Simplifying The Tax Code

Ahso! · Post by **Ahso!** » Tue Aug 23, 2011 7:18 pm

This is the newest mantra coming from the right currently. To be clear, I'll quote part of an answer to a question from Robert Schroeder of MarketWatch to freshman Senator Pat Toomey (R-Pa) to illustrate the point and then I thought some of us could discuss the pluses and minuses of what republicans are arguing for, if anything.

Pat Toomey wrote: ...I think the general theme is, we could benefit enormously by simplification, reducing these special interest features, and having a corresponding reduction in marginal rates, so that we would increase the incentives to invest, to expand existing businesses, to attract foreign capital, all of those things are enhanced if we simplify the code, make it more fair, and lower marginal rates. That’s an area of great opportunity for us.

Source:‘Super committee’ Republican: Simplify taxes - MarketWatch

So here's the thing: Our corporate tax rate before deductions is at 34%, and we collect, for all intent and purposes, about 24 to 25% when all is said and done, which incidentally, actually turns our high corporate tax rate into one of the lowest in the world, or at least very competitive.

The corporate deductions mostly come from behaviors such as; employing people; providing benefits (medical, dental, life insurance, employer matching contributions to retirement plans and so forth); remaining within environmental standards, etc... and things like local do-gooding such as throwing a picnic every now and then for the town little league and stuff like that. The more they reward the economy (local and national) the lower their rate goes.

The republican argument (which I believe will win out because democrats such as Bill Clinton have been conceding (capitulating IMV) the idea for quite some time now) is to just do away with the deductions and make the tax rate 24 or 25 percent. That's what they mean when they say they want to "simplify the [tax] code". It isn't really much of a change other than possibly to the employees of these corporations. In other words, corporations will be on the honor system to treat their employees right and care for where they operate.

So, the question is: Is this what you believe is best for our country and economy?

Also, If you believe I've got any of the above incorrect please show me what it is.

Scrat · Post by **Scrat** » Tue Aug 23, 2011 9:49 pm

Simple, every person that works and every entity that does business pays 20% of the gross income. Nothing more nothing less.

Ahso! · Post by **Ahso!** » Wed Aug 24, 2011 5:14 am

Scrat;1366921 wrote: Simple, every person that works and every entity that does business pays 20% of the gross income. Nothing more nothing less.So you believe a person or couple who makes $10,000.00 a year should pay $2,000.00 in taxes (and you believe they could afford that?), or at $50,000.00 pay $10,000.00 in tax? Currently, before any deductions on $50,000.00 a single person would pay $8,625.00 and a married couple filing jointly would pay $6650.00 according to > Average Tax Rate Calculator - SmartMoney.com

Explain to me how a 20% flat tax rate is better if you please. The plan you advocate will definitely save corporations tax money in the event they should cut their expenses via employee benefits and bonuses.

Another question: What about state and local taxes, how does that work in your scenario?

Post by **LarsMac** » Wed Aug 24, 2011 9:48 am

I prefer the idea of a Point-of-Sale tax. With necessities like groceries exempt.

Then folks pay tax by what they spend, rather than what they earn.

Nothing quite as severe as the VAT that many European countries have.

Ahso! · Post by **Ahso!** » Wed Aug 24, 2011 10:37 am

LarsMac;1366967 wrote: I prefer the idea of a Point-of-Sale tax. With necessities like groceries exempt.

Then folks pay tax by what they spend, rather than what they earn.

Nothing quite as severe as the VAT that many European countries have.I suspect the reason for taxing incoming as opposed to outgoing monies is that it's safer to assume that income ensures the money is (or at least should be) available for taxation purposes.

No comment on the op? Do you agree with the philosophy of people such as senator Toomey?

gmc · Post by **gmc** » Wed Aug 24, 2011 11:42 am

I'm not american so please excuse me putting in my tuppence worth. I just can;t believe any of you really believe the arguments you are putting forward.

Tax poor people: Republicans want the IRS to nail "lucky duckies." - By David Weigel - Slate Magazine

You guys are off your heads.

posted by scrat

Simple, every person that works and every entity that does business pays 20% of the gross income. Nothing more nothing less

OK if you don't see anything wring with someone earning $20,000 paying $4,000 tax and being left with $16,000 to support their families while someone $1,000,000 is left left with $800,000 . Especially if the one earning the $million earns it off the labour of the one earning $20,000. I'm not even going to try and convince you. people in financial services jobs don't actually create wealth they just rearrange it. Companies don't make profits the people working in them do.

posted by Larsmac

I prefer the idea of a Point-of-Sale tax. With necessities like groceries exempt.

