Flat tax? Perry?

[stdreb27]

I kinda laugh, do liberals realize when they attack flat taxes, or fair tax systems, they're running around defending the IRS?!? I know it is a pipe dream, there is no way the liberals, and some leftist republicans would give up that much power, to influence the country.
I personally like the pitch, you have 2 choices, stay the status quo, or pay 20% flat, I wonder how many americans would choose, the taxes they pay now....

 

[bionicarm]

Quote:
Originally Posted by stdreb27 http:///t/388686/flat-tax-perry/20#post_3429931
I kinda laugh, do liberals realize when they attack flat taxes, or fair tax systems, they're running around defending the IRS?!? I know it is a pipe dream, there is no way the liberals, and some leftist republicans would give up that much power, to influence the country.
I personally like the pitch, you have 2 choices, stay the status quo, or pay 20% flat, I wonder how many americans would choose, the taxes they pay now....
What are you rambling about now? Have nothing intelligent to provide to the debate, so you use your "how dumb the Liberals and Lefties are" snarky remarks. Your immaturity is showing.
The current system would be a no brainer if it was simple as a 20% flat tax on everyone. But Perry is throwing in this $12,500 per person standard deduction, which essentially gives the Top 10% a lower tax rate, and the lower and middle class an even lower effective tax rate. Based on reef's numbers, the only one's who'd pay an actual 20% flat tax are those making over $250K/year. With the no capital gains tax on long-term investments, even those individuals could get below the 20% effective tax rate if they dump some of their earned income into those investment strategies.

 

[stdreb27]

Quote:
Originally Posted by bionicarm http:///t/388686/flat-tax-perry/20#post_3429980
The current system would be a no brainer if it was simple as a 20% flat tax on everyone. But Perry is throwing in this $12,500 per person standard deduction, which essentially gives the Top 10% a lower tax rate, and the lower and middle class an even lower effective tax rate. Based on reef's numbers, the only one's who'd pay an actual 20% flat tax are those making over $250K/year. With the no capital gains tax on long-term investments, even those individuals could get below the 20% effective tax rate if they dump some of their earned income into those investment strategies.
I'm a little confused, are you trying to talk me into this tax plan? That sounds great!

 

[reefraff]

Quote:
Originally Posted by bionicarm http:///t/388686/flat-tax-perry#post_3429912
Say what? How do you think people get back these exhorbitant tax refunds? Let's say your Gross Income is $60,000, and through payroll deductions, they took 23% out for Federal Income Tax, that's $13,800. Let's say the taxes on $60,000 from the IRS Tax Tables is $18,000 (just a guess for the example). So at that point, you owe $4,200 in underpaid taxes. However, you still have deductions to reduce you gross income. If this family had 5 kids, at $12,500 x 7 = $87,500. They subtract that amount from the original $60,000, giving them a negative income of $27,500. So this family should get a refund of the $13,800 in taxes they paid in through the year. If they limited it to just four people, that's still $50,000 in personal exemptions, giving them an adjusted gross of $10,000. So they'd be paying whatever taxes are for a gross income of $10,000, which is probably around $2,000. So they'd still get a refund of $11,800. With the current tax system, they probably get a $2,000 - $3,000 refund, depending on how many Schedule A deductions they have, or just taking the current standard deduction. You also have to factor in how they filled out their W-4, which determines what percentages of taxes are taken out of the paycheck. This plan would be great for the middle class families, depending on the number of dependents they have, but would suck for the Feds and generating revenue to pay the bills.
So now you change arguments to people getting a big tax refund.......... So somebody with a lot of kids doesn't pay income taxes if they don't make a lot of money. THAT'S HOW THE CURRENT SYSTEM WORKS!
2,300.00 deduction per kid PLUS 1000 per kid tax credit. Do you understand the difference between a tax deduction and a tax credit? At the 10% tax rate that thousand dollar tax credit represents a Deduction of 10,000.00 so under the current system those kids are worth 12,300.00 in deductions. What's the difference?
Personally I wouldn't give a deduction or credit for kids. You are a bigger drain on public services, why should you pay less taxes than someone without kids.

 

[reefraff]

Quote:
Originally Posted by bionicarm http:///t/388686/flat-tax-perry/20#post_3429980
What are you rambling about now? Have nothing intelligent to provide to the debate, so you use your "how dumb the Liberals and Lefties are" snarky remarks. Your immaturity is showing.
The current system would be a no brainer if it was simple as a 20% flat tax on everyone. But Perry is throwing in this $12,500 per person standard deduction, which essentially gives the Top 10% a lower tax rate, and the lower and middle class an even lower effective tax rate. Based on reef's numbers, the only one's who'd pay an actual 20% flat tax are those making over $250K/year. With the no capital gains tax on long-term investments, even those individuals could get below the 20% effective tax rate if they dump some of their earned income into those investment strategies.

