Rick Perry's plan calls for Forbes Flat tax. Great plan!

The Viking wrote: First off this plan obviously isn't at the expense of the lower or middle class with the lowering of the taxes from 25-17 and still giving them bigger child and personal deductions. And second, ANY flat tax unless it it over 33% is going to lower taxes on the wealthy, so that is a given and can't really be used in an argument. But it will also close loopholes.

I'll wait and see if it taxes just wages or taxes income.....that makes a big difference on how it will be perceived by the voters.....and yes, it will be a hard sell to the guy making $75,000/year that he pays the same rate as the guy making $5 million a year, or more. I also am interested in how they handle the payroll/SS/Medicare taxes, will they tax total wages, or still have a cap on it.....which also favors the wealthy.

Oh well, time will tell. I do agree that it is good to see the whole tax issue being addressed, long over due in my mind. It has made it to campaigns before, but never past that. Once in office the new president suddenly has a memory fart and forgets all about it.

Here's what it looked like when it was proposed by Huckabee... I doubt that it will be much different in Perry's iteration:

Huckabee's tax plan appeals, but is it fair?
Critics say burden would fall on middle-income Americans
ON THE ECONOMY
By Tom Redburn

Long before Mike Huckabee, the former Republican governor of Arkansas, began campaigning for president, advocates for replacing the entire federal tax system with a national sales tax were campaigning to convert him to their cause.

They succeeded. “Am I running for president to shut down the federal government? Not exactly,” Mr. Huckabee says on his Web site. “But I am running to eliminate all federal income and payroll taxes. And I do mean all — personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment.”

“Instead,” adds Mr. Huckabee, who demonstrated his appeal to voters with his victory on Thursday in the Iowa caucuses, “we will have the FairTax, a simple tax based on wealth.”

Under the plan, Americans would pay only one federal tax, which would be applied to just about everything they buy: not just the goods people buy at stores on which most states assess a sales tax, but nearly all services, including health care and insurance, the purchase of a new home or rental of an apartment, even things like a teenager mowing a lawn or baby-sitting for a neighbor.

But the FairTax , as its many fervent backers call it, is not as simple as its supporters describe. And, to most tax experts who have looked at the proposal, it is anything but fair. For one, its burden would fall disproportionately on middle-income people.

Still, the plan has undeniable appeal. “There is a yearning across the political system to make the tax system better,” said William G. Gale, a critic of the proposal who is a leading tax economist at the Brookings Institution, the liberal-leaning research organization in Washington. “Right now the only people talking about tax reform are the sales tax advocates.”

Supporters, including a handful of tax experts like Laurence J. Kotlikoff, an economist at Boston University, contend that a rate of about 23 percent, applied across the board, would bring in just as much money to the Treasury as all the taxes the federal government now collects.

It is not the same as a normal sales tax, however. Under the proposal, the tax is included first. That means a $100 item would cost $130, or 30 percent more. The plan’s supporters say that works out as a 23 percent rate because $30 is 23 percent of $130. Americans would no longer face federal withholding from their paychecks. But most analysts say the tax rate necessary to replace current federal revenues, under any likely plan, would actually need to be much higher. By some estimates it could add 40 percent, if not more, to the cost of living.

Whatever the rate, critics say, a steep federal retail tax, piled on top of existing state sales taxes, would encourage widespread illegal tax evasion, black market transactions and other forms of cheating, creating a cycle that would require even higher tax rates.

“The main weakness of the FairTax is its comprehensiveness,” said Dale W. Jorgenson, an economist at Harvard who opposes the plan but whose research into problems with the current system is sometimes cited by supporters. “It tries to roll everything into one tax, which simply can’t carry all that weight.”

<snip>

Like any tax on consumption, the biggest burden, comparatively, would fall on the poor. To help compensate for this, the plan would provide a monthly check from the government to every American household, rich and poor alike.

The rebate amount would be set to equal what a household living at the poverty level would pay in taxes, leaving some of the poor better off and cushioning the proposal’s impact on the middle class.

But, apart from the administrative nightmares associated with giving every household a rebate, it would still not prevent transferring a substantial part of the current tax burden from those with annual incomes above $200,000, who tend to save a large part of their income rather than spending it, to those earning less.

“Even with the rebate counted the way FairTax supporters want it calculated,” said Bruce Bartlett , a conservative tax analyst and policy maker in the Reagan administration who has emerged as one of the proposal’s most powerful critics , “there would be an enormous shift in the tax burden from the wealthy to those with lower and middle incomes.”

<snip>

But even though critics acknowledge that there would be some economic benefits from introducing a broad-based consumption tax, Mr. Gale of the Brookings Institution said that the proposal itself was “fundamentally a ruse.”

