And of course when asked about how this would create a larger deficit, he never actually asserts that his flat 14.5% tax across the board would actually balance the budget.
But here's the crazy thing: his proposal isn't even a flat-tax policy! He agrees that the first $50,000 for a family of four shouldn't be taxed. That's a progressive tax plan. And it makes sense right - up to a certain amount of income, one makes so little money that need a bit more help than others to get by. Makes sense...but then you could logically assert the converse - that those making so much money need far less help than others to get by, and therefore could be taxed more without affecting their lifestyles.
And this is why a progressive tax plan works in the United States - there exists an income level based on the cost of consumer staples, housing, and transportation, that allows one to be a productive member of society. And so the further away from you get from that magic number (or delta of that number), the more that taxes have an effect either on the individual or the community as a whole. A family cannot get by on $1 a year. A billionaire simply does not need a billion dollars. The burden on them is far different - which is why their tax burden should reflect that.
>He agrees that the first $50,000 for a family of four shouldn't be taxed.
I live in an expensive part of Chicago. $50k for me has nothing in common with some rural Alabama family making $50k. This is one of the reasons why the flat tax is wrong. It lacks the flexibility and subtlety of a more complex tax system. In a nation this large with so many different wealth levels, a non-progressive tax is just asinine. But it engages conservative low information voters who just want easy cowboy-ish answers to complex problems, especially if they're the ones in he rural south who will benefit from this kind of plan more than northern Democratic urban dwellers.
What significant law do you think is outdated and unnecessary, the repeal of which wouldn't be controversial? Let's limit discussion to the federal level since we're talking about a Presidential candidate.
I like to see a law or amendment that evens the playing field by making it unlawful for government officials and officers to lie. A federal officer can lie to you but you can't lie to them. I think that's BS.
Absolutely. I've always thought all laws, sans the constitution & bill of rights, should be wiped out every so many years. That would also include the tax code.
I've always wondered exactly where the line is between ignorance and messaging for politicians. Like, when he says, "[Obama's] redistribution policies have led to rising income inequality and negative income gains for families."
He can't actually believe that is a strictly true statement. I'd think that any Republican politician with an understanding of economics would have to believe that a president's policies are at best contributory rather than a distinct cause. I get it as messaging; if one believes that progressive taxation has side effects that cause inequality, then they'd want to gloss over things to blame the presidency for it. So, I tend to believe that most politicians have private meetings where they talk about what they actually think is going on, and then translate it into brain-deadening messaging for the public. But sometimes I wonder if for a lot of these politicians, how much of what they say is actually because of willful ignorance rather than messaging.
Like that guy with the snowball that argued against global warming, that almost definitely has to be chutzpah rather than stupidity, right? Like, he would understand the concept that just because a stock price spikes down, it could still be true that the stock market is going up over time. So he has to secretly understand the argument about global warming, right? And then we waste our time trying to explain how a snowball doesn't disprove anything, and he doesn't care because he already knows that. There's got to be a term more accurate than chutzpah for someone that deliberately lies and plays dumb, knowing they can get away with it.
>most politicians have private meetings where they talk about what they actually think is going on, and then translate it into brain-deadening messaging for the public
Yes, sort of, but the reality of these things are so well understood all politicians that there's not often that much of a reason to discuss these things outright.
When a politician (and by "politician," I do not mean a single person. I mean an amalgam of the politician, their staffers, and their advisers) are weighing an issue, the actual merits of the arguments are just a part of the equation. They're weighing the interests of various groups and constituencies, they're considering coalitions and alliances and favors, and making a pragmatic decision. Usually a mix of their conscience, their constituents, their fundraisers, and their party.
Rand is a bit of an outlier on this front because he is a legitimate True Believer, but he's still a pragmatic true believer.
Then they hire someone like me to turn it into the soul deadening messaging.
But, yes, these people understand both sides of the issue. They are usually very smart. And if they don't understand the other side of the issue, their close advisers do.
Maybe you could use the word "sophistry"? I don't agree for TFA, however. Paul didn't have much chance anyway, and in proposing this he pretty much drops out of the running completely. You can't get far without the corporate executive class bankrolling your superPAC. So, it's not perfect (he's keeping the mortgage deduction!), but relative to most politicians it's a good effort.
