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| Name: |
4691
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| Subject: |
Tax Reform - Any ideas?
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Date:
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10/1/2011 11:54:53 AM
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Anyone thought of a good tax reform plan? What would you do if you could change the tax system? Below is my plan. I’ve always leaned toward the Fair Tax and Flat Tax concepts but the actual plans are still too complicated in my opinion. I’d like to see a system that does not care how you get the money, what you do with it after you get it, or what your personal circumstances are. To go along with this would be a forced balanced budget such that the federal government never spends more that it receives. Under my plan an individual would have to earn over $150K before reaching an effective tax rate of 10%. A person earning $1M would pay less than 25% including FICA and the sales tax. Would the federal government and military have to shrink under my plan? I certainly hope so. Would individuals and businesses keep more of their own money? Definitely.
Individual Income Tax
No deductions. No credits. None! All rates are on an individual basis. Income is defined as any and all sources of money that the individual received during the calendar year.
1% $1 - 10K
5% $10K – 50K
10% $50K – 100K
15% >$100K
Federal Sales Tax (excludes food, housing, utilities, and medical) = 2%
Business Tax
No deductions. No credits. None!
Max Tax Rate = 20%
Min Tax Rate = 0%
Tax Rate = % of workers that live and work outside the U.S. capped at 20%
FICA = rates frozen as-is on all income – no cap
But I know I'm only dreaming. The likelihood of any real tax reform is near zero even if the Republicans controlled all three after 2012. Democrats and Republicans alike are far too beholding to special (and personal) interests.
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| Name: |
Barneget
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| Subject: |
Tax Reform - Any ideas?
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Date:
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10/1/2011 11:20:21 PM (updated 10/1/2011 11:21:46 PM)
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Great concept, love the simplicity. Wonder, based on 09 filings, just how much revenue it could produce. My recall is that biz/Corp taxes and fees account for roughly 40% of fed revenue, and most thinking folks recognize that business taxes are a shell game with the cost ultimately borne by the consumer. Along with that, we have the 15.?% FICA. Maybe employers should be required to increase wages by the employer share of the FICA, put the full payment burden on the wage-earner, and since FICA winds up in the general fund anyway, adjust the suggested rates to include that. What would we do with the tax lawyers, CPA's, and support staff that are required to walk many of us through today's 72,000 page federal tax code? There is an entire business sector, as well as a federal agency built around the document. Maybe we should cure the spending disease before we attempt to fix the revenue side. Without the spending fix, which includes defining the role of government, there can never be agreement on funding required.
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| Name: |
water_watcher
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| Subject: |
Tax Reform - another approach
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Date:
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10/2/2011 7:22:48 AM (updated 10/2/2011 8:04:51 AM)
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I think you are on the right track for reform and simplicity we need. On individuals, one of the problems with brackets with big jumps in rates vs a flat tax is you have situations at the fringes where someone making $50k vs $49k pay double the tax. But you are on the right track with your thinking. Also, I know you are trying to capture illegal income as well in saying all money received ... but unless there is a way to track it will not be reported, just like today.
That is why I favor a larger consumption tax and a very simple and low flat tax for all income with no deductions. To satisfy the liberals ... you may need a 3 tier flat tax on "excess" income over certain levels. For example, a 5% flat tax for all over $15K (the first 15k is excluded for everyone and pay no income tax, only a consumption tax). Then 5% additional (10% total) on just the excess over say $250K and then an additional 10% (20% total) on just the excess over $500K.
Then have a 7.5% consumption tax.
Corporate tax ... my view is very simple ... all corporations pay 15% tax on calculated income before depreciation and you also add back individual compensation over $500k to satisfy the excessive income hawks. But you allow a 3 year write off of all "new" capital spending in the US "only". This would promote US investment without the crazy approach of Obama. There would be a 3 year limit for start-up companies or companies in finacial difficulty, where they could pay no taxes based on this structure ... then it would revert to a minimum tax of 3.5% of revenue.
I do agree on SS the entitlement reforms will not be enough and going to a "lower rate" on "all income" may be the only answer. It makes dems happy since lower income will pay less for benefits they ultimately receive, while higher incomes will subsidize that since they will never get out of the system what they put in. But it has to be looked at as insurance or annuity plan rather than a retirement plan that it has evolved to when it was never intended to be.
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| Name: |
Packrat
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| Subject: |
Tax Reform - Any ideas?
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Date:
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10/2/2011 7:52:50 AM
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Consumption tax is the only fair tax.How do you tax the income from all the Pimps,Hoes,Drug Dealers and the underground economy?People pay taxes,Corporations only pass them on to you and me.But I realize that our great leaders will lose the power they have over the masses,so I'm only wasting my time with this thought.
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| Name: |
water_watcher
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| Subject: |
Tax Reform - Any ideas?
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Date:
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10/2/2011 7:55:42 AM
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exactly ... you tax honest and ethical income more to support the illegal income made and never reported or taxed. Therefore the current tax system indirectly rewards illegal activity.
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