March 31, 2005

Down with the Punitive Tax System!

The deadline looms for all of our taxes to be in, and what better time than this to debate reforming our current (and definately) punitive tax system?

Every year, we Americans either spend hundreds of dollars sending our taxes to H&R Block, or we spend hours attempting to decipher our taxes ourselves.

While doing my own taxes this year, the same frustrating questions kept erupting in my mind:

Why does it have to be SO hard?

Since when should married couples be penalized by paying higher taxes?

Why is it that the more money you work harder for, the more the government takes from you? Since when was the United States socialist, and why are we penalized for working so hard to bring home more bacon?

Why do I get taxed for owning my property?

My personal opinion is that we should all be taxed AT THE SAME RATE. This way there is no inequality. The socialsts can't complain the rich are not paying enough (but I'm sure they'll find a way), and to appease the Democratic voting base, lets just eliminate taxes on those who make under a certain dollar amount a year.

While we're at it, lets also abolish property taxes, and make it up in sales tax. Property taxes are an awful concept, because it really can strain the elderly, and the more their home appreciates, the more they pay, and often are forced to move, because of the tax increase. I know there are exemptions, but not without strings attached. There's the application, and then you must be "approved". Replacing this with a sales tax, will most likely bring in more money, and you control what you pay in, in a sense.

Of course, there is much debate on the subject, and loads of articles, all with different ideas on how to make this work. But, the concept is the same:

It would be FAIR. The only people I would see complaining is people with "old money" like the Kennedys, because they do not pay income tax on their wealth, and they would get sacked by sales tax if they bought that multi-million dollar Lear jet. But, then again, so would everybody, so it's still a fair practice. The loophole the closes is what I'm going to call "the old money" loophole, and there's alot to be had there, so that should please the socialists who are always looking for a way to play liberal Robin Hood, and take from the rich.

Nobody could complain, because we all pay in at the same rate, and if you eliminate all the loopholes and schedules, it would be easy.

Citizens for a Sound Economy offers many articles featuring the pros of a flat tax economy. President Bush made passing comments on moving towards a flat tax system, and I hoping his administration is quietly working on this.

Maybe someday soon Americans won't need to waste countless hours and money trying to make sense of a punitive tax system.

Posted by Lisa Zeimetz at March 31, 2005 09:11 PM
Comments
Comment #49636

Lisa
Very timely posting. Here is my tax plan in a nutshell. All incomes over an established poverty level would pay 10% at the source. We would always be paid up and when April 15th rolled around it would only be 2 weeks past April Fool’s Day. That’s all. Now, if there was a situation where money was being paid under the table, then when it was found out there would be stiff penalties for that type of illegal behavior. There is much more than what I have simply stated. But that is the simple basic plan. Now the second part of the plan is that congress could not spend more that 75% of that 10% that is collected. The 25% would go towards paying off the national debt, and certain extreme emergencies. No more handing out dollars like pieces of candy. That is all of my tax plan for national level in a simple way.

Posted by: Tom at March 31, 2005 10:21 PM
Comment #49638

Lisa, billions of dollars in the form of bribe money and incentives were used to install loopholes. It’s a lot harder to remove loopholes than it is to adjust the tax rates. Sure, in a perfect world flat-taxes would be “fair,” but in this world, the rich always get laws passed that give them an edge, which is why flat-taxes will never work.

All this crap about how the rich are “punished” for making money. Uh… not from where I’m standing. In fact, it’s just the opposite! GASP! Yes, the more money people make, the better their life actually is! Incredible no? The way many of my conservative friends speak you’d think the rich lived in dirt holes.

Posted by: Zeek at March 31, 2005 10:44 PM
Comment #49649

Lisa wrote:
While we’re at it, lets also abolish property taxes, and make it up in sales tax. Property taxes are an awful concept, because it really can strain the elderly, and the more their home appreciates, the more they pay, and often are forced to move, because of the tax increase.

