Would you support a flat tax?

[PrincessFiona]

There are plan with the current administration to have a flat tax for everyone earning above 30-40,000 ... supposedly anyone earning below that would pay no taxes. What do you think?

[PrincessFiona]

I have to say, I'm with the repubs on this one. I used to feel differently, but now that we are actually earning enough money for it to matter, we pay a huge amount of taxes. We worked hard to get where we are and I think that we shouldn't have to share a larger percentage of the tax burden than others...it seems unfair....

Jloreine, am I freaking you out yet?

kris

[Meenah]

I'm not sure about this one (or the social security reform question). I worked a double today so I will have to go to bed and think about it!
Luanne

[Vishenka69]

I'd vote for it if we could postpone paying until DH is done with training. Currently, we'd be majorly screwed by it.

I'm not really sure on this one, but at first glance it seems like a good idea to me. I'll have to look into it more. Does having a flat tax mean no write-offs? I like the idea of having write-offs, but I sort of think they should be done away with because my former boss wrote off so much crap that he got away with paying far fewer taxes than he should have (I secretly hope he'll be audited one of these days).

Part of me thinks that when you earn more money, you should share the wealth. And it's hard enough for a family to live off of $40k a year as it is, so how can we expect them to pay even more taxes? But it really hurts when I see that 42% of my DH's gross pay has been taken out for taxes. The percentage is hard enough to swallow, but when you see the actual dollar amount...it's just painful!!

(Please refer to my new tag line in that post before reading this )

I don't think you can have it both ways. You can't have a rich presciption benefit package for Medicare, lots of $$$ for education, and health care for everyone without paying for it. Heck, we don't really have any of that now. (Well, maybe the prescription coverage which is a huge mistake IMO and a sizable amount for education).

You could say -- tax the corporations! But would that really make up the difference? And how much can individuals or corporations absorb before they start changing their spending patterns? Tax corporations enough and it will start coming out of paychecks and capital investments.

Ditto for the deductions. If there is a flat tax, no more deductions. With the possible exception of deducting business expenses for self-employed -- they should only be taxed on profit similar to a corporation.

My opinion on this would depend on what the flat tax rate is. Would it be higher or lower than what a family earning $40K/yr pays now? If it was significantly higher I would say no.

I think another important factor is the income to which the flat tax is applied. How would capital gains be treated? I would be more likely to be in favor of it if all income -- earned and unearned -- was subject to the same tax rate.

[spotty_dog]

The numbers I'm seeing are 17-20% rates across the board (for families earning over $36,000) with no deductions and no tax on capital gains. So those with large incomes, who are also more likely to have investments and savings, benefit most. The middle class ultimately suffers.

I can't see how that low taxation level (apparently the current average is 22%) can be reconciled with our government's needs. And of course the Republican way is to trim the fat, decreasing the size of government and cutting programs. But what goes first? Do we "take away welfare and send the poor people to the ghetto with the blacks" as one Republican gentleman was recently heard to suggest?

I dunno. DH and I currently feel we pay too little federal tax. In fact, we pay none, because there are so many loopholes. Maybe we'll feel differently when we have more income; who knows. I'd rather see the loopholes, especially on corporate taxes, tighten up. The Taipei Times is reporting that Cheney and some other Bush advisers are advocating for the flat-tax; Card and the Treasury Secretary among others would rather keep the graduated tax but streamline it and close loopholes. I hope the latter prevails.

I would have a lot less of a problem with it if all income was taxed. I think there is a perverse incentive to not work to avoid taxes. If you get to a point where you can live off of investments, you don't pay ANY taxes?
I'm not sure of the exact figures, but I'll bet that the average family at $36K pays a lot less than 17% of that $36K. I wonder at what income point that flat tax rate would mean that a family would pay about the same.

I think the current tax code is a frustrating mess with too much political pork and such in it. But I wouldn't want the job of fixing it! A graduated tax rate that is streamlined makes more sense.

These are all great points Alison & Nellie! I really need to read up more on this topic so I can be more informed!

Erica