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Paul Ruth

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Use the tax deductions system to spur economic groth, and this is not just another tax cut idea.

I would like to share an idea I had to one, help resort the government budget, and two, to increase economic activity. I have entitled my idea The Non-Profit Employment Incentive: It is outlined in brief below.

The basic concept is for profit businesses large to small, to help employ people who they may lay off, or those who need a job through non-profits. The system would work just like the donation program for tax deductions and so on, only these donations would go specifically to employ people at non-profits. So if company A donates $1 million to a non-profit to hire 20 people for a year, then they would get a tax deduction, and/or reduce liability, and so on.

The two major benefits to this program would be increased employment and economic stability, and increases tax revenue without having to raise taxes. When someone is employed that salary is spent 5 to 7 times in the economy, which also means that tax revenue would be 5 to 7 greater for that money. This should spur economic growth, and make downturns less painful in the future.

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    Mar 27 2011: for heaven's sake ...nomore tax laws. Lets get a flat tax....you spend a lot...you pay a lot. You don't spend much...you don't pay much . Fair enough NO LOOP HOLES !!!
    • Mar 27 2011: Hear hear!
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      Mar 27 2011: A flat tax rate only help the weathy becasue it becomes a regressive tax. It is basic economics.
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        Mar 27 2011: How you figure that ? BTW Jobs have been lost because of deregulation. You can thank greedy americans for that.
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          Mar 28 2011: "Opponents argue that flat tax systems place an undue burden on the lower and middle class by removing deductions and expanding the tax base to include every level of income. They claim that moving to a flat tax system shifts the tax burden from the rich to the poor, those who are most effected by taxes and least able to pay. By exempting unearned income like interest or dividends, opponents argue, that the working class is supporting the idle rich. Some flat tax systems in the U.S. get around this by exempting from tax those who fall below certain income limits or by offering special exemption or tax credits for lower income individuals"

          http://taxes.about.com/od/statetaxes/a/Flat-tax.htm

          lets say everyone pays a 10% flat tax rate. Person A makes $1 million and pays $100,000 leaving with $900,000

          Person B makes $30,000 and would pay $3,000 leaving with $27,000.

          Seems fair, BUT that 3,000 means a lot more to person B than 100,000 mean to person A. What is the true difference in lifestyle from 1 million to 900,000? Not much.

          That 3,000 is taking away $250 a month which is a huge difference when thinking about the type of apartment a person B is living in.

          It is harder for a lower income person to maintain a livielihood than a higher income person. In reality the 3,000 means more to person B, than 100,000 means to person A.

          Over deregulation has lead to a rise in greed and corruption with the loss of jobs. Plus it has reduced the number of competitiors in the market. At the same time an overly regulated market can slow down progress. There are many reasons why jobs have been lost. Globalization, mechanisation, and higher efficency has lead to more jobs being lost.

          America needs to find a new way to distribute wealth, and a flat tax will not do it.
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        Mar 28 2011: in your longer argument, you say 900k is almost 1m, but 27k is grossly different than 30k. i wonder what measurement supports that claim. 27k was a luxury income a hundred years ago. what happened since, so today 27k deserves tax cut? or what if we take the world distribution? 27k is dream salary in most parts of the world. also, how do you know how people feel about it? mathematically, they are the same proportions. 30k is of course less than 1m, but how much less? around one third, just like the flat tax would be. psychologically, we are all different. there is no general intrinsic value to money, only individual valuations exist. maybe that 100k tax means the child of that "rich" man will go to a better school. rich lives their children less?

        btw if observe carefully, everyone draws the line between poverty and luxury somewhere around his/her level. above, there are those who earn sick luxury wages, below the unlucky or the lazy. the world's income distribution is kind of a smooth curve from below one dollar to a few hundred dollars per day. if you include the extremes, even wider.

        and please don't talk about deregulation, the (western?) world goes in the opposite direction for a good 50 years at least, probably more.
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          Mar 28 2011: Poverty is determined by the established standard of living in a given country. This standard of living is based on what things cost in that country. So yes, 30,000 a year means a lot more in a poor country than is does in the United States, but it does not mean that people making thatincome with three children are not struggling in the US.

          If someone cannot afford the food at their local store, I would stay that they are living in poverty. It would be nice for the poor in developed countries to buy food at prices of developing countires, but that is not how market economies work.

          27K was a luxury at one time, but it is called inflation!! As long as wages keep up with inflation, then it becomes a wash.

          Since the standard of living is fixed to a certian point, a flat tax is regressive. It is harder for the person making 30K to pay 3K than it is for I million to pay for 100,000. Based on a accepted standard of living in a country is is much harder for a poorer or middle class person to pay a flat tax simply becase they are closer to the base line standard of living. Everyone in a country pay the same price to survive, but not everyone makes the same amount. REGRESSIVE!!!!

          Most countires around the world are poor becasue they are torn apart by war, governmental corruption, and an unwillingness to accept a free market system. Simply re distributing out the wealth is called communism, which for most cases does not work. Why has China embraced a more and more market system, becasue it works.

          My original idea uses the free market system to generate wealth for all in a free market system.

          and on deregulation. I know the EU has had to regulate many countries that entered their system becasue some countries needed the regulation to be included in a functioning international trade. In most ways the "West" has deregulated if you look at the consolidation in the banking industry, utilities in the US, corn production in the US, and the consolidation in the Oil industry.
      • Mar 28 2011: Paul: A flat tax is NOT regressive! In your example, you compare someone on a very low income with someone on an enviously high income, which can prove almost anything. They are going to have very different lifestyles regardless of how they are taxed. But the basic concept that if I earn twice what you do then I pay twice as much tax as you do is so abundantly fair that it is hard to understand how anybody could criticize it. If I earn twice what you do I likely consume fewer taxpayer-funded services, so the system is already what you call "progressive".
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          Mar 28 2011: It is always easier to point the finger at the poor, and this is what a flat tax does. It blames peoeple for being poor.

          There is a baseline standard of living. It is called the poverty line. The closer someone is to it the worse a flat tax gets. It becomes no different than a sales tax, which is regressive.
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        Mar 28 2011: there is no such thing as large part, say 10% of the population can't buy food in stores. economy adjusts, and demand finds its supply. food is expensive in the U.S. exactly because people have enough money to buy it. in a rich country, negligible percent of the population have problems buying food. if they do, it is because they bought too much whiskey. i mean, come on. in my country, a kg (about 2 lbs) of white flour costs less than USD 0.50.

        if you take a look at PPP corrected GDP-s, you see that nepal has 1/20 of the income of the US. it is not nominal value, it is price-corrected.

        i'm not talking about the inflation. inflation corrected average GPD per person in the united states, in 1800, was USD2000. inflation corrected! today it is almost 40000.

        and value is still personal and intrinsic. you can't compare what $3k means for X and for Y. this just does not make sense. it is the same as asking if i like chicken more than joe does. what is the unit of liking chicken?
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          Mar 28 2011: Food is expensive in the US becasue most people can buy it. Not all.

          This is not value judgements. It has to do with people trying to survive. A flat tax works only for the wealthy. Why do you think the US has been on a progressive income tax for so long?

          If it was really going to help all people, then it would have switch. Conservitives have dominated politics in the US, and it still did not change. Why? becasue a flat tax makes no sense.
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        Mar 28 2011: saying that something is good because we do it for so long, is rather self defeating when you are here to propose an idea. why do you think your idea is not implemented already, if it is so good?
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          Mar 28 2011: I think you need to look at history a little closer. Just in general.

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