Suspeckted,

True a tax of any sort punishes anyone who earns any money, but the point of a flat tax is to make the punishment fair regardless of income levels. A progressive tax such that we have now can act as a disincentive to achievement if it's increased the way people like Gene keep calling for.

15% across the board (or any other percentage as long as it's equally applied) means everyone's paying an equal share of their income into the federal govt. Raising taxes on upper class doesn't actually do anything meaningful. A simple tax hike will not come close to fixing the budget issues... and another thing is since when has the govt even considered tax income as a limiter to spending? They just spend what they like, and if it happens to fall in line with taxes, then great... but it almost never does. If they had more money, if anything they'd just spend more. Taxes are half of the budget equation, the other half is spending, and you can do a LOT more if you address spending over if you address taxes. It's realtively easy to cut wasteful programs and departments to make a big dollar save at the end of the year. It's much harder to increase taxes to the point where you'd see an income hike equivalent to budget save through cuts.

15% across the board (or any other percentage as long as it's equally applied) means everyone's paying an equal share of their income into the federal govt.

It really could be that simple. That's what I would call fair.

Little_whip

Not at all. Lets take it to ALL Taxpayers and see what the MAJORITY WANT. I doubt that 15% flat tax would come close to a balanced budget given the size of the deficit. Setting an amount before knowing how much it will take to balance the budget and begin paying down the $ 8 Trillion on the National Debt, would be foolish.

Here's the thing, though Gene. There are a lot of folks that don't pay their full amount of taxes due. I know this for a fact.

See, I'm a working father of 4. We have only my salary to live on (and subsequently, to be taxed). With everything that's going on (educator's tax credits, educator's expenses tax writeoff's, child tax credits for 4 qualifying children, ... ), I end up not having ANY tax liability. So, here I am, a middle-class working stiff that doesn't pay taxes. Oh, I have them taken out, and I file my 1040A (and all other necessary forms, as required) every February. And then Uncle Sam (via that lovely agency, the IRS) returns everything that was withheld. Is this fair? Not in the least. Is this what happens under the current tax system? Most definitely.

To be fair, every person that works should have to put into the pot a portion of what they have earned. Make it a flat percentage so that the amount put by Party A is proportional to the amount put in by Party B. The actual numbers don't matter because the proportions of taxes paid to earnings kept will be the same. That's fair. It only seems unfair (and where most opponents to a flat tax latch on to) when you look at Party A only paying $2700 in taxes (off a base earnings of $18,000, keeping $15,300) versus Party B paying $27,000 (off a base earnings of $180,000, keeping $153,000).

Seems like Party B is getting to keep so much more money than Party A, right? In raw numbers, yes, he is. Why does Party B get to keep 10 times more money than Party A? Because Party B earned 10 times more money than Party A. The proportion of taxes paid is the same, though.

How does this help get the deficit down? More people paying taxes. No more loopholes to avoid paying taxes. Therefore, no way to avoid paying taxes = more money coming in.

Think of it like a company. On paper, I might have $2.5 million dollars in revenue. But, I can't actually spend it if my Accounts Receivable folks drop the ball and don't actually collect the money that I'm owed. Same here, if the people that are currently not paying any taxes (because of refunds or simple avoidance or other loopholes), then revenue goes up.

Also, measures would need to be put in place to curtail not filing, at all.

Another way to avoid this whole deal is to kill the Federal Income tax entirely. Move to a national sales tax. You aren't actually taxed on the money that you earn. You pay an additional fee when you purchase something. This way, you're only hit once for your money - when you use it. If you can only afford the little stuff, that's all you pay taxes on. If you can afford the huge $$ luxery items, then you get taxed on that. And this national sales tax would be required on all transactions - sales, services, and trade. Oh, this also puts into play a tax-free savings plan - any money that you don't spend, you don't get taxed on. Simple enough.

I was out of work for one month.

Since my last paycheque was twice the usual amount, the Irish tax office taxed me as if my income had doubled. This is necessary in a progressive tax system since the tax office cannot know why my paycheque had doubled.

It effectively meant that I suddenly paid more taxes when I was unemployed.

It wouldn't have happened in a flat tax system.

I only got the money back two months later, when I had a new job and didn't need the money as urgently as during the month I was unemployed.

How is that fairer than a flat tax system?

Move to a national sales tax.

What's so great about a sales tax?

If you can afford the huge $$ luxery items, then you get taxed on that.

