Tom from New Hampshire proposes not collecting any taxes from paychecks until a person's yearly income has exceeded the poverty line. Host Al Lewis points out that this could reduce the use of payday lenders. Guest Anthony Sanders thinks this would be an improvement over the current system, but would prefer a negative income tax. Dean Baker does not think this idea would work well because low income wage earners often have multiple jobs.
Graydon from New Elk Rapids, Mich., suggests implementing a flat tax. Guest Dean Baker doesn't like that this would raise tax rates for low and middle class people and thinks that rich people would find a way around paying taxes. Sanders agrees with Baker and says it is a political non-starter.
Mark from Massachusetts does not think it is fair that internet companies do not have to charge sales tax, so he wants to implement a single federal sales tax. Baker understands why local business owners do not like the current system. Sanders agrees with Mark that internet sales should be taxed but thinks that it's more likely online sales would be taxed at the same rate as purchases at local brick-and-mortar stores.
Music: "Closer To My Dreams" by Goapele