The Pawlenty Plan/My plan.

[leftysergeant]

Oh, I guess on reading its not all that clear. I made 10.85 dollars an hour for 40 dollars a week. I could not afford to pay all my taxes on that. My coworker made 14 dollars an hour for the same job. He did not pay taxes and got 3,500 back from the govt. I barely made my rent while he ate nightly dinners for 100-200 dollars etc. I do admit that he lived with his rich parents with his 4 kids but there was more than that. I think I was proposing a graduated flat rate with deductions based on whether or not you can afford it.

Sakrament noch Mal! This is just plain lifestyle jealousy.

 

[MinnesotaBrant]

Sakrament noch Mal! This is just plain lifestyle jealousy.

Fine, you can work on my plantation then.

 

[MinnesotaBrant]

Yeah, you need to flesh this out a bit. Are you talking taxing income or wealth? Are you counting capital gains as income? What is your position on luxury taxes?




(I made a correction that I think you meant.)

There is a whole lot of info left out from this, like how much tax was deducted from your payroll. Your co-worker did not get "$3,500" back from the government", he got a refund of that amount because he had a payroll deduction large enough to cover his taxes plus extra. There is mixed opinion on whether or not to take a large payroll deduction. On one hand, you get a nice refund. On the other hand, the government holds your money for part of a year without paying you interest.

The other thing is that it sounds like your co-worker is married and it sounds like you aren't. (Correct me if I'm wrong.) I'm married too, and my wife makes a great deal less than me, so when we pool our incomes, our tax rate is lower because it's two people.

Lastly, doing the calculations at $10.85 per hour, you earn about $22,000 a year, which is one of the very lowest tax brackets. Indeed it is so low, that it is likely that they don't withold taxes at all. This is why you owe money at the end of the year. You need to put some money aside or ask your employer to withold some taxes so that you won't be stuck with this bill in April.

You are one of the people that would be badly hurt by a flat tax. Under your own plan, you'd owe only slightly less income tax than you pay now, but the government would probably have to slap on all sorts of sales taxes in order to make up for the lost income that your plan would cause. And sales taxes are "regressive", meaning they are much harder on people not making much money.

Maybe you should think this through some more. (And talk with your HR department about deducting taxes from your payroll.)

I'ma business now. I am no longer a wage slave. I think as a couple they were making maybe 100k a year with 4 kids. I believe we made 58k and paid in 5k federal and maybe 1.5k state. Nope there are many games people play with taxes and if you don't think the pot is gonna blow you are in dreamland.

 

[leftysergeant]

I'ma business now. I am no longer a wage slave. I think as a couple they were making maybe 100k a year with 4 kids. I believe we made 58k and paid in 5k federal and maybe 1.5k state. Nope there are many games people play with taxes and if you don't think the pot is gonna blow you are in dreamland.

Yeah. The working people who actually create wealth are going to get sick of subsidizing useless investors.

 

[Alferd_Packer]

What do you think of Mr. Pawlenty's proposal to eliminate all Federal regulations for environmental and consumer protection? Is that a good idea?

I'm sure they are planning to follow that up with "tort reform" to put a cap on how much you can sue a corporation for environmental damages or consumer protection fraud.

 

[Alferd_Packer]

The post office, the government printing office, Amtrak, Fannie Mae, Freddie Mac, and others, were all built for a time in our country and a different chapter in our economy, when the private sector didn't adequately provide those services. But that's no longer the case."

USPS is still a better deal than fed ex

I don't see many private sector railroad startups.

 

[sarge]

Your co-worker did not get "$3,500" back from the government", he got a refund of that amount because he had a payroll deduction large enough to cover his taxes plus extra.

Not necessarily. A person making $14 bucks an hour with a wife and several kids would get back considerably more than they paid in - indeed would be eligible for a refund even if they had no withholdings.

Such a person would qualify for the Earned Income Tax Credit, a refundable credit that can be taken in advance.

