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Politics : Politics for Pros- moderated
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To: goldworldnet who wrote (450327)10/11/2011 4:34:49 PM
From: aladin2 Recommendations  Read Replies (1) of 793964
 
This is a revision to an earlier post - to propose a variation to the 999 plan.

With no other payroll taxes - this does not hit the 'poor' the way its portrayed. Today plenty of folks pay Social Security and Medicare, but no income taxes. This creates a culture of class war where many vote to tax 'other' people who have 'too much'.

The comparisons I have seen done - show middle income folks earning 60-70k losing in the 999 plan, but they conveniently forget that these folks are currently paying Social Security and Medicare taxes.

The retiree issue needs addressing as does how to make it appear (and please forgive the terminology) progressive.

So here is how we could handle retirement, social security and the working poor - a 'slightly progressive' system.

Set the Starting Rate to 9%. Changes require 3/4 Senate Approval.
Set the Starting Income Level to 100k. Changes require 3/4 Senate Approval.
Overall income = earned and unearned income combined.

For overall incomes under the starting level - Reduce income by property taxes, state and local income taxes, charity and social security or other basic pensions (railroad retirement etc). Above the starting level - social security and basic pensions are prorated.

Overall Income Tax at Starting Rate for Starting Level and lower.
+3% from Starting Level to 2.5x, add +3% from 2.5x to 5x, and an additional+3% above a 10x.

The VAT would hit the uber-rich fairly (Netjet flights get taxed at 9%), but is not directed at them as pariah's.

The effect would be catastrophic to sophisticated tax shelters, but everyone would have a stake in government spending. The reason the left would burn cars in the streets and riot over any such plan is that very fact - having a population that sees it has a real stake - this would break the dependence model.
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