Having to pay too much tax is a problem most of us would love to have.
3
We're back to "Voodoo Economics." While I'm sure we can find examples of taxes (and fees) that are not equitable or fair, in general, we need income to pay for expenses. As the world becomes more and more interdependent, we need more interconnectivity. That requires infrastructure. That costs money. We are not a country of Jeffersonian small farmers anymore. Without the internet, smart phones and rapid transportation, we would have a hard time surviving the present world conditions.
Remember that the Articles of Confederation that bound the thirteen original colonies failed primarily because nobody wanted to pay for the government.
Remember that the Articles of Confederation that bound the thirteen original colonies failed primarily because nobody wanted to pay for the government.
2
They still don't. They want to reduce taxes, weaken the government, then drown it in the bathtub.
Apparently, this line of "reasoning" appeals to old, white Republican farmers in the Middle West who believe in rugged individualism, the Bible, and pulling yourself up by your own bootstraps... and welfare queens. When it comes to how this all adds up, and who fixes the highways and mans the FAA and buys and operates the aircraft carriers, and operates Medicare and the VA - and subsidizes the Blue Angels airshows - well, that is just not on the menu, thanks very much.
GHW Bush said it best, I think: voodoo.
It plays in Peoria!
Apparently, this line of "reasoning" appeals to old, white Republican farmers in the Middle West who believe in rugged individualism, the Bible, and pulling yourself up by your own bootstraps... and welfare queens. When it comes to how this all adds up, and who fixes the highways and mans the FAA and buys and operates the aircraft carriers, and operates Medicare and the VA - and subsidizes the Blue Angels airshows - well, that is just not on the menu, thanks very much.
GHW Bush said it best, I think: voodoo.
It plays in Peoria!
2
I agree with Republicans that we should have a flat tax, except it should be on wealth over $10 Million. A nice starter rate would be 10%. As for the income tax, we should leave it as is except add a new bracket: for income over $2 Million, the rate should be 45%.
2
Across-the-board tax cuts do not work, except to make the rich unnecessarily richer. Do some research. Why do you think even Forbes admits that Democratic tax policies are always better for American than those of the GOP?
6
We have an excellent opportunity to see how the Republican proposals for tax reform would affect our country -- look no further than Kansas. Governor Brownback courageously pushed through tax proposals in Kansas based on the Paul Ryan national blueprint and he proudly announced that Kansas would be an "experiment" to show how successful these policies could be.
His "experiment" has resulted in huge state deficits which he is trying to fix by gutting the Kansas educational system.
We should thank Mr. Brownback for giving us a fine example of where these policies would take the US.
His "experiment" has resulted in huge state deficits which he is trying to fix by gutting the Kansas educational system.
We should thank Mr. Brownback for giving us a fine example of where these policies would take the US.
12
To be sure, everyone should pay his or her fair share of taxes, but things have gotten out of hand for some taxpayers. Explicit income tax is not the only tax on income. There are shadow taxes, such as the additional income-based amounts that some parents are expected to pay for their children's education, for example, as well as new "taxes" in the form of subsidies for the ACA. Disappearing personal exemptions and deductions are another hidden tax, and property taxes are another income tax proxy. Probably the most onerous tax burden is that on second incomes of married couples, because the lowest rate paid by those earning the lesser of the two incomes is the marginal rate of the higher-earning spouse. Someone earning $60,000 per year as a teacher might well be paying $30,000+ in taxes on that income. Discounting the work of these secondary wage earners is not only unfair, but inappropriate and counterproductive, because it discourages talented but modestly paid people from working.
2
Make it so that one person equals one tax burden, no more "stacking".
1
The concept that the risk of having to pay tax - high, low, onerous, or anything at all - will discourage people from working is an old GOP line. As such, if you examine it, or even think about it, is doesn't make any sense... except possibly to someone old and rich, in a hypothetical way, from the POV that work is an option that can be chosen or discarded according to how advantageous it is - when you really don't need the income to fritter away on something foolish such as living expenses, compared to gaining some extra money you could invest in subordinated debentures.
1
“I think we need to cut taxes and reform our code to create economic prosperity..” sounds good but is detached from reality. If you want to create economic prosperity, how about demanding that taxpayers and businesses demand that we make college affordable for all qualified students, that states provide sufficient funding for educational needs, that businesses pay taxes to support educational needs and start providing in-house and external training and education for their employees.
Stop trying to turn the country into a banana republic with walled estates and go back to meeting the needs of the entire electorate and population instead of the top tenth of one percent.
Stop trying to turn the country into a banana republic with walled estates and go back to meeting the needs of the entire electorate and population instead of the top tenth of one percent.
10
Now, this line is one that must absolutely go down in Republican History for originality, absurdity. "It is condescending to argue that poor people could not afford to pay the same tax rate as rich people."
Well, then what we could do is offer all tax payers the option of paying their required rate of taxes or the chance to opt into paying the rate of rich people. That solves that. Lord knows we don't want people to feel oppressed by their tax rate. Yes, during a time of record level income inequality, let's raise the tax burden on the poor.
In all seriousness, tax policy on the republican side has never been a serious discussion. They have never seen a tax cut on business and the wealthy that they did not love. The lower and sooner the better. As such, as a candidate for the GOP, nomination the safest option is to go for the flat tax. It is simple to explain, it sounds good and you never get held accountable if you get elected because it has zero chance of happening.
Well, then what we could do is offer all tax payers the option of paying their required rate of taxes or the chance to opt into paying the rate of rich people. That solves that. Lord knows we don't want people to feel oppressed by their tax rate. Yes, during a time of record level income inequality, let's raise the tax burden on the poor.
In all seriousness, tax policy on the republican side has never been a serious discussion. They have never seen a tax cut on business and the wealthy that they did not love. The lower and sooner the better. As such, as a candidate for the GOP, nomination the safest option is to go for the flat tax. It is simple to explain, it sounds good and you never get held accountable if you get elected because it has zero chance of happening.
9
As with most issues on this blog I am not surprised how quickly it turns into a battle of bashing the right. Cutting taxes has a common sense solution. Get more people to pay taxes and each person can pay less. Does it get any easier? Now how to do that is the question. I can tell you step one. Get rid of all these garbage so called "free trade" agreements. Step two, I've got ideas for that too.
The idea that you can "Get more people to pay taxes and each person can pay less" has been touted since the Reagan administration but has been repeatedly and thoroughly discredited.
It always causes huge deficits.
It always causes huge deficits.
8
I am really beginning to think that conservative ideology is going to sink this country (if it hasn't already). Conservatives have made their case aggressively for four decades now, and their prescriptions for a stronger and better nation have failed repeatedly. Isn't it about time that progressives found a way to counterbalance these failed ideas and shift the thinking of Red State voters?
7
It's too late for them to avoid the "deceive the public tax trap", they are already deep in the doo-doo of their own making. While they might be able to disguise the smell during the primary, thoughtful swing voters will be harder to convince in the real campaign.
1
The Republican administrations of the last 3 decades have created the **illusion** of prosperity by cutting tastes and running up massive deficits.
Using the household budget analogy they favor, it is easy to feel rich if you charge things to your credit card and then ignore the rising monthly balance. (Dick "deficits don't matter" Cheney.) Let's eat out? Sure! Four-star hotel for a weekend getaway? Why not? If you don't think about the balance on your card, or ignore it when it comes and just pay the minimum, you don't have a problem.
The Reagan-Bush 41 and Bush 43 administrations ran up about 11 trillion of our 17 trillion dollar deficit. Eight years of Hillary's husband: one trillion added. And here Barack DOES get a bye, because he inherited the TARP and the horrible economy that Bush 43 created. (You know, a tax cut followed by a two trillion dollar vacation in the Middle East--all charged to the taxpayers' credit card.)
This is not abstract economic theory or high-minded projections. Simple facts that you can look up yourself. The Republicans spend more than the tax-and-spend liberals that they then scold for massive national debt.
Like the old joke, the only time you can tell they are lying is when their lips are moving. Just like your credit card, if you want the balance to go down, you need to stop spending (lower standard of living) or get a better job (raise taxes.) Ain't no other way.
Using the household budget analogy they favor, it is easy to feel rich if you charge things to your credit card and then ignore the rising monthly balance. (Dick "deficits don't matter" Cheney.) Let's eat out? Sure! Four-star hotel for a weekend getaway? Why not? If you don't think about the balance on your card, or ignore it when it comes and just pay the minimum, you don't have a problem.
The Reagan-Bush 41 and Bush 43 administrations ran up about 11 trillion of our 17 trillion dollar deficit. Eight years of Hillary's husband: one trillion added. And here Barack DOES get a bye, because he inherited the TARP and the horrible economy that Bush 43 created. (You know, a tax cut followed by a two trillion dollar vacation in the Middle East--all charged to the taxpayers' credit card.)
