Kari,
Why is it regressive? Do you mean that some people will pay more taxes than they already do? At least it’s fair.

I don’t like the idea of a flat tax. I need the dependent deductions and credits to raise my family.

#3 “Ron, It takes a larger amount of money needed for basic necessities from the poor, rather than from those who have a greater ability to pay their taxes from disposable income.”

Most flat tax proposals I’ve seen address the regressivity objection by allowing each taxpayer a certain floor amount of income before the tax kicks in. This is meant to take the place of the dependent deductions and credits that jks mentioned.

As someone with a CPA background, I’m sympathetic to the flat tax. However, I think the crowd that claims its advent will abolish the IRS is badly overstating the case. Any government that taxes something as private as someone’s “income from any source derived” is going to need a robust enforcement mechanism to ferret out the cheats.

National sales taxes or VAT taxes have the appeal of broadening the tax base while encouraging saving/investment. But I would never support them unless their implementation was coupled with the repeal of the 16th Amendment authorizing the income tax. Silly me, but I can’t see myself exactly trusting Congress when it promises us all that we’ll nevvveerrrr wind up with both kinds of taxes at the same time. Cynical me!

The biggest problem I see with the Fair Tax lies in switching over to the new system. The current system taxes people on earnings, meaning any money they have has already been taxed. The Fair Tax is a consumption tax. If we switch over, then everybody who has saved money, and been taxed on that money, will be taxed again when they spend it.

The second problem I see has been mentioned: the government loses a lot of its ability to influence or control behavior. Like child tax credits, etc.

A third problem I see, though I’m no economist, is that it would discourage buying stuff, which would hinder growth of the economy. I wonder what economists think about this, whether this would be the case or not.

In the immortal words of Leona Helmsley, “we (the rich) don’t pay taxes only the little people do.” I’m sorry anyone thinks one could get a fair tax out of a House controlled by the current Republicans, as they want to lower taxes for the wealthy and cut programs that benefit the poor and middle class. If you have such faith, Ive got a bridge to sell you in an eastern city where the Dogers used to play. The U.S. Senate? 2/3 of its members are millionaires as well as nearly all require large political contributions of wealthy corporations.

Every time a proposal for a flat tax has been proposed certain exclusions seem to be added. For example, Steve Forbes wanted to exclude capital gains . Others proposed adding business profits paid as wages to the excluded list. The Gucci Gulchers from K street would have a field day collecting for all the lttle “exemptions” and “credits” they could get through Congress.

Dream on

Let’s remember, businesses don’t pay taxes, they pass them on to us in the form of higher prices. So by all means increase the taxes on the small business owner. She will just have to increase prices, lay someone off, or go out of business. But then again those rich business men deserve it don’t they.

Well, how about we allow that people need a certain amount to live…..like $75,000 and those people pay no taxes and tax everything over that at 10%? That makes sense to me. Businesses do pay taxes but if we tax them to extinction, none of us will have any money.

I like my idea.

Me and Bill had to pay something like $5000 last year–can’t remember what–and my daughter in law, who didn’t even work, got $10000 BACK! This year, even though we modified our W-4′s we are still paying over $2000 (now that’s on TOP of what was deducted from our checks every month) and our daughter-in-law, who worked uh, about 6 months, received a $7000 refund. Which she promptly blew. Something is very rotten in Denmark.

11. The answer is not to fund that 10%, it is to try and not spend that 10% The problem arises because people like #10 get all up in arms about the federal government cutting funding for things it has no business funding in the first place. Clearly Stan believes that allowing Mrs. Helmsley to keep the same percentage of her hard earned money as I do is somehow a bad thing. Because clearly Leona will only spend that extra money on flyaways to the Hamptons and new jewelry. Never mind the fact that when she spends her money, she allows a business owner to make money which he can then use to hire another employee who can then feed his family.
When are the commies going to agree that it’s not actually fair to confiscate a higher percentage of someone’s income just because their income is higher? Then again, if they agreed then they wouldn’t be commies.