Ah, you mean a luxury tax. That is a good idea. The second best tax according to Adam Smith.

What the col doesn't realize is that most people in the first two sections of his list pay no taxes at all, since they get it all and more back on refunds.

What I don't understand is why the Col feels that the majority of people who USE government resources shouldn't have to pay for them. The bill should be handed to the small, wealthy minority who we rely upon to invest and create businesses and jobs. It doesn't make sense.

First, for a flat tax to work it would first have to allow a deduction that reflects the reality of the taxpayer-- Mortgage interest real estate taxes, children, cost of living in the area where you live, any medical expense paid by the taxpayer and contributions. After those deductions we would need to calculate what % would be required, after the above deductions, to balance the budget. I am sure it would be a lot more the 15%.

The national sales tax would not work because the low and middle income workers could not affort that tax added to the cost of the goods and services they purchase. They already spend alomst 100 % of their take home pay. The savings rate in this country is almost zero. The Fair Tax Group estimates a sales tax would require 23% on Everything including, health care, legal, all services and all things you purchase.

I do not support a flat tax. I believe the wealthy should pay disproportionately more because they benefit disproportionately more from living in a stable, free, open society.

"What is their new big idea? A flat tax. An idea that they say is sweeping the world, well sweeping Estonia, well a wing of the neo conservatives in Estonia. The Tories promising to do for national tax what they did for local tax with their last big idea, the poll tax. And let the flat tax go the way of the poll tax.

The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage. The price tag – £50 billion of cuts in public services."

Gordon Brown, Labour Party Conference, 26th Sep 2005.

He is referring to the rival Conservative party proposing a flat tax rate in the UK.

Good on you Gene, you're a brave man to post this article on a site where ideas of equality are scoffed at.

Gordon Brown is widely expected to take over as Prime Minister when Blair resigns for any Americans wondering who he is.

He will be the one working out how to pull troops out of Iraq with the next President.

Colon Gangrene, first you hit us with bigoted class warfare crap, now you defend the Marxist "taxation as a form of social engineering" farce.

Face it, if you heroes Marx, Mao and Stalin weren't for it, you don't like it!

I do not support a flat tax. I believe the wealthy should pay disproportionately more because they benefit disproportionately more from living in a stable, free, open society.

That makes no sense at all. I've benefitted a lot more from the tax base since I've been disabled than I ever got when I was working. You make a pretty penny, how has paying taxes benefitted you more now that you are doing pretty well than when you didn't have it so well?

Gene: The problem with the taxing the rich to death is as follows. Giving the government more money to spend is not going to solve anything. It will not create jobs, it will not lower the deficit, it will not end poverty.

If you want to solve the problems, make the tax rate even, put more money into the hands of the people and guess what they will do? They will EMPLOY people. Sure, the government employs many people, but we all foot the bill. Now as I've shown on another post, if someone earns more money than they need to live, what will they do? They'll go out and blow it. I guess I would be rich by your standards so let's look what I do with my "disposable" income:

1. I have six children. My children help me to employee food manufacturers, clothing manufacturers, toy manufacturers, etc.. In other words my having six kids (that I can afford), creates jobs.

2. I employ a nanny, she earns a salary that she goes out and spends on her grandchildren. She creates jobs for clothing and toy manufacturers with the products she buys for her grandchildren.

3. I have a lawncare service, the service employs 30+ lawn care professionals. Guess what? They take the money that I and other people pay them every month and go out and spend it, creating more jobs.

4. I commute to work six days a week, beacause I do, I indirectly employ gas station attendants, auto mechanics, oil manufacturers, gas manufacturers, insurance salespeople, etc.

5. I am usually too lazy to make my own lunch, so I often times go out for lunch, I employ fast food workers, restaurant wait staff, cooks, busboys, etc.

Col. Gene, I could go on and on about the wisdom of keeping the money in the hands of the people instead of the government. Many people like to demean the crowd that makes more than the bare minimum to live on, but those are the people that truly make our economy the greatest in the world. Not many people understood the concept of Reagan's trickle down economics, but what I wrote above is trickle down in it's simplist form. Over taxing the rich will only perpetuate the problems that exist in this country. I agree with you on this Gene. Our politicians are morons, for that reason, I ask, why the hell would you give them 40% or more of the money generated in our economy? They've done nothing but prove to me their lack of ability to manage money, God forbid we give them more to screw up.