Single Payer

[jdshock]

1. If you remove exemptions, then revenue would not be radically reduced.
2. Not true. No one pays any taxes below the poverty line. If the poverty line is $10K, then no one pays any taxes below 10K. If the rate is 20% and you make 15k, then you get 10k free and pay a 20% tax on 5k (1k), for a net income of 14k. That's that's like a 7% income tax on your entire earnings. This structure would be better for the poor and middle class up to around 40k per year for a single person.
3. Probably not. Most high earners pay the Alternative minimum tax due to deductions. I think that's 24%. I'm not opposed to a flat tax of 24%, but used 20% for simplicity. Since all the wealthy are paying AMT anyway, they still pay the same amount.
4. Maybe. I'd have to work the numbers more, but it won't be lower middle class...possibly upper middle class.

1. What percentage of total income are high earners paying currently? And I'm not talking about Bill Gates, etc. where they have huge deductions and exemptions and they are getting huge percentages of their income in capital gains. What percentage are people who are making 400k+ currently paying on average? If it's higher than 20%, you'd definitely have big reductions in tax revenue.
2. The federal poverty line for an individual is $12,060. An individual making $15,000 right now would be in the 10% marginal tax bracket. In reality, with the standard deduction currently in place, this person is probably going to pay about $450 in federal taxes. A quick Google search confirms the effective tax rate for a person making $15k is about 3%. Your proposal shifts it up to about $600 this person would pay. An extra $150 isn't a ton, but it obviously doesn't make the person better off.
3. That's a pretty big assumption to just state that "all the wealthy are paying AMT anyway." Regardless, a 4% tax cut would be huge. We haven't had a 4% tax cut on highest earners since GWB, and your stance that no wealthy individuals pay the 40% rate means that no one even benefited from those tax cuts.
4. It would shift it "toward" the middle class. In terms of total dollars, high earners would still be putting in more.

[Kung Wu]

Flag tax! I pay 20% of earnings above poverty level and you pay 20% of earnings above poverty level. What could be simpler?

What counts as earning?

[Kung Wu]

I mostly want to know 1. why simple is important and 2. how important is it (e.g. Only taking in revenue is more important than a simple tax code).

1.

- On a macro scale, requires less resources to accomplish (less cost to filer, less cost to auditor).
- Less prone to error for both filer and auditor (again saving resources for both civilian and government).
- Less mistakes by auditors put less civilians in financial duress (even if temporary).
- More difficult to cheat (reduction of people creating a massive debt burden to government, possibly reduction of jail resources, reduce auditor resources).
- More difficult for special interest groups to game.

That's just off the cuff.

[jdshock]

1.

- On a macro scale, requires less resources to accomplish (less cost to filer, less cost to auditor).
- Less prone to error for both filer and auditor (again saving resources for both civilian and government).
- Less mistakes by auditors put less civilians in financial duress (even if temporary).
- More difficult to cheat (reduction of people creating a massive debt burden to government, possibly reduction of jail resources, reduce auditor resources).
- More difficult for special interest groups to game.

That's just off the cuff.

No one has told me how to weigh these impacts, though. How important is it? Just how bad is the system currently in terms of dollars from errors and cheating and time? Should I be willing to accept a major reduction in revenue? What about someone like me who favors a small amount of wealth redistribution? Is there an alternative system to prevent major amounts of wealth disparity?

[Jamar Howard 4 President]

I'm ok with a wide range of possible tax structures, all of which are greatly simpler than the wildly complex one we currently have.

[ShockCrazy]

No one has told me how to weigh these impacts, though. How important is it? Just how bad is the system currently in terms of dollars from errors and cheating and time? Should I be willing to accept a major reduction in revenue? What about someone like me who favors a small amount of wealth redistribution? Is there an alternative system to prevent major amounts of wealth disparity?

As JH4P mentioned we can vastly simplify the system without reducing revenue. A graduated tax system could still easily be used and really is no more complex than a flat tax, but remove things such as personal deductions and other tax deductions. After that adjust rates accordingly, maybe the current 10% rate moves to 5%, and 15 to 10, etc.

[shockfan89_]

I can't take seriously any person who would say such a thing. Stupid beyond belief.

Do you have examples of well-run government programs? Do you have examples of government programs recommending cuts to their staff or budget? I have seen example after example of wasteful spending to ensure the budget remains the same or goes up. No accountability because they are not required to add value, just required to exist and spend the money allocated to them. Yes, continuing to grow the federal government is stupid beyond belief. Glad to know where you stand.

[Aargh]

If I were to support a flat tax as wufan proposed, I'd prefer a rather high "poverty line". I'd be thinking more in terms of $40,000 for a family (after exemptions for family size). That would protect lower-level earners. It might even need an cost-of-living adjustment based on where you live. $40,000 won't get you housing in southern California, but in Kansas, you could live in reasonable housing.

Please don't argue with my numbers. I just threw some out for examples to understand the viewpoint, rather than stating what those numbers should be. The point is that the amount exempt from a flat tax should be high enough that people could afford something in the lower-middle-class of the economic scale.