Then folks pay tax by what they spend, rather than what they earn.

Nothing quite as severe as the VAT that many European countries have.

Indirect taxation hit those on power incomes disproportionately. The cost of filling a car with petrol in the UK has doubled, it's all right if you live in a big city, if your need a car to get to work your income has just taken a massive hit. Must be the same in parts of america, no car can't get to a job fuel costs too much you're stuffed the guy with the Cadillac probably won't even notice.

They only way you can get revenue with indirect taxation is to hit the things people need to buy.

Does no one make a case for social justice and equality of opportunity in the United States? If you have a vast gulf between rich and poor in a country that is when democracy goes out the window, too much wealth and power in too few hands you don't have a democracy any more you have fascism. We're kind of going the same way but at least no one cries socialist demon when someone criticises it.

Scrat · Post by **Scrat** » Wed Aug 24, 2011 5:53 pm

I'm just playing. A base tax for everyone would be a good start though. We could work from there. It's a very complex subject.

Ahso! · Post by **Ahso!** » Wed Aug 24, 2011 6:04 pm

Scrat;1367098 wrote: I'm just playing. A base tax for everyone would be a good start though. We could work from there. It's a very complex subject.Our current tax code is large and complex but it works, and it actually works well. Our system has made our country the most economically viable in the world.

Have you considered how many bookkeepers, accountants, accounting firms, software developers and other people in the accounting sector would be put out of work if we went to a flat, value added or exclusive sales tax?

However, chances of the corporate tax rate being reduced are very good IMV. Read the interview with Toomey, who is a former investment banker, and take note as to how well he articulates his position. This idea has been sold professionally to tea party people and Paulies alike. It's a mistake in my view.

Post by **Bryn Mawr** » Wed Aug 24, 2011 10:47 pm

Ahso!;1367100 wrote: Our current tax code is large and complex but it works, and it actually works well. Our system has made our country the most economically viable in the world.

Have you considered how many bookkeepers, accountants, accounting firms, software developers and other people in the accounting sector would be put out of work if we went to a flat, value added or exclusive sales tax?

However, chances of the corporate tax rate being reduced are very good IMV. Read the interview with Toomey, who is a former investment banker, and take note as to how well he articulates his position. This idea has been sold professionally to tea party people and Paulies alike. It's a mistake in my view.

Excuse me? Which world is this?

Scrat · Post by **Scrat** » Thu Aug 25, 2011 5:39 am

All things considered I have my doubts about that statement too.

flopstock · Post by **flopstock** » Thu Aug 25, 2011 5:47 am

Cut out all credits and exemptions and tax at 8 to 10 percent across the board.

Ahso! · Post by **Ahso!** » Thu Aug 25, 2011 6:10 am

Bryn Mawr;1367116 wrote: Excuse me? Which world is this?Take a look at GDP comparisons.

Several economies which are not considered to be countries (world, the EU, Eurozone, and some dependent territories) are included in the list because they appear in the sources. These economies are not ranked in the charts here, but are listed.

List of countries by GDP (nominal) - Wikipedia, the free encyclopedia

I believe an argument can be made that our tax code is the reason behind America's economic strength.

Ahso! · Post by **Ahso!** » Thu Aug 25, 2011 6:14 am

Scrat;1367135 wrote: All things considered I have my doubts about that statement too.No surprise there, it's your nature to adopt a contrary stance, apparently. Now all you need to do is begin to learn how to support those stances.

. You can do it if you try, that is if your willing to admit both correct and incorrect positions. i have confidence in you.

What exactly is it you've looked at in your "all things considered" approach and analysis? Edify us.

Ahso! · Post by **Ahso!** » Thu Aug 25, 2011 6:28 am

flopstock;1367136 wrote: Cut out all credits and exemptions and tax at 8 to 10 percent across the board.I'll take it then you agree with the philosophy of those who support the positions of Senator Toomey and other like-minded individuals?

Our tax code is designed to do it's best to resist the implementation of regulations and yet attempt to ensure adherence to our insistence to preserve our environment and individual quality of life, and instead uses a carrot/stick approach to encourage corporations (as well as individuals) to do the right thing, it's a sort of voluntary reward system. Doing away with our current system leaves one of two options: 1) put everyone on the honor system or; 2) regulate more. I don't see any other alternative other than a third unmentioned option which is to not give a hoot what happens.

