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Old 08-18-2011, 01:16 PM
 
Location: Keosauqua, Iowa
9,270 posts, read 18,195,165 times
Reputation: 12634

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I'd be all for a flat tax. But our current income tax system started out as a flat tax and it didn't take long for it to develop into the mess that it's become. If we go back to a flat tax who's to say it won't morph into something undesireable again?

I'm more in favor of a consumption tax. The argument against it is that the poor are taxed more heavily, but most "fair tax" proponents are in favor of "prebates" that reimburse everyone for what they would expect to pay in sales tax on basic necessities. That would work. Eliminating sales tax on groceries, health care items, services (such as haircuts or labor on auto repairs), and individual clothing items under, say, $50 would accomplish the same thing.

The big advantage is that everybody pays. If my neighbor is hard up for cash and sells me his ATV for $500 and I turn around and sell it for $1500 I'm probably not going to report that income. But if I want to take that income and buy something with it I will have to pay the sales tax. The same goes for drug dealers and people who do work "under the table."

Of course there is a point where consumption decreases significantly, so I'd keep an income tax in place for any amount earned over that point, not that I know what that point is; $250K? $500K? I'm sure that studies have been that would indicate what that level is.
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Old 08-18-2011, 01:50 PM
 
8,265 posts, read 11,192,888 times
Reputation: 4788
Quote:
Originally Posted by jtur88 View Post
Personally, I'd prefer a national sales tax to completely replace the income tax. Tax people on what they consume, not what they produce. If you need a $50,000 car and I'm fine with a $5,000 car, please feel welcome to pay ten times as much tax as I pay. But don't punish me for earning and saving that $45,000 difference.
While I agree with your rationale in letting those who consume more pay more in taxes, wouldn't this be pretty unfair to anyone who has put away after-tax money? They were taxed on it at the higher income tax days, now when they want to spend it in retirement suddenly there is the equivalent on the other end since income tax has been replaced by consumption tax.
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Old 08-18-2011, 03:17 PM
 
Location: West Orange, NJ
12,545 posts, read 19,470,204 times
Reputation: 3712
Quote:
Originally Posted by slackjaw View Post
While I agree with your rationale in letting those who consume more pay more in taxes, wouldn't this be pretty unfair to anyone who has put away after-tax money? They were taxed on it at the higher income tax days, now when they want to spend it in retirement suddenly there is the equivalent on the other end since income tax has been replaced by consumption tax.
those people you speak about are commonly known as the middle class. haven't you learned that no one cares about them?
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Old 08-18-2011, 04:29 PM
 
Location: Keosauqua, Iowa
9,270 posts, read 18,195,165 times
Reputation: 12634
Quote:
Originally Posted by slackjaw View Post
While I agree with your rationale in letting those who consume more pay more in taxes, wouldn't this be pretty unfair to anyone who has put away after-tax money? They were taxed on it at the higher income tax days, now when they want to spend it in retirement suddenly there is the equivalent on the other end since income tax has been replaced by consumption tax.
You raise a valid point. Some sort of voucher system would have to be developed to equalize those who have invested their money post-tax only to draw it out in a world without income taxes.

That being said, I invest in a Roth IRA specifically because at this point in my life my net tax liability is virtually nothing. I think most people who use these investment vehicles are in a similar position (and if they aren't they should probably reconsider their investment strategy), so I'm guessing the effect would be minimal for most people.
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Old 08-19-2011, 09:58 AM
 
11,004 posts, read 10,601,480 times
Reputation: 35311
Quote:
Russia switched to a Flat Tax and they are raking in the dough, not to mention they lightened their bureaucracy.
Wrong. Russia is raking in money because the two commodities is has in abundance (oil and gold) are both selling at record prices. The state gets a big chunk of this revenue.

Quote:
They'll get over it. Darwin at work.

Netflix or food
Netflix or food
Netflix or food
One more attempt to trivialize poverty in this country. I've pretty much given up listening to this kind of nonsense. Many people in this country have near empty refrigerators and the food banks report a dearth of donations. About 50% of the poor in this country are children who committed the "crime" of being born to parents without any money.

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And what would be wrong with that?

All of you have it ass-backwards.

You should be paying 3% of your earnings to the federal government and 15% to your State.
Says who? I don't share your ideas of what government should or should not do. I'm sure you believe social security, medicare, welfare, and probably any other need than defense is not the business of the federal government. The problem is most Americans don't agree with you. We decide things in this country through elections and your limited view of government lost.

Quote:
And what is wrong with sharing accommodations with others?
More attempts to trivialize poverty. We've already pursued policies that concentrate 30% of this nation's wealth in the hands of 1% to 2% of its citizens. Hey, lets keep at it. Everybody knows no one is really poor in this country is just a mythology!

Quote:
Tax accountants, tax attorneys and tax preparers are not an essential part of any economy.
If a nation decides it wants to use tax policy to reward some types of behavior and discourage other types than accountants and tax lawyers are an essential part of the economy. We decided many years ago we wanted to use the income tax system to do exactly that. We want to encourage deductions to charities, encourage home ownership, allow employers to deduct the cost of wages from income taxes, and encourage investment in new plant and equipment.

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It is stupid for me to pay taxes just so they can toot their own horns.
What you personally think is "stupid" is unimportant to me in terms of formulating a tax policy.

