10% U.S. Flat Tax Accross the Board!

[Hank Rearden]

Several of the so-called Flat Tax proposals are actually modified flat tax. There is a deduction for a single person, or a married couple and additional deductions for children After that, the flat tax rate is applied.

One of many problems with the current system is that 49% of households in the U.S. pay no income tax. They have no "skin in the game". It doesn't really matter to them what the tax rates are or how the U.S. Government spends the taxpayers money.

I read an editorial this past weekend where the writer tried to debunk some politicians statement that 1/2 of the households pay no income taxes. They always call Social Security "Payroll Taxes". They also brought up gasoline taxes, sales taxes, etc. But the point remained unchanged that 49% of households pay no Federal Income Tax.

If I paid no income tax, I would care less what the tax rates were or how it was spent!

Another argument that I grow very tired of is that "you can't support a family on minimum wage". Of course you can't! It was never intended to be able to do that.

Minimum wage is for people with minimum skills. The vast majority of people that receive minimum wage are not trying to support a family on it. You might find the data in this report a real eye-opener!

http://www.heritage.org/research/rep...rban-teenagers

Although there are those unfortunate folks who due to a job loss find themselves working at minimum wage, and that could be difficult. But even older adults that are working at minimum wage have an average family income of $33,606 a year, well above the poverty level for a family of four.

Personally, I only ever worked 2 jobs where I started at minimum wage. The first was at $1.65 per hour. That lasted for 2 months. At that time I was promoted and received a raise to $1.90. I was in High School at the time.

The second time was after I graduated from college, the job market was very poor, and I took a temporary job at MW, which was $2.50 at the time. I worked that job for about 8 weeks until I was hired for a position commensurate with my education and experience and paying about $10.00 per hour.

[BlueStreak]

You can't support yourself on minimum wage, is the point I try to make. And really, this is the incentive for people to strive for better. I had one minimum wage job, when the MW was $3.35. It sucked, I kept it until I found something better and no longer needed it.

The minimum wage is meant to be just that a MINIMUM. The argument that kills me is this, "Well, if you pay them too much to flip burgers, they'll make a career out of it." I can't see anyone thinking of $7.25 an hour as fat money, 'cept maybe the insufferable tightwads that Uncle Sam has to force it out of. On the receiving end, it's crappola. That's why I, and millions of others just simply move on to bigger and better things, and let the penny stretching Scrooge employers hire the dregs.

Dave

[Hank Rearden]

You're close to the point, but not on it yet.

Minimum wage is a starting wage, a training wage. Quite often, the employee who is making MW is often not even worth that to the employer. A good part of their time is spent being trained and learning how to do the job. Those who learn well, do the job well, show up on time and contribute to the overall operation move up. They get more responsibility and more pay commensurate with their duities and tasks.

A reasonable MW allows an employer the opportunity to employ many people, with the ones that apply themselves moving up and the ones that don't end up stuck. Most of those will drift from one MW job to another, continually stuck at MW. A few may just not be able to do better, but many just choose to do the minimum required to get by.

Many years ago, I used to stop at the same convenience store each morning. I would see a new clerk and then weeks or months later, they would disappear and be replaced with another. Most were just doing enough to "get by" and showed little iniative to do their job well.

Then a new girl appeared one day. She had a good personality, was friendly, did her job well and was someone you enjoyed having your business interaction with. As weeks went on, you could see how much better she got at performing her duties.

And then it happened. One day she told me that it was her last week there. She had landed a job at a local building supply center. It was a big move up for her, as the new job offered benefits and better pay. A fellow that stopped in the store daily as I did had encouraged her to apply at the Building Supply Center where he worked for an open position. She applied, was interviewed and subsequently hired.

I believe this happens all over the country. Those who show they can do the job and show their real potential move up. Those who do the minimun to just "get by" stay there at MW.

[whell]

A flat tax cannot become a reality without a total overhaul of the ENTIRE tax code. A flat tax is a populist idea that, while it has some merit, only addresses taxes on income. IMHO, nuke the ENTIRE tax code and start over.

Get rid of taxes on capital formation and appreciation. Capital is the life blood of of a capitalist economy. Tax it, and you keep the economic throttle choked. If you want to increase the value of labor, increase the value and reward associated with the conversion of capital into goods or services.

Get rid of corporate taxes. Replace corporate taxes with taxes on consumption of any good or service, including any industrial goods and services. Get rid of income taxes in their current form and replace them with either a flat tax on income or a flat tax on and individual or joint filer's net worth, as well as a nominal consumption tax.

Get rid of the Social Security and Medicare System and give up to a dollar for dollar tax credit up to 20% of an individual's income into a medical savings account, which can accumulate funds with the same tax treatment as a Roth IRA. If an individual's employer wants to contribute, they can do so in lieu of paying medical insurance premiums. OK, if we can't get rid of Medicare and / or SS right away, they can be phased out over time.

This is just a start.

[finnbow]

Originally Posted by whell

A flat tax cannot become a reality without a total overhaul of the ENTIRE tax code. A flat tax is a populist idea that, while it has some merit, only addresses taxes on income. IMHO, nuke the ENTIRE tax code and start over.

