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

Sun Jan 14 17:50:59 EST 2007

Bill,

As an addendum to the discussion, here is an example of the unfairness of
the current system.  I'm not picking on Kerry/Edwards but they are a perfect
example of the hypocrisy and the abuse.  Kerry and his wife had a marginal
tax rate in 2003 of around 13%.  Edward's rate was slightly over 5%.  Maybe
you can afford their tax advisor, I doubt I can.  Early on in my ill-fated
accounting career I learned I hate studying taxation and especially hate
computing them.  Paying taxes is a necessary evil. Making it more difficult
than necessary isn't.  Here is a link to a WSJ article from 2004 on the
issue.

http://www.opinionjournal.com/extra/?id=110005781

Brad

On 1/14/07, Brad Haslett <flybrad at gmail.com> 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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