All people in retail sales should be aghast & Cruz & Rubios plan. It is bad enough calculating New York States ridiculous sales tax, where each town & county have different rates but imagine if we have to calculate a national sales tax. We would be working for the government for free, & should we make an error we would be penalized plus if for example a sofa in Vermont costs $1000 with both state & federal tax it would be $1220, not the way to encourage people to shop.
Why on earth would Rubio propose a larger child tax credit? Is there a looming shortage of people? And if you're not paying any income taxes, you surely aren't paying as much into Social Security as you will take out, so making the credit refundable against payroll taxes is insult to injury. All in all, a horrible idea that simply panders to a large slice of the GOP base that won't acknowledge tax expenditures like this as just another form of being on the welfare dole.
1
It seems to me that people are missing the point.
If you have an extra $100 do we put it into your pocket and trust that you will spend it efficiently and wisely...or do we put it in the government's pocket and trust that they will spend it more efficiently and wisely than you will?
We spend billions of years subsidizing the post office. How much value do you get out of the post office?
New York city has the highest taxes in the nation - why do the roofs leak? Why is Newark airport a zoo? Where does all the money go?
If you have an extra $100 do we put it into your pocket and trust that you will spend it efficiently and wisely...or do we put it in the government's pocket and trust that they will spend it more efficiently and wisely than you will?
We spend billions of years subsidizing the post office. How much value do you get out of the post office?
New York city has the highest taxes in the nation - why do the roofs leak? Why is Newark airport a zoo? Where does all the money go?
Even if one of these proposals somehow made it into law, I am curious who is going to make sure each citizen pays their proper share of taxes once the IRS is abolished as some candidates proposed. Do they think it will be an honor system?
2
Ben Carson is so ignorant about taxes that he thinks his " 15% tithing" (sic) plan is original without apparently realizing it is simply another flat tax plan, one of many proposed by Republicans since Steve Forbes proposed a 17% flat tax in 1996. How can someone running for President be this ignorant?
4
Since Carly Fiorina says that the tax code can be reduced to just
3 pages, why hasn't her campaign released it? How hard can it be
to produce a 3-page document?
I hope the press will ask her when this document will be released
to the public?
3 pages, why hasn't her campaign released it? How hard can it be
to produce a 3-page document?
I hope the press will ask her when this document will be released
to the public?
4
Everyone agrees the income tax is a mess. Beset with the contradictory objectives of simplicity vs. fairness, and riddled with constitutional violations ("presumption of innocence," "right to remain silent," "secure in papers and possessions," "no direct tax,") the income tax has grown into an expensive and absurdly complex monster, forcing government and taxpayers into direct adversarial confrontation with jail time for taxpayers accused of violating laws they cannot understand.
The solution to the income tax morass is obvious: INSTEAD OF TAXING INCOME, TAX EXPENSE. The tax bases of national income and expense are almost the same (we don't save much). So if the federal government takes up 25 percent of national income, have businesses collect an average of 25 percent at the cash register and be done with it. Let business do the calculation, collection and remitting of funds, as they already do for state sales taxes.
To introduce an element of progressiveness into the system make the national sales tax GRADUATED, exempting essentials (basic (i.e. inexpensive) food, clothing, shelter and medicine) and making up the shortfall with a surtax on expensive luxuries.
In one fell swoop, a graduated national sales tax would eliminate all the ills of the income tax and replace it with a truly simple, constitutionally sound, non-confrontational method of tax computation and collection. April 15 would then pass unremarked, just like any other day.
The solution to the income tax morass is obvious: INSTEAD OF TAXING INCOME, TAX EXPENSE. The tax bases of national income and expense are almost the same (we don't save much). So if the federal government takes up 25 percent of national income, have businesses collect an average of 25 percent at the cash register and be done with it. Let business do the calculation, collection and remitting of funds, as they already do for state sales taxes.
To introduce an element of progressiveness into the system make the national sales tax GRADUATED, exempting essentials (basic (i.e. inexpensive) food, clothing, shelter and medicine) and making up the shortfall with a surtax on expensive luxuries.
In one fell swoop, a graduated national sales tax would eliminate all the ills of the income tax and replace it with a truly simple, constitutionally sound, non-confrontational method of tax computation and collection. April 15 would then pass unremarked, just like any other day.
