Suggested Video: Cleaner, Simpler, and Better Tax Solution

[Rheo]

United States Senator Mike Lee
Our tax code should accomplish two goals:
1. It should fund the government.
2. It should accurately communicate the cost of government to voters.

Our current tax code fails to accomplish either of these goals. A flat tax would generate a more predictable and stable tax revenue stream. It also allows everyone to pay a fair share of the cost of government. Instead of arguing to raise tax rates on a small group of Americans, we should be having a discussion on what kind of tax code will work better for all Americans. Everyone agrees that our current tax code is a disaster, and raising rates on a small group of Americans will only further complicate an already complicated tax code.

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[Valin]

@Rheo

 

Flat Tax kicking around for 4 or 5 years?

 

 

I can recall Steve pushing this back in the mid 1990's.

[Argyle58]

The Flat Tax idea actually dates back to the late 1850s and was actually enacted twice in the 19th century, but no revenue was actually generated through either.

 

As fair as the flat tax is, in theory, I doubt that Congress will ever enact it. Besides being the primary revenue source to the federal government, the progressive income tax is also seen as a tool for for manipulating public policy. As such it represents too much power for the government to ever let go of.

[Valin]

 

As fair as the flat tax is, in theory, I doubt that Congress will ever enact it. Besides being the primary revenue source to the federal government, the progressive income tax is also seen as a tool for for manipulating public policy. As such it represents too much power for the government to ever let go of.

 

I fear you are correct.

[Argyle58]

Another reason that the replacement of the current code will most likely not be replaced is that, simply because it is so complicated and convoluted, few people understand it. In fact NO ONE completely understands it. But this allows politicians to tell out and out lies and get away with it. For example, the Republican's current "Financial Cliff" proposal calls for a cap on certain itemized deductions. This allows them to make the claim that they didn't raise taxes, when, in fact, they will. By lowering deductions they will increase the amount of taxable income represented on a return, which, of course, means a higher tax is imposed.

 

Further, the deductions they wish to cap already have limits on them. You can only deduct healthcare related expenses that exceed 7.5% of your income, out of pocket business expenses that exceed 2% of your income, casualty loss deductions are deductible to the extent that exceeds 10% of your income plus $100 and charitable deductions a limited to the amount equal to 50% of your income (all income percentages are based on adjusted gross income). Finally, all of your deductions, including exemption and dependency allowances, are phased out as your income exceeds $150K and continue to graduate out as your income increases.

 

If you read and understood the previous paragraph, you will see the irony in the Republican plan. In their attempt to placate the Democrats on raising taxes on the higher income brackets, they are actually shifting more of the tax burden onto the middle class. Additional caps on existing deductions will miss the targeted income groups BECAUSE THEIR DEDUCTIONS HAVE ALREADY BEEN PHASED OUT.

 

This type of misrepresentation would not be possible under a flat tax system, hence it will never be enacted.

[Valin]

@Argyle58

 

Few people understand what is in the federal tax code? Try Nobody! This why both it needs to be changed, and changed into something people can understand and believe if fair and equitable....this is also why it will be almost impossible to change. Too many people have too much invested in it.

 

What is interesting is one of the things that concerned the "Anti-Federalists" was direct taxation of peoples income. Looks like they were right.

 

We may however have an opportunity here, to reach across the ideological divide to address this and maybe correct it. I say this because so often the Left talks about wanting taxes to be fair. I mean nobody Left Center Right likes this damn thing, so maybe...just maybe there is a shot to actually do something. I'm not talking the political parties I'm talking real grassroots.

May not work...probably won't work, but, I'm thinking nothing ventured nothing gained.

[Argyle58]

@Argyle58

 

Few people understand what is in the federal tax code? Try Nobody!

 

Read the second sentence of the first paragraph in my post.