Posted on 07/07/2011 12:42:35 PM PDT by jessduntno
The current U.S. tax system is huge convoluted mess. The Internal Revenue Service (IRS) has six federal income tax brackets ranging from 10 to 35 percent. Our so-called progressive tax system punishes the most productive members of society with a higher tax rate. The current tax system is riddled with loopholes and biases that hurt individuals who save money for the future. Not only does our tax code treat citizens differently but it is hopelessly complicated. According to the IRS, the average taxpayer spends 26.5 hours preparing and sending in their taxes. The ever-growing Internal Revenue Code is now over 3 million words. It’s far too complex, intrusive and long.
We can all agree that we clearly need to fix the tax code. The two most common tax reform proposals are the flat tax and the fair tax. Which one is best? First, both the flat tax and the fair tax (if implemented correctly) would likely be better than the current tax system. As Cato Institute scholar Dan Mitchell says, “from an economic perspective, the flat tax and the national sales tax (or fair tax) are virtually identical. Both would junk the current system. Both would restore fairness by taxing at one low rate. Both would eliminate all forms of double taxation.”
FreedomWorks has long concentrated our efforts on implementing a flat tax. The flat tax is simple and would generate more economic growth than the status quo. Instead of our current multi-rate tax system, a flat tax would tax all individuals at the same rate. Under a 10 percent flat tax, someone making $100,000 annually would pay a $10,000 federal income tax. It’s a simple equation. It would not punish productive members of society with a higher tax rate.
I personally advocate the flat tax being as low as possible. Of course, any tax reform should be accompanied by significant spending cuts. The flat tax would remove special interest loopholes from the tax code and allow individuals to file their taxes within five minutes on a form the size of a postcard.
You are correct with regards to FEDERAL spending. I was referencing TOTAL (Fed + state + local) spending. The 42% represents the total tax load on US citizens.
If we look at it from just the Federal level. The break even point is between 24% and 25%. Again, that is without any spending cuts.
There are far, far too many temptations for elected leaders to promise "exemptions" or "exclusions" in return for their vote.
Nope, totally eliminate the 16th Amendment, then move to the flat tax, as it is now, almost (some would say more) people pay NO income tax, no matter how much they earn, others are taxed on monies that they've already paid taxes on!!!
Time to shut this door once and for all IMHO!
[ You didn’t read the article...it covers that point. Quite well, I though. ]
I have read many fair and flat tax proposals on FR..
They are the same basically.. same concepts..
Congress mainly and the american people have become socialists...
SSA is already pure socialism.. only thing remaining is to make the rest of the system purely socialist..
UNTIL the federal government has been reduced to manageable size..
ANY attempt to recover proper taxation will NOT happen..
Any that trusts it will has a Utopian bent.. and resides in OZ..
The reason for the massive pages of current tax code is defining various “incomes” (capital gains, wages, deferred, etc ...) and how to “report” and calculate with numerous exemptions and on, and on, and on to the point that the IRS and millions of private tax accountants come up with different scenarios and solutions.
Plus, Uncle Sam still has his giant bureaucracy into your so-called “private” affairs. The proposed Flat Tax does not solve these issues rather is simply flattens them which arguable is better than what we have today.
With the Fair Tax, defining a “sale” is nowhere as difficult. But the big bonus is Uncle Sam won't be all up in your personal affairs.
Most states already have sales tax collection systems in place. Without going into great detail about the Fair Tax, I encourage one to read the Fair Tax Book for the particulars. Granted, there is a lot to argue about, but for me, the restoration of some personal financial privacy moves in the direction of liberty.
There is no secure way to “trust” politicians from legally enacting more government “greed,” but reading the Fair Tax Book answers many of these type of honest objections. We are only mere citizens ruled by the governing class. (If you don't believe that, just ask them). Our only strength is in numbers.
I believe many US citizens are witnessing an American revolution of rejecting the statist status-quo. Me, I am participating. Here is how: I am a Tea Party of One! I work to help other Tea Party individuals to politically restore our Constitutional Liberty. I fight against statist tyranny. I financially support FreeRepublic and I support the Fair Tax.
[ US GDP for 2012 is projected to be a tad over $15T. So for simplicity, I will just go with a round $15T.
Flat tax chart
10% = 1.5 T
14% = 2.1 T
18% = 2.7 T
20% = 3.0 T
22% = 3.3 T
Total spending for 2011 = 6.2 T (estimated)
18% in Healthcare
16% in Pensions
16% in Defense
14% in Education
11% in Welfare
25% in Other
Without any spending cuts, the FEDERAL flat tax rate would need to be at or near 42% ]
I see no problem with this, if everyone was having to pay 42% of their income to the government, Tea party Ranks would swell and we would see some real spending cuts.
Other than Herman Cain, who is backing the Fair Tax, has a single one of the Republican candidates made fundamental tax reform a key part of his platform? If not, why not? Either the Flat Tax or the Fair Tax would kill the present corrupt system and deprive hack career politicians of their power over the economy.
