Many proponents of the flat tax have advocated for the elimination of tax on dividends and interest, leaving only a tax on wages and “earned income.” The argument for the elimination of such a tax is that it would encourage investments and savings and thus, stimulate the economy. The argument against the proposition is that it unfairly places a tax burden on those who must work for a living and not rely on “passive income” (dividends and interest). What do you think:
Should Congress eliminate the tax on dividends and interest and implement a flat tax on wages and “earned income”?
Maybe the government should consider a GST such as Singapore and other countries. Fairness of the GST is that all pay a tax, wealthy and poor. No exceptions, a flat rate on all “goods and services”. It has advantages over the European VAT tax, as it reduces paperwork. GST would eliminate a good portion of the IRS, that fearless and often self-serving government agency. BUT as many folks try now to avoid paying taxes, under any government, so to protect the rest of us, a mini-IRS should be retained for enforcement and collection verification.
As for taxing “Dividends and Interest”, keeping it simple under GST, would not be taxed. But “the rich” have to live, eat, buy cars (high dollar stuff to most of us), which would definitely bring dollars to the US Treasury.
Tax dividends less? Earned income more? Heck no. Tax all income alike — quit screwing work.
Let the market work. Just treat income as “income” and if you chose to make your money by dividends or cap gains, wonderful for you.
But why should self employed, or a small businessman, or a mechanic, be taxed 300% higher. And they are taxed up to 300% higher on the same income.
I make capital gains and dividends. I quit working four years ago. So happens, I make about the same income as my brother — who works very hard every day in a business he owns.
Watching him work his rear end off – while he employes others, and takes a lot of risk — made me realize he is getting screwed on taxes.
A self employed brick layer making 100K could pay almost 38,000 in FICA and Fed income taxes. A person making 100K in dividends would pay 15,000, tops.
Now, supposedly capital gains and dividends are the backbone of our economy, blah blah. In fact the greedy cap gains crowd wants there to be NO tax on unearned income — Newt Gingrich has wanted that for years. So does Romney, and Rudy. All on the basis of “the risk”
Actually the self employed, the worker, the small businessmen are the backbone.
If risk is to be rewarded with low taxes — then small businessmen should get the low rate, and self-employed should get the low rate, and fireman, policeman, and teachers in inner city schools, should get the low rate. Because they take the real risk.
Its just nonsense that capital gains is so risky. I can unload my stocks in ten seconds. I can put a stop loss order, and sell automically. I take very little risk.
I have a brother that runs a small business. WOrks very hard himself, employes 10 or 11 people, and puts out a very nice product.
His whole life is risk. Risk that some huge competitor will come in and underbid him. Risk that his machinery won’t break down. Risk that he doesnt get sick because the business could not run if he werenn’t there almost every day.
He can’t unload that business. I can unload my stocks.
He can’t even leave it. He is heavily in debt, and working his way out it. Once he is free and clear of the loans, he will do fine. But in meantime, its a real struggle.
Now, why should he pay 300% higher taxes than I do? He creates jobs – I dont.
My stocks are mostly in Canadian mining stocks, and Chinese tech stocks — well they were, I got out of the market for a while, till this blows over.
See — I could get out of the market, with a few clicks of the mouse. MY brother has to fight all the harder in any downturn. He has to squeeze the nickel even more.
Yes, it was his decision to go into business. But we shouldn’t punish him by making him pay 300% higher taxes on the same income as I make.
Im not doing the AMerican companies any good. I bet AGAINST america. I put my money in other countries. And thats fine.
My point is, quit screwing work. Quit pretendin capital gains is so frigging wonderful. Tax it the same. Let the market work/
Why not let the market work- remember the market?
Why not give earned income the lower tax – and unearned income the higher rate? I would just FLIP the code to have UNEARNED income pay the high rates, and the UNEARNED income pay FICA.