also how can you believe in a flat tax you moron. :P

someone who barely gets by... you really want to tax the shit out of that guy? why not just cut him a break?

"The rate of taxing based on income is uneven anyway, and rightly so."

Actually and unjustly so. Here is where the pendulum swings in the other direction. Income tax is a tax on the amount of money you make in a year. Investing protects that as long as it realizes no income in the year.

ex. If I have an $100,000 house it's an investment and an asset but it doesn't gain me any income. I pay local property taxes but no federal tax on it. On the other hand if I rent it out then the money that I gain is taxable income.

In this way lots of these millionaires put off taxes by keeping their investments long term and letting them grow. In the above example when you cashed in your $ 5 million mutual fund expect the tax man to visit, because you just realized $5 million dollars that year and you're going to pay 42% of it to Uncle Sam.

In this way most of the millionaires are paying 6.7% of their total wealth in income taxes each year while it goes way up for others. What you do with your money makes over the long term has more to do with accruing wealth than how much you make.

"someone who barely gets by... you really want to tax the shit out of that guy? why not just cut him a break?"

How about a national sales tax? You keep everything you make and there is a standard deduction that would cover the basic needs of food and clothing, etc. That way if you're just scraping by you pay nothing. If you are frugal and invest a lot you can choose how much to pay in taxes through carefully watching your expenditures until you cash in and start buying luxury stuff. If you are like the rest of us you get about 32% more cash to buy the same stuff with and you're about in the same boat as usual.

A. Don't call me a moron. Out tool an have a little courtesy.

B. Why the fuck do taxes have to gouge anyone you imbecile. A 17% flat tax on everyone except the absolute bottom feeders is more than fair enough to everyone

i am not completely opposed to national sales tax.

however that would cause a lot of peripheral problems too. for instance, you can easily operate on a cash only basis and get around the tax, or you could have people getting screwed by the tax because of the large hike in prices. meaning like things that were just on the fringe off being too expensive for people to buy stop getting bought and those industries fold.

@Jack - and how much did his Secretaries husband make? I make 85K and only pay about 25% on all taxes and SS combined. His secretary is either a fucking moron who doesn't know how to do taxes, has a moron for a tax accoutnant, or lied to him about how much she paid.

That or your quote which is clearly not a direct quote from him, is false.

Re: flat tax - all flat tax proposals I have seen have a minimum income before any tax is required and deduct that minimu from the taxable income. Basically, if you make less than 20 K a year, you pay no taxes. Everything over that pays a fixed percentage. So the poor guy doesn't get taken to the cleaners.

"meaning like things that were just on the fringe off being too expensive for people to buy stop getting bought and those industries fold."

Do you really think a national sales tax will make people stop buying on credit? Rememeber that the boat will be about 23% more expensive but on average the guy who'd like to buy will have 25% more to buy it with.

I just listened to the interview with Buffet. This was an apples to oranges comparison. He was comparing his total income tax liability versus there taxes purely off their income from employment. Of course this rate is different. Look at his tax rate based on just his direct salary from his companies and you will see he is in a higher tax bracket and pays more.

His income is from capital gains primarily which is *much* lower than payroll income tax rates.

"however that would cause a lot of peripheral problems too. for instance, you can easily operate on a cash only basis and get around the tax"

Sales taxes aren't anything new. Do you really think Wal-Mart would risk the fines and loss of their business licensure just to help me evade my taxes? WHat would be their motive?

"His income is from capital gains primarily which is *much* lower than payroll income tax rates."
And this is fair... how? ...being that the rich are the ones that are making the capital gains and payroll is based on actual labor (mental and/or physical)...

If you tax an investment at 42% when it's only making 12% you are telling investors to find another game.

Scratch that write up to bad math.

However, investing isn't a bad thing and it's not only the wealthy that get into it. The investments make the labor possible in most cases.

Look at it like this. If someone saves $1,000 they have options of what to do with it.

-Save it (and slowly lose it because banks pay less than inflation)
-Spend it (hey, it's back in the economy and I have stuff!)
-give it away (that's cool)
-Invest it (that puts it back in the economy with the chance of stimulating more jobs)

What's wrong with expecting a return on money that you earned and already payed taxes on if you take the risk of losing it?

Sales taxes are regressive as low earners spend a higher proportion of their earnings they pay more of their income in tax.