What's your preferred approach? Feel free to list any I've omitted if you've come armed.

gmc · Post by **gmc** » Sun Aug 28, 2011 3:35 am

Ahso!;1367137 wrote: Take a look at GDP comparisons.

List of countries by GDP (nominal) - Wikipedia, the free encyclopedia

I believe an argument can be made that our tax code is the reason behind America's economic strength.

No it's nothing to do with the tax code it's down to the fact that you were late industrialising and learned a lot from europe about the processes involved not to mention all the technology that was pinched, you were always very good at developing other countries ideas. Your economic strength was due to a an affluent, educated, working class and middle class mainly urbanised population. Your constitution and attitudes incorporated in the tax code are pre industrial. You cannot have a capitalist economy without active government involvement in changing the infrastructure, providing an educated workforce etc etc etc and also in regulating the industries that develop and preventing the abuse of monopolistic power to distort the markets and rake in excessive profits at the expense of the consumer up to and including breaking up companies that have become too powerful. You need somehow to regulate the cities and finance that running as well as provide education and healthcare for the workers. It's only right that industry pays it's share and if the wealthy get rich on the labour of those they employ it is only right those they employ get a say in how rich they are allowed to become at their expense. If you take away those controls you have what is happening now in america with factories being built overseas where labour is cheap and all that matters is the bottom line with no thought to the long term future meanwhile the consumer base at home is being destroyed till eventually they can't actually buy all the cheap goods. by the time it dawns on them what has happened it will be too late to fix. It's going to take a god few years to sort out but at the moment you don't seem to think you have a problem.

Post by **Bryn Mawr** » Mon Aug 29, 2011 2:32 pm

Ahso!;1367137 wrote: Take a look at GDP comparisons.

List of countries by GDP (nominal) - Wikipedia, the free encyclopedia

I believe an argument can be made that our tax code is the reason behind America's economic strength.

I would seriously argue that GDP is not a measure of ecconomic viability for a country in the same way as turnover is not a measure of ecconomic viability for a company.

Ahso! · Post by **Ahso!** » Mon Aug 29, 2011 2:45 pm

Bryn Mawr;1367520 wrote: I would seriously argue that GDP is not a measure of ecconomic viability for a country in the same way as turnover is not a measure of ecconomic viability for a company.How would you measure?

Post by **Bryn Mawr** » Mon Aug 29, 2011 3:00 pm

Ahso!;1367522 wrote: How would you measure?

In a company you'd do it by operating profit, for a country the direct equivalent would be negative deficit.

Do you have a hady list showing countries by budgetry deficit and we can see where the US ecconomy sits.

Ahso! · Post by **Ahso!** » Mon Aug 29, 2011 4:05 pm

Bryn Mawr;1367525 wrote: In a company you'd do it by operating profit, for a country the direct equivalent would be negative deficit.

Do you have a hady list showing countries by budgetry deficit and we can see where the US ecconomy sits.Cute! But as I constantly tried to remind the Bush administration, and you may recall my signature back then of: "It's a Country, not a company!"

Companies with a negative operating profit don't last, countries have no such luck or luxury, they have to include their negatives and continue to exist.

Your method is like adding with letters and spelling with numbers. We're talking economics, not accounting.

yaaarrrgg · Post by **yaaarrrgg** » Mon Aug 29, 2011 6:50 pm

It could be simplified but I don't really trust the GOP to simplify it.

If a company is making billions in profits but not doing much for the community, IMO the tax rate should be fairly high. Because the GOP apparently wants to dismantle the government, and without a net, it seems to me more social responsibility falls in the lap of the corporations.

I would support making the tax rate a function of the ratio between lowest and highest paid employees of a corporation. If one person is making 1000 times what the lowest paid employee in the the company makes, his company's tax rate should be a lot higher than someone who's top person only makes only 10 times what the lowest paid employee is paid. That way, if a business is struggling, or small, it might not pay any taxes at all.

Post by **Bryn Mawr** » Mon Aug 29, 2011 11:16 pm

Ahso!;1367531 wrote: Cute! But as I constantly tried to remind the Bush administration, and you may recall my signature back then of: "It's a Country, not a company!"

Companies with a negative operating profit don't last, countries have no such luck or luxury, they have to include their negatives and continue to exist.

Your method is like adding with letters and spelling with numbers. We're talking economics, not accounting.

Accounting is just a method of keeping track of economics. The economics is appropriate whether it is a country a company of a household - if you spend more than your income then you loose assets to pay for it. They can either be fixed assets (you sell off the family silver) or liquid assets (you run up a cash debt) but one way or another the difference between income and expenditure (in national terms, the deficit) equals a loss of assets. Loose enough assets and you end up bankrupt.

