View Full Version : Rand Paul pushes for flat tax
His flat tax, does not seem so flat to me, but possibly an improvement over what's the cluster fu%$ that is the US tax code?
When it comes to taxes, Rand Paul wants them simple and flat.
The blunt-spoken, Libertarian-leaning senator from Kentucky, who won the 2016 presidential straw poll among leading conservatives, favors a flat tax: a one-rate income tax system with a minimum of tax breaks for individuals and businesses.
But Paul hasn't settled on what that rate should be.
He has publicly discussed 17%. An aide said if Paul does make a formal proposal, the rate would not be higher than 17% and could be lower.
Much would depend on which tax breaks Paul chooses to keep. Two would definitely remain: the standard deduction and personal exemptions. But both would be considerably larger than they are under today's code.
The Paul aide said the senator might also consider preserving in some form the tax breaks for mortgage interest and charitable contributions.
Paul hasn't ruled out other types of tax reform if they "eliminate" complexity and regulation. But he has sketched out his views on a flat tax over the past few years.
"What you'd have is an attrition if not an outright elimination of the IRS because it would be so simple that people would comply, and it would be very simple to know whether they complied or not," Paul told Fox News last year.
Under a Paul flat tax, an individual would owe taxes on his wages, salaries and pension payments. But fringe benefits at work would remain tax free to workers, as they are today. One example of that is the contribution employers make to pay for workers' health insurance.
Capital gains, dividends and interest would also be tax free at the individual level, but would be taxed at the business level. Capital gains on owner-occupied housing would also be tax free.
In addition, Paul would eliminate the estate tax and the alternative minimum tax.
Related: Paul takes step toward White House run
Could a flat tax no higher than 17% raise as much revenue as the current system? No. To do that you'd need to have a rate at least in the low- to mid-20% range, said Joseph Rosenberg, a senior research associate of the Tax Policy Center.
But raising the same amount of revenue isn't Paul's goal.
On the contrary, Paul favors tax reform that would raise less revenue than today's tax code is projected to. At the same time, he wants to eliminate deficits within five years and proposes to do so in large part by reducing spending (as a percent of the size of the economy) every year over a decade.
Cont:
http://money.cnn.com/2014/03/31/pf/taxes/rand-paul-flat-tax/
Rand Paul for prez 2016!!!
I don't know... I worry about IRS officials losing their bonuses. :suicide:
Crow Hunter
09-09-14, 13:02
I used to be in favor of a flat tax.
Now I am not so sure. I am still open to it but I am not a fan of what I have read about Rand Paul's plan so far. I do not think that the home interest credit should be retained. I think it promotes increased consumption. I think it should be eliminated from the current tax code.
I am not sure that eliminating taxes on capital gains and dividends are a good idea either. Even though I would directly benefit from it.
I 100% agree with reducing government spending and waste though.
Personally I am not one of the people out there that wants to pay no taxes. I have no problem with paying taxes if I can see where it is being used wisely and not wastefully. I also want to pay my "fair share" for the benefits that I receive.
I do, however feel that the current system where some pay nothing and some pay MUCH more is promoting an incorrect mindset. I think everyone should pay something in so they all have "skin in the game". I don't mind paying more if I know that the person in line in front of me a the grocery store paying for steaks, soft drinks and crab legs with their SNAP card while talking on their smart phone has at least contributed something towards their own consumption.
wildcard600
09-09-14, 13:28
i have no problem with paying taxes either , but when 40% of my income comes right off the top before i even get my paycheck in various fed, state and local taxes i dont agree with that.
the tax situation everywhere in this country is out of control.
i have no problem with paying taxes either , but when 40% of my income comes right off the top before i even get my paycheck in various fed, state and local taxes i dont agree with that.
the tax situation everywhere in this country is out of control.
Move to Texas or Nevada or Alaska or another of those free states without personal income tax at the state level.
wildcard600
09-09-14, 13:50
Move to Texas or Nevada or Alaska or another of those free states without personal income tax at the state level.
to save what 5% ? and probably higher cost of living ? i moved from NH which is in many ways a tax free state because the cost of living and the taxes you do have to pay are ridiculous.
you "solution" is like moving out of the US cause you dont like the firearms laws.
my government mandated health insurance costs more than my state income tax btw. well one of them.
to save what 5% ? and probably higher cost of living ? i moved from NH which is in many ways a tax free state because the cost of living and the taxes you do have to pay are ridiculous.
you "solution" is like moving out of the US cause you dont like the firearms laws.
my government mandated health insurance costs more than my state income tax btw. well one of them.
