[Rhodes22-list] Flat Tax Anyone? What is fair Dave(political rant)

[Brad Haslett]

Bill,

How is "income" defined here?



If you are a wage earner, income would be the amount on your W-2 less what
you put in savings, (assuming the savings aspect survived Congress).  If you
are self-employed, nothing would change; your net profit for the year-end is
your income.

Does the "flat tax" replace all other taxes.



No.

Is the gasoline tax gone?



No.  My personal opinion is that we should be paying about $4 per gallon for
fuel, with a floating tax implemented over time to bridge the gap between
the market price of gasoline and the $4 target.  I know this sounds strange
coming from a free market disciple but this is a matter of national
security.

Are tobacco and liquor taxes gone?



No.  Those are local taxes and here in the Bible Belt a big fund raiser.

Can cities and states tack on other taxes over and above the "flat tax"?



Yes.  Each state is still responsible for their own spending and revenue
raising schemes.

Are property taxes gone?



No.  Property taxes will still be used locally to fund schools and local
government, as they should be.

What about taxes on the sale of securities and real estate?



Some flat tax advocates suggest eliminating capital gains.  I personally
think we shouldn't tax the gain on assets held over two years.  This
encourages long term investment and throttles real estate speculation.

What about fees charged by the government?  Why should the government
charge for entry to parks?  Or postage?  Or fees for passports?  Aren't
these all just hidden taxes?



These are user fees and they wouldn't change.  Airlines will still pay
landing fees to support the airspace infrastructure, etc.

Please fill in some more blanks on how the "flat tax" actually
works--how everything becomes so simple and fair.



The fair and simple is that the lowest income earners ($40K or less) don't
have to fool with federal income taxes at all.  The top 1% (read Bill Gates)
actually pays the same marginal rate as everyone else.  The 2% to 5%, that's
you and me kid, probably won't see much difference except that our friends
who borrowed a million dollars for a house may rethink their decision.  For
the 6% to 50%, life gets a lot simpler, and for the bottom 50% the tax
burden decreases.



