A hybrid flat tax?

Ok there are many that seem to support or oppose a straight flat tax, but has a hybrid tax ever been introduced. If you did your taxes you would know that it is BS how much crap goes into it and why the IRS can't come down on people that don't pay faster. The paperwork is frustrating and way to many lines to fill out to increase the return. So here is what I propose.

$0-$29k (a percent)
$30k-$59k (b percent)
$60k-$99k (c percent)
$100k-$249k (d percent)
$250k-$999k (e percent)
$1 mil-$49mil (f percent)
$50mil-Infinity (g percent)

All can be reworked of course and percent values would have to fit with the standard of living. I am no economist but this simplifies things greatly. This is insurance that the loopholes are taken out of the system. I read about the Dodgers owner a few years back making over 100 million and not paying one cent. This should disturb everyone.

Has anyone ever heard of such a proposal and honestly what do you think of it? Our tax code needs reworking badly and it wouldn't be hard IMO.

Also does anyone who supports a true flat tax think that this is a healthy compromise?

reply to post by ventian


The problem with progressive taxes, is those with more money, will trade it for capitol, thus lowering income, and lowering their tax bracket. They never pay the percentage that would normally be required of them.

That being said. A flat tax would be nice Hong Kong style. 15% on an annual income. No other taxes, EVER, on ANYTHING. No property tax, no sales tax, no capital gains tax, etc. You can't hide from a non-progressive flat tax, and the poor would also have MUCH more money in their pockets, as they would only pay 15% annually, compared to the 25-35% they pay now.

Yes, you have problems with ANY type of income tax.

Sorry, once a certain level is reached you no longer have that income stated as income.

Here is just one trick used. You get paid a salary of $1/year. Things like partnerships are set up so that your income becomes something else entirely. This way you pay such things as corporate taxes. A WHOLE nother ball of wax.

I say get rid of ALL taxing schemes on individuals and have a sales tax only. Food, clothing(to a certain price) and individual domicile being exempt. You have a flat sales tax of say 25% on EVERYTHING including such things as stocks and such.

This way there are NO hidden taxes and all other taxes can be eliminated. The more money you spend on luxury items not necessary for survival, the more taxes you pay.

Seems to be the ONLY fair way to set up a tax system. Also it does the one thing I like the best, K.I.S.S.

Rids ourselves of the blood suckers. Tax accountants, Tax lawyers, IRS, blah blah blah.

The gov cannot sneak in a new tax either. Right out there in the open.

Now, I could agree to an income tax on all governmental employees on top of this sales tax. The government can tax themselves all they want.

Sales tax, VAT tax are all taxes on the poor.

The rich have ways to beat sales tax and VAT taxes.

If they pass cap and trade it will be a tax on the poor, disabled, or retired.

The rich will have the money to take there homes off the grid and find other loophole to minimize what they pay.

I know of one company owner that I work for that had a 2000 gal diesel tank at his company yard, strange part was all the company had was a beat up old forklift and a truck they used around town that used diesel.

But the owner had a 40 foot $200,000 diesel motor home and two mercedes diesel cars.

He would fill the 2000 gal diesel tank in the winter when diesel cost were down and write the tax for the diesel fuel off of the company taxes.
Found out on weekends he would also take fuel in a 50 gal tank he had to fill the oil heater tank at his home. And the company paid for this to.

This meant that his customers paid for this.

reply to post by endisnighe


I don't agree with that percentage. That is way too high. The less money the Govt. has to work with, the less they'll be inclined to misuse it. We need to give the just under what is required, so that the rest comes from donators to help out (philanthropists). NO govt. employee should be paid with tax payer money.

There is no need for any of the following:

1) Federal Personal Income Tax of any variety
2) Federal VAT tax
3) Federal Income tax

We have all manner of stupid discussions on how to give our personal money to the Federal Government when we can easily (and with surprisingly little impact) get rid of all personal taxation to the Federal Government.

Effective theft is still theft. Income tax currently pays for nothing, literally.

Originally posted by KrazyJethro
There is no need for any of the following:

1) Federal Personal Income Tax of any variety
2) Federal VAT tax
3) Federal Income tax

We have all manner of stupid discussions on how to give our personal money to the Federal Government when we can easily (and with surprisingly little impact) get rid of all personal taxation to the Federal Government.

