Am I the only one that thinks Income Tax is BS?

[dullard]

In terms of what I think is the right tax:

Wealth tax > Death tax > Income tax >>> Sales tax.

However, wealth tax is the most difficult tax to implement. Also, with income tax, it is the ONLY tax where you have duplicate reporting. You report your income AND your employer reports your income. Checks and balances like that keep abuse and tax evasion to a minimum. No, it isn't perfect. But with the other taxes, the IRS just has to take the word of one person or one company and trust it with no possible way to verify it. Thus, I perfer this in practice:

Income tax > Death tax > Wealth tax >>> Sales tax.

A sales tax is the worst possible format for taxing people. What will a sales tax do? It'll be the biggest tax cut the wealthy have ever seen. They can go to a near 0% tax rate if they wanted to (just don't spend money on goods, but instead spend it on investments; or buy your stuff out of the country; etc). Who picks up the slack? The middle class. It would be the biggest tax increase the middle class in America has ever seen. When Bill Gates pays billions less in tax, you'll pay thousands more in tax. Oh and don't forget, remember the money you already have (in the bank, in your Roth IRA, etc) that has been taxed once, be prepared to pay tax on it again if a sales tax is implemented. Won't that just be pleasant. You took the hit and pre-paid taxes on your Roth IRA, just to turn around and have to pay a higher tax rate when you cash it out and spend it.

 

[zephyrprime]

Originally posted by: Dissipate
Why can't us working stiffs earn our money in peace and spend our money in peace?

Ha ha. Why don't you go move to somalia where there's no real government and hence no taxes and tell me how well that works for you?

 

[Craig234]

The appeal to shift to a sales tax is playing on the naivete of many voters by getting them to think that 'those rich guys who buy yachts' would pay more, while they'd happily benefit by no longer paying income tax, because they don't realize how the extremely rich actually spend a far lower proportion of their income on consumption, even with the yachts.

It's another scam by the extremely wealthy.

 

[FoBoT]

i have a conflict of interest, therefore i espouse no opinion

 

[vi edit]

Originally posted by: dullard
In terms of what I think is the right tax:

Wealth tax > Death tax > Income tax >>> Sales tax.

However, wealth tax is the most difficult tax to implement. Also, with income tax, it is the ONLY tax where you have duplicate reporting. You report your income AND your employer reports your income. Checks and balances like that keep abuse and tax evasion to a minimum. No, it isn't perfect. But with the other taxes, the IRS just has to take the word of one person or one company and trust it with no possible way to verify it. Thus, I perfer this in practice:

Income tax > Death tax > Wealth tax >>> Sales tax.

A sales tax is the worst possible format for taxing people. What will a sales tax do? It'll be the biggest tax cut the wealthy have ever seen. They can go to a near 0% tax rate if they wanted to (just don't spend money on goods, but instead spend it on investments; or buy your stuff out of the country; etc). Who picks up the slack? The middle class. It would be the biggest tax increase the middle class in America has ever seen. When Bill Gates pays billions less in tax, you'll pay thousands more in tax. Oh and don't forget, remember the money you already have (in the bank, in your Roth IRA, etc) that has been taxed once, be prepared to pay tax on it again if a sales tax is implemented. Won't that just be pleasant. You took the hit and pre-paid taxes on your Roth IRA, just to turn around and have to pay a higher tax rate when you cash it out and spend it.

You also have to factor in the effect on the economy. We're a consumer nation. We work to buy crap we don't really need. The cost of non-essential items just automatically went up 7% (random number I'm throwing out as an assumed increase in sales tax) how much less would people buy?

A $1000 big screen TV just went up another $70. A $25,000 car now just cost you another $1,750. A $50 pair of pants is now another $3 more. $100 pair of shoes costs another $7. When you now have control over being taxed or not, will people actually start buying less? And if they do, what does that do to our current economy?

 

[palehorse]

all >>> Income taxes are not the problem. It's the IRS, and their convoluted income tax system, that is the problem.

dullard >>> there should be no such thing as a "death" or "inheritance" tax.

vi_edit >>> nano is a much better editor.

 

[theeedude]

Inheritance should just be classified as income, and treated as such.

 

[Mxylplyx]

Originally posted by: jackace
With how jaded most Americans are against taxes today if we went to a fully volunteer based tax system no one would be paying taxes and our government would crumble.

It's about time we hit the reset button on the U.S. government anyways.

 

[heartsurgeon]

i believe that generally, everyone's point of view can be accurately summed up as "raise someone else's taxes"

generally speaking, this is a myopic view about raising tax revenue.

total tax revenue is determined by the rates of taxation AND the size of the economy.

you can tax everyone at 100% and raise very little revenue if your economy (GDP) is small.

you can have a miniscule tax on an enormous economy, and raise lots of revenue.

the goal should be to find that level of taxation (and distribution) that minimizes the drag on the growth of the economy, and maximizes TOTAL TAX REVENUE.

The Lib/Dem?Lefty talking points have brainwashed people into believing the "size of the [economic] pie" is fixed, and that you have to raise taxes to raise tax revenue.