“The notion that there is a 23 percent rate that solves all our problems,” he said, “is politically unrealistic and mathematically impossible.”

http://www.nytimes.com/2008/01/06/us/po ... onomy.html


"its burden would fall disproportionately on middle-income people." You can hear the surprise in *MY* voice...

What I don't get is how all of you middle and lower-income Righties keep campaigning for something that's going to raise your taxes?!?! Surely it can't all be because the candidate pushing it says he's against gay marriage?!?

But isn't this really perception vs. reality? If the millionaires are taxed at 39% but really only pay 10%, wouldn't the country be better off taxing them at 17% with no exemptions?

And consider this, most Republicans aren't millionaires, yet they are still willing to vote for people who advocate a tax that has them pay more but is more fair to the wealthy.

None of this matters...whether it's Perry's plan or Cains, nothing will be excepted by congress just like congress wouldn't even give Obama's budget a second of consideration. Presidents don't make big changes like this, they can only make suggestions...which usually get shot down anyway.

LadyJazzer wrote: Here's what it looked like when it was proposed by Huckabee... I doubt that it will be much different in Perry's iteration:

Huckabee's tax plan appeals, but is it fair?
Critics say burden would fall on middle-income Americans
ON THE ECONOMY
By Tom Redburn

Long before Mike Huckabee, the former Republican governor of Arkansas, began campaigning for president, advocates for replacing the entire federal tax system with a national sales tax were campaigning to convert him to their cause.

They succeeded. “Am I running for president to shut down the federal government? Not exactly,” Mr. Huckabee says on his Web site. “But I am running to eliminate all federal income and payroll taxes. And I do mean all — personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment.”

“Instead,” adds Mr. Huckabee, who demonstrated his appeal to voters with his victory on Thursday in the Iowa caucuses, “we will have the FairTax, a simple tax based on wealth.”

Under the plan, Americans would pay only one federal tax, which would be applied to just about everything they buy: not just the goods people buy at stores on which most states assess a sales tax, but nearly all services, including health care and insurance, the purchase of a new home or rental of an apartment, even things like a teenager mowing a lawn or baby-sitting for a neighbor.

But the FairTax , as its many fervent backers call it, is not as simple as its supporters describe. And, to most tax experts who have looked at the proposal, it is anything but fair. For one, its burden would fall disproportionately on middle-income people.

Still, the plan has undeniable appeal. “There is a yearning across the political system to make the tax system better,” said William G. Gale, a critic of the proposal who is a leading tax economist at the Brookings Institution, the liberal-leaning research organization in Washington. “Right now the only people talking about tax reform are the sales tax advocates.”

Supporters, including a handful of tax experts like Laurence J. Kotlikoff, an economist at Boston University, contend that a rate of about 23 percent, applied across the board, would bring in just as much money to the Treasury as all the taxes the federal government now collects.

It is not the same as a normal sales tax, however. Under the proposal, the tax is included first. That means a $100 item would cost $130, or 30 percent more. The plan’s supporters say that works out as a 23 percent rate because $30 is 23 percent of $130. Americans would no longer face federal withholding from their paychecks. But most analysts say the tax rate necessary to replace current federal revenues, under any likely plan, would actually need to be much higher. By some estimates it could add 40 percent, if not more, to the cost of living.

Whatever the rate, critics say, a steep federal retail tax, piled on top of existing state sales taxes, would encourage widespread illegal tax evasion, black market transactions and other forms of cheating, creating a cycle that would require even higher tax rates.

“The main weakness of the FairTax is its comprehensiveness,” said Dale W. Jorgenson, an economist at Harvard who opposes the plan but whose research into problems with the current system is sometimes cited by supporters. “It tries to roll everything into one tax, which simply can’t carry all that weight.”

<snip>

Like any tax on consumption, the biggest burden, comparatively, would fall on the poor. To help compensate for this, the plan would provide a monthly check from the government to every American household, rich and poor alike.

The rebate amount would be set to equal what a household living at the poverty level would pay in taxes, leaving some of the poor better off and cushioning the proposal’s impact on the middle class.

But, apart from the administrative nightmares associated with giving every household a rebate, it would still not prevent transferring a substantial part of the current tax burden from those with annual incomes above $200,000, who tend to save a large part of their income rather than spending it, to those earning less.

“Even with the rebate counted the way FairTax supporters want it calculated,” said Bruce Bartlett , a conservative tax analyst and policy maker in the Reagan administration who has emerged as one of the proposal’s most powerful critics , “there would be an enormous shift in the tax burden from the wealthy to those with lower and middle incomes.”