Effective theft is still theft. Income tax currently pays for nothing, literally.

I agree that income tax is theft. I am confused however, How do we get rid of the income tax? You state it like it is something we can just do while our employers keep taking it out. If there is a way to stop them from taking it then please let me know. Also did you get your name from Jethro Tull? That is an awesome band.

Originally posted by ventian
I agree that income tax is theft. I am confused however, How do we get rid of the income tax? You state it like it is something we can just do while our employers keep taking it out. If there is a way to stop them from taking it then please let me know.

No, the Income tax would have to be repealed and the IRS disbanded. This will never happen, but it would be terribly easy if the political will was there

Also did you get your name from Jethro Tull? That is an awesome band.

Yeah, I did, and you're right. The Krazy part comes from The Payback "I don't know Karate, but I know Karazy (sweet James Brown song).

Elvis sucks, but James Brown rules.

The problem with taxes as I see them is that there is no such thing as a perfect tax, but they are needed for the functioning of government, which is needed for the functioning of society. That's my view on the overall matter really.

As for the state of taxes in the United States, from what I understand, the income tax is currently hurting the middle-class and small businesses over the rich which it was supposed to do.

Sales taxes and a VAT impact the poor the worst, since as a function of their income, they pay more.

Capital gains taxes impact the rich over the middle class and poor who do not have as much of their assets invested.

In order to spread the burden and still be progressive a combination of all three is really required.

reply to post by ventian


I agree that the tax laws need a serious overhaul. The problem with a flat tax is that it might be too simplistic. For starters, it is hard to define what the "income" the flat tax would tax.

It is easy to define a wage earners income. If you get paid $x in a given year. Your income is X. If we add the $y in interest you made off your savings account, your income is x + y. Simple enough.

Now let us look at someone who owns a sole proprietorship. The person had a gross of Z. However it would not be right to tax that person at an income of Z. In order for the tax laws to make economic sense, we should allow deductions for at least some of that person's business expenses. In this regard, things are going to get slightly complicated. We are going to need deduction rules.

Now let us make things more complicated. This person does not own a sole proprietorship. This person is a part owner of the LLC. The LLC grosses X, but has some expenses. In order for the tax rules to make economic sense, we are not only going to have to allow for deductions, but we will have to allocate income amongst the person and other owners of the LLC. This would lead to allocation rules.

Perhaps the person does not own an LLC or a sole proprietorship. The person is one of many shareholders of a C corporation. The C corporation makes profits, but only pays out some of those profits to the shareholder. How are we going to tax this person? We will need rules to decide this.

Let us add a further wrinkle. Let us assume that Congress wants to continue to use the tax laws as a means of encouraging or discouraging certain behaviors. (Or for the cynical amongst us, Congress wants to use the tax laws to reward campaign contributions.) This means that we will have all sorts of deductions and credits for various things like environmentally friendly windows and gifts to charity.

reply to post by ProjectJimmy


The States are the ones to distribute and monitor all disbursal of social support. The Federal Government simply collects, filters it through costly bureaucracy, and disburses it back to the states. However the State also collects income and sales tax (most at least) to support social systems. Our localities do as well, which creates a compounding problem with taxation.

The Federal Government has no need to directly tax individual people as that income tax is a small portion of it's yearly take. Add to that what money it does collect, it exceeds in spending by 50-90% excess, so they have no qualms about spending money they don't have already.

Considering what it takes to maintain empire, we could easily bring our military home from the globe and eliminate Federal taxes on individuals permanently.

The State gov. over here handles everything your gov does, barring tariffs, war, and resolving disputes between states.

reply to post by ProjectJimmy


To add to your comment, the Internal Revenue code is like software. It is unduly complicated largely because it contains "patches" to eliminate abuses or avoid unfairly harsh results for taxpayers. Software eventually runs poorly because it has too many patches. The software needs to be replaced. Similarly, our internal revenue code needs an overhaul.

Currently we are on version 3.99 of the Internal Revenue Code. Things would run much smoother if we had a version 4.00

reply to post by hotpinkurinalmint


That was an excellent analogy! Well done mate, and I completely agree. Tax reform should start with a uniform, trim and universal tax code, not one that is as you said, a patched former version.