The boxer could set up an LLC or Corp, and if those expense are ligit, and not loopholes take them off his "revenue" and pay the flat tax on the income portion.

There also would need to be a minimum income to qualify.. say, $35,000/yr per family of 4.

My understanding of the flat taxes proposed both here in Australia and in the US is that each have a minimum income level to qualify (say, $35,000/yr), which makes them all a progressive tax - simply put, pretty much what we already have.

Modelling has shown that the higher earners are the ones who win with a flat tax as their tax comes down, whilst middle incomes subsidise them..... not very appealing for a politician to sell.

Cheers

In the US however, the far richer individuals can afford far better services to find loop holes and such in tax codes. Where as a person making 38K a year, probably can't blow hundreds of dollars on an accountant/lawyer to walk through it, or do the investments necessary to save money.

IMO, our current system is heavily bias to the highest earner. That said, I don't think rich people should have to pay higher percentages then others, just because they are successful financially.

A flat tax idea sounds very appealing to most. The question is how do you make the change and what will the impact be to the economy?

If everyone paid a certain percentage of income in taxes regardless of exspenses then peoplw would change spending habits. For example, some people buy 'more' house because of the tax benefit. If someone pays the same tax regardless if they are a home owner or not, some people would opt not to buy a house or buy a smaller house than what they have now. This impact just on the home market has a trickle-down effect on many other parts of the economy that would be hard to predict and prepare for.

On one hand I don't believe it is 'fair' that two people that earn the exact same amount should pay differnent total taxes (no deductions) than each other due to personal choices. On the other hand, these personal choices have a hand in stimulating the economy. So there should be some kind of benefit for the people that help stimulate the economy.

If the tax system was just about payment on your fair share, then a flat tax is the way to go and could be very simple. However, the US tax system has more to do with the economy overall.

I would love a simple 'safe' answer to this and I guess that's why congress hasn't been able to come to any agreements because the simple answer isn't there (as much as we'd like to thinke we have the answer). I don't think corporate lobbies have a huge impact personal income tax legislation and I think that personal income tax liability can be handled at a different time than corporate tax codes. Something needs to happen and imho will in the next 10 years, it will be intersting to see if it's better or worse than what we have now.

Then you are dealing with them having to pay certain fees to have the LLC or Corporation. There are many low-paying jobs that work like this as well. Many sales jobs work exactly like this. The sales person is reimbursed for his travel expenses after he pays them from his own pocket. A friend of mine is a computer specialist and he spends 90% of his time traveling. His monthly travel expenses are usually more than his actual salary. He is required to pay for the travel expenses out of his own pocket, and then those expenses are added to his paycheck at the end of the month. You cannot ditch the "adjusted gross income" idea as much as you would like to.

And BTW, whether or not it is a corporation calculating profits (i.e. revenue leftover after expenses), or a person calculating "adjusted gross income", it is still the same exact thing, and will still require the IRS to review and audit to make sure cheating does not take place.

:iagree:

Most wealthy people make the majority of their money in capital gains. The current tax rate on capital gains is much much lower than the income tax rate, so it favors business owners over those in the work force.

...

I can think a lot clearer on this ...around april/08

One thing that needs to be eliminated for sure is sales tax. It discourages spending, and is a regressive tax (opposite of progressive). Poor people spend a higher percentage of their income due to necessity, so they actually end up paying a higher percentage of their income in sales tax.

I would agree w/that.

An example of indirect expense would be child care. If the boxer was a single parent and hired a nanny to care for his children during his training, this also would be considered a tax credit.

As I suggested, every adjustment to income would have to subjected to reevaluation; revenue and expense would have to be redefined. Some would remain, while others should be tossed.

Example:
Child care credit - socially responsible
Hybrid/electric car credit - pointless