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During the presidential election, many candidates in the Republican Party promised to enact a fair and such a simple tax system that it would fit on the back of a post card. Republicans, like many Libertarians, like to propose a flat-rate tax where everyone pays the same percentage of their income and that would be considered the “fairest way of taxation.”

    The ideology of a flat-rate tax may seem perfect on the surface to many people, but when you look at it a little deeper and examine some statistics, you will find that a flat-rate tax is another scam that benefits the rich who will pay less taxes and will only hurts working-class people.

    If you haven’t noticed already, America has the highest, and I mean highest, wealth inequality in the world. In 2007, the richest 1% of Americans owned about 35% of the nation wealth, and I can guarantee that in 2013, it is much higher. If you were to add the next richest 4% of Americans and take the wealth of the richest 5% of Americans, the amount of the nation’s wealth that they own climbs to about 62%.


    From an ethical viewpoint, one must ask themselves, do the top 5% of Americans work so hard that they deserve 62% of the nation’s wealth? If all of the workers that they hired who created that wealth suddenly left, would those 5% of Americans be just as rich?

    The reason why I explain this is that a flat-rate tax would work well if everyone made the same-amount or at least close to the same amount of income. However, since America has the highest wealth inequality in the world, our tax structure should reflect that.

    We all hear about the deficit and ask what went wrong. What went wrong was this: We put in policies that allowed the wealthy to exploit the working-class and force so many into poverty. We cut taxes on the wealthy and as the working-class got poorer, we saw less taxable income from them as well.

    The reason why a progressive tax structure works best is that it bases off someone’s ability to pay. For somebody that makes $25,000 dollars a year compared to someone that makes a million dollars, a tax rate at 10% is more damaging to their ability to survive off their income than someone who makes a million dollars. For example, after taxes (with a 10% tax rate), it is hard to survive on $22,500 compared to $900,000. (I created an example below)

An effective way would to tax those who make over 60% of the nation’s wealth pay based of those statistics, shouldn’t the people that own 60% of the wealth, pay 60% of the taxes? Even with a progressive tax structure, the wealthy can still survive and have money left over to invest.

       In the image above, I gave the example of tax-rate of 0% on the working-class person that makes $25,000 dollars a year and a 50% tax rate on someone who makes $1,000,000 dollars a year. The person who makes $25,000 year may be able to survive and the person who makes $1,000,000 dollars, and pays 50% in taxes is still able to survive off of $500,000 comfortably.

    Middle-class and working-class people are what stimulate economy because many are forced to spend the majority of their income on needs such as food and housing.  Allowing them to keep more of their income, allows them to spend more which will increase the economy and the nation’s GDP.

    Realizing the wealth inequality and the fact that middle-class and working-class people are what stimulate the economy, it should be at no shock that as wealth-inequality increases, the strength of the economy weakens.

    Until Corporations and their CEOs pay their workers a living wage, and give up part of their income, they should be responsible for making up the taxes that many people are no longer able to pay. Because many companies like Walmart, pay such a low-wage that the taxpayers are forced to subsidize Walmart’s greed through welfare, and then those big-shot CEOs go on TV and complain that they have to pay taxes and criticize those who rely on social services like welfare to survive. The average Walmart cost taxpayers $400,000 per store.

    When it comes to the idea of a flat-rate tax structure, you must ask yourself. Is it fair for someone who makes less than 1% of the nation’s wealth to pay the same amount in taxes than someone who makes 40% of the nation’s wealth? My answer is simply no.

Originally posted to Alex Forgue on Tue May 14, 2013 at 09:23 AM PDT.

Also republished by Daily Kos Classics and Community Spotlight.

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Comment Preferences

  •  Flat Rate taxes are as Unfair as Sin Taxes (4+ / 0-)

    on alcohol and cigarettes.

    Yet, many Kossacks do support these REGRESSIVE sin taxes that exacerbate income and wealth inequality.

    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

    by PatriciaVa on Tue May 14, 2013 at 09:45:46 AM PDT

    •  You need income. You don't need alcohol. (15+ / 0-)

      Same reason we generally don't have sales taxes on unprepared food, but do have tax on the bill when you eat out.

      •  You don't need a 4Star Meal for Dinner (4+ / 0-)

        Yet, I don't see The Four Seasons charging a 50% excise tax, as a struggling member of the working class would have to pay for cigarettes.

        Let's have The Four Seasons and Marlboro compete on a level playing field.

        Regrettably, many of you would rather have the struggling family in East LA shoulder a higher tax burden than a wealthy American.

        And I say all this as a non-smoker (I did smoke for about five years in my 20s, when I was working as an expat in Mexico City) who occasionally dines at high-end restaurants.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

        by PatriciaVa on Tue May 14, 2013 at 10:35:27 AM PDT

        [ Parent ]

        •  Negative externalities (13+ / 0-)

          Smoking passes on costs to society (YOUR choosing to smoke affects MY health); high taxes make the person choosing to make pay more of the total costs. Going out for a nice meal doesn't have the same costs to society.

          It's the same reason we should have a carbon tax - make the person or company choosing to do X pay more of the actual costs of X.

          •  Smokers cost less than NonSmokers (4+ / 0-)

            Recent studies show that smokers die far earlier and consume less health care dollars than NonSmokers.  And this is before accounting for less pension/ss benefits.

            The truth is, smokers are easy marks for too many politicians, who refuse to tax the really wealthy.  And by really wealthy I mean the likes of Ellison and Buffet.

            Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

            by PatriciaVa on Tue May 14, 2013 at 10:47:52 AM PDT

            [ Parent ]

            •  And it's so much easier for them (3+ / 0-)
              Recommended by:
              PatriciaVa, Chitownliberal7, DFWmom

              to tax smokers since so many of us are poor and lower class.   I would imagine that if most smokers were rich, cigarettes wouldn't be taxed at all.

              Only the rich and well connected have advocates.

              There already is class warfare in America. Unfortunately, the rich are winning.

              by Puddytat on Tue May 14, 2013 at 10:04:35 PM PDT

              [ Parent ]

            •  Hmmm...those 'countless studies' sound bogus (0+ / 0-)

              Because it's looking at a "dollars out" and doesn't consider any  "dollars in" metric, I suspect.

              If you are killed by an auto accident at age 55, society will be spared any long-term health care costs, true. Society will be also denied your income and any associated taxes, as well as the benefits of any unpaid labor you contribute in retirement (remember, GDP doesn't account for everything, and seniors often do a lot of volunteer community work plus family assisstance chores).

              With alcohol, we know that the social costs are nearly double the amount from alcohol SALES (not taxes, SALES). Smoking probably isn't as great a burden as alcohol but I would think its true impact is still negative.

          •  I used to smoke... (6+ / 0-)

            another engineer I worked with went off on me one day saying he didn't think it was fair that he paid higher health care cost because I smoked (outside in the cold no where near him).  

            I let it go for a couple of days and then, one day he was talking about his kids going on a mountain biking expedition and showed me a video of the wild riding they did down these really steep cliff paths.  I said, has any of your kids ever fell and hurt themselves doing that?  He proudly told me about broken extremities and blood and hospital visits like they were badges of honor.

            I said, I do not ride mountain bikes so why should I have to pay for your kids recreation?  Are your supplies already taxed at 200% or 300% to pay for injuries like that?  I have never been to the hospital or even the doctor's office because of smoking and yet you say I drive up your health care costs?

            He apologized and shut up about my smoking from that day forward.

            "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

            by Buckeye Nut Schell on Tue May 14, 2013 at 03:31:49 PM PDT

            [ Parent ]

            •  However, activities like biking are excellent (0+ / 0-)

              for overall health. And for every broken bone there is a long-deferred heart attack, etc.  Smoking, on the other hand, does nothing good ever for anyone. So in my opinion that's not a great analogy.

              Gentlemen, you can't fight in here! This is the War Room!

              by bigtimecynic on Wed May 15, 2013 at 06:57:33 AM PDT

              [ Parent ]

              •  Also (2+ / 0-)
                Recommended by:
                JerryNA, socindemsclothing

                Smoking and mountain biking may both affect your health, but YOUR biking doesn't give ME cancer.

                •  MY smoking doesn't give YOU cancer either... (2+ / 0-)
                  Recommended by:
                  PaloAltoPixie, Praxical

                  I do not even know you, never met you and there is no way MY smoking affects you in any way.

                  I quit in Novenber of 2011 because I agree that it is a nasty habit but the second hand smoke stuff that people site is way over the top.

                  If you live with a smoker who smokes around you then you are at an increased risk.  But occasionally coming into contact with smoke will not do you any significant harm (unless you have an allergy which peanuts could do the same thing).

                  You are around exhaust fumes all the time which are way more hazardous, you are around chemical sprays like insecticides which are way more hazardous all of the time.  You are around dusts that contain toxins all the time.  Get off the high horse about a smokers causing you cancer.  

                  I was standing outside a restaurant, well away for the door, in Indiana and I saw a nicely dressed lady walking hand in jand with a little 3-4 year old through a busy mall parking lot.  When she got near where I was standing, she covered the little girl's mouth and nose and looked at me with a mean glance.  I was twenty feet from her at least.  She had walked by several running vehicles whose exhaust was a few feet from this little girl's face and it was no big deal.  I bet they have cooked hotdogs by a campfire before and the smoke probably choked the little girl.  But for her to see a smoker, twenty feet away, she was appalled.

                  Smokers are people and you are not better than them.  There are rude people who do not respect other people's rights in both groups.  You have no right to look down on peole and you have no right to say my smoking gives you cancer.  It is rude and it is wrong.

                  "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

                  by Buckeye Nut Schell on Wed May 15, 2013 at 08:09:50 AM PDT

                  [ Parent ]

                  •  Sorry, but the fact of the matter is (1+ / 0-)
                    Recommended by:
                    Gordob

                    smokers smell bad.  Maybe you burned your nose out with all your smoking and can't tell anymore, but smokers smell really, really stomach-turningly bad.  I don't know why there aren't any anti-smoking commercials about that--give the kid that smokes the nickname "Stinky" and very few of the other kids will think smoking is cool and want to try it themselves.  

