A flat tax...
An idea:
- Abolish the current tax system.
- Apply a 10% flat tax to individuals earning more than per capita GDP ($37,800 in 2004).
* Currently $5.4 trillion of taxable income.
- Apply a 10% flat tax to revenue of corporations, partnerships and sole proprietorships, irrespective of profit/loss.
*Currently $23.6 trillion of taxable revenue
This would result in $2.9 trillion of tax revenue.
Budget 2006 is 2.57 trillion. That leaves us with $400 billion to start paying down the national debt. Let’s not stop there. I would reduce the IRS budget from $10 billion down to $1 billion, cut NASA to $6 billion, slash the defense budget by $200 billion and increase education spending by $100 million. This realizes a total additional saving of $119 billion, also to be applied to our national debt.
I realize this is going to be a considerable burden for companies that make profit that is less than 1% of revenue. But I’m not convinced that is a bad thing. Obviously non-profit organizations are completely absolved from this new tax code.
- Abolish the current tax system.
- Apply a 10% flat tax to individuals earning more than per capita GDP ($37,800 in 2004).
* Currently $5.4 trillion of taxable income.
- Apply a 10% flat tax to revenue of corporations, partnerships and sole proprietorships, irrespective of profit/loss.
*Currently $23.6 trillion of taxable revenue
This would result in $2.9 trillion of tax revenue.
Budget 2006 is 2.57 trillion. That leaves us with $400 billion to start paying down the national debt. Let’s not stop there. I would reduce the IRS budget from $10 billion down to $1 billion, cut NASA to $6 billion, slash the defense budget by $200 billion and increase education spending by $100 million. This realizes a total additional saving of $119 billion, also to be applied to our national debt.
I realize this is going to be a considerable burden for companies that make profit that is less than 1% of revenue. But I’m not convinced that is a bad thing. Obviously non-profit organizations are completely absolved from this new tax code.
posted by mochi at 1:13 PM
16 Comments:
Mochi, are you supporting Steve Forbes for prez in 2008? Seriously though a flat tax is fine. The only thing I would do different is graduate it a little bit at the bottom. Maybe start the 11% at 40,000 instead and tax 39,000 at 10%, 38,000 at 9%, 37,000 at 8%, 36,000 at 7%, and so on. If you had people who made 35,000 paying nothing, and people who make 36,000 paying 11%, that might be a little infair and it would provide a disincentive for people who are on the bubble. In general, I like your idea though. Anything is better than the complicated system we have now. With all of those cuts you are proposing and the flat tax, you sound a lot like a conservative. Maybe you should change the name of this blog to Conservative Thought. Just kidding.
This comment has been removed by a blog administrator.
"Defender of the fiscally conservative liberal left."
The two concepts have never been mutually exclusive. It makes perfect sense to be socially liberal and fiscally responsible.
Ok, Mochi, I'll just take on one issue of your flat tax. (Although I'll give you credit! You're the first self-confessed liberal I have ever heard suggest a non-progressive tax. Good for you!)
The issue I want to take on is the increased funding of the education money pit. Without going into all the countries, lets just do a comparison between the United Kingdom and the United States (all figures have been adjusted to reflect comparable value. Also this is actual cost, devoid of subsidies, etc.):
The expenditures per student for education:
Primary/Secondary
United States: $7,877
United Kingdom: $5,135
Higher Education:
United States: $20,358
United Kingdom: $9,657
Teacher Salaries:
Primary/Secondary:
United States: $28,806
United Kingdom: $23,297
Higher Education:
United States: 41,708
United Kingdom: $36,864
Number of hours worked during school year:
Primary/Secondary:
United States: 1,139
United Kingdom: 944
Educational Rankings:
Literacy Scores-
United States: 542
United Kingdom: 553
(Believe it or not, our "enlightened" friends, the French, are even lower than the United States)
Overall Ranking:
United Kingdom: 2
United States: 9
Our education system (based on Nazi Germany's) is mostly about indoctrination, not education. Its about teaching our children to be good compliant citizens of the state. If we had any sense we would scrap the failing institution and put our money into a shiny new one--kind of like what we do when buying a new car when the old broken down clunker gets too expensive to keep taping up.
I have a question: Why do most on the left not see this?
Look forward to your comments.
-Jack
Could we do the same with defense spending?
Absolutely! The first place to start would be the Pentagon.
-Jack
Of course, Mochi, defense spending is only 17.5% (up from 5% under the Clinton Administration) of the federal budget, while education is 41%.
I think that a lot of liberals are aware that education in America is due for reform, but we also know about crumbling schools, lack of textbooks and supplies, and the second-class-citizen status of teachers. I don't know where all that money goes, but when I was in school the emphasis was all on sports programs instead of education. I think liberals' position is "if publishers are going to charge a bazillion dollars for a new box of textbooks, then that is what we have to pay, rather than have no books at all." I think the education problem touches many other areas that way.
As for defense, I say defense contractors screw us all immeasurably.
Shea, I think one has to look at the education issue logically. The top school in our city is Christ Church Episcopal. It consistently yields the highest standardized scores, the highest college placement, etc. What is interesting about this school is that it is full of "bad kids"--kids who are sent there basically to reform them. What is even more interesting is that it educates these students each year for around $3,000 per student which includes bussing. Our city per pupil expenditures are close to $9,000. There is something significantly wrong.
