Less than 1/2 of Americans have an income (I forget the actual number) so the 300 million plus population number is irrelevant. I cut off the line at $100,000 because all of these Americans would be worse off under this tax proposal. Remember that all "deductions" on personal income are eliminated. By leaving Social Security/Medicare FICA/Payroll/Self-employment taxes out of the equation all of those earning less than $113,000/yr are worse off under this tax plan. They are all responsible for an additional 15.3% tax on gross personal income. Many argue that the employee doesn't pay all of thise because an employee directly pays 7.65% in reported income but additionally they pay the "payroll" tax that is just unreported income that is directly paid for by the employer but is still tied to the employee's gross reported earnings. This is best exemplified by the "self-employment tax" that is the full 15.3%. Anyway, for a person with a $100,000 income they would pay $19,700.00 in income taxes plus $15,300 in FICA/Payroll/Self-employment taxes for a total tax burden of $35,000. It can be noted that for an employee they would have $100,000 in "reported" income plus $7,650 in "unreported" income. The self-employed would be taxed on only the "reported" income because they don't have any unreported income. This brings up another issue. The proposal was that there would be no tax on enterprise but that only applies to corporations. The Self-employed reports all of their net income from Schedule C on their 1040 form and all of this would be taxable. A corporation would have no tax burden under this proposal and the only taxes collected would be on corporate net income that may or may not be paid out as dividends to the stockholders where the stockholder pays an income tax. Why is the all of the net income of the self-employed taxed but corporations don't have this tax burden on their net income? This is a problem that I addressed where a corporation could write-off dividend payments as a cost to the business and then the "net income" remaining would be taxed at the same tax rate that is applied to all income regardless of source and regardless of the entity, either a person or corporation, that receives the income.
I'm going to bring up one point again (and again) and that is if the tax rate isn't based upon "expendatures" then we'll never have a balanced budget and will never be able to reduce the tax rate based upon reducing expendatures. Setting an arbitrary tax rate accomplishes nothing and it about as worthless as the "Balanced Budget Amendments" that have been proposed in the past that have so many leaks in them that they would never reduce deficit spending. Only by tying the tax rate to the expendatures can a balanced budget be obtained. And if there are "emergency" expendatures that run the budget into a deficit then that has to be paid for the following year with an increase in the tax rates to repay the borrowing. If we give the government 25% they'll just spend 10%, 15%, 20% or more above that if we don't tie the tax rate to the expendatures. Only if Americans actually have to pay for the cost of government will public pressure result in lowering the expendatures. People don't typically complain about that which they aren't paying for.
Oh i was just being a jerk and trying to make a joke. I think we deal with it over time. With a normal interest rate I think savings will rise and fix our imbalances.
This would be total tax burden. Soc security would not be a separate fund anymore. Self employed will get out of the big tax trap too. The numbers posted above keeps the corporate tax in place, just drops their tax to 25% too. Fair enough to let the dividend be written off and the rest taxes, that is an improvement anyway and the extra cuts would be harder to find. Every American that is a citizen would get the credit. It works out to an even larger surplus becaus ethe numbers run before would give payments to non citizens too. This would be a tax break for most Americans. I will run the tax numbers now. Will try to find average deductions claimed ... Such a pain to find what revenue will be under the current system..in any event the new system would give employees an 8% raise because of payroll tax consolidation.
Instead of trying to get a table together, why dont we pick specific ways people make income, and test them out. I feel like any deductions I use will be arbitrary, so lets find a real world type situation to apply the systems too, and see where we get different results. Shoot me some scenarios.
The 14th Amendment requires equal protection under the law for ALL People and that includes both citizens and non-citizens in the United States. The tax laws cannot be discriminatory based upon citizenship. As noted roughly 60% of the residents of the United States have zero income so if the "tax credit" applies to every individual then this 60% alone would all receive the maximum tax credit and that equals over $950 billion annually in new expendatures just for the "unemployed" such as children and non-working spouses. The actual cost would be much higher at perhaps $1.5 trillion/yr or more. As noted this cannot be limited based upon citizenship as that would violate the 14th Amendment that requires equal protection under the law for everyone living in the United States.
