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Is America ready for a flat / fair Tax

Andy Devine 2010/11/01 19:52:45
Politics Government
Related Topics: Debt, Congress, IRS, Mortgage
Yes, Eliminate the hidden taxes that Congress calls fees also
5 votes
56%
No, It would not be fair to ask me to contribute
2 votes
22%
Undecided
2 votes
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.

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Top Opinion

  • Vipor_GG 2010/11/02 18:20:51
    Undecided
    Vipor_GG
    +4
    The only ones ready for it are the ones that have been footing the bill for the rest.

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Opinions

  • STEVE 2012/03/25 21:42:56
    No, It would not be fair to ask me to contribute
    STEVE
    I LOVE THE IDEA OF A FLAT TAX AND HAVE CONSIDERED IT. I FIND TO MAKE FOLKS HAPPY IT MUST BE EITHER NET "0" OR LESS TO THEM...WE CAN'T DO THAT WITHOUT A LARGE DECREASE IN REVENUE. WOULD I LIKE TO PAY LESS AND CATCH CHEATS...SURE, BUT THIS WILL NOT MAKE IT HAPPEN. EMPTY POCKETS
  • Native Born American 2011/08/17 13:55:36
    Yes, Eliminate the hidden taxes that Congress calls fees also
    Native Born American
    Yes! A Fair Tax is a Fair Tax....
  • FeedFwd ~POTL 2010/12/13 07:41:13
    Yes, Eliminate the hidden taxes that Congress calls fees also
    FeedFwd ~POTL
    +1
    The Fair Tax plan, for sure! We need to stop taxing work. We need to reduce or eliminate the Congress's ability to social engineer or pander for votes using the tax code. We need to make taxes more transparent and more voluntary. We need to put domestic US manufacturing on a more equal basis with respect to taxes compared with foreign manufacturing. These and many other compelling reasons lead me to strongly advocate for the Fair Tax Plan.
  • concerned 2010/11/07 23:34:13
    No, It would not be fair to ask me to contribute
    concerned
    it gives to much control to the states .. and they can not seem to agree on anything .. but control ..
  • Vipor_GG 2010/11/02 18:20:51
    Undecided
    Vipor_GG
    +4
    The only ones ready for it are the ones that have been footing the bill for the rest.
  • Andy De... Vipor_GG 2010/11/02 18:48:31
    Andy Devine
    +1
    Yup, that would be us.
  • FeedFwd... Vipor_GG 2010/12/13 07:36:05
    FeedFwd ~POTL
    Funny... those are the same people who always want less government spending, too. What's up with that? ;)
  • Michaelene 2010/11/02 13:42:18
    Undecided
    Michaelene
    +1
    Considering the new taxes and fees that will be imposed on Americans are mostly unknown at the moment, I'd have to take a wait and see.
    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.
  • Andy De... Michaelene 2010/11/02 18:51:33
    Andy Devine
    +1
    There are actual classes being taught as to how to complete the forms to get that “Free Money”
  • Michaelene Andy De... 2010/11/03 12:51:00 (edited)
    Michaelene
    +1
    Yes, I am very aware of both the scam classes and the tax prep "artists" who help people create handwritten w-2's and 1099's. They also list dependants without SS#'s or gender.
    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.
  • Andy De... Michaelene 2010/11/03 15:11:44
    Andy Devine
    +1
    Crooks
  • Michaelene Andy De... 2010/11/08 14:26:30
    Michaelene
    Yes! Institutionalized theft and fraud provided with funding from the American taxpayer!
  • Joves the Instigator 2010/11/02 02:37:31
    Yes, Eliminate the hidden taxes that Congress calls fees also
    Joves the Instigator
    +4
    Flat Tax no the Fair Tax yes.
    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...
    Flat Tax no the Fair Tax yes.
    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.
    (more)
  • Vipor_GG Joves t... 2010/11/02 04:46:05
    Vipor_GG
    +1
    I will not let me vote.
  • Andy De... Vipor_GG 2010/11/02 13:33:58
    Andy Devine
    +1
    I don’t understand why, I just tried it and it worked fine.
  • Vipor_GG Andy De... 2010/11/02 18:18:56
    Vipor_GG
    I now understand why. I didn't read that little line that said "You must be a member of this group to vote" duh!
  • Andy De... Joves t... 2010/11/02 18:50:01
    Andy Devine
    +1
    I’m not sure how it should be setup. What I am sure of is that the current method is not working.
  • Joves t... Andy De... 2010/11/05 00:28:01
    Joves the Instigator
