Flat Income Tax and Tithing

There has been much to do about the fact that Mitt Romney paid only 14% or so in tax last year compared to the 20-30% many Americans have paid.  Then you find out that it was not on typical income but, on capital gains or investment income that is taxed at about that rate anyways; far different then the typical income.

There are those that hem and haw about it being unfair and the like.  They may even say that the rich should be taxed more.  Well if your rich in the way Romney is it might not make any difference.  Jack up his income tax all you want he'd likely have paid more or less the same amount.  That is because most of his money is from investments and not from sweating in the fields, or book royalties or other income gains related to direct labor.  So when you talk about jacking up the income tax rate on the rich who are you really going to hit hardest?  Not likely the one that can find a way to make a load of deductions or the one that make his money off of buying stock or bonds or having some money in a CD.

Have you ever wondered why some CEOs and other Corporate executive are will or can take a salary of only $1?  It might be that the related stock options that  they will receive or get will compensate.  Also since it is taxed at such a different rate it does not hit them as bad as say 2 million in salary.

I was able to read a good article on the subject and why it would not be such a bad idea move toward a flat tax.   The issue now with some more well to do people and their taxes is that they don't pay the same rate across the board.  They can hire a good attorney or accountant and use this to their advantage.

The great article on the subject found here Peter Rush: Yes, Washington should adopt a flat income tax


So one might think - why go with any kind of flat tax at all?  Isn't our thousand pages of tax code not working very well.  As the article mentions very plainly - there are to many exemptions that have been built into the system over time.  Thus those that have the time and money to pay a professional can work the system to their advantage.  A average person is kind of up the creek, though not necessarily without a paddle.

So what is the advantage of a flat tax?

• Everyone pays the same percentage on their income. 
• Same tax rate for all income, regardless of origin.
• Removes exemptions and ways to work the system.

Now some might say that this would be an unjust burden on the poor.   Other would say that the rich would not pay enough.  You might sense that this is right.  But what is 2% on  $10,000 in income and 2% on income of $6,000,000?  The difference basically amounts to  $200 verses  $120,000.  You might see a small up tick in the amount coming from lower incomes especially if they are currently not paying anything.  You might think you will see less from the richer people.  Yep it would seem that way.

Anyway you look at it; it is still a guaranteed percentage.  Easily seen and you can predict in a general sense what you'll pay.
Also the only way to cheat the system would be to falsify the sources of income and not apply some fake or inappropriate exempt you really did not qualify for.  I know it would reduce the number of accountants needed and the IRS would likely be reduced some.  But, leaner and meaner is better right?



An alternate view on why a flat tax would not work can be found here - Ajay K. Mehrotra: No, Washington should not adopt a flat income tax

Now there is the other subject I'd like to bring up.  It is called tithing.  It is the religious way of funding church activities.  Some congregations or denominations simply pass a plate around at their meetings.  Other like mine, have you pay 10% and it is done via envelop so that the whole world doesn't have to know what you paid.  You reconcile with the local leader at the end of each year.  A good way to make sure none of the money is being lost or stolen.  However, you put it the money is then used to build buildings, maintain building and do any of the many other things that occur in the church.  Now what is different here then the flat tax folks is that it is voluntary and no one asks to see your pay stubs.  They take your word for it and assume your being honest.  If that could only be the case with our government taxes.





In the end it may all amount to how we spend the money and how efficient we are in do that.  Thousands if not millions of government money i.e., our tax dollars have been thrown at project that never give a return on investment.  Though it is understandable we need government to provide us with things such as roads, police and fire etc.   These could be considered a bad return on investment until, your home is saved as it catches fire, or when the drunk driver is removed from the road by police.  Under perfect circumstances you would not need them at all. 

Moses 7 

 18 And the Lord called his people ^aZion, because they were of ^bone heart and one mind, and dwelt in righteousness; and there was no poor among them.

 19 And Enoch continued his preaching in righteousness unto the people of God. And it came to pass in his days, that he built a city that was called the City of Holiness, even Zion.

 20 And it came to pass that Enoch talked with the Lord; and he said unto the Lord: Surely ^aZion shall dwell in safety forever. But the Lord said unto Enoch: Zion have I blessed, but the ^bresidue of the people have I cursed.

 21 And it came to pass that the Lord showed unto Enoch all the inhabitants of the earth; and he beheld, and lo, ^aZion, in process of time, was ^btaken up into heaven. And the Lord said unto Enoch: Behold mine abode forever.

So all this is food for thought.   Maybe going the route of the Lord's economic plan is best in the end.  it is just one way or the other.

Buaidh - NO - Bas