Today is the day-- APRIL 15th! You must file your taxes or file for that extension.
I did my taxes over the weekend (yes, I usually wait until the last minute) using FreeTaxUSA. I choose it because 1.) It sounds patriotic, and 2.) my AGI is not over $56,000 (I hope to change this one day soon!).
It amazes me the things you can use as an deduction. Here is an article on 25 Most Ridiculous Tax Write Offs of All Time.
There is a way to eliminate this painful process: Flat Tax.
Are you a fan? Why or why not?
With a flat tax, the rich actually pay more and the poor pay less.
Obama's tax plan does not ACTUALLY help the poor, rather, it just burdens the rich with more taxes. But wouldn't that help the poor? No. Just because the rich have more of the burden, does not alleviate the poor of any of their tax obligations.
In fact, it hurts the poor. The "rich"-- they provide jobs. They are small business owners that now need to layoff employees under Obama's tax plan. They are the ones that buy more goods because they have more disposable income... but now, they buy less which means that companies are selling less...which means the companies need to layoff due to the slow down in sales.
So let's just be done with it all and institute a flat tax. Oh wait, Obama won't do that because he doesn't actually want to help the poor...he wants to keep them dependent on him and big government.
For further reading, check out Forbes' flat tax plan.
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It's funny- 8 years of Republican power and no flat tax, with the only proposal for one coming from Mike Huckabee.
ReplyDeleteWhile there are several iterations of the flat tax, let's just look at the problems with the concept.
1- on a sales tax model, poor people spend nearly 100% of their income, leading to 100% of that income being taxed. On an income tax basis, it's a little more fair, but only if there are NO exemptions, but the working poor (those who work full time but still can't pay the bills), are going to be penalized by this.
2- the threshold exemption: most models have an exemption up to a certain income threshold or a stepped up implementation or rebate. This ends up being a de facto progressive tax and under Huckabee's model, it would have required billions in up front cash to implement, since he wanted to give families cash up front.
3- I have not seen a single model where a serious economist said it would actually fund our government, especially Social Security and Medicare/Medicaid.
4- http://lanekenworthy.net/2009/01/05/how-progressive-are-our-taxes/
I've seen this graph in a few places. Our progressive tax system isn't really THAT progressive and the effective rates are lower.
5- The central argument: 17% of $20,000 is less money than 17% of a million, but when you're trying to get by, that 17% is needed a lot more for the person making $20,000 than the person making a million. Furthermore, the person making a million is benefiting wonderfully from our system. They have more money, they can live more comfortably. They likely deserve their earning and good for them. The person making $20,000 is clearly not benefiting. Those of us better off can certainly pay more so those of us who are less well off can survive.
Griffith - You are advocating that "From each according to his ability, to each according to his need (or needs)" It's been tried...didn't work.
ReplyDeleteBTW - How come someone making $20,000 is not benefiting from the system. The system (since FDR) has been designed to benefit low income Americans. I would say that we all benefit from the freedoms secured by the constitution...regardless of income.
I have been in every income bracket from $300 to $150,000 and never once has the benefits of the USA been denied to me. In fact, the more $$ I make the fewer benefits (FDR type) I receive.
I recommend you read Thomas Sowell's "Economic Facts and Fallacies".
Be careful of the "better off/less well off" labeling. Those type of determinations are only accurate to those who hold the authority to do so.
P.S. Do you know how income is calculated by the government? You would be surprised what is and is NOT included. Beware statistics, you can get them to say anything 5 out of 4 people know that.
http://www.ntu.org/main/page.php?PageID=93