Drastically cutting the cost of income tax compliance and encouraging Americans to keep their savings and capital investments in the USA under this plan would go a LONG way towards real economic recovery.
Posted on 12/09/2010 11:01:26 PM PST by streetpreacher
"President Obama is considering whether to push early next year for an overhaul of the income tax code to lower rates and raise revenues in what would be his first major effort to begin addressing the long-term growth of the national debt."
"Rather than increase individual and corporate tax rates to raise more revenues, a majority of the panel proposed eliminating or reducing many of the popular tax breaks for businesses and individuals that cost $1 trillion annually and using the additional revenues to lower rates and reduce deficits. The majority included five Republicans, among them two of the Senate’s most conservative members, Tom Coburn of Oklahoma and Michael D. Crapo of Idaho.
According to commission officials, the Treasury secretary, Timothy F. Geithner, expressed interest in the panel’s approach. With tax breaks ended or restricted in return for lower rates, businesses and individual taxpayers would know that for each credit or deduction they wanted put back into the code, their marginal tax rates would go up by an amount sufficient to make up the revenues that would be lost."
(Excerpt) Read more at nytimes.com ...
Simplifying the tax code, i.e. flat tax; eliminate “deductions” & replace with lowering the marginal tax rates... would lead to more revenue. This is essentially capitulation to Reaganism. It would be much better than the current status quo of fighting over whether or not to “extend the Bush tax cuts”.
Based on the flawed premise that the money belongs to the government in the first place and lower taxes "costs" the government by letting people keep the money they earned in the first place.
Readying himself for the next election, I see....
It’s not a move to the right when you eliminate tax deductions that people have built their cash flow budgets upon.
I can guarantee you if they eliminated mortgage interest deductions while lowering the tax rate, you will find that the people who get screwed the hardest (net tax dollars) are the ones who itemize.
All you need to do is look at the rule changes each year and you will see that they are trying to make itemization less and less viable. The standard deduction (right wording??) for non-itemizers has gotten to the point where I’m willing to bet many homeowners are better off not itemizing.
What they need to do is kill all the tax “credits” and standard deduction (which make it “fair” for non itemizers). Then lower rates accordingly.
Anything they are doing where they claim deductions are a “cost” shows that they will screw taxpayers eventually.
Yep, he and big Mo have no intention of giving up that cushy lifestyle. If he’s re-elected, I’m sorry but I’m done. I’ll be back in 2016.
Not a word about reducing spending - just new taxing revenue streams, like eliminating deductions, business expenses, etc.
The tax rules could be made easy:
Flat tax rate for everyone of a fixed percentage. e.g., 15%
Taxed on total income, not just wages - e.g., wages, dividends, capital gains - whatever you get between Jan 1 and Dec 31 no matter what the source.
Exempt first $15000 or so of income.
No deductions.
There, it’s done.
A guy making $35,000 will pay $3000.
A guy making $10,015,000 will pay $1,500,000.
That should make a liberal happy, and a conservative happy, and 64,000 IRS agents and 125,000 tax lawyers unemployed.
And check this out: Some DemoRats actually think Obamao is a capitalist.
Unless Obama strongly condemns this, throws his appointee under the bus, and proves this will never happen, I’m just disgusted. btw, the anti-”capitalist” posts are a joke. Do they realy believe Obama’s capitalist?
Yes, but, the next Congress could make some spending cuts. Maybe.
I am so sick of this $hit.
The tax code needs to completely overhauled and simplified.
I don’t why people here get so worked up about Obama.
He has absolutely no power to write the tax laws.
Only the GOP can do it and they should go for it if they got the chance.
And the guy making $15K, or couple making $30K pays nothing ? That doesn’t make me happy.
A truly flat rate of 10% would suffice without your $15K deduction.
If McCain-Feingold had been serious about fighting corruption, their bill bearing their name would have been to scrap the tax code, which what people trying to “buy influence” are hoping to effect. The tax code is a huge source of corruption.
Longterm and overall, lowering marginal rates are better for the economy than itemizing. We can’t have it both ways. This is essentially the flat tax debate.
The only caution I would add is once those deductions are gone and THEN they raise the rates... but that’s not going to happen with a Republican House.
eliminating or reducing many of the popular tax breaks for businesses and individuals that cost $1 trillion annually
“Based on the flawed premise that the money belongs to the government in the first place and lower taxes “costs” the government by letting people keep the money they earned in the first place.”
Well, not arguing with your basic premise but of course there is a “cost” to the government when you let people keep more of their money. The money doesn’t “belong to the to the government in the first place” but the argument is what a fair tax rate should be, not whether or not we should have a tax system at all. Otherwise, we could just lower the rate to 0% and our military could consist of private groups like Blackwater and militias.
Someone will be on here shortly arguing that’s not a half bad idea...
It’s all academic anyway. Personally, I don’t believe Obama will go through with this. If he did, he would show he has some political survival skills in place, but this would probably kill him on the inside to have sign such a bill into law...
...and no one has really said what that top rate would be. I think anything higher than 25 - 28% should be a non-starter for Republicans.
Drastically cutting the cost of income tax compliance and encouraging Americans to keep their savings and capital investments in the USA under this plan would go a LONG way towards real economic recovery.
How does raisig taxes, for whatever reason, in a depressed and overtaxed economy help?
I’d be fine with a simple 10% flat income tax with no deductions, exemptions of credits, and leaving SS/M to be sorted out later.
But that would mean the family of four who today pay only %690/yr in Federal income tax would be paying $5,000/yr.
Since that isn’t going to fly because people want to give families a break and somehow think producers should pay higher tax rates than takers, how about this:
Three tax rates: 5%, 10%, 15%.
The 5% rate applies to the first portion of income, up to Number of filers * $15K + Number of Children * $5K. Children count twice if parents are filing jointly or if one parent is deceased.
The 10% rate applies to the next portion of income, up to Number of filers * $100K + Number of Children * $20K.
The 15% rate applies to all income above that.
No estate or gift taxes.
Corporate income tax is eliminated for earnings retained less than three years, and earnings retained longer than three years must be distributed to shareholders. Employer’s 7.65% Payroll tax is collected on all employee compensation, including the value of fringe benefits like pension contributions and health insurance. This payroll tax pays the benefits currently promised to retirees.
Employees’ 7.65% payroll tax only on wages up to $100K/yr goes into private accounts, invested in S&P 500 index funds with retirement benefits calculated at time of retirement based on annuity value and life expectancy. This is in addition to the benefit SS would have paid if they stopped working today.
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