Rand Paul Tax plan:
14.5% Flat Tax ( all personal income, including wages, salaries, dividends, capital gains, rents and interest.)
Eliminate Payroll Tax (Specifies business taxes must fund Social Security and Medicare obligations first)
Eliminate most tax loopholes (Charitable donations and Mortgage interest deductions preserved)
Eliminate gift and estate taxes and all duties and tariffs
First $50,000 of income is exempt from taxation for family of four / Preserves Earned Income Tax Credit(EITC) for low income families
Plan is expected to lower taxes by 2 trillion dollars over 10 years and increase economic growth by nearly 1% per year
Paul said the plan is meant to “turbocharge the economy and pull America out of its slow-growth rut of the last decade,”
“It shows that we have something we can offer to the working class”
“It will be the largest tax cut in American history, and a tax cut that will leave more money in the paychecks of every worker in America.”
I'm not a numbers man and think Matt will be better equipped to either say this is good or bad.
I'm only going to touch on the $50,000.00 exempt from flat tax and think it should be raised to $75,000.00 and should vary from city to city, state to state. A family of 4 with an annual income of $51,000.00 in New York City would be hard pressed to survive while the family of 4 living in Cincinnati making $50,000.00 per year could live like kings(just a figure of speech by the way).
Song of Solomon 2:15
Take us the foxes, the little foxes, that spoil the vines: for our vines have tender grapes.
I have some pros and cons with this one. I'll discuss them after I get to work. We all know I am a proponent of a flat tax, but there are some things here that I disagree with. Also, while lower taxes would be a wonderful thing, we need to increase our revenues right now. Decreasing will only leave us in a continuing cycle of deficit spending as we cannot cut deeply enough to meet our obligations.
"A great democracy has got to be progressive, or it will soon cease to be either great or a democracy..." - TR
"The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." - FDR
(06-19-2015, 02:21 AM)Nebuchadnezzar Wrote: I'm not a numbers man and think Matt will be better equipped to either say this is good or bad.
I'm only going to touch on the $50,000.00 exempt from flat tax and think it should be raised to $75,000.00 and should vary from city to city, state to state. A family of 4 with an annual income of $51,000.00 in New York City would be hard pressed to survive while the family of 4 living in Cincinnati making $50,000.00 per year could live like kings(just a figure of speech by the way).
Totally agree.
Oh, and as soon as this would pass the states and localities would be jacking up taxes to make up the difference so they could afford not only THEIR needs, but to fund all the federally mandated things they have to do.
Your anger and ego will always reveal your true self.
Rand Paul Tax plan:
14.5% Flat Tax ( all personal income, including wages, salaries, dividends, capital gains, rents and interest.)
Eliminate Payroll Tax (Specifies business taxes must fund Social Security and Medicare obligations first)
Eliminate most tax loopholes (Charitable donations and Mortgage interest deductions preserved)
Eliminate gift and estate taxes and all duties and tariffs
First $50,000 of income is exempt from taxation for family of four / Preserves Earned Income Tax Credit(EITC) for low income families
Plan is expected to lower taxes by 2 trillion dollars over 10 years and increase economic growth by nearly 1% per year
So I will address these point by point as far as my take on things. I have some commentary on something else he mentioned that isn't listed here as well:
14.5% is a good number. I'm not going to spend the time crunching the numbers as to the full effects, but I think upping it to maybe 16% for something I mention later on may be good.
Eliminating the payroll tax is something that I find to be an intriguing idea. Putting the burden on the employer to pay for OASDI/HI is interesting and I'm not sure how many businesses would take it. Would definitely be a boost to the people.
I'm about eliminating all tax loopholes. Leaving charitable donations and mortgage is an interesting move, and something that shows he is still pandering to the GOP with this some. These two deductions are, in today's society, only available to upper and upper-middle class America. Just close them all and make this a true flat and fair tax.
