A budget proposal: towards a balanced budget and for the people - the Progressives

[Craig234]

Neither do I. A flat tax with no deductions or loopholes would be great. Cut the hell out of the IRS and now people can't find sneaky ways to avoid taxes.

No, it wouldn't. It would be a huge FURTHER transfer of wealth to the top.

They don't need to 'find sneaky ways' when the rates are giving them MORE of a break.

 

[Craig234]

i just had a thought: CEOs' exorbitant salaries are mostly stolen from the wealthy anyway as it's really shareholder value the CEOs are eating up.

Except when the wealthy as a group are taking a hugely disproportionate share of the wealth from everyone else, it doesn't help much how they split it, even if you were right.

 

[ProfJohn]

but then the "progressive budget" still fails at being balanced, it simply shifts existing revenue.

Don't get me wrong, it could still raise some revenue just not the amount they are claiming. This is rather common knowledge so I must assume that they either know this or they are absurdly incompetent and they shouldn't be anywhere near the budget writing process. My bet is on the former which means they are still planning on growing debt faster than GDP. The law of exponents FTL.

The bold part is the truth.

They don't take behavior into consideration. As Craig illustrated. When you mention that a millionaire will only take home say 50% of that million after taxes he responds "hahaha I wish I was only making $500,000 a year" Which totally ignores how the people making that kind of money will actually react.

A millionaire won't laugh at having another 10% of their income taken from them by laughing at their good fortune. Instead they will seek ways protect their hard earned wealth. When New Jersey passed its millionaire tax increase the rich responded by looking for and finding loop holes. " In 2009, when Democratic Gov. Jon Corzine raised the top tax rate to 10.75 percent for a year, the Legislature predicted added revenue of $1 billion, but Treasury spokesman Andy Pratt said the state only collected an extra $560.2 million."

So a tax increase on millionaires only collected 50% of what they claimed it would. If that applied to the progressive budget then we'd miss our balanced budget goal by $2 trillion...

 

[child of wonder]

No, it wouldn't. It would be a huge FURTHER transfer of wealth to the top.

They don't need to 'find sneaky ways' when the rates are giving them MORE of a break.

I wouldn't have a problem with a "progressive" flat tax either. My biggest issue is that many wealthy people have means of avoiding the majority of taxes.

The government needs to stop subsidizing behavior through tax write offs and deductions. We need something simple and EVERYONE needs to pay an effective positive tax rate.

0-10,000 Income: 5%
10,000-50,000: 10%
50,000-100,000: 15%
100,000 - 500,000: 20%
500,000 and up: 25%

All income needs to be taxed the same, too. Warren Buffet pays an effective 17.7% tax rate on the tens of millions he makes each year. That's bullshit.

 

[Craig234]

I wouldn't have a problem with a "progressive" flat tax either. My biggest issue is that many wealthy people have means of avoiding the majority of taxes.

The government needs to stop subsidizing behavior through tax write offs and deductions. We need something simple and EVERYONE needs to pay an effective positive tax rate.

0-10,000 Income: 5%
10,000-50,000: 10%
50,000-100,000: 15%
100,000 - 500,000: 20%
500,000 and up: 25%

All income needs to be taxed the same, too. Warren Buffet pays an effective 17.7% tax rate on the tens of millions he makes each year. That's bullshit.

Yup, it's just good to understand there's a big difference between 'closing loopholes allowing taxes to be evaded', and the 'flat tax' which is a policy designed for the rich to shift taxes off themselves onto everyone else - which is why it's heavily marketed, including its false propaganda name 'fair tax'. We have a lot of loopholes that should be closed.

 

[Darwin333]

The bold part is the truth.

For the record, I think that both sides are equally incompetent. Ryans budget is just as bad as this one mathematically.

 

[Darwin333]

I wouldn't have a problem with a "progressive" flat tax either. My biggest issue is that many wealthy people have means of avoiding the majority of taxes.

The government needs to stop subsidizing behavior through tax write offs and deductions. We need something simple and EVERYONE needs to pay an effective positive tax rate.

0-10,000 Income: 5%
10,000-50,000: 10%
50,000-100,000: 15%
100,000 - 500,000: 20%
500,000 and up: 25%

All income needs to be taxed the same, too. Warren Buffet pays an effective 17.7% tax rate on the tens of millions he makes each year. That's bullshit.

The .gov uses the tax code as a very powerful tool to control what people do via financial incentive. Do you honestly think that the .gov is going to give up that much power? When in history have they ever done so willingly?

 

[child of wonder]

The .gov uses the tax code as a very powerful tool to control what people do via financial incentive. Do you honestly think that the .gov is going to give up that much power? When in history have they ever done so willingly?

Of course they won't. The Federal government has devolved into a big HOA that goes to war with other countries.

 

[werepossum]

I wouldn't have a problem with a "progressive" flat tax either. My biggest issue is that many wealthy people have means of avoiding the majority of taxes.

The government needs to stop subsidizing behavior through tax write offs and deductions. We need something simple and EVERYONE needs to pay an effective positive tax rate.

0-10,000 Income: 5%
10,000-50,000: 10%
50,000-100,000: 15%
100,000 - 500,000: 20%
500,000 and up: 25%

All income needs to be taxed the same, too. Warren Buffet pays an effective 17.7% tax rate on the tens of millions he makes each year. That's bullshit.

Works for me. No deductions, no shelters.

