Ben Carson reveals his new tax plan (flat tax)

a reply to: peskyhumans

So if all taxes are at 15%, what exactly is the plan for spending? What and where are we cutting?

originally posted by: Flatfish
a reply to: Edumakated

There's a whole host of other ways that the uber wealthy enjoy tax advantages over lower income individuals besides stock options and the capital gains tax rate, which in and of themselves are indeed big ones.

Especially seeing how the whole idea behind stock options is to evade taxation and the vast majority of income for the uber wealthy is earned through capital gains.

Like I said, I'm not a tax professional and I don't intend on becoming one in order to properly answer your question, but there's a reason the tax code is 75,000 pages long.

But just as an example;

I know a guy who is wealthy, bought a couple hundred acres for hunting, put about 15 American bison on the place, filed for agricultural ranch exemption and now pays a substantially lower property tax rate because of it.

Did I mention he also bought a backhoe, two large tractors and a $60,000 "ranch truck" that he uses for everything, all of which he gets to amortize on his tax return.

He also attends Bison conventions while on vacation which allows him to write of a large portion of his vacation cost.

How many low to middle income earners do you know who get to utilize those tax advantages?

My father-in-law who was wealthy and owned his own company never drove anything but a "company" truck and my mother-in-law, (Stay-at-home V.P. of the company) always had a "company" Town Car that spent 90% of it's time parked in their garage.

They never burned anything other than gas bought on the company card and all maintenance was done at company expense.

They'd purchase new vehicles every 3 to 5 yrs, or as soon as there was no tax advantage to keeping them.

How many low to middle income people do you know that are able to enjoy those tax advantages?

The reasons you cite are why a flat tax with no deductions and loopholes should be supported. Politicians are using the tax code for social engineering and paying back political favors to special interest. The complexity is because politicians carve out exceptions for their favored interest and then people naturally try to take advantage of them.

The simpler the tax code the harder it is to be manipulated.

originally posted by: dogstar23
There's other factors at play, of course, but reducing the corporate tax rate would mostly simply cause more corporate HQs to be based in the US, rather than parking themselves in Ireland, or other lower corporate tax nations.

How low do we go? There's nations where one can have a negative tax rate, the banks and some large corporations even do so in the US. Chasing the lowest rate will ultimately bring that rate to 0% or even lower. Is that really a benefit to us?

Access to American markets are a powerful thing and charging our taxes in order for people to have access to them works well.

originally posted by: MystikMushroom
Well when you make 40k a year, and have to provide housing, transportation, food...it's kind of hard to scrape enough together to invest in the volatile stock market, making any kind of capital gains benefit a moot point.

In order to make money in the market, you need to have money. $100 every two weeks into an investment account isn't going to pay very much out in the way of dividends that are taxed under capital gains.

Most people making 30-50k a year don't get 'stock options' and have a crappy 401k that they obviously shouldn't touch for obvious reasons.

Sure, if I had a 100 grand laying around and could throw it into a Vanguard or something maybe I'd make some decent dividend returns on it that I could claim under capital gains...

But then again, I'm stoopid and anyone can become a millionaire by investing $100 every two weeks, or $2400 a year.

it is a matter of priorities. I made less than $40k/year at one point but I still maxed out my 401k. I know plenty of people who make $40k/yr. They have money for cigarettes, cell phones, new clothes, and everything else, but never any money to invest for their own well being.

It doesn't take much. A $100 a month invested over 30 years a paltry 6% return would have a value of $100k.

Your post demonstrates how poor people think versus how people who don't stay poor think.

originally posted by: MystikMushroom
a reply to: peskyhumans

If I make $25,000, under that plan I'd pay $3,725 leaving me with $21,275 to live off of.

If I make $500,000 under than plan I'd pay $74,500, leaving me with $425,500 to live off of.

It's a helluva lot easier to live off of $425,000 than it is $21,000.

