09-11-2004 07:14									#61
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quote: Originally posted by Oerdin That's all well and good except... How do we cut everyone's taxes in half and not destroy the budget? It seems like with our huge debt and Bush's ever generous spending increases we can't afford to keep cutting taxes. At least not if you give a rat's behind about the nation's finances.

Hence my later comment about the proposed 17% rate being too low - it isn't revenue neutral.

The benefit of a flat tax isn't that it reduces taxes, it makes preparation and filing of them much simpler and it erases all deductions, exemptions and loopholes in the personal income tax code. It's easy to remove any element of regressivity by increasing the personal deduction - under a flat tax plan, a personal deduction of $30,000 would pretty much cover the entirety of the middle class, leaving the income tax burden on those with higher incomes.

	09-11-2004 07:21									#62
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Teresa Heinz-Kerry payed 12.5% of her income in tax last year. So how is a progressive tax better than a flat tax? A Flat tax would work if an exemption amount is fairly set...all income below $50K tax free (or $60K or whatever is deemed fair). Elimination of all deductions except mortgage interest and child credit to maintain the government's social engineering in favor of homeownership and allow families to support the extra financial burden of kids.

	09-11-2004 07:29									#63
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Naw, just increase the dependent deduction to $15,000 or something.

	09-11-2004 07:32									#64
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quote: Originally posted by JohnT Naw, just increase the dependent deduction to $15,000 or something.

I'd be okay with that. The net-net should be about the same.

	09-11-2004 08:34									#65
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quote: Originally posted by PLATO Teresa Heinz-Kerry payed 12.5% of her income in tax last year.

That's a very good example - which illustrates the degree to which Bush's 2003 tax cut was a giveaway to the wealthy.

Teresa Heinz-Kerry doesn't work for wages, she derives all her income from stocks and bonds. Bush reduced the capital gains rate to 15% and applied it to stock dividends. So for example, if Teresa gets 5/6 of her income from dividends and 1/6 from tax-free municipal bonds then her tax rate nets out at 12.5%.

Before Bush's tax cuts, Teresa paid the top marginal rate of 39.6% on her dividend income. So as you can see, people who live off their investments now pay much lower taxes than people who earn wages/salaries - and that's the way Bush wants it.

	09-11-2004 08:41									#66
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Republican concept of a flat tax.

	09-11-2004 08:45									#67
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quote: Originally posted by JohnT Hence my later comment about the proposed 17% rate being too low - it isn't revenue neutral. The benefit of a flat tax isn't that it reduces taxes, it makes preparation and filing of them much simpler and it erases all deductions, exemptions and loopholes in the personal income tax code. It's easy to remove any element of regressivity by increasing the personal deduction - under a flat tax plan, a personal deduction of $30,000 would pretty much cover the entirety of the middle class, leaving the income tax burden on those with higher incomes.

Right there's nothing wrong with a flat tax as long as the personal deduction is high enough, it taxes capital gains the same as earned income and the personal deduction is inflation-indexed. I'd be also be good if Social Security taxes were rolled into the flat tax since right now SS taxes are regressive.

I very much doubt it would fly though, since so many people have their favorite deduction, so you'd piss of a whole lot of people, such as ones with a big mortgage, lots of kids, lots of education fees etc. etc. etc.

	09-11-2004 08:58									#68
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Well, who you would really piss off is the entire industry of CPA's, tax lawyers, and other bloodsucking leeches, which is why a flat tax plan will almost never pass.

	09-11-2004 09:11									#69
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quote: Originally posted by JohnT Well, who you would really piss off is the entire industry of CPA's, tax lawyers, and other bloodsucking leeches, which is why a flat tax plan will almost never pass.

That too, but you need some deductions just for sanity's sake like the expat one, you can't have people who have to pay full foreign taxes taxed at the same rate as people in the us. But then maybe I'm biased

	09-11-2004 09:17									#70
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No, I agree Boshko. People saying it all simple if we do it X way don't understand all the things involved. The lesser taxes for expats is one important thing to be considered. And, of course, what is considered taxable will still be a big issue and keep the IRS busy for years to come.

	09-11-2004 09:20									#71
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sez the future lawyer.

	09-11-2004 09:31									#72
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quote: Originally posted by Patroklos Paying youer taxes is basically the only civic duty left. If you don't make the poor pay you have just made second class citizens out of all of them. Imagine the people who already think they are lazy burdens to society.

Must be the first or second time we agree.

Civic duty

	09-11-2004 09:37									#73
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quote: Paying youer taxes is basically the only civic duty left. If you don't make the poor pay you have just made second class citizens out of all of them. Imagine the people who already think they are lazy burdens to society.

civic duty?? why would they be second class citizens? thats like saying people who dont vote are second class citizens.

	09-11-2004 09:38									#74
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A flat tax would also penalize at home businesses and small businesses if you didn't have capital investment deductions. The code is horribly compicated, but it doesn't affect most people.

	09-11-2004 09:38									#75
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quote: Originally posted by Lawrence of Arabia civic duty?? why would they be second class citizens? thats like saying people who dont vote are second class citizens.

They are. What do they get from the government? When you vote, politicians pay attention to you.

	09-11-2004 09:42									#76
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quote: Originally posted by MrFun A flat tax is stupid -- one should be taxed progressively more, within reason, as one's income rises.