And every year the Internal Revenue Code grows absurdly more
incomprehensible, as if it were designed as a jobs program
for accountants, IRS agents and tax attorneys.
I think this is a point people across the political spectrum agree with. It does not follow, however, that simplifying the tax code would require a regressive flat tax. One could easily imagine a simplified tax code that still has progressive tax brackets.
The left will argue that the plan is a tax cut for the
wealthy. But most of the loopholes in the tax code were
designed by the rich and politically connected. Though the
rich will pay a lower rate along with everyone else, they
won’t have special provisions to avoid paying lower than
14.5%.
This would be a massive tax cut for the wealthy, unequivocally – a 25.1 % lower tax rate for the top bracket. The idea that this cut would be offset by closing unnamed loopholes is disingenuous at best. A 14.5% tax rate also conveniently matches the current maximum capital gains tax rate of 15%, which is the effective tax rate the ultra wealthy already pay.
> A 14.5% tax rate also conveniently matches the current maximum capital gains tax rate of 15%, which is the effective tax rate the ultra wealthy already pay
That's exactly the point. So now the middle class can pay what the wealthy already pay.
> A 14.5% tax rate also conveniently matches the current maximum capital gains tax rate of 15%
Well, except that 15% is the next tier down from the top capital gains tax; the top tier is 20%.
Plus the fact that 14.5% does not match 15%. If you don't believe me, I'll give you $14.50 for the "matching" $15.00 and repeat that until you're convinced.
This is the fundamental problem. Everybody wants a simpler tax system. But nobody can agree on which parts to remove, or how to change it. The current system is close to what you get when everybody tries to get what they want. Even if you blew it up and started over, I think you'd get back to the current state pretty fast.
Edit: everybody can stop replying to my comment proposing your favorite simplified tax system and explaining why it's great. You're missing the point here. If you want to discuss your favorite tax system, make a top-level comment.
Flat tax + basic income is the only sane way forward. Most other systems lead to stupid incentives, unjust inequality, and over priced accountants.
For example. Assume a household of two people. one earns $20k per year, the other earns $80k per year. With a 50% tax and a $10k (after tax) per year basic income you get the following:
2*$10k + 0.5 * ($20k + $80k) = $70k
Now if each partner earned the same you would get:
2*$10k + 0.5 * ($50k + $50k) = $70k
Which is exactly what you want. The problem with income splitting measure that try to replicate this is that they lead to a perverse disincentive to divorce. So in the first example, the person earning $80k would no longer be able to offload part of his income to the lower paying person, and the two persons effective income decreases just when their expenses double. Furthermore it discriminates against people that are single, which is politically expedient, but unjust.
It also solves the welfare and old age security paperwork problem. There are some other problems: like having a higher tax rate to pay for all this basic income, but ultimately I think it would unleash more minds on problems that matter instead of setting up family trusts for the wealthy.
"Things would be better if we did away with the system."
"But what about when things go wrong?"
"Well, there would be agreements in place to handle that."
"Yes, that's called a 'system of government.'"
Or, "The government shouldn't tell me what to do."
"The word 'govern' literally means 'to conduct the policy, actions, and affairs of people.' That is, in fact, the whole point of government: to tell you what to do."
"Taxes are complicated" translates to: "People don't understand the rules for tax brackets that don't apply to them and think they are getting screwed over. So let's change the tax laws to save those(people or businesses) making more than $100k a year some money while doing nothing to help those making less."
I'm not in favor of any of the flat tax proposals... but this is the tax system where receiving a 1099 for from-home software development means you literally have to get out a tape measure and measure the room where you did the work. The exemption allowance worksheet on the W-4 is similarly insane. There's a lot that could be done to make the tax system here less complicated without touching the tax rates themselves.
There's some interesting bits like the earned income tax credit for the working class stays, and the first 50,000$ of income of a family of 4 wouldn't be taxed.
Capital gains are left unmentioned (probably because they're being abolished, and this is most likely going to reduce the effective tax rate on capitalists to ~0.0% -- no capital gains, no estate tax, no gift tax, so in essence taxes will finally be 0% for the oligarchy. Policy like this helps pave the way for what we all know is true: we're going to meet the first trillionaires in our lifetime).
The other critical problem they don't mention is:
* $2 trillion dollar tax cut = $2 trillion dollar revenue cut.
