Flat Tax?

[moburg]

No more deductions at all? I'm not so sure about that.

I would like to see corporations pay their fair share.

You do realize, don't you, that corporations don't pay taxes? The collect taxes from their consumers embedded in the price of their products/services and pass that along to the government. If corporate taxes go up, they simply raise prices* to handle the increase. Who pays that? The consumers, you and me.

*or cut jobs, or cut dividends, or cut payroll, or any number of other options that effect individuals without effecting the corporate bottom line.

 

[crisi]

The fair tax is based on consumption. You want to stick it to the millionaires? Tax them on what they consume.

That simply encourages millionaires to consume outside the U.S. They can afford it - they do a lot of it now. The Bahamas are a lovely place to live to avoid taxes currently - and if you tax consumption, you'll find more millionaires spending more time than ever in places that don't tax them on consumption.

 

[Colleen27]

Yes, let's tax all corporations and small businesses to death so they move overseas - that will help us all! I wonder where we'll get our jobs then? If you only knew how many different taxes that businesses pay!

Business don't move overseas to save on taxes. They move jobs overseas to save on labor. There is no excuse for a company like GE having a 0 tax liability; they benefit from our infrastructure and government far more than any individual, and they need to contribute as well.

You do realize, don't you, that corporations don't pay taxes? The collect taxes from their consumers embedded in the price of their products/services and pass that along to the government. If corporate taxes go up, they simply raise prices to handle the increase. Who pays that? The consumers, you and me.

Actually, for most products prices aren't that flexible and tax rates effect the bottom line. Companies can't jack up prices beyond what consumers will pay.

The net effect of our current policies, particularly in terms of taxation but also in other areas, has been a massive concentration of wealth into fewer and fewer hands. I've yet to meet a person who would argue that we're better off now than a generation ago, and yet the most often proposed remedy for that is a continuation and expansion of the exact. same. things. that brought us to this point.

 

[HHSTigerFan]

And isn't a corporation, such as GE thats been thrown under the bus lately, just the shareholders of the company?? And I am betting that at least 50% of the US population has a vested interest in GE..

The wealthy and corporate America is always the target, perhaps the target should be the 47% instead?

 

[Hoodie]

. We do not provide the basic needs protections that most European nations provide, which makes it all the more important that we not add a tax burden to those who would have to choose between paying their taxes, their mortgage, or their health insurance.

But at what level does that happen? My husband and I faced that choice this tax day - taxes or mortgage. We are not in the highest bracket, but probably in the top 15% of gross earnings. We live in a townhouse that is worth less than $200k. Our cars our 10 and 4 years old. We haven't had a vacation in 3 years and won't have one again this year. Yet I'm sure several would like to increase our tax burden despite the fact that we are already shouldering most of the responsibility for those who don't pay anything. A co-worker of mine is a single mother who has to refinance her house to pay her federal taxes and she's in the same bracket as I am. I'm sure there are many people over that $250k threshold who would have to chose between mortgage, taxes or insurance should their tax burden increase.

Everyone should have to pay something, regardless of their status. Class warfare hasn't helped so far and the burden is now too high for one income class to handle. You can't make a general statement that if someone earns XX then they wouldn't have to chose between rent/mortgage, insurance, or taxes. It's subjective.

 

[brerrabbit]

I guess this may sound a little strange but in my current situation I am indifferent to the the whole taxing methodology. The reason is because there are no loopholes for me given my employment/ investment situation. I mean I get a W-2 as does my wife, and so does the IRS, all my 1099-I and 1099-Rs are also sent to the IRS. My interest paid on my home is reported to the IRS. The payments I make for my daughters college are reported to the IRS. The only wiggle room I have is virtually inconsiquintial. What I donate to charity is about it. So as a good friend of mine one said who was in the same situation as myself is" once a year I get out my purple crayon and do my taxes. I mean they could do it for me if I just told them how much I gave to my church and United Way every year because they have everything else."

As to a flat tax and corporations paying less, I would assume a flat tax scenario would eliminate most if not all of the loopholes they use to avoid taxes and if enacted might just prompt them to exit the US to a country with more favorable tax treatment. And just because they may avoid some income taxes remember that they pay millions if not billions in other taxes and fees. There are state taxes on virtually every product and service they use. Property, rent, phones, office supplies, cars, trucks, etc. So as the arguement goes for the 47% who pay no federal taxes, thats not really true because they still pay SS, Fica, and sales taxes. The corporations also pay half the SS taxes for every worker they employe. The whole arguement is very complex and no "simple" solution is necessarily going to work.

 

[Hoodie]

Business don't move overseas to save on taxes. They move jobs overseas to save on labor. There is no excuse for a company like GE having a 0 tax liability; they benefit from our infrastructure and government far more than any individual, and they need to contribute as well.



Actually, for most products prices aren't that flexible and tax rates effect the bottom line. Companies can't jack up prices beyond what consumers will pay.

The net effect of our current policies, particularly in terms of taxation but also in other areas, has been a massive concentration of wealth into fewer and fewer hands. I've yet to meet a person who would argue that we're better off now than a generation ago, and yet the most often proposed remedy for that is a continuation and expansion of the exact. same. things. that brought us to this point.

Not 100% true. The US charges income taxes on earnings made overseas IF they bring them back and re-invest in their US operations. The now famous GE example show this - of the $14 billion earned, $9 billion was overseas. As long as they keep that money overseas, the US won't tax it, so it sits in overseas accounts. This pretty much shoot us in the foot - US companies are making money but there's a tax disadvantage to investing it back in the US.

