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Rick McKee, The Augusta Chronicle

A Fair American Flat Tax

Tax Reform Is Equitable for Everyone


Tuesday, April 15, 2014
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The United States and the states must reform their tax structures to make it more equitable for everyone.

Today 40 percent of the people pay 90 percent of the taxes. In addition, everyone wants to be excluded from paying any taxes by gaining special exemptions at the expense of other taxpayers. This is social redistribution of wealth: Un-American and unfair.

The easiest way to redo the tax system is by making the 16th Amendment to the Constitution in 1913, the income tax, a flat tax of not more than 1.5 percent of a person’s gross yearly income. If you made $10,000 a year, you would pay $150 a year, and that is all. No tax return to prepare and no taxing of your savings. No other taxes except FICA to pay for Social Security and Medicare, if they still exist by then.

And, if you earned a gross income of $100,000 a year, you would pay an income tax of $1,500 per year. This tax would be taken out of your paycheck directly as FICA and income tax presently are.

There would be no other deductions, tax credits, or write-offs, and no tax reporting. This would end the present outlandish tax code.

Your savings, Social Security, and stock profits would be yours, and your stock losses would be yours, too.

Companies would report their gross incomes through a CPA and submit a check for 1.5 percent of gross: no write-offs, no depreciations, etc.

All nonprofits would pay, meaning all religious organizations, the Sierra Club, the Farm Bureau, ACORN, AARP, Democrat Clubs, Republican Clubs, unions, etc. would hand over 1.5 percent of their gross incomes! No exceptions, no excuses, no exemptions.

Taxes could not be raised except by a supermajority in Congress, but only every four years, if that, and for only 0.1 percent at a time, if approved, with 5 percent the max.

If this is not enough to run the government, then cut the government to fit the taxes. But, when everyone pays their fair share, there will be plenty of revenue.

Flat taxes being considered by other groups of 15, 17, and 30 percent are just too high and do not solve the American tax problem with their deductions and tax credits.

A small fair tax for everyone is the solution! This is real tax reform.

Comments

Independent Discussion Guidelines

Remember POTUS Roosevelt started nearly half of the Services that we pay Taxes on because our Country lacked protections and refuge less off than the rest of us; to lower the Taxes would mean doing away with those services...

dou4now (anonymous profile)
April 15, 2014 at 5:44 a.m. (Suggest removal)

I will actually make a serious post here. I truly hate the IRS. They destroyed Joe Louis, devastated Redd Foxx and Willie Nelson, among others. They suck, and the income tax was supposed to be temporary..

dolphinpod14 (anonymous profile)
April 15, 2014 at 5:53 a.m. (Suggest removal)

Ruhge's been ranting this tired old line for twenty years, and it's just as useless now. Of course we all hate paying taxes. Why support 10 aircraft carriers or the world's biggest military, Justin? Why do you support our bloated military? And however you cut it, with a flat tax the upper income groups, especially those above 2% (the big money is there), end up paying less in taxes. No way, Justin, we have a progressive tax system and that's good because it's redistributive, which I realize you detest. Keep dreaming, but your stale idea offers us nothing.

DavyBrown (anonymous profile)
April 15, 2014 at 6:02 a.m. (Suggest removal)

IMHO, taxes are much less of an issue than spending. When we spend $13B on a single aircraft carrier, when our social safety net programs balloon out of control, something needs to be done. Solve the spending issue first, then tackle our obscenely complex tax code.

Botany (anonymous profile)
April 15, 2014 at 6:16 a.m. (Suggest removal)

Actually, government revenue collection is *regressive*, when *all* aspects are considered… sales tax, social security, property tax, etc. Income above about $117,000 is not charged Social Security at all; self employed who earn up to $117,000/year pay 15% or so.

Then there is carried interest, by which the wealthy avoid income tax.

So an unexpected reason for a flat tax: get the wealthy to pay up.

And also: any US Corporation that has foreign income: they would pay the flat tax on all that income.

As long as the tax were totally impossible to get out of, no exceptions, applying to all capital gains, dividends, municipal bonds, etc, a flat tax might actually be an improvement, but not for the reasons pointed out in this article.

snugspout (anonymous profile)
April 15, 2014 at 7:44 a.m. (Suggest removal)

mostly agree, snugspout, but do not think the hyper-wealthy/powerful elites will let their incomes be cut...thus, if we DID go flat tax, somehow the top 1% would still get out from under paying their full, PROGRESSIVE, tax. Such a tax would not prove "totally impossible to get out of, no exceptions, applying to all capital gains, dividends, municipal bonds".
Agree Botany, at least on the aircraft carriers [we just launched another one!]

DavyBrown (anonymous profile)
April 15, 2014 at 8:53 a.m. (Suggest removal)

"Ruhge's been ranting this tired old line for twenty years"

It might be a little longer than that :)

EastBeach (anonymous profile)
April 15, 2014 at 9:24 a.m. (Suggest removal)

Flat tax has many economic benefits, including much higher actual (as opposed to theoretical rates full of loopholes) dollar taxes on the wealthy. But since the vast majority of Americans (perhaps the world?) citizens are illiterate in economics, it is much more convenient for them to believe that the current system is better.

JohnLocke (anonymous profile)
April 15, 2014 at 10:27 a.m. (Suggest removal)

$150 to somebody making $10,000 a year means a lot more than $1500 to someone making $100,000 a year. 2d flat world does not exist. It's ok, you're only human Justin.

spacey (anonymous profile)
April 15, 2014 at 2:04 p.m. (Suggest removal)

"This is social redistribution of wealth: Un-American and unfair."