A gallon of milk or a loaf of bread costs the same to both people. The basic necessities for life don't become cheaper if you're poor or more expensive as you get rich.

Flat taxes hurt the lower income people the most.

Dead on. All these flat tax fans don't realize just how lopsided it is.

Ask any person making $500k or more and they will gladly sign up for it.


There should be a wealth tax for anyone who makes more than a specific amount. It could be a one time event, 100% of any earnings over 10 million. or an annual 50% of anything over 10 million.

Any bigwigs making huge bucks will not bother taking the additional income so the corporations will have 2 options, pay corporate taxes (35% of anything over 50k profit) or put that money back into the company in the form of salaries, upgrading their infrastructures or some other spending which winds up putting more money back into the hands of the middle and lower classes.

originally posted by: Edumakated
a reply to: Flatfish

What tax loop holes are only available to the uber wealthy? Please be specific...

You would have to ask your CPA but you've already alluded to several loopholes you're taking advantage of that most people don't have access to. The biggest one though is the capital gains tax rate. That's something that only the wealthy have access to and it lowers the effective tax rate to around 12-13% provided you're using it correctly and not doing something dumb like taking your compensation in the form of cash.

originally posted by: interupt42
Imagine if billionaires that have lobbying influences and the politicians in their hands had to pay the same 15% tax on their income as everyone including the common folks and politicians themselves. They would not be to happy to pay 15% on their hundreds of millions to billions of dollars on the income they earned.

They typically pay about 12-13% on the majority of their wealth currently because of the tax laws on capital gains. If we go with Carsons plan, what will likely happen is that the wealthy will simply trade business shares rather than ever touch actual cash. It will further the way the wealthy are paid even more towards stock options than salary, more so than it already is.

originally posted by: Aazadan

originally posted by: Edumakated
a reply to: Flatfish

What tax loop holes are only available to the uber wealthy? Please be specific...

You would have to ask your CPA but you've already alluded to several loopholes you're taking advantage of that most people don't have access to. The biggest one though is the capital gains tax rate. That's something that only the wealthy have access to and it lowers the effective tax rate to around 12-13% provided you're using it correctly and not doing something dumb like taking your compensation in the form of cash.

originally posted by: interupt42
Imagine if billionaires that have lobbying influences and the politicians in their hands had to pay the same 15% tax on their income as everyone including the common folks and politicians themselves. They would not be to happy to pay 15% on their hundreds of millions to billions of dollars on the income they earned.

They typically pay about 12-13% on the majority of their wealth currently because of the tax laws on capital gains. If we go with Carsons plan, what will likely happen is that the wealthy will simply trade business shares rather than ever touch actual cash. It will further the way the wealthy are paid even more towards stock options than salary, more so than it already is.

The capital gains rate applies to anyone who has invested money. If you sell a house, have a small amount of stock options, etc. Where in the tax code does it say that only people of certain incomes can take advantage of capital gains? let me help you, it doesn't.

originally posted by: Aazadan


They typically pay about 12-13% on the majority of their wealth currently because of the tax laws on capital gains. If we go with Carsons plan, what will likely happen is that the wealthy will simply trade business shares rather than ever touch actual cash. It will further the way the wealthy are paid even more towards stock options than salary, more so than it already is.

There is no wealth tax. Capital gains rates, for the top tax brackets, are 20% plus the obamacare tack on of 2.9%.

originally posted by: Edumakated
The capital gains rate applies to anyone who has invested money. If you sell a house, have a small amount of stock options, etc. Where in the tax code does it say that only people of certain incomes can take advantage of capital gains? let me help you, it doesn't.

With more income you're in a position to take advantage of it more often. The low income person might sell a house once in their life, the wealthy person is taking 90% of their annual income in capital gains. Additionally it's a bigger benefit, paying 15% when your effective rate is 18% isn't a very big difference but paying 15% when you would otherwise be paying an effective rate of 35% is.

originally posted by: Crakeur
There is no wealth tax. Capital gains rates, for the top tax brackets, are 20% plus the obamacare tack on of 2.9%.