Mr Micawber had the right of it and you'd do well to listen to him.

gmc · Post by **gmc** » Tue Aug 30, 2011 12:56 am

If you raise the base level at which you start taxing people it's easier for them to make end meets and they are less likely to need social welfare. Something Gordon brown never quite understood - he had a Presbyterian obsession with making sure people were deserving poor. If someone on benefits started earning a little they lost the equivalent or sometimes more in benefit creating a poverty trap that's hard to get out of.

Taxing someone earning $10,000 the same percentage as someone earning $100,000 is ludicrous, if you them increase indirect sales tax as well you make live harder for those who are already struggling. It's not as though a poor man's house takes less to heat than a rich man's is it.

posted by yaaarrgghh

I would support making the tax rate a function of the ratio between lowest and highest paid employees of a corporation. If one person is making 1000 times what the lowest paid employee in the the company makes, his company's tax rate should be a lot higher than someone who's top person only makes only 10 times what the lowest paid employee is paid. That way, if a business is struggling, or small, it might not pay any taxes at all.

It's called progressive taxation and that's what warren buffet was arguing for.

"Les Super-Riches" French Pull A Buffett And Ask For More Taxes

The notion that if you let the rich stay richer and become richer they spend and invest to stimulate the economy is a stupid one not borne out by any actual results. All they do is buy a Ferrari for the drive to work and a Lamborghini for the weekend. I suppose the guy paid to polish it is duly grateful.

Ahso! · Post by **Ahso!** » Tue Aug 30, 2011 3:23 am

Bryn Mawr;1367563 wrote: Accounting is just a method of keeping track of economics. The economics is appropriate whether it is a country a company of a household - if you spend more than your income then you loose assets to pay for it. They can either be fixed assets (you sell off the family silver) or liquid assets (you run up a cash debt) but one way or another the difference between income and expenditure (in national terms, the deficit) equals a loss of assets. Loose enough assets and you end up bankrupt.

Mr Micawber had the right of it and you'd do well to listen to him.Do we want to reduce our debt from it's current levels? Yes! Do we want to eliminate our debt completely? No!

I can agree that we don't want spending to get out of control, and whether or not it currently is is part of the debate. Countries run deficits, and to a certain degree they are fine, even good provided; inflation remains in check (it currently is); the private sector is saving more and building assets (we are); stock and bond markets are strong (short term bonds are and the stock market is chugging along); jobs are being created (they are, albeit painfully slow); Consumer spending supports exports and imports (it is).

Look, GDP is recognized to be one of the fair judges of every country's economic health, that you don't recognize GDP as an indicator to economic viability is unfortunate and places your view outside that of what is generally recognized. The fact stands that the rest of the world looks to the health and well being of U.S. economy, like it or not.

gmc · Post by **gmc** » Tue Aug 30, 2011 3:48 am

posted by ahso

The fact stands that the rest of the world looks to the health and well being of U.S. economy, like it or not.

That may have been true but it is beginning to change and america doesn't seem to be noticing. Globalisation affects everybody but It's going to be harder for americans to adjust at least in the europe there is an expectation that government will take a hand in regenerating areas hit by unemployment whereas the prevailing sentiment in the US seems to be too bad. Can't say I envy you at all.

Global 3000 | Changing Trade Patterns - YouTube

Ahso! · Post by **Ahso!** » Tue Aug 30, 2011 4:15 am

gmc;1367578 wrote: posted by ahso

That may have been true but it is beginning to change and america doesn't seem to be noticing. Globalisation affects everybody but It's going to be harder for americans to adjust at least in the europe there is an expectation that government will take a hand in regenerating areas hit by unemployment whereas the prevailing sentiment in the US seems to be too bad. Can't say I envy you at all.

Global 3000 | Changing Trade Patterns - YouTubeThings being what they are and have been up to now, there is only one way to surpass American economic viability and that is for other countries to become more consumer oriented, which, for the most part, appears contrary to what Europe would like to encourage. Consumerism is what drives the U.S. economy.

yaaarrrgg · Post by **yaaarrrgg** » Tue Aug 30, 2011 5:55 am

gmc;1367569 wrote:

It's called progressive taxation and that's what warren buffet was arguing for.