A simple solution to a complex problem. I can only imagine the resistance to your plan from the CPA's of the world, the businesses that would have to remit the taxes, instead of cheating taxpayers you would have cheating businesses, huge non-profits squealing about lower contributions, etc.
Too much of our economy is predicated on how we tax now. Change would have to be incremental.
Too much of our economy is predicated on how we tax now. Change would have to be incremental.
Nearly all the proposed plans eliminate the earned income tax credit and income taxes for households with with less than $40,000 income. All reward the top 1% with much more money after taxes. The total tax burden for everyone else, especially the bottom fifth that loses the earned income tax credit -- federal, state, payroll, excise, and local taxes -- will be much higher.
People at the top will pay less taxes. People at the bottom will get much less help from the government. That's to encourage the Poor to get to work.
Republican candidates want to help people get to work by allowing them to work for less. If we eliminate the minimum wage, if employers do not have to provide any benefits at all, and if we eliminate unemployment compensation, then many more people will enter the labor market. That increased supply of available labor will magically generate increased demand for that labor. That's how Republicans helped us in 1929 and that's how they want to help us now.
People at the top will pay less taxes. People at the bottom will get much less help from the government. That's to encourage the Poor to get to work.
Republican candidates want to help people get to work by allowing them to work for less. If we eliminate the minimum wage, if employers do not have to provide any benefits at all, and if we eliminate unemployment compensation, then many more people will enter the labor market. That increased supply of available labor will magically generate increased demand for that labor. That's how Republicans helped us in 1929 and that's how they want to help us now.
4
At least the Republican candidates are proposing to simplify the tax code by reducing or ending tax concessions. For too long both parties have used taxes as a tool to amass and retain political power.
1
The Republican presidential candidates either are "addicted" to tax-cuts, or they feel this is the only way they can win the nomination, by outbidding each other as to how low they would cut the taxes.
This is another way of winning over their donors as well who would handsomely benefit from the tax-cut policy. But Trump is not beholden to any donors.
They seem to be intoxicated with this tax-cutting binge. Either way they are totally out of touch with reality, especially when they seem to be overly concerned about the growing national debt.
This is another way of winning over their donors as well who would handsomely benefit from the tax-cut policy. But Trump is not beholden to any donors.
They seem to be intoxicated with this tax-cutting binge. Either way they are totally out of touch with reality, especially when they seem to be overly concerned about the growing national debt.
5
Not to mention how they would pay for the increased military spending they are demanding.
Basic premise: Lower taxes will super charge economic growth and thereby employment, and finally produce offsetting tax revenues. Mostly hogwash.
Then too there is nothing here about the affect on the huge economic transfer to the top 10%. Across the board tax reductions will certainly sustain and expand the obscene economic advantage of the most wealthy Americans. So the bottom 90% can suck it up even more to include the unravelling of the supposedly unsustainable safety net. this while the national debt reaches for the moon.
Both the GOP and the Dems are habitually beholden to the oligarchs. Expect no substantial shift that redresses the fleecing the American economy over the last thirty years no matter who wins the Oval Office prize.
Then too there is nothing here about the affect on the huge economic transfer to the top 10%. Across the board tax reductions will certainly sustain and expand the obscene economic advantage of the most wealthy Americans. So the bottom 90% can suck it up even more to include the unravelling of the supposedly unsustainable safety net. this while the national debt reaches for the moon.
Both the GOP and the Dems are habitually beholden to the oligarchs. Expect no substantial shift that redresses the fleecing the American economy over the last thirty years no matter who wins the Oval Office prize.
3
Once you accept the premise that lower taxes create growth which actual brings in more revenue it all makes sense. Lower taxes to bring in more money and balance the budget. that works, right?
Because that's worked so well in the past?
2
Why do politicians always say they are going to cut taxes while screaming about our huge deficit. Who do they think are going to pay the bills? Santa Claus. They are all full of it.
9
Not only that, but, when you look at the 'responsible' ones who only increase the deficit by a couple of trillion, it's by using a regressive VAT, which will put the monkey squarely on the backs of the people who are already spending most of what they earn to keep a roof over their heads and food on the table.
