Progressive Taxation

[Ban Hammer 14,647]

I disagree. Right now the wealthiest use many loopholes to avoid paying taxes. At 10% of my GROSS earnings I would pay less than I do under the current progressive system.

What are these loopholes that everyone keeps talking about?

I'm in the 33% Federal tax bracket and if there is a loophole I can use, I'd definitely like to know.

i'm still searching for it too

[one...two...tree 2,762]

...from an interview with Edward J. McCaffery

author of Fair Not Flat: How to Make the Tax System Better and Simpler

Q: There have been a variety of proposals for a flat tax on income—from folks like Congressman ####### Armey, Senator Arlen Specter, and presidential candidates Steve Forbes and Jack Kemp. How does your proposal differ from theirs?

McCaffery: My plan, the Fair Not Flat tax, is progressive. It won't raise tax rates on the middle classes to pay for tax reduction for the rich. You can get almost all of the benefits of these flat tax proposals—in terms of simplicity, economic efficiency, and the fairness of the tax base—without abandoning America's longstanding and sensible commitment to at least moderate progressivity in tax burdens. The wealthy can and should pay a bit more at the margins of their luxurious lifestyles.

Q: But how does it work? What does it mean to have a progressive national sales tax?

McCaffery: A supplemental tax on spending for the wealthiest individuals would make the sales tax progressive. Under the system I propose, a family of four would pay no tax on their first $20,000 in spending, and 10 percent on the next $60,000. Only the few families who spend more than $80,000 a year would be subject to the supplemental tax. Necessities would be taxed less than ordinary and luxury items. And no one would be taxed directly on savings or investments. It's that simple.

Q: This sounds like the USA Tax plan that was proposed about seven years ago by Senator Pete Domenici and then-Senator Sam Nunn. Is your proposal any different?

McCaffery: Yes and Yes. Yes, it is very similar to the Nunn-Domenici "USA" or "unlimited savings accounts" plan, proposed in Congress in the mid-1990s, and I give credit to that proposal in the book. But the Fair Not Flat plan differs from that proposal in being more technically consistent and in substituting an actual national sales, or value added tax (VAT) for the lowest brackets of the tax. That latter change poses a huge and welcome simplification for most Americans: they'll no longer have to fill out tax forms or file tax returns.

Q: So this is a national sales tax?

McCaffery: Everyone would pay taxes on the things, or the goods and services that they buy. Then the upper middle and upper classes would fill out a "supplemental spending tax" form every April. As I said, only families of four spending more than $80,000 need pay this supplemental tax, and at rates starting at 10%. For these relatively affluent families, this tax adds to the actual sales tax or VAT to get progressivity. Rates keep going up, until families that spend more than a million dollars a year ($1,000,000) on themselves pay a total tax on their marginal purchases of 50%.

Q: But isn't it dangerous to tax consumption? Spending is the engine of the economy isn't it?

McCaffery: Funny, that's the most common question I get, and the one I use to start the Question and Answer section at the back of Fair Not Flat. Look, consumption is good. And it is the engine of our economy, especially now that we are in the throes of a recession. But taxing consumption won't slow down our economy further as many fear. Under my plan, tax rates wouldn't increase for any but the wealthiest spenders. For many lower- and middle-class Americans, taxes would actually decrease. And with that money, a vast majority of Americans would be able to spend more if they wanted to. With my proposal, we'd be increasing consumer confidence, and making spending more possible than ever before.

Q: But doesn't taxing the wealthy more amount to class warfare?

McCaffery: Well, there are some who would call my proposal that. But that's not the case at all. What I propose in my new book is class teamwork. Most wealthy people, as books like The Millionaire Next Door teach us, want to and, in fact, do save and invest their riches back into the economy. And there's no reason to tax them when they do. Capital helps us all. It keeps interest rates low, and that's good for homebuyers, students, and workers. I'm not proposing that we simply tax the wealthiest people in our country. Simply those who spend the most. I think that's fair, and I think it's in line with classic American values.

http://www.press.uchicago.edu/Misc/Chicago/555607in.html

[homesick_american 1]

How about a flat tax and treat everyone the same.

Because a flat tax is regressive and the poor would be particularly hard-hit. The average wage earner in the US would see their tax bill skyrocket. Pardon the language, but #### flat tax. It's total carp.

I disagree. Right now the wealthiest use many loopholes to avoid paying taxes. At 10% of my GROSS earnings I would pay less than I do under the current progressive system.

