Is America ready for a flat / fair Tax
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5 votes
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56% | ||
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2 votes
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22% | ||
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2 votes
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22% | ||
Currently many Americans pay as much as 33% or more in cumulative taxes because tax rates vary for each individual based on income brackets, exemptions and a complex system of IRS codes. This proposal would create a single flat rate tax fixed at 17% that would be the same rate for all Americans. Most Americans would see this as a reduction in tax rate. The national average is currently 22%.
Advantages: the 17% flat tax would replace the existing tax system and proposes the following:
- Individuals would be initially taxed at a flat rate of 20%, falling to 17% after two years.
- It would significantly reduce the tax rate for many Americans.
- It would eliminate double taxation.
- It would simplify tax preparation. Corporate and individuals would be able to file their returns on a ten-line postcard-size tax form.
- It would encourage savings. Individuals would no longer pay tax on income from savings, capital gains, and interest income.
- It would provide a strong boost to capital formation and thereby stimulate the economy.
- It would reduce IRS staff and overhead and streamline tax preparation.
- Corporations would be allowed to expense all their investments--no more complex depreciations.
- It is a progressive tax with a flat rate on taxable income, however, the more an individual saves or invests, the lower his taxable income becomes, thus lowering his total tax payment.
- Taxable income is defined as total income minus savings and investments minus a threshold income. The typical family threshold income is $36,800.
- This would mean that nearly half of all households would pay no federal income tax under this plan.
- It would reduce the cost of compliance from $593 Billion to an estimated $50 billion per year.
- It is a simple tax that levies the same tax rate to all Americans regardless of taxable income, while reducing or eliminating income taxes for low income families.
Disadvantages :
- It would not eliminate the IRS, but would reduce its role.
- It would eliminate deductions for mortgage interest payments, a drawback for homeowners.
- It would eliminate deductions for charitable donations.
- Corporations could deduct all wages and salaries, but benefits like social security, health or life insurance would no longer be tax exempt.
- Corporations would no longer be able to deduct interest payments on debt.
You must be a member of the group Politics Government to vote on this poll.
I hope it would eliminate the scams the IRS is currently having with people never paying a dime but getting bonus checks that average $5k yearly.
I have quite a few IRS pals who said the amount of fraud this year was bigger than ever before.
edit to add- ACORN offices often teach these classes.
The problem with the Flat Tax is it still only penalizes those who work legitimate jobs where taxes are withheld. Those who are working under the table and, those below a certain income level would skate once again. Also there is the problem of the others in the underground economy such as roadside vendors to drug dealers. They pay nothing.
Now the Fair Tax where all Income Tax is eliminated and the tax falls on goods, except for food and clothing, is indeed a Fair Tax. In this form everyone pays when they purchase goods and services. So if you are making cash it doesnt matter, you still pay. Some claim the poor are disadvantaged by this but this is untrue, it is the cry from the bleeding hearts who would also have to pay their fair share for a change. The other beauty of this tax is that all imports have to add the tax to their goods so, it somewhat levels the playing field. Afterall many of the countries we trade with impose this tax on our goods so, it is only fair we return the favor. This is also the other group who is not in favor of it. What the Fair Tax also means is the the corporate taxes go bye bye too so, now the US becomes a very attractive place to put your manufacturing, meaning somthing called good jobs.
Lately I have heard s...
The problem with the Flat Tax is it still only penalizes those who work legitimate jobs where taxes are withheld. Those who are working under the table and, those below a certain income level would skate once again. Also there is the problem of the others in the underground economy such as roadside vendors to drug dealers. They pay nothing.
Now the Fair Tax where all Income Tax is eliminated and the tax falls on goods, except for food and clothing, is indeed a Fair Tax. In this form everyone pays when they purchase goods and services. So if you are making cash it doesnt matter, you still pay. Some claim the poor are disadvantaged by this but this is untrue, it is the cry from the bleeding hearts who would also have to pay their fair share for a change. The other beauty of this tax is that all imports have to add the tax to their goods so, it somewhat levels the playing field. Afterall many of the countries we trade with impose this tax on our goods so, it is only fair we return the favor. This is also the other group who is not in favor of it. What the Fair Tax also means is the the corporate taxes go bye bye too so, now the US becomes a very attractive place to put your manufacturing, meaning somthing called good jobs.
Lately I have heard some who favor the Fair Tax on the political trail have already been figuring out how they can screw the pooch. They want to exempt people under a certain income. This is clearly how they if they instituted it would make it fail, purposely.Part of being a good citizen is to actually pay your share and, if you are on the government tit, guess what you dont deserve to own the same goods that those of us who work for ours earn. Guess you should get a job because if the Fair Tax is done right there will be many to choose from. Those of us who are currently paying the Progrssive/Regressive Income Tax would finally be able to keep all of our earnings and that is the way it should be.
As far as trade. Most of the countries we trade with have VATs on our goods and they skate when it comes to importing here. This along with any tariffs they impose. Our trade negotiators have not really done the job when making treaties. Free Trade has never been Fair Trade when it comes to us, we as a nation have been getting the short end of the stick. It is time we level the playing field and, if it takes having a VAT then Im all for it.