In response to:

Tax Reform Is the IRS Fix

John148 Wrote: Jun 01, 2013 7:32 AM
"Right now, a middle earner pays roughly a 15 percent payroll tax and a 28 percent income tax. That's a 43 percent tax rate" First, 28 percent is the marginal rate and most middle income earners don't make that much money. I am married, making over 100K per year which puts me in the top 20% of income tax returns and I'm not in the 28 percent bracket. Even if someone does make that much more and fall into the bracket, they only pay the 28% on the high end of the income. Their effective rate is MUCH lower, especially if they have deductions. My *effective* rate only cracks 10 percent in a bad year. Most families are already lower than 10 percent (if they pay income taxes at all) and a flat tax of 10 percent in the absence of a very high standard deduction would raise their taxes not lower them.
Barbara1247 Wrote: Jun 01, 2013 11:25 AM
I was making a bit less than 44k/yr and taking home a bit less than 30k (including fed/state income taxes and payroll taxes). I'm no mathematician, but that's a whole lot more than 10%.
johnm h Wrote: Jun 01, 2013 8:35 AM
That is true. A flat tax would raise the average tax on most of us and to avoid that the standard deduction would have to be so high that a majority of low income people would again pay no tax. Best to link it to a VAT, i.e. 10% so that everyone pays but low income folks pay only the consumption tax, and if a prebate is included we could end welfare SS taxes and unemployment insurance. If linked to a VAT it becomes politically very difficult to raise either income or consumption taxes.
Sharon453 Wrote: Jun 01, 2013 10:01 AM
VAT increases taxes at EVERY LEVEL of production and the end price is much higher.
johnm h Wrote: Jun 01, 2013 1:21 PM
You do not understand how it works. What you are describing is a turnover tax. Look at New Zealand's VAT. it was the basis of their market revolution.
Scrap Iron in Texas Wrote: Jun 01, 2013 7:36 AM
Are you also counting your payroll taxes in your effective rate?
John148 Wrote: Jun 04, 2013 5:41 AM
No, but he doesn't either for his flat tax percentage of 10 percent. That doesn't include the payroll taxes. He said the total burden would "drop" to 25% percent for middle income earners. For most middle income earners, 25% would be an increase in total burden, not a drop.