Flat Tax

[ALPHAGRIZ1]

You can look at it like that if you want to. Now I understand what you mean.

I don't care if you earn 1,000,000 a month or 50 a month you should pay the same % per dollar earned. (In this case 17% hypothetically)

I will never understand the thinking that people that have more should pay more. Just because somebody is fortunate enough to make a ton of money doesn't mean they should be penalized for it. Same goes for people that don't make much, they should have to pay the same % just like everyone else.

Maybe if this were the case there would be less poor people?

 

[Bay Area Cat]

You can look at it like that if you want to. Now I understand what you mean.

I don't care if you earn 1,000,000 a month or 50 a month you should pay the same % per dollar earned. (In this case 17% hypothetically)

I will never understand the thinking that people that have more should pay more. Just because somebody is fortunate enough to make a ton of money doesn't mean they should be penalized for it. Same goes for people that don't make much, they should have to pay the same % just like everyone else.

Maybe if this were the case there would be less poor people?

Are you suggesting that people choose not to make more money to avoid paying taxes, and are thus still poor? If so, they would have to be so stupid and lacking in basic math skills that they probably don't have the option to make more money.

However, if the taxes were raised on what they do make now, then I'm sure their kids will be much less likely to have a quality education (as Mommy and Daddy will have to work more hours to have the same net take-home pay, and they will have much less money to buy the necessary items for school and life experiences.

I am a big believer in fiscal conservativism, but I am also a realist and know that there are a whole lot of practical aspects of the flat tax that would hurt our society (and ESPECIALLY the red states). The progressive tax system does build some element of socialism, but at the same time, few people would truly be in favor of a "fair" system of taxation/government. For example, how about if all of MT's road's were paid by with user fees from only the people who use it? The entire state would still have gravel roads were it not for the fact that some wealth redistibution is in place to assist the rural areas that don't have the tax base to support and build their infrastructure.

 

[ALPHAGRIZ1]

You can look at it like that if you want to. Now I understand what you mean.

I don't care if you earn 1,000,000 a month or 50 a month you should pay the same % per dollar earned. (In this case 17% hypothetically)

I will never understand the thinking that people that have more should pay more. Just because somebody is fortunate enough to make a ton of money doesn't mean they should be penalized for it. Same goes for people that don't make much, they should have to pay the same % just like everyone else.

Maybe if this were the case there would be less poor people?

Are you suggesting that people choose not to make more money to avoid paying taxes, and are thus still poor? If so, they would have to be so stupid and lacking in basic math skills that they probably don't have the option to make more money.

However, if the taxes were raised on what they do make now, then I'm sure their kids will be much less likely to have a quality education (as Mommy and Daddy will have to work more hours to have the same net take-home pay, and they will have much less money to buy the necessary items for school and life experiences.

I am a big believer in fiscal conservativism, but I am also a realist and know that there are a whole lot of practical aspects of the flat tax that would hurt our society (and ESPECIALLY the red states). The progressive tax system does build some element of socialism, but at the same time, few people would truly be in favor of a "fair" system of taxation/government. For example, how about if all of MT's road's were paid by with user fees from only the people who use it? The entire state would still have gravel roads were it not for the fact that some wealth redistibution is in place to assist the rural areas that don't have the tax base to support and build their infrastructure.

I don't see how you keep saying that their taxes would be raised with a flat tax? 17% is lower than what most people pay now. So Mommy and Daddy would actually have more money in their pockets to spend on a quality education and other things like health insurance, cars and homes.

I also fail to connect with you on the Montana road argument. I understand that federal money is used in Montana for projects like those. If a flat tax was implemented there would be more money taken in every year and then Congress could piss away even more than 3 TRILLION dollars a year.

 

[Bay Area Cat]

So you are saying that, under the flat tax proposal, most people would pay less tax than they do now, yet you also say that it would raise more revenue? That is not possible.

The effective tax rate for most people is well below 17%, especially the poor. Your tax proposal would effectively raise taxes on most people, the most on the poorest people. Only the wealthier people would get a tax cut.

If you want to promote a tax policy, you must at least concede that any change in taxes is going to affect some people positively and others negatively. With a flat tax, taxes would be raised for the poorer people in this country. This will leave them with less cash with which to improve their lives and bring themselves and their children up into the higher income spheres.

