Would You Support a Flat Tax?

I have always thought it would work and would be in favor IF the loopholes were filled. It makes sense to me.

Actually, I would like to see some sort of flat tax plan. There must be some reason why this isn't workable or why isn't it seriously considered more often.

the flat tax is a gift to rich people.

I'm sure the bean counters could come up with an equitable and workable system that would simplify the tax code. Just a few problems with making it happen; who's gonna have the cahones to propose and stand behind it? What will happen to all those tax lawyers who get you off the hook for "just pennies on the dollar"? Where will they put all those people who work at the IRS? And, what do you do with the "class warfare" zealots who feel the rich should be taxed at higher rates than everyone else? I'd like to see it happen, maybe coupled with a national sales tax but I fear the government would collapse if it had to transition from the current system.

Yes. Corporate, Individual, married or not, children or not. Had a brilliant Econ professor who "professed" that if every company and every individual paid a flat 3%, we could move mountains of deficit and fund social security...pay off all debt in 5 years. SO, I'm thinking...who hasn't been paying taxes so far?

My personal thoughts as to why the flat tax wont work based on what I have read. The super rich would actually have to pay taxes. Right now they pay a very low portion of their income in taxes. With a flat tax system you pay a percentage regardless.

Not sure, I think I would have to read up on this first before I could have a real opinion.

Very wise Sarah. I do the same thing.

I'm not sure how I feel about a flat tax, I haven't really researched it much.

I am somewhat favorable toward "Fair Tax" though. It's something that Michigan is considering for the near future.

I dont think thats true lori, I know there are all these stories about the rich getting out of taxes but I think they pay quite a bit and I think a flat rate of 10% would be a huge tax cut for them. why do you think steve forbes makes it his issue? Its not because he wants to add to the govt coffers.

I always thought it would be a good idea. But, I do think the rich will find loopholes cause they can afford lawyers to do it.

It is really funny that when the simple things are proposed, they never get up in parliament, Over the last 10 years the tax laws were changed to incorporate GST or VAt as it is also known In Australia, and the book on Tax increased by a further 600 pages. It is now impossible to do your own tax. I think there should be Just 2 taxes on Income. both flat tax Based. Income tax, and Future Tax for retirement. I did write a book about this, but My ex wife through out my drafts and it was lost to the garbage for ever

It won't work, and is not fair. There are certain very wealthy people who pay a large portion of our taxes right now. If we give the same percentage to all, then the corporate leaders who make 200 million a year will pay about 1/2 of what they do now. How that is fair is beyond my comprehension.

Joseph from what I have read the super rich dont pay their fair share in taxes. They can afford the high priced attorneys. Think about it logically. Flat tax makes sense. Each person pays a portion of their income to taxes. That includes business' too. But each time this comes up it is shot down..why? Because as much as we dont want to admit it. The politicians work for big business...both repubs and dems. If this was something that saved the rich and big business money then it would have gone through years ago. It would save the average person money...you loose 11-22% of your income to taxes...this doesnt include sales and property tax. So based on this the rich if they were paying their fair share would be paying the same 11-22%. So they would be all for it if it benefitted them. It doesnt they pay something like 5-6% of their reported income.

Does that make sense.


Jessie thats why we need to get rid of all the loopholes.

Gary what a shame I would have liked to seen some of your posts out of the book. You didnt keep a spare on a disk or anything did you?

Dave I dont know where you get the rich are supporting our government it is the middle class that pays the majority of the taxes.

Lori, just a bit before PC's 1986

Gary now thats a shame. Maybe you could pen another one.

Like many "quick fix" ideas, there are devils in the details. . .

I don't think we really want to start taking money from a single parent working a minimum wage job . . . and I don't think we want to deny tax write offs to people struggling to go through college while working full time jobs . . . and I don't think we want to encourage further movement into "alternative compensation" packages to multi-millionaire executives which are not actually classifiable as "income" though their true "net worth" grows by leaps and bounds.

Many complications arise, and the more realistic goal is 'simpler tax'.

John Knight I am not familiar with the simpler tax. Would you care to share?

There would still be a need to file for income tax. The government at one time didn't pre collect taxes and they had to seize assets. This put the government in a bad light. So they made people file for their taxes at the end of the year which sheds a positive light on them since they are giving money.

This sort of psychology works on the weak minded. It is how politicians get control.

