US National Debt Crisis Simplified

[Canuker]

I am of the mindset that we should have a flat tax for EVERYONE! To me, that's the only version of "fair share" that is acceptable and here's why:

My boss makes roughly $245,000 a year running his own private consulting business. His wife wanted to get a part time job for extra income, however if she made more than $5k in a year, they'd be bumped up to the $250,000 tax bracket and pay $10,000 more in taxes which means they actually LOSE $5,000! This gives his wife NO incentive to work! Why should ANY family be punished for working harder and making money?!?!

Here's how I see it: I have always thought a 10% flat income tax would be reasonable (although I wouldn't mind Herman Cain's 9% since it'd be cheaper   ). Here's how you do your taxes: add up all income and move the decimal point one place to the left! DONE! Bye bye IRS (except for a few auditors). All of you who say "the rich should pay more!" are right, AND THEY DO! THEY HAVE FOR YEARS! If you make $5,000 a year, you pay $500. If you make $5,000,000 a year, you pay $500,000! Now some people say this is "regressive" because people who are "rich" can afford MORE than 10% and people who are "poor" CANT afford 10%, but I say that if you're "poor" you're probably getting other money from the government anyways so you'll probably recoup your $500 (not that I really agree with that, but oh well, one step at a time).

For as long as you have tax "brackets" there will always be some point where an individual will get a "raise" that will actually HURT them, instead of helping them and that is WRONG!

And a sidenote for some food for thought, a recent study was done that said, even if you raised taxes on anyone making over $250,000 to 75%, you could still not raise enough in tax revenue to offset the debt limit increase! (That means we need to cut spending!)

Doesn't the american brackets work in that every dollar in the new bracket is taxed in that range?  So the above couple it would be the next dollar above $250K is taxed at 30%(or whatever % it is) and not a subjective tax of 10K for making that one dollar?

[UOMaddog]

I don't disagree with TT, corps are completely flush right now, not hiring, and to a large degree not investing.  There is a TON of money sitting on the sidelines right now, and guess what? Its not helping the economy, and its corporations, for the most part, sitting on it.  Where is the trickle down there?

MD, I would agree with a flat tax as long as it had an offset at the bottom end that accounted for very low wage earners.  I don't think we should be taking anything from a family of four that is making $40,000 a year. I don't know where the number is, but there is a cost of subsistance that ought to fly beneath the tax hit. 

With the current system, here's what I would be willing to concede after going to a flat tax. EVERY person MUST pay their flat tax each year, however we are still required to pay into Social Security and Medicare, and in theory, the government holds onto that money and we get it back when we retire. For families making BELOW the poverty line each year, they would have the OPTION of NOT contributing into their SS and MC for that tax year, thereby giving them a tax "break" because of their financial situation. However, that does mean that when they get back on their feet, they should think about contributing EXTRA to their SS/MC to make up for a missed year or years.

I hate this idea that because you're "poor" you don't have to contribute anything. You still use roads, highways, sidewalks, benefit (or suffer) from trade agreements, etc. The LEAST you could do is chip in a few dollars, especially when you know some richer guy is chipping in way more.

For the family of 4 making $40,000 a year, there are THOUSANDS of agencies across the country that are willing to help with food, clothing, etc. As Ron Paul said at the debate, "I practiced medicine BEFORE Medicare, and we NEVER turned anyone away! There was always a church group or charity that was willing to help those that could not afford care." Let CHARITIES do the work of CHARITIES, and let GOVERNMENTS do the work (and ONLY the work) that is laid out for them in the Constitution.

[Endless Night]

UOMaddog, I would have to conclude that you have never really been without money.   Not that that is a bad thing.