Gift and estate taxes as they stand only come into play for a small portion of the country. I don't know why this is such a big fight for them to be gone. It was funny, my parents were told to look at transferring property to me now to avoid these taxes. I told them don't bother, they don't own enough for it to be an issue. When you gain income from any other source, taxes are paid. I'm not sure why people think that there shouldn't be taxes on gifts and estates. But I digress. Duties and tariffs. That is an interesting one. They don't do much for our budget now but considering how much we are fighting the whole free trade idea right now I will be shocked if people accept that considering it is the epitome of free trade. Well, I probably won't be shocked because I don't think most people know what free trade actually means beyond the pundit buzzword of the quarter.
I like that he wants to keep the EITC. What I think would be a great idea and have proposed all along, going back to number 1, is to set a panel of economists to look at the average CoL around the country. Maybe 150% of poverty level or something. Set that amount for single, married, number of dependents, and that amount based on your return is tax free. This makes your basics be covered tax free, essentially. Now, CoL is different all over the country, but since this is a federal thing we would unfortunately have to rely on an average. Ideally, each state could then use more specific information to make their taxes offset some things. The tax codes in this country are so convoluted that the states should get in on a revamp as well.
I'm all for lowering taxes, once we fill in this hole a bit more. As for the economic growth, I can see some coming from this, but the elimination of duties and tariff will see to a decrease in net exports for us.
On the Breitbart link he mentioned: "Business benefit from how my plan will simplify deductions by getting rid of current expense depreciation schedules and making capital expenses deductible in the first year." This is someone who doesn't understand finance/accounting. This can help some businesses, hurt others. One thing is for certain in that it will keep my former colleagues, the corporate tax accountants of the world, employed as this will be a mess to sort out the differences between GAAP/FASB/IASB/SEC reporting and what the IRS would want.
"A great democracy has got to be progressive, or it will soon cease to be either great or a democracy..." - TR
"The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." - FDR
(06-19-2015, 07:51 AM)Belsnickel Wrote: Also, while lower taxes would be a wonderful thing, we need to increase our revenues right now. Decreasing will only leave us in a continuing cycle of deficit spending as we cannot cut deeply enough to meet our obligations.
(06-19-2015, 02:21 AM)Nebuchadnezzar Wrote: I'm only going to touch on the $50,000.00 exempt from flat tax and think it should be raised to $75,000.00 and should vary from city to city, state to state. A family of 4 with an annual income of $51,000.00 in New York City would be hard pressed to survive while the family of 4 living in Cincinnati making $50,000.00 per year could live like kings(just a figure of speech by the way).
But isn't that NY's problem? Why should someone who can choose to live in CIN have to subsidize someone who chooses to live in NYC? You do see that if those people leave NY, then NY would have a problem they have to address?
Federal govt really shouldn't be involved in redistributing income from state to state. State are fully capable of raising taxes to supplement federal welfare programs because of their higher COL.
1- When people say this will lead to more spending, I'm not so sure. They will have more money in their pocket, but generally it's just going back into paying the tax. So while they're spending higher dollar amounts, they aren't buying more stuff. So there's not any real job creation associated with it. If anything, possibly less as people are spending less because it costs more.
But that's a lot of guess work. And you can argue one side or the other of it and I'll probably agree. My real issue is....
2- They won't close the loopholes. They say things like "no loopholes" but what they mean is "we're going to put loopholes in and we know there's not a whole lot you can do about it."
Too few people have too much invested in gaining the ability to consider a race horse, a jet or other luxury items as tax deductions. They aren't just going to shrug and say "well, let's go back to paying for those like you do everything else."
How much would be lost for the gaming industry alone if people couldn't write off gambling losses?
Gift and Estate taxes are just vile. the only reason they are taxes is to take people down. It's to kill a family who grows wealth little by little each generation.
I don't care for the Earned income tax credit either but I am sure that's being kept to balance the plan amoung everyone.
He did say he will have a balanced budget so that means all the gov will fit into what he brings in with this plan.
(06-19-2015, 02:22 PM)StLucieBengal Wrote: Gift and Estate taxes are just vile. the only reason they are taxes is to take people down. It's to kill a family who grows wealth little by little each generation.
Is this supposed to be a joke?
Gift and estate taxes are two the biggest elitist perks this country has to offer.
A guy who works hard to earn a million dollars has to pay tax on it while a guy who does NOTHING to deserve inheriting a million dollars gets it tax free.
Also retaining the mortgage deduction is more pandering to the wealthy.
