Posted on 06/01/2006 6:58:55 PM PDT by Angel
The AMT is viewed by many as a bad thing. Yet, consider this: There is wide agreement among economists on the benefits of a federal "flat tax" on income that would apply a uniform rate to every taxpayer and eliminate most current deductions and tax credits. A flat tax would get rid of a large number of economic distortions resulting from the many tax "subsidies" that often benefit narrow interest groups. This is tax "pork," and Congress is as addicted to it as to the ordinary spending kind.
snip . . .
If we wait long enough, and with some continuing degree of inflation, the AMT flat tax eventually will apply to most taxpayers. The AMT will, in effect, have become the federal income tax system. And unlike most other important policy changes, this is one in which Congress need do nothing, although at some point it would probably be desirable to modify details of the current AMT that limit its effectiveness as a flat tax.
(Excerpt) Read more at washingtonpost.com ...
Somebody has to feed the "leviathon," as it would be characterized in the dark corners of libertarianism. Defense, roads, and a host of other stuff are not free, putting aside whether the relatively dumb and ill and disabled, should just be left to their own devices, or even those who were feckless, and get in a jam, like a medical emergency, or a problem in obtaining basic housing and food, including for their kids.
First off, one of the main aims of conservatism should be the choking off and eventual death of the leviathon to its smallest possible level. This is something that doesn't take a libertarian.
Of the things that you mention, defense and roads are the only things that really fall under the federal baliwick, but even including the others, it is incumbent upon us as citizens to be certain that our efforts to fund government do not fall unequally upon the backs of any. There is too much power inherent in the ability to favor one group over another, and to allow envy and greed to dictate policy when "progressive" taxation becomes the method of funding our governmental largess.
I object to the entire idea of income taxes for several reasons, not the least of which is that it imposes a form of economic serfdom/slavery. I am not sure what the best form of taxation is, but I am coming around to the belief that the only fair form would be a consumption tax of some sort, perhaps a national sales tax.
Our current system is highly unfair and unjust, not to mention complicated. It is ridiculous in the extreme that our tax code has spawned an entire industry that is dedicated simply to helping individuals and corporations to figure it out.
FWIW, conventional wisdom among flat tax proponents in the early to mid 70s was that 11% would be more than sufficient.
The code is now 17,000 pages and 5.5 million words.
We should write a new one from scratch limiting it to 25 pages (nice big type, lots of white space) and 7,000 words (hmmm what real successful document is 7,000 words long?)
It is possible for one person to read the tax code. At about 40 minutes a day it could be done in about two and a half years. It would be a pretty serious waste of time. It's a lot easier just to scrap it and start over.
"From each according to his needs....."
That line of thinking is positively Marxist.
Although Steve Forbes pushes the flat tax, his real advantage is simplification, not flatness.
There is nothing particularly simple about the Forbes or any other flat income tax proposal for that matter.
The complexity of any income tax system, regardless the number of tax brackets it contains, is inherent to the definition of income and separating gain (i.e. income) which is taxable from return of one's capital inputs which are not income to be taxed.
Tax Foundation: http://www.taxfoundation.org/blog/show/1629.html
The Congressional Research Service has released an interesting new report, "Flat Tax Proposals and Fundamental Tax Reform: An Overview". Here's the summary:
President George W. Bush has stated that tax reform is one of his top priorities.
He appointed a nine-member bipartisan panel to study the federal tax code, and
November 1, 2005, this panel proposed two alternatives to reform the code including simplification elements. Consequently, the concept of replacing our current income tax system with a “flat-rate tax” has received renewed congressional interest.Although referred to as “flat-rate taxes,” many of the recent proposals go much
further than merely adopting a flat-rate tax structure. Some involve significant
income tax base broadening whereas others entail changing the tax base from income to consumption.Proponents of these tax revisions often maintain that they would simplify the tax
system, make the government less intrusive, and create an environment more
conducive to saving. Critics express concern about the distributional consequences and transitional costs of a dramatic change in the tax system.Most observers believe that the problems and complexities of our current tax system are not primarily related to the number of tax rates but rather stem from difficulties associated with measuring the tax base.
