Flat Income Tax? Yes or No?

[Granny Jill A]

I was listening to an "expert" talk on NPR radio last week. He said that "the people" do not want a flat tax. They want their deductions, thank you very much.

Is the expert correct? I'm going to ask you, the "real" people, what you think of a flat income tax for everyone.

:D

[Basket Mommy]

I strongly prefer the flat tax. I think the "people" oppose it because they're constantly told it would be catastrophic for this country, but would really be better.

[Altair]

Forty seven percent of households pay no Federal Income Tax, I sure they will all be for a flat tax.:(

[Reedy Creek Buccaneer]

Flat tax for me!

[Scar]

Anything has to be better than what we have now. Lately, I've been thinking about a national sales tax replacing the income tax. The more you earn, the more you buy. The less you earn, the less you buy, and taxes paid proportionately. Food, clothing and toilet paper would be exluded.

ETA: It would also force people earning money illegally to pay taxes.

[BrerGnat]

Does a "Flat Tax" imply that everyone pays the same PERCENTAGE of tax on earned income? If so, I think THAT is fair. If not, then no.

[Granny Jill A]

Does a "Flat Tax" imply that everyone pays the same PERCENTAGE of tax on earned income? If so, I think THAT is fair. If not, then no.

Everyone would pay the same RATE - say 10% on ALL earnings. No loopholes, no hiding the money in Switzerland.

[faline]

I could still see a number of possible exceptions - what counts as "income" and what gets "excluded" from income? Would there be a minimum amount that needed to be earned before taxes are due or would it be owed on every dollar - including the first dollar earned?

[BrerGnat]

Everyone would pay the same RATE - say 10% on ALL earnings. No loopholes, no hiding the money in Switzerland.

I think that's fair. Everyone should have to pay tax, and imposing a flat percentage would be the most fair way. If you make less, you pay less. If you make more, you pay more. Should be how it works. There really should be no difference if you are married or not, have kids or not, etc.

[DizneyRox]

I've heard the Federal Income Tax idea a lot, and overall it's probably one of the better ideas. As long as it's "loophole" free. That's the problem with deductions.

Much like the legal system (where the one with the best lawyer wins) those with the best accountants pay less.

[princessjojo]

I think a flat tax is a great idea. But as mentioned, there are loopholes that would have to be addressed, such as interest income, dividends, ect... But it does make one think. For those lucky ones who make $200,000 yearly, 10% would be a hefty $20,000. But 10% is far less than I pay now and would gladly pay that.

But I, like one of the above mentioned posters would like to know how those who are paid in cash or make money illegally would pay their share of taxes...

Such a corupt system we're expected to support.

[finaldynasty]

I'm okay with the flat tax...

[kakn7294]

I have to say that I'm honestly not really sure. I would have to know what the percentage would be and see how it affected me and my family before I could decide. It sounds good in theory but how it works in the real world would probably not be what we all would expect.

[vizsla]

Flat Tax all the way.

[comicguy]

I love the idea of a Flat income Tax but the only draw back that I see is, it can become too easy for Congress to change the percentage almost at will. And fanakly, I do not trust Congress at all!!!

[DizneyRox]

... it can become too easy for Congress to change the percentage almost at will. And fanakly, I do not trust Congress at all!!!
Didn't you vote them in?

[Granny Jill A]

I think a flat tax is a great idea. But as mentioned, there are loopholes that would have to be addressed, such as interest income, dividends, ect... But it does make one think. For those lucky ones who make $200,000 yearly, 10% would be a hefty $20,000. But 10% is far less than I pay now and would gladly pay that.

I ran the numbers on my measly paycheck, and I currently fork over 23% of my earnings for Fed/State/Local taxes. And that's with my medical insurance and parking fees "sheltered" from the tax bite.

For the flat tax to work out fairly, ALL income from ALL sources would have to be taxed, and there would have to be no ceiling. Right now, well-to-do folks stop paying into Medicare after a certain dollar amount is reached.

[A Big Kid]

Whether a person makes $10,000 dollars a year or $10,000,000 a year, it is my opinion they should pay taxes.

As a matter of fact, I think it is more important the the lower end pay taxes so that they understand that all government programs have a cost and that way there is an incentive for them to keep costs down as well instead of thinking that "someone else will pay for it."

[Ian]

MODERATOR ALERT!

Guys, this is clearly a topic that could become kind of heated and potentially controversial. We'd love to let the discussion continue, but please everyone remember to keep your comments closely related to the original topic, refrain from any editorial remarks that could potentially be inflammatory, and (most importantly) stay clear of the back-and-forth, please.

We're trusting you guys to conduct yourselves like adults. Don't let us down, please! :thumbsup:

[rubato]

I will try to be an adult. :blush:

I would love a flat tax. I would also love an increased sales tax. Let's let the people that are spending all the money pay. After all, a drug dealer or "professional lady" will not be paying income tax but will be buying things.

