Reply
Tue 15 Jun, 2004 04:53 pm
I'm all for tax simplification. I believe most americans are. This is how I think we can achieve this.
Each dependent and individual covered unter the file gets a 10,000 tax exemption. Thus a family of four making $40,000 would pay nothing in taxes.
For each dollar above this, you pay 20% on it in taxes up to $100,000
For each dollar above this, you pay 35% in taxes...
In addition, we eliminate state taxes, local taxes, sales taxes and all other taxes. States get paid proportionally 50% of the average collected for every person they have .
I know that it is still somewhat progressive, but the tax code is atleast flatter and I think liberals would get behind this proposal too.
And god knows the tax code needs some simplification
In addition to this, while filing their taxes, individuals can indicate that they would like to donate up to 10% of their total tax dues to one of several nationally recognized charities listed and described instead of giving this money to the IRS. No individual can donate more than $5000 to any particular charity.
To qualify, the nonprofit organization...
1. Must not be affiliated with any political group or intentionally discriminate against any race, religion, or ethnic group.
2. Must be nationally based with several branches, to ensure that the money goes to the areas that need it most.
3. Must either aid the sick, the poor, the unemployed (ie job training), the environment, disaster relief programs, civil service agencies (such as volunteer firemen), apprenticeship programs, orphanages, day care centers, education facilities, conduct medical research, provide international aid, provide information and help on health and safety concerns, provide free counseling, or fund development projects.
4. Must keep through and open accounts so that the media, the government and individual donators can clearly see where the money is going and how it's being spent.
5. Must not give donors any awards or gifts in return for their donations.
6. Must spend less than 5% of their budget on bueracratic costs.
This would also allow private charities to take up some of the burden of alleviating poverty since so many insist that they would do a better more efficent job than the government. It'll also let people decide how a portion of their tax revenue gets spent.
The media would publicize the most successful charities right around tax day. Community development becomes a focus of the public. And the increased scrutiny would ensure that inefficent charities are quickly publicized and starved while congress is often too slow and bueracratic to shut down inefficent social programs. It's captiatlism applied to social goods.
The tax rates are already that simple, though somewhat more gradual. The tax codes are extremely complex when it comes to what constitutes "income" and "tax deductable expenses." It also wouldn't account for variances in living expenses from place to place.
If your only income is W2 income, and you don't have any deductable expenses, your tax return consists of a 2 page 1040ez form which can be completed in about 5 minutes.
Federalizing the state taxes and tax collection and distribution is very unconstitutional. It would allow the federal government to force states to inact or repeal certain laws that the government has no right meddling with. The federal government did it with the highway funds in the early '80s by forcing states to raise the drinking age or forgo federal highway funds.
Finally, your tax rates are really low (I like low taxes). I live in Virginia, I am not in the highest tax bracket and Virginia has comparatively low state taxes and my total income tax rate is close to 30% (includes social security, medicaid, federal and state income taxes, excludes property and sales taxes). Under your plan, my taxes would be greatly reduced not only the 10% to your new bracket, but my property taxes would go away and so would my sales tax.
I'd like to see the math that would demonstrate that this proposal would be revenue neutral.
It wouldn't. The tax rates are for theory only (I think).
I don't like any exemptions or inflated rates based on income or family members.
I'm just for a flat tax, period, or no tax at all.
Just my unresearched opinion
tony2481 wrote:It wouldn't. The tax rates are for theory only (I think).
Theory or not, I don't think anyone would be silly enough to support something where a total tax revenue estimate can't be demonstrated. Picking numbers out of the air is nice but if you can't tell the taxpayer what they get in terms of services when it's all said and done no one is going to support it.
Tony, I was speaking specifically of the federal income tax. If you count all the taxes my family pays, these absorb 50% or more of our gross income.
I don't think a national sales tax would violate states rights in any way. Virtually all states that have a state income tax now link it to the federal income tax form numbers.
And those who complete that 2-page income tax form are in a distinct minority. 50% of federal revenues are paid by a small percentage of Americans (the so-called rich) who are often required to hire expensive accountants and attorneys to figure out what they owe Uncle Sam.
The vast lion's share of the bottom 50% are paid by people like my husband and me who do our own taxes but it takes lots of forms what with self employment income, a little bit of interest income, modest investments, possibly social security income, etc. I get about $60/year from a tiny oil royalty and have to fill out one whole form just for that.
The idea of not having to keep track of all that stuff just to satisfy Uncle Sam is very appealing.
The next best thing would be a flat tax with maybe three deductions: capital gains, charitable giving, and home mortgage. That I could really go for.
