This is going to be an interesting thread...

The way I figure it, how you distribute taxes and how high you set taxes are two separate debates - I want to address them both eventually, but first I want to talk about the distribution problem.

First off, I'd like to know how you'd re-design the Tax Code if you had a chance - how would you distribute the Tax Burden? I sat down and crunched the IRS numbers from 2005 and from that, I've come up with the following information that I'll use in this thread. The IRS divides individual taxpayers into six basic "brackets" based on Adjusted Gross Income:

Six Adjusted Gross Income Brackets:
(1) Under $15,000
(2) $15-30,000
(3) $30-50,000
(4) $50-100,000
(5) $100-$200,000
(6) $200,000 or more

If you take Gross Income and subtract Deductions, you get a person's Taxable Income. I've taken the actual number of income tax returns in each bracket and calculated what percentage of people fall into each bracket:

Percentage of Taxpayers in each Bracket:
Under $15,000: 11.29
$15-30,000: 24.44
$30-50,000: 23.05
$50-100,000: 27.49
$100-200,000: 10.34
$200,000 or more: 3.38

So that's how the tax-paying population breaks down - next, I calculated what percentage of taxable income each bracket reported:

Percentage of Taxable Income reported by each Bracket:
Under $15,000: 0.71
$15-30,000: 5.02
$30-50,000: 10.79
$50-100,000: 26.66
$100-200,000: 20.82
$200,000 or more: 36.01

So, 11.29% of US Taxpayers earned $15,000 or less and combined they reported 0.71% of all Taxable Income. Similarly, 3.38% of US Taxpayers earned $200,000 or more and combined they reported 36.01% of all Taxable Income.

Now here's the question and my challenge to everyone here - you have the number of people in each bracket and you have the percentage of total income in each bracket.... and added up, 100% of taxpayers earned 100% of all taxable income - but they also have to pay 100% of the taxes. The question is, how would you divide up the tax burden between the different brackets? What rationale would you use? If you're for a Flat Tax, for instance, each bracket would pay the same percentage in taxes as they earn in income (ie, $100-200,000 earns 20.82% of income, so under a Flat Tax they'd also pay 20.82% of taxes). If you believe in Progressive Taxation, the poor would pay less and the rich pay more... if you believe in Regressive Taxation, the rich less and the poor more.

What I'd like to see is how everyone would divide up the 100.00% Tax Burden - I've got how the actual numbers break down and I've got my own ideas, and I'll post them here also... but first, I'd like to see some other peoples' ideas about how to distribute the taxes.

So who's up for a challenge?

I don't think we need to support the US Postal Service because I am pretty sure they actually make quite a large profit per year.

Right you are, Dom... According to Bush's last Budget, they're estimated to pull in a $7.6 billion profit this fiscal year.

This is why I don't know why it gets around 100 million dollars a year from the tax payers. Maybe the tax money comes back - not sure.

I'm pretty sure any surplus that the US Postal Service runs goes back into general revenue, Dom.

Wow... Nobody's going to take me up on my Tax Code Challenge? All you've got to do is divide up 100% of the tax burden into 6 income brackets... what's the big deal?

Rob? I thought knowledge was power? Dom? Surely you've got an opinion - you've got an opinion on just about everything else - why not this?

Come on... there's got to be some conservative genius out there who will put forward their view on how the tax burden should be distributed.

I was just going to observe on this thread. One point of contention I have with the current system is the top 3%-you have those who earn around 250,000 are paying a higher percentage of taxes then those who are earning in the millions-because the highest earner(those earning millions+ annually) are able to manipulate the system to get breaks.

A flat tax would have to insure no special breaks for the wealthiest .5% .

I understand what you're saying, Sam... but by the same token, a lot of the special breaks the super-wealthy enjoy come about from their use of foreign tax shelters. In today's world of high-powered finance and rapid capital movement, I'm not sure how you can really control that without having the cure become worse than the disease.

This is NOT my area of knowledge by any means. However, I think taxing corporations and company for doing business in your city to help pay for streets, lights, construction, etc., would be good to possibly reduce the tax burden on incomes period.

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A lot of those things are paid for by State & Local Property Taxes, though, Cookie. That's a whole separate ballgame - I'm just talking about Individual Incomes Taxes that go to the Federal Government.