Posted on 10/24/2011 5:39:41 PM PDT by SeekAndFind
We are finally starting to get the details about Texas Gov. Rick Perry's flat tax plan to be unveiled formally on Tuesday. Perry insiders confirm that the flat tax will have a rate of 20%, and tax filers will be able to choose between the flat tax and the current code.
This means that workers won't "be forced into the flat tax if they like the current system," a Perry advisor tells me.
It would also include a standard deduction of $12,500 for each person in the household. Mr. Perry said during the last GOP presidential debate that he would embrace a flat tax in the days to come.
The idea of an optional flat tax isn't entirely new. It was embraced by Steve Forbes in his 2000 presidential campaign. Also one of the leading flat tax bills in Congress would create an alternative flat tax. The Hong Kong flat tax of 15% (one of the inspirations for the Forbes flat tax in the 1990s) is also optional.
Mr. Perry is also not the first candidate in this field of Republican presidential hopefuls to endorse an optional flat tax. The plan released by former Speaker of the House Newt Gingrich also has that feature. "If our ideas are as good as we think they are, we shouldn't force people into our plan," says Mr. Gingrich. "Under an optional flat tax, no one loses," he adds.
Mr. Perry hopes to steal thunder from Herman Cain, who has dominated the tax reform debate with his 9-9-9 plan.
(Excerpt) Read more at online.wsj.com ...
You are correct that people pay attention to the local sales tax. They go to a lot of trouble to buy things online to illegally evade a 9% sales tax, and they’ll shop in neighboring counties or cross state lines to get a break of a few percent.
How much effort do you think they’ll expend in evading a Fed + State combined sales tax when the rate is 18% ?
20%? 10% is usurious.
Texas doesn't have a state income tax, but try not paying the state sales taxes you collect as a business and see what happens.
The IRS will not go away under any plan, it will only change its mandate.
The 20% rate seems high to me. I guess we will have to wait for the details to see if there are any deductions available.With $12.5K per member of household the effective rate will be lower for a typical 2 child family earning $75K per year. If I understand their tax will be 20% on $25K ($75K - (4*$12.5K)) or $5K. $5K/$75K will be an effective 6.7% rate. As income rises the effective rate goes to max 20%.
While I like most any tax cut, this does not broaden the base. In fact, it might shrink it even more which is awful. You still have not addressed the size and scope of the IRS, imho. For the very wealthy, who can afford lots of accountants and tax lawyers, they still can get out of paying taxes for the most part.
Cain's plan is a huge restructuring of the tax system and broadens out the tax base. Poor people do not pay taxes, but lower income, middle income, and high income all do and it flat and fair. This gets everyone on the same side versus higher taxes.
The 9 9 9, 3 3 3, or 1 1 1 plan is what will be an IRS nightmare!Baloney.
That is the stupidest G.D. thing I ever heard. With a stroke of the pen you DOUBLE the complexity of complying with the tax code. Now you have to calculate your taxes TWO WAYS to find out which gives you the smallest tax liability.
Or if you use Turbo Tax they will add a question at the end that asks - Do you want to pay $20,000 or $27,000 in taxes?
In what fevered drunken brain does this seem to be an advantage?
One household pays 10% and the other 20%.
Let's see the Perry Peons spin this one...
“Is he clueless? We’d double our accounting bills as they figured our returns both ways to see which was better, and be back to stacking income and deductions is alternate years. The worst idea I’ve heard since the alternative minimum tax.”
I highly doubt you’d have to ‘double’ your accounting bills. The flat tax can be calculated by hand in about 2 minutes. No accountant is gonna charge double for that and stay in business very long.
Thisis the STUPIDEST idea yet~!!!
And this guy wants to be PRESIDENT????
“It’s not a flat tax. If you’re single and make $100K you’ll pay twenty grand. If you’re married and have a wife and two children and make $100K you’ll pay ten grand. That’s not a flat tax.
One household pays 10% and the other 20%.”
The flat tax idea has always had variations of it that include deductions for members of the family, charity, even home mortgages. I believe when Jack Kemp floated the idea in the 90s these were the 3 deductions he had. So this may not make it a ‘pure’ flat tax, but I don’t recall Perry ever saying that’s what he would propose. At the last debate, I remember him saying he wanted a ‘simpler and flatter’ tax code.