-------------------------

Flat tax

Family-Friendly. All flat tax proposals have one “loophole.” Households receive a generous exemp­tion based on family size. For instance, a family of four would not begin to pay tax until its annual income reached more than $30,000.[6]

http://www.heritage.org/Research/Taxes/bg1866.cfm

LOL....you would never pay ONLY 10%. A flat tax would be at least 20%.

Plus, what makes you think the rich won't use loopholes to get out of paying a flat tax the same as they use them to get out of paying a progressive bracketed tax? I mean, REALLY. How will a flat tax help that? Answer: it won't.

[Mr. Big Dog 10,747]

I disagree. Right now the wealthiest use many loopholes to avoid paying taxes. At 10% of my GROSS earnings I would pay less than I do under the current progressive system.

What are these loopholes that everyone keeps talking about?

I'm in the 33% Federal tax bracket and if there is a loophole I can use, I'd definitely like to know.

So, you actually pay 33% of every dollar you earn? If you do, fire your accountant.

[w¡n9Nµ7 §£@¥€r 123]

I disagree. Right now the wealthiest use many loopholes to avoid paying taxes. At 10% of my GROSS earnings I would pay less than I do under the current progressive system.

What are these loopholes that everyone keeps talking about?

I'm in the 33% Federal tax bracket and if there is a loophole I can use, I'd definitely like to know.

So, you actually pay 33% of every dollar you earn? If you do, fire your accountant.

Do all the deductions provided for by law count as loopholes?

[w¡n9Nµ7 §£@¥€r 123]

How about a flat tax and treat everyone the same.

Because a flat tax is regressive and the poor would be particularly hard-hit. The average wage earner in the US would see their tax bill skyrocket. Pardon the language, but #### flat tax. It's total carp.

I disagree. Right now the wealthiest use many loopholes to avoid paying taxes. At 10% of my GROSS earnings I would pay less than I do under the current progressive system.

-------------------------

Flat tax

Family-Friendly. All flat tax proposals have one “loophole.” Households receive a generous exemp­tion based on family size. For instance, a family of four would not begin to pay tax until its annual income reached more than $30,000.[6]

http://www.heritage.org/Research/Taxes/bg1866.cfm

LOL....you would never pay ONLY 10%. A flat tax would be at least 20%.

Plus, what makes you think the rich won't use loopholes to get out of paying a flat tax the same as they use them to get out of paying a progressive bracketed tax? I mean, REALLY. How will a flat tax help that? Answer: it won't.

You cant use any loopholes if there are no loopholes to begin with.

That said, a tax system that took away the mortgage deduction and other deductions that people have come to count on, would wreak havoc. Short-term havoc.

[homesick_american 1]

You cant use any loopholes if there are no loopholes to begin with.

That said, a tax system that took away the mortgage deduction and other deductions that people have come to count on, would wreak havoc. Short-term havoc.

True, but we won't ever get a system without 'loopholes,' i.e. personal/business/etc. deductions, so it's a moot point.

[Saddle Bronc 124]

Basically, there is no such thing as "progressive" when it comes to taxation!!!!

[w¡n9Nµ7 §£@¥€r 123]

You cant use any loopholes if there are no loopholes to begin with.

That said, a tax system that took away the mortgage deduction and other deductions that people have come to count on, would wreak havoc. Short-term havoc.

True, but we won't ever get a system without 'loopholes,' i.e. personal/business/etc. deductions, so it's a moot point.

A 'true flat tax' would not have any loopholes. Of course, a 'true flat tax' is just an ideological construct and has no chance of ever happening.

[homesick_american 1]

A 'true flat tax' would not have any loopholes. Of course, a 'true flat tax' is just an ideological construct and has no chance of ever happening.

Yes, a true flat tax wouldn't have loopholes. I'd love to make people pay their fair share; it isn't fair that people who can afford an army of accountants can jiggle the system to their own benefit but a regressive flat tax would unfairly punish lower-income taxpayers and I just can't support something that would do that.

We agree completely on one point...a true flat tax won't ever happen in the USA.

[GaryC 7]

...from an interview with Edward J. McCaffery

author of Fair Not Flat: How to Make the Tax System Better and Simpler

Q: There have been a variety of proposals for a flat tax on income—from folks like Congressman ####### Armey, Senator Arlen Specter, and presidential candidates Steve Forbes and Jack Kemp. How does your proposal differ from theirs?

McCaffery: My plan, the Fair Not Flat tax, is progressive. It won't raise tax rates on the middle classes to pay for tax reduction for the rich. You can get almost all of the benefits of these flat tax proposals—in terms of simplicity, economic efficiency, and the fairness of the tax base—without abandoning America's longstanding and sensible commitment to at least moderate progressivity in tax burdens. The wealthy can and should pay a bit more at the margins of their luxurious lifestyles.