My response:
Stability is an important factor in government funding. In order of stability, from greatest to least, is property, income then consumption (sales). For this reason I oppose going straight to a sales tax. As the economy slows, people tend to spend less. A good thing right? And when people spend less, sales tax receipts by the government decline as well. A good thing? Maybe, but there are big trade offs for that. And sales taxes tend to effect the poor disproportionately in comparison to the wealthy. The poor need to spend. The wealthy can afford to sit on their money for a while. In economic terms this “incresaing propensity to save” by the wealth during poor economic times is what economists call a “leakage” from the economy. Money is being taken out of play at precisely the time it is needed in play the most.

The funny thing about Americans is that we don’t want to pay as much in taxes as we expect in services from the government.

If we flatten the tax rate, the government will receive less money than it does now. I know that many think this is a good thing. Maybe someday it will be. But not right now in the face of a burgeoning national debt.

In the final analysis, the economy can handle a broad range of tax levels so long as changes are slow and predictable. Predictability is a critical factor in maintianing economic health and healthy business environment.

For these reasons I oppose flat taxes and sales taxes as the sole sources of government funding. Our solutions should focus on curbing government spending rather than on taxing our citizens less.

Posted by: Chris Edwards at April 1, 2005 01:31 AM
Comment #49658

A lot of people complain about taxes without knowing how it affects them. College Loans, Disability Benefits… . That Company you work for could depend on Government Funds… If your Parents lose their Benefits, are you willing to pay for it yourself?

Posted by: Aldous at April 1, 2005 06:02 AM
Comment #49661

The largest single act our government can take toward reforming and even significantly lowering taxes is to prioritize through concensus. What is missing is a viable two (or more) party government that challenges each other to justify and win over votes from the other party in to pass the bill. For all intents and purposes we have a one party government when it comes to spending. Not just that the GOP is one party, but, there is no executive branch acting as a second party to veto unnecessary and non-high priority spending.

Folks the system is broke. And its getting broker by the day. Just look at the 10 year trend in the trade deficits and the national debt. You know, just last June I wrote and alarming article about a 6.5 Trillion national debt. Today its stands just shy of 7.8 Trillion in less than a year. And the President’s and Congress’s are intent on adding another 400 billion to it over the next year.

It is broke, and we are all getting broker, we just don’t see it because it is like a freight train still a mile or two off, but, it’s going too fast to stop even if it saw us laying in the tracks. Policies and legislation have been passed and enacted that will continue to add to our national debt for the next 8 to 10 years at least. Even if we cut the deficit in half, that still means between another 1.5 and 2 trillon added on. And interest rates are definitely rising meaning the 100’s of billions we pay in interest each year on that debt will grow precipitously along with the principal debt.

But how many of you readers have told your Congressperson they aren’t getting your vote if the freight train is not stopped by 2006? Huh? Huh? My conscience is clean, Cornyn, Hutchison and Lamar Smith hear from so often they probably see my name and trash it. Why, because my voice is a minority voice. When will you make it a majority voice and take responsibility for your, your parents, and your children’s future? Delay until after 2006 and it may well be too late to cry STOP!

Posted by: David R. Remer at April 1, 2005 06:24 AM
Comment #49662

As one of the geezer brigade, I’m pretty much obligated to spend a substantial share of my time complaining about politicians and taxes.

While I like to believe that I have some control over politicians, there is a sense of powerlessness when it comes to taxes. There are few things more frustrating to me than to decide each year whether I need to hire someone to slog through what should be a relatively simple tax form or to further enrich the folks at TurboTax or one of the other tax preparation software corporations.

I don’t know whether the answer lies in a flat tax, consumption tax, or some other structure, but something really needs to be done. If you’re a home owner, drawing funds from an IRA, who donates a fair amount each year to charities, you’re well on your way to a very complicated return.

There is an excellent article by William L. Watts at the CBS Marketwatch website that provides an insight into why the tax code is purposely complicated and why it’s pretty unlikely that there will be any major changes made to it.

Personally, I’d just like to see a “truth in taxing” law that would require every product or service to carry a price tag that shows what federal, state, and local taxes have already been included in the purchase price. Gas pumps would be a good place to start.

Posted by: websteward at April 1, 2005 06:43 AM
Comment #49671

Lisa, that sales tax is a bad idea. People who make less money pay a larger proportion of it for necessities, so right off it favors the wealthy.