I dunno...my area is fairly expensive; if I could move to Texas, ditch the income tax and have a cheaper standard of living, how is that not a win-win for me?
to save what 5% ? and probably higher cost of living ? i moved from NH which is in many ways a tax free state because the cost of living and the taxes you do have to pay are ridiculous.
I can't speak for other states, but I was going to mention NH also. My sisters house is valued far lower than mine in MA, yet her property tax is higher. When you go to register your car in NH, it costs a ton compared to MA, etc, etc. It seems they simply screw you...I mean tax you, a different way while claiming no state income tax. I don't know iff once all calculated, apples for apples if the cost of living is lower in NH, but I can say they they have higher taxes than MA in specific areas to make up for the lack of a income tax.
It's not a perfect plan, but it's better than what we have to deal with now.
wildcard600
09-09-14, 14:32
I dunno...my area is fairly expensive; if I could move to Texas, ditch the income tax and have a cheaper standard of living, how is that not a win-win for me?
my point was that i left a "no-tax" "free" state and moved to a much lower COL and overall tax liability state and still have 40% of my pay stolen.
your situation may be different.
I am all in on a flat tax! Why? Because There are TONS of people (crack dealers, millionaires and large corporations) that avoid taxes. Who pays the bulk of the taxes? Middle America.
I like how some states do a flat sales tax on all goods sold, but have no income tax. This hits everyone equally and I would prefer this over any kind of income tax. You make $30k a year and are buying a Honda Civic, your taxes are going to be way less than the guy buying a BMW 7 series. You also GAIN revenue from folks that were paying ZERO taxes a year (as they have to buy food, clothing, etc).
Anyway you slice it, the IRS needs to go and taxes need to be cut for small business. 17% tax rate would allow me to hire 3 more employees and pay them EACH $50k a year! I think people would be shocked at how many more companies would be hiring (and paying more) if the tax rate was lowered.
C4
Move to Texas or Nevada or Alaska or another of those free states without personal income tax at the state level.
Granted, I don't pay state income tax, but that doesn't necessarily make it better. For example, in Austin I have both sales tax at 8.25%, and real estate taxes at nearly 3% annual on the full appraised value of my home. My home value is many times more than the most money I ever made in a year.The local taxing authorities get their money one way or another.
Why are we paying taxes on the same dollar 3 times. Example I invest some of my income, then I have capital gins. Then I cash out and go to buy something, I have to pay taxes on that item too. WTF.
wildcard600
09-09-14, 14:48
Why should I pay taxes 3 times. Example I invest some of my income, then I have capital gins. Then I cash out and go to buy something, I have to pay taxes on that item too. WTF.
good point.
also why should someone have to pay taxes on something they already own ?
out of control.
thopkins22
09-09-14, 14:48
Granted, I don't pay state income tax, but that doesn't necessarily make it better. For example, in Austin I have both sales tax at 8.25%, and real estate taxes at nearly 3% annual on the full appraised value of my home. My home value is many times more than the most money I ever made in a year.The local taxing authorities get their money one way or another.
Except that you can deduct your property tax from your federal income tax.
I am all in on a flat tax! Why? Because There are TONS of people (crack dealers, millionaires and large corporations) that avoid taxes. Who pays the bulk of the taxes? Middle America.
I like how some states do a flat sales tax on all goods sold, but have no income tax. This hits everyone equally and I would prefer this over any kind of income tax. You make $30k a year and are buying a Honda Civic, your taxes are going to be way less than the guy buying a BMW 7 series. You also GAIN revenue from folks that were paying ZERO taxes a year (as they have to buy food, clothing, etc).
Anyway you slice it, the IRS needs to go and taxes need to be cut for small business. 17% tax rate would allow me to hire 3 more employees and pay them EACH $50k a year! I think people would be shocked at how many more companies would be hiring (and paying more) if the tax rate was lowered.
C4
Very good points.
Granted, I don't pay state income tax, but that doesn't necessarily make it better. For example, in Austin I have both sales tax at 8.25%, and real estate taxes at nearly 3% annual on the full appraised value of my home. My home value is many times more than the most money I ever made in a year.The local taxing authorities get their money one way or another.
