Cory Booker, presidential hopeful, rolls out establishment tax plan

[Pauls' Revere]

I would still prefer the states to run the excise/sales tax system and then the states be taxed by the feds but what you suggest combined with tariffs would be much better than the current system.

I'd leave the states alone, let them figure out their own systems. Open up a competitive tax rate war between states, low(er) tax states v/s high(er) taxed states.

[Swordsmyth]

I'd leave the states alone, let them figure out their own systems. Open up a competitive tax rate war between states, low(er) tax states v/s high(er) taxed states.

That's what would happen with my system, the feds would put an X% tax on state budgets and the states would choose what to tax, how to tax it and how heavily to tax it.
States with lower taxes and spending would not only attract more businesses but would also pay a smaller share of the federal tax burden.

[Pauls' Revere]

That's what would happen with my system, the feds would put an X% tax on state budgets and the states would choose what to tax, how to tax it and how heavily to tax it.
States with lower taxes and spending would not only attract more businesses but would also pay a smaller share of the federal tax burden.

How do we get this passed? or at least taken seriously? who would sponsor this?

[Zippyjuan]

Ok, and we all pay the same rate. Everyone, regardless. Abolish ALL other forms of taxation. One single federal rate for ALL. Again, abolish ALL other forms of taxes, one rate to rule them all! LOL

Using Income Tax as an example:
https://bradfordtaxinstitute.com/Fre...Tax-Rates.aspx

Per this source and table the highest rate in 2019 is 40%. Some, I imagine paid zero taxes, like some corporations maybe even some people. Nonetheless, abolish the current tax code and simply set a 20% flat rate. In this example then everyone pays a 20% rate regardless. 20% of your income is 20% wheater it be 100,00 per year or 25,000 per year. Both persons would be contributing the same rate of 20%. No more credits, no more deductions, etc... all of it is gone. Again, I would abolish the income tax but I use this as an example for a flat tax.

37% is the highest "marginal" tax rate- the rate applied to the last dollar earned. In this case, any dollar earned over $500,000 a year ($6000,000 a year for couples filing jointly). But even for this person, not all of their income is taxed at the top rate- just dollars earned above $500,000. Other income is taxed depending on the rate for the income bracket that portion of the income falls into.

The first $13,600 dollars are taxed at 10% (as head of household). Dollars they earn between $13,601 and and $51,800 will be taxed at $12% and so on as they make their way through the brackets. Then deductions and exemptions can reduce their taxable income. $250,000 a year puts you in the top one percent of incomes- at that level, $50,000 of your income would be taxed at 35% (the next highest bracket). $300,000 a year gets you into the top five percent. Median income (half earn more, half earn less) is $53,000 a year.

[Swordsmyth]

How do we get this passed? or at least taken seriously? who would sponsor this?

I would like to see Rand propose it but I don't think there will be an opening to reform the tax system as long as the Demoncrats control the House.

It would help if someone could sell Trump on the idea in time for the 2020 campaign.

[Zippyjuan]

I'd leave the states alone, let them figure out their own systems. Open up a competitive tax rate war between states, low(er) tax states v/s high(er) taxed states.

The idea is to basically have the states collect taxes for the Federal Government and a tax on taxes. But it would not work. For one, not enough revenues. States took in about $900 billion in 2017. https://www.taxadmin.org/2017-state-tax-revenue

You would need a 450% tax on state revenues at current spending levels. States would not want to almost quintuple their tax rates to help out the Federal government. Citizens would revolt. Nobody would support it.

[Pauls' Revere]

37% is the highest "marginal" tax rate- the rate applied to the last dollar earned. In this case, any dollar earned over $500,000 a year ($6000,000 a year for couples filing jointly). But even for this person, not all of their income is taxed at the top rate- just dollars earned above $500,000. Other income is taxed depending on the rate for the income bracket that portion of the income falls into.

The first $13,600 dollars are taxed at 10% (as head of household). Dollars they earn between $13,601 and and $51,800 will be taxed at $12% and so on as they make their way through the brackets. Then deductions and exemptions can reduce their taxable income. $250,000 a year puts you in the top one percent of incomes- at that level, $50,000 of your income would be taxed at 35% (the next highest bracket). $300,000 a year gets you into the top five percent. Median income (half earn more, half earn less) is $53,000 a year.

That's a great system to kill incentive. Why should I bother making more money or working harder (overtime) just to be taxed more?