If you think rich people are going to buy their Lear jets in the US and get hit with the sales tax for it, you’re crazy. They’ll buy them overseas. They’ll vacation overseas, they’ll invest overseas, they’ll shop overseas. That plan doesn’t help the economy or the federal revenue stream.

Another problem would be people paying cash to avoid the sales tax. It happens all the time here in Singapore, so the govt. has to have a higher sales tax to make up for it - which would further kill us working stiffs.

I’m all for streamlining the tax process and closing some loopholes, but we don’t need to completely chuck the progressive tax system we have.

Posted by: American Pundit at April 1, 2005 08:55 AM
Comment #49672

LOL! Lisa, I checked out your site to see where you’re coming from. You’re killin’ me. But I enjoyed your latest post there, and I love your house.

Let me know next time you drop in on the Rockefellers for wine & cheese, I’ll meet you there. :)

Posted by: American Pundit at April 1, 2005 09:05 AM
Comment #49673

Aldous wrote:

A lot of people complain about taxes without knowing how it affects them. College Loans, Disability Benefits… . That Company you work for could depend on Government Funds… If your Parents lose their Benefits, are you willing to pay for it yourself?

To paraphrase Monty Python, this is what us conservatives are on about! You’re absolutely right that every sector of society receives some form of government payout, and that’s what we want to change. Most of the things you list above should be done by private citizens, businesses or non-profits. The more we depend on the government for our daily life, the more powerless we become in our relationship with it.

Personally, I don’t have a problem with a progressive income tax; however, I do have a problem with the slow, steady creep of government into every sector of society and industry.

Posted by: Chops at April 1, 2005 09:08 AM
Comment #49677

“Personally, I don’t have a problem with a progressive income tax; however, I do have a problem with the slow, steady creep of government into every sector of society and industry.” - Chops

My version of this would be “I do have a problem with the slow, steady creep of government into every corner of our private lives.”

My summary is that progressives want economic security for everyone, even the poor, and personal freedom, and “real” conservatives want economic freedom for everyone, even the wealthy. Neo-cons I’m not sure about, my theory is they just want to rule the world and don’t care much how they accomplish it.

While we’re on taxes - the Brits have (or maybe a had) a system in which the government just decided how much you owe, and takes it out of your paycheck. No fuss, no paperwork. Who’d like that approach? hands, anyone? what, nobody here trusts Dubya and Congress to do their taxes for them? come on guys, they’re Republicans, you can trust them….

Posted by: William Cohen at April 1, 2005 09:29 AM
Comment #49687

Actually William, Democrats have been kicking that idea around for years. It seems that if you’re just filing a simple form 1040, the govt already has all the info they need to do it for you.

Posted by: American Pundit at April 1, 2005 10:37 AM
Comment #49694

American Pundit wrote -

“Lisa, that sales tax is a bad idea. People who make less money pay a larger proportion of it for necessities, so right off it favors the wealthy.”

I disagree… If a sales tax is done the right way this would not be the case…

The best plan out there that I have seen on this subject is the “Fair Tax” plan also known as HR25. Their website is www.fairtax.org if you want more specific informaiton.

My opinion is that the progressive tax system outdated and should be replaced. There are far to many loopholes and hidden taxes that are being taken advantage of by all levels of society. The use of a sales tax would be the most fair way to remedy this and if it is designed correctly would not favor anyone.

Posted by: Brad at April 1, 2005 11:43 AM
Comment #49695

Brad,

I ask you, what makes you think that this Congress, or any Congress, would be interested in a fair tax? Congress gets its power by handing out special tax breaks to one group or the other. Which group gets the break is usually dependent upon which party they are lobbying……

Although I think I may be a fan of the fair tax plan, especially the removal of the hidden supply chain taxes that we have now, I’m also realistic to know that it will probably never happen.

