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If the top marginal rate is 39% and the flat tax is at 15%, with the current structure being that standard deductions and personal exemptions set the bottom brackets at almost zero tax paid, then the flat tax is a 15% hike on the poor and an up to 24% cut on the wealthy.
Literally it's poor people paying for rich peoples tax cuts.
I'll agree that the tax code is a nightmare to use, but in some ways it's beneficial to small business, specifically certain stock elections for start ups and deductible losses. Without those the incentive to invest in start ups and small business is lost.
No one is purposing a flat tax with any deductions ,it's why it's a flat tax.15% for all across the board no deductions.
No one is purposing a flat tax with any deductions ,it's why it's a flat tax.15% for all across the board no deductions.
I don't think you understand the post.
Poor people right now would pay more without deductions and rich people would pay a lot less.
Here's a hypo: flat tax is 15% on income.
What if I buy property that appreciates, use my equity for low interest loans in increments, then live on the appreciation? The reason the tax code is complicated is scheming like this. How does the flat tax address people who skirt around income while still getting income.
When is income taxed? Right now it's not until I sell that property.
Ok Trump comes into office and implements his tax plans, what does it mean for you ? For your paycheck and tax return?
For me, it means that I will be working more. Every month, we have some shifts that are not covered. Those shifts are offered for extra money above the money we split amongst ourselves for the average work week. In other words, it is considered overtime pay.
When I decide whether or not to accept the extra shifts, I always factor in how much of that money I get after taxes. Often I decline working, say, an extra Saturday, because my time off is not worth giving up after the taxes are taken out. The lower tax rate might just make the difference between it being worth it or not worth it.
Poor people right now would pay more without deductions and rich people would pay a lot less.
Here's a hypo: flat tax is 15% on income.
What if I buy property that appreciates, use my equity for low interest loans in increments, then live on the appreciation? The reason the tax code is complicated is scheming like this. How does the flat tax address people who skirt around income while still getting income.
You don't get it ,rich people aren't paying crap and a flat tax will help that the poor and middle class have always paid their share a flat tax of 15 to 20 percent would help anyone not rich.
You don't get it ,rich people aren't paying crap and a flat tax will help that the poor and middle class have always paid their share a flat tax of 15 to 20 percent would help anyone not rich.
Not true, the current standard deduction is 6,300 per person and you can take exemptions per dependent of around $2,000 per person in your household, not including bonuses like head of household status (which Trump wants to eliminate), which usually means that the bottom brackets get an automatic tax refund of all the taxes they actually paid.
Rich people save money on taxes, but they don't get completely around it unless you take risky and aggressive positions like Trump does.
But how does the flat tax address smart rich people who can skirt around it with ease? When do you pay the 15% is it on income? When is income? What about passive income and appreciation in property?
You take away these deductions for poor people and they start paying taxes they are otherwise being refunded while rich people, who pay lawyers and accountants to save, but not completely skirt, their tax obligations an enormous windfall, often greater than they can accomplish with creativity.
Flat tax causes an increase in tax paid. I have seen that here in NC. The flat tax is a way to get more from those who have the least. It does not promote growth as the people with the most gains do not have to become creative (spend more so as to have write offs). It allows that tax saving to sit and do nothing. Slowing down economic growth. The myth that it leads to this GOP nirvana of the rich spending and growing the saved dollars is totally false. We saw this with the Bush and Reagan take cuts and the depression in 2008-10 (my term).
It looks like Trump's plan requires people to pay income tax on their employer provided health insurance. If your company deducts $200/month out of your paycheck toward your company provided health insurance premium, then this $200 will be taxed under Trump's plan. Today it's not taxed(the deduction is make using pre-tax money on your paycheck).
How about the company's subsidy toward your health insurance. Is it to be taxed to the employee? For example, if I pay $200/mo toward health insurance premium I realize under Trump's plan I will have to pay income tax on the $200 , but my employer pays $350/month for the remainder of my health policy. Will I also have to pay tax on the $350 part that the company pays? Does anyone know?
Last edited by sware2cod; 12-04-2016 at 09:39 AM..
Can someone please post the proposed tiers, and the income amts associated with each tier.
12%
$0 to $37,500 single
$0 to $75,000 married
25%
$37,500 to $112,500 single
$75,000 to $225,000 married
33%
$225,000+
But there are other things to consider. Like the increased standard deduction, the lowering of the mortgage deduction, the removal of the AMT, the new child care deduction, etc.
Because of the elimination of the personal exemption, almost everyone who itemizes now that is within Trump's 25% bracket (under 225K joint) will pay higher taxes. The slight reduction in the marginal rate does not offset the loss of the exemptions.
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