3
No taxes for Republicans, high taxes for everyone else, right? And, no social services, while they're at it.
7
I admit I was surprised at the reaction among my siblings when Bush gave a huge tax break to the wealthiest & simultaneously a miniscule break to those on the lower end of the spectrum. I thought they'd react to the relative difference in size of the tax breaks, but they didn't. It mattered not to them that they (middle class to lower middle class incomes) were now paying a relatively much much larger fraction of the total taxes. All they cared about were the nickels and dimes that were tossed to them.
For all they care(d), if the marginal tax rate dropped to 0% on income over $1 million, they'd be fine with this as long as they got an extra $5 tax break / month themselves. They have no discernible realization that the bills have to be paid further down the road.
So nothing in this article surprises me. The R's desire to cut taxes energizes their audience; implications of what they propose simply don't matter. End of story.
For all they care(d), if the marginal tax rate dropped to 0% on income over $1 million, they'd be fine with this as long as they got an extra $5 tax break / month themselves. They have no discernible realization that the bills have to be paid further down the road.
So nothing in this article surprises me. The R's desire to cut taxes energizes their audience; implications of what they propose simply don't matter. End of story.
4
Multiple brackets are not the issue here.
The tax code will not simplified by moving to a single flat rate, it will be simplified by removing exemptions, deductions, and loopholes. Unless of course you are befuddled by simple multiplication problems.
The tax code will not simplified by moving to a single flat rate, it will be simplified by removing exemptions, deductions, and loopholes. Unless of course you are befuddled by simple multiplication problems.
5
Interesting, but not surprising, that no one, Republican or Democrat, considers lower taxes for the middle class only. They are the one's being squeezed. Everyone earning less than 40 grand should be at a 10 percent marginal tax rate with a similar rate for couples earning up to $80,000. It's time for our politicians to stop all of handouts to the wealthy and lend a hand to the rest of America.
2
That would be a middle class tax hike. Currently, those making less than $40,000 are taxed at slightly less than an effective rate of 10% which includes payroll taxes. You did specify a marginal rate of 10% but marginal rates are completely meaningless unless you tell us the margin at which it applies. On all income? Income over $10,000? Over $30,000?
1
No more Voodoodoo!
As much as Carly lies about everything, I admire her 4 page tax code. I'd modify it to be a little more realistic. Just burn down the entire existing 70,000+ page code. Have the congress people and their staffs work a couple long weeks and weekends (like we do in the fabled 'industry) and come up with a 200 page code with a fair progressive income tax. And 90% of all loopholes eliminated (including for Mrs Romney's dancing horses).
Then put in place a Constitutional amendment that prevents the politicians from corrupting the new code. Explicitly state that we can have anywhere from 100 pages of exemptions to 400 pages of exemptions, totally in dollar amounts no more than 20% of the baseline tax income. After that, if you want a new exemption you have to get rid of any equal amount of exemptions from somewhere else. The politicians can use pages of exemptions to horse trade like they used to do with pork projects.
At least this would be how the tax system would work if you kicked out plutocrats politicians and elected rational public servants to congress. We'd probably have to have an amendment to get the money out of politics first, though. Elect Bernie.
As much as Carly lies about everything, I admire her 4 page tax code. I'd modify it to be a little more realistic. Just burn down the entire existing 70,000+ page code. Have the congress people and their staffs work a couple long weeks and weekends (like we do in the fabled 'industry) and come up with a 200 page code with a fair progressive income tax. And 90% of all loopholes eliminated (including for Mrs Romney's dancing horses).
Then put in place a Constitutional amendment that prevents the politicians from corrupting the new code. Explicitly state that we can have anywhere from 100 pages of exemptions to 400 pages of exemptions, totally in dollar amounts no more than 20% of the baseline tax income. After that, if you want a new exemption you have to get rid of any equal amount of exemptions from somewhere else. The politicians can use pages of exemptions to horse trade like they used to do with pork projects.
At least this would be how the tax system would work if you kicked out plutocrats politicians and elected rational public servants to congress. We'd probably have to have an amendment to get the money out of politics first, though. Elect Bernie.
3
You can stuff a lot of exemptions into 400 New York Times sized pages with 1-point font, single-spaced with no indents or margins.
