Where do I sign up? Mitt Romney's tax rate would drop by 0.5% under this plan. My tax rate would drop by 10.5%. I'd say that's fair enough.
there are real examples of this type of tax system working well and actually increasing tax revenue. corporations that have been leaving for greener pastures in a global economy would flock back, jobs would increase significantly and unemployment would drop significantly. There's no certainty the tax revenue would work here but it sure sounds good. Puts more money in everyone's pockets.
I'd like to see what economists say about it. Is it really a fair tax code if everyone pays the same %. But the idea of cutting out all kinds of loopholes for the rich, etc could make it fairer. So as a liberal I'm basically for progressive tax rates but open to better ideas. Rand along with Lindsay Graham to me are definitely the best of the Repubs and people you have to listen to.
I'm not an economist so this may be an opinion riddled with holes, but my viewpoint is that the tax system favors people who can utilize the myriad of deductions that are available to lower their taxable income. Those people are predominantly rich people. People on the lower end of the wage scale can't afford to be maxing out their 401k plans, flex spending plans, itemized deductions, overcosted McMansions, donations, and God knows what else. I think a flat rate IS more fair because it eliminates top heavy advantages. Also, investors (the super rich, typically) pay a lower tax rate than your typical 40-60 hour a week working putz (a majority of employed people) due to the idea that their lower rate spurs growth. Yet, people in the middle class and especially the poorer have very limited upwards mobility to break out of their tier because they can't take advantage of the benefits that the rich already have. The increased take home pay would do wonders for people who aren't in that upper tax bracket. The idea is that a financially empowered middle class = a financially empowered economy.
I think you have to crunch the numbers. And can you get rid of all of these loopholes. The rich are pretty smart or they wouldn't be so wealthy. Would it include Romney's stash in the Cayman Islands, too? Of course the idea of getting rid of tax lawyers who specialize in tax loopholes would be great. But I think they're like insects, you can cut them in half or try to squash them but they'll still survive.
I'm for tax reform but not sure how deeply Rand's experts have delved into this. In the past his facts and his sources have been seriously challenged and in a few instances he's had to apologize for it. Sometimes he hasn't apologized for it. As for the US having the highest corporate tax rate: they do have the highest statutory rate in the world. But after loopholes they don't. If you google it you get the Heritage Foundations take on it (of course biased). Here's an article about it from CBS http://www.cbsnews.com/news/expert-debunks-claim-us-corporate-taxes-are-high/which basically quotes an expert saying that after loopholes the US doesn't have the highest corporate tax rate. Those companies that left: they don't want to pay their taxes.
TYpical bait and switch move by the Paul clowns. The complaint about complexity in the tax code is not an excuse to replace the progressive income tax. You can retain progressivity and eliminate the deductions. So why is complexity a reason to have a flat tax? It is total bullshit. Just a cover to give mor to the rich. Are you rich? If not, are you familiar with the concept of the useful idiot? I also note that the notion that a VAT-type tax will be applied to tax the expenditure of money saved by people who earned their income under the current tax code will work a huge unfairness to those about to retire or are already retired. This makes the proposal politically unfeasible once this becomes apparent - what is the justification for screwing that group? And of course once that group realizes the net effect of this proposal, they will be uniformly opposed. Taxpayer accumulates savings after tax, having paid up to the current top marginal rate of (what is it?) 36%. Current state sales taxes range from @5% to 8+%. So, the money saved that will be spent under the current tax rates will be taxed on consumption in that range. Under Paul's proposal, the effective tax rate on consumption effectively doubles. Now if you are making your money on a going forward basis, you might feel that the proposal is effectively neutral to you, since your income tax rates will be lower. But if you've already earned the income you have accumulated as savings, why should you want to have consumption taxes doubled?
Care to explain yourself? I know my opinion on this topic is on soft grounds, and I'm certainly open to an explanation that states why I'm wrong, if it makes sense.
Btw if we're talking about losing jobs. There's a lot more jobs in the US than there was 6 years ago. Unemployment rates are way down. As for income inequality the Repubs of course blame it on Obama which is the ultimate joke. When they do everything they can to keep the status quo. They're even against increasing the minimum wage. But if they really wanted to improve society, cut unemployment and provide better paying jobs and a lot of them. Pass an infrastructure bill that would fix highways and bridges and tunnels. Some of them in bad condition. This would jump start the economy and help everyone. But the Repub Congress won't do it because they don't want Obama to get credit for it. It's as simple as that.
Well, I laid it out in my response to the OP. Flat tax proponents make their case primarily by complaining about "complexity" in the tax code. But the complexity coming from the progressive nature of the income tax is minimal. It is simple mathematics. Where the real complexity comes in is in the deductions, credits and their effects. Eliminating the complexity caused by the deductions does not require elimination of the progressive income tax. So, why then do proponents of the flat tax present the issue as an attack on complexity, when their "solution" is a flat tax on income? Because the net effect of a flat income tax benefits the wealthy. Flat tax proponents do not want to say that is what they are up to, so they instead focus on complexity. Now of course one can be genuinely concerned about complexity in the tax code. But that concern does not require adoption of a flat tax. Complaining about complexity and then focusing on a flat income tax as the solution (or changing to a VAT-type tax that everyone pays the same rate on) is a classic bait and switch.
