How long before we see a flat tax?

The estate tax is pretty much history.
Class action lawsuits are going to soon be very heavily restricted.
So when does this right wing group of assholes pass a flat tax?

I think it will happen within six months.

Most flat tax plans eliminate some sacred cows: mortgage interest deduction, etc. People aren't quite brainwashed enough to give that up to help out the super-rich even more.

Don't be so sure

It is going to be our supposed "represenatives" in Congress. And we all know how much they have the worker's interests at heart. Mortage interest deductions do not matter much if the vast majority of your wealth is sitting down in the Cayman Islands beyond the reach of the IRS. A flat tax will be another piece of welfare for the wealthy, and with the incredible clout and control the wealthy and corporations have in our government, this flat tax idea is one whose time could be coming quite soon.

it would help the just rich -

but this guy takes his orders from the super rich.

If it does come up - the Dems should run with it on the cry of replace all incomes taxes - FIT AND SS PAYROLL - with flat tax with per person deductible.

If it is revenue neutral (in other words - if it collects the same amount of tax) - it will be great .

Add your SS payroll to your FIT. Take your household income and subtract $7500 for each adult, $3750 for each child.

Now divide.

Any tax rate less than the number you just calculated and you win.

And the above does not factor in Employers portion of the SS tax (which is really a cost of doing business just like your wage) - so Corporate tax should go up a bit also!

Unfortunately.

Any further adjustment could only hurt the rich.

Right now only "government bonds" are tax free. But a lot of the Super Rich put money into Corp. bonds and they are taxed as income. Bush will come up with some nice sounding name for not taxing bonds.

It may take The Greater Depression to do it, but it's too important to a progressive society for it to be gone for good.
I have faith -that a progressive mindset will return to our shores someday- andthat we are just unlucky enough to be living in the Modern Dark Ages. I'd really like to be there/here for the Renaissance that may or may not come before the next extinction-level natural disaster.

Warren Buffett, through no fault of his own, is now paying taxes at a 15% tax rate, thanks to Bush cutting the tax rate on dividends to 15%. I'm paying at a 28% marginal rate.

Plus, I pay 8% into Social Security on my entire income. Warren pays 8% on the first $80,000, then nada after that.

You earn the money the employer pays, he pays 15.2%. Just 7.65% is removed from your so-called gross-pay. You don't ever see the other equal amount paid to SS/MC.

This is why dividends were double-taxed. So it would be fair.

The robbery of the poor and gift to the rich is so clear that people cannot believe what they see.

rate (all taxes, local, state, fed, on all income, earned, unearned, and sales tax and government licenses and fees) of between 15% and 18%, with I believe, the second and fourth quintile paying closer to 18 and the first and fifth paying closer to 15. (This is from memory.)

We do have a de facto flat tax in this country which allows high income people to pay LOWER marginal rates on additional income (usually unearned) that is lower than the marginal rates paid by the working class (which is usually tax on income earned from the hard work that is giving unearned income to the super wealthy).

Even prior to the Bushoilini 'taxcuts,' and using figures from the CTJ (Citizens for Tax Justice) and IRS (Satan), I figure the bottom quintile paid at a rate of 42% and the top quintile at a rate of 38%.

Our conclusions are the same: The rich pay a lower tax rate by far.

The fascist furor over a "flat tax" is fraudulent in the extreme, always focusing only on the very few progressive taxes we pay instead of the overall tax structure -- and never including corporate taxation under the same rules.

on all sources of income (including, presumably gifts, inheritance, and maybe charity) not just taxes on earned and unearned income. (But, obviously, if you came up with 42%, you must be counting something more than income tax -- but I'm not sure what data the IRS would have on anything other than income tax.) I don't doubt there is a huge disparity between quintiles when you consider only taxes on earned and unearned income (muni bonds and cap gains will drag down that percentage for the rich person, even if their earned income is taxed at a higher marginal rate).

A good rule of thumb to remember is, the richer you are, the more control you have over how you get your income. You can channel your income through low-tax transfers to yourself. A good example is that stock options take advantage of the much lower tax on capital gains.

I took the IRS taxes on income of all kinds and combined those figures with the CTJ's figures on all state and local taxes and added the OASDI/HI taxes.