12 I totally agree with your first sentence. I hope the rest is snark.

13. Devyn
They do pay 35% of profits but it make sense as a business owner to try and squeeze an extra 35% in to my profit margin.

#8 buraianto:

“A third problem I see, though I’m no economist, is that it would discourage buying stuff, which would hinder growth of the economy. I wonder what economists think about this, whether this would be the case or not.”

Yes, taxes distort consumption. However, a switch from an income tax and a national sales tax would probably be a wash, since you no longer have payroll witholdings. Your monthly income increases (which might increase your overall consumption), while the taxes paid on goods consumed increases (which might bring consumption back to income tax levels). So in essence, if the powers that be might be able to chose a sales tax rate which keeps your spending habits constant, but allows for a fixed percentage of GDP to be received as tax revenue.

As to the regressivity of a flat tax, one could always tax classes of goods at different rates. Basic grocery items get taxed at a lower percentage, and so on. But I agree that if a transition to a national sales tax were to happen, it needs to be accompanied by a repeal of the 16th Amendment.

I think I am pretty much opposed to the flat tax. I think its really regressive. I agree with a progressive tax system. The only debate for me right now is what should the top tax rate be? I think it should be kept low like 28%.

I also think that SS faces such huge problems that the country should probably look at raising the income level at which you stop paying into SS. Like 200K or so instead of the 100K it is now. Or means test SS. Or we could have more babies which is really the problem with SS.

The rich not only don’t pay taxes, they (and some parts of the middle class) also get their tithing subsidized by the federal government by avoiding taxes on capital gains by donating to the church as tithing investments that have increases over their basis.

The rich have both the incentive and resources to avoid taxes in ways that are perfectly legal which all work to give them a lower tax rate. The most obvious means is to generate a healthy portion of one’s income in long-term capital gains which are currently taxes at 15%. For a point of comparison, someone with an income more than $34,837 in 2010 has a marginal tax rate of at least 25%.

For more on who pays more taxes, I refer you to the parable of the widow and the mite as a means of thinking about the utility of the last dollar the rich and the poor give to the government.

Many states have homestead tax credits to ease the property tax load on those at the bottom of the income distribution, including renters.

I love the idea of a flat tax. Every one pays, every one is invested. Exemptions for food and some housing costs. No 39 ridiculous pages. I also agree that government spending at it’s current level is unsustainable and MUST be cut. Military, transportation, education, entitlements; it all has to be considered. The liberals squawking for more revenue- do you think they will ever be happy? I make hard choices and pass on some things I think i need, so should the government. If we all used our resources with the same reckless extravagance as our gov does we’d be broke by next week.

15. mfranti – yes we live above the poverty level, but in the New England area, you need to make a lot to live a middle class life – but we are very blessed

We don’t have a Mormon Flat Tax, we have a progressive tax. We have been counseled and commanded in General Conference talks by the current and past four Church Presidents at least (not just Apostles or GAs in general) to specifically give very generously in Fast Offerings, Humanitarian Relief, the Perpetual Education Fund, the Book of Mormon Fund, the Temple Fund, etc. These Presidents have explicitly stated that as one’s income goes up the level of contributions should go up *faster*, i.e., the exact definition of a progressive tax. They have said to donate much more than is *required* if we area at all able to do so.

It’s a very bad idea as far as I’m concerned. 10% affects someone alot more at the bottom end of the pay scale, than some else at the top end. That’s when people get divorce they should never say They’ll go have on expenses. Depending on what one makes half is more for some than others.

John, in each of those cases, you are claiming they receive more benefit. But you forget they would also pay many times more in taxes than a lower income person. So if I pay 40k in taxes and you pay 4k in taxes, I have indeed paid more for the greater benefit I have received.

Diane, if 10% affects someone a lot more at the bottom end than the top end, do you believe the Lord was unjust in declaring tithes at 10%?

