Oh great, the Republicans want a FLAT TAX

[Geronimo]

Originally posted by MrFun
A flat tax is stupid -- one should be taxed progressively more, within reason, as one's income rises.

You can have the best of both you know. Just have a flat tax on income with a single large universal exemption. Depending on the ratio of the single universal exemption to the rate of the tax you can make the tax system as 'regressive' or 'progressive' as you please. Income tax brackets are just too cumbersome and illogical.

[Rufus T. Firefly]

Originally posted by AnnC


That's a very good example - which illustrates the degree to which Bush's 2003 tax cut was a giveaway to the wealthy.

Teresa Heinz-Kerry doesn't work for wages, she derives all her income from stocks and bonds. Bush reduced the capital gains rate to 15% and applied it to stock dividends. So for example, if Teresa gets 5/6 of her income from dividends and 1/6 from tax-free municipal bonds then her tax rate nets out at 12.5%.

Before Bush's tax cuts, Teresa paid the top marginal rate of 39.6% on her dividend income. So as you can see, people who live off their investments now pay much lower taxes than people who earn wages/salaries - and that's the way Bush wants it.

Yes. Thank you.

[Rufus T. Firefly]

Originally posted by Geronimo


You can have the best of both you know. Just have a flat tax on income with a single large universal exemption. Depending on the ratio of the single universal exemption to the rate of the tax you can make the tax system as 'regressive' or 'progressive' as you please. Income tax brackets are just too cumbersome and illogical.

That's not true. A flat tax is always regressive. But if you make the standardized deduction large enough, teh people hit most unfairly will still be so rich that only David Floyd could possibly call it unjust.

[Shi Huangdi]

Why should the middle class or upper middle class pay a great proportion of their income then the Super Rich?

[chequita guevara]

Originally posted by Shi Huangdi
Why should the middle class or upper middle class pay a great proportion of their income then the Super Rich?

Press: Mr Dillenger, why do you rob banks?
John Dillenger: Cuz that's where the money is.

[Bosh]

Originally posted by Shi Huangdi
Why should the middle class or upper middle class pay a great proportion of their income then the Super Rich?

Because Bush pushed for sharp reduction of capital gains tax rates.

[Rufus T. Firefly]

Originally posted by chegitz guevara


Press: Mr Dillenger, why do you rob banks?
John Dillenger: Cuz that's where the money is.

Willie Sutton, not John Dillinger.

[Geronimo]

Originally posted by AnnC


That's a very good example - which illustrates the degree to which Bush's 2003 tax cut was a giveaway to the wealthy.

Teresa Heinz-Kerry doesn't work for wages, she derives all her income from stocks and bonds. Bush reduced the capital gains rate to 15% and applied it to stock dividends. So for example, if Teresa gets 5/6 of her income from dividends and 1/6 from tax-free municipal bonds then her tax rate nets out at 12.5%.

Before Bush's tax cuts, Teresa paid the top marginal rate of 39.6% on her dividend income. So as you can see, people who live off their investments now pay much lower taxes than people who earn wages/salaries - and that's the way Bush wants it.

Even if you earn all your income from investments you still pay your income tax as if it was all earned income don't you? It's not like your adjusted gross income will be reduced due to it including no wages, at least that's how I understood it.

[chequita guevara]

Originally posted by Geronimo
Even if you earn all your income from investments you still pay your income tax as if it was all earned income don't you?

Not anymore. Thanks to the tax cuts on dividend income, the idle rich now pay a much lower percentage.

[Shi Huangdi]

Dividends taxes collected taxes on earningst that have already been taxed.

[Dis]

I support a flat tax.

75% on all rich people.

[Geronimo]

Originally posted by chegitz guevara


Not anymore. Thanks to the tax cuts on dividend income, the idle rich now pay a much lower percentage.

Sure they pay a lower percentage on their dividend tax but they aren't allowed to then deduct their dividend earnings from their gross adjusted income are they? If someone earns 100k in salary won't they pay income tax in the same bracket as someone who sits on their ass and 'earned' 100k by having an accountant invest their savings for an income of 100k? They both would have an adjusted gross income of 100k and both would pay income tax in the same income bracket based on that 100k right?

[Bosh]

Originally posted by Geronimo


Sure they pay a lower percentage on their dividend tax but they aren't allowed to then deduct their dividend earnings from their gross adjusted income are they? If someone earns 100k in salary won't they pay income tax in the same bracket as someone who sits on their ass and 'earned' 100k by having an accountant invest their savings for an income of 100k? They both would have an adjusted gross income of 100k and both would pay income tax in the same income bracket based on that 100k right?

Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

[MrFun]

Originally posted by JohnT
The person making $17,000 a year would pay $765 in income taxes under Steve Forbes'* old tax plan, not $3,400. Currently, using a standard deduction, they pay $1,215.

One thing about the flat tax (again, proposed by Forbes), is that the standard deductions are increased to $12,500 for individuals and $5,000 for dependent children, so that a family of four would have their first $35,000 of income tax free.

*Tax rate of 17%, deductions: $5,000 dependent, $12,500 single, $25,000 married.

Ok, so then the upper class will be paying unreasonably too low in taxes.

[Geronimo]

Originally posted by Boshko

Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

Is there a non bias source to check this out? I know that each year (including last year) that I did my taxes I had to include income from interest into my total income for that year. It went straight into the adjusted gross income along side wages. If I had gotten no wages but enough extra interest that year to make up the difference how would it have decreased my taxes?