You seem to think that the flat tax is a cure-all. I think you are failing to take into account a lot of the implications of it and are instead taking the marketing materials a little too literally.

It WOULD hurt Montanans on average. It WOULD help CA and NY residents on average. It WOULD increase taxes for the non-wealthy and WOULD decrease taxes for the wealthy.

 

[ALPHAGRIZ1]

BAC I understand that there are pro/cons to this subject matter.

You can raise more money with a flat tax and decrease what is being payed by the current taxpayers.

Businesses will lose the loopholes they currently enjoy thus adding revenue.

There will be more people paying taxes thus increasing revenue.
(Yes the poor will finally have to find out how the real world is and start contributing instead of sucking this country dry)

I never said it was a cure all. ANYTHING is better than what we currently have.

 

[GrizWhiz]

I am quite sure most Montanans fall into the 15% tax bracket or below. This also includes the first $14K or so (for married couples) being taxed at 10%. The flat tax as described in this thread would result in most Montanans paying more tax. :crybaby:

 

[ALPHAGRIZ1]

They would still have more money in their pockets being taxed at 17% because of all the other federal taxes that would go away.

 

[GrizWhiz]

alpha-good discussion but I respectfully disagree. The money has to come from somewhere. Not everyone can end up paying less. The rich certainly end up paying a ton less. Who does that leave paying more? :tounge:

 

[Bay Area Cat]

BAC I understand that there are pro/cons to this subject matter.

You can raise more money with a flat tax and decrease what is being payed by the current taxpayers.

Businesses will lose the loopholes they currently enjoy thus adding revenue.

There will be more people paying taxes thus increasing revenue.
(Yes the poor will finally have to find out how the real world is and start contributing instead of sucking this country dry)

I never said it was a cure all. ANYTHING is better than what we currently have.

What specific business "loopholes" will be lost? Businesses essentially pay taxes based on net income ... and raising taxes on business certainly isn't a cure-all, nor would it even make a dent towards any tax system that would reduces personal income taxes for everyone. Besides, if one wants jobs in the economy, the worst idea would be to dramatically raise taxes on businesses.

The numbers just don't add up in what you are saying. And on its face, a 17% flat tax rate would raise taxes on most individuals.

 

[Bay Area Cat]

There will be more people paying taxes thus increasing revenue. (Yes the poor will finally have to find out how the real world is and start contributing instead of sucking this country dry)

Ummm, yeah. I hope you're just saying that for effect. Otherwise, I'd have to come to the conclusion that you have no idea how the economic world works (beginning with the concept of low-cost labor and how it benefits the wealthy).

 

[Grizlaw]

I oppose a flat tax for a lot of reasons, some of which have already been stated by others in this thread. I don't want to repeat points that have already been made, but I do have a thought to add.

Looking at the issue strictly from a "fairness" standpoint, I can understand the argument of those who favor a flat tax. From a certain point of view, it does make sense: why shouldn't everybody pay tax at the same rate? In a perfect world, I would probably agree.

Unfortunately though, fairness is not the only factor that needs to be considered in forming a tax system. Of course we want our tax system to be fair, but it also has to be practical. Whatever system we implement has to work from an economic perspective; it has to raise revenue without doing major damage from a societal standpoint.

This is where economic reality comes into play. In our current system, roughly the poorest 15-20% of our society is not paying any federal income tax, period. That might not seem fair to some people, but the reality is that that segment of society really, truly cannot afford to pay taxes. They are already living in poverty, and if we impose a tax on them, we will be driving them even deeper into poverty. I realize that may seem fair to some people; after all, why is it the fault of the wealthy that the poor can't afford to pay taxes?

I can understand the argument, but at the end of the day, what we have to realize is that taking people who are already impoverished and driving them deeper into poverty is going to carry its own set of negative consequences. Thus, while it might be more "fair," I don't think imposing a flat tax would have a positive impact on society as a whole.

--GL

 

[griznhel]

I'm not sure of the "exact" number, but on the so called "death tax"(indeed a misnomer) the amount excluded is over $1mil, and I believe it increases to $3mil over the next few years. So, in reality, very few taxpayers will even reach that amount in any estate that is going to be taxed. This tax ends up being a pain only for the very wealthy... if it wasn't, it wouldn't get the discussion it does.

