Upon reflection ....

[lawgator1]

I am starting to become interested in the notion of a simpler tax structure. I still think "9-9-9" is a bit gimmicky. But I see a lot of philosophical and intellectual honesty with the notion of a flat tax structure.

Now, I still think it should be stratified. Otherwise, the whallop to the middle class is too big. And I think it should be more than 2-3 steps.

Also, and this is a major component in my mind, I think investment income should be taxed at the same rate as is income from ordinary work. That is, if you make a million dollars in bonds one year, then you should pay the same amount in taxes as someone who makes a million dollars by selling computers.

What would you guys think about a plan like this?

$1 to $50,000 taxed at 5 %
$50,000 to $250,000 taxed at 10 %
$250,000 to $1 million taxed at 15 %
$1 million to $5 million taxed at 20 %
Over $5 million taxed at 25 %

No deductions. No discounts. And all income is treated the same, regardless of source.

 

[Lexvol]

I am starting to become interested in the notion of a simpler tax structure. I still think "9-9-9" is a bit gimmicky. But I see a lot of philosophical and intellectual honesty with the notion of a flat tax structure.

Now, I still think it should be stratified. Otherwise, the whallop to the middle class is too big. And I think it should be more than 2-3 steps.

Also, and this is a major component in my mind, I think investment income should be taxed at the same rate as is income from ordinary work. That is, if you make a million dollars in bonds one year, then you should pay the same amount in taxes as someone who makes a million dollars by selling computers.

What would you guys think about a plan like this?

$1 to $50,000 taxed at 5 %
$50,000 to $250,000 taxed at 10 %
$250,000 to $1 million taxed at 15 %
$1 million to $5 million taxed at 20 %
Over $5 million taxed at 25 %

No deductions. No discounts. And all income is treated the same, regardless of source.

Convince me that spending would be addressed more seriously and I would be willing to discuss the progressive nature of the plan. 25% is still way too high.

 

[theFallGuy]

Convince me that spending would be addressed more seriously and I would be willing to discuss the progressive nature of the plan. 25% is still way too high.

AGreed. Until the gub'ment gets serious about cutting spending I don't want to hear shat about new taxation.

 

[n_huffhines]

How about no income tax?

If we got rid of income tax, the Federal Government still will bring in as much revenue as they did in the late 1990s. That's more than enough to operate.

 

[lawgator1]

Convince me that spending would be addressed more seriously and I would be willing to discuss the progressive nature of the plan. 25% is still way too high.

I see it as in tandem with some sort of spending cut or limitation plan. I'm not sure I can agree with a balanced budget plan. That might prove unwieldy/too much for the economy to bare all at once.

But I agree with you that there should be a paradigm shift in how we treat government revenue and spending.

 

[PKT_VOL]

I see it as in tandem with some sort of spending cut or limitation plan. I'm not sure I can agree with a balanced budget plan. That might prove unwieldy/too much for the economy to bare all at once.

But I agree with you that there should be a paradigm shift in how we treat government revenue and spending.

That's sad.

 

[lawgator1]

As to 25 % being "too high," I just sort of threw out simple numbers that would serve as a basis for discussion. Might be 18 %. Might be 22.346 %.

That is less the point and more the question of whether people could support a lot of layers like this and also support treating investment income as ordinary income.

That latter is in part because I keep hearing folks like Gingrich tout some sort of ultra low (even 0) tax on investment income. I get the argument that it would lead to more investment. But that would certainly favor the wealthy in a huge way.

And so it seems to me that if the purpose of a flat tax system (even a structured one) is to be honest with what we are bringing in and how we are taxing it, leading to stability, transparency, and accountability, then it also seems to me that to be consistent then you can't start differentiating between income by type.

 

[lawgator1]

That's sad.

To be specific, I mean a balanced budget amendment. A forced one. There will be periods where deficit spending occurs. But I agree that every year the plan should be to spend no more than is brought in.

 

[volinbham]

We definitely need to flatten and simplify the code.

Historically, we pull about 18-20% of GDP in tax revenue regardless of tax rates so attention must be paid to spending.

A massively simplified code should greatly reduce lobbying as well.

 

[lawgator1]

We definitely need to flatten and simplify the code.

