stegosaurus
Jr. Member
Posts: 628
Political Matrix E: -0.26, S: 1.83
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« on: July 27, 2012, 03:51:47 PM » |
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« edited: July 27, 2012, 04:13:38 PM by stegosaurus »
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The Flat Tax: Taxes should be flatter, but a universal rate comes with complications. For starters the flat tax would have to be 21-22% to be revenue neutral. A flat rate lower than that would leave the government supremely underfunded and/or explode the deficit. Secondly, a flat rate disproportionately affects low income people, who can not live so easily on only 80% of their gross income. Furthermore, to propose such a thing is to ignore the fact that most of America's wealthiest already pay a ~15% rate through "Capital Gains" rates and deductions.
Deductions: To put it simply, a vast majority of people benefit and in some cases depend on these. To eliminate these deductions would amount to a massive tax increase on the middle and lower classes, which we know is not a good thing to do in a sluggish economy. I do however support limiting the availability of deductions to incomes under 500,000$.
Requiring companies to take taxes out: Unless you are working as an independent contractor (1099), I believe this is already the case; hence the W2 you fill out upon accepting a job.
Increased user fees: This works(ish) on a state level, but there aren't enough user fees collected by the federal government to make up for the revenue free fall that would occur under 15% flat tax system.
I would prefer a flatter, but ultimately progressive system:
>1,000,000$ - 30%-35% <- no deductions allowed for this bracket. 500,000$-1,000,000$ - 20-25% <- no deductions allowed for this bracket. 100,000$-500,000$/year - 20-25% <100,000$/year - 10%-15% (i used ranges because I'm not an well versed economist nor do I have access to CBO analysis, obviously the lower ends of these ranges would be preferable).
I would also abolish the "Capital Gains" tax system and begin treating it as income, subjecting it to the above bracket system.
Certainly not perfect, but flatter and equally as fair.
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