Rep. Forbes co-sponsors tax reform act
By JR Hoeft | Wednesday, April 15th, 2009 | PolicyRep. Randy Forbes announced today that he is a co-sponsor of the Freedom Flat Tax Act. From a Forbes release:
The legislation would create an optional flat tax that would eliminate taxes on savings, capital gains, and dividends, and allow individuals to accomplish their taxes on a one page form in 30 minutes.
“Tax Day has become a day that Americans have come to dread, because they must respond to an income tax system that is complicated, unpredictable, and unfair. The outcry we’re consistently hearing from Americans, like the Tea Parties taking place today, should be a wake-up call to Washington that hardworking Americans have had enough with our current tax system. They want a commonsense system that reduces taxes. An optional flat tax creates the kind of dramatic overhaul we need in our tax system to reduce taxes, simplify the tax process, and add certainty for consumers and businesses,” said Forbes.
Two-thirds of Americans think the current income tax system is too complex. Each year, Americans spend 3.8 billion hours preparing their tax forms. A flat tax would save taxpayers time and money, treat all taxpayers the same, and stimulate economic growth. In Colorado, a single income tax rate generated so much surplus revenue that lawmakers are now proposing a reduction in the original flat tax rate. In Indiana, corporate rate income tax receipts have increased 250 percent since going to a single rate in 2003.
Specifically, H.R. 1040 would allow an individual or business person to opt out of the current tax system for a flat tax of 19% for the first two years and 17% thereafter. There would be no deductions aside from the basic standard exemption and additional standard exemptions for each dependent. The business tax would consist of the total costs of taxed inputs subtracted from total sales; only employee wages and pensions would be deductible. Additionally, the flat tax would:
- Eliminate the marriage penalty
- Repeal the death tax
- Abolish the Alternative Minimum Tax
- Eliminate capital gains taxes
- Allow for immediate expensing for business capital equipmentBecause the flat tax is optional, anyone who preferred the current tax system could continue using it.
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Conservative to the core; liberal with his opinion! J.R. has been involved in politics for over a decade and has worked on several campaigns in Hampton Roads. He has served on the Executive Committee of the Republican Party of Chesapeake and the Central Committee of the Republican Party of Virginia. He is also the director of “Blogs United” in Virginia. E-mail J.R.. Follow J.R. on Twitter.
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10 Responses to "Rep. Forbes co-sponsors tax reform act"
Give me a break, those of us who benefit from the current system by making it optional would lose all of our benefits.
Let me point this out to you. You must come up with tax system that enjoys broad public support. If the wealthy keep getting wealthier and the poor keep getting poorer you lose that public support. You lose elections.
I continue to support a progressive tax code.
As a flat tax supporter, it’s a start. I’d obviously scrap the current tax system for a flat tax alone.
Optional in what way LittleDavid?
Personally, I don’t like the flat tax. Although, maybe better than the current system. I won’t waste my time fighting for it though. I much prefer the Fair Tax where even Geithner would have to pay taxes as well as underground economies such as ones created by drug lords, prostitution(where not legal) and illegal immigration.
Did I mention politicians would pay taxes under Fair Tax? Oh yea, ……I did say something about prostitutes.
Oops. Sorry I thought you meant paying taxes optional. You meant by making the Flat Tax an option. You’re right. The ability to option out woud result in cost shifting. Tax reform will need to be all or nothing. Otherwise it will only be a cut for whomever recieves the advantage.
You have a flat tax on your houses. How’s that working out?
The largest tax paid by most taxpayers is payroll taxes (Social Security and Medicare). Unfortunately, this flat tax does nothing to relieve the payroll tax burden on the poor and lower middle class. The Fairtax does a much better job of relieving the poor of income and payroll taxes while implementing an unavoidable progressive tax on the wealthy. The Fairtax is more progressive than the current Income/Payroll tax scheme. Read about it at fairtax.org.
The Fair-tax would increase my taxes by about $5,000 a year to give the likes of Paris Hilton a tax cut. Taxes on the average American taxpayer would go up by more then $2,000 a year to give Paris her tax cut.
Once again we see what I am motivated to vote against. Increasing the taxes of those who have too little to give tax cuts to those who already have more then enough.
Little David,
Under a Flat Tax, the rich would still pay more by the virtue that they tend to make more than the poor.
Under a Fair Tax, the rich would pay more by the virtue that 30% of a 3 million dollar yacht is much more than 30% of a $20,000 middle class home.
Just to clarify, I am not sure of the exact amount of the Fairtax percentage, it was just an example.
Once again, I feel compelled to mention (in light of Little David’s Paris Hilton comment), that all of Obama’s non-taxpaying appointments that make much more than LD does would actually be paying their taxes for a change. Additionally the wealthy tax cheats all over (non-Obama appointees) would start paying taxes.
I’m damn sure Paris spends massive bucks. I’m thinking her tax payments would increase substantially.
Steven Osbourne,
They might pay more, but not pay more at a higher rate like they do under our current progressive tax code.
Just like I willingly pay more at a higher rate then the lower class, I expect the wealthy to pay more at a higher rate then me.
Your comment about the $20,000 middle class home leaves me wondering how long it has been since you have been in the housing market! But I will mention that my understanding is that only new construction homes would be subject to the Fair-tax. Existing homes would have already been taxed once (or grandfathered upon implementation of the tax) and would not then be subject to the tax subsequently when ownership is transferred afterward. Or is my understanding mistaken?
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