How trickle-down works:

Reduce the estate tax so rich kids can inherit a ton of tax-free wealth.

Rich kids sit on their duffs and have their brokers bet as much against the markets as on them, invest in risky exotic schemes that are guaranteed against loss by tax-payers, buy American companies and dismantle them to sell off the assets (destroying jobs), invest in foreign companies (Americans don’t benefit), etc, etc…

Make obscene amounts of money by all the above.

Pay an accountant and lobbyist to ensure almost no taxes are payed on the income.

Park money in illegal tax havens to further ensure no taxes are paid.

A trickle of money filters down to the rest of hard-working Americans.

Reagan and the Republican Revolution really got this one right!

A simple question for the bright minds that regularly inhabit this comment section: Are the wealthy simply undefeatable/unaccountable? Since mankind developed specialization and surplus, there have been a small percentage at the top who have owned and controlled the human and material capital available. Is there any way to hold their wealth somewhere beneath avarice while uplifting the lowliest among us? Or, is the way it has been the way it will always be and we are best off accepting that reality.

Cory,
The middle of the twentieth century in America (From Roosevelt until Reagan) saw the greatest equalization of wealth America ever knew.

During this period, CEO’s, on average, made only a dozen or so times the average worker’s wage.

Also during this entire period, Dems were the majority party in Congress.

The changes made by Republicans (since Reagan and through the Republican Revolution) have utterly destroyed wealth equality and restored class warfare.

It took Roosevelt over a dozen years of fighting for progressive legislation to equalize wealth in America, and for fifty years Dems saw to it that the game never turned against hard-working Americans.

Republicans wasted no time skewing the game back in favor of the wealthy, and now we are again caught in a corrupt system that allows the rich and powerful to buy any political outcome they want from nearly any politician.

It took twelve years of hard fought progressive legislation and the desperation of Americans to equalize wealth in America during the last century, and it took decades of progressive legislators to keep the system fair for fifty years.

Now that the system is again skewed in favor of the wealthy, are Republicans the best or worst chance for Washington to again start fighting for average Americans, whether it takes another dozen years or not?

Swiss banks are no longer reliable either. The World has no more places to hide from the long hands of the Government. They will get you anywhere. A guy goes to an ATM to withdraw some money to pay a girl for her services – Federal agents know about virtually immediately. Now Swiss banks give up their clients. What’s the World coming to?

Alex, awh, man!?! I know! If I go to an ATM in Switzerland to withdraw money to pay a girl for her services, I am in double trouble!!!

JP has a good point, there, in his second comment. Elizabeth Warren, chair of the COP, made a similar observation on On Point a couple of weeks ago.

The idea of trickle-down, from Reagan to George W Bush, was that the rich, with tax relief, would invest their extra money in creating jobs, while the rest of us peons, if given the same sort of tax relief, would spend the money immediately (little do they know, we pay it to health insurers, for whom it is profit, and goes back to the rich, through dividends, who put it back into the stock market). Or we peons would pay that extra rebate to the bankers who hold our mortgages and have figured out how to gouge us. And again, the banks pay that money, their windfall from yours truly, in bonuses or dividends, and again, the rich have the monies to invest — which as the Republican strategists figure will go straight to inventing jobs (never mind that those jobs are in India and the Phillippines).
By the way, I heard that Congress just blocked some legislation that would have spelled the end of off-shore tax havens. A great coup for corporate entities with PO boxes on sunny islands far away. Is this so? Say it ain’t so.

This World is not populated just by tax evaders. There are also dissenters against their governments and fighters for freedom against tyranny. Some people have to flee for political reasons. Or to avoid expropriations or nationalizations at home. If there are no more heavens left where you can hide out on this Planet while also transferring your funds, it troubles me. Maybe it is my Soviet background talking, but I do not want any government to be able to reach beyond its bordres and raid any bank it wants anywhere on the planet. Cathing tax evaders is an important governmental interest, but perhaps our privacy should prevail over the interests of the government, no?

Alex, you paint quite a picture for a reason to keep tax havens. I’m sure with off-shore corporate accounts and with organized crime, they would love to maintain their ‘freedom from tyranny.’