Sorry, I meant income not wealth.

originally posted by: Edumakated


The capital gains rate applies to anyone who has invested money. If you sell a house, have a small amount of stock options, etc. Where in the tax code does it say that only people of certain incomes can take advantage of capital gains? let me help you, it doesn't.

No, the capital gains tax applies to anyone who sold an asset at a profit. Stocks, a home, land, etc. Usually, when options are exercised, if the exercise price is less than the market price, the difference is taxed as ordinary income.

a reply to: Edumakated

It would have to be a progressive flat tax plan without loopholes before I'd even consider it.

Common sense tells me that we can't get money from where it's not and while I always hear the wealthy complain about their share of the tax burden being too big, I never hear them complain about controlling the lion's share of our nation's wealth.

While 15% may work for some income categories, I doubt it's anywhere near high enough for the uber wealthy. Much less, substantial enough to fund our governmental needs as an "across-the-board" rate.

It's not the variable rate that makes our tax code so long and complicated, it's the loopholes."

originally posted by: Flatfish
It would have to be a progressive flat tax plan without loopholes before I'd even consider it.

So basically, what we have now.

Lets say for example it's a 15% tax and the first 25k is tax free. Here's the effective rates at various income:
15k - 0%
30k - 2.5%
50k - 7.5%
75k - 10%
100k - 11.25%
150k - 12.5%
200k - 13.125%
250k - 13.5%
500k - 14.25%
1000k - 14.625%

That's literally exactly what we're doing now, except we only have a few percent brackets, and the rates themselves are higher because everyone whose using their brain knows 15% max is not enough to fund the government.

a reply to: Aazadan

I never said anything about 15% being the max rate, I know that's far too low.

On the other hand, there are plenty of tax loopholes and write-offs that could & should be eliminated.

My brother is a newly retired salesman who worked for a crane company.

When he was working, the company he worked for routinely entertained clients with golf, hunting and/or deep sea fishing excursions on private charter boats and every bit of the costs was a write-off for the company.

I know this because there were times when clients backed out at the last minute and I got invited to fill the spot. Once, my father, my son and myself went deep sea fishing as part of a party of 15. It was a big boat and big boats don't come cheap.

Also, I live in a small coastal town where fishing is huge and every time I go to any of the dozen or so available boat ramps to launch my boat, at least half the trucks in the parking lot are company trucks bearing their respective company logos.

What do you want to bet, every one of them, (boats included) were gassed up on the company card as well?

Are these things legal tax write-offs? Unfortunately, yes they are.

Are these things legitimate business expenses? Hell no, they're not!

How many ordinary citizens get to write off entertainment expenses or the cost of owning, operating and maintaining their personal automobiles? (Or boats, the company my brother worked for also owned their own boat for entertaining small groups as well.)

I support a progressive tax code minus all the corporate & special interest loopholes/write-offs.

I would just imagine that somewhere around 90% of the tax code is designed by & for special interest and with that in mind, you'd think we should be able to shorten it to somewhere around 7500 pages or less.

a reply to: Flatfish

I used 15% because that's what Carson is proposing. It's a ludicrous rate.

My point with the numbers were to show that a flat tax+certain amount that's tax free is really just a progressive rate by another name, so even those arguing for a flat tax are conceding the point that a progressive rate is the way to go. Except under their model it's structured in such a way that the middle class is the hardest hit group (your effective rate triples between 30k and 50k but less than doubles between 50k and 1 million).

I do support simplifying the tax code but it's never going to happen, it would put literally a million people out of work overnight and destroy an entire industry that many have gone to school for, and being a financial industry it has plenty of lobbying power.

