It is time for an open discussion about the Fair Tax, the Flat tax, as well as the benefits and drawbacks of both systems, that in essence can possibly be combined to be the ultimate in the revision of our tax system.

There is still more research to be done about both systems on my part, however, both systems seem to have their benefits over our current system.

The last time revision of the current system happened, through politics, many of the good reforms, were done away with on behalf of lobbyists, and others.

My comment is a simple tax code that reduces the rules can be a fair tax code. I received my accounting degree in 1980. I stopped doing tax work a few years later. The tax code has changed and grown so many times since 1980 that other than the basics, the rules for both personal and business taxes are way to complex. Companies moan and b-tch about it, but they are the ones that lobbied for all the rules.

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Originally posted by Dave_M:
My comment is a simple tax code that reduces the rules can be a fair tax code. I received my accounting degree in 1980. I stopped doing tax work a few years later. The tax code has changed and grown so many times since 1980 that other than the basics, the rules for both personal and business taxes are way to complex. Companies moan and b-tch about it, but they are the ones that lobbied for all the rules.

Please bring your experience, as well as thoughts to this thread. What would you do. Would you adopt the fair tax, or flat tax? Or something of a combination of both systems, or one different from both?

The fair tax is a national sales tax. I support cleaning the tax code of all rules that only benefit a few companies, and reducing certain deductions for individuals.

We have a deduction for interest on homes because of the real estate lobby. Tax deductions for individuals and companies can be used to promote certain propositions that the government thinks is good policy. But many of them are bad policy.

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Originally posted by Dave_M:
The fair tax is a national sales tax. I support cleaning the tax code of all rules that only benefit a few companies, and reducing certain deductions for individuals.

We have a deduction for interest on homes because of the real estate lobby. Tax deductions for individuals and companies can be used to promote certain propositions that the government thinks is good policy. But many of them are bad policy.

Spot On, Dave.

Florida is an excellent example of using a State Sales Tax, in lieu of, an income tax. No paperwork, strictly consumption driven, AND EVERYONE PAYS, no exceptions...

Florida does have a $30K Homestead Exemption (deduction) and $5K Disabled Vets Exemption (deduction) that apply to your property tax. An incentive for homeowners verses renters/leasing.

Besides, the best incentive for homeownership is the potential ownership of home and land, AND Credit Rating advantage over renters/leasing, I do believe...

I've said it before, I'll say it again:

The major advantage for eliminating the progressive tax is that it takes it out of the hands of politicians (who use is as a carrot to get us to vote for them).

Both parties play political games with the progressive tax in order to pander to special interests and their base. Neither side is able to enjoy a permanent "fair" tax code once the opposition party takes power. Having a flat tax will result in both parties having to make the simple choice of whether to raise or lower the tax... across the board.

The main purpose of the progressive tax is to keep the taxpayer confused and to give him the false notion that he's somehow getting over on the government and paying less than his neighbor.

Very Well Stated there T_B . . .

There is nothing wrong with a progressive tax unless you play games with what is taxed. In fact the fair tax proposal is called a progressive tax, and property tax exemptions like you stated in Florida with thing like Save Our Homes could be called progressive with political maneuvers just like the Federal Income Tax.

Sales taxes in different states have different rules on what is taxed. The risk is that with a National Sales tax, the same thing will happen, and then it is not fair.

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Originally posted by Dave_M:
There is nothing wrong with a progressive tax unless you play games with what is taxed. In fact the fair tax proposal is called a progressive tax, and property tax exemptions like you stated in Florida with thing like Save Our Homes could be called progressive with political maneuvers just like the Federal Income Tax.

Sales taxes in different states have different rules on what is taxed. The risk is that with a National Sales tax, the same thing will happen, and then it is not fair.

Concur, with regret

Bottomline. There will never be a perfect plan, whether its taxes, health care, and on, and on. "We The People" just can't seem to come together to draft any sort of ideal plan...

A human fallacy

The only fair tax IMO would be a percentage of your income. No deductions and no one exempt. Elimination of the IRS and stiff penalties for any income tax evasion when found. I cant see the drawbacks and what could be simpler?

Never happen.

It has been a long time since this much power by a single party has ruled the roost. If the dems were really for the working class as they like to slobber about they could do this in a weekend.

One can dream and boy is it a good dream. But like a dream I keep waking up.

This is what Steve Forbes wanted. And it's still a great idea. Unfortunately, Forbes was the most boring, make that second most boring, I forgot Al Gore, guy on the planet. He never made it out of the primaries.

Russia went to a flat tax and it worked out great for them. I could work here too.

