Since no state can function without the return of federal dollars, the schools must follow the federal programs.
Control.

Also, Freedman argued that there is a minimum level of subsistence earnings. If you make $12,000 a year, you are using it all to provide food and shelter.

His tax program was a percentage of gross income, but a flat amount returned. Like a 20% tax for everyone, but everyone got $5,000 back.

Again, the problem with that is control. The fed govt does not get to redistribute money in accordance with its agenda.

[joedirt 0]

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Instead, the tax system isn't designed to be "fair", it is designed to provide the federal govt with a tool to control the states.
***

Amen to that brother. Money is control, that's all it is.

[lawrocket 3]

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let's see what happens when you crush them by removing the tax incentives towards home ownership (something I subsidize for you folks).

We've already seen that. The 1986 Tax Reform Act closed a bunch of tax shelters in property. We saw what happened with the S&L's after that.

My wife is hotter than your wife.

[kelpdiver 2]

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Again, what is wrong with sending the people a single bill for government, rather than hiding charges anywhere and everywhere?

It's the method least like to result in the items of interest to you being funded.

As it is, gas taxes and most vehicle related taxes get sucked into the general fund, and some portion comes back out. (though some argue that when the CHP and traffic cops are factored in, gas taxes don't cover the bill for roads). Politicians get votes for spending on the children, not freeway maintenance. So the money gets diverted.

Park admissions to Yosemite should stay in Yosemite.

Etc.

You can't take away all of the service fees for the simple reason that some resources would be abused if free. Every time there is a Spare the Air day and the bus is free, it's so unpleasantly crowded with bums riding it 3 blocks that you'd rather get in your car rather than save $1.50. Take 24% of people's money but then make everything 'free' and there will be similar abuse on a national scale.

[rehmwa 2]

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You can't take away all of the service fees for the simple reason that some resources would be abused if free. Every time there is a Spare the Air day and the bus is free, it's so unpleasantly crowded with bums riding it 3 blocks that you'd rather get in your car rather than save $1.50. Take 24% of people's money but then make everything 'free' and there will be similar abuse on a national scale.

actually, it sounds like a great way to identify programs that likely should be private and not public

but that's just me

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Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[PLFXpert 0]

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the "Fair Tax", but I understand that Neal Boortz has written a very thorough book on it. What I do know, is that it is a National Sales Tax, based on the premise that the income tax is gone. Certain essentials are not taxed (like food and clothing). So, your lifestyle truly determines how much taxes you pay...I like the fair tax...if the 16th Amendment is repealed.

Yes.

Paint me in a corner, but my color comes back.

[billvon 3,116]

>The federal govt should receive enough money to support only
>national programs like national defense and interstate highways.

>If the reason was to provide education to its children, then leave the
>money with the states to begin with. Instead, they take the money and
>give only a portion of it back.

And if the reason was to provide highways, then leave the money with the states to begin with. They're going to do the work anyway. Instead, they take the money and give only a portion of it back.

^^ That represents the eternal problem when it comes to government funding. "Their" projects are just forms of governmental control, ineffective programs created by tax-and-spend politicians to increase the size of the federal government. "Your" programs are sensible and efficient and are well within the purview of the government.

>His tax program was a percentage of gross income, but a flat amount
>returned. Like a 20% tax for everyone, but everyone got $5,000 back.

Still a progressive tax; indeed, in some ways far more progressive than what we have now. It would 'pay people to not work' to coin a popular phrase. Result:

Income zero - get $5000 from the government
$20,000 a year - get $1000 from the government
$40,000 a year - pay $3000 net, or 7.5%
$60,000 a year - pay $7000 net, or 11.6%
$80,000 a year - pay $11,000 net, or 13.8%
$100,000 a year - pay $15,000 a year, or 15%

Similar to our current scheme, although more progressive at the lower end and you'd have to make that tax around 35% to be able to match tax incomes now.

[dannydan 5]

HAPPY.... What a breath of freash air you are!!!

to the OP... I didnt vote! You left out the ONLY option that I believe there is;

NO INCOME TAX?

http://givemeliberty.org/FreedomDrive/Redress/SignPetitions.htm

Please don't look at this mission/effort as a joke. There is so much that is NOT understood about WHY the 16th was never fully ratified. But the majority of Amerikan citizens will not take the proper time to RE educate themselves... Including some of the so called well versed educated brainiacs in these forums.

Our forefathers did not fight and die for thirteen years, just so WWilson and the so called congress back then could implement taxation upon the People (subjects)...

Why should I pay the USGvt for my sweat? And then to turn around and GIVE it away to peeps that WON"T go out and work when the majority of them ARE ablebodied? THANKS FDR!!!!

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The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.

Thomas Jefferson

LONGGGGGgggggg overdue!!