 

[Craig234]

I wouldn't have a problem with a "progressive" flat tax either. My biggest issue is that many wealthy people have means of avoiding the majority of taxes.

The government needs to stop subsidizing behavior through tax write offs and deductions. We need something simple and EVERYONE needs to pay an effective positive tax rate.

0-10,000 Income: 5%
10,000-50,000: 10%
50,000-100,000: 15%
100,000 - 500,000: 20%
500,000 and up: 25%

All income needs to be taxed the same, too. Warren Buffet pays an effective 17.7% tax rate on the tens of millions he makes each year. That's bullshit.

By the way, to be revenue neutral, a 'flat tax' would need to be over 30% (they say 23%, which is misleading because they reverse how they calculate it.)

So, your sample rates above would need to be quite a bit higher in order to be revenue-neutral.

 

[child of wonder]

By the way, to be revenue neutral, a 'flat tax' would need to be over 30% (they say 23%, which is misleading because they reverse how they calculate it.)

So, your sample rates above would need to be quite a bit higher in order to be revenue-neutral.

That's true. If you take this year's Federal Budget ($3.82T) and divide it by the total income of people in the US ($12.5T) you get a 30% tax rate.

However, if we could get the Federal government's spending under control, that tax rate can decrease.

Reduce the size of the Federal government? A pipe dream, I know.

However, does the government have other major methods of obtaining revenue? Someone with more knowledge of that will have to clue me in. That, too, would offset the flat tax rate.

 

[Craig234]

That's true. If you take this year's Federal Budget ($3.82T) and divide it by the total income of people in the US ($12.5T) you get a 30% tax rate.

However, if we could get the Federal government's spending under control, that tax rate can decrease.

Reduce the size of the Federal government? A pipe dream, I know.

However, does the government have other major methods of obtaining revenue? Someone with more knowledge of that will have to clue me in. That, too, would offset the flat tax rate.

The government gets most, not all, of its income from income taxes; but that does *not* offset the flat tax rate, as that money is already coming in and accounted for.

You said you looked at the budget and the income.

Remember, revenue neutral means 'same as the current income tax' - which leaves a large deficit.

 

[Attic]

Works for me. No deductions, no shelters.

This, give power back to people who need it most by removing the control of government and the tax savvy (read: tax cheaters).

Though id change Child of Wonders rates to be heavier on 500K plus and have a maximum closer to 40% kicked in somewhere above 1 million if this could releave ~5% tax burden from those earning 40k or less.

If it requires a huge shift up in taxes for 500K plus earners in order to achieve a 5% break for < 40k then this would not work as you'd be removing to much incentive to earn 500K (or creating to much incentive to cheat on paying taxes on >500K)

 

[child of wonder]

This, give power back to people who need it most by removing the control of government and the tax savvy (read: tax cheaters).

Though id change Child of Wonders rates to be heavier on 500K plus and have a maximum closer to 40% kicked in somewhere above 1 million if this could releave ~5% tax burden from those earning 40k or less.

If it requires a huge shift up in taxes for 500K plus earners in order to achieve a 5% break for < 40k then this would not work as you'd be removing to much incentive to earn 500K (or creating to much incentive to cheat on paying taxes on >500K)

I also want everyone to pay SOME taxes so we all feel a bit of responsibility towards how the government spends our money. IIRC, half of us have a net effective tax rate less than 0%! That's unacceptable and a big reason why so many have no qualms about living on the government teet.

If there was to be a 40% tax bracket I'd want it very high... say $5M or more.

0-10,000 Income: 5%
10,000 - 50,000: 10%
50,000 - 100,000: 15%
100,000 - 500,000: 20%
500,000 - 1,000,000: 25%
1,000,000 - 5,000,000: 30%
5,000,000 and up: 40%

 

[ConstipatedVigilante]

Estate taxes (aka death taxes) suck. And that budget needs to tax less and cut spending more.

 

[the DRIZZLE]

By the way, to be revenue neutral, a 'flat tax' would need to be over 30% (they say 23%, which is misleading because they reverse how they calculate it.)

So, your sample rates above would need to be quite a bit higher in order to be revenue-neutral.

Source? For which flat tax proposal is that for? Different versions handle capital gains and corporate taxes differently.

 

[ProfJohn]

Here is the real life effective tax rates for all Americans.
These rates include SS and Medicare taxes. (I added income tax rates with Social insurance rates) On top of these taxes we would have corporate and excise taxes.

By looking at what people are actually paying we can guess at what the rates would need to be for a flat tax to work.

If we passed a flat tax it should also eliminate SS and Medicare and throw it all into one big bucket since that is the way we treat it anyway.

Rates:
Bottom 20% 2%
next 20% 9.1%
middle 20% 12.7%
next 20% 15.7%
Top 20% 20.1%
top 10% 20.7%
top 5% 20.9%
top 1% 20.6%

The rate paid by the top 1% is skewed due to their income coming from capital gains.
A solution to that might be a progressive capital gains tax rate that start at 10% and goes to 20%. That would boost revenue from the rich without killing the goose that lays the golden eggs.

 

[Craig234]

Source? For which flat tax proposal is that for? Different versions handle capital gains and corporate taxes differently.

Sorry, I was thinking of the rates needed for eliminating the income tax to move to a *sales tax* - that even with optimistic notions of consumption continuing, it needs to be over 30%.

That is not, of course, about adjusting the income tax rates, which would have a different rate.