New Tax structure

[Ziggy]

Heard a new proposal for a simplified tax code and wanted to see what the group thought. The new code would change everyone's tax to 17.5% regardless of income, but would only tax income above $50,000. So if you make up to 50K you pay no taxes, if you make 100k you pay taxes only on the second 50k, or $8750. Granted its not perfect, but I am pretty interested in finding new ways to solidify the tax structure, make it fair, and close a lot of loop holes.

[Conga3]

I'm not a fan of creating two classes of citizens through the tax code.

 

Those who pay taxes, and those who don't.

 

I'm all for for a simple tax, but I think it should be one rate for everyone.

 

If you VOTE you should pay taxes...and no politician should be able to raise taxes on the minority and hand out gifts to the majority in order to stay in power.

 

-----

 

Democracy will fail when the majority votes to give themselves gifts by taking the minorities wealth - or some such thing said by someone smart at one time.

[gobiggergoredder]

consumption tax....fair tax....national sales tax. whatever you want to call it.

[Count 'Bility]

Why cant there just be a flat rate all across the board? 10%. 15%. 20%. it doesnt matter what you invest in. It doesnt matter what your assets are. It's doesnt matter how much you spend on day care. 15% (or whatever figure) of your paycheck is going to income tax. And guess what. Come April?-youre not gettin any back, and youre not payin any in.

 

"Why should I have to pay as much taxes as that rich CEO?".

 

Youre not. Your income is 34,000/yr. Youre paying (15%) 5100/yr in tax. That CEO making 5.6million is paying 840,000/yr. And that 1.2 million dollar bonus he received? He paid 180,000 in tax for that. Now, he can do whatever he wants with his remaining 5,780,000$ after taxes, and it's no one's business but his own.

 

I have yet to be explained to or shown why such a system would not work. Close the loopholes, set a flat rate, and all should be well, right?

[BigRedBuster]

I have said for a long time that there is a simple answer to this but it would take two constitutional amendments.

 

1) Set a limit to the amount legally a person can be taxed. Let's say that is 25%.

 

2) balanced budget amendment.

 

Ok. The government can predict pretty darn close what they are going to bring in as income. That is what they have to spend. Now, if everyone paying taxes is at 25% and let's say all expenses are paid by people making $50,000 then great. Now, if we want to bring on board a huge new program that will increase expenses, then that limit of who pays must be lowered to cover it. If we cut costs, then that limit can be raised above the $50,0000.

 

This gives incentive to the public to find ways they don't want the government to spend money.

[Ziggy]

Why cant there just be a flat rate all across the board? 10%. 15%. 20%. it doesnt matter what you invest in. It doesnt matter what your assets are. It's doesnt matter how much you spend on day care. 15% (or whatever figure) of your paycheck is going to income tax. And guess what. Come April?-youre not gettin any back, and youre not payin any in.

 

"Why should I have to pay as much taxes as that rich CEO?".

 

Youre not. Your income is 34,000/yr. Youre paying (15%) 5100/yr in tax. That CEO making 5.6million is paying 840,000/yr. And that 1.2 million dollar bonus he received? He paid 180,000 in tax for that. Now, he can do whatever he wants with his remaining 5,780,000$ after taxes, and it's no one's business but his own.

 

I have yet to be explained to or shown why such a system would not work. Close the loopholes, set a flat rate, and all should be well, right?

 

More and more I am seeing that pushing for a full straight tax rate without any below poverty line adjustments is never going to happen, so I thought the proposal to start at 50k+ was a pretty easy solution and a good compromise for both side of the political spectrum. As BRB mentions, the us govt will have a fairly good idea of what taxes are going to come in, people will have a pretty good idea of how much they are going to make, and we don't have people not able to pay taxes on April 15th, because they will already have them taken out of every paycheck.

[carlfense]

My thoughts:

1. Maintain the current progressive income tax structure.

2. Tax all income, regardless of source, as ordinary income.

3. Eliminate nearly all deductions/loopholes. (Case by case basis . . . but the vast majority would go.)

4. Given the above changes, maintain revenue as a percentage GDP at or near historical levels (18-20%) by adjusting the rates as needed.

[BigRedBuster]

My thoughts:

1. Maintain the current progressive income tax structure.

2. Tax all income, regardless of source, as ordinary income.

3. Eliminate nearly all deductions/loopholes. (Case by case basis . . . but the vast majority would go.)

4. Given the above changes, maintain revenue as a percentage GDP at or near historical levels (18-20%) by adjusting the rates as needed.

 

Honest question and I'm interested. What deductions/loopholes would you keep?

[BigRedBuster]

Why cant there just be a flat rate all across the board? 10%. 15%. 20%. it doesnt matter what you invest in. It doesnt matter what your assets are. It's doesnt matter how much you spend on day care. 15% (or whatever figure) of your paycheck is going to income tax. And guess what. Come April?-youre not gettin any back, and youre not payin any in.

 

"Why should I have to pay as much taxes as that rich CEO?".

 

Youre not. Your income is 34,000/yr. Youre paying (15%) 5100/yr in tax. That CEO making 5.6million is paying 840,000/yr. And that 1.2 million dollar bonus he received? He paid 180,000 in tax for that. Now, he can do whatever he wants with his remaining 5,780,000$ after taxes, and it's no one's business but his own.

 

I have yet to be explained to or shown why such a system would not work. Close the loopholes, set a flat rate, and all should be well, right?

 

More and more I am seeing that pushing for a full straight tax rate without any below poverty line adjustments is never going to happen, so I thought the proposal to start at 50k+ was a pretty easy solution and a good compromise for both side of the political spectrum. As BRB mentions, the us govt will have a fairly good idea of what taxes are going to come in, people will have a pretty good idea of how much they are going to make, and we don't have people not able to pay taxes on April 15th, because they will already have them taken out of every paycheck.

