If my wife makes 30 a year and I make 30 a year, were fukked.
GOP’s Rand Paul Calls For 14.5% Flat Tax
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Berniewood Hogan
IT'S BERNIE SANDERS WITH A STEEL CHAIR!
http://www.taxjusticeblog.org/archive/2015/06/rand_pauls_tax_plan_would_blow.php#.VYQ0GFVTO2x
Rand Paul's Tax Plan Would Blow a $15 Trillion Hole in the Federal Budget
Sen. Rand Paul (R-KY) outlined the broad contours of his plan for restructuring the federal tax system in a Wall Street Journal op-ed today. He proposes replacing the personal income tax and payroll taxes with a flat-rate14.5 percent income tax, and replacing the corporate income tax with what amounts to a value-added tax (VAT). A CTJ preliminary analysis of the plan finds that it would likely cost $1.2 trillion a year and $15 trillion over a decade.
Paul’s plan would repeal the progressive personal income tax, the estate tax, and the federal payroll tax and replace them with a single 14.5 percent “flat tax” on all types of personal income. The plan would keep a few features of the current tax code, including itemized deductions for mortgage interest and charitable contributions and the Earned Income Tax Credit, and would create a large “no tax floor” by exempting the first $50,000 of income (for married couples) from the new income tax. A CTJ analysis estimates that the switch from the progressive personal income tax to the new flat-rate tax on personal income would cost more than $700 billion in 2016 alone.
Repealing payroll taxes, the estate tax and all customs duties would cost an additional $1.6 trillion, leaving a $2.3 trillion hole in the budget. Paul proposes to fill some of that hole with a 14.5 percent “business activity tax,” which appears to be conceptually identical to a VAT. While it’s uncertain exactly what would be included in the base of Senator Paul’s VAT, a VAT at this rate could plausibly raise about $1.1 trillion a year.
When the dust clears, this would leave the federal government with $1.2 trillion less in tax revenue in fiscal year 2016 if the plan were implemented immediately—a reduction of about one-third in total federal revenues. Over a decade, the plan would cost a stunning $15 trillion.
Sen. Paul seems unfazed by this math, arguing that these massive tax cuts would act as “an economic steroid injection” that would make it possible to balance the federal budget—something Paul has proposed he would do as President. (If this line seems familiar to residents of Kansas, it’s because they’ve heard it from their governor repeatedly over the past four years.)
But it’s hard to see how this could be possible. Even the Tax Foundation, which he cites as providing evidence that his plan wouldn’t cost anything, finds that the Paul plan would cost $960 billion over ten years when “dynamic scoring” is factored in. And the Tax Foundation’s approach to dynamic scoring notoriously assumes that while tax cuts always spur economic growth, government spending on education, roads and health care has no positive impact on the economy at all. A more clear-eyed approach to measuring the “dynamic” effect of federal tax changes would at least attempt to quantify the very real—and very beneficial—effect of public investments on the national economy.
It should go without saying that given the fiscal challenges facing America—and given the chronic deficits Congress and the President have authorized in recent years—the most sensible first step toward sustainable tax reform should be to raise more revenue. But it seems very likely that Paul’s plan would blow a trillion-dollar hole in the federal budget each year. That’s the furthest thing from a sustainable tax plan.
Rand Paul's Tax Plan Would Blow a $15 Trillion Hole in the Federal Budget
Sen. Rand Paul (R-KY) outlined the broad contours of his plan for restructuring the federal tax system in a Wall Street Journal op-ed today. He proposes replacing the personal income tax and payroll taxes with a flat-rate14.5 percent income tax, and replacing the corporate income tax with what amounts to a value-added tax (VAT). A CTJ preliminary analysis of the plan finds that it would likely cost $1.2 trillion a year and $15 trillion over a decade.
Paul’s plan would repeal the progressive personal income tax, the estate tax, and the federal payroll tax and replace them with a single 14.5 percent “flat tax” on all types of personal income. The plan would keep a few features of the current tax code, including itemized deductions for mortgage interest and charitable contributions and the Earned Income Tax Credit, and would create a large “no tax floor” by exempting the first $50,000 of income (for married couples) from the new income tax. A CTJ analysis estimates that the switch from the progressive personal income tax to the new flat-rate tax on personal income would cost more than $700 billion in 2016 alone.
Repealing payroll taxes, the estate tax and all customs duties would cost an additional $1.6 trillion, leaving a $2.3 trillion hole in the budget. Paul proposes to fill some of that hole with a 14.5 percent “business activity tax,” which appears to be conceptually identical to a VAT. While it’s uncertain exactly what would be included in the base of Senator Paul’s VAT, a VAT at this rate could plausibly raise about $1.1 trillion a year.
When the dust clears, this would leave the federal government with $1.2 trillion less in tax revenue in fiscal year 2016 if the plan were implemented immediately—a reduction of about one-third in total federal revenues. Over a decade, the plan would cost a stunning $15 trillion.
Sen. Paul seems unfazed by this math, arguing that these massive tax cuts would act as “an economic steroid injection” that would make it possible to balance the federal budget—something Paul has proposed he would do as President. (If this line seems familiar to residents of Kansas, it’s because they’ve heard it from their governor repeatedly over the past four years.)
But it’s hard to see how this could be possible. Even the Tax Foundation, which he cites as providing evidence that his plan wouldn’t cost anything, finds that the Paul plan would cost $960 billion over ten years when “dynamic scoring” is factored in. And the Tax Foundation’s approach to dynamic scoring notoriously assumes that while tax cuts always spur economic growth, government spending on education, roads and health care has no positive impact on the economy at all. A more clear-eyed approach to measuring the “dynamic” effect of federal tax changes would at least attempt to quantify the very real—and very beneficial—effect of public investments on the national economy.
It should go without saying that given the fiscal challenges facing America—and given the chronic deficits Congress and the President have authorized in recent years—the most sensible first step toward sustainable tax reform should be to raise more revenue. But it seems very likely that Paul’s plan would blow a trillion-dollar hole in the federal budget each year. That’s the furthest thing from a sustainable tax plan.
88m3
Fast Money & Foreign Objects
Not nearly the laser precision of Rand Paul claiming that it would probably cause +1% growth in the first year, sure.
ZEB WALTON
ayo! - BEZ
i make more than 50k. tell me how it helps me. im not sayin yur wrong but most people wanna make over 50k. what incentive is there?People below 50k would be exempt...
More importantly, would you support it if the loopholes were closed?
im asking cause im stupid with money
this is my biweekly breakdown of what gets taken from me every 2 weeks
Federal Income Tax $402.64
Social Security $155.00
Medicare $36.25
New Jersey $86.88
is this dude saying the federal income tax is gone cause i could swear it just says FICA which i already pay less that 10% with. but if he means the whole thang, 15%... ill take 375 over 575 anyday
Richard Wright
Living Legend
Now just add a 40 percent tax on all income, including capital gains, above 2M and we have a good start
Jen The Prude
بسم الله الرحمن الرحيم
A flat tax is regressive and benefits only the richest members of the population.
A way too high amount of the population that is completely ignorant on everything literally just looks at and sees "low taxes!"no no no, focus on the low sounding number
And then they wanna cut education so these people continue to think this
these dudes are gonna take society apart brick by brick and have y'all cheerfully helping pass the pique ax
so Paul essentially wants to destroy SS and Medicare by distracting people with promises of "lower" taxes.