"Les Super-Riches" French Pull A Buffett And Ask For More Taxes

The notion that if you let the rich stay richer and become richer they spend and invest to stimulate the economy is a stupid one not borne out by any actual results. All they do is buy a Ferrari for the drive to work and a Lamborghini for the weekend. I suppose the guy paid to polish it is duly grateful.

Interesting article ...

Yes, I'm thinking more along the lines of a "selfish bastard" tax. Not necessarily based on income, but based on how much they do for their community and employees. I wouldn't mind some people earning high incomes but being taxed very little if they were actually helping out everyone in the process, and not getting rich at the expense of the community. IOW, the money ought to be earned, not merely taken.

gmc · Post by **gmc** » Tue Aug 30, 2011 7:22 am

Ahso!;1367580 wrote: Things being what they are and have been up to now, there is only one way to surpass American economic viability and that is for other countries to become more consumer oriented, which, for the most part, appears contrary to what Europe would like to encourage. Consumerism is what drives the U.S. economy.

What is it you think europe would like to encourage? You forget who first developed the concept of the consumer society? Britain's industrialisation was driven by consumer demand as was that of the rest of europe. Napoleon called us a nation of shopkeepers but was then called to account at waterloo. (little anti french humour there). Joking aside he was saying something about the growing consumer society in britain at the time. You need an affluent middle and working class for industry to develop - they feed off each other. Your companies have actually destroyed their own consumer base, to be candid you are not really in a position to lecture others on the problems with theor econmies.

Ahso! · Post by **Ahso!** » Tue Aug 30, 2011 7:38 am

Bryn Mawr;1367525 wrote:

Do you have a hady list showing countries by budgetry deficit and we can see where the US ecconomy sits.Might this help?

List of sovereign states by public debt - Wikipedia, the free encyclopedia

Post by **Bryn Mawr** » Tue Aug 30, 2011 1:43 pm

Ahso!;1367576 wrote: Do we want to reduce our debt from it's current levels? Yes! Do we want to eliminate our debt completely? No!

I can agree that we don't want spending to get out of control, and whether or not it currently is is part of the debate. Countries run deficits, and to a certain degree they are fine, even good provided; inflation remains in check (it currently is); the private sector is saving more and building assets (we are); stock and bond markets are strong (short term bonds are and the stock market is chugging along); jobs are being created (they are, albeit painfully slow); Consumer spending supports exports and imports (it is).

Look, GDP is recognized to be one of the fair judges of every country's economic health, that you don't recognize GDP as an indicator to economic viability is unfortunate and places your view outside that of what is generally recognized. The fact stands that the rest of the world looks to the health and well being of U.S. economy, like it or not.

Where do I suggest that you should eliminate debt completely? What I am saying is that you cannot run a budget deficit indefinitely or you, as a country, will become bankrupt. I also suggest that (one of) the accepted indicator(s) if economic health is the negative of the deficit and that a country that is running a high debt is in trouble.

It is not just that you are currently running a 10% deficit, spending 10% more than you're earning, that's bad enough and shows that your economy has a problem. It's that you've been doing it for so long and build up such a debt that servicing that debit is, in itself, a serious drain on your resources.

You might like to check out :-

Debt-to-GDP ratio - Wikipedia, the free encyclopedia

In economics, the debt-to-GDP ratio is one of the indicators of the health of an economy. It is the amount of national debt of a country as a percentage of its Gross Domestic Product (GDP).

A high GDP is wonderful - you've a big economy as you should do being a big country but by spending so much more than you're earning, and owing so much to other countries, you are weakening you economy. It's like the factory owner in the big house, it looks impressive until you see that he's mortgaged to the hilt and spending more than the factories earning - it won't be long until he goes under.

GDP is not, and never has been, a measure of economic health. It is a measure of the size of an economy and nothing more.

Post by **Bryn Mawr** » Tue Aug 30, 2011 1:54 pm

Ahso!;1367597 wrote: Might this help?

List of sovereign states by public debt - Wikipedia, the free encyclopedia

Enormously, it linked to the page I was looking for which is your debt to other countries :-

List of countries by external debt - Wikipedia, the free encyclopedia

Actually, if you sort that table by % of GDP which is the useful measure it shows that the US is by no means the worst (and is far better off than the UK) but owing a year's income is a dangerous place to be (and the UK owing four year's income is terrifying) and one that needs to be recognised and sorted sooner rather than later.

gmc · Post by **gmc** » Wed Aug 31, 2011 2:02 am

“The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses.”

