Do You Think a "Flat Rate Tax" Would be a Good Idea?

[liteman]

I think it's double taxation. You make your money at your job, then invest it wisely and make a buck. Why does the government have the right to take your money when you've invested it properly?

Not always. The uber rich are mostly paid in stocks which they pay only 15% on capital gains currently, where if they were paid in cash, they'd be taxed at a much higher rate. It's called gaming the system.

And the super rich sometimes pay little to no taxes after loopholes, so the money hasn't really been taxed once.

[Keven]

The uber rich are mostly paid in stocks

Huh? What "uber rich"?

Do you know how stock options and stock grants work, or do you just like running your mouth and repeating what you heard once?

[bk94si]

If you were "paid" in stocks, I would assume you would have to declare the value at the time given as income. Might be slightly different with stock options but even then I would think you would have to declare some kind of value as income.

[SkaarjMaster]

I agree with the capital gains tax, but not the inheritance tax. Always thought the inheritance tax wasn't fair.

[Enmore]

I see most of the 2012 Republican candidates are floating a flat tax policy now.

When Russia introduced theirs at 13% in 2001, their tax take went up 25%.

[baghdad bob]

Demythologizing the Russian Flat Tax


bb

[bk94si]

Demythologizing the Russian Flat Tax


bb

Whether this is true or not, a flat tax would be absolutely fair with everyone paying their share. I expect that the 50% of people who currently pay no taxes would think otherwise.

Whether it would lead to economic growth is another matter but, honestly, I don't see how it could hurt. The labyrinth of current tax law is ridiculous.

[tucker]

I like big breasted women and flat taxes… Oh wait…

[madhatter256]

Like the saying goes: The only two things certain in life are death and taxes....


It's all about how you work the system, what you claim, etc.
*added*
I will agree that the current tax code is complicated, but only if you cannot comprehend what you read. I've seen people trying to file taxes themselves and when it comes time to try and itemize deductions, etc. they get frustrated and quit because that's the most complicated part of individual tax returns. Also, paying for someone to do your taxes is expensive if you qualify to get a lot of money back from the IRS.

Understanding the tax code is not that difficult, just take your time.

It took me 6 hours one time (across a few days) to file mine as I went in and read instruction forms, tax forms, deduction forms, etc. (sometimes I had to re-read them). I ended up getting back $500 more from the IRS. The following years have been considerably faster, but only because incomes and what type of deductions I could claim changed as I was going through school at the time, but I was able to milk out the most that I could with my limited knowledge. Although I think I could get more but would require more time, etc..

Taxes only get complicated if you own your own company. Large companies have a department dedicated to taxes when it comes time to file. But alot of small business owners don't have the time to digest that extra tax info and obviously don't want to pay someone a lot to do their taxes... So, they end up paying more than they should... If they take the time or attend a class about taxes and small business if one exists, then it will considerably help them.

I view the tax code as a test, and if you studied for the test then you're likely to do good at it. The people who complain about how complicated the tax code is are the ones who do poorly. A flat tax means that the those that know how to work the code to get the most money back or not pay a lot in taxes get screwed because some simpleton doesn't have a 10th-grade reading level.
*/added*

Also, inheritance is not a gift. It all depends on how your grandpappy set up their will/trust/estates.

I don't remember my inheritance ever getting taxed.

[baghdad bob]

well the above from the brookings in 2005, cato in 2007 The Global Flat Tax Revolution

But it is important also to be realistic about the lessons that can be learned. The United States already is a wealthy economy, so it is very unlikely that a flat tax would generate the stupendous annual growth rates enjoyed by nations such as Estonia and Slovakia. The United States also has a very high rate of tax compliance, so it would be unwise to expect a huge "Laffer Curve" effect of additional tax revenue similar to what nations like Russia experienced.

and the submission to the Journal of Political Economy in 2009 Russian Flat Tax Myth and Fact"

Looking at the survey data over time, the researchers found that the consumption-income gap shrank substantially in the years after the tax reform. In other words, the amount of income Russians reported got closer to the amount they spent. This effect was strongest for households who had been in the highest tax brackets before the reform. That's a good indication that the flat tax was directly responsible for decreasing tax evasion in Russia.

The other implication in these data is that the flat tax seems to have done little to increase real income for taxpayers. If real income had increased substantially, one would expect consumption to increase as well. That wasn't the case. Taxpayers whose tax rates were cut increased their consumption net of windfall gains by less than 4 percent.

seem to think it's true.

so for us it nothing more than the fair share issue.

50% of All Workers Made Less than $26,000 in 2010

cry me a river!

bb

[bk94si]

well the above from the brookings in 2005, cato in 2007 The Global Flat Tax Revolution



and the submission to the Journal of Political Economy in 2009 Russian Flat Tax Myth and Fact"

seem to think it's true.

so for us it nothing more than the fair share issue.

50% of All Workers Made Less than $26,000 in 2010

cry me a river!

bb

1. I want to see everyone paying something. Otherwise, they have no incentive to work together to keep taxes low.

2. You are also omitting the fact that many of those making that little are receiving many other "free" benefits: health care, welfare, WIC, food stamps, subsidized housing, subsidized daycare. Enough to make their effective take home equal to over 40k in many cases.

Sorry, but if they can afford cable TV, cell phones, and enough food to make them 100# overweight, they can can certainly pony up their fare share.

[JustinC939]

^cell phones are just as cheap if not cheaper than landlines phones these days. That and lower priced foods tend to be higher in fat and calories which makes one more prone to obesity.

[Phopojijo]

The problem with flat tax is that it creates a giant dead zone where people are not incentivized to increase their income unless they do it drastically.

[otoc]

Until all income sectors get their fair share of the income this country generates and reverses the last 30 year trend where the bottom 2 groups make more than inflation takes away I am against a flat tax unless it has provisions for income verification in regards to basic living needs , quality of life, as well as acknowledgement of other taxes paid.

On the point of business? Take away the loopholes and reward investment in this country while reducing the overall rate. Take healthcare out of the hands of business like China does.

[Frank1946]

Until all income sectors get their fair share of the income

And just who defines "fair share" and will they get it whether they actually work or not?