                    When everyone smoked in the bad old days, nobody realized just how bad cigarette smoke, especially old cigarette smoke in someone's clothing and hair, smelled.  But not a lot of people smoke these days, and the stink surrounding a smoker, even when he or she hasn't got one lit up, is a very unpleasant miasma that is going to get a smoker some dirty looks and people walking around them to avoid the smell.  If their cigarette smoke gets on your clothes, you'll catch whiffs all day.  If a smoker hugs you, it's worse: the stink gets all over you.

                    My parents were smokers when I was a kid, and they destroyed my lungs: I've had asthma and been generally sickly my whole life.  They quit when I was in my teens but by then it was too late.  My husband will have a tiny cold for 3 or 4 days; I'll catch it and it will invariably develop into a raging chest cold that lasts a month or more.  Smokers are nausea-inducing poison factories and I don't want them anywhere near me.

                    •  I heartily agree. (0+ / 0-)

                      Both my parents smoked. My Dad quit cold turkey from a 2 1/2 pack a day habit because it was supposed to help his ulcers. I was in high school at the time.

                      My Mom didn't quit smoking until two years before her death at age 56.

                      When my niece was an infant my Mom thought nothing of lighting up a cigarette while she was in her lap. (My sister and her husband both smoked) I'm positive my sister and I were subjected to the same thing.

                      As the only non-smoker in the family, in my head I was thinking, if that baby was mine, you would not be allowed near him or her with a cigarette or even smoke in the house.

                      My niece and I both have asthma problems. My niece's father ended up dying of lung cancer at 58, smoking right to the last minute. My sister died at age 62 and had COPD and heart disease. She smoked to the last day. I had a first cousin who meant much more to me than that relationship might infer. She died of COPD at age 75, smoking to the last day (not good with pure oxygen around). Her sister, who I hardly knew, died a few years earlier of lung cancer.

                      The money thing is only part of the story. The suffering of those who die and those who watch them die should never be ignored.

              •  The point was... (2+ / 0-)
                Recommended by:
                DFWmom, 18038

                My smoking was not impacting his health care costs.  I was not using my insurance while he was.  I was paying an exorbitant amount of taxes to cover the additional health risks where he wasn't.  

                It may be socially acceptable to bash smokers but that doesn't make it right.

                "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

                by Buckeye Nut Schell on Wed May 15, 2013 at 07:48:57 AM PDT

                [ Parent ]

            •  After nearly 30 years of being a smoker (1+ / 0-)
              Recommended by:
              kobaltkween

              A recent chest X-ray found my lungs to be pink.

              I'd always been told they'd turn black from smoking.

          •  Sent off to Top Comments. (0+ / 0-)

            I must end each day with a dose of Top Comments. A TC diary is a must for developing the calmness I need to get the required eight hours of sleep. - cohenzee

            by cohenzee on Tue May 14, 2013 at 04:28:15 PM PDT

            [ Parent ]

          •  EXCEPT.. (1+ / 0-)
            Recommended by:
            kobaltkween

            NOBODY "chooses" to smoke, and I am pretty sure that smoking is banned in many public places, so its likely that NOBODY'S smoking affects YOUR health.  It does affect the cost of healthcare.  But, back to the basic argument, a stupid teenager may choose to try smoking for any number of reasons...nobody "chooses" any addiction.  That is preposterous!  But your right, it seems totally logical to tax people who already have numerous personal health problems.  Seems legit...if you have no basic understanding of why people smoke, how the majority of those who do are poor, or how addiction in general works.  

        •  That doesn't represent a major incremental (2+ / 0-)
          Recommended by:
          JerryNA, Panama Pete

          cost to society. Invalid argument.

          Voting is the means by which the public is distracted from the realities of power and its exercise.

          by Anne Elk on Tue May 14, 2013 at 03:04:40 PM PDT

          [ Parent ]

        •  Nobody's forcing anyone to smoke (3+ / 0-)
          Recommended by:
          Calamity Jean, caul, JerryNA

          If I wasn't making much money, I can think of cheaper hobbies than cigarettes.

          If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

          by Major Kong on Tue May 14, 2013 at 07:29:37 PM PDT

          [ Parent ]

        •  This is debatable (0+ / 0-)

          There are costs to society of obesity from too much availability of prepared foods.  

          There are costs to society of search and rescue missions for skiers.

          And costs to society for podiatry care for people who wear flip flops.

          And costs to society for people who SIT AT A DESK ALL DAY WORKING.

          And, costs to society of drinking coffee, tea, fruit juice and cokes.

          It's like the ogre who lives under the bridge.  Each time a person chooses to spend the money that they worked to earn, there is a "fee" for exercising their free choice, if the Ogre decides their choice is unworthy.  

          There is great danger in allowing the government to decide what you "need".   When I was little, and the Blue Laws were in effect, whole aisles were roped off in the stores, and the government might decide you didn't need baby bottles, or safety pins for diapers.    What the government thinks you need, and what you think you need, may be two entirely different things.

          •  All of which is no reason... (0+ / 0-)

            To take the typical libertarian response and throw science and morality both out the window and say all "free choices" are equivalent.  Some activities do, objectively speaking, shorten lifespans signiiicantly and measurably and do impose large costs upon others. Others do so to a much lesser extent if not at all, and some actually are a net positive.

            We CAN and SHOULD make such judgements and discriminations, both personally and nationally.

      •  Some of us do pay tax on groceries. (0+ / 0-)

        Conservatism is an obsession with the past ... with little regard for the future.

        by RUNDOWN on Tue May 14, 2013 at 05:07:17 PM PDT

        [ Parent ]

      •  so why target cigs and alcohol? (0+ / 0-)

        why not a national sales tax on everything?  Why not tax soft drinks and potato chips?  

        Short answer:  everyone drinks soft drinks and everyone eats chips...and everyone is okay with taxing cigarette smokers and beer drinkers.  They "deserve to be taxed."

        Everyone wants their services...and everyone wants somebody else to pay for them.

        _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

        by Keith930 on Tue May 14, 2013 at 08:18:46 PM PDT

        [ Parent ]

    •  There is a very good rationale (2+ / 0-)
      Recommended by:
      JerryNA, Panama Pete

      for taxing things that create a significant cost burden to society. Alcohol and tobacco are excellent examples of that. They both cost us collectively a lot of money. It's only fair that we try to recoup some of the cost. This type of tax is most definitely not regressive.

      Voting is the means by which the public is distracted from the realities of power and its exercise.

      by Anne Elk on Tue May 14, 2013 at 03:03:59 PM PDT

      [ Parent ]

      •  Sure it is... (2+ / 0-)
        Recommended by:
        Tim DeLaney, unfangus

        Guns cost our society more than that but they are not taxed that way.  Alcohol is protected by the constitution in the 21st amendment.

        Sin taxes target the poor disporportionately.  It is therefore regressive.  If something is legal, it should not be given a sin tax.  If it is a sin, then outlaw it.  You see how effective prohibition was.  

        This is just a way of injecting religious morality into the law and making money off poor people to boot.

        "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

        by Buckeye Nut Schell on Tue May 14, 2013 at 03:43:02 PM PDT

        [ Parent ]

      •  Yes (1+ / 0-)
        Recommended by:
        happy camper

        By taxing certain items, we can keep the Poor people from using them.  There are so many poor people, that all of society benefits when we can control the behavior of Poor people.  

        And, by using taxes to control these items, that means that the Rich people are not inconvenienced.  While it is  prohibited for the Poor people due to cost, it is not even noticed by the Rich people.

        And, that is the society that we want?   Right?   Poor people under our thumb, and Rich people doing what they want.   Poor people cost society so much already, right?   We have to stop them costing us more.

        Not regressive at all.

        •  Some might say (0+ / 0-)

          that in many ways this is exactly how much of American society (and politics) already works.  Sort of like the monumental failure of Republican governors drug-testing welfare recipients in a couple of states.  Poor people under the thumb of the government, because they are poor, and therefore, must be deviant.  

          It is a ludicrous argument to begin with, any rational thinking person (like yourself) already knows that poverty never prevented anyone from addiction, it in fact, it lends to it.    

    •  The purpose of sin taxes isn't to raise (4+ / 0-)
      Recommended by:
      JerryNA, Panama Pete, caul, leftywright

      revenue, it's to discourage undesirable behavior.  

    •  I support a kind of flat tax... (1+ / 0-)
      Recommended by:
      Leftcenterlibertarian

      I believe that there should be a flat tax of 30% for everyone with only one deduction... the poverty level.

      This flat tax should include the social security and medicare taxes and should not be in addition to.

      We should not tax poor people... period.

      If we taxed everyone thirty percent on all income including capital gains and investments with no deductions except the poverty level, then someone making the poverty level or below would pay nothing (or even pay a negative tax to subsidize their income like the EIC).

      Let's say the poverty level was $25,000 / year for a single person.

      If a single person made $35,000, they would pay $3,000 in taxes (less than 9%).  If someone made $45,000, they would pay $6,000 (13.3%).  If someone made $75,000, they would pay $15,000 or 20%.  As a person approaches infinite income, they approach 30% total taxes.

      Keep it simple.  There are some issues that would have to be worked out but overall, I think it would be fair.

      "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

      by Buckeye Nut Schell on Tue May 14, 2013 at 03:23:30 PM PDT

      [ Parent ]

      •  Disagree... (8+ / 0-)

        ...because the complexity of the tax code is not caused by multiple tax brackets.  It is caused by all the deductions, tax credits, etc that go into determining how much of your income those tax brackets apply to.

        Tax simplification doesn't mean eliminating tax brackets.  It does mean eliminating deductions and tax credits.

        So why not make income below, say, 150% of the poverty line tax exempt?  Then, perhaps, a 10% bracket up to 400% of poverty level, a 20% bracket up to 800% of poverty level, and so on.  Perhaps peaking out at a 50% bracket for those making over, perhaps, $5 million.

        That would be fair.  And it would also be simple.

        Political Compass: -6.75, -3.08

        by TexasTom on Wed May 15, 2013 at 06:10:06 AM PDT

        [ Parent ]

        •  Yep (2+ / 0-)
          Recommended by:
          TexasTom, JerryNA

          The progressive nature of the income tax is uncomplicated.  There's a chart! You don't even have to do the math (and this if you're not doing your taxes on a computer in the first place).  Determining your taxable income is hard, determining the amount of tax on a given amount of taxable income is trivial, even if we added 30 more brackets.

        •  Exactly. The incremental tax bracket system works. (6+ / 0-)

          What doesn't work is the complicated system of deductions and credits, and the absurd fact that investment income is taxed more lightly than wages from actual work.

