If the US were to change to a "flat tax" system it would have to be implemented as an automatic payroll deduction, otherwise most of the lower and middle classes would be going to jail as they won't have that %15 in cash saved up for Uncle Sam. Most people in the lower and many in the middle class live paycheck-to-paycheck. Changing the system so that they would no longer get a refund would push many families down in the social ranking. It would also be murderous on the retail sector, charities, and many other facets of society that depend on the status quo. Eventually things would level out, but this certainly isn't something that you would want to contemplate in a fragile economy. It also goes without saying that the rich would still find ways to avoid paying their full share as they always have.
Hi, Life, yes any change which would have the effect of dropping U.S. Government subsidies in the form of reduced taxes would require careful thought, and implementation. As you said, The list of people, businesses, and whole industries receiving government subsidies in the form of reduced taxes is far longer than that: it includes us all, and we've all grown accustomed to it, but this has to change for the sake of the country's future, as I see it. One percent, half a percent- or whatever figure was seized upon to introduce a national sales tax- it would generate an enormous amount of revenue to the federal government: the exact figure would be easy to calculate because every state knows the dollar amount of retail sales that occur in their state, each year. Then, from many sources, the U.S. Government gathers information about how much its citizens earn, making it easy to calculate how much revenue would be produced by any increment of a flat tax, allowing a figure to be chosen that would be very near being just the rate required. With 47% of Americans contributing nothing, at present, were they added to the pool and their total incomes taxed at the same, flat rate, without deductions or exemptions of any kind, that rate would probably be surprisingly low. To impose a flat rate with no deductions or exemptions would increase the taxes of those who are now paying nothing, or very little; others, now paying more than the newly established, flat rate, might actually enjoy reduced taxes. To be sure everybody was included, I'd impose this tax on all forms of welfare, and treat it as income, as well: to do so would be merely symbolic, of course, but it would demonstrate the seriousness of the intent to get everybody "on board", when it came to supporting their government.
you'll have to excuse my ignorance here, so if someone is earning $75k, they would only pay 15% tax on that? seems very low.... Does everyone have to complete their own taxes and file them? over here we all have our taxes automatically deducted from our wages on a monthly basis, "pay as you earn" .... i think the percentages are something like 20% on earnings up to £37k, 40% on earnings between £37k and £150k and 50% on earnings above £150k ... we then pay 10%, 1% and 0% respectively for national insurance (health, state pension contributions etc) on top of that ... however we all have personal allowances of something like £7k, so you don't pay any tax on the initial 7k you earn, but this is pro rated over the year ....... hope that makes sense is this something that happens over in the US?
Tax fairness Franco, what happens in the U.S. is that a great many personal, individual choices are subsidized by the government, through a reduction in the taxes that person must pay. There are countless (almost) examples. Here are just a few. Get married, pay less taxes: those who are not married then pay proportionately more. Have a child, pay less taxes: those who do not have children pay proportionately more. Take out a mortgage to buy a house, pay a lot less tax: those who do not take on this debt then pay proportionately more in taxes. Put aside money you find you don't need for living into any of a number of personal investment/retirement accounts, save on taxes: those who do not then pay proportionately more in taxes. The net result of these government subsidies is that, of those who are paying any income tax, a great many pay less than 15%: Zachman says 47% pay none at all. Our "tax rates" are also progressive, just as you described in the U.K., though the rates themselves tend to be significantly lower: most in the U.S. seem to escape paying anywhere near the established rates- through the mechanism I outlined, above, and others.
Thanks for clearing that up V, your description makes sense, although the system does not lol ... we have "tax credits" here but only for childcare, also we have tax free saving schemes which in a round about way lowers the amount of tax you pay if you take advantage of it, but no-one pays more as a result of not doing it.
I don't know if it's necessary to say, but what occurs, when one takes advantage of the subsidies offered- in the form of reduced taxes when one makes certain personal choices- is to shift the burden of paying those taxes to other taxpayers; so, not making the choice to get married, have kids, take out a mortgage, put money in your personal investment/retirement accounts, contribute to your church or favorite government sanctioned charity, etc., means you will have to pay more in taxes, significantly more, than those who do. A single professional man or woman, unmarried, no kids, renting because he/she saw what had happened to others of their age and stage of life who'd bought homes, putting their savings into certificates of deposit at the bank and into savings accounts, not being a church goer nor big contributor to charities with government approval but contributing to other activities and groups, would pay $12,544 USD in U.S. income taxes, 16.7%, on his/her $75,000 salary. In the example twinimini supplied us, the taxpayer was paying nothing in income taxes, on the same salary, owing to the many government subsidies of his personal choices, and life style. See how it works, Franco? It seems to me the government should not be in the business of subsidizing the personal lives of its citizens: doing so, as is done, makes all of us recipients of a form of government welfare- instead of standing on our own two feet- and limits our choices in life by penalizing some them, such as the ones I mentioned, with higher taxes.