This is not abstract economic theory or high-minded projections. Simple facts that you can look up yourself. The Republicans spend more than the tax-and-spend liberals that they then scold for massive national debt.
Like the old joke, the only time you can tell they are lying is when their lips are moving. Just like your credit card, if you want the balance to go down, you need to stop spending (lower standard of living) or get a better job (raise taxes.) Ain't no other way.
9
Macroeconomics works nothing like "your credit card" and Cheney was right however inadvertently that deficits don't usually matter since their relevance depends on the amount of unused resources in the economy. It is the debt that never matters.
Steve Bruns,
Actually, macroeconomics does eventually work like a credit account. It's all the matter of proportion and growth. We can "grow" our way out of debt (or perceived amount of acceptable debt) but just like getting a college degree, the way you take on debt influences how much your economic power grows. The right degree commands a better income, the right investment in government projects commands a better return on that investment.
The key is where you put your money and how well you target your goals. Working hard to achieve those goals is also a very good idea.
Actually, macroeconomics does eventually work like a credit account. It's all the matter of proportion and growth. We can "grow" our way out of debt (or perceived amount of acceptable debt) but just like getting a college degree, the way you take on debt influences how much your economic power grows. The right degree commands a better income, the right investment in government projects commands a better return on that investment.
The key is where you put your money and how well you target your goals. Working hard to achieve those goals is also a very good idea.
"I like the idea of a simple tax code." How refreshing. Within moments of being passed, a flat tax would have deductions made available for millionaires and hedge fund managers--but I repeat myself.
9
No tax "reform" legislation can emerge from Congress devoid of riders and hidden provisions favoring special interests who contribute to incumbent politicians' re-election campaigns.
5
Rich folks have taken their "discount" long before W2 time, in the form of cars, travel, aircraft and perks that never get to a tax form.
7
Republicans say that lower tax rates on everyone including the rich will lead to prosperity for everyone. Democrats say that increasing tax rates on just the rich will lead to prosperity for everyone else. They are both wrong. Each party is completely clueless as to the fundamental changes that have and will continue to occur in our new world economy. Tax policy is not the economic impactor that it once was. Both parties still cling to the notion that increasing or decreasing, or generally tinkering with tax policy will lead to widespread prosperity. This may have been true in 1955, or 1975, but not now in an era of near total economic globalization and automation technology. The idea that tax policy change can bring about prosperity is so old fashioned that it is truly lame if not infantile. We need real change that goes way, way, way beyond tax policy.
7
Progressives and liberals should be backing a flat fax. A flat tax is the only way to curtail Congress from doling out favors to lobbyist and large corporations. The simpler the tax code the harder it is for politicians to use it as giveaways for their favorite groups.
Even though I benefit immensely from some deductions, I'd gladly give them up for one flat rate. Everyone should have some skin in the game when it comes to Federal taxes regardless of where you are on the income ladder.
Even though I benefit immensely from some deductions, I'd gladly give them up for one flat rate. Everyone should have some skin in the game when it comes to Federal taxes regardless of where you are on the income ladder.
2
So in your world someone earning $7.25 an hour should pay $1.45 of that to the feds, leaving a whopping $5.80 for food, clothing, shelter, meadical, transportation, payroll taxes of $0.50 and state and local taxes (depending on the state). You try living on less than $5.00 per hour net for a year and then tell us if you still want to sing that tune.
15
Many advocates of flat taxes build rebates of various kinds into them to deal with that problem. For example, the Michigan state income tax is a flat tax, but there are various credits for low-income people that reduce their tax burden.
When someone recommends a "Flat Tax" it means they don't understand what they are talking about.
The problem is never the tax rate. The problem is to calculate "TAXABLE INCOME".
If you are typical worker and get paid by your employer then you get a W-2. You get statements showing how much you paid in mortgage interest and state taxes. You get statements showing how much you earned in investment income and bank interest. This means your taxable income is simple.
If you work as a independent contractor then you have a lot of problems with calculating taxable income. How much of what you spent is deductible? How much of what you earned is taxable? These are not easy questions. This is why the tax law is so complicated.
It is IMPOSSIBLE to define "taxable income" in less than 10 million words. It is easy to define it for most situations but once you define it then I will easily find something that you think should be income that won't meet your definition of taxable income.
The problem is never the tax rate. The problem is to calculate "TAXABLE INCOME".
If you are typical worker and get paid by your employer then you get a W-2. You get statements showing how much you paid in mortgage interest and state taxes. You get statements showing how much you earned in investment income and bank interest. This means your taxable income is simple.
If you work as a independent contractor then you have a lot of problems with calculating taxable income. How much of what you spent is deductible? How much of what you earned is taxable? These are not easy questions. This is why the tax law is so complicated.
It is IMPOSSIBLE to define "taxable income" in less than 10 million words. It is easy to define it for most situations but once you define it then I will easily find something that you think should be income that won't meet your definition of taxable income.
4
Anybody who believes that "It is IMPOSSIBLE to define "taxable income" in less than 10 million words" probably is incapable of reading. IRS Publication is a 286 page booklet describing just about every screwball case that could come up in preparing individual federal Form 1040 return in plain english with lots of examples.
A corresponding publication, IRS Publication 334 - Tax Guide for Small Business, all of 53 pages in length, will tell you just about anything you need to know to properly determine business income and taxes.
If people are still finding it difficult to read, they can buy any software package which can easily handle individual federal income, self-employment, rental income, investment income for $100 or less and just follow the instructions.
A corresponding publication, IRS Publication 334 - Tax Guide for Small Business, all of 53 pages in length, will tell you just about anything you need to know to properly determine business income and taxes.
If people are still finding it difficult to read, they can buy any software package which can easily handle individual federal income, self-employment, rental income, investment income for $100 or less and just follow the instructions.
2
This is straight out of the Bush II handbook: you don't need to talk deficits when telling your wealthy base you're cutting their taxes. Deficit talk is for strangling entitlements.
11
Eliminate the entire tax code for individuals.
New form one side of one single spaced 12 font form.
All income taxed the same - earned, unearned, gains, dividends.
Eliminate all deduction - too many kids, state tax too high, stock market losses not a problem for the Feds to solve
6 brackets based on family of 4:
< 50K per year - no tax
50-100 K per year 10% tax
100-200 k/year 20% tax
200k-500K /year 30% tax
500 K-1M /year 35% tax
> 1 M per year 40% tax
> 2 M per year 50% tax
New form one side of one single spaced 12 font form.
All income taxed the same - earned, unearned, gains, dividends.
Eliminate all deduction - too many kids, state tax too high, stock market losses not a problem for the Feds to solve
6 brackets based on family of 4:
< 50K per year - no tax
50-100 K per year 10% tax
100-200 k/year 20% tax
200k-500K /year 30% tax
500 K-1M /year 35% tax
> 1 M per year 40% tax
> 2 M per year 50% tax
2
I once saw a much more simplified tax form. It needed only three lines.
How much did you make last year? $__________
How much do you have left? $_________
Send it in.
How much did you make last year? $__________
How much do you have left? $_________
Send it in.
3
The current personal income tax system was intended to be an emergency wartime measure. Ordinary Americans didn't pay income tax during the 1920s and 1930's and only accepted it as being necessary after Pearl Harbor.
What role did it play in the war effort against the Tripartite Alliance? It was an anti-inflationary measure. By 1943 the federal government was the nation's principal employer. The US Treasury created billions of new paper dollars every month to wage war and buy weapons, munitions and supplies. To forestall domestic hyperinflation most of those dollars had to be recycled to the US Treasury so they couldn't be used to buy consumer goods. The US Treasury used that income stream to create even more debt (sold to the war-industry employed general public as "War" and "Victory" bonds) to buy more B-17s and Sherman tanks. That closed circle financed the "Arsenal of Democracy".
But, like so many other temporary wartime measures created by Washington DC politicians "in quiet rooms" -- Mitt Romney's timeless formulation, Romney the ultimate insider and backroom fixer -- the personal income tax became an enormous albatross around ordinary Americans' necks and a deeply corruptive influence on American politics itself.
When Republican politicians denounce our current tax system they are hypocrites and liars. It's their baby. They use it to cudgel ordinary Americans, the middle class especially, while shamelessly pretending to be their advocates, friends and champions.
What role did it play in the war effort against the Tripartite Alliance? It was an anti-inflationary measure. By 1943 the federal government was the nation's principal employer. The US Treasury created billions of new paper dollars every month to wage war and buy weapons, munitions and supplies. To forestall domestic hyperinflation most of those dollars had to be recycled to the US Treasury so they couldn't be used to buy consumer goods. The US Treasury used that income stream to create even more debt (sold to the war-industry employed general public as "War" and "Victory" bonds) to buy more B-17s and Sherman tanks. That closed circle financed the "Arsenal of Democracy".