<snip>

But even though critics acknowledge that there would be some economic benefits from introducing a broad-based consumption tax, Mr. Gale of the Brookings Institution said that the proposal itself was “fundamentally a ruse.”

“The notion that there is a 23 percent rate that solves all our problems,” he said, “is politically unrealistic and mathematically impossible.”

http://www.nytimes.com/2008/01/06/us/po ... onomy.html


"its burden would fall disproportionately on middle-income people." You can hear the surprise in *MY* voice...

What I don't get is how all of you middle and lower-income Righties keep campaigning for something that's going to raise your taxes?!?! Surely it can't all be because the candidate pushing it says he's against gay marriage?!?

What an ignorant statement. Only you would try and bring your gay marriage into our flat tax discussion.

And your whole post is ignorant with no facts and not talking about up to a certain ammount not paying taxes. At least archer is having a legitimate, intelligent discussion about this.

archer wrote: it will be a hard sell to the guy making $75,000/year that he pays the same rate as the guy making $5 million a year, or more.

Why would a guy making $75,000 if their taxes go down, care that someone making $5 million pays the same rate.

Please answer that first but I am going to give an example based upon Forbes plan for a family of 4.

$75,000 - $26,000 ($13,000 each) for two adult deductions = $49,000 - $10,000 ($5,000 each) for two kids deductions = $39,000 to pay taxes on times 17% = $6,630 in taxes on $75,000 which equals 8.8% total in taxes. MUCH lower than it is for them now which is 25% at that bracket.

$1 million - the $36,000 in deductions = $964,000 times 17% = $163,880. Which equals 16.38% of thier income.

Then look at a family of 4 making $40,000. subtract the $36,000 and they are only paying 17% on $4000 which comes to $680 which equals 1.7% in taxes for the year.

It is NOT the same. The deductions disproportionately help the lower and middle class. It does nothing for the millionaires and they loose the loopholes. 16.38% compared to 8.8% or 1.7% is NOT at all the same ammount of taxes! A family of 4 making $75,000 pays about half the tax rate of millionaires.

LadyJazzer wrote: Here's what it looked like when it was proposed by Huckabee... I doubt that it will be much different in Perry's iteration:

Huckabee's tax plan appeals, but is it fair?
Critics say burden would fall on middle-income Americans
ON THE ECONOMY
By Tom Redburn

Long before Mike Huckabee, the former Republican governor of Arkansas, began campaigning for president, advocates for replacing the entire federal tax system with a national sales tax were campaigning to convert him to their cause.

They succeeded. “Am I running for president to shut down the federal government? Not exactly,” Mr. Huckabee says on his Web site. “But I am running to eliminate all federal income and payroll taxes. And I do mean all — personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment.”

“Instead,” adds Mr. Huckabee, who demonstrated his appeal to voters with his victory on Thursday in the Iowa caucuses, “we will have the FairTax, a simple tax based on wealth.”

Under the plan, Americans would pay only one federal tax, which would be applied to just about everything they buy: not just the goods people buy at stores on which most states assess a sales tax, but nearly all services, including health care and insurance, the purchase of a new home or rental of an apartment, even things like a teenager mowing a lawn or baby-sitting for a neighbor.

But the FairTax , as its many fervent backers call it, is not as simple as its supporters describe. And, to most tax experts who have looked at the proposal, it is anything but fair. For one, its burden would fall disproportionately on middle-income people.

Still, the plan has undeniable appeal. “There is a yearning across the political system to make the tax system better,” said William G. Gale, a critic of the proposal who is a leading tax economist at the Brookings Institution, the liberal-leaning research organization in Washington. “Right now the only people talking about tax reform are the sales tax advocates.”

Supporters, including a handful of tax experts like Laurence J. Kotlikoff, an economist at Boston University, contend that a rate of about 23 percent, applied across the board, would bring in just as much money to the Treasury as all the taxes the federal government now collects.

It is not the same as a normal sales tax, however. Under the proposal, the tax is included first. That means a $100 item would cost $130, or 30 percent more. The plan’s supporters say that works out as a 23 percent rate because $30 is 23 percent of $130. Americans would no longer face federal withholding from their paychecks. But most analysts say the tax rate necessary to replace current federal revenues, under any likely plan, would actually need to be much higher. By some estimates it could add 40 percent, if not more, to the cost of living.

Whatever the rate, critics say, a steep federal retail tax, piled on top of existing state sales taxes, would encourage widespread illegal tax evasion, black market transactions and other forms of cheating, creating a cycle that would require even higher tax rates.