Read the full report here (PDF).
The above PDF report from the Congression Research Service, compares and contrasts the numerous tax reform proposals before the current session of Congress. It is a very informative report, that anyone interested in understanding what is actually being proposed in legislation before Congress today should read. The CRS report has a broad discussion of the various "Flat Tax" and "consumption tax" proposals that have been introduced as bills to be considered for enactment.
The dominant portion of the current tax code is mainly involved with separating income which is taxable from return of one's capital with is not and therein lay the inescapable complexity that is inherent to any income tax system.
I highly recommend everyone to read the Vern Hoven paper on this particular topic and how the Forbes version of a flat income tax would impact the tax preparation industry and there by all businesses that must deal with income taxes what ever there nature.
See:
Flat Tax as Seen by a Tax Preparer
by Vern Hoven
A Special Report by Tax Analysts Tax Notes, Volume 68, No. 6, pp 747-754.
See #29 above.
FWIW, conventional wisdom among flat tax proponents in the early to mid 70s was that 11% would be more than sufficient.
Probably true, if one were designed with no standard deductions or personal exemptions. Unfortunately that would only replace the income tax half of what hits the average household's wages. It would do nothing to relieve the 15% hit on wages that the SS/Medicare taxes hit nearly everyone with as well.
That other problem with the 11% tax rate, is that there is no "Flat Tax" proposal before Congress, nor ever has been, which doesn't have a standard deduction/personal exemption scheme. Thus all their rates are much higher for having that built in progressive structure in them.
So-called 'fair' tax spam to be posted in 5...4...3...2...
I see you have a problem with opposing views and alternatives to the income tax system.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Why in the world should higher CONFISCATION of someone else's income be considered 'social justice'?
Great incentive for increased education, higher work skills, working longer (and overtime) hours, and taking more risk (as entrepreneurs) don't you think? Yep, the increase in the penalty/punishment for working longer, harder, smarter, and/or achieving more--or increasing your educational/professional skill levels is 'social justice'. (rolling-eyes)
So high income earners should pay more? Guess what, THEY DO!! So you think they should pay a higher RATE too?
funny - for ex: sKerry/Heinz, with all the loopholes, paid a lower rate that joe-sixpack.
FAIR TAX illuminates the loop holes...that's why it's called FAIR. Oh, and the super wealthy will only being paying the SAME rate as the not so wealthy - it's called FAIR for all...but the Trumps and Hienz's don't want to see their loop holes close up...and then have to pay the same rate everyone else does... They get the SAME prebate, and then pay the SAME tax rate. That's what FAIR means. ( no longer the unfair myriad poopholes - oops, Freudian slip?)
But we expect a lot of caterwauling from those who have been used to swimming through the loop holes
As Hillary so elqouently stated in her San Francisco speech a couple of years ago,
"We're going to take things away from you on behalf of the common good." -Hillary Rodham Clinton, 6/28/04
Yep, real 'social justice' there. (s/off)
"It is a social justice position"
You must have had a great time in college studying Karl Marx.
As always, that was the political tug at the heartstrings of the public and was strictly for public consumption. The real reason was to get at some tax deductions that businesses were taking, specifically depreciation on capital equipment. They also restricted the time over which those assets could be depreciated.
Combined with a strong dollar, the AMT had the effect of putting many US manufacturers out of business. The Germans and Japanese quickly moved in with equipment at about 50% of what American equipment was selling for. That, plus the obstinacy of the unions, meant bye bye for lots of US manufacturing.
At the root of it all is taxing income and the myriad of hoops that must be jumped through to comply or avoid. The NRST is a complete sea change from that Marx inspired income tax. That is the direction we should go.
...1.
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