Fred Thompson Proposes Two-Rate Income Tax

[Pabster]

Story here.

Sounds like a terrific idea. You can stick with the current system and pay as your currently do, or you can opt for the simpler two-rate income tax system. (No deductions sans the personal deduction).

This seems like a nice balance between what we have now and going all-out with a flat tax system, fair tax, et al.

 

[StageLeft]

A simple idea proposed by a simpleton to appeal to simpletons. Obviously, people will do whichever system taxes them less so the fed gov will end up with less money coming in (or perhaps the new plan is almost always higher than the current, in which case nobody will do it, who knows).

 

[Red Dawn]

Originally posted by: Skoorb
A simple idea proposed by a simpleton to appeal to simpletons.

That's why it's so appealing to Pabster and the majority of us, when it comes to taxes we are baffled.

 

[Pabster]

The projection is that there would be a 2.5 trillion loss over 10 years.

Fred says that his Social Security plan would cover that loss, and then some.

I don't know, but at least give the guy credit for taking on the tough issues. I don't see any of the other candidates talking taxes or Social Security in any meaningful way, much less making plans and proposals.

 

[StageLeft]

It is good he's trying to do something about it, but it's too simple, really too low-brow. I don't believe any meaningful country has anything even close to approaching such a level of simplicity. If his SS plan would cover the $2.5 T, perhaps he could put that in place and keep taxes as they are currently, turning back the tide on where the debt has been going in recent times.

 

[Jhhnn]

It's the same pie in the sky supply side pollyanna bullshit as ever- "we'll borrow our way out of debt!" by cutting taxes!

Unfortunately, taxes have to go up, not down, just to pay the interest on the looting spree of the last 6 years...

But then, repubs never let the truth get in the way of anything...

 

[First]

Lower taxes and getting rid of garbage like the outdated alternative minimum tax would be great. First, however, we have to solve SS and gov't-funded healthcare program crisisies, which the OMB predicts will become solvent within the next decade. Those are massive programs. I'd get rid of gov't-funded SS and Medicare/Medicad altogether and replace it with corporate-mandated investment and healthcare programs. I wouldn't be opposed to gov't-funded investment and healthcare programs altogether, though, just the bloated ones like SS and Medicare/Medicad.

But SS, Medicare, Medicad, and Iraq spending need to be solved and reined in for additional tax cuts to occur.

 

[senseamp]

How about we just have a parallel reality for Thompson where he can have a different tax system and even be president.

 

[CADsortaGUY]

Originally posted by: Jhhnn
It's the same pie in the sky supply side pollyanna bullshit as ever- "we'll borrow our way out of debt!" by cutting taxes!

Unfortunately, taxes have to go up, not down, just to pay the interest on the looting spree of the last 6 years...

But then, repubs never let the truth get in the way of anything...

:roll: Nice attempt but as usual you're distorting the facts. there is no "borrow our way out" but there is a "grow our way out". So please - next time attempt to get it right instead of posting your BS spin.

And no, taxes do not need to go up. Right now the projections are for an Aug 2009 tipping point on the deficit. That can change(and has) due to economy, tax reciepts, and gov't SPENDING. The economy you can't fully control and is only generically "steerable" so one has to look at tax reciepts and spending for changes. Raising taxes only invidts more SPENDING by the gov't whereas lowering SPENDING by the gov't might actually allow people to keep more of their own money instead of the gov't redistributing it.

 

[piasabird]

Without knowing all the specifics like standard deductions and looking at a tax model I would not be able to comment. Average income is around $45.000. I think that may actually raise the tax of the poorer americans who have no deductions. In some areas where the cost of living is higher, I think you should have different rates because average income may be higher in some areas like the east coast as compared to some other locations. If the average house costs over $500,000.00 where you live this does not mean much.

$50,000.00 is barely above the average wage in the United States. Probably a lot of people are making like $60,000.00 and barely getting by.

Like I said without specifics in writing who can tell if this is a good idea.