That depend on what you're spending it on. In Georgia, food (groceries) are taxed at 1% and everything else is taxed at 5%. Doing something that simple let's plenty of low earners off the hook. The people that will get pinched are the ones that earn little, spend everything, and try to live beyond their means. These people are going to get pinched in any tax system including the current one. The bottom line on a sales tax is that you get to decide how much tax to pay based upon what purchases you'd like to make.

@CA
Even with reduced rates for necessities it is still regressive.

I'll quote Buffett's views on this, Draugnar.

* This time Congress should listen to the slim accountants. The logic behind their thinking is simple:

1. If options aren't a form of compensation, what are they?
2. If compensation isn't an expense, what is it?
3. And if expenses shouldn't go into the calculation of earnings, where in the world should they go?

@dexter - the money put into the stocks was taxed once as another form of income at some point, typically. For instance, I invest my bonuses every year in my account at my broker and promptly invest it in one stock or another depending on what I see doing well over ther next six months or longer (depends on what my plan for that money is). I have built my account up since 9/11 trashed it to over $100,000 again. When I cash that out to pay off my home why should I pay higher taxes on the $80,000 profit? The money used to build that balance was already taxed. It was my hard worjk researching and picking the stocks that made me the money. The fact that I have a brain and don't do physical labor (software developer here) even for my payroll based income doesn't mean I don;t work for it,. In fact, I work harder than most ditch diggers, burger flippers, and garbage men as I take my work home and work on evenings and weekends, yet I'm salaried so don't make any extra for the OT.

Basically, you want to punish those who got ahead when the whole point of cpaitalism is to get ahead. So punishment for all who succeed! Woo hoo! Way to go! You did that well?! Here let me unload that to the slackers who don't want to get ahead and just want a handout!

@Thucy and Jack - Thank you for fighting the good fight.

Wow - I can't believe we have so many fiscal conservatives jumping in here; this board is usually much more liberal.

@diplomat

Whether it's regressive or not, what specifically is the issue with a tax that allows each individual to decide what percentage of their wealth is paid out in taxes each year? Bear in mind that a standard deduction can be given so that people who are honestly buying the basics and getting by will not pay any tax whatsoever. THere are other benefits to the idea.


1) It encourages people to live on a well planned budget. The better you control your expenses the less you pay in taxes.

2) There is no "I made too much money this year, and came out behind" from going up a tax bracket. You are not taxed on your income but rather how much of it you decide to spend. If you work more then you get to take home more.

3) The Federal Government might actually have to tighten it's belt a little bit (wouldn't that be horrible).

4) The average person might decide it's better to tighten the purse strings and invest a little bit.

5) The IRS doesn't need auditors to track down individuals and instead focuses on businesses.

Overall more people investing (hopefully wisely) will mean that there are more affluent people in the country. The main problem that I could see is the that mall might suffer. In answer to that Georgia usually has a "Tax free Holiday" before the school year begins. Nobody pays tax on clothing, computers, and school supplies so the retail places are really raking it in about that time.

**the mall**

Even with that though, how many people really decide to never have a coke at McDonald's again now that they aren't a dollar anymore. People will tend to get used to the prices and purchase what they want anyway.

@CA
The problem is that without income or corporation tax the very high sales tax rate necessary to raise the funds that government needs/wants. Sales tax in Europe is around 15-20% (with some lower rate goods), on top of income tax rates up to 50% and 30%+ corp tax rates. If the entire burden was on sales tax low earners would in effect be taxed on their entire earnings (assuming they spend most of it, which they do) rather than as now a substantial portion of their income is not taxed or at a lower rate.

The kind of live within your means approach that you advocate is equally valid in a sales tax heavy or income tax heavy environment.

"The problem is that without income or corporation tax the very high sales tax rate necessary to raise the funds that government needs/wants."

It's the wants part that gets expensive.


" If the entire burden was on sales tax low earners would in effect be taxed on their entire earnings (assuming they spend most of it, which they do) rather than as now a substantial portion of their income is not taxed or at a lower rate."

Still it's part of the plan to exempt the lowest earners. If you are honestly using your income to buy the necessities then you are not taxed on those items either through a standard deduction or through certian exempt items or exempt times.

Exmpting necessities would be best and easiest to implement. need new school clothes, certain affordable ones are tax free, others like Nikes and Reeboks are considered luxuries and still get taxed. Need clothes for work/job interviews? Under a certain dollar amount is considered basic business clothing, over that is luxury. So a $200-$250 suit is basic and tax free, a $1000 Brioni is taxed.