Simplifying the tax code is a red herring. You are not employing enough people who can then afford the products you want to make and sell in large part because companies have downsized and shifted jobs overseas to make the things that there now unemployed or employed in less well paid jobs cannot afford to buy. The american standard of living used to be the highest in the world it isn't any more Companies’ efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant. Who is going to buy the stuff?

If consumerism drives the american economy how does making them all unemployed and cutting the wages of those left make any kind of sense? The american consumer has been shafted by big business right where it hurts.

http://www.otherwords.org/blog/fracking_the_irs

As the Super Congress eyes trillions in budget cuts that will undermine the quality of life for most Americans, here's a stunning fact to contemplate: 25 hugely profitable U.S. companies paid their CEOs more last year than they paid Uncle Sam in taxes.

I can't help feeling that if ordinary americans were a bit more clued up they would be howling for blood.

Ahso! · Post by **Ahso!** » Wed Aug 31, 2011 5:30 am

gmc;1367656 wrote: Simplifying the tax code is a red herring.Agreed! I started this thread wondering if any Americans (or anyone) agreed or disagreed with my interpretation as I expressed it in the op. Unfortunately, most contributors have diverted the thread into other semi or unrelated subjects.gmc;1367656 wrote: You are not employing enough peopleYou got that right! gmc;1367656 wrote: who can then afford the products you want to make and sell in large part because companies have downsized and shifted jobs overseas to make the things that there now unemployed or employed in less well paid jobs cannot afford to buy. The american standard of living used to be the highest in the world it isn't any more Companies’ efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant. Who is going to buy the stuff?

If consumerism drives the american economy how does making them all unemployed and cutting the wages of those left make any kind of sense? The american consumer has been shafted by big business right where it hurts.The idea that caused all this underpaying was that employees would borrow more if wages remained stagnant and just enough was being made to pay the bills thus increasing stocks in the financial markets. The companies employing these people have portfolios stacked with banking stocks and that's one of many reasons they were too big to fail.

Now it appears the financial industry has no other way to increase it's profits other than to cut expenses and one of those expenses they are trying to cut is the taxes they pay. This is the problem I see with the need for constant growth, it will eventually devour everything and everybody. Something needs to be done with the banking industry but right now and in the not so distant past the banking industry has been mainly responsible for keeping the U.S. economy alive.

gmc;1367656 wrote: I can't help feeling that if ordinary americans were a bit more clued up they would be howling for blood.Some of them are, however those getting them riled up are the same ones responsible for the disaster directing the anger in the wrong direction.

flopstock · Post by **flopstock** » Wed Aug 31, 2011 12:53 pm

Remove all credits and exemptions and tax everyone 8 to 10 percent. If someone is only making 10000 a year, they are not working full time.

Ahso! · Post by **Ahso!** » Wed Aug 31, 2011 1:04 pm

flopstock;1367703 wrote: Remove all credits and exemptions and tax everyone 8 to 10 percent. If someone is only making 10000 a year, they are not working full time.What problems will be solved by doing this? Are you including corporations in this as well? How will this idea spur the economy?

Ahso! · Post by **Ahso!** » Wed Aug 31, 2011 1:13 pm

flopstock;1367703 wrote: Remove all credits and exemptions and tax everyone 8 to 10 percent. If someone is only making 10000 a year, they are not working full time.Not necessarily true. Restaurant servers and commissioned salespeople are often paid less than $3.00 per hour plus tips/commission. $10000.00 is equal to $4.81 per hour@40 hours.

yaaarrrgg · Post by **yaaarrrgg** » Wed Aug 31, 2011 2:19 pm

flopstock;1367703 wrote: Remove all credits and exemptions and tax everyone 8 to 10 percent. If someone is only making 10000 a year, they are not working full time.

As we are running huge deficits as it is, this would of course mean huge military cuts and getting rid of things like medicare and social security. That actually means a tax hike to all the people now bearing the direct cost of their parent's medical care; it has the same effect of reducing take home income.

A fourth big ticket item I think is the interest on existing debt. Where does 8-10% number come from? Without me actually looking up the numbers and crunching them that seems like it wouldn't even come close to covering interest on existing debt. I believe interest is currently about 80 cents of the existing tax dollar.

yaaarrrgg · Post by **yaaarrrgg** » Wed Aug 31, 2011 2:25 pm

Ahso!;1367709 wrote: Not necessarily true. Restaurant servers and commissioned salespeople are often paid less than $3.00 per hour plus tips/commission. $10000.00 is equal to $4.81 per hour@40 hours.