Ellen, you might want to extend the trickle down economics through Obama, seeing as his top down spending style hasn’t deviated to far from that of GW.

If the bank is UBS, I don’t think it’s dissenters overseas whose business is in question. When I watch network TV, before the 2009 bank crash UBS was ALL OVER THE ADS. Remember You Be Us? And now there is resurgence of the UBS ads. That is THE Swiss bank, advertising HERE, not to foreign freedom fighters.
On the side of protection of privacy, someone on NPR cited “a hundred Holocaust survivors,” who had managed to squirrel their resources in Swiss banks before fleeing Germany, and those ancestral monies are still there in the Swiss banks, the last remnant of their family, their roots, their heritage, and it has felt safe as long as it belonged to Switzerland and its privacy practices. Hence the tears when the protections come down. I can understand that.

Henry, I think Obama’s administration is playing to the special interests (monied, lobbying interests), and once when Obama said something suggesting he was going to sacrifice the chance at a second term, I thought maybe, just maybe, he’d change direction. But the next elections are 2010, so his window of opportunity (if he doesn’t play to special interests and their effects on elections) is de minimus.
Special interests somehow have to be persuaded that their (special) interests have to align with We the People, not vice versa.

Swiss banks are no longer reliable either. The World has no more places to hide from the long hands of the Government. They will get you anywhere. A guy goes to an ATM to withdraw some money to pay a girl for her services – Federal agents know about virtually immediately. Now Swiss banks give up their clients. What’s the World coming to?

Posted by Alex, on October 15th, 2

Alex i’m pretty sure that only a small percentage of names where given or negotiated with the U.S. government

“The details of last week’s settlement of the U.S. government’s case against Swiss mega-bank UBS, which is accused of helping wealthy Americans hide their incomes from the IRS, were released on Wednesday. Under the agreement, UBS will disclose information regarding approximately 4,450 American taxpayers with current or former accounts at UBS. In exchange, the U.S. government will withdraw its legal action to compel UBS to disclose all of its 52,000 American customers. A related agreement with the Swiss government will provide a new treaty process to facilitate the release of the information.

This is both good news and bad news for law-abiding Americans who pay their taxes and who are tired of subsidizing those who don’t. The good news is that the 4,450 Americans’ accounts at one point in time totaled $18 billion in assets, approximately 90% of the estimated $20 billion in American-owned accounts at UBS. So, the IRS is perhaps going to be able to catch most of the tax-cheating, at least in dollar terms.

The IRS will use this information to investigate the offshore accounts of those 4,450 taxpayers, with hopes of collecting back taxes, interest, civil and possibly criminal penalties if those accounts have not been previously reported to the IRS.

Of course the bad news is that the 4,450 names expected to be released to the IRS make up less than 10% of the estimated 52,000 American-owned accounts. Without 100% disclosure, American taxpayers may in the future be tempted to play the “audit lottery,” assuming they have only a 10% chance of getting caught.”

http://www.ctj.org/taxjusticedigest/archive/2009/08/swiss_bank_to_give_up_some_but.php

4450 is pretty small from 52000, so that haven is still there, and out of those 4450 people they are given a window and break on the fines and penalties. (sorry forgot what npr station the women was on talking about it)

I’m curious if the guest are going to address the above.

Oh gee…there goes UBS’ support of public radio…

Who was the science fiction writer who wrote of the Helvetian War? Which dovetails nicely to yesterdays program.
Money in not speech. The Supreme Court got it wrong. Money is property.
Great generosity with money has a corrosive influence. Out West our Referendum process has become hijacked by major players out of state. Our politicians are bought and paid for. When you look at their contributors you find their legislative agenda.

I think that was David Brin in “Earth” (who wrote about the Helvetian War, when most of the world joins up and declares war on Switzerland).

I don’t think any money in a Swiss bank account that was put there from Jews fleeing the German holocaust would be under consideration in this issue. That money was not untaxed income earned in the US. I don’t believe the ’secret Swiss bank accounts’ pay interest so it is nothing more than a very safe mattress.

I personally have NO sympathy for the rich who hide their untaxed money in Switzerland, the Cayman Islands or anywhere else. While it is nice that some FEW people are coming clean, back taxes are not enough, major penalties are in order. Maybe lesser penalties for those who are crawling out of their hole. I bet they are the REALLY small fish in this tax haven thing.

