Richest Are Leaving Even the Rich Far Behind

[Steve]

Fun to learn new stuff huh?

Raider, that article is a nice fluff piece but not really where the problem lies.  The Govt of CA had bad laws and made worse deals.  This is what caused the crises there.  If it was Enron's fault, G Davis would still be in power in CA.... probably.

[oboe]

Steve -

no worries, mate.   I still believe what I said about you is true.




As far as what Enron did California, and in reference to the bad/bizarre laws? that supposedly had them 'deserving' what they got...

Come on!     Manipulating the energy market the way they did was illegal, wasn't it?    

btw, I thought one of the things that made that fiasco possible was deregulation in the California energy market (there is the Grey Dacis connection, I think).    Deregulation usually involves an unfettering of business by the removal of laws governing conduct, standards, etc.

[crowMAW]

A flat tax is a truly regressive tax...it harms low income folks more than high income folks. Consider a 10% flat tax...a person earning $100,000 would end up with $90,000 after taxes. That $10,000 difference is really not going to change their life style all that much. They may have to buy a Cadillac instead of a Lexus.

Now consider a person earning $10,000 who would end up with $9,000 after the tax. A thousand dollar difference to that person is significant. It might mean the difference between being able to afford a used Toyota or taking the bus.

Replacing the current income tax system with a national sales tax is more preferable. I know many economists consider a sales tax a regressive tax as well, however this economist disagrees (yeah, one of my degrees is in economics). Here is why: The rich tend to buy more expensive products than those less well off. The sales tax on a Lexus is going to be a lot more than on a used Toyota, but they still provide the same utility, i.e. transportation. The rich person does not have to choose to buy the Lexus, but they prefer it and therefore voluntarily choose to pay a greater amount of tax. So in the end the rich person ends up paying a greater amount of tax than the lower income individual.

Now the sales tax also has several side benefits

1) It encourages savings, which frees more money for investment and economic growth. Of course economic growth in turn stimulates further spending and greater tax revenues.

2) It simplifies the tax code incredibly.

3) It would allow for the virtual elimination of the IRS as 45 of 50 states have a sales tax collection agency which can collect the Federal Government's share just as they currently collect and redistribute each county's share. Of course, nearly eliminating the IRS reduces the cost of running the government.

Anyway...just my $0.02.

[lazs2]

crow... that is bull..  Allmost every flat tax I have seen had a minimum yearly income..   If the bottom was say 20,000 then the "poor" with 20k or less declared income would pay.... 0%... everything I have seen would have credits for families also.

I am not married currently but would like to see a tax system that encouraged being married and raising a family.  I think that is important..  

I would also like to see a flat tax with a return to deducting tax spent on say gas or property tax.  

I am not adverse to a tax based solely on sales tho.

lazs

[crowMAW]

Originally posted by lazs2
crow... that is bull..  Allmost every flat tax I have seen had a minimum yearly income..  

I think you are confused...the $100,000 income comparison to $10,000 income was illustrative to show that a flat tax is regressive.  I was hoping to make the math easy for those who are easily confused.

[lazs2]

Ok... so the math would be.... 10% of 100k is... 10k in taxes.

0% of 10k would be 0k in taxes.  How is that hurting the poor?

lazs

[oboe]

Looks like we may also disagree on the meaning of 'flat' as well, Laz.

When I think of a flat tax, I think of a tax where everyone pays the same percentage - no ifs ands or buts.   Your version of the 'flat' tax includes a minimum ceiling, below which no one pays tax, and tax incentives for marriage and children, and deductions for gas and property tax.   In short, you've greatly simplified the current tax code, but you've kept some of its main features - progressivity, incentives and deductions.

Not that I am against what you describe, but I think you're not talking about a truly 'flat' tax system.

[straffo]

Flat is the only pseudo logical and "equal" way to crush the low income more than the hight income.

Only a cretin can pretend it's fair.

[Captain Virgil Hilts]

The current suggestion for flat tax allows ONLY the personal family deductions, and NOTHING else. Meaning a single person with no dependants gets his first $10K free of taxes. He pays $1K only on his NEXT $10K. Actually it's about $1.3K because the flat tax is supposed to be around 12.7%. A family of 3-4 would pay nothing on the 1st $20K or so.

In the current proposal you get NO other deductions. No interest, mortgage or other, nothing besides the deduction for state income taxes.

