Bush Reiterates Call for a Simpler Tax System (Flat Tax)

[RamboLiberal]

http://www.washingtonpost.com/ac2/wp-dyn/A64387-2004Sep5?language=printer

President Bush reasserted his call Sunday for a simpler tax system, and aides said he is considering pushing for a flat tax, which would set the same income-tax rate for most taxpayers, as a major priority if he were to win a second term.

In arguing for a rewrite of tax laws, Bush said that they are "a complicated mess" and "full of special-interest loopholes."

"Americans spend about 6 billion hours of paperwork and headache every year on the tax code," he said. "In a new term, I will lead a bipartisan effort to reform and simplify and make fair the federal tax code."

A flat tax, which Congress would have to pass, would have fewer -- or no -- deductions and credits. Administration officials, while saying no decision has been made, said the Treasury Department is studying such a system, and White House proponents assert that it would encourage saving and investment.

Sen. John F. Kerry's campaign contends that because many such proposals do not tax investment income like interest, capital gains and dividends, such a move would have the effect of shifting the tax burden from the wealthy to the working class. "This is the ultimate embodiment of what they've done the last four years," said Jason Furman, Kerry's economic policy director.

[Norquist Nemesis]

1. 8760

The number of hours in a year. But they spend 6 billion hours on paperwork every year?

That's how they do it. Throw out the most exploitive number you can find for a little shock and awe!

edited for typo

[struggle4progress]

3. I think it's comparable to the amount of time people spend sitting ...

... at traffic lights. I figure that I spend about five minutes each day, five days a week, fifty weeks a year, waiting for a traffic light. Add that up over the whole US population: you've got about 6 billion hours. <edit:> I don't think my federal tax filings take me nearly that long to prepare.

[Toots]

12. Let's see five minutes a day five days a week fifty two weeks

Comes to about 1300 minutes which is about 21.5 hours. Quite a ways off from six billion don't you think?

[RUMMYisFROSTED]

14. Now multiply by 200+ million (taxpayers/drivers)

4.3 billion hours.

[struggle4progress]

35. Per person. Now add up over the entire US population. eom

[struggle4progress]

2. few weeks back, * was calling for a national sales tax ...

... to replace the income tax. A study by Citizens for Tax Justice estimates that a national sales tax rate of 50% would be required: http://www.itepnet.org/sale0904.pdf .

I expect that careful analysis of the flat tax proposal will show that this proposal is also ridiculous.

[porkrind]

4. like everything * says, it's a lie.

The reason * wants this is not to simplify the tax code, but to give rich people a tax cut by replacing the current progressive (but complicated) system with a flat and simple system which is harder on the poor. Also, it would only "encourage saving and investment" by the wealthy, because they will have even more money, while the poor will have less. This is disgusting, but predicatble. It has been a right-wing wet dream for years.

[papau]

11. "encourage saving and investment" is the key - tax less of the rich's

investment and capital gains income, while keeping the "dedicated Soc Sec payroll tax with wage cap" as a separate tax as they pretend it is not a tax on income - that it is not a second income tax.

[Gore1FL]

5. Simplification is a great way to disguise

The completeion of the Original tax strategy he implemented.

A flat tax is simply the worst parts of the 2001 tax cut taken to extremes.

[sonicx]

6. Kerry better hammer him hard for this. nt

[struggle4progress]

7. I think it forces the bottom 40% of the population into grinding poverty:

Assume about $ 9500 billion in annual US income and a Bush budget of about 2.5 trillion. Overall, Bush's budget must consume about 26% of income. The bottom quintile of the population receives only 3.4% of income, hence makes about $ 12.3K annually or (after a 26% tax) about $9.1K. The second lowest quintile receives only about 8.7% of US income, hence makes about $ 31.5K or (after a 26% tax) about $23.3 K.
(For the distribution figures, see )

[mrbill]

8. pat peale, the "bandaid" lady is ready to go jump in the lake

From a 13 April 2004 article in my local paper......

Pat Peale, Lake Kiowa resident and a vice president of the Cooke County Republican Women, said Forbes' advocacy of the flat tax made many county residents think about alternatives.

