Posted: Mon Aug 22, 2005 5:46 pm Post subject: Re: Is The Tax System A Scam?
Tyler_JC wrote:
Alternative Minimum Tax prevents the income-rich from not paying any taxes.
The rich folks who don't pay taxes have all of their money in tax-free bonds. They earn a X% return on their wealth and use that tax-free income to do whatever they want.
The truely rich own nothing but control everything.
There's no way to tax those people without closing the charitable trust loop hole and creating a wealth tax.
I personally wouldn't mind doing that.
Also, we HAVE to change the payroll tax system. The cap on taxable earnings is regressive and should be eliminated. Also, the tax rate on SS and medicare should be lowered in order to prevent a major soaking of the upper middle class.
To be fair, those tax-free bonds are that way for a reason. They also pay less interest for a reason.
It's a market-based way for the Federal Gov't to help municipalities and states lower their borrowing costs. So yes; the rich can find loopholes. Those loopholes, however, aren't quite as infuriating as one might expect them to be.
Joined: May 19, 2005 Posts: 761 Location: Merry Ol' USA
Posted: Tue Aug 23, 2005 12:15 am Post subject: Re: Is The Tax System A Scam?
JoeW wrote:
jdmartin wrote:
1. Set a flat tax rate (say 10%).
2. Set a poverty threshold (say $30,000).
3. No deductions, period. All income is subject to 10%.
4. Everyone gets to exempt the first $30,000 of income. You pay 10% on every dollar of income beyond that level. So if you earn 40k, you pay taxes on 10k, or $1,000 (in this example). If you earn 60k, you pay taxes on 30k, or $3,000.
The problem with this solution is that the US GDP is in the neighborhood of $11T. The 10% flat tax would therefore be less than $1.1T, and the federal government has annual expenses that more than double that amount. Your flat tax would have to be more than 20%, and even higher if you make everyone's first $30,000 tax-free as you propose. 150M workers times $30K means the exemption covers perhaps as much as $4.5T of the GDP, leaving only $6.5T to tax. That puts your flat tax in the ballpark of 33% to make your plan work. If you make it a sales tax instead of an income tax (as I have seen proposed by others), the sales tax would have to be 50% (so that 33% of the sale goes to federal tax).
I'm not saying it's a bad plan. It would work at this higher rate of taxation, but it might be hard to get people to vote for you if you ran on this tax reform platform.
JW
I understand your point but I don't think it would have to be that high. $30k a year equals almost $15 per hour. If I had to hazard a guess, I would say that many people fall far short of this number. In 2002, 19 million households were reported with median income of 20k. Another 13 million were reported with median income at 28k. These were single-people households (women led). Combined households, 57 million were reported at 61k. That means about 60 million households, total, would probably owe no tax whatsoever (using median numbers as a guide). That's over 60% of the total households figured in those census numbers. Which means that the rich would be paying up, even if the percentage had to be 50%. _________________ After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
Joined: Sep 25, 2004 Posts: 4420 Location: Boston, MA
Posted: Tue Aug 23, 2005 12:30 am Post subject: Re: Is The Tax System A Scam?
You would have to cut federal spending.
The department of education? Slashed.
Department of transportation? Slashed (or at least moved to mass transit).
Plus. The income tax is not the only source of revenue.
Corporate taxes, tariffs, fees, gas taxes, sin taxes, issuing bonds...
There are other ways of raising revenue that don't involve income taxes.
Heck, we funded the entire budget without income taxes before 1913, we could probably do it again. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Tue Aug 23, 2005 11:29 am Post subject: Re: Is The Tax System A Scam?
I think that people should be taxed only on what they spend and not on what they earn. i.e. replace the income tax with a sales tax. Things like groceries (but not restaurant food) could be exempt from this tax. Our current tax system just encourages people to spend their cash on useless junk that feeds the system instead of conserving their wealth to help themselves, their families, or their decendents in times of scarcity. _________________ ...delenda est.
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