          Gentlemen, you can't fight in here! This is the War Room!

          by bigtimecynic on Wed May 15, 2013 at 07:06:42 AM PDT

          [ Parent ]

        •  Or (see below also) expand the zero bracket (0+ / 0-)

          ...to include 51% of Americans.

          This is supposed to be a democracy, after all.

          "You've got that eternal idiotic idea that if anarchy came it would come from the poor. Why should it? The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all." -- "The Man Who Was Thursday"

          by tallen387 on Tue Feb 24, 2015 at 11:07:35 AM PST

          [ Parent ]

      •  add a different word (0+ / 0-)

        30% of total GROSS worth. to include market value of everything a person owns. wages, real estate, stocks, bonds, hedge funds, insurance policies, every investment.
        AND offshore account, international investment.

        of course every country would have to agree, since tax havens woud have to give up being tax havens.

        every financial entity in the world would have to comply.

        good lord, heads would explode - sounds way too much like that dreaded one worlder stuff or even worse - socialism.  can't have that! like the cowboy with his gun, avoiding taxes is the 'merkin way".

      •  Wont stop or reverse income disparity (0+ / 0-)

        Even with your tweaks.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 15, 2013 at 01:57:08 PM PDT

        [ Parent ]

    •  I support those taxes IF (0+ / 0-)

      the revenue from them is used to treat the damage and problems that the "sins" cause.  Use cigarette taxes for medical care, and I'm happy. Use it for funding highways, and I'm NOT happy.

    •  Sales taxes are even worse. (1+ / 0-)
      Recommended by:
      debocracy

      Most places exclude food and prescribed medications from sales taxes, but there are many other necessities that the poor pay tax on, including clothes, cleaning and hygeine products, and OTC meds.  For the very wealthy, even the tax on a luxury car doesn't take as great a bite compared to means to pay as these items do for the very poor.

      If anyone questions whether flat rate taxes are fair, they need only look at who the main proponents of such a tax are.  The very rich don't care about complex tax codes - they don't fill out their own tax forms.

      BTW, I'm pretty sure that there is a strong correlation, but this piece equates accumulated wealth with income without doing anything to explain a correlation.

    •  Sin taxes (0+ / 0-)

      Especially the kind of cigarettes are designed to target the poor.  Poor people smoke cigarettes at a larger percentage than all other economic groups.  And they do not have the resources of other economic groups to quit smoking.  

      Many people view smoking as some sort of character flaw.  This is wrong headed.  Most smokers are addicted to the chemicals found in tobacco or to the act itself.  I will be in favor in even higher cigarette taxes if smoking were looked at as the addiction and disease it is.  Until then, not so much.

  •  Couple of problems I see (1+ / 0-)
    Recommended by:
    Leftcenterlibertarian

    You're conflating wealth and income which are different things. If you own a factory worth $10 million that creates a net profit of $500k per year you have $10 million in wealth and $500k in income.

    Another issue is that flat tax supporters generally include a floor for the tax, don't they? So if the floor is $25k that low income earner would pay no tax. Also, I'd really like to see an analysis of what happens if we include Medicare and SS tax in a flat tax, with a floor. That could actually create a simple system that's completely fair and taxes higher earners appropriately.

    There's a difference between a responsible gun owner and one that's been lucky so far.

    by BeerNotWar on Tue May 14, 2013 at 10:01:01 AM PDT

    •  I designed a modified flat tax a few years ago (13+ / 0-)

      It got zero republican support - I could not get a single person on the right to agree to it.

      Why? It had a floor (as you mentioned), replaced ALL federal taxes (not just income tax), and treated ALL income equally.

      Of course, as soon as they hear that last bit the answer is "absolutely not". Gotta have preferential treatment for unearned income...

      •  Takes the wind out of their sails, eh? (4+ / 0-)

        That's why this plan is perfect. To the Republicans you say, "Oh, you want a simple, fair, flat tax system? How about a system that is actually all of those things?" I forgot to mention that it should also treat all income identically: dividends, interest, capital gains would all be taxed the same. As well as corporate income. No Republican would ever agree to this and you can end any discussion of a flat tax.

        One factor that compels my interest in a flat tax is this: fairness. A progressive system just feels unfair to people and they may have a point. A percentage is naturally progressive in the sense that it takes more from those who earn more. But making the percentage itself increase on higher marginal earnings just rubs people the wrong way. A sense of unfairness is a major motivator for people and I really think taking that away could make our politics a lot more sane.

        There's a difference between a responsible gun owner and one that's been lucky so far.

        by BeerNotWar on Tue May 14, 2013 at 10:26:28 AM PDT

        [ Parent ]

        •  I actually hadn't included corporate taxes (2+ / 0-)
          Recommended by:
          caul, Leftcenterlibertarian

          Since I was just looking at personal taxes. I replaced the income tax and got rid of the estate tax (another thing the right should love, yes?) and the employee share of FICA.

          Very simple formula:

          1) Add up all of your income
          2) Subtract the personal deduction
          3) Multiply by X%
          4) That's what you owe!

          I had the personal deduction starting somewhere between $30-$50k (double that for a married couple) and indexing to inflation, and the tax rate set to an initial 35%, but I haven't actually run the numbers to see what those values would need to be in order to bring in the same amount of income.

          I also considered an additional rule that the tax rate cannot be increased above 35%, and cannot be decreased while we're running a deficit.

          Of course, with the large personal deduction this probably end up being a lot more progressive than what we currently have!

          •  Estate taxes are a Transfer tax, not income tax (4+ / 0-)
            Recommended by:
            Anne Elk, YucatanMan, caul, Tom Anderson

            My Karma just ran over your Dogma

            by FoundingFatherDAR on Tue May 14, 2013 at 10:55:14 AM PDT

            [ Parent ]

          •  I've had a similar idea for some time (3+ / 0-)
            Recommended by:
            JerryNA, peregrine kate, ozsea1

            Except mine is perhaps a bit more complicated.

            I would make the personal deduction some multiple (2x?) of the poverty line for the size of the family. Then, the "X%" you have would be a sliding scale keyed to how much excess income you have above the personal deduction.

            Let's say the personal deduction was twice (2X) the poverty line.

            Then for income between 2X and, say 3X the poverty line, you'd pay 10% tax

            For taxable income >3X to 5X: 20%

            For taxable income >5X to 7X: 40%

            For taxable income >7X: 60%

            Current poverty line for a family of three is $19,530, so 2X that is $39,060 and

            3X is $58,590
            5X is $97,650
            7X is $136,710

            So, a 3-person family earning $30K would have no taxable income and would pay zero income tax.

            Such a family earning $50,000 would have taxable income of $50,000-$39,060 = $10,940 and would pay 10% = $1,094,  an effective tax rate of 2.2%.

            Earning $80,000 would pay:

            $80,000-$39,060 = $40,940 taxable income. $19,530 of that falls within the 2X to 3X interval and would be taxed at 10% = $1,904. The remaining part ($40940-$19530) falls within the 3X to 5X part and would be taxed at 20%: $40940-$19530 = $21,410 x 0.2 = $4,282. Total tax is $1,904+$4,282 = $6,186, an effective tax rate of 7.7%.

            Earning $150,000 would pay:

            $150K-$39,060 = $110,940 taxable income.

            $19,530 of that falls into the 2X to 3X interval and would be taxed at 10% = $1,904.

            $39,060 of that falls into the 3X to 5X interval and would be taxed at 20% = $7,812.

            The remaining $53,350 falls into the 5X to 7X interval and would be taxed at 40% = $20,940.

            The total tax would be $30,656, for a total effective tax rate of 20%.

            Earning $300,000 would pay:

            $300K-$39,060 = $260,940.

            $19,530 of that falls into the 2X to 3X interval and would be taxed at 10% = $1,904.

            $39,060 of that falls into the 3X to 5X interval and would be taxed at 20% = $7,812.

            $39,060 of that falls into the 5X to 7X interval and would be taxed at 40% = $15,624.

            The remainder ($163,290) falls into the >7X interval and would be taxed at 60% = $97,974.

            Total tax owed on $300K income = $123,314, an effective tax rate of 41%

            And finally, earning $1,000,000 would pay:

            $1MM-$39,060 = $960,940.

            $19,530 of that falls into the 2X to 3X interval and would be taxed at 10% = $1,904.

            $39,060 of that falls into the 3X to 5X interval and would be taxed at 20% = $7,812.

            $39,060 of that falls into the 5X to 7X interval and would be taxed at 40% = $15,624.

            The remainder ($863,290) falls into the >7X interval and would be taxed at 60% = $517,974.

            Total tax owed on $1MM income = $544,214, an effective tax rate of 54%

            Although a bit more complicated,this respects the fact that those earning higher and higher incomes relative to the poverty rate have much higher disposable incomes than those living close to the poverty line, and consequently not only should pay more in tax (as even a simple flat tax would do) but a higher percentage of that disposable income.  

            Of course, one would have to do some statistical runs to target the percentages to revenue goals, but doing something like this would provide huge benefits to the working class while ensuring that those higher income earners (such as myself) who have benefited handsomely from our economic and capital system pay what they can afford.

            •  No upper brackets? (0+ / 0-)

              The rich never paid an effective rate over 39%. You propose taxing them at 54% effective, OUCh...

              .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

              by Roger Fox on Wed May 15, 2013 at 02:42:44 PM PDT

              [ Parent ]

              •  A tear might fall (1+ / 0-)
                Recommended by:
                aguadito

                if I could somehow convince myself that someone earning $1MM before taxes with after tax take-home pay of ~$456K was...er...inconvenienced.

                But I don't think that'll happen.

                My proposal, which is of course open for revision, is designed to increase taxes paid by the relatively wealthy and the wealthy.  

                I make a pretty good income (~$150K).  If this plan were instituted my take-home pay would be reduced by 7 percent.  Not a bad deal for a fairer tax rate.

