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Fair and Simple Tax Act. David Dreier

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Craig234

Lifer
May 1, 2006
38,584
345
126
Originally posted by: Robor
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
You can go ahead and bump me just over that $150K mark. I promise, I will not whine and cry! ;) :laugh:
But if we put you over the $150M mark, you will hire sellouts like David Dreier to lower your tax rate:)
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
101,382
5,382
126
Originally posted by: Craig234
Originally posted by: ElFenix
Originally posted by: piasabird
if we were not giving all kind of incentives and breaks to corporations
seeing as how taxes on corporations are usually paid by lower level employees more than anyone else, and usually exclusively, maybe taxes on corporations are something to rethink. though, i'd agree that it'd almost be impossible to explain that concept to the general public so it'd never work.
Huh? No, they're not, they're paid by the corporations.

You think that reduced taxes on corporations go into low levels emploiyees' pockets?
the economic burden, which is who actually feels the effect, is not necessarily the same as the legal burden, which is the person who writes the check.

CBO working paper says 70% workers, 30% shareholders for the economic burden


let's just analyze this logically. if we've got a competitive market in equilibrium, and then add a corporate tax, what happens?

as we all know, a corporation is just a fictitious entity. a nexus of contracts, if you will. there are three main groups of actual people that can be burdened with the tax: consumers who purchase corporations' goods, shareholders who own the corporations, and employees who work for the corporations.

the group most people assume will bear the brunt of the tax is consumers. but that is actually the group least likely to bear the burden. why is that? if there are sellers in the market that are not subject to the tax, then those sellers will beat the corporations on price due to lower costs. if there are corporations that choose to bear the burden in some other manner, then those corporations will beat the corporations that try to pass on the cost.

you can actually see this in action when airlines try to raise fares. one will announce a fare increase, a couple more will follow along, but if they don't all raise fares, they lower the fares back down.

so, logicially, consumers bear little of the cost increase due to the tax.

next is shareholders. assuming the corporate tax hits all corporations, then there will be movement of capital to methods that don't have the tax. if there are very few restrictions on the movement of capital, then it'll equilibrium out pretty quickly. shareholders will bear some burden, but the free movement of capital is a very important factor to remember.

the next place it can go is on employees. there are two sets of employees to consider: those at the very top and everyone else. of the two, which is more likely to bear the burden of any cost cutting? everyone else. employees will be fired, hirings will slow, bonuses will be cut, hourly and salary pay won't increase or may be cut. so, employees, particularly lower level employees, will feel a burden.

so, who feels it more, shareholders or employees? remember that capital movement is nearly unrestricted. is labor movement unrestricted? not hardly. even when there is no legal barrier to movement people don't move around all that much. most people live within 50 miles of where they grew up, even in the US.

you can see this in action with various companies leaving the NE and CA for the sun belt and lower taxes. sure, higher ups will move, some middle managers will move, but hourly workers? not likely. they now have to find a new job.

and what about the places that have lowered or eliminated taxes? no, you may not necessarily see an immediate raise for lower level employees, true. but you'll see employers expanding their operations in the area, you'll see employers moving to the area, etc.

if my reasoning is off somewhere, please say so. i don't think i am, though.
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: Craig234
Originally posted by: CADsortaGUY
Originally posted by: Craig234
All you need to figure this out is that Dreier is a right-wing congressman, and therefore his tax proposal will help the wealthy. Whether it shifts the taxes to the poor or to the debt is just a detail.

You can put lipstick on a pig, as they say, but it is what it is. Having investigated that conclusion in proposal after proposal, there's not much point in doing so for each one they come up with.

It's marketing 101 - start out with what you want, a tax reduction for the wealthy; then ask what will sell it, "simple!"? "fair!"? "New and improved!"? "Conservative!"? "Fiscally responsible!"? Who cares, do some market research and get the popular flavor of the day, and try to put a little in the bill, and then hype it with the flavor at high volume.
So now that you've shot him
Shot him? You misrepresent what I said. I pointed out whathis agenda is, and that I disagree with it. If you want to disagree and say that no, this right-wing politician doesn't want to help shift the burden even further off the rich, then go ahead, and offer some evidence, but you can't, because that is his agenda, and my post was right, and your false attack was the only unfair 'shooting' that happened.

why exactly do you think this would be bad or wouldn't work?
If you can't understand the issue I have from what I said, that I'm not in favor of plans that shift the burder further off the very wealthy however much lipstick is added, what can I sai?

For what it's worth, I don't mind some complexity in the tax code, where it serves a useful purpose. When it's merely unjustified special-interest rules, of course, I'm not for that.

And the issue isn't without its gray areas. While deductions for increasing home ownership or for blind people may seem pretty helpful, and sections which say 'Company XYZ is exempt' just because they're a nice donor for a politician are pretty clearly corrupt, there are plenty in the middle that have a bit of both. Are rules to help the elderly good public policy, or handouts to buy their votes under AARP pressure?

