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Discussion in 'In the News' started by Lon Tanner, May 3, 2021.
Politicians continually harp about this but never ever say what a FAIR SHARE is.
Get consensus on the role of each government first (Federal, State, City/Town/County) and what the duties AND LIMITS are to each, then talk about what a reasonable cost might be to meet those duties and what reasonable compromises will be made in a world with finite resources, and THEN we can have this conversation.
(Don't let me put an end to discuss as the first comment. That's just my opinion.)
A fair share to a Democrat is simply more than you are paying now no matter how much that is.
And you are entitled to it, but the question still stands, What's A Fair Share?
10% Flat Tax, all the way across the board. No exceptions. No exemptions. No "refundable credits."
What is a fair share?. I don't know the answer, but ...
First, I would look at how much income is left over, instead of how much is paid in taxes. And how hard a person has to work for their income.
If someone has $1 million taxable income per year and pays 37% in taxes (top bracket), they have $630K left over, or $52K/ month.
If someone has $10,000 taxable income per year and pays 12%, they have $8,800 left over, or $733/month.
In addition ...
Many wealthy people get most of their income from investments earning capital gains (CG) and qualified dividends (QD), which are taxed at most at 20%. They do no work to earn CG and QD.
Plus, their remaining income is taxed based on the bracket of the amount left over. For example, if they make $10K income other than CG and QD, that part would only be taxed at 12%.
That's partly why the AMT (alternative minimum tax) exists. However, even the AMT taxes income at most at 28% (rather than the top bracket) and excludes CG and QD. Btw, the Tax Cuts and Jobs Act enacted in December 2017 repealed the corporate AMT.
A flat tax might work if you could truly enforce it, for everyone, including corporations, but I doubt the numbers would add up. Not familiar enough with the details of any proposal.
"Fair" is certainly a subjective term when it comes to paying taxes, but I've found those accusing rich people of not paying their fair share typically have no clue of the tax facts. Here's a few from the IRS's 2020 summary report, using 2017 U.S. income tax receipt numbers.
- the top 1% earned 21% of the income and paid 38.5% of the taxes, at an average rate of 26.8%
- the top 5% earned 36.5% of the income and paid 59.1% of the taxes, at an average rate of 23.7%
- the top 10% earned 47.7% of the income and paid 70.1% of the taxes, at an average rate of 21.5%
· the top 50% earned 88.7% of the income and paid 96.9% of the taxes, at an average rate of 16%
- the bottom 50% earned 11.3% of the income and paid 3.1% of the taxes, at an average rate of 4%
The report shows that the top 1% paid a greater share of the nation's taxes (38.5%) than the bottom 90% (29.9%), thus demonstrating that the U.S. income tax code is very progressive, borne primarily by the highest income earners.
While people can argue whether the government should redistribute the wealth and pursue income equality via a more progressive tax, the facts show that the rich are paying more than their fair share while half of the country are not paying hardly anything at all. This seems wrong to me. I think we should all have skin in the game, which means even poor folks should feel the bite of taxes. I'd support a flat tax on all types of income with no deductions, or at least a simpler, less progressive 3-tier system. That would take away congressional power though for social engineering the economy and culture. So far, the liberals have resisted any such change.
I’ve been drumming for the Fair Tax. 26% or so on all purchased items. Close the IRS and everyone gets their full paycheck sans social security and whatever is purchased gets the standard tax.
The pre-bate system needs a little work but overall I like the idea.