From the article: U.S. Federal Budget Breakdown
Most people agree the current income tax plan is so complicated that it's no longer fair. What do you think is the best plan: the Flat Tax, the Fair Tax or just make the existing tax code simpler? Or, do you know of an even better tax plan? Share your thoughts here. What Do You Think?
True Flat Tax
- A true flat tax should be considered. Every individual would pay a specific percentage of all income, regardless of source. Income below a specific "poverty level" would not be taxed at all, but all income above that amount would be taxed at the specified percentage for everyone. No deductions for anything, except possibly for catastrophic medical expenses. No loopholes for the very wealthy. Businesses, especially corporations, would pay the same rate as a percentage of all income received, a gross receipts tax, with no deductions for anything. The entire tax code could be written on a few pages and the IRS could be reduced to a small fraction of the current size. I'm not an economist, but I suspect with everyone paying their true fair share of taxes, that the actual tax rate to be paid by individuals and corporations could be as low as 10-15% when all the deductions and loopholes are removed.
Debt as Percentage of GDP
- Debt as % of GDP goes down when the economy grows faster than the debt, and up when the debt grows faster than the economy. It can therefore be used to measure the success of the tax cuts. The Debt as % of GDP went UP every year Reagan, Bush and Bush were in office. Supply side economics FAILED!
- —Guest Doug
Laffer Curve includes ALL Taxes
- Not just federal, and should include ALL costs of doing business since they all siphon off profits, the engine of jobs.
- —Guest tobyw
ssdi and medicare
- I am a 52 year old male I worked in construction for 32 years I had suffers 3 major crush injuries our workers comp is not there for the worker its there to protect the company's and now I am 100% disabled just recently I had found out I have cancer. Now I paid taxes for 32 years paid into ssi for that entire time why are the medicare and SSDI and SSI calls hand outs or entitlement we paid for the programs our government took our money's Barrow from SSI and never paid it back it wouldn't be broken if it wasn't robbed by our government that's suppose to be protecting us Since I broke my neck 5 years ago at work I have lost everything I worked for waiting for SSI and my government to do what we as Americans paid for and pay our government to do for us leave the programs alone and pay back what you've taken from these programs
- —Guest Dean Lee
- I was for the FAIR Tax when I had 20 years to work, but I'm now down to 6. Since half my money is in Roth, only half my retirement will be taxed and, done properly, in the 10 or 15 percent bracket. The fact that there's no more IRS doesn't mean squat to me after I retire...no benefit there. In fact, the only way to make this FAIR is to give refundable tax credits and phase them out over a 20 or 30 year period as non-income taxed workers reach retirement. Seniors should not have to pay taxes all over again!!!
- —Guest Ted
To tax or to untax,THAT is the question!
- Eliminate the IRS period. Flat tax food and services rendered. Neither of those items we are EVER refunded on anyway. Use a flax tax deduction of ALL Mortgage Interest in which the homeowner gets a full refund for every dime of interest paid that year. Finally- let the US Government try having yard sales to collect money for the back taxes and deficit currently a big problem. If they cannot come up a resolution-then reduce Congress, Senate and White House employees who by the way are far too busy doing stupid polls on if the president is popular that week. Better time would be served trying to feed americans who are out of work and need food & a job. Charge the banks they saved a minimum of 1000x % interest on what was borrowed-and with THAT & useless Aid sent to other countries-maybe-just MAYBE we can save our own people. Stop excessively appointment of usless committees inside the White House- DO THEIR JOBS! OR ELSE- FIRE THEM
- —Guest spuk57
Equitable Tax Plan
- The first $30,000 is exempt, $2,000 exemption for each dependent and then as follows: 10% on the NEXT $50,000, 15% up to $250,000 and 23% thereafter. No deductions... PERIOD.
- —Guest Ray McNamee
- 1. If you piggy-back a federal sales tax on top of each state's sales tax, the federal tax will be applied differently in different states, because each state has its own sales tax scheme. Result = unconstitutional tax. So, the federal government still must administer its own tax. You'll never get rid of the IRS this way, and federal spending will not be reduced. 2) States adopt the Internal Revenue Code as the basis for imposing their income tax. Repeal the Internal Revenue Code, and there's no state income tax. States must find new revenue sources or rewrite their income tax laws. Result = higher state sales tax rates. 3) Whatever you tax, you get less of (remember the fed luxury tax?). Many large purchases are discretionary, meaning people and businesses will simply buy less, and revenue will not meet expectations. Result = recession and loss of federal tax revenues, or complete failure of this loony tax system.
- —Guest Pete
- There is no money in the social security trust. IOU's which have been spent already. Kind of like telling a bankrupt neighbor to invest your money, instead he spends it, then he says, "dont worry you will get all that back"
- —Guest Tim F
- My hope is a Flat tax rate for everyone at 18% either on income or sales of goods, but not both. Keep it simple. Make the tax system less complex.
- —Guest Joe M.
Undo Reagenomics and quick like!
- Reagen turned the keys of the once prosperous for all US economy away from the hands of many to the hands of a few greedy gamblers.This post space is much too short for me to properly pick apart the Reagen debt and supply sided boom and bust cycles his economic reforms brought forth.Reagen brainwashed a good percentage of citizens into believing that government never works or if the government does work well than beware.This is unfortunate because reality is that the government and private sector used to work well together in harmony on economic reforms and policies that helped the common aamerican prosper.Many of the worlds greatest businesses and inventions that created wealth and prosperity for all was started from government subsidies or government money.
- —Guest Kevin
- since lower corporate taxes haven't worked lets try raising them. at this point they are only paying about 9% while we are paying several times that
- —Guest Donna Miller
Some States Don't Tax Pensions
- Of course, any state that does not have an income tax is not going to tax your pension. In addition, there are states that tax wages but no pensions, such as Pennsylvania, and states that do not tax certain pensions, such as your federal pension. Louisiana, for example, has an incomee tax, taxes pensions, but waives state incomee tax on certain pensions, including your federal pension. There are 10 states that do not tax federal pensions:Alabama, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania
- —Guest lLdjrOKybkpmfQ
Any Major Tax Change Could Hurt the Poor
- The current graduated tax should shift the the US budget burden to those who can most easily afford it. What good will it do to have a flat tax that makes the poor poorer? But tax loopholes, such as taxing investment income at a lesser rate than working income, put the burden back on those least able to afford it. There is a reason that the rich are getting richer at an alarming rate. A small part was the tax breaks given in 2001 and 2003. The larger part is that executives get to set their own salaries and bonuses. Before you say "They must answer to the board of directors" just remember this, members of the board are essentially part of a club. They are members and executives of other boards. They are not likely to deny increases or bonuses to one another. If every board had employee representatives or if they were some law governing the maximum pay with bonuses for the highest paid verses the lowest paid, then maybe a flat tax would be fair.
- —Guest Walt
- I am in favor of fair tax. The reason the economy is stagnant right now is because Reaganomics reduces the federal government's revenues so greatly while increasing spending. He also created the payroll tax which mainly effects middle and low income households. Fast forward to Clinton who found a way to create a budget surplus through tax increases and spending cuts. The second Bush lowered tax rates and increased spending, along with historically low interest rates. All of our tools for coming out of a recession have been over-used. The stimulus package worked to keep the economy out of a full blown collapse but out want enough. Because our GOP law makers are being held hostage by Grover Norquist, they refuse to negotiate. Why are the GOP so hypocritical that they only support government spending when there is a Republican president and they are tripling the national debt? Because they do no support caring for the elderly and the needy. They support oil subsidies and war!
- —Guest Kristine
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