Steve Forbes pimping the Flat Tax on MSNBC
Was asked if it weighs more heavily on people at the lower end of the economic scale and he replied "NO! It encourages GROWTH!"
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Last edited Mon Nov 17, 2014, 10:34 PM - Edit history (1)
While us little people would pay. 
Mine are taxed as income. Under Forbes's flat tax plan, they would be exempted.
But do continue....
somehow fits your idea of "fairness".
Ooofff 
a) there are not "millions" above the poverty line who pay next to nothing.
In 2009, for example, there were 13,480 filers with more than $10,000,000 in AGI. They paid $83 billion in taxes. A rate of 23.4%
b) as for those poor, poor people making $75,000 to $250,000.
My heart does not bleed for them. 
Especially at the upper end of that range. In 2009, 78.97% of tax filers had income LESS than $75,000, and 87.2% had income less than $100,000. When it comes to income, those making between $75,000 and $200,000 had 33% of the income, compared to only 19% for those making under $50,000 who were 65.5% of tax filers.
c) in the bad old days of 1996 (when rates for the rich were higher before Bush tax cuts) those making over $1,000,000 paid an average tax rate of 30.9%. So apparently lowering those rates saved them a fair amount in taxes, those rich people.
But even at that low rate, many working class people would face huge tax increases. Likewise, the 1% would receive the largest tax cut in history.
Yep. Sounds like a plan to me. 
The top tax bracket from the mid-sixties to about '83 was over 70 percent, so this is sort of a return to that.
By linking the standard deduction to them minimum wage, it should pretty much eliminate "bracket creep", as there should be strong incentives to keep the minimum wage increasing and thus relevant.
I figure this: there are more than enough regressive taxes out there now. Gas tax, FICA tax (which, incidentally, I would remove the cap from and then lower the rate), telecom taxes, sales taxes, property taxes, registration taxes, etc., Those making below 4x annualized are already paying PLENTY in taxes. And the "job creators" 
certainly aren't "creating" jobs with any sort of retirement plan, job security, or even necessarily regular pay increases.
So... screw'em.
I figure it would drastically shift the market in a variety of ways. The giant salaries for corporate executives, lawyers, lobbyists, sports figures, TV actors, and movie stars would shrink down to something manageable. I mean, making a $1,000,000 a year to play baseball... hell, that means the player probably has the best job on earth (from his perspective). Assuming he was married with two kids, his taxes would be 0.7 x ($1,000,000 - $120,640-(4 x $3,900))= $604,632, for a total after-tax income of $395,368. Four hundred grand a year to play baseball for 8 months! That's about a thousand dollars per game-hour... how is that not enough money?
And of course, if he contributed to a retirement plan, his taxable income would go down. He would withdraw that money later, after his baseball career. Now, obviously, sports careers generally end far younger than the standard retirement age of 65, so his plan would have to have that sort of option available. If one doesn't exist right now, then one will be made. The free market will see to that. But he could pump tens of thousands of dollars into some kind of over-65 retirement account and tens more into some kind of post-career account.
In fact, maybe the Congress would have to make some new kinds of 401(k) accounts... instead of withdrawal being based on your age, they would have a fixed lifespan of 5, 10, 15, 20 etc. years. A person making big bucks could put every year let's say $15k a year into a 5 year, $15k into a 10 year, and so on retirement account. When the term is up, you can't contribute any more but you can start withdrawing... at the above-mentioned tax rate.
This would have the effect of making things cheaper, as payrolls for those kinds of people would probably be slashed by an order of magnitude. There would be less investment in critical commodities like oil, wheat, corn, and industrial metals, lowering those prices as well. And real estate... wouldn't it be nice if the cities and their suburbs became affordable again because the market distortion from the rich was significantly diminished?
We should tie the estate tax to the annualized minimum wage, too. It's currently about 354x the annualized minimum wage, or $5.34 million. Knock that down to about 300x and apply the usual 70% tax rate.
The combinations of these two thing would make it hard to accumulate and hoard vast quantities of wealth, and thus power, in the United States. Even if a movie star was making $50 million a year (such as Bruce Willis) and dumping 95% of that into tax-deferred retirement accounts, upon his or her death it would be subject to the estate tax. It would become HARD and RARE to pass on more than $10 million in wealth to a descendent.
And if that doesn't drive the Waltons and the Koches INSANE, I don't know what will!
Wall Street would have to do what it was suppose to do... provide a market for large number of people to buy into a company that is seeking to expand by selling shares of stock. Much less of the casino, much more of getting the middle class involved in making modest investments.
A rich person might look at that and think the bottom 20% is just loafing around not paying their fair share, but then they should try to live on minimum wage for awhile. What's left for the bottom 20% after basic living expenses is nothing - there's nothing there for the federal government to take. Even up to the top of the second quintile (where I'm at more or less now) I can say there's really not much. Flat tax sounds deceptively simple and fair, but really it just makes the rich a tiny bit richer, at the cost of beating the poor down to less than nothing and adding to their numbers.
People here think Steve Forbes has good ideas?