Tax Policy
- Thread starter FtWorthCat
- Start date
The Fair Tax is the best alternative. It replaces (& abolishes) the Income Tax, replacing it with a national Sales Tax, which is estimated to be about 23%. That % could be raised or lowered, but would be clear to ALL who is voting to raise/lower it.
The Fair Tax also:
- was written as a bipartisan proposal about 20-25 years ago, and had a number of House of Rep sponsors
- it includes a monthly rebate that everyone would receive, based on the family size, to reimburse for the taxes a family that size would expect to pay living at the top of the poverty line. So essentially those living below the poverty line would effectively pay no taxes, those slightly above it would pay a small %, and those living way above it would pay close to the full 23%. So it is not regressive.
- Unlike the Income Tax, it would capture much more in taxes from illegal activities. No, a drug deal would not be taxed. But the car, the jewelery, the house, etc... bought by the drug deals would be taxed. Same for illegal aliens. Same for rich who are able to shelter their income currently, but still live "the rich lifestyle".
- it would promote investment and businesses staying/returning to the US, and growth back to the US, helping our entire economy
- it would get rid of the many Hidden taxes that we have, where an item you buy at the store, has already been taxed several times.
There is no 15% rule.
In reality, the large earners are limited to a lesser % max than lower earners...however, lower earnings would need to be able to afford putting the max in to take advantage.
Example - in 2024, you can put in $23,000 (and recognize $345,000 in compensation). Someone making over $345,000 a year cant even recognize any compensation above that.
23,000/345,000= 6.67% deferral rate
23,000/50,000= 46% deferral rate
If we ever go to a consumption tax, I believe it should be charged on EVERYTHING - groceries, homes, entertainment, stocks/bonds (not inside IRA/401k), CDs, etc. So, the high earner would still pay more of the tax as they're going to spend/buy something with all that cash. Otherwise, they'll sock it away in those assets that don't incur the tax. However, with a consumption tax, I believe capital gains taxes would be eliminated, which is OK with me. There would have to be tax credit/rebate for lower income earners but the notion that a $1 earned at one level should be taxed at higher rate than a $1 earned at a different level is illogical.
I wonder about the 'tax' %, though. IIRC, GDP is roughly $29T and the budget is $5.6T. Wouldn't that translate into ~ 19% consumption tax rate vs 23%? I may have the numbers wrong or the $5.6T may omit some budgetary items. By this math, Social Security and Medicare taxes would also be eliminated, correct?
I wonder about the 'tax' %, though. IIRC, GDP is roughly $29T and the budget is $5.6T. Wouldn't that translate into ~ 19% consumption tax rate vs 23%? I may have the numbers wrong or the $5.6T may omit some budgetary items. By this math, Social Security and Medicare taxes would also be eliminated, correct?
My policy is that I'm against taxes. But roads need to be built, garbage picked up, and we need an armed forces. So I'd be happy with just a National sales tax (for any new purchases above a sliding scale that defines basic cost of living expenses) to fund those things.
Also, I don't think Federal politicians should draw a salary. Consider it something akin to "jury duty" You get COLA, live in a dormitory, and get your old job back at the end of the year.
Also, I don't think Federal politicians should draw a salary. Consider it something akin to "jury duty" You get COLA, live in a dormitory, and get your old job back at the end of the year.
So the taxpayers who have retired and paid into the social security tax system (15% for self employed) all of their working lives, will continue funding the social security system with the consumption tax. Wonder if they’ll receive a rebate based on their social security income for each year?
No worries. I shouldn't have gotten so frustrated.
Whatever group supports no income tax, and a transparent government that does what it's told to. THAT one I guess.
I hadn't really considered a name for it.
Googled this Simpson cat and he has 4.5 million shares in TXO which pays, on average, around a $.60 dividend quarterly. Not sure about his other compensation in other companies but he is pocketing around $2.7 million quarterly in dividends for which he only pays a 20% tax instead of the 38% in that income range.
Wonder how many cats pause posters it would take to pay the amount of taxes he has given to the government this past year? I’m guessing a lot. Maybe we need to pony
up and give extra money to the government so we can match what he has given. Who wants to go first?
The reason that dividends are taxed at a lesser rate are that corporations are also taxed on their income.The reasoning is to tax dividends at the normal income rate is in essence double taxation
The government definitely wants to avoid double taxation. Thats way too few times to tax the same dollar. They prefer to tax it way more often.
You should read up on The Fair Tax.
Every item would be taxed. But it would only be taxed once. For example if you buy a house, that final house would be taxed. Currently the house is taxed, the marble countertops are taxed, the quaried marble is taxed. Products are taxed at every step. It's called imbedded taxes/taxation.
But yes, SS and Medicare would be wrapped up in The Fair Tax. So, the IRS would not need to know how much you earned, in fact there would be no need for an IRS.
Well, almost everything you pay for has been taxed many times already.
Farmer has income taxes that he pays, and tax on seed and fertilizer and gas & other supplies. That cost is part of the cost of the wheat he sells. The flour company has corporate taxes, and pays 1/2 of employees FICA tax, and pays taxes on their supplies to make the flour. The shipping company, the bread making company, the trucking company that distributes the loaves of bread to groceries. The grocery store, they all pay taxes on that loaf of bread, and imbed those taxes in the cost of the bread.
When politicians say "make corporations pay their share", when you increase their cost of doing business, all they do is roll that back into the cost of their goods. Inflation anyone? That doesn't mean corporate (& private) loopholes should not be ended, they should. But simply raising tax rates, does not necessarily raise tax income. In Economics class most theories start with "assuming all other things remain constant", even though we fully know if you change 1 thing that will affect other things (they won't stay constant).
I think we can all agree that politicians need to pay a 90% tax on their stock portfolios.
Giving the govt as little as possible is the only "Tax Policy" that I'll ever support.
Meanwhile every major university has a billion dollar endowment which is a tax free hedge fund and no one says a word about it while tuition continues to rise bc ppls solution is to making everyone pay more for whatever their demands are.
I think the top 1% pay 32% now. I'd have to look it up but saw where that total has been increasing the 10 years at pretty good clip.
Because the schools can tap into massive amounts of easily obtained student loan money. Its a massive scam that lawmakers should end if they had concerns about the American people. But as with tax law, their only concern is making sure their donors and supporters get their goodies.
The difference between state/local politicians and federal politicians is that fed pols appear to be experts in the stock market.
Yay Guaranteed Student Loans letting schools steal all they want and burden the next generation!!