OT: You guys mind a tax question?

Remember Steve Forbes and his 10% flat tax idea? Why wouldnt this work?

GDP is almost 16 trillion. Ten percent of that would be (rattle, rattle, rattle) $1.6 trillion. Not enough.

US Government spending for 2013 will be around $3.5 trillion. US Government revenue will be around $2.8 trillion.

10% straight across the board, NO EXCEPTIONS! That is where the problem lies, the rich get all the breaks. If they had to pay their fair share just like the working peo9ple, I think 10% would work.

I think it's the other way around, the 40% of people that don't pay any taxes wouldn't like it.

10% won't do it,but a figure of 22% to 23% on all new goods and services, which includes a subsidy to the poverty level folks.
Read Neal Bortz's flat tax book, its ends all federal taxes

100% in agreement!

Well, actually it'd work great if you could get the govt to quit spending money like they do. It's absolutely absurd the way they do things...

Ben

The flat tax would work just fine but the problem is the rich want loop holes so they can get write offs. If it was a true flat tax and if you make $1000 you pay $100 and if you make $100,000 you pay $10,000. But the rich would never agree to that let alone those in D.C.

Sounds like that's where the problem is.

That is, of course, not a "tax" question but a political question.

What do you think is meant by a "flat" tax? Do you really want to eliminate all deductions? Mortgage interest deduction? Gone. Married? You and your wife get taxed at the rate for as for singles. Kids? No exemptions for them. Sell your house? No exemption from capitals gains; it gets taxed at the flat rate, even if you buy another home to replace it.

Everything in the tax code was put there for a reason, from the reduced tax rates for married couples to the billion-dollar corporate welfare tax credits. Not necessarily for good reasons, mind you, but enough congressmen thought at one time that each of those loopholes was justified to vote them in.

Be careful what you ask for; you just might get it.

Agree let everyone pay 10 percent so everyone has a stake in it. Then you will see spending in government change.

I think most of the rich pay far more than 10%. Remember the big flap over Warren Buffet being in a lower tax bracket than his secretary? That's because most of his income is from selling his stock, not wages- but he still pays 15% on that.

If you look closely at the so-called "loopholes", they are mostly designed to get rich people to expand their businesses, hire more people, and keep the economy going. Take those incentives away, and remove their prospects of making more money, and they'll just pack it in and live off what they have, and the economy loses even more jobs.

Yep, family with 2 kids, with one parent working and making $20,000 a year (10 bucks an hour) pays no taxes, and gets a check from the guvment at tax time for $5,600 (the Earned Income Credit). Plus food stamps, medicaid, free external_linkcare, and lord know what else. Oh, and free day care, because the non-working spouse sits home and takes care of the kids- What with all the free stuff at $20,000, they're better off with only one working than with both at $40,000 total. But I guess it all works out, because there aren't enough jobs to go around, anyhow.

It would work if you could cut government spending about one trillion dollars. As things stand now, you just would not collect enough revenue.

It's interesting how everybody jumps on the "the rich will benefit" bandwagon.
So a waitress making cash tips won't find any loopholes? Your hair cutter, making 50% of her income in cash, will be 100% honest?
It's humorous to watch the jealousy in human nature.

"Remember Steve Forbes and his 10% flat tax idea? Why wouldnt this work?"

Well, it would put my accountant out of a job, and I'd hate to do that. Some years ago after I sold in Illinois and bought in Indiana, but still work mostly in Illinois, come tax time got to be pretty confusing since Illinois stopped the reciprocating agreement. First year I made out my taxes, I don't think I got much or any back until I went down the road to the CPA guy and gave him $140 to take a crack at it. He deducted things her and there and got me almost $6,000 back. Was the $140 investment worth it especially since Illinois raised their income tax by 66% a year or two ago? Let's just say, I don't want to put my CPA out of business. Besides, not only is his receptionist nice, she's real eye candy too. If I had been born wealthy, good looking, and hunged like a horse, I wouldn't have too many or even any problems the way I got it figured. I could have been a well paid movie star, just not in main stream movies. Oh well, better luck next life I guess.

Don't be starting anything...especially with the holidays fast approaching. Ho, Ho, Ho...

Mark

VAT(value added tax) is used widely in Europe. If
enough people want a flat tax, we probably would get a hybrid like this. Watch would you ask for, you might get something like it. But, it could be worse than what we have now.

Works good for those making a weekly paycheck. Very simple.

Sucks for everyone else. Will be the same deductions, loopholes, etc. if you farm 1000 acres, do you pay 10% of gross sales, or net income after expenses? Would be the very same tax setup we have right now.

Paul

Super-H-Mike,
Dave2 said in Germany they have a sales tax of around 17-18% ???? Not sure if it cover just health care or all forms of tax.

A friend goes to Canada bear hunting. He said they have a sales tax 17-18% ???? for their health care too.

I think England has something like that too, not certain??

My info is second hand, so please if you live in Germany, England, Canada or any other country that has a sales tax, please post your first hand info.

George

Would be a great idea remember Herman Cain ran on that but the problem is the rich would have to pay to much LOL.

I"d rather see the income tax done away with and just have a sales tax that way everyone would be taxed and if you have alot of $$ and spend a lot of money you pay a lot of tax.It would encourage saving and make people think before buying a bunch of stuff they don"t need.