 

[darthtang aw]

it amazes me that a business owner does not have any semblance of a grasp on our tax code/system
darth (just sign here) Tang

 

[bionicarm]

Quote:
Originally Posted by reefraff http:///t/388686/flat-tax-perry/20#post_3430009
So now you change arguments to people getting a big tax refund.......... So somebody with a lot of kids doesn't pay income taxes if they don't make a lot of money. THAT'S HOW THE CURRENT SYSTEM WORKS!
2,300.00 deduction per kid PLUS 1000 per kid tax credit. Do you understand the difference between a tax deduction and a tax credit? At the 10% tax rate that thousand dollar tax credit represents a Deduction of 10,000.00 so under the current system those kids are worth 12,300.00 in deductions. What's the difference?
Personally I wouldn't give a deduction or credit for kids. You are a bigger drain on public services, why should you pay less taxes than someone without kids.
Yes, I'm well aware of the difference between the two. That $1000 per kid tax credit only applies to a family that makes under $110K/year adjusted gross income.
Where do you get a $1,000 tax credit is equal to $10K in tax deductions. A tax credit gets applied AFTER you adjust your gross income with standard deductions.
Let's say a family of four has a gross income of $100,000. The personal exemption is $3,700/person, or $14,800. Standard deduction is $11,600, for tn AGI of $73,600. Last year's tax tables state for someone with this AGI, they pay $9,500 in taxes plus 25% for any amount over $69,000 which would be $1,150 in this situation, for a total tax liability of $10,650. If this family only had $6,000 taken out of their paychecks for taxes, they'd still owe $4,650 in taxes. If they had 2 kids, that amount would be reduced to $2,650 with the CTC.
What you're saying is that instead of taking the standard deduction $11,600, I would itemize my deductions, and that $2,000 tax credit would equate to $20,000 in deductions on Schedule A. Let's say they did this, and even added another $10,000 in other itemized deductions. That would make their deduction $30K instead of $11,600, for an AGI of $55,200. Their tax liabilty would be right at $7,500, for a difference of about $3,000 in tax savings.

 

[reefraff]

Quote:
Originally Posted by bionicarm http:///t/388686/flat-tax-perry/20#post_3430024
Yes, I'm well aware of the difference between the two. That $1000 per kid tax credit only applies to a family that makes under $110K/year adjusted gross income.
Where do you get a $1,000 tax credit is equal to $10K in tax deductions. A tax credit gets applied AFTER you adjust your gross income with standard deductions.
Let's say a family of four has a gross income of $100,000. The personal exemption is $3,700/person, or $14,800. Standard deduction is $11,600, for tn AGI of $73,600. Last year's tax tables state for someone with this AGI, they pay $9,500 in taxes plus 25% for any amount over $69,000 which would be $1,150 in this situation, for a total tax liability of $10,650. If this family only had $6,000 taken out of their paychecks for taxes, they'd still owe $4,650 in taxes. If they had 2 kids, that amount would be reduced to $2,650 with the CTC.
What you're saying is that instead of taking the standard deduction $11,600, I would itemize my deductions, and that $2,000 tax credit would equate to $20,000 in deductions on Schedule A. Let's say they did this, and even added another $10,000 in other itemized deductions. That would make their deduction $30K instead of $11,600, for an AGI of $55,200. Their tax liabilty would be right at $7,500, for a difference of about $3,000 in tax savings.
If a family is in the lowest tax bracket which is 10% they would need to lower their income level by 10K to equal the tax savings of that 1,000.00 tax credit. It's not a difficult concept.
Under your top scenario the family of 4 would subtract 12,500 per person from the 100K plus For the sake of this discussion the current 11,600 standard deduction for a taxable income of 38.400.00 x 20% tax rate for a total tax owed of 7,680.00
It's simpler to figure (I did the math in my head) harder to fudge and less moving parts to track. The thing in Perry's plan that I think is the best idea is retaining the write offs for the 4 most popular deductions, Medical expenses, charitable contribution, Mortgage interest and state and local taxes paid for those who want to itemize.
One thing I don't like is offering to let people stay on the current system. The great thing about a flat, simple tax is we could fire a lot of IRS employees and still have added resources to go after tax cheats/

 

[stdreb27]

Quote:
Originally Posted by reefraff http:///t/388686/flat-tax-perry/20#post_3430045
If a family is in the lowest tax bracket which is 10% they would need to lower their income level by 10K to equal the tax savings of that 1,000.00 tax credit. It's not a difficult concept.
Under your top scenario the family of 4 would subtract 12,500 per person from the 100K plus For the sake of this discussion the current 11,600 standard deduction for a taxable income of 38.400.00 x 20% tax rate for a total tax owed of 7,680.00
It's simpler to figure (I did the math in my head) harder to fudge and less moving parts to track. The thing in Perry's plan that I think is the best idea is retaining the write offs for the 4 most popular deductions, Medical expenses, charitable contribution, Mortgage interest and state and local taxes paid for those who want to itemize.
One thing I don't like is offering to let people stay on the current system. The great thing about a flat, simple tax is we could fire a lot of IRS employees and still have added resources to go after tax cheats/
(I know this will completely fly over Bionics bald head) but, that opt out is just politics. Now he can say, I'm giving America the choice... Lets see how they choose, I'm not forcing anything on anyone. And not putting the millions that make their money doing our bass ackwards tax system, out of business.