The people hiding their untaxed money in Swiss banks make more in a year than the average person would make in a lifetime, yet they feel the need to skip out on paying taxes. Entitlement. No sympathy.

While we’re talking about the consolidation, protection and accumulation of personal wealth- again- I will offer the most honest comment I’ve ever heard on this topic, straight from the horse’s mouth:

“Darling, do you know how the rich stay rich? Because we’re CHEAP!”- A very wealthy woman (from inherited wealth, of course) related this bit of reality to me, unsolicited, and I assume, purely out of the goodness of her heart. I offer it here, likewise.

re: recent caller’s discussion of “social impact” and host’s question — think of all the underfunded social programs which might well be paid for with the millions in unpaid taxes. Taxes on everyone go up when the richest don’t pay their share, right?

If America continues this way, we will become like the 3rd world countries. It seems to me that we’re catoring to the rich when it’s clearly that the middle class and poor spends the most money. They’re harboring their money and getting off tax free! Its ridiculous. And in reference that America is more of a consumption country instead of production, this is the main reason why we’re not surving. We need to go back to making our products and this will save the American dollar because the rich definitely doesn’t give a hoot about this economy.

Are there other countries that require people to pay taxes on foreign income or foreign investments?

Tax Evasion by Westfield

I wonder how and why Frank Lowy (australian) and Westfield Properties (and Silverstein Properties) and his sons were allowed to hide 9/11 profits in Swiss and Leichtenstein banks (in LGT Group)

The amount of money they were given after 9/11 was close to $6.00 billion on immense and calculated terrorism insurance policy that they took on WTC Towers about 53 days before they were hit.

Why were the proceeds not reported to the IRS, before the checks were written to Westfield. Did Kenneth Feinberg have any role in such secrecy?

Do the Guests know anything about the Lowy Family’s share of the evasion? Why the congress (Sen. Levin’s Committee) held hearings for only $68 million of the money even though everybody knows that the actual amount was in Billions?

Why should there have been any deal cut with UBS?

UBS paid the federal government a fine of $780 million while we paid them $5 billion through AIG.

http://dealbook.blogs.nytimes.com/2009/03/15/aig-discloses-counterparties-who-received-224-billion/

JOKE.

The rich stay rich and the rest of us are their wage slaves.

This reminds me of the questions around Kenneth Lay. He was found criminally guilty and when the civil case started which would have taken back the money he “stole”, suddenly he dies in questionable circumstances. The question is why was the civil case dropped. The morality of this action is: Steal as much as you can and you’ll probably get away with it, but if not, commit suicide and the government will let your family keep the money.

Great show, the best thing on the air!
Winston

David Cay Johnston should have been named Treasury Secretary. That is a job for a person who is not tarred by business and filial connections to the financial world, but a person of ethical integrity who will enforce the laws without ‘fear or favor.’

That last point is a good one. The LAWYERS that are paid to help people hide their money to avoid taxes should also be prosecuted.

I should clarify my last comment with lawyers who help people hide their money ILLEGALLY to avoid paying taxes. There are plenty of ways to legally reduce your tax burden. Giving money to NPR for example.

THE USA HAS THE SECOND HIGHEST CORPORATE TAX RATE OF ALL THE INDUSTRIALIZED COUNTRIES IN THE WORLD. THE FEDERAL INCOME TAX TAKES 35% OF WEALTHY PEOPLE’S PAYCHECK AND THEN THERE IS STATE INCOME TAXES. THE USA NEEDS TO CUT TAXES. I WOULD NOT WANT ALMOST HALF OF MY PAYCHECK GOING TO THE GOV’T.

http://www.usatoday.com/money/companies/management/2009-03-16-some-aig-billions-went-to-banks_N.htm

Look on the left there is a list.

The US government is in bed with these criminals.

Keep paying your taxes wage serfs.