There is no mention of cutting spending, and there IS mention of "growing economy", so there is only one conclusion: "Liberal Stimulus". When you cut revenue by $2 trillion and leave spending the same, you end up issuing debt to cover the deficit. It's the same debt-driven tax scheme literally every republican has proposed since Reagan (who did the exact same thing perfectly: tax cuts + spending increases = growing economy and growing debt).
Oh, another right-wing "flat tax" guy. Somehow, these simplified tax schemes always result in lower taxes for rich people.
The tax code is complicated because of lobbying for exceptions. Propose removing some of those exceptions, and the lobbyists will line up in the House and Senate office buildings. (There's a book about that, "Showdown at Gucci Gulch". The cover picture is of lobbyists lining up.)
I love the idea of a flat tax, but flat taxes don't get rid of the complexities of the tax code. The tax code is definitely full of random cruft, but the bread and butter that keeps the IRS and all those tax attorneys busy are a few principled features of the system: taxing net rather than gross income, deducting the value of depreciating capital assets over an amortization schedule, taxing income internationally, taxing capital gains differently than income, not taxing certain intra-familial transfers, etc.
Most of the complexity of tax accounting is complexity that's intrinsic to accounting itself.
> flat taxes don't get rid of the complexities of the tax code
Most flat tax proposals don't allow for exemptions. You pay your taxes off your gross salary, full stop. That would eliminate 99% of the tax code complexity for most individuals.
I might add as a former lobbyist, everything he said in the article about my former profession is absolutely correct. Every day we analyzed policy to find ways for our clients (corporations) to increase profits, decrease costs, and eliminate taxes. On the other hand we did a lot of good for small and medium sized business. Unfortunately working for small and mid-sized businesses, and average citizens, doesn't pay the bills. I just bought my first house, and I'm starting to save and budget wisely for my family. Anything anyone - be it the President, congress, or otherwise - can do to reduce my tax burden, reduce government involvement in my life, and increase money for my family, is a good thing in my book. Like I said in my last comment: I'm so sick of both parties that I'm less interesting in "Republican" or "Democrat" and more interested in the actual person.
Observation 1: Nice idea, but what remains to be filled in is why people who earn 1M per year will want to give $145,000 to the gov. every year, instead of continuing to use N levels of ownership indirection and contribute-money-to-the-budget-like-right-now-this-year half of this amount? Or maybe even less if Investment gains or holding company? Not sure how income from rent counts.
So in terms of "let's cleanup the API" its a great idea, but how do you make the real estate owners and corporates pay all of a sudden? [1]
Observation 2: the minimum income before you start to get taxed, is a very interesting number. A half-step towards having a guaranteed minimum income for everyone, is to set this "target number" as the income where taxation starts. Thought experiment. If the tax-exempt portion of your income were increased to $15k, or $20k, how would that affect people's choice of occupation? The Hipsters will definitely be in---they're like "$20k tax-free, I'm like a lunberjack/lumberjess living out in the wilderness who pays no taxes; that's my beer and bike money and I don't need more." (Such an increase in the "personal amount" will make a big hole in the budget, but ask your self this, why are we taxing people who make $14k per year?)
United States tax complexity isn't because of the shape of the tax(income) function. That function is the most important part of tax to most Americans, but the complexity comes from two other places:
1) Some people will game the system for economic advantage. Of the 321M Americans, a certain portion are both extremely clever and amoral. A lot of the code is a response to "They did what‽"
2) Americans tend to have an inbuilt belief that everyone should make it on their own which manifests into the government not "giving" things to people, even if it is to induce a person to accomplish the government's goal. Since it is politically difficult for the government to use payments to change people's behavior it is easier to "not take as much" instead and accomplish the same end with a tax credit. This pushes all sorts of policy and governance into the tax code.¹
␄
¹ As an example, I have in the past claimed "historic building renovation" tax credits. I have never renovated a historic building. My state wants to spend $X to preserve historic buildings, but they politically can't give $X to people preserving buildings. So instead, they give transferable tax credits worth $X to the renovators, who probably aren't paying much tax (because they are in the business renovating historic buildings, like that pays) and don't have a use for the credit. If you know the right finance person, you will find there is a quiet market that connects sellers and buyers, so you can buy credits and split the savings with the seller 80/20 if I recall. It's a stupidly complex system that only puts 80% of the state's cost into what it wanted done, but at least they didn't give anyone money to preserve buildings.