Brad




On 1/14/07, Bill Effros <bill at effros.com> wrote:
>
> Brad,
>
> How is "income" defined here?
>
> Does the "flat tax" replace all other taxes?
>
> Is the gasoline tax gone?
>
> Are tobacco and liquor taxes gone?
>
> Can cities and states tack on other taxes over and above the "flat tax"?
>
> Are property taxes gone?
>
> What about taxes on the sale of securities and real estate?
>
> What about fees charged by the government?  Why should the government
> charge for entry to parks?  Or postage?  Or fees for passports?  Aren't
> these all just hidden taxes?
>
> Please fill in some more blanks on how the "flat tax" actually
> works--how everything becomes so simple and fair.
>
> Bill Effros
>
> Brad Haslett wrote:
> > Bill,
> >
> > There are a gazillion different versions out there, including the ones
> > currently being used in Eastern Bloc countries.  The one I like best
> > is the
> > one proposed by Steve Forbes.  Basically, the first $40,000 or so of
> > household income would be tax free with adjustments for family size
> > and type
> > (single v married).  After the threshold, consumption, meaning income
> > minus
> > savings, would be taxed at a flat rate, 17% in Forbes proposal.
> Corporate
> > income would be taxed at the same 17%.  Going back to the old 80/20
> rule,
> > the 20% of taxpayers who pay 80% of the taxes still would.  Much of
> > the 80%
> > who pay little taxes anyway would be exempt, and what they did owe
> > could be
> > calculated on a postcard. Gone would be the deduction for home
> > mortgage interest and other itemized deduction.  The idea is that a
> > flat tax
> > encourages savings while discouraging subsidized spending on oversized
> > houses, etc. The original income tax in the US was a flat tax of 1%.
> > We had
> > a lot fewer accountants and tax attorneys back then.
> >
> > Brad
> >
> >
> > On 1/14/07, Bill Effros <bill at effros.com> wrote:
> >>
> >> Same question, Brad:  How does the flat tax work?
> >>
> >> Bill Effros
> >>
> >> Brad Haslett wrote:
> >> > Chris wrote:
> >> >
> >> > "If the system steals all their wealth then I guess those guys won't
> >> > bother
> >> > to earn their
> >> > vast sums of money."
> >> >
> >> > Precisely!  That is exactly what happened when marginal tax rates
> were
> >> in
> >> > the 70 to 90 per cent range.  That, and people got involved in
> >> > sophisticated
> >> > tax dodging schemes.  Our current code is far more complicated than
> >> > necessary because of all the tinkering done over the years to achieve
> >> > various social aims.  Under a flat tax, the top 20% of earners will
> >> still
> >> > pay over 80% of the total tax collected. Those 10,000 square foot
> >> > McMansions
> >> > won't be subsidized and driving a leased Hummer to work won't make
> >> much
> >> > sense either.  JFK said it best when he explained why he was cutting
> >> > marginal rates, "a rising tide raises all boats."
> >> >
> >> > If the ultimate goal of a nations tax system is to achieve equal
> >> > incomes for
> >> > all,  you get Cuba, North Korea, and a few other third world
> >> countries.
> >> > Every other industrialized nation interested in growing their economy
> >> has
> >> > given-up on such foolishness.
> >> >
> >> > Brad
> >> >
> >> >
> >> > On 1/14/07, Geankoplis <napoli68 at charter.net> wrote:
> >> >>
> >> >> Dave,
> >> >>        There seems too much hand wringing about the unfair taxes,
> the
> >> >> crushing burden of those taxes on the wealthy.  I agree with you,
> >> isn't
> >> >> wealth the reward?  Didn't the system benefit those wealthy
> >> people?  If
> >> >> that
> >> >> system exist to reward these people then why shouldn't they pay
> >> more to
> >> >> support it?  They have more to loose than the little guy.  If the
> >> system
> >> >> steals all their wealth then I guess those guys won't bother to earn
> >> >> their
> >> >> vast sums of money.  People can complain all they want but their
> >> actions
> >> >> speak louder than words.  If the amount of taxes someone pays is
> more
> >> >> important than what they make, let them work minimum wage, an
> obvious
> >> >> luxurious level of existence that should be suppressed as it is more
> >> >> money
> >> >> than someone really needs.
> >> >>
> >> >> Chris the tax payer
> >> >>
> >> >> -----Original Message-----
> >> >> From: rhodes22-list-bounces at rhodes22.org
> >> >> [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of
> >> >> DCLewis1 at aol.com
> >> >> Sent: Friday, January 12, 2007 8:29 PM
> >> >> To: rhodes22-list at rhodes22.org
> >> >> Subject: Re: [Rhodes22-list] Flat Tax Anyone? Tossing ball back to
> >> >> Slim(political rant)
> >> >>
> >> >>
> >> >> Interesting that Ed thinks 36% tax is an oppressive tax rate (and
> >> that's
> >> >> the
> >> >> max rate, not on your gross, its after deductions).  Look at the
> >> >> roads  you
