The best the GOP has to offer (Rand Paul wants flat tax)

[Genx87]

I agree it's not a tax plan. It's hard to call Rand Paul's a tax plan either though, as it looks like he's just making shit up.

I'd call his a tax plan. It isnt a very good one. But it is definitely a plan.

 

[dank69]

That isn't a tax plan. In fact none of that is a plan. They are all talking points lol.

Just ignore the fact that even no tax plan is better than any GOP tax plan, right?

 

[fskimospy]

I'd call his a tax plan. It isnt a very good one. But it is definitely a plan.

It's only a plan when it makes a reasonable attempt to describe how it would be implemented in the real world. Saying "I'm going to make tax rates X" while not addressing the obvious implications of doing that is just issuing a press release.

I'm not saying you have to cross every t and dot every i, but there has to be SOMETHING.

Anyways though, I doubt Hillary would have a corresponding tax plan. I imagine hers will end up being something that tinkers around the edges, expanding the EITC, things like that.

 

[dank69]

I'd call his a tax plan. It isnt a very good one. But it is definitely a plan.

What makes his a plan and not hers? The addition of make-believe numbers? lol

 

[TheSlamma]

A good starting point would be to get rid of most of those tax breaks, loopholes and subsidies that the very rich and big corps have unfairly corrupted our politicians into blessing them with.

http://www.reuters.com/article/2015/06/17/us-wal-mart-stores-taxavoidance-idUSKBN0OX1IL20150617

Walmart is rolling back ethics again.

 

[dullard]

He is basically shifting the entire payroll tax onto the employer. Eliminating payroll taxes for the individual.

I dont think it is the same thing though. As it is now we pay payroll + income taxes. Now we would pay just income taxes. And I think we would pay for it long term via higher costs of goods due to the VAT.

Why don't we then just shift the income tax to the employer as well and claim it as a 0% tax for everyone plan? That will be really popular!

Shifting taxes from the left pocket to the right pocket, in general, has no material impact on the employee or the employer. It just is a smoke and mirrors distraction trying to hide it from us. Sure, some fringe cases will matter in the short term (such as if you had a guaranteed wage and the employer can't cut it). But in the long run, it all is a wash.

Whether we pay it or the employer pays it, Paul's plan puts us at 29% tax bracket on wages minus unspecified deductions. End of story.

 

[Genx87]

Just ignore the fact that even no tax plan is better than any GOP tax plan, right?

Who is ignoring that? You are showcasing Hillarys plan which is nothing more than a talking point on her website.

 

[Genx87]

Why don't we then just shift the income tax to the employer as well and claim it as a 0% tax for everyone plan? That will be really popular!

Shifting taxes from the left pocket to the right pocket, in general, has no material impact on the employee or the employer. It just is a smoke and mirrors distraction trying to hide it from us. Sure, some fringe cases will matter in the short term (such as if you had a guaranteed wage and the employer can't cut it). But in the long run, it all is a wash.

Whether we pay it or the employer pays it, Paul's plan puts us at 29% tax bracket on wages minus unspecified deductions. End of story.

Eh any kind of major tax overhaul is going to do that as it needs to be revenue neutral.

 

[Genx87]

What makes his a plan and not hers? The addition of make-believe numbers? lol

What is make believe about his numbers? Are you arguing against your own article now? You may not like the numbers or how he plans to implement the tax. But what he presented according to the article is more than a talking point about providing tax relief to people without a single bit of information on what that even means.

 

[MrPickins]

So we should allow fortune 500 companies to have a negative tax rate?

I do not know about you, but if a company makes billions of dollars, they should be paying their fair share of taxes.