I say we axe income tax completely. Two reasons: 1) even a progressive income tax is highly regressive when one considers that the wealthy mostly don't even earn employment income and therefore don't pay tax on it, and 2) taxation on income is the source of most discontent with redistributive policies.
I propose a multi-layered tax code operating in coordination at each level of government.
1) Land Value Tax collected by local governments, with land valuations determined at the state level and the revenue redistributed as Universal Basic Income by the Federal government (your SSN becomes your UBI account number). Local governments may in turn add a percentage to the LVT to replace property tax revenues. Minor recipients of UBI (below age of 18) receive their income as a school voucher. The LVT replaces income and payroll taxes as the majority of aggregate national tax revenue, and the UBI replaces SS, EITC, and a host of other safety net programs.
2) a Progressive VAT to be collected by the states with Federal revenue sharing. This becomes the second largest source of tax revenue and funds the majority of state functions, with the Congress taxing a portion of state VAT revenues to fund the Federal government. Most domestic spending programs would be devolved to the states to fund and manage directly rather than redistribute as block grants. The VAT would be progressive in that it would primarily target non-essentials (not food, for example).
3) the rest of Federal revenue sources would come from taxing financial instruments (capital gains, etc), as well as its traditional sources like corporate tax, tariffs, duties, etc. It would also have the option of increasing its share of the VAT. The Federal budget would be significantly smaller than it is today but would be free of the large domestic spending programs (which it would still regulate), as well as from pork barrelling which would instead never leave state borders to begin with. Federal spending would instead focus on interstate and international commerce, defense, national initiatives (nasa, nih, etc).
Flat tax benefits the top incomes more than the bottom ones. But we now know for certain that trickle down just doesn't work and that increasing income for the poorest benefits the economy the most.
Getting rid of exemptions and special rules is a good idea to reduce bureaucracy. You can replace tax exemptions with direct subsidies to make the amount spent on it more transparent.
A progressive income tax makes a lot of sense and has lots of configuration levers.
Flat tax benefits the top incomes more than the bottom ones.
Not under Paul's proposal...."I devised a 21st-century tax code that would establish a 14.5% flat-rate tax applied equally to all personal income, including wages, salaries, dividends, capital gains, rents and interest."
Take a look at what tax rate the high-earns are paying. It can often be a small percentage than lower income earners. If the rate was flat at 14.5% for all income (also removing a lot of the current exemptions), I think you'd see high income earner's overall tax rate increase.
Interestingly, the 14.25% tax rate is not new. Donald Trump proposed in his 2000 presidential bid. At the time, 14.25% one -time wealth tax on personal wealth with $10MM or more would collect $5.7 trillion, which wipe the ENTIRE U.S. debt.
"One-time" taxes feel a bit like theft, though, don't they? The follow-on effects wouldn't be pretty either, after the billionaires realize how foolish it is to keep their money in USA accounts.
Paul proposes a 14.5% rate, so, even if novelty or lack thereof was relevant, I'm not sure what the relevance of the novelty of a 14.25% rate would be.
> 14.25% one -time wealth tax on personal wealth
Yeah, not only is 14.25% different from 14.5%, but a one-time wealth tax is different than an income tax. So, again, what's the relevance?
I like this guy more and more each day. I've grown so weary of the political parties that I'm desperately seeking a really different candidate who can push a more libertarian agenda. I just hope he sticks to his word.
[+] [-] acconrad|10 years ago|reply
And of course when asked about how this would create a larger deficit, he never actually asserts that his flat 14.5% tax across the board would actually balance the budget.
But here's the crazy thing: his proposal isn't even a flat-tax policy! He agrees that the first $50,000 for a family of four shouldn't be taxed. That's a progressive tax plan. And it makes sense right - up to a certain amount of income, one makes so little money that need a bit more help than others to get by. Makes sense...but then you could logically assert the converse - that those making so much money need far less help than others to get by, and therefore could be taxed more without affecting their lifestyles.
And this is why a progressive tax plan works in the United States - there exists an income level based on the cost of consumer staples, housing, and transportation, that allows one to be a productive member of society. And so the further away from you get from that magic number (or delta of that number), the more that taxes have an effect either on the individual or the community as a whole. A family cannot get by on $1 a year. A billionaire simply does not need a billion dollars. The burden on them is far different - which is why their tax burden should reflect that.