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What kind of people? People who like city-living, who like apartment living, who don't want to be burdened with the maintenance and house-keeping a home requires, who don't want to be burdened with the added costs of a home such as the 75% -125% increase in electric costs and the cost of heat, who might be physically disabled and unable to care for a home, who might be mentally ill and unable to care for a home, who may prefer to be on a bus-line so the don't need the added expense of a vehicle, who might be unable to have a valid driver's license for any number of reasons, including medical reasons who might need to live on a bus-line, who might want to live near where they work or play, and for dozens of other reasons.
You apparently have little experience dealing with rental property. Because my family made the mistake of getting into that business when I was young, I do. I've observed rental property often over the years. Tenants have no incentive to do simple things like pay for screws to replace a towel rack in the bathroom and often they fail to do so. More importantly, they live in ways that tend to be more destructive of property than owners do. The highest crime rate in virtually any area can be found where there is the most rental property. Governmental policy should encourage home ownership.

People who still decide they want to live in rental housing can choose to do so. They just won't get a deduction for their rent.

Quote:
So what, you're going to force people to own homes, even though they don't want to? Way to go Stalin.
Classic Tea Potty retort. Compare anyone who supports the use of governmental policy to achieve any objective with communism or socialism. Tax policy doesn't "force" anyone to do anything. It simply gives a greater monetary reward to those who make a choice that society finds consistent with a public policy.

Your ideas about getting a flat tax stand about zero chance of winning approval and thank heavens for that.
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Old 08-19-2011, 11:32 AM
 
Location: MN
378 posts, read 638,483 times
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Quote:
Originally Posted by Mircea View Post
What kind of people? People who like city-living, who like apartment living, who don't want to be burdened with the maintenance and house-keeping a home requires, who don't want to be burdened with the added costs of a home such as the 75% -125% increase in electric costs and the cost of heat, who might be physically disabled and unable to care for a home, who might be mentally ill and unable to care for a home, who may prefer to be on a bus-line so the don't need the added expense of a vehicle, who might be unable to have a valid driver's license for any number of reasons, including medical reasons who might need to live on a bus-line, who might want to live near where they work or play, and for dozens of other reasons.

So what, you're going to force people to own homes, even though they don't want to? Way to go Stalin.
Guess you didn't read my post. Another poster suggested that we should encourage mortgages b/c crime is higher in rental neighborhoods. I'm saying that this doesn't make sense b/c there are other factors at work.
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Old 08-19-2011, 12:30 PM
 
Location: West Orange, NJ
12,545 posts, read 19,470,204 times
Reputation: 3712
Quote:
Originally Posted by markg91359 View Post
You apparently have little experience dealing with rental property. Because my family made the mistake of getting into that business when I was young, I do. I've observed rental property often over the years. Tenants have no incentive to do simple things like pay for screws to replace a towel rack in the bathroom and often they fail to do so. More importantly, they live in ways that tend to be more destructive of property than owners do. The highest crime rate in virtually any area can be found where there is the most rental property. Governmental policy should encourage home ownership.

People who still decide they want to live in rental housing can choose to do so. They just won't get a deduction for their rent.
while i don't agree with everything he said, and you may have experience with people who rent, I live in an area of the country where there are plenty of cities with a large percentage of renters and they are doing quite alright. I agree, a tenant almost always does not treat a home as well as they would if they owned it, but they still have to live in it. crappy people that don't care about the space they live in will treat it poorly. people who take pride in their living space will treat it well. i now live in a town with mostly owners, of single family homes and i have neighbors that completely neglect their properties. i've looked at homes when i was buying that were horribly maintained, and when they were maintained...people used the cheapest materials they could find to install things.

so i don't think your rental argument is a very good one personally.at least not in the part of the country i live in.
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Old 08-23-2011, 10:32 AM
 
2,515 posts, read 1,818,320 times
Reputation: 362
Quote:
Originally Posted by mettler View Post
hi

sorry if this has been discussed before, but 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
My take is this a flat tax for the bottom 99% of wage earners. For the top 1% I would want a tax rate that is a function of the total debt in the US.

http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg

http://upload.wikimedia.org/wikipedi...omeTax.svg.png

The two graphs have a striking inverse relationship. So if the total debt as % of GDP is high (200% of GDP) then the top marginal tax rate should be high approaching 100% if the total debrt as % GDP is low (less than 125% of GDP) then the top tax rate would be the same as it is for everyone else.

The rich can do what they want with their money as long as it does not include blowing a debt bubble.
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Old 08-23-2011, 10:35 AM
 
2,515 posts, read 1,818,320 times
Reputation: 362
Quote:
Originally Posted by 2018 View Post
Guess you didn't read my post. Another poster suggested that we should encourage mortgages b/c crime is higher in rental neighborhoods. I'm saying that this doesn't make sense b/c there are other factors at work.
Ownership gives you more to lose so there is a point for it reducing crime.
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Old 08-23-2011, 12:33 PM
 
13,660 posts, read 23,821,262 times
Reputation: 13925
Quote:
Originally Posted by newonecoming2 View Post
Ownership gives you more to lose so there is a point for it reducing crime.
Yeah I agree, home ownership invokes a certain psychological switch and people tend to treat their own property better. Not to say that some renters aren't fantastic, my neighbors rent their home and do an incredible job of keeping up with it, however as a general rule that is not the case.

I know when I buy something with my own money I tend to treat it better than if it was bought for me. It's just human nature.
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