Lori,

I just meant ; simpler tax. As in, simplify where possible. Perhaps in a big way, perhaps through a series of smaller steps, but a concerted effort to simplify. The system has become too Byzantine.

Some measures have already been implemented, and many people file rather easily. I don't make enough money, or pay enough mortgage interest to need more than the one page EZ form, but I know it gets rather complicated as you move up into higher income and investment circumstances.

Intriguing idea that's been floated before. I tend to say yes, but need to know more.

lori,where do you get the 5-6% figure? Ill try and think about this logically but I dont think we should base our conclusion on anecdotes.Again why do you think steve forbes has devoted his life to this?

I'm not sure a flat tax will work. Unreported income is likely to rise as employees and employers find ways to compensate "outside" the system, thus avoiding taxes.

Now, a portion of the sales tax on consumer goods and services, allocated to the Federal government. That might work.

Julie G. makes an interesting point.

Would a flat tax differentiate between a couple bring home $60,000 with no children and one bringing home $60,000 with 4 children? Or, a single person making $60,000?

Should It?

There is a very good reason why this has never been put into place. The tax rate would never be that low and as of right now we pay more than 10% I'm an accounting major and we have talked about this extensively in my class. The fact of the matter is that if you imply a flat tax rate it will make it worse for the lower income individuals than it already is. The individuals who usually want this in place are the people with 7 digit incomes. I will never be in that bracket and I really do not forsee this ever happening.

Lori, super rich pay they. Their problem is they are greedy and want to keep as much of their money as possible. Corporations for example pay double taxes on their income. After they get done paying out their income taxes on their revenue they then have to turn around and pay out taxes on the dividends they pay their stock holders. This is called double taxation and that is why when you look up the different types of corporations, there are I believe three or four depending upon the classifications of the business. People who have lots of money like Steve Forbes mentioned by another person in your article pay taxes. They pay a lot of taxes, the thing of it is though they make so much money their taxes don't take a large chunk out of their of their net earnings like it does us middle class folks. Like I said before there is a very good reason why a flat tax rate is not a good idea and for once the government has taken a good stance on something.

BTW all figures are made up by me. This is just my opinion and I didnt use any real stats...thanks for the comments.

Rex has a very good point. What about all those government employees at the IRS, all those tax lawyers and not to mention the tax companies, such as H&R Block for example? All would have to go out of business and take up another career.

I seen the comment about the rich benefiting the most from this and I think this is biased. What if you were rich and the government was taking 40% of your money? Would you feel it fair? I wouldn't especially if I worked very hard for my riches, however, you do have a point in the existence of so many loopholes. The rich have tax shelters and other ways of reducing their bottom line to a smaller amount to pay income tax on and that's not fair.

However, I feel 10% is too high. But as you said, it is just a made up figure for the purpose of this proposal. I wouldn't have a problem with a flat tax. I do have a problem with taxing tax. What I mean by this is the tax they put on something that is automatically included in it's purchase price, such as beer, alcohol, gasolines, fuels and even some utilities for example telephone service, and then you have to pay sales tax on top of it all! Now that is just crazy and unfair and even stupid.

I think if there is to be a simple flat tax and to make it work, it would have to have no tax shelters. If they keep any of those things, tada, here are the loopholes for getting out of paying your fair share. But in support of families. small or large, there should be allowable deductions for each child under the age of 18. I don't think it would be fair for families if they had to pay the same tax as a single person. There would be less money and wouldn't be beneficial for families.

thank god the conclusion of this issue wont be determined by this thread

First of all if everyone gets to take home more it means the government takes home less. While this may sound attractive, the government needs money to pay for the work they do. With infrastructure crumbling, schools in decay and millions of Americans needing health care (not to mention the deficit and debt problems) this seems like a poor time to be reducing government revenues.

The flat tax also removes the progressive taxation levels meant to ensure that those who can afford to pay more and those who can't pay less. This kind of redistributive aspect to taxation is necessary in a market driven economy to level out the inequities that arise from aggressive competition.

To believe for one minute that the parties in power, all paid for by wealthy people, are going to allow anything that will mean they cannot evade taxes to pass is naive. There will be ways around it.

One last thought: simple solutions to complex issues rarely work in practice as well as they seem to on paper.

rory, you forgot one other thing we have to pay for: war on terror

I was trying to, Joseph.