You aren't speaking my language Blocker. How exactly does a proposed flat tax benefit the wealthy? Maybe you need to speak in black and white terms instead of fluffing around the issue. Not trying to criticize, I don't even know if I disagree with you, I am just saying I am personally having trouble understanding what you are trying to say. Edge's responses I could follow The tax code is very complicated and eliminating loopholes may make it more fair, I truly don't know either way, but eliminating some loopholes here and there would certainly make it more complicated. A complicated tax code benefits the wealthy no matter what even if the complexities are intended to not benefit them
First of all, the complexity issue is important in the sense that there is a lack of transparency. Nothing short of intense research, something that most people can't afford or have the time to do, will reveal the full workings of the tax system. When you're dealing with a massive voting population, simplicity and transparency are both strong qualities that are worth pursuing. Second, the progressive income tax in my opinion is misleading. It's simple enough to think that the more money you make, the higher your tax percentage, but this simply isn't true. It's true when applied to the working class. However, the working class are not the "rich" class. Real wealth that can be described as "rich" isn't generated through a 9-5 job. I'd go so far to say that anyone who accomplishes that sort of wealth using their annual income as their only means of doing this is nothing short of a miracle. Real wealth is generated through investments and passive growth. Compounding interest. Savings. Selling high, buying low. Things that people on the poor end of the financial spectrum do not have the means or the education to do. The people who do get to participate in these activities are not taxed against the progressive income tax, but rather the capital gains tax, which is an entirely different beast altogether. The example of this is Mitt Romney, who pays 15% tax against income that is in the millions. Third, you're not really helping your argument by being all conspiracy like concerning people who buy into the logic of the flat tax. I'm a registered independent and I could care less what the Republican party does. I'm no longer associated with them, nor ever will be again. However taxes is an issue I care about because it directly affects my life, and based on my experiences, this is what I believe is best. I'm not interested in the partisan reasoning, I'm interested in changes that will positively affect me. I'm not playing some left right game.
If payroll taxes are eliminated what happens to Social Security, Medicare and Medicaid? What happens to Workman's Compensation? How are these funded under a flat tax program? As an Entitlement or as any other government program subject to being cut by whoever won the last election? What types of income that are currently taxed will be taxed at a lower effective rate than they currently are taxed at? What will the overall revenue shortfall be compared to the current revenue gained from income tax + payroll taxes? Leaving aside the inevitable exhortations to a growth oriented economy, a process in which Boom and Bust rules the day, how will things like the existing federal debt be managed? Can we service the debt with a lower overall revenue base or will the interest payments become an ever-growing burden on the people? What happens in a flat tax environment when the economy slows down? What happens when it suddenly accelerates? Anybody seriously proposing a flat tax needs to give clear answers on most of the questions above. The US and increasingly the world economy are predicated on a model that is nearly a century old at this point. Changing things dramatically without preparing the people whose lives are going to be effected dramatically is likely to bring about creative destruction of a kind much different than free market economists envision. Note that my primary concern is that the math doesn't work out. I think this is lock the beast in a cage and let him starve in a week or so and I don't think anybody knows what happens then. The one thing about the last seventy odd years that is true is that American workers and their families have been largely spared sudden shocks to the system. I don't think anybody wants to see the average worker trying to figure out if American Democracy works or not because he can't feed his family or pay his bills or reliably keep a roof over his head.
An article I discovered concerning Mitt Romney's income: http://www.csmonitor.com/USA/Electi...-Romney-s-15-percent-tax-rate.-Yes-it-s-legal
This is actually a concern I've thought of that I would like to see adequately answered, should this type of system ever generate actual potential. In a system where consumption is relied on for economic success, if consumption drops it could cause a crisis. How WOULD that be handled? I don't know the answer to that question.
It's not even clear that we should be aiming at a heavily consumption based society. Heavy consumption creates enormous ongoing problems in terms of health and the environment. Continual growth will always outstrip the resources that backed it eventually. That's the story of civilization writ large. I'm not saying that we should all be frugal monks living cheaply but much of the spending that we do is pure excess. We'd probably be better off in a society where people spent less and saved more. A savings based society would collapse under a pure consumption model.
BB, I won't begin to pretend like I fully understand this. If you would like to help me and others understand this I'd ask that you start by not referring to us as idiots. It's hardly a way to get people to listen. I see nothing in his plan that refers to raising sales tax or creating a consumption tax. Are you referring to a different flat tax plan or did I miss something in Paul's? I see nothing in his plan that goes after retirement income. In this article it specifically states that retirement plan tax breaks will remain in place. He also specifically says investment tax goes away, so you get a break before the retirement savings and then no tax on the income after the fact. That sounds like a big win for retired folks to me, but maybe I'm missing something. http://money.cnn.com/2015/06/18/news/economy/rand-paul-flat-tax/ I'd like to have a discussion on this if you can tone it down a notch. Cutting taxes of the wealthy is not inherently a bad thing if it's also cutting everyone else's taxes and revenue can actually increase.