But, like so many other temporary wartime measures created by Washington DC politicians "in quiet rooms" -- Mitt Romney's timeless formulation, Romney the ultimate insider and backroom fixer -- the personal income tax became an enormous albatross around ordinary Americans' necks and a deeply corruptive influence on American politics itself.
When Republican politicians denounce our current tax system they are hypocrites and liars. It's their baby. They use it to cudgel ordinary Americans, the middle class especially, while shamelessly pretending to be their advocates, friends and champions.
2
Given that such a plan could even be implemented, one of the first things that would happen would be a gross-up, if you will, of the incomes of highly-paid employees to cover the tax, because such people would demand it, and, being highly-valued, they would get it. Since the pot of money from which to pay all employees is not unlimited, others would likely see more wage stagnation. Not exactly a great outcome in terms of ending income inequality.
There are two political parties in the U.S.
One is corrupt.
The other is morally reprehensible.
I do not see Americans turning their screens off long enough to do anything about it.
One is corrupt.
The other is morally reprehensible.
I do not see Americans turning their screens off long enough to do anything about it.
2
"He (Carson) said on "Fox News Sunday" this month that it was "condescending" to argue poor people could not afford to pay the same tax rate as rich people."
Exactly what alternate universe does Carson come from?
Exactly what alternate universe does Carson come from?
9
Of all the presidential candidates, he is probably uniquely qualified to make that argument, having been raised in abject poverty himself.
He is far smarter than anyone realizes having made up the household budget & tax forms while just an infant.
Regardless of the numbers and what they reveal about politicians, ALL politicians, it is comforting to me that somebody is keeping score of what is said, what is done and what is or is not true.
I just find articles talking about 2016 tax cuts to be LUNACY. When our budget is in deficit as much as it is, talk of tax cuts is just plain dishonest.
7
These candidates are not shy about admitting their ignorance on scientific matters.
"I'm not a scientist so I can't comment on global warming".
So why don't we hear the same candor on economics?
"I'm not an economist so I can't comment on tax policy".
Because they claim expertise when it suits their cause and ignore the experts when it doesn't.
"I'm not a scientist so I can't comment on global warming".
So why don't we hear the same candor on economics?
"I'm not an economist so I can't comment on tax policy".
Because they claim expertise when it suits their cause and ignore the experts when it doesn't.
14
Because their understanding of policy comes from folks who took careful notes about perfect competition models the first six weeks of ECON 101, decided they knew enough to be experts, and slept through the parts about externalities and Keynesianism.
Capital gains and dividends, money that is made without working for it, should be taxed at a HIGHER rate than ordinary income where people actually have to show up and do work.
The ONE exemption should be the gain in value on ONE primary residence, ONE TIME.
The ONE exemption should be the gain in value on ONE primary residence, ONE TIME.
7
Exactly! But it's too simple for lawyers and accountants to live off...
2
If you want less of something, raise taxes on it. If you want more of something, reduce taxes on it. Are you saying that American businesses--especially startups (e.g. IPOs)--don't need investment capital? Or that the American economy doesn't need prosperous businesses?
Prosperous businesses haven't done squat for the vast majority of Americans since Bill Clinton gave away the store to them. Their sole ambition is to increase shareholder value while grinding the workers into the dust on pay, benefits, sick leave, vacation time, health care, schedules. Keep 'em hungry, off balance, and poor is what they like.
It is a Republican fantasy the people will stop investing if they have to pay real tax on dividends and long term capital gains, mostly because most Republican politicians are too stupid to think things through past the last 'contribution'.
What do you think investors are going to do, eat the funds or stuff them into 1% interest savings accounts or their mattresses? No, they're going to put on their big girl panties and pay the tax, because deep down they understand that it's that or nothing or move out of the country.
This is the same fantasy that calls the robber barons 'job creators' and posits that the only way they will create jobs is if they're paid to do so by middle and working class taxpayer money.
Don't look now, but that free ride the wealthy have suckered the fools in Congress into giving them is slowly coming to an end.
It is a Republican fantasy the people will stop investing if they have to pay real tax on dividends and long term capital gains, mostly because most Republican politicians are too stupid to think things through past the last 'contribution'.
What do you think investors are going to do, eat the funds or stuff them into 1% interest savings accounts or their mattresses? No, they're going to put on their big girl panties and pay the tax, because deep down they understand that it's that or nothing or move out of the country.
This is the same fantasy that calls the robber barons 'job creators' and posits that the only way they will create jobs is if they're paid to do so by middle and working class taxpayer money.
Don't look now, but that free ride the wealthy have suckered the fools in Congress into giving them is slowly coming to an end.
3
The current federal income tax system that collects 95% of income taxes from 50% of Americans is not fair nor sustainable. Income tax reform is required so that every American pays at least 10% of total income earned in excess of the poverty level. Americans should pay 25% of total income earned in excess of $1 million. Under this system, only poor Americans will claim that taxes are not high. The rest will understand what it feels like to have money confiscated by the government. This will lead to great public pressure to reduce government's wasteful spending across the board which in turn will eventually result in smaller or no annual deficits. America's economy, benefiting from the elimination of annual deficits and increases in public debt, will begin to grow again and provide opportunities for all Americans to increase their incomes which have been declining since 2008.
2
How is the government confiscating your money? Please explain that silly statement.
2
In America, the bottom 80% make less than 10% of the national income. They are already struggling. The vastly rich don't need to become more prosperous on the backs of the middle class and poor.
3
Hi, Jon. Numbers are fun but no need to exaggerate. According to 2011 CBO data on all forms of income, the bottom 80% made about 52% of all income.
And germain to this column, they paid about 31% of all federal taxes.
And germain to this column, they paid about 31% of all federal taxes.
The US GDP is 16 trillion dollars. The Federal government budget is around 4 trillion dollars.
So the GDP without the Federal government is 12 Trillion dollars. The government would need to tax around 30%.
While this does not take multipliers into account the real figure must be around 25% at least.
So the GDP without the Federal government is 12 Trillion dollars. The government would need to tax around 30%.
While this does not take multipliers into account the real figure must be around 25% at least.
3
Not right and way oversimplified too. U.S Gov't's domestic spending is income that is part of the tax base, so you can't just look at GDP w/o government spending.
Also a lot more goes into effective tax rates and total revenue that you allow for. There are other types of taxes besides income taxes and they are a measurable amount of gov't revenue. Also GDP does not directly equate with taxable income.
Also a lot more goes into effective tax rates and total revenue that you allow for. There are other types of taxes besides income taxes and they are a measurable amount of gov't revenue. Also GDP does not directly equate with taxable income.
As bad as it now is, the federal tax code and all of its ancillary legislative and bureaucratic machinery is probably better than anything that will come from attempts to "reform" it. This will be the case no matter which party controls government. That's because the words "tax reform" are like a dinner bell to Washington law and accounting firms that exist to advance the interests of their wealthy clients. These firms will have a major role in the "reform" process and will indeed write the laws, a skill that congress no longer has.
4
Ow! The cognitive dissonance hurts when the GOP first complains about the large deficits and then advocates for lower taxes. I want to know, is there a market miracle that is going to turn the US economy toward a year over year 5% growth rate? Does the GOP have some magical fairy dust that can accomplish both issues simultaneously? No, I'm not a believer.
But, yes, I'm ready for a Republican candidate to put forth a coherent three-pronged plan: pay down the debt, cut taxes on the wealthy, and eliminate or privatize social programs like social security and medicare. A truthful platform like that would surely be rejected in all but the reddest states.
But, yes, I'm ready for a Republican candidate to put forth a coherent three-pronged plan: pay down the debt, cut taxes on the wealthy, and eliminate or privatize social programs like social security and medicare. A truthful platform like that would surely be rejected in all but the reddest states.
5
Anyone who has tried to research and compare health insurance to determine which one to buy, will understand how complex this process is and how utterly incapable most elderly would be to comparison shop for health coverage in the event that Medicare were to be privatized. I cannot fathom how Paul Ryan or anyone could make a claim that we should be moving to privatize any social safety net designed for the elderly. Even if they could handle investments and comparing health insurance policies on first retiring, as they age, and as their needs and mental abilities change, many if not most would not be able to continue to do this.
What we need are continuous tax brackets rather than discrete ones with a higher top tax rate. There isn't much sense in this age of excessive executive pay for the highest tax bracket to top out as $464.85k. After all, the median compensation for CEOs in the USA in 2014, including salary, spending allowance, perks, incentives, benefits, stock, etc., was $9M. The highest paid executive made $92M.