Historically, we pull about 18-20% of GDP in tax revenue regardless of tax rates so attention must be paid to spending.

A massively simplified code should greatly reduce lobbying as well.

That and the ease of compliance, the lower cost to the top, seem to me to offset a lot of the issue related to taxing investment income the same as ordinary income.

 

[YorkVol]

I've never understood the reasoning behind a higher percentage for higher incomes. If it is flat, then the actual amount follows your income so a "rich" person is still paying more. Why do we think someone who makes 5 mill has to pay back a larger chunk than the rest? Likewise at the lower end, why does a smaller income drive a smaller percentage? Doesn't seem fair to me.

 

[therealUT]

Taxing productivity, which is exactly what an income tax does, is inconsistent with encouraging productive growth.

 

[Lexvol]

Taxing productivity, which is exactly what an income tax does, is inconsistent with encouraging productive growth.

Agree, but we will never see a stand alone consumption tax in our lifetime.

 

[PKT_VOL]

To be specific, I mean a balanced budget amendment. A forced one. There will be periods where deficit spending occurs. But I agree that every year the plan should be to spend no more than is brought in.

Normally I would agree with you. However, given the actions of two administrations and ten plus congressional cycles since 2000, I would say a balance budget amendment of some sort is a good idea at the present time.

Taxing productivity, which is exactly what an income tax does, is inconsistent with encouraging productive growth.

Agreed.

 

[lawgator1]

I've never understood the reasoning behind a higher percentage for higher incomes. If it is flat, then the actual amount follows your income so a "rich" person is still paying more. Why do we think someone who makes 5 mill has to pay back a larger chunk than the rest? Likewise at the lower end, why does a smaller income drive a smaller percentage? Doesn't seem fair to me.

The theory WAS that it needed to be progressive, so that lower income people did not feel as much impact as higher income people, in raw dollars, since the same raw dollars to the former is much harsher than the latter.

At this point, I think the concern is that if overnight everyone was taxed the same rate on all income, you'd absolutely kill the middle and lower classes and wreck the economy.

Part of the reason I have suggested this stratification is to sort of ease the economy into this. The benefit is far less about "fairness" (however you might define it) and far more about simplifying the tax code, getting rid of cumbersome and costly deductions and adjustments, etc.

Overtime, the effect would be to spread the burden out more evenly. And most importantly, there would be substantial benefit to dependability. You would know going into a transaction, a job, an investment, etc., exactly what the tax consequence would be. And you wouldn't have to pay an accountant or a bunch of lawyers to figure it out for you.

 

[Weezy]

I am starting to become interested in the notion of a simpler tax structure. I still think "9-9-9" is a bit gimmicky. But I see a lot of philosophical and intellectual honesty with the notion of a flat tax structure.

Now, I still think it should be stratified. Otherwise, the whallop to the middle class is too big. And I think it should be more than 2-3 steps.

Also, and this is a major component in my mind, I think investment income should be taxed at the same rate as is income from ordinary work. That is, if you make a million dollars in bonds one year, then you should pay the same amount in taxes as someone who makes a million dollars by selling computers.

What would you guys think about a plan like this?

$1 to $50,000 taxed at 5 %
$50,000 to $250,000 taxed at 10 %
$250,000 to $1 million taxed at 15 %
$1 million to $5 million taxed at 20 %
Over $5 million taxed at 25 %

No deductions. No discounts. And all income is treated the same, regardless of source.

I agree with this (and I don't think $5M at 25% is too high). No deductions. I agree with taxing investment income at the same rates. I think we should get rid of corporate income taxes. And I agree with others that spending needs to seriously be hacked at.

 

[therealUT]

Agree, but we will never see a stand alone consumption tax in our lifetime.

One can dream...and, the income tax has only been around for a century.

 

[therealUT]

I agree with this (and I don't think $5M at 25% is too high). No deductions. I agree with taxing investment income at the same rates. I think we should get rid of corporate income taxes. And I agree with others that spending needs to seriously be hacked at.

You do not think that handing the government over $1,000,000 of money that you earned either though direct work or risk is too much?

 

[lawgator1]

I agree with this (and I don't think $5M at 25% is too high). No deductions. I agree with taxing investment income at the same rates. I think we should get rid of corporate income taxes. And I agree with others that spending needs to seriously be hacked at.

