Forum Post: Perrys flat tax plan is a freakin joke!
Posted 12 years ago on Oct. 25, 2011, 12:57 p.m. EST by paulg5
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All the poor and middle class people who cant afford lawyers and accountants can file their income tax on a simple post card at a 20% rate. All the Rich folk who can afford lawyers and accountants to find all the loop hole can file there taxes the old way so everyone gets the same rate! So what is he changing? nothing!
And look out social security recipients he's got a magic trick for you 2!
Big surprise... Perry is the joke... i really don't think the R party will go with that bozo.
Perry is a Joke. He must think were all idiots. He lowers taxes on the rich and calls that fair?
Social Security recipients don't pay federal tax under Perry's plan.
It sounds like you didn't look it over.
He also said something about correcting entitlements?
Correcting entitlements doesn't mean taxes on SS recipients.
You do realize that current SS recipients pay taxes on that money if it brings their total income to a taxable level.
I could be wrong but I thought SS was lumped in with things like welfare unemployment compensation food stamps SSDI etc, etc. They are entitlements right? I thought that SS was only taxed if you also work and your income plus you SS benefit exceeds a certain amount? I'm 57 I guess I should know these things by now......
If you live on SS without other income, chances are you won't have to pay federal taxes.
If you have additional income, you could pay income tax on your SS payments.
SS was immune from taxation at one time. It hasn't been that way for quite a while.
http://www.irs.gov/newsroom/article/0,,id=179091,00.html
my father who is in his 80ies hasn't worked in over 25 years and has never paid taxes on his benefits!
It depends what your income is. Some people have pensions that are exempt from some income taxation.
But, if you collect SS and also have additional taxable income, you might be brought up to a level where taxes kick in.
What I understand it is flat tax. Every body pays 20% on their income. In this way everybody gets same percentage. No exceptions. That right in to our OWS philosophy that every body pays their fair share. I think this flat tax idea is OWS inspired. I am all for it. Simple tax return. One line income x .20 that is your tax.As an OWSer I am for it. So warren buffet and me pays same percent. That is equality.
Heavily skews the overall tax burden to the lower income levels. But hey, maybe those folks ain't so good at math and it sure looks fair in a 15 second sound bite!
This is more about fair share. Every body pays same percentage. As OWS I want rich to pay same as I pay. Now Warren buffet is paying less then her secretary percent wise.
The US tax code today is progressive up to the very top, then suddenly becomes regressive. I don't believe making it flat across the board nets out.
Plus, you simply have to have some concept of a cost of living allowance. That number could be defined perhaps as whatever is calculated to be the poverty line. A flat rate tax that takes income minus poverty line number and then taxes x% of that, is somethig closer to what I could live with.
This of course makes the calculation of that poverty line number hugely important and subject to political jiggering.
That said, I still don't think it will net out though admittedly that is just a feeling.
As long as the option of "The Old Way" is available all the loop holes will be taken advantage of by those who are well off small businesses, corporations, etc. and then the expected tax base will not meet expectations and another tax rate increase will be inevitable. The only real way to lessen the burden on taxpayers is to drastically reduce the size of government, and for some reason no politician wants to attempt to do that, the budget for just the CIA alone is 30B a year! No this plan doesn't work for me.......sorry!
Why not make it a "flat" rate based on income levels with no deductions? For example, less than $40,000 a year pays 5%, regardless of marital status or number of kids, the next rate could be along the lines of $40,001 - $100,000 at 10% and so on. The rates would be flat depending on household income up to a max rate of the current 35%, which would be a true 35% rather than the current 15% after exemption rate that many of the wealthy pay. Yes, this is a progressive rate, but it would be a truly progressive rate as our current system has far too many ways of getting around paying depending on you lot in life.
So someone making $40,001 pays 10% and someone making $40,000 pays 5%? That would tax certain people into a lower income than someone making less than them. If we are going to try to keep the income tax system, which I am completely opposed to, the tax percentage should increase as an inverse exponential function to ensure some people don't get taxed into a lower income bracket.