 

[MinnesotaBrant]

Not necessarily. A person making $14 bucks an hour with a wife and several kids would get back considerably more than they paid in - indeed would be eligible for a refund even if they had no withholdings.

Such a person would qualify for the Earned Income Tax Credit, a refundable credit that can be taken in advance.

They made 100k a year as a couple. Lived in their parents house with 4 kids. He was going to school to be a police cadet and it appears that he had been going to school for the last 10 years. I don't believe they paid any taxes. Hey Sarge. Aren't you going to ask me how I know all that? Just asked them, and from the vague responses, I extrapolated the answers.

 

[Ladewig]

Not necessarily. A person making $14 bucks an hour with a wife and several kids would get back considerably more than they paid in - indeed would be eligible for a refund even if they had no withholdings.

Such a person would qualify for the Earned Income Tax Credit, a refundable credit that can be taken in advance.

Indeed. Apparently the cow-orker is receiving quite a lot of gifts from the parents.

In any case, my experience with the work force is that when a fellow employee brags about something, it is probably wisest to assume that the whole story is BS until tangible evidence is presented. This guy says he is getting $3500 back from the government, but until I actually saw the check (and saw some paychecks indicating withholding amounts) I would write it off as all talk and no cattle.

Same with people who say they fly first class. First, not everyone sitting up their paid money for the ticket - some used frequent flier miles. Until I saw ticket stubs indicating full fare purchases, I would write it off as just a story.


ETA: I didn't see your response before I typed up this post, but the point still stands.

 

[The Don]

So a candidate, to respond to a HUGE deficit caused by a significant drop in tax revenues (spending has increased but not soared) proposes to reduce personal taxes and cut business taxes by over 50% (35% down to 15%).

I'm not a US tax payer but if I was, I would do spectacularly well out of these proposals. In the UK I pay very little income tax (Mrs. Don and I have a joint salary of under £15,000 a year and dividend income of around £40,000). Under these proposals, I'm sure we'd be much better off.

On the other hand, we we would save £20,000 a year in business taxes.

I'm pretty sure that this would only result in a larger deficit

 

[MinnesotaBrant]

Indeed. Apparently the cow-orker is receiving quite a lot of gifts from the parents.

In any case, my experience with the work force is that when a fellow employee brags about something, it is probably wisest to assume that the whole story is BS until tangible evidence is presented. This guy says he is getting $3500 back from the government, but until I actually saw the check (and saw some paychecks indicating withholding amounts) I would write it off as all talk and no cattle.

Same with people who say they fly first class. First, not everyone sitting up their paid money for the ticket - some used frequent flier miles. Until I saw ticket stubs indicating full fare purchases, I would write it off as just a story.


ETA: I didn't see your response before I typed up this post, but the point still stands.

Possibly but he was trying to hid the info and got extremely agitated when I produced the numbers. His was was making I believe 52k as some kind of head nurse and he was making about 40k from what I remember from working two jobs. He was paying child support. He got back 3500$ in taxes. He had an unfinished master and had was about to be made a cadet in a police force. This is unfortunate since he is unable to separate truth from fact. He might be dirty which might make him valuable to some though.

I think the pawlenty plan would work as long as the only people getting deductions are people who need it for economic reasons rather than based on income.

 

[KoihimeNakamura]

I was in a lower bracket (8.55/hr full time) and still ahd to pay taxes due to the HR department for the company having no brains. Probably what happened to you.

 

[Tricky]

I think the pawlenty plan would work as long as the only people getting deductions are people who need it for economic reasons rather than based on income.

Nobody gets deductions based on income now, apart from the fact that lower incomes pay a lower percentage of tax (i.e. tax brackets).

You haven't even suggested getting rid of tax brackets. You've only suggested that there should be just two of them.

 

[MinnesotaBrant]

Nobody gets deductions based on income now, apart from the fact that lower incomes pay a lower percentage of tax (i.e. tax brackets).

