
Originally Posted by
GasMan
I would be down with a flat tax. My ideal flat tax would have only one deduction (first $20 or 30k) and then a flat 20-25% rate. Because those making lower wages would have a higher % of their income exempt it would inherently be progressive especially at lower income levels. The rate would be determined by spending, allowing the government to only carry a projected deficit/surplus at a set % of the total budget.
How do you define income? If deductions are limited, and I am a businessman, do I no longer have the full ability to deduct expenses? If I am able to deduct expenses, does this include non realized expenses like depreciation? If I cannot deduct depreciation, are capital expenses treated as ordinary expenses? If the capital expense is more than my years income.....
My point is that what seems like a simple a absolutely clear idea, is way more complex.
Are loans considered income? So, if I have an asset that is growing, and instead of selling it, I take a loan, is that income? Is the growth in value in my life insurance policy considered income?
Flat tax proposals are not simple. The fact is that Gov Romney was paying under 15% on his income, because it was not defined as ordinary income. This is not to castigate him, it is to point out, a simple word like income, and flat tax, is not simple.
Here is the question of the day, does anyone think that wealthy people should pay a lower percentage of their income to taxes than middle class people? Don't argue tax brackets, just a simple question. Do you think someone earning 46 million dollars should pay a lower percentage of their income than say someone earning sixty thousand?