So Paul's plan is the only way to get corporations to have a higher effective tax rate? 😕

 

[OutHouse]

Whoops! Didn't even need to wait days or weeks:

http://www.vox.com/2015/6/19/8810269/rand-paul-flat-tax

Even if you don't like Vox for some reason, you can read the Tax Foundation's estimates that are contained therein. Although the Tax Foundation's estimates of growth resulting from this plan are frankly absurd, even they admit it's pretty clearly very regressive.

the headline "Rand Paul proposed the most bizarre tax plan I've ever seen"

umm our current tax plan is the most bizarre in history"

 

[glenn1]

You are correct that math is usually the enemy of the flat tax. Math, or details, or both.

Lets just look at what is presented in the OP's article. Basically all taxes as we know it are ended and replaced with three taxes: 14.5% on income, 14.5% on wages, and 14.5% on profits.

So, if you are the typical working class family, your taxes are 14.5% on income + 14.5% on wages = 29%. Does Paul really think that 29% tax is a winning number? Sure, there are unspecified deductions. So your tax ranges from 14.5% to 29%. But, without the details, all we can go on is that Paul wants everyone with wages to have a 29% tax rate minus unspecified deductions.

Of course, those who have non-wage income (generally the wealthy) get lower tax rates (since wage income is double taxed and non-wage income like dividends are only taxed once), but lets ignore that kickback for the wealthy for now.

Now, lets look at the math. Total US citizen income is about $13.5 trillion, wages are about $6.7 trillion, corporate profit is about $8 trillion, and expected government spending in Paul's first year is about $4.2 trillion. So, ignoring the unclear deductions for now, does this add up?

Paul's Government Revenue if there were no deductions:
$13.5 trillion * 0.145 + $6.7 trillion * 0.145 + $8.0 trillion * .145 = $4.13 trillion.

Compare that to the expected $4.2 trillion government spending. Paul's plan is not balanced even without his unspecified deductions. Meaning, his plan can't actually afford ANY deductions, which is why he is leaving those details out.

Do you want a 29% tax bracket with the government still running deficits?

You're conveniently ignoring the 14.5% wage tax only applies to income over $50k, not every marginal dollar of income. Unless you're making an absurdly high amount your effective taxes will be nowhere near 29% due to that 50k exclusion. Using completely an entirely arbitrary theoretical family making $60k household income, their effective income tax rate would be:

(60,000 - 50,000) * 0.145 = $1,450 tax liability, and
1,450 / 60,000 = 2.4% effective income tax rate.

Yeah, I know this plan would never fly with anyone whose primary purpose of the tax code is to ensure the rich get soaked out of "fairness," but I think the logistical merits of a tax plan can be examined independently of what you think the rates should be.

 

[OutHouse]

So a republican is wanting to tax big biz... and you dems are upset about that? wtf?

 

[glenn1]

So a republican is wanting to tax big biz... and you dems are upset about that? wtf?

Here you go, this may help.

 

[dullard]

You're conveniently ignoring the 14.5% wage tax only applies to income over $50k, not every marginal dollar of income. Unless you're making an absurdly high amount your effective taxes will be nowhere near 29% due to that 50k exclusion.

I didn't ignore it at all. I specifically said that the tax bracket would range from 14.5% to 29%. Please reread. Here is the quote to look for in my post: "Sure, there are unspecified deductions. So your tax ranges from 14.5% to 29%."

Your math is also wrong, since you forgot the 14.5% wage tax.

($60k - $50k) *0.145 + $60k * 0.145 = $10,150 tax.
Effective rate = $10,150 / $60,000 = 16.9%.

That said, the OP's article doesn't specify how to get to the $50k deduction. Other articles put Paul's numbers much lower than that (look at the vox.com article linked above which lists it as $15,000 standard deduction + $5000/person = $25k for the family of four). And, Paul's budget can't even afford a $1 deduction since it doesn't bring in enough money.

 

[glenn1]

I didn't ignore it at all. I specifically said that the tax bracket would range from 14.5% to 29%. Please reread. Here is the quote to look for in my post: "Sure, there are unspecified deductions. So your tax ranges from 14.5% to 29%."

Your math is also wrong, since you forgot the 14.5% wage tax.