“The main weakness of the FairTax is its comprehensiveness,” said Dale W. Jorgenson, an economist at Harvard who opposes the plan but whose research into problems with the current system is sometimes cited by supporters. “It tries to roll everything into one tax, which simply can’t carry all that weight.”

<snip>

Like any tax on consumption, the biggest burden, comparatively, would fall on the poor. To help compensate for this, the plan would provide a monthly check from the government to every American household, rich and poor alike.

The rebate amount would be set to equal what a household living at the poverty level would pay in taxes, leaving some of the poor better off and cushioning the proposal’s impact on the middle class.

But, apart from the administrative nightmares associated with giving every household a rebate, it would still not prevent transferring a substantial part of the current tax burden from those with annual incomes above $200,000, who tend to save a large part of their income rather than spending it, to those earning less.

“Even with the rebate counted the way FairTax supporters want it calculated,” said Bruce Bartlett , a conservative tax analyst and policy maker in the Reagan administration who has emerged as one of the proposal’s most powerful critics , “there would be an enormous shift in the tax burden from the wealthy to those with lower and middle incomes.”

<snip>

But even though critics acknowledge that there would be some economic benefits from introducing a broad-based consumption tax, Mr. Gale of the Brookings Institution said that the proposal itself was “fundamentally a ruse.”

“The notion that there is a 23 percent rate that solves all our problems,” he said, “is politically unrealistic and mathematically impossible.”

http://www.nytimes.com/2008/01/06/us/po ... onomy.html


"its burden would fall disproportionately on middle-income people." You can hear the surprise in *MY* voice...

What I don't get is how all of you middle and lower-income Righties keep campaigning for something that's going to raise your taxes?!?! Surely it can't all be because the candidate pushing it says he's against gay marriage?!?

This plan is not even close to what Forbes proposed or what Perry is looking at. It takes out all the deductions. Wasted time pasting this one. But it figures that you wouldn't want to look at the true facts. And then throw your gay comment attack in there? Pathetic.

The Viking wrote:

archer wrote: it will be a hard sell to the guy making $75,000/year that he pays the same rate as the guy making $5 million a year, or more.

Why would a guy making $75,000 if their taxes go down, care that someone making $5 million pays the same rate.

Please answer that first but I am going to give an example based upon Forbes plan for a family of 4.

$75,000 - $26,000 ($13,000 each) for two adult deductions = $49,000 - $10,000 ($5,000 each) for two kids deductions = $39,000 to pay taxes on times 17% = $6,630 in taxes on $75,000 which equals 8.8% total in taxes. MUCH lower than it is for them now which is 25% at that bracket.

$1 million - the $36,000 in deductions = $964,000 times 17% = $163,880. Which equals 16.38% of thier income.

Then look at a family of 4 making $40,000. subtract the $36,000 and they are only paying 17% on $4000 which comes to $680 which equals 1.7% in taxes for the year.

It is NOT the same. The deductions disproportionately help the lower and middle class. It does nothing for the millionaires and they loose the loopholes. 16.38% compared to 8.8% or 1.7% is NOT at all the same ammount of taxes! A family of 4 making $75,000 pays about half the tax rate of millionaires.

So based upon this plan any famiily making $40,000 or less will pay practically no taxes. And anyone in the middle class will pay far less than the 15- 25% they have been paying. And anyone making a million or more will not be able to get under 16.5% unless they donate to charity which helps everyone. And it closes the loopholes so millionaires and above can no longer find ways to pay 0%. AND it gets rid of 3 million words of tax code and a lot of the IRS! It is a win / win for everyone!

No longer can the secretary say they are paying more taxes than their bosses.

LadyJazzer wrote: What I don't get is how all of you middle and lower-income Righties keep campaigning for something that's going to raise your taxes?!?! Surely it can't all be because the candidate pushing it says he's against gay marriage?!?

Some of us realize that a fundamental change in taxation like those proposals would be good for this country and end many of the loopholes and perks currently put in the tax system by special interest groups and lobbyists.

Some of us care about making things better rather than simply focusing on "what's in it for me" - an attitude that would help us all out alot if the entitlement minded democrat voters would take it up as well.

Besides, some of us can also see that it plainly won't hurt the middle class like you erroneously claim, and all this has got nothing to do with gay issues. The only thing surprising about your post is that you failed to blame anything on Bush.

Honestly had Cain put this plan out there instead of the 999 which is a failure, he would be President. I like Cain but not that plan and it would help Obama defeat him.

Too bad he sold his soul to the 999 plan. If he had kept the door open he could have agreed with Forbes and Perry and used the same idea. Nothing says two candidates can't have the same tax plan.