You just can't understand the consequences which you don't want to see and you can't understand it would never, ever, ever, ever, ever, ever, ever, ever, pass.
LOL, you live in your world I live in mine.
Personally, I like a simple flat tax with exemptions only for each individual equally...adult or children.
Hmmmm! and who makes the rules for calculating that income on which the tax is based? I note your "flat tax" has two tiers to it, a 0% rate and some other rate. Just like the current income tax started out, and didn't last much more than one session of Congress.
And no other exemptions. Thus, a family of four will pay NOTHING in income taxes on their first $40-45K earned a year and then about 17% on every dollar after with no rate tables.
LOL, as I said two rates before even starting, now how do you determine what is income on which you pay that tax, who makes the rule. Is the money received from a loan considered as taxable in your consideration, no exemption remember. How about money being paid back to you after you loan it to someone, is that taxable as income in your plan? ...
Or are you just going to use the Armey/Shelby flat income tax, which purports to do what you claim.
Here's how tax rates come out for the Armey/Shelby Flat Tax, a flat individual/corporate income tax, leaving all SS/Medicare, Federal Unemployment, excise taxes and tariffs in place and unchanged.
http://www.library.unt.edu/govinfo/subject/vital.html
- "The chart below shows a hypothetical set of flat tax rates and allowances that would result in revenue neutrality. This model, produced by the Congressional Budget Office shows that all federal income tax revenues could be fully replaced by a system with a flat tax rate of 13.1 percent and no deductions. Allowing total deductions for a family of four to reach $36,800 (more than double the amount allowed in 1995) would require a 19.9 percent rate."
Joint Economic Committee
Revenue Neutral Tax Rates for Alternative Allowances and Exemptions Under a Flat Tax Standard Allowances Option 1 Option 2 Option 3 Option 4 Option 5 Single $13,100 $13,100 $ 6,550 $ 6,550 $0 Joint $26,200 $26,200 $13,100 $13,100 $0 Head of Household $17,200 $17,200 $ 8,600 $ 8,600 $0 Dependent Exemption $ 5,300 $ 2,650 $ 5,300 $ 2,650 $0 Revenue Neutral Tax Rate 19.9% 19.4% 16.8% 16.3% 13.1% Source: Congressional Budget Office, 1995.
Under the Armey "flat" tax, as it is currently proposed,(HR1040 introduced 3/15/2001) a single person would pay:
7.65% ---- 7.65%(SS/Medicare) tax on wages/salary income below $13,600,
26.65% --- 19% + 7.65%(SS/Medicare) tax on wages/salary and other taxable income from $13,600-$75,000
20.45% --- 19% + 1.45% Medicare tax on wages/salaries and other taxable income from $75,001 up.
0% -------- on savings & bond income and stock dividends.
And that single person's business/employer pays,
19% ------ on earnings (Gross Receipts less allowed business deductions, exemptions and credits)
13.65% ---- 7.65% on SS/Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's on wages up to $75,000.
7.45% ----- 1.45% on Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's wages greater than $75,000.
Plus additional selective excises and tariffs dependant upon the nature of business engaged in.
Note: The base "Flat Tax Rate" is subject to meet revenue neutrality requirements under the Budget Enforcement act. The 19% rate stated in the Armey/Shelby Flat Tax proposal does not meet these requirements and would of necessity be adjusted upwards, and/or personal exemptions and business deductions be reduced to meet revenue neutrality criteria for enactment.
Further the Flat Tax is a VAT in the manner in which it transfers tax onto the consumer from business which is taxed at all stages of production and passed on to the consumer hidden in price of retail goods an services.
http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Income Tax (FIT) proposal, H.R. 1040, has two elements: a Flat Income Tax on an individual's earned income, and a VAT on businesses. The Flat Income Tax on businesses, is, by admission of Professors Robert E. Hall and Alvin Rabushka, who "wrote the book" on the FIT, a subtraction method Value Added Tax.
Quoting Hall and Rabushka ("The Flat Tax," Hoover Institution Press, 1995, pp55,56):
"To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following:
Total revenue from sales of goods and services
less
purchases of inputs from other firms
less
wages, salaries, and pensions paid to workers
less
purchases of plant and equipment."
Fair, simple, easily planned for.
Better read:
Flat Tax as Seen by a Tax Preparer
by Vern Hoven
and disabuse yourself of those notions.
Income is defined with much smaller rules than consumption.
Sure. that is why there are so few pages in the income tax code.
Consumption is retail sales my friend. Price you pay for products, nothing more nothing less.
If you think you can seriously pass a NRST bill that doesn't have incremental rates to "tax the rich" and at the same time wipe out "targeted taxes" like Soc Sec, Medicare, fuel, etc. then I wish you luck over the rainbow.
One thing is for sure, it won't happen with folks like you helping it along.
No incremental are rates required, just needs one rate & an allowance paid to all households based solely on household size.
Refer reply #17 The tax burden that a family of four (with FCA for 4 persons) will have at various annual expenditure levels.