Also, a person's check can easily be decimated by medical insurance and bills. Pre-tax income on paper doesn't mean a whole lot ...

flopstock · Post by **flopstock** » Wed Aug 31, 2011 2:44 pm

Ahso!;1367709 wrote: Not necessarily true. Restaurant servers and commissioned salespeople are often paid less than $3.00 per hour plus tips/commission. $10000.00 is equal to $4.81 per hour@40 hours.

Yep and they are supposed to be claiming those tips as income. None of the older waitresses I worked with claimed more than 15% of their tips even though I tried to explain that they were going to lose out on social security benefits down the road.

They just didn't want to have to pay the taxes. And the boss didn't care because he'd end up paying less too.

But you find me a waitress putting in 40 hour work weeks and claiming annual wages of 10000 and if she/he is not a family member, they are a liar.

flopstock · Post by **flopstock** » Wed Aug 31, 2011 2:47 pm

yaaarrrgg;1367729 wrote: Also, a person's check can easily be decimated by medical insurance and bills. Pre-tax income on paper doesn't mean a whole lot ...

So can the person's who is making 250,000 per year.

yaaarrrgg · Post by **yaaarrrgg** » Wed Aug 31, 2011 2:53 pm

flopstock;1367732 wrote: So can the person's who is making 250,000 per year.

I agree... tax deductions are one way to tax take-home versus gross. For example being able to subtract a huge medical cost from your taxable income seems fair. One medical procedure can easily cost $250,000 ... not as rare as you might think and expensive without health insurance. Though deductions are complex and messy.

flopstock · Post by **flopstock** » Wed Aug 31, 2011 2:55 pm

yaaarrrgg;1367727 wrote: As we are running huge deficits as it is, this would of course mean huge military cuts and getting rid of things like medicare and social security. That actually means a tax hike to all the people now bearing the direct cost of their parent's medical care; it has the same effect of reducing take home income.

A fourth big ticket item I think is the interest on existing debt. Where does 8-10% number come from? Without me actually looking up the numbers and crunching them that seems like it wouldn't even come close to covering interest on existing debt. I believe interest is currently about 80 cents of the existing tax dollar.

Social Security has been abused, IMO. We should all be paying into retirement accounts.

Start today.

yaaarrrgg · Post by **yaaarrrgg** » Wed Aug 31, 2011 3:08 pm

flopstock;1367738 wrote: Social Security has been abused, IMO. We should all be paying into retirement accounts.

Start today.

That's possible, though by the same token ... as the market becomes more intertwined with social well-being you create an entity that's "too big to fail." IMO we don't really get rid of social security in that case, we just move it into the market and re-brand it.

Accountable · Post by **Accountable** » Thu Sep 01, 2011 3:45 am

Ahso!;1367707 wrote: What problems will be solved by doing this? Are you including corporations in this as well? How will this idea spur the economy?
Corporations are property. We should stop giving them a status they do not deserve. Tax the owners. Capital gains, royalties and stock dividends are income just as much as standard paychecks. They should be taxed at the same rate.

Ahso! · Post by **Ahso!** » Thu Sep 01, 2011 5:26 am

yaaarrrgg;1367740 wrote: That's possible, though by the same token ... as the market becomes more intertwined with social well-being you create an entity that's "too big to fail." IMO we don't really get rid of social security in that case, we just move it into the market and re-brand it.Good point.

Ahso! · Post by **Ahso!** » Thu Sep 01, 2011 5:28 am

flopstock;1367738 wrote: Social Security has been abused, IMO. We should all be paying into retirement accounts.

Start today.Is there any chance you could explain what you mean by "Social Security has been abused, IMO."?

Ahso! · Post by **Ahso!** » Thu Sep 01, 2011 5:33 am

Accountable;1367767 wrote: Corporations are property. We should stop giving them a status they do not deserve. Tax the owners. Capital gains, royalties and stock dividends are income just as much as standard paychecks. They should be taxed at the same rate.That's a debate worth exploring in my view. Do you hold that view only on private corporations or also on corporations that go public?

yaaarrrgg · Post by **yaaarrrgg** » Thu Sep 01, 2011 7:37 am

I've been thinking more about the tax rate on corporations, and suspect the effective rate on a healthy corporation is probably close to 0%.

Who really pays this corporate tax? The company likely just passes the cost on to the consumer (higher prices for middle class) or subtracts this money from wages (likely from blue collar workers). The people at the top of the corporation hardly look at their own paycheck as a place of sacrifice. Look at the reaction to Warren Buffett's tax proposal. Many give themselves bonuses even when they do a lousy job and have to have the federal government give them hundreds of billions of dollars in corporate welfare money.

