The GOP wants to snoop in your tax returns, and make them public if they wish

Another thing a flat tax with "no loopholes" would create is a situation in which tax benefits for retirement savings would be eliminated.

 

This quote is absolutely correct. The wealthy were the main beneficiaries of the last round of tax cuts. When Bush decided to cut taxes for those who receive dividends, he was doing this for individual stockholders. People who own stocks are usually the super wealthy. Bush/Cheney(we all know who runs the government) reduced taxes on the super wealthy in some cases by 20%. A good percentage of individuals own stock but usally in some sort of retirement plan where the taxes are deferred. They don't receive any benefit to the dividend tax reduction.

If a flat tax is enacted, I can almost guarantee the wealthy will want a change in the tax code again.

 

Wrong. A high percentage of stocks are owned through mutual funds/retirement funds/investment plans for common workers. All unions fund their retirement funds in this fashion. Even you acknowledge this later in your post.

Where did this happen? Congress sets and approves tax rates. The Executive branch has an influence for sure but this is liberal BS, to use one of superdave's favorite terms. Congress saw the wisdom of a tax reduction

 

You bring up the difficult issue of local funding. The ideal mechanism would be to eliminate state income taxes and go to a true revenue sharing program but that will never happen.

However, the bottom line is that the Federal tax system has the biggest impact on everyone. Reforming that system would yield a much better result than what we have now. A Federal flat tax would reduce the cost of collection in a major way, leaving more money for needed services.

While there is no perfect way to collect revenue in a country as diverse as the US, a flat rate system would be much more efficient than what we have now. What would logically remain would be the Social Security system.

The key point is the efficiency of collection. My accountant claims that up to 1/3 of revenue collected goes to pay for the cost of collection. Under the flat rate that cost would be cut by 2/3 leaving a significantly larger portion for funding services. All this based on a 10% rate.

Lots of issues to discuss but the efficiency and equity issues trump or overcome everything else.

 

Right. But I was talking about the benefit of being able to deduct retirement savings (IRA's, 401k's) on a pre-tax basis. They don't benefit from a dividend tax cut. Some retirees have their dividend checks sent to them, but this is taxed as income.

 

Outside of retirement accounts dividends are double taxed, so I've no problem with the dividend tax cut.

 

Not really. They're taxed in the form of a corporate income tax, then as a personal income tax to the shareholders. There's a distinction between the two. The corporation and individual are two separate entities.

Besides, corporations are going away from giving out dividends, and for the most part, shareholders are in tune with that. The most successful corporations of recent years (Microsoft, Dell, etc.) generally choose to reinvest profits.

 

Individuals are owners so it's a double tax. Simple as that.

You've got it wrong... growth companies reinvest profits, mature companies pay dividends. Dropping the dividend tax rate only makes corporations more willing to pay dividends.

A word of advice… invest your money in no-load index funds because you obviously don’t understand the market.

 

Again, there's a distinction between the two. Corporations can act separately from shareholders, shareholders are exempt from legal liability, etc. They are two separate entities.

Would you, then, eliminate the sales tax? I earn income, which is taxed. If I then use that already taxed income to buy a television, I'm being taxed on the TV.

You're correct in that regard. I was referring to companies who have grown over the last couple of decades.

I'm broke, so that's a moot point. Besides, I have 25 Euros in my wallet left over from my trip to the Azores this summer, so I'm doing pretty well in that regard.

 

Nothing could be farther from the truth... Corporations exist to benefit shareholders. While individuals maybe shielded from personal liability, corporate malfeasance costs them dearly in share price

I didn't realize we had a Federal sales tax…. that would be triple taxation.

One day you'll own assets and your opinions will change.

 

I'm speaking generally. GA has a state income tax right?

If I'm fortunate enough to be one of the folks that REALLY benefits from a dividend tax cut, then yeah, I'll probably become a conservative.

 

Sure... but it's a different taxman, so it's not triple taxation.

I'm not a rich man, nor what you derogatorily label "a conservative", but do I save for retirement and imagine one day I'll be dependant on dividend income.

 

I was talking about the double tax of state income tax coupled with sales tax.

Well, retirement savings from employer sponsored plans and IRAs are taxed as income, so a dividend tax wouldn't apply. As for dividend income from personal savings, you'd be in the minority. Most folks rely on retirement savings from IRAs or employer-sponsored plans. But I get where you're coming from.

 

It's a smaller fish taking a smaller bite. Perhaps I should be outraged, but ya gotta prioritize your battles.

I (and many like me) save for retirement outside of the traditional plans. Call me paranoid, but I doubt Social Security is going to be paying checks when I retire.

 

I hear ya. But most folks are in a situation where they may have to rely on Social Security and employer-sponsored retirement.

http://www.cepr.net/dividend_tax_break.htm

30 seconds my ass.

 

That's not actually true, but the wealthier stock holders disproportionately benefited from the reduction in the dividend tax rate.

 

Under that logic, household workers (maids, butlers, gardeners, etc.) shouldn't have to pay any taxes at all since their income is derived entirely from the already taxed income of their employers.

 

Simplistic is the word you're looking for.

 

Yes. it's disingenuous, but not in the way you're saying. It's disingenuous because state and local taxes are REGRESSIVE. The whole agenda of the flat tax people is NOT tax fairness, it's getting rid of the only PROgressive taxation out there.

That's why I always ask, how come nobody's trying to get, say, Florida to adopt a flat tax. Cuz the flat tax is about rich people trying to avoid taxes, and if Florida went to a flat tax, rich people would be paying more, and people like me would be paying less.

It's greedy hypocrisy, and we know Jesus doesn't walk among us today, or else he'd be in the halls of the Cato Institute overturning desks.

 

How is that different from my income being taxes when I earn it, then taxed when I buy my 40 oz?

It's different because I don't have a bunch of rich people funding think tanks to fight the class war on my behalf.

This whole digression would fit perfectly into the conservative media bias thread. It's just amazing that the people on the other side are so well versed in the issue, yet are, apparently, completely unaware of the class warfare being fought. That's because the news media, conservatively biased, doesn't raise the issue. You've got to go to "alternative" media to learn anything about this.

Well, that, or exercise your independent common sense.

 

Because the Federal government doesn't impose a sales tax. Why is that so hard to comprehend?

 

Wrong. A flat rate tax is based on Federally taxed income, the most PROgressive tax in the nation. What could be more fair than everybody paying a set percentage of their income, no loopholes?

That is an easy answer and you know what it it:
the Federal government gets first call on taxes and that trumps what a state might do.

Wrong again. Everyone pays the same rate.

 

Under the full reform program, states would get a prorated share of Federal collections, based on population, of the taxes collected by the Federal program. The size of government at both the Federal and state level would shrink considerably as the result of simplification at the Federal level, and elimination of state income collection efforts.

The savings resulting from the reduction of collection efforts would yield a huge increase in funds available for services. The result at the state level would be that they would have more PROgressive funds available to distribute as they see fit, without a large part of the collection costs - a much better solution than is now in place.

The system we have now is just a collection of add-ons over decades with no central plan. It is a ridiculous mess that is way past time to completely reform...but I'm not holding my breath on this one.

 

My state has an income tax AND a sales tax. The feds have income tax AND excise taxes.

Why is that so hard to comprehend?