Companies pass taxes on to the consumer all the time. The truth is that we rarely notice the increases. 10 cents here, 20 cents there and their taxes are paid. Look at grocery prices now. Those increases are to pay for gas because the corporations won't eat the increase. If the price increase actually would impact sales, then the corporation looks elsewhere to decrease costs - layoffs, salary/benefits decreases, etc. Some how, increase of costs, whether from gas or taxes, gets passed on to the public.

 

[JENOS]

The solution is not to change the tax method but rather to change the way it is distributed. Everything from social services, government salaries, schools, pensions…ECT should be examined. I’m not saying to cut any of those, just to distribute accordingly.

Todd Stroger anyone? Or Chicago politics for that matter

 

[Disneycrazymom]

I didn't know much about the fair tax but found this:
http://www.fairtax.org/site/PageServer
It seems pretty informative.

 

[OrangeCountyCommuter]

And this political debate belongs on the "budget board" WHY????

Even for the most OT board on the DIS this really needs to be moved to the CB where the fight can REALLY take off.

 

[Disneycrazymom]

For those of us who have to pay quarterly it is definitely part of our budget! I have to plan for them just like buying groceries. Maybe more so as the IRS doesn't care if I have cash left for groceries!

 

[leahjade]

The same uninformed voices who want our corporations to be taxed so heavily are the same people who scream when businesses go overseas where they can actually make a profit. Do these people think that companies can stay in business if they are not making any money? When did success and profit become dirty words in this country? When companies are profitable, they can hire more people, give raises etc. It's not really rocket science!

 

[sam_gordon]

The same uninformed voices who want our corporations to be taxed so heavily are the same people who scream when businesses go overseas where they can actually make a profit. Do these people think that companies can stay in business if they are not making any money? When did success and profit become dirty words in this country? When companies are profitable, they can hire more people, give raises etc. It's not really rocket science!

So businesses should have to pay ZERO in taxes, right? After all, the more profit they make, the more people they higher, and the more raises they give.

Also, it's wrong to tax those who have the most because their money is used to create jobs/pay employees. Do I have this all right?

There was an article in the paper the other day that as of 2008 (the most recent year the data is available), the top 400 income makers paid an average of 17% in taxes. That's because of deductions, credits, etc.

I'm with the group that says 'do away with all deductions and credits'. I think you do that AND run a progressive (ie: 0%, 5%, 10%, 15%, 20%, 25% based on income) tax.

And while I know there are people who abuse the system, there are also low income wage earners that try hard but barely make enough to support themselves and their families. Don't make it sound like EVERYONE paying 0% is lazy.

 

[eliza61]

I know nothing about the tax codes, I have been trying to get more knowledgable but God is it confusing.

Anyway, would a simplier solution be to make everyone actually pay income tax.

I read an article (on yahoo, don't know how accurate it was) that said only 55% of the population pays taxes. How about we eliminate all these credits and simply make every one pay?

http://blogs.marketwatch.com/fundmastery/2010/04/08/47-of-americans-pay-no-income-taxes/

http://news.yahoo.com/s/ap/20110417/ap_on_bi_ge/us_no_taxes

 

[eliza61]

The same uninformed voices who want our corporations to be taxed so heavily are the same people who scream when businesses go overseas where they can actually make a profit. Do these people think that companies can stay in business if they are not making any money? When did success and profit become dirty words in this country? When companies are profitable, they can hire more people, give raises etc. It's not really rocket science!

Except thats not what they do. Lately, they make a huge profit, give the top 1% outrageous bonuses and hire no one.

You're right it's not rocket science but you do have to do more the give lip service. You actually have to hire the people you swear you are going to hire when you get the tax break.

Lastly, very few business move their operations to 3rd world countries to save on taxes, they do it to save on labor cost. When you can get goods made by paying some one 45cent a hour it lowers your operating cost. What do you suggest we lower the minimum wage to 1.00 a hour to be competitive with Taiwan?

 

[HHSTigerFan]

Except thats not what they do. Lately, they make a huge profit, give the top 1% outrageous bonuses and hire no one.

And remind me... who owns these companies that so many in this country have come to view as the bad guy?

 

[eliza61]

And remind me... who owns these companies that so many in this country have come to view as the bad guy?

those top 1% who can afford to turn around a buy stocks because every one else had their 401Ks wiped out and can't afford a gallon of gas.

 

[HHSTigerFan]

those top 1% who can afford to turn around a buy stocks because every one else had their 401Ks wiped out and can't afford a gallon of gas.

You go ahead and keep believing that...

 

[bettymae1121]

As long as people realize that a flat tax would likely mean the amount you pay in taxes will go UP, I'm fine with it!

DH and I made high five figures last year, have no kids and only deduct our mortgage, state taxes, and charitable deductions. Our effective tax rate was just under 10%. When we have kids, that will drop even lower.

If a flat tax is implmented at the 15-17% I've heard thrown around, our tax bill would increase by 50-70%. I imagine most of the middle and upper middle class would see the same effect.

If you truely believe that everyone should pay the same % in the name of fairness, that's fine. Just don't believe for a second that your tax rate will stay the same or go down. It won't. You'll see your taxes skyrocket. But hey, at least it will be fair!

 

[moburg]

The same uninformed voices who want our corporations to be taxed so heavily are the same people who scream when businesses go overseas where they can actually make a profit. Do these people think that companies can stay in business if they are not making any money? When did success and profit become dirty words in this country? When companies are profitable, they can hire more people, give raises etc. It's not really rocket science!

Well stated!!