[TrailMyx]

I've always been a fan of the flat income tax.  The day I don't have to do an income tax return is the day I'm going to pinch myself because I must be dead.  I'm not a great fan of the fact that 50% of our citizens pay no tax OR STILL GET A REFUND.  Imagine the savings when they can unplug the IRS completely.  Nothing like self-fulfilling bureaucracies. I'd even be OK with a reasonable VAT, but that VAT has to be applied at the top level (at final consumption).  If you layer VAT after VAT throughout the production process, that'll really inflate the prices.  But if that tax is added (say 10%) at final consumption (i.e. us consumers) then I'd be all for that.  More money in my pocket to buy stuff, more equal tax burden spread across the masses, and a giant kick in the pants to the economy.  I'm taxed 60% (F,S,L) now, and I'm getting a little fed up with it.

[Toptwo]

  I'm taxed 60% (F,S,L) now, and I'm getting a little fed up with it.

  Gotta LOVE paying for the privaledge of living in California! I have never in my life payed state taxes, and unless something really strange happened I never will.

[Endless Night]

  I'm taxed 60% (F,S,L) now, and I'm getting a little fed up with it.

  Gotta LOVE paying for the privaledge of living in California! I have never in my life payed state taxes, and unless something really strange happened I never will.

Been their done that... ouch .. especially if your self employed... everyone's got their hands in your pockets.

[UOMaddog]

I have definitely had times in my life with little to no money to my name (and a bunch of debt), but I was always extremely careful about how much I spent and went without a lot of things.

Everyone always wants to tax the rich more and I'm sorry, but that's not right! Let's dig deeper...

The three mantras have always been:
Communism: "From each according to his ability, to each according to his need"
Socialist: "To each according to his contribution"
Capitalism: "From each to himself"

Let's take a look at cash flow in the U.S.

"Class" / "Pay In" / "Get Out"
RICH - TONS - Very Little (Social Security probably, but most have their own IRA's and 401k's too)
MIDDLE - DECENT - Little (Social Security, Medicare, Unemployment maybe)
POOR - NOTHING - TONS (Welfare, Medicaid, WIC, Unemployment, "Disability", and the list goes on)

If you put that in a bar graph, it'd look quite disproportionate! In fact, it looks almost exactly like communism! (Or as our president put it, a "redistribution of wealth"). Of course, in this case it's the adulterated form: "From the rich, because they can afford it, to the poor, because they need it." And that's why Communism never works, because not everyone contributes "from their ability" and you end up with a large group that just wants handouts. If you think the United States is capitalist, then I'd say you don't know economics very well. We may be the CLOSEST developed country TO capitalism, but since the early 1900's we have become quite clearly Socialist. The current "Social Security" (need I say more) system is based on the quintessential quote from above "To each, according to what they contributed!" Not to mention welfare and unemployment, which falls completely into the category of communism. And anti-trust/monopoly laws prevent true capitalism as do higher taxes on the rich.

Here's my vision for America:

Federal Government: (shockingly this all comes from the Constitution)
- Handles national security/defense (military)
- Handles immigration with the help of the states
- Handles foreign policy
- Handles making sure that interstate commerce is not inhibited by any state(s)
- Handles interstate highway system (maintenance, plowing, etc)
- Is funded by a flat income tax on individuals AND businesses (fair share)
State Government:
- Handles local law enforcement
- Handles state and local roads
- Can choose a tax system of it's own (none, income, sales, etc)
- Assists federal government with immigration (all states, not just border states)
People:
- Handle their own finances, including, but not limited to: retirement, healthcare, higher education,
- Pay taxes
- Maintain their own property (this includes land, homes, vehicles, etc)
- Strive to make their country better

There is only one thing that I believe should be added to the Federal Government's "control" that currently is not something that Constitution allows and that is Education! As we have become more of a nation and less of individual states, I believe it is important for all citizens to be on an even playing field with regard to education. If states were in charge (as we see currently), education levels would (and do) vary drastically from state to state and I don't believe that is good.

It's really not a difficult world to live in and it's based on personal responsibility!