The point is as I said, that it's not worth the time to pick apart the hundreds of specific 'proposals' from the righties one at a time, when they prettty much all have the same basic structure of wanting to shift the taxes off the very wealthy, and to use some lipstick, like 'simplified!', to sell it. I said all this already, though, and if you didn't see the point the first time, why will you now?

Sounds almost like the system we have today except for simplifying it.
So, if he doesn't SAY clearly "the real point to this is to shift taxes off the very wealthy!", then you don't think that's the purpose? He has to NAME it the 'help the wealthy' plan for you? No wonder the schemes these people come up with get som many voters' agreement, no wonder the Bush administration named its pro-pollution bill the 'clear skies act' to get agreement - voters like you think if it's named the clear skies act, it must be good for the skies!

I mean, there is still "progressive" taxation which mean the "rich" still pay more than the rest of us. Isn't that what you people want?
Yes, it's less radical, it's less reduction of being 'progressive', than the radical flat tax. So what? It's still a step in the wrong direction.

In the past 30 years, the wealthy have paid a lower and lower share of taxes; that trend should be reversed. The Eisenhower administration and his Republican congress weren't commies, but they had far more taxes paid by business, and a top tax rate of 90%. The nation was not in a catastrophe over it. I'm not saying to go back to that point, but voters like you appear unaware of the huge shift just since Reagan took office off the very wealthy (the top 0.01% especially), which partly explains their incomes skyrocketing hundreds of percent while the bottom 80% have had zero net gins after inflation over 25 years, unprecedented in out nation's history that I'm aware of - increased economic productivity not shared with everyone, but all going to the top. You don't seem to know that, so how can we talk about it?

If you could get past the ideology you have been fed claiming that all fairness concerns are 'just jealousy and class warfare', and instead notice that one of the Richest men in the world, Warren Buffet, has said there is class warfare - and his side is winning - we could start to have a discussion, but that's rare for your side to do. Can you lay out any idea at all about what you think 'fairness' is regarding wealth distribution in the US, other than blind ideology like 'the government shouldn't play any role', which isn't the question?

My position is pretty simple, that an unprecedented lack of sharing in the nation's growth by the bottom 80% over 25 years, with a skyrocketing concentration of wealth draining the economic rewards available for incenting productivity and increasing our economic wealth so that the very wealthy can sit fat and happy, is a problem requiring the system to be better balanced for the very wealthy to pay a fair share, for poverty to be reduced, for the middle class to share in the gains, for there to be resources to reward people.

You know, as CEO compensation has gone from, say, 30 times workers to 400 or more times workers, we have not seen the CEOs somehow run companies much differently.

It's not, as the right-wing propagandists like to lie, an issue of 'class warfare', it's an issue of what's good for the nation, and we WANT people who run companies well to make a lot.

But not an absurd amount that harms the society.

Your post was attacking the guy - not the proposal. You stated "All you need to figure this out is that Dreier is a right-wing congressman, and therefore his tax proposal will help the wealthy. Whether it shifts the taxes to the poor or to the debt is just a detail. " You stated that because you think he's a "right-wing" politician it means xxx. Why not just focus on the proposal? Hmmm....

So basically - you either don't understand the issue OR you just wanted to throw some partisan trash around. My comments were about you not addressing the issue and focussing on the individual. You people never change...
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: Craig234
Originally posted by: shira
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
These are marginal tax rates. Only the amount of income in excess of $150K would be taxed at the 30% rate.

But what I want to know is how would the total revenues under this plan compare with current revenues? Here is the 2007 tax rate table (for marrieds):

$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

Only dollars betwen $128.5K and $150K would be taxed at a higher rate (2% higher). All other amounts would either be taxed at the current rate or a rate 3 to 13 percentage points below current rates.

Naturally, the big winners would be those at the top: A person with $2 million of taxable income would save $100k in taxes, compared with someone making $100K, who would save about $4800.

And this doesn't include the elimination of the AMT.

I'll bet implementing this tax would reduce federal tax revenues by at least $200 billion a year.
As I said, the righties' plans shift taxes off the very wealthy - the shift going to either other taxpayers or the debt, which is an unimportant detail. You clarified, this one is to the debt.
:roll: because obviously $100K is more than $5K it's suddenly for the rich? What % reduction in actual taxes paid is it for both of those? Seems to me the guy making 2mil pays over a half mill in taxes while the guy making 100K pays around 18K.

...for the rich.... man you people are pathetic. same old tired claptrap from the socialists...
 

MonkeyK

Golden Member
May 27, 2001
1,396
8
81
The OP mentions a single page tax form. That means no deductions or credits.

I don't know how this figures for others, but my household income is around 110k and we currently pay the fed around 10% of that. The proposed taxation system results in an increase for me to about 13%
 

Craig234

Lifer
May 1, 2006
38,584
345
126
Originally posted by: CADsortaGUY
Originally posted by: Craig234
Originally posted by: shira
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
These are marginal tax rates. Only the amount of income in excess of $150K would be taxed at the 30% rate.

