Posted on 01/12/2015 6:05:13 AM PST by bestintxas
Under the new GOP Congress, the future looks bright for fundamental tax reform. So Republicans and thinking Democrats should embrace my modest proposal: The 0–10–100 Tax Plan.
“0” is the number of deductions that would be allowed: Zero. The home-mortgage deduction? Gone. Business-dinner write-offs? Kaput. Charitable deductions? Sayonara.
As soon as we permit one exemption, then we must include a second. And then a third. Americans quickly would become freshly mired in the unfathomable bog that governs taxes today. The best way to handle the 73,954-page U.S. Tax Code is to go Nagasaki on it: Every loophole left behind.
“10” is the flat-tax rate on gross income. What did you make in 2014? Send 10 percent to Washington, D.C. Period. See you next year.
The 10 percent rate applies to income, regardless of source. So wages, speaking fees, capital gains, dividends, royalties, stock sales, gifts, and gambling winnings would face a 10 percent tax in the year that the income is received. Estate income would endure a 10 percent death tax, from dollar one. While I know any death tax will annoy my fellow supply-siders, we live in a world of tradeoffs. Oxen must be gored from Left to Right to make this work.
(Excerpt) Read more at nationalreview.com ...
“A FLAT TAX NEVER STAYS FLAT”.
There’s a new session of Congress every 2 years and they always have power under the 16th amendment to tinker with the income tax code.
Since 1861, there have been 5 flat taxes enacted (most unconstitutional and later struck down by the US Supreme Court).
Each of the 5 historical flat taxes were enacted at low rates of 1$ with no deductions. The subsequent sessions made the rates and deductions grow.
This offer of 0-10-100 (obvious borrowing on Cain’s gimmick of 9-9-9) is no solution.
The solution is HR 25 (https://www.govtrack.us/congress/bills/113/hr25/text).
If you love your country and know how important lasting tax reform is to it, study the following:
10% is at least 10 times too much.
So not only are you raising taxes on close to half the people, and a lot of businesses, you're stripping Social Security and Medicare from people who are getting it? Yeah, I'd say your plan has a great chance of passing. </sarcasm>
Go look at a Schedule “C” at irs.gov
There is one place where “gross income” is used, and that is in essence where the cost of goods sold is subtracted from “gross sales”.
That means there is no consideration for rent paid or salaries paid or vehicles used or machinery bought, things the owner probably thought or thinks necessary to conduct his business.
“Income” is a rotten term to use for a business. It is fairly meaningless and noncoherent in its meaning as far as I am concerned. A business owner may be said to have “business income” because of his ownership of the business, but that is more a convenient contraction of terminology.
Suppose I wish to open a business largely identical to yours. You have an old lease on premises where you pay $1000 a month. I cannot find any place to run my business where the rent is less than $2000. a month.
Now that is fine, you had the acumen to obtain your lease earlier than I did. Congratulations.
As things are, if we sold the same amount of stuff with the same number of employees and cars and widget machines, you would be rewarded by $1000 a month in money you didn’t have to spend. As far as I am concerned, you’re entitled to it.
Under the gross income tax proposal though,
I would spend $1000 more in rent, obviously reducing any profit I could pull out of the business. I would also pay the same amount of tax as you since our grosses would be the same. But I would have $1000 less every month from which to pay those taxes. They would be far more punitive.
For the convenience of being able to encapsulate how businesses are taxed in one sentence, dozens and dozens of ripple effects would emanate from this change. I am no more in favor of one-sentence liberal sloganeering any more than I am in favor of one-sentence whatever-this-is sloganeering.
I don’t my business to be able to run inside the brain of Maxine Waters.
This proposal would have massive effects of great complexity, complexities obviously shunned by those who advocate for it because they don’t understand the complexities.
If you like the idea of a flat tax on individuals, that is an entirely different story.
You are right why there is effectively a zero chance for tax reform.
However, IMHO, you have incorrectly identified the cause. No wealthily person, business, or union writes the tax code - Congress does. As long as Congress continues to see the tax code as an effective and invisible way to raise money for reelection they will be walking the halls of power with their hands out. If Congress didn’t have their hands out seeking money for tax exemptions how could the wealthy people, businesses, and unions get a tax break?
You can have some welfare and not have socialism.
Forty years ago, it was considered shameful to be on welfare. It was embarrassing and dishonorable, and even a bit dishonest.
Now, welfare is anything but shameful. It is nearly encouraged. That attitude HAS to be reversed.
Going on welfare has to discouraged. It has to be viewed as a last resort, not a way of life.
No thanks. Income taxes are slavery. The current income tax was supposed to only be a few percent and only “on the rich”. Now look at you, 10% to everybody.
Income taxes are theft.
0-10-100; nine, nine, nine, where have I heard that before?
That's their problem. They should have to live on the income they have, like the rest of us. Cut out the waste and fraud.
All well and good, but as Devil's advocate, welfare would have to be replaced by charity. How much of charity is due to the tax advantages of giving? Let's consider all the unintended consequences before jumping aboard.
You mean the spending levels that added 7.5 trillion to the deficit?
I have no objection to writing off the legitimate costs of doing business and taxing net income. A company car and a weekend hideout for the CEO are NOT legitimate business expenses, for example.
Employ the KISS (Keep It Simple Stupid) principle. Simply tax consumption (retail sales tax) and not income. No deductions, no exemptions. You buy a hamburger at McDonald’s you pay tax. You go to Wal-Mart and buy a coat you pay tax. And so on. Simple and straight forward. No filing on April 15th. No records to keep. No income to report. No IRS involvement in your personal life. Alas, it’s too simple. A pipe dream. The government will never relinquish their control over the people. Oh well.
And who get’s to decide “legitimate”?
If a company decides a jet makes them more responsive to the market, who gets to deny it?
Many folks don’t realize that essentially all taxes, are a tax on consumption.
It is where the funds for every tax are generated.
Why corporations?
Another simple idea. The federal government could simply send a tax bill to each of the states. The amount of taxes owed by each state would be apportioned based on its population just as the number of representatives is determined. It would be up to the various states to decide how to generate the revenue necessary to cover their tax liability. Again, too simple. Feds don’t want to relinquish their control over the people. Feds want to continue their constant social engineering via the IRS.
Their are three ways to balance the budget:
1. Cut spending
2. Raise taxes
3. Both 1 and 2
None of these address the fairness of the tax system. A flat tax is one perception of a fairer system than the current one. Their are two common misconceptions about a flat tax among the lesser informed public.
The first is that the average person’s taxes would go down. This is not only false, it is the exact opposite of reality. The second is that corporations would pay more. This is also the exact opposite of reality.
In fact, a flat tax would reduce the the taxes paid by those in the upper tax brackets, including big corporations. Both are currently paying far more than the proposed flat tax rates.
The one perception that may be correct is that all taxpayers would have some skin in the game instead of the 53% who currently pay taxes versus the 47% who don’t.
A perfect description for the occupation known as "politician"!
What was that Scrooge said about the surplus population? But seriously, most of them will straighten out enough to survive, and few will "die" as we are a charitable people.
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