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With the health care law and cap and trade still out there, along with the direction of the country, many business are not investing.
Of course, this would just be the tip of the iceberg compared to what it would be with no deductions.
Why does the money stop moving? Banks saving rates go up, already have since 2008. Went from 0% to just now over 5%. Banks have more money in savings, the credit loosens because they have more money to bet on.
Free market works again.
Why is it that people (mainly conservatives) think that the general public is the only way to inject money into the economy? BANKS are the best way to do that, because they have a vested financial interest in growth. The consumer only consumes, they don't grow anything.
hnsq - I am not spouting anyone's propaganda. I am presenting a tax proposal that I consider economically beneficial as well as fair. This high deductable would eliminate income taxes on the working and lower middle classes that actually produce the wealth of America and place the burden of operation the government on the upper 5% that manipulate the wealth created by the workers for the benefit of the owners. Many of the owner class do not work at all and never have.
Who do you think the owners are, Greg?
Again... read the following article. It's a pretty basic explanation of how this works, but you'll get the idea:
"This shift of business ownership from rich people to working people may be the greatest economic transformation since the Industrial Revolution. ...So what does all this mean? Well, for starters, it should lead to an end of complaints about the profits of corporations and allegations about 'greedy corporations.' After all, much of that profit now goes toward the current and future retirement incomes of working people." Business Ownership & Labor Day
Everyone who contributes to or benefits from a 401k, pension fund, mutual fund, annuity, or whole life insurance policy is the owner class, en masse.
The flaw in your calculations is that there are other taxes paid currently not counted. Gasoline tax, cigarette taxes, and all sorts of hidden taxes. All of these taxes would go away..
Many of those taxes are from the state and local level not the federal level, however look at the amounts. Even if you were to take those into consideration you would still be sharply increasing the taxes on the poor and middle class.
That is why unfortunately it will likely never be implemented. The middle class has lots of exemptions they can use to lower their tax liability.The poor pay little or none and the middle class up to the upper middle class pay around 8-10% roughly depending on the manner to which they file and manage their money.
It is the rich that pay much higher percentages even after deductions. They carry the largest burden of tax payment. Few are going to want to accept paying more taxes than they are in the lower incomes and are content to keep piling more on the rich to pick up the slack.
Problem is, this form of tax policy works into the favor of the politician and spurs corruption. As Madison said, politicians would then seek to appeal to the self interests of the majorities to oppress the minorities. Hence the rich always being a target for more taxes and the majorities being the middle to poor.
While it would initially be a hardship, equalizing this burden would result in less power of the politicians to leverage people against each other. Since all would have to carry the burden equally in taxation, fewer wasteful spending programs would result and over bloated government bureaucracy would not so easily go unnoticed.
As long as they can keep sticking a minority with the largest part of the bill, the people will keep voting for more and more government control and power in order to enforce their social programs.
I think a flat tax would be a nice wake up call to the country, letting them know how much bloat they have allowed and how much they have pushed off on to others in their desire to get a free ride. I think programs would be cut drastically by public demand if everyone had to pay for them equally.
Exactly! What we have now is not sustainable. Everyone SHOULD be seeing that by now.
Many of those taxes are from the state and local level not the federal level, however look at the amounts. Even if you were to take those into consideration you would still be sharply increasing the taxes on the poor and middle class.
The federal government taxes every item I listed. They also have TONS of hidden taxes, on things like cars etc...
Of course you would increase taxes on the poor and middle class.. If you go from not paying taxes, to paying taxes, thats an increase. Why should they not pay taxes like the rest of society?
I have always been for the progressive income tax structure we have had (with some adjustments) however I heard something the other day that might just change my mind.
There was a discussion of a national sales tax. (Called the Fair Tax)
Now my understanding of a sales tax is that it is the most regressive tax out there but this time there was a twist I had never heard (those that support FT may already know about this)
The guy was advocating a pre-bate where each person would receive a check at the start of the year equal to the tax rate times the top of the poverty level.
That basically means the poor would pay no effective tax rate, and the middle class would have mitigated rates and all other goods and services would be subject to the tax rate.
It would encourage savings and eliminate shenanigans by the congress and lobbyists. Plus it would cause every Americans to actually see what they were paying in taxes every year.
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