Besides that's income, I would ABOLISH the income tax, Excise tax on business at point of sale and Sales tax for individuals. Both taxes (excise and sales) are taxed exactly the same rate. This then goes to the floor for debate every three years in front of C-SPAN for everyone to watch. Then we all know exactly how much were getting screwed. I would be willing to bet voter turnout would quadruple when people realize (get woke) to the fact of how much they pay and who the representatives are that vote to raise or lower that rate every three years.

If you wish to raise taxes on corporations fine then you as the individual are going to pay the same rate in the form of a sales tax. Visa versa, If you want to lower your sales tax rate then corporations get to lower the rate to the same rate individuals pay.

I have no problem hearing stories about corporations paying zero taxes. I only want the same break they get, and able to pay zero as well.

Besides, these lame brackets change every few years as the parties move these goal post to fit their base/donors. These brackets is just the governments way of picking who wins and who loses.

[Swordsmyth]

The idea is to basically have the states collect taxes for the Federal Government. But it would not work. For one, not enough revenues. States took in about $900 billion in 2017. https://www.taxadmin.org/2017-state-tax-revenue

You would need a 450% tax on state revenues at current spending levels. States would not want to almost quintuple their tax rates to help out the Federal government. Citizens would revolt.

Citizens would not revolt if all their federal taxes disappeared.

[Zippyjuan]

Citizens would not revolt if all their federal taxes disappeared.

If their state taxes went up five fold, yes, they would. Especially since about half do not pay net income taxes to the Federal government.

[Swordsmyth]

If their state taxes went up five fold, yes, they would. Especially since about half do not pay net income taxes to the Federal government.

Why?

The states could divide up the taxes the same way the feds did and people's total taxes wouldn't change at all.

Maybe it's not such a bad idea for people to have a tax revolt either.

[Pauls' Revere]

The idea is to basically have the states collect taxes for the Federal Government and a tax on taxes. But it would not work. For one, not enough revenues. States took in about $900 billion in 2017. https://www.taxadmin.org/2017-state-tax-revenue

You would need a 450% tax on state revenues at current spending levels. States would not want to almost quintuple their tax rates to help out the Federal government. Citizens would revolt. Nobody would support it.

Yes, taxes are revolting, seems we did pretty good the last time this country revolted against taxation. And wouldn't you think that states would CUT SPENDING so they wouldn't need to tax the hell out their citizens?

[Swordsmyth]

Yes, taxes are revolting, seems we did pretty good the last time this country revolted against taxation. And wouldn't you think that states would CUT SPENDING so they wouldn't need to tax the hell out their citizens?

The states would also be in a better position to go on a tax strike than individuals are.

We might be able to starve the beast and force federal budget cuts too.

[Zippyjuan]

That's a great system to kill incentive. Why should I bother making more money or working harder (overtime) just to be taxed more?

Besides that's income, I would ABOLISH the income tax, Excise tax on business at point of sale and Sales tax for individuals. Both taxes (excise and sales) are taxed exactly the same rate. This then goes to the floor for debate every three years in front of C-SPAN for everyone to watch. Then we all know exactly how much were getting screwed. I would be willing to bet voter turnout would quadruple when people realize (get woke) to the fact of how much they pay and who the representatives are that vote to raise or lower that rate every three years.

If you wish to raise taxes on corporations fine then you as the individual are going to pay the same rate in the form of a sales tax. Visa versa, If you want to lower your sales tax rate then corporations get to lower the rate to the same rate individuals pay.

I have no problem hearing stories about corporations paying zero taxes. I only want the same break they get, and able to pay zero as well.

Besides, these lame brackets change every few years as the parties move these goal post to fit their base/donors. These brackets is just the governments way of picking who wins and who loses.

So you would turn down a raise because it would put you in a higher tax bracket? (again noting that only dollars over a certain amount face the top rate you pay)?

Let's ignore deductions and make an example to see what would happen. Say you were head of household and made $45,000 a year. Then your boss gives you a raise to $55,000. Only money over $51,800 would be subject to the new tax bracket. $55,000 minus $51,800 leaves $3,300 taxed at the higher rate- the rest you pay the same rate as you did the year before. The new rate is 22% and the old one was 12% so that means for that $3,300 dollars you are paying ten percent more. Ten percent of $3,300 is $330. So at the Federal level, that $10,000 in income will cost you $330 more in taxes due to the higher bracket. (Social Security taxes and state taxes may be higher). Would you turn down that $10,000 to save $330?

