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Author: stevenjklein Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 80  
Subject: How to calculate how changes affect revenue Date: 11/1/2005 3:11 PM
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Okay, I'm going to break the cardinal rule of discussion boards and post a question without having spent even 1 second lurking first.

My own ideal tax would be a flat tax combined with a personal exemption double the poverty guideline. For example, the government has calculated the poverty guideline as follows for 2005:
+--------------+-------------------+----------+----------+
| Persons in | 48 Contiguous | | |
| Family Unit | States and D.C. | Alaska | Hawaii |
+--------------+-------------------+----------+----------+
| 1 | $ 9,570 | $11,950 | $11,010 |
| 2 | 12,830 | 16,030 | 14,760 |
| 3 | 16,090 | 20,110 | 18,510 |
| 4 | 19,350 | 24,190 | 22,260 |
+--------------+-------------------+----------+----------+
Why double? Because I arbitrarily decided that a person earning only $19K/year is already so poor he shouldn't have to pay tax. Same for a family of 4 with only $38K. But perhaps it should be less than double -- and this leads to my question.

My question is this: If we were to switch to a flat tax, with the exemptions I've suggested, what would the tax rate have to be for this change to be revenue neutral?

I've love to be able to plug these numbers into a spreadsheet and say, "Okay, if we make the person exemption exactly equal to poverty, then the tax rate will need to be X percent, but if we raise the exemption to 150% of poverty, then it'd have to be Y%, and at 200% of poverty the tax rate would have to be Z%.
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