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Replies: 19
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Connoisseur [391]
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A Flat Tax Rate
Jul 17, 2012, 4:12 PM
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http://www.voxeu.org/article/effects-russia-s-flat-tax
Before anybody goes knocking the idea down... Just think about the most basic concepts behind it.
It's fair for everyone to have to give up the same fraction of their earnings. Those that have worked hard to become wealthy should be able to enjoy it. Those that are poor should still not complain about a tax rate of only 13%.
Will it eliminate tax evasion?
Yes.
Will it greatly increase revenue? Yes, by reducing tax evasion.
Will it help the real, business sector of the economy? Maybe. Leaving people with more money to spend certainly won't hurt us.
I doubt the tax evasion in the U.S. is as widespread as was in Russia but it seems like this would be a very beneficial change regardless.
"In January 2001, Russia introduced a fairly dramatic reform of its personal income tax, becoming the first large economy to adopt a flat tax. The Tax Code of 2001 replaced a conventional progressive rate structure with a flat tax rate of 13 percent. Over the next year after the reform, while the Russian economy grew at almost 5% in real terms, revenues from the personal income tax increased by over 25% in real terms. Besides this revenue yield performance, advocates also have credited the flat tax with beneficial changes in the real side of the economy. The Russian experience would appear to have been so successful that many other countries have followed suit with their own flat rate income tax reforms, and an increasing number of countries around the world are considering the adoption of a flat rate income tax."
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Rock Defender [54]
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a flat tax with no deductions.
Jul 17, 2012, 4:15 PM
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best idea for revamping the tax code.
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Ring of Honor [32958]
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I've been a proponent of a single tax rate for decades.
Jul 17, 2012, 4:25 PM
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Still is it fair that someone who's truly poor to pay tax at all? Is it fair to tax someone into poverty?
Eliminate tax evasion? Har har har!
Increase revenue? Only if it is designed to do so.
Will it help the real, business sector of the economy? Maybe. Leaving people with more money to spend certainly won't hurt us.
Sirriusly? It'll raise revenue and leave people with more money? Wut?
How 'bout a single rate on all income, after some std. exemption, with no personal deductions. Put all bidnesses on an even playing field in determining taxable income and charge them the same rate.
That rate would be below 20%, maybe closer to 15%. But then sell it for what it is, and don't make things up like eliminating tax evasion, or magically bringing in more money while leaving more money in people's pockets.
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110%er [8142]
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Thought the same thing about tax evasion.
Jul 17, 2012, 4:33 PM
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Very naive.
I think more people would be interested in a flat rate if it did indeed include all income.
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Connoisseur [391]
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Re: I've been a proponent of a single tax rate for decades.
Jul 17, 2012, 4:37 PM
[ in reply to I've been a proponent of a single tax rate for decades. ] |
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"But then sell it for what it is, and don't make things up like eliminating tax evasion, or magically bringing in more money while leaving more money in people's pockets."
How come that's exactly what happened in Russia? It's almost completely because of reducing tax evasion but the results are still there. I may have misused the word eliminate, of course there will always be tax evasion but all studies on this topic have concluded that it reduces tax evasion significantly.
Obviously a flat tax rate doesn't mean more money for everybody. Logic of which a 6 year old is capable of tells us that those who were taxed less than the new flat rate will be taxed more than before, those paying greater will be taxed less.
I agree with a lot of what you're saying though, no deductions and all that. I just like the idea of the law being fair, as well as the amount of time-wasting debate it would cut down on, were it passed.
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Ring of Honor [32958]
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I would also expect to see a reduction in tax evasion, but
Jul 17, 2012, 6:10 PM
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I'd make no bets on what degree. One would hope if the plan was considered "fair" by most, that would certainly help, and just the simplification aspect would also certainly help in reducing noncompliance.
I would not base any expectation, however, on the experience in Russia, without a lot of analysis to back that up.
