Quote:
Originally Posted by bornagainbiking
There seems to be so much confusion on taxes. I think it is set up this way so no one really understand this elaborate walnut shuffle shell game.
There are many people involved in this shuffle, and a HUGE government beaurocacy.
Maybe it is time for a flat tax for all and eliminate all the loopholes. RRSP's, tax free saving accounts, etc, etc, etc
Everyone pays say 25%, and if you want your retirement savings will be your savings account. No, pay so much per year, get a tax refund or exemption and pay tax on it later when you retire at a lower rate.
I know, I know this is simplistic and may rub some wrong as this is a big industry. But, it was suggested several years ago as a political point.
People complain that the rich use loop holes to avoid taxes or not pay their fair share. Well just get rid of the loopholes with a flat tax no exemptions.
There would have to be some consideration for the low income earners.
When this was explained to me at a town hall meeting it sounded good, and I imagine, someone in here will highlight the downfalls.
Thanks
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Flat tax is extremely regressive. Awful for the middle class and/or working class striving to enter middle class.
Taxation systems should be simple. Keep in mind, this does not mean they should be simple structurally, but rather simple to understand.
There is a well-thought out motive behind every intricacy in our tax system. What it comes down to is rich people manage their money much more effectively than less rich people. (and having more money in a capitalist framework makes it a lot easier: you need money to make money)
The loopholes you're referring to shouldn't be seen so much as loopholes, but rather opportunities to pay less tax. For example, owning a home or having your own business offer several ''loopholes'' in our system. So do gains made on investments. While these may sound like cruel initiatives (cruel because they help the richest get even richer) but in fact they are in place as a means of promoting certain monetary 'values'.
The government wants you to buy a home, it wants you to have your own business and it wants you to invest your money. Less moneyed folks would be very foolish to endorse a flat tax system. Ironically, the working classes tend to promote these types of simple systems. This is because they are more naive, gullible and superstitious and their professional counterparts. (I'm generalizing of course)
Make no mistake, we'd be worse off if our system was more simple just for the sake of being more simple. That doesn't mean there aren't ways of making the tax filing system more easy and appealing. A 25% flat tax-policy would do nothing to prevent people from seeking unlawful ways of avoiding taxes. Tax havens, etc. Those who use illegal loopholes should be more harshly punished.
The one thing I find so scandalous about our tax system is that it taxes everyone making above 132,000$ exactly the same rate. Everyone making less than 200,000$ should be paying less than they are now. The extra revenue could come from higher tax rates at 200,000$, then even higher at 300,000$, etc. I am sure people making 500,000$ would argue against what I'm proposing on the grounds of it being another ''complicating'' measure
My opinion.