In my system, there are NO deductions allowed.R/T Hemi wrote:That's right on Z, except for one very big thing. The rich hide money in deductions the poor can never afford.szh wrote:From an older post of mine:
The problem is that people conveniently forget that when taxes are based on percentage, the person making more actually does pay more in absolute dollars in taxes. And does not get the same benefits in return, by the way (no extra voting rights, no extra schools for kids, or road improvements in front of their house, no better response from fire-fighters, etc., etc., etc.)!
We sugar-coat taxes as a percentage - even in flat tax proposals - to make it more palatable and feel less guilty about it! My problem is that we then take the additional steps and say "oh, the rich can afford it, so let's tax them at a higher percentage!"
That is where the unfairness occurs!
BTW, in many other taxes and fees and things, we do not make people pay more ... based on their income. Think about these:
- Should you pay more in property tax than your neighbor if you make more money, even if your houses are identical?
- Is your car excise tax based on your income?
- Is your sales tax percentage higher or lower than somebody else who makes more or less than you do?
- Your fishing license does not cost more based on your income!
Etc, etc., etc.
The fact is that we have become so inured to using percentage as a means of calculating personal income tax, that we are not likely to change that at all. So, all my (and others) flat tax proposals are still based on percentages - but I think that people opposed to flat tax don't realize that or "get it".
My suggestion: create a threshold to accommodate the "poor" (even if I think this is somewhat unfair, but I will play along with the libbies here) and then charge a flat tax on everything about that. No deductions (even for mortgage or number of kids, etc. ... those are choices, not privileges), no loopholes, including capital gains, etc.
For a hypothetical calculation, keep a floor of, oh, let's say $30,000 (change this to suit, if you think it needs to be different, or even add in a few thousand per dependent like we do today - I disagree with this, but I'll go along) and make the flat tax percentage be 20% (change that if you think it needs to be different) on everything above that.
Then - taxes could be done with a simple calculator (imagine the savings on tax professionals and the IRS alone!):
1. A person making $ 30,000 a year pays $ 0.2. A person making $ 40,000 a year pays $ 2,000.3. A person making $ 75,000 a year pays $ 9,000.4. A person making $ 100,000 a year pays $ 14,000.5. A person making $ 250,000 a year pays $ 44,000.6. A person making $ 500,000 a year pays $ 94,000.7. A person making $ 1,000,000 a year pays $ $ 194,000.
And so on.
Fair? I believe so!! Totally!!
Z
P.S. I have posted statistics from a site in other posts here, about the actual total tax revenue collected from the people who pay taxes. Not surprisingly, the large portion of taxes is, indeed, already paid by the so-called "rich".
Does that clarify things better perhaps?
Z