reply to post by Americanist
Fair enough. Flat tax versus removal of Corporate tax.
I have one major problem with the flat tax, and that is that it is more biased to the benefit of those with great wealth and less for those
impoverished. Let me explain:
If I am making $10,000 a year and the flat tax rate is, say, 10% (I have heard reports it would need to be 20% to balance the US budget, but let's be
generous), I pay $1000 in tax. That leaves me a mere $9000, when even the full $10,000 was not enough to feed my family.
Someone making $1,000,000 a year will pay substantially more than I will, $100,000, but they will still have $900,000 left... plenty to sustain a very
comfortable lifestyle in most areas of the world.
Now that is a fair percentage, but it still has the disadvantage I mentioned in the earlier debate: those in desperate need are given no assistance to
move back into a position of being assets instead of detriments to society. The uber-wealthy as well have no restrictions placed on their continued
growth, and thus we have runaway capitalism.
Our present system, loopholes excluded, does do something to help those in need and restrain those in continual growth. The standard deduction allows
those with meager incomes to escape the tax penalty on income, while the progressive rate brackets place some restraint on those who are experiencing
unbridled success. In short, it acts as an accelerator to those in poverty and a brake to those in extreme wealth. The problem lies with the
loopholes, not with the structure.
To reuse my example above, under our present system (loopholes excluded), the poor man making $10,000 pays nothing while the wealthy man making
$1,000,000 pays $280,000 (assuming a 28% tax bracket).
Now, to my idea of removing the corporate tax structure entirely: it has nothing to do with equalizing tax rates among citizens. It has everything to
do with removing olne of those loopholes I mentioned above. If there is no income tax for corporations, there are also no income tax credits for
corporations, and the income is still taxed when it is realized by the owners.
That allows corporations to grow, the smaller moreso than the larger (allowing for more competition), and in the process creates jobs in a more open
marketplace. Jobs decrease the number of individuals who require government assistance and allow them to begin paying taxes as well. All this then
fills government coffers and actually reduces the deficit while allowing more people to have a higher standard of living.
Now none of this is going to do any real good unless we also curb out-of-control government spending. To parrot Ron Paul, we need to stop trying to
police the planet and stop supporting every third-world dictatorship disguised as a democracy that smiles at us the right way. We need to enforce the
border laws to prevent our internal security from becoming heinous on the citizenship rather than spending orders of magnitude more on internal
security. We need to stop the extreme waste and duplicity that all governmental offices have in such excess. And most of all, we need to start holding
our politicians feet to the fire and looking at situations in the light of what's good for the country as a whole instead of what's good for me
So there is no flat tax versus removal of the corporate tax; they are separate issues.