Federal Income Tax = Federal Reserve Bank Scam. There is no valid law that mandates citizens to pay tax to the IRS. Every penny of the money the IRS collects goes directly to the FRB; it does NOT go to pay for roads, schools, gov’t services, etc. Those who evade paying federal income tax are not cheating the rest of us out of anything. Do you actually believe that the IRS is going to chase these evaders all the way to Switzerland because they’re cheating you and me out of anything? Ha! The IRS is merely the knee-cap breakers for the FRB. If you want to nail the real criminals in this matter, then audit the non-government, private corporation that’s been raping America since 1913: The Federal Reserve Bank.

Silly folks,
the United States is a Socialist country. For large companies, Wall Street, and for the wealthy.

Didn’t you know that?

For those folks who say we have to accept that fact and just get on with life, there are those pesky examples from history.
What were they again? (pardon me if the dates are off)
1. the French revolution of 1789
2. the Russian revolution of 1917
3. the Chinese revolution of 1949.

Inequality will correct itself. In an orderly way or not.

This really is a case where the USB vigorously sought out wealthy people/corporations to do business with them, then they ran close to being dragged through the mud with the IRS over their practices, so they cut a deal to give up customers who were “hiding” money with them. It is kinda like a drug kingpin getting popped then being so big they manage to broker a deal where they have immunity from prosecution if they give up smaller fish. Then the USB can pretend it is the pinnacle of propriety, the IRS can look tough, the small fish can act all contrite, be made an example of, etc., while the big, clever fish can go on with their layered financial ways using their tiered shell corporations. All of this while you and I go on doing what peons do: we pay our taxes! And I believe the “dissenter argument” or citing ancestral accounts from Holocaust survivors as examples of why potential tax evasion practices in foreign banks may be reasonable, do not hold up. As the one quest said on the show, it is not illegal to have one’s money in an account in another country.

Let’s not talk about tax-haven crackdown – let’s actually crack down on them. That’ld be worth talking about!

RespeK!

“THE USA HAS THE SECOND HIGHEST CORPORATE TAX RATE OF ALL THE INDUSTRIALIZED COUNTRIES IN THE WORLD.”

I hear this often. Are they actually paying those highest rates, though? There are so many loopholes and deductions that I doubt any self-respecting corporation would pay anything at all. I saw a TV program once how big corporations are buying up depreciable assets such as for instance subway cars and leasing them back to the municipalities. Then they take a depreciation deduction on those assets and pay a significantly lower taxes. Besides, other countries, like Russia or Belarus (where I am from) have much tougher enforcement and collection powers, so I am not sure American businesses are at such a disadvantage taxwise.

On the other hand, I agree that our taxes here are too high considering how little we have to show for it in a way of personal benefits. I’d evade taxes too, if I could. But I can’t.

“As the one quest said on the show, it is not illegal to have one’s money in an account in another country.”

It may be. It was for a long time where I am from. I would hate to see this country go down that same road.

THE FEDERAL INCOME TAX TAKES 35% OF WEALTHY PEOPLE’S PAYCHECK AND THEN THERE IS STATE INCOME TAXES.

*sigh* Like under Reagan, and a pile less than under Nixon or Ike. And anyone in that bracket has a CPA to play numbers and make it a lot less. So if you weren’t complaining then, don’t bother us about it.

We’ve given up on your grasp of (non- or meaningless) facts. Let’s start with small steps, and work on having you use your inside voice.

Alex,
In as much as I’ve used a bit of humor and fast and loose analogy in my opinions toward your comments; I am genuinely trying to understand your point of view, yet you’ve said nothing truly compelling. Are you speaking purely for yourself in that you would love to evade taxes? Do you think people should be able to evade taxes by putting their money in other countries’ banks? In your experiences, have you heard of someone, an individual, trying to escape an oppressive society caught and harmed in some way through an investigation into another country’s banking system? Do you think that this little “crackdown” will further harm individuals who are dissenting against their government or fleeing/fighting for freedom from tyranny?

I do agree that we should think about how events may tilt privacy issues more toward government control. Governments can insidiously encroach on personal freedoms, and we should maintain vigilance. I also think we should be careful about the idea that ‘privacy prevail over the interests of the government’ statements. I don’t believe this situation with the USB represents such encroachment; I also don’t believe in a pure neo-Libertarian view of the world, either, especially disguised as something else.