A flat tax is a fair tax. The use tax you admire is confiscatory at best and is not necessary, especially as it wil GROW the government, not reduce it. Black markets would flourish and crime would escalate.
Why not a flat tax? Ten percent of my income has the same value to me as ten percent of yours ... ten percent ... and if we have the same amount of skin in the game we have at least some interest in government, unlike the use tax, where there would be a tremendous body (still) of people who don’t pay and, therefore, don’t care.
The one who pays no taxes has no interest...and we are about to perish from freeloader ennui...if presented with a budget that is designed to provide that which the State requires to function at the level at which we all agree, through representative republic votes, we will fare better and be more able to correct course.
The FairTax replaces the Income Tax and...
* Ends - Filing income tax returns!
* Ends - IRS audits and fines!
* Ends - IRS costs of $500 billion/year!
* Ends - Tax code abuse by politicians!
* Ends - Tax free underground economy!
* Ends - Tax on businesses (more jobs)!
——— www.FAIRTAX.org ———
Are you suggesting that it didn’t turn out well? Perhaps you would have preferred that we stay a colony?
Imagine how much money we could save getting rid of the IRS?
Only "fair" solution? Nonsense!
BuffaloJack's instincts were keen to observe that:
"Anything with the word 'fair' in it seems to be rooted in communism and socialism..."
The so-called 'fair' tax can only be judged fair by use of very subjective (progressive) thinking. Which, by definition, is objectively UNFAIR.
Certainly there are fabulous components to the total FairTax boondoggle. We definitely should switch to consumption based taxation. We should streamline the system, get rid of the IRS as we know it and tax everybody at ONE RATE.
But I would implore anyone who considers themselves conservative/ libertarian/ RightWing/ originalist/ etc. to seriously consider the ramifications of the FairTax's poison pill: the God awful 'prebate' concept.
Prebates are NOT something simply for the "poverty striken" (as if that would make it ok). NO. They are a check sent to EVERY American household EVERY month from good old Uncle Sam! In theory, to cover the expense of the tax rate for purchases up to whatever level that DC bureaucrats decide (and continually re-decide) is what 'poor' people might spend.
The fairness of which these people speak is the very liberal concept of progressive taxation. The effective tax rate under the FairTax will range from 0% to just under 23%. It is not even close to a flat tax. And it is only fair by the most subjective of definitions - in other words, the liberal definition.
The FairTaxers bad-mouth a flat income tax stating that exceptions and exemptions will creep back into the effective rate. And they are correct. However, the asinine prebate idea does the same dang thing, FROM THE START, under the FairTax.
Once the wildly subjective 'poverty rate' determines how many digits appear on each household's monthly federal sugar payment, then I fully expect that poverty will strike a majority of voters by the next election. Meaning that vote-buying politicians (which are with us always) will see to it that both the poverty rate and the tax rate will skyrocket leaving fewer folks paying anything close to the stated tax rate and millions more who pay nothing.
Prebates ARE the built-in, streamlined facilitation of the exemption process which FairTaxers say would eventually foul a real flat tax. Apparently the answer is to build such corruption into the plan from the start so it would seem as much like corruption.
Sales tax, YES!
Progressive rates, NO!
Listen to the wise Buffalo. Subjective fairness itself IS the enemy of responsible budgeting. Don't fall for the prebate trap.
That simply is NOT true.
I've read all the FairTax propaganda too. The "rate" they talk about is really a range. People will pay from 0% to 23% (or whatever) as a personal effective tax rate based on how much they consume and on the current size of the Uncle Sam sugar checks sent to EVERYONE monthly.
Raising the "poverty" rate (which will quickly be renamed the "subsistence" or "living" rate) in sync with raises in the tax rate will be just as politically easy or more so than adding similarly evil progressivity today. The actual taxation is built-in and hidden to those not looking. But the sugar checks... ooohh, baby... the sugar checks will be not only VERY visible, they will become intravenous dependencies.
To ALL conservatives tempted by bad ideas like the FairTax prebates, I'd ask that you consider one possibility:
If having the federal government sending a check, the amount of which is decided politically, to EVERY home in America EVERY month does not set off a huge red flashing light in your conservative spider senses, then it's maybe time to get the bulb checked!
The Cato Institute calls this system of taxation Reverse Revenue Sharing: The federal gov't should collect only an agreed-upon flat percentage of what each state collects. Each state would be a laboratory to determine the best state tax system. The states would compete to have the best tax system in order to attract people and business; and the state leaders would similarly compete to get re-elected. The voters of each state would get the level of taxes and government services that they want. Voters in Vermont will not determine how taxes are collected in Oklahoma, and vice versa.
The flat tax is the only fair tax.
All sales taxes are regressive and subject to manipulation is myriad ways.
Jump in, FairTaxers!
Let the debate begin anew!
>> “Anything with the work “fair” in it seems to be rooted in communism and socialism, and we know how that work” <<
.
Absolutely true.
Fair is in the eye of the beholder; a very squishey word.
Jump in, FairTaxers!
Let the debate begin anew!
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