Flat tax, no deductions.
One of the very few things that NJ does do right is that there is no tax on basic food and clothing.
Flat tax for all of the rest I agree with.
There is certainly more than enough to be taxed by eliminating those basic exceptions.
"And I don’t care how many Freepers depend on that deduction - they can get off the government nipple."
Concur. I have a CPA do my taxes every year because the tax system is just too damned complicated.
Having recently refinanced my home at a rate of 2.75%, my interest payments will be so small that the deduction is unlikely to give me any help anyway, so I no longer have a dog in this fight.
But there is a question of fundamental fairness. Just as the income which my employer pays me for services is deductible as an expense from their corporate taxes, it is taxable to me personally.
Just as the interest I pay the bank is taxable to them, so it should be deductible to me.
For that matter, working stiffs like me should be able to deduct their cost of commuting (mileage, actual car ownership costs, etc.) from their taxable income just as a contractor who, say, puts new gutters on my house can deduct the cost of bringing the truck, material and crew to the worksite. Typically, these have been handled with a standard deduction (if you are an employee) or business income deductions (if you are self-employed).
A flat tax would be a great idea if it were applied equally to the jag-offs who don't work but suckle at the government teat for a living. Even if they get an ObamaPhone, they should pay the equivalent flat tax rate on the thing. Make everybody a flat taxpayer on equal terms. Sounds great in theory, but how are you going to accomplish it politically?
Agreed! 10% - if it's good enough for the Church, it's more than good enough for the government. Anybody that thinks that's too low can voluntarily pay more of THEIR OWN money.
The founders were right. No income tax at all.
A sales tax at a flat rate.
Any income tax gets the government unnecessarily into your business.
If we stay with this income tax model, then I also believe that a household is a business as much as a business is, and everything required to make that business work is tax deductible.
IF it takes buildings, machines, transport, wages, etc., to make a business profitable, then it takes the same for the individual or family.
What a business considers “cost of doing business”, then it is the same for an individual.
It takes transportation, food, clothing, shelter, utilities, etc.
Anything above those reasonable expenses is “profit” and taxable.
That is, IF we stay with this income model.
Just get rid of the income tax. There's no way to really remove complication from this tax.
And you don't really mean no deductions, you mean no non-business deductions. Computing business income will always be complicated.
The only advantage of this over the FAIR tax is that the undesirable immediate regressive effect aren't so clear. Removing the deductions for employer paid benefits will cause an immediate reduction in pay for all employees, hitting the lower income folks most. It would not be fair not to do so if the self-employed can't deduct these expenses.
Removing 401K/IRA deductions will hammer the stock market, hurting pensions.
Removing deductions for insurance/annuity payments will hammer the insurance industry.
This is a nice theory, but ugly in the short run. We currently have a heavily progressive tax, made much more progressive by deductions and credits. Dumping it all at once will cause a lot of pain as folks adjust how they handle their money.
And, should we get to a flat tax, and with a firm cap at 20% or so, the government will also adjust. There are already proposals to tax you on imputed rent, the rent that you would have to pay if you rented your home. The definition of income will become very flexible, and not in your favor.
Just kill the evil income tax. The 16th amendment ratification is suspicious in the first place.