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 ...
He didn’t have this plan when he decided to announce for President,
Source? It’s my understanding that Perry has a series of such plans scheduled from the gitgo, first the energy, then the tax...
He should propose a flat tax on the sale of every financial instrument rescinded when the deficit is zero. Minimal impact on low wage earners, if any. Oversight should include one board member of the too big to fail banks. Plain and simple.
Unfortunately this shows me that Perry doesn’t understand our complaints..
That horse is already out of the barn.
That 47% won’t vote for anyone who threatens to make them pay any federal income taxes. Why would they?
In fact, the truth would be the opposite: 999/909 with empowerment zones for favored cities *and* the sales tax would require larger, newer bureaucracies , while the flat tax, with a standard deduction would require less.
The flat tax would be much simpler - that’s one reason they call it “flat.” There are not separate bureaucracies for those who pay the current regular tax and for those who pay the alternative minimum tax. The same crowd audits both.
On the other hand, there’s currently no rules or regulations for monitoring or collecting a sales tax. That bureaucracy would have to be developed.
In addition -— the biggest flaw in my opinion -— the very areas that are Democrat controlled and and rife with corruption would be the places that Cain proposes to put “empowerment zones.” These “zones” nor the regulations to define or run them do not exist. How long ‘till the corruption sets in? Who gets paid to develop more empowering empowering zones that favor the current powers that be? Who gets paid to look the other way when some are “empowered” more than others?
All I really want to know is will TurboTax figure out for me which one to choose so I pay the least amount of taxes?
If you are going the flat tax way....make it 10% across the board for everybody, no exceptions, no exemptions.
However, a better idea is to get rid of all income taxes, no payroll taxes either. Go to a 25% national sales tax. Studies show that is the hidden tax on each purchase anyhow. What you make is yours....How much you are taxed depends on how much you spend. This would change the psychology of this country overnight from big spenders to big savers.
With all tax reform, there must be a balanced budget amendment to keep Washington’s spending habits in check.
This is the best Perry could come up with? An option? There is nothing “optional” about reforming our tax code; it MUST be done away with and replaced with something else.
Sorry, Ricardo, but you’ve lost what little support you had from me. I hope you and Slick Willard knock each other out.
Even if you don’t agree with everything in Herman Cain’s 9-9-9 plan, you have to give him credit for attempting to fix our problem rather than putting another band-aid on it.
That’s why I said people “illegally evade” the existing local sales taxes by buying elsewhere. They will always be able to do that as long as the two different jurisdictions both want the business more than they value cooperation with the competing jurisdiction. At the very least, the American tourism industry will die as people get more for their vacation dollars outside the country. That doesn’t even consider the people who will leave the country entirely and take ALL their spending to places that value their conspicuous consumption.
Basically, yes. Here’s Newt’s optional flat tax plan: http://www.newt.org/news/newt-quad-city-times-optional-flat-tax-will-launch-recovery
my jobs proposals also call for an optional flat tax of 15 or less%. All workers and businesses would have the freedom to choose each year to file their income taxes either under the new flat tax option with limited deductions or under the current U.S. income tax code. Anyone who strongly favors a deduction or credit under the federal government’s current complex income tax system would have the choice to keep filing that way.
This optional flat tax system will create a new personal deduction for every adult of $10,000 to $12,000 (double for married couple), which would be above the established poverty level at $40,000 to $48,000. The current $1,000 tax credit for each child age sixteen or younger would also apply, as would the current earned income tax credit (EITC).
See post 50 for link.
One household pays 10% and the other 20%.
Let's see the Perry Peons spin this one...
Let me explain to you why people with children get tax deductions.
As it stands, a single person, paying into social security actually pays in enough to be supported for 11 to 15 years of retirement. (That's dollar for dollar - not taking into account money lost with bureaucratic management of that same money. It's actually closer to 7 years.) After that, they're being supported by the next two generations of workers.
Married people (who reproduce) sacrifice 20 years of their lives to produce those workers/tax payers.
The reason people with children get tax breaks is that they're producing future tax payers who're going to support all of the single, childless people later.
If childless people agree to only accept EXACTLY what they they pay in, they should get the tax breaks. Otherwise, they need to realize that they're sucking off the labor and sacrifice of others and shut the **** (insert the word of your choice) up.
How does adding a national sales tax while continuing the income tax “take away the IRS”? They’d still do the income tax, they’d probably get the responsibility of enforcing the sales tax, they’d have to write all the new regulations for what is deductable or not, AND they’d get to work out all the rules about empowerment zones.
Perry’s plan doesn’t get rid of them either, it sounds like. And if you really want to pay the minimum tax, you’d have to figure out your tax both ways. I guess some people will choose to pay even a little more for the ease of a flat tax. With the deductions he mentions, I think I’d probably pay a bit less with a 20% flat tax, depending on what deductions still existed.
On the other hand, even though my taxes are “complicated” by the fact that in addition to my real job, I’m also a free-lance opinion columnist so I have contractor income, AND I work part-time at a theme park, it’s easy to do my taxes, because I just use a tax program. Takes me longer to collect the information than to do my taxes, and I’m sure the program will tell me whether the flat tax is better.
When most people switch to the flat tax, we can phase out the other income tax version, and it wouldn’t be a shock to the economy.
I’m not supporting this plan — I’m a fan of incremental change, so I’d prefer us to just start stripping deductions and flattening the existing code, until we’ve gotten to the flat tax Perry is pushing. But at least it doesn’t include a national sales tax, which is just an invitation for the feds to take MORE control over things.
If you think it’s bad now that the feds know every dime you make, imagine when they have access to EVERY PURCHASE you make.
We don’t need to reform the tax code now. We need to fix the economy and cut the deficit now. Which means we need to get government out of our businesses, reduce regulation, stop bad-mouthing the economic producers, free up energy exploration, and stop screwing around with private matters like mortgages.
So for me, I see the flat tax as an interesting distraction from the real work.
You already do that with the AMT calculation.
But you only HAVE to calculate this twice if you care a lot about lowering your taxes. There are a LOT of people who do the standard deduction and never bother to figure out if the itemized deductions would be better for them.
And most people who make enough money for it to matter are likely using a tax program by now; they are cheap and do all the work, and will easily be able to add this calculation.
And if you do it on your own, the new calculation looks like it might be easy enough. I assume there will still be some deductions, but maybe not. If no deductions, it’s trivial — you take your gross income, subtract $12,500 for each dependent, and multiply hte result by 0.2.
The advantage is that it gives you the choice of simplification if you WANT to. But I don’t know if there is much of an “advantage”. It seems it would reduce tax revenue, since as you note people would use whatever gave them the lower tax.
But until we see details, we don’t know exactly how it works. I tend to like optional things, so if I want to keep my existing tax code, I can, just as I wish I could keep my existing health care.
The point is a parallel tax system is asinine.
Nice little diatribe. Which, of course, completely avoids the point of my post.
When two people make the same amount and they pay different rates it's NOT a flat tax.
“That 47% won?t vote for anyone who threatens to make them pay any federal income taxes. Why would they?”
That 47% is voting for obama and the democrats no matter what plan is introduced.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.