MA: Mideast Budget 2012 (Statute)

[Chancellor Tanterterg]

The proposed corporate and regional income tax-rates are much too low, at least if we want a balanced budget.

[Chancellor Tanterterg]

We could have a flat income tax rate.  That is what many states in America do.  Maybe 5%?  That's about an average tax for Ohio, Michigan, Missouri, Illinois, Indiana, etc.

The problem with that is that someone making $1,000,000 per-year should be taxed more than a person making $13,000 per-year.  A flat tax would put an unfair burden on the poor.  If one person has eight cars and another has one car, the first person is being asked to sacrifice much less if everyone loses one car. 

[Chancellor Tanterterg]

Income taxes are already extremely high from the federal government.

The answer to excessive federal taxation isn't to deprive the regional government of much needed revenue.  If you think the federal rates are too high than you should lobby for them to be lowered at the federal level. 

[Chancellor Tanterterg]

Income taxes are already extremely high from the federal government.

^^^^

needed revenue.  If you think the federal rates are too high than you should lobby for them to be lowered at the federal level. 

This is a pretty bad argument. To suggest that we should lobby to decrease Federal income taxes just so we can increase regional taxes is ridiculous. Whether it be that the Federal Government is taxing you 99% and the Region is taxing you 1% (or vice versa) you're still paying 100%. The only difference is which level of Government will waste the money.

I'm not saying that I agree with the argument (I agree that it is a terrible one).  My point was only that it makes little sense to say we should reduce regional income tax rates because federal income tax rates are too high and that to argue that we should do so relies on very weak reasoning.  I was only observing the implication of Governor Tmthforu94's reason for arguing against an increase in the regional income tax rate (unless I somehow misunderstood what he meant, in which case I retract the earlier post).  Regardless, the Mideast regional government ultimately needs more revenue if we are going to pass a balanced budget (or even anything close to that).  Budget shortfalls are a revenue problem first and a spending problem second (and sometimes only a revenue problem).

[Chancellor Tanterterg]

I would also be in favor of raising taxes on upper income levels and even adding more brackets. The corporate tax rate could also be raised a little bit, but not too much more then its current rate.

You're right, there should definitely be more brackets.

[Chancellor Tanterterg]

I would like to propose that hot groceries be removed from exemption.

I would also like to propose putting the sales tax at an even 6%.

I'm alright with raising the sales tax to 6% as long as regional income taxes are also raised on the upper-brackets, but I am definitely opposed to removing hot groceries from the exemption.  Regional Income Taxes for the wealthy must be increased before we consider eliminating important exemptions from the sales tax.  Unsustainably low regional income tax rates for the wealthy and unsustainably low corporate tax rates for big business must not be treated as sacred cows, if for no other reason than we simply can't afford it (or at least not if we are serious about passing an even remotely fair and fiscally responsible budget, let alone a balanced budget). 

[Chancellor Tanterterg]

I suggest cutting credits over raising/creating new tax brackets. If you guys are arguing for more tax brackets at the top that is simply ridiculous, we're talking about a handful of people. There's no use creating brackets for some hundred, a hundred, and then ten people in the region.

Federal taxes are burdensome, I strongly recommend you make the Mideast the most competitive region for economic and living purposes by keeping these tax rates.

You must be logged in to read this quote.

I have no problem with open debate and attacks of the flat or fair taxes, but you need to understand what a flat tax is to participate in a debate. A flat tax does not mean everyone pays the same dollar amount, they only pay the same percentage of their income. The rich gives a car, the poor gives a tire, they both don't give up the same dollar value sacrifice.

I know what a flat tax is.  Even though the dollar amount is different, a person making $1,000,000 per-year who pays a 5% rate can much more easily afford to pay that 5% than a person who makes $20,000 per-year.

[Chancellor Tanterterg]

What we need is a more progressive tax system with more tax brackets.

No, we don't.

The current tax rates are not fair to the lower and middle classes. The wealthy need to pay there part to help our great region.

I agree with Assemblyman Gass3268 on this.  At the very least, the regional income tax rates (especially for the upper income brackets) need to be increased as do the corporate tax rates (although the regional income tax brackets are a bigger problem).  Long story short, we need a more progressive tax system (at least, if we are serious about passing anything close to a fiscally responsible balanced budget).

[Chancellor Tanterterg]

I would prefer about a 10% increase to the regional sales tax, bringing it to about 6.3%, but I can settle with 6%.