Besides that's income, I would ABOLISH the income tax, Excise tax on business at point of sale and Sales tax for individuals. Both taxes (excise and sales) are taxed exactly the same rate.

I ran the numbers earlier and if you want to get rid of the income tax and have a balanced budget at current spending levels you need a 75% tax on all sales- including food. If you exclude food or other necessities, you will need a higher tax rate. A $10 case of beer would then run you $17.50.

[Pauls' Revere]

I would like to see Rand propose it but I don't think there will be an opening to reform the tax system as long as the Demoncrats control the House.

It would help if someone could sell Trump on the idea in time for the 2020 campaign.

I emailed Rand & El Jefe.

@realDonaldTrump Sir, for 2020 campaign proposal. ABOLISH the federal tax code. Implement a FLAT TAX RATE for Excise tax (collected at point of sale) on business & Sales Tax for individuals. Both rates are the same and voted in the house every three years.

[Swordsmyth]

I emailed Rand & El Jefe.

@realDonaldTrump Sir, for 2020 campaign proposal. ABOLISH the federal tax code. Implement a FLAT TAX RATE for Excise tax (collected at point of sale) on business & Sales Tax for individuals. Both rates are the same and voted in the house every three years.

What about the leave all domestic taxation to the states and tax their budgets idea?

[Pauls' Revere]

So you would turn down a raise because it would put you in a higher tax bracket? (again noting that only dollars over a certain amount face the top rate you pay)?

Let's ignore deductions and make an example to see what would happen. Say you were head of household and made $45,000 a year. Then your boss gives you a raise to $55,000. Only money over $51,800 would be subject to the new tax bracket. $55,000 minus $51,800 leaves $3,300 taxed at the higher rate- the rest you pay the same rate as you did the year before. The new rate is 22% and the old one was 12% so that means for that $3,300 dollars you are paying ten percent more. Ten percent of $3,300 is $330. So at the Federal level, that $10,000 in income will cost you $330 more in taxes due to the higher bracket. (Social Security taxes and state taxes may be higher). Would you turn down that $10,000 to save $330?




I ran the numbers earlier and if you want to get rid of the income tax and have a balanced budget at current spending levels you need a 75% tax on all sales- including food. If you exclude food or other necessities, you will need a higher tax rate. A $10 case of beer would then run you $17.50.

Irrelevant, the income tax would be ABOLISHED.
Payroll Tax ABOLISHED.
etc...

[Zippyjuan]

Irrelevant, the income tax would be ABOLISHED.
Payroll Tax ABOLISHED.
etc...

Say hello to a national 75% sales tax.

[Pauls' Revere]

So you would turn down a raise because it would put you in a higher tax bracket? (again noting that only dollars over a certain amount face the top rate you pay)?

Let's ignore deductions and make an example to see what would happen. Say you were head of household and made $45,000 a year. Then your boss gives you a raise to $55,000. Only money over $51,800 would be subject to the new tax bracket. $55,000 minus $51,800 leaves $3,300 taxed at the higher rate- the rest you pay the same rate as you did the year before. The new rate is 22% and the old one was 12% so that means for that $3,300 dollars you are paying ten percent more. Ten percent of $3,300 is $330. So at the Federal level, that $10,000 in income will cost you $330 more in taxes due to the higher bracket. (Social Security taxes and state taxes may be higher). Would you turn down that $10,000 to save $330?




I ran the numbers earlier and if you want to get rid of the income tax and have a balanced budget at current spending levels you need a 75% tax on all sales- including food. If you exclude food or other necessities, you will need a higher tax rate. A $10 case of beer would then run you $17.50.

The only federal tax "you" would pay is a Sales Tax. Let's do this one better. Since business will pass on this hypothetical Excise Tax to the customer then we could say that the Individual Sales Tax must be 1/2 what the Excise tax is. I kind like this idea even better.

[Pauls' Revere]

Say hello to a national 75% sales tax.

BINGO!


That's my point! Now you see immediately how screwed you got!

Nice and easy, very transparent even the sheep can understand it!

[Zippyjuan]

BINGO!


That's my point! Now you see immediately how screwed you got!

Nice and easy, very transparent even the sheep can understand it!

So you think a 75% sales tax would be a good idea and much better than the current system. All but the highest incomes would be paying more. Lower incomes a massively higher amount.

Irrelevant, the income tax would be ABOLISHED.
Payroll Tax ABOLISHED.
etc...