The talk about holocaust survivor money is a red herring. If tax is due, it is not on “ancestral money”, but on income made by someone subject to US law. Holocaust survivors who have come to the US to live should be lining up for the pleasure of paying their taxes to a country that sacrificed blood and treasure to allow them to survive–and I suspect most of them are.

Can’t the rich just change their country of domicile or nationality if they want to avoid high taxes in the US? I recall reading that lots of British sport stars were moving to Switzerland for tax reasons.

@Brett: There are a number of reasons why someone would want to legally move money to another country, e.g. to keep funds in another currency. The Swiss Franc is fairly stable compared to the US dollar, Switzerland is at peace, stable society and government.

@Jeff: Yes, they can, corporations can too and, I believe, they will, as they already do. Why not? Switzerland has a general high living standard and a competitive taxation system (plus, in Switzerland they still enjoy bank client confidentiality).

Hello tax avoiders. The rationale for progressive taxation was made by Andrew Mellon himself. Those who make their living off profits, not wages, should pay more. The ooncept that ‘wage slaves’ can least afford to pay is quite old and established. The society built by wage earners has benefited us all, but has benefited those who have great amounts of capital far more. Therefore, those folks, who get the greatest benefit, should pay the most. This is obvious, but as DC Johnston has documented over and over, these rich are feeling entitled to a ‘Free Lunch’. Since nothing is free, this means that the wage class is paying for many of the benefits that accrue to the rich. In fact, I personally have kicked in $80,000 additional dollars, (post-Tip O’Neill congress revisions of law), over my working life to ensure the solvency of the ‘Social Security Trust Fund’. This fund is, I understand not solvent. The additional funds we have deposited have gone ’someplace.’ That place is tax breaks for the rich. I rest my case.

Brett – I wish I had a better defined point of view on this subject. But I don’t. I am not against taxes at all. I am against many spending priorities that waste my tax dollars. For example, the US has almost doubled its military budget when the cold war had been over for a decade. Why? To catch a few dozen bearded guys brandishing assault rifles on a VHS tape? “No” to the universal healthcare, but “yes” to big corporate handouts? Come on. The government grabs 30% of my paycheck to kill other people and enable high life styles to corporate executives. Additionally, being from a former Soviet Union, I would like to see people’s private freedoms expanding, not shrinking. So I don’t have much sympathy for fiscal enforcement, no matter what kind of form it takes.

Mike,
Obviously, people may have legitimate reasons for putting/keeping their money in other countries. Better exchange rates and better tax rates being two. What LEGAL reason would they have for keeping their accounts private from tax authorities? For the express purposes of not paying taxes? To hide income/funds? THIS would be the point.

The Swiss bankers took deposits from Nazi Germany. Deposits that had belonged to Jews that had been sent off to concentration camps. Swiss banks also accepted deposits from the the Medellin and Cali drug cartels in the 1980’s. Swiss bankers will stoop to any level to make a buck, they have no shame, morals or ethics.

Alex,
Well, at least you and I can agree on not wanting our tax dollars to be spent on corporate subsidies (especially those with no regulatory oversight) and increasing military spending. One would also think, considering how much we average folk DO pay in taxes, we could have a decent universal healthcare system!

Alex; your tax dollars subsidize the richest Americans, fight wars, and go toward debt service. There is a small, tiny part that goes toward the advance of society, but not enough to do much good.

Is that true that more than half of those foreign bank account owners were US Citizens that holacoust survivors’ and/or belong to their kids?

I find this kinda odd? Any explanation for this?

There is something weird…. why a selection of the names? Why not all of them? Who makes the selection of which ones to tell to US, which ones to exclude.

Who is the Boss here…. IRS Commissioner Douglas Shulman is a Bush Appointee and his Boss is Timothy Geithner who knowingly, willingly and deliberately cheated on his taxes.

Something is fishy here. I suspect, they will punish and publicize a few names and the big names will go scott free.

