Perry's Flat Tax Proposal

[Puppycow]

Perry proposes 20 percent flat tax

The flat rate would be optional: You get to choose whether to pay the flat tax rate or the current rate.
Assuming that everyone pays whichever one minimizes your taxes, it amounts to a tax cut for the rich, but no change for the rest.

He would also cap federal spending at 18% of GDP and privatize social security (optionally).

He does not say what parts of the federal budget are going to be cut to get spending down to 18%. Hint: Americans are getting older and so current projections for Medicare and Social Security, major parts of the federal budget, are projected to rise relative to GDP just due to the changing demographics. What do you suppose is going to have to be cut to get spending down to 18%?

 

[mortimer]

Just some quick maths and stuff.... 18 < 9+9+9, so that's less tax and totally awesome, right? Please correct my arithmetic if necessary.

 

[Puppycow]

Just some quick maths and stuff.... 18 < 9+9+9, so that's less tax and totally awesome, right? Please correct my arithmetic if necessary.

Dude. Three nines means you hit the jackpot. How awesome is that?

ETA: Uh-Oh! I just realized the TRUE MEANING of 9-9-9!!!11ELEVENTY!!!!

 

[darling]

The flat rate would be optional: You get to choose whether to pay the flat tax rate or the current rate.

Which makes the tax system more complex, not simpler. The existing tax code stays in place, and the majority people still have to do their taxes the 'old' way, just to see which will save them the most money.

Assuming that everyone pays whichever one minimizes your taxes, it amounts to a tax cut for the rich, but no change for the rest.

It's not just a tax cut for the rich, it's a tax elimination according to Perry's form[/quote]. Those whose only source of income is capital gains and dividends will pay zero tax.

I can't tell you how bad an idea this is.

Also, the 'postcard size form' is more than deceptive. The "Your 2014 income" line will need to have various schedules and attachments in order to list the various sources of income.

 

[Arrow]

Read that the Texas governors tax plan has received mixed reviews. Overall though glad that new ideas are being thrown out there for discussion concerning our current laws. Reform of the old taxing ways would be helpful in cleaning up our political system.

"Mixed Reviews for Perry’s Optional Flat Tax"

http://www.commentarymagazine.com/2011/10/25/perry-flat-tax-reviews/

&

"Cleaning up Politics Through Tax Reform"

http://blogs.the-american-interest.com/wrm/2011/10/04/cleaning-up-politics-through-tax-reform/

excerpt:

If reformers truly want to find a solution to the influence of special interests in politics, they should begin with the tax code, strip out the existing loopholes (reducing rates to make it revenue neutral) and look for ways to make it harder for lobbies and legislators to play games. Over the years, the tax code has become littered with thousands of small exceptions, written by individual politicians to benefit interest groups and political supporters in their state. Beer brewers in Wisconsin, horse farms in Kentucky, Nascar in New York — the countless minor tax exemptions for local businesses have made the tax code confusing and unwieldy, and have given politicians ample opportunity to throw bones to their political supporters at the public expense.
A reformed tax code with flatter, broader and lower tax rates with fewer exemptions would remove the incentives for interest groups to sweeten politicians through donations. Such a plan could draw bipartisan support — Republicans have long wanted a simplified tax code with lower rates, while Democrats should welcome the closing of loopholes to raise revenue even at lower tax rates.