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  1. #1
    Senior Member Judy's Avatar
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    Will Carson’s tax plan be a tithe that binds or will he compromise?

    Will Carson’s tax plan be a tithe that binds or will he compromise?

    October 02, 2015 6:15 pm • By Amity Shlaes Bloomberg View

    It’s Ben Carson’s turn to get real on taxes. This is what some Republicans have been saying since Donald Trump released details of his tax plan.

    Carson, who is still neck and neck with Trump in the polls, has so far stuck with the simple idea he first began mooting years ago: a 10 percent flat tax on income modeled on the biblical tithe.

    A tithe sounds primitive, something involving pottery shards and sheep. The notion doesn’t fit into the political culture of a primary, let alone a general election. Tax plans do not come as bolts from the clouds. They come as spreadsheets.

    Trump took advantage of such impressions in the last Republican debate to mock Carson. Trump suggested that in rejecting progressivity, Carson was simply betraying ignorance of (tax) civilization. “One thing I’ll say to Ben is that we’ve had a graduated tax system for many years.”

    But for Carson to back off from his plan would be a shame. His tithe reminds us that our modern tax culture features its own idols, themselves worth smashing.

    Politicians worship the progressivity. This is the system under which tax rates rise as workers move up the income scale. Just about every tax plan in the past century has been progressive.

    But it’s not clear that voters understand progressivity. A recent study by the American Accounting Association suggested that 7 in 10 liberals who say they support progressivity indicate a preference for flat rates when asked about specific examples.

    Voters generally mistake progressivity for proportionality. And Carson’s 10 percent tithe favors proportionality.

    “A Wall Street Mogul who made $10 billion would be required to give $1 billion,” Carson writes in his memoir. “A Harlem schoolteacher who made $50,000 would be required to give $5,000.” Along with imposing that flat rate, Carson says, “of course, get rid of tax loopholes.”

    A second idol Carson breaks is the range for the top tax rate. In the U.S. this range is set in granite at between 20 and 40 percent. At 10 percent, Carson’s tithe feels “utterly implausible,” as the left-leaning Citizens for Tax Justice put it. With so much revenue lost, the contention is, the government will run dry as a desert.

    But here again, Carson creates an opening. Experience suggests that when a nation drops its tax rate substantially below that of other countries, it will draw commensurately substantial amounts of business, and extra tax revenues. No evidence has materialized that this phenomenon ceases when you drop your statutory top tax bracket by 75 percent.

    So Carson’s bet that a bold low rate will undam an ocean of revenue is hardly crazy. What’s more, the fervent fashion in which Carson preaches suggests he has the will to narrow deficits.

    Another tax idol is the child credit. No social conservative candidate is worth his salt until he crusades for tax changes that give an advantage to families.

    Sen. Marco Rubio recently provided an example of this when he proposed an expansion of existing child credits so generous it would give up a good trillion dollars in federal revenue. By math the Rubio campaign itself commissioned, that shift won’t yield a drop of additional economic growth.

    Carson doesn’t so much reject the child credit as parade past it. At a 10 percent tax rate, even the largest family will benefit.

    No, it won’t be easy for Carson to stand his tithe ground. Already he has let it be known he is open to permitting his tithe to be remade into, say, Mike Huckabee’s Fair Tax, which buys off lower earners with a cashback early “prebate.” It’s also quite possible that the surgeon candidate, if he stays near the top in the polls, will indeed succumb and advocate the standard Republican compromise mishmash. To all of which one can only reply: Heaven forfend.
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  2. #2
    Senior Member Judy's Avatar
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    Oh God, it's so frustrating reading all these stupid income tax tweak proposals.

    If you have a mandated income tax, then you need a progressive system. Ben Carson is using a "bibical" tithe tax rate as if what's good enough for God should be good enough for the Government. In fact that's what he said!!

    Well, there's a huge difference. First of all, God doesn't need money, just men and women of churches who want to pay themselves nice salaries and have the congregation pay for their homes and expenses and everything they do a they do out a do "God's Work". They need a big nice expensive facility with A/C and heat and nice drapes and choir robes and pianos and so much more and they want the congregation of course to pay for all that. If churches ceased to exist tomorrow and not another person spent another dime in this country on religion, then we could probably balance the federal budget in about 10 years. But that issue aside, religion is a choice, tithing is a choice, everything to do with "religious liberty" is a personal choice. Churches don't force their members to tithe or give. They can't foreclose on your home, or garnish your earnings, or send you to jail if you don't pay-up.