I listen to this today and I was dismayed that David Cay Johnston, did not mentioned the person, with help from others in late October of 2000 when the Federal Budget was stalled! Government Offices were Closed and Locked, and this Senator Phill Gramm with a 260 page Amendment to the Budget Bill, Created the Mess we are now in! After the Bill was passed (No One In Congress, and Senate Read this 260 page amendment) Senator Phill Gramm Resigned and took a High Position at UBS! There is more to what he did, wrote in the 260 pages! The Bill set in motion what caused this meltdown! Go to MotherJones.com “Foreclosure Phil” by David Corn may 28Th, 2008. Other places have reported the same and more! Pbs.org/Frontline and Pbs.org/Billmoyersjournal. David Cay Johnston’s Books reveal the Truth about Us Taxpayers being Ripped Off! My favorite is “Free Lunch” Excellent Book, gets your Blood Boiling!!

A working person (i.e. someone who works for a living rather than living off capital or the work of others) can be ruined by a mistake with the IRS. The wealthy should be no different. But then they are. Power and wealth dance on our throats and tell us it is therapeutic and then spend most of our taxes subsidizing themselves or weapons. The golden rule: whoever has the gold….

Many of us hope that enough can be gained from this process so that a public option can be funded to afford JP and his like the chance to receive counseling for their self esteem issues.

Cory….accept it and move on.

There’s so much talk about how the IRS isn’t well funded, could we not solve this problem by enforcing a sales tax rather than an income tax. The rich naturally consume much more than low income workers, would this not resolve many issues and save the government from having to fund an institution like the IRS in the first place?

Funny how some complain so much about paying higher corporate taxes and always point to how Europe pays far less, you know that socialist Europe, the ones whose socialist government pay for health-care so the companies don’t have to. Maybe theirs a connection?

I had a roommate who was a starched republicans who hated illegals because he said they don’t pay taxes and he being a hard working American has to pay for them yet he had no problem with wealthy Americans not paying there taxes or hiding it,funny thing is he only paid taxes on his part-time job and his full time job doing landscaping he took under the table money and didn’t pay any taxes on it. When i pointed out that he is doing the same thing he hates illegal Mexicans, His response was “well I’m american” and they wouldn’t find out he also was not paying taxes on the house he co-owned with his dad, and he got audited and his father saved his butt and ended up paying thousands.

He still complains about all the taxes (he partially pays) going to the government.

I like any other person hates paying taxes esp the excess tax on my car but if everyone was able to pick and chose if they wished to pay taxes cause it could be possibly to go to something they don’t like than no one would pay, nothing would get done and whoever took over would still require you to pay.

“here’s so much talk about how the IRS isn’t well funded, could we not solve this problem by enforcing a sales tax rather than an income tax. The rich naturally consume much more than low income workers, would this not resolve many issues and save the government from having to fund an institution like the IRS in the first place?”

No cause the lower bracket spends a much higher % of there income than our upper bracket, enforcing our creating a sales tax say 23% from the current depending on where u live would futher taxs the lower bracket up to the middle bracket and be even less for the upper bracket of people reason why the fair tax is not fair or logical.

“”"”First consider the way in which sales tax is normally figured. A consumer good that carries a $100 price tag might be subject to a 5 percent sales tax. That means that the final bill for the item is $105. The 5 percent figure is the amount of tax that is charged on the original purchase price. But now suppose that instead of pricing the item at $100, the shop owner simply priced the item at $105, then sent $5 directly to the state. The $105 price would be a tax-inclusive sales price. But $5 is just 4.8 percent of $105. That 4.8 percent number, however, is relatively meaningless. You are still paying exactly the same 5 percent tax on the item.

The 23 percent number in H.R. 25 is the equivalent of the 4.8 percent in the previous example. To calculate the real rate of the sales tax, we have to determine the original purchase price of an item. We can begin with the same $100 item, keeping in mind that a price tag that reads $100 has sales tax already built in. If our tax rate is 23 percent of the tax-inclusive sales price, then of the $100 final price, $23 of those dollars will be for taxes, meaning that the original pre-tax price of the item is $77. To get $23 in taxes on a $77 item, one must impose a 30 percent tax. In other words, a 23 percent sales tax on the tax-inclusive sales price is equivalent to a 30 percent tax on the actual price of the item.”"”"

http://www.factcheck.org/taxes/unspinning_the_fairtax.html

This flat tax, hypothetically, would it apply to visits to the dentist? To stocks I might purchase, certificates of deposit? To college or professional courses I might take? To insurance policies I might buy?
Michael, would they be counting every single time something changed hands, so the loaf of bread would have the 23% taken out of the flour, out of the electricity, out of the gas, out of the farmer’s cost, the baker’s cost, the wholesaler’s cost, out of the retailer’s cost, out of everything except any labor that went into it — right? So ending up with a much greater percentage than goes to the government on that retail transaction. We’d become a labor-intensive/low- consuming nation pretty quick.