Santa will never give up his sleigh…

Posted by: George in SC at April 1, 2005 12:02 PM
Comment #49698

If you think filling out the personal tax forms are complicated, try doing taxes for a business!!!! Of coarse that’s one of many reasons I have an accountant.
I’m in favor of a flat no loopholes tax although I’m not to sure about the sales tax. However I don’t think well ever have a flat tax. That might put the IRS out of business.
William, we already have a system where the government decides how much we owe and takes it out of our checks. Haven’t you looked on your pay stub? FIT, FICA/OSIA, and MEDICARE are all tax deduction. Did you ask the government to take that money out for you?

Posted by: Ron Brown at April 1, 2005 01:00 PM
Comment #49699

George, as idealistc as it may sound I have to believe that we the voters can still control our own Congress, that if there is enough demand for change they eventually have to give in to it… If I can’t believe in this then I don’t see any purpose in discussing anything that the government does. What good is talk if you don’t really believe that anything your saying makes (or could make) a difference.

With regards to the Fair Tax specifically… I realize that it is a HUGE uphill battle but it already has many proponents on both sides of congress. From what I can tell it truly is a non-partisan bill. Mainly what it needs now is more exposure.

Posted by: Brad at April 1, 2005 01:08 PM
Comment #49702

I’m going to take some liberties here so correct me if I’m misjudging something.

The way I understand it, Republicans (or Shrub anyways) want to instate a flat-tax or completely remove income tax and replace it with higher sales taxes. There is really no “right way” to do the sales tax because either way it screws the little guy. Sure, you could aim the taxes at things “rich” people tend to buy (jewelery, luxury cars, yachts and what not), but you’d still need to bite into things that everyone buys.

I defy any of you to explain a method where flat income taxes or increased sales taxes are not steeped in clear favor of rich people.

Posted by: Zeek at April 1, 2005 01:22 PM
Comment #49704


The deadline looms for all of our taxes to be in, and what better time than this to debate reforming our current (and definately) punitive tax system?

Ah yes, the annual Right Wing rant about taxes, timed to always coincide with the date that Federal Income Tax forms are due.

Before you decide you pay too much, remember that someone else will have to pay more if the government is to collect the same amount of revenue.

Before you say the government collects too much revenue, please tell me which government spending programs you will cut and by how much money.

Federal income tax is only one of many taxes we pay, and only one of many governments which spent them. Please be clear which you are referring to.

Posted by: You Get What You Pay For at April 1, 2005 01:25 PM
Comment #49705

Brad: “My opinion is that the progressive tax system outdated and should be replaced. There are far to many loopholes and hidden taxes that are being taken advantage of by all levels of society.”

Really? Please provide details!

Posted by: Stephen at April 1, 2005 01:29 PM
Comment #49711

Stephen, you do know that loop holes exist right? I’m wondering whether your being critical of the idea of loop holes existance or loop holes being used by all levels of society. Please clarify so I can criticize you appropriately ;).

Posted by: Zeek at April 1, 2005 01:45 PM
Comment #49712

One thing we should ask ourselves at this time of year is if these taxes are even legal.
Makes me wonder since I haven’t paid them for 22 years and I’m still not in jail.
Oh well, good luck with your returns this year sheeple.

Posted by: kctim at April 1, 2005 02:02 PM
Comment #49714

What’s the matter kctim? Not a patriot? :(

Posted by: Zeek at April 1, 2005 02:20 PM
Comment #49715

Zeek: “Stephen, you do know that loop holes exist right? I’m wondering whether your being critical of the idea of loop holes existance or loop holes being used by all levels of society. Please clarify so I can criticize you appropriately ;).”

There will always be loopholes. If we have a flat income tax, income up to a certain % will be exempt. Or “capital gains” will be exempt. If we have a VAT (consumption) tax, certain goods will be exempt, etc. How are all those decisions made? Loopholes!


I’m more concerned with the comment that “the progressive tax system outdated” and there are “hidden taxes.” Please tell me:
1) how is it “outdated” and,
2) what are the “hidden taxes”?

Posted by: Stephen at April 1, 2005 02:22 PM
Comment #49720

Zeek: “I defy any of you to explain a method where flat income taxes or increased sales taxes are not steeped in clear favor of rich people.”

