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BAQT #5 - Change the US Tax Code

BAQT #5 Tax reform 2004

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#1 QueenTiye

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Posted 24 March 2004 - 12:10 AM

I'm dead tired - and can't type my theory tonight.  But rest assured I'll have one by morning.  In the meantime - the question is - how would you restructure the US Tax system?  National Sales Tax? Flat Rate? Graduate Tax? No withholding?  What would you do?  

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#2 Shalamar

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Posted 24 March 2004 - 12:12 AM

VAT - value added tax  - ie a national sales tax.
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#3 Rov Judicata

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Posted 24 March 2004 - 12:23 AM

I would propose a ten-year transition to a national sales tax; if things turn out disastrouly wrong, there's nothing stopping us from turning the boat back around.

<More realistically, within our current system, we really need to take steps to make it easier to become self-employed...>
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#4 Delvo

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Posted 24 March 2004 - 12:45 AM

I could list several changes I'd like to make, but I think the first and foremost would be eliminating the automatic withholding. Make people actually save up for and PAY their taxes at tax time like the way it was before the government figured out that people wouldn't see how much they're paying if the money was confiscated before it even got to them. It would be harder to keep increasing taxes on us if people experienced for themselves how moch of THEIR/OUR own money is really being snatched away.

#5 HubcapDave

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Posted 24 March 2004 - 03:01 AM

Delvo, on Mar 23 2004, 10:43 PM, said:

I could list several changes I'd like to make, but I think the first and foremost would be eliminating the automatic withholding. Make people actually save up for and PAY their taxes at tax time like the way it was before the government figured out that people wouldn't see how much they're paying if the money was confiscated before it even got to them. It would be harder to keep increasing taxes on us if people experienced for themselves how moch of THEIR/OUR own money is really being snatched away.
I remember hearing about a company that did an experiment one time. Instead of automatically withholding the taxes, they gave each employee their full paycheck and had them divvy out the taxes and pay them themselves.

Being a self-employed person, I can tell you that you get a whole new perspective on taxes when you have to pay them yourself.

Aric's disagreements notwithstanding, I say national sales tax is the best way to go.

#6 Drew

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Posted 24 March 2004 - 09:11 AM

Delvo, on Mar 23 2004, 11:43 PM, said:

I could list several changes I'd like to make, but I think the first and foremost would be eliminating the automatic withholding. Make people actually save up for and PAY their taxes at tax time like the way it was before the government figured out that people wouldn't see how much they're paying if the money was confiscated before it even got to them. It would be harder to keep increasing taxes on us if people experienced for themselves how moch of THEIR/OUR own money is really being snatched away.
Yes. I like that. Although I'd hate that, too.

I've always favored a flat tax, and all arguments against it just don't hold water. Want to make the rich pay more? A flat tax achieves that. Want the poor to pay less? Yep. Same thing. It's about as fair a system as one can design.

A national sales tax might work well, although I do wonder what effect it would have on the economy if people ended up spending less as a result.
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#7 Cardie

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Posted 24 March 2004 - 09:31 AM

I'd say a combination of a flat income tax (after reasonable reductions of taxable income by what it takes the filer and any dependents s/he supports to survive) and a national sales tax.  That would be for the Feds.  How you allow states and localities to fund themselves is still iffy; I suppose they could follow the national model or the Feds could do all the taxing and give back to states.

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#8 QueenTiye

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Posted 24 March 2004 - 09:54 AM

As promised here is my own proposal.

I propose a flat tax something like 7% of income on every income-producing entity business and individual alike. And further until the debt is eliminated no givebacks, no deductions just a straight 7%. But Id put the law on the books that the government is required to give back proportionately amounts over budget each year.  That way it wouldnt be forgotten once the debt was eliminated.

Id also eliminate the automatic withdrawal for all but non-payers.  

Id also make a portion of the tax discretionary.  That is taxpayers would be able to allocate a small percentage of their tax payment to line items within the US Budget that they feel strongly about and Id require the government to give the taxpayers a statement saying what they did with the taxpayers money how it was allocated.  Id add these measures to allow the taxpayers to feel a vested interest in their tax contributions.

To simplify, local municipal taxes would be paid simultaneously with a cap stating essentially that the federal government takes x percent, and no tax payer may be taxed above y percent.  

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#9 D.Lerious

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Posted 24 March 2004 - 02:56 PM

Firstly, some reins need to be put on the IRS. As for other ideas.....I can't make any suggestions, as I've got a bus to catch.


peace

Dee


ps- though I would mention that the whole system needs to be simplified, and I disagree with the idea of taxing tips.

Edited by D.Lerious, 24 March 2004 - 02:57 PM.


#10 UoR11

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Posted 25 March 2004 - 06:31 AM

I'd go with a national sales tax, as it both is simple to calculate and collect, and it's blatently obvious how much the tax rate is. Plus, it has the advantage of freeing up a lot of money from the IRS.
Interesting note about the withholding tax. That didn't start until World War 2, and was largly the doing of Milton Friedman. Up until then, the vast majority of people didn't have to pay fedral taxes, and as the yearly bill came due, it became obvious that a huge amount of the population couldn't pay, so rather than send half the country to jail, withholding was started to finance the war. Of course, Friedman, being an optimist, actually thought that the tax system would go back to the way it had been previously once the war ended :lol:
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#11 Kimmer

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Posted 25 March 2004 - 12:49 PM

I'd go for a flat tax and for withholding. Why withholding? Because far too many people do NOT know how to save, and would NOT put their money aside and come tax day, they wouldn't be able to pay and we'd be in worse than we are now.

Also, the IRS needs to be changed and their powers taken away.

#12 Delvo

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Posted 25 March 2004 - 02:54 PM

People learn when the protection from ignorance is removed, Kimmer. And that is something we'd be better off if people would learn for other reasons as well as for taxes anyway. The only thing that protecting people from their own ignorance accomplishes is to keep them dependent and growing ever more ignorant and more dependent.

#13 Rhea

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Posted 25 March 2004 - 03:49 PM

Javert Rovinski, on Mar 23 2004, 10:21 PM, said:

<More realistically, within our current system, we really need to take steps to make it easier to become self-employed...>
Makes sense to me. I was successfully self-employed for over 15 years - till there were simply no advantages left and too many penalties.
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#14 Rhea

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Posted 25 March 2004 - 03:51 PM

kimmer, on Mar 25 2004, 10:47 AM, said:

I'd go for a flat tax and for withholding. Why withholding? Because far too many people do NOT know how to save, and would NOT put their money aside and come tax day, they wouldn't be able to pay and we'd be in worse than we are now.

Also, the IRS needs to be changed and their powers taken away.
I agree with Kimmer. I know from when I was self-employed that it takes REAL self-control to put away tax money when faced with some minor emergency.

I don't think withholding is a bad thing, properly done (now if the state of California would just fix their withholding tables, which have been screwed up for at least 10 years, I'd come out even every year :p)
The future is better than the past. Despite the crepehangers, romanticists, and anti-intellectuals, the world steadily grows better because the human mind, applying itself to environment, makes it better. With hands...with tools...with horse sense and science and engineering.
- Robert A. Heinlein

When I don’t understand, I have an unbearable itch to know why. - RAH


Everything is theoretically impossible, until it is done. One could write a history of science in reverse by assembling the solemn pronouncements of highest authority about what could not be done and could never happen.  - RAH

#15 QueenTiye

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Posted 25 March 2004 - 04:13 PM

It ought to be optional.  The same way you can "Opt" to pay bills automatically or not.  And other payment arrangements are available too - including electronic debiting.

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