Ellen,
The Flat tax is on everything, its good for the rich since no ones pay taxes on any on there income, its a sales taxes on everything instead of a % of what u make. In reality that 23% would have to be much higher closer to 30% to even break-even to what where getting now if were lucky.

So say someone that has a large portion of there income already going to food, medicine, at say in mass at 6.25% now, with the flat taxes it now becomes 23% on each thing you buy.

It’s pushed by the wealthy to lower there tax burdens and increase profits at the cost of the poor who say normally would get a tax return pay even more of there income in taxes along with the middle-class.

Also a attack against the IRS(you know the ones in charge of collecting such money,and busting tax cheats) from some of the people who gladly hide there money overseas as well.

Because it would be just a flat tax and no IRS, bribes,corruption would be far easier to do since the ones (IRS) following the money would no longer be there. Since the supreme court upheld money from corporation is free-speech you can expect even more corruption.

This explain it better

As it happens, that’s roughly how the current system works. Toting up the combined impact of personal and corporate income taxes, payroll taxes, excise and estate taxes, the data reveal a number of basic and important facts about the current state of tax fairness.

* Everyone bears some of the burden – including families living in poverty, who today pay on average more than 6 percent of their income to the federal government. Affluent people pay the bulk of federal taxes not because the system is sharply progressive, but mainly because they earn the bulk of all the income subject to tax.

* The combined tax burden is significantly progressive at the bottom and the top, but not in-between. Families with incomes under $20,000 have roughly 20 percent more to spend after paying taxes today than they would under a comprehensive flat tax, while those in the top one percent with incomes averaging $486,000 pay nearly 30 percent higher taxes than they would under a truly proportional system. The additional tax burden for the nation’s highest earners, going to finance progressivity, equals about 9 percent of their annual income.

* The tax burden on middle-class Americans is already nearly proportional. The current system provides benefits equal to 3 percent of income or less to families earning under $75,000, and costs families earning $75,000 to $200,000 roughly that same 3 percent.

* The federal tax burden rises most sharply as a family moves up from poverty to the middle class; beyond that, the tax burden increases at a much slower rate. A family living on $6,000 a year pays out about 6.4 percent in federal taxes, and as its income quadruples to $25,000, the share paid in taxes nearly triples to 16.8 percent. If the family increases its income another 20-fold to reach $500,000, its tax burden will only double to 32.7 percent.

* Two groups bear lighter tax burdens than others: Elderly Americans pay significantly less than younger people with comparable incomes; and at low and moderate income levels, families with children pay less than other households. Lower taxes on families with children simply reflect the dependent’s exemption and the Earned Income Tax Credit (EITC). Lower taxes on the elderly are mainly a consequence of taxing more lightly the capital income and transfer benefits on which they generally rely, compared to the wages on which working families depend.

* Shifting from the current system to a strictly proportional one would mean higher taxes for all poor families and most of the middle class. The Armey and Forbes flat tax proposals retain two of the current system’s basic progressive features – a separate business tax and an expanded income-tax exemption for initial income – and repeal four others. Gone under both plans would be the EITC for working poor people, estate taxes on the wealthy, reductions in the value of income tax deductions for the affluent and graduated tax rates for everyone.

In fact, fairness under these flat tax plans would be more nearly regressive than truly proportional, because they would shift part of the burden from capital to labor. Under both, capital would be taxed once – under the business tax – while wages and salaries would be taxed twice – under the income and payroll taxes. Since the top 10 percent of families derive 30 to 48 percent of their incomes from capital, as compared to 6 to 10 percent for everyone else, these plans necessarily mean higher taxes on middle-class people and lower taxes on the wealthy.

