Question for the US Citizens.
 

Taxes....should the Government apply a flat tax system instead of our current income based tax system?

What would the implications be for state taxes?

Do you ever think a flat tax would take effect?

I assume participation in this discussion should include a reading of "The Fair Tax Book" by Neal Boortz?

It's a good, comprehensive read and IMO, a beta rollout using US military personnel to get the kinks out would make all the sense in the world.

Couple a flat tax with a tax credit for investing in US Treasuries and we solve the Chinese problem as well while keeping the yield from debt service here at home.

The economies of Eastern Europe should be proof enough: http://www.fairtaxblog.com/20050914/...astern-europe/

Can someone just get on this right away, please?

I don't know enough about how a flat tax system might work. Is it based on income or spending? Is it based on available cash or total assets?

Can someone please explain the basics of a flat tax system..

B

I voted flat tax. Our present system is way too complicated for the average citizen and most of them get ripped off because of it. It shouldn't take a CPA or tax consultant to figure out how much one owes in taxes or what all the 'deductions' are that one may be able to take advantage of.

It should be this simple:

You earned 'this much' last year so you pay 'this percentage' of your earnings in tax.

And EVERYBODY pays the SAME PERCENTAGE. Little old me, you, and John Q Corporate owner.

Even Suzie Orman suggested a flat rate percentage based division for paying household bills and expenses to a couple with different income levels as the only fair way to divide those expenses.

The complicated BS like this needs to be done away with:

"You may be eligible for a deduction on your income tax if you had a hangnail during the last year that affected your ability to scratch your own ass. You may be able to take a deduction based on the length of time the hangnail affected your ability to scratch your own ass provided you meet the following criteria:

1. The hangnail was not repairable using ordinary trimming/filing devices.

2. Physical immobility impaired you from seeking a manicurist to repair the hangnail or you could not afford those services due to your level of income.

3. The hangnail was on the actual hand you scratch your ass with.

4. You had a genuine need to scratch your ass with said hand and were impaired from performing this action for a period of not less than 1 month.

5. The hangnail was NOT on a toe unless you are able to scratch you ass with your foot.

If the answer to any of these criteria is "NO" you are not eligible to take any portion deduction. If you answered "YES" to all of the above criteria fill out FORM 1364A-7 to figure the amount."

:rolleyes:

In my opinion the present system is just silly and needs to be done away with. It has been designed to benefit the wealthy and place the heaviest tax burden on the little guy.

I've followed the flat tax debate over the years dating back to Rep. Armey's failed proposal back in the 90's to it's inclusion as Steve Forbe's platform centerpiece in 2 presidential campaigns.

The concept to simplify an overburdening tax system is embraced across party lines, but there is no clear cut agreement on the means of implementation. A flat tax proposal has to address the individual tax system, business and corporations, and Social Security. Income, revenue, and expense would have to be redefined under new terms. We don't have just simple income in the U.S.; we have Adjusted Gross Income. Every line item entry that adjusts income would have to be reevaluated.

It's success in Eastern Europe further champions its legitimacy as a viable taxation system. The long term benefits are unquestioned. But the show-stoppers are likely the cost to overhaul and implement a new system and the possible ensuing chaos during the transition. It won't happen if it destabilizes the economy.

Brownback and Giuliani are flat-tax proponents, with Giuliani only recently hoisting the flat tax flag with Steve Forbes now running his campaign. I've actually downloaded many of their position papers and speeches, along with many of the other candidates, but I haven't had a chance to read them all.

Here's Brownback's: http://www.realclearpolitics.com/art...lat_tax_1.html

And Giuliani's sudden backtrack on the flat tax issue:
http://www.nytimes.com/2007/03/29/us...prod=permalink

In regards to fl8ntive's mention of the FairTax concept, :iagree: , Boortz's book is a must read. Going to a fixed rate sales tax has to be considered (and debated in this election). But the poll was regarding flat tax, so maybe a discussion of the FairTax concept should be held in another thread.

The only, REPEAT, the only reason we don't already have a flat tax (and campaign finance reform for that matter) is the corporate lobbies.. they own Congress, and as long as they're able to buy their votes, we'll never get a fair tax system in this country.

It's a damn shame..........flat tax, from what I see, is the fairest and most honest tax method because it dictates the same tax for all individuals.

I am not a US citizen but as a legal alien who pays the same taxes as US citizens I will give my opinion on this. Although the income tax based system is not that bad over here to be compared to some other western countries I still vote for a flat tax system.

Hi Asawadude,

What I'm thinking is to tax all of this the same. No expense breaks, or any other breaks or deductions, for business, corporations, or individuals. That would automatically get rid of the "Adjusted Gross Income" thing. All that crap is what has made the system so fraking complicated in the first place!

Whether the tax is applied to a business, a corporation, or an individual, they each have a net income/profit. TAX THAT. Equally. Like this:

John Doe made $100,000 last year, He pays XX% tax on that.
ABC corporation made $100,000,000 profit last year, the corporation pays the same XX% tax on that just like a person.

What's so difficult about that? All that needs to be done is calculate the percentage needed to maintain the current tax revenue.

Of course a business or corporation has no need for Social Security so that would only be applied to individuals for the present. With the implementation of mandatory enrollment into an individual retirement plan Social Security will eventually not be needed.

What you propose will result in some people having to pay more in taxes than they earn.

I'll use as an example a professional boxer:

A well-known boxer makes $10 million for a championship fight. That is what his paycheck is for: $10 million.

He then is required by contract to pay $3 million to his manager, $1.5 million to his trainer, $750k to the assistant trainer, and another $500k to his supporting staff who helped him during the 8 weeks of training and preperation. He has to pay $100k for renting the training facilities for 8 weeks, $300k for his entire staff to have room and board during the training, $50k for travel and hotel expenses for his entire staff, etc.

Let's suppose that by the time he is done paying out all his expenses, he is left with $3 million. Yet, according to the tax law, he is required to pay 35% of his income in taxes. His "adjusted gross income" is $3 million. If you require him to pay taxes on $10 million, he will end up having to pay more than he earns.

While most people do not encounter such high expenses, there are quite a few professions that work like this. The IRS allows you to work as an "independent contractor" which means you can deduct all your expenses and only pay taxes on your "adjusted gross income". Without this, many professions could not exist.