I would vote for any tax that would be the same for everyone. The same percentage for everyone. As long as we have adopted the cry of give me this but let the other guy pay for it....we will be on the wrong road. If someone is voting for somthing they have to be voting to pay for it at the same time.

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Originally posted by maoms:
I would vote for any tax that would be the same for everyone. The same percentage for everyone.

Do you realize that if that happened, the middle class would have to pay significantly more in taxes in order to offset the reduction of taxes from the upper class in order for the revenue to stay neutral?

If you are OK with that, so be it.

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Originally posted by ACR26:
Never happen.

It has been a long time since this much power by a single party has ruled the roost. If the dems were really for the working class as they like to slobber about they could do this in a weekend.

One can dream and boy is it a good dream. But like a dream I keep waking up.

Precisely.

The same can be said about the Health Care "Plan" the Dems have wrestled with (supposedly) since 1994, results are NADA (nothing coherent)... Unacceptable

RC I am ok with fair. Do you think it would be OK for me to walk into McDonalds and order what I want and expect you to pay for it? Now if you offered to pay for it you would probably feel good about it. If you were ordered to pay for it you would probably resent it.

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Originally posted by maoms:
RC I am ok with fair. Do you think it would be OK for me to walk into McDonalds and order what I want and expect you to pay for it? Now if you offered to pay for it you would probably feel good about it. If you were ordered to pay for it you would probably resent it.

I just find it odd you are calling for a large middle class tax raise.

I find it odd that you think it is OK to have things that someone else pays for. If everyone has to pay for it I think the congress will be more careful with the money they spend. If they are spending everyones money they will have to account to everyone. We are getting very close to 50% of the country not paying any taxes. The new minority. Tax payers!

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Originally posted by rcjarrell:

quote:

Originally posted by maoms:
I would vote for any tax that would be the same for everyone. The same percentage for everyone.

Do you realize that if that happened, the middle class would have to pay significantly more in taxes in order to offset the reduction of taxes from the upper class in order for the revenue to stay neutral?

If you are OK with that, so be it.

Not if they did away with all right offs and taxed everyones income at a percentage rate.

quote:

Originally posted by rcjarrell:

quote:

Originally posted by maoms:
RC I am ok with fair. Do you think it would be OK for me to walk into McDonalds and order what I want and expect you to pay for it? Now if you offered to pay for it you would probably feel good about it. If you were ordered to pay for it you would probably resent it.

I just find it odd you are calling for a large middle class tax raise.

no it would be a steep reduction once all write offs were eliminated for everyone, and no one was exempt from taxes on any recieved income.

I do believe the income tax needs to be eliminated. Elliot, you mentioned Florida's tax system. I do not think they have adopted anything like a fair or flat tax system as a whole, but have just eliminated the income tax, in favor of the sales tax. Some folks say the entire tax system should be overhauled instead of concentrating on just that one area. Florida does need to get their budget in order, and cut spending. If not, they will wind up falling short with the budget.

One question. Since the implementation of Florida's sales tax over the income tax, how much have revenues increased, if at any for Florida?

How do either of these plans help? Seriously? And short of enshrining one in the Constitution, what assurances could be made for either plan to keep it from being "adjusted" by our wise and modest politicians? The Flat Tax plan shifts tax responsibility from the wealthy to the less-wealthy - I am ignoring the argument about getting rid of exemptions because you could just as easily do that with the current system. The Fair Tax does much the same, as consumption relative to income decreases with increasing wealth.

So are the proponents of these plans in favor of shifting tax liability onto the less-wealthy? Other than the obvious benefit to the wealthy, what is the justification for a fundamental change in system? I am fine with an overhaul - the tax code is far far too overloaded and complicated - but I see little improvement to be made with either of those switches. And when I look at the lists of countries currently using them, I do not see systems I want to emulate. The Flat Tax is primarily a holdover from the old USSR, and the Fair Tax is ... unused anywhere? To be honest, I can't figure out the math they are using for the Fair Tax, and I'm pretty good at math.

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The Flat Tax plan shifts tax responsibility from the wealthy to the less-wealthy

Id like to understand how you came to that conclusion When in fact just the direct opposite is true and was designed to be that way
t favor the elite.

While the graduated tax percentages make the dollar value look impressive once the gross profit is figured in. But truth is the business write offs and padded tax free expense accounts that are large enough to live on and then some, make thier actual percentage paid lower than the the percentage paid of the average middle class taxpayer percentage paid.

It's apparent that not a one of you knows anything about taxes in America.

Repeat after me:

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If it raises my taxes, it's not a fair tax.
If it lowers my taxes, it's a fair tax.
No matter how much tax I pay, I pay too much.