I believe I did…

Take a look at the FAQ page on the website for the Fair Tax that I mentioned previously… It clearly explains how the “little guy” will not be in any different situation financially then they are now.

Stephen, Examples:

A) loophole for the Rich, setting up a “corporation” and using it to make personal purchases pre-tax so that they can avoid paying income tax on their full income
B) loophole for the poor, income does not reach the poverty level therefore any taxes that they may have paid are immediatly refunded in full, however they are still able to claim “Deductions” for things and end up getting a bigger amount back from the government then they paid into it.

Both are loopholes… both of which would go away with if there were no more income taxes and in it’s place only a national sales tax was used.

Posted by: Brad at April 1, 2005 02:45 PM
Comment #49723

Brad: “Both are loopholes… both of which would go away with if there were no more income taxes and in it’s place only a national sales tax was used.”

And to be replace with national sales tax loopholes:

E.g.: the purchase of certain “capital” equipment will be exempt from a “national sales tax” because if we don’t tax them, then we are promoting growth.

E.g: domestically produced food items will be exempt from a “national sales tax” because the poor need food.

E.g.: prescription drugs. Are we going to ask our seniors to pay taxes on a $200 prescription?

E.g.: Anything bought in a restaurant (including liquor?), because we can’t let those minimum wage workers see their tips decline because suddenly a restaurant meal costs more & fewer people go to restaurants.

All these are just examples that I bet will show up as proposed “exemptions” in a debate for a “national sales tax.” But they can equally be called loopholes. I am not making a judgement one way or another on the merits of any of these.

Like I said just before: loopholes aren’t the issues. As long as there are taxes there will be loopholes (unless you want to go to a poll tax).

Posted by: stephen at April 1, 2005 03:15 PM
Comment #49726

Brad: “Take a look at the FAQ page on the website for the Fair Tax that I mentioned previously… It clearly explains how the ‘little guy’ will not be in any different situation financially then they are now.”

here are some choice explainations from the FAQ at http://www.fairtaxvolunteer.org/smart/faq-main.html

Is the 23% FairTax higher or lower when compared to the income taxes people pay today?Most people are paying that much or more today. much of it is just hidden from view. [where?] The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. That’s 23 percent right there, without taking into account the 7.65 percent employer matching!

This is a BS argument. The 15% income tax bracket is a MARGINAL rate, not the person’s EFFECTIVE rate. Anyone who passed freshman economics knows the difference.

One More:

Our present tax system … is one of the reasons the next generation may not have a standard of living as high as this generation.

This is another piece of BS. every generation of Americans has always had a higher standard of living than the previous one. Unless you want to argue that the income tax is going to cause this country to enter an economic downturn at least as bad as the Great Depression, and that that downturn will last for generations, this statement is a complete scare tactic.

Posted by: Stephen at April 1, 2005 04:10 PM
Comment #49727

Stephen just said:

This is another piece of BS. every generation of Americans has always had a higher standard of living than the previous one. Unless you want to argue that the income tax is going to cause this country to enter an economic downturn at least as bad as the Great Depression, and that that downturn will last for generations, this statement is a complete scare tactic.

Actually, Stephen, real wages in the U.S. have fallen overall since 1973, which was our major economic turning point at the end of the post-war boom. It almost rallied in the 1990’s, but it’s been hovering a bit below the 1973 level since 1999.

Of course, technology has improved immensely during that time, so a lot of things come to us much more cheaply now, especially information. However, that my generation is the first one in American history growing up without the reasonable expectation of doing better than our parents is a scary fact.

Posted by: Chops at April 1, 2005 04:19 PM
Comment #49730

Brad, I don’t know what your seeing, but from what I can tell, fairtax.org is offering a plan that will completely screw over the poor. First off, the proposed 23% percent sales tax will not be nearly enough, especially by the way fairtax.org figures it.

To site an example, my family would receive at the LEAST a 5% tax cut (i.e. $5,000) with this proposed plan. However, our tax cut would consistently be in the neighborhood of 15-20% (or 15k-20k). And I’m not even in the highest tax bracket. The higher you go in the tax bracket, the bigger that tax cut is.