You dont have to give a subsidy to non citizens. You just can't tax them different. If you prefer, we can call it a $5300 check each year or voucher for children, for being awesome, and a 25% tax on all income. If I were king of the castle, I would let them accrue credits at 5% a year for every year they are working an paying taxes here, making them a full citizen, and entitled to the full credit at year 20. No, it can be based on citizenship Do they citizenship test welfare? The government can give money to whomever it wants, I realize the mechanism needs to change, but that is no issue. The government denies welfare benefits and checks to all kinds of immigrants here. Besides, this type of plan would have to be a constitutional amendment to get passed anyway, so it is neither here nor there. Besides, all the numbers run before, were counting the immigrants too and giving them a credit and it still balanced. I went with the census data. But you couldnt give it to immigrants, it would set a horrible precedent.
Hold on...wait one minute. I crunched lots of numbers buddy, let me get a "you were wrong about the personal median income, but you were right about the system being plausible under the claims initially made from a revenue and expenditure standpoint". I think I deserve at least that.
why do republicans want to get rid of the min wage, pell grants, social security, unemployment insurance, medicare, medicare, ect.... and why should not all income be treated as income, why should labored income be taxed more? .
Balancedd budget ammendments work. We have had one in Florida and have had a pretty balanced budget every year. Sometimes projections are wrong and it goes a little one way, or another but we have done well with it. Much better then before we had one, we racked up big debt before Jeb, and Scott has cut the debt since being in office despite the recession. Pretty good. Crist did well, but the recession at the end made him a net adder to the debt, but not by much. The best plans are those that are easy to understand and can be enforced by the public at the polls. Schemers will always scheme to get around the Constitution. Right to bear arms, means they can say no arms, register arms, some arms etc... The 14th Amendment meant Jim Crowe was OK for a few generations. How did that happen? Judges are a political entity IMO, only in an ideal world is it any different. Experience is bias, and children can't serve as judges. This attempts to do that, it is tying basic subsitence payments to a percentage of personal median income. I agree, and there are ways to do this. The NIT as a base system makes this easy. Lets see where we can agree on the cuts, and then we can look at different mechanisms to keep those expenditures we can agree on that are still within the real of government that havent been replaced by the credit affect. [/quote] They are, and they can see it with the 25% flat tax. No special deductions, no hidden half of Soc Sec to taax them on the sneak etc...What I liked about Herman Cain's 999 plan, was that you knew how much they were taking from you, and if they can't balance it then,, then they need to work on it. Now people look at what they pay, and think "It isnt that much", with no clue how much the actually pay, because of hidden payroll taxes, import taxes etc...Here it is clear, and everyone is paying the same tax on every dollar they earn, it isn't being paid by the rich, or the poor, it is being paid equally by everyone. It is just a credit is worth more to some then others subjectively, but not objectively. [/quote] And the problem is people don't think they are paying as much now as they really are.
The money is in better hands of the people. A poor kid trying to get his first job and learn a skill at a very low wage rate, but one that will make money later, (apprenticeship for instance), can use the $5300 cash from the government as much as the college kid can use it, but the current situation gives the kid working in the shop $0, and taxes him to pay the kid in college $10k in grants ans scholarships. When that kid graduates, he will be among the well off, and the other kid will be paying taxes still, and likely subsidizing the college kids children when it comes time again. College subsidies are welfare for the well off, or soon to be well off. This treats every person equal. Agreed, you should check out my plan in this thread.
This is a misunderstanding based upon the US Constitution. While a US citizen does have certain privileges and immunities because of their citizenship but they cannot be treated differently under the law. For example as a natural born citizen my citizenship can never be revoked or denied. I have immunity related to it. I also have the privilege of leaving or returning the the United States whenever I choose (excluding a temporary restraining order issued by a court) and don't even really need a passport. Yes, without a passport the US government can hassle me a bit when I return but ultimately it must allow me back into the United States. I would suggest researching Supreme Court decision on this because that's the reason that federal welare assistance has to include non-citizens as well as citizens. It is a government "benefit" to the People and the Constitution does not establish that "citzens" can have benefits not given to others. We must also note that if a person pays a tax that provides a benefit then they are entitled to the benefit without discrimination. So if a non-citizen taxpayer is paying a tax that provides a "tax credit" then they are entitled to it if they qualify. Foreign immigrants that pay FICA/Payroll taxes are entitled to Social Security benefits even though they may never become citizens for example. They cannot be excluded because they pay the tax.
Oh I was talking to Shiva that time. Shiva has no pinnable ideology, pure devils advocate, "it is more complicated then it seems" kind of guy.