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Originally posted by john2x:

quote:

The Flat Tax plan shifts tax responsibility from the wealthy to the less-wealthy

Id like to understand how you came to that conclusion When in fact just the direct opposite is true and was designed to be that way
t favor the elite.

While the graduated tax percentages make the dollar value look impressive once the gross profit is figured in. But truth is the business write offs and padded tax free expense accounts that are large enough to live on and then some, make thier actual percentage paid lower than the the percentage paid of the average middle class taxpayer percentage paid.

See, this is what happens when you truncate statements. I said:

quote:

The Flat Tax plan shifts tax responsibility from the wealthy to the less-wealthy - I am ignoring the argument about getting rid of exemptions because you could just as easily do that with the current system.

So Flat Tax does two things:

(1) Get rid of all the assorted deductions and exemptions that make the tax code so complex. I think some of those are probably a good idea, but certainly a lot could be eliminated, and if you can find some that are so significantly skewing the tax burden we can axe them first.

(2) Give everyone the same tax rate. I don't see this part saving anyone money. Part (1) - absolutely. Part (2) - how? These are two separate ideas, you could implement either or both, but this part very specifically takes tax burden from the wealthy and places it on the less wealthy.

As I pointed out, if you want to find a country that thinks a flat tax is a good idea, you had better go to a former Soviet state - they are almost the only ones who still have it.

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but this part very specifically takes tax burden from the wealthy and places it on the less wealthy.

Thats where you lose me. A percentage is a percentage based on income. How could that be not fair? Status and wealth shouldnt be cause for higher or lower tax contributions.

At say ten percent 0 deductions if you make a dollar you pay a dime and if you make 100 dollars you pay 10 dollars thats as fair as it gets. Unless you believe that the poor should pay nothing and be made up by the wealthier? Thats would be a whole different discussion and a redistribution of wealth.

quote:

Originally posted by john2x:

quote:

but this part very specifically takes tax burden from the wealthy and places it on the less wealthy.

Thats where you lose me. A percentage is a percentage based on income. How could that be not fair? Status and wealth shouldnt be cause for higher or lower tax contributions.

I was not commenting (yet) on "fair" - changing the base tax rates to a single flat rate would mean poor people's tax rates would increase while rich people's would decrease - thereby shifting the tax burden.

quote:

Originally posted by john2x:
At say ten percent 0 deductions if you make a dollar you pay a dime and if you make 100 dollars you pay 10 dollars thats as fair as it gets. Unless you believe that the poor should pay nothing and be made up by the wealthier? Thats would be a whole different discussion and a redistribution of wealth.

Everything the government spends money on is redistribution of wealth. I live in Illinois, so I am pretty sure that military spending benfits me less than most people and yet I pay the same proportion. But you are correct, that is a separate discussion.

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changing the base tax rates to a single flat rate would mean poor people's tax rates would increase while rich people's would decrease - thereby shifting the tax burden.

The percentages would change to equal but the dollar value without the tremdous write offs would cause business corporations to pay far more than they do now. The real winners would be the middle class who now pay more than than the elite percentage wise due to the write offs and the poor who pay nothing by virtue of being exempt. The big corporations have the ability to effectively lower thier percentage rate below that of the middle class, and yes it is more money paid in dollars but far less than thier fair share.

These tax codes apply to all, but the majority dont understand them or use them. If they did and its all perfectly legal, The system could not work as designed and generate the revenue needed to run a government.

Im upper middle class and legally use the tax codes and write offs which is my right, to benefit me and I Pay far less than I would with a flat percentage tax and zero write offs.

Thats how the system was designed to accomodate the corporations and elite depending on people not using the same methods. Its like when they used the name Federal reserve to describe private business, and in fact if you ask 8 out of 10 people what the federal reserve is They wont know its private. Try it youll be surprised
Ive asked teachers and they didnt know it was a private industry. Its a fun thing at party conversation.

quote:

Originally posted by john2x:

The percentages would change to equal but the dollar value without the tremdous write offs would cause business corporations to pay far more than they do now.

FYI, almost all Flat Tax advocates, especially the Fair Tax ones, want to eliminate all corporate taxes.

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Originally posted by rcjarrell:

quote:

Originally posted by john2x:

The percentages would change to equal but the dollar value without the tremdous write offs would cause business corporations to pay far more than they do now.

FYI, almost all Flat Tax advocates, especially the Fair Tax ones, want to eliminate all corporate taxes.

I bet they would, specially if it was ever passed and thier gov financed life style shriveled. The horror of having to pay thier fair share.