Oct. 12, 2005, 7:59AM
Think the U.S. should replace
the income tax?
Bush's advisers have other ideas, including a flat tax
New York Times
WASHINGTON -
President Bush's tax advisory commission indicated on Tuesday that it would not propose replacing the income tax with a national sales tax or a value-added tax, but would recommend limits in the popular deductions for mortgage interest and employer-provided health insurance.
The commission, scheduled to make its recommendations to the president by Nov. 1, did not take votes or dwell on details, but its consensus on many important issues was clear.
"We're getting focused on the income tax as a base," said the panel's chairman, Connie Mack, a former Republican senator from Florida.
Many prominent conservatives have argued over the years that the income tax is a drag on the economy and should be scrapped in favor of a consumption tax — a tax based not on what people earn, but on what they spend.
But the commission members concluded that consumption taxes had more drawbacks than advantages.
Various proposals for a flat tax — an income tax with everyone paying the same rate — are still under consideration, said Jeffrey Kupfer, the commission's executive director.
At its last meeting, in July, the commission agreed to recommend abolishing the alternative minimum tax for individuals, a step that would cost the federal government $1.2 trillion in lost revenue over 10 years.
With a mandate to develop a proposal for changing the tax system that is revenue neutral — meaning it neither raises nor lowers total tax receipts — the commission must find enough revenue to offset the amount now generated by the alternative minimum tax.
That is mainly what led to an examination of ways to modify the deductions for mortgage interest and health insurance, two of the largest tax breaks now available to individuals. Together, the two deductions will cost the treasury about $250 billion this year.
The commission members decided that another popular deduction, for charitable contributions, should be expanded rather than cut back. They are looking at how to give the tax break to taxpayers who do not itemize deductions.
President Bush is not committed to adopting the commission's recommendations, and the prospects in Congress of limiting the mortgage and health insurance tax breaks, sure to be politically unpopular, are uncertain.
The panel's vice chairman, John Breaux, a former Democratic senator from Louisiana, acknowledged the political difficulty but said, "We've got to make bold recommendations without regard to politics."
Source of Article: Houston Chronicle - Texas, USA
My comments? I'm all for the flat tax. Burn the current tax code in it's entirety and replace it across the board with ONE tax for all. No huge Bible of secret tax laws, no forever-changing rules and regulations... a simple flat tax on everyone, rich and poor alike. Contrary to what the press alludes to, this would actually RAISE money, not deplete the reserve. It would cause the poor people to actually pay a LITTLE tax (10% of 100$ is 10$, right?)... but it would also cause the RICH to pay the equal share! Can you imagine what the tax on 100,000,000 would bring in to the US Govternment? Yeah,... a lot more than Donald Trump is paying NOW. No more tax lawyer mumbo-jumbo and huge companies who have a single cow roaming their grounds to deem their land as farmland to escape higher taxes. It would bring a little RELIEF and equality to the finances of the entire country. Yes, sure, Donald Trump may have a hard time with it at first... but I know I could use a tax break. A flat tax would provide that. Our tax rates are really out of hand. We went to war with the British for less grief than this! Ponder that over your next cup of tea!
What we will be seeing if we don't stand up and make our voices heard to the FEDS on this issue is the DEATH OF THE MIDDLE CLASS in America. It seems, though, the government is going to squeeze it's money out of us (rather than cutting the pork from it's current plans) even if they do adopt a flat tax. Talk of decreasing mortgage tax relief is sad news to those who live in states with unfairly high property tax rates. Home prices are already over-inflated, and foreclosures are on the rise. Without relief, many Americans will be forced to change their lifestyles for the worse. With the energy crisis (gasoline, natural gas and electricity) sucking everyone's wallets dry, is there really much left to offer the Feds? If you consider all the things we already pay tax on, and how much we actually pay through the course of the year, we probably make less than 50% of what we earn already. I haven't actually put the pencil to the numbers, but let's get real... we pay a tax to drive our car, to buy our groceries, to live in our house, to bring home a paycheck, and anything else we conceive of doing. When do we hold the government accountable for what it's spending? How about these endless over-inflated salaries of the "civil servants" who serve in the higher offices? Why not cut those? That would be a start.
Technorati Tags: politics, News, Media, money, Work, financial, Economics, Finance, Real Estate
4 comments:
I couldn't agree with you more, Sprittibee. How about getting rid of the IRS altogether.
I've got a great idea for a future post. Okay, it doesn't really relate to homeschooling. But, I've been wondering:
How you did the little bee cursor?
How you became a marauding marsupial?
Do the technorati tags help bring traffic to your site?
I'll think of more questions later probably. I've been reading your wonderful posts everyday although I've been so busy I haven't had time to post lately. Hope all is well with you, my friend.
Linda, I'm not sure exactly how I became a Marsupial - other than joining the pro-life bloggers. Wierd, if you ask me. I don't get more than 45 views a day on average... at least so far. I think my top day has been around 165, but it was a one time thing. I get tickled when I see that ANYONE is reading my site. I check the little ticker every day or so - out of curiosity. I started the delicious tagging because it was a way to organize my posts by topic. Delicious will create Technorati Tags as well. Technorati brings in a few clicks every now and then... but when you link there, it is only on the front page for the tag for a few hours at best (depending on the tags). Every few minutes, people are tagging. It's really just a habit now. Sometimes I leave them out if I am rambling about personal things.
I'm not sure I would do a blog on this topic, as I am a pretty green blogger... but I know a little bit (un poquito?) of html, and just did a search for a bee cursor and added the html code to my template for the mouse change you see. I linked the site in my sidebar, and mentioned it on the original post after I created it. The website has many cursors to pick from, and the code is pre-written. When you pick the cursor, you highlight the code (copy it) and then open your blogger template and insert it (paste) into the area directly after your template body. Don't put it in the header - it will fry your website formatting. I tried it, and learned that the hard way!
So... there's really no magic behind the bee, except a little virtual elbow grease!
I appreciate the comradery, and enjoy your blog as well!
I saw someone (forget who) point out that a major part of income tax code is simply defining what, exactly, IS income. And that that would not go away even in a flat tax scenario.
After all -- if someone owns a business at home, it isn't fair to charge them 10% on all recipts, when a good amount of those go right back into the business. Instead, you have to figure out what parts are income.
Do you pay taxes on dividends from stock? How about if you never see the money, but it goes right back into the stock?
Do you let losses in one stock sold in a year compensate for gains in another?
For that matter, you still have to make sure people are not paying tax on the money they used to buy the stock in the first place (Ie only on gain, not on the entire check gotten at the time of sale)
How about selling a house? Do you owe 10% on your proceeds from that? Before or after paying the realtor? Or do you owe nothing if you decide to buy another house with the money right away?
Etc.
I never thought about "income" the way My Boaz's Ruth put it. Yes, I would agree that there needs to be a form to figure income. Not everyone receives a W-2 at the end of the year. I work from home as a contractor and only get a 1099, but I do have business expenses. But I do agree on a flat tax. If 10% is good for God, why not the government?
In Georgia they stopped taxing groceries - technically - but I still have to pay local taxes, including those SPLOST taxes that never go away, so I still end up paying 3-4% for groceries. The tax holiday on clothing and school supplies does help, though.
When we got car tags for my dh's car in September we paid $30. I told Wiliam "This is why you drive a used car." Driving used has really helped keep costs down.
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