Assemblyman Gass3268 and Mr. X, what are some specific changes in the corporate and income tax rates you support? I'm sympathetic to your point of view, but I would support the status quo over dramatic tax hikes. I would also like to see any changes in the bracket system you support.

I will get back to you on this Monday or Tuesday, Assemblyman TexasDem

[Chancellor Tanterterg]

I would prefer about a 10% increase to the regional sales tax, bringing it to about 6.3%, but I can settle with 6%.

Assemblyman Gass3268 and Mr. X, what are some specific changes in the corporate and income tax rates you support? I'm sympathetic to your point of view, but I would support the status quo over dramatic tax hikes. I would also like to see any changes in the bracket system you support.

These are my proposed rates (I decided against creating any new brackets, although I would not be opposed to this, I doubt that it can make it through the Assembly):

Actual Rates (proposed rates) (% Increase)
 

Income Tax Rate:
0%    $0 - $13,000 (0%) (0%)
1%    $13,001 - $40,000 (1%) (0%)
1.5%    $40,001 - $100,000 (2%) (.5%)
2.2%    $100,001 - $180,000 (3.5%) (1.3%)
2.7%    $180,001 - $300,000 (5.5%) (2.8%)
3.25%    $300,001 - $750,000 (6.5%) (3.25%)
4%    $750,001 - $2,750,000 (7.5%) (3.5%)
5%    $2,750,001- $9,999,999 (8.5%) (3.5%)
6.5%   $10,000,000+ (9.75%) (3.75%)
1.5%   Employer conributions to pensions

Corporate Tax Rate:

0%    $0 - $50,000 (0%) (0%)
0.5%    $50,001 - $75,000 (0.5%) (0%)
1%    $75,001 - $125,000 (1.2%) (.2%)
1.5%    $125,001 - $350,000 (1.8%) (.3%)
2%    $350,001 - $1,000,000 (2.5%) (.5%)
2.5%    $1,000,001 - $10,000,000 (3.25%) (.75%)
3.25%    $10,000,001 - $20,000,000 (4.5%) (1.25%)
4%    $20,000,001-$70,000,000 (5.5%) (1.5%)
5%   $70,000,001+ (6.5%) (1.5%)

Thoughts?

[Chancellor Tanterterg]

I would prefer about a 10% increase to the regional sales tax, bringing it to about 6.3%, but I can settle with 6%.

Assemblyman Gass3268 and Mr. X, what are some specific changes in the corporate and income tax rates you support? I'm sympathetic to your point of view, but I would support the status quo over dramatic tax hikes. I would also like to see any changes in the bracket system you support.

These are my proposed rates (I decided against creating any new brackets, although I would not be opposed to this, I doubt that it can make it through the Assembly):

Actual Rates (proposed rates) (% Increase)
 

Income Tax Rate:
0%    $0 - $13,000 (0%) (0%)
1%    $13,001 - $40,000 (1%) (0%)
1.5%    $40,001 - $100,000 (2%) (.5%)
2.2%    $100,001 - $180,000 (3.5%) (1.3%)
2.7%    $180,001 - $300,000 (5.5%) (2.8%)
3.25%    $300,001 - $750,000 (6.5%) (3.25%)
4%    $750,001 - $2,750,000 (7.5%) (3.5%)
5%    $2,750,001- $9,999,999 (8.5%) (3.5%)
6.5%   $10,000,000+ (9.75%) (3.75%)
1.5%   Employer conributions to pensions

Corporate Tax Rate:

0%    $0 - $50,000 (0%) (0%)
0.5%    $50,001 - $75,000 (0.5%) (0%)
1%    $75,001 - $125,000 (1.2%) (.2%)
1.5%    $125,001 - $350,000 (1.8%) (.3%)
2%    $350,001 - $1,000,000 (2.5%) (.5%)
2.5%    $1,000,001 - $10,000,000 (3.25%) (.75%)
3.25%    $10,000,001 - $20,000,000 (4.5%) (1.25%)
4%    $20,000,001-$70,000,000 (5.5%) (1.5%)
5%   $70,000,001+ (6.5%) (1.5%)

Thoughts?

I'm with you on corporate tax rates, but I'd prefer slightly lower income taxes, such as the following I'd like to propose.

Income Tax Rate:
0%    $0 - $13,000 (0%) (0%)
1%    $13,001 - $40,000 (1%) (0%)
1.5%    $40,001 - $100,000 (2%) (.5%)
2.2%    $100,001 - $180,000 (3%) (1%)
2.7%    $180,001 - $300,000 (4.5%) (1.5%)
3.25%    $300,001 - $750,000 (5%) (1.75%)
4%    $750,001 - $2,750,000 (6%) (2%)
5%    $2,750,001- $9,999,999 (7.5%) (2.5%)
6.5%   $10,000,000+ (9.5%) (3%)
1.5%   Employer contributions to pensions

I can definitely live with that.