Also, people like their write offs. Most political contributions come from business owners, do you really think it's any wonder that it's business owners are the ones that get to take advantage of the tax code? In addition it's very psychologically satisfying to get a tax write off, it makes people feel like they're pulling one over on the man and they want that feeling, therefore they want loopholes for themselves to remain.

a reply to: interupt42

However if I pay 15 percent on my income why shouldn't a billionaire?

Why should you be paying the same amount as a billionaire? So it is 'fair' for that billionaire?

a reply to: Sremmos80

I think there's a belief that most billionaires don't pay taxes. Thus, people call for them to pay what they pay. It's a silly concept because the savings for the rich would be widely accepted and the poorest people, who pay little to no taxes, would suddenly be suffering greatly.

As to the small percentage of the population that manage to pay no income tax, they still won't pay any because they tend to structure things so that they don't show any income. If you don't show income, you still won't pay taxes.

Now, if the flat tax managed to include tax-free income, such as municipal bonds, then, sure, there'd be additional money coming in from the folks who have their money sitting in tax free investments but the decrease in taxes from the people who drop from 39 to 15% would be far more damaging and, even worse, nobody would want those municipal bonds which means that municipalities would have to offer competitive market rates to lure in lenders and that would, in turn, crush many municipalities.

So, a flat tax would decrease total tax revenue and crush many states and cities but, on the flip side, a small portion of society would see no change in their taxes, other than those already in that flat tax bracket.

Good luck with that plan.

originally posted by: Sremmos80
a reply to: interupt42

However if I pay 15 percent on my income why shouldn't a billionaire?

Why should you be paying the same amount as a billionaire? So it is 'fair' for that billionaire?

Because billionaires own the lobbyist , MSM, GOP, DNC, and the congress and have the power to set that flat tax rate as they see fit. They are the ones who wrote and directly benefit from all our crazy tax loopholes.

Hence if they pay the same as you and I then you will benefit ,because it is in their best interest to lower that percentage. There is no way in hell they would want to pay 15% on what the earn yearly.



However, this is all fantasy talk because no billionaire wants to pay the same percentage as the common folk does. If they did then the flat tax would have been passed long ago for the reasons I stated in regards to having the power to get things done.

Hence any candidate that proposes a flat tax such as Carson or Paul and who might actually put some effort into accomplishing it will never get elected.

a reply to: interupt42

It would be so much easier to discuss tax plans if people didn't tune out the moment a bunch of numbers get thrown at them. That's why the only idea that ever gains popularity is the simple x% for all because it's soundbyte length with few numbers. Until you look at it, and then there's plenty of numbers... no one wants to do that though.

Every flat tax I have seen proposed in atleast the last 5 years is just a progressive tax, with the only difference being that the tax rate scales up on a logarithmic curve rather than a linear or exponential one.

Maybe this keeps it simple and explains just who is getting the raw deal.
Under Carsons tax plan, your tax rate will triple between 30k and 50k. It will less than double between 50k and 1 million.

a reply to: Aazadan

Under Carsons tax plan, your tax rate will triple between 30k and 50k. It will less than double between 50k and 1 million.

To be honest I'm not up to speed on the details of Carson plan so I can't argue on those specifics.

However, one advantage of a straight flat tax that makes everyone pay the same is:

Those who have the power to control the percentage are likely to get hit the hardest by having too high of a tax percentage.

Hence they will be motivated to decrease the tax to a fairly low percentage and because the joe smoe gets the same percentage they will also benefit from that.

So there is no way that IF and thats a very unlikely IF that a flat tax gets passed that it will be anything greater than double digits and most likely in the lower part of the single digits.

There is a reason that the flat tax has not passed and it has nothing todo with the regular people , it has everything todo with the Billionaire and those in control that don't want it passed because they will get hit.

If it was something they wanted and would benefit them then you would already have it. The gov't works for the Oligopolies not the people.

However, Again there will be no candidate that will ever get elected that supports and actually plans to implement a flat tax.