    Government on the other-hand can do all of that and does so regularly so when you have a mandated income tax, care has to be taken that whatever arrangement is legislated, the people can pay the taxes without suffering and thus do not have to face the choice of pay income taxes or starve or lose their house or fail to pay the utility bill. They have to have enough money left over to buy clothes for work and support a car, maybe 2, with all the payments, repairs, gas and oil and insurance so they can get to work and still have some gas in the tank to get to the store to buy things.

    So lets take the example of Carson's 10% plan:

    “A Wall Street Mogul who made $10 billion would be required to give $1 billion,” Carson writes in his memoir. “A Harlem schoolteacher who made $50,000 would be required to give $5,000.” Along with imposing that flat rate, Carson says, “of course, get rid of tax loopholes.”
    Lets take the Harlem school teacher example:

    She pays $5,000 of her salary in Carson Tax. She pays $4,000 in Social Security Tax (rounded to 8% from 7.65% for easy math), that's $9,000 a year for the feds of her $50,000 which means she/he now only has $41,000 of their earnings after federal mandatory income taxes, which is probably about what the teacher pays now in federal income and payroll taxes.

    So, this is the perfect example to show how the FairTax works in lieu of an income tax.

    Under the FairTax, the teacher pays no mandatory federal income or Social Security tax. Instead he/she will pay FairTax on new goods and services when they choose to buy. In addition, she/he can sign up for a Rebate if they want to, and depending on how may adults and children are in the home, they receive this monthly to pay the FairTax on any new goods or services they choose to buy. Carson doesn't describe the teacher's household, so we'll use the example of a single teacher with 1 child, the monthly rebate for 1 adult ($226)and 1 child ($81) is $305 based on household consumption allowance of $15,930 per year.

    So now the teacher has their $50,000 in earnings plus the $3,600 in FairTax Rebate for a total of $53,600. Note, the Rebate is not limited to low-income persons, any one who is a citizen or legal resident can apply for it. It's not based on income. The teacher would receive the same rebate as Donald Trump or Warren Buffet should they choose to apply for it. It's based on number adults and children in the household, not income. I've noticed many news pundits and writers don't understand this simple fact about the FairTax, which could be why they make the erroneous claim that is hurts the middle class. The middle class, the upper class, the rich class, everyone is entitled to it if they want to apply for it which just requires the names, birth dates, social security numbers of the household. Social Security Administration administers everything to do with the Rebate, including sending the payments by direct deposit or on a SmartCard of some type.

    Now the teacher lives his/her life, free of withholding taxes, income taxes, tax returns and so forth.

    Because the FairTax replaces the income tax the cost of which is already embedded in the price of all our new goods and services, the teacher now has a net of $53,600 instead of $41,000 to spend in our economy (before accounting for state and local income taxes, which we won't address, because it's static between the two systems.

    So which program benefits the individuals and businesses the most? The FairTax without question. Consumers have more net expendable income to spend in the economy. Businesses enjoy more sales. The government collects approximately the same revenue under the FairTax as it does under the income tax. The states collect the tax from the retail vendors, taxpayers no longer fund a huge IRS, no one has to pay a tax accountant or a tax preparer to do their taxes. Politicians can stop taking about "tax plans", Congress can stop wasting their time on tax legislation, and everyone can turn their attention to work, earnings, investment, savings, more jobs, better jobs, higher wages and better lives and more successful business enterprises because everyone just saved over $300 billion a year in income tax compliance expense. No one loses their home to an income tax foreclosure, no one has to borrow money to pay taxes, no one goes to jail, unless it's a retailer who steals the FairTax it collects and fails to send it in to the States who collect it and then forward it to the Feds.

    What a beautiful world we would have here in our little land of liberty.

