Fair Tax vs Flat Tax vs IRS


There are currently two proposals for changing the US tax system that have gained popularity with the people, the Fair Tax and the Flat Tax. Here is a brief look at each.
The Fair Tax

The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The ‘Fair Tax’ is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

For a review of The Fair Tax Book, read what Ross Korves has written.

The Flat Tax

A flat tax is simple, fair, and good for growth. Instead of the 893 forms required by the current system, a flat tax would use only two postcard-sized forms: one for labor income and the other for business and capital income. Unlike the current system, which discriminates based on the source, use, and level of income, a flat tax treats all taxpayers equally, fulfilling the “equal justice under law” principle etched above the main entrance to the U.S. Supreme Court building.

You tube has a video explaining the Flat Tax.

IRS and Income Tax

The American tax system is a huge machine with a tax code that seems more complex than rocket science.

Not only is the United States government’s income tax code extremely complicated, it is also extremely unfair. It has become the number one method of redistribution of America’s wealth with nearly 1/2 of all adults not paying any income tax yet still receiving refund checks.

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About jlue

I am a grandmother of seven and I like to garden, read, study the Bible, and spend time with family. I am not very politically active, but very interested in who is elected to lead our country.
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3 Responses to Fair Tax vs Flat Tax vs IRS

  1. Mark says:

    A flat tax of some sort would be great. We could have a simple post card sized return, and all that.

    Trouble is, the con artist that push this stuff. Oh they make it SOUND like that is what their plan is. Nothing could be further from the truth.

    Depends on the DETAILS — and how gullible you are. No one is proposing a flat tax. The “Flat tax” that Newt Gingrich wants, that Steve Forbes wants, that CATO institute wants, is about as flat as Pike’s Peak. Sure — they tell you it’s all about being flat, but then, like a snake oil salesmen, they have a “little” detail. They don’t want their income taxed AT ALL. ZERO.

    The “Flat taxes” are really about a massize ZERO tax on trillions of dollars. If you earn your money a certain way, they want zero taxes on it. That’s the “detail” they really wannt. The “FLAT” part of their plan is just a way to make this sound wonderful.

    It would depend entirely on how you made your money. If you ran a small business, if you were self employed, if you worked your asp off for it, and make 100K, they want you to pay about 30-40K in taxes. But if you made that exact same dollar amount, 100K, in leverage buy out profit, in credit swap profit, in capital gains on Chinese cell phone stock profit (etc) you would pay NO taxes whatsoever.

    SO they call this flat! One guy pays 40K — the other guy pays 0.

    Then you say “Hey I thought this was flat” — they act surprised, oh, no, you see we don’t want “double taxation”.

    They have this slick BS about “double taxation” that is as deceptive as the FLAT part, but it fools a lot of people. They claim a person shouldn’t pay taxes on unearned income (income a person didn’t earn, it came from profit on his money). Why shouldn’t a person pay taxes on unearned income? Because, they say with a straight face, he paid taxes on it before.

    Problem with that carnard is, it’s not true. Many billions of these dollars have literally never been taxed before, because of inheritance fine print, and how inheritance of capital gains is determined.

    But even more distorted — businessmen, self employed, they paid taxes before too — on the money they used to set up their business. A dentist, for example, buys a building, gets an education, etc, easily investing a million dollars. Then he has to pay all kinds of taxes for his employees, property taxes, work comp. And if he makes a profit, the :FLAT TAX crowd wants him, and everyone like him, to pay very high taxes, while the “capital gains” pays ZERO.

    My family owns a printing company. My brother, a friend of his, and I have put in about a million dollars into that company, some of it borrowed. We have worked at that business for about 20 years now, we employee 17 people.

    The flat tax folks want us to pay 1,000 times higher tax rate than the guy who makes the same money we do in cap gains, in dividends, in credit swapss.. If we eek out 100K a year profit, do you have ANY idea how much taxes we pay?

    We often pay far higher taxes than we make in profit. We not only have to pay the tax on the profit, we pay workers comp, unemployment, FICA taxes, property taxes, all kinds of taxes, before we make a dime. All told we already — right now, right this minute — pay five times higher taxes that those making unearned income. To get our 100K in profit, we will probably pay 70K in taxes of one kind or another, and THEN we have to pay income taxes on that.

    But those making unearned income — they want NO taxes at all! This crazy system isnt unfair enough for them. They want people like us to pay it ALL. Right now the unearned income tax folks (like CATO, like Newt, like Forbes) pay just a fraction of the taxes we do — on the same money. If we make 100K and they make 100K, right now, we wil pay 70-90K in taxes total. They pay 15K in taxes. Right NOW they should be estatic what a good deal they have.

    Are they happy with their deal? Heck no. They want NO taxes. That 15% top rate they pay– they hate that.

    Who do you suppose they want to pick up their 15%? People like us, that’s who. People who actually do the work, in our case, printing. But anyone who gets “earned income” would have to pick that up.

    And then they call that “flat”. They have the audacity to tell you its FLAT.

    Here is a way to tell. Have a real flat tax– that would be GREAT! Tell Newt and Forbes and CATO, sure you can have a flat tax. Everyone pays the same — EVERYONE. No matter how you make your money. If you get it from putting on roofs, or pulling teeth, or playing baseball, you pay the same tax rate as someone getting money from credit swaps or leverage buy outs — or whatever. No matter how you make money, from now on, there is one flat tax rate for all.

    Guess who would scream bloody murder? Guess who would turn 5 shades of purple and get tongue tied? Those people who SAY they want a flat tax.

    Ironically the last thing on earth they want is to a true flat tax. That’s what is so funny. What they want is to pay LESS taxes on unearned income. And the truth is, they pay very little now. They have you thinking they pay VERY high taxes. Nonsense, the top rate, the highest rate they can possibly pay, is 15%. If they have short term cap gains, the worst they can do is to pay taxes as ordinary income, and they have about a million ways to get around that. They pay no FICA — never a dime — on any unearned income. While almost everyone else pays FICA through the nose.

    SO yes, let’s have a real flat tax. I’m all for it. Guess who isn’t? Those people who are trying to fool you about taxes.

    http://fairtaxfineprint.blogspot.com/

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  2. jlue says:

    Mark, Your link isn’t concerning a Flat tax, but the Fair Tax. Could you give me your source on the Flat Tax. Sorry it took me so long to approve your comment. I live in the area where the storms went through this week.

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  3. Pingback: The fair tax: is it right for America? - noomizo

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