How to improve our tax laws?

[dm123]

Your VAT calculation is off, as the 20T is what is produced not consumed.

Amazing thanks for pointing that out.

Gross consumption appears to be 13-14T giving a VAT tax of about 35% with no exemptions.

[CountValentine]

Just trying to play with some numbers here - seems the annual federal spending over the last few years was 3-4 trillion, more recently projected into 6 trillion, scraping 7 trillion over Covid spending. GDP was about 20 trillion. Assuming about 250 million adults (over 18) in USA we'd have a flat tax of $20K per person (40K/couple, or a frum family with 3 kids over 18 would have a bill of $100K) or about 25% VAT (5T/20T).
If you want to start exempting low income, being as over 50% of US households make less than $50k annually the bill would be a lot larger for those that do end up paying. I imagine the same with GDP - the larger the percentage of untaxed "essential goods", the larger percentage VAT on remaining goods.

Also this is from the federal side - we leave everything state and city as is?

Very interested to hear feedback, as I probably overlooked and miscalculated some basic things here. 

The issue is what the floor would be. One side wants it as high as possible and the other side wants it as low as possible. The funny part is let's say (BS here) it is 100k. The right will argue that isn't fair even when then are not taxed on the first 100k.

[zh cohen]

Assuming about 250 million adults (over 18) in USA we'd have a flat tax of $20K per person (40K/couple, or a frum family with 3 kids over 18 would have a bill of $100K)

That's not how a Flat Tax works at all. It means that everyone pays the same rate (percentage of their income), regardless of how much they make, not that everyone pays the same dollar amount.

[dm123]

That's not how a Flat Tax works at all. It means that everyone pays the same rate (percentage of their income), regardless of how much they make, not that everyone pays the same dollar amount.

So assuming average household income is about $67K with 125 million households we'd need a 60% flat tax rate? ($5T/[$67K*125M])

I'm probably still off, keep the corrections coming please!

[S209]

So assuming average household income is about $67K with 125 million households we'd need a 60% flat tax rate? ($5T/[$67K*125M])

I'm probably still off, keep the corrections coming please!

Call me crazy but maybe we shouldn’t be giving a quarter of our GDP to the government

[zh cohen]

So assuming average household income is about $67K

That's the median income. Average is $97,026

[dm123]

Call me crazy but maybe we shouldn’t be giving a quarter of our GDP to the government

Maybe if the government would actually implement this:

Set the amount to go towards something not just go in to be spent without thought.

as it officially does on a number of items we wouldn't be spending a quarter of GDP.

[dm123]

That's the median income. Average is $97,026

So 42% rate?

[zh cohen]

$5T

Where does this number come from? In 2021 the govt collected $2.04T in income taxes.

So 42% rate?

Assuming an average household income of $97,026 (as it was in 2019) and 125M households;

To replace income tax revenue with a flat tax would mean a 17 percent flat tax.

If you are trying to replace all federal revenues ($4.03T in 2021), it would require a flat tax of 33 percent. This would come together with repealing the payroll tax, business income tax, death tax etc...

[dm123]

Where does this number come from? In 2021 the govt collected $2.04T in income taxes.

Source in my OP:

annual federal spending

Under Obama federal spending went from 3.4-3.9T, Trump from 4.1 to est. 7T, under Biden est. 6T+.

If you are trying to replace all federal revenues... This would come together with repealing the payroll tax, business income tax, death tax etc...

Yes I'm looking at one tax to cover the Federal budget. Or we could repeal the 16th amendment and go back to funding the country on tariffs etc?

[zh cohen]

Source in my OP: Under Obama federal spending went from 3.4-3.9T, Trump from 4.1 to est. 7T, under Biden est. 6T+.

But a significant portion of that is deficit spending, so it is not helpful when comparing the flat tax to the current system.

[Ver hut gazugt]

Call me crazy but maybe we shouldn’t be giving a quarter of our GDP to the government

this is just federal taxes it’s way higher if we include state and local taxes.

[dm123]

But a significant portion of that is deficit spending, so it is not helpful when comparing the flat tax to the current system.

Spending habits change? Are you assuming that's a prerequisite for the overhaul?

[S209]

Spending habits change? Are you assuming that's a prerequisite for the overhaul?

Either they will or won’t but the fairest comparison of methods is looking to cover whatever you’re currently covering.

[yesitsme]

https://www.google.com/search?q=elon+musk+government+on+mars
Change the government to a direct democracy and cut all the pork

[aygart]

https://www.google.com/search?q=elon+musk+government+on+mars
Change the government to a direct democracy and cut all the pork

Why do you think direct democracy is so good

[yesitsme]

Why do you think direct democracy is so good

Fair representation not campaign promises

[avromie7]

Fair representation not campaign promises

It has no protections for the minority.

[CountValentine]

It has no protections for the minority.

Would you rather have the people or politicians decide their protections?

[avromie7]

Would you rather have the people or politicians decide their protections?

A constitution.