Posted on 01/01/2025 5:26:26 PM PST by SeekAndFind
Making the Tax Cuts and Jobs Act permanent would be a good start for Congress in 2025. But it’s time to take an even bigger step: creating a simplified flat tax for all. The TCJA got us close to this goal, and a few additional reforms would get it done.
Collapsing the personal-income and corporate tax rates to 15% would have huge economic benefits. America would suddenly have one of the lowest tax rates in the world, resulting in trillions of dollars of new capital flow and a spike in take-home pay.
The simplicity of a flat tax would reduce the deadweight costs associated with tax compliance—and the headaches. The White House Office of Information and Regulatory Affairs calculates that Americans spent almost eight billion hours filling out tax forms in 2024. The Tax Foundation estimates that this cost the economy $413 billion in lost productivity, and the Internal Revenue Service estimates that we spent $133 billion on out-of-pocket compliance costs. That adds up to a burden of $546 billion.
Donald Trump’s 2017 reforms already simplified tax filing by doubling the standard deduction from $12,500 to $25,000 for married couples filing jointly. Prior to 2017, almost 40% of tax filers itemized deductions on their tax returns. Today, only 9% do. Almost all low- and middle-income tax filers now check the box for the standard deduction.
Getting rid of what remains of these itemized deductions and special credits—except for those dedicated to supporting families with children and dependents, a worthy investment—would unleash the economy.
Consider mortgage interest deduction. Most homeowners don’t take it anymore, and those who do are effectively subsidized by lower-income taxpayers who don’t have large mortgages. Any revenue losses resulting from this deduction’s elimination would be easily offset by higher incomes created by the new flat tax rate.
(Excerpt) Read more at wsj.com ...
I have posted this before, it is already in the tax code, called the Alternative Minimum Tax.
No tax on tips.
No tax on Social Security
No tax on mandatory overtime.
Do those and I’ll consider the flat tax to be better than “flat earth”.
There should be no income tax.
Period.
And get rid of the double tax on Sosha Security.
Consumption tax. It would motivate politicians to keep the market humming and impact consumers purchasing a candy bar to a yacht.
Or, if its kept, exempt employers from being gubmint tax collectors and let employees responsible for writing a check at the end of the year around Christmas. There would be a revolt the first year implemented.
Once upon a time that was a good idea. But I’m retired now with a 10% tax rate.
Seniors like me DO NOT WANT higher taxes.
Correct. When it was first proposed, it was said “it will never be over 3% of income.” They lied and continue to lie. The biggest lie ever passed—now look where we are; Trillion dollar debt, an ever-expanding administrative state with no end in sight. We are so screwed. Stop SPENDING MONEY WE ONLY PRINT!
Yeah, except in that case, it's a penalty, not tax relief.
Nope...
a ‘simple’ flat tax of 15%, today, becomes 18%, tomorrow, and 20% next month.
Better plan is the FairTax.
But, regardless, tax reform without spending reform is a fool’s game.
There can be no alternative tax scheme until the 16th amendment is fully repealed. If it stays and a new tax is implemented as a replacement, they WILL resuscitate the income tax and run both in tandem.
The flat tax rate should be dependent on age and income.
In today’s economy it should be no more than 10% for anyone over 61 and social security should not be taxed at all.
Anyone with an earning of less than $30k should be exempt in this high inflationary economy. Today $30k is poverty level.
Income over that should be taxed on a tier basis.
Tariffs are way better than another income tax scheme.
Flat tax of 10% for everyone, 15% for corporations. The only deductions would be for charitable donations. Nothing more. No mortgage interest, deductions for children, and so forth.
That would be too easy. I love spending weeks organizing my taxes for the business. So much fun.
So how do you propose to finance things like the military, roads, bridges, and so forth? Or do we just go without each of these?
Raise the floor with which income is taxed. Remove any taxing of Social Security, or at least start reducing the amount of it that can be taxed and lower the rate. But most of all, REDUCE spending.
Would also capture the unreported income.
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