Flat Tax System Imposed On Iraq

Washington Post ^ | 11/02/03 | Dana Milbank and Walter Pincus

[Pokey78]

U.S. Administrator Orders 15% Rate

The flat tax, long a dream of economic conservatives, is finally getting its day -- not in the United States, but in Iraq.

It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, former representative Jack Kemp (R-N.Y.), former senator Phil Gramm (R-Tex.) and former representative Richard K. Armey (R-Tex.) over the course of a decade and two presidential campaigns.

"The highest individual and corporate income tax rates for 2004 and subsequent years shall not exceed 15 percent," Bremer wrote in Coalition Provisional Authority Order Number 37, "Tax Strategy for 2003," issued last month.

Voila, Iraq has a flat tax, and the 15 percent rate is even lower than Forbes (17 percent) and Gramm (16 percent) favored for the United States. And, unless a future Iraqi government rescinds it, the flat tax will remain long after the Americans have left.

[jocon307]

"...go to a national retail sales tax?"

No Principled, I don't like the idea of a federal sales tax. I think it would be very regressive and bad for business too.

Flat income tax, that's the way I'd go. Of course, I'd be willing to drop the Fed'l income tax altogether, and get back to whatever we did before we had one.

All income taxes should be flat, and if we need to shield the lowest paid workers, let the tax kick in only after a certain $ amount of income has been earned.

[HardStarboard]

Impost a flat 15% tax on us....please. Why should our former enemies be the only ones to suffer under a burdensome tax like that!!

[Principled]

I urge you to find out about the NRST that is actually in Congress right now. It's NOT regressive.

Hey, it just takes about 4 minutes to educate yourself on the basics:

Look here for 4 minutes, then reevaluate.

[Principled]

I contend that whenever taxes exceed what people think is fair, they will find ways to avoid paying, ...

Indeed, perceived fairness has a lot to do with compliance.

It is the case, however, that there will always be some degree of cheating. The goal is to minimize it...it can't be eliminated.

[Principled]

Under the national retail sales tax, the tax is on the product rather than the means of production,.

This is hugh and series. It means US goods manufactured here and sold abroad can earn the same profit margin for prices that are 22% LESS! And since the retail tax would be levied on any good sold in the US, imported goods would have to pay the 23% tax- eliminating their government subsidy.

This is one of the more important reasons to support the nrst...prices of exports go down by 22% while prices of imports increase.

This would be really good for jobs in the US. This would be really good for our trade deficit. This would even be good for tax revenues- meaning the overall rate could be reduced soon!!

Check it out here - it just takes 4 minutes!

[Principled]

http://www.fairtaxvolunteer.org/smart/faq8.html

Sales tax and evasion

[Principled]

From http://www.fairtaxvolunteer.org/smart/faq.html:

The FairTax empowers those with low incomes. Under the FairTax plan, no American will pay taxes on necessities. Every household will receive a rebate that is equal to the FairTax paid on essential goods and services, and wage earners will keep 100% of their paycheck. More money will be available to spend, save and invest. Used items will not be taxed and prices will go down by 20–30%. Education will be easier to obtain with the FairTax. Education costs will go down by as much as 50%. This will allow for easier upward mobility among lower income earning families. The FairTax is the only plan that can legitimately claim to "untax" the poor. Those spending at twice the poverty level will pay a rate much lower than the income and payroll tax burdens they bear today. The FairTax would dramatically improve economic growth and wage rates. Jobs will be more plentiful and wages will go up.

[jocon307]

Well, principled, I looked at it.

Anything is better than what we have now. One of my other bosses (that's the best part of working for partners, multiple bosses!) - he's a republican - very much favors a sales tax.

Another very important reform needed is on Soc. Sec. I wish they had never linked soc. sec. reform with the stock market. I have no clue why that happened. They've got to emphasize "individualizing" it, not where one puts one's indidual account.

[Principled]

Anything is better than what we have now.

Jes about!