I might accept a 10% if all Corportate welfare and other deductions are done away with. It is all the loopholes which make for an unfair tax. One major problem is people use the loophole to plan their investment strategy. So one thing we dont need is any sudden changes in the tax code. If anyone plans on changing things like the deductions for home mortgages or interest on home loans then people need some time to plan out their investments accordingly.

So if you make say $40,000.00 a year and pay 10% that is about $4,000.00 in taxes with no deductions or what?

 

[Pabster]

Originally posted by: piasabird
So if you make say $40,000.00 a year and pay 10% that is about $4,000.00 in taxes with no deductions or what?

Here's verbatim from Fred's plan:

# Expand Taxpayer Choice. The Thompson plan would give Americans greater choice about how to pay their federal taxes. This plan is based on a proposal developed by the House of Representatives Republican Study Committee that would provide taxpayers the option of remaining under the current, complex tax code or opting for a simplified, flat tax code. The simplified tax code would contain two tax rates: 10% for joint filers on income of up to $100,000 ($50,000 for singles) and 25% on income above these amounts. The standard deduction would be more than doubled to $25,000 for joint filers and $12,500 for singles. The personal exemption amount would be increased to $3,500. Therefore, a family of 4 would be exempt from income tax on the first $39,000 of income. The simplified tax code would contain no other tax credits or deductions. It would also retain the 15% tax rate on capital gains and dividends. This approach would dramatically simplify taxes for tens of millions of Americans. In addition, the larger standard deduction and personal exemption amounts will still provide significant tax relief to families with children. This proposal would serve as a stepping-stone to fundamental tax reform.

 

[senseamp]

It's a pipe dream. Republicans had 6 years to pass their pipe dreams, now the public doesn't want them anymore. They should learn how to govern in the real world, not the world they wish they had.

 

[techs]

Let me guess. Sharp, wealthy people with accountants will now have an additional opportunity to save on their taxes, and poorer people will just be baffled and many will choose the option that costs more.

 

[senseamp]

We already have a system where you can pick standard or itemized deduction, now Fred wants to make it even more confusing. Plus his plan would not bring enough revenue to pay for all the spending he helped pass when in Congress, not to mention Iraq, not to mention the burden of repaying the SS system the money that was borrowed from it and which will be needed to pay new retirees, and the Medicare drug boondoggle that the GOP passed.

 

[Pabster]

Originally posted by: senseamp
We already have a system where you can pick standard or itemized deduction, now Fred wants to make it even more confusing. Plus his plan would not bring enough revenue to pay for all the spending he helped pass when in Congress, not to mention Iraq, not to mention the burden of repaying the SS system the money that was borrowed from it and which will be needed to pay new retirees, and the Medicare drug boondoggle that the GOP passed.

:roll:

How is it more confusing? You can do it just like you always do now, itemized or not, or you can opt for the simple tax plan where you can't itemize and deduct anything. Seems pretty simple.

PS what has Hillary proposed for tax code reform and Social Security reform?

 

[ElFenix]

speaking of spending:
mashup of farm bill subsidies

 

[FoBoT]

that just complicates things more
now you need your tax guy to calulate two more possible scenarios to figure out which one benefits you the most
:laugh:

 

[GTaudiophile]

What does Neal Boortz think?

The Fair Tax FTW!

 

[Jhhnn]

From the ever spinning CSG-

Nice attempt but as usual you're distorting the facts. there is no "borrow our way out" but there is a "grow our way out". So please - next time attempt to get it right instead of posting your BS spin.

Heh. "Grow our way out" has been the repub mantra since the reagan era... Growth for who? In their trickle up scenario, wealth and income shift to the top, while the median drifts slowly downward, and the temporary appearance of middle class prosperity depends entirely on accumulating more debt, personal and governmental...

"Growth" is meaningless without equitable distribution, and any fool can look good on borrowed money- at least for awhile...

Fred's no different- same shuck and jive, same policy of flirtin' with disaster- someday, she'll take us up on the offer...