Even a well-crafted law banning all exemptions would be a failure. Exemptions are just the flip-side of expenditures. So instead of an exemption for, say mortgage interest, you can end up with a government subsidy for mortgage interest that you can use to offset your taxes which is just an exemption by other means. You could ban government subsidies but then, you'd find the government getting into direct provisioning. E.g., government mortgages.
Even a well-crafted law banning all exemptions would be a failure. Exemptions are just the flip-side of expenditures. So instead of an exemption for, say mortgage interest, you can end up with a government subsidy for mortgage interest that you can use to offset your taxes which is just an exemption by other means. You could ban government subsidies but then, you'd find the government getting into direct provisioning. E.g., government mortgages.
1
This piece is not very informative and gives no new insight. What people need to know is: a) exactly how their own rates would be affected; b) how the cuts are distributed along the income spectrum; and c) the likely effect on the federal budget. This should be done without phony assumptions about stimulus effects - we've heard that before.
13
In moments when I despair for our political system I find it encouraging that the investor class still pays at least SOME taxes. They get preferential rates on the bulk of their income, they don't pay FICA on virtually any of it, they don't pay property taxes on most of their assets, and sales taxes are completely irrelevant to them.
But even with entire herds of politicians lining up to demand (successfully in recent times) we lower their taxes even further, they still pay at least a little.
Now if only the rest of us would quit being so selfish and agree to a 16% VAT or huge cuts in government services (or both) we could usher in a new golden age of plentiful jobs at good wages. None of them would be in THIS country, but it would be a start.
But even with entire herds of politicians lining up to demand (successfully in recent times) we lower their taxes even further, they still pay at least a little.
Now if only the rest of us would quit being so selfish and agree to a 16% VAT or huge cuts in government services (or both) we could usher in a new golden age of plentiful jobs at good wages. None of them would be in THIS country, but it would be a start.
4
Even scarier than the Republican tax proposals is that fact that neither party seems concerned that 1 in 4 of our major corporations, such as GE, Merck, GM, pay little to no tax.
11
Totally illogical arguments. There needs to be a pre hoc decision of what percent of tax revenues should come from corporations vrs. individuals. Then apply that to the tax income required, and figure out ways of getting the needed tax income from each of these two classes of tax payers. Its ridiculous to state what you will require a class of tax payers to pay BEFORE you know what amount of tax income you need!
1
John R: "GE GM and Merck shouldn't pay any income tax."
Really?
The right constantly says that corporations don't really pay taxes anyway, that people pay taxes because the corporations pass the costs on to them. But this is exactly why corporations SHOULD pay taxes.
To function, a corporation depends on the infrastructure that society provides through its tax revenue, whether physical, legal educational or military. It's only right that it should be taxed to pay for the share of infrastructure that it uses, and it's eminently logical that its customers should be the ones to pay the tax that is therefore built into the cost of its goods or services.
Having got that out of the way, let's also remember that the nation prospered the most, with much greater equity than now, with working people sharing best in that prosperity, when we had a more progressive income tax, with a top tier around 90%. I'm not arguing for 90%, but a greater top tier than now would discourage executives from paying themselves stratospheric incomes, encourage them to invest in plant and workers, and raise revenue for overdue public works that would create lots of jobs.
Really?
The right constantly says that corporations don't really pay taxes anyway, that people pay taxes because the corporations pass the costs on to them. But this is exactly why corporations SHOULD pay taxes.
To function, a corporation depends on the infrastructure that society provides through its tax revenue, whether physical, legal educational or military. It's only right that it should be taxed to pay for the share of infrastructure that it uses, and it's eminently logical that its customers should be the ones to pay the tax that is therefore built into the cost of its goods or services.
Having got that out of the way, let's also remember that the nation prospered the most, with much greater equity than now, with working people sharing best in that prosperity, when we had a more progressive income tax, with a top tier around 90%. I'm not arguing for 90%, but a greater top tier than now would discourage executives from paying themselves stratospheric incomes, encourage them to invest in plant and workers, and raise revenue for overdue public works that would create lots of jobs.