[Hammer]

Flat tax sounds great in theory, but like some posters suggest I wonder if they would be able to make it free of loopholes.

As for the national sales tax, I don't like that at all. Yes, people who are wealthy (be it legal or illegal means) whould be paying more, but so would the guy down the street who had to get his car fixed. This would need to be paid on top of state sales tax as well, as states would still need that revenue.

[Ms. Mode]

Forty seven percent of households pay no Federal Income Tax, I sure they will all be for a flat tax.:(

The way I understand the Flat Tax, that means that these would be the people who would have to start paying a tax....I'm all for it. :thumbsup:

[thrillme]

I'm all for a flat tax. The people that aren't FOR a "flat tax" are those that don't pay anything. SIGH. I think a flat tax is fair. NO DEDUCTIONS. It would make things sooooooo easy. Your taxes would be a "no brainer"...wouldn't matter if your married or not...wouldn't matter if you have kids or not....Everybody pays flat tax except for those over 65 and retired.

We'd probably have more money than we could count...I think 10% would do.

[LVT]

1.A National Flat Tax would not affect the states, etc. You would still have to file for your state.
2.Sales taxes seem to vary wildly. State, city , motel, etc. A national tax on top could be cumbersome, but that is what computers are for.
3.Finally, I have read many times that the flat taxes burden the poorest since that same 10 % might be more than they have after food/shelter. The middle class and rich have leftovers, they often do not. IE see number of homeless.
4. This is a complicated question. Each of us debating it has a viewpoint. Is it right for the poor to pay so much, or is it right for the wealthy to may so much more than others.
5. I get riled up by the deductions for people who have enough to live on. I think the tax breaks for wealthy or business make no sense at this time.

[magicofdisney]

I see nothing wrong with people keeping as much of their hard earned money as possible, via deductions. Besides, "enough to live on" is a subjective topic at best.

If a state tax is enforced on top of the flat tax, it's moot (unless I'm missing some relevant point here). Not all states have a tax and they're not equal, anyway.

[A Big Kid]

5. I get riled up by the deductions for people who have enough to live on. I think the tax breaks for wealthy or business make no sense at this time.

I respectfully disagree with most of what you said, but this part I disagree with the most.

Actually, businesses pay NO Taxes whatsoever. Any tax on a business is passed on to the consumer and added onto the price of the product. As a matter of fact, a business pays for nothing - the consumer pays for everything. Consider the following:

In 2010 ABC Widgit company buys:
$100 in plastic
$100 rent
$ 10 in metal
$ 10 in wage/salary
$ 10 in utilities
$230 total.

ABC Widgits can be sold for $10 each. In order to break even, ABC needs to sell 23 widgits, right? Assume that ABC wants to make a $1 profit on each widgit that means each widgit must sell for $11.
($11X 23 widgits =$253 - $230 in costs =$23 profit)

Now assume, that in 2011 the state put a $1 tax on each widgit sold. That means that unless ABC adds another dollar to the price of a widgit, they wont make a profit, right? The additional $1 cost per widgit is passed on to the consumer, right?

Now, ask yourself who paid for the plastic, rent, metal, wages/salaries, utilities and taxes. ABC Widgit company didnt, that is for sure. The consumer paid for everything + the the margin that ABC added as thier profit.

And remember this point, "those who have enough to live on" buy widgits, go on vacation, go out to eat, etc and all that puts people to work.

[magicofdisney]

Actually, businesses pay NO Taxes whatsoever. Any tax on a business is passed on to the consumer and added onto the price of the product. As a matter of fact, a business pays for nothing - the consumer pays for everything. Consider the following:

In 2010 ABC Widgit company buys:
$100 in plastic
$100 rent
$ 10 in metal
$ 10 in wage/salary
$ 10 in utilities
$230 total.

ABC Widgits can be sold for $10 each. In order to break even, ABC needs to sell 23 widgits, right? Assume that ABC wants to make a $1 profit on each widgit that means each widgit must sell for $11.
($11X 23 widgits =$253 - $230 in costs =$23 profit)

Now assume, that in 2011 the state put a $1 tax on each widgit sold. That means that unless ABC adds another dollar to the price of a widgit, they wont make a profit, right? The additional $1 cost per widgit is passed on to the consumer, right?

Now, ask yourself who paid for the plastic, rent, metal, wages/salaries, utilities and taxes. ABC Widgit company didnt, that is for sure. The consumer paid for everything + the the margin that ABC added as thier profit.

And remember this point, "those who have enough to live on" buy widgits, go on vacation, go out to eat, etc and all that puts people to work.

I couldn't have said it better myself (in fact, I didn't ;)). Excellent points.