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

Sun Jan 14 17:29:00 EST 2007

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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