But what I want to know is how would the total revenues under this plan compare with current revenues? Here is the 2007 tax rate table (for marrieds):

$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

Only dollars betwen $128.5K and $150K would be taxed at a higher rate (2% higher). All other amounts would either be taxed at the current rate or a rate 3 to 13 percentage points below current rates.

Naturally, the big winners would be those at the top: A person with $2 million of taxable income would save $100k in taxes, compared with someone making $100K, who would save about $4800.

And this doesn't include the elimination of the AMT.

I'll bet implementing this tax would reduce federal tax revenues by at least $200 billion a year.
As I said, the righties' plans shift taxes off the very wealthy - the shift going to either other taxpayers or the debt, which is an unimportant detail. You clarified, this one is to the debt.
:roll: because obviously $100K is more than $5K it's suddenly for the rich? What % reduction in actual taxes paid is it for both of those? Seems to me the guy making 2mil pays over a half mill in taxes while the guy making 100K pays around 18K.

...for the rich.... man you people are pathetic. same old tired claptrap from the socialists...
How ironic, that you use the same old tired claptrap from righty cultists about 'same old claptrap from the socialists'.

You're not honest, and you are not able to get the point when clearly laid out. So, the exchange with you is a waste of Anandtech's disk space the readers' time, and our time.

The simple fact you are blind to is that the Republic tax schemes are designed to shift taxes downward. You either don't know it, ignore it, or defend it.
 

Craig234

Lifer
May 1, 2006
38,584
345
126
Originally posted by: ElFenix
Originally posted by: Craig234
Originally posted by: ElFenix
Originally posted by: piasabird
if we were not giving all kind of incentives and breaks to corporations
seeing as how taxes on corporations are usually paid by lower level employees more than anyone else, and usually exclusively, maybe taxes on corporations are something to rethink. though, i'd agree that it'd almost be impossible to explain that concept to the general public so it'd never work.
Huh? No, they're not, they're paid by the corporations.

You think that reduced taxes on corporations go into low levels emploiyees' pockets?
the economic burden, which is who actually feels the effect, is not necessarily the same as the legal burden, which is the person who writes the check.

CBO working paper says 70% workers, 30% shareholders for the economic burden


let's just analyze this logically. if we've got a competitive market in equilibrium, and then add a corporate tax, what happens?

as we all know, a corporation is just a fictitious entity. a nexus of contracts, if you will. there are three main groups of actual people that can be burdened with the tax: consumers who purchase corporations' goods, shareholders who own the corporations, and employees who work for the corporations.

the group most people assume will bear the brunt of the tax is consumers. but that is actually the group least likely to bear the burden. why is that? if there are sellers in the market that are not subject to the tax, then those sellers will beat the corporations on price due to lower costs. if there are corporations that choose to bear the burden in some other manner, then those corporations will beat the corporations that try to pass on the cost.

you can actually see this in action when airlines try to raise fares. one will announce a fare increase, a couple more will follow along, but if they don't all raise fares, they lower the fares back down.

so, logicially, consumers bear little of the cost increase due to the tax.

next is shareholders. assuming the corporate tax hits all corporations, then there will be movement of capital to methods that don't have the tax. if there are very few restrictions on the movement of capital, then it'll equilibrium out pretty quickly. shareholders will bear some burden, but the free movement of capital is a very important factor to remember.

the next place it can go is on employees. there are two sets of employees to consider: those at the very top and everyone else. of the two, which is more likely to bear the burden of any cost cutting? everyone else. employees will be fired, hirings will slow, bonuses will be cut, hourly and salary pay won't increase or may be cut. so, employees, particularly lower level employees, will feel a burden.

so, who feels it more, shareholders or employees? remember that capital movement is nearly unrestricted. is labor movement unrestricted? not hardly. even when there is no legal barrier to movement people don't move around all that much. most people live within 50 miles of where they grew up, even in the US.

you can see this in action with various companies leaving the NE and CA for the sun belt and lower taxes. sure, higher ups will move, some middle managers will move, but hourly workers? not likely. they now have to find a new job.

and what about the places that have lowered or eliminated taxes? no, you may not necessarily see an immediate raise for lower level employees, true. but you'll see employers expanding their operations in the area, you'll see employers moving to the area, etc.

if my reasoning is off somewhere, please say so. i don't think i am, though.
I notice how topic after topic about a specific issue like this ends up requiring an exposition and debate about big-picture economic concepts.

That's not a criticism, just an observation about how the different big-picture assumptions people have even which they may not realize they have adopted, color these issues.

For example, we'd have to try to address the bigger issue of the effects of corporate taxation.

The most simplistic view may belong to the left - the one that says, "if the corporations pay it, the people don't so woo hoo." Of course, that's not right.