                •  No upper brackets? (0+ / 0-)

                  1932 brackets, starting at the 1million break, adjusted for inflation

                  36.0% $982,684
                  $1,015,441
                  37.0% $1,015,441
                  $1,048,197
                  38.0% $1,048,197
                  $1,080,953
                  39.0% $1,080,953
                  $1,113,709
                  40.0% $1,113,709
                  $1,146,465
                  41.0% $1,146,465
                  $1,179,221
                  42.0% $1,179,221
                  $1,211,978
                  43.0% $1,211,978
                  $1,244,734
                  44.0% $1,244,734
                  $1,277,490
                  45.0% $1,277,490
                  $1,310,246
                  46.0% $1,310,246
                  $1,343,002
                  47.0% $1,343,002
                  $1,375,758
                  48.0% $1,375,758
                  $1,408,514
                  49.0% $1,408,514
                  $1,441,271
                  50.0% $1,441,271
                  $1,474,027
                  51.0% $1,474,027
                  $1,506,783
                  52.0% $1,506,783
                  $1,539,539
                  53.0% $1,539,539
                  $1,572,295
                  54.0% $1,572,295
                  $1,605,051
                  55.0% $1,605,051
                  $1,637,807
                  56.0% $1,637,807
                  $2,456,711
                  57.0% $2,456,711
                  $3,275,615
                  58.0% $3,275,615
                  $4,913,422
                  59.0% $4,913,422
                  $6,551,230
                  60.0% $6,551,230
                  $8,189,037
                  61.0% $8,189,037
                  $12,283,556
                  62.0%
                  $12,283,556 $16,378,075
                  63.0%
                  $16,378,075

                  .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                  by Roger Fox on Thu May 16, 2013 at 02:47:46 PM PDT

                  [ Parent ]

        •  There is a problem with this approach: (8+ / 0-)
          One factor that compels my interest in a flat tax is this: fairness. A progressive system just feels unfair to people and they may have a point.
          The problem is simple. A flat tax is bad for the country. It is bad for the overwhelming majority of citizens.

          Here is the real problem: When wealth grows, so does income. When income exceeds that amount that can be spent on consumer goods and services, it can only be used for two things: increasing one's wealth even more or philanthropy.

          Bill Gates and Warren Buffett have spearheaded a movement to induce the obscenely wealthy to pledge to give away at least half their wealth during their lifetime of upon their death. Participation among the Forbes 400 is pathetic.  

          Take the Walton heirs as an example. Each of the four major heirs collects dividends in the range of $700 million annually. They became this wealthy by winning the sperm lottery. Unless they take to philanthropy in a big way (no indication of that yet), they are destined to become wealthier every year at an ever-increasing rate because they cannot possibly spend that income.

          What do they do with that income? Who knows? A luxury hotel here, an office building there--pretty soon they, and people like them, will own everything. And a flat rate tax would help that happen. Oh, and don't forget to repeal the estate tax so it can happen more dramatically.

          The diarist is dead right. I don't care if you call it "fair". A flat tax would be terrible for the country and for the vast majority of its citizens.

          Note to Boehner and McConnell: "You don't need a weatherman to know which way the wind blows." --Bob Dylan-- (-7.25, -6.21)

          by Tim DeLaney on Tue May 14, 2013 at 05:19:58 PM PDT

          [ Parent ]

          •  I don't understand why it's terrible (0+ / 0-)

            I disagree with a comment up thread that taxes are intended to encourage behaviors... they may have become that, but I don't think that was the original intent and I would suggest we move in a different direction.

            Taxes should fund the needs of government.  One thing the libertarians have right (and there aren't many in the extreme ideology) is that government shouldn't pick winners and losers.

            A simple flat tax scheme, with a floor (1x or 2x poverty level?) is a fair way to fund government.  We all use government services.  We should all pay.  If the rate is 20% and I make $100K per year and you make $1M then my share is $20K and yours is $200K.

            If your goal is to punish the wealthy (I've heard people suggest a 95% rate) then you might get the rabble roused with pitchforks and torches... but it isn't the appropriate role of government.  Government should make sure that the millionaire is being a good citizen, paying their taxes, and treating their employees and the environment well.  In that case, I don't care if they make a zillion dollars.

            •  It's very simple (4+ / 0-)

              It is terrible because it causes 307 million American citizens to suffer, just so 3 million Americans can become even more wealthy.

              It is most definitely NOT a matter of "punishing" the wealthy. It is a matter of fair treatment for the 307 million that actually produce the wealth.

              The 1%, by and large, lay no bricks, fight no enemies, teach no children, assemble no automobiles, grow no crops, cure no patients, and advise no clients. They produce no genuine wealth. But what they do exceedingly well is to harvest the real wealth produced by others.

              I do not dismiss the work that capitalists do in our economy. I merely question the notion that they should get all the rewards. Don't you think that the 307 million of us deserve a fair share of what we produce?

              Note to Boehner and McConnell: "You don't need a weatherman to know which way the wind blows." --Bob Dylan-- (-7.25, -6.21)

              by Tim DeLaney on Wed May 15, 2013 at 12:36:50 PM PDT

              [ Parent ]

            •   a large order effect is behavior (1+ / 0-)
              Recommended by:
              NoMoreLies

              From 1839 to 1930  28 out of 31 economic downturns saw peak to trough of 20-33%, unemployment of 15-30%, lasting 1 to 5 years.

              From 1938 to 1988 only 3 recessions were worse than negative 2% and only one recession lasted more than 11 months.

              Since 1988, 3 recessions, one worse than negative 2%, all 3 with the jobless recovery, seen for the first time since the Great Republican Depression.

              .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

              by Roger Fox on Wed May 15, 2013 at 02:40:08 PM PDT

              [ Parent ]

            •  wrong on so many levels (2+ / 0-)
              Recommended by:
              JerryNA, alexforgue

              progressive taxation accounts for the market power the wealthy have.

              the rich should not be taxed at the same rate as the middle class.

              a rich guy making millions a year, earned or unearned through capital gains, should not be paying some flat tax, floor or otherwise. There should be incremental marginal tax rates that offset the market power that comes with being rich in the first place. having money makes it easier to get and earn money, so the incremental 500,000th, 1 millionth, etc. dollar should get taxed higher and higher and used to fund public institutions that provide services that aren't profitable in the market but are socially beneficial. there's no argument against incentives because nobody is losing money by earning an extra dollar that is taxed at, say, 45% instead of 30%, Buffett has already talked about this himself, rich people KNOW this is a bullshit argument but they convince middle class libertarians that it's "fair" lol.

              it's unbelievable how so many "libertarians" shill for the wealthy by arguing for an (un)fair tax system that overwhelmingly benefits the wealthy and fuels inequality in society.  if you hate the middle class and think the wealthy should be able to compound their wealth subsidized by the government, then go ahead, support the regressive flat tax.

              look around the world -- Russia has a "fair tax", so does Romania -- these are the kinds of places that you get oligarchs growing out of with the rampant inequality. there's a negative economic externality to people with lots of money and market power, you have to tax it to offset the social cost of compounding wealth, hoarding, etc.

              And look at the countries in Scandinavia, probably the best example of an egalitarian society that uses progressive taxation. Also, post-war in our country we had a progressive boom in the economy.

              I know where your argument comes from because I used to make it as well, but what you don't understand is the reality of such a policy is not fair at all, and the chances of you becoming one of those millionaires benefiting from the regressive flat tax is really low, so don't bother lobbying for the wealthy unless you're getting paid for it.

              Deficits don't matter, jobs do.

              by aguadito on Wed May 15, 2013 at 10:30:10 PM PDT

              [ Parent ]

              •  You haven't convinced or informed me (0+ / 0-)

                Warren Buffet paid less than 20% last year or the year before (according to himself and media).  If everyone were paying 20% (with some exclusion below poverty line), it would be a cut for the middle class and an increase for the wealthy (particularly the guys who get free capital gains).

                That funds government.  that is the point of taxation.  Make your case for a progressive system without assuming I'm shilling for anyone.

                I can't think of a reason to punish "market power".  I can think of reasons why the rich shouldn't be able to buy legislators to get special loopholes.

                Make your case for progressive taxation.  I've already been convinced that an exclusion at poverty (x1 or x2) is a reasonable amendment to my original position, so I am open to your argument.  Make it.

                •  Hurt equalization (0+ / 0-)

                  To  be "fair" everbody should share the burden fairly. The poorest are already suffering - now adjust the progressive tax rates so that the "hurt" is shared. This requires both positive and negative taxation - i.e. rebates for the poorest. Nixon proposed this and got nowhere.

                •  20 % (0+ / 0-)

                  That's about the Federal share of GDP, so there'd be no tax cut.

                  And this "everyone pays 20 %" neglects that most cannot afford to.

                  Why not the wealthiest pay 80 %, and the poorest pay 0 %? We used to do just that. Plus such a system prevents the rich from having enough $$$ left over to buy politicans like they do now.

        •  "earn more" (2+ / 0-)
          Recommended by:
          DFWmom, JerryNA

          A disturbing phrase.  For the most part, I believe that pay is unrelated to earning.  Which activity in a "corporation" actually earns the most?  A skilled worker making the most necessary part of the product, or a mediocre manager who produces ineffective plans?

          And in fields where profit ought not be the criterion...art, medicine, teaching, civil service?  Principals or teachers, custodians or bursars?  Sales or production?  

          Though I recognize need for some pay inequity,  The top to bottom range surely should not be more than 10 times.  And while we are at it, why should capital get so much return, while labor gets so little?  "Earning" has very little to do with it.

    •  My approach: (0+ / 0-)

      Income tax of, say, 50% on all income.

      Each adult starts with, say, a $12,000 credit (like the negative income tax or EITC).

      Each child starts with a $8,000 credit.

      Health coverage included.

      A family of four will start with $40k even if no one can find a job.

      Americans can make our country better.

      by freelunch on Tue May 14, 2013 at 05:53:23 PM PDT

      [ Parent ]

      •  I can't see that working (3+ / 0-)

        How many people would just spend all their time having kids?

      •  Seriously — so (2+ / 0-)
        Recommended by:
        JerryNA, socindemsclothing

        in my last job I made about $30,000. I would get $12,000 and pay HALF of the rest, leaving me with $21,000 to live on. This would kill those of us working modest jobs who aren't families, especially since housing has dramatically increased as a cost percentage of income, and that's one thing where being more than one person doesn't increase your expenses much.

        (Actually, since I'd still have to pay property taxes, and they are so high here, I'd end up with closer to $18,000 to live on — and don't forget state and local income taxes too — maybe $17,000).

        Taxing anyone with an income of less than $100,000 at a 50% rate is cruel and inhumane.

