On October 18 2011 00:26 cLutZ wrote: What is wrong, exactly, with a tax system that is not progressive (which is what people mean when they says this is regressive, its not like the first 10k is taxed at a higher rate)?
The only thing that I can see that is bad about economic stratification is that is leads to civil unrest and revolution, but it seems like greater inequality is better for the economy (because smarter people make smarter investments theoretically) so long as revolutionary tendencies don't take over.
A flat sales tax is regressive, as poor people spend more of their income. So it affects poor more than rich. That's what regressive means. The 9% income tax is neither regressive nor progressive. It's the 9% sales tax that is regressive.
I think people don't seem to realize that a 9% federal sales tax is actually pretty crazy. It's ridiculous. The middle and lower classes are hurting enough already. Not to mention the double sales tax situation that a lot of states would have.
Okay after all warren buffet say tax the rich, america's going on to implement a regressive tax that hurts the lower bracket of incomer earners... The only reason i can think of them not implementing progressive taxation is the backlash from the rich.
The 9-9-9 tax plan isn't egalitarian, no matter what Herman Cain says in debates. The current US tax code is progressive in nature and no flat tax rate can achieve that. That said, the top tax rate has been 70%+ in the period 1936 to 1980 and I'd say the rich people got rich just as actively back then as they are under a 35% tax rate.
However, the true culprit to inequality isn't a bad tax code. It's structural problems in the economy that lead to Wall Street getting richer and richer, making millions with risky methods while Main Street earnings remain relatively unchanged. Policymakers should aim to equalise pay packets, not just the tax code. Of course, if those policymakers dare to ire the rich at all.
In Israel almost everyone that's middle class+ pays a bit more than 50% income tax to the government. So as I see it your situation (~10%) is far more favorable.
Here's an interesting perspective. I think a sales tax is superior to an income tax but Herman Cain plan has some problems. I'm also concerned about when 9-9-9 becomes 11-11-11 then 15-15-15.
On October 24 2011 19:46 Mobius_1 wrote: The 9-9-9 tax plan isn't egalitarian, no matter what Herman Cain says in debates. The current US tax code is progressive in nature and no flat tax rate can achieve that. That said, the top tax rate has been 70%+ in the period 1936 to 1980 and I'd say the rich people got rich just as actively back then as they are under a 35% tax rate.
The problem is the loopholes and corporate wellfare. If the rich at any point actually DID pay 70% of all their income, that'd be absolutely horrible.
However, the true culprit to inequality isn't a bad tax code. It's structural problems in the economy that lead to Wall Street getting richer and richer, making millions with risky methods while Main Street earnings remain relatively unchanged. Policymakers should aim to equalise pay packets, not just the tax code. Of course, if those policymakers dare to ire the rich at all.
equalize pay brackets what? Where's the incentive to excell then?
On October 24 2011 19:43 aFganFlyTrap wrote: hermain caines ridiculous 999 tax doesnt even warrant a thread and hes just in this to make money and build his brand.
it's worth it just to prove how stupid it is and kill him before he gets any steam heading into primaries.
Wasn't another major complaint, besides the ones outlined in the op, that this plan would also result in a major shortfall as far as what the fed govt collects year to year?? so not only would the low-middle class residents get a huge hike, but the federal government would also have to slash a whole bunch of shit out of the budget or go further into debt hell??
i mean, this country really, really needs to get spending under control, but trying the pull the table cloth out from everything in the budget and just keeping what doesnt break from the shortfall isn't the way to do it.
The other major thing from what I've been reading is that the reduced rate for corps is expected to be made up in business investments and payroll increases. This thing entirely hinges on trickle down, which sure as shit isn't gonna happen in the midst of a recession. Businesses will hoard that shit until they're in the clear, and even then, it's not gonna happen to the extent that anticipated by this plan
On October 17 2011 07:41 Navillus wrote: I would never ever want an economics plan to be passed when one of the main merits of the plan is that it's easy to remember because it arbitrarily uses to same number for 3 largely unrelated taxes.
This x 1 billion. I don't think we should be structuring our entire tax code around an idea that was chosen primarily because it fits neatly in a sound bite and caters to the simple minded. Tax code simplicity is overrated. Give me an economically correct tax code over an arbitrary simple one any day.
On October 24 2011 20:20 Zokkar wrote: In Israel almost everyone that's middle class+ pays a bit more than 50% income tax to the government. So as I see it your situation (~10%) is far more favorable.
I'm sure if you read even the first page of this thread or had access to Wikipedia for more than 2 minutes you would not have posted something so incredibly stupid.
On October 24 2011 19:46 Mobius_1 wrote: The 9-9-9 tax plan isn't egalitarian, no matter what Herman Cain says in debates. The current US tax code is progressive in nature and no flat tax rate can achieve that. That said, the top tax rate has been 70%+ in the period 1936 to 1980 and I'd say the rich people got rich just as actively back then as they are under a 35% tax rate.
