Proposed tax plan for the USA

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Jamie in Chile
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Re: Proposed tax plan for the USA

Post by Jamie in Chile »

Jebus wrote: Sun Dec 10, 2017 3:09 am Here is the tax plan I would recommend if I were the American president:

Flat tax rate 20% above $30000. Hence, those who make under $30k per year pay no income tax, while those who make 50k would pay 20% of the amount exceeding 30K (i.e. 20% of 20000= $4000).

Remove VAT on necessary and encouraged products, such as basic plant-based food products, bus and train travel, basic apartment rent, while raising the VAT on unnecessary and discouraged products, such as luxury cars, air travel, meat, alcohol, and cigarettes.
...
On the first part, are you proposing a large reduction in total income tax overall? I think someone said it would come out about the same but wouldn't that by less money raised for government overall compared to the current system? I don't have time to check right now but at a glance it looks that way
https://en.wikipedia.org/wiki/Income_tax_in_the_United_States

I'm assuming in my comment you are proposing one band at 20%. E.g. someone earning 2 million dollars pays only 20% from 30k-2 million. Or are you just modifying the lower bands but still proposing to keep some of the higher bands in the 25%-40% region.

On the second part I agree.
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brimstoneSalad
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Re: Proposed tax plan for the USA

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It depends on how many kids you have, but without tax breaks for dependents at least, that's a huge burden.
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Jebus
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Re: Proposed tax plan for the USA

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Jamie in Chile wrote: Mon Dec 11, 2017 8:29 pmOn the first part, are you proposing a large reduction in total income tax overall?
No, that's not what I want, and I definitely don't want the wealthy to pay less tax.
Jamie in Chile wrote: Mon Dec 11, 2017 8:29 pm Or are you just modifying the lower bands but still proposing to keep some of the higher bands in the 25%-40% region.
The thought was to keep it the same overall. Obviously not a good idea if some currently pay 40%. Perhaps the percentage and the base salary needs to be raised so that it helps the poor and hurts the wealthy.
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brimstoneSalad
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Re: Proposed tax plan for the USA

Post by brimstoneSalad »

If you did anything over 60k or so is 40% that might work.
You have to contend with local taxes too, though. U.S. tax law is a terrible mess.
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Re: Proposed tax plan for the USA

Post by AKiry »

AKiry wrote: Mon Dec 11, 2017 11:11 amI would also propose an increase in the capital gains tax to make up for some of the lost revenue;
Don't you think a VAT increase on unnecessary and health/environmental damaging products would make up the difference? I'm not sure about the capital gains tax. The profit margin on stocks is so razor thin as it is.
[/quote]

Yes, you would be gambling with your money if you put it in the stock market. Most will put it in something like Mutual Funds, or a passively managed fund pegged to something like the S&P500 (hedge-fund managers have never been shown to be better than passive funds and are probably out to fleece you). Basically, a capital gains tax works to redistribute wealth to a certain extent since the gain in capital in not earned through labour, which is how the majority accumulate theirs. To my knowledge, there already is a tax on things like cigarettes which should (theoretically) account for the negative externality of smoking on someone's health by turning into a financial penalty. I am not sure how well it works in reality, especially since additive substances tend to make someone not so rational when it comes to decision making. Pollution is currently not taxed, which would help with government revenue and hopefully encourage companies to invest in renewables technology.
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Re: Proposed tax plan for the USA

Post by AKiry »

Jebus wrote: Mon Dec 11, 2017 11:38 am
AKiry wrote: Mon Dec 11, 2017 11:11 am It is an interesting tax plan. Currently, the lowest 25% of Americans earn around $22,000 so under this scheme they would not pay any income tax. The extra money these people have they could then save or spend which is still a boon to the US economy. The highest 20% of earners would pay around $16,400 while the top 5% would pay around $35,300.
Interesting stats.
AKiry wrote: Mon Dec 11, 2017 11:11 amIt's pretty close to the current tax level.
Do you mean it's close in terms of tax money collected by the government?

AKiry wrote: Mon Dec 11, 2017 11:11 amI would also propose an increase in the capital gains tax to make up for some of the lost revenue;
Don't you think a VAT increase on unnecessary and health/environmental damaging products would make up the difference? I'm not sure about the capital gains tax. The profit margin on stocks is so razor thin as it is.
Yes, you would be gambling with your money if you put it in the stock market. Most will put it in something like Mutual Funds, or a passively managed fund pegged to something like the S&P500 (hedge-fund managers have never been shown to be better than passive funds and are probably out to fleece you). Basically, a capital gains tax works to redistribute wealth to a certain extent since the gain in capital in not earned through labour, which is how the majority accumulate theirs. To my knowledge, there already is a tax on things like cigarettes which should (theoretically) account for the negative externality of smoking on someone's health by turning into a financial penalty. I am not sure how well it works in reality, especially since additive substances tend to make someone not so rational when it comes to decision making. Pollution is currently not taxed, which would help with government revenue and hopefully encourage companies to invest in renewables technology.
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