Flat or Sales tax instead of current system...agree or disagree?

[mfs378]

First, set up the following bracket structure:

no taxes: 0 - $20,000
05.0%: $20,000 - $40,000
12.5%: $40,000 - $80,000
20.0%: $80,000 - $160,000
27.5%: $160,000 - $320,000
35.0%: $320,000 - $640,000
42.5%: $640,000 -

Next, tie the brackets to inflation; if the tax brackets don't move every year with inflation, everyone gets a built-in tax increase.

Now, if the government has surplus revenue or has a deficit, don't compensate by changing the tax rates. Instead, scale the tax brackets by some factor. For example, if we want to cut the taxes on people, we do the following:

no taxes: 0 - $30,000
05.0%: $30,000 - $60,000
12.5%: $60,000 - $120,000
20.0%: $120,000 - $240,000
27.5%: $240,000 - $480,000
35.0%: $480,000 - $960,000
42.5%: $960,000 -

Or, if we need tax increases, we end up with the following:

no taxes: 0 - $10,000
05.0%: $10,000 - $20,000
12.5%: $20,000 - $40,000
20.0%: $40,000 - $80,000
27.5%: $80,000 - $160,000
35.0%: $160,000 - $320,000
42.5%: $320,000 -

This is how I think the income tax should be structured.

 

[Dissipate]

Originally posted by: mfs378

This is how I think the income tax should be structured.

Thank God you aren't in charge.

 

[Loralon]

Originally posted by: ElFenix

Originally posted by: Gonad the Barbarian

All those expenses get passed on to the consumer though.

not all. has to do with the slopes of the demand and supply curves, so that the cost is usually shared.

This is on the right track. How much of the tax is eventually borne by the consumer, or more precisely how the burden of the tax is apportioned between the business and the consumer, is dependent on how competitive the marketplace is for that particular good, or service. The more competitive the marketplace is, the more the consumer will bear the taxes' burden.

 

[mfs378]

Originally posted by: Dissipate

Originally posted by: mfs378

This is how I think the income tax should be structured.

Thank God you aren't in charge.

What is so bad about my plan?

 

[charrison]

Originally posted by: mfs378

Originally posted by: Dissipate

Originally posted by: mfs378

This is how I think the income tax should be structured.

Thank God you aren't in charge.

What is so bad about my plan?

take a look at the tax that almost killed the swedish economy. The rich simply left the country, causing jobs to dry up after they left.

 

[Dissipate]

Originally posted by: mfs378

Originally posted by: Dissipate

Originally posted by: mfs378

This is how I think the income tax should be structured.

Thank God you aren't in charge.

What is so bad about my plan?

It sucks because A. it requires the government to know everything about my private financial life (as the current tax system does). B. It has a huge tax burden on anyone making over 300K.

No one, I don't care how much they make should have to work 6 months out of the year for Uncle Sam. If I did I would just haul off and take long vacations (I'm sure a lot of current wealthy people do), I know folks in Britain and other socialist European countries do.

 

[mfs378]

take a look at the tax that caused almost killed the economy. The rich simply left the country, causing jobs to dry up after they left.

What tax are you refering to?

 

[ReiAyanami]

Nationalizing the sales tax only makes it easier for them to raise it.

UK Sales tax system was like ours, county by county. Then they nationalized it. It is now 16.5%.

 

[Dissipate]

Originally posted by: ReiAyanami
Nationalizing the sales tax only makes it easier for them to raise it.

UK Sales tax system was like ours, county by county. Then they nationalized it. It is now 16.5%.

I don't know about Britain but I think if there was only a national sales tax here in the U.S. it would be a lot harder to raise. As it is now with our tax system the government can tax willy nilly anything it wants, plus it can hide taxes in a lot of stuff in a deceptive manner. If there was only one tax everyone would know immediately when taxes have been raised, there would be no beating around the bush so to speak.

 

[ReiAyanami]

by the current $7 trillion national debt, it is evident that the government is UNDER taxing us.

and he wants to pass more tax cuts! (for the rich)
that moron shrub.


i suppose it will be made up by the sinking dollar at 11yr lows, but even that's not working as it has let the trade deficit jump 15%

 

[charrison]

Originally posted by: mfs378

take a look at the tax that caused almost killed the economy. The rich simply left the country, causing jobs to dry up after they left.

What tax are you refering to?