"There's got to be an alternative. Having just gone through doing my taxes for the first time for myself -- I was ready to go jump in the lake!" Peale said.

http://www.gainesvilleregister.com/articles/2004/04/13/news/news3.txt

This article was months ago, guess she and chimpy have been talking about it.

As you might remember, Pat received a purple heart at the rnc for "swimming a river".

[Disturbed]

9. Rich people don't pay taxes...

according to W because they got accountants that help them avoid that.
So why did he bother given them a huge tax break?

[2Design]

10. very rich don't have income...they have dividends and capital gains

and other types of cash flow but they do not earn their living so there would be NO tax on earned income....

[FloridaPat]

26. There is no social security tax on unearned income. They still

pay taxes, but at a different rate. It's all still income.

[shockingelk]

27. Exactly

I support flat taxes, which means every income tax being treated the same.

Do away with the absurd notion that and capital gains are not "ordinary income" and you have the über rich paying their fair instead of the the 15% they currently pay on capital gains.

A married working couple each making $35K a year pays over 16% on their income.

People who make millions a year sitting on their asses collecting dividends are taxed at a lower rate.

[lpricanprynces]

13. What's so bad about a flat tax?

What is bad about a flat tax? I wouldn't mind a flat tax, no deductions.

[TahitiNut]

16. Read ...

http://www.ctj.org/html/publist.htm#flattax

[lpricanprynces]

17. Thanks

Thanks for the info, I will read it.

[AP]

31. It ignores the fact that the ease of making another dollar is a function

of how many dollars you already have.

If it's so much easier for a millionaire to make another 10,000 bucks relative to a gas station attendant, why is it OK for them to both pay the same marginal rate on additional dollar?

It isn't fair at all.

[TahitiNut]

15. Same 'flat tax' rate on corporate revenues?

After all, if corporations get to subtract expenses from income (i.e. revenues) why not let people do the same?

Why do oil compnaies get an "oil depletion allowance" and workers don't get a "life depletion allowance"?

Why do corporations get to subtract their "housing expenses" but people don't?


If the same 'flat tax' rate (including all deductibility rules) were imposed on both people and corporations, the 'payroll tax' was credited against the income tax, and all kinds of income (including deferred capital gains) were taxed at the same rate ... I might be interested.

Oh... and a 'flat tax' means that only capital gains are taxed, without any allowance for subtracting capital losses. After all, that'd be a 'deduction' and those aren't allowed.

[underpants]

20. I said the same below-what about Charitable giving and home sales

Are we going to have lines for that? under a flat tax if I sell a home (lived in 2 out of the last 5 years) am I going to have to pay say 15% on the sale amount? on the gain? I have to DOWNGRADE my housing because of this?

As someone who has done taxes for many "rich" people I can tell you (my wife agrees) that the number of checks written to charities during April is amazing. Gee must be a timing coincidence right?

[sweetheart]

18. beware of Trojans bearing gifts

I agree with the sentences quoted from fratboy, but when has he
ever been honest. Given his history, it is just another front he's
planning to open to screw the country's middle classes and poor in
to the ground whilst benefitting his campaign donors.

I am for a comprehensive rethink of the tax code, in favour of a
progressive flat tax, that is embedded in to the computers of the
nation's corporations to do the entire job without paper and without
the pre-computerized view on ameican finance. However, so much
this looks like a big wooden horse.

And i wonder if the republicans call it bi partisan so they can
get zell and people like him on board to slosh out their lobbiests.

So, i'm taking advise from Nancy Reagan: "Just say no."

[underpants]

19. Okay-2% flat tax on corporations and WE won't have to pay any taxes

Do the math it would work. 2/3 of corporations paid NO taxes from 96-02. Think of all that expendable cash if Joe Schmoe paid NO taxes and all the products that would be sold/produced thus negating the "then they won't hare anyone" BS.

[54anickel]

21. Sort of like he fixed Medicare? No thanks. Bush's fairness doctrine

states "we will spread the burden of costs equally among those who can least afford it. We will leave no member of the lower and middle class unscrewed! All will contribute equally to the financial support of the corporate welfare system."

