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amartin315
04-09-2015, 08:10 AM
Is Rand Proposing Raising Taxes For those who earn under 36,000? If he is proposing a flat tax of 17%, and the current marginal tax rate is 15% for the 36,000 bracket, and 10% for the lowest bracket, then that's about a 2 or 3 percent tax increase on poor people...

And I dunno if I like that.

Should I justify this by thinking, "hey this is only a first step toward eliminating the income tax?" Is there some other justification?

And while you're hear, what is Rand going to do about social security and medicare? I always liked Ron's opt-out plan which required cuts to foreign aid, but Rand may not get cuts to foreign aid.

Virgil
04-09-2015, 08:14 AM
His last plan was under $46,000 (I think) you would have no taxes and only after that amount will it start to be taxable. Say you made $47,000 last year you would only have to pay 17% of $1000. I hope this clears it up for you.

-Virgil

RonPaulMall
04-09-2015, 10:29 AM
Is he saying they will be exempt from the 15.3% self employment/FICA tax too? Because you always have to factor that in whenever you talk about a flat tax. Otherwise it does create a pretty regressive system. Even if he is exempting up to $46,000 from FICA taxes, it would still be problematic because the marginal tax rate of somebody earning $100,000 is going to be significantly higher than the rate of somebody earning $200,000 because the former is paying a 32.3% rate on 54% of their income and 17% on the other 46% while the person making $200,000 grand would be paying a 32.3% rate on about a quarter of their income and getting a 17% rate on the rest.

r3volution 3.0
04-09-2015, 04:52 PM
His last plan was under $46,000 (I think) you would have no taxes and only after that amount will it start to be taxable. Say you made $47,000 last year you would only have to pay 17% of $1000. I hope this clears it up for you.

-Virgil

Right, we don't have the details on the plan yet, but the only way you can have a flat rate tax (where the rate is above the current bottom marginal rate) without raising the effective rate on the poor is by increasing the standard deduction. Since Rand's said that his plan will cut taxes for everyone, that must be what it does - big increase in the standard deduction.

Danke
04-09-2015, 05:05 PM
Is he saying they will be exempt from the 15.3% self employment/FICA tax too? Because you always have to factor that in whenever you talk about a flat tax. Otherwise it does create a pretty regressive system. Even if he is exempting up to $46,000 from FICA taxes, it would still be problematic because the marginal tax rate of somebody earning $100,000 is going to be significantly higher than the rate of somebody earning $200,000 because the former is paying a 32.3% rate on 54% of their income and 17% on the other 46% while the person making $200,000 grand would be paying a 32.3% rate on about a quarter of their income and getting a 17% rate on the rest.

I don't think there is an income limit on Medicare portion (2.9%) of the FICA tax.

RonPaulMall
04-09-2015, 07:22 PM
I don't think there is a income limit on Medicare portion (2.9%) of the FICA tax.

True, and good correction. But that still leaves a 12.4% tax that everybody under $120,000 or whatever is going to be paying and that everybody who makes double that won't have to pay on half their income and unless that is addressed, you are going to have a system that in practice will look extremely regressive and make the middle class the highest taxed segment of society.

ctiger2
04-09-2015, 07:32 PM
0% income, death, inheritance, property & capital gains taxes would be freedom, aka the ideal.

cindy25
04-10-2015, 10:02 AM
0% income, death, inheritance, property & capital gains taxes would be freedom, aka the ideal.

the payroll tax alone puts the USA rate above Hong Kong

jbauer
04-10-2015, 10:18 AM
True, and good correction. But that still leaves a 12.4% tax that everybody under $120,000 or whatever is going to be paying and that everybody who makes double that won't have to pay on half their income and unless that is addressed, you are going to have a system that in practice will look extremely regressive and make the middle class the highest taxed segment of society.

Um....because after $120k you don't get any benefits from SS. You've maxed out the program.