($60k - $50k) *0.145 + $60k * 0.145 = $10,150 tax.
Effective rate = $10,150 / $60,000 = 16.9%.

That said, the OP's article doesn't specify how to get to the $50k deduction. Other articles put Paul's numbers much lower than that (look at the vox.com article linked above which lists it as $15,000 standard deduction + $5000/person = $25k for the family of four). And, Paul's budget can't even afford a $1 deduction since it doesn't bring in enough money.

I didn't forget the wage tax, my post specified income tax. The OP article specifies that only nonprofits and governments pay the wage tax, so for the overwhelming majority of people that's a non-factor.

 

[Fanatical Meat]

I'll give credit where it is due, at least he put it in writing unlike everyone else who has done nothing but vague talk about taxes.

 

[fskimospy]

I didn't forget the wage tax, my post specified income tax. The OP article specifies that only nonprofits and governments pay the wage tax, so for the overwhelming majority of people that's a non-factor.

No.

To quote the OP article:

The plan would also replace the corporate tax with a 14.5 percent tax on businesses' capital income — including profits, rents, and royalties — and labor expenses such as wages and salaries

 

[glenn1]

No.

To quote the OP article:

Fucking idiot. It's replacing current payroll taxes, reducing them from 15.3% to 14.5% and making the employer responsible for them all. It's a fucking tax CUT for the poor you moron, and yet you complain.

The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total.

 

[Fanatical Meat]

Glenn I believe the point is this would leave a large hole in the budget its safe to assume social cuts would be required. I don't believe conservatives are going to want to support a budget the drastically cuts defense spending, liberals will never support a budget that kills welfare programs and middle aged voters are not going to support a budget that kills Social Security & medicare. Thus this is not a reasonable tax plan, again I do support Mr. Paul for putting it in writing which is what we should expect from everyone.

 

[fskimospy]

Fucking idiot. It's replacing current payroll taxes, reducing them from 15.3% to 14.5% and making the employer responsible for them all. It's a fucking tax CUT for the poor you moron, and yet you complain.

I like how when someone points out to you that you can't read your response is to fly into a rage instead of just admitting you were wrong.

To quote the passage in full:

The plan would also replace the corporate tax with a 14.5 percent tax on businesses' capital income — including profits, rents, and royalties — and labor expenses such as wages and salaries, according to an analysis by the conservative Tax Foundation. Nonprofits and governments would also pay a 14.5 percent tax on wages for their employees.

You said that the 14.5% tax only applied to nonprofits and governments, so it would only affect a small percentage of people. Nonprofits and governments are simply paying the same wage tax as for profit businesses are. There is no difference. You claimed the 14.5% tax applied to only nonprofits and governments. That was obviously wrong if you took even ten seconds to read the passage discussing it.

Either you're a fucking idiot because you can't read, or you're a fucking idiot by your own standard because you were referencing the same tax on nonprofits that you called me a 'fucking idiot' for telling you applied more generally.

Nice self ownage, you tool.

 

[glenn1]

I like how when someone points out to you that you can't read your response is to fly into a rage instead of just admitting you were wrong.

To quote the passage in full:



You said that the 14.5% tax only applied to nonprofits and governments, so it would only affect a small percentage of people. Nonprofits and governments are simply paying the same wage tax as for profit businesses are. There is no difference. You claimed the 14.5% tax applied to only nonprofits and governments. That was obviously wrong if you took even ten seconds to read the passage discussing it.

Either you're a fucking idiot because you can't read, or you're a fucking idiot by your own standard because you were referencing the same tax on nonprofits that you called me a 'fucking idiot' for telling you applied more generally.

Nice self ownage, you tool.

Payroll taxes would go away from the employee perspective and be paid instead by the employer at this new 14.5% rate. That's the takeaway. It's not a net new 14.5% tax payable by employees. I know you're smarter than this. Use the grey matter between your ears and stop fixating on "OMG the rich get $$$"

 

[Spungo]

I can't speak for Exxon, but Apple's numbers are pretty obviously false, at least from a normal person's perspective of what counts as income.

