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Coalition seeks to dump flat-tax system
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Dishonest people can never accept the simplicity of this system. It's too easy to do it right, do it honestly, and do it fairly. I mean 5% to a man who makes $100 a month is $5.00, 5% to a man who makes $1,000 a month is $50.00, and to a man who makes $10,000 a month is $500.00. It is fair and everyone pays the SAME according to the amount they make. What is the problem? You will always have whiners I guess???
Question: Who was the first modern economist/philosopher to strongly advocate for a progressive tax system?
Answer: Karl Marx.
A progressive tax system is one in which the more a person makes the larger percentage they pay in taxes. The reason Karl Marx advocated this is his mantra of "from each according to their ability, to each according to their need."
The idea is that ultimately all people would have about the same amount of money to live on. He hated wealth and wealthy people. So if a person made $30k a year, they paid nothing in taxes. If they made $100k a year their tax rate would take enough taxes to leave them roughly $30k to live on.
These initiative supporters are making incremental arguments. We should keep in mind that before Reagan got to it the highest tax rates were well in excess of 70%! If I remember correctly even higher than that!
We do a flat tax for all purchases, it is good enough for income. If people make more, they pay more. Make nothing, they pay nothing.
Huntsman is right!
The flat tax does not consider ability to pay, so the wealthy are taxed at the same rate as the poor and middle class. The result of changing from a progressive system to a flat system is that the wealthy got a huge tax break, and the middle class got no material tax break (if you're a middle class Utahn and dispute this, just check your state tax refund this past year and compare it to previous years when we had a progressive system).
While on the surface, the flat tax appears more fair, it isn't if you calculate taxes as a percentage of gross income. If you are poor or middle class, your taxes as percentage of gross income remained the same, and is a much higher percentage than the wealthy's taxes as percentage of gross income, which was already lower than poor and middle class percentage under the progressive system and is still lower under the flat system.
while the wealthy's taxes as percentage of gross income
$50.00 is a lot of money to someone making only $1000 per month. However, to a someone making $10,000 per month it's peanuts.
As long as the percentage is the same I don't see a problem. I want my government to treat us all equally when it comes to taxes. Maybe that way it will encourage us all to get out and work our behinds off to get ahead.
After all, if a liberal / socialist government is going take more and more of my hard earned money. Why should I work so hard? I'll just rest on my back side and let the government supply me with what I need.
Progressive or flat tax has nothing to do with budget cuts or over-runs only with who pays what portion; both taxes can be raised or lowered accordingly.
while the wealthy's taxes as percentage of gross income "
Is this new math of some kind??? - where I live if everyone is taxed 5% on their income; everyone pays the same percentage.
It's called gorilla math, the libs love to use it to confuse their constinuents into voting for things they don't understand as Progressive just pointed out. God Bless America!!!
Yes, if this was a big piece of cake, and my "keeping proportionately more" meant there was less for you - that would be unfair. But our economy doesn't work like that. One person well off is not offest by several others going without in order to balance things out. Your point has no validity.
The person who worries about the poor paying more of their income with a flat tax doesn't understand it. These poor people still get their tax write-offs. This means that in general they pay no taxes at all on the first $20-30k they make.
Say they make $40k they would get to write-off mortgage, children, etc. In Utah they also index this against the Federal taxes they pay. So most of what they make is tax exempt. Someone making $40k might pay taxes on $10k or less. This means their total state income tax would be roughly $500.
A person making $1million would get the same $20-30k in tax write-offs, likely more since few salaries pay that much. They are likely a sole-proprietor. Ultimately they will pay 5% on hundres of thousands of dollars of earned income.
Middle class pays $500. Millionaires will pay tens of thousands of dollars.
I'm fine with that. Only Karl Marx and the Democratic party think its unfair.
Obama is bringing out the communist rhetoric. ug!
Flat tax is the only fair way.
I actually agree with that. There is no reason government should subsidize life choices through tax breaks.
I also think the first so much of income (perhaps 40k) should be exempt from the flat tax as this is a basic living wage. Thus, someone making 50k pays tax on 10k ($500). And, someone making 1M pays tax on 960k ($48k).
Seriously, think about it and give me an intelligent reply as to why it would or wouldn't work.
Answer: Because no one would do any work once they earned the $250,000 limit. Doctors, Lawyers, CEOs, etc. would just close up shop in April or May and take the rest of the year off. (In fact, no one would bother going to medical school in the first place, knowing they could never make more than $250k.) The government would get nothing in taxes at the 100% rate.
No one would bother to invest or build up a business that hires lots of workers either. The economy would be a wreck...but we would not have any rich people to envy though, so it might be heaven.
