Posted on 02/02/2008 11:54:59 AM PST by xcamel
(Alexandria, VA) -- As House Ways and Means Committee Chairman Charles Rangel (D-NY) plans another push this year for an overhaul of the Tax Code, lawmakers should abandon Rangel's multi-rate proposal and follow the worldwide movement toward a simple flat tax system, according to the 362,000-member National Taxpayers Union (NTU). In the mid-20th century, Hong Kong was the only country with a flat -- and proportional -- national personal income tax rate. Since then, 17 other countries have followed suit and introduced flat taxes, according to the World Taxpayers Associations (WTA), a coalition of 60 taxpayer-advocacy groups -- including NTU -- from 44 countries.
"A single-rate tax would create a more simplified and transparent Tax Code," NTU Vice President for Policy and Communications Pete Sepp said. "Instead of 'wrangling' more money from families, Chairman Rangel and other legislators should catch on to what the rest of the world is discovering -- lower, flatter taxes benefit their citizens and their economies."
One recent trend many countries have followed is to introduce very low flat income tax rates -- usually from 10 percent to 13 percent. Bulgaria, Kazakhstan, Kyrgyzstan, and Macedonia have introduced flat tax rates of 10 percent over the past two years. Russia enacted a 13 percent income tax rate in 2001, and Ukraine did the same in 2004, according to WTA.
Estonia, the first European country to introduce a flat tax rate (in 1994), plans to reduce its rate by 1 percent each year, with a goal of an 18 percent rate by 2011. Estonia's current rate is 20 percent. Both Lithuania and Hong Kong reduced their income tax rates for 2008, from 27 percent to 24 percent and from 16 percent to 15 percent, respectively. Jersey, Georgia, Guernsey, Iraq, Ireland, Latvia, Macau, Romania, and Slovakia also have flat income tax rates ranging from 12 percent to 25 percent.
"Whether it's a flat income tax or even better, a retail-level national sales tax, American policymakers should look abroad to see what's working," Sepp concluded. "Single-rate taxes represent the wave of the future for countries that want to be competitive and governments that want to respect the rights of their taxpayers."
Fact is, Flat taxation works as evidenced by the 36 countries (280 million people) that have adopted similar (and wildly popular) plans in the last 30 years
Countdown to the FairTax kooks spamming the thread 3...2...1
I think it’s unfair to call people who support the Fair Tax "kooks." There’s some good reasons why the Fair Tax should be considered, especially if they drop the prebate idea. The Flat Tax, however, should have the least bureaucracy associated with it.
Unfortunately, the Congress seems to have chosen Vladimir Ilyich Lenin as a guide.
Hah!! The worldwide trend has been for countries to earnestly explore/tap into off-shore oil. Something no one can ever blame the U.S. for doing. Unfortunately.
So if we go from several progressive tax rates to a single rate, all of a sudden loopholes, deductions, incentives, the bureacracy, armies of accountants, and tax attorneys just disappear? Believers must be potheads.
That is an entirely different topic...
Are any of them capitalist countries?
They all are now..
http://www.heritage.org/Research/features/issues/issuearea/Taxes.cfm
But according to some, they are just another group of Marxists.
This will let you make more sense of it..
http://www.cato.org/pubs/policy_report/v29n4/cpr29n4-1.html
President Reagan was hinting around about a flat tax during his first term. I was hoping that he would push one after the 84 election but........
Russia, for example, adopted a "flat income tax" rate some time ago. But from what I've read, the Russian government actually gets more revenue from a payroll tax system that is far more dysfunctional than ours. The result is that the flat income tax rate doesn't have quite the same impact as one might have expected in that case.
If only the repubs & dems could start towards that flat tax direction; dreaming I guess.
No matter how many income levels and tax rates the IRS comes up with it is a relatively simple thing to read your taxes owed off a table once you know your taxable income.
The complicated part about filling out a tax form is adding up all the different things that constitute income and subtracting all of the different things that are counted as deductions.
Bush, and even Thompson, who claim to be for tax simplification are/were contantly supporting tax "incentives", etc. which amount to additional pages of tax code leading to further complication.
Personally I would be willing to accept a little bit of progressivity in the tax schedule in exchange for the elimination of all or most deductions and "incentives".
We should do this for corporations first. No more "incentives" to invest in solar, or whatever other harebrained ideas they have. Just total up the profits and slap on a tax.
If so, then the job of "tax attorney" might be eliminated in our time.
"Taxes should be uncomfortable. Not especially painful, mind you -- just a bit irritating. Enough to make you pay attention. Modest discomfort is an element of citizenship, reminding voters of the price they pay for civilized society."
(thank you, Justice Holmes)
What I think I’d do is to have NO income tax on all income taxed for social security benefits. Then I would tax any income above the SS income cap at a rate of 12.4 percent. When combined with Medicare, that would ensure a flat marginal tax rate of 15.3 percent.
Corporations I would tax at 5 percent. When combined with the average state corporate tax, that would come to about 10 percent or so, making us competitive with such countries as Ireland.
