Posted on 09/30/2011 9:44:01 AM PDT by Kaslin
What if you were in charge of reforming the U.S. individual income tax? Would you consider ditching today's excessively complex tax code in favor of something much, much simpler? Something like a flat income tax, perhaps?
If so, you've come to the right place! Our latest tool puts you in the driver's seat for determining how the nation's, and your own, fortunes would fare under such a system!
In the tool right here, all you need to do is enter the percentage income tax rate that would apply to all Americans, from Warren Buffett on down to his pool of non-amused secretaries, along with the value of a single tax credit, which would be provided to each individual American, again regardless of who they are.
After that, if you want to see how your or your family's income taxes might change as a result of your dramatic proposal, enter your household's total money income (whether you earned a salary, wages, capital gains, and/or dividends) and the number of individuals who would be covered by it (sorry, pets and other livestock need not apply!).
We used our model of the 2010 aggregate distribution of household total money income for the U.S. in generating the "how would the federal government do with your flat tax?" portion of the tool, along with the U.S. GDP for 2010, and the IRS' count of the number of exemptions reported on tax forms for 2009 (the most recent year this data is available.)
The rest was just simple math! (Trust us - you should see how the IRS does quadratic equations!)
In 2011, it took 72,536 pages to document the ins and outs of the U.S. tax code. We whipped our tool up yesterday afternoon. If you're into simple, this is about as simple as it gets.
Do you think anyone in Washington, D.C. wants that?
White House Office of Management and Budget. Budget of the United States Government: Historical Tables Fiscal Year 2012. Table 2.1 - Receipts by Source: 1934-2016. [Excel Spreadsheet]. 14 February 2011. Accessed 28 September 2011.
Bureau of Economic Analysis. Gross Domestic Product: Second Quarter 2011 (Second Estimate). 26 August 2011. Accessed 28 September 2011.
Internal Revenue Service. Selected Income and Tax Items for Selected Years (in Current and Constant Dollars). Individual Complete Report (Publication 1304), Table A, 1990-2009. [Excel Spreadsheet]. Accessed 28 September 2011.
53,176 million returns filed in the U.S., 65,361,000 paid no tax or had a negative tax rate (checks are actually mailed out to them under the earned income tax credit). This means that 42.67 or 43 percent of all taxpayers in the U.S. don’t pay any taxes or get tax refunds exceeding their tax liability.
It also shows that 23,658 million Americans, all those earning over $100,000 per year, or 15.4 percent of all taxpayers, pay 83.3 percent of all taxes; and that the 5.138 million top taxpayers earning over $200,000 per year pay 58.1 percent of all income taxes.
I hate taxes, but until we get to a fair tax or flat tax, it’s time for EVERYBODY to pay something. Once you do have skin in the game, you will all of a sudden become aware of how your tax money is being wasted.
No Thanks!
We’ve been there and done that several times in our history already and we have what we have today! Let’s get back to what the founders universally recommended which is an excise on articles of consumption. In modern terms a point of retail sale only sales tax as laid out in the Fairtax bill currently before both houses of congress!
Honestly, I’m way more interested in discussing cutting the spending and how much of the Federal Government can be reduced than I am worrying about how the Federal Government is going to change the Tax Code to raise the revenue thaey plan to extract from us.
12% flat tax on all income, for all income earners. Same for corporations
No deductions of any kind, except children and elderly dependents.
Tax can be calculated on a post card. Broadens the tax base considerably and even the poorest Americans must have a stake and responsibility.
Under your plan who exactly gets to define what is , or is not, “income”?
How is income defined now? Same way. Includes capital gains.
I am not in favor of a sales or consumption tax, unless the income tax is constitutionally banned. We do not need another new tax in the country, no matter how low - because it will not remain low for long.
A) Make any income tax totally regressive, the same percentage whether you make a dollar a year, or a billion. That way, everybody feels the bite and has skin in the game.
B) NO DEDUCTIONS! No depletion allowances, no amortizatons, no “offsets” for any kind of special interest spending. Just a flat rate on every dollar, no matter what the source. If you are on food stamps, and getting a benefit of, say, $3,500 subsidized annually for your purchase of stamps, that is imputed income and should be taxed accordingly.
C) “Capital gains” that can only be attributed to inflation of money supply are not taxable, but gain in value due to actual appreciation in real worth is subject to this same flat income tax rate. Capital losses cannot be used as an offset, you are entitled to suffer the effects of your own risky behavior.
Of course, thee may be a huge and booming “underground” economy as a result, but that in itself generates an enormous amount of cash velocity through the hands of individuals and corporations. A little-practiced rule of economic growth is that the greater the velocity with which cash is exchanged between participants, the more rapidly the overall net worth of the entire country improves. No stashing of cash in mattresses.
Tax consumption, not productivity!
Go Fair Tax!
So you would allow the Warren Buffets of the world to continue to arrange their affairs in such a way that they realize very little "income" and thus pay virtually no "income" taxes but consume like crazy in their very high end life styles?
I am not in favor of a sales or consumption tax, unless the income tax is constitutionally banned. We do not need another new tax in the country, no matter how low - because it will not remain low for long.
Then you really should visit the fairtax website and READ THE BILL!
For a host of reasons I think truly FREE people ought to be able to pay their taxes in a completely anonymous manner just as the founders intended they should!
I would think that a flat tax with zero exemptions would be the best way to go then everyone pays the same.Perhaps after the first $20K of income(first $20K exempt) 9%...below $20K a flat rate of $500?No one should be able to avoid having a stake in income tax.
Nope no exemptions for children or anything is the only fair way to go.Children cost society but punt nothing into society.
Nope no exemptions for children or anything is the only fair way to go.Children cost society but put nothing into society.
It’s always been my belief that the federal government shouldn’t tax individuals apart from fica, perhaps, until we can wind SocSec and Medicare down. The federal government should charge the states a flat, per capita rate to fund defense, national infrastructure, etc, and leave it to the states to recoup the money from their residents as they see fit. You’d get more competition vis-a-vis tax structures, and less federal power. Which, of course, is why it would never happen....
a penny tax on all transactions from buying a candy bar to buying a Audi. Everybody pays by the rate of their consumption..and that's it.
No one should be able to avoid having a stake in income tax.
Exactly! They use the same government services for free that we have to pay for!
Children cost parents more, not society. There is a culture war being waged on the USA. Kids will run this country someday. So we should encourage welfare recipiants to have kids and not taxpayers?
Anyway, who is going to take care of you when you are old sick and need your diaper changed?
Amen. I’ve had it with “conservatives” coming up with more efficient ways to take money form us to fund the the leviathan that is destroying our way of life and our future. Cut government and its spending down to its constitutional size and it won’t much matter how we collect the revenue. The worst is “conservatives” who brag that their tax cuts will bring in even more money. Show me tax cuts that will starve the government.
Agreed. Income is already defined as a gain. Define or redefine gain.
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