Even many republicans are socialists.. However a value added tax scheme masked by "something else" might be possible..
oh... wait. We already have that!
However a value added tax scheme masked by "something else" might be possible..
Indeed!!
| http://www.taxfoundation.org/files/rl33443.pdf Congressional Research Service Flat Tax Proposals and Fundamental Tax Reform
Senator Richard C. Shelby's Proposal S. 1099. The Tax Simplification Act of 2005 was introduced on May 23, 2005, and referred to the Committee on Finance. This act was modeled after the proposal formulated in 1981 by Hall and Rabushka. This flat tax would levy a consumption tax as a replacement for the individual and corporate income taxes, and the estate and gift taxes. This proposal has two components: a wage tax and a cash-flow tax on businesses. It is essentially a modified VAT, with wages and pensions subtracted from the VAT base and taxed at the individual level. Under this proposal, some wage income would not be included in the tax base because of deductions, while under a VAT all wage income would be included in the tax base. *** Representative Phil English’s Proposal H.R. 4707. The Simplified USA Tax Act of 2006 was introduced on February 8, 2006, and referred to the House Committee on Ways and Means. This proposal would replace our income tax system with a consumption tax system. The corporate income tax would be replaced by a cash-flow business tax (a subtraction-method VAT). The gross tax base (value-added) would equal gross receipts less purchases from other firms. The business tax would be determined by multiplying the valueadded by the appropriate tax rate. A tax rate of 8% would apply to the first $150,000 of a business’s value-added, and a tax rate of 12% would apply to all of the business’s value-added over $150,000. A business tax rate of 12% would apply to all imports. A credit for the 7.65% employer-paid OASDHI payroll tax (commonly called FICA or the Social Security tax) would be subtracted from the tax on valueadded in order to calculate the amount that the business would remit for the year. The individual income tax would be replaced by a tax on consumed-income.An individual’s tax liability would be calculated by (1) calculating gross income, (2) subtracting exemptions and deductions, (3) applying a progressive rate structure to the difference, and (4) subtracting a credit for the 7.65% employer-paid OASDHI payroll tax payments. Gross income would equal wages and salaries plus interest, dividends, pension receipts, and amounts received from the sale of stock and other assets. Deductions would be allowed for charitable contributions, home mortgage interest, and higher education tuition. Deductions would also be allowed for retirement-oriented 401(k) contributions and IRAs for lower income families. *** Senator Arlen Specter’s Proposal S. 812. Flat Tax Act of 2005 was introduced on April 15, 2005, and referred to the Senate Finance Committee. This act is modeled after the Hall-Rabushka proposal, which was previously discussed. The Specter flat rate consumption tax would replace the federal individual and corporate income taxes and the federal estate and gift taxes. This proposal has two components: a wage tax and a cash-flow tax on businesses. It is essentially a modified VAT, with wages, salaries, and pensions subtracted from the VAT base and taxed at the individual level. The individual wage tax would be levied at a 20% rate on all wages, salaries, and pensions. In addition, government employees and employees of nonprofits would have to add to their wage base the imputed value of their fringe benefits. The individual wage tax would have “standard deductions” that would equal the sum of the “basic standard deduction” and the “additional standard deduction.” *** Senator Ron Wyden’s Proposal S. 1927. The Fair Flat Tax Act of 2005 was introduced on October 27, 2005, and referred to the Senate Finance Committee. This proposal would reform the current income tax base rather than changing to a consumption base. This act has three stated purposes: (1) to make the federal individual income tax system simpler, fairer, and more transparent, (2) to make the federal corporate income tax rate a flat 35% and eliminate special tax preferences that favor particular types of businesses or activities, and (3) to partially offset the federal budget deficit through the increased revenues resulting from these reforms. The progressive individual income tax would have three rates: 15%, 25%, and 35%. The individual income tax would provide a federal income tax credit for state and local income, sales, and property taxes. The individual income tax would provide for an earned income tax credit for childless taxpayers and a new earned income child credit; repeal the individual alternative minimum tax; increase the basic standard deduction and maintain itemized deductions for principal residence mortgage interest and charitable contributions; and reduce the number of exclusions, exemptions, deductions, and credits. All income including capital gains and dividends would be taxed equally. This act would be effective beginning with tax year 2006 but would sunset after tax year 2010. Representative Rahm Emanuel’s Proposal H.R. 5176. The Fair Flat Tax Act of 2006 was introduced on April 25, 2006, and referred to the House Committee on Ways and Means. This proposal would broaden the tax base of the current income tax. The individual income tax would have three tax rates: 15%, 25%, and 35%. The current rate differential for capital gains and dividends would be repealed. The basic standard deduction would be increased, including tripling the standard deduction for single filers from $5,000 to $15,000 and raising it from $10,000 to $30,000 for married couples. A “simplified family credit” would replace the current earned income tax credit, the child credit, and the dependent care credit. A refundable “college tax credit”of $3,000 per year to students for four years of college and two years of graduate school would replace five existing education tax incentives. The home mortgage deduction would be available to all homeowners regardless of whether or not they itemize their deductions. A “universal pension account” would replace 16 existing IRA-type accounts with a single portable retirement account for all workers. The individual alternative minimum tax for individuals would be repealed. The corporate tax rate would be 35% of taxable income. The Secretary of the Treasury would be required to report “recommendations regarding the elimination of federal tax incentives which subsidize inefficiencies in the health care system ....”5 When sufficient information is available, brokers would be required to report customers’ basis in securities transactions. Penalties for promoting abusive tax shelters would be increased. The criminal monetary penalty limitation for the underpayment or overpayment of tax due to fraud would be increased. A sunset provision states that “All provisions of, and amendments made by, this act shall not apply to taxable years beginning after December 31, 2010. *** Representative Michael C. Burgess’s Proposal H.R. 1040. The Freedom Flat Tax Act was introduced March 2, 2005, and referred to the House Committee on Ways and Means. This proposal would allow taxpayers to select a flat tax as an alternative to the current income tax system. The flat tax was based on the concepts of Hall-Rabushka and is similar to the Armey flat tax proposal. The individual’s selection of the flat tax would be irrevocable. In the first two years, the flat tax rate would be 19%, and in subsequent years it would fall to 17%. An individual engaged in a business activity may elect irrevocably, as an alternative to our current income tax system, to be taxed on business taxable income that equals gross sales less the cost of business inputs for business activity, wages,and retirement contributions. For the first two years, a 19% rate would apply to business taxable income, but after the first two years, this rate would decline to 17%. This act would have become effective for tax year 2006. |