THere is a forbes article from 2001(webcontent is now gone).

google cache

Consider the distance Sweden has traveled. After some flush years in the 1950s and 1960s (the result, according to Milton Friedman, the Nobel winning economist, of Sweden's "having had the good economic sense to stay out of World War II"), the socialists neutered then exiled the geese that laid the golden eggs. Ingvar Kamprad, 75, the founder of ikea, the $10 billion (estimated worldwide 2000 revenues) furniture retailing chain, describes meetings with Sweden's tax bureaucrats in the 1960s and 1970s this way: "They would accuse me: ?But you just want a profit.' And I would proudly reply that I was giving people jobs."

Bertil Hult, 60, the founder of the Stockholm-based ef language schools, remembers those dark days well. "By the 1970s, the Swedish media were presenting anyone who started a business as someone who was using the people," he says. "Entrepreneurs were pariahs. So lots of entrepreneurs left. The government's view was, ?Let them go, we don't need them here.'" In the 1970s Hult left and built ef from Germany, the U.K. and the U.S. Today the privately owned ef Group is the largest company of its kind in the world. Veckans Affärer, a respected Swedish business magazine, estimates that its revenues are $650 million; its net margin is 5%; and its payroll is 17,000.

Sweden had excessive taxes on the wealthy, and the wealthy just left.

 

[mfs378]

Originally posted by: Dissipate
It sucks because A. it requires the government to know everything about my private financial life (as the current tax system does). B. It has a huge tax burden on anyone making over 300K.

No one, I don't care how much they make should have to work 6 months out of the year for Uncle Sam. If I did I would just haul off and take long vacations (I'm sure a lot of current wealthy people do), I know folks in Britain and other socialist European countries do.

What do you mean by huge tax burden?

Under my plan (if my math is right):

if you make $100,000 you take home $90,000.
if you make $200,000 you take home $167,000.
if you make $300,000 you take home $240,000.
if you make $500,000 you take home $371,000.
if you make $1,000,000 you take home $669,000.

I fail to see the huge burden.

I don't see what your point is regarding taking vacations.

 

[Dissipate]

Originally posted by: ReiAyanami
by the current $7 trillion national debt, it is evident that the government is UNDER taxing us.

and he wants to pass more tax cuts! (for the rich)
that moron shrub.


i suppose it will be made up by the sinking dollar at 11yr lows, but even that's not working as it has let the trade deficit jump 15%

No, the source of the national debt comes from two facts:

A. People want services from the government.
B. People do not want to pay for these services.

Therefore, in order to meet the demands of their constituents politicans must borrow every year. By inductive logic I would also claim that people are C. Stupid.

 

[mfs378]

Originally posted by: charrison

Originally posted by: mfs378

take a look at the tax that caused almost killed the economy. The rich simply left the country, causing jobs to dry up after they left.

What tax are you refering to?

THere is a forbes article from 2001(webcontent is now gone).

google cache

Consider the distance Sweden has traveled. After some flush years in the 1950s and 1960s (the result, according to Milton Friedman, the Nobel winning economist, of Sweden's "having had the good economic sense to stay out of World War II"), the socialists neutered then exiled the geese that laid the golden eggs. Ingvar Kamprad, 75, the founder of ikea, the $10 billion (estimated worldwide 2000 revenues) furniture retailing chain, describes meetings with Sweden's tax bureaucrats in the 1960s and 1970s this way: "They would accuse me: ?But you just want a profit.' And I would proudly reply that I was giving people jobs."

Bertil Hult, 60, the founder of the Stockholm-based ef language schools, remembers those dark days well. "By the 1970s, the Swedish media were presenting anyone who started a business as someone who was using the people," he says. "Entrepreneurs were pariahs. So lots of entrepreneurs left. The government's view was, ?Let them go, we don't need them here.'" In the 1970s Hult left and built ef from Germany, the U.K. and the U.S. Today the privately owned ef Group is the largest company of its kind in the world. Veckans Affärer, a respected Swedish business magazine, estimates that its revenues are $650 million; its net margin is 5%; and its payroll is 17,000.

Sweden had excessive taxes on the wealthy, and the wealthy just left.

So you are citing an example from a different country? What was the maximum tax rate there?

http://www.oecdobserver.org/news/fullstory.php?aid=35

I don't have time to check the details, but this article cites an implicit tax rate of 100% in the top bracket. Since this is not what I am proposing, I fail to see the relevance.

 

[Dissipate]

Originally posted by: mfs378

Originally posted by: Dissipate
It sucks because A. it requires the government to know everything about my private financial life (as the current tax system does). B. It has a huge tax burden on anyone making over 300K.

No one, I don't care how much they make should have to work 6 months out of the year for Uncle Sam. If I did I would just haul off and take long vacations (I'm sure a lot of current wealthy people do), I know folks in Britain and other socialist European countries do.