[+] [-] drzaiusapelord|10 years ago|reply
I live in an expensive part of Chicago. $50k for me has nothing in common with some rural Alabama family making $50k. This is one of the reasons why the flat tax is wrong. It lacks the flexibility and subtlety of a more complex tax system. In a nation this large with so many different wealth levels, a non-progressive tax is just asinine. But it engages conservative low information voters who just want easy cowboy-ish answers to complex problems, especially if they're the ones in he rural south who will benefit from this kind of plan more than northern Democratic urban dwellers.
[+] [-] presty|10 years ago|reply
says who?
[+] [-] elchief|10 years ago|reply
The law is so complex in America, that you probably break several laws a day, without knowing.
And it costs law makers little to make new ones, and it's a pain to get rid of old ones.
I'd love to see
a) a huge clean up of out-dated and unnecessary laws.
b) then a cap on the total number of laws. If they want to add a new one, they need to repeal an old one.
(Allow for very minor growth over time as society becomes more complex).
[+] [-] qsymmachus|10 years ago|reply
[+] [-] rayiner|10 years ago|reply
[+] [-] jrs235|10 years ago|reply
[+] [-] Sir_Vival|10 years ago|reply
[+] [-] tunesmith|10 years ago|reply
He can't actually believe that is a strictly true statement. I'd think that any Republican politician with an understanding of economics would have to believe that a president's policies are at best contributory rather than a distinct cause. I get it as messaging; if one believes that progressive taxation has side effects that cause inequality, then they'd want to gloss over things to blame the presidency for it. So, I tend to believe that most politicians have private meetings where they talk about what they actually think is going on, and then translate it into brain-deadening messaging for the public. But sometimes I wonder if for a lot of these politicians, how much of what they say is actually because of willful ignorance rather than messaging.
Like that guy with the snowball that argued against global warming, that almost definitely has to be chutzpah rather than stupidity, right? Like, he would understand the concept that just because a stock price spikes down, it could still be true that the stock market is going up over time. So he has to secretly understand the argument about global warming, right? And then we waste our time trying to explain how a snowball doesn't disprove anything, and he doesn't care because he already knows that. There's got to be a term more accurate than chutzpah for someone that deliberately lies and plays dumb, knowing they can get away with it.
[+] [-] patdennis|10 years ago|reply
Yes, sort of, but the reality of these things are so well understood all politicians that there's not often that much of a reason to discuss these things outright.
When a politician (and by "politician," I do not mean a single person. I mean an amalgam of the politician, their staffers, and their advisers) are weighing an issue, the actual merits of the arguments are just a part of the equation. They're weighing the interests of various groups and constituencies, they're considering coalitions and alliances and favors, and making a pragmatic decision. Usually a mix of their conscience, their constituents, their fundraisers, and their party.
Rand is a bit of an outlier on this front because he is a legitimate True Believer, but he's still a pragmatic true believer.
Then they hire someone like me to turn it into the soul deadening messaging.
But, yes, these people understand both sides of the issue. They are usually very smart. And if they don't understand the other side of the issue, their close advisers do.
[+] [-] jessaustin|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] qsymmachus|10 years ago|reply
[+] [-] jonas21|10 years ago|reply
[1] https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_Unite...
[+] [-] dnautics|10 years ago|reply
That's exactly the point. So now the middle class can pay what the wealthy already pay.
[+] [-] dragonwriter|10 years ago|reply
Well, except that 15% is the next tier down from the top capital gains tax; the top tier is 20%.
Plus the fact that 14.5% does not match 15%. If you don't believe me, I'll give you $14.50 for the "matching" $15.00 and repeat that until you're convinced.
[+] [-] douglasisshiny|10 years ago|reply
[+] [-] mikeash|10 years ago|reply
Oh crap, "flat tax."
This is the fundamental problem. Everybody wants a simpler tax system. But nobody can agree on which parts to remove, or how to change it. The current system is close to what you get when everybody tries to get what they want. Even if you blew it up and started over, I think you'd get back to the current state pretty fast.
Edit: everybody can stop replying to my comment proposing your favorite simplified tax system and explaining why it's great. You're missing the point here. If you want to discuss your favorite tax system, make a top-level comment.