        Jon Husted is a dick.

        by anastasia p on Wed May 15, 2013 at 12:56:25 PM PDT

        [ Parent ]

  •  Flat tax: forbidding wealthy as well as poor... (6+ / 0-)

    from sleeping under bridges.

    So it's all equal before the law.

  •  Flat tax is regressive (8+ / 0-)

    that means it hurts the poor more than the rich.

    When I first heard about the flat tax some years ago it sounded interesting.... on the first go round.  Then I started to investigate and learnedhow  regressive it actually was.

    I too have diddled with trying to conjour a  better tax code...and the closest I can come requires a progressive tiered  tax...with the first amount of x (probably what is needed to live )   being non taxed for all people....and only the amounts over x being taxed in various ascending amounts.  If all income except capital gains on the house you live in were included...I think it might be fair.

    “... there is no shame in not knowing. The problem arises when irrational thought and attendant behavior fill the vacuum left by ignorance.” ― Neil deGrasse Tyson, The Sky Is Not the Limit: Adventures of an Urban Astrophysicist

    by leema on Tue May 14, 2013 at 02:55:30 PM PDT

  •  The biggest lie about a flat tax... (9+ / 0-)

    is that it simplifies the tax code...I forget where I read it but I read during the election that the tax code is something approaching 70,000 pages. of those pages it takes only 1/4 of one page to outline the marginal rates for the various brackets.

    Seems to me simplifying the tax code from 70,000 pages to 69,999.75 is hardly worth the effort.

  •  A tax code for the mathematically challenged (2+ / 0-)
    Recommended by:
    TexasTom, Roger Fox

    Is there really any other justification?

    Jeez, if the math freaks you out so much, you can let the IRS do it for you, or get a cheapo tax program.

  •  good to see you, (3+ / 0-)
    Recommended by:
    alexforgue, Tim DeLaney, ozsea1

    in the diary and in the CS box.

    flat tax is immoral, imho.

    and Jon Huntsman is a flat-taxer.  be ware, dems!  

    Ted Kennedy: “The work goes on, the cause endures, the hope still lives, and the dream shall never die…”

    by jlms qkw on Tue May 14, 2013 at 03:37:36 PM PDT

  •  i completely agree (3+ / 0-)
    Recommended by:
    alexforgue, ozsea1, JerryNA

    with this diary. i have often considered posting something similar. overall, the current income taxes are higher than i would ideally have, sure, and when you add state, etc. it looks worse. really, the feds should get less flak on taxes than states and cities. however, if you just designed your tax rates according to that pie chart with less, or at least less complicated, deductions and what not, it would make a very ideal income tax structure. the criteria of share of wealth = tax rate would be the exact criteria i used if i were in control. also i would count paper, but not productive capital as regular income and raise the SS cap, though the later wouldn't provide as much revenue as people think since the payrolls basically halt at 350k or so. of course i have my preferences for other reforms but i won't bore the commenters any further.

    the only fair flat tax is a property tax.

  •  Hit the nail on the head. (5+ / 0-)
    Recommended by:
    Tim DeLaney, ozsea1, Hirodog, JerryNA, Praxical

    I've been saying for years now that I don't care if the wealthy feel it is unfair they pay way more in taxes than the poor.  The reality is they control the vast majority of the wealth.  And even then, the percentage of taxes they contribute does NOT equal the amount of wealth they own and control.   That means that those who own/control very little wealth in country, are paying WAY more in taxes than what they have.   That, to me is what is unfair.

    If you control 60-70% of the wealth, then your taxes should make up 60-70% of the nation's tax revenue.  Anything less is a sign of a problem.

    Meanwhile, we know for a fact that not only do the richest minority control an insanely disproportionate amount of the national wealth, that amount is growing.  This is why wealth inequality is growing.  The rich are sucking the wealth from the rest of us.  They are getting richer because they are making everyone else poorer.  There is no logical way to deny this fact.

    I personally think all economic polices should be evaluated on whether or not they contribute to the increasing of wealth inequality or not.  If so, then I don't see how that can be called sound economic policy as it contributes to a completely unsustainable society.  

  •  Flat does not imply simple (7+ / 0-)

    The singlest biggest myth in tax arguments is the conflation of flat and simple. Our tax code complexity has to do with the numerous deductions/credits. The other main complexity with filling in tax returns has to do with gathering all the forms and distinguishing different types of incomes. I'm all for tax simplification, getting rid of most deductions and taxing all income equally (yes, capital gains should not be taxed less), but good luck getting conservatives to agree to that.

    Of all the lines on the 1040, there is a grand total of 1 line having to do with tax rates ('look up your income on line m in the tax table and write the result on line n'). Perhaps it would save 1 minute to multiply line m by x% (the flat rate, if not tiered), but I doubt even that since far too many Americans freak out at the thought of calculating percentages (its math!). If its tiered, you probably have the exact same table lookup, since the alternative is to replace that line with several lines computing your income and taxes on each tier, making the return more complicated.

    •   Flat does not imply stable either. (1+ / 0-)
      Recommended by:
      JerryNA

      Financial regulations and a steeply progressive income tax go a  long way to creating a stable economy.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed May 15, 2013 at 02:32:31 PM PDT

      [ Parent ]

  •  Absolutely agree.... (2+ / 0-)
    Recommended by:
    Tim DeLaney, ozsea1

    Businesses can deduct business expenses.  For individuals, what it costs to stay alive (And thus produce labor) is a business expense.  I suppose more progressive taxes than just not taxing what's needed to stay alive, though then it becomes more of a moral argument (And suppose can make an economic argument, too, but that's not what drives my opinion).

    This is also why all states should do away with sales taxes.  Probably property taxes as well, though not quite sure how regressive they are, in practice.  Replace them with state income taxes.

  •  the way I see it (5+ / 0-)

    is that the wealthy are using way more of the infrastructure to generate and maintain their wealth (including the judicial system, for example). It is completely natural that the tax structure should be progressive, and aggressively so, and all income should be taxed on a equal basis. The wealthy have clearly captured the system to their advantage without realizing the overall damage that this does to the country.

    What I can't fathom is why the wealthy would want to undermine the few highly successful safety net and health care programs we do have. What is the angle? It just seems plain mean-spirited, IMO.

  •  Here is the crux of the argument against flat (4+ / 0-)
    Recommended by:
    ozsea1, caul, PatriciaVa, alexforgue

    taxation:

    Until Corporations and their CEOs pay their workers a living wage, and give up part of their income, they should be responsible for making up the taxes that many people are no longer able to pay.
    Until workers can pay whatever tax rate is deemed fair and still have enough left-over to thrive, not just survive, I am against the flat tax.

    Incomes have stagnated and the earnings/winnings of the top tier have swollen savings and investment accounts.  However, if the vast majority of citizens live a hand-to-mouth existence due to insufficient wages, those surplus resources of the top tier will stagnate as well since economic activity will be depressed.

    •  ??? That is the argument FOR flat tax (1+ / 0-)
      Recommended by:
      Roger Fox

      If you discount the first X (say $25K) of income, then paying a consistent portion of your income in taxes (flat tax) means that the wealthy DO pay more than the middle class.

      It sounds like you are trying to "punish the greedy bastards" rather than fund the operations of government.  These are two different goals.  Conflating them and using the tax system to punish people doesn't seem right.

      •  Flat tax fails due to extreme income inequality. (4+ / 0-)

        If the income range was 1x to 10x, then the flat tax might be equitable.  It's not.  The income inequality is so lop-sided that CEO's now make ~450x more than the average worker, and more like ~900x times more than the minimum wage worker. (There was a DK diary about this recently.) Most flat taxes have such a minimal baseline that they have to distribute an unfairly high tax across too many lower paid people.  

        It's not that the wealthy would pay more than the average or lowest wage worker.  It's that the very wealthiest now make obscene amounts of money, mainly by cutting wages and benefits to below living levels and in some cases stealing pensions (401ks do not cut into profits nearly as much).  The current system is rigged to help the top 0.5% to 0.1% and has been for the last 40 years.  The public debt has risen in lockstep with their wealth gains, with everyone else losing or staying flat at best.  The wealthiest need to be taxed enough to pay down the debt proportionate to their gains, not leave most of it on the backs of people who they exploited.

        •  What is so difficult to understand, I wonder. (2+ / 0-)
          Recommended by:
          alexforgue, starduster

          The 1%ers have stolen and hoarded revenue that rightfully belongs to the workers who generated it.  They should be forced to pay it back, one way or another, and taxation is a handy mechanism for rectifying the imbalance.  

          One person's "punish the greedy bastards" is another's "requisite government intervention".

          Bipartisan usually means that a larger-than-usual deception is being carried out. -George Carlin

          -7.88, -7.64

          by socindemsclothing on Wed May 15, 2013 at 07:42:01 PM PDT

          [ Parent ]

  •  Portland Oregon likes to think of itself as (1+ / 0-)
    Recommended by:
    Whatithink

    progressive......

    It voted in a flat tax last year called an "Arts Tax".  Everyone 18 years and older who earns at least $1000 a year must pay it.  

    Nominally, it is a school levy.  But people grow tired od voting yes every year for yet another school levy.  Where does all the money go?  Nobody knows.

    So in Portland they have gotten cagier as to how they call a "school levy"

    They now break them out and call them something else.  In this case, it was called an Art Tax.  Who doesn't support the arts?  Except that some portion...perhaps a significant portion...will be diverted to support the Portland Opera/Symphony/Ballet.  Nothing like a flat tax upon everyone in Portland to support "arts"  that only the top one percent will likely attend.

    Of course it wasn't published that way...it was all about schools.

    And the tax passed.  I didn't vote for it...but it passed.

    So now...everyone who lives in Portland with an income over $1000 must pay $75 a year to support "the arts" in this city.  It's another school levy.  Yet...does anyone really think that 2 million people paying $75 a year from now on will mean that school officials will stop asking parents to supply art materials for their students?

    No...........

    This money will disappear as soon as it is collected.  It won't pay for art.  It will pay for beauracracy.  It will pay for a few more teachers, who "teach art."  And it will only partially pay for their retirement benefits.

    There's another ballot measure this time...they call it "Help Our Children", or something like that.   It's another school levy.  They just keep looking for more "tug at your heart strings" names for tax measures that are, basically, about paying for education.  

    Because the basic taxes we pay each and every year just don't pay for education.  Who knows what it pays for.....but apparently, schooling isn't among them.  You gotta pay extra for that.