[crowMAW]

Originally posted by Captain Virgil Hilts
The current suggestion for flat tax allows ONLY the personal family deductions, and NOTHING else. Meaning a single person with no dependants gets his first $10K free of taxes. He pays $1K only on his NEXT $10K. Actually it's about $1.3K because the flat tax is supposed to be around 12.7%. A family of 3-4 would pay nothing on the 1st $20K or so.

So...what you and Laz2 are telling me is that you consider a tax with select deductions and sliding scale on income up to a point as a "flat tax". {blink, blink}:confused:

Sooo...what do you call what we have now?

Since we are on the slippery slope...maybe the Congress can make a minor modification and say: flat tax allows ONLY the personal family deductions and interest deduction on a home (because we want to encourage home ownership), and NOTHING else...except...well...also deduct state income tax...and maybe state sales tax too.  BUT NOTHING ELSE...cuz this is a simple flat tax.

Then in a few years they can make just another tiny change: A person with no dependants gets his first $10K free of taxes. He pays $500 only on his NEXT $10K and $1k on his NEXT $10k. Except if they are a married couple (cuz we want to encourage marriage) and then the first $20k is free. But it is still flat...sorta...from an angle anyway.

Then many years and many tiny changes later we have: flat tax that allows ONLY the personal family deductions, interest deduction on a home (because we want to encourage home ownership), state income/sales tax deduction, a deduction on each 1000 head of cattle raised for beef, deduction for each bushel of corn not grown over the quota, deduction for leased automobiles over 5000lbs and $75K, deduction for emu breeding stock, deduction for...deduction for...deduction for...but absolutely NOTHING else...this is a flat tax remember...so really nothing else.  But we might want to think about a deduction for hybrid cars cuz we want to encourage fuel efficient clean cars.  But after that...scout's honor...NOTHING else.

Lets just make it really easy...if you buy something, you pay a sales tax.  No loop holes.

[oboe]

crowMaw got it right.   We need to have the guts to say flat and mean flat, or in a few years we'll be right back where we are now.
Or maybe, where we are right now isn't so bad after all, because even the people that want a 'flat' tax end up emulating important features of the current tax code.   Its starting to sound like a smokescreen to me - the flat tax backers gain notoriety by being crusaders for radical tax change but really there is not much fundamentally different from what we already have.

btw I don't think I'd like a national sales tax.    Sales taxes hit you right in the face everytime you make a purchase; can you imagine what the sales tax would be on a house purchase?    I thought we wanted to encourage home ownership?    I don't mind paying taxes but I don't like to be reminded about it every time I turn around, you know?    

Our economy depends greatly on consumption, so any tax proposal that adversely affects consumption could backfire unless its implemented properly.

[lazs2]

we don't have a flat tax now at all.   I said that I would not be opossed to a sales tax only but if we had a flat tax it should include marriage and children deductions and have a minimum for which there would be no tax.  Also..  you should not pay tax on tax.  Your property and state taxes and gas taxes and regestration for instance are all taxes and should be deducted.

In reality.. that is the only kind of flat tax that would fly... there isa huge tax industry that is stuffed full of accountants, preparers and lawyers and they won't go down easy.

lazs

[bj229r]

Social Security started at like 1%...("you'll HARDLY even notice it")...every few years, TEENY ("you'll HARDLY even notice it") changes have been made, until we arrived at our current 14% or thereabouts, and we've got some folks on left saying the poor should be exempted from even THAT; (the 'tax-breaks for the rich mantra was partially correct, as those with families making 30ish really dont pay any taxes other than FICA, in the end, and thus received no tax break;)

The actual rate when the INCOME tax first started, in WWI, was like 3-4%? mebbe one of yall can hunt that up, and it was supPOSED to be temporary--like, until the war ended. When Reagan's first term started the top earners were paying 70%  (of the income they couldnt hide from the gov't, and thus from the economy)---There is NO reason to think our elected pimps won't do the same damn thing with a flat tax, except we will have already given away the few deductions we now have.

BTW, in either '84 or '86, Reagan cut a deal with congress--MANY deductions were given away (first and foremost interest on credit cards, etc.) in exchange for lower rates. Bush I and Clinton took those cuts away, and we never DID get those deductions back:mad:

[lazs2]

bj.. nice short and accurate history lesson on why you never let the government have anything or run anything.   The socialists here just don't get it.

lazs