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Wednesday, September 9, 2015

GOP tax con game starts again

The
proposed tax tables are approximate correlations with the existing
federal income tax tables. Trump and Bush are proposing tax brackets
that don't exist in the tax code.

Jeb
Bush is probably the worst of the bunch with his three tax brackets
courtesy of the Committee to Unleash Prosperity that includes
Larry Kudlow, Stephan Moore, Steve Forbes and Republican economist
Arthur Laffer, an economic fossil from the Reagan era.

Rand
Paul also has a similar flat tax plan His 14.5%, plan is similar to
Ben Carson's which is based upon tithing. However, Paul doesn't
mention tithing

The
flat income tax is a bad idea because the majority of American
taxes, such as sales tax and municipal property tax, are already
flat.

Let's
look at a worse case scenario: Huckabee's fair tax. Florida has a
sales tax of six or cent and Pinellas county has a one per cent sales
tax. So if you purchase the average car which costs $32,000, your
sales would boost you cost by another 30 per cent or $9600. You car
would now cost $41600 under Huckabee's fair tax.

Now
consider what the fair tax would be on a home sale.

Think
that is fair?

President George W. Bushreported that that a national sales tax of at least 34
percent would be required to replace federal income tax. The
Institute on Taxation and Economic Policy estimated
the sales tax would need to be at least 45 percent to be revenue
neutral.

Donald
Trump on a national flat sales tax”

I
would try to avoid paying it whenever possible.

Trump makes a great point. You
can avoid sales tax with bartering, something that is common
in the underground economy.

Theodore
Roosevelt, a progressive Republican, created the graduated income tax
and Republicans have been whining about ever since,

Theodore
Roosevelt said this:

At
many stages in the advance of humanity, this conflict between the men
who possess more than they have earned and the men who have earned
more than they possess is the central condition of progress. In our
day it appears as the struggle of freemen to gain and hold the right
of self-government as against the special interests, who twist the
methods of free government into machinery for defeating the popular
will. At every stage, and under all circumstances, the essence of the
struggle is to equalize opportunity, destroy privilege, and give to
the life and citizenship of every individual the highest possible
value both to himself and to the commonwealth……

“No
man should receive a dollar unless that dollar has been fairly
earned.

Every
dollar received should represent a dollar's
worth of service rendered.
. .”

Some other features
of the GOP candidates' tax plans:

Trump wants to
eliminate the inheritance tax with a would impose a one-time,
14.25% tax on individuals and trusts with a net worth over $10
million. Trump's proposal indicates that that would a one time
tax. What people who establish new trusts. In the future, would
they be subject to this tax? Trump uses of the term “one time'”
suggests that people who establish trusts in the future would get
free rides.

The Estate Tax only
affect 0.1 to 0.2per cent of the US population and it was reformed
when Bill Clinton was president. Not clear why any changes are needed
to the Estate Tax.

Jeb Bush's tax plan
is even more reactionary that Trump's with three tax brackets. It is
similar to his brother's plan that contributed to the record deficit
spending Bush does end carried interest for hedge fund mangers that
allows their income to be treated as capital gains.

Ted Cruz is the only
one who has said much about corporate taxes:

Right
now, U.S. corporations face the highest tax rate in the developed
world, and they face double taxation if they invest their profits in
America.

Ted is correct but there are
so many corporate tax exemption, the effective tax rate is one of the
lowest in the industrial world. None of the candidates said anything
about ending corporate tax exemptions and having a minimum tax on
corporations.