Bush's Panel May Propose Version of Flat Tax in Final Report

[papau]

Once again a shift the tax burden from wealthy individuals to salaried employees - via the definition of income (called rewarding savings) and other design flaws (It has two parts, a business tax and a wage tax - and keeps the payroll tax income tax separate with a wage cap so it does not annoy the rich - but in ending the deductions for interest paid they may still have annoyed the rich and life insurance companies).

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=IOJF9D07NBB5


Bush's Panel May Propose Version of Flat Tax in Final Report

Oct. 18 (Bloomberg) -- U.S. President George W. Bush's tax advisory panel may recommend a fundamental overhaul of the current system, replacing it with a variation of the flat tax that would abolish most deductions and end levies on investment income. <snip>

Under the proposal, U.S. companies would stop issuing bonds, municipalities would face higher borrowing costs, the housing and life insurance industries would become less attractive to investors, Olson and other experts said. No one is quite certain how financial services companies would be taxed, they said.

Individuals living off investments would pay nothing, while wage earners would continue to have taxes withheld from their paychecks; people earning higher salaries would pay higher rates without the benefit of popular deductions, such as breaks for mortgage interest.
<snip>

A second, less-ambitious tax option the panel is considering would aim to simplify the current system by repealing the alternative minimum tax and curbing dozens of tax breaks, including popular ones benefiting homeowners and those receiving employer-provided health care.
<snip>

[olacan]

1. As I

have said before when it comes to taxes I think "The Fair Tax" plan is the way to go.

[papau]

3. Fair tax does all the evil to the middleclass/poor that a flat tax does -

and then adds a few twists.

Removing investment earnings from taxation is the real goal - and either the GOP flat tax or the fair tax sales tax can accomplish that. The rich would love either-= except the fair tax is - given our experience with the luxury sales tax and the rich in the 90's - prefered since rather tan paying tax on 10% of there earnings, they will pay near zero percent as a sales tax as they re-order their in-country purchases - as they did in the 90's - so as to minimize tax.

[phantom power]

2. Imagine that. Rich investors pay nothing, workers pay everything.

[WildClarySage]

4. Why don't they just come right on out and eliminate all taxes except

those derived from income (ie. the sweat of the brow taxes?)

[papau]

5. WAGE ONLY -They call it a "simplification to encourage savings! :-(

:-(

[sofa king]

6. Right. But this version screws the poor and middle class.

This is Grover Norquist's baby. It is becoming clear that Grover is a criminal mind with dirty ties to very unscrupulous characters even beyond the scope of the GOP. We would be wise to watch him closely.

[freestyle]

7. Progressive taxation of all income regardless of source is fair.

What we have now, and all the garbage being bandied about is not. There is no conflict between simple and fair taxation and progressive taxation. Using the tax code as a reward and punishment system is the root of the problems. Tax income from wages and investments at the same rates and with the same progressivity and also tax profits. Individuals and businesses all pay, and the better off pay disproportionately because they benefit disporportionately.