Come again? All I’m getting is a red X.
No messy cleanup here either. A good discussion.
(taxes)
There’s some good reasons why the Fair Tax should be considered, especially if they drop the prebate ideaBut then it would no longer be "the Fairtax".
It’s a clever plan. We use other people’s oil until it’s almost gone, and then we have ours......
Well, it's still different than other proposals. I just worry that the prebate is where the politicians will get their foot in the door...again. The other thing that bothers me is that, given the cost of living varies across the US, you will find arguments that the prebate should "float" with the cost of living. Also, you're going to hear arguments about those taxes that won't go away. For example, I know a lady with a beach-front condo whose property taxes and insurance rates have tripled in the past two years. My guess is that people who have that experience will argue that they should have a "bigger" prebate than people who live in areas where such costs are more stable. Therefore, people in FL will argue with some force that their costs have gone up disproportionately and they should have a "special" adjustment due to higher costs. Once that door is opened, you're right back where you started.
Well, it's still different than other proposals.In more ways than you might know.
I've studied the Fair Tax pretty thoroughly and have read the book once from cover-to-cover and parts of it more than once. Also, I think my background and 20 years of teaching university-level economics gives me some insight into the proposal. There's a lot to like about it, but the prebate, to me at least, is the weak link in the proposal.
C'mon, mate, you've seen how the Regress operate. Without this guarantee, we'd end up with BOTH an income tax and a ''fair'' tax, sure as hell.
That, afaic, is an unacceptable risk, er, excuse me, an unacceptable certainty.
Well I don’t like the idea that unelected government bureaucrats at social security would have taxing authority and I also don’t like the idea that local, actually “any government” would have to pay an additional 30% tax ON their employee’s wages, salaries and benefits not to mention the 30% tax on their purchases. Does your background in teaching economics give you any insight where that additional money would need to come from?
No, I agree there’s a lot of political “stuff” that has to happen first. I was only commenting on the tax itself.
;^)
This post (<-click), while addressing a tax related thread, attempts to explain how FDR's disdain for 10th A. state powers created an environment where federal politicians, like Senator Clinton and her HillaryCare, wrongly propose federal spending programs based on non-existent federal powers.
(Should anybody feel inclined to comment about the above referenced post, please do so in this thread.)
Again, the people need to wise up to politicians like Senator Clinton who are unthinkingly trying to carry on the unconstitutional federal spending policies established by FDR. The people need to quit sitting on their hands and petition government leaders like Clinton who are ignoring their oaths to defend the Constitution, demanding that they resign from their jobs.
a flat income tax is a good idea IF: everybody pays the same percentage of income, Everything is classified as income, and raises/lowering of tax rates effects everybody the same, percentagewise.
"It's The Spending Stupid..."
What about SS income ? What about muni bond income ? What about disability income ? What about the value of employer-provided benefits like health insurance ?
Which of those would you include in taxable income and which would you exclude ?
Of all of those, I think the only one that would be reasonable to include as taxable income is the one that currently ISN’T taxable income — employer-provided benefits. That would take away the tax favoritism that locks people into their jobs, they can decline the employer plan and take the cash to buy the health insurance that fits them rather than the one-size-fits-all their employer chose.
But, in general, I agree with you. All wages, interest, gains, etc. should be counted as taxable income and no deductions for anything — no matter how many children, wives, or mortgages you have, those were your choices and the government shouldn’t be showing favoritism. A 10% truly Flat Tax would collect slightly more revenue than the convoluted mess we have now, and pay for all the General Fund spending. (SS/M benefits are supposed to replace a portion of wages and benefits typically associated with a job, so it makes sense that they are funded as they are now — by a flat tax on wages up to a cap.)
income is income. there cannot be ANY sacred cows else they''ll spread and we'll be right back to where we are now.
Part of the problem is that some people are demanding services when they don't pay into the system - they're playing with other people's money - they haven't a stake in supporting the system.
when everybody pays into the system, there are no freeloaders telling the supporters they have to pay more.
by what moral right do some people demand a share of the labors of others? When everybody is affected by rising costs, perhaps there will be less incentive to gouge the taxpayer.
In general, I agree that creating blocks of voters that don’t pay taxes is a problem.
But these are very specific types of income I listed.
SS — any tax that comes out of this will just mean the benefit has to be increased or the elderly for whom it is the sole source of income will fall into poverty. Making it taxable would not encourage this group to lower government spending to get a lower tax rate, since the government would simply reduce the benefit to match the new lower tax rate.
Disability — the same as above. They have no ability to earn more income, so the state will have to provide it just so they can turn around and give it back in taxes.
Muni bond income — these bonds are at a lower interest rate BECAUSE they are tax-free. If they become taxable, then the local governments that issue them must pay higher interest, and pass along that cost to the taxpayers in some other tax. In addition, the existing muni bonds are a contract that making taxable would breach.
So taxing these special types of income will not leave the taxpayer better off, and the government will not collect any additional revenue. It would be a shell game that might or might not have the desired psychological effect of encouraging people to vote responsibly.
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