When I do a 'reasonableness test' against GDP analyses that show all kinds of government spending at around 18-20% of the GDP, I think it passes if we consider that only about 50% of the GDP actually translates into domestic reportable 'income'.

For example, if you inherited money, the IRS would know the value of the estate, but they wouldn't know who got the money. They wouldn't know any gift income which you weren't required to declare at your end.

You should check out the study from late last year or early this year which did a thorough study of tax burdens from all taxes and fees. I think it tried to do the same thing you tried to do (and came up with those 15-18% numbers). Also, there was a study more recently which tried to determine how progressive all taxes were state by state and found there were only three states, I believe, in which the highest one third of income earners paid a higher percentage of income tax than people in the lowest third.

you said... For example, if you inherited money, the IRS would know the value of the estate, but they wouldn't know who got the money. They wouldn't know any gift income which you weren't required to declare at your end.

It doesnt matter if they knew or didnt know what you got in an inheritence since the person inheriting property or cash do not pay tax on it. The estate of the dead person pays the tax. And that almost beside the point as they most defintily do know since you have to pay capital gains taxes on the sale of any capital assets you inherit.

And on the gift income, you do not need to report a dime in gift income. Your mother can give you $100,000 gift if she wants and it is tax free for you. The giver of the gift pays the "gift tax" on the amount above the gift exemption. Was $10,000 but has been raised recently I believe.

we get the next progressive government in office. The rich should pay 8% on all of their income. They still will find ways of dodging their responsibility, but it would bring a lot of much needed money into the SS system. Then we need to take the fund and put it into Al Gore's lock box so that it can't be touched by Congress or anyone else in the future.

is some kind of truly simplified system. It shouldn't take hours and hours to fill out tax forms. I long for the days when I actually used the short form. But so many exemptions and exclusions are sacred cows -- mortgage interest deduction being only the tip of the iceberg. And I'm really not sure I'm looking forward to the day I can start taking out of my 401k, given how phenomenally complicated the rules are about that.

Inheritance taxes are an interesting problem. There was this huge up front tax free part (depending on which year you're talking about) of up to a million dollars. And then everything above that was immediately taxed at an exhorbitant rate, something like 50%. How about a true flat tax of about 25% on all inheritance above some smaller amount, say $100,000 - $250,000. Oh, well, I don't make policy.

5 hours to save 10,000 dollars? That's probably the most lucrative way to spend 5 hours there is for most people.

Fine tuning the tax code with deductions and credits which promote socially/economically valuable behavior is GOOD. Rich people want the simplified tax code because the closer you get to a flat tax, the more the rich benefit.

no forms at all, its built into what you buy as a consumer. Better choice than a flat tax.

If you spend more than you make, which many middle income Americans do by choice, and many low income Americans do out of necessity, then you end up paying taxes on income you don't even have.

Remember, rich people are rich because they make more money then they spend. They'd love to pay only a consumption tax. Poor people are poor because they spend more than they make. A consumption tax, like I said, is a tax on money you don't have.

Remember, rich people are rich because they make more money then they spend. They'd love to pay only a consumption tax. Poor people are poor because they spend more than they make.

Rich people are rich because of the decisions in life they have made and the risks they took. They continue to make these proper decisions and risks. Except for the very very small number of people who inherited the wealth.

And poor people are poor because they have made and continue to make bad decisions and avoid risk.

if you choose to spend more than you earn... I guess you're asking for it.

... is that one's parents were wealthy or affluent.

This paper assesses the similarity in net worth between parents and their children, and explores alternative explanations for this similarity. Using a standard life cycle model, we show that, depending on the extent to which preferences for saving are correlated across generations, the relative magnitudes of the intergenerational wealth and income correlations are a priori indeterminate. We document substantial intergenerational persistence in wealth: the age adjusted correlation is between 0.23 and 0.50, similar in magnitude to the documented intergenerational income correlation. These intergenerational relationships are large, especially since we only focus on households who have not yet received bequests from their parents. Permanent income measures explain less than one-half of the raw intergenerational wealth correlation. Controlling for the receipt of large gifts, expected bequests and interfamily risk sharing explains a small amount of the remaining wealth correlation. Our model suggests that such a finding implies a sizeable intergenerational persistence in preferences for saving. We provide direct evidence for this claim. Using measures of preferences from the Panel Study of Income Dynamics, we show that the responses to survey questions designed to measure risk aversion are highly correlated between parents and their children.

