Flat tax number

[dawgball]

Is there a real number that has been published for this?

Let's say, everything under $20K for an individual and $40K for married couple is exempt. (Can you tell I'm pulling these numbers out of my arse?). All charitable donations are exempt up to 10% of gross income.

Also, let's say there is a 10% federal consumption tax on all purchases.

Inheritance Tax is abolished.

No changes to corporate taxes (for sake of discussion)

No reduction in government spending.

What is the flat tax rate that would be needed to match the current "income" of our government?

Can we make this friendly? :SIB

 

[dawgball]

I guess another way to ask this is "What is the total amount of individual taxes are collected each year?" My question would include any tax collected from individuals but no taxes collected directly from corporations.

Also, if we could break out the number collected on the federal level for sales tax.

Is this a pointless discussion? Probably.

 

[Chadman]

DEFINITELY not a pointless discussion, db. I think it's a great topic. Busy right now, but if memory serves, when Forbes was running for prez, I think the number he was proposing for a flat tax base was $17,000. I could be wrong about that. I'll gladly join in on this in a while.

 

[DOGS THAT BARK]

Heres a good read on flat tax--too long to cut and paste on single page--has most your answers brother Dawg--

http://en.wikipedia.org/wiki/Flat_tax

 

[hedgehog]

Is there a real number that has been published for this?

Let's say, everything under $20K for an individual and $40K for married couple is exempt. (Can you tell I'm pulling these numbers out of my arse?). All charitable donations are exempt up to 10% of gross income.

Also, let's say there is a 10% federal consumption tax on all purchases.

Inheritance Tax is abolished.

No changes to corporate taxes (for sake of discussion)

No reduction in government spending.

What is the flat tax rate that would be needed to match the current "income" of our government?

Can we make this friendly? :SIB

I like the consumption tax idea, all things are taxed at the same rate. Houses, cars, food, gas, everything. If you want to raise the tax it goes to a vote of the American public. No income tax at all. You get paid your gross salary, dividends are tax free, no inheritance tax, no property tax. Except make the rate something like 20ish percent.

 

[dawgball]

Haven't read the link, yet, DTB. Thanks.

Is there any real threat that consumption goes down if all taxes rely on it? I wouldn't think so, but you never know.

 

[dawgball]

Clips from various wikipedia entries

In 2006, the median annual household income according to the US Census Bureau was determined to be $48,201.[3] The median income per household member (including all working and non-working members above the age of 14) in the year 2006 was $26,036.[4] In the year 2005, there were approximately 113,146,000 households in the United States. 19.01% of all households had annual incomes exceeding $100,000,[5] 12.7% fell below the federal poverty threshold[6] and the bottom 20% earned less than $23,202.

Using the 2 numbers (even though they are from different years, should give us general number), we come up with $5,453,750346,000 of total gross revenue in US. This number, I assume, does not include income from dividends and other investments.

I think the two numbers needed now are the dollar amount that is currently collected from personal income and the gross amount of realized dividend/investment earnings.

Leaving everything else out, I would just like to see what that percentage needs to be.

Side tidbits:

The Center on Budget and Policy Priorities states that three-fourths of taxpayers pay more in payroll taxes than they do in income taxes.[15] IRS data indicate that the wealthiest 5% of taxpayers (ranked by AGI) paid roughly 60% of all income taxes; the bottom 50% of taxpayers account for just 3% of income taxes paid.

Wisconsin passed the nation's first personal income tax in 1911

Damn you badgers!!

 

[dawgball]

Another snippet from the "againts" flat tax side:

An argument raised by opponents of the flat tax is that corporations or wealthy persons might move to countries with lower taxes, especially in a single country context. The argument states that this would lead to a race to the bottom in which countries compete to offer ever-lower taxes for the rich, so that the rich become ever richer, while the poor and middle classes, unable to financially handle relocation to another country, are left to shoulder the entire cost of all government services. [citation needed] A consequence would be an ever-worsening under-funding and neglect of the public sector. [citation needed] Proponents might respond to that argument by questioning if the wealthy would relocate to pay less in taxes.

Opponents of the flat tax argue that the end result of this race to the bottom is social disintegration (see also failed state), a situation from which even the richest cannot benefit. It is argued that in order to prevent this it is the responsibility of local and national governments everywhere to ensure that the rich pay a fair share of the tax burden. Concepts such as flat rate taxes are therefore said to be irresponsible at a global level, even if they may seem to grant a temporary advantage at a national level.

this is so laughable. FEAR! FEAR! FEAR!

They should read Atlas Shrugged again.

 

[dawgball]

It looks like most people have it pegged around 17% with lower-end exemptions.

It sounds like Buffett is already on this system!