    Because business no longer pay corporate income taxes either, they would be hard pressed to ever leave the United States, and those who have left will come back home and investors with money stored offshore will move it back here. It may take them a little while to get comfortable with the system, to be sure some Moron in Congress doesn't try to revive the income tax, but once it's all settled law, they will be roaring home faster than we can count new industries, good jobs, and new capital generated by this wonderful FairTax system.

    What about Social Security you ask?

    Well, of the 23% FairTax rate, 8.09% of it is earmarked to robustly fund Social Security and Medicare, and employers while no longer paying or collecting payroll taxes, still file their earnings reports to Social Security so Social Security has all the information it needs on employees to determine your benefits when you retire based on your earnings. The remainder of 14.91% of the 23% is dedicated to General Revenue to run our government.

    Companies no longer have to report your interest or dividend earnings. Banks no longer have to require copies of your tax returns for a loan. You no longer have to supply them, because no longer exist. Politicians never have to provide their tax returns, they would still have to provide a financial disclosure, but not tax returns, again, because they no longer exist. Same with corporations, businesses, and entrepreneurs.

    No one, individuals or companies will have to take into account "income tax implications" of a purchase, sale, business or investment decision. This is so important, because when tax consequences enter into such decisions, they're thwarted, twisted, manipulated, and usually turn out to be bad decisions. For example, take homeowners, many of whom bought homes for the purpose of a mortgage interest deduction to save on their income taxes, so they left their beautiful, convenient apartments in the city, close to work, near all the services, shopping, restaurants, bars, museums and liveliness of our once wonderful urban areas, and moved long distances to new developments 1 to 2 hour commutes from their job, stuck in cheaply-built houses with nothing nice to see or do, except worry about repairs and flooding and mowing and on and on and on.

    So were they happier in the urban sprawl or were they happier living in the city? Well, I'm sure some are happier, just as I'm sure some aren't, probably most aren't, because of the longer day, the hours in traffic, the cost of the commute, property taxes, distance from friends, and the lack of amenities. Regardless, the income tax should not be part of that decision or a factor in the choice.

    The income tax caused the demise of our cities with the flight of residents to the suburbs to buy homes for a tax deduction. They took all their income that was earned in the city and left our cities behind to become well ... country bumpkins with a long form tax return.

    Our urban areas have struggled to overcome this problem, but there's no way they can. It's not possible. When the incomes earned by the people who work in the city live outside the city, the city decays. Every city in America has tried to revitalize, and there's small tourist-driven areas that have done so for awhile. They hoped with the redevelopment of certain areas that it would spread and expand, and it did a little, but until we get rid of the income tax that drives out the working residents, it's just not mathematically possible. Cities have tried earnings and personal income taxes to at least tax the income earned in the city that left the city, but all that did was make it harder on the people who still lived in the city. The problem with the income tax is that it's an unnatural tax, it's a tax no one wants to pay so everyone spends most of their financial time trying to figure out how to get out of it, and when they do, the government spends all its time trying to figure out how to get it another way. It's a scheme, a scam, a sham, an invention of Marxist, derived from the feudal lord system, the key driver of Socialism, and the evil that has cost our country everything it was designed and created to achieve, which was the blessings of liberty.

    When you let a government invade your life and business to take your money and information, you are not free. Your a laboratory rat under a microscope being examined for ill-will and bad purpose

    The FairTax solves that at its root. The FairTax is like a giant pesticide that destroys the weeds taking over our country, our citizens, our minds, our energy, our freedom, our money, our future.

    The income tax = $19 trillion in debt, tax credits to illegal aliens who didn't pay any tax to begin with, thousands of industries, millions of jobs and trillions of dollars that left the US to avoid it.

    How much worse can it get before you wake up and realize that our founders who forbid such a tax were far smarter than the Democrats who dared in 1913 to amend our Constitution to allow it?

    HR 25 in the US House of Representatives and S 155 in the US Senate with 79 Co-Sponsors. Obama Care has ... 8.

    So to all those claim they'd like to see it but it will never happen, you're the reason it doesn't happen. Stop fulfilling your own prophecy and get to work supporting it, demanding it, refusing to take no for an answer, and kick all the idiots in Congress who won't support it, out of Congress and replace them with candidates who will.
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    Save America, Deport Congress! - Judy

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