I don't know the numbers on the flat tax, but I know that we will still have to collect as much tax under the new plan as we are right now. So if the amount collected remains the same all the flat tax does is shift more of the burden to the lower income earners.
(06-19-2015, 02:33 PM)fredtoast Wrote: I don't know the numbers on the flat tax, but I know that we will still have to collect as much tax under the new plan as we are right now. So if the amount collected remains the same all the flat tax does is shift more of the burden to the lower income earners.
His budget will be much Lower than the current level. Says it will be balanced. So this will be what he governs with....
(06-19-2015, 02:38 PM)StLucieBengal Wrote: His budget will be much Lower than the current level. Says it will be balanced. So this will be what he governs with....
Still no need to shift more of the burden to the lower income brackets.
(06-19-2015, 02:32 PM)fredtoast Wrote: Is this supposed to be a joke?
Gift and estate taxes are two the biggest elitist perks this country has to offer.
A guy who works hard to earn a million dollars has to pay tax on it while a guy who does NOTHING to deserve inheriting a million dollars gets it tax free.
Also retaining the mortgage deduction is more pandering to the wealthy.
??? When did owning a house become a wealthy thing?
“History teaches that grave threats to liberty often come in times of urgency, when constitutional rights seem too extravagant to endure.”-Thurgood Marshall
1- When people say this will lead to more spending, I'm not so sure. They will have more money in their pocket, but generally it's just going back into paying the tax. So while they're spending higher dollar amounts, they aren't buying more stuff. So there's not any real job creation associated with it. If anything, possibly less as people are spending less because it costs more.
But that's a lot of guess work. And you can argue one side or the other of it and I'll probably agree. My real issue is....
2- They won't close the loopholes. They say things like "no loopholes" but what they mean is "we're going to put loopholes in and we know there's not a whole lot you can do about it."
Too few people have too much invested in gaining the ability to consider a race horse, a jet or other luxury items as tax deductions. They aren't just going to shrug and say "well, let's go back to paying for those like you do everything else."
How much would be lost for the gaming industry alone if people couldn't write off gambling losses?
You can only write off gambling losses against wins.
“History teaches that grave threats to liberty often come in times of urgency, when constitutional rights seem too extravagant to endure.”-Thurgood Marshall
(06-19-2015, 02:51 PM)michaelsean Wrote: ??? When did owning a house become a wealthy thing?
When did poor people get the same mortgage deduction as millionaires? You want a flat tax rate, but you also want to give people with more expensive houses a bigger tax break? Seems like a contradiction to me.
What does owning a house have to do with paying your fair share of taxes?
I have a tough time seeing how this is only going to cost $200B a year, most likely that's net of additional revenues from the projected 1% growth.
For starters, everyone pays 7.65% FICA, so already we're down an incremental 7% on the flat tax. And corporations are going to cover SS? I thought the average effective rate of corporations, even after all the deductions, is @ 22%.
You don't eliminate the two biggest deductions - charity and mortgage (which would not be wise to do so). You're also cutting out estate taxes (which aren't that significant).
You're effectively reducing dividends from 20% to 14.5%. The exemption for family of four on $50k...you're LOSING their 7.65% FICA, which is huge when talking almost half the country.
The main advantages of a flat tax are simplicity, but most people favor a progressive tax system. And this evolves into something of a bait-and-switch, which is you go to a flat tax but then end-up with a bunch of credits to make it progressive...really just a mirror image of a progressive tax rate with deductions and exemptions.
The only way you're going to significantly increase revenues (as a % of GDP) over the long-run is implementing a VAT. That is the inevitable consequence if we don't reduce or slow spending increases.
(06-19-2015, 02:57 PM)fredtoast Wrote: When did poor people get the same mortgage deduction as millionaires? You want a flat tax rate, but you also want to give people with more expensive houses a bigger tax break? Seems like a contradiction to me.
What does owning a house have to do with paying your fair share of taxes?
The interest deduction is capped at $1.2M, I believe. If, over 30 years, prices double the guy with a $500k house can exclude his entire $500k gain, while the other will be hit with a net capital gain of $700k. So it's still pretty progressive.
There has been talk over the years of lowering the cap to $400k.
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