The 4-4 plan

[billvon 3,070]

If the attractiveness of Cain's proposal is simplicity then let me propose this plan:

40% tax on all income over $40,000. Period. Np additional sales taxes or other taxes. It's revenue-neutral compared to our current six-layer scheme, and doesn't require any new forms of taxation.

[nbblood 0]

Ah, the good ole flat tax. The problems are, to make it work you'll have to eliminate all the write-offs and loopholes that are used by big businesses and people wealthy enough to hire staffs to do their taxes, otherwise they'll not end up paying their fair 40%.

The other problem is that the lawmakers will have to write the plan and pass it. The same lawmakers, that is, that answer largely to the greatest contributors to their election campaigns, i.e., the same wealthy businesses and individuals mentioned in part A.

Therein lies the problems with this plan. Personally, I would favor a flat tax as long as it was a true flat tax.

Blues,
Nathan

If you wait 'til the last minute, it'll only take a minute.

[billvon 3,070]

>Capital gains, dividends, and investment income excluded?

ALL income; no exemptions, deductions or credits, to keep it as simple as humanly possible. One of the reasons that the tax code is so complex now is that every tom, dick and harry wants an exemption for capital gains, dividends, mortgage interest etc etc etc. And so the tax form is 20 pages long.

>How about the business tax side of the house?

You could do the same thing - 40% on everything over $40,000 in income. That would slightly _increase_ revenues. So instead I'd do 35% over $40,000 to keep it at about the same revenue level. (Also similar to what larger corporations pay right now.)

[billvon 3,070]

>The problems are, to make it work you'll have to eliminate all the write-offs and
>loopholes that are used by big businesses and people wealthy enough to hire staffs to
>do their taxes, otherwise they'll not end up paying their fair 40%.

Agreed that that indeed will be a problem. And that's one thing that worries me about a 9% income tax, a 9% business tax and a 9% sales tax - can you imagine how complex that thing will be once politicians get a hold of it? They have another entire tax to mess with.

[mnealtx 0]

  Quote

If the attractiveness of Cain's proposal is simplicity then let me propose this plan:

40% tax on all income over $40,000. Period. Np additional sales taxes or other taxes. It's revenue-neutral compared to our current six-layer scheme, and doesn't require any new forms of taxation.

40% of 4.48T (2009 taxable income for the 40k+ group) is 1.79 trillion, while total taxes collected were 865B (19.3% of the 40k+ income).

Your plan is *not* "revenue-neutral".

No exemptions makes for a different income pool of 6.388T for all returns, not just taxable for 2009.
865B is 13.5% of that total.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[billvon 3,070]

>40% of 4.48T (2009 taxable income for the 40k+ group) is 1.79 trillion, while total
>taxes collected were 865B (19.3% of the 40k+ income).

I went purely by our current tax brackets and left out the myriad deductions, tax credits, exemptions that most people get; thus it is only neutral assuming no such deductions in the current system. (And because 4-4 were nice round numbers.) Exact parity would be closer to 35%, to account for the deductions that people now get, and which they would not get under the 4-4 system.

Or keep it at 40% and use it to pay down the deficit, your choice.

However, keep in mind that my proposal is 40% on all income OVER $40K, not 40% on everyone who makes over $40K. In other words, someone who makes $80K will pay 40% of (80-40)*.4 = $16,000, or an effective tax of 20%,

[DiverMike 5]

  Quote

ALL income; no exemptions, deductions or credits,

So you aren't allowing any business deductions? If I buy raw materials for .50, pay someone .30 in labor to manufacture something, and sell the finished good for $1.00 I pay the tax on the entire dollar? The only way to keep my profit margin up high enough would be to inflate the retail price significantly.

For the same reason I jump off a perfectly good diving board.

[mnealtx 0]

Taking the average for the various brackets and subtracting 40k from each comes up with 4.05T in income for total income (no deductions).

40% is 1.62T

  Quote

Or keep it at 40% and use it to pay down the deficit, your choice.

How about we make the rate 22% so it's the revenue-neutral solution you claimed?

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[rehmwa 2]

  Quote

Taking the average for the various brackets and subtracting 40k from each comes up with 4.05T in income for total income (no deductions).

40% is 1.62T

  Quote

Or keep it at 40% and use it to pay down the deficit, your choice.

How about we make the rate 22% so it's the revenue-neutral solution you claimed?

or, we just skip to the chase -

we figure out the income level defining 50% of the lowest earners and make that the dividing line $xx,xxx

anything over that gets taxed at a rate that is then revenue neutral - y%



we'd end up there anyway, we are already there now

the "x-y plan"


at least it would be a lot simpler

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[mnealtx 0]

  Quote

we figure out the income level defining 50% of the lowest earners and make that the dividing line $xx,xxx

The under-40k is 56.6% of total filers, so he's pretty close on that already.

  Quote

anything over that gets taxed at a rate that is then revenue neutral - y%

That would be the ~22% mentioned above. Comes out about 25.5B over the total tax collected for 2009.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[wayneflorida 0]

Let's get that billion that Warren Buffett's business owns the country first.

[rehmwa 2]

  Quote

  Quote

we figure out the income level defining 50% of the lowest earners and make that the dividing line $xx,xxx

The under-40k is 56.6% of total filers, so he's pretty close on that already.

  Quote

anything over that gets taxed at a rate that is then revenue neutral - y%

That would be the ~22% mentioned above. Comes out about 25.5B over the total tax collected for 2009.

nope - the "38.7-22 Plan" just doesn't make me FEEL good and clean -

lacks marketing appeal
doesn't really hurt those that make more than me either


You've clearly not done any large chain pizza sales marketing before.

