Yes Pokedad, I am back. I have been BUSY managing a state house campaign in Iowa. We nicknamed our direct mail campaign of 40 thousand pieces "operation insomniac." The direct mail dropped on Thursday, so I will have a lot more free time to bring truth to the Gym.
I commend you for your political action. I have worked winning and losing campaigns, and have felt better for my effort than for my donations and votes ('though all are important).
There are 2 different tax systems I would like to see:
1st one is the flat tax which would garnish a fixed percentage across all income levels.
So in the separate cases of your three scenarios, Pokedad:
Family making 50k/year with 15% tax rate = $7,500 tax burden
Family making 250k/year with 15% tax rate = $37,500 tax burden
Family making 5M/year with 15% tax rate = $750,000 tax burden
The tax rate for a $50,000 income household is already 15%. You are just suggesting that the wealthy have their tax rate reduced.
Many wealthy households do no work for their money, merely benefit from investment income. Currently, he tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets. You are just suggesting that the poor have their tax rate increased.
2nd Scenario is the fair tax which you addressed.
One commonly unknown fact about the fair-tax is that it really IS progressive. There is a tax rebate on spending until the spending passes the poverty line.
So, let's arbitrarily say the poverty line is $20k/year. $20k X .20 = $4000 given back as a rebate check. Spending past that is not given back. Therefore, the rich, spending more on their house, their car, entertainment, out dining, etc etc is GOING to be taxed more as a percentage of income because their spending will most definitely go further past the poverty line than lower income earners. What I like about this system, is that it encourages savings and investment because it gets rid of the capital gains taxes. Taxation is based on actions of the person being taxed. It brings people into the system like Illegal immigrants. Taxation is mostly on luxuries... and the system doesn't so grossly favor one group over another.
This progressive adjustment would mean that the actual taxes would be:
$50,000 - 8% - $6,000 discretionary income
$250,000 - 1.6% - $246,000 discretionary income
$5,000,000 - 0.08% - $4,996,000 discretionary income
That doesn't seem any better to me.
When were we talking about war, Pokedad?
Anyways, I applied for the Airforce Academy out of highschool, and thought I was going to get in, but was rejected because of previous bouts with asthma. I went through all the Physical Aptitude Tests, Physicals, and Eye examinations and then in May of my senior year of high school, I got word that I wouldn't be going. So, I went to Texas Tech instead.
We weren't talking about war, or military service; we were talking about looking at different schools of thought on taxable contributions to the government, and how they affect the poor and middle class very differently than they do the wealthy.
I noted that other contributions to the government, specifically military service, also unfairly burden the poor and middle class, while the wealthy don't seem to make a similarly proportional patriotic contribution in defense of our country.
You and I have more alike than I thought. Largely through parental pressure, after a vigorous competition, I won a Congressional Appointment to the Air Force academy in 1979. For ridiculous reasons, I foolishly turned it down. 2 1/2 years later, I joined the US Army as an enlisted soldier.