I could go along with a no corporate tax policy, but only if two conditions were met.

1) All income (save a reasonable reserve for legitimate purposes) was distributed each year to shareholders such that it is properly taxed as income to each shareholder.

and

2) Under no circumstances could corporate monies be used for any personal purpose whatsoever. For example, corporate monies could not be used for meals, cars, clothing, etc. All of that would be treated as income. Otherwise, it is too easy to camouflage a personal expense as a business one.

 

[lawgator1]

You do not think that handing the government over $1,000,000 of money that you earned either though direct work or risk is too much?

It would be 25 % of income OVER $ 5 million. The first $5 million would be taxed at lower rates, i.e. the first $50,000 at 5 %, the next $200,000 at 10, etc.

 

[therealUT]

It would be 25 % of income OVER $ 5 million. The first $5 million would be taxed at lower rates, i.e. the first $50,000 at 5 %, the next $200,000 at 10, etc.

And...?

 

[YorkVol]

The theory WAS that it needed to be progressive, so that lower income people did not feel as much impact as higher income people, in raw dollars, since the same raw dollars to the former is much harsher than the latter.

At this point, I think the concern is that if overnight everyone was taxed the same rate on all income, you'd absolutely kill the middle and lower classes and wreck the economy.

Part of the reason I have suggested this stratification is to sort of ease the economy into this. The benefit is far less about "fairness" (however you might define it) and far more about simplifying the tax code, getting rid of cumbersome and costly deductions and adjustments, etc.

Overtime, the effect would be to spread the burden out more evenly. And most importantly, there would be substantial benefit to dependability. You would know going into a transaction, a job, an investment, etc., exactly what the tax consequence would be. And you wouldn't have to pay an accountant or a bunch of lawyers to figure it out for you.

I get the reason for the flat tax and absolutely agree with it. Simplification is the answer in my book as well. I've just never bought the notion that someone should pay a larger percentage simply because they are successful at making a larger income. But, I recognize the point that implementing it all at once could be seen as a hardship on those with lower incomes, so a system that adjusts the rates over a number of years until they all equal out is probably the only way to go. In the end it seems to me that having everyone pay the same percentage removes a large point of friction between economic groups. Sort of like we all get one vote, we all pay 10%, etc.

 

[joevol320]

I see it as in tandem with some sort of spending cut or limitation plan. I'm not sure I can agree with a balanced budget plan. That might prove unwieldy/too much for the economy to bare all at once.

But I agree with you that there should be a paradigm shift in how we treat government revenue and spending.

the end of 2011 we have a 15.22 trillion dollar debt. by November we'll probably have over 16 trillion dollar debt.

neither party will be willing to cut any spending that will make a dent in the debt. you people on here have to realize that hussein or any gop president will be unable to pay this debt off.

America is no longer the country that prided itself on self determination, but a country that must rely on gov programs either by choice or by necessity. We are beyond repair and we do not have the discipline to alter the course we're going.

 

[lawgator1]

the end of 2011 we have a 15.22 trillion dollar debt. by November we'll probably have over 16 trillion dollar debt.

neither party will be willing to cut any spending that will make a dent in the debt. you people on here have to realize that hussein or any gop president will be unable to pay this debt off.

America is no longer the country that prided itself on self determination, but a country that must rely on gov programs either by choice or by necessity. We are beyond repair and we do not have the discipline to alter the course we're going.

Honestly, when you refer to him as "Hussein" it distracts from, and in a lot of respects drowns out, the point you are making about spending.

We get that a number of people don't consider him to be legitimate. But at this point you and your fellowship on that issue just aren't going to convert anyone and all you do is undermine your credibility and distract form your real arguments by constantly referring to it.

 

[PKT_VOL]

the end of 2011 we have a 15.22 trillion dollar debt. by November we'll probably have over 16 trillion dollar debt.

neither party will be willing to cut any spending that will make a dent in the debt. you people on here have to realize that hussein or any gop president will be unable to pay this debt off.

America is no longer the country that prided itself on self determination, but a country that must rely on gov programs either by choice or by necessity. We are beyond repair and we do not have the discipline to alter the course we're going.

I disagree.