Nope.

Here's Paul Krugman, referring to a recent book by Thomas Piketty:

The modern notion that redistribution and “penalizing success” is un- and anti-American is completely at odds with our country’s actual history. One subsection in Piketty’s book is titled 'Confiscatory Taxation of Excess Incomes: An American Invention'; he shows that America actually pioneered very high taxes on the rich:

"When we look at the history of progressive taxation in the twentieth century, it is striking to see how far out in front Britain and the United States were, especially the latter, which invented the confiscatory tax on “excessive” incomes and fortunes."

Why was this the case? Piketty points to the American egalitarian ideal, which went along with fear of creating a hereditary aristocracy. High taxes, especially on estates, were motivated in part by “fear of coming to resemble Old Europe.” Among those who called for high estate taxation on social and political grounds was the great economist Irving Fisher.

Just to reemphasize the point: during the Progressive Era, it was commonplace and widely accepted to support high taxes on the rich specifically in order to keep the rich from getting richer — a position that few people in politics today would dare espouse.

...many people nowadays imagine that redistribution and high taxes on the rich are antithetical to American ideals, indeed practically communism. They have no idea (and wouldn’t believe) that redistribution is in reality as American as apple pie.

pk (anonymous profile)
April 15, 2014 at 2:07 p.m. (Suggest removal)

"Concerned Taxpayers I.N.C."

He used to write it "Inc."

Where can I join?

Walter (anonymous profile)
April 15, 2014 at 4:50 p.m. (Suggest removal)

Look at the economies that have the highest rates of redistribution of wealth. These are mostly the economies of Europe. These are also the countries with the lowest growth rates. Coincidence? NOT!

Botany (anonymous profile)
April 15, 2014 at 5:50 p.m. (Suggest removal)

Botany. I assume you have the relevant figures for all of the European economies, including the effects on the quality of life of their populations. Please provide them.

pk (anonymous profile)
April 15, 2014 at 7:29 p.m. (Suggest removal)

Look at the economies that have the highest rates of redistribution of wealth. These are mostly the economies of Europe. These are also the countries with the lowest growth rates. Coincidence? NOT!

Botany (anonymous profile)
April 15, 2014 at 5:50 p.m.

Why do you want them to have lots of babies?

dolphinpod14 (anonymous profile)
April 15, 2014 at 8:36 p.m. (Suggest removal)

Botany (anonymous profile)
April 15, 2014 at 8:40 p.m. (Suggest removal)

Botany. Which numbers do you think prove what?

pk (anonymous profile)
April 15, 2014 at 9:09 p.m. (Suggest removal)

yes, Botany, your webref is enormous and unclear; can you answer pk? And Germany has an extremely healthy economy and it's in Europe.

DrDan (anonymous profile)
April 16, 2014 at 2:58 a.m. (Suggest removal)

I thought it was in Asia.

billclausen (anonymous profile)
April 16, 2014 at 4:08 a.m. (Suggest removal)


Botany. Which numbers do you think prove what?

pk (anonymous profile)
April 15, 2014 at 9:09 p.m.

Sir/Madam PK: The first five or so seconds of this video will answer your question.

http://www.youtube.com/watch?v=LVf5Cr...

dolphinpod14 (anonymous profile)
April 16, 2014 at 4:22 a.m. (Suggest removal)

Yes, for some reason, my link gets thrown back to the home page.

Try going to www.worldeconomics.com

Then go to economic indicators

Then go to global growth monitor

Please note the graph "Share of world Real GDP".

In the last 50 years, Asia has the highest growth rates, the Americas second, and Europe is dead last.

And yes Dan, Germany is the one decent economy in Europe. The only problem is that Europe also has the highly dysfunctional economies of France, Spain, Italy, Greece, Ireland and Portugal. Most ot the rest of Europe is somewhere in between. If there ever is an example of a country that we don't want to follow the example of, France would have to be it.

Botany (anonymous profile)
April 16, 2014 at 7:27 a.m. (Suggest removal)

Botany.

Asia (and Africa) have had high growth rates since the 1960s. This says absolutely nothing about some supposed causal connection between the tax policies of the European nations, their economic growth, the well-being of its citizens, including access to health care, higher education, and economic opportunities, and in turn the effects of those on economic growth.

In addition, according to your reasoning, lowering the top tax rates should lead to greater economic growth. And yet it doesn't. http://www.businessinsider.com/study-...

Attributing the economic problems of some of the European nations to this one supposed cause while ignoring the multiple factors behind the financial crisis and deep worldwide recession is nonsense.

And your bashing of France in this context is based on what exactly?
http://krugman.blogs.nytimes.com/2013...

As to your general claim, well,
"There is, it turns out, a fair bit of variation among euro area countries in the amount of redistribution — and there is actually a positive correlation between redistribution and growth over the post-crisis period, significant at the 10 percent level."
http://krugman.blogs.nytimes.com/2014...

Finally,
"On average, across countries and over time, the things that governments have typically done to redistribute do not seem to have led to bad growth outcomes, unless they were extreme. And the resulting narrowing of inequality helped support faster and more durable growth, apart from ethical, political, or broader social considerations."
http://www.imf.org/external/pubs/ft/s...

pk (anonymous profile)
April 16, 2014 at 8:15 a.m. (Suggest removal)

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