The only time we would hit that 5% is if we spent our ENTIRE income on taxable goods. Other than that we would be in that 15-20% range. I’m all for fairness, but this is the biggest crock I’ve ever heard of in my life.

Posted by: Zeek at April 1, 2005 04:39 PM
Comment #49731

Chops: “Actually, Stephen, real wages in the U.S. have fallen overall since 1973, which was our major economic turning point at the end of the post-war boom.”

Yes, you are correct: real wages have fallen, but by any broad measure of “standard of living” that also encompassed non-monetary measures we are much better off than the previous generation.

You will have a tough time finding a person who wants to forego all the advances in technology, consumer goods, and whatever else you can think of that we’ve gained since 1973.

OTOH, there were probably millions of people living in Hoovervilles in 1932 who longed to return to 1928.

Before you fear that you may be “worse off” than your parents, ask youself in what way.

Posted by: Stephen at April 1, 2005 04:45 PM
Comment #49732

but from what I can tell, fairtax.org is offering a plan that will completely screw over the poor

Interesting thing about the website: can anyone find the names of anyone associated with it?

Here’s all I can find:
You can contact American’s for Fair Taxation at:
PO Box 27487
Houston, Texas 77227-7487
General Email: info@fairtax.org
Local Call: 713-963-9023
Toll-Free: 1-800-FAIRTAX (324-7829)

I wonder who answers the phone …

Posted by: Moi at April 1, 2005 04:50 PM
Comment #49733

Any consumption/sales taxes would create a regressive tax system. Sure would be nice for the rich folks who only spend 10% of their annual income to pay a 3% effective tax rate, while those who live paycheck to paycheck pay 30%. Yep, that sounds fair.

Posted by: Andrew L. at April 1, 2005 05:19 PM
Comment #49740

One thing a flat tax would have in its favor would be that it would be a simpler tax code. I’m certainly not conviced that we need a flat tax, but I am convinced that simplifying the tax code would be a good thing, no matter what system we use.

I’m not as up on tax law as some of you probably are, but one possible suggestion I would have would be to make all loopholes with a “dead-line,” at which point the loophole would cease to exist if it weren’t once again passed into law. “No permanent loop-holes” would be a good way to put it. Any good and useful loophole (like not taxing food or those who make less than a certain amount) would, of course, be reapproved every five years or so, but ones that have served their purpose (or been flagrantly abused) would cease to exist.

Another suggestion would be to pass a law on an upper limit to the size of the tax code. This is a somewhat silly suggestion, but it is April Fool’s Day and it’s fun to play around with ideas. Let’s say the tax code (all of it) has to fit onto fifty single-spaced pages, Courier New 12-point font, 1-inch margins. Or maybe say it has to have a “readability index” of eigth grade or so. Something to keep interpretation of the tax code from being a “black art,” best practiced by accountants.

By the way, I heard that Mrs. Kerry paid less in taxes than George Bush, while making several times his (substantial) income.

Posted by: Daniel at April 1, 2005 07:01 PM
Comment #49744

Aldous wrote:

A lot of people complain about taxes without knowing how it affects them. College Loans, Disability Benefits… . That Company you work for could depend on Government Funds… If your Parents lose their Benefits, are you willing to pay for it yourself?

Actually, for the last few years my family has been faced with this issue. My grandparents were both very old and we knew one of them was going to pass soon which would mean their social security would drop. I was prepared to come in and fill that gap. I had been talking to family and was arranging for all of us kids and grandkids to chip in 20-30/month to make up for that loss and then a little more. With 4 kids and 11 grandkids we wouldn’t have to chip in much to recover the lost income. The 20-30 would have more than made up for what would have been lost. Unfortunately, my grandmother died just 8 days after my grandfather this past November. But when he died, we were all prepared to do that. I believe the government needs to back off. We have a constitution that limits what they can and can’t do. Social programs should be left to families, social and religious groups. Not the government. I currently qualify for several governement programs and have caught a lot of flack because I don’t take advantage of them “because they are already there”. My husband and I struggle everyday, paycheck to paycheck to pull our self out of the mess that WE put ourselves in. It’s not the government’s responsibility to come in and rescue us.