"60-60 plan" how's that math out?


edit: of course the end game is actually the "100%-$0" plan - then the government can just dole it out as they see fit

or not



for the children

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[billvon 3,070]

>So you aren't allowing any business deductions?

Nope. No complexities.

> If I buy raw materials for .50, pay someone .30 in labor to manufacture something,
>and sell the finished good for $1.00 I pay the tax on the entire dollar?

Yes.

>The only way to keep my profit margin up high enough would be to inflate the retail
>price significantly.

Yep. It's an alternative to adding yet another sales tax on the product (to inflate the price of the product that way.)

[lawrocket 3]

  Quote

e problems are, to make it work you'll have to eliminate all the write-offs and loopholes that are used by big businesses and people wealthy enough to hire staffs to do their taxes

As well as mortgage deductions, student loan deductions, child deductions, etc...

And why $40,000?

My wife is hotter than your wife.

[mnealtx 0]

  Quote

nope - the "38.7-22 Plan" just doesn't make me FEEL good and clean -

lacks marketing appeal
doesn't really hurt those that make more than me either

You've clearly not done any large chain pizza sales marketing before.

"60-60 plan" how's that math out?

Nah...just market it as "40K is free"

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[rehmwa 2]

  Quote

  Quote

nope - the "38.7-22 Plan" just doesn't make me FEEL good and clean -

lacks marketing appeal
doesn't really hurt those that make more than me either

You've clearly not done any large chain pizza sales marketing before.

"60-60 plan" how's that math out?

Nah...just market it as "40K is free"

I'm disgusted, Billvon's plan would have these uber rich not paying taxes on $40K of their nasty incomes made off of the corpses of the poor (especially handicapped, women, children, endangered animal species, vegetarians, and minorities).

The government to should just give $40K/year to anyone making less than that (or at least make up the difference). Then we could all not pay taxes on the first $40K

is it "FAIR" that someone that only makes $20/year to not being able to avoid taxes on the next $20K just because they don't make it?

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[rehmwa 2]

Maybe we could just tax the money they saved by not being taxed. It's essentially free income - reckless government spending.

Let's see - $40K tax free at 40% is $16K

so the $16K is unreported income and they should report that and pay taxes on it.......

40% of $16K = $6400

$6400 x (300M citizens + 50M illegal...sorry visiting permanent residents) =
.
.
.
$2,240,000,000,000

That's 2.2 Trillion Dollars

Billvon for president

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[rehmwa 2]

  Quote

$2,240,000,000,000

That's 2.2 Trillion Dollars

actually, it's only $1T new income to the Treasury.
apparently, Congress got wind of my post with one of the Patriot Act web digging algorithms......

Reid/Pelosi immediately contracted a foreign sculptor to build a statue of Obama for a bargain price of $1.2T

for the children


Edit: whoops, and the House also just passed spending against this proposed income stream of $1.5T for "family studies research"

on the plus side -
1 - the Dem senate will be issuing a statement about identifying $1T in cost savings

2 - the Rep house will be issuing a statement about identifying $700M in cost cuts

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[Andrewwhyte 1]

  Quote

>So you aren't allowing any business deductions?

Nope. No complexities.

> If I buy raw materials for .50, pay someone .30 in labor to manufacture something,
>and sell the finished good for $1.00 I pay the tax on the entire dollar?

Yes.

Farmer grows the wheat, sells it to the miller: 40%
Miller mills the wheat, sells it to the baker: 40%
Baker bakes the bread, sells it to the grocer: 40%
Grocer sells it to the sandwich shop: 40%
Sandwich shop sells it to you: 40%
This is why most advanced economies have opted for a value added tax. Yes it is complex but it is as close as you are going to get to a flat tax.
You would think someone in the US would be advocating that. Oh wait Ron Paul is.

[mnealtx 0]

Claiming a vat is a solution is stupid, when the same exact same thing occurs now with sales taxes.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[Andrewwhyte 1]

Well, first of all I didn't say it was the solution. I don't believe there is a solution as long as the right and left in your country continuously put political points ahead of the wellbeing of the whole. However to claim that a retail sales tax that does not capture services such as paying the domestic help or accounting fees is the same as a VAT is just stupid.

[mnealtx 0]

  Quote

Well, first of all I didn't say it was the solution.

"This is why most advanced economies have opted for a value added tax."

  Quote

However to claim that a retail sales tax that does not capture services such as paying the domestic help or accounting fees is the same as a VAT is just stupid.

Costs of doing business are already factored into pricing, so why do they need to be 'captured'?

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[Andrewwhyte 1]

Generally speaking paying the domestic help is not a cost of doing business, it is a form of consumption that is not taxed like buying goods. One form of consumption, services, is not taxed while another, goods is taxed under most retail sales taxes. Of course as one travels up the income ladder ones consumption tends to move towards consuming services relative to those who provide rather than consume domestic help.

[mnealtx 0]

  Quote

Generally speaking paying the domestic help is not a cost of doing business, it is a form of consumption that is not taxed like buying goods. One form of consumption, services, is not taxed while another, goods is taxed under most retail sales taxes. Of course as one travels up the income ladder ones consumption tends to move towards consuming services relative to those who provide rather than consume domestic help.

I don't recall seeing many maids/butlers in farmhouses, groceries or sandwich shops. Accounting would be via a paid employee or contracted out, again as a cost of business and included in pricing.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[popsjumper 2]

I say we go for the 2-4-6-8 Plan

..back up 15 yards and punt.

My reality and yours are quite different.
I think we're all Bozos on this bus.
Falcon5232, SCS8170, SCSA353, POPS9398, DS239