They have billions of dollars of income that is considered 'offshore', but really results from them claiming a lot of income that's actually earned in the US as 'offshore' income due to various ways they structure their business. I'm not knocking them for this, as it is apparently legal, but their actual tax rate on all their income earned in the US is likely a good bit lower than what is reported.

Claim: Apple's revenue was $183 billion in 2014, but they only paid $14 billion in taxes!
Reality: $183 is the top line (literally) on the income statement. That's the total of all money collected by the company, and it does not include any expenses. How much of that does Apple actually keep? Total operating expenses (paying your employees, paying rent, etc) was $130 billion, so take that off. Now we're down to operating income of $53 billion. Paying $14 billion in taxes (globally) on $53 billion operating income is fairly significant. You could argue that they should be paying more or paying less, but let's not kid ourselves by acting like Apple is getting a global free ride.

The reason for paying almost no US taxes is very simple - Apple products are not American. They're Chinese. My iphone 4 says it's made in China. The way to dodge US taxes is very easy. Here's how it works:
-Let's say you make a product in China for $100. This product would be made by Apple China, or a name similar to that.
-Apple China sells the product to Apple USA for $700.
-Apple USA sells the product to consumers for $700.
-Apple USA would actually be losing money, so it would pay no American income tax.
-Apple China is making $600 on every product sold to Apple USA, so it writes that down as $600 of profit in China.

Notice how all 4 of those years I posted hover around 25% tax rate. Can you guess what the corporate tax rate in China is? Yep, 25%. We can't even get angry at them for doing this. Apple is a Chinese company. An overwhelming majority of its workers are Chinese. All of its products are Chinese. Of course they pay Chinese taxes. If they made things in America, they would pay American taxes. If they made things in Bangladesh, they would pay Bangladesh taxes. Why not move Apple's factories to Bangladesh even though the labor is cheaper there? The tax rate in Bangladesh is 45%, so that would be a bad business decision. If America's corporate tax rate was 10%, global manufacturing would move to the US. I'm not saying we should make it 10%; I'm just saying that's what would happen.

I think it's important to get this information out to the people. Right now, we're moving in the wrong direction. People want higher corporate taxes because they think that will make corporations pay more in taxes. In reality, that's the exact opposite of what would happen. The higher our official tax rate is, the harder companies will work to avoid paying our taxes. It's the exact same logic that drives rich people to "live" in Florida even though they actually live in Maryland. They buy a house in Florida, say that's their primary residence, pay no state income taxes, but continue living somewhere that isn't Florida.

 

[glenn1]

Glenn I believe the point is this would leave a large hole in the budget its safe to assume social cuts would be required. I don't believe conservatives are going to want to support a budget the drastically cuts defense spending, liberals will never support a budget that kills welfare programs and middle aged voters are not going to support a budget that kills Social Security & medicare. Thus this is not a reasonable tax plan, again I do support Mr. Paul for putting it in writing which is what we should expect from everyone.

Again, we're smart people and can talk about two different but related things at the same time; both how the plan works (the mechanics) and whether the results it produces as currently written are desirable (the fiscals). The second could be addressed by changing the numbers, the first might make the plan unworkable no matter what numbers you used.

 

[Fanatical Meat]

Again, we're smart people and can talk about two different but related things at the same time; both how the plan works (the mechanics) and whether the results it produces as currently written are desirable (the fiscals). The second could be addressed by changing the numbers, the first might make the plan unworkable no matter what numbers you used.

Funny I was just going to edit and mention that the only other thing I'd like to see from Mr. Paul is what is his plan b if cutting taxes does not generate enough business to fill the gaps. This is where we all fail as voters and even the news fails as interviewers. We should always ask when will it work, how will we know its working and what is the plan if it doesn't work?