On Wednesday, October 14, 2020 at 9:14:32 PM UTC-4, Turd Ferguson wrote:
The Ten Percent Flat Tax

The present tax system is unfair.

The most serious fault with our present income tax system is that it has
so grossly unfair. Only half of our nations income sources are being
taxed so that the other half pays no taxes whatever. Our gross domestic
product (GDP) was over 7.2 trillion dollars in 1996 .(1). Our present
income tax system collects only 735 billion dollars or about 10% of our
nations income (1). But IRS statistics show that the middel income
workers pay average tax return contribution rate is 18% and a marginal
tax rate of 28% of taxable income(2). This means that our present tax
base (taxable income) is slightly less than half of total income or GDP.
Middle income wage earners are paying 18% instead of 10.2% so that
others can pay nothing, zip, zero! If all income producing sources were
taxed at a single unitary tax rate of 10% the federal government would
collect more in taxes than it does now and every one would pay his fair
share of taxes. The Ten Percent Flat Tax would be much easier to
administer because all income producing business transactions could be
taxed at their source without regard to who the recipient might or might
not be. At the end of the year, no private citizen would ever again owe
the IRS even one penny more on his wages, his dividends, or his
interest. No citizen who worked for wages would ever again have to file
a federal income tax return. Only those citizens with income property
and businesses would file income tax returns. The IRS would no longer
process over 100 million individual tax returns, but would only have to
process 10 million business returns. Hundreds of thousands of IRS agents
and tax accountants would then be free to live useful and productive lives.
A summary of the ten percent flat tax.

All real income will be taxed once at a flat rate of 10%.
There will be no deductions or exemptions of any kind.
There will be no tax credits of any kind.

And the below in the details, long term capital gains and interest income
get what amounts to a 50% tax exemption. Go figure.





The value of all benefits will be taxed. This includes welfare,
health insurance premiums , pension plan contributions, company cars, etc..
Taxes will be collected by businesses.
Individuals will no longer file income tax returns.·
Interest will be taxed at a rate of 5% in lieu of indexing for
inflation.


Dividends will be taxed at 10% but will be a deductible business
expense.
Short term capital gains will be taxed at 10%
Long term capital gains will be taxed at 5%
Estate taxes will be a flat 10%.

That's a huge tax INCREASE, as most estates today have no federal estate
tax, only estates over $11+ mil.



A tariff of 10% will be imposed on all imports.

So now it's not just an income tax.



The Minimum wage will be increased to compensate for taxation on
minimum wage workers and their loss of welfare benefits.
Health care insurance premiums will count toward meeting the
minimum wage.

Another sign this is half baked. Taxing poor people's healthcare insurance?




Depreciation and interest expense will no longer be allowed.·


Now it's gone totally stupid. Depreciation and interest expenses are as
real as the cost of good sold, labor or the electric bill.



Part A. Taxes on personal income

1. Wages and earned income will be taxed at a flat rate of 10 % starting
with the first dollar earned. The taxes will be withheld from the
workers paycheck and the money remitted to the IRS just as is done
today. A W-2 form will be supplied to the worker but since all taxes due
will have been paid, the worker need not file an income tax report.

2.Health insurance premiums paid by the employer will be subject to the
10% tax. The employer will deduct 10% of the premium value paid on the
workers behalf from the employees pay check. The taxes will be remitted
by the employer to the IRS.

3 Pension plan premiums paid by the employer will be subject to the 10%
tax. The employer will deduct 10% of the premium value paid on the
workers behalf from the employees pay check. The taxes will be remitted
by the employer to the IRS.


Another half baked idea. Taxing people today on money they will not
see for twenty or fifty years.




4.Company Cars, housing allowances, and other company perks will be
subject to the 10% tax. The employer will deduct 10% of the value of
such perks from the workers pay check. The taxes will be remitted by the
employer to the IRS.

5. Interest received from banks, savings and loans, government bonds and
other financial instruments will be subject to a 5% tax. The financial
institution will deduct 5% from all interest distributions and remit the
tax to the IRS. The tax rate of 5% instead of 10% is imposed because
inflation reduces the value of savings by about ½ the going interest rate.

6 Dividends received on corporate stocks will be taxed at 10%. The
corporation will withhold 10% from all dividend distributions and remit
the tax to the IRS. Dividends will be a deductible business expense. We
will no longer have double taxation of dividends.

7. Short Term Capital Gains will be taxed at a rate of 10%. The
brokerage house or the escrow department will remit 10% of the short
term capital gains on the sale or exchange of property to the IRS. Short
term is any asset held less than seven years.