35 re 33. Exactly right. The notion that people of higher income benefit out of proportion to the taxes they contribute compared with lower income people is a little hard to swallow. Though by no means upper income, I’ve worked hard, I’ve taken risks, and I’ve sacrificed a lot of indulgences and spent an extra 11 years in school to achieve my goals. I employ 7 people, I drive less than most people, the police have never been to my house. I have 1 child in public school. I buy my own cheese. The percentage of my income that goes to taxes is in the low 40′s. I can tell you that the police, schools and courts keep themselves plenty busy “serving” some of the low income renters John Harvey references. How is it again that I benefit more from government services more than I deserve? By the way, John Harvey, The FDR quote if anything argues against your position.
37. Diane. So sorry that you feel poorly served by the church. I hope things get better soon.

Diane-
This is much more complex than the tired populist rich vs poor debate, and presenting it as such skirts the issue. I grew up poor, by the way, so I’m not unfamiliar with the concept. Our society, above all, needs to care for those genuinely in need. My experience, however, in 20 years of close association with entitlement programs is that far too much resource is diverted away from the disabled and the deserving to the disinclined. As for “invariably taxed more”- I would love to see the data on that.

Diane- Clearly you have an agenda born of hard experiences. The assertion made by john henry, if you’ll go to the bother of reviewing, was that since higher earners benefit more from government assistance than lower earners They deserve to pay a higher proportion of their incomes to offset the costs of those programs. I’m simply disagreeing with that by pointing out that like most people, the abilities I have came from working hard, sacrifice, and a willingness to personally bear financial risk, not from disproportionate governmental assistance. You are the one that started this ridiculous “poor people work as hard as rich people” thing. No one has said, and I’m certainly not one who believes otherwise.

Sorry to be the bearer of bad news, but, I don’t have any hidden agenda, I just expressed how your post came across. I even stated in the post that I didn’t know if you are an elitist or not. And, I was never disrespectful in my tone as you have been. You have not only been negative, but dismissive in tone to anything I have posted simply because I have disagreed with what you have posted.. My original response, if you had bothered to check(see what I mean) was in response to Devyn St question, You responded by telling how wrong in thought I am to make this simply about rich vr poor.

oh, loser’s a stupid way to put it. I just meant that, even though I’ve got some problems, I still have something to give. And so do you. You could tithe what you can give. However, it’s moot. Have you checked out John Dehlin’s site yet? He did a wonderful post on staying a member even when you’re disillusioned. Can’t think of the name.

I didn’t get the same point from bearbait’s response to your post. I don’t know from populist, and I don’t know why you’d pay taxes at all. Last year, a couple of my relatives (I griped about it ad nauseum, trying to keep it pithy)only worked about, I think–5 months, if that. They were separated but did get a lot of welfare in the form of medicaid and food stamps. They got $10,000 from the government in the form of a tax refund. My husband and I, who both worked our butts off, had to pay an additional $5000 (can’t remember, it might have been 6 or 4 but it was ALOT of money.

I don’t believe poor people pay taxes at all. I don’t have a problem with them not paying taxes. I do have a problem with my having to pay additional thousands while they receive a handout from the government. It’s not right. And we’re not rich. We’re lower middle class, struggling to pay the bills just like everybody else. We underpaid, but I think we ended up paying a total of $10,000. Should have just written my relatives a check. (we screwed up on our w-4′s). Heck, this year, same people got back over $7000! By “back” I mean, got. We “only” had to pay $2300 this year. Well, don’t get me started.

I get leaders who suck. I get no longer believing in the gospel (I do, but I get how people can stop believing). I get how hard it is to go to church when you’ve been treated unfairly. I don’t get leaving the church. An asshole bishop doesn’t negate the first vision.

My rant about taxes wasn’t directed specifically to you. But there is an inequity in the way taxes are assessed.

sorry, it should have read, we have just been having a conversation.