As for who is behind the fair tax. Neal Boortz is a supporter. He has been talking about writing a book about it with the guy in congress who is supposed to be sponsoring the bill. I’m sorry for the vagueness. I just cant remember the name. I’ll try to find it and post later.

—DM

Posted by: Dawn at April 1, 2005 07:36 PM
Comment #49748

Lisa-
Einstein once said that we should make things as simple as possible and no simpler.

In the real world, an utter simplification of the tax code would create economic chaos and social injustice. That said, there are tax breaks we don’t need, and tax cheats we need to bring to justice.

Problem here, is that I don’t sense that the advocates of flat taxation have really thought things through.

A flat tax system will charge more at a given rate than a progressive tax system. With a progressive tax, one’s income fills up a series of brackets. Each separate bracket, regardless of how high one’s income rises, taxes income at a set rate, one which is always lower than the next higher income bracket. This is a very important fact.

One must simply look backwards over the course of the brackets filled. Only the last bracket is taxed at the highest rate, all others are charged less than that. An equivalent flat tax would charge each bracket the same rate as the highest one, ensuring higher taxation in every other bracket than the equivalent progressive tax.

Because of this, those who are taxed at lower rates now, run the greatest risk of losing the most from a flat tax. Because a person in lower income brackets operates much closer to their cost of living than a richer individual, they will feel the pain of an excessive flat tax more than people of higher income. This will make things particularly troublesome when we do need to tax more.

I mean, that’s the very trouble with a flat tax: A progressive tax can be reworked to place the burden on those who will feel the least pain from it. I know everybody loves to pity the poor rich man who has to pay money he earned to the government, but should we instead take more money from the poor person for whom frugality is already stretched to the limit?

No, we don’t need this kind of simplification, where all we do is create another, perhaps worse problem, by solving one that may not be all that troublesome to begin with. I don’t know about you, but I’d rather have to fill out a complicated form than send my fellow man to the poorhouse. Of course, if you want to disagree with that moral equation, please feel free.

Posted by: Stephen Daugherty at April 1, 2005 08:45 PM
Comment #49750

Oh, and Stephen?

I’m all right with you posting your opinions, but would you be so kind as to use your last name, or some kind of distinguishing handle so as to prevent confusion as to who is posting?

Thank you

-Stephen Daugherty

Posted by: Stephen Daugherty at April 1, 2005 08:50 PM
Comment #49755
Makes me wonder since I haven’t paid them for 22 years and I’m still not in jail.

Yikes! kctim, do you know how criminals usually get caught? They usually can’t keep their yaps shut.

BTW, for a guy who’s all about responsibility, I’m disappointed. Why do we all have to make up your share of the cost of the roads you use, the schools that teach your kids, and the military that protects this country?

Posted by: American Pundit at April 1, 2005 09:10 PM
Comment #49766

Daniel, “Any good and useful loophole (like not taxing food or those who make less than a certain amount) would, of course, be reapproved every five years or so, but ones that have served their purpose (or been flagrantly abused) would cease to exist.”

Ok, a few things flawed with this. First, if politicians are so willing to remove loop holes that are flagrantly abused, why wouldn’t they have done it before now? Oh yah, because the poor are oblivious and the rich are profiting from it. Another thing, can you imagine sifting through all tax laws and re-evaluating them? Government legislature works slow enough as it is just to pass 1 bill let alone a collection of bills.

“By the way, I heard that Mrs. Kerry paid less in taxes than George Bush, while making several times his (substantial) income.”

I’d have to attribute this to Bush’s general idiocy when it comes to finances.

Posted by: Zeek at April 2, 2005 02:27 AM
Comment #49781

Socialist unite!

Down with the Rich! May they burn for their excise! Why do I not have what they have?

The answer is work.
Stop smoking the happy weed and go to it.
My observations, people who only work a 40 hr week are rarely a raging success, and those who work an 80 Hr week are rarely mediocre or fail.

Life, Liberty, and the Pursuit of Happiness—
Not the promise of mediocrity or of similarity of outcome.
Will always be so, some will work and some will not.

Looking forward to the revolution.