1
Josh Barro nice zinger with the French welfare state comment. How about some perspective by pointing out that just north of us is Canada and they operate a fully functioning VAT system.
6
The U.S. is the only developed economy without a VAT.
We don't need fat or flat. The US needs a federal VAT. The more you spend the more you pay. We can exempt essential basic necessities to ensure the under or unwaged are not disproportionately burdened. Canada sets a nice example of how to achieve this with its current GST/HST system. They also operate a system of prebates for those middle and low income earners. Canada also has a very low, at 15%, corporate tax rate. Look north my friends.
3
I'm a proponent of a VAT but if you're going to start adding exemptions, count me out. If helping a class is what you really want to do, you can do it by lowering rates or increasing rebates.
Also, a corporate tax is unnecessary if we're going to have a VAT. A VAT is effectively the corporate tax plus income tax set at the same rate.
Also, a corporate tax is unnecessary if we're going to have a VAT. A VAT is effectively the corporate tax plus income tax set at the same rate.
A VAT is ultimately paid by consumers in the form of higher prices, whereas an income tax on corporate profits is paid by the corporation.
A VAT is paid by consumers and shareholders whereas a corporate tax is paid by shareholders. There's some debate over the breakdown but in any case, assuming no exemptions: x% corporate tax + x% personal income tax = x% VAT.
We have heard no new economic ideas from the GOP since Reagan first sold the tax cut snake oil. And as the years have gone by we have seen that the tax cut snake oil does nothing except what it was designed to o, transfer wealth from the poor and middle class to the rich. Jobs are not created. Growth does not occur. All that happens is that revenue drops, deficits soar and the GOP blames the Democrats every time they come in, work to clean up the mess, and actually grow jobs and the economy. How many times do we have to watch this movie?
24
It's obscenely obvious that these people have ALL been purchased by the wealthy and corporations. I'm sure these people know that these tax cuts will only cripple our society yet they purse this policy in the name of greed and immorality.
What a fine bunch of self absorbed liars and thieves. And I really love the part where they cloak themselves in religion, some religion eh?
What a fine bunch of self absorbed liars and thieves. And I really love the part where they cloak themselves in religion, some religion eh?
12
I suggest that a flat 10% income tax coupled with a value added tax (TAX) would meet the governments spending needs. Everyone pays 10% and that rate is fixed for 16 years. The VAT could rise or fall to support necessary spending. Changes to the VAT could be enacted every 2 years with a super majority in both houses of Congress.
Our tax current code continues to be unjust as the code discriminates against those who are single, married without children and those who work for a living. Changing the way the government collects revenue seems to change with each session of Congress.
When our constitution was amended to allow for personal and corporate tax I suspect the American People couldn't envision the system we have today. I don't think the American people when voting to amend the US Constitution intended for income taxes to be graduated or that some would pay no tax. Indeed when the US Constitution was amended there was a common expectation that all would contribute equally.
Since Congress and no President has had the courage to take on the special interests supporting the tax code it may be time for American people to amend the Constitution.
Our tax current code continues to be unjust as the code discriminates against those who are single, married without children and those who work for a living. Changing the way the government collects revenue seems to change with each session of Congress.
When our constitution was amended to allow for personal and corporate tax I suspect the American People couldn't envision the system we have today. I don't think the American people when voting to amend the US Constitution intended for income taxes to be graduated or that some would pay no tax. Indeed when the US Constitution was amended there was a common expectation that all would contribute equally.
Since Congress and no President has had the courage to take on the special interests supporting the tax code it may be time for American people to amend the Constitution.
1
What's the point of having both a flat income tax and a VAT? Get rid of one of them.
The flip side of the equation is exactly where the spending cuts would come from to pay for the tax reform. I would rather see the plans as to what they would cut first to generate a balanced budget and then a surplus that would pay for tax cuts. But you know that will never happen.
3
A flat tax is a terrible idea. What is needed, as I have written for decades, is a tax with no deductions, todays tax brackets and much lower rates. My wife and I are retired and well into the 25% bracket. Our effective tax rate is around 11%. a 14 or 15% flat tax would cost us a lot of money unless there were a large upfront personal deduction. A one to 3 page tax form would reduce the amount of work needed at the IRS. The IRS workers could then be retested to go after the untaxed underground economy. Taxing this money would balance the budget immediately. Why tax brackets? Because we are a nation of laws and those with the most money take best advantage of the law. eg O.J. Simpson. Thus they should pay for that privilege.