But the right is only one level less simplistic; they get credit for the insight that corporations pass along expenses in various ways - lower wages, higher prices, less productivity.

But that view, too, IMO is simplistic. It would lead you to say 'why have ANY corporate taxes, they're just a pass-through."

But I disagree. I think that it's more complicated, and they're only a partial pass-through. I do think that *some part* of the tax reduces the burden on citizens, as corporations, to be competitive, deal with the overhead in various ways, some of which include reducing the CEO's bonus from $25 million to $22 million, some of which is in improving efficiency, and so on. It does slightly raise the bar for companies to compete. Where the line is drawn between too low corporate taxes leaving too much burden on citizens, and too high corporate taxes where the costs exceed the benefits, is a pretty hard to answer topic we can't resolve here, but I think there is some middle ground.

One thing I think is very lacking in nearly all these discussions is the idea of how society should look as the focus of the discussion, rather than blindly adopting ideology.

It's not that people don't have opinions on how society ought to look - most everyone has a preference for a decent middle class over, say, the 'robber baron/starving hordes' distribution of wealth - but people don't know to connect their ideological proclamations with any goals for society.

This is why, for example, the gilded age in the late 19th century was filled with ideology about how the starving hordes signed contracts for employment, because if they signed a contract, it was a completely fair and voluntary system - ignoring the fact of the coercion for one side caused by the need not to starve leading them to sign absurdly unfair contracts. It made for a nice story, and mass poverty. Our society grew out of that sort of fallacy, giving labor more rights and such, but the same type of fallacy is still happening.

The thing is, back to your topic, employees' wages have already settled where they are pretty much for good reasons. If the corporation suddenly has more income (say, a government subsidy), or more expense (say, increased corporate taxes), it may not have much effect on the wages.

The bottom line to me is that you see some people always leave the majority of Americans with more direct taxes (or debt), while always explaining away any taxes for the very wealthy and corporations by arguing that they'll just get passed along anyway, so they shouldn't be taxed so much, there's no point.

Well, I tend to think that indirect taxation is better than direct taxation, and I'll take the chance that a 'fair share' of taxes going to the rich and corporations is ok.
 

shira

Diamond Member
Jan 12, 2005
9,574
5
81
Originally posted by: piasabird
I dont think we should have incremental taxing. %10.00 tax with no other tax breaks would be fine if we were not giving all kind of incentives and breaks to corporations. I am for a flat tax and no tax breaks for anything and no exceptions or exemptions. Eliminate all loopholes and simplify the tax code.

If a chruch can get by on a 10% tithing, that is not even compulsory, then 10% mandatory tax should be good enough for anyone and everyone. There are so many loop holes and special deals now that it takes forever to figure out your taxes. Just make it simple.
The total U.S. GDP for 2007 was approximately $13.8 trillion. The U.S. budget was $2.8 trillion. Dividing the latter by the former, you get about 20%. That is, if you taxed all income for goods and services in the U.S. at a 20% rate - no deductions- you'd have a balanced budget.

So postulating a 10% overall tax rate is absurd, unless you think a yearly budget deficit of $1.4 trillion is acceptable.
 

Engineer

Elite Member
Oct 9, 1999
39,255
699
126
Originally posted by: MonkeyK
The OP mentions a single page tax form. That means no deductions or credits.

I don't know how this figures for others, but my household income is around 110k and we currently pay the fed around 10% of that. The proposed taxation system results in an increase for me to about 13%
I don't think most people really know what they pay. I asked people at work about a flat, across the board 15% "federal" tax and they said great, sign me up. None of them paid over 12% currently after I had figured their federal tax up as a percentage of their income.


SEC. 408B. RETIREMENT SAVINGS ACCOUNTS.

`(a) General Rule- Except as provided in this section, a Retirement Savings Account shall be treated for purposes of this title in the same manner as an individual retirement plan.

`(b) Retirement Savings Account- For purposes of this title, the term `Retirement Savings Account' means an individual retirement plan (as defined in section 7701(a)(37) which is designated at the time of establishment of the plan as a Retirement Savings Account. Such designation shall be made in such manner as the Secretary may prescribe.

`(c) Treatment of Contributions-

`(1) NO DEDUCTION ALLOWED- No deduction shall be allowed under section 219 for a contribution to a Retirement Savings Account.

`(2) CONTRIBUTION LIMIT- The aggregate amount of contributions for any taxable year to all Retirement Savings Accounts maintained for the benefit of an individual shall not exceed $5,000.

`(3) CONTRIBUTIONS PERMITTED AFTER AGE 70 1/2 - Contributions to a Retirement Savings Account may be made even after the individual for whom the account is maintained has attained age 70 1/2 .

`(4) MANDATORY DISTRIBUTION RULES NOT TO APPLY BEFORE DEATH- Notwithstanding subsections (a)(6) and (b)(3) of section 408 (relating to required distributions), the following provisions shall not apply to any Retirement Savings Account:

`(A) Section 401(a)(9)(A).