I think finding a balance in the tax rate, a standard exemption, truly eliminating personal deductions, and just what income was really included would be a monumental sticking point.
Not sure a six year old's logic would ever sort through the actual effective rates people pay today. Few on here have been willing to even discuss them (but a lot of general boreders seem to avoid all logic - even that of a 6 year old  ).
But I think we're mostly in agreement on the gist of what you propose.
Cheers
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Orange Blooded [4104]
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A Flat Tax With No DEDUCTIONS AND, AND.......
Jul 17, 2012, 4:34 PM
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first 45K of person filing single is tax free, first 60K if filing joint
This protects lower income people because a person making 200K a year can afford 15& more then a person making say 30K....
Flat Tax rate is 15%, again NO DEDUCTIONS. Companies pay 15% too since Corporations are "people"....
Lastly, any company shipping a job overseas will be charged a penalty tax equivalent to the "lost wages" of that job shipped overseas.
Stop all trade with the Chinese UNLESS they buy an equal amount of our stuff that we buy from them.
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Rock Defender [54]
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Yeah. No.
Jul 17, 2012, 4:58 PM
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Tax at the poverty line and up.
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Orange Blooded [4104]
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Taxing at the Poverty Line makes no sense
Jul 17, 2012, 5:14 PM
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people have to have money in their pockets to buy stuff ...
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Rock Defender [54]
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Then why not just stick with a staggered tax rate?***
Jul 17, 2012, 5:21 PM
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The moral purpose of a flat tax (to me) is to avoid punishing people for making more money than others. A flat tax says you're not going to pay more (by percent) than someone who makes less than you. So, if you're going to set the bar very high (and, 3 to 4 times the poverty line is setting the bar high), which increases the flat tax rate on higher-earners to supplement that lost income, undermines that moral purpose.
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Orange Blooded [4104]
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The idea is get rid of the convuluted tax code....
Jul 17, 2012, 5:24 PM
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simple flat tax, no deductions. BROADENS the tax base, actually MORE revenue, its "Fair"... hey, ever hear of the "Fair Tax"?
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Rock Defender [54]
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Sure, that's a practical reason.
Jul 17, 2012, 5:30 PM
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But there is also an immorality to punishing high earners that's inherent in a graduated tax system. Bigger brains than me can figure out the magic number at which to begin taxing income, but I'm simply saying that setting the threshold too high places an immoral burden on high earners.
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Orange Blooded [4104]
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You have to define "high earner"***
Jul 17, 2012, 8:49 PM
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Legend [15863]
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anyone that makes > $10,000
Jul 18, 2012, 12:26 AM
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Orange Blooded [4104]
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>10K a month?
Jul 18, 2012, 9:05 AM
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I would agree that might be considered a "high earner".... 10K year is well below poverty level
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Oculus Spirit [97994]
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Butthentherichwouldn'tbepayingtheirfairshare.org
Jul 17, 2012, 7:13 PM
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You tax labor equally instead of money unequally, and you fix a lot of our problems.
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All-In [34149]
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Re: A Flat Tax Rate
Jul 17, 2012, 7:24 PM
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It's fair for everyone to have to give up the same fraction of their earnings.
Why is that fair?
Those that have worked hard to become wealthy should be able to enjoy it.
What about those who didn't work hard and are wealthy anyway? What about those who work hard and are not wealthy?
Those that are poor should still not complain about a tax rate of only 13%.
Why is 13% a good rate that no one should complain about?
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110%er [6765]
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I think initially that the unemployment rate would go up
Jul 17, 2012, 9:23 PM
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About 1.2 million high dollar tax attorneys would have to find something else to do.
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All-In [34149]
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And don't forget all of the accountants.***
Jul 17, 2012, 9:34 PM
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Legend [15863]
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I"M all for Flat Tax Rate & TAX ID that shows U paid, THEN
Jul 18, 2012, 12:23 AM
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then you can VOTE and get your FREE healthcare, Soc Sec, welfare, food assistance, buy a GUN & drive a car
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