I fail to see the huge burden.

I don't see what your point is regarding taking vacations.

That's because you don't understand the concept that time is money.

I suggest you read up on something called Laffer's Curve. It shows that tax rates != tax revenue after a certain point. The higher the tax rates the less people engage in income earning activities. They literally take vacations.

 

[mfs378]

I am aware of the concept of Laffer's Curve. However, I disagree with your implict assertion that my plan is in gross violation of it.

 

[Dissipate]

Originally posted by: mfs378
I am aware of the concept of Laffer's Curve. However, I disagree with your implict assertion that my plan is in gross violation of it.

Practically any progressive income tax is. The reason why is it punishes people for being productive. The more they produce the more incentive they have to partake in leisure activities.

With a national sales tax people aren't punished for producing, they will work a lot more hours because their productivity isn't doomed from the get go. They can save it or invest it tax free.

 

[LunarRay]

A progressive 'Sales Tax' where the tax on autos, for instance, progresses as the value does. Ex. Tax on a 15,000 auto could be 5% and on a 200,000 auto say 20%. Additionally, all current exclusions would be allowed. Eliminate FICA/MED and fund out of the General Fund.
Flat Tax is not as good as what we have. The top 50% of earners pay 96 or more % of the tax.. fine by me as it is. But, they could also implement the sales tax on top of it to really stall the economy and insure Democratic majority in Congress and the White House.

 

[Dissipate]

Originally posted by: LunarRay
A progressive 'Sales Tax' where the tax on autos, for instance, progresses as the value does. Ex. Tax on a 15,000 auto could be 5% and on a 200,000 auto say 20%. Additionally, all current exclusions would be allowed. Eliminate FICA/MED and fund out of the General Fund.

A progressive sales tax is little different than what we have now. The whole idea is to get rid of all the special interest loopholes and soak the "rich" schemes. Therefore there shouldn't be any exclusions minus a few things, everything gets taxed at the same rate and no pandering to this group or that group.

 

[Orsorum]

How does one go about phasing out Social Security? How does one go about repaying the money input by younger workers? It is their money, no?

 

[Dissipate]

Originally posted by: Orsorum
How does one go about phasing out Social Security? How does one go about repaying the money input by younger workers? It is their money, no?

To me repayment is not the issue. Just getting rid of the boondoggle of the century, Social Security, is the only thing that matters.

 

[Orsorum]

Originally posted by: Dissipate

Originally posted by: Orsorum
How does one go about phasing out Social Security? How does one go about repaying the money input by younger workers? It is their money, no?

To me repayment is not the issue. Just getting rid of the boondoggle of the century, Social Security, is the only thing that matters.

So how would you go about achieving this?

I want to hear the words you're going to be telling to the taxpayers.

 

[LunarRay]

Originally posted by: Dissipate

Originally posted by: LunarRay
A progressive 'Sales Tax' where the tax on autos, for instance, progresses as the value does. Ex. Tax on a 15,000 auto could be 5% and on a 200,000 auto say 20%. Additionally, all current exclusions would be allowed. Eliminate FICA/MED and fund out of the General Fund.

A progressive sales tax is little different than what we have now. The whole idea is to get rid of all the special interest loopholes and soak the "rich" schemes. Therefore there shouldn't be any exclusions minus a few things, everything gets taxed at the same rate and no pandering to this group or that group.

So, I guess you wish to take more of what we all know the poor don't have any of. I'm all for taking more of what we all know the rich have plenty of. If you take a dollar from the poor you take a greater percentage of their net worth than if you take it from the rich..

 

[Dissipate]

Originally posted by: Orsorum

Originally posted by: Dissipate

Originally posted by: Orsorum
How does one go about phasing out Social Security? How does one go about repaying the money input by younger workers? It is their money, no?

To me repayment is not the issue. Just getting rid of the boondoggle of the century, Social Security, is the only thing that matters.

So how would you go about achieving this?

I want to hear the words you're going to be telling to the taxpayers.

Phase it out. First cut FICA by say 10%, then require employees put the money that would have gone to FICA into a private investment account that they cannot access until they retire, such as a 401(k). Every year a percent of FICA would be cut and the money would be placed into the private accounts.

Social Security should not be phased out completely. However, it should ONLY be for the poorest of the old, those who would not put much into their accounts during their working years.

You see the problem is people are stupid. They don't plan for retirement, therefore they rely on the government to care for them in their old age.

 

[LunarRay]

Private investment... hah..
No security in that..
Social Security is meant to be Social Security.
It is a social need and that can never change. It is the cost the richer folks pay to have the benefits they have living in this country.