Michael Burgess is just "flat wrong" on taxes.

The Nimrods Never Cease to Amaze Me
Posted by WhosPlayin on 2008/4/23 21:32:58 (2074 reads)

TexasToad of North Texas Liberal critiques an article that our own Congressman Michael Burgesss (R-TX 26) co-wrote with Newt Gingrich for the National Review about the "Flat Tax". (H.R. "1040") nyuk, nyuk.

The flat tax targets income, but the rich don't make their money through salaries, they make it through investments. There's the loophole. The crisis in the subprime mortgage sector left thousands on the brink of foreclosure, but one hedge fund manager made over three billion dollars shorting the housing market. Under Burgess' flat tax proposal, he would not pay one cent of taxes on that money.

Read what TexasToad wrote, then come back here for my take.

I'll take what TexasToad says one step further: MICHAEL BURGESS WANTS TO RAISE YOUR TAXES.

Yes. It's true. That is exactly what will happen to you if hell freezes over and Burgess somehow got his bill passed. (Except for you, Mr. Buffett - You'll do ok) You may think you're doing well enough to benefit, but chances are that you can't even afford the down payment on this line of bullshit.

Unless you earn in the top 10%, or you don't work at all and you earn your money by "dividends" you will pay more in federal income taxes.

Burgess and Gingrich write:

Recent polling by American Solutions shows that over 80 percent of Americans favor the option of filing taxes on a one page tax return with one rate. After all, who would complain about making something easier, less costly, and less time consuming?

I would complain. I don't like doing taxes any more than anyone else. Even though I had a refund coming this year, I waited until the week before it was due to file my taxes. BUT: I will spend the time if it means that I pay less.

Do I want simple? Yes. BUT, what's the simplest tax form?

Form 1040-SS
Super-Simple Individual Tax Return
1. How much did you earn? __________
2. Send it in.

I earn pretty good money, with my family's household income in the fourth quintile. (top 60 - 80%) Which quintile are you in? Even so, for 2007, after deductions, I paid an effective federal income tax rate of 10.15% The flat tax rate is 17% - 19%.

Under the flat tax plan Burgess proposes, I would have paid an additional $2,500, turning my nice tax return into me writing a check.

Of course, the selling point is that the flat tax is "optional". Optional in that once you choose it, you are stuck with it for life. Corporations and high earners will choose this version, and tax revenue will drop. The shortfall will need to be made up somewhere. Either the flat rate will be increased, it will no longer be optional, or your government will continue to borrow and blow like there is no tomorrow. Unfortunately there are no CBO estimates on revenue impact of this tax.

Compared to the flat tax, the Fair Tax looks a lot more fair.

The "flat tax" is a Reverse-Robin-Hood sandwich on an anti-IRS Demagogue bun.

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Poster	Thread
WhosPlayin	Posted: 2008/4/24 16:02 Updated: 2008/4/24 16:09
Webmaster Joined: 2008/12/12 From: Posts: 1400	Calculate how much you'll "save" with the Flat Tax Download MS Excel Spreadsheet here You'll need 3 numbers off your 2007 Form 1040. This spreadsheet will help you calculate your taxes under the flat tax and compare them to what you paid. Looks to me like some very low income people may save a bit or break even. High income elites, specifically those who earn their money from dividends and not from wages, will make out like bandits. The middle class will get squeezed once again.

Poster	Thread
Anonymous	Posted: 2008/6/9 12:53 Updated: 2008/6/9 15:45
	Almost nicely played Very subtle change in there when talking about the amount of taxes you paid. You go from an effective tax rate of 10.14% and compare that to a full tax rate of either 17 or 19%. You are not giving the benefit of effective tax rate in the flat tax option system. What you need to compare is that you are either in a 38% tax bracket and will be reduced to a 19% flat tax along with everyone else or that your effective tax rate is 10.14% and with a flat tax your effective tax rate is going to be similar after the personal exemptions for yourself and dependants. As a person who is in the tax bracket you claim to be in, then I am sure you are upset about losing the deductions and loopholes you are accustomed to exploiting. But a flat tax is as fair of a system as we can make it.

Poster	Thread
WhosPlayin	Posted: 2008/6/9 16:10 Updated: 2008/6/9 20:41
Webmaster Joined: 2008/12/12 From: Posts: 1400	Who's playin'? These are honest calculations. You wrote: "You go from an effective tax rate of 10.14% and compare that to a full tax rate of either 17 or 19%. You are not giving the benefit of effective tax rate in the flat tax option system. What you need to compare is that you are either in a 38% tax bracket and will be reduced to a 19% flat tax along with everyone else or that your effective tax rate is 10.14% and with a flat tax your effective tax rate is going to be similar after the personal exemptions for yourself and dependants." Actually, this calculation DOES take into account that the flat tax system gives a greater standard deduction than the current system. Since the current tax code is too complicated to calculate in a simple spreadsheet, we ask you to enter actual numbers in order to see your current taxable income. The example shows numbers approximating my own situation for 2007. We then calculate your new standard deduction based on whether one is married or not, and how many children. We then calculate with the full 17% or 19% specified in the new calculations. I'm not making up the math - it's what is specified in the bill. Based on my situation, I would have paid a higher taxes - both in terms of effective tax rate, and total dollars. Your mileage may vary, depending on whether your situation. The full effective tax rates under each scenario are shown side-by-side on the bottom. In my example, under the current system, the effective tax rate is 10.20% The flat tax year 1 and subsequent rates are 12.05% and 10.78% respectively. "As a person who is in the tax bracket you claim to be in, then I am sure you are upset about losing the deductions and loopholes you are accustomed to exploiting. But a flat tax is as fair of a system as we can make it." Actually, most years I don't itemize. This year, I took the standard deduction, if memory serves me correctly. "Fair" is a judgment call. I believe in progressive taxation, but a flat tax is much less progressive than the current system where the rate increases for those who can better afford it. Further, if a system is to be revenue neutral with respect to the current system, there HAVE to be winners and losers. In this case, the winners appear to be the higher income earners, such as the $125,000 and higher household incomes. I ran some scenarios tonight for various income levels of a 4 person nuclear family. From $40,000 - $125,000, the flat tax RAISES your taxes. Over $125,000, it LOWERS your taxes. Since the median income in the district is $48,714 - equivalent to $97,428 for this 4 person unit, you could say that MOST constituents in this district would see a tax increase.

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Michael Burgess is just "flat wrong" on taxes.