`(B) The incidental death benefit requirements of section 401(a).

`(5) ROLLOVER CONTRIBUTIONS-

`(A) IN GENERAL- No rollover contribution may be made to or from a Retirement Savings Account except from or to another such Account, as the case may be.

`(B) COORDINATION WITH LIMIT- Any rollover permitted under subparagraph (A) shall not be taken into account for purposes of paragraph (2).

`(6) TIME WHEN CONTRIBUTIONS MADE- For purposes of this section, the rule of section 219(f)(3) shall apply.

`(d) Distribution Rules- Any qualified distribution (as defined in section 408B(d)((2)) from a Retirement Savings Account shall not be includible in gross income.'.

(b) Conforming Amendments-

(1) Clause (vi) of section 1361(c)(2)(A) is amended by inserting `or a Retirement Savings Account under section 408B' after `Roth IRA under section 408A'.

(2) Section 4973 (relating to tax on excess contributions to certain tax-favored accounts and annuities) is amended by inserting after subsection (g) the following new subsection:

`(h) Excess Contributions to Retirement Savings Accounts- For purposes of this section, in the case of contributions to a Retirement Savings Account (within the meaning of section 408B(b)), the term `excess contributions' means the sum of--

`(1) the excess (if any) of--

`(A) the amount contributed for the taxable year to Retirement Savings Accounts (other than a rollover contribution from another such Account), over

`(B) $5,000, and

`(2) the amount determined under this subsection for the preceding taxable year, reduced by the sum of--

`(A) the distributions out of the Accounts for the taxable year, and

`(B) the excess (if any) of $5,000 over the amount contributed by the individual to all Retirement Savings Accounts for the taxable year.

For purposes of this subsection, any contribution which is distributed from a Retirement Savings Account in a distribution described in section 408(d)(4) shall be treated as an amount not contributed.'.

(3) The table of sections for subpart A of part I of subchapter D of chapter 1 is amended by inserting after the item relating to section 408A the following new item:
How about Lifetime Savings Plans? They sound great....up to $5,000 per year and never pay tax on withdrawls....and you can withdrawl your money at any time - no penalties. However, as good as this sounds, it would be replacing traditional IRA's/Roth IRA's. Can you imagine people with no restrictions on withdrawls on their retirement accounts? LOL...yea, right.
 

HombrePequeno

Diamond Member
Mar 7, 2001
4,657
0
0
Originally posted by: shira
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
These are marginal tax rates. Only the amount of income in excess of $150K would be taxed at the 30% rate.

But what I want to know is how would the total revenues under this plan compare with current revenues? Here is the 2007 tax rate table (for marrieds):

$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

Only dollars betwen $128.5K and $150K would be taxed at a higher rate (2% higher). All other amounts would either be taxed at the current rate or a rate 3 to 13 percentage points below current rates.

Naturally, the big winners would be those at the top: A person with $2 million of taxable income would save $100k in taxes, compared with someone making $100K, who would save about $4800.

And this doesn't include the elimination of the AMT.

I'll bet implementing this tax would reduce federal tax revenues by at least $200 billion a year.
Well I would assume that this plan would seek to eliminate the myriad of tax deductions people are allowed to take. Eliminating those would allow overall tax rates to be lower because the tax would be broader. You may think that much of that income tax that the person making $2 million pays is taxed at 35%. That's actually the reason for the AMT (26/28%), because the extremely rich were deducting and writing off their taxes owed down to where they were only in the lower tax brackets. Eliminate those deductions and you also eliminate the need for the AMT.

We do need a simpler tax system. One that's more pro-savings, has fewer brackets and fewer deductibles. I'm not sure if this congressman's idea is the answer because I haven't really looked that much into it. The tax panel that Bush put together a few years ago had a pretty good plan but it got nowhere because GW was focused on other things.
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: Craig234
Originally posted by: CADsortaGUY
Originally posted by: Craig234
Originally posted by: shira
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
These are marginal tax rates. Only the amount of income in excess of $150K would be taxed at the 30% rate.

But what I want to know is how would the total revenues under this plan compare with current revenues? Here is the 2007 tax rate table (for marrieds):

$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

Only dollars betwen $128.5K and $150K would be taxed at a higher rate (2% higher). All other amounts would either be taxed at the current rate or a rate 3 to 13 percentage points below current rates.

Naturally, the big winners would be those at the top: A person with $2 million of taxable income would save $100k in taxes, compared with someone making $100K, who would save about $4800.

And this doesn't include the elimination of the AMT.

I'll bet implementing this tax would reduce federal tax revenues by at least $200 billion a year.
As I said, the righties' plans shift taxes off the very wealthy - the shift going to either other taxpayers or the debt, which is an unimportant detail. You clarified, this one is to the debt.
:roll: because obviously $100K is more than $5K it's suddenly for the rich? What % reduction in actual taxes paid is it for both of those? Seems to me the guy making 2mil pays over a half mill in taxes while the guy making 100K pays around 18K.