As for the so-called flat or "fair," this tax isn't the slightest bit fair because the relative burden decreases as income rises. Consider that the marginal utility of the dollar declines as income rises: $10 has less value to a billionaire than to a school teacher. A billionaire, once all income streams are accounted for, may make $200 to $600 a second while the school teacher may earn .24 -.50 cents a second. Which one would be more likely to stoop and pick up a buck on the street? To hurt all taxpayers equally, rates must rise proportionally.
Also, for the highest earners, most of their income is "play" money in that they earn enough in the first days or weeks of the year to cover their luxurious nut while, for the rest of us, the last few weeks of the year will determine whether we end the year in the black.
As for the so-called flat or "fair," this tax isn't the slightest bit fair because the relative burden decreases as income rises. Consider that the marginal utility of the dollar declines as income rises: $10 has less value to a billionaire than to a school teacher. A billionaire, once all income streams are accounted for, may make $200 to $600 a second while the school teacher may earn .24 -.50 cents a second. Which one would be more likely to stoop and pick up a buck on the street? To hurt all taxpayers equally, rates must rise proportionally.
Also, for the highest earners, most of their income is "play" money in that they earn enough in the first days or weeks of the year to cover their luxurious nut while, for the rest of us, the last few weeks of the year will determine whether we end the year in the black.
10
How many billionaires are there in the U.S.? Now, how many families earn between $200k and $400k? I am better the second number is a lot larger than the first one. Talking about billionaires versus teachers is the reason why no one can agree on what needs to be done - you're picking an extreme example and acting as if that is the norm.
I would argue that you should compare a dual-income family making $200k to a dual-income family where both parents are teachers and earn about $100k. $10 is worth a lot to both of these households. The family making $200k should not have to shoulder a larger tax burden just because they are more successful - proportionally, both families should pay the same tax rate.
Now, let me ask you this - where do you draw the line on what constitutes rich and deserves to be taxed more? $200k could be considered rich in a rural area like Iowa, but in NYC it's middle class.
A more realistic solution is to have a flat tax on all earnings up to $1 million (or some number that encompasses most of the U.S. population), and then a progressive tax beyond that.
I would argue that you should compare a dual-income family making $200k to a dual-income family where both parents are teachers and earn about $100k. $10 is worth a lot to both of these households. The family making $200k should not have to shoulder a larger tax burden just because they are more successful - proportionally, both families should pay the same tax rate.
Now, let me ask you this - where do you draw the line on what constitutes rich and deserves to be taxed more? $200k could be considered rich in a rural area like Iowa, but in NYC it's middle class.
A more realistic solution is to have a flat tax on all earnings up to $1 million (or some number that encompasses most of the U.S. population), and then a progressive tax beyond that.
2
So you want to tax a guy making $10K a year at the same tax rate as a guy making $1 million??
Wow.
Wow.
The issue isn't "deductions". It is income turned into capital gains and other devices (depreciation) for not counting income as income.
If we want government to do things, we have to pay for it with taxes. Stop complaining they are too high. They aren't.
If we want government to do things, we have to pay for it with taxes. Stop complaining they are too high. They aren't.
16
This is a discussion about Republican posturing, not a discussion about real plans to change to the tax code.
Our current congress is totally incapable of effecting major changes to the tax code.
Our current congress is totally incapable of effecting major changes to the tax code.
14
Spare us the "flat tax" farce.
We have seen how "flat taxes" work in practice. And it's not pretty.
Social Security exacts a "flat tax" of 6.2% on the employee and 6.2% from the employer -- but only on the first $118,500 of income. Why is that? Why doesn't this "flat tax" extend to every single dollar of income?
As a result, the median worker pays 6.2% directly and another 6.2% indirectly, whereas a hedge fund manager pays Social Security 0.0007% of his income. How "progressive" is that?
The burden of federal payroll taxes, state sales taxes and municipal property taxes already falls disproportionately on the middle and working classes.
We have seen how "flat taxes" work in practice. And it's not pretty.
Social Security exacts a "flat tax" of 6.2% on the employee and 6.2% from the employer -- but only on the first $118,500 of income. Why is that? Why doesn't this "flat tax" extend to every single dollar of income?
As a result, the median worker pays 6.2% directly and another 6.2% indirectly, whereas a hedge fund manager pays Social Security 0.0007% of his income. How "progressive" is that?
The burden of federal payroll taxes, state sales taxes and municipal property taxes already falls disproportionately on the middle and working classes.
36
If Social Security withholding was not limited, but benefits remain limited, then Social Security would become a wealth transfer tax and lose significant political support.
Social Security is sacrosanct because it is not considered a wealth transfer tax.
Social Security is sacrosanct because it is not considered a wealth transfer tax.
8
Your argument is flawed. The "flat tax" you are looking at is not truly a flat tax because it is capped at $118k of salary. A true flat tax would tax every dollar earned by every person at the same amount.
And tell me, how many hedge fund managers are there in the U.S. versus the number of dual income households with professionals (engineers, lawyers, doctors, etc.)? I can bet that the second number far outstrips the first number, and many of those professional households have incomes in the $200k+ range because of their hard work. Why should that bracket pay a higher tax rate than someone earning less than $100k? In my opinion, you should have a flat tax up to an income that encompasses 99% of the U.S. population, and then have a progressive tax on top of that.
And tell me, how many hedge fund managers are there in the U.S. versus the number of dual income households with professionals (engineers, lawyers, doctors, etc.)? I can bet that the second number far outstrips the first number, and many of those professional households have incomes in the $200k+ range because of their hard work. Why should that bracket pay a higher tax rate than someone earning less than $100k? In my opinion, you should have a flat tax up to an income that encompasses 99% of the U.S. population, and then have a progressive tax on top of that.
The reason why Social Security is a flat tax program that is income capped is because it was always intended by FDR and the New Dealers to be an Entitlement Program, and not a Welfare Program. We could just ditch SS altogether, and just payout Welfare to poor seniors, and get the money from the normal Federal Income tax system, which is non capped and progressive. The intent of the current SS is as a savings program with your monthly payout based on what you paid in when you were working. If we lift the cap on how much rich people pay into SS, do we also lift the cap on how much they get when they retire? Seems fair, doesn't it?
2
Taxes are seen differently by two groups of people, therefore the problem.
An economist would propose a simpler tax code to save costs to the taxpayers, and rates that are lower that would collect more money also.
A politician in favor of wealth redistribution doesn't care about how much tax is collected, as long as "the rich" pay most of it.
A politician who wants to alter our behavior uses taxes to manipulate us, either stop drinking, smoking or drinking a huge soda (Bloomberg).
Honest people know that if taxes are needed, making them fair and simple to comply with won't be popular with liberal politicians who see taxes as a tool to change behavior and wealth distribution, not just pay for government.
I worked for my money and I want to keep it. Politicians want to take it from me in varying degrees.
I will vote always for those who at least talk about it being mine in the first place.
An economist would propose a simpler tax code to save costs to the taxpayers, and rates that are lower that would collect more money also.
A politician in favor of wealth redistribution doesn't care about how much tax is collected, as long as "the rich" pay most of it.
A politician who wants to alter our behavior uses taxes to manipulate us, either stop drinking, smoking or drinking a huge soda (Bloomberg).
Honest people know that if taxes are needed, making them fair and simple to comply with won't be popular with liberal politicians who see taxes as a tool to change behavior and wealth distribution, not just pay for government.
I worked for my money and I want to keep it. Politicians want to take it from me in varying degrees.
I will vote always for those who at least talk about it being mine in the first place.
2
Actually very few economists believe in "rates that are lower that would collect more money also." and when this has been tried in practice, it has failed miserably.
We need to collect enough taxes to fun essential and important government activities, without unduly burdening those in most need. Exactly how the tax burden should be distributed can be argued by reasonable people. Unfortunately many people seem to want drastically lower taxes (at least on themselves) with no decrease in services or programs (at least for programs they use or like). That is simply not a feasible approach.
We need to collect enough taxes to fun essential and important government activities, without unduly burdening those in most need. Exactly how the tax burden should be distributed can be argued by reasonable people. Unfortunately many people seem to want drastically lower taxes (at least on themselves) with no decrease in services or programs (at least for programs they use or like). That is simply not a feasible approach.
23
Lower tax rates resulted in more taxes collected which is an historical fact.
Want proof? Taxes are 0% in Florida, and over 10% in New York state. What are New York retirees who have money doing? They're voting with their feet and becoming Florida residents, e.g. Palm Beach County.
Want proof? Taxes are 0% in Florida, and over 10% in New York state. What are New York retirees who have money doing? They're voting with their feet and becoming Florida residents, e.g. Palm Beach County.