I agree that a lot of the government subsidies are beyond crazy, but it is part of what the government has created. Perhaps the best way to resolve the issue would be for Congress to gradually wipe out the various subsidies. I sincerely doubt that any of us will ever live long enough to see that happen. The current thrust in Washington is to make more and more of the population wards of the state, paying no tax and being subsidized. In essence the purchase of votes. Zackman's original point is that having more than half the population on the government dole means that the group receiving the doles will always vote to keep the same people in power.
Zachman, I mentioned two ways I could see that would result in every American paying taxes in support of his national government: is there any scheme of taxation you could personally support, that would shift more of the national tax burden to those who now pay little, or nothing? ______________________ twinimini, I can't agree that a gradual approach is the way to go: pain applied gradually is the hardest to take. The first step can be a national sales tax of say 0.005 (one half of one percent) imposed on every product sold in America at retail. The immediate result would be a much needed boost to the federal government's revenues, while having the effect of making every one start contributing to their national government, without exception. Tell the people frankly that the country and its finances are in trouble, something that has not been done in our country since WWII, but has been done recently and successfully in Ireland, where the people accepted that their country needed their help. Americans don't want to sacrifice anything, financially, but they can be persuaded to do so if the need for it is made clear. The country is in trouble: one is bankrupt when one's credit runs out. The U.S. Government's credit ran out in the fall of 2008, and the bill is starting to come due. Unless China agreed, in secret negotiations recently, to begin lending to the U.S., again, there is no credit available from any source sufficient to cover the expenditures of the U.S. Government now, and our government will be forced to continue printing money to pay the bills, as it has been doing since the fall of 2008, thereby risking a U.S. dollar currency collapse. It is time for the American people to step up to the plate, stop asking what's in it for them, and come to the rescue of the country they sing of, every time a pitch is thrown out. The time for tea parties is over.
we could spend weeks on this mess and while i do agree with you that change has to come change needs to be simple and to the point and that change has to start with those given the responsibility to make the change - as zackman correctly says in his signature "We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much." President Reagan, January 14, 1982 there could not a more accurate statement be made our government is simply too large, and far too inefficient what we need is a very simple honest party to step up to the plate and take a stand to truly downsize this hairball of a migraine by making government much smaller eliminating about half of the dumb ass laws that have been passed over the last century would be a great start.........and to make the people more accountable for their actions - not having the government create more laws that they have to enforce every freaking day example of how stupid our system is the other day t hung up on a 911 call - we had some friends over and she thought one of them had drowned in the pool (they were faking) anyways she called 911 and hung up. when the police arrived - they ended up arresting her for calling 911 and hanging up i mean really we spent four trips through the court system (an overloaded and burdened court system i might add) over a stupid law some dumb ass in austin created just because he had nothing better to do than create dumb ass laws for hard working police officers to have to enforce and over burdened courts to have to deal with hey here is an idea - why dont you guys in office get rid of half the laws we have that dont make any sense (see hanging up on a 911 call law as a start) more effective by getting rid of the IRS and the present tax mess and starting from scratch with a brand new plan that actually works!!! we could spend weeks here but why should we its really a simple fix ..................if you could just get rid of both the political parties and their insatiable Desire to make new laws (we dont freaking need) and focus on the problems rob
twinimini: diamondheaded: Get my point? People talk about being accountable, taking responsibility, what ever you want to call it. But, when given a chance, they say, "It's the government's fault," or, "Let the government do it." To fix the problems, we're going to have to be able to look inside ourselves: the problem starts there. Zackman: That's true, Zackman, but you have declined to make any commitment, even hypothetically, even if it's just on a forum, to getting the 47% you complained about to start paying taxes to the national government- so there could be a bigger constituency for reducing government expenditures. Get serious, guys.