This is based upon assumption and not fact because it all depends on what the person does with the money. For example if there wasn't a Social Security Program then the person would have more money to spend but if they don't invest the money then they are far worse off when they become too old to work because they'll starve to death.
Ok fine, the numbers included them. I would lock the borders down and bring every soldier in Europe home to do it. We can't have all the people living on less then 5300 a year flooding here for a better life for themselves, it would drop the credit too fast. I am otherwise pro immigration Otherwise, we can deport people when they show up to pickup their check. We wont mail it to them and hire another agency to try to find them. Or they could come into the country legally, foregoing the credit in return for permanent residency expedited status. That they can do. You can trade away future money, to pay for expedited residency status. Consider it a payment plan that comes to a cool $5300 a year, I think you will find inflation will not be as fast as I would have had the credits accrue, but it your sticking point not mine. Furthermore, as mentioned it would have to be enforced via Constitutional Amendment, replacing the 16th, and coming later in time then the 14th, so it would fix that issue. Much better chance getting this type of thing passed with corruption in the constitutional process. Otherwise if it was just for taxpayers, the left would cry for welfare for people who made no income, and it becomes cloudy again as to how much welfare can be cut etc.. and how much they are spending...It has to go to the student taking time off to focus on studies, the apprentice in a shop that is learning for free, the crack addict that would be trying to cheat the system and getting other income. It just couldnt go to a couple million people who show up overnight. They have to pay up to get in that pool, or face deportation. As shown, the numbers work with those already here, so we need only talk about future immigrants.
Two problems. 1. The largest group of those being paid below minimum wage are the "illegal" aliens that US employers can exploit because the "illegal" alien cannot report the employer without risking deportation. To eliminate this we require an open immigration policy so that everyone that works in America can be a "legal" alien. 2. There is a fundamental problem with the minimum wage as it establishes a "one-size-fits-all" wage that isn't applicable in the vast majority of cases. In many cases, such as part time employment for a high school student, it's too high and in other cases, such as a married man trying to support a wife and kids, it's too low to live on. "One-size-fits-all" government policies are never good because "one-size-fits-all" only really fits very few people.
FreshAir- If your only contention is the minimum wage, you can still sign up to agree with the plan in theory. The numbers work with a minimum wage law, and we can't get numbers on how life would be without a minimum wage law to prove viability of the plan, so... we can fight that argument another day.
it's not a "One-size-fits-all", it is the bare minimum, some employers want to pay everyone the bare minimum .
It is not what brings wages up though, it is what keeps certain people out of certain jobs. Anyway, if minimum wages laws were untouched for now, can you agree with the rest of the tax proposal?
As judged by them, the only measurement that matters. But where this had been put in place in Canada called MINCOME the studies showed the people spent the money wisely. But they do save and invest in housing and their retirement. The vast majority of people do, and those that didn't didn't earn enough to cover taxes and living expenses and Social Security, plus put in another 5% for a decent retirement. You are talking about a very small % when we get this out of the way, a % surely the states can cover as they see fit, as well as charitable organizations. The most efficient expenditure is when you are spending money on yourself. You get the most value for the best price. Second to that is a voucher, where you are spending the money on something for yourself, but the amount is predetermined, you maximize quality, but not price efficiency. Third is when you spend your money on others, the incentive is to economize, or to pick what you value you most not what they value you most. (Think about all the field hands in America that qualify for food stamps, or some farmers even). The worst is when someone is spending someone else's money on others. No incentive to economize spending,or maximize value. Besides, we already established that Social Security as it stands is still covered in this plan. It would just be changed to "old age welfare", I kept as an expense, and exempted its income, but all other income would be taxed at 25%, so the elderly would pay the same tax on their non social security tax as everyone else pays. To the extent it is over $40k I think, that is a pretty big tax deduction. Social Security starts to wind down your money at 50% at some point. You can opt out of social security simply by taking the credit. You can be on the Sam work ate plan simply by claiming the credit instead. Up to the taxpayer. Problem solved.
How about this, since the surplus in my mind would go towards next years credit evenly among claimants, yearly shortfalls can be deducted evenly in the credit? That will eat the people rioting when the government spends too much. That should fix your other issue, at least better then the current system and automatically self correcting.
Seems a strange comment as many countries apply multiple minimum wages (typically depending on age, occupation and industry)
Yes they all do what they can to mitigate the effects of their policies but they are slow to change and the mitigation is arbitrary in nature. In either event, topic for another day, how do you like the tax as we applied it in this thread after shiva's critiques?