It isn't yours. The idea that money has value outside the society that creates the money and enforces rules for its use is a fable the rich and greedy tell themselves. What would all those dollars be worth in the middle of the Amazon? (And I don't mean the website.)
3
The US creates its own currency and therefore does not require tax revenue to pay for anything. Taxes help regulate the economy, that is all. The debt is just a meaningless balance sheet. There is no need to balance the budget. This is all an enduring fiction based on people's inability to separate the function of a business or household from the function of a government. Look up Modern Monetary Theory.
9
Weimar Germany and Zimbabwe also created their own currency. That did not save them.
Tell that to the Greeks and Argentines.
If money represents real value, such as hours of labor, government spending should should be funded by taxes. Otherwise you risk monetary collapse as has happend in history.
Try this thought experiment on for size:
Give every taxpayer absolute say on what programs 50% of his or her annual "contribution" funds. Currently, something over 1/2 of 535 individuals has "the power of the purse." It's OUR money, let US spend it. That still gives Congress half of our money for their pet projects. More than they deserve.
Congress would soon learn what the real concerns of taxpayers are.
Give every taxpayer absolute say on what programs 50% of his or her annual "contribution" funds. Currently, something over 1/2 of 535 individuals has "the power of the purse." It's OUR money, let US spend it. That still gives Congress half of our money for their pet projects. More than they deserve.
Congress would soon learn what the real concerns of taxpayers are.
3
Actually, relatively little of annual Federal Government spending is discretionary. Most of it is fixed, mandated by prior congresses. The agonies of Sequestration reflect that simple fact and another, even simpler truth: for the United States government it's impossible to do more with less.
And the size of the annual Federal deficit and overall Federal debt relative to the size of the American economy, usually expressed as a percentage, is not a meaningless statistic. If the growth rate of the American economy is arithmetic but the growth rate of the federal deficit and total federal debt -- after adding all off-budget, unfunded future government obligations -- is exponential, it cannot be safely ignored.
And the size of the annual Federal deficit and overall Federal debt relative to the size of the American economy, usually expressed as a percentage, is not a meaningless statistic. If the growth rate of the American economy is arithmetic but the growth rate of the federal deficit and total federal debt -- after adding all off-budget, unfunded future government obligations -- is exponential, it cannot be safely ignored.
2
A deficit that is never to be paid off, only turned over into eternity, is a pernicious 'flat tax' on all of us. Our children need not worry, they will not pay more or less because of it. It is we who pay for these things. For nothing really exists in the far tomorrows, what the government spends today comes out of the current year GDP.
So we pay for this deficit spending, whether it be for things or for interest on debt, in the current cost of living and in the current split between consumption, savings and investment. As we all live in this world today, and those who survive the night will all live in the world tomorrow, we will all end up paying in equal measure for the inefficiencies of extraordinary public debt.
Which is not to say that all debt is bad. Consider that money is a necessary economic tool and the level of public debt is in many ways an analog for both the quantity and velocity of the money supply.
It is just that public debt is also and always a flat tax on the entire populace.
Wonks like Paul Ryan and the various hard right think tanks all know this, but will never admit it. They don't really hate the deficit. If they could figure out a way to fund the entire government with long term or even perpetual debt they would.
No, what they hate is what the debt is currently being spent on. On 66 year old truck drivers and shelf stockers who obviously have another good 10 years of work in them. On lay about and unmarried mothers. On the unchosen.
So we pay for this deficit spending, whether it be for things or for interest on debt, in the current cost of living and in the current split between consumption, savings and investment. As we all live in this world today, and those who survive the night will all live in the world tomorrow, we will all end up paying in equal measure for the inefficiencies of extraordinary public debt.
Which is not to say that all debt is bad. Consider that money is a necessary economic tool and the level of public debt is in many ways an analog for both the quantity and velocity of the money supply.
It is just that public debt is also and always a flat tax on the entire populace.
Wonks like Paul Ryan and the various hard right think tanks all know this, but will never admit it. They don't really hate the deficit. If they could figure out a way to fund the entire government with long term or even perpetual debt they would.
No, what they hate is what the debt is currently being spent on. On 66 year old truck drivers and shelf stockers who obviously have another good 10 years of work in them. On lay about and unmarried mothers. On the unchosen.
2
For higher income households, we already have a flat tax called the Alternative Minimum Tax. Even if we cut the regular tax system rate to 5%, the AMT still operates with a 28% floor for earned income (not including surcharges, state and local taxes).
Depending on income, the AMT also reduces and then eliminates other deductions like state/local taxes, mortgage interest, and standard deduction like the number of dependents.
I know the tax system is complicated, but the AMT brings in more revenue than the "standard" tax system. It should not be forgotten or ignored.
Depending on income, the AMT also reduces and then eliminates other deductions like state/local taxes, mortgage interest, and standard deduction like the number of dependents.
I know the tax system is complicated, but the AMT brings in more revenue than the "standard" tax system. It should not be forgotten or ignored.
6
In a word NO. Reality bedevils them.
3
With no apologies whatsoever to Rich Lowry, tax cutting schemes are Trojan horses intended to create fiscal emergencies that justify cutting or eliminating government activities. It is long past time that the voters should call candidates out on this. We should demand that candidates answer a different question first, before they describe their various tax scenarios: What do you want government to less of? What do you want the government not to do at all that it has previously been doing?
40
"Popular wisdom holds that the income tax code is full of deductions for the wealthy, but... people making over $200,000 took deductions equal to just 15.7%"... "just" 15.7%? am I wrong in thinking that that would start at around 30k for the lowest high incomes? Even if it's 10k, it's nothing to sneeze at.
1
I'm still waiting for Reagan's trickle down to work its magic.
Ooops. What we actually got was a large gap in income and wealth. A good deal if you're in the top 1%. Not so good if your income has been stagnant or declining in the last decade or two.
And it will be interesting to see if Republicans can convince conservative white voters to accept cuts in Social Security and Medicare. After all, the country needs those cuts in capital gains taxes. I can't believe they can sell that again.
Ooops. What we actually got was a large gap in income and wealth. A good deal if you're in the top 1%. Not so good if your income has been stagnant or declining in the last decade or two.
And it will be interesting to see if Republicans can convince conservative white voters to accept cuts in Social Security and Medicare. After all, the country needs those cuts in capital gains taxes. I can't believe they can sell that again.
23
You have it all wrong. It did trickle down. It's just that the upward gusher looked like Old Faithful. That was the part they didn't mention when extolling the plan.
4
Hillary Cinton should endorse a flat tax - a progressive flat tax. There is nothing in the concept of eliminating tax deductions which says you can't have more than one rate, depending on income. Eliminating all deductions except a standard deduction for everyone, taxing all forms of income -capital gains, dividends, currently tax-free bonds - equally, and seTting rates of, say, 10, 20 and 30% based on level income, would enable a simpler, fairer system.
1
I note that Pundit's proposals say nothing about mortgage interest. Could there be a reason for that?
3
He did say "all deductions..."
Everybody has their Sacred Cow.
As bad as ALL these plans are, how is Marco Rubio not being loudly condemned by every newspaper (and thinking person) in this country for proposing to create (or rather expand) a class system in which the wealthy, who get most of their income from investments, are largely excused from paying taxes?
38
"Gov. Chris Christie, who is not yet a candidate but sometimes acts like one..."
Perfect.
Perfect.
10
Gov. Christie actually isn't a presidential candidate. He just plays one on TV.
Why do we expect candidates to propose detailed plans for things like taxes which are almost totally under the control of the legislature? Regardless of who gets elected, I guarantee that the plan the lands on his or her desk will have much more to do with who wins in the congressional elections. Let's get rid of this charade of having presidential candidates propose detailed schemes for things that are going to be decided by the legislature.
18
Do not begin any discussion of taxes with rates! One must begin the discussion with "Who do we want to pay taxes, and in what proportions?"
Should businesses pay taxes? If so, what fraction of total federal revenues should be supplied by businesses? Should taxes be based on earnings (which are subject to accountant tricks) or something else, like revenues (which are less subject to accountant tricks)?
Should the bottom quintile of individual earners pay taxes? In what proportion of total taxes?
Second, third and fourth quintiles? Same questions.
Should the highest earning quintile pay taxes? In what proportion to all revenues?
Should any groups get a break? Married? Childrearers? Young? Elderly? Sick? Homeowners? Students? Investors? Job creators?
Only after arriving at consensus on these issues should any discussion of rates be approached.
Should businesses pay taxes? If so, what fraction of total federal revenues should be supplied by businesses? Should taxes be based on earnings (which are subject to accountant tricks) or something else, like revenues (which are less subject to accountant tricks)?
Should the bottom quintile of individual earners pay taxes? In what proportion of total taxes?
Second, third and fourth quintiles? Same questions.