The only point where a tax on a large corporation is felt is if a factory in a third world country can do a better job screwing over a community and group of workers, and produce the same product at a lower price.

What is the effective tax rate on the middle class then?

As it is, I suspect the effective tax rate on middle class is probably more like 60% or more if we include healthcare costs, sales tax, and other taxes passed along. Even if the rich pay more taxes, the government then turns around and hires some middle class guys to do the actual work. One person contributes paper of imaginary value, the other person contributes back breaking work.

Perhaps a simpler tax policy could be this: Eliminate all taxes on business, and move taxes directly to individuals. Since the businesses aren't really paying the tax anyway... it's likely just a hidden and regressive tax on middle class. However, an individual is dependent on their community for existence. Allowing that both the individual and community are of equal weight, for every dollar earned, 50% goes to the individual, 50% goes to the community. To prevent aristocracies from forming, inheritance is taxed at 100%. Then use the money to pay for a baseline of programs essential to social-well being: universal healthcare, education, basic foods, public transportation, and possibly public housing.

flopstock · Post by **flopstock** » Thu Sep 01, 2011 8:21 am

yaaarrrgg;1367799 wrote: I've been thinking more about the tax rate on corporations, and suspect the effective rate on a healthy corporation is probably close to 0%.

Who really pays this corporate tax? The company likely just passes the cost on to the consumer (higher prices for middle class) or subtracts this money from wages (likely from blue collar workers). The people at the top of the corporation hardly look at their own paycheck as a place of sacrifice. Look at the reaction to Warren Buffett's tax proposal. Many give themselves bonuses even when they do a lousy job and have to have the federal government give them hundreds of billions of dollars in corporate welfare money.

The only point where a tax on a large corporation is felt is if a factory in a third world country can do a better job screwing over a community and group of workers, and produce the same product at a lower price.

What is the effective tax rate on the middle class then?

As it is, I suspect the effective tax rate on middle class is probably more like 60% or more if we include healthcare costs, sales tax, and other taxes passed along. Even if the rich pay more taxes, the government then turns around and hires some middle class guys to do the actual work. One person contributes paper of imaginary value, the other person contributes back breaking work.

Perhaps a simpler tax policy could be this: Eliminate all taxes on business, and move taxes directly to individuals. Since the businesses aren't really paying the tax anyway... it's likely just a hidden and regressive tax on middle class. However, an individual is dependent on their community for existence. Allowing that both the individual and community are of equal weight, for every dollar earned, 50% goes to the individual, 50% goes to the community. To prevent aristocracies from forming, inheritance is taxed at 100%. Then use the money to pay for a baseline of programs essential to social-well being: universal healthcare, education, basic foods, public transportation, and possibly public housing.

I don't know why you want to keep making it hard. Any money I make will have already been taxed at my 8-10%. What I do with that money is then no longer the business of the internal revenue service. If I reinvest it and make more money off of it, that new revenue would be taxable, but I've already met my obligation on taxes for that original money. There should be no inheritence penalty simply because you or anyone else doesn't care for the fact that someone saved money for their kids. Save money for your own kids after you pay your own taxes.

Ahso! · Post by **Ahso!** » Thu Sep 01, 2011 9:16 am

flopstock;1367803 wrote: I don't know why you want to keep making it hard. Any money I make will have already been taxed at my 8-10%. What I do with that money is then no longer the business of the internal revenue service. If I reinvest it and make more money off of it, that new revenue would be taxable, but I've already met my obligation on taxes for that original money. There should be no inheritence penalty simply because you or anyone else doesn't care for the fact that someone saved money for their kids. Save money for your own kids after you pay your own taxes.Why do you advocate a tax?

yaaarrrgg · Post by **yaaarrrgg** » Thu Sep 01, 2011 10:30 am

flopstock;1367803 wrote: I don't know why you want to keep making it hard. Any money I make will have already been taxed at my 8-10%. What I do with that money is then no longer the business of the internal revenue service. If I reinvest it and make more money off of it, that new revenue would be taxable, but I've already met my obligation on taxes for that original money. There should be no inheritence penalty simply because you or anyone else doesn't care for the fact that someone saved money for their kids. Save money for your own kids after you pay your own taxes.

I still don't understand where your 8-10% number comes from. Why not 7.234% or 13.4477% ?

You don't think money should generally be earned through work? How is it that the right has moved so far off the charts, the left is defending what used to be a conservative position?