[NeoConsSuck]

22. I will lead a bipartisan effort...

Zell Miller and 90% of the repukes.

[indepat]

23. W's wants a flat tax to help us all, not to make the tax system more

regressive which it will egregiously be unless the flat tax scheme includes a payroll tax on all earned income?

[stray cat]

24. Flat tax on interest, capital gains and dividends would be great!

nt

[TahitiNut]

25. I'd also like to see an excise tax on stock sales.

The insanity of the 'greater fool' market does absolutely nothing to "invest" in enterprise. A low excise tax (and possibly an equivalent royalty) would go a long way toward taking the speculation out and leaving investment in the equity markets. (A fractional percentage would be enough, imho.) It'd be even more helpful when applied to derivatives (puts, options, etc.).

[AP]

32. We do have a flat tax on cap gains and div's and it's not great.

[mbperrin]

28. Simplicity is not a virtue.

Envision this scene: "Walk out that door and get on the boat." Nothing could be simpler. Thus begins your voyage to another continent and a lifetime of slavery.

This is the same. You might guess who the masters will be, and who the slaves, except not in any rhetorical sense.

Funny how the prosperity of the 50s and 60s occurred with a 70% top rate, ain't it? Just history, no analysis needed.

[Hong Kong Cavalier]

29. I'm amazed that anyone here

would seriously believe that after FOUR years of this crap Bush* would do something to benefit the middle and lower classes over the super-rich.

His track record on taxes should be enough, no matter what he says. (Why anyone here believes something he says is beyond me.)
A flat tax would do exactly as Kerry's campaign says: shift the burden even more to the lower classes, becuase the vast majority of the income that the upper classes make would not be taxed anymore. Combine this with his "ownership society" and Bush*s goal of a 21st century feudal society would be complete.

[progressivebydesign]

30. Who was the candidate last time who was jeered for this??

Another rich guy... damn.. who was that? He was ridiculed last election.. oh yeah, Forbes. Now Bush is adopting this? What a flip-flopper, didn't he recently say he was for a national sales tax? What happened to his constitutional amdendment for his tax cuts? What a flip flopper.. can't make up his mind. Where's Mommy Karen? How can she let him be so undisciplined? Bad George!

Please.. let's find footage of Bush ridiculing Forbes during the last primary season when he ran... I know we can find it. I'm sure it was Forbes, and I KNOW Bush must have ridiculed him for it.

[Yavin4]

33. It Won't Happen

Because you'd have to allow for mortgage deductions, and if you do allow that deduction, then everyone else's deduction would also have to be allowed. Thus, no flat tax.

[progressivebydesign]

34. Forbes proposed it... Bush was against it in 2000

Please help me.. I've tried for a while to nail down some juicy Bush quotes against Forbe's tax plan.. perhaps from the debates???? Bush is flip flopper.

[struggle4progress]

36. Income and Wealth Inequality

<snip>

Tax progressivity was highest in the decades after World War II, when the rich were taxed a stratospheric 88 percent for nearly two decades. This was also an era in which the U.S. economy was a juggernaut, and the American Dream was indisputably alive and well. Because of this, most economists do not believe that high tax rates on the rich are bad for the economy.

Personal income tax rate for top bracket

Years Percent
1945 91%
1946-63 88
1964-81 70
1981-86 50
1988 28
1991 31

The following chart shows the effectiveness of a progressive tax system. When the top rates were truly high from 1950 to 1978, American income at all levels grew at about the same pace. But when progressivity was lost in the 80s, the income of the poor began falling, while that of the rich continued growing.

Income Growth by Quintile2

Quintile 1950-1978 1979-1993
Lowest 20% 138% -15%
2nd 20% 98 -7
3rd 20% 106 -3
4th 20% 111 5
Highest 20% 99 18

<snip>

Executive Compensation as a Share of Corporate Profits

1953 22%
1987 61

<snip>

http://mirrors.korpios.org/resurgent/4Inequality.htm

Mostly focussed on the effect of the Reagan era, but I'd bet it will also give you a reasonable idea what to think about King George II and his circle of plutocrats.

[struggle4progress]

37. * is vulnerable on this. eom