8. Long term capital gains will be taxed at a rate of 5%. The brokerage
house or the escrow department will remit 5% of the long term capital
gain on the sale or exchange of property to the IRS. We define "Long
Term" as any asset held for seven years or longer. The tax rate on long
term capital gains is 5% to compensate for the devaluation of the dollar
due to ever present inflation. A more precise alternative would be to
index all capital assets for inflation. But I believe that the 5%
rate after seven years accomplishes this objective and is much less
subject to debate.

9. No deduction or tax credit of any kind will be allowed for any
interest paid for any reason or purpose.

Some kind of fetish here and total misunderstanding of interest





10. No other deductions or exemption will be allowed for any reason.

11. Estate taxes will be a flat 10%. There will be no exemptions or
deductions of any kind. This tax will start at the first penny of
inheritance.

Nice, so a son inherits the family home worth $300K and now he suddenly
owes $30K in tax? How is he supposed to pay that? Or a farmer's children
inherit a farm, they have to sell it to pay the tax. This is as stupid as
it gets.




Part B . Taxes on business

1. All net profits will be subject to a 10% tax.

2. Interest paid will no longer be a deductible expense. Companies built
with sweat equity and money equity will no longer suffer discrimination
relative to companies built on borrowed money.

Like I said, someone here has an interest fetish.





3. Depreciation will no longer be a deductible expense.

And an ignorance of basic accounting.



4. Losses will no longer be carried forward. Profits will be determined
year to year.

Totally unfair and illogical. If a business has an extraordinary event
that results in a loss, they should be allowed to carry it forward.




5. Losses will no longer be transferred from one company to another.

6. Dividends paid out will be a deductible expense. No more double
taxation of dividends.

7. Executive salaries. Any salary in excess of 200,000 dollar per year (
the salary of the president of the United States) will be declared
excessive. That portion of the salary in excess of 200,000 dollars

Another example of how ignorant and half-baked this is. The president's
salary is twice that.


will
be subject to a 10% surcharge

So again, it's not a flat tax, there are exemptions, surcharges.



and paid by the corporation. Some may
argue that an excessive salary tax is not fair or flat. But there is a
real problem with CEO and other high paid executives taking obscene
salaries and perks while the owners of the companies, the stock holders
get next to nothing in dividends. Let these wizz kids get their extra
bonus out of dividends like the owners and investors in the companies.

8. Company Cars. The value of any company car provided to an employee by
a company will be subject to a 10% tax.

The personal use of a company vehicle is already taxed.


This tax will be withheld from
the employees pay check and the tax remitted to the IRS by the company.
The same rule shall apply to any other company perk like company
housing, paid vacation trips, or any other perk.
Part C. Taxes on the Working Poor.

federal transfer payments and tax forgiveness of low wage workers amount
to a negative income tax in the order of 150 billion dollare each year.
This loss to the federal treasury is almost 20% of total income tax
revenues. If this drain on our treasury is not stopped we will not be
able to have a balanced budget

Typical. The thought of a balanced budget only comes up when it comes
to reducing payments to the poor.




with a 10% flat tax but would have to
increase the rate to about 13%. We are not talking about unemployed
here. We are talking about people working for substandard wages. If all
our workers earned a living wage these government handouts would be
unnecessary.

1.The ten percent income tax shall be levied on all earned income
no matter how small. The income tax shall start with the first penny
earned and will finish with the last penny earned.
We acknowledge that the present minimum wage is not a living wage
and that we cannot expect any worker making the present minimum wage to
pay this tax. But we must insist that all citizens pay their fair share
to support our government. For this reason we demand that the minimum
wage be increased by $0.50 per hour each year over the next five years
as this ten percent flat tax is instituted.
For the first year that the flat tax is instituted the minimum wage
increase will just keep up with the tax increase so the minimum wage
worker will just break even. For that reason we will not start
dismantling the earned income credits until the third year.
All earned income tax credits will be completely phased out over
the third, fourth and fifth year of the ten percent flat tax plan.
All food stamps and housing assistance for the working poor will be
phased out over the first five years of the flat tax plan.

Part D. Tariffs and Most Favored Nations

All work has dignity and therefore all workers deserve a living wage. We
must recognize that we live in a global economy where transport over
intercontinental distances is no longer expensive. We must also
recognize that in many countries child labor, slave labor, and prison
labor are commonplace. These same countries have very low or non
existent minimum wage laws, fair labor standards, and no workman
compensation system. If our companies have to compete in a price war
with competitors in these countries we will loose even more good jobs.
Our workers need protection from these unfair competitors. We do not
mean to stifle honest competition but we do need to even the playing field.

1. All nations having most favored nation trading status with the United
States will have a flat Tariff of 10% levied on all goods of any kind
and description coming into our country.

And they will retaliate with a tariff of 10% on our goods.




2. No nation will be granted most favored nation status if its negative
trade balance with the United States exceeds ten percent in the past
calendar year.

Exceeds ten percent of what?



Can you spell half-baked?