Mags, I've been proposing this idea for quite a while, as I think a flat tax across the board with no deductions is a common sense thing. I've often asked the wealthier on this board to explain what they think is a fair tax rate to keep our country going from a sensible perspective, and if they/we would be ok with giving up ALL their various deductions to make that a reality.
I have not seen one person answer either question. And volunteer to give up their deductions, most of all. I invite you, or anyone, to jump in here. What is a fair tax rate (as you understand it), and would you give up ALL your deductions to make that happen?
Chad - thanks for responding. It is nice to see a response that isn't full of name calling, etc, which seems to be the only way to respond to discussions by some of the guys on this board (Scott, Muffy, etc). But it is easy enough to skip over those posts, since there is never anything important in their responses - just name calling typicallly (I assume not all liberals are like that?)
While I'm pretty certain I'm not one of the wealthy folks on this board, I'd love to have a true flat tax for personal income taxes (this would be more difficult for business or corporate taxes obviously).
Think about the simplicity of filing your returns:
1. No deductions - no mortagage interest, no real estate taxes, no personal exemptions, no child exemptions, no earned income credit - basically, your income is your income.
2. No more AMT! There will be no need for this anymore.
3. The rich will pay more in taxes (not sure if this is a good thing, as the top 2% pay 50% of the FIT already). But they would pay more under this scenario.
4. Anybody that does make income would pay FIT - which is appropriate and good, so everyone "feels" the pain of paying taxes and not just voting themselves rich.
5. At the same time, everybody files as a single filer - no more marriage penalty. If you make income, you pay taxes.
I've read in a number of articles that it is estimated that a 14-15% tax rate would replace our current tax level, if we went to this approach. That seems like a fair number.
Off topic - but I fail to understand (even though I'm not affected by this - I wish I was!), but if we are going to extend the Bush tax cuts, why not extend them to all? Since the top 2% (which is the over $250K crowd already pay 50% of the overall FIT) - it just seems fair that they get a break too. Actually, that number just blows me away - without those rich people, our country wouldn't function.
But, back to the original - yes, flat tax to all, I'd love that. Take away the deductions (and you have to take them ALL away, not just some), and I think you'll have the fairest system. Now I do have some concerns that it could hurt the real estate market, but it's so bad now, maybe now would be the time to take away the mortgage interest deduction since it can't get a lot worse?????
