@saillakeerie, that would be pretty much the entire imputed rent discussion.
What definition of “efficient” are you using, saillakeerie?
I’m trying to figure out why a flat tax would be more “efficient” than a tax that targeted exactly the same income, but was continuously progressive. For any definition of “efficient.”
A true flat tax would be more efficient for any number of reasons:
- for earned income or simple unearned income like interest or dividends, taking a constant percentage off the top would mean you are always paying exactly the right amount of tax. If all you had was income of that nature, you wouldn't even need to file a return because the amount due or the refund owed would always be zero. And that's, what, probably 80% of everybody?
- the minute you start having deductions or exemptions or progressive rates, things get more complicated. You can't just take x% off the top, and you have to file a return to reconcile it all at the end of the year. Depending on where you look, we collectively spend between 6 and 9 billion hours and close to $100 billion a year complying with the tax code. What if you could wipe out 80% of that?
- a flat tax would give politicians less opportunity to engage in social engineering and giving favors and giveaways to certain companies or industries. Again, this reduces complexity, makes compliance easier, and therefore is more efficient.
When I print out my return for my records every year, it typically runs to 50+ pages. It takes hours and hours of my time to complete. I can think of lots better things to do with my time.
If your flat tax is just having one tax bracket, but you keep all of the other stuff that takes thousands of pages to codify, well then yeah you probably don’t save too much.
Did you read the entire thread? The whole thing is pretty much a gripe-fest.
Complaining about taxes is as American as apple pie. What is your point?
However, I think it’s a gripe fest not because people like to complain, but because this tax bill is for suckers. Most people would see their taxes go down slightly, or go up. It’s one thing if it’s for what people think is worthwhile, but it’s obvious that the main beneficiaries are very wealthy or corporations. Who wants a tax increase for that?
Though supposedly this will drive companies to give workers an average $4K/ year raise. My bet is on stock buybacks and CEO compensation. Anybody want to bet?
Hahahaha. You would have to be a sucker to think workers below the C level suites will see an extra penny.
I need to get in touch with my former tax prof, a true fiscal conservative. He was so hilariously offensive in class taking swipes at everyone and everything that it was not really offensive but genuinely funny. I bet he will have a lot to say about this corporate giveaway.
I will simply say that a lack of complexity≠efficiency. They tend to correlate, certainly, but the one doesn’t necessarily mean the other (nor is the converse true).
We would be very interested in what he has to say, Bunsen!
https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968
This article gives a run-down on the current plan, and explains things in a nice, easy to understand manner for those of us who are not very tax-savvy.
The bottom line:
Everyone likes to tout Reagans tax cuts , but they don’t talk about his tax raises. Sure he had a huge tax cut, but when the revenues went down dramatically he raised taxes. That’s what I don’t get about this, my taxes will go up and I see no benefit except corporations getting a windfall. If this even cut the deficit I would feel a little bit better but it doesn’t nothing but add to it.
Interesting editorial about specific increases - https://www.nytimes.com/2017/11/08/opinion/republican-tax-bill-cost.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
I hadn’t realized this:
Just take the $2500 savings middle class families were promised when the ACA was passed and apply it toward any increase in taxes. Should be a wash 
Priceless
So I just realized they are trying to do away with deferred comp plans, that’s not good unless they are going to modify rules for on discrimination testing. Most non qual(deferred comp) plans are for the execs making millions but in many companies they are execs, such as my hubby, who don’t make millions. They happen to work for a company that the bulk of the employees let’s say make 30-50k, so he is limited as to what he can put in the 401k plan, well below the 18k limit.
If we now are unable to put into the deferred comp we have no way of lowering our taxable income.
Haven’t seen Senate proposal yet. Here’s Nick Newman on how he fares,
https://finance.yahoo.com/news/pay-1500-senate-tax-plan-170400575.html
It looks like senate proposal trades in $10,000 property tax deduction with an increased mortgage interest deduction limit to $1M. Senate tax rate is also less different from the present.
These tax proposals make moving to low tax states look more and more interesting. Maybe that’s the objective.
Well, the bill is clearly designed to reward some states and punish others. “Low tax” is one way to describe the “winners” in this bill.
About 20% corporate tax that stays the same in both bills. Apparently, the average tax corporations pay after deductions at present is 24% in the US. World average 22.5%. Revenue neutral rate would be 28.5%. Considering world average rate is 22.5%, 20% and no deductions sounds reasonable to me.
I don’t see anything wrong with redistributing wealth among more states. That’s what we do with a progressive tax rate. We don’t tax the wealthy at a higher rate because they are not paying enough. It helps middle class and strong middle class helps the democracy. You could argue the same thing on the state level. Should you have a few ultra rich states getting richer or should you make some effort to redistribute wealth homogenizing states? Just look at people loathing to live anywhere else than coastal states. From the way they talk, it sounds as if they think they are condemned to live in an outdoor toilet. If we are to stay together as a nation, we need to reduce the disparity.
BTW in the senate version, step-up in cost basis goes away when estate tax is repealed. I would still like to see estate tax remains with lower exemption amount. But riddiing step-up helps.