the talking heads said it was now a six way race. The 2008 thing. For the Dems, it is still 1) Hillary, and fast comer 2) Barack and
steady 3) John Edwards. On the GOP side, it is pro-war 1) McCain, closely followed by hero of the Nine Eleven Event 2) Giuliani and far back,
Mormon’s 3) Romney. The Big 6.
A “Flat Tax?”
posted by ludaChris
posted by xmotex: I'm not terribly enthused about the Libertarian economic agenda, however would I trade an end to the Drug War and an end to
foreign interventionism for a flat tax? In a heartbeat.
That is a good point, we could make up any shortcomings of a flat tax by eliminating the unnecessary and unwinnable war on drugs . . [and stop] the
interventionist policy . .” [Edited by Don W]
Well, cheer up folks! The R&Fs already have it. The Republican 109th Congress thoughtfully rewarded them a 15% cap on
dividends, a major source of income to the R&Fs, and a super duper 5% tax on income earned aboard Say Hello Halliburton and Dubia. Uh, how much did
you send your congressperson last year? That may explain the outcome.
You should have noticed by now there is no longer any mention of a flat tax in high-up GOP circles. Sorry guys, your leaders have left you behind.
Maybe they weren’t serious after all? Like a shell game, first you see it then you don’t. Or the huckster’s old bait and switch con?
For the rest of us mortals, the max tax rate is 34%. Proponents of the flat tax usually mention 17% as the rate-to-be. Realizing the inherently
regressive nature of a flat or single tax rate - America has always had a progressive tax rate - there is usually a large exemption for the poor and
poorer. A survival exemption. The number bandied about is usually $25,000 for a family of 2 up to $45,000 for larger families. I assume singles
would get half the basic family rate, $12,5000. Example: you make $50,000 a year. You’re single. You are taxed 17% on $37,500. That is $6,375.
I’ll bet you are paying less than that now?
OK, let’s go on. Don’t forget the 17% does not effect the FICA - Federal Insurance Contributions Act - deduction of 7.65% of wages matched by your
employer. 15.3% if you are self-employed. On your $50,000 pay, that would come to $3,825. Plus the $6,375 totals $10,200. Plus any state or local tax
on income. Your take-home pay would be about $765 a week on a $50K job. Or $691 if self employed.
At the national level, the problem is twofold. First,
we are already running in the red, about $275 b. a year. This is not the whole story.
This is because even in 2007, the Social Security Trust Fund and the Medicare Trust Fund are operating in the black. That is, they take in more each
year than they pay out. This will change by 2011, they tell us. But the point is, that tody, 2007, the SS surplus and Medicare surplus is counted as
income against the declared budget deficit. This sum amounts to about $175 b. this year.
The reality of our nation’s finances is that we are running in 2007, a $450 b. deficit, and not $275 b. Counting as “income” money already
obligated. By 2020, if we don’t change our ways, and quickly, we will need $1 t. to pay our interest on debt and the short fall in SS and Medicare.
It is coming. But the public prefers to shoot the messenger than to buckle down and raise taxes to make this system work. Ever year we skip our duty,
it will cost more when we finally have to do our duty. Which is to pay-as-you-go for government. Not to pass the bill to our grand-children.
problem with the 17% flat tax. I’ve just mentioned the 2007 year and now Congress is dealing with the $2.9 t. 2008 budget. As you
also know, we are not including in the budget the “supplementals” we use to fund the 2 wars, Afghan and Iraq. There are reasons for that, but none
of them are good. It’s called “smoke and mirrors” in polite company. Just as the 17% is about half of the 34% top bracket rate, so also if
adopted the Federal government’s revenue would be reduced by about half. That is a fiscal impossibility. End of discussion.
Which brings me to the hidden agenda of those who first advocated a flat tax back in the 1980s. Rightly or wrongly, Ronald Reagan and that wing of the
GOP wanted to end the welfare state created by the New Deal in 1933. They knew they could not win in Congress on up or down votes on each individual
welfare program. At least half of the Republicans in Congress would not have agreed to that. And 3/4ths of the Democrats would have resisted, too. I
believe Newt Gingrich was an early devotee to the “end the welfare state” theory, but that he has now changed his position.
In the 1980s, the GOP tactic changed. It was believed they could accomplish their goal by de-funding the welfare state. By cutting taxes, they
reduced Federal income to the point where only what they regarded as the constitutional duties of the Federal government could be supported. What you
can’t do up front, they thought, you may get done out back. To their unexpected surprise and chagrin, the Democratic Congress kept spending even
though Reagan had cut the tax rate and Federal revenue. The GOP’s attempt to de-fund the New Deal and Great Society failed. At the expense of fiscal
Like it or not, some people will always need help. I liken it to the Bell curve, the 15% percentile at the bottom end. They would do ok 10,000 years
ago on the Serengeti Plain as scavengers, but they cannot “hack” it in our highly competitive 21st century. If we cannot or will not adopt
China’s one family one child policy, then the numbers will likely rise.
Now that’s my take on the Flat Tax.
[edit on 3/13/2007 by donwhite]