Under these flat tax schemes, for the first time in our history, the tax system would redistribute income towards higher-income people. Those at the top would claim a larger share of national income after paying their taxes than they did before paying them, and taxation would reinforce the income inequalities produced by free markets. And that would flunk any test of fairness yet proposed.

Robert Shapiro directs economic studies at the Progressive Foundation. This essay is adapted from a coming report, “Why Fairness Matters: Progressive Versus Flat Taxes.”

http://www.washingtonpost.com/wp-srv/politics/special/tax/stories/top032496.htm

so more

The national debate over the flat tax is only beginning. The dissenting dis·sent
intr.v. dis·sent·ed, dis·sent·ing, dis·sents
1. To differ in opinion or feeling; disagree.

2. To withhold assent or approval.

n.
1. voices seem to be made up of “special interest” groups–the real estate industry, charitable organizations This article is about charitable organizations. For other uses of the word charity, see Charity.
A charitable organization (also known as a charity) is an organization with charitable purposes only. , tax attorneys and tax accountants. The general public is expected to soon join the national debate when it becomes understood that the various flat tax proposals will significantly increase the tax burden of Americans earning less than $100,000 per year.

The most heavily promoted flat tax plan exempts interest, dividends and investment gains from tax. A family with $50,000 of investment income may pay no income tax under these proposals, while a working family with the same $50,000 of income generated by one or two working family members will pay substantial income tax.

The general public is not aware that these flat tax proposals are for income tax purposes only; Social Security taxes will continue to be a burden in addition to the flat tax. Many low- and middle-income individuals pay more Social Security tax than income tax. The flat tax will not replace the Social Security tax system.

Over the past generation, America has moved toward and embraced what can be termed a “Western European-style Social Safety Net.” This safety net includes Social Security, Medicaid, school lunch programs, aid to families with dependent children Aid to Families with Dependent Children (AFDC) was the name of a federal assistance program in effect from 1935 to 1997,[1] which was administered by the United States Department of Health and Human Services. , youth work programs and general welfare. As America has moved toward Western European-style social programs, the number of individuals receiving funds from the government, many as their main means of support, has increased.

With these points in mind, the current flat tax proposals are wrong for America for a number of reasons:

[] The flat tax will significantly benefit individuals who do not work for a living. The unemployed, under employed and the rich will benefit. Those working in society will be asked to bear an even larger share of the Federal tax bill.

[] The flat tax may create a number of catastrophic side effects Side effects

Effects of a proposed project on other parts of the firm. . The banking industry relies heavily on residential real estate as security for home loans and secondary mortgage lines of credit. A number of proponents and opponents of the flat tax agree that home values may drop 15% to 20% as a result of the current proposals. A recent DCI/McGraw Hill, Inc. study projects a 15% drop in home values as a result of some of the flat tax proposals.

[] The flat tax may create a huge burden for state and local governments that rely on public financing through the sale of bond issues at rates discounted to market because of their tax-favored status. Proponents of the flat tax believe that mortgage and other rates may fall to municipal bond levels once the flat tax has been implemented. This belief is firmly grounded in the experiences of other countries: current mortgage rates of 8.5% in England, where home mortgage interest is only partially deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes).
….. Click the link for more information.; 8.5% to 10% in Canada, where home mortgage interest is nondeductible non·de·duct·i·ble
adj.
Not deductible, especially for income-tax purposes.

Adj. 1. nondeductible – not allowable as a deduction
deductible – acceptable as a deduction (especially as a tax deduction) ; and 7% to 8% in Germany, where home mortgage interest is nondeductible. These are not substantially different from U.S. mortgage rates.

http://www.thefreelibrary.com/Why+the+flat+tax+is+wrong+for+America.-a017930900

Hey workers and peasants,

It is my money that gives you the 8am-8pm 10-day-per-year-vacation jobs you have, that leave you nothing after you’ve paid my other CEO and executive friends across big business.

Just go to church, it will settle things down.

So I am just going to take my business where the peons are happy with fewer crumbs – think Dubai or Indonesia. After all, if those wretches over these would sell a kidney for $500, why should I pay you this for only a month of work?

Its my money – my dad got it from his grandad – and you will get none if it.

Millionaire kid.