Get rid of taxes on capital formation and appreciation. Capital is the life blood of of a capitalist economy. Tax it, and you keep the economic throttle choked. If you want to increase the value of labor, increase the value and reward associated with the conversion of capital into goods or services.

Get rid of corporate taxes. Replace corporate taxes with taxes on consumption of any good or service, including any industrial goods and services. Get rid of income taxes in their current form and replace them with either a flat tax on income or a flat tax on and individual or joint filer's net worth.

Get rid of the Social Security and Medicare System and give up to a dollar for dollar tax credit up to 20% of an individual's income into a medical savings account, which can accumulate funds with the same tax treatment as a Roth IRA. If an individual's employer wants to contribute, they can do so in lieu of paying medical insurance premiums. OK, if we can't get rid of Medicare and / or SS right away, they can be phased out over time.

This is just a start.

All are very interesting ideas, none of which have a chance in our current political environment (unfortunately). Congress will never give up the ability to reward their own constituents through favorable tax treatment (and the kickbacks euphemistically called "campaign contributions" which are thereby financed). Sucks, don't it?

[BlueStreak]

Originally Posted by Hank Rearden

You're close to the point, but not on it yet.

Minimum wage is a starting wage, a training wage. Quite often, the employee who is making MW is often not even worth that to the employer. A good part of their time is spent being trained and learning how to do the job. Those who learn well, do the job well, show up on time and contribute to the overall operation move up. They get more responsibility and more pay commensurate with their duities and tasks.

A reasonable MW allows an employer the opportunity to employ many people, with the ones that apply themselves moving up and the ones that don't end up stuck. Most of those will drift from one MW job to another, continually stuck at MW. A few may just not be able to do better, but many just choose to do the minimum required to get by.

Many years ago, I used to stop at the same convenience store each morning. I would see a new clerk and then weeks or months later, they would disappear and be replaced with another. Most were just doing enough to "get by" and showed little iniative to do their job well.

Then a new girl appeared one day. She had a good personality, was friendly, did her job well and was someone you enjoyed having your business interaction with. As weeks went on, you could see how much better she got at performing her duties.

And then it happened. One day she told me that it was her last week there. She had landed a job at a local building supply center. It was a big move up for her, as the new job offered benefits and better pay. A fellow that stopped in the store daily as I did had encouraged her to apply at the Building Supply Center where he worked for an open position. She applied, was interviewed and subsequently hired.

I believe this happens all over the country. Those who show they can do the job and show their real potential move up. Those who do the minimun to just "get by" stay there at MW.

Excellent post and spot on. This is also why many better paying employers hire through temp agencies, (Which BTW, I was once opposed to.). They can bring a bunch in, sort through them, keep the good and send the bad back to the agency. It's not 100% foolproof, but by and large, it works.

Dave

[BlueStreak]

Originally Posted by whell

A flat tax cannot become a reality without a total overhaul of the ENTIRE tax code. A flat tax is a populist idea that, while it has some merit, only addresses taxes on income. IMHO, nuke the ENTIRE tax code and start over.

Get rid of taxes on capital formation and appreciation. Capital is the life blood of of a capitalist economy. Tax it, and you keep the economic throttle choked. If you want to increase the value of labor, increase the value and reward associated with the conversion of capital into goods or services.

Get rid of corporate taxes. Replace corporate taxes with taxes on consumption of any good or service, including any industrial goods and services. Get rid of income taxes in their current form and replace them with either a flat tax on income or a flat tax on and individual or joint filer's net worth, as well as a nominal consumption tax.

Get rid of the Social Security and Medicare System and give up to a dollar for dollar tax credit up to 20% of an individual's income into a medical savings account, which can accumulate funds with the same tax treatment as a Roth IRA. If an individual's employer wants to contribute, they can do so in lieu of paying medical insurance premiums. OK, if we can't get rid of Medicare and / or SS right away, they can be phased out over time.

This is just a start.

Eh,

It sounds possible, but we have to have some way to ensure people save for old age. I'm sorry, but (IMO) leaving it entirely up to individual responsibility to save up for old age only ensures that politicians in the future will have a lot of impoverished and ill prepared folks to pander to. Responsible people already do their best to save. But, unfortunately...............

I'm just sayin'.

Dave

[Charles]

Originally Posted by finnbow

All are very interesting ideas, none of which have a chance in our current political environment (unfortunately). Congress will never give up the ability to reward their own constituents through favorable tax treatment (and the kickbacks euphemistically called "campaign contributions" which are thereby financed). Sucks, don't it?

A few variations on the theme.

http://en.wikiquote.org/wiki/H._L._Mencken

Chas

[finnbow]

Originally Posted by Charles

A few variations on the theme.

http://en.wikiquote.org/wiki/H._L._Mencken

Chas

The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are.

When a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental — men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand. So confronted, the candidate must either bark with the pack or be lost.

True (and depressing) stuff from The Sage of Bawlmer.

[BlueStreak]

Originally Posted by finnbow

The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are.

When a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental — men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand. So confronted, the candidate must either bark with the pack or be lost.

True (and depressing) stuff from The Sage of Bawlmer.

Hear, hear! +1.

Some of the sharpest candidates go down the tubes simply because they are perceived as "elitist" or "intellectual". The latter really makes me crazy, when people vote against a candidate because he or she seems intelligent.

Dave