Selene Posted November 2, 2011 Share Posted November 2, 2011 Cato's Alan Reynolds makes a decent case for the Flat Tax based on Hong Kong pragmatic example, would it work here in the United States? The United States could easily adopt something similar to the Hong Kong tax. It would require no wrenching changes, such as giving up interest deductibility for corporations or homeowners. Some tax rates would presumably have to be higher (the 2 percent rate is ridiculously low anyway), but not as much higher as you might think. Hong Kong's taxes on salaries and profits amounted to about 7 percent of GDP last year, while combined U.S. corporate and individual taxes brought in only 8.6 percent of GDP. Since a larger percentage of American employees have higher salaries, a salary tax such as Hong Kong's would raise more money even without higher tax rates. The Hong Kong tax system has one major advantage over even the most elegant theoretical alternatives. It has been tested for more than 50 years. It works. http://www.cato.org/pub_display.php?pub_id=3793I would like to see us try it with a ten (10) year sunset provision.Adamwe have no economic forum, so I put it here Link to comment Share on other sites More sharing options...
sbeaulieu Posted November 2, 2011 Share Posted November 2, 2011 Adam,Interesting piece. What would be the lowest income for targeted flat rate tax? If someone's making a low income of $12,000 per year and they're hit with a flat tax of even 10%, that would take a big bite out of their earnings compared to someone who made 10 or 100 times more a year?~ Shane Link to comment Share on other sites More sharing options...
Selene Posted November 2, 2011 Author Share Posted November 2, 2011 Adam,Interesting piece. What would be the lowest income for targeted flat rate tax? If someone's making a low income of $12,000 per year and they're hit with a flat tax of even 10%, that would take a big bite out of their earnings compared to someone who made 10 or 100 times more a year?~ ShaneShane:Yes, quite interesting. As to your question, I believe that the "tinkering" place in the flat tax conceptual framing is in the lower twenty-five percentile grouping [25%] which is where that $12,000.00 per annum would fall. I see no problem with having a minimum flat tax of 2-5 %, for example, in order to weight the impact while we decide what ratios work best in achieving paying for the minimal state that most of us want to structure. The keys. as I perceive the advantages of a flat tax structure are the basic:1) elimination of the IRS and it's anti-freedom actions;2) termination of the progressive tax structure concept which is anathema to freedom; and3) establishment of a base budget amount that the limited government will be limited too.Adam Link to comment Share on other sites More sharing options...
Mikee Posted November 2, 2011 Share Posted November 2, 2011 An exemption where you only start to pay the flat tax on an amount above some starting point would take care of the lowest income earners, and be a non-factor for higher income earners. Still the same fair rate for everyone but doesn't take food out of anyone's mouth. Can't remember where I first read about that idea... Link to comment Share on other sites More sharing options...
Selene Posted November 2, 2011 Author Share Posted November 2, 2011 An exemption where you only start to pay the flat tax on an amount above some starting point would take care of the lowest income earners, and be a non-factor for higher income earners. Still the same fair rate for everyone but doesn't take food out of anyone's mouth. Can't remember where I first read about that idea...Mikee:I could live with that concept, but some critics think that everyone should have "skin in the game," so everyone should have some minimal payment. Even 1% would work. For example, in Shane's $12,000.00 example that would amount to an annual tax of $120.00 or ten ($10.00) per month. No one could argue, rationally, that that amount would be oppressive.Adam Link to comment Share on other sites More sharing options...
sbeaulieu Posted November 2, 2011 Share Posted November 2, 2011 Agreed. Among millions, a 1% tax would still add up to a lot. But then, it's not a flat tax rate That's a hard pie to slice.~ Shane Link to comment Share on other sites More sharing options...
Mikee Posted November 2, 2011 Share Posted November 2, 2011 Whatever it is has to be something enough people would actually vote for. I'd vote for a step in the right direction, anything to get rid of the IRS and get things moving. Link to comment Share on other sites More sharing options...
Selene Posted November 2, 2011 Author Share Posted November 2, 2011 Agreed. Among millions, a 1% tax would still add up to a lot. But then, it's not a flat tax rate That's a hard pie to slice.~ ShaneShane:I am a political Randian. I am fully, and consciously, aware that the path to changing this country is a political path. Therefore, towards that end, I am more than willing to work with incrementalism. Hell, the marxists got us to this disastrous state via incrementalism combined with false science and social and racial guilt.I would gladly accept a close to workable flat tax with a few wrinkles and a ten year sunset clause in the simple statute to achieve slowing and stopping this juggernaut of statism that is enslaving us.As Mikee also points out, "...anything to get rid of the IRS and get things moving."Would you support approach to a flat tax Shane?Adam Link to comment Share on other sites More sharing options...
sbeaulieu Posted November 3, 2011 Share Posted November 3, 2011 Adam,Definitely. Incrementalism should be the natural transition. I can't imagine a straight-forward cutover working well. But if it works towards a flat tax rate, and it eliminates the IRS (that alone would save millions towards useful pursuits), I'm all for it.~ Shane Link to comment Share on other sites More sharing options...
BaalChatzaf Posted November 3, 2011 Share Posted November 3, 2011 In order for a flat tax system to work in the U.S., the U.S. has to get out of the Superpower Business. Our participation in the Forever War since the conclusion of the Korean Conflict has cost us much more than we really can afford. The U.S. will have to cut back on the scope and size of its military doings.Ba'al Chatzaf Link to comment Share on other sites More sharing options...
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