All:
My point was not that a national sales tax is bad. It was that the federal government should not be administering the states income nor collecting state's taxes. Nationalizing state taxes and there are no longer individual states making decisions for themselves.
I don't think the federal government should be collecting taxes for anything but national defense. Different parts of the country need and want vastly different things. We the people should be afforded all the flexability possible to be more effecient with our tax dollars.
Also, Centroles tax rates were quite low, which I like.
Fox, with your 3 deductions, you would be paying taxes on money you had to expend on your small business (like your car if you use it for business). To avoid paying too much tax you would have to figure out your business' net profit anyway, it just might not be on a federal tax form.
Anyways, I the the Federal government collects way too many tax dollars, and spends way too many tax dollars on stuff we don't need, or don't need them to provide anyways.
I also don't know why two words became ad-links in my post. in the last sentence. the first "the" was supposed to be "think"
fishin' wrote:I'd like to see the math that would demonstrate that this proposal would be revenue neutral.
ican711nm wrote:fishin' wrote: I don't wanna poke to big of a hole in your thoughts here but this would be a bad idea. I'm not opposed to "alternative families" but if I'm a single person making $100,000 a year the first thing I'd do under your plan is find a bunch of unemployed homeless people (or nursing home residents) and claim them all as my "family members". If I can come up with 19 people my tax liability becomes $0.
Two easy solutions:
#1 Limit the number of dependents participating in any
joint file to some arbitrary number (e.g., 12).
#2 Set no limit. As long as each person is a dependent in no more than one
joint file, then let them form dependent families as large as they want.
There are approximately 300 million people in the US. If they all make one joint file. At $5,000 per exemption that would exempt 300 million x 5,000 = 1.5 trillion dollars tax free. But total income in the US exceeded, in the year 2000, 8 trillion (from Encyclopaedia Britannica, Book of the Year 2003, page 755, year 2000). So at 13% that would be 0.13 x (8 -1.5) trillion = 0.13 x 6.5 trillion = 0.845 trillion. But spending in the year 2000 was almost 1.9 trillion. To obtain that 1.9 trillion tax revenue from the income tax with the tax system I propose, the tax rate would have had to have been 100% x 1.9/6.5 = 29.23%.
There is a practical reason why large dependent, joint files will not be as attractive as one might first think. Folks with little or no income will probably charge the folks with larger incomes a fee for delivering their exemption to a joint file.
I prefer solution #2! :wink:
If the tax rate would have to average 29.23% to meet spending, then this should work.
Keep in mind that there are many people who's revenue goes well above 100,000 to millions upon millions.
I'm fairly sure that it would come close to balancing out.
But the tax rate might need to be increased to account for state and local taxes.
That's not neccesary though, if enough people think that owuld be unfair, we won't incorporate them into the flat tax.
I think its generally a good idea to get rid of most of the tax exemptions though. Perhaps a few basic ones like mortagages, charitable contributions and education fees. But nothing big.
I want to know more about the "spending" before I can form an opinion about these proposed tax rates.
Centroles wrote:If the tax rate would have to average 29.23% to meet spending, then this should work.
Keep in mind that there are many people who's revenue goes well above 100,000 to millions upon millions.
I'm fairly sure that it would come close to balancing out.
I'm not so confident. The numbers Icann used are at best, guesses and he only does his calculations based on Federal income tax revenues. You are proposing the elimination of all State and local taxes as well so you have to adjust the tax rate to create enough revenue to compensate for those as well. If you are looking at a 29% tax just to cover the Federal Income tax then you might very well be looking at a flat tax in the 65%-75% range when you add in all of the other taxes you'd be eliminating here.
From my libertarian soul, I would prefer the Federal government collect only enough taxes to provide for the national defense and administrate those things that cannot be efficiently done by the states and/or (production and regulation of currency, interstate trade/traffic, control of the airways, international treaties, etc.)
I would prefer that everything else, welfare, education, laws re employment, etc. be left to the states. And I would prefer that the states do only that which cannot be administered/produced more efficiently by the private sector.
If we did that federal budgets should be much easier to estimate and administer and a flat tax, however structured, would work beautifully. And Michigan, who has different problems and issues than does say Kansas, could structure its own laws and tax structure and Kansas could do the same.
It is always mystifying to me how some people put more faith in the federal bureaucracy to deal with national issues/problems than they put in their own local and state governments. But the more power the federal government has, the more coercive it can be and more out of touch with local tradition, customs, and mores.
Stumble It!
Tweet This
Bookmark on Delicious
Share on Facebook
Share on MySpace