[+] [-] 3pt14159|10 years ago|reply
For example. Assume a household of two people. one earns $20k per year, the other earns $80k per year. With a 50% tax and a $10k (after tax) per year basic income you get the following:
Now if each partner earned the same you would get: Which is exactly what you want. The problem with income splitting measure that try to replicate this is that they lead to a perverse disincentive to divorce. So in the first example, the person earning $80k would no longer be able to offload part of his income to the lower paying person, and the two persons effective income decreases just when their expenses double. Furthermore it discriminates against people that are single, which is politically expedient, but unjust.It also solves the welfare and old age security paperwork problem. There are some other problems: like having a higher tax rate to pay for all this basic income, but ultimately I think it would unleash more minds on problems that matter instead of setting up family trusts for the wealthy.
[+] [-] Retra|10 years ago|reply
"Things would be better if we did away with the system."
"But what about when things go wrong?"
"Well, there would be agreements in place to handle that."
"Yes, that's called a 'system of government.'"
Or, "The government shouldn't tell me what to do."
"The word 'govern' literally means 'to conduct the policy, actions, and affairs of people.' That is, in fact, the whole point of government: to tell you what to do."
[+] [-] ccockerhamkc|10 years ago|reply
[+] [-] facetube|10 years ago|reply
[+] [-] GFK_of_xmaspast|10 years ago|reply
[+] [-] criley2|10 years ago|reply
Capital gains are left unmentioned (probably because they're being abolished, and this is most likely going to reduce the effective tax rate on capitalists to ~0.0% -- no capital gains, no estate tax, no gift tax, so in essence taxes will finally be 0% for the oligarchy. Policy like this helps pave the way for what we all know is true: we're going to meet the first trillionaires in our lifetime).
The other critical problem they don't mention is:
* $2 trillion dollar tax cut = $2 trillion dollar revenue cut.
There is no mention of cutting spending, and there IS mention of "growing economy", so there is only one conclusion: "Liberal Stimulus". When you cut revenue by $2 trillion and leave spending the same, you end up issuing debt to cover the deficit. It's the same debt-driven tax scheme literally every republican has proposed since Reagan (who did the exact same thing perfectly: tax cuts + spending increases = growing economy and growing debt).
[+] [-] Animats|10 years ago|reply
The tax code is complicated because of lobbying for exceptions. Propose removing some of those exceptions, and the lobbyists will line up in the House and Senate office buildings. (There's a book about that, "Showdown at Gucci Gulch". The cover picture is of lobbyists lining up.)
[+] [-] rayiner|10 years ago|reply
Most of the complexity of tax accounting is complexity that's intrinsic to accounting itself.
NB: If you want to learn more about the theory of the U.S. tax code, I can't recommend this book enough: http://www.amazon.com/Federal-Income-Taxation-Concepts-Insig...
[+] [-] driverdan|10 years ago|reply
Most flat tax proposals don't allow for exemptions. You pay your taxes off your gross salary, full stop. That would eliminate 99% of the tax code complexity for most individuals.
[+] [-] jessaustin|10 years ago|reply
Did you intend intra-familial? Like inheritance and 529 plans, right?
[+] [-] Simulacra|10 years ago|reply
[+] [-] ivansavz|10 years ago|reply
So in terms of "let's cleanup the API" its a great idea, but how do you make the real estate owners and corporates pay all of a sudden? [1]
Observation 2: the minimum income before you start to get taxed, is a very interesting number. A half-step towards having a guaranteed minimum income for everyone, is to set this "target number" as the income where taxation starts. Thought experiment. If the tax-exempt portion of your income were increased to $15k, or $20k, how would that affect people's choice of occupation? The Hipsters will definitely be in---they're like "$20k tax-free, I'm like a lunberjack/lumberjess living out in the wilderness who pays no taxes; that's my beer and bike money and I don't need more." (Such an increase in the "personal amount" will make a big hole in the budget, but ask your self this, why are we taxing people who make $14k per year?)
__________________
[1] http://www.blue-route.org/blog/wp-content/uploads/2014/09/3-...