 

 

The reason this will never happen is that the amount of the population below $50,000 is too low. Meaning, the voter base this would cater to is not enough and a politician pushing for it wouldn't be elected.

 

The Dems were brilliant in their design of the tax increase for the top 1-2 percent. That gives them a voter base of 98% of the population that wouldn't be negatively affected by that proposal.

 

The vast majority of Americans were hearing..." ahhh..haaa....Tax the other guy."

[Ziggy]

BRB, i get what your saying, but I think when it comes down to it, 99% of people hate April 15th, hate doing taxes, hate paying someone to do their taxes. A lot of people are tired of people ripping off the government and there fore the people who actually pay taxes. Also, I think a lot more people are under the 50k income than you think. And the ones are are over 50K are not really overly effected by 17.5%, which isn't that high compared to some tax brackets currently being paid.

[QMany]

My thoughts:

1. Maintain the current progressive income tax structure.

2. Tax all income, regardless of source, as ordinary income.

3. Eliminate nearly all deductions/loopholes. (Case by case basis . . . but the vast majority would go.)

4. Given the above changes, maintain revenue as a percentage GDP at or near historical levels (18-20%) by adjusting the rates as needed.

Honest question and I'm interested. What deductions/loopholes would you keep?

I'd guess Mortgage Interest and Charitable Contributions. Maybe a few more?

Some of the loopholes that need to be closed are the ones that can be exploited by many high-income earners. For example, certain individuals (politicians) using exotic deductions and moving around capital gains to get a 14.1% effective tax rate on $13,700,000 income.

[JJ Husker]

I like the flat tax rate and exempting the first $50K +/- of everyone's income. Depending on how you look at it, that doesn't necessarily create a class that pays and a class that doesn't pay because nobody is paying on that first $50K. I haven't studied the numbers that closely so I don't know if the rate would need to be 10% or 15% or 20% or what but that does seem like the fairest way to me. Remove all the deductions and loopholes and make it simple as possible. Investment income gets taxed just the same. The only thing I would not tax (again) would be inheritance money as that would've already been taxed once. No special considerations for if you're married, if you have a mortgage, how many kids you have none of it. One flat rate. Each person files their own tax return-no head of household, married filing seperately, etc. BS. This solves most or a lot of the current problems with politicains catering to certain classes of people, making ludicrous campaign promises, paying for "access" to politicians, etc. Probably wouldn't even need campaign finance reform with this deal. Also removes a few hurdles about gay marriage and disparate treatment of heterosexual and homoseuxual peoples. It would have some broader, possibly negative impact, of reducing the number or federal employees (IRS) needed to administer the current plan and it would also negatively impact many CPA's and tax prep firms like H&R Block but I think the benefits would far outweigh the bad stuff.

 

And while we're at it, do away with all government subsidies. ALL of them. If your business model doesn't let you survive, get a new one. The free market can take care of all of this. I can already hear people saying "but what about the poor farmers. If they don't get help they won't survive" Ya know what? Everyone has to eat- it'll work out. The people it will hurt are those who are not efficient and productive. Isn't that the way it's supposed to be?

 

And then we can talk about increasing import tariffs to discourage the influx of cheap labor products into our country. Get our own people employed making the products we need and let the other countries fend for themselves. If you've just gotta have that Japanese made electronic gizmo or car, then you're gonna pay for it. Call it punishment for not supporting US made goods.

 

Probably gonna have to throw in some welfare reform too while we're at it. Need to remove the encouragement to have more kids just so you can collect more freebies from the government.

[QMany]

I like the flat tax rate and exempting the first $50K +/- of everyone's income. Depending on how you look at it, that doesn't necessarily create a class that pays and a class that doesn't pay because nobody is paying on that first $50K. I haven't studied the numbers that closely so I don't know if the rate would need to be 10% or 15% or 20% or what but that does seem like the fairest way to me. Remove all the deductions and loopholes and make it simple as possible. Investment income gets taxed just the same. The only thing I would not tax (again) would be inheritance money as that would've already been taxed once. No special considerations for if you're married, if you have a mortgage, how many kids you have none of it. One flat rate. Each person files their own tax return-no head of household, married filing seperately, etc. BS. This solves most or a lot of the current problems with politicains catering to certain classes of people, making ludicrous campaign promises, paying for "access" to politicians, etc. Probably wouldn't even need campaign finance reform with this deal. It would have some broader, possibly negative impact, of reducing the number or federal employees (IRS) needed to administer the current plan and it would also negatively impact many CPA's and tax prep firms like H&R Block but I think the benefits would far outweigh the bad stuff.

 

And while we're at it, do away with all government subsidies. ALL of them. If your business model doesn't let you survive, get a new one. The free market can take care of all of this. I can already hear people saying "but what about the poor farmers. If they don't get help they won't survive" Ya know what? Everyone has to eat- it'll work out. The people it will hurt are those who are not efficient and productive. Isn't that the way it's supposed to be?

Bold moves in a NEBRASKA forum. I respect that.

[74Hunter]

My thoughts:

1. Maintain the current progressive income tax structure.

2. Tax all income, regardless of source, as ordinary income.

3. Eliminate nearly all deductions/loopholes. (Case by case basis . . . but the vast majority would go.)

4. Given the above changes, maintain revenue as a percentage GDP at or near historical levels (18-20%) by adjusting the rates as needed.

That is a flat out horrible tax plan. How about the politicians stop spending like drunken sailors?

 

I'd also rather see that everyone actually pays the same percentage. It would at least be fair.

[RedRedJarvisRedwine]

Is this an actual news article or just a suggestion by the OP?