Flat Tax - please to esplain?

[Grey Fox]

Not necessarily.  Again I'd say look at the Kiwi approach.  Their tax rates go from 10.5% (on income up to $14k) to 33% (on income over $70k) and, I think the top rate's to fall to 30% soon.  They've still got some credits for people on low incomes.  But I think that sort of low, broad, simple system is probably best.

Not to agree nor disagree with the merits of the New Zealand system, but on what planet is 33% income tax "low"?

Everywhere but in the US.

[Sheilbh]

Not to agree nor disagree with the merits of the New Zealand system, but on what planet is 33% income tax "low"?

As a top rate.  Isn't US Federal tax 35% at top rate?

Edit:  Also with the exception of oil oligarchies and offshore tax havens I can't think of a country with a lower top tax rate worth living in.  Possibly Hong Kong and Singapore.

[Ed Anger]

Not to agree nor disagree with the merits of the New Zealand system, but on what planet is 33% income tax "low"?

As a top rate.  Isn't US Federal tax 35% at top rate?

Yep. 349K and above, if I am remembering the brackets correctly.

[fhdz]

As a top rate.  Isn't US Federal tax 35% at top rate?

Edit:  Also with the exception of oil oligarchies and offshore tax havens I can't think of a country with a lower top tax rate worth living in.  Possibly Hong Kong and Singapore.

33% last year.

[Razgovory]

Not to agree nor disagree with the merits of the New Zealand system, but on what planet is 33% income tax "low"?

As a top rate.  Isn't US Federal tax 35% at top rate?

Edit:  Also with the exception of oil oligarchies and offshore tax havens I can't think of a country with a lower top tax rate worth living in.  Possibly Hong Kong and Singapore.

Ireland.

[Sheilbh]

Ireland.

It's in the 40s now.  You throw in PRSI and the Universal Social Charge and you're over 50%.  That's austerity

[Ed Anger]

Ick.

[Razgovory]

Ireland.

It's in the 40s now.  You throw in PRSI and the Universal Social Charge and you're over 50%.  That's austerity

Was it lower earlier in the decade?  I know they had a fairly low corporate tax, I assumed they had lower taxes for the higher brackets as well.  Incidentally conservatives in this country pointed to the Celtic Tiger as an example of how to do taxation.  I don't think they do so now.

[Sheilbh]

Ick.

Yep.  And the top rate comes into effect around about €45-50k from what I remember, top rate of USC is effective at even lower, it was something ridiculous like €15k

[Sheilbh]

Was it lower earlier in the decade?  I know they had a fairly low corporate tax, I assumed they had lower taxes for the higher brackets as well.  Incidentally conservatives in this country pointed to the Celtic Tiger as an example of how to do taxation.  I don't think they do so now.

Their corporate rate's still 12% and that seemed to become totemic of independence during the bailout row.  I couldn't tell you if they were lower earlier on, I've only really had to investigate post-crash.

[KRonn]

Personally I support what the New Zealand government are working towards.  Low rates, broad base, few deductions.  The challenge is making the rates low enough that you don't need to complicate the system with credits and deductions while keeping the base broad enough that you don't end up with a situation like the US or Ireland.

There's been talk of doing something fairly similar in the US, by politicians Dem and Repub, for a little while now. I think it has some good merit to it. I think also Pres Obama's debt commission had some similar ideas, but their views pretty much went nowhere.

[Berkut]

A flat tax also implies that the tax is not tiered of course. When we say that the top bracket in 33%, that doesn't mean that you are taxed 33% on all your income if you are over a certain income, that means you are taxed 33% only on the income that is over the bracket. Which does make it kind of complex, since it means you are taxed at a variety of different rates for a given income. Although I suppose that if the tax system was simple enough, for a given highest bracket, the amount you would be taxed at the lower rates would effectively be fixed, right?

IE, if the brackets look like this:

0-50k: 10%
50-75k: 15%
75k+: 20%

then everyone in the 75k+ braket will always pay the same amount and rate on the first 75k -  8750.

[Caliga]

I don't feel like reading all of this but in case nobody has pointed it out already, in the case of Warren Buffett his income tax would be utterly marginal compared to what he pays on capital gains... IIRC as Berkshire CEO he only draws a salary of like $100K.  All the rest of his enormous income is derived from capital gains and dividends which are taxed at a much lower rate than conventional income.

[Admiral Yi]

I thought dividends were taxed as income.

[Caliga]

I thought dividends were taxed as income.

I think it's at a lower rate.  Capital gains is definitely a lower rate.