And let’s remember that Mr Cain’s 9/9/9 plan is not 9/9/9 for everyone either. He’s revised it to 9/0/9 for lower income households.
So bottom line-no candidate out there has a ‘pure’ flat tax plan, or for that matter a plan where everyone pays exactly the same rate.
That's right. The main advantage of the flat tax is that everyone pays something--well, except the ones who don't. But with the flat tax, there would be fewer loopholes that allow companies like GE to pay no taxes. And the sales tax, as abhorrent as it is, would at least capture taxes from those who don't file, such as illegal aliens, mobsters, hookers, drug dealers, etc.
Perry has said from day one that he'll cut spending and starve big government.
Now, sometimes, I think people suppose that those of us who believe in a limited central government do not believe the federal government should do anything at all. That’s not true. We simply want the federal government’s involvement in our lives to be constitutional, paid for, effective, and as minimal as possible. (p.174)When the federal government oversteps its authority, states should tell Washington that they will not be complicit in enforcing laws with which they do not agree. Again, the best example is an issue I don’t even agree with—the partial legalization of marijuana. Californians clearly want some level of legalized marijuana, be it for medicinal use or otherwise. The federal government is telling them they cannot. But states are not bound to enforce federal law and the federal government cannot commandeer state resources and require them to enforce it. So good luck to the federal government if it wants to enforce every law on its books without the help of state and local law enforcement. When the federal government oversteps its bounds, states should think hard about whether a single state resource should be committed to carry out the intrusive policy in question. (p.177)
First, we must restrict federal spending. Rampant and wasteful spending in Washington is an affront to both freedom and federalism. The most important thing we could do is amend the Constitution—now—to restrict federal spending. There are generally thought to be two options: the traditional ―balanced budget amendment‖ or a straightforward ―spending limit amendment, either of which would be a significant improvement. I prefer the latter. It is imperative that we establish a constitutional requirement that the federal government live within its means like states and most American households must do—but I don’t want the Washington establishment to hide behind tax increases to ―balance‖ the budget. Let’s use the people’s document—the Constitution—to put an actual spending limit in place to control the beast in Washington. (p. 181)
Second, we should restrict the unlimited source of revenue that the federal government has used to grow beyond its constitutionally prescribed powers. One option would be to totally scrap the current tax code in favor of a flat tax, and thereby make taxation much simpler, easier to follow, and harder to manipulate. Another option would be to repeal the Sixteenth Amendment to the Constitution (providing the power for the income tax) altogether, and then pursue an alternative model of taxation such as a national sales tax or the Fair Tax. (p.182)
Perry, Rick (2010-11-15). Fed Up!: Our Fight to Save America from Washington. Little, Brown and Company. Kindle Edition.
So if I choose the flat tax my 15% payroll taxes goes away, my 15% income taxes go away and somehow they will magically remove the 22% hidden sales taxes in everything I buy?
Well -- whose idea was it? :-)
NO. I welcomed Perry’s support of a flat tax. But allowing people a choice between a flat tax and current code is worthless. That means we have to retain both systems. The dems will make sure the flat tax is less attractive from a total tax standpoint than going through the hoops they want you to go through to get the government-sponsored deductions. Perry takes a great idea and screws it up.
I like the idea. The flat tax doesn’t take much accounting. And you pick the cheapest one. Works for me, a hell of a lot better than that 9-9-9 garbage. But that’s a dead duck at this point anyway. If Cain is still in the race in 6 months, I’ll bet he’s dropped it altogether by then.
Actually the sales tax is not a sales tax.
It is a use tax.
So eventually the law will be enforced that if you use it you pay the tax.
In other words, the practice of no tax if purchased over the internet will be brought to an end.
I know I’ll get hammered by the Perrywinkles, but Rick Perry is an opportunist. He didn’t have this plan when he decided to announce for President, he only came up with it after seeing how much traction and buzz Cain’s 9-9-9 plan was getting. Tax reform is a big thing with a lot of people who vote. Might as well jump on the “tax reform” bandwagon and get some more voters. Just like he jumped on the in-state tuition bandwagon in an effort to get the Hispanic vote.
I had to take issue with Rush today when he said Perry is a conservative. I’ll repeat, Perry is an opportunist who will do or say anything that advances him toward his goals. Perry’s “conservatism” is due to his religion (which I think is straight-up honest) and being Governor in a conservative state. If he lived in Massachusetts, he’d be a Christian Mittens Perry.
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