This is precisely why the left will never go for a flat tax. To the left, the IRS and the tax collecting system isn't about funding the government but more about their social engineering goals. It's a form of socialism. Take from the rich and give to the poor. If they were interested in being fair then a straight flat tax would be what they want. I don't understand the driving need the left has to soak the rich at every opportunity. Unless it's old money, they worked hard and found a way to succeed. As a reward the left has painted a target on their back and put Velcro on the bottom of their purses so they can fund their latest feel good legislation.

A flat tax would also take away a large amount of the lefts power. They promise every "downtrodden" group they encounter some sort of government freebie as a way to get elected. Then they use class envy to justify a new tax on the "rich" to pay for it. Thats their M.O.. Play one class against the other to get elected and let the "rich" pay for it.

[Mr. Big Dog 10,747]

I disagree. Right now the wealthiest use many loopholes to avoid paying taxes. At 10% of my GROSS earnings I would pay less than I do under the current progressive system.

What are these loopholes that everyone keeps talking about?

I'm in the 33% Federal tax bracket and if there is a loophole I can use, I'd definitely like to know.

So, you actually pay 33% of every dollar you earn? If you do, fire your accountant.

Do all the deductions provided for by law count as loopholes?

[Hilarious Clinton 452]

...from an interview with Edward J. McCaffery

author of Fair Not Flat: How to Make the Tax System Better and Simpler

Q: There have been a variety of proposals for a flat tax on income—from folks like Congressman ####### Armey, Senator Arlen Specter, and presidential candidates Steve Forbes and Jack Kemp. How does your proposal differ from theirs?

McCaffery: My plan, the Fair Not Flat tax, is progressive. It won't raise tax rates on the middle classes to pay for tax reduction for the rich. You can get almost all of the benefits of these flat tax proposals—in terms of simplicity, economic efficiency, and the fairness of the tax base—without abandoning America's longstanding and sensible commitment to at least moderate progressivity in tax burdens. The wealthy can and should pay a bit more at the margins of their luxurious lifestyles.

This is precisely why the left will never go for a flat tax. To the left, the IRS and the tax collecting system isn't about funding the government but more about their social engineering goals. It's a form of socialism. Take from the rich and give to the poor. If they were interested in being fair then a straight flat tax would be what they want. I don't understand the driving need the left has to soak the rich at every opportunity. Unless it's old money, they worked hard and found a way to succeed. As a reward the left has painted a target on their back and put Velcro on the bottom of their purses so they can fund their latest feel good legislation.

A flat tax would also take away a large amount of the lefts power. They promise every "downtrodden" group they encounter some sort of government freebie as a way to get elected. Then they use class envy to justify a new tax on the "rich" to pay for it. Thats their M.O.. Play one class against the other to get elected and let the "rich" pay for it.

Right on Gary!!! You came to the rescue again.

[Mr. Big Dog 10,747]

...from an interview with Edward J. McCaffery

author of Fair Not Flat: How to Make the Tax System Better and Simpler

Q: There have been a variety of proposals for a flat tax on income—from folks like Congressman ####### Armey, Senator Arlen Specter, and presidential candidates Steve Forbes and Jack Kemp. How does your proposal differ from theirs?

McCaffery: My plan, the Fair Not Flat tax, is progressive. It won't raise tax rates on the middle classes to pay for tax reduction for the rich. You can get almost all of the benefits of these flat tax proposals—in terms of simplicity, economic efficiency, and the fairness of the tax base—without abandoning America's longstanding and sensible commitment to at least moderate progressivity in tax burdens. The wealthy can and should pay a bit more at the margins of their luxurious lifestyles.

This is precisely why the left will never go for a flat tax. To the left, the IRS and the tax collecting system isn't about funding the government but more about their social engineering goals. It's a form of socialism. Take from the rich and give to the poor. If they were interested in being fair then a straight flat tax would be what they want. I don't understand the driving need the left has to soak the rich at every opportunity. Unless it's old money, they worked hard and found a way to succeed. As a reward the left has painted a target on their back and put Velcro on the bottom of their purses so they can fund their latest feel good legislation.

A flat tax would also take away a large amount of the lefts power. They promise every "downtrodden" group they encounter some sort of government freebie as a way to get elected. Then they use class envy to justify a new tax on the "rich" to pay for it. Thats their M.O.. Play one class against the other to get elected and let the "rich" pay for it.

Money has largely dictated the tax code. It's the capital's socialism...

[Niels Bohr 72]

It's our fault for not being wealthy. We can't blame it on them.