You haven't even suggested getting rid of tax brackets. You've only suggested that there should be just two of them.

gah, mind shriveling, must rehydrate brain. Its very very very very very hard to make politics interesting but someone has to try.

 

[MinnesotaBrant]

Lets restart this. Use a graduated flat tax like Pawlenty said at 0% for the first 20k per tax paying person in the household, 10% for the next 50k, then 25% for the rest. Only give deductions to those who cannot afford to pay using net worth as a guide. This will increase compliance from people who cannot afford to pay and keep people who don't really need all those deductions from getting them and driving us crazy. There is no way that Palin needs 8 deductions for those 8 kids she adopted. In fact she could probably pay for her down baby too. Rich people don't want to work then fine. We will give your job to a deserving person on unemployment. I hope that isnt too detailed for you.

 

[The Don]

Lets restart this. Use a graduated flat tax like Pawlenty said at 0% for the first 20k per tax paying person in the household, 10% for the next 50k, then 25% for the rest.

I've paid tax from the age of 16 even though I was in full-time employment until I was 21. Does this mean in your model that my parents could could use my unused 10% band to offset their 50K+ earnings ?

This seems to be a significant reduction in overall tax rates, how will this increase the tax take by the significant % required to balance the budget ?

Only give deductions to those who cannot afford to pay using net worth as a guide.

Net worth is notoriously difficult to calculate. You're also encouraging people to manage down their net worth (for example by borrowing) so as to qualify for deductions.

By factoring in net worth you are effectively launching an attack on home-owners and giving renters a significant boost.

This will increase compliance from people who cannot afford to pay and keep people who don't really need all those deductions from getting them and driving us crazy.

How will this increase compliance if they cannot afford to pay ? Either they pay or they do not

There is no way that Palin needs 8 deductions for those 8 kids she adopted. In fact she could probably pay for her down baby too.

Why is there a deduction at all for anyone ?

If deductions do exist, preventing people from claiming them if they have a certain income will result in earning $1 more but losing $1000s in deductions. Having a sliding scale would just make things even more complicated.

Rich people don't want to work then fine. We will give your job to a deserving person on unemployment. I hope that isnt too detailed for you.

So a rich surgeon decides they don't want to work so you just pick the the next person from the unemployment line.

Please give some examples of jobs rich people do that someone on unemployment could just pick up.

Please give an estimate for the number of jobs this would create (my guess - literally tens)



One thing I'm pretty sure of is that rich people who operate in a tax efficient manner will continue to do so in a flat tax environment.

 

[The Central Scrutinizer]

Lets restart this. Use a graduated flat tax like Pawlenty said at 0% for the first 20k per tax paying person in the household, 10% for the next 50k, then 25% for the rest. Only give deductions to those who cannot afford to pay using net worth as a guide.

How do you determine if someone can afford to pay?

 

[MinnesotaBrant]

I've paid tax from the age of 16 even though I was in full-time employment until I was 21. Does this mean in your model that my parents could could use my unused 10% band to offset their 50K+ earnings ?

This seems to be a significant reduction in overall tax rates, how will this increase the tax take by the significant % required to balance the budget ?



Net worth is notoriously difficult to calculate. You're also encouraging people to manage down their net worth (for example by borrowing) so as to qualify for deductions.

By factoring in net worth you are effectively launching an attack on home-owners and giving renters a significant boost.



How will this increase compliance if they cannot afford to pay ? Either they pay or they do not



Why is there a deduction at all for anyone ?

If deductions do exist, preventing people from claiming them if they have a certain income will result in earning $1 more but losing $1000s in deductions. Having a sliding scale would just make things even more complicated.



So a rich surgeon decides they don't want to work so you just pick the the next person from the unemployment line.

Please give some examples of jobs rich people do that someone on unemployment could just pick up.

