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Originally Posted by DFINITLYDISTRUBD
Is that before or after taking out earned income credits and all of the other "deductions" that people use to avoid paying their fair share?
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It’s total reported gross income, before any deductions or exemptions of any kind. The only income not included is unreported, “under the table” money, bartering and trade (which legally must be reported, but, being nearly impossible to enforce, rarely is). In short, everything reported on forms W-2 and 1099.
So the 29.7 is an accurate estimate of what a flat tax would need to be to sustain current Federal tax revenue. Note that this doesn’t include state and local taxes, which are essential to providing most of the essential services we actually depend on on a regular daily basis.
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I personally know of at least a dozen people …
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Though this seems to make intuitive sense, it’s what statisticians call
anecdotal. Real tax accounting must be based on hard numbers, not intuition (though the political selling of tax policies to the public often appeals heavily to the latter)
What these numbers show is that a disproportionate part of the federal tax burden is born by a small percentage of very high wage and other income earners. If the tax code were changed to a completely flat tax – no deductions, not incremental rates – the burden would be spread evenly across a much larger population of wage-earners. This would be a profound change that would require substantial planning for most people to bear – I personally (my household, consisting of me and my non-wage-earning wife) would have to pay about $19,000 more this year than in 1994! Clearly, many people would not be able to adjust to this change. Equally clearly, the income of low and middle wage earners would have to be increased, and/or their expenses decreased, and or federal spending decreased.
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Originally Posted by DFINITLYDISTRUBD
Just remember I said every body pays 10% as apposed to the current system where many people either pay nothing or very little. I would be willing to bet that if you added up the income of every person in the country then multiplied it by 0.10 there would be enough possible with a surplus.
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That’s not what my check of the US Executive branch’s public data indicates. Based on the 1994 fiscal year, I calculate that a 10% flat tax (federal only) would have increased the federal deficit from $307,000,000,000 (14%) to $1,559,000,000,000 (70%).
I don’t want to divert from this thread's main theme that Americans may be less well off, compared to the rest of the world, than we commonly believe and our leaders tell us, just point out that seemingly simple solutions, such as a flat tax, might not be as simple or effective as they seem upon first examination.