The problem is the loopholes and corporate wellfare. If the rich at any point actually DID pay 70% of all their income, that'd be absolutely horrible.
However, the true culprit to inequality isn't a bad tax code. It's structural problems in the economy that lead to Wall Street getting richer and richer, making millions with risky methods while Main Street earnings remain relatively unchanged. Policymakers should aim to equalise pay packets, not just the tax code. Of course, if those policymakers dare to ire the rich at all.
equalize pay brackets what? Where's the incentive to excell then?
1, The rich paying 70% of all their incomes will not cripple the economy. They will not lose all their incentive to work and will not move all their assets abroad just because of high tax rate, the USA still holds a premier spot as the largest and most active economy in the world (even in this climate). A low Capital Gains tax rate will help facilitate investment and also encourage performance-based compensation for executives, giving them incentive to perform well. But an absolute 0% as suggested by Cain may not be the optimal, I feel it is an opportunity to decrease the government deficit and help US finances, and a low rate wouldn't harm worthwhile investment.
2, Not eliminating incentives, but restructuring compensation in a way that adjusts for risk and value-add. One reason for the rise in the discrepancy between WS and MS incomes is the repeal of the Glass Steagall Act which meant WS could speculate with your savings, and partake in deals whose upsides meant bonuses while downsides meant shareholders taking the hit (but never for too long). This is mostly the failure of the Federal regulators as well as the Boards of the firms to properly oversee their firms and keep risk in check. In the end, the size of the large firms meant orderly bankruptcies were impossible and MS paid a lot of the bill, too. I would characterise the rise of giant financial entities and lack of oversight as structural problems, leading to WS ditching MS in their unregulated pursuit of profits (which is natural and to be encouraged, nothing wrong with greed, we are all better because of it, as long as it is kept in check). The implementation will of course be very difficult and will require a concerted joint effort by various countries, regulators and banks themselves, otherwise nothing will change because that age-old excuse of "we need the big salaries to keep the best talent".
On October 17 2011 00:02 ScrubS wrote: My father pays almost 40% of his income to the government in taxes. I think that americans finally are paying normal taxes rather than high taxes (for their standards).
But you have to appreciate that the government of the netherlands takes a more active role in the countries day to day running than the US government. Afaik, there is a strong sense of the right to choose and competition governing the market as opposed to government regulation. For instance, your 40% tax rate helps fund your public health system and operate any state owned enterprises you may have. Despite a move to change this in the US, healthcare is still heavily reliant on insurance to cover expenses and whatnot. So the money the US saves on taxes theoretically should be paid back in the form of things that are covered by the government.
Basically, the country has a different ethos towards these things than EU/other parts of the world. It's not really a matter of getting over yourself, rather the fact that one must appreciate the underlying differences between our cultures. Through doing that you will see why things like an 18% tax rate is accepted in the US and why any increases are frowned upon more so than in our countries.
While this is true to an extent, I'm under the opinion that less government is better in America. This country was founded upon freedom and freedom to spend the money you make is one of those freedoms. This country operated under no tax code for a while.
While the op makes mention of the low class, I'm quick to remind him that Cain has repeatedly stated that the low class would pay no income taxes at all. After all, 9% of a little income is just a blip on the government's radar.
The primary emphasis behind this plan is to reduce the government's role while maintaining a fair federal corporate tax rate to keep companies here rather than relocating their HQ. After all, 9% of a corporate budget is much better than no taxes at all from a multi-million or billion dollar company. The current corporate tax rate is absurd, and countries that taxed corporations and the rich have experienced a disaster of them just flat out moving out of the country.
60 minutes did a special not long ago showing how many businesses have just relocated their HQ to Switzerland to avoid the 35% rate here.
You hear guys like Warren Buffet saying, "The rich should pay more," but I don't see Mr. Buffet offering his wealth up to the government.
While saying this however, I do agree there is a need for a standardized healthcare system or at least the federal option we have now. While it won't fix everything, it will guarantee everyone has a right to healthcare, which is a basic freedom I think everyone deserves.
On October 20 2011 05:11 MangoTango wrote: A flat sales tax is a regressive tax.
Because of that reason, I only ever seen talk about a high sales tax together with some kind of base income for every citizen. Those models have 0 % income tax, seemingly ridiculously high sales tax, like 100 %, and then flat base income of for example $1500 for adults and $750 for children (and government bureaucracy, regulations like minimum wage, and all social security measures are cut).
The problem with fixing the tax code is that you need to leave in all the dodges and deductions for the average citizen while eliminating the ones being abused by the absurdly wealthy.
EPT
