Forum Post: New Tax System in Brief
Posted 12 years ago on Oct. 18, 2011, 4:47 p.m. EST by jiminga
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A 10-10-10 Freedom and Renewal Plan
Tax Collection-A ten percent sales tax including local, state, and federal taxes for basic services: roads, police and national defense, annual healthcheck-up, and general welfare.
A flat ten percent tax on income for retirement.
The following surtaxes: An additional ten percent income tax on any income over one million dollars to the general fund.
Individual businesses pay no income tax, but if you incorporate (considered to be like a person) then there is the ten percent tax. (If they make more than one million in income there is the additional ten percent).
I recognize that it would be impossible to get rid of the sin and vice taxes on alcohol and tobacco, and the fuel tax on motor fuel. Could we keep that to an additional ten percent?
(In wartime a one percent tax might be collected at the federal level for a truly declared war).
No other taxes.
This is bad for a number of reasons. For those of us interested in equitable taxation, as in, the rich paying at least as much in proportional share in taxes as the rest of us, a flat tax is very bad for those at the bottom whose level of taxation directly takes away from their requirements for life, food, housing, energy, etc. Conversely, for the rich it is a very good thing as it even further lowers their share of social responsibility in terms of tax burden. Taxing the poor and working class as with the flat tax directly takes away from their livelihoods. With the rich, their livelihoods and lifestyle isn't touched. Taxation can be used as a somewhat redistributive design to give a few crumbs back to the people at the bottom and give some relief to those who need it most. Flat taxes do nothing to curb inequity, rather it would increase it by further reducing the purchasing capacity of the poor and middle class! This is just a streamlining to help the 'haves' much more than the 'have-nots'.
If we want to look at the tax structure, how about recognizing that not all dollars are taxed the same way. Taxes which primarily affect the rich are always up to being slashed. The biggest corporation in the nation, General Electric paid effectively paid NO TAXES in the U.S even though it had $14 billion in profits. What gives??? Some of the very wealthiest people pay proportionately far less than middle income people. If we want to get real we can look at some basic facts and overcome the myths. We can recognize that in fact we have a regressive tax structure for the rich, the higher up the pyramid of income we go, the less the social responsibilities in proportional share of tax burden.
Let's look at some analysis of a couple of Pulitzer prize winning reporters on the subject available at http://www.askquestions.org/articles/taxes/taxes.pdf : "In the year 2000 – at the height of the last economic boom and before the most recent round of tax cuts were enacted – IRS data shows that the richest 400 taxpayers paid 27% of their income in federal, state, and local taxes. On average, these 400 taxpayers each had taxable income of $151 million. All other taxpayers had average taxable income of only $34,600, and yet their tax burden was 40%..."
"Journalists Donald Barlett and James Steele point out that this inequity results from a political system that has been put up for auction: “Over the last three decades, America’s elected officials have turned a reasonably fair tax code into one crafted for the benefit of those who give the largest campaign contributions, enjoy the greatest access, hire the most influential lobbyists, or otherwise exercise power beyond that enjoyed by average citizens.”
Corporations have profited, too. In 1965, individual taxpayers paid 66% of all US income taxes, and corporations paid about a third. But by 2000, the corporate share had dropped to 18%, just about half what it used to be."
Take for instance the analysis of UFE (United for a Fair Economy), available here http://faireconomy.org/flipitsummary : "Almost everyone would be amazed to know that in virtually every state in the US that when you add up Fed + State Income Taxes, Payroll Taxes, Sales Taxes, Property Taxes, Capital Gain Taxes - that the bottom 20% always pays a higher % of their income in TOTAL Taxes than the Top 20%. If every state switched this around - so that the Top 20% paid the combined total that the Bottom 20% and the Bottom 20% got to pay the same effective tax rate as the TOP 20% - that EVERY State would NO LONGER HAVE Deficits - and of course the bottom 20% would be much better off!!"
If we want to get in the real world we need to look at the issues from the bottom up and not the top down in terms of fairness with taxation, in terms of a lot of things concerning economic thinking. If we want a tax system which begins to be fair to all we need to look at the issues first from the perspective and interest of working families, ordinary people working ordinary jobs and not jump for joy with getting some crumbs from problematic proposals like the flat tax.
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So those paying no taxes or less than 10% taxes(those making less than $8,500) are now getting a tax increase. Everyone else is getting a tax break. Huh?
Thank you Herman Cain.