Should the highest earning quintile pay taxes? In what proportion to all revenues?
Should any groups get a break? Married? Childrearers? Young? Elderly? Sick? Homeowners? Students? Investors? Job creators?
Only after arriving at consensus on these issues should any discussion of rates be approached.
17
Those sound like just the issues we can't agree on.
So what do we do?
So what do we do?
3
Every attempt to simplify the tax code ultimately founders on the reality that doing so would seriously damage the businesses of financial people and lobbyists. It would also mess up congressional fundraising and the lobbying trade.
Promises to simplify the tax code, undelivered, are far more valuable to people who raise money to run for office than actually delivering a simpler tax code would be. It's political theater.
Promises to simplify the tax code, undelivered, are far more valuable to people who raise money to run for office than actually delivering a simpler tax code would be. It's political theater.
23
Republicans are just shills for the rich. They are intellectually incapable of coming up with a fair tax plan.
To run for President of the United States, I believe every candidate should be required to live for 6 months on nothing but a minimum wage income. Only then would they have a clue what life is like for many Americans.
Rubio and Carson, in particular, are totally disconnected from reality.
To run for President of the United States, I believe every candidate should be required to live for 6 months on nothing but a minimum wage income. Only then would they have a clue what life is like for many Americans.
Rubio and Carson, in particular, are totally disconnected from reality.
50
Very clever and telling picture.
2
One thing you can count on with any Republican candidate tax plan. People earning under $75K will get the shaft, those earning significantly under that will be super shafted, and those earning over $200K will do much better.
They always say a "flat tax" with less deductions will be simpler. No it won't. Politicians have been "simplifying" the tax code for years, and the tax code and regulations books never get thinner.
They always say a "flat tax" with less deductions will be simpler. No it won't. Politicians have been "simplifying" the tax code for years, and the tax code and regulations books never get thinner.
21
I don't know what planet produced Marco Rubio, but it is not one of the nine 9 (I still count Pluto) in this solar system. His plan to eliminate taxes on dividends and capital gains, and slash those on ordinary earned income is the siren song the Koch brothers, Sheldon Adelson, and the rest of the 0.01% are paying to hear played on the Republican juke box.
The Kochs, Adelson, et al, already receiving the protection of the strongest country on the planet for their wealth producing assets at bargain basement prices, are expecting and demanding a 90%-off coupon to boot. Zero taxes on unearned income? This category should be taxed at multiples of the rates your minimum wage burger-flipper and Army PFC are paying. It's free money, people, for the ultra-rich, even at the preferential rates they are currenty paying. These people can afford to buy a new luxury car every time the one they're driving runs out of gas. They are a pitiful bunch, indeed.
The Kochs, Adelson, et al, already receiving the protection of the strongest country on the planet for their wealth producing assets at bargain basement prices, are expecting and demanding a 90%-off coupon to boot. Zero taxes on unearned income? This category should be taxed at multiples of the rates your minimum wage burger-flipper and Army PFC are paying. It's free money, people, for the ultra-rich, even at the preferential rates they are currenty paying. These people can afford to buy a new luxury car every time the one they're driving runs out of gas. They are a pitiful bunch, indeed.
96
The problem is that when you put your money in the jukebox, you get to choose the music. The Supreme Court said so.
12
I have yet to see a Republican tax proposal that does not include magical thinking. No one talks seriously about defense cuts. No one talks about the desperate need to overhaul the nation's entire infrastructure. No one talks about the fact that there are not enough doctors to serve the population. Nope, not a one. It's all about how taxes can be further cut. Because it works soooo well in Kansas, Wisconsin and Louisiana, right?
100
I am sure that Romney would agree that the only fair way to raise taxes on the middle class was to raise their income not their tax rate. President Obama and the democratic congress found a way in 2010 to raise middle class taxes as well as take 716 billion dollars from medicare. Obamacare is the largest tax put on the middle class in history. Romney would have signed the repeal of Obamacare. I am sure that he would have had a replacement that contained the good points of Obamacare. I don't know if that would make the subject of this story true, but to omit Obamacare in the discussion seems wrong.
2
The ACA is a near mirrored image of a Bi-partisan, during a GOP governor (Romneycare to you), driven by the Heritage Society, field tested, very successful health program. The designer of Romney care even assisted in the design of the ACA. What problems exist are there because of the 151 changes to the ACA, to include the single payer the GOP made to the program. Then the GOP defunded the logistical development of the program while it was being implemented. Then add on how GOP Governors refused the Medicare Extension of the ACA (and are now crashing their states budgets to fight a half-Black, Democratic President). Taxes have not been raised for ordinary, non-wealthy Americans to pay for the Affordable Care Act.
Only two Affordable Care Act taxes apply to individuals.
Households with earned income above $200,000 if single or $250,000 if married filing jointly pay an extra 0.9 percent Medicare tax on all earnings over that threshold.
Wealthy investors. There’s also an extra 3.8 percent Medicare tax on "net investment income" such as interest, dividends, and capital gains. But the tax only applies to households with a modified adjusted gross income of more than $200,000 if single and $250,000 if married filing jointly and it is only applied to total investment income or the amount that investment income exceeds those income thresholds, whichever is smaller.
Only two Affordable Care Act taxes apply to individuals.
Households with earned income above $200,000 if single or $250,000 if married filing jointly pay an extra 0.9 percent Medicare tax on all earnings over that threshold.
Wealthy investors. There’s also an extra 3.8 percent Medicare tax on "net investment income" such as interest, dividends, and capital gains. But the tax only applies to households with a modified adjusted gross income of more than $200,000 if single and $250,000 if married filing jointly and it is only applied to total investment income or the amount that investment income exceeds those income thresholds, whichever is smaller.
33
What you fail to address is the cost of the increase in premiums that millions pay, the cost of losing employer paid premiums for those whom employers discontinued coverage, the penalties that people pay when they choose not to be covered, the increased costs of medical devices, the $716 billion that was taken from medicare, and those that I don't remember. It adds up to the largest tax increase in history for the middle class any way to want to look at it.
2
Please........ back away from the Fox networks
The ACA imposes a 2.3-percent excise tax on the sale of any taxable medical device by the manufacturer or importer of the device starting in 2013. The tax does not apply to eyeglasses, contact lenses, hearing aids, wheelchairs, or any other medical device that the public generally buys at retail for individual use.[5] Sales for further manufacture or for export are also tax-exempt.[6] Because of these exemptions, only about half of the device industry's output is subject to the tax.[7]
The excise tax has now been in effect for two years. The Internal Revenue Service (IRS) published final regulations and additional guidance in December 2012 detailing how the tax is applied.[8] The tax is levied on the wholesale price of a medical device, not the price paid by the end user, so the effective tax rate is actually less than 2.3 percent of the final price. For example, in those instances where the manufacturer is also the distributor of the device, the wholesale price is generally assumed to be 75 percent of the actual selling price.
The ACA imposes a 2.3-percent excise tax on the sale of any taxable medical device by the manufacturer or importer of the device starting in 2013. The tax does not apply to eyeglasses, contact lenses, hearing aids, wheelchairs, or any other medical device that the public generally buys at retail for individual use.[5] Sales for further manufacture or for export are also tax-exempt.[6] Because of these exemptions, only about half of the device industry's output is subject to the tax.[7]
The excise tax has now been in effect for two years. The Internal Revenue Service (IRS) published final regulations and additional guidance in December 2012 detailing how the tax is applied.[8] The tax is levied on the wholesale price of a medical device, not the price paid by the end user, so the effective tax rate is actually less than 2.3 percent of the final price. For example, in those instances where the manufacturer is also the distributor of the device, the wholesale price is generally assumed to be 75 percent of the actual selling price.
9
A flat tax makes it harder to raise taxes, because any tax increases affects a broad group of people. A progressive income invites demagogues to buy votes by promising to gouge a small number of people. Even in liberal Massachusetts, the income tax rate is not that high because it is flat. People only want big government when someone else is paying.
5
My late father in law, a practical sort, general practice physician and family man said it this way: ' if you complain about your taxes, you make too much money. "
I'm going with that.
I'm going with that.
119
My father had a different take on this.
(Assuming no change in tax law from the previous year) - Thank goodness I am paying more in taxes this year!
(Assuming no change in tax law from the previous year) - Thank goodness I am paying more in taxes this year!
9
The safest thing to do for the GOP candidates is to ignore taxation entirely. Nobody can agree on the issue, so anything they say will just be used against them.
In any case, when they change something, they make it an addition to all the other existing rules, causing the system to become even more complicated. Eventually, people will be working full time filling out forms and building spreadsheets.
In any case, when they change something, they make it an addition to all the other existing rules, causing the system to become even more complicated. Eventually, people will be working full time filling out forms and building spreadsheets.