The alternative is the Fairfax pushed by but not invented by Mr. Huckabee. As sort of a national sales tax it would overcome a lot of income tax problems. One problem I see is that it calls for the government to administer a prebate which overall is a huge amount of money and I am not sure that the government would not find a way to subvert it all.
The alternative is the Fairfax pushed by but not invented by Mr. Huckabee. As sort of a national sales tax it would overcome a lot of income tax problems. One problem I see is that it calls for the government to administer a prebate which overall is a huge amount of money and I am not sure that the government would not find a way to subvert it all.
3
Under a flat tax, the wealthier pay more, both in absolute terms and effective percentage terms.
The FairTax is a flat tax. The biggest problem with it is that it's impossible. Most of the economy would move to the black and gray markets. Including state taxes, we're talking about a sales tax in the 40% range.
The FairTax is a flat tax. The biggest problem with it is that it's impossible. Most of the economy would move to the black and gray markets. Including state taxes, we're talking about a sales tax in the 40% range.
Unless that flat rate is very high, that's spectacularly untrue. After taking into account deductions for charitable giving, mortgage interest, and state/local income and property taxes, I pay an effective federal income tax rate of approximately 20%. If you get rid of all deductions and cut the rate to 10%, or even 15%, I will pay much less both as a percentage of my income and in absolute dollars.
I meant that the under a flat tax, the wealthier pay more than the less wealthy. Al Galli, incorrectly assumed that the wealthy pay the same. In no sense do they pay the same. Yes, the marginal tax is the same but it would also be the same with a 50% flat tax on income over $70,000 but that would be more progressive than the current system. My point, and I noticed some others trying to make the same point, flatness has little to do with progressivity. You can have a progressive flat tax.
Never underestimate the power of stupid. Of course, we already have a flat tax: taking into account federal (including payroll), state, and local taxes, with a few exceptions at the extremes, people pay essentially the same effective tax rate; the progressive feature of the federal income tax is offset by the regressive feature of the payroll tax and state and local taxes. Yet, many people support the idea of a flat federal income tax. Why. They believe their taxes will be cut as a result, greatly overestimating their own federal income tax rate relative to the federal income tax rate of the affluent. It's the power of stupid.
6
While there is a deeply rooted hatred of taxes in our nation there is also the reality that the founders of the nation wanted fairness. The progressive tax codes developed out of that pursuit of fairness. However, the rich and powerful carved out more-and-more exemptions to make sure that they pay a lower effective tax rate than everyone else. Part of that program was to eliminate almost 2/3 of the brackets which means that any attempts to "tax the wealthy" wind up hitting the middle income brackets hardest while the wealthy still have breaks that keep them at the bottom of the effective rates.
Underneath the taxation argument is the "Small Government" argument that wants us to return to The Articles of Confederation where States Rights trump Federal and taxation is only a request or a suggestion that can be ignored at will.
Since The Constitution points out that it is We the People who ordain government, and there are over 315,000,000 of us - how do you make a government of over 315M people smaller?
Underneath the taxation argument is the "Small Government" argument that wants us to return to The Articles of Confederation where States Rights trump Federal and taxation is only a request or a suggestion that can be ignored at will.
Since The Constitution points out that it is We the People who ordain government, and there are over 315,000,000 of us - how do you make a government of over 315M people smaller?
9
We have a progressive income tax rate, however, most taxes that we pay have a regressive rate. The overall tax rate for all taxes is roughly a flat tax rate. If we shift to a flat income tax rate then the combined tax rate will be regressive. The poor will pay higher rates and the rich will pay lower rates.
6
I'm at a loss to understand how these candidates think we are going to pay for all the wars they are proposing.
21
In 2 words: they don't.
Iraq War II was off the books as was Afghanistan I. And, in the latest, much heralded "Budget Deal", there is a slush fund for the Defense/Offence Department of $32B which is unpaid for.
Looks to me that that's a good down payment on some other foray into futility.