 

[bionicarm]

Quote:
Originally Posted by reefraff http:///t/388686/flat-tax-perry/20#post_3430045
If a family is in the lowest tax bracket which is 10% they would need to lower their income level by 10K to equal the tax savings of that 1,000.00 tax credit. It's not a difficult concept.
Under your top scenario the family of 4 would subtract 12,500 per person from the 100K plus For the sake of this discussion the current 11,600 standard deduction for a taxable income of 38.400.00 x 20% tax rate for a total tax owed of 7,680.00
It's simpler to figure (I did the math in my head) harder to fudge and less moving parts to track. The thing in Perry's plan that I think is the best idea is retaining the write offs for the 4 most popular deductions, Medical expenses, charitable contribution, Mortgage interest and state and local taxes paid for those who want to itemize.
One thing I don't like is offering to let people stay on the current system. The great thing about a flat, simple tax is we could fire a lot of IRS employees and still have added resources to go after tax cheats/
Wait, so you're saying the $12,500 replaces the current $3,700 personal exemption (sorry, haven't read the details)? That's nuts. Take your scenario, add two kids, and the AGI is $13,400, with a total tax owed of $2,680. Add yet another kid, or simply itemize your deductions, and you have another sector of the population that pays no income taxes. That brings back the 60% or more of Americans who'd pay no taxes, and would most likely get a nice refund. That's great for the people, but again where is any revenue generated? You think the deficit is soaring now, implement that plan and it would make Obama's spending spree look like peanuts.

 

[reefraff]

Quote:
Originally Posted by bionicarm http:///t/388686/flat-tax-perry/20#post_3430085
Wait, so you're saying the $12,500 replaces the current $3,700 personal exemption (sorry, haven't read the details)? That's nuts. Take your scenario, add two kids, and the AGI is $13,400, with a total tax owed of $2,680. Add yet another kid, or simply itemize your deductions, and you have another sector of the population that pays no income taxes. That brings back the 60% or more of Americans who'd pay no taxes, and would most likely get a nice refund. That's great for the people, but again where is any revenue generated? You think the deficit is soaring now, implement that plan and it would make Obama's spending spree look like peanuts.
They would have to cap the number of exemptions allowed or drop them to a couple thousand bucks after the first 4 to make it work. Like I said upthread, it's a start. What I am saying is a flat tax is a good deal for lower wage earners, especially the way Perry left in itemized deductions up to 500KSUBMIT

 

[bionicarm]

Quote:
Originally Posted by reefraff http:///t/388686/flat-tax-perry/20#post_3430162
They would have to cap the number of exemptions allowed or drop them to a couple thousand bucks after the first 4 to make it work. Like I said upthread, it's a start. What I am saying is a flat tax is a good deal for lower wage earners, especially the way Perry left in itemized deductions up to 500KSUBMIT
I agree with you it's a great deal for the lower and middle class, IF they provide the balance between taxes and deductions, If you just dropped some 9%,15%, whatever percent flat tax across the board with no form of allowable deductions, then the opposite effect would occur to the lower and middle class. You could skew the personal exemptions based on income. Families with a gross of $50K or less get the $12,500, $50K - $100K, $8,500, $100K - $500K, $4,000 $500K+, $2,000.
It's kind of hypocritical when a Republican candidate continually sings the mantra of "over 48% of Americans pay no federal income taxes. This is a major reason the deficit is growing exponentially.", but then turns around and creates a flat tax plan that would allow even MORE taxpayers not to pay any taxes.

 

[reefraff]

Quote:
Originally Posted by bionicarm http:///t/388686/flat-tax-perry/20#post_3430227
I agree with you it's a great deal for the lower and middle class, IF they provide the balance between taxes and deductions, If you just dropped some 9%,15%, whatever percent flat tax across the board with no form of allowable deductions, then the opposite effect would occur to the lower and middle class. You could skew the personal exemptions based on income. Families with a gross of $50K or less get the $12,500, $50K - $100K, $8,500, $100K - $500K, $4,000 $500K+, $2,000.
It's kind of hypocritical when a Republican candidate continually sings the mantra of "over 48% of Americans pay no federal income taxes. This is a major reason the deficit is growing exponentially.", but then turns around and creates a flat tax plan that would allow even MORE taxpayers not to pay any taxes.
One component of this you are missing. Currently almost nobody pays zero income tax. Of that 47% that don't pay taxes almost all will actually end up getting back more than they paid in though Earned Income Credit, the Child credit or one of the other refundable tax credits. In 2009 a family of 4 could earn 51K and have no income tax liability. I am actually cool with a family of 4 earning 40K not paying any taxes. It's turning around and handing them 4 or 5 grand I object to.
I think rather than the excessive exemption amount there should be a floor of say 15K single 30K married filing jointly and then allow like 2500.00 per personal exemption amount. Family of 4 wouldn't pay taxes on the first 40K assuming they had no deductions. As a proud member of the 53% I could live with that.