"He [Carson] said on “Fox News Sunday” this month that it was “condescending” to argue poor people could not afford to pay the same tax rate as rich people."
Remarkable how when those at higher brackets complain about tax rates being too "high" he does not call them "condescending" but when those are at a lower income the story changes.
Remarkable how when those at higher brackets complain about tax rates being too "high" he does not call them "condescending" but when those are at a lower income the story changes.
45
Dr. Carson should live in a crumbling West Baltimore row house for a month after leaving his cash and credit cards back at the mansion. Scrapping on hard "Bawl'mer" streets would teach him something about being poor -- for starters, the terrible burden regressive taxation imposes on low-income workers.
Until he does he won't have a clue, while hating the poor for being poor; like most Republicans. Hating the poor and downtrodden is an important part of the Republican psyche, ethos and self-identity.
Until he does he won't have a clue, while hating the poor for being poor; like most Republicans. Hating the poor and downtrodden is an important part of the Republican psyche, ethos and self-identity.
A better name is 'Kansas Trap.' Republicans are the first to extrapolate Governor Brownback's results to a federal model.
Candidates are reduced to exploiting anger from poor peoples' tax returns as if they are luxuriating in poverty with all those windfall tax savings compared to everybody else.
It's better than taking questions about Iraq.
Candidates are reduced to exploiting anger from poor peoples' tax returns as if they are luxuriating in poverty with all those windfall tax savings compared to everybody else.
It's better than taking questions about Iraq.
31
In 1913 the income tax for the U.S. was begun. Not required to file, was anyone who made UNDER $3,000 a year. In 1913 $3,000 a year was ABOVE AVERAGE.
Simply put, Federal Income Tax was paid ONLY by the well-off.
Only the rich paid Federal taxes.
That $3,000 for an individual is equal, today, to $69,000.
For couples, in 1913 the amount was $4,000, equal today to $92,000.
In other words, by not raising the standard deduction to keep up with the changing rate of the value of a dollar, the game became rigged.
My source for this is the New York Times: Feb. 12, 2013, F2 (home delivery), "Here's The Start Of Your Tax Troubles".
It's a rigged game, folks. "Flat Tax" just rigs it more.
None of these people are qualified to run this nation.
Simply put, Federal Income Tax was paid ONLY by the well-off.
Only the rich paid Federal taxes.
That $3,000 for an individual is equal, today, to $69,000.
For couples, in 1913 the amount was $4,000, equal today to $92,000.
In other words, by not raising the standard deduction to keep up with the changing rate of the value of a dollar, the game became rigged.
My source for this is the New York Times: Feb. 12, 2013, F2 (home delivery), "Here's The Start Of Your Tax Troubles".
It's a rigged game, folks. "Flat Tax" just rigs it more.
None of these people are qualified to run this nation.
97
The Federal government in 1913 spent practically no money compared to today. Now it needs all the money it can get from everyone.
1
.... except the 1%. They have bought their exemption from such a silly concept as "paying their fair share". And the reason that the government can spend soooo much more than in 1913 is because it found its Mother Lode by gouging the poor and middle-class. You are aware that the law has been changed on derivitives? The next time that mad game crashes, the bill goes directly to the taxpayer. And that's 'game over'. It is going to kill the Golden Goose.
17
Thanks, Rosa, that's some really great insight into the issue and I will do further research. Nice answer to Jonathan too.
4
Republicans like the flat tax cut because it is hysterically simple to sell. Simple & hysterical is what they do better than anyone in the American political pantheon.
33
On its non-economist surface, 'Flat-Tax' sounds simple and do-able. But the devil is in the details: No home mortgage deduction, the one that most middle class taxpayers depend on! Also that tax is not paid on interest and dividends, which, from what I read is how executives in most large corporations-ie: Mitt Romney-get most of their wealth.
Would a national sales tax, or even one on a state-by-state level, be enough to make up the numbers? I don't know. I'm hardly a math whiz.
Would a national sales tax, or even one on a state-by-state level, be enough to make up the numbers? I don't know. I'm hardly a math whiz.
5
And further, the rate is secondary. This and the balanced budget talk avoid the real discussion. It doesn't matter what the rates are or if the budget is balanced if there isn't enough to fund priorities. With Republicans, Defense cuts are off the board and middle class voters won't allow them to touch elder entitlements or middle class exemptions. What does that leave? A tax rise and lower spending on poor/working class individuals, the very folks struggling already.
12
Something I never hear mentioned with the flat tax/no deduction, idea is that the need for H & R Block, Jackson Hewitt, and the legion of small tax preparers will be gone. Wonder which way those companies will be lobbying? And the right wing will be painted as job killers.
1
the Koch brothers Sheldon and grover hasn't told them what their stand is going to be
23
Oh, yes they have.
When the wealthy are buying each candidate through super pacs (thank you Supreme Court), do you really think they're going to walk away from major tax cuts for the wealthy? when it comes to free speech these days, it's only for those folks who are rich enough to afford it.
32
The flat tax is inherently regressive. Assuming everyone pays the same rate, a person making $10,000 a year will be hit a lot harder than the person making a $100,000 a year.
Perhaps someone will propose to add deductions to alleviate the burden on lowest-income earners. However, everyone else will want a deduction and in time we will be right back to the tax code mess we have now.
Perhaps someone will propose to add deductions to alleviate the burden on lowest-income earners. However, everyone else will want a deduction and in time we will be right back to the tax code mess we have now.
21
You could just have a living allowance. You could say a single guy can live on $24K a year, so single filers can subtract $24K from their income, and anything over that is taxable.
Of course, everyone will complain about regional variations in cost of living, and different levels of state taxation.
Of course, everyone will complain about regional variations in cost of living, and different levels of state taxation.
I'll bite: You're a single guy, Jonathan - how much money do you spend in a year?
3
@Lorem Ipsum - That's a fair question. My current budget is $3000 a month, but I tend to come in under budget. But it's quite expensive to live in Manhattan.
Josh Barro is a wonderful writer but even he can seem boxed in; parsing his phrase, "people making over $200,000 took deductions equal to just 15.7 percent of their adjusted gross income." "Deductions" are just a small part of $1.3 trillion in tax expenditures which also include: credits, exemptions, special tax rates and deferrals. The phrase "adjusted gross income" excludes most tax expenditures; and unrealized capital gains are not even considered as income. Over the last five years individual wealth increased from $56 trillion to over $83 trillion largely due to unrealized (and not taxed) capital gains. The wealthy rightly consider the economic income not to be income because the tax code permits it.
Investors avoid taxes on most economic income. Most of the GOP is unabashed in its desire not only to lower rates on the portion of income that is taxed but to actually expand the portion of economic income that is not taxed. They want to exclude taxes on dividends, interest, realized capital gains, exports (and just about anything that represents a return on investment rather than a return on labor).
The GOP tax reforms fail to halt the declining family wealth of 90% of the population who need a tax reduction just to stop the decline. The top 10% now have 75% of the wealth and the next 40% (the middle class) went from 27% to a 24% share in the last 20 years. Sadly, that leaves just 1% for the poorer half of the population who pay 15.3% payroll taxes on their labor.
Investors avoid taxes on most economic income. Most of the GOP is unabashed in its desire not only to lower rates on the portion of income that is taxed but to actually expand the portion of economic income that is not taxed. They want to exclude taxes on dividends, interest, realized capital gains, exports (and just about anything that represents a return on investment rather than a return on labor).
The GOP tax reforms fail to halt the declining family wealth of 90% of the population who need a tax reduction just to stop the decline. The top 10% now have 75% of the wealth and the next 40% (the middle class) went from 27% to a 24% share in the last 20 years. Sadly, that leaves just 1% for the poorer half of the population who pay 15.3% payroll taxes on their labor.
56
The reality is that the tax cuts have not yet proven to increase revenue or create jobs. We have 30+ years of examples at the federal level and Kansas, Louisiana and Wisconsin are the poster children for the failure at the state level. However, give republicans credit. They are transferring more and more taxes to fees so they can continue to claim they did not raise taxes even though the end result is the same.
53
Tax cuts can create jobs, but only if they go to lower wage earners, not the rich. If I own a shoe factory and have 200 people working for me, I am NOT going hire another person just because you cut my taxes - that would be stupid. I will only hire more people if I have more customers, which triggers a need for more workers.
If you target those tax cuts to the working class, they will increase their spending. But do you think Mitt Romney or Warren Buffet will say, "Oh, hey, I can finally afford that new car" or "Now we can take that vacation we only dreamed of"?
If you target those tax cuts to the working class, they will increase their spending. But do you think Mitt Romney or Warren Buffet will say, "Oh, hey, I can finally afford that new car" or "Now we can take that vacation we only dreamed of"?
