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How's this for a fair tax system...

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  • Are you sure you want to delete this post?
    This is my solution for a fair tax system, thus creating no class warefare by either party...Every adult person gets a $25,000 personal write off....(a Husband and wife would thus get $50,000 write off)...every dependant person would be a $15,000 write off ...(so a Husband, wife and Two kids would get $80,000 write off)...any remaining amount would be Taxable income...NO OTHER DEDUCTIONS....YES A FLAT TAX...say $30%....thus everyone who pays would pay the same tax class warefare...if correct our economy is roughly $10Trillion Dollars a year....we spend at current levels over $3.5 Trillion eliminating all other tax breaks then a 30 % tax rate should cover us at current levels plus maybe even spend down our National Debt...As For Business...their rate should be after all expenses should also be 30% of their profits...currently Businesses are taxed about 35%...some would like tosee it at 30% is a compromise...anyone have an opinion???  in the example above a, a family of four making under $80,000 would pay no tax....if they made $100,000 then they would pay $6,000  ($100K - $80K = $20K X 30% = $6,000)...if they made $250,000 then they would pay $54,000 ($250K - $80K = $170K X 30% = $54,000)....if they made $1,000,000 then they would pay $276,000                  ($1 million - $80K = $920K X 30% = $276K)....and President Obama's Friend, the CEO of GE, would not get to play accounting games with the Billions of money they earned yet PAID NO TAXES THIS YEAR...isn't it a surprise that this man who Obama appointed to one of his Business Commissions that his company didnot have to pay any taxes...he mister Obama...hire ME...
  • Are you sure you want to delete this post?
    Paul, your proposal could have merit, but the IRS would have to run the numbers to see how every income group would be affected. Some would win and some would lose.  Capital gains, interest and dividend income would have to be thrown into the mix and at the same rate.  For some of the super rich, that's 95 percent of their income.

    Of course all the overseas tax loopholes would have to be closed as well, but that would come with your "NO OTHER DEDUCTIONS.'

    Would the payroll taxes for Social Security and Medicare also disappear?  Medicare is a flat tax already.

    I would be interested in seeing how the numbers work, but I'm afraid that our Congress wouldn't take it seriously. At the least I wonder what kind of tax rate it would take to make it revenue neutral from the current system. I have to admit the simplicity of tweaking just one number (the 30 percent number) from year to year has appeal.

    And yes many big firms with overseas loopholes would have to pony up their share.

    This differs from the other Fair Tax proposal floating around the internet that libertarians like Ron Paul promote.  That is a tax on consumption instead of income, dividends, interest, and capital gains.
  • Are you sure you want to delete this post?
    Frank,..I to am not a fan of consuption tax...I believe that would hurt the low and middle class the per the other deductions...there would be only one allowed besides the personal and dependant deduction and that would be the mortgage tax deductions...every other penny would be taxed a flat rate....last I heard/read...our U.S. economy is roughly 12 Trillion dollars....if our yearly budget is $3.5 Trillion....that would give a rate of roughly 25%...I would start at 30% and each year work it down...any excess would go to pay the National Debt...then if we can ever get the Dems and Repubs to start working seriously on budget cuts then the rate could even go down more.
  • Are you sure you want to delete this post?
    Paul, in thinking about this some more, yes in principle, it is something that I might be able to support without working the numbers in any detail.  I especially like getting rid of much of the 71,684 pages (and growing) tax code that creates its own employment base of tax accountants and lawyers.  Many of those people would have to be retrained in other professions.

    One absolute caveat for me would be that capital gains, dividends and hedge fund earnings would all be taxed at the same rate as ordinary income. And overseas loopholes would have to be closed.

    In so far as paying down debt, this would have to be focused on paying off, but not renewing, treasury bonds as they expire.  The trillions of debt that we owe to ourselves in the Social Security and Medicare Trust Funds would have to remain, as there is no mechanism for drawing that debt down, short of buying tangible assets...or letting it run its course paying off benefits until the funds are exhausted. Then the entitlement programs could revert to as you go, the way they were before 1983 when deliberate surpluses were created with payroll taxes.

    Of course, as we both know, wanting draconian tax reform of this magnitude is one thing.  I would guarantee that we would find strong opposition from some privileged segements of society that have benefited most from the 71,000 pages of tax code. And they have more of an ear with Congress than ordinary folk on the street.