You can have the best of both you know. Just have a flat tax on income with a single large universal exemption. Depending on the ratio of the single universal exemption to the rate of the tax you can make the tax system as 'regressive' or 'progressive' as you please. Income tax brackets are just too cumbersome and illogical.

	09-11-2004 09:46									#77
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quote: Originally posted by AnnC That's a very good example - which illustrates the degree to which Bush's 2003 tax cut was a giveaway to the wealthy. Teresa Heinz-Kerry doesn't work for wages, she derives all her income from stocks and bonds. Bush reduced the capital gains rate to 15% and applied it to stock dividends. So for example, if Teresa gets 5/6 of her income from dividends and 1/6 from tax-free municipal bonds then her tax rate nets out at 12.5%. Before Bush's tax cuts, Teresa paid the top marginal rate of 39.6% on her dividend income. So as you can see, people who live off their investments now pay much lower taxes than people who earn wages/salaries - and that's the way Bush wants it.

Yes. Thank you.

	09-11-2004 09:48									#78
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quote: Originally posted by Geronimo You can have the best of both you know. Just have a flat tax on income with a single large universal exemption. Depending on the ratio of the single universal exemption to the rate of the tax you can make the tax system as 'regressive' or 'progressive' as you please. Income tax brackets are just too cumbersome and illogical.

That's not true. A flat tax is always regressive. But if you make the standardized deduction large enough, teh people hit most unfairly will still be so rich that only David Floyd could possibly call it unjust.

	09-11-2004 09:52									#79
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Why should the middle class or upper middle class pay a great proportion of their income then the Super Rich?

	09-11-2004 09:53									#80
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quote: Originally posted by Shi Huangdi Why should the middle class or upper middle class pay a great proportion of their income then the Super Rich?

Press: Mr Dillenger, why do you rob banks?
John Dillenger: Cuz that's where the money is.

	09-11-2004 09:55									#81
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quote: Originally posted by Shi Huangdi Why should the middle class or upper middle class pay a great proportion of their income then the Super Rich?

Because Bush pushed for sharp reduction of capital gains tax rates.

	09-11-2004 09:58									#82
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quote: Originally posted by chegitz guevara Press: Mr Dillenger, why do you rob banks? John Dillenger: Cuz that's where the money is.

Willie Sutton, not John Dillinger.

	09-11-2004 10:00									#83
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quote: Originally posted by AnnC That's a very good example - which illustrates the degree to which Bush's 2003 tax cut was a giveaway to the wealthy. Teresa Heinz-Kerry doesn't work for wages, she derives all her income from stocks and bonds. Bush reduced the capital gains rate to 15% and applied it to stock dividends. So for example, if Teresa gets 5/6 of her income from dividends and 1/6 from tax-free municipal bonds then her tax rate nets out at 12.5%. Before Bush's tax cuts, Teresa paid the top marginal rate of 39.6% on her dividend income. So as you can see, people who live off their investments now pay much lower taxes than people who earn wages/salaries - and that's the way Bush wants it.

Even if you earn all your income from investments you still pay your income tax as if it was all earned income don't you? It's not like your adjusted gross income will be reduced due to it including no wages, at least that's how I understood it.

	09-11-2004 10:03									#84
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quote: Originally posted by Geronimo Even if you earn all your income from investments you still pay your income tax as if it was all earned income don't you?

Not anymore. Thanks to the tax cuts on dividend income, the idle rich now pay a much lower percentage.

	09-11-2004 10:23									#85
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Dividends taxes collected taxes on earningst that have already been taxed.

	09-11-2004 10:24									#86
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I support a flat tax.

75% on all rich people.

	09-11-2004 10:28									#87
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quote: Originally posted by chegitz guevara Not anymore. Thanks to the tax cuts on dividend income, the idle rich now pay a much lower percentage.

Sure they pay a lower percentage on their dividend tax but they aren't allowed to then deduct their dividend earnings from their gross adjusted income are they? If someone earns 100k in salary won't they pay income tax in the same bracket as someone who sits on their ass and 'earned' 100k by having an accountant invest their savings for an income of 100k? They both would have an adjusted gross income of 100k and both would pay income tax in the same income bracket based on that 100k right?

	09-11-2004 10:38									#88
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quote: Originally posted by Geronimo Sure they pay a lower percentage on their dividend tax but they aren't allowed to then deduct their dividend earnings from their gross adjusted income are they? If someone earns 100k in salary won't they pay income tax in the same bracket as someone who sits on their ass and 'earned' 100k by having an accountant invest their savings for an income of 100k? They both would have an adjusted gross income of 100k and both would pay income tax in the same income bracket based on that 100k right?

Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

	09-11-2004 10:38									#89
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quote: Originally posted by JohnT The person making $17,000 a year would pay $765 in income taxes under Steve Forbes'* old tax plan, not $3,400. Currently, using a standard deduction, they pay $1,215. One thing about the flat tax (again, proposed by Forbes), is that the standard deductions are increased to $12,500 for individuals and $5,000 for dependent children, so that a family of four would have their first $35,000 of income tax free. *Tax rate of 17%, deductions: $5,000 dependent, $12,500 single, $25,000 married.

Ok, so then the upper class will be paying unreasonably too low in taxes.

	09-11-2004 10:45									#90
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quote: Originally posted by Boshko Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

Is there a non bias source to check this out? I know that each year (including last year) that I did my taxes I had to include income from interest into my total income for that year. It went straight into the adjusted gross income along side wages. If I had gotten no wages but enough extra interest that year to make up the difference how would it have decreased my taxes?