Would a flat tax be ok if the tax

[Lucky Luciano]

was based on a $25K deduction from total income and some additional $3K deductions for each dependent? I am not sure what the right percentage would be, but would this idea make any sense to simplify things? The large deductions should prevent this from hurting poor people. I use $25K because that seems like a good poverty line for me whether or not it is the official one.

I am no expert on taxes - just asking.

Of course...you do have to worry about sneaky incomes from overseas that are well hidden...

[Name removed]

1. Deleted message

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[Fovea]

2. The problem is that it is regressive.

It does not distribute tax burden with an eye to the equal participation of the investing class.

Flat tax is a bad idea, even with a sugar coating.

[leftyandproud]

12. It is not regressive it is FLAT and progressive

A truly regressive tax would start out a 50% for the poor, then gradually drop...50% for 10k income, 40% for 20k, 20% for 80k, 5% for 100k...THAT is regressive. Starting out with a fat deduction and a flat rate above it is still a progressive system. The more you make, the closer you get to paying the highest percentage rate.

[Fovea]

13. And would investments be subject to the same tax rate?

[Jackpine Radical]

3. For starters, a flat tax on WHAT?

The usual conservative proposals are for taxes only on earned income, not taxing capital gains, for example. That was Steve Forbes' proposal back in '92 or whenever, IIRC. A flat tax on earned income is a tax that would be paid disproportionately by the middle class. Of course that's pretty much what happens now, with the lower CG rates, plus FICA topping out at $85k

[trotsky]

4. EXACTLY.

People like Forbes live off of dividends and capital gains - they'd be tax-free. Is that fair?

[sallyseven]

7. If bush recommends this then it is no good.

When did he ever care about what the regular people? It is a scam just like his tax cut. Let cut out the loop holes. Make the Dem's and repugs responsible for a fair and equitable tax not exceptions.

[papau]

5. Include investment income at 100 cents on a dollar, and it could fly.

if unrealized gains that occured during the year are also taxed (or credited) with a 10 year phase in of unrealized to date and an inheritance tax deductible of 25 million with a similiar 25% rate.


With the above structure the proposed "flat tax" of 25% with 10,000 per person and 20,000 per return deductible that replaces both the Payroll tax and the FIT - so we have only one tax on income -

would be much more progressive than the current system.

[Warpy]

6. $25K is below the real poverty line

Even raising it to $50K (above the poverty line for now but not for long)would still sock the middle class while giving the top 0.5% (those with a minimum of ten million dollars in assets) a huge tax cut.

Do we really want to hurt the middle class? Do we really want to fatten plutocrats?

A flat tax is by definition a regressive tax, falling more heavily the less disposable income (that left over from necessities) a family has.

I say we eliminate the earnings cap on FICA and have it apply to all income, earned and interest, private and corporate. That would give the rich the flat tax they've always wanted, shore up social security by having them pay back everything they've looted from it over the years, and end forever their whinging about how the poor pay no tax.

The income tax should always be a progressive one. It's the only way to support a government that works for the people, not just for the rich.

10. Actually it's above the Official povery line

At least according to this http://www.census.gov/hhes/poverty/threshld/03prelim.html

U.S. DEPARTMENT OF COMMERCE
BUREAU OF THE CENSUS
WASHINGTON, D.C. 20233

PRELIMINARY ESTIMATE OF WEIGHTED AVERAGE POVERTY THRESHOLDS FOR 2003

Size of Family Unit Estimated Threshold

1 person (unrelated individual)......…………. $9,392
Under 65 years ............…. 9,572
65 years and over 8,825

2 people ..........................................….. $12,024
Householder under 65 years …..................………… 12,386
Householder 65 years and over 11,133

3 people ......................….. $14,675
4 people .................................….. 18,811
5 people .....................................….. 22,240
6 people ...................................……. 25,136
7 people ..................................…….. 28,639
8 people ...............................…….. 31,611
9 people or more ..........................……… 37,907

These average poverty thresholds were derived by increasing the 2002 weighted
average thresholds by a factor of 1.022790 which reflects the percent change in the
average annual Consumer Price Index between 2002 and 2003. These estimates
may differ by a few dollars from the thresholds that will be published in the final
report on the 2003 poverty population.

If you have any questions concerning these poverty thresholds, please call
[phone].


January 22, 2004

[Gothmog]

8. Flat Taxes are just disguised tax cuts

The Repugs love the flat tax because it is based on shifting the tax burden from the upper income brackets to the middle income brackets. It is in effect a massive tax cut for the upper income brackets.

There are other policy reasons why to hate this tax such as the effect on charitable giving of elimination of the deduction for charitable giving and the effect on the housing industry if the home mortgage deduction is eliminated.

[ProfessorGAC]

9. My Guess Is It Would Need To Be Higher

I did this excercise several years ago. (I think it was in '96 when Steve Forbes was frothing about it.)

As i recall, the number was about $30k then, which would make it (if i remember the year correctly) $38 - 39k now. On top of that, the flat rate needed to be about 4 or 5% higher than what Forbes was talking about.

Lastly, there could be no other deductions, except for dependent children, and a FIRST mortgage. That's it!

It turned out to be revenue neutral (again, i don't have that computer here, it's at home), when the flat rate was 21% of everything over $30k, adjusted for the simple deduction plan.

But, that would have to include ALL income, no matter the source, otherwise it would turn out to be a huge tax break for the extremely wealthy.
The Professor

[Jeff in Cincinnati]

11. Dick Gephardt floated a flat tax plan a few years back

Essentially taxed all forms of income at the same rate. Provided hefty deductions and exemptions for dependents. Closed a boatload of corporate loopholes.

The Republicans wouldn't consider it because they really don't give a crap about the "complexity" of the tax code as long as it allows the ruling class to escape taxation. Their version the flat tax is nothing more than a Trojan Horse.

[K-W]

14. What is the point?

The sales/flat/income/whatever debate is just a distraction.

Why change to a different structure of taxes? What would ti change and who would benefit from that change. And if you structure it so that nothing really changes, why bother changing it?

[UdoKier]

15. No.

Progressive taxation or nothing.

[The Sushi Bandit]

16. All taxes should be based on your Car!

$$$ and Pound tax for all!!

Take a bus... no tax

Walk or ride a bike... no tax

drive a hummer.... your screwed

Domestic is taxed lower than imports cars

Limos have an excise tax

Taxis... no tax (but very taxing if you know what I mean)

Hybrids... very low tax

Diesel... high...Poluters

Lincoln's and Caddys... high

Mercedes and Lexus... higher than Lincoln's cause they are imported

Hyundai's are taxed high because of repressive labor laws in Korea

Volvo's are taxed the lowest of the imports because of safety and because I like Swedes.

Big trucks if you don't use them daily on construction jobs... very high