And of course the rate would have to be even higher than that. Such a high tax (nearly doubling the price you pay for everything) would force people to buy less (because they can't afford what they used to) so your revenue falls significantly as well so the rate needs to be probably well over 100%.

[Pauls' Revere]

So you think a 75% sales tax would be a good idea and much better than the current system. All but the highest incomes would be paying more. Lower incomes a massively higher amount.


And of course the rate would have to be even higher than that. Such a high tax (nearly doubling the price you pay for everything) would force people to buy less (because they can't afford what they used to) so your revenue falls significantly as well so the rate needs to be probably well over 100%.

No, I want a zero tax rate. But I'm realistic and know that's hardly possible. How about 5% Excise rate and 2.5% sales rate.
people would vote for lower taxes. Because they'd see how much they are really paying.

[Zippyjuan]

No, I want a zero tax rate. But I'm realistic and know that's hardly possible. How about 5% Excise rate and 2.5% sales rate.
people would vote for lower taxes. Because they'd see how much they are really paying.

Total retail sales $5.3 trillion. (I looked at a wrong number earlier- $6 trillion was a forecast for 2022- that means not a 75% sales tax but an 85% tax). https://www.statista.com/statistics/...-retail-sales/

2.5% sales tax rate will raise $132 billion. Interest on the debt alone is three times that. The deficit for this year alone will be about $1 trillion. A 19% national sales tax in addition to current taxes could close that deficit. The government may be willing to consider that IN ADDITION to current taxes.

[Pauls' Revere]

Total retail sales $5.3 trillion. (I looked at a wrong number earlier- $6 trillion was a forecast for 2022- that means not a 75% sales tax but an 85% tax). https://www.statista.com/statistics/...-retail-sales/

2.5% sales tax rate will raise $132 billion. Interest on the debt alone is three times that. The deficit for this year alone will be about $1 trillion. A 19% national sales tax in addition to current taxes could close that deficit. The government may be willing to consider that IN ADDITION to current taxes.

Unless what?...your working only one side of this equation. (Government Expenditures) = (Excise Tax Rate & Sales Rate Incomes)

Unless the government CUTS SPENDING! yep, that means a more realistic balanced budget, military spending cuts, etc...across the board haircut for every government agency. We will quickly determine which ones are worth keeping and which would be abolished or reduced in size. Heck those crazy lefty states can pick up the federal slack and start their own programs to substitute the loss of the federal ones. If say the XYZ program drys up. Each state can start their own XYZ as a substitute and tax their citizens accordingly, but it would be eliminated at the federal level.

[Zippyjuan]

Unless what?...your working only one side of this equation. (Government Expenditures) = (Excise Tax Rate & Sales Rate Incomes)

Unless the government CUTS SPENDING! yep, that means a more realistic balanced budget, military spending cuts, etc...across the board haircut for every government agency. We will quickly determine which ones are worth keeping and which would be abolished or reduced in size. Heck those crazy lefty states can pick up the federal slack and start their own programs to substitute the loss of the federal ones. If say the XYZ program drys up. Each state can start their own XYZ as a substitute and tax their citizens accordingly, but it would be eliminated at the federal level.

Even Ron and Rand Paul were unwilling to try to cut Social Security and Medicare/ Medicaid in their budget plans. That leaves you with this to cut: What would you reduce or get rid of?



Cut 100% of that (no border protection, no military, no government besides Social Security and Medicare) and you only need a 64% national sales tax. (again higher really since the massive tax increase would kill retail sales which in turn would cause unemployment to soar).

Paul's plan differs from many of his rivals in that he does not propose reducing any benefits for massively indebted programs such as Social Security, Medicare and Medicaid.

"I see the Social Security as a contract that we should fulfill if at all possible," he said.

https://www.cnbc.com/id/44942719

[Swordsmyth]

Even Ron and Rand Paul were unwilling to try to cut Social Security and Medicare/ Medicaid in their budget plans.

You can cut them by implementing means testing and freezing all new enrollments after the next 5 years.

[Pauls' Revere]

Even Ron and Rand Paul were unwilling to try to cut Social Security and Medicare/ Medicaid in their budget plans. That leaves you with this to cut: What would you reduce or get rid of?



Cut 100% (no border protection, no military, no government besides Social Security and Medicare) of that and you only need a 64% national sales tax. (again higher really since the massive tax increase would kill retail sales which in turn would cause unemployment to soar).

