Quote:
Originally Posted by polak
Edit: What would you set the exemptions at? It'd have to be quite high for me to agree with a flat tax.
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Just for fun, pretend the flat tax was 15% and the personal exemption was $50k. Compared to the "old" system of a 10% flat tax and a $20k exemption:
Earnings Old Tax Percent New Tax Perecent
($k)--------($k)----(%)-----($k)------(%)----
20k---------0-------0--------0---------0
30--------- 1------- 3.3---- 0---------- 0
40--------- 2------- 5------ 0---------- 0
50--------- 3------- 6------ 0---------- 0
60--------- 4------ 6.6---- 1.5-------- 2.5
70--------- 5------- 7.1---- 3---------- 4.3
80--------- 6------- 7.5---- 4.5 --------5.6
90--------- 7------ 7.8------ 6 ---------6.7
100 --------8------- 8------- 7.5------- 7.5
125-------- 10.5---- 8.4 -----11.25----- 9
150 -------13------- 8.7------ 15 -------10
200 -------18 -------9---------22.5---- 11.25
500 -------48------- 9.6-------67.5 ------13.5
1000------98 -------9.8 -------142.5 ----14.25
In other words anyone making under $50k/year (approximately the median income) pays no tax. Anyone making under $100k/year is paying less tax than they currently do. Someone making $150k/year is only paying $2k or 1.3% higher taxes.
No idea what the tax curve actually looks like, this was just for fun. Some combination of a lower exemption and a higher tax rate may be required to get enough revenue....
Quote:
Originally Posted by Slava
Thats the glory of a consumption tax pure and simple. No paperwork, no deductions, no messing around to save pieces of paper for the better part of a decade, and relatively stable and secure funding for the government.
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Agreed. I'd just like to see tax reform at the same time. Federally as well. Deductions are nothing more than bribes at election time. You've got kids? Here's $500 each. You drive an electric car? Here's $1,000. You're going to university? We'll buy your books. You're in the trades? We'll buy your tools.