On the flip side, Hawaii has a 4.16% or so sales tax on everything, but has about a 7% income tax at the $60,000/yr filing single/separately rate. And the cost of living is ridiculously high.
Vegas has a total of 8.1% sales tax, but no income tax. I prefer this way since I buy as much online as possible (free 2-day shipping has spoiled me, it allows me to do a lot of research before purchasing, and waiting for a product to arrive instead of instant gratification helps the purchase process), I rent instead of own because I move a lot, and groceries are not taxed.
Why are we paying taxes on the same dollar 3 times. Example I invest some of my income, then I have capital gins. Then I cash out and go to buy something, I have to pay taxes on that item too. WTF.
The logic the gov't uses is that capital gains are a form of income. Whether you make money (taxed), buy a saw (taxed), and cut down some trees for more income (taxed) or you make money, use that money to make more money, you're still... making money. Which is taxed.
I am all in on a flat tax! Why? Because There are TONS of people (crack dealers, millionaires and large corporations) that avoid taxes. Who pays the bulk of the taxes? Middle America.
I like how some states do a flat sales tax on all goods sold, but have no income tax. This hits everyone equally and I would prefer this over any kind of income tax. You make $30k a year and are buying a Honda Civic, your taxes are going to be way less than the guy buying a BMW 7 series. You also GAIN revenue from folks that were paying ZERO taxes a year (as they have to buy food, clothing, etc).
Anyway you slice it, the IRS needs to go and taxes need to be cut for small business. 17% tax rate would allow me to hire 3 more employees and pay them EACH $50k a year! I think people would be shocked at how many more companies would be hiring (and paying more) if the tax rate was lowered.
C4
Agreed, but the argument against is that the flat tax (and the flat sales tax) disproportionately affects the lower income. This is a big argument that the anti's (anti-flat tax) have used, with success, in the past.
I rent instead of own because I move a lot,
You are still paying (your landlord's) real estate taxes in your rent.
brickboy240
09-09-14, 15:24
A flat tax similar to Neal Boortz's one he outlines in his book, "The Fair Tax" is a great idea.
However it will NEVER come to light.
Why?
Because a flat tax or even another form of consumption tax will take power base away from Washington DC. No longer could they use the tax code as a punishment and rewards system for their voters.
I'd love this system but because it is simple, easy to understand and puts power in people's hands instead of big govt...it will never see the light of day.
We also stand zero chance of having Rand as our nominee. The GOP establishment does not like this guy. Unfortunate because he would make a great president.
-brickboy240
Ive always been a fan of the fair tax which is basically a consumption tax. It truly does get everybody, even those that earn mostly cash and dont report it as well as those on some form of assistance. You get an exemption for stuff like groceries, clothing, medicine, basic toiletries(soap, shampoo, deodorant, shaving products, tooth paste, etc...), etc... but everything else is taxed at a certain level or you could have a few tiers depending on purchase price so if somebody is buying say a luxury car that costs 100k they pay a little more in tax on it. You tax things like cars, motorcycles, boats, tv's, etc.. at a 10% of purchase price. You get rid of all deductions 100%: no mortgage interest deduction, no personal business deductions, etc... I would also support a repeal of the capital gains tax as the money you "gained" would then be used to buy goods which would be subject to the consumption tax.
My only worry with a consumption tax is that eventually they will re-instate income tax and you will have a system like up in Canada where the residents pay income tax as well as the VAT tax.
For corporate tax you tax at a flat 15% of profits. Dont want to pay taxes on profit, re-invest in your company or increase wages so you dont make a profit. This can spur growth in various industries as well as increasing compensation which then trickles into other parts of the economy. I am not well versed on the current business tax and write off's so my idea's for this area might not work or might not be practical, I dont know.
brickboy240
09-09-14, 15:39
Yes...a valuable part of replacing income tax with a flat or fair tax would HAVE to be the abolishing of the 16th amendment. Otherwise, with a very left leaning Prez. and Congress...you could easily get back the income tax and have BOTH an income and other tax systems side by side.
Again...I doubt govt would ever abolish that amendment, though.