Predictions are that Social Security and Medicare will swallow up the federal budget anyways at the rate were going. other programs are going to die by attrition. Then we would have to decide what is worth saving and what must go. I'd like to see bases closed overseas, how much would be saved there? etc...the Flat Rate would be set to match the expenditures we have. Once people realize as you've pointed out how crazy the rate would "really" be people would come to terms with whats important for this country.

Meh, not voting to touch SS and medicare is strictly a political move a favorite for the older voters a huge block of boomers these days.

What would you, (if you could decide) reduce to bring an 85% rate down?

[Zippyjuan]

Predictions are that Social Security and Medicare will swallow up the federal budget anyways at the rate were going. other programs are going to die by attrition. Then we would have to decide what is worth saving and what must go. I'd like to see bases closed overseas, how much would be saved there? etc...the Flat Rate would be set to match the expenditures we have. Once people realize as you've pointed out how crazy the rate would "really" be people would come to terms with whats important for this country.

Meh, not voting to touch SS and medicare is strictly a political move a favorite for the older voters a huge block of boomers these days.

What would you, (if you could decide) reduce to bring an 85% rate down?

Ron Paul claimed shutting overseas bases could save $1 trillion. But the entire Department of Defense, including overseas bases, is not $1 trillion. Can't save more than you spend- especially when you still have most if not all of the existing military. Would you simply let the troops and support personnel go or move them back to bases here? If that is the idea (bring them home), it saves little if anything plus adds the cost of moving everything to the US along with cleanup costs and creating space and housing for them here.

Close them down and fire everybody? This would be a low figure since retired military would still be eligible for government payments but let's just assume that the costs of having somebody overseas is the same as having them here (I realize that it isn't but I am just trying to find a simple way to get a very rough estimate). US active duty military was 1.3 million in 2016. Of that, about 200,000 were overseas (15%). I am going to assume that those 15% are also responsible for 15% of total defense spending. That would be about $100 billion of the military budget in the chart posted earlier. That would reduce spending about two percent.

[Pauls' Revere]

Mfg Sales Rev Sales Rev Total Rev Excise Tax Rev Individual Sales Tax Rev Excise Tax Rate Individual Sales Tax Rate Flat Tax Rev
2.25E+11 4.5E+11 6.75E+11 2.475E+12 2.475E+12 11.00 % 5.5 % 4.95E+12

I created a spreadsheet, like I said even I can figure this out.

Given the current government expenditure of 4.79 Trillion (who really knows what it is?) we would need Mfg Sales Rev of (2.25E+11) and Sales Rev of (4.5E+11) and the above rates of 11% Excise Tax & 5.5% Sales Tax to reach 4.95 Trillion.

Obviously sales change etc, but we adjust the rate accordingly to match expenditures. But nice to know a regular Joe can figure this out. It takes a team of PhD tax lawyers to figure out the tax code.

[Pauls' Revere]

Ron Paul claimed shutting overseas bases could save $1 trillion. But the entire Department of Defense, including overseas bases, is not $1 trillion. Can't save more than you spend- especially when you still have most if not all of the existing military. Would you simply let the troops and support personnel go or move them back to bases here? If that is the idea (bring them home), it saves little if anything plus adds the cost of moving everything to the US along with cleanup costs and creating space and housing for them here.

Close them down and fire everybody? This would be a low figure since retired military would still be eligible for government payments but let's just assume that the costs of having somebody overseas is the same as having them here (I realize that it isn't but I am just trying to find a simple way to get a very rough estimate). US active duty military was 1.3 million in 2016. Of that, about 200,000 were overseas (15%). I am going to assume that those 15% are also responsible for 15% of total defense spending. That would be about $100 billion of the military budget in the chart posted earlier. That would reduce spending about two percent.

I would start by disbanding the reserves, 90 day notice you out. Close bases overseas. I think a lot of the budget is wrapped up in maintenance and operations (overhead) but idk. Got to start somewhere, and sooner the better were all going to be.

[johnwk]

I agree with Congress' primary revenue ought to come from taxes at our water's edge. But, what do you mean by a tax on state budgets?



JWK



“…a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue it shall not be oppressive to our constituents.”___ ___Madison, during the creation of our Nation’s first revenue raising Act

Like an income tax or an expenditure tax applied to the states, it would reward low tax and spending states and discourage high taxes and spending.

I'm not sure whether it would require a Constitutional amendment or not but that should be the only domestic taxation allowed for the federal government.

I still have absolutely no idea what you are taxing and how you would calculate what you are taxing.


JWK