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Saturday, November 25, 2006

Flat tax with a cap.

I would like to see America have a simple flat tax. Hold onto homeowner deductions for interest, charity donations and maybe a couple of others. Near zero taxation for those earning less than $15,000 with a sliding increase to a flat percentage for those from $30,000 and up. When the income exceeds $500,000 then reverse the rate to lower percentages so as to free up capital for expansion...therefore more jobs. What rate...I hear 12% would equal what our current system generates and I may be off.

I don't think it will ever happen because the IRS, public accounting and the legal profession would never support such a simple idea.

6 Comments:

Blogger abloggersayswhat said...

I would like to see a flat tax also. Every time I have seen one proposed it wasn't actually a flat tax, there were always limits and exemptions. A true flat tax is applied equally "flat" across the board. All income is taxed and separate social security withholding is eliminated. That is the only way it will work. When I researched this around 20 years ago we could have done it for 4% including national health care. Today, I would guess 7%. Maybe 6% if we file bankruptcy on the national debt.

November 26, 2006 at 1:31 AM  
Blogger Chad Sargent said...

The tax code we have is a drag on the economy. It is a hopeless morass of regulations, loopholes and special interest influences. For the sake of our country, its economy and citizens, we must dispatch it and replace it with a tax plan we can live with. The sooner the better.

The flat tax reform proposal (HR 1040) is a definite improvement over the convoluted tax code. Filing simplified tax returns on a postcard is appealing and has some popularity. However, history teaches us that a flat tax doesn't offer a permanent or satisfactory solution to our tax code problems.

The income tax started out as a single rate (flat) tax. Under the power of government and isolated from the People, it gradually grew into an oversized, complex mess, with numerous loopholes, multiple brackets and high rates. In 1986, the tax code was overhauled, simplified and reduced down to two brackets. Many deductions and loopholes were eliminated. Today, we have six brackets, and most of the loopholes are back. This demonstrates twice over how a flat tax simply won't stay flat. The reason is simple: Congress makes the laws. Precedents have been set. Lobbyists procure tax breaks for special interests and have more access to Congressmen than We the People have. Each tax break complicates the tax code just a little more, and they add up.

Finally, a flat tax is still income tax, counter-constitutional and contrary to the founders' vision. The income tax was made possible only after self-serving politicians did an end run around the Constitution in 1913 and took powers for themselves that the Constitution denied them.

At the time people were debating the flat tax, a new tax system proposal formed and began to grow; a tax plan with an entirely different base and philosophy. This tax plan had the visions of the Founders in mind, with fairness to all citizens in its foundation. First dubbed the National Retail Sales Tax, it became known as the FairTax.

In Congress, the FairTax Bill (HR 25) has 58 congressional co-sponsors; the Flat Tax Bill (HR 1040) has six. Popular support for the FairTax is strong and growing; flat tax support has all but vanished. Two very successful FairTax rallies have taken place; no flat tax rallies have been held or planned. The FairTax Book has outsold Steve Forbes' book "Flat Tax Revolution" many times over.

Income tax in any form is unacceptable. It will put us on a circular path leading right back to where we are now, for the third time. It's time to scrap the entire income tax code once and for all and replace it with a tax that generates the same amount of revenue for the government, puts power back in the hands of the people, and encourages economic growth. The only tax reform that will accomplish that is the FairTax Plan; a nonpartisan national grassroots campaign to replace the federal income tax system with a progressive national retail sales tax and dollar-for-dollar federal revenue replacement. It provides a "prebate" to ensure no American pays federal taxes on spending up to poverty level. Companion legislation already in Congress will lead to repeal the 16th Amendment. The facts and research are online at FairTax.org and 1-800-FairTax.

As for the IRS, half the agents who work there will retire within the next 10 years. The rest will find jobs in accounting or law enforcement, such as the DEA or Homeland Security. The tax code has become so complex that few people like to deal with it. Accountants mostly view tax returns as grunt work. Many accountants and CPAs favor the FairTax. Lawyers might object but there's plenty of other legal work out there. Effective tax reform requires grassroots effort. When grassroots is strong enough, is doesn't matter who objects; it will push them aside or run them down.

Sign the FairTax petitions:

Congress.org
FairTax.org
Grassfire.org
Patriot Petitions
National Taxpayers Union

November 26, 2006 at 3:12 AM  
Blogger bubba said...

The flatest of flat taxes is still an income tax.

The fair tax makes good sense.

That's why it will probably never be enacted.

November 27, 2006 at 8:45 PM  
Blogger abloggersayswhat said...

A national sales tax is a good idea. The "Fair Tax" plan needs a lot of work from what I've seen. I know I'm going to buy as many of the most expensive new houses I can the day before it's implemented. That's an immediate 23% equity.

November 27, 2006 at 10:55 PM  
Blogger Joe Guarino said...

Meblogin, I think either a flat tax or a national sales tax would be an improvement over the current system. Great post, and I like the main direction of your proposal.

The system needs to be more fair than it is, and should not extort monies from one group to a greater extent than other groups. One added benefit is that tax increases would be much less likely to be advocated if it is not perceived that the main impact is merely pushed off on those in the mid-to-higher brackets.

November 28, 2006 at 3:11 PM  
Blogger meblogin said...

FOX ran some discussion about this idea earlier today....and if my brief observation was accurate...the speakers believed that it was a good idea but no one has enough "horsepower" to pull it off.

I don't think that the lower brackets should be made to pay their fair share as this would take away from their abiltity to spend...etc...which would hurt business and therefore have a negative impact.

December 2, 2006 at 9:32 PM  

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