> >> >> travel, the ATC, national security, public health, the commerce
> >> >> infrastructure, etc - seems like a one time good deal to me.
> >> >>
> >> >> For those of you who worry that you're paying school taxes for other
> >> >> peoples
> >> >> kids, ask yourself who is going to be paying into the Social
> >> >> Security  fund
> >> >> on your behalf 10 years from now - it's those kids.  You better hope
> >> >> they're
> >> >> educated and have good jobs, their Soc Security deposits are
> >> >> going  straight
> >> >>
> >> >> to you.
> >> >>
> >> >> Further, while Ed makes a good point regarding founders that begin
> >> and
> >> >> develop companies, I suggest they are likely a small fraction of
> >> the 1%
> >> >> under
> >> >> discussion.  I would encourage you to consider the real 1% -
> consider
> >> >> the
> >> >> Grasso'
> >> >> s, who didn't start, found, begin or develop anything he just got
> >> >> the  NYSE
> >> >> to
> >> >> give him an egregious pay package.  Or Nardelli of Home Depot,
> >> >> or  Skilling
> >> >> of Enron, or Conrad Black accused of looting the Tribune, or the
> >> >> guys  that
> >> >> looted Tyco, or McKinnel of Pfizer, or Immelt of GE, or  Waggoner of
> >> >> GM,
> >> >> or
> >> >> Ford
> >> >> of Ford......  Lets cut out the mythology and deal with cases,  and
> >> >> there
> >> >> are
> >> >> a ton of cases, and in all those cases the MBAs that won the water
> >> >> cooler
> >> >> wars stepped up to run major corporations and made out like bandits
> -
> >> >> that's
> >> >> the real story and that's the real 1%.  I can't think of a single
> >> >> S&P 500
> >> >> corporation that's run by it founder.  And I respectfully  suggest
> >> that
> >> >> the
> >> >> MBAs
> >> >> that win the water cooler wars are no more entitled to  special tax
> >> >> consideration by society than anyone else - they are not
> >> founders,  they
> >> >> are
> >> >> watch
> >> >> standers, and there is a difference.
> >> >>
> >> >> Regarding founders: If you do found and develop a public company,
> you
> >> >> make
> >> >> out like a bandit even with the current tax code - and I don't
> >> begrudge
> >> >> that
> >> >>
> >> >> one  bit.  But you reasonably make out so incredibly well that even
> >> >> after
> >> >> taxes
> >> >> you are incredibly well off.  Consider Phil Knight, the guy who
> >> founded
> >> >> Nike
> >> >> - I think he's the 48th richest guy in the US even after the current
> >> >> taxes,
> >> >>
> >> >> and that's fine but he doesn't need a change in the tax code to help
> >> him
> >> >> out
> >> >>
> >> >> he's doing very well thank you.  Consider Bill Gates, I think the
> >> >> richest
> >> >> guy in the US, money up the gazoo - under the current tax
> >> code.  Michael
> >> >> Dell,
> >> >> absolutely not suffering at all - under the present tax code.
> >> None  of
> >> >> the
> >> >> founder types I've mentioned need special consideration from the
> >> >> tax  code,
> >> >> they
> >> >> are all doing very very well by any standard - and I don't begrudge
> >> >> their
> >> >> doing well, but neither do I feel sympathy for the tax they pay.
> >> >> They've
> >> >> got
> >> >> it made and some of the reasons they have it made is the
> >> larger  society
> >> >> respects and enforces their intellectual property rights - at a real
> >> >> cost
> >> >> to the
> >> >> larger society - the larger society facilitates their production
> >> >> efforts
> >> >> with
> >> >> roads, power, terminals and infrastructure and security of all
> >> >> sorts, and
> >> >> generally enables the commerce that they profit from so greatly -
> >> >> so  maybe
> >> >> they
> >> >> should pay more for that increased support.  If that increased
> >> support
> >> >> weren't
> >> >> there, they'd have nothing or very much less.  The
> customs  inspector
> >> >> standing on the dock looking for counterfeit Nikes is not paid by
> >> Phil
> >> >> Knight, but
> >> >> Phil Knight benefits directly from that customs
> >> inspector's  activities,
> >> >> maybe
> >> >> Phil Knight should pay more tax than the rest of us.   Maybe Bill
> >> Gates
> >> >> should
> >> >> pay more taxes, the US Government is investing time and  manpower
> >> trying
> >> >> to
> >> >> mitigate software pirating efforts in Asia and around the  world, a
> >> >> direct
> >> >> significant beneficiary is - Bill Gates.  I don't begrudge  any of
> >> these
> >> >> guys
> >> >> their wealth, but I also think they, more than some day worker  in
> >> South
> >> >> Carolina,
> >> >> are constructively exploiting, using, and benefiting from the  full
> >> >> range
> >> >> of
> >> >>
> >> >> government services and in consideration they should pay
> more  taxes.
> >> >>
> >> >> Dave
> >> >>
> >> >> __________________________________________________
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> >> >>
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