    Oh I agree. Right now only those of us who work jobs where our employers take the taxes out, pay. Those who get cash or recieve assistance do not. Which means there is a very large segment of the population that gets to skate. The Fair Tax is really that everyone pays according to the goods they buy minus food and clothing. Also the government makes a whole lot more from it so, guess what they dont operate in deficits, ofcourse they would figure out a way to get them selves in that situation again but, they shouldnt with the extra income to the coffers.
  • Andy De... Joves t... 2010/11/05 13:56:06
    Andy Devine
    +1
    One concern I have is how to prevent the government from double and triple dipping tax on the same item. They could conceivably receive more tax for an item than it was worth by taxing it every time it changes hands.
  • Joves t... Andy De... 2010/11/05 22:40:51
    Joves the Instigator
    Well the problem is right now we have some in the Congress who want to drop the Income Tax rate down to a Flat Tax of say 5%, then institute a VAT/Fair Tax of 20% on top of that so, we would fall under the same danger but, still be getting hosed by Income Tax. That means those of us who work end up somehow paying out 50% by the time the whole scheme works out. Also they say htey would freeze the Income Tax rate, yeah I believe that one. And to add insult to injury some people below a given yearly income would pay nothing by getting a rebate, gee that is a real change. Meanwhile those of us under both the IT and VAT would get zero rebates. So this is another reason I have been for the FT because it eliminates the IT and, taxes goods on top of any Tariffs imported into the US. They can almost double and tripple dip but, then when they did that and made the prices too high, they would be stagnating sales and, thereby slow their intake.
  • FeedFwd... Joves t... 2010/12/13 07:59:16
    FeedFwd ~POTL
    Vat taxes are scary because goods get taxed at every stage of production. Income taxes create a hidden tax good in everything we make in this country because everybody who is part of the production chain has been taxed along the way. VAT will have the same hidden tax impact when goods are finally sold at the retail level. Furthermore, collecting taxes all along the way creates a huge new tax bureaucracy that might end up dwarfing the IRS. Sales taxes aren't inherently fairer or superior to income taxes. The Fair Tax plan is by far the best of the plans discussed for adding or converting to a national sales tax policy. Tariffs are not a huge problem if they are reasonable and uniform. Once they are used as a punishment and reward system, they become a political toy to be abused by Congress. Higher tariffs will lead to less imports. That is a double edged sword. It might be good for the worker, but maybe not so good for the consumer. Workers are consumers, so it can be hard to tell whether it will be for better or worse to raise tariffs.
  • Joves t... FeedFwd... 2010/12/14 00:57:09
    Joves the Instigator
    As I told Andy I do mind the scariness of the VAT, IF there is zero tax on income. It would lvel out for most of us. And I dont think there should be any from of prebates, that politicizes it more than anythingelse. Those considered poor can either buy used or, save. The point of the Fair Tax is everyone pays the same amount when buying good and services. The problem with the current system is that only a certain level of income earners pay more per capita of their earnings. While the upper levels may pay more amount wise in dollar figures, they have more tax loop holes than the middle class does. Those below the middle class generally pay zero.
    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.
  • FeedFwd... Andy De... 2010/12/13 07:51:01
    FeedFwd ~POTL
    Used goods don't get re-taxed upon re-sale.
  • FeedFwd... Joves t... 2010/12/13 07:48:57
    FeedFwd ~POTL
    Actually, everything is taxed including food and clothing when it is purchased for the first time. Used goods that were already taxed are not taxed again everytime they are re-sold. The pre-bate is supposed to be the answer to satisfy those concerned about the poor. Somebody living at the poverty level would get the same prebate as everybody else, and that prebate is supposed top be equal to the amount of taxes they would pay based on what they would spend on necessary goods. Since everybody, rich and poor get the prebate, the tax rate would be a bit higher. But everybody gets the prebate, so you can't claim it is unfair. It gives the tax system the appearance of being progressive while maintaining fairness. I hope you continue to encourage others to seriously consider the Fair Tax Plan.

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