...for the rich.... man you people are pathetic. same old tired claptrap from the socialists...
How ironic, that you use the same old tired claptrap from righty cultists about 'same old claptrap from the socialists'.

You're not honest, and you are not able to get the point when clearly laid out. So, the exchange with you is a waste of Anandtech's disk space the readers' time, and our time.

The simple fact you are blind to is that the Republic tax schemes are designed to shift taxes downward. You either don't know it, ignore it, or defend it.

Right... because lowering taxes by only $5K/25%+ for the 100K guy is shifting the burden to him from the guy who got his lowered by $100K/18% (numbers estimated). Boy you people really don't have a clue do you. Do you live in a raw numbers world? No - no you don't. So it is intellectually dishonest to use them as shock value and try to compare $5K to $100K reduction in raw values.
 

WHAMPOM

Diamond Member
Feb 28, 2006
7,630
181
106
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I'll support a two tiered system 10% TAX RATE UP TO FIVE MILLION AND 90% THERE ON UP. Sounds fair and simple to me.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: WHAMPOM
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I'll support a two tiered system 10% TAX RATE UP TO FIVE MILLION AND 90% THERE ON UP. Sounds fair and simple to me.

Yes Komrade! Great idea for motherland Russia!
 

Craig234

Lifer
May 1, 2006
38,584
345
126
Originally posted by: CADsortaGUY

Right... because lowering taxes by only $5K/25%+ for the 100K guy is shifting the burden to him from the guy who got his lowered by $100K/18% (numbers estimated). Boy you people really don't have a clue do you. Do you live in a raw numbers world? No - no you don't. So it is intellectually dishonest to use them as shock value and try to compare $5K to $100K reduction in raw values.
Did you have a point? I don't trust any of the numbers the plans are sold with, the bottom line is that they're going to shift taxes off the wealthy, whatever the sales pitch says.
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: Craig234
Originally posted by: CADsortaGUY

Right... because lowering taxes by only $5K/25%+ for the 100K guy is shifting the burden to him from the guy who got his lowered by $100K/18% (numbers estimated). Boy you people really don't have a clue do you. Do you live in a raw numbers world? No - no you don't. So it is intellectually dishonest to use them as shock value and try to compare $5K to $100K reduction in raw values.
Did you have a point? I don't trust any of the numbers the plans are sold with, the bottom line is that they're going to shift taxes off the wealthy, whatever the sales pitch says.
Ah, so instead of the actual details, we need to look at the (R) or (D) at the end of their name? Wow, hackery at it's finest(worst).
 

shira

Diamond Member
Jan 12, 2005
9,574
5
81
Originally posted by: TallPilot
The only fair way to tax would be a headcount tax, 5,000 per person, regardless of income.
That would raise only $1.5 trillion (on a population of 300 million). The federal budget for 2008 is $2.9 trillion.
 

shira

Diamond Member
Jan 12, 2005
9,574
5
81
Originally posted by: HombrePequeno
Originally posted by: shira
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
These are marginal tax rates. Only the amount of income in excess of $150K would be taxed at the 30% rate.

But what I want to know is how would the total revenues under this plan compare with current revenues? Here is the 2007 tax rate table (for marrieds):

$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

Only dollars betwen $128.5K and $150K would be taxed at a higher rate (2% higher). All other amounts would either be taxed at the current rate or a rate 3 to 13 percentage points below current rates.

Naturally, the big winners would be those at the top: A person with $2 million of taxable income would save $100k in taxes, compared with someone making $100K, who would save about $4800.

And this doesn't include the elimination of the AMT.

I'll bet implementing this tax would reduce federal tax revenues by at least $200 billion a year.
Well I would assume that this plan would seek to eliminate the myriad of tax deductions people are allowed to take. Eliminating those would allow overall tax rates to be lower because the tax would be broader. You may think that much of that income tax that the person making $2 million pays is taxed at 35%. That's actually the reason for the AMT (26/28%), because the extremely rich were deducting and writing off their taxes owed down to where they were only in the lower tax brackets. Eliminate those deductions and you also eliminate the need for the AMT.

We do need a simpler tax system. One that's more pro-savings, has fewer brackets and fewer deductibles. I'm not sure if this congressman's idea is the answer because I haven't really looked that much into it. The tax panel that Bush put together a few years ago had a pretty good plan but it got nowhere because GW was focused on other things.
The number of brackets has nothing to do with the complexity of the tax system. Whether there is one bracket or ten, once you know your taxable income, you can look up your tax in a table (or follow the extremely simple instructions for computing it). The complexity in the tax system is in the bazillion rules for determining how to compute what your taxable income is.

In scanning through the proposed legislation HR 5105, I don't see how this bill simplifies much of anything. Indexing is added in several places (for example, to the basis of capital goods, for the purpose of computing capital gains), but most deductions seem pretty much still in place.

