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Flat Tax

The Flat Tax is Progressive

Submitted by Roanman on Thu, 11/30/2017 - 19:14

 

Since we are rife with discussion lately about the nature of the Republican tax plan, I thought I'd break out an old post.

So, as I continue my rant on "How They Keep Us Apart" I'm going to use simple numbers.

Consider a system of taxation wherein:

Everybody files as an individual (no joint filing)

The first $20,000 of income is exempted from taxation.

All payroll taxes are abolished (FICA et. al.).

All deductions from taxable income are abolished.

All of em ......... quit your whining ......... no exceptions!

The one and only, universal rate is 20%.

God himself only asked for 10%.

 

So, if you make $20,001.00, you pay 20 cents in taxes, or 0.001% of your total income in taxes.

That's affordable.

If you are a couple, regardless of your status and each of you are making $20,001.00 a year, your total taxes will be 40 cents and your rate will still be 0.001%.

Still affordable. 

If you make $25,000, you pay $1000.00 in taxes or 4% of your total income in taxes.

Notice here that $1000,00 is more than 20 cents.

And .......

4% is more than 0.001%.

Let's say you make $50,000.00, you pay $6000.00 in taxes, or 12% of your total income.

$6000.00 is more than $1000.00 and way more that 20 cents.

And ...

12% is more than 4% and much, much higher than 0.001%.

Let's say you attain that magical number of $250,000 and are now "Rich".

You pay $46,000 in federal income taxes, or 18.4% of your total income.

Which is, I am sure you know by now, more than .......... etc.

How bout a cool million?

You pay $196,000 in federal income taxes, which represents 19.6% of your total income.

What if you are Tiger Woods and you used to make $80,000,000 a year?

Under this system you would have paid $15,996,000.00 in federal taxes or 19.9955% of you total income in taxes.

What I've described here is what is typically described as "The Flat Tax".

But, as far as I'm concerned, it ain't flat at all.

The more you make, the more you pay in taxes, which is as it should be if you're gonna tax income.

And ..... the more you make, the higher your tax rate.

Although, not by much and it does flatten out at the very top.

Still, it is "progressive".

The gravy here is that you can now fire your accountant.

(Sorry Doug, Willy, Loris. This isn't personal, and I still love you all very much) and most of the IRS.

 

And here is the most elegant part, regardless if you make $20,001.00 ... $25,000 ... $50,000 ... $250,000 ... a cool million ... or $80,000,000, you are secure in the knowledge that every single American anywhere in this glorious land who made the identical amount of income, paid the identical amount in federal income taxes, regardless of place of residence, fertility, charitable and religious proclivities or anything at all.

Now, wouldn't that be a nice feeling?

 

"This isn't enough income to fund the government." You might say.

The system we have now doesn't provide sufficient income to fund the government, nobody seems overly concerned about that.

 

Zug

Submitted by Roanman on Mon, 08/29/2011 - 10:31

 

Here's just another in a long line of examples having to do with why that "Tax the Rch' idea never works.

Sneaky bastards just up and move away ..... take their money with em.

Someone else gains access to their disposable income and you of course, don't get squat.

As usual click on the photo for this Wall Street Journal story.

 

Tax Haven's Tax Haven Pays a Price for Success

By DEBORAH BALL 

 

 

ZUG, Switzerland—Developed nations from Japan to America are desperate for growth, but this tiny lake-filled Swiss canton is wrestling with a different problem: too much of it.

Zug's history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.

But when Stefan Hurschler, a man who works with the disabled, and his schoolteacher wife decided to expand their family and wanted a bigger house, they found nothing in Zug they could afford. They moved to Zurich, and Mr. Hurschler now commutes back to the town he grew up in.

"There are older people who still live [in Zug] because they bought their homes in the 1960s," said his wife, Lilian. "Or there are the very rich. But there isn't much of a middle class."

If Switzerland is the world's most famous tax haven, Zug amounts to a haven within a haven. It has the highest concentration of U.S.-dollar millionaires in Switzerland, a country where nearly 10% of households meet that standard, according to Boston Consulting Group. The highest personal income tax anyone in Zug has to pay is 22.9%, and companies pay an average of just 15.4%—rates lower than Switzerland's average and far below top rates in the U.S.

 

How They Keep Us Apart, part three

Submitted by Roanman on Sat, 05/14/2011 - 18:08

 

Distractions abound in this country.

Cynical Roany thinks that this is by design.

The example of this that best speaks to me has to do with taxes.

Your "Silly Little Democrats ............." are always whining about tax cuts for the "The Rich".

Your "Formerly (although still mostly) Feckless Republicans ............." counter that "The Rich" pay almost 90% percent of all the income taxes paid in this country.

The American people pick a side and go to arguing and finger pointing.

Anger and upset are the only outcome.

Media is complicit.

Everybody benefits except the citizenry.

Democrats have their union and legal haters pumping up the masses.

Republicans have their wealthy and middle class constituents feeling themselves to be under siege.

The media get their ratings and sell their advertising because promoting drama is good for business.

As for me?

I got questions.

First of all, who the hell is "Rich"?

As opposed to, who the hell is Rich?

I would truly love to hear the debate where "Rich" finally gets defined.

Is "Rich" a function of income?

Are you "Rich" if you made $250,000 last year?

What if you've never made anywhere near that number ever before?

What if you're unlikely to ever make that much again?

That doesn't happen you say?

I know a raft of guys in the real estate business who had a big year that they have never duplicated.

How about if you're only making $60,000 a year, but it's from a $1,800,000 in CDs or treasuries, and you happen to be living in a nice little, paid for condo in Destin.

"Rich"?

What if you're 62 years old and have a defined benefit retirement plan from a pair of government entities paying $86,000 a year with escalators for inflation until the day you die, plus Social Security, plus all the health care you can eat for $142 a month, and you happen to be living in the nice little paid for condo in Destin right next door to the one mentioned above?

The reason I ask is that my HP 12C (financial calculator) is telling me that the above deal has a "Present Value" of $1,292,228 if capped at 3% (That there is real estate guy talk. Capped is short for cap rate which is an assumed rate of return for some specified investment, which in this case it is arbitrarily set by me at 3% because there is almost negligible risk in a defined benefit government retirement plan.  The less risk, the lower the cap rate.) and amortized over 20 years.

That $1,292,228 is before you even begin to figure for the Social Security benefit, and the true cash value of the health care.

"Rich"?

 

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