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Old 08-16-2011, 12:02 PM
 
Location: Littleton, CO
654 posts, read 1,734,504 times
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Hi -

I was wondering if someone could give me the pros/cons of a national flat tax and doing away with federal income tax. I have always been a proponent of a national flat tax, tho I do realize it would be a major undertaking to implement it. But, I think it would be a nice thing since a lot of the non-taxed monies (drugs etc) would be taxed. Anyway, I am just looking for some insight - pros and cons, and I thought there might be some finance people on here that could do that for me

thanks
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Old 08-16-2011, 12:11 PM
 
Location: Fort Worth, TX
9,396 posts, read 14,456,895 times
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I tend to find the concept of the FairTax pretty great. Taxing consumption instead of success. However some people argue that it's unfair to people who, say, are buying things for the first time (e.g. furniture for your first house). It's not an unflawed proposal, but frankly I think it would be a lot better than the system we have now.

Another idea which would be effective IMO would be to remove so-called "loopholes" (aka the generous amount of credits and deductions offered to both people and corporations) while also lowering the tax rate. Collecting from more people could increase revenues better than simply increasing the tax rates while leaving the loopholes intact.

And all that said I think this thread ought to be in the Politics section not the DC section, fitting as it may seem.
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Old 08-16-2011, 12:45 PM
 
1,783 posts, read 3,548,169 times
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Income tax in the United States - Wikipedia, the free encyclopedia

Just skim down to the chart that shows the historic tax rate 1930 - 1980. Look at how between 1932 and 1980 the wealthiest tax bracket is 58% and at times as high as 94% (height of WW2). Scroll down to today's tax rates. Draw your own conclusions.
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Old 08-16-2011, 01:54 PM
 
465 posts, read 859,854 times
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And despite the huge variation in the upper tax rates, government revenue as a % of GDP basically stayed the same. But you'll always find some ostriches who think we can tax our way out of the entitlement debt crisis.
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Old 08-16-2011, 02:13 PM
 
Location: Littleton, CO
654 posts, read 1,734,504 times
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I did start a thread in the 'finance' section. The argument there is that the lower income people spend more of their money that the higher income, so it would be unfair to low income and people getting unemployment. I don't know if unemployment checks pay federal taxes. But, I would still like to see a good model of this that incorporates taxes on drug money/illegal money in general and then a final tax rate.
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Old 08-16-2011, 02:47 PM
 
Location: Fort Worth, TX
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Do they mean a higher percentage of their money or something? Everybody buys food, pays for utilities, pays for gas, etc... maybe i could see that argument in that poor people might have to pay more because, for example, they can't afford newer reliable cars and so they spend a lot on getting theirs fixed.
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Old 08-17-2011, 01:03 AM
Yac
 
6,023 posts, read 6,962,934 times
Moved from the DC forum.
Yac.
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Old 08-17-2011, 12:09 PM
 
Location: Victoria TX
42,661 posts, read 78,828,808 times
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Quote:
Originally Posted by Yac View Post
Moved from the DC forum.
Yac.
And a duplicate to this thread:

//www.city-data.com/forum/busin...-flat-tax.html

started at the same time by the same OP.
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Old 08-17-2011, 01:40 PM
 
13,726 posts, read 24,052,961 times
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Quote:
Originally Posted by HurricaneDC View Post
Do they mean a higher percentage of their money or something? Everybody buys food, pays for utilities, pays for gas, etc... maybe i could see that argument in that poor people might have to pay more because, for example, they can't afford newer reliable cars and so they spend a lot on getting theirs fixed.
What it means is taxing lower income folks more will hurt the economy much more than taxing high income folks. This "trickle down" economy is a myth. As someone posted above, look at what the top tax rates used to be, and compare that to the health of our nation then vs. now.

Revenues might've remained the same (I don't know) but the overall economy was much better.
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Old 08-17-2011, 01:59 PM
Status: "Retired and happy about it" (set 21 days ago)
 
Location: WA
5,545 posts, read 22,702,784 times
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What the rates are and what people pay are two different things. Delaware put in a higher tax rate on incomes of a million and up and guess what happened... 30% of the millionaires disappeared and taxes in that segment dropped to even lower than before the increase.
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