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  1.    #1  
    Well...okay...it is still just all talk, but it has taken the next step.

    Tax Reform Panel: Appointed Panel Releases Two Options

    WASHINGTON — Chosen to find a simpler way to tax the nation, a presidential panel on Tuesday recommended two designs that would rewrite virtually every tax law for individuals and businesses.

    Treasury Secretary John Snow (search) called the proposals "bold recommendations" but he did not indicate what ideas the administration would embrace.

    "Now it's up to us," Snow said. The Treasury Department will "take the report, review it carefully, understand the implications and use the report as a starting point for recommendations that we will make to the president," he said.

    Under the panel's plan, most deductions, credits and other tax breaks would be eliminated along with much of the paperwork and equations that baffle taxpayers under a drastically simplified income tax.


    FULL STORY: http://www.foxnews.com/story/0,2933,174156,00.html
  2. #2  
    You put "simple" and "tax" into the same sentence, and what do you get:

    An oxymoron!

    Guaranteed, ANY continuation of the income tax will result in grabbing your ankles for Uncle Sam. They can't resist writing programs and exceptions to favor the richest lobbiest/constituent of the month.
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  3. santas's Avatar
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    #3  
    I'll cross my fingers. Simplification and clarity would be so good for so many reasons.

    I'm just not sure I trust those with the votes to implement it without imbedding their own agendas into it.
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  4.    #4  
    If a flat tax was ever offered at the table as a simple tax, I would have one major concern. I do believe that a flat tax would help a vast majority of Americans in the beginning. Aren't there countries in the EU who have been successful with a flat tax?

    But let's say they set it at 10-12%, which is the most popular range. What laws, loopholes, fine print, etc... would be stopping the Gov from upping the flat percentage whenever they want more money. In 25 years it could be up to 18%.
  5. santas's Avatar
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    #5  
    Quote Originally Posted by HobbesIsReal
    If a flat tax was ever offered at the table as a simple tax, I would have one major concern. I do believe that a flat tax would help a vast majority of Americans in the beginning. Aren't there countries in the EU who have been successful with a flat tax?

    But let's say they set it at 10-12%, which is the most popular range. What laws, loopholes, fine print, etc... would be stopping the Gov from upping the flat percentage whenever they want more money. In 25 years it could be up to 18%.
    Nothin. Nothing keeps it from being set too low or too high. That's not any different from today.

    The word the report uses is "transparent". I think that's the best hope that we have with a simple system. It makes it easier to see the games that are being played.
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  6. #6  
    Quote Originally Posted by HobbesIsReal
    If a flat tax was ever offered at the table as a simple tax, I would have one major concern. I do believe that a flat tax would help a vast majority of Americans in the beginning. Aren't there countries in the EU who have been successful with a flat tax?

    But let's say they set it at 10-12%, which is the most popular range. What laws, loopholes, fine print, etc... would be stopping the Gov from upping the flat percentage whenever they want more money. In 25 years it could be up to 18%.
    If everyone (including businesses) paid a flat tax...couldn't the percentage be even less (under 10%)?
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  7.    #7  
    It would depend. The 10-12% model that I have seen wipes out several, if not all, other taxes associated with investments, stocks trading, etc.... This would actually allow a greater yield with smaller investments, making it more open for smaller investors like you and me. This would in turn add greater capital for businesses to expand, R&D, hire more people, ect.... Which in turn would generate more revenue to be taxed. Anyways...that is part of their theory.
  8. #8  
    If we go to a flat tax, the very poor will pay the same percentage as the very rich. While Bill Gates can well afford to pay 10% of his income to the governent, a single mother living on the poverty line will not be able to. The net result will be an increased burden for the poor and an tax break for the rich.
  9. #9  
    Quote Originally Posted by DHAnderson
    If we go to a flat tax, the very poor will pay the same percentage as the very rich. While Bill Gates can well afford to pay 10% of his income to the governent, a single mother living on the poverty line will not be able to. The net result will be an increased burden for the poor and an tax break for the rich.
    Every flat tax idea proposed to date that I have bothered to read about has had provisions for lower income folks. A certain level of income must be reached before any taxes are paid at all. Nice try though.
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  10. #10  
    Quote Originally Posted by HobbesIsReal
    Well...okay...it is still just all talk, but it has taken the next step.

    Tax Reform Panel: Appointed Panel Releases Two Options
    WASHINGTON — Chosen to find a simpler way to tax the nation, a presidential panel on Tuesday recommended two designs that would rewrite virtually every tax law for individuals and businesses.

    Treasury Secretary John Snow (search) called the proposals "bold recommendations" but he did not indicate what ideas the administration would embrace.

    "Now it's up to us," Snow said. The Treasury Department will "take the report, review it carefully, understand the implications and use the report as a starting point for recommendations that we will make to the president," he said...
    Under the panel's plan, most deductions, credits and other tax breaks would be eliminated along with much of the paperwork and equations that baffle taxpayers under a drastically simplified income tax.
    Here's an interesting analysis of the politics behind this plan: Tax 'em Till They Turn Red
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  11. santas's Avatar
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    #11  
    Quote Originally Posted by HobbesIsReal
    It would depend. The 10-12% model that I have seen wipes out several, if not all, other taxes associated with investments, stocks trading, etc.... This would actually allow a greater yield with smaller investments, making it more open for smaller investors like you and me. This would in turn add greater capital for businesses to expand, R&D, hire more people, ect.... Which in turn would generate more revenue to be taxed. Anyways...that is part of their theory.
    While quite possibly true, this is why the odds are slim that what you're talking about will happen.

    Bottom line: The more money you have, the higher percentage you're able to save. So while it's true that it makes investments for you and me a bit more profitable, for those who are able to invest substantial funds the net effect is to reduce taxes that they pay to a greater extent than you and me. Net effect (if you discount the trickle down theory) is that the tax burden is shifted lower.

    If simplification is going to work, it can't be hijacked by either side to acheive other targets they'd like to see the tax code achieve (like increased savings). It has to be revenue neutral across all segments of society. It just needs to be simple.

    That saves society a zillion dollars. It also prevents either side from being able to easily hide their "gaming" of the tax system to promote their purposes.
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  12.    #12  
    Quote Originally Posted by santa
    It has to be revenue neutral across all segments of society. It just needs to be simple.

    That saves society a zillion dollars. It also prevents either side from being able to easily hide their "gaming" of the tax system to promote their purposes.
    I agree that the process needs to be transparent.

    I am still totally open on this subject. Still learning and always willing to listen. So, how would you propose to have it neutral accross all segments of society while keeping it simple?
  13. santas's Avatar
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    #13  
    I don't know. You need big computers and a whole bunch of data to do that.

    Maybe a simple flat tax that applies to interest and capital gains as well as income would be all that it takes.

    Maybe it would have to be slightly graduated.

    Maybe what's being proposed would do that. My concern is that I'm not sure I trust the people with the big computers and the data.
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