Iraq War II was off the books as was Afghanistan I. And, in the latest, much heralded "Budget Deal", there is a slush fund for the Defense/Offence Department of $32B which is unpaid for.
Looks to me that that's a good down payment on some other foray into futility.
9
Replacing payroll taxes with a value-added tax ("VAT") would effectively tax current senior citizens twice for Social Security and Medicare benefits: once during the years they worked, through payment of payroll taxes that limited their ability to accumulate after-tax savings, and again, after enactment of the VAT, through purchases when those after-tax savings need to be spent.
Younger citizens with decades to go before they retire would have time to adjust to the a new VAT system and make the trade-offs between consumption and saving that could allow a comfortable retirement.
For retired senior citizens and those very near retirement, however, there would be no opportunity to adjust and little to no benefit from elimination of payroll taxes. The purchasing power of their existing after-tax savings would be permanently diminished by the VAT, and the potentially offsetting effect of any income-related benefits beyond payroll tax elimination could be limited or nil, depending on individual levels of taxable income.
Younger citizens with decades to go before they retire would have time to adjust to the a new VAT system and make the trade-offs between consumption and saving that could allow a comfortable retirement.
For retired senior citizens and those very near retirement, however, there would be no opportunity to adjust and little to no benefit from elimination of payroll taxes. The purchasing power of their existing after-tax savings would be permanently diminished by the VAT, and the potentially offsetting effect of any income-related benefits beyond payroll tax elimination could be limited or nil, depending on individual levels of taxable income.
3
Exemption for basic necessities and low and middle income rebates. Those fully retired would obtain a full rebate and those with higher incomes would have their rebates reduced until fully phasing out at say $45K. Rebates available for everyone including minor children.
Taxes paid on existing savings can be rebated and Social Security and Medicare benefits can be raised accordingly. There simpler but cruder ways to do it and more complex but fairer ways to do it but point is it can be done.
No exemptions. That should be a constitutional amendment. You can cut rates or give out tax credits. Just don't start adding exemptions.
the country has historically been running deficits. With an upper rate of about a third, since the early 1980s. What fool in their mind could think a flat tax of 10% could fix this? Talk about wishful thinking. Imagine this daydreamer in a position of responsibility.
9
Every Republican candidate for the presidency described their favorite recipes for voodoo yesterday, in the fourth Republican debate. Mix and half-bake with the help of corrupting money:
reduced wages, a reduction of government, a reduction of regulation, a reduction of taxes (mostly for the wealthiest), with as much more corporate welfare as you can fold in. Substitute corporate power for representative democracy as desired. Leaven neoliberally with more war and military spending. Half bake then rely upon corporate news media and anonymous campaign funding to convince voters to vote against their own self interests. Divide, punch down, and suppress as necessary, before returning to broiler to finish off.
reduced wages, a reduction of government, a reduction of regulation, a reduction of taxes (mostly for the wealthiest), with as much more corporate welfare as you can fold in. Substitute corporate power for representative democracy as desired. Leaven neoliberally with more war and military spending. Half bake then rely upon corporate news media and anonymous campaign funding to convince voters to vote against their own self interests. Divide, punch down, and suppress as necessary, before returning to broiler to finish off.
21
JayCe, I would add a filler to make sure some of those republican ingredients don't leak out.
I've found that most people, even highly educated people, don't realize that every single flat tax ever proposed is a progressive effective tax by virtue of the personal exemption. E.g., a 50% flat tax with a $70,000 personal exemption is more progressive than the current system. Multiple rates are actually a way of grabbing more middle class income by exempting less of it.
3
Except that much of the GOP's base would never accept such a high personal exemption. Indeed, they already complain about those at the lower end of the income scale who "don't pay any taxes" (even though they do indeed pay taxes).
9
"Let be be perfectly clear," a certain Republican President once said...
Politics is a farce.
Voting will not save you.
Politics is a farce.
Voting will not save you.
"Let me be clear," a certain Democratic President also once said.
Basic tax program:
100 Tax code grows in size and complexity.
200 Taxes increase.
300 People demand reform.
400 Politicians promise change.
500 GoTo 100
100 Tax code grows in size and complexity.
200 Taxes increase.
300 People demand reform.
400 Politicians promise change.
500 GoTo 100
10