    _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

    by Keith930 on Tue May 14, 2013 at 04:51:24 PM PDT

    •  You're mistaken (3+ / 0-)
      Recommended by:
      caul, Leftcenterlibertarian, JerryNA

      You've written:

      "So now...everyone who lives in Portland with an income over $1000 must pay $75 a year to support "the arts" in this city."
      This is somewhat at odds with Portland City Code Chapter 5.73.020:
      5.73.020 Tax Imposed.

      A tax of $35 is imposed on the income of each income-earning resident of the City of Portland, Oregon who is at least eighteen years old.  No tax will be imposed on filer(s) within any household that is at or below the federal poverty guidelines established by the federal Department of Health and Human Services for that tax year.

      And, by "somewhat at odds" I mean false.

      False on the amount.

      False on the insinuation that those living in a household at or below the poverty line owe the tax, even if they personally make more than $1,000 in a year.

      And, if you pay attention to local news, Social Security income and other government pension income is exempt.

      I don't live in Portland, but I work there so I pay attention to local news. This whole art tax debacle has been very poorly managed by the City. But there's no need to mislead people about it.

  •  The irony is (2+ / 0-)
    Recommended by:
    Leftcenterlibertarian, JerryNA

    if the "1%" actually paid a flat rate just equal to the average worker - it would be fairer than the cluster fark "system" we have now.

    Conservatism is an obsession with the past ... with little regard for the future.

    by RUNDOWN on Tue May 14, 2013 at 05:05:36 PM PDT

  •  A FAIR FLAT TAX (0+ / 0-)

        I think you could get overwhelming approval for a flat tax by simply adding one word.  Instead of taxing income tax accrued income.  3 or 4 percent each year and exempt the first three of four million dollars.  Few households would be effected and it would only hit those able to pay.
         All income from what ever source derived that has been accrued.  Of course include a hardship board for a taxpayer to seek relief if the tax payment would really be onerous and the circumstance  has not been encountered and resolved before.  Five million in accrued income- exempt three million. Four percent of the remaining 2.0 million equals 80k.

    •  Do you mean accrued wealth? /eom (0+ / 0-)
      •  A FAIR FLAT TAX (1+ / 0-)
        Recommended by:
        JerryNA

        Yes.  Of course I do.  The problem with the death tax is that it only happens once.  Capital/wealth is just accrued income.  Tax it every year. Why should labor be the method to measure tax and done once a year.  Why not accrued income, er , capital/wealth.  Taxes are a method to raise money to pay for the operations of government and to pursue our common goals and objective.  Tax people based on shoe size if it  is the most effective to achieve those ends.  Calling it accrued income shoehorns into the constitutional amendment allwoning income tax.

  •  Factor in payroll taxes (3+ / 0-)
    Recommended by:
    TexasTom, Val, JerryNA

    and we just about have a "flat tax" already.

    They only want to talk about income taxes because those effect the wealthy more.

    If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

    by Major Kong on Tue May 14, 2013 at 07:22:32 PM PDT

  •  I like progressive tax (0+ / 0-)

       But from the simple idea that we are all citizens we should all chip in something.  The lowest incomes should be taxed , say 0.1 percent.  Obscene income . say > $1 to 5 Million should be taxed at 50 percent, or maybe a little more.  
         Todays tax code is so regressive to the point that a "flat tax" might actually be more fair.

  •  Every single commenter here is approaching (1+ / 0-)
    Recommended by:
    caul

    the issue of taxation through the lens of THE BIG LIE of neo-liberal economics.  Namely, that just like households, the Federal Govt must either collect taxes or borrow money in order to spend US dollars.  This is patently false, the US Govt is the source of all NET financial assets for the non-govt.  Nobody has the legal authority under Article 1 Section 8 of the Constitution to create a monetary system except for Congress.  The US dollar is a public monopoly, there is no such thing as the creator and issuer of the national currency running out of dollars or needing to get its own money from its citizens before it can spend a dollar.  This is The Biggest Lie, IMO.  Because, it allows the Govt to reduce benefits and investment into the public and the people wholly based off the strange belief that the US Govt finances are just like your household or business budget.

    Taxes don't fund Govt spending per se.  There would be no modern US Dollars (Federal Reserve Notes) if it wasn't for the Govt inventing them through the Federal Reserve Act of 1913.  Taxes only serve 3 purposes in our modern monetary system:
    1.  To backstop the currency....the Govt only accepts its own currency to eliminate tax liability guaranteeing some level of demand and universal usage
    2.  To reduce aggregate demand in order to maintain low and stable inflation.  If the Govt created and spent money equal to 20% of GDP and collected only 1% of GDP in taxes, we would most likely get increasing inflation
    3.  To penalize certain types of activities (sin tax, wealth tax, carbon tax, etc)

    Please follow our group 'Money and Public Purpose' here at Kos and familiarize yourself with the only school of economic thought that is concerned with the truly seismic paradigm shift that occurred to our nation's monetary system after August 15, 1971 when Nixon ended the gold standard and created our modern purely fiat currency system.....commonly known as Modern Monetary Theory (MMT), post-keynesians, or heterodox economists

    MMT = Reality
    neweconomicperspectives.org
    http://mythfighter.com/....

    "The Earth is my country and Science my religion" Christiaan Huygens

    by Auburn Parks on Wed May 15, 2013 at 06:32:14 AM PDT

  •  Sorry, but the Overton window has lurched right. (3+ / 0-)

    A flat tax is now considered socialist to the lapdogs. They want their masters (the fictional "makers") to pay a LOWER tax rate than the rest of us.  Just recall 2012 when the Right defended Romney's 14% tax rate, and witness their criticism of Warren Buffet for noting that the working class pays a higher tax rate than the investment class.

    Gentlemen, you can't fight in here! This is the War Room!

    by bigtimecynic on Wed May 15, 2013 at 06:53:43 AM PDT

  •  another consideration--obscene CEO pay (2+ / 0-)
    Recommended by:
    JerryNA, socindemsclothing

    CEO pay has skyrocketed in the past decade---largely because the tax rate on the top has shrunk so much. When the marginal tax rate on the 1% is 90% or 80%, CEO's don't bother to negotiate huge salaries--because they don't get most of it anyway. But when tax rates on the rich are a mere pittance, the bigger salaries all go into their pocket.  And all solely for conspicuous consumption---the rich don't need their salaries to live. Their huge salaries are just peacock's feathers--mere displays that they can strut around and show off to everyone else, which do nobody any good at all.

    •  Agree CEO pay obscene... disagree with 80% rate (0+ / 0-)

      Taxation as behavior modification?  Taxes should fund the government.  Everyone should pay their share.  I'm not thrilled with CEO pay of zillions either... but that is an issue for share holders to address, not the tax code.

      •  of course I disagree (2+ / 0-)
        Recommended by:
        JerryNA, socindemsclothing

        Global corporations are no longer private institutions---our very lives now depend upon them. They have a responsibility to the public, not just to shareholders.

        Indeed, my opinion is that the public should BE their shareholders.  Their ONLY shareholders.

      •  Thats what New Deal tax policy used to do (1+ / 0-)
        Recommended by:
        JerryNA

        And frankly it worked out real well for everyone involved.

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 15, 2013 at 02:03:31 PM PDT

        [ Parent ]

      •  Most shareholders are locked out. (2+ / 0-)
        Recommended by:
        alexforgue, socindemsclothing

        The Boards are rigged so only the very biggest shareholders get any input at all.  Stockholder questions rarely get in, and even more rarely do they go anywhere.  There are few chances to vote "no"- mainly it's "abstain", which means anything the Board wants, the Board gets.  That is not an owner democracy, it's an oligarchy.  This is where Libertarianism fails- it does not take reality into account.

    •  That'll push compensation to unearned income (2+ / 0-)
      Recommended by:
      socindemsclothing, JerryNA

      Without raising cap gains to where it was 30-50 yrs ago, your idea wont work.

      New Deal tax policy incentivizes capital to be kept in a company, reinvestment....not in CEO pay.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed May 15, 2013 at 02:02:20 PM PDT

      [ Parent ]

  •  It is sad that many Americans simply (2+ / 0-)
    Recommended by:
    JerryNA, starduster

    Do not know how their tax system works, and how easily the rich bastards exploit that.  Sometimes, it is because they are too stupid to understand themselves, but usually it is a propaganda ploy.

    I listened to a rich broker tell everyone that he was going to stop working part way thru the year, because he would "lose money" by going into the next bracket.  Even if the bracket was 92% he would gain money by getting more income.  (I of course felt puzzled about why we should be concerned about his "threats" to stop working, and why he hadn't already stopped since he had more money than a reasonable person could spend.)

    A progressive taxation state is the fairest one I believe, and the rich vastness know this, and hope the serfs do not understand that.

    A section of a mandatory civics course should make the issues of tax clear to students.  Moreover, I believe that the IRS system should be revised so that the daunting nature of filing could be made simpler and more accessible to all. The IRS scares ordinary taxpayer with charts and tables, and records that just exacerbates the tax antagonism.

  •  Maybe I'm missing something but (0+ / 0-)
    An effective way would to tax those who make over 60% of the nation’s wealth pay based of those statistics, shouldn’t the people that own 60% of the wealth, pay 60% of the taxes?
    Based on this:

    http://www.ntu.org/...

    Granted that's just federal taxes... But it still seems like the logic might be applying?

    •  Except that "income taxes" is narrowly drawn. (1+ / 0-)
      Recommended by:
      Roger Fox

      Most of the top wealth comes from unearned income, not wages subject to the income tax.  Capital gains are taxed at a lower rate.  Hedge fund managers salaries are taxed as capital gains, even when they have not risked a dime of their own money.  You're looking at a carefully crafted tiny picture and thinking it's a full window.  In short, that table is quite true but very misleading.

  •  Flat taxes are unfair because the (2+ / 0-)
    Recommended by:
    JerryNA, alexforgue

    real point is not "how much do you pay in taxes" but "how much do you have left" - 10% of a $25K income leaves $23,500 to live on not counting any other deductions (like FICA and health insurance premiums for example) while 10% of $2,500,000 leaves $2,350,000 to live on.

    •  That's you exempt the first X of income (0+ / 0-)

      On the one hand, I think EVERYONE benefits from government and everyone should pay something.  On the other hand, your point that at lower income levels taxation rapidly becomes onerous is a fair observation.