If you have a flat tax on income; with no consideration of what it costs to generate that income; many self employed or small businesses will be paying more in taxes than they "cleared". If you start allowing deductions or exemptions; how is it any better than what we have now??????? There are many businesses that "handle" lots of money; but; get to keep very little. For instance(and from experience); a truck owner / operator may generate over $200,000 in income; but; after fuel, insurance, truck payments and operating costs; the "net" take home income may be as little as $30-50,000. He worked all year to make 10-30,000 after flat tax. If he had a bad year with some major breakdowns and repairs; he pays more in tax than made.

Yes especially when W started two major wars and then lowered taxes, what an idiot!

(quoted from post at 09:23:16 11/09/13) The flat tax would work just fine but the problem is the rich want loop holes so they can get write offs. If it was a true flat tax and if you make $1000 you pay $100 and if you make $100,000 you pay $10,000. But the rich would never agree to that let alone those in D.C.

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You can look up the tax codes yourself old, the rich, on pay check type income (over 400,000 per year), pay 39.6% of taxable income, 15% on investment income and as much as 23.8% on capital gains. The lowest tax bracket pays 10%. When the top 50% of the tax paying public pays in a little more than 97% of taxes collected while the bottom 50% pay less than 3% how can you say the rich are not paying enough or "their fair share"? What hurts the numbers the most for the bottom 50% are the folks receiving "earned income credit" and getting everything they paid in on top of that back too. They are the ones not paying their fair share, they are making over 5K a year not paying their fair share.

Rick

Interesting concept, but when & how would the change be made? I am in no way commenting on whether or not the total tax bill is too low, too high, or about medium.
Some people have managed their money well, & by being careful with their spending have been able to put away a few bucks to live on in retirement, & have paid income tax on those savings. If suddenly income tax was dropped & higher sales tax took over they would have to pay the larger sales tax when they spend the savings that they have already paid income tax on (doouble taxation).
As an example let's say change tax systems on Jan 1,2015. Only way to change from one to the other is that all persons born before change-over date continue with the present system, maybe with a different rate. All persons born after the same date would not pay income tax, but pay the larger sales tax on everything.
Keeping track boggles the mind.
Willie

Ah but there are many people who never file taxes but pay into the system and they could very well get $$ back but do not do so. I know years ago I payed in but did not file and could have gotten most if not all I payed in back but was told I did not make enough to file. But then I also started paying into the system at the age of 12 which including paying S.S.

Nice try!

I'm not gonna take that bait!

;-)

Ben

(quoted from post at 19:31:48 11/09/13) Ah but there are many people who never file taxes but pay into the system and they could very well get $$ back but do not do so. I know years ago I payed in but did not file and could have gotten most if not all I payed in back but was told I did not make enough to file. But then I also started paying into the system at the age of 12 which including paying S.S.

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Old, that's you, many people have never paid anything in. Heck a 17 year old nephew of mine started working for the first time about a month ago. He is going to be a daddy next month and my BIL told him he has to work. They have been to see a judge and they will get hitched next month too. He's a really bad under achiever and I suspect he'll work at Wal Mart for a number of years and get back far more than he pays in. He's not alone. There are many people in the same boat. He will most likely milk the system for all he can and will never pay his fair share unless he win the lottery.

Heck think about it. Get a pay check for 400,000 plus dollars. Have an adjusted taxable income of 400,000 even. Your tax bill for federal income tax is going to be 158,400 bucks. Plus state taxes. Then with that kind of income you are going to spend more than the guy making 40,000, so you would pay out a fair amount in sales tax too. Then with that kind of income you most likely like in a more expensive home that has higher taxes too. Then people who make that kind of money most likely have investments too and returns on those investments are going to cost them 15%.

We have a guy here who I know pretty well. His average tax bill to Uncle Sam is about 68,000 a year. That's more than most people I know make. Now get this. He has no earned income. All his money is from investments.

Rick

have said all along we should have a consumer tax to fund obomacare. then every one would be paying,illegels,low income, welfare. everyone paying, everyone using. you cant have 100% of the people using, 50% paying

It would probably have to be more than 10%. But the largest problem is gov't spending. Until gov't stops spending like crazy, and printing fiat currency to pay with, we aren't going to do better. Our debt is over $17 Trillion, not 16, and no one in Washington has any intention of ever paying it down- ever. Until they stop borrowing to buy votes with entitlement programs,grants and pork it's not going to end.

I've read through this and seen the same old "the rich don't pay their share" crap. The rich ARE paying their share and then some. The top 25% of wage earners, those making $66K or more a year (hardly RICH!) pay almost 90% of the income taxes. The top 10%, $112K and up, pay 70% and the top 5%, $154K and up are still paying almost 60%!!! How can anyone say they aren't paying? They are most certainly are. And it goes beyond income taxes to capital gains, trusts, etc. As a percentage they pay more than we do. Simple fact. They just do. Personally I don't much care for the rich, but I'm also not petty enough to think that it's right to force some mega-gazillionaire to fork over, say, 50% of his wealth to pay for useless social programs or pork barrel spending to get some slime ball Senator re-elected. I don't want my tax dollars going to that or his.

Sometimes people need to open their eyes and look at the bigger picture. You're getting raped, your kids and grandkids and great grandkids are all getting the shaft because of politicians spending in ways that benefit them, the politicians. It happens so often we don't even hear about it some company that is hired to "fix" external_linkcare turns out to be run by external_links wifes former roommate, another is run by Diane Fienstiens husbands company, Terry McCaulife was involved in a scheme that made Solydra look like nothing, etc, etc, etc. That's where your money is going, that's why we're borrowing and that's why we can't get away with 10% anymore. Add in external_linkcare, more taxes, more regulation, less jobs...it ain't gonna end well.

The tax code is a source of power for elected officials...a flat tax obviates trading preferential tax perks for favors.