[Chancellor Tanterterg]

I've done a considerable amount of thinking on the issue of a progressive income tax, and at the end of the day, I just can't support those increases. First, I don't think it'll be necessary, as I think we can find other ways to balance our budget without raising taxes, especially by that much. But raising taxes on the wealthy is also raising taxes on thousands of small businesses across our region, and put together with the corporate tax, I just feel this would stifle job growth.

Considering that there is already a pretty steep progressive tax on the national level (shown below), I have to agree with Inks and 20RP12 and I ask the Assembly to please consider establishing a flat tax. I could probably be swayed to also limit it to two tax brackets, if the left feels strongly about a higher rate for the rich.

Federal level:

You must be logged in to read this quote.

[Chancellor Tanterterg]

Income Tax Rate:
1.5%    $0 - $13,000
3%    $13,001 - $180,000
4%    $180,001 - $750,000
5%    $750,001 - $2,750,000
6%   $2,750,001+
1.5%   Employer contributions to pensions

Corporate Tax Rate:

0.5%    $0 - $75,000  
1.5%    $75,001 - $350,000
3%    $350,001 - $10,000,000
3.5%    $10,000,001 - $20,000,000
4%    $20,000,001-$70,000,000
5%   $70,000,001+

Would these proposals be acceptable?

No.  No.  No.  No.  No.  No.  We need a FLAT tax rate.  That's the only thing that will balance this budget.  And we can set it at 5 or 6% and be good.

I would like at least two to four brackets, even if the main rates vary around 5 or 6%. People with millions have much more discretionary income than those making in the tens of thousand only, and therefore, it is perfectly reasonable to expect them to pay a higher tax burden than the less wealthy.

Income Tax Rate:
1.5%    $0 - $50,000
3%    $50,001 - $180,000

That's what I meant to put for those two brackets. D:

I really don't want to eliminate brackets.  But I would be willing to agree to smaller increases (especially for some of the lower and mid-income brackets).  Although some of the higher-income bracket rates are a bit too low.  Still, with some adjustments and the return of all currently existing brackets, I am certain that there is a compromise to be made here.  Thoughts?

[Chancellor Tanterterg]

If I concede to vote for the immigration bill and the driving bill, will you concede to a flat tax rate for the region, a tax rate in line with most states representative of the Mideast in America?

Unfortunately Mr. Speaker, I am going to have to reject this proposal.  We already have a majority on the immigration bill and the driving bill isn't that big an issue, for me at least.  Agreeing to a flat-tax would be a huge concession (at least for me) and the concessions should be proportional

[Chancellor Tanterterg]

I will not be supporting a flat tax. While I can accept reducing the amount of brackets, and allowing some increases on lower and middle income citizens to reduce the discrepancies in the tax rates, a progressive taxation system should remain, in some form...

...I do want to see a budget passed, preferably balanced, but a concession of the magnitude the Speaker would like is unacceptable.

This.

[Chancellor Tanterterg]

I'm willing to take a small progressive tax, with possibly only 2 or 3 brackets (though I prefer a flat tax). But I can't let it get too progressive - I don't too see too much of an increase, as the rich are already paying a pretty substantial tax rate from the federal government. I feel it'd be counterproductive.

We'll have to find some middle ground here, folks, as no one has a majority on this bill.

What if we only had increases for the top three highest-income brackets (corporate and income), kept the other rates the same, and didn't reduce the number of brackets?

[Chancellor Tanterterg]

Here is another proposal, removing one bracket, and changing the income tax rates slightly.

Income Tax Rate:
2%    $0 - $50,000
4.25%    $50,001 - $180,000
5.5%    $180,001 - $999,999
7%   $1,000,000+
1.5%   Employer contributions to pensions

Corporate Tax Rate:

0.5%    $0 - $75,000  
1.5%    $75,001 - $350,000
3%    $350,001 - $10,000,000
3.5%    $10,000,001 - $20,000,000
4%    $20,000,001-$70,000,000
5%   $70,000,001+

Thoughts? Ideas? Proposed changes?

What's clear is that neither a flat tax (supported by the Speaker, Governor, and Assemblyman 20RP12) or progressive system with more than four/five brackets (supported by Assemblyman Gass3268, Assemblyman Mr. X, and myself) can be enacted, so I hope this proposal, or the one I suggested earlier can be a sort of foundation for a middle ground.

