The Lee-Rubio tax blueprint

The Washington Times ^ | March 17, 2015 | Allen West

[Tolerance Sucks Rocks]

Republican Sens. Mike Lee of Utah and Marco Rubio of Florida have released a blueprint for federal tax reform called “The Economic Growth and Family Fairness Tax Plan.” First, we should not embrace the language of progressive socialism in believing tax reform should have as a goal to advance “family fairness.” The plan should simply be entitled “The American Growth and Opportunity Plan.” That said, the Lee-Rubio plan is a great improvement over the current system.

For the individual tax structure, the plan introduces a two-tier system to replace the current seven tax brackets. This plan moves America from a progressive tax structure to a bifurcated flat tax. All income earned up to $75,000 for singles and $150,000 for joint filers would be taxed at 15 percent. All income earned over those thresholds would be taxed at 35 percent. While a two-tiered system moves us closer to a flat tax, the 35 percent bracket could raise the tax burden for households earning less than $200,000 a year, compared to the current system. A top rate of 22 percent to 25 percent would be less burdensome.

The Lee-Rubio plan also proposes to increase the child tax credit to $2,500, up from $1,000. This is designed to eliminate the supposed bias against parents, who not only pay payroll taxes, but also pay to raise children who will eventually pay for future retirees through their own payroll taxes. However, if the child tax credit is to be expanded, the National Center for Policy Analysis (NCPA) recommends making it contingent on parents using it to provide health insurance for their children; or, if the children are otherwise covered, putting aside money in a Health Savings Account for the family’s future medical needs.

[Tolerance Sucks Rocks]

PING!

[hosepipe]

Mike Lee and Marco Rineo.. together..
pegs out my Rinometer.... Rope-a-Dope?

[RedMDer]

Reducing the control and political leverage the IRS has will be a tough tooth to pull.

[Resolute Conservative]

Just because I went to school and worked hard my whole life my wife and I have to pay 20% more than some people? That is pure BS. Make it flat across the board at 15%. If you must have us who worked harder pay more how about 20%? This passes, which it won’t, I will stop working and drive a dozer for a living.

[Steve_Seattle]

I’m retired and my income is about $65,000 a year. If I’m not mistaken, this proposal would increase my tax by more than $3,000 a year.

[Pollster1]

However, if the child tax credit is to be expanded, the National Center for Policy Analysis (NCPA) recommends making it contingent on parents using it to provide health insurance for their children; or, if the children are otherwise covered, putting aside money in a Health Savings Account for the family’s future medical needs.

No! There should be no social engineering in tax policy or in any other federal policies. Taxes should collect revenue, and free Americans should decide how to spend their own money without artificial incentives or penalties. There should be no exceptions to this, not even in a "good cause". Exemptions and deductions also should not phase out. Someone who makes $1B plus, like Bill Gates, should pay 1,000 times as much as someone making "only" $1M, so it's silly to be phasing out deductions too. Simplify the tax code by making it only about collecting revenue.

[navyguy]

35% is very high. I already pay out the wazoo and this would be no better.

Drop it to 25% and I might support it, but as it is I’m getting just a raped under this plan as I am now.

[Georgia Girl 2]

U R kidding me? 35% for $151,000? That’s nuts.

Just get rid of the income tax. Period. These guys just can’t let go of the teat. I don’t care who they are they just can’t conceive of not taxing your income.

I can’t believe Mike Lee has hatched this looney idea. Rubio I am not surprised.

[sheana]

Hubby and I both retired and we hit the ‘rich’ category. No dependents and no write offs, our house is paid for. Wow! They hit us hard.

[RayChuang88]

While it’s a significant improvement, we need something as drastic as what Steve Forbes proposed in 1996: a 17 to 19% flat tax where the only loophole is a very generous initial earned income (wages and pensions) exemption. The result would be tax filings that would make the current 1040 EZ forms look complicated in comparison and could save American taxpayers 75% of the current yearly compliance and economic opportunity costs of the tax code—imagine US$750 billion per year freed up for way more productive economic activities.

[Myrddin]

For $151,000 it is 15% on the first $150,000. It is 35% of the next $1,000. It's called a marginal tax rate. There will be lots of people making pre-tax contributions to reduce the impacts. I've been on both sides of that line in the last few years. In my current 32 hour per week mode, the new plan would be better. At 40 hours per week, the extra income earned would get hammered hard. It might not be worth the effort. Idaho is taking 8% of everything over $100k right now, so I lose 23% from $100k to $150k, then 43% from $150k up. That's just income tax. There is still social security and medicare when takes the percentage over 50%.

[nascarnation]

There’s a HUGE lobby of attorneys and accountants working hard to expand the current 74,000 pages of tax code.

[Myrddin]

My company tracks hours worked by zip code. That resulted in having to file in 3 states this year. Turbo Tax Federal = $40 + 1 free state. 2 more states x $30 = $60. Electronic filing fee $20/state = $60. $160 in software/fees plus time to enter the data. The Nebraska filing refunded $56. Break even for the software/filing cost.

[Georgia Girl 2]

Yeh I didn’t even bother to throw in Medicare and SS. The whole thing is just BS IMO. It stinks. Scrap the income tax. Or just charge everybody the same rate. I don’t think MItt Romney should or Donald Trump should have to pay 35% of their hard earned income to the govt. Its ridiculous. The only good think Bush ever did was the tax cuts and now they are gone.

Before the Bush tax cuts I worked my butt off scrimped and saved and still could not afford to buy a small cabin in the mountains for my dream (yes I dream small) getaway. After the Bush tax cuts all of a sudden I managed to save a hefty down payment and got my place.

The only way the average American can ever truly get ahead is if they get to keep all of the money they make. We need to go back to the sales tax which worked just fine before WWI.

[11th Commandment]

This plan is probably a gillion times better than the current tax scheme; however, it is still an income tax. The problem with the 16th amendment is we give all our income to the government and they give some back. YES, for once, Obama has it right. And now thanks to Chief Justice Roberts, congress has almost unlimited power over its citizens by labeling any new mandate a tax. Time to repeal the 16th amendment and institute the FAIR Tax.

[oldbill]

Flat tax won’t work unless it’s on ALL income - wages, dividends, faux “benefits”, investment income, etc.

Income is income. You spend a wage dollar the same way you spend a dividend dollar. Forbes and all those other guys who limit flat tax on wages only get most of their income from other sources, like dividends, exchanges, company benefits, etc.

And NO deductions. Phase out mortgages over 10 years. Removing the mortgage deduction will bring house prices down and more affordable. They are only high now because most people, especially the wealthy home owners, are getting a taxpayer subsidy of up to 39% on their luxurious mansions, while you live in an apartment.

[Myrddin]

I did much the same. I had my primary residence paid off. The Bush tax cuts provided me extra income, so I purchased a 2nd small house with the intent of making it income property. It is paid off now too. Not income property yet.

[RedMDer]

I’m sure and the larger and more complicated it becomes, the larger of a political weapon it is to be used to coerce people to bend to their will and to punish those that will not.

[Forward the Light Brigade]

Love it! They should do a whole national program called the New Fairness! Show what to do rather than what their against.