200 Billion Tax Increase

if you invest in prospect for oil you could write them all off according to the guy who made presentation.

 

so does the mortgage deduction restart every time you buy property or is it a lifetime total?

 

Or the damned govt. keeps spending to much.

 

Last time we had a net positive trade balance was the 70's and we had horrible economic conditions with 18% interest rates, rampant inflation, several recessions, and a stagnant equities market?

But I love your system development.

 

I hate to say it but the trade balance account is irrelevant. It's kind of like looking at core CPI numbers then telling a low-income family that there is minimal inflation.

 

You can deduct as long as you pay mortgage interest. Basically, I think you can deduct the smaller of the interest rate times your loan amount, or the interest rate times the cap.

The cap is now $1M.

I support the move because I think it is a great way to land the housing bubble, and I don't care if my home goes down in value as long as my next home goes down more.

Besides, if people take money from housing and put it in something more productive, America benefits, and so do traders.

 

I know what you mean, but do you know that the phase-out rule you describe is being phased out?



Of course it will come back again, which is why I support a simplier tax system with less changes. Like inflation, no one wants a surprise because it restricts rational agents from planning.

 

Why not just do a sales tax? It will reduce consumption, reduce imports, make the government smaller (at least the IRS), and also be more equitable. ("Working" americans pay taxes now, but wealthy jobless americans do not. A sales tax will tax people who spend...)

 

Cuz the feds won't switch income tax for a sales tax. If (when, more likely) we impose a national sales tax, then that'll be another tax they keep on raising. But they won't ditch income taxes.

 

Hello guys, this an interview with steve forbes, one of the senator Mack righ hand man.
MAYBE this is what the tax reform panel is looking for.


What about the Flat Tax plan?

The Flat Tax is a single-rate federal income tax and corporate profits tax of 17 percent. The flat tax eliminates all double or triple taxation on personal savings, dividends and capital gains. No “death tax” (aka the Estate Tax). No more Alternative Minimum Tax (AMT).

No more effort-sapping, discouragingly high tax rates. Just one simple rate.

All the information you need to file will fit on a simple card or sheet of paper: With the flat tax, there’s no need to muddle over twenty-page tax tables. No more page after page of confusing returns.



Why do we need a flat tax?

As Americans and as taxpayers we know the reason: Because the present system doesn’t work. The federal US income tax code is a tax beast whose complexity and confusion, and outright unfairness, has corrupted the economy and society. Consider this: The Declaration of Independence runs some 1,300 words. The Holy Bible has 773,000 words. The federal income tax code and all of its attendant rules and regulations has some 9 million words and rising. The code is so complex and confused: no one knows what’s in it. And people with comparable incomes end up with wildly disparate – and grossly unfair – tax liabilities. America wastes over $200 billion and more than 6 billion hours filling out tax forms. They engage in all kinds of useless economic activity intended to take advantage of the code’s complicated maze of deductions and reduce our taxes – from donating socks to making unwanted investments. The waste of brainpower – this at a time when we face increasing global competition – is incalculable.

The code corrupts our system of government by creating a massive federal bureaucracy and encouraging the crassest, crudest political conduct. One sixth of the private sector employees in Washington are employed by the lobbying industry – one-half their efforts are directed at wrangling changes in the tax code.

Few people realize that our health care system with its runaway costs is, in fact, the ultimate product of tax code distortion of our economy.

And last and definitely not least, we simply pay too much in taxes. When you take into account all the taxes, fees and tolls you pay to the government, the typical American pays something like half or more of his or her income in taxes. Why do We the People have to accept this?



What happens to deductions and exemptions under a flat tax?

The Forbes Flat Tax plan features generous and refundable exemptions for adults and children. The plan eliminates today’s clutter of varying rates and deductions. Each adult would be able to take a $13,200 standard exemption. Single people who make less than that would come right off the tax rolls. Married couples would receive a $26,400 deduction. Families, meanwhile, would receive generous exemptions for dependents: $4,000 for each child or dependent and a refundable tax credit of $1,000 per child age 16 or younger.

A family of four would pay no federal income tax on its first $46,165 of income; for a family of six – Mom, Dad, four kids the number is $65,930.

These deductions are far more generous than under our current system, in which taxpayers start with just a $3,100 exemption.

To avoid puerile, divisive and totally irrelevant debates on all who gain and who lose, my flat tax is a tax cut for all. Because some people will only focus on what they lose in the way of deductions under the flat tax – thereby ignoring the fact that their income tax payments would go down under the flat tax – we give you a choice: when the flat tax is implemented, you can file under this new, simple system or you can continue to file your tax returns under the old system. See for yourself which is better. Virtually all Americans would conclude that the flat tax is simply the best choice.



How will the Forbes Flat Tax free America?

The flat tax will free America by liberating us from the tyranny of the federal income tax code. It will do away with the corruption and economic distortion produced by the current system. Politicians and others would not be rewarded for tax-code related favors. Our political system as a result would be less corrupt. We would not have to devote massive amounts of manpower and dollars into income tax compliance. We’d be able to focus more of our time on creating needed goods and services – creating wealth. The flat tax would provide a tax cut for all that would spur the economy and usher in a new era of enterprise and prosperity. That is what has happened in a succession of countries that have instituted a flat tax – including Russia and other nations once part of the former Soviet Union. How ironic that one-time Communist nations were able to cast off their bone crushing bureaucracies and regulations and reap the benefits of a flat tax before the US, with its traditional market economy.



Would a flat tax generate less revenue for the US government?

Absolutely not. The flat tax is a tax cut. Tax cuts have historically produced economic growth that has generated more wealth and government revenue. That happened during the tax cuts of both the Kennedy and Reagan administrations, and it is happening as a result of the 2003 tax cuts by George W. Bush.

From 2005 to 2015, the Forbes Flat Tax plan would generate $56 billion more in net government revenue than the current federal income tax, according to Fiscal Associates, an independent economic consulting firm.



Won’t I lose my mortgage deductions?

Yes. But the loss of your mortgage interest deduction will be more than offset by what you gain under a flat tax system. The flat tax would not only allow people to keep more of their incomes, but the value of their assets, including housing, would be higher. The flat tax would eliminate the capital gains levy. When this tax was eliminated for most homeowners in the 1990s, housing prices soared. By scrapping the capital gains tax once and for all, the flat tax would cause housing values – and the value of other assets, such as equities – to increase.

The flat tax would also lower interest rates by about 20 percent, since lenders would no longer have to pay tax on the interest revenue they receive, enabling them to pass on their savings to customers. The reduction in interest rates alone would offset the elimination of the mortgage interest deduction.

Remember you can still file under the current, complicated tax system if you wish rather than go with the flat tax.


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