And...unless you want to simultaneously impose drastic government spending cuts, any new tax bill should not be revenue-neutral. It should increase revenues going to the government. If that would be too devastating to the economy, then we're already past the point of no return on our national debt.

Kansas recently gave us a great example of how effective those insisting on shrinking government really are when they get into power. They don't have the willpower to actually cut anything for fear they would get voted out of office and lose their power. Political power seems to be way higher on politicians' desirability scale than responsibility.

[MoValley John]

I just want to make a few things clear. There is no such thing as a fair tax. Never has been, never will. Also, every tax is regressive, there is no such thing as a progressive tax.

When we ignore these two truths, we will never design a tax system that works. In my opinion, everyone needs skin in the game. The rich, the poor. Even if the poor only pays 2%, they need to participate, regressive or not.

[WuDrWu]

Should I be willing to accept a major reduction in revenue? What about someone like me who favors a small amount of wealth redistribution? Is there an alternative system to prevent major amounts of wealth disparity?

1)Being a progressive, I assume you already donate excess income to the IRS, yes?
2)Can you define "a small amount of wealth redistribution"? I don't need details, just a general thought. It appears to me we already have a system with a moderate wealth redistribution system in place, but I suppose all of these debates are about our own personal baseline.
3)Again, disparity is in the eye of the beholder I guess. I believe the system we have allows for mostly that opportunity now. If you work hard, go to school, study and stay out of trouble you ever chance to be successful in this country. If you want it handed to you, then not so much.

[Jamar Howard 4 President]

The best run government program is way inferior to the worst run non-government company.

Do you have examples of well-run government programs?

The US military
Interstate highway system
Emergency 911 services

I could list more. None of those 3 are perfect by any means, but each is operated far better than "the worst run private companies".

Yes, continuing to grow the federal government is stupid beyond belief. Glad to know where you stand.

I did not say anything about wanting to grow the federal government. Clearly you are putting words in my mouth.

[WuDrWu]

All these discussions seem, to me at least (when we discuss tax cuts), to take the stance that the current amount of revenue and the way it's collected is the absolute minimum amount in total, and the absolute minimum amount of the wealthiest portion to contribute. We literally NEVER have a discussion where it's even possible that some in the middle or slightly above or below might have to give a little more. It's blasphemous. Only the # of people that don't pay must go up, and the wealthiest few must pay more.

Do you think that has to do with the fact that those of us discussing it have little to nothing to do with either of those groups?

[Dan]

I consider myself conservative but there is one topic that is concerning to me that doesn't get a lot of play and is considered blasphemy when I talk to my conservative friends. This is regarding the extreme wealth that is being generated. I'm not talking about people making $500k a year, but the people making tens of millions+. The wealth of the US over the past 20 some years has been moving more and more to the few. I believe our government made rules to prevent this when families like the Rockefellers, Vanderbilts, Carnegies, etc., started controlling vast amounts of wealth. We are getting to the point where that is happening again, yet it is companies that are controlling everything - Amazon, Google, Apple, to name a few. It is concerning what direction we are headed. I'm all for capitalism, but extreme wealth could be damaging to our society.

[WuDrWu]

I consider myself conservative but there is one topic that is concerning to me that doesn't get a lot of play and is considered blasphemy when I talk to my conservative friends. This is regarding the extreme wealth that is being generated. I'm not talking about people making $500k a year, but the people making tens of millions+. The wealth of the US over the past 20 some years has been moving more and more to the few. I believe our government made rules to prevent this when families like the Rockefellers, Vanderbilts, Carnegies, etc., started controlling vast amounts of wealth. We are getting to the point where that is happening again, yet it is companies that are controlling everything - Amazon, Google, Apple, to name a few. It is concerning what direction we are headed. I'm all for capitalism, but extreme wealth could be damaging to our society.

All good points. But in the name of fair play and safety etc etc, we've regulated the crap out of small businesses. There is history of ebb and flow of contracting and expanding large monopolistic businesses. Hopefully we've reached the crest of big business expansion and will start to see it go the other way soon. That will help to reverse course of your concern...and mine too.

[RoyalShock]

I consider myself conservative but there is one topic that is concerning to me that doesn't get a lot of play and is considered blasphemy when I talk to my conservative friends. This is regarding the extreme wealth that is being generated. I'm not talking about people making $500k a year, but the people making tens of millions+. The wealth of the US over the past 20 some years has been moving more and more to the few. I believe our government made rules to prevent this when families like the Rockefellers, Vanderbilts, Carnegies, etc., started controlling vast amounts of wealth. We are getting to the point where that is happening again, yet it is companies that are controlling everything - Amazon, Google, Apple, to name a few. It is concerning what direction we are headed. I'm all for capitalism, but extreme wealth could be damaging to our society.

How can this be? Aren't those huge companies all run by liberal progressives? They would never grow so large as to have too much wealth and power. Would they? Or are we just supposed to believe they will be more responsible with all that wealth and power?