      If we exempted the first $25K (or whatever) of income, then taxed everything else at 15% (or whatever) and limited congress to adjusting the knob for EVERYONE - including their rich friends - we would have a fairer system.

      •  Yes my example was overly simplistic - (1+ / 0-)
        Recommended by:
        JerryNA

        but no, even if we exempted the first $25K or whatever, it wouldn't be fair.  The wealthy, by the requirements to protect/maintain (and increase) that very wealth, use more of the benefits government provides and thus should pay the higher rate for their higher usage.

  •  starting from scratch (3+ / 0-)

    just take a look at the business accounting rules and procedures.  it takes lots of study time to learn all the ins and outs of what is deductible as a business expense.

    millions of dollars are spent on the best accounting firms,
    and lawyers to pour over archane tax language to find the appropriate loophole.  millions more are lavished on lobby groups to hand over pre-written legisation in government-speak to give bidness a special break. and millions more making sure that a certain congressman or senator pushes that legislation or amendment, or inserts that single sentence just where they want it.

    astonishing that they would spend this much money avoiding a tax, that if paid would probably be less money.

    any revision in the tax code must start with a total revision of the basic accounting standards and practices.  one of my jobs in the paper age was to update the tax law book at my office. it sat on a credenza. it was 4 ft. wide.it had  thousands of pages.  and every month the irs would send a packet of new/or updated pages.  my job was to remove or insert the relevant pages.  i imagine today its online, but still full of minutia allowing corporations, llc, and sch c small bidnesses to write off everything.  cause they're special, they're that most hollowed thing of all:  BUSINESS.

  •  The original Flat Tax (before Reagan) proposed (3+ / 0-)

    doing away with all deductions and exemptions. Your 1040 would be the size of a postcard:

    1. $X = Total all income for the last year.
    2. $Y = $X * 10/100
    3. You owe $Y in taxes this year.
    Make check payable to U.S. Treasury.

    You pay 10%. I pay 10%. Bill Gates pays 10%. ExxonMobil pays 10%.

    During the Reagan years, the 'Pubs co-opted the term "flat tax". But in their lexicon, it only means "flatter" tax rates.

    Imagine how doing away with a complex tax code would change the relationship between government and citizen.

    If Bush/Cheney wanted to go conquer an oil-rich foreign nation, they's have to ask Congress to raise the tax rate from 10% to 11%. If we wanted to promote home ownership, Congress would have to directly subsidize first-time home buyers, rather than subsidizing the banks with our mortgage interest deductions.

    I think I'd stay with graduated tax rates, but do away with all deductions. The complex code always works to the advantage of the wealthy.

    It would probably take an armed revolution to overcome the entrenched establishment of tax lawyers, accountants and lobbyists... not to mention their employers.

    And it would probably take a constitutional amendment to keep favoritism from creeping back into the tax code.

    But if we could just get the Big Money out of political campaign funding, we might be able to start moving toward tax code simplification.

    It would have to be done incrementally. I imagine if we removed the home mortgage deduction all at once, property values would plummet to levels that represent real intrinsic values. That would be a bitter pill for many voters to swallow.

    The important thing today is to call out the Republicans on the issue of "Flat tax" vs "Flatter tax rates", and keep the conversation focused on seeking fairness and justice in taxation.

    “It is useless to attempt to reason a man out of a thing
    he was never reasoned into” - Jonathan Swift

    by jjohnjj on Wed May 15, 2013 at 10:02:10 AM PDT

    •  Did you read the diary? (1+ / 0-)
      Recommended by:
      alexforgue

      What is your view of the inequities the diarist describes (and shows with specific calculations) regarding the outcome of a 10% flat tax for a lower income and a higher income person?.

      “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

      by Catte Nappe on Wed May 15, 2013 at 10:06:19 AM PDT

      [ Parent ]

      •  10% wont generate enough revenues (1+ / 0-)
        Recommended by:
        JerryNA

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 15, 2013 at 02:46:36 PM PDT

        [ Parent ]

        •  That's the least of the problems (3+ / 0-)
          Recommended by:
          Roger Fox, alexforgue, JerryNA

          The diarist points out basic inequity in a flat tax, and the commenter is all kinds of enthusiastic about the amazing simplicity of a flat tax and a post card, but has not addressed the question.

          “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

          by Catte Nappe on Wed May 15, 2013 at 03:02:43 PM PDT

          [ Parent ]

          •  post card, LOL, right. @ a minimum: (2+ / 0-)
            Recommended by:
            Catte Nappe, JerryNA

            Me I want more brackets

            Tax policy thats progressive enough to reverse income disparity will require more brackets, we used to have 30 to 67 brackets IIRC. I think we need to add at least 6 more:

            2mil---40%
            4mil---41%
            6mil---42%
            12mil-43%
            24mil-44%
            48mil-45%

            With the current stable of deductions and shelters this would yield an effective rate equal to what we saw prior to 1950's & 1960's.

            Current brackets need be moved to lessen the tax burden on those making under 80k for families and less than 50k for singles.

            .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Wed May 15, 2013 at 03:34:43 PM PDT

            [ Parent ]

        •  It was an example. (0+ / 0-)

          10% allows for an easy mathematical example. I was not suggesting a 10% tax rate, just giving an example. :)

    •  WE used to use deductions to incentivize (1+ / 0-)
      Recommended by:
      JerryNA

      domestic investment, the 86 TRA removed them all.

      And those were long term investments, back when we had a more vigorous manufacturing sector.

      If you remove all deductions you remove any incentive for good behavior, which is rather short sighted IMHO.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed May 15, 2013 at 02:49:28 PM PDT

      [ Parent ]

  •  Re-read your last paragraph (0+ / 0-)

    A flat tax (percentage) does not mean that the wealthy and the poor pay the same taxes.  They pay the same RATE.  If you make $50K a year and I make $50M per year and the rate is 10 percent, they you pay $5,000 per year in taxes and I pays $5,000,000 <= Note: more zeros.

    I used to believe firmly in a flat tax rate.  Folks around here lobbying for a progressive tax code convinced me that excluding lower income was more fair.

    Taxes should fund the government.  We can deal with inequity in other ways.  The tax code should not be a way to punish or reward behavior... because then whoever is in power gets to decide what behavior they want to reward or punish.

    A flat tax rate (with a floor) is a pretty fair proposal when it comes to deciding what is a reasonable way to fund government.

    I am passionate about income inequity... but taxes aren't the solution.

  •  Tax fairness is a misnomer (1+ / 0-)
    Recommended by:
    starduster
    shouldn’t the people that own 60% of the wealth, pay 60% of the taxes?
    Thats the fail in an otherwise great dairy. Tax policy should be formulated in such a way as to allow for a stable economy. If that goal requires that the top 60% pay 40% or 60% or 80% should not matter, the goal should be creating a stable economy that doesnt crash every 4.3 years, as our economy did from 1830 to 1930.
    Allowing them to keep more of their income, allows them to spend more which will increase the economy and the nation’s GDP.
    Allow me to refine that: Middle and working class families should be engaged in the economy, not taxed out of the economy. Allow these families to keep what they earn to a large degree, and they will be able to better take care of their own.

    Tax policy thats progressive enough to reverse income disparity will require more brackets, we used to have 30 to 67 brackets IIRC. I think we need to add at least 6 more:

    2mil---40%
    4mil---41%
    6mil---42%
    12mil-43%
    24mil-44%
    48mil-45%

    With the current stable of deductions and shelters this would yield an effective rate equal to what we saw prior to 1950's & 1960's.

    Current brackets need be moved to lessen the tax burden on those making under 80k for families and less than 50k for singles.

    TnR

    .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Wed May 15, 2013 at 01:53:30 PM PDT

  •  Perhaps I missed it (0+ / 0-)

    but I didn't see any comment regarding a financial transaction tax. A recent diarist estimated that a one tenth of one percent tax on financial transactions would fund national government at current levels.

    This satisfies the 'fairness' issue for flat taxers as everyone would pay the same rate and shifts the tax burden to consumers of financial transactions, business and high income individuals.  Tax refunds could level the field for those below certain income levels.

    Using the above estimate and taxing both sides of the transaction, taxes on a family receiving and spending $50,000 per annum would generate $200 as follows:

    Employer - $50
    Family Income - $50
    Family Spending - $50
    Goods and Services provider - $50

    Assuming the matrh is correct, this sure looks attractive from a 'simple and fair' perspective.

  •  Not sure why flat tax is so popular... (1+ / 0-)
    Recommended by:
    AllenMcw

    Many people seem to confuse "flat" with "simple".

    Generally I answer that by saying that the simplest tax is a poll tax: everybody pays $20,000.  Period.  If you don't have $20,000, well, then you go to prison.  That's pretty tough, but by God, you can't say it's not simple.  Math not even necessary, unless you consider counting to be math.

    The problem the current tax system labors under is the apparent need to tax the poor.  Don't ask me why, it's not my idea, but it seems like everybody is thinking of clever ways to get more and more money out of the poor.  Sales taxes are a popular way to do this, but they're not the only way.  Even the 'progressive' income tax manages to get a disproportionate share of its revenue from the poor.

    In the case of the income tax, the true culprit seems to be the exemption and deduction scheme now in place.

    The personal exemption used to be the amount a person needed to feed and clothe themselves.  I'd like to meet the person who can do that today on what the income tax code allows as the personal exemption.

    Even the housing deduction (now in the crosshairs of Paul Ryan's latest budget, which should surprise nobody) only gets you a deduction if you own your own home.  Do you rent?  Ouch!  Man, that's a tough break, buddy.  Maybe your bank will let you protect the money you're paying to shelter your family from taxation.  Unless you're poor, in which case, um, no, not so much.

    What people don't seem to realize is that it really is a good idea to make taxes more popular.

    Right, you say.  Make taxes more popular.  Why don't we make ebola more popular while we're at it?

    Well, as they like to say on the O'Reilly factor, hear me out (oh, no, wait, that's somewhere else, um, never mind).

    Suppose we had an income tax system so fair, so reasonable, so enlightened, that only the richest 49% of Americans ever paid a dime in income tax?

    This is the way it was supposed to be.  Income taxes were popular, long, long ago because 'most people' never paid them at all.

    What happened since then?  Well, it's a complicated history, but like most things that proved to be bad for the middle class, it did at one time have Ronald Reagan's name on it.