And this bill reduces the capital gains rate from 15% to 10% AND eliminates both the estate and gift taxes. Those are all HUGE benefits to the wealthy, with very little benefit to people in the middle class.

Frankly, my earlier estimate was way low. It think this change would reduce tax revenues by at least $500 billion.
 

shira

Diamond Member
Jan 12, 2005
9,574
5
81
Originally posted by: CADsortaGUY
Originally posted by: Craig234
Originally posted by: CADsortaGUY
Originally posted by: Craig234
Originally posted by: shira
Originally posted by: RY62
Originally posted by: SSSnail
So I just got a letter in the mail from our Congressman, an excerpt of which is a part where he introduces a bill which would "... provides American with a new optional single page tax form that reduces the tax rates to 10% on the first $40K of income, 15% on earnings beetween $40K - $150K and 30% above $150K".

What do you think?

His site http://dreier.house.gov/
I think it would really suck to be the guy that gets a pay raise that just pushes him over the $150k mark. :D
These are marginal tax rates. Only the amount of income in excess of $150K would be taxed at the 30% rate.

But what I want to know is how would the total revenues under this plan compare with current revenues? Here is the 2007 tax rate table (for marrieds):

$0 $15,650 10% of the amount over $0
$15,650 $63,700 $1,565.00 plus 15% of the amount over 15,650
$63,700 $128,500 $8,772.50 plus 25% of the amount over 63,700
$128,500 $195,850 $24,972.50 plus 28% of the amount over 128,500
$195,850 $349,700 $43,830.50 plus 33% of the amount over 195,850
$349,700 no limit $94,601.00 plus 35% of the amount over 349,700

Only dollars betwen $128.5K and $150K would be taxed at a higher rate (2% higher). All other amounts would either be taxed at the current rate or a rate 3 to 13 percentage points below current rates.

Naturally, the big winners would be those at the top: A person with $2 million of taxable income would save $100k in taxes, compared with someone making $100K, who would save about $4800.

And this doesn't include the elimination of the AMT.

I'll bet implementing this tax would reduce federal tax revenues by at least $200 billion a year.
As I said, the righties' plans shift taxes off the very wealthy - the shift going to either other taxpayers or the debt, which is an unimportant detail. You clarified, this one is to the debt.
:roll: because obviously $100K is more than $5K it's suddenly for the rich? What % reduction in actual taxes paid is it for both of those? Seems to me the guy making 2mil pays over a half mill in taxes while the guy making 100K pays around 18K.

...for the rich.... man you people are pathetic. same old tired claptrap from the socialists...
How ironic, that you use the same old tired claptrap from righty cultists about 'same old claptrap from the socialists'.

You're not honest, and you are not able to get the point when clearly laid out. So, the exchange with you is a waste of Anandtech's disk space the readers' time, and our time.

The simple fact you are blind to is that the Republic tax schemes are designed to shift taxes downward. You either don't know it, ignore it, or defend it.

Right... because lowering taxes by only $5K/25%+ for the 100K guy is shifting the burden to him from the guy who got his lowered by $100K/18% (numbers estimated). Boy you people really don't have a clue do you. Do you live in a raw numbers world? No - no you don't. So it is intellectually dishonest to use them as shock value and try to compare $5K to $100K reduction in raw values.
$5K and $100K savings are solely due to the reductions in the income tax rates. But you're overlooking that this bill also eliminates estate and gift taxes (99.9% of which is currently paid by the wealthy) and reduces the capital gains rate from 15% to 10% (again a vast benefit to the wealthy). When you add those tax changes to the mix, I wouldn't be surprised if the average tax savings of the wealthy approach 25%.

And note that most in the middle class are already paying most of their income at the 10 and 15 percent rates. So, for example, consider a household with taxable income of $63,700. Under the current rates, their tax is $8772. Under the new rates, they'd pay $7555, a reduction of 14% - a lower percentage savings than your multimillionaire.

Yeah, this tax is "Fair."
 

TallPilot

Member
Sep 25, 2007
40
0
0
Originally posted by: shira
Originally posted by: TallPilot
The only fair way to tax would be a headcount tax, 5,000 per person, regardless of income.
That would raise only $1.5 trillion (on a population of 300 million). The federal budget for 2008 is $2.9 trillion.
The income tax doesn't pay for the entire budget, as a matter of fact we don't pay for the budget, we borrow the money!

 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: shira

$5K and $100K savings are solely due to the reductions in the income tax rates. But you're overlooking that this bill also eliminates estate and gift taxes (99.9% of which is currently paid by the wealthy) and reduces the capital gains rate from 15% to 10% (again a vast benefit to the wealthy). When you add those tax changes to the mix, I wouldn't be surprised if the average tax savings of the wealthy approach 25%.