Agreed, but the argument against is that the flat tax (and the flat sales tax) disproportionately affects the lower income. This is a big argument that the anti's (anti-flat tax) have used, with success, in the past.
I am sure "they" say that because they DON'T PAY ANY FEDERAL INCOME TAXES NOW and don't want to pay any taxes!
Something like 50% of the people pay no federal income tax. Hard to complain when you don't have any skin in the game.
C4
brickboy240
09-09-14, 16:14
But if a flat tax means EVERYONE pays the same percentage....the wealthy will still pay more than the lower income people. How does that disproportionately affect the poor?
Sorry, but if we are going to continue welfare, social security and other govt. programs....EVERYONE that works is going to have to pay income taxes.
THAT is fair. What we have right now is very far from fair. What we have right now has the wealthy actually paying most of the freight but the public THINKS they are all skipping out.
-brickboy240
wildcard600
09-09-14, 16:16
I am sure "they" say that because they DON'T PAY ANY FEDERAL INCOME TAXES NOW and don't want to pay any taxes!
Something like 50% of the people pay no federal income tax. Hard to complain when you don't have any skin in the game.
C4
how many of those people are employed i wonder ? with the decades of wage supression in this country i wouldnt be surprised by a relatively large number of people working full time and not having any tax liability.
I am sure "they" say that because they DON'T PAY ANY FEDERAL INCOME TAXES NOW and don't want to pay any taxes!
Something like 50% of the people pay no federal income tax. Hard to complain when you don't have any skin in the game.
C4
No argument from me... I agree with your points. It is the typical debate with liberals who claim "fair taxes" hit the higher wage-earners the hardest and also call flat taxes regressive.
My only worry with a consumption tax is that eventually they will re-instate income tax and you will have a system like up in Canada where the residents pay income tax as well as the VAT tax.
This ^ Count on it, it would happen. This is why I am against a VAT or consumption tax.
brickboy240
09-10-14, 12:18
This would not happen if you abolished the 16h amendment at the same time the consumption tax was brought forward.
-brickboy240
This would not happen if you abolished the 16h amendment at the same time the consumption tax was brought forward.
Good luck with that, LOL. A flat tax is more likely, IMO, and where I will put my support instead of a consumption tax.
BoringGuy45
09-10-14, 12:55
It could never pass. It would forever be marketed by the left, and accurately to be honest, as a tax break for the richest Americans and a tax hike for the poorest. Yeah, I think most of us know that a progressive tax is nothing more than the philosophy that, in order to create equality, it's easier to drag the Joneses down than it is to try and keep up with them. But America, especially my generation and younger, is in a pathetic state where people don't want to earn the benefits of advancing oneself; instead, they want the benefits without having to advance themselves. And there's also the mentality of "If I can't have it, no one should be allowed to have it."
So, even if a flat tax was instituted, we'd constantly hear the complaint that "10% out of my minimum wage income is a lot harder to live with than 10% is to a millionaire's income," and "Well, become a millionaire then!" is not going to be considered an acceptable response. Also, a flat tax would cause long term problems when, inevitably, taxes are raised. Either that means that taxes are raised for everyone, and this would hit lower income families harder than wealthier families, or it would mean reintroducing a progressive tax.
I'd like a flat tax, but unfortunately, I think that ship has sailed.
I am sure "they" say that because they DON'T PAY ANY FEDERAL INCOME TAXES NOW and don't want to pay any taxes!
Something like 50% of the people pay no federal income tax. Hard to complain when you don't have any skin in the game.
C4
Yep. If you really want equality let EVERYONE pay the same percentage of their income. People who are tax exempt AND get free shit are really the problem. They contribute NOTHING and take from others.
I'd like a flat tax, but unfortunately, I think that ship has sailed.
I agree with you. The idea of a flat tax is a good one, but too many vested interests in placating the free riders. That ship probably sailed back in 1964... maybe even earlier.
IMO, a "Flat Tax" isn't quite sophisticated enough to work properly.
One problem with all of this tax stuff is that its complicated, can be difficult to understand and has far reaching implications.
Any legislative tax proposal that is just whipped up without a great deal of research and forethought is doomed to fail.
A well reasoned alternative is called Fair Tax.
It seems to have reasonable solutions to many scenarios, is nuanced enough to make it "fair", while still remaining fundamentally simple in concept and implementation.
More information can be found here http://fairtax.org/
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