MAY GOD ALMIGHTY SAVE THE UNITED STATES OF AMERICA FROM ALL THOSE WHO SEEK TO DESTROY HER

Posted by: Sean at April 2, 2005 10:30 AM
Comment #49792

How about a flat 20% not decutions income tax.
Get rid of sales tax.
Everyone pays (even the welfare class).
Your respondsable for sending your own taxes in (No payroll deductions). This way your aware of exactly how much you pay. Of coarse then we might get a lot more picky about how OUR money is spent.

Posted by: Ron Brown at April 2, 2005 01:28 PM
Comment #49793

Zeek -

First, if politicians are so willing to remove loop holes that are flagrantly abused, why wouldn’t they have done it before now? Oh yah, because the poor are oblivious and the rich are profiting from it. Another thing, can you imagine sifting through all tax laws and re-evaluating them? Government legislature works slow enough as it is just to pass 1 bill let alone a collection of bills.

Essentially, politicians are lazy, and don’t want to do more than they need to. Probably most of them wouldn’t mind the tax code being cleaned up; they just don’t want to do it themselves. My suggestion would mean that it takes effort to keep loopholes in the tax code, not to remove them. Any loophole simply ceases to exist if not reapproved every few years. That’s why I think it could help.

If you force the tax code to be reapproved every once in a while, in self-defense, Congress will have to simplify it in order for it to be passed at all. This could be a good thing.

Posted by: Daniel at April 2, 2005 02:11 PM
Comment #49797

Daniel,
Who would have to approve it?
Congress, they most likely wouldn’t take the time to read it, and who knows what would get put in by politicians up for relection in their districts or states.
The voters, how many of them would understand the tax code? Would you?
I do beleive that the voters should have to approve any tax increases. After all regardless of what those in Washington say, IT IS OUR MONEY!!!

Posted by: Ron Brown at April 2, 2005 03:25 PM
Comment #49811

Daniel, I understand fully what you mean. Nonetheless, it will never happen so long as rich people still draw breath. That was the point I was trying to make.

Posted by: Zeek at April 2, 2005 06:07 PM
Comment #49870

Sean wrote:

My observations, people who only work a 40 hr week are rarely a raging success, and those who work an 80 Hr week are rarely mediocre or fail.

As Mitch Ablom wrote in Tuesdays With Morrie: “No one ever lay on their deathbed wishing they’d spent more time at the office.”

Posted by: stephen at April 4, 2005 09:44 AM
Comment #49873

Great article Lisa, especially noting the issues with property taxes. The rate of increase for property taxes has been unbelievable the last 10 years. You are correct to point out that these “hidden” taxes are forcing some people from their homes and worse, the trend looks to continue for some time.

This was a very big issue two years ago here in Tallahassee, where we were given the choice of a property tax increase or a sales tax increase. The homeowner class rose up and rejected the property taxes.

As we all know, economies move in cycles, our income may fluctuate, but governments NEVER spend less than they did the year before.

Posted by: Fisher at April 4, 2005 11:11 AM
Comment #49875

The rate of increase for property taxes has been unbelievable the last 10 years. You are correct to point out that these “hidden” taxes are forcing some people from their homes …

How is a property tax a “hidden” tax? In 20 years as a homeowner I have never seen anything “hidden” on my property tax bill.

Posted by: stephen at April 4, 2005 12:01 PM
Comment #49892

Fisher: As we all know, economies move in cycles, our income may fluctuate, but governments NEVER spend less than they did the year before.

The proper measurement of government spending is as a share of economic output. Inflation, population increase, and economic growth almost always increase the size of the economy. Recessions only very temporarily shrink it; only a depression causes a long term shrinking of the economy.

Every year, government spends more because there are more roads to repave, more people in public hospitals, more kids in school, or on Medicare, more visitors to National Parks, etc., etc., etc. If you want the government to spend less than it did the year before, please identify the government programs you want to cut. And we’ll cut your taxes along with it. This mantra of “taxes are too high” is absolutely meaningless without a solid discussion of what those taxes are spent on.

Posted by: stephen at April 4, 2005 03:36 PM