And note that most in the middle class are already paying most of their income at the 10 and 15 percent rates. So, for example, consider a household with taxable income of $63,700. Under the current rates, their tax is $8772. Under the new rates, they'd pay $7555, a reduction of 14% - a lower percentage savings than your multimillionaire.

Yeah, this tax is "Fair."
That's fine. I am not arguing FOR this bill, I have been commenting on the lack of actual discussion of it and the excess of hackery shown by the people attacking the bill's author.

I understand that this bill isn't perfect or great. Heck, I don't support it but lets have a discussion on the details of the plan - which you are doing. thanks.

The two points you raise are good points but I have to disagree with in part. I do not believe death taxes should exist and I didn't see exactly where gift taxes were "eliminated". Cap gains I could go either way on but I guess I'd support leaving them at 15%.

BTW, any "progressive" form of taxation is not "fair" IMO. Why should someone pay more per dollar earned in taxes just because they earn more?
 

shira

Diamond Member
Jan 12, 2005
9,574
5
81
Originally posted by: CADsortaGUY
Originally posted by: shira

$5K and $100K savings are solely due to the reductions in the income tax rates. But you're overlooking that this bill also eliminates estate and gift taxes (99.9% of which is currently paid by the wealthy) and reduces the capital gains rate from 15% to 10% (again a vast benefit to the wealthy). When you add those tax changes to the mix, I wouldn't be surprised if the average tax savings of the wealthy approach 25%.

And note that most in the middle class are already paying most of their income at the 10 and 15 percent rates. So, for example, consider a household with taxable income of $63,700. Under the current rates, their tax is $8772. Under the new rates, they'd pay $7555, a reduction of 14% - a lower percentage savings than your multimillionaire.

Yeah, this tax is "Fair."
That's fine. I am not arguing FOR this bill, I have been commenting on the lack of actual discussion of it and the excess of hackery shown by the people attacking the bill's author.

I understand that this bill isn't perfect or great. Heck, I don't support it but lets have a discussion on the details of the plan - which you are doing. thanks.

The two points you raise are good points but I have to disagree with in part. I do not believe death taxes should exist and I didn't see exactly where gift taxes were "eliminated". Cap gains I could go either way on but I guess I'd support leaving them at 15%.

BTW, any "progressive" form of taxation is not "fair" IMO. Why should someone pay more per dollar earned in taxes just because they earn more?
I understand that estate taxes are not loved by everyone. But it's a current source of revenue and merely eliminating it without replacing the lost revenue isn't a solution. I wouldn't have a problem with increasing the income tax rate on the wealthy such that - over a multi-year period - the combined effect was revenue neutral. Of course, the sense I get is that the right-wing just wants the wealthy to pay less taxes.

With respect to repealing the gift tax, see page 5 (Sec. 3) of the link to HR 5105 I provided a few posts up. Here's the relevant text:

SEC. 3. REPEAL OF ESTATE AND GIFT TAXES.
(a) IN GENERAL.?Subtitle B is hereby repealed.
(b) EFFECTIVE DATE.?The repeal made by sub21 section (a) shall apply to the estates of decedents dying, and gifts and generation-skipping transfers made, after December 31, 2008.
 

Craig234

Lifer
May 1, 2006
38,584
345
126
Originally posted by: CADsortaGUY
Originally posted by: Craig234
Originally posted by: CADsortaGUY

Right... because lowering taxes by only $5K/25%+ for the 100K guy is shifting the burden to him from the guy who got his lowered by $100K/18% (numbers estimated). Boy you people really don't have a clue do you. Do you live in a raw numbers world? No - no you don't. So it is intellectually dishonest to use them as shock value and try to compare $5K to $100K reduction in raw values.
Did you have a point? I don't trust any of the numbers the plans are sold with, the bottom line is that they're going to shift taxes off the wealthy, whatever the sales pitch says.
Ah, so instead of the actual details, we need to look at the (R) or (D) at the end of their name? Wow, hackery at it's finest(worst).
Try to work on your reading comprehension - the point you're missing is that I didn't say not to look at the details, I said not to trust the numbers supplied with the sales pitch.

Similarly, remember the administration's numbers with the Medicare drug benefit, where they had to threaten the person who had the actual figures to hide them from Congress?

Similarly, remember the administration's numbers with the Iraq war that 'would pay for itself', that might cost tens of billions?

Similarly, remember the administration's numbers that they would not skyrocket the deficit with their tax cuts for the rich, they were just returning surplus?

My point that the (R) after the tax bill tells you a lot about how the plan will shift taxes off the wealthy is a different point, which you have not begun to prove wrong.
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
101,382
5,382
126
Originally posted by: CADsortaGUY

BTW, any "progressive" form of taxation is not "fair" IMO. Why should someone pay more per dollar earned in taxes just because they earn more?
i'll note that while our current tax system is progressive through the lower 95%, it often goes regressive right near the top, so that people way at the top often pay less per dollar earned than people in the middle.
 

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