The problem is that government should be able to function well with about 20% of total economic activity, but they can't control spending. To get votes and grant favors, politicians love to promise everything under the sun with our tax money.
They also love to control peoples' lives through the tax system. They couldn't do that with a flat tax.
The point is, we are a market economy, government should be here to support that market by ensuring fairness, providing legal support, and ensuring the essential public infrastructure is built. Anything else is government interferance.
The more simple the tax system is, the less subject the system is to fraud, and to negligent spending by the government.
What I was describing is what we have in Utah.
You are describing the ideal, which I support.
Last year my brother in law made $54k, with write-offs, three kids, etc he paid $4500 in Fed taxes and almost $600 in State taxes. I helped him do his taxes.
Current is system is fair. I would like to have our current national income tax changed to what you describe.
The big difference is "this flat tax" rate proposal nixes a lot of deductions, namely mortgage interest and contributions.
For the average Utahn this is a tax INCREASE.
That way, instead of looking at the wealthy vs. the poor, you're looking at big spenders vs. low spenders. It gives incentive towards people who save their money, instead of penalizing people for working their tails off to earn a lot of money.
If you're a wealthy person, and you're buying boats, cars, houses, jewels, plasma tv's, etc., you're going to pay more than the guy who buys just the necessities.
It might even keep people from racking up credit card debt they can't afford.
We can argue all day long on tax breaks for kids and mortgages though. There are compelling reasons to offer breaks for certain activities and situations, but drawing those lines are difficult.
"Progressive" taxes not only pit rich against poor, in a game to see who can cheat the other out of the most, they also kill the economy and deny the government needed revenues.
As has been shown over and over and over again, if you want the government to take in more revenues, CUT taxes. If you want to kill the economy and make everyone poor, including the government, raise taxes.
Works every time.
Consider:
Employers never spit profits evenly with employees; they keep the lions share for themselves at the wage earners expense. This is business as usual - capitalism. No argument. Yet, when the same methodology is applied in the form of progressive tax its called socialism. Why? Shouldn�t a two sword swing both ways - to be fair? To swing one way only benefits the wealthy. Besides, it seems to me the progressive tax resembles American capitalism more than the flat tax.
Progressive or flat tax has nothing to do with flag waving or simplicity; only with which is really fair; flat taxes mean well but both taxes can still impose a complicated system of deductions, types of incomes to tax, etc.
A sales tax would just reduce consumption.
The rich should see how the poor live, true enough
But the poor should see how the rich work.
I was out of the work force for 8 years (7 in college and 1 in an intership) living on 2 dollars an hour cleaning building. I worked my rear off for those years, and now reap the rewards. Why should I have to pay a progressive tax so others can goof off. It seems those seeking a progressive tax want to punish people like me that set goals and obtained them through hard work. My work is in the health sector, and my labor is much in demand, as their are to few of us. I am asked to work overtime almost weekly - to help people in medical need. Any more, I ask myself why. I lose 50% of my wages on overtime. You do the math - I make more on strait time than overtime after taxes. Yet I want to help people, and all they want in return is to tax me higher? Maybe I should just give up and drive truck.
Think about it.
The Constitution calls for everyone to be treated EQUAL.
$10 = $10.
Why should I pay more tax because I work harder than someone else? EQUAL is EQUAL.
The point of this article, and this group, is that they want to end that and go to a progressive tax scheme that would kick in for fiscal year 2010. That means that on April 15, 2011 you would pay the new Marxist tax plan.
I would like to do a different type of tax plan. I say that we allow certain write-offs, so that the first $30k is not taxed and after that it is taxed at a flat rate.
I say from $0 - $30k they pay 1% tax. That would mean a person making $29,999 would pay $299.99 in State Income Tax. Someone making $10k would pay $100.
Right now we have one half of the society paying no income taxes and demanding the other half pay more. Let those folks pay something and see if they want to increase taxes anytime soon.
Nothing like paying something of your own way.
Let's just set aside the fact that progressive income taxes have been the foundation of every civilized society in modern history and flat-tax societies tend to become second-world backwaters with a couple of rich people and everyone else desperately poor.
Let's also just set aside the need for intelligent regulation of our nation's banking and financial system... oh we already did that. Worked well didn't it?
Employers may not "split" profits evenly with employees, but they don't split expenses or risks either. Most rich entrepreneurs have taken enormous risks before they reap the rewards.
Why do some people think that if an employer makes a lot of money, he does it at the "expense of the worker"? Every employer has to pay every employee what they are worth. Otherwise the employee leaves for someone who will pay them what they are worth.
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I have to manage my budget this way. I can't demand a raise just to buy an iPhone, I have to cut something else out in order to afford it.
Why is this so hard for some groups to understand?