A question about taxes I always hear that after the tax cuts for the Wealthy ?

[light200763]

A question about taxes I always hear that after the tax cuts for the Wealthy by JFK Reagan and the Bush tax cuts that the Wealthy pay more money in taxes can any Conservative explain the reasons for this ? I don't understand how the Wealthy would pay most of the taxes if they are paying a lower tax rate. I also want to know if the economy is good and the government gets more revenue do the Wealthy pay more taxes ?

A Brief Guide to the Flat TaxBy Daniel Mitchell, Ph.D.
July 7, 2005

Frequently Asked Questions

Q: Should the rich pay more?

A: Under a flat tax, the rich do pay more than the poor. A wealthy taxpayer with 100 times more taxable income than his neighbor will pay 100 times more in taxes. However, a flat tax does not impose special penalties on those who contribute the most to the nation's prosperity by subjecting them to punitive and discriminatory tax rates. For those who think the "rich" should pay a higher percentage of their income, the generous family allowance effectively creates a modest level of "progressivity." For instance, a family with an annual income of $20,000 faces a tax rate of zero. Wealthy taxpayers also benefit from the family allowance, but the effective tax rate on an income of $1 million will be only a tiny fraction below the statutory tax rate.

This approach is much fairer than the current system, which penalizes investors, entrepreneurs, and others who create wealth for the American economy while simultaneously providing myriad deductions, credits, exemptions, and other preferences that are much more likely to be exploited by upper-income taxpayers. The flat tax eliminates these special-interest loopholes, ensuring that the rich play by the same rules as other taxpayers.

http://www.heritage.org/research/reports/2005/07/a-brief-guide-to-the-flat-tax

[light200763]

Does anyone have any view of this thanks ?

[Travlyr]

The rich pay the most so that they can control the process. They also benefit the most from the counterfeiting operations.

Income Taxes are from Marx's doctrine. A free society is not taxed on their labor. End the Income Tax and replace it with nothing is the goal.

[spudea]

the more wealthy have more income subject to taxation.

[Simple]

I know Roy L (and Henry George?) doesn't exactly have a warm following in these forums, but I do see the Land Value Tax as a lesser of evils among versions of taxation,and based on what I've seen from OWS and the class warfare crowd, this is a system of taxation which could enjoy populist support, be less destructive then taxing productivity, actually improve land development as people act in their own interest, and it'd fit right in with Ron Paul's proposals concerning selling off some of the federally managed lands. If

If people aren't ready for a free society with no taxation, maybe we can support a libertarian minded alternative to taxation. Taxing the land makes more sense than taxing productivity or consumption. A nice bonus of the proposal is that the only way to increase the tax base is to sell of more federally managed lands. Its not a perfect proposal, but if people are not ready to accept a tax free society yet, we can make progress towards that goal.

I could go on, but I think I'll just go visit the LVT tax thread :eek:

[erowe1]

They don't pay a lower tax rate. They pay a higher tax rate.

As for government revenue, the goal needs to be to decrease revenue. So if you cut tax rates and revenue goes up, that just means you didn't cut them enough.

[Zippyjuan]

A flat tax would have to get rid of all deductions. There are currently more deduction options available to those at higher incomes than those at lower incomes. If you leave deductions as they are and institute a flat tax then those at lower incomes will end up paying a higher percent of their total income in taxes than those at higher income levels otherwise. Currently the wealthy may face a higher tax rate but by using deductions they are able to lower that rate.
The Tax rate is the marginal rate- the rate the last dollar earned was taxed at. The average rate is usually lower (that is the actual tax paid as a percent of your total income)- any dollar excluded from being taxed is taxed of course at zero percent.

If you make say $20,000 a year, your marginal tax rate is 15% but not all of your income gets taxed. There is the personal exemption plus at least one deduction. This person may end up owing no federal income taxes (last year 46% of all taxpayers owed zero). Their marginal rate would be 15% but their average rate would be zero percent. If you are single and earned over $380,000 last year, your marginal rate was 35% but again, anything which removes any part of your income from taxation will lower that percent for your average tax rate.

[light200763]

Would'nt 10% of a Million dollars be more then 10% of hundred dollars if we had a 10% flat tax ? Also would'nt the Government get more revenue from lower taxes if we had a flat tax therefor the Rich would pay more ? Should'nt the Rich/Wealthy paying more money in taxes under a Flat Tax make the Left happy ?

[light200763]

On My Mind
A Kinder, Gentler Flat Tax
John C. Goodman, 09.29.05, 12:07 PM ET

How to reform our tax system--and satisfy both the left and the right.

http://www.forbes.com/forbes/2005/1017/042.html

[jt8025]

Would'nt 10% of a Million dollars be more then 10% of hundred dollars if we had a 10% flat tax ? Also would'nt the Government get more revenue from lower taxes if we had a flat tax therefor the Rich would pay more ? Should'nt the Rich/Wealthy paying more money in taxes under a Flat Tax make the Left happy ?

Wealthy people are paying more in general depending on how they earn their money.

The wealthy people (who earn money through wages) did get a tax rate decrease under Bush (so did everyone else) but they still pay a higher rate.

Clinton Tax Brackets - 15, 28, 31, 36, 39.6
Bush Tax Brackets - 10, 15, 25, 28, 33, 35

So you see "Tax cuts for the rich" were from 39.6% down to 35% on wages. However the lowest bracket went down from 15% to 10%. So everyone got a tax cut not just the wealthy.

Part of me would like to roll back the taxes to the Clinton years and watch the people in the lower income brackets calling for this realize what they just did to their paycheck. But what is being called for by Obama is only rolling back the upper income tax rates.

Now how Warren Buffett can claim he pays less than his secretary in taxes is that he earns most of his income through capital gains not wages. Capital gains during the Bush years was cut from 25% to 15%.

So yes Warren Buffett pays 15% on his capital gains (minus whatever loopholes) and his secretary may pay 25% on her wages. They are both taxes but are not earn in the same way.

I would be in favor of a flat tax over our current system. Ron Paul is for a very flat tax - like 0%.

A flat tax would help make government more accountable because more people would be paying taxes. That is, unless the government made 12,984,873 loopholes like they most likely will.