I do have one pet peeve to add and it relates to elections. The current electoral system is horribly flawed and needs drastic changes. Here's how I envision it being fixed:
- You may not run for any public office while holding another public office (*cough* all you representatives that aren't doing your job because you're too busy campaigning, including presidents *cough*)
- By the same token as above, that would mean that you cannot be "re-elected" immediately after your current term, you'd have to wait at least one election cycle!
- There would no longer be "campaign funding". That means politicians would not be dipping in the pocketbooks of corporations or the rich! Here's how campaign funding would work: You fill out a form that requires a set number of signature (let's say 5,000) from tax-paying citizens (if you're delinquent, you don't count). If you collect sufficient signatures you are now entered into the race!
- Each person is given 1 page to explain their platform (or really, use however they want) in a bi-yearly election publication (I'm thinking magazine-form).
- Also, all BROADCAST (that's the Over-The-Air stations that are controlled by the FCC) would be required to show a 5 minute video for each entrant over the course of a week during the election "season" (so there would be 10 videos a day, shown over the course of an hour at 3 different time slots so that people of all shifts would get to see all of the videos). The broadcast stations would have to give up this time as a condition of being allowed to broadcast OTA (let's be honest, it's not that much time in the grand scheme of things!). These videos would not be the political ads you see today, but rather would only be allowed to be the entrant, standing in front of a seal of the president and an American flag, saying whatever they want for those 5 minutes.
- That is all the promotion you get, other than you going around and talking to people.

This completely removes the idea of political parties (which have honestly destroyed much of our nation) and "primaries". Everyone is on a level playing field for elections and may (hopefully) the best person win!

My fingers are tired and I feel winded... /END RANT

[Endless Night]

wow, that's defiantly not how i think  but this thread is probably going to start to trigger  Cerveza's  warning sirens, so i'll say no more

[UOMaddog]

wow, that's defiantly not how i think  but this thread is probably going to start to trigger  Cerveza's  warning sirens, so i'll say no more

HAHA! I agree completely! I'm waiting for the big red letters to appear!

[Cerveza]

Well, though we don't normally allow such talk, as long as it's the ideas being discussed and not the person posting them...

The second someone attacks someone else you'll see stars.

[Canuker]

I've been enjoying this thread with great pleasure.

[UOMaddog]

Cerveza sounds like my wife!    She hates when I talk politics and makes me see stars!   

[manwinc]

It was a pretty good read to be honest Maddog.

One question, Is flat tax rate based on Your Income? Say, you retire and don't make a dime, do they still tax you?

[Canuker]

It was a pretty good read to be honest Maddog.

One question, Is flat tax rate based on Your Income? Say, you retire and don't make a dime, do they still tax you?

You would have something like a 401 or a roth(I think that is what those american things are called)?  In Canada the similar plans who show as taxable income when you utilize them and I'd think the same in the US so that should be where your taxation comes from.

[UOMaddog]

One question, Is flat tax rate based on Your Income? Say, you retire and don't make a dime, do they still tax you?

Flat tax is based on your income. Unlike Romney, I don't think that people should get away with no tax on interest. It creates a HUGE tax loophole. (Imagine someone who saves up enough money, such as $3,000,000 who can then live off the interest, modestly, for the rest of their life and never pay taxes). So I would say, income is ANY money that comes to you during that tax year. So if your parent died and you got a $10,000 inheritance, you wouldn't pay all those stupid death taxes, etc, you'd simply count it as INCOME and pay your normal income tax on it.

As for retirees it's complicated right now because of the 2 different types of IRAs. With a normal one, you contribute to your IRA BEFORE taxes are taken out, so each year you pay tax on any interest, and when you retire and start taking out money, you pay tax on it (as if it were income). With a Roth IRA, you are contributing money AFTER you paid taxes on it, so you pay interest on it yearly but since you've already paid income tax on it, when you take the money out, you don't pay taxes. (Please don't hold me to that exact description because I'm only about 90% sure on that and I know there are all kinds of penalties and deferred interest options and such).

I'd prefer that the system would only allow Roth IRA's, that way it acts very much like a standard savings account just with potential for higher returns.

So to sum it up, people have to pay tax on every cent of income throughout their life including interest, but if you're saving your income and then withdrawing it later, then you would only be paying tax on any interest that has accrued.