The problem is, the income tax is easily avoided by the people that make more than their fair share. All wealth comes from land so the only tax that is based on something natural is a land tax that uses the surplus economic rent to run the governement functions. This is a non-intrusive tax, cannot be avoided and does not tax people's labor or capital. Since nobody personally created the land, this value should be the only thing taxed since land value comes from the community and not from anyone's individual efforts.
The theory of economic rent has been around for some time, but land taxation has seldom been implemented throughout history. It is well known that the factors of production are composed of land, labor and capital. Land, in the economic sense, can be explained as anything with a productive capacity that has not been created by men or women, but has value created by the community. Labor is any human energy spent , whether by the mind or through brute force, that contributes to a means of production. Capital is mainly what is spent from savings for future production. Under the current system, mainly labor and capital are taxed, while the landed elite make out like bandits with the rents that are created by the community! It is no surprise that civilizations have suffered from vast inequalities since the founding of the first governments.
What we need to fight for is a redistribution of these economic rents for the sake of the people, while at the same time reducing the tax rates on labor and capital. These rents from land are the source of all wealth and are presently held by a small number of wealthy people who will speculate and slow there productive capacity in order to increase profits.
This demand goes out to the people of OWS! If there is one thing we need to change in order to promote equality, environmental protection and job creation through increased productive capacity, this is the solution we need. Please read about economic rent and land taxation in order to fully grasp the concept.
This is something proven in theory and not based on anyone's personal opinion or ideology. While we are divided on many things, it's time to come together with some real demands to benefit the majority of unrepresented individuals of the world. Lets show the top 1% that we know where their unearned wealth is coming from and that we know exactly what is needed in order to bring them back to the real world!
No the person making $1 more pays the higher rate on $1 and the lower rate on the $40K. Which is how the current system works, except for all the deductions which can be taken which basically amount to social engineering. So what Jay here is basically saying is do away with all deductions and lower the rates in each tier, the theory being that the deductions require the tax rates to be inflated to compensate for them.
Ok, I do know how the current income tax works but it sounded like he was talking about a flat tax across the board not a marginal rate for each tax bracket like we have now. That sounds a lot better than what I was understanding from his post earlier. While making the tax structure simpler by getting rid of deductions, loop-holes, etc. will be much better than what we have now, the income tax is still avoidable. And since it taxes people's labor and capital, it causes major inefficiencies in the market. The tax I mentioned above has no loop-holes, cannot be manipulated and does not change the function of market It is also easliy collected and would drastically cut costs for just trying to collect the tax.
What you're proposing sounds like property tax to me but on a federal level. Property taxes are tough for a lot of people on fixed income and so forth. I think it would be difficult to implement without some kind of exceptions (aka deductions aka loopholes)... or is it something different?
No, this is not a property tax. If you own a home and invest $100,000 dollars into upgrading your home, the tax does not increase based on the value of the home. The tax is only based on the land underneath. Property value and land value are mutually exclusive; they are both assessed independently of one another even today.
I have to oversimplify the theory because it's not realistic to do a detailed analysis on a forum. But this idea is derived from the law of production which states there are three factors that go into production; land, labor and capital. Most people know what these words mean, but have never really thought about them fom a market perspective. Labor and capital come from human actions and thus people ought to have the right to reap these rewards. But how is it that we as humans can continue to create more abundance with less labor? It's because nature has provided everything for us and the only limitations to our growth is the limit of our technology. So land is EVERYTHING that has not been produced by human labor or capital. Just like the electromagnetic spectum, water, air, oil, and anything else you can think of in nature. But for some reason people who own these things expect to have the right to 100% of the profits. This is how it is possible for some people to make billions of dollars in our society. The more we divide our labor and the more technology we have, the more we can create. This can go on to infinity!! The land tax would be designed to allow people to keep what they make from their labor and capital, but the value of land would be redisbursed. The result would be greater economic equality, the slowing down or elimination of urban sprawl, lower poverty and as a result, lower crime and increased health and increased productivity beyond what can be achieved under our current system of taxation.