[+] [-] jws|10 years ago|reply
1) Some people will game the system for economic advantage. Of the 321M Americans, a certain portion are both extremely clever and amoral. A lot of the code is a response to "They did what‽"
2) Americans tend to have an inbuilt belief that everyone should make it on their own which manifests into the government not "giving" things to people, even if it is to induce a person to accomplish the government's goal. Since it is politically difficult for the government to use payments to change people's behavior it is easier to "not take as much" instead and accomplish the same end with a tax credit. This pushes all sorts of policy and governance into the tax code.¹
␄
¹ As an example, I have in the past claimed "historic building renovation" tax credits. I have never renovated a historic building. My state wants to spend $X to preserve historic buildings, but they politically can't give $X to people preserving buildings. So instead, they give transferable tax credits worth $X to the renovators, who probably aren't paying much tax (because they are in the business renovating historic buildings, like that pays) and don't have a use for the credit. If you know the right finance person, you will find there is a quiet market that connects sellers and buyers, so you can buy credits and split the savings with the seller 80/20 if I recall. It's a stupidly complex system that only puts 80% of the state's cost into what it wanted done, but at least they didn't give anyone money to preserve buildings.
[+] [-] trimble-alum|10 years ago|reply
[+] [-] mlitchard|10 years ago|reply
[+] [-] fredgrott|10 years ago|reply
Over 65% of gov receipts are from income tax and payroll taxes.
from SBA there are only 35 million businesses
US pop is 307 million(2007 numbers)
It is not a simple solution where you say A or B group is not paying enough..flat tax is simplistic band-aid suggested by simpletons
[+] [-] ende|10 years ago|reply
I propose a multi-layered tax code operating in coordination at each level of government.
1) Land Value Tax collected by local governments, with land valuations determined at the state level and the revenue redistributed as Universal Basic Income by the Federal government (your SSN becomes your UBI account number). Local governments may in turn add a percentage to the LVT to replace property tax revenues. Minor recipients of UBI (below age of 18) receive their income as a school voucher. The LVT replaces income and payroll taxes as the majority of aggregate national tax revenue, and the UBI replaces SS, EITC, and a host of other safety net programs.
2) a Progressive VAT to be collected by the states with Federal revenue sharing. This becomes the second largest source of tax revenue and funds the majority of state functions, with the Congress taxing a portion of state VAT revenues to fund the Federal government. Most domestic spending programs would be devolved to the states to fund and manage directly rather than redistribute as block grants. The VAT would be progressive in that it would primarily target non-essentials (not food, for example).
3) the rest of Federal revenue sources would come from taxing financial instruments (capital gains, etc), as well as its traditional sources like corporate tax, tariffs, duties, etc. It would also have the option of increasing its share of the VAT. The Federal budget would be significantly smaller than it is today but would be free of the large domestic spending programs (which it would still regulate), as well as from pork barrelling which would instead never leave state borders to begin with. Federal spending would instead focus on interstate and international commerce, defense, national initiatives (nasa, nih, etc).
So yea, just a simple adjustment ;)
[+] [-] orkoden|10 years ago|reply
http://www.theguardian.com/business/2015/jun/15/focus-on-low...
Getting rid of exemptions and special rules is a good idea to reduce bureaucracy. You can replace tax exemptions with direct subsidies to make the amount spent on it more transparent. A progressive income tax makes a lot of sense and has lots of configuration levers.
[+] [-] refurb|10 years ago|reply
Not under Paul's proposal...."I devised a 21st-century tax code that would establish a 14.5% flat-rate tax applied equally to all personal income, including wages, salaries, dividends, capital gains, rents and interest."
Take a look at what tax rate the high-earns are paying. It can often be a small percentage than lower income earners. If the rate was flat at 14.5% for all income (also removing a lot of the current exemptions), I think you'd see high income earner's overall tax rate increase.
[+] [-] kjw|10 years ago|reply
[+] [-] devy|10 years ago|reply
http://www.ontheissues.org/Celeb/Donald_Trump_Tax_Reform.htm
[+] [-] jessaustin|10 years ago|reply
[+] [-] dragonwriter|10 years ago|reply
Paul proposes a 14.5% rate, so, even if novelty or lack thereof was relevant, I'm not sure what the relevance of the novelty of a 14.25% rate would be.
> 14.25% one -time wealth tax on personal wealth
Yeah, not only is 14.25% different from 14.5%, but a one-time wealth tax is different than an income tax. So, again, what's the relevance?
[+] [-] driverdan|10 years ago|reply
[+] [-] astraelraen|10 years ago|reply
[+] [-] Simulacra|10 years ago|reply