Another specific example. I attended school in Australia. I went to a school in the outback. Every class included 2 grades-one teacher. We did not have computers, we did not have hot lunches, and most of us removed our shoes the minute we got to school. This school system trained me to become a draft choice for a semi-professional soccer team, and prepared me to play soccer and rugby at the University of Maine. In addition, the same mathematics and science I had in the 8th grade was the same mathematics and science I was being taught in my Junior year of University in the United States. Needless to say, my GPA in the sciences was a 4.0.
Shea, its time for the excuses and whining to stop. It's time for the parents and citizens of the United States to stop making excuses for abject failure. If my output here at work was commiserate with what our education system is producing I would be fired. It is time to stop condoning and accepting failure. If we don't we sacrifice our children and their future. The global market has arrived and our children are ill equipped to compete. What are we going to do about it?
As for defense-
Defense is an ever growing technology and requires a lot of R&D. Drugs require the same, as do a lot of things. I don't know how many people I heard criticizing the military for not having armor on the Hummers while in the same breath saying we should cut defense spending.
I do agree with you, however, that whatever the government does it does half as well at twice the price--that's the reason the Pentagon will pay $400 for a toilet seat.
Check out an old post of mine at:
http://newssnipet.blogspot.com/2005/01/inconsistencies.html
-Jack (a Neolibs fan)
Sorry, where did the 41% number come from?
Education:
"[In 2006] The administration is requesting $56 billion for the Department of Education, a reduction of a half billion dollars, or 0.9 percent, from the current spending plan -- which would be the first cut in overall federal education spending in a decade."
Defense:
"The fiscal 2006 defense budget of $419.3 billion represents a 4.8 percent increase over fiscal 2005 in real terms, but is about $3 billion less than projected for fiscal 2006 in last year's plan."
Jack, I understand what you're saying about dollars vs. results. My first question, if I were to audit the system, would be, "Where is that money going?" Once that is determined, I would like to see a comparison between the relative costs between specific items, for example, costs of textbooks and materials in America vs. other countries which show better results.
I also would welcome a review of educational systems world-wide to apply sound concepts to American education. We could look to global examples of success to learn from them. But God forbid anyone should try to apply a concept from Japan or someplace at a backwoods, redneck, gun-totin', bible-thumpin, "Deliverance" nightmare environment like the one where I grew up, where their idea of education is football and hatred. And, unfortunately, that condition is widespread. In fact, I'll bet if Americans were to describe their ideal school, the results might be pretty scary!
Mochi, you can find it on any pie chart for Federal non-discretionary spending. Here's a good place to start, though:
http://www.whitehouse.gov/omb/budget/fy2006/
Shea, understand what you're saying. There are a couple of research projects done that do exactly what you suggest. I have them bookmarked on my computer at work, and I will try to remember to fwd them to you on Monday.
I guess from my perspective, so many on the left talk about be "progressive", but become exceedingly "conservative" when it comes to government programs like education or social security. For example, the Democrats of old used to be a party of progress, but it seems that it came to a place that most today feel comfortable with and they don't want any more progress/any more change. They are unwilling to try something different--even try--they want to keep the same old failing systems alive. I think the people I am describing are "Neo-Dems" or "Neo-Libs"--not like you guys, but the same ilk as today's Neo-Cons.
Anyhow, its just a perspective of mine. Look forward to your thoughts.
-Jack
Yeah Jack I went to that site to compile my original blog. I'm still not understanding how the hell you can make this statement:
"Of course, Mochi, defense spending is only 17.5% (up from 5% under the Clinton Administration) of the federal budget, while education is 41%.
"
This comment is complete bullshit and I'm not a fan of bullshit. Your response is also weak.
Just to let you know, non-discretionary spending includes Medicare, Medicaid and social security. That’s why the department of health and human services has a budget of $642 billion only 70 billion of which is discretionary. What component of the Education department’s budget is non-discretionary? The answer is about $13 billion in 2006. Comparing Health and Human Services (Medicare, Medicaid) and Education alone that is not going to give you a number anywhere near 41% no matter how you slice it.
Ahhh, OK I found your 41%. You are talking about percentage increases in funding over time. Not real dollar amounts. Even this 41% number is bogus. It assumes 100% funding of the proposals which hasn't happened.
On the topic of education, it seems that the motivation and inspiration to get educated is not present. I see more motivation to beat the system in this country. In college and high school, I took many classes with students who came from outside of the country. Whether or not they had better basic skills like grammar, arithmetic, or whatever, one thing I did notice was that there was a curiosity about them, they WANTED to be there, they got involved in class discussions, they were PASSIONATE about education. Not to say that Americans are not, but my point is that there is really something missing in this country; there is this indescribable passivity and it seems education is something that is incredibly taken for granted and underappreciated.
I still cannot get over how steroid-laced rockhead pro-athletes make more in a year than a teacher or professor would make in a lifetime.
Defense spending has always been out of control and Americans are wont to do much about it. How about those Army, Navy, Marine, Air Force commercials which say 'Paid for by the U.S. Army'. See what fools they take us for? Why don't they just be honest and say 'Paid for by your Tax dollars'?
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