Income Tax Rate:
1.5%    $0 - $50,000
3%    $50,001 - $180,000
4%    $180,001 - $750,000
5%    $750,001 - $2,750,000
6%   $2,750,001+
1.5%   Employer contributions to pensions

Corporate Tax Rate:

0.5%    $0 - $75,000  
1.5%    $75,001 - $350,000
3%    $350,001 - $10,000,000
3.5%    $10,000,001 - $20,000,000
4%    $20,000,001-$70,000,000
5%   $70,000,001+

I can live with this.

[Chancellor Tanterterg]

I'm going to introduce my proposal, which originally had bi-partisan support until someone backtracked. Hopefully we can try and work with it, making small changes to find something acceptable to both sides.

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $1,000,000
7%    $1,000,001+

I'd personally rather do the income tax, see how much that cuts the deficit, then do the corporate tax instead of doing both at the same time.

 

I'd much prefer the rates and brackets that Assemblyman TexasDem suggested.  But I would be willing to wait on the corporate tax (and probably accept smaller increases there) if you'd agree to TexasDem's proposal for the regional income tax.  Since TexasDem listed two proposals, this is the one I am referring to:

Income Tax Rate:
2%    $0 - $50,000
4.25%    $50,001 - $180,000
5.5%    $180,001 - $999,999
7%   $1,000,000+
1.5%   Employer contributions to pensions

The Governor's proposal is a big step in the right direction, but I still feel I'd be giving up a little more ground than I'm comfortable with by supporting it.

[Chancellor Tanterterg]

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $999,999
7%    $1,000,000-$10,000,000
9%    $10,000,001+

As Assemblyman TexasDem wisely noted, neither side has enough votes to pass their ideal regional income tax rates.  The important thing is not to seek the rates we would pick were it up to us alone, but ones that we can live with.  This is a compromise that I can live with and one that I would urge both the Governor and my friends and colleagues in the Assembly to support!  Thoughts?

[Chancellor Tanterterg]

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $999,999
7%    $1,000,000-$10,000,000
9%    $10,000,001+

As Assemblyman TexasDem wisely noted, neither side has enough votes to pass their ideal regional income tax rates.  The important thing is not to seek the rates we would pick were it up to us alone, but ones that we can live with.  This is a compromise that I can live with and one that I would urge both the Governor and my friends and colleagues in the Assembly to support!  Thoughts?

Can we change these two brackets to the following?

3%    $13,001 - $175,000
5%    $175,001 - $999,999

I am fine with that if we can get the Governor to support it.

[Chancellor Tanterterg]

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $999,999
7%    $1,000,000-$10,000,000
9%    $10,000,001+

As Assemblyman TexasDem wisely noted, neither side has enough votes to pass their ideal regional income tax rates.  The important thing is not to seek the rates we would pick were it up to us alone, but ones that we can live with.  This is a compromise that I can live with and one that I would urge both the Governor and my friends and colleagues in the Assembly to support!  Thoughts?

Can we change these two brackets to the following?

3%    $13,001 - $175,000
5%    $175,001 - $999,999

I am fine with that if we can get the Governor to support it.

I'm pleased to see that we are approaching a compromise.

Indeed.  If that change were made would you support this?

[Chancellor Tanterterg]

The original compromise was enough of a stretch for me - I can't support the proposed amendment to it.

If I changed the proposed cutoff to $200,000, would you be willing to support it?

Again, I'm fine with this, but I don't think we should let this become a give an-inch-take-a-yard situation (or at least feel like one to the Governor).  The original compromise may be about the only thing that can both get through the legislature and get Governor Tmthforu94's support (remember, he could always veto the budget).  Better to have 50% of something than 100% of nothing.  Maybe Governor Tmthforu94 might consider $225,000 as a cut-off, but if not, I think this is about as good as we'll get.

[Chancellor Tanterterg]

Proposed Amendment:


The income tax rate section of the budget shall be amended to read the following:

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $999,999
7%    $1,000,000-$10,000,000
9%    $10,000,001+

[Chancellor Tanterterg]

What do people think about basing the income tax rates on a real life state from the region? If you want to be able to see estimates from me without a very long wait, that'd be the way to do it.

Oh hey - like a flat tax rate?  Just like I've been saying.

I still would not support a flat tax.  Plus, I think my amendment/proposal is a better solution

[Chancellor Tanterterg]

I would prefer a vote on my amendment before the analysis.  I think there is already pretty solid support for the compromise.