(Cite)

Affluent families have far more ways to ensure their children are wealthy than mere asset inheritance. Children "inherit" skin color, ethnicity, and religion, for example. When one's family is affluent, one's risk tolerance may be higher and counseled ability to assess risk/reward ratios may also be higher. Better schools and colleges, better nutrition, better health care, and belonging to "better" clubs all contribute to the probabiltiy of wealth.

be on you to prove that point...

is to try to live in the same county where my job is. Where the cost of living is such that small families - even those like me and mine with with little or no credit debt, a paid off vehicle, and renting at the lowest rate in a cheap neighborhood are still living paycheck to paycheck, even though the family income after taxes and company health care benefits was a little over $42K.
And that's over the average county wage - which runs around $32K a person a year. That's why most poor families work two or three jobs.

Around here, the cheapest 2 bedroom crackerbox roach apartments go for between $800 and $900 a month. Mortgage rates run about $2000 a month on average. Manditory Auto insurance runs an average of $50 - $150 a month for most families. Basic utilities, such as Electricity, Phone, Water and Sewage cost the average family around $300 a month - and if utilities are included, say, rent, those same costs show up in the rent. And with the price of gas as it is now - whew. The average lower middle class or poor person has a difficult time just making the average hour long commute to their one (or two) job(s) on a daily basis even if they've got an "economical" car - a trip to the beach or a fun trip with the kids? Even if public transportation was halfway decent, you might as well forget it.

And you'd best pray to whatever diety you have that no one in your house gets seriously sick or injured, that your vehicle doesn't break down, that you don't get laid off or injured on the job and have to depend on disability insurance...any single one of these events will break a family that has less than $10K in savings and/or ready emergancy funds on hand. It usually takes about that much to "remain even" during and just after the emergancy. Especially if you have one spouse that stays at home to care for the kids or just works part time for the same reason because of a socially acceptable and (IMO) morally sound decision "to raise the kids properly".

I've seen it happen more times than I care to think of to people who ran the spectrum from bluecollar workers, teachers, engineers and mid-level mangers who thought they would have no worries in their future because they were making "smart decisions" with their lives - and it's happened to me and mine.

So, where's the "bad decision" here? That there's no safety net in this country for people who have the bad luck not to be born rich or luck into wealth through their personal networks and sales talent? That those who are still climbing the ladder and run into a few broken rungs through no overt fault of their own should just be cast down to wallow in some sort of pit of societal shame because they just weren't "good enough?".

A very elitist and naive attitude, methinks. Too many people don't understand just how much luck plays in their personal fortunes. I hope those who proclaim "the poor just make bad decisions" (like putting away for their kids college funds?) never have any nasty thing like a layoff, a car wreck, or a serious disability happen to them.

Haele

Thank God.

the payroll tax.
sales taxes.
property taxes.

That estate tax *will* be back. Too much money comes from that and it serves too much of a public service by helping to curb the transfer of resources to the upper 1%. To get rid of it would require huge tax increases on the lower 99%.

Another upper upper tier will be added at an increased rate if we are to keep the resources inside of America instead of allowing the upper 1% to take their money and leave.


The top 1% wealthiest households in America own at least 38.1% of all the wealth in America. The Great Depression happened when 44.2% of all the wealth in America was owned by the top 1%.

The bottom 90% of American households own less than 30% of America's wealth.
The bottom 40% of American households own 0.2% of America's wealth.

http://www.ufenet.org/research/wealth_charts.html

Big buisnesses (owned by those in the top 1%) are running small buisnesses out of buisness. Big buisnesses are now leaving the country and taking their wealth with them. Run a small buisness and you have to pay high taxes. Run a big one and you can incorporate in the Cayman Islands, thereby avoiding federal taxes, and shop around in all 50 states for the one that will pay the board members the most to move there.