The Economic Truth Behind a Flat Tax System
This was an excellent post by Marlene Tobin, the PA State Director for the Americans For Fair Taxation:
World Taxes Income Tax Rates Finance and Economy
When the Flat Tax’ers push their reform because “other Countries in Europe and elsewhere are using a flat tax and doing well”, remind them that most of those other countries also have a very high VAT tax working along side the Flat income Tax. This is a fact they almost always forget to mention in the Flat Tax debate. After their jaw drops, send them to the link above to see the exact costs of taxes in these countries. It’s amazing to realize how much in the way of taxes paid by consumers around the world are hidden from them in the price of goods and services. Hardly a Country in the entire world lets their citizens really see what their government cost them. It’s easy to see why the major world politicos would be against the FairTax passing in the U.S.A. It would be a trend toward honesty in government that could start a worldwide riot!
Ex from web chart: The U.K. has a 30% Corporate flat income tax (hidden in prices), a 0-40% personal income tax to everyone, AND a VAT tax of 17.5%, Do we really want a tax system like this?
Ex from web chart: Russia often used as the example for the Flat Tax by Steve Forbes, has a 24% Flat Income tax on corporations (hidden in price of everything), a 13% flat income tax on individuals AND an 18% VAT tax . As I see it, this equals 55% taxes on every citizen there. Boy and this is the best example the Club for Growth and Steve Moore can use?
Notice that the USA is one of the few countries that currently doesn’t have an “official” VAT tax, although one could call our current corporate taxes a form of VAT. We at least don’t have 2 forms of VAT operating at the same time.
Check out Germany and Indonesia for some real eye openers on their high taxes.
Then check Japan our biggest rival for world domination of the economic world who like us, doesn’t have a VAT officially.
No wonder there are so many imports into this country by these countries.
Due to the high taxes, most of their own citizens probably can’t afford to buy anything!
And to think this is what Steve Forbes, Dick Armey, Gingrich, S. Moore, Bartlett, Feinstein, N. Pelosi, Elizabeth Dole, and many others including many in Congress, want for Americans.
Marlene Tobin
PA State Director – AFFT (volunteer from McMurray PA)
marlene [at] pafairtax [dot] org / fairtaxsupportpa [at] aol [dot] comwww.pafairtax.org
www.fairtaxcalculator.org
www.fairtaxplan.org
FairTax-Flat Tax Comparison Charts – compares various aspects of both systems
What the global economy needs is a US government that will enforce taxation upon multinational companies that shield their income from taxation via secret banking like that practiced by the Swiss. Why the fuck should I pay taxes if corporations don’t have to?
Jack – Know this s an old post. But, I can’t resist.
Corporations never have and never will pay one cent of taxes. They will remit the prescribed amount to the government and then collect the same amount from their customers. Only people pay taxes. It is counterproductive and inefficient to tax business. It only hides the true tax bill from the individual. The end consumer pays the whole bill in the price of the product he buys. If you like paying higher prices, then definitely support taxes on business. If you like the idea that everyone pays the same amount of taxes regardless of income (the poor and middle class pay the same amount as the rich), then definitely support taxes on business.
I am not a businessman by the way. The businessman figures out as best he can how to legally minimize his tax bill so that he isn’t at a disadvantage to his competitors. Then sets his prices to recover all of his costs including taxes. If he doesn’t recover his costs, he loses money and eventually goes bankrupt. End of his business and of the jobs of all of his employees. Investors lose the money they invested in the business, lenders may lose the money they committed.
Sure multinationals minimize their tax bill and move jobs to the lowest cost areas. They have to or they would be forced out of business. Remove all taxes at all levels on American business. One exception might be to have them pay for local services their business uses; police, fire, garbage, etc.
Our government and people will be so much better off the day we have transparent simplified easy to understand tax system. Oh and don’t forget we need laws in place to stop the tax system from being corrupted by corrupt lawmakers . . .
I like the fact that you compare our tax system with the UK and Japan. Interesting.