    So consider this a modest proposal:

    1. 'Basic' personal exemption of $500/month, indexed for inflation (and inflation specifically redefined to include food prices).

    2. 'Supplemental' personal exemption of an additional $500/month for any wage earner in a family, also indexed for inflation as above.  This reflects the simple fact that it costs money to have a job, when you consider the costs of clothes and commuting, even the additional energy you have to put into working according to someone else's schedule and needs.

    3. Rent is deductible, as is interest on a mortgage.  I never understood why this wasn't a long-time part of the tax code.  Today renters pay for their shelter with after-tax dollars, and the landlord collects the money and pays taxes on it all over again....

    4. Educational expenses at any accredited educational institution are deductible.  Anything that produces more productive workers/earners in the next generation is just common sense.

    5. Medical, dental and vision expenses are deductible, as are insurance premiums for same.

    6. Interest on savings is fully deductible unless the interest paid exceeds the official rate of inflation, in which case only the portion that exceeds the rate of inflation is taxed (the bank reports all this to you on your 1099).

    7. Charitable donations are fully deductible.

    8. Everyone then gets a 'standard deduction', which is equal to the median income of working Americans.

    After that the tax rate starts at 25%.

    So if you ever end up paying income taxes, you can take some comfort in the fact that you're richer than most Americans, just because you ended up owing that tax.

    "You've got that eternal idiotic idea that if anarchy came it would come from the poor. Why should it? The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all." -- "The Man Who Was Thursday"

    by tallen387 on Tue Feb 24, 2015 at 11:03:06 AM PST

    •  One more thing (0+ / 0-)

      Keep the highest individual tax bracket at approximately double the corporate tax rate.

      Let's see how many CEOs like using their companies as their own personal piggy bank then.

      Well, okay, maybe shareholders instead.

      "You've got that eternal idiotic idea that if anarchy came it would come from the poor. Why should it? The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all." -- "The Man Who Was Thursday"

      by tallen387 on Fri Feb 27, 2015 at 06:46:34 AM PST

      [ Parent ]

  •  Fiscal Responsibility (0+ / 0-)

    No Bail out for Greece!!!  Bailouts do not correct the source of the problem; An unbalanced budget!! To do so would open flood gates that could not be managed!!!
    *
    Virtually all European countries, and South American Countries have huge debt burdens; they cannot bail us out! Do not forget that the U.S. has a $21Trillion Debt load!!! All countries must always have a balanced budget, in order to avoid these huge debt burdens; The source of debt problems in the U.S.A. is The IRS Tax Loopholes that have  created a “Snowballing” group of  “Tax Dodging, Revenue Free-Loaders”, and Non-Profit Organizations that pay out all of their Gross Income to their Officers so that they can claim to be a “Non Profit, Tax Free Organization”, in order to avoid paying taxes. Making it impossible to maintain U.S.A. Fiscal Strength!  Debt is a Monster that must be kept in a cage, and is not “Economically Sound Financing” of any Country! These Revenue “Free-Loaders do not pay their fair share of Taxes in support of the U.S.A. Fiscal Strength,  and they always want something for nothing; “Representation Without Taxation”. In the U.S.A. Democrats had control of Both Houses of Congress, and the White House from January 20, 2009 to January 2, 2012, and did nothing about this Taxation Inequity. Furthermore, Democrats passed legislation to make the “Bush Tax Cuts Legislation” Permanent, and has not balanced a single budget. Therefore, “Taxation Inequity” is not a Partisan Issue in the U.S….

  •  More sense.... (0+ / 0-)

    would be to do away with ALL deductions, including moving any American money to offshore accounts before you look at a flat tax.
    This was discussed locally twenty years ago on the radio and the only two groups to speak up against it were a local big-time tax preparer (who would have seen her business dry up overnight) and the I.R.S. (who are too lazy/scared to go after Big Business) and they shouted down anyone who spoke up in favor of an equal payment rate.

  •  Imagine no IRS (0+ / 0-)

    Use a Financial Transaction Tax, or "Tobin tax," named after one of its proponents to fund government.

    The Tobin tax would be collected at a teeny tiny rate, say 1/10th of 1%, but it would collected on ALL money that changes hands. You can pick the market that you will put the Tobin tax on. Clearinghouse transactions, international arbitrage, doesn't really matter.

    What matters is that all governments collect it so people can't venue-shop.

    I am writing a thesis on this topic. Neither you or I have any idea what is spent in complying with or hiding money from taxing entities as they are now configured.

    Our tax collection mechanisms are antique, and broken. How dare we claim to be the greatest nation on earth?

  •  Not a flat tax but a sales tax (0+ / 0-)

    I don't think a flat income tax is a good idea. However I do think that replacing income taxes with sales tax is an idea worth looking into. Basically you would exempt some set of basics from the list. We can argue about what should be on that list but most people would probably say that staples, clothing, transportation, medical supplies, etc should be included. Then whenever you buy anything you pay x% tax on it, where x is determined by the revenue we need to raise. Since the rich buy more things of greater value they will pay more. The poor need no longer worry about paying any taxes and everyone else will sit in the middle. Done.

  •  If you've got a couple of brain cells .. (3+ / 0-)
    Recommended by:
    AllenMcw, debocracy, Bard

    you can see that a flat tax is immensely unfair to the middle class and lower classes. And an immense benefit to the upper class (rich).

    A flat tax is also very, very bad for the country because it encourages the concentration of wealth and, thus, power in the hands of a small number of rich people. Despite what SCOTUS thinks, democracy cannot survive this.

    In the eighteenth century we learned that very, very rich people, like aristocracy, will exploit those who don't have the power to resist. Think of coal miners and mine owners, steel workers and steel mill owners, etc..

    We seem to have forgotten the lesson. A progressive tax does not prevent people from becoming rich and living really, really well. It can prevent them from becoming so rich that they are tempted to try to control our lives. Think Sheldon Adelson or the Koch brothers.

    •  Well said, though regarding SCOTUS ... (0+ / 0-)

      ("Despite what SCOTUS thinks, democracy cannot survive this.")

      ... I think in light of Bush v. Gore, Citizens United, and McCutcheon v. FEC, the Republican SCOTUS majority knows as well as we do that democracy cannot survive the concentration of wealth and power.

      That knowledge just gives them a different feeling in the tummy than it does us, is all.

      •  Then why? (0+ / 0-)
        ... I think in light of Bush v. Gore, Citizens United, and McCutcheon v. FEC, the Republican SCOTUS majority knows as well as we do that democracy cannot survive the concentration of wealth and power.
        Then why, pray tell did they make the ruling they did on Citizens United? That decision was a shot to the heart to everything America is supposed to stand for.
  •  That pie chart is hard to get a sense of. (0+ / 0-)
  •  And the answer is? Flat or Progressive? Neither. (0+ / 0-)

    The idea of continuing the current tax system is asking for more of the same, which everyone agrees and have agreed on for a couple of decades.  As one previous poster explained so well, its not in the interest of Congress and the power they have in handing out tax breaks and including loopholes in legislation that benefit a specific lobbying group.  

    Republicans have been asking for a Constitutional Amendment for a balanced budget.  First step.

    Next is to inject into the 2016 election conversation that idea along with plausible tax systems for Congress to choose from to correct the inequity of our current tax system.  A simple Flat, Fair, Progressive tax system or a version of all current suggestions.  But one suggestion. No deductions, No tax refunds.  Let me explain why.  First it would eliminate the IRS saving Billions of dollars.  Second it would also save tax payers Billions of dollars, saved by not having to pay an accountant, tax preparer or tax lawyer to figure out your taxes.  No more April 15th.

    Hall–Rabushka two Stanford University Economics professors developed a version of the Flat tax that has already been vetted back in the mid 1990's and could easily be revised and implemented in short order.

    Tying a Constitution Balanced Budget Amendment to a new tax system that Congress could not corrupt by doling out deductions or loopholes in the future, getting our government back on a stable financial course.  Stopping the constant budget battles and political gamesmanship in the process.  

    This would be a start in turning around the current inequities not only in our tax system but also in equal pay, living wages, CEO compensation and Citizens United.

    Let's all get the message out that this next election cycle is not just about electing a new President and some Congress members but also about issues that need to be addressed in the process.  Let's get a list together as American's on our agenda for 2016 and beyond.

  •  Flat Tax Proposals (0+ / 0-)

    When confronted by someone advocating a flat tax of some sort, I like to AGREE with them with the following counter-proposal of my own. You would like a flat tax? Okay, here's one I could agree with. First, it should not be based upon INCOME. It should be based upon NET WORTH, because many people don't have any income from WORK, or only partially from WORK, the rest being from investments of one kind or another, but let me be generous and call that activity WORK. So, as you can see, this would result in a very wide variety of NET WORTHS, from very, very, very HIGH,  to very,very,very low, even NEGATIVE NET WORTHS, due to outstanding debts on housing, autos, etc. So, due to that those with negative net worths should not have to pay ANY TAXES AT ALL, instead they should probably be give some help, but that could be debated. Once the flat tax is based upon net wealth that is in the positive, and without any tax of negative net wealth, then a percentage of that total wealth that the people's representatives agree upon as the cost of government could be assessed upon those with positive net worth at a flat rate for all.

  •  Have a flat tax of 50 to 75% and (0+ / 0-)

    exempt the first $150,000 in income.

    Problem solved.  LOL

    (Actually, it wouldn't work out quite right but it's in that general direction).

    -- illegitimi non carborundum

    by BadBoyScientist on Wed Feb 25, 2015 at 04:33:57 PM PST

  •  Ok,makes sense to me, let's do it!!!' Oh right,... (0+ / 0-)

    Ok,makes sense to me, let's do it!!!' Oh right, the Republicans control congress, that will never happen, it makes too much sense.

  •  Moreover, I've rarely heard the flat tax proposed (0+ / 0-)

    ... without being immediately coupled with " and of course, no tax on capital gains" - the latter probably being the real objective.

  •  Flat rate and progressive. (0+ / 0-)

    A friend of mine once proposed this simple plan: flat rate of 15%, and give everyone $8,000.

    Income $10,000 - $1,500 + $8,000 = net $16,500

    Income $50,000 - $7,500 + $8,000 = net $50,500

    Income $1,000,000 - $150,000 + $8,000 = net $858,000

    Intriguing. Seems better than taxing 0%. You'd probably want to add extra credits for children, but it would still fit on a postcard.

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