"Tax Reform" Panel and a revised income tax system

[papau]

Acting Deputy Assistant Treasury Secretary Eric Solomon said that at least one option will be a revised income tax system.

Many observers expect simplification to include extensive changes in the areas of savings. Pension plans, life insurance, annuities, mutual funds, and other savings vehicles (e.g., education IRAs and 529 plans) are likely to be affected directly or indirectly by a simplification proposal. The Ways & Means Committee's Subcommittee on Select Revenue Measures has scheduled a hearing on tax reform for July 28. Witnesses at the hearing will be Members of Congress who will detail issues related to simplification, economic growth and fairness important to their individual constituencies.

[shoelace414]

1. the tax brackets are simple

the deductions make it complex.

[TheFarseer]

2. I don't think alot of people understand tax brackets

For example if the tax bracket is at 25,000 and you make 26,000, you pay at the higher bracket on only $1000 of that, not the whole $26,000, and I'm honestly not sure alot of people understand that.

[papau]

3. Which is why a "flat tax"with very large per return/per person deductibles

might be a reasonable replacement.

But the "flat tax rate" will be over 33% if it is to collect the current FIT and still have large enough deductibles such that it is as progressive as the current FIT.

[shoelace414]

4. a flat tax cuts taxes on the wealthy and raises taxes on the middle class

so yea.. the republicans love it.

[papau]

6. Note the Quote marks - a "flat tax " need not be flat -A $40,000 per

return deduction plus a 10,000 per adult plus a 5000 per child plus an interest deduction up to the interest on the first 500,000 of mortgage loan interest on the primary resident plus a medical deuction up to 10000 plus charity deduction up to 20,000 and u end up with a FLAT rate around 40% with most folks under 60,000 per year paying nothing

[TheFarseer]

5. I thought my post was an argument AGAINST

a flat tax. You can have a graduated tax bracket system just as easily as a flat tax - you don't even have to figure anything - they have a table that just tells you what you owe based on your adjusted gross income. Like someone said, they hard part is the deductions. You can do away with all the crazy deductions no matter which system you have. Whether you want to is another question.

[papau]

7. I am against a less progressive tax and I am against a tax so low it

requires borrowing from my children.

As tou say, the deductibles can be as complicated or as simple as you want. Just so long as they result in a very progressive tax.

[Odin2005]

8. I am against deductions.

once one group gets favored, every little intrest group will want a deduction, as happens now. :crazy:

[tfizzle]

9. What do you all feel about the FairTax

Any thought. Brought by Linder? Solely a consumption tax? Wondering what a majority of Dems think about it, its still new but its a good plan. see fair tax