 

[GrizWhiz]

The inheritance tax exempt amount is 2 million $ in 2006. Also, amounts left to a surviving spouse are exempt from the tax. Obviously, people other than the pretty darn rich are not affected by it.

 

[ALPHAGRIZ1]

There are many countries that have or are going to a flat tax and they are doing damn fine. The above points that are against the flat tax are made out of ignorance.




So if it's OK to OVER tax the rich to death, why isn't it OK to tax the poor a little?


Hold the poor accountable.

 

[Grizlaw]

There are many countries that have or are going to a flat tax and they are doing damn fine. The above points that are against the flat tax are made out of ignorance.

If you're going to direct words like "ignorance" at me, then please at least respond to my substantive points. It's fine that you disagree with me, but if you can't really articulate why, you just look like a fool.

--GL

 

[Bay Area Cat]

There are many countries that have or are going to a flat tax and they are doing damn fine. The above points that are against the flat tax are made out of ignorance.




So if it's OK to OVER tax the rich to death, why isn't it OK to tax the poor a little?


Hold the poor accountable.

Hold the poor accountable for what? For being poor? You think those ladies changing sheets and cleaning up after us in hotel rooms are getting off too easy and should pay more taxes? You think the farmhands in MT are living a little too high on the hog, and should essentially give more of their paycheck to people in CA who make over $100K per year?

I really don't know what bizarre chip you have on your shoulder, and I am sincerely intrigued by what kind of background you have, but you clearly are not in touch with the economic realities of people in this country. And when pressed with real questions, you just call people ignorant. That is telling me that you have no knowledge on the topic and are resorting to name calling as opposed to admitting that you are in WAY over your head on this topic. (Hint: I'm a tax CPA, and Grizlaw is a tax attorney, and I have a feeling a few others on this thread have similar backgrounds).

And what countries are going to flat taxes? I expect a long and distinguished list.

 

[GrizWhiz]

There are many countries that have or are going to a flat tax and they are doing damn fine. The above points that are against the flat tax are made out of ignorance.




So if it's OK to OVER tax the rich to death, why isn't it OK to tax the poor a little?


Hold the poor accountable.

alpha- I think you are over simplifying things just a tad, don't you think? You obviously have opinions and values that disagree with others in this thread. That doesn't necessarily make anyone ignorant. I'm suprised you have resorted to name-calling in what otherwise has been a pretty good exchange.

 

[ALPHAGRIZ1]

(Hint: I'm a tax CPA, and Grizlaw is a tax attorney, and I have a feeling a few others on this thread have similar backgrounds).

And what countries are going to flat taxes? I expect a long and distinguished list.

Countries that already have a flat tax:
Russia
Hong Kong
Romania
Lithuania
Slovakia

Countries that are considering a flat tax:
Spain at 30%
Panama
Australia-I heard, but didn't look it up.

Now it's clear why the opinions on this board are the way they are. With a flat tax in place a few of you would be out of a job. I can't say I blame you for thinking that way, but chances are you know that it is a better idea than what we have now, but are against it for security sake. Thats cool.

 

[ALPHAGRIZ1]

There are many countries that have or are going to a flat tax and they are doing damn fine. The above points that are against the flat tax are made out of ignorance.

If you're going to direct words like "ignorance" at me, then please at least respond to my substantive points. It's fine that you disagree with me, but if you can't really articulate why, you just look like a fool.

--GL

I said the above statement not directed at any one person. I used the word ignorance because most people just hate the idea of a flat tax because they hear talking points about why it is a bad thing and it would cost them money when the exact opposite is the truth.

I also didn't know you 2 were tax attorney's. Now I understand why you have your opinions on this subject the way they are.

 

[Grizlaw]

Now it's clear why the opinions on this board are the way they are. With a flat tax in place a few of you would be out of a job.

That's actually not true at all. Any tax reform would create a ton of work for people like me, and a flat tax would not reduce the need for tax advisors for large businesses, which makes up all of my client base. For what it's worth, I have read articles written by tax advisors who do favor Forbes' plan; it's not like I'm speaking on behalf of the tax bar as a group.

I guess my bottom line is, your opinion is what it is, and that's fine. Unlike you, though, I have actually read all of the academic discourse on both sides of this subject, and that is what my opinion is based on -- not on "talking points," and not on self-interest. Take it for what it's worth; just don't call me ignorant -- I know more about this than you do.

--GL