Please give an estimate for the number of jobs this would create (my guess - literally tens)



One thing I'm pretty sure of is that rich people who operate in a tax efficient manner will continue to do so in a flat tax environment.

I guess you are making the assumption that the tax code is fair and everybody making the same amount of money has the same ability to pay. Net worth is pretty easy to figure out. If you have the ability to pay, without stuggling for your kids, your grandparents, your disabled whatever, the government should give you a denial of service and make you pay for it, willingly or unwillingly.

As far as tax revenue goes, Lets say that 50% of the income tax revenue is paid by the top 25% of the wage earners who would get no deductions and be paying 25%. Total gross income tax revenue is a bit over 12 trillion dollars. Divide by 2 for 6 trillion is 1.5 trillion Lets say that the other 50% pays 10% with some being able to take deductions and some not based on their net worth. for 400 million. This puts us at 1.9 trillion, almost double what we are taking in. Are you good at math? Where did you get your numbers? The economy would continue to grow since the people who are denied service would likely contribute their own wealth to continue the service since they can afford it. Wow, I am a policy wonk now.

The retired well off often take low paying jobs to keep busy. Lots of well off people and their kids are working day jobs. I would guess that anybody with a job probably knows this.

 

[The Don]

I guess you are making the assumption that the tax code is fair and everybody making the same amount of money has the same ability to pay. Net worth is pretty easy to figure out. If you have the ability to pay, without stuggling for your kids, your grandparents, your disabled whatever, the government should give you a denial of service and make you pay for it, willingly or unwillingly.

Working out net worth is notoriously difficult. To work out my net worth you would need to value everything I own. Who is going to do this ? Who is going to come round my house and go through Mrs. Don's jewellery box and appraise everything in there ? How much is my 1989 Jaguar XJ-S worth ? What about our collection of watercolours ?

As far as tax revenue goes, Lets say that 50% of the income tax revenue is paid by the top 25% of the wage earners who would get no deductions and be paying 25%. Total gross income tax revenue is a bit over 12 trillion dollars. Divide by 2 for 6 trillion is 1.5 trillion Lets say that the other 50% pays 10% with some being able to take deductions and some not based on their net worth. for 400 million. This puts us at 1.9 trillion, almost double what we are taking in. Are you good at math? Where did you get your numbers? The economy would continue to grow since the people who are denied service would likely contribute their own wealth to continue the service since they can afford it. Wow, I am a policy wonk now.

I got my numbers from applying the figures listed against my business's figures.

Currently my company makes just over £100,000 a year profit. If the tax rate on business is currently 35% I would pay £35,000 in business taxes. If this is lowered to 15% I would only pay £15,000 - a saving of £20,000.

The retired well off often take low paying jobs to keep busy. Lots of well off people and their kids are working day jobs. I would guess that anybody with a job probably knows this.

And this relates to what exactly ?

 

[Ladewig]

I guess you are making the assumption that the tax code is fair and everybody making the same amount of money has the same ability to pay. Net worth is pretty easy to figure out. If you have the ability to pay, without stuggling for your kids, your grandparents, your disabled whatever, the government should give you a denial of service and make you pay for it, willingly or unwillingly.

I disagree with your assertion that net worth is easy to calculate. Plus, as previous posters pointed out, it is easier to game the system if net worth is a key variable in the equation. In fact the only thing harder than fairly and accurate calculating the net worth of every taxpayer in the U.S. is calculating the ability to pay of every taxpayer in the U.S. Who is going to determine whether or not kids, grandparents, and disabled relatives will be adversely affected by a particular person's tax burden?

Also, could you give examples of which services will be denied and how they will be denied?

Lastly, I can see that this thread could escalate to an emotional argument very quickly. I would prefer for that not to happen so I ask for posters to avoid name calling. More specifically, I want to say that pointing out flaws with your system does not inherently mean that a poster thinks that the current system is fair and without flaw. It simply means that the proposed system has more flaws than the current system.