Thanks for taking time to check it out. Whenever you have a question, you can go there and search it. You'll find research papers, Congressional testimony, position papers, and regular FAQ.

[meyer]

Actually there was a study put out that showed lower income people would suffer more financially with a national sales tax. A lower income person is taxed more and they can afford it less.

Taxed more than what? I suspect that the study you've seen compares a NRS tax against today's redistribution scheme. It is inevitable that when comparing today's scheme to a retail sales-based tax scheme, that poor people (who pay little tax or even have a negative tax through EIC) will see an increase. But I hate to use the word suffer - rich people and poor people alike drive on the roads, use the police and fire protection, and benefit as much as anyone else from government spending. It only stands to reason that everyone pay an equal share of the burden. I'll settle for an equal proportion or percentage of personal spending as opposed to a flat per-capita rate.

I don't mind giving those who are legitimately poor and doing all they can a financial break but the progressive taxes the hell out of the middle and upper class.

I will agree that it is a good thing to help out the poor. But, it isn't a good thing to steal from one group to give to another. Today's tax scheme makes people very generous - with someone else's money. I prefer that we get the government out of the welfare business all together and let people give what they feel is right out of their own earnings.

[nmh]

My "facts" for what I said I no longer possess. This goes back to the Forbes days. He had all kinds of stats etc that seemed reasonable to me. I don't remember the details anymore.

"I will agree that it is a good thing to help out the poor. But, it isn't a good thing to steal from one group to give to another. Today's tax scheme makes people very generous - with someone else's money. I prefer that we get the government out of the welfare business all together and let people give what they feel is right out of their own earnings."

That is why I prefer a flat tax. That's wha twe have today through a graduated tax. The government is like Sanata Claus and couldn't agree more gov. needs to completely remove itself from subsidizing ANYONE. I include, loans, welfare, low income housing, you name it.

[nmh]

I'm not interested in being taxed by a nationals sales tax. Soon it will morph into a V.A.T. as Europe has. No thanks.

[meyer]

That is why I prefer a flat tax. That's wha twe have today through a graduated tax. The government is like Sanata Claus and couldn't agree more gov. needs to completely remove itself from subsidizing ANYONE. I include, loans, welfare, low income housing, you name it.

I'm pretty comfortable with either the flat tax or the sales tax, though I prefer the sales tax. Either way would be a drastic improvement from the miriad of tax rules that we now experience at the federal level.

[TommyDale]

"...a National Sales Tax would tax the underground economy."

How would that work, considering the "underground economy" consists of unreported transactions?

[Flashman_at_the_charge]

How would that work, considering the "underground economy" consists of unreported transactions?

People who benefit from the underground economy eventually end up purchasing legitimate goods and services. For example the dope dealer with the brand new SL500 or the illegal immigrants enjoying a day out at Disney.

[Principled]

Golly, maybe I could borrow that crystal ball of yours!

Not to use it though- to wipe it clean. You see, if you could see clearly, you would know that WE ALREADY HAVE A VAT.

Sheesh.

One of the major reasons for the NRST is to ELIMINATE VAT components from our system. Indeed, it is at the very heart of the nrst. That you would say such indicates that you know very little about the plan. Why not spend a few minutes learning about it??

[TommyDale]

Spending money earned illicitly in the underground economy doesn't help the tax revenue stream. There needs to be a way to assess those people who have been freeloading from the tax system.

[Principled]

Some say the nrst captures more underground tax dollars cuz there will inevitably be a time that the dirty money is spent on legal goods (bread, milk, beer, cars, fur coats, boats, etc). And when the money is spent into the legal economy, taxes are collected. But there is rarely a time that illegal income gets reported and taxed.

Some posters have said it before, and they're right in saying that the nrst captures more of the underground economy- not all of it.

Our current system taxes all goods and services too- most folks just don't realize it.

[Sloth]

Let's move to Iraq.

[Flashman_at_the_charge]

I was refering to a national sales tax, not an income tax.