76
I've often wondered why 'trickle down' only applied to the top earners. I'm sure many in lower tax brackets would 'trickle sideways' if given the chance, and it certainly wouldn't trickle all the way to the Cayman Islands.
19
NPB, corrrect. Trickle economics, so far, has only trickled upwards. I think the operative syllable is trick
18
We need a simple counter narrative here. When you cut taxes and shrink government, then individuals take on the full economic burden of obtaining common services.
Unlike government, business has to make a profit on what they do. The tax hawks will say that "government is inefficient", but is that really the case? In healthcare you have so many intermediaries in the process of delivery that the cumulative profit requirement makes our healthcare 2x what it is in countries with government managed healthcare.
One of the great joys of moving to California is that you can drive from one end to the other without paying a single toll; unlike New England where I grew up and toll booths where everywhere.
Unlike government, business has to make a profit on what they do. The tax hawks will say that "government is inefficient", but is that really the case? In healthcare you have so many intermediaries in the process of delivery that the cumulative profit requirement makes our healthcare 2x what it is in countries with government managed healthcare.
One of the great joys of moving to California is that you can drive from one end to the other without paying a single toll; unlike New England where I grew up and toll booths where everywhere.
8
I've driven in California with it's oppressive traffic jams it takes 2 hours to go 20 miles in the bay area and LA. How's that free highway driving working for you? Still think it's a good idea?
The reality of course is that no tax cuts are possible. In fact given the medium and long term condition of major programs like Medicare and SS, and the parlous state of our infrastructure, a modest increase in the tax take is required. The folly of thinking otherwise was revealed by the actions of the Bush administration when deficits didn't matter and more recently those of the Brownback and Jindal regimes in Kansas and Louisiana.
98
Oh, Republicans will cut taxes all right given half-a-chance. Just not yours.
Your taxes they will raise, by fiat or surreptitiously, to finance tax cuts handed to the wealthiest few almost like they are Easter eggs, or lollipops.
And some of that money will mysteriously materialize in their superPAC or reelection campaign treasuries because, in the Washington D.C. tax-&-spend game what goes around comes around.
Your taxes they will raise, by fiat or surreptitiously, to finance tax cuts handed to the wealthiest few almost like they are Easter eggs, or lollipops.
And some of that money will mysteriously materialize in their superPAC or reelection campaign treasuries because, in the Washington D.C. tax-&-spend game what goes around comes around.
1
Eliminate capital gains taxes? Oh, I remember: it is necessary as an incentive for rich people to invest; otherwise they'd just stuff it in their mattresses and get absolutely nothing for it.
63
Well, capital gains should be adjusted for inflation. If you bought a stock for $10 in 1985, and sell it for $20 today, you have definitely not made $10.
1
Jonathan, don't forget that all those capital gains accrued tax free, year after year. This benefit of tax deferral balances the inflationary gains, providing an overall rough fairness.
1
Good point. Sounds like a lousy investment. Hopefully you have had some dividends along the way.
As long as we're adjusting for inflation, maybe we should retire the "stepped up" basis, under which many inherited capital assets escape taxation.
As long as we're adjusting for inflation, maybe we should retire the "stepped up" basis, under which many inherited capital assets escape taxation.
2
These are exactly the types of plans GOP primary voter want the candidates to propose and support. Certainly, the voters believe they are being principled. It's the fact that they 'believe', instead of 'think', that makes them so difficult to understand and/or sway.
12
If the GOP plans were explained better everyone would vote Democratic.
104
Spell out "G.O.P." first. As long as you continue to imbue them with grandness, the plans don't matter.
I appreciate Barro's little summary, but he overlooks one very important fact: the vast majority of Americans pay more in payroll tax than income tax; indeed, we have two tax systems in America, one for working Americans and one for the wealthy. The former is a flat tax with no deductions and no exclusions and only applies to income up to about $118,500, while the latter (surprise!) is full of deductions, exclusions, preferences, and credits. Of course, Americans think of Ronald Reagan as the great tax cutter. Sure, he cut the income tax paid by wealthy Americans, but he raised (and raised greatly) the payroll tax paid by working Americans. How did he do it? A fiction: that the payroll tax only goes to fund retirement (social security) benefits. A fiction? Almost $3 trillion has been collected in payroll tax that has been used to fund everything from the war in Iraq to partially offsetting the Bush income tax cuts. Who will repay the $3 trillion? Now that's a good question, one Barro doesn't address. Senator McConnell has said many times that if it were up to him, it wouldn't be repaid.
52
The idea that a monetarily sovereign nation should (or even could) save for some future event like the much discussed baby boom retirement bulge is preposterous on its face. It was a ruse to paper over the massive deficits caused by Reagan's income tax cuts engineered by those serial economic malpractitioners, Greenspan and Stockman. The US can fund pretty much whatever it wants whenever it wants it, too bad we mostly want war and its accoutrements.
1
Tax reform should be focused on non-labor income, including preferred rates for capital gains and a whole raft of tax loopholes like carried interest. The increase for capital gains and dividends from 15% to 20% in 2013 after the expiration of the Bush tax cuts was a good start, but still a huge preference compared to the top marginal rate of 39.6%.
Tax enforcement is a big opportunity. Go after the cash economy through forensic accounting. Go after the enablers of tax evasion, just as the Obama Administration did with the Swiss Banks. A little enforcement goes a long way toward promoting honesty, by increasing the risks of cheating.
Tax enforcement is a big opportunity. Go after the cash economy through forensic accounting. Go after the enablers of tax evasion, just as the Obama Administration did with the Swiss Banks. A little enforcement goes a long way toward promoting honesty, by increasing the risks of cheating.
21
You also have to pay 3.8% Medicare tax on cap gains and divs, so the total rate is 23.8%. If the dividend is not qualified, then you have to pay 43.4%.
As for the cash economy, it's small money. Many poor-to-middling people operate in the cash economy, but going after them would not be efficient.
As for the cash economy, it's small money. Many poor-to-middling people operate in the cash economy, but going after them would not be efficient.
2
An important point is glaringly missing from this article. The structure of marginal tax rates is simple enough that anyone with a decent elementary school eduction can do the calculations or read the tax tables. Complexity of the tax code is largely due to provisions required to define "taxable income" for individuals, companies, and other entities who face an enormous variety of earning situations. The single tax rate is an glib gimmick, not a serious form of simplification. The serious part involves eliminating special deductions, exemptions and such.
71
What deduction are 'special'?
If I operate a small business, then the rent I pay for my store, electricity, insurance, the cost of goods are all offsets to my revenue. Determining what is and is not a legitimate business expense in computing profits will always be an issue.
If I operate a small business, then the rent I pay for my store, electricity, insurance, the cost of goods are all offsets to my revenue. Determining what is and is not a legitimate business expense in computing profits will always be an issue.
2
Exactly! It takes me ninety seconds to do the Tax Table and nine hours to do Schedule A.
1
Those tax rate on the flat side look mighty tempting, but what they never compare them to is your effective rates of taxation. What they never tell you is that while middle income people might be in a tax bracket of 28% their effective rate, the rate at which they actually pay is much, much lower.--Usually around 5-6% with deductions.
Thus a flat tax would double the tax rate for most poor Americans and would hardly represent a tax break at all for the middle class. The winners on the flat tax are the super rich who already park a lot of their money in places where it does not get taxed at all and have had all their deductions phased out.
Thus a flat tax would double the tax rate for most poor Americans and would hardly represent a tax break at all for the middle class. The winners on the flat tax are the super rich who already park a lot of their money in places where it does not get taxed at all and have had all their deductions phased out.
28
Kerry, if the rich park their money in places where their money already doesn't get taxed at all as you have stated, then how would a reduced tax rate help them? Seriously, if the rich already pay nothing or next to nothing in taxes as most commenters have stated, then how in the world would a tax reduction help them? I'm a liberal progressive who supports Elizabeth Warren, but I just do not understand how people can say the rich do not pay taxes, and at the same time say that a tax cut will benefit the rich enormously.
Republican economics and fiscal and tax policy: Endless stupidity, hopeless ignorance, total disregard of history and utter misunderstanding for the fact that every dollar spent by the public sector turns over in the private sector three times or more.
And Carson? The brain surgeon? A hopeless fool who in one man symbolizes everything there is that is wrong with the arch ignorance of those who, notwithstanding the gifts of education, know nothing, learning nothing and almost shout hosanna in the name of ignorance.
And Carson? The brain surgeon? A hopeless fool who in one man symbolizes everything there is that is wrong with the arch ignorance of those who, notwithstanding the gifts of education, know nothing, learning nothing and almost shout hosanna in the name of ignorance.
124
Love to run, but
Hate to govern
ALL Americans.