I really urge you to read more about it. This is not some wild idea that I came up with. It's just that the majority of people are so far removed from this topic that they don't realize it's staring us in face. If there is one thing that could greatly improve every facet of our global socio-economic system, I can say with confidence that this is it. Please read the book below. You will be surprised at what you find.
http://www.henrygeorge.org/pdfs/PandP_Drake.pdf
I like your idea but land value is subjective, maybe your from NY and land value is astronomical. But in rural PA where I live it's very reasonable in fact my new town home was built in 2006, I had to pay the property tax on it while the home was being built. The tax on the lot was 53.00 after the home was complete the property tax bill came in at 1500 and an additional bill a few month later arrived entitled “school and property tax” at 3500. The community is on about 10acres but the property is considered community property the only real property an individual home owner owns is the ground the home sits on which in my case is 700 sq feet. Property tax has always and will continue to be a locally collected tax in which the federal government has nothing to do with. So in that regard are wallets are left to the whims of whatever the local assessor who works and is paid by the local government thinks our property is worth. I have fought for local governments to use assessors that are independent and who could not be considered interested second party's, per uniform standards of professional appraisal practices rules, rules that are federal regulations. The rules state that an appraiser should be an uninterested second party! An appraiser that works for a local; county or state government has a vested interest in assessing property high if his or her job depends on it, and I'm sure they are pressured to assess high when the tax base is falling! Property school tax can remain the tax revinue collected by local government but be based on a percentage of salary, not on some appraisal or assessment method that recently have been shown to be exaggerated to say the least. Besides what you spend on your home is your business, If your earning enough to buy a large home then your tax according to your earnings. If you loose your job making six figures and you get another earning half as much your property taxes are adjusted to justify your lower income, your not put out on the street because of taxes.
You do raise some valid concerns and are common among people living in PA since property taxes are extremely high compared to neighboring states.
One thing that stood out at the beginning, "The tax on the lot was 53.00 after the home was complete the property tax bill came in at 1500." Like you said, you live in a rural area and is a low desirablity for businesses due to low demand and distribution expenses among other things. This keeps land value low, but when you are stuck paying property taxes, you are getting less return on your investment. Why would someone invest in infrastructure when they know a portion of that is going to be collected in taxes? From the perspective of a business, this is counter-productive because it takes away savings for new capital to invest. I'm sure you are aware of some of the benefits that happened in Harrisburg when they decreased the rate of property taxes and increased the land tax. They went from being one of the worst places to live in the 1980's to a pretty desirable area. They have had a massive decrease in poverty, crime, increased growth and urban sprawl has slowed down. I know many other cities and towns in PA, including Pittsburgh, have adopted some form of this system so maybe you can give me some insight on how it worked in some of these other places. I know from my own personal research that Pittsburgh has reaped positive benefits from this system, but I haven't looked into other Pa areas. I do know in fact that Hong Kong and parts of Australia have seen huge successes when adopting this system.
As far as assessers go, absolutely they need to be independent and have no affiliation with the State. Just as Federal politics has become corrupted by having ties to large corporations and other firms, land assessment could be corrupted in the same way. But there is software out there that can calculate land values within 0.1% of actual market value. This can take some bias out of assessing the system.
Part of the beauty of this system is that it takes a lot of the complexities out of the system. It takes vast amounts of money just in to collecting income, property and sales taxes when we can focus on a singe tax that only taxes land which can be easily assessed with current technology and can not be avoided. It also consolidates cities and encourages maximum growth and equality. While some things need to be addresses to ensure that corrupt activity doesn't occur, with a simpler single tax, corruption will be much easier to monitor.
Your plan sounds better to me! The current system is so full of detail and loop holes it's nuts. I think it was designed that way to frustrate people so they take the standard just to get out of the work. I for one think deductions for children rips everyone without children off. If your single with no children, putting no burden on the educational system your penalized, and you end up paying more for your neighbors childrens education that you neighbor.