Well that's wrong. The economy grows, and it grows faster when income earners/generators/corporations are taxed less. And lo and behold, tax revenue GOES UP! even though tax rates go down...

Class warfare and ignorance, that's the Dem/Lib view of taxes....

there has been MORE tax revenue collected under current lower tax rates, than under the higher rates from before, and the DOW is at historic levels.

now i'm waiting for someone to tell me how crappy the economy is, and how bad the low tax rates are.....inspite of the facts...

 

[dullard]

Originally posted by: vi_edit
The cost of non-essential items just automatically went up 7% (random number I'm throwing out as an assumed increase in sales tax) how much less would people buy?

7% is way, way too low. Even under the best possible circumstances, many national sales tax plans call for more than that. For example the well-known "Fair Tax" plan proposes 23% sales tax rate. But if I recall correctly (there are so many plans it is hard to remember all of the details), that Fair Tax rate assumes the government slashes spending and/or somehow the sales tax drastically increases spending. If these don't happen, the national sales tax rate will go up to 30%+. Then add on your state income tax and ~7% state sales tax if you have them. Remember, you still have state income taxes in most areas, so you still have to do all the income tax forms and all the expenses related to that.

Originally posted by: palehorse74
all >>> Income taxes are not the problem. It's the IRS, and their convoluted income tax system, that is the problem.

dullard >>> there should be no such thing as a "death" or "inheritance" tax.

I agree the convoluted income tax system is a problem. But, I disagree on the death tax. I'd perfer NO taxes at all during my life and 100% tax on everything I have when I die. But that is just a personal opinion. If you enjoy paying taxes instead while you are alive, that is an ok opinion too. I just don't understand why you'd like that, but I'll accept it.

 

[vi edit]

Originally posted by: Shivetya

Fact : No company pays taxes. They collect taxes for the US Government from people who buy their products, people who are already taxed on that very same money.

I'm not a tax accountant, but I did work with about 20 of them and I'm pretty sure that the quarterly checks they wrote out to the state and year end closeout of the books and the big check they sent off to Uncle Sam wasn't out of courtesy.

I don't understand your statement of "no company pays taxes".

There are some work arounds where you can defer the tax burden to shareholders, but even then they are still responsible for paying capital gains on dividends and realized income through sales.

 

[dullard]

Originally posted by: heartsurgeon
The Lib/Dem?Lefty talking points have brainwashed people into believing the "size of the [economic] pie" is fixed, and that you have to raise taxes to raise tax revenue.

Well that's wrong. The economy grows, and it grows faster when income earners/generators/corporations are taxed less. And lo and behold, tax revenue GOES UP! even though tax rates go down...

That isn't a dem/liberal talking point. Instead, it is pure undeniable fact in half of the situations. Crude chart I made for another thread. If you have a 0% tax rate, the government generates no revenue (0% of a lot is $0). If you have a 100% tax rate, the government generates no revenue (no one would work, 100% of $0 is $0). Somewhere in between, there is a maximum revenue location (it may move depending on situaitons, but it is probably fairly stationary). There is no conceivable reason for there to be other local minimums or local maximums. So draw a graph (like the one I linked) and put on those 3 points. $0 at 0% tax, $0 at 100% tax, and a high $ amount at a middle tax rate. I'll let you choose where to put that high point as it doesn't matter for this thread.

If you are in the green side of my graph, lowering the tax rate will RAISE tax revenue. In that case, you are completely correct. We SHOULD in that case, lower the tax rate even though that means people pay more tax.

If you are in the yellow side of my graph, lowering the tax rate will LOWER tax revenue. In that case, you are completely incorrect. This situation isn't a dem/liberal thing, it is just a fact of math. We could in that case, raise tax and raise government revenue, but only if absolutely necessary.

The key is to determine if we are in the yellow portion or the green portion.

 

[Dissipate]

Originally posted by: zephyrprime

Originally posted by: Dissipate
Why can't us working stiffs earn our money in peace and spend our money in peace?

Ha ha. Why don't you go move to somalia where there's no real government and hence no taxes and tell me how well that works for you?

Somalia actually fared much better when it's government was toppled in 1991. They have had the lowest rates for cell phones and some of the best schools in Africa.

Text

 

[BoberFett]

Originally posted by: mfs378

Originally posted by: Shivetya

Originally posted by: jackace
As the title says. Why can't us working stiffs earn our money in peace and let the government tax us when we spend it on goods and services? Corporations do not pay an income tax. They pay taxes on profits after ALL exenses.

Edit- I still believe we need to pay taxes to support our government, but I would rather have a system that encourages saving and wise spending.

This poll has nothing to do with government spending and HOW they spend the money. It is just related to how they collect the money to pay taxes.

Fact : No company pays taxes. They collect taxes for the US Government from people who buy their products, people who are already taxed on that very same money.

The great lie that Congress likes to push is that they can raise taxes on corporations to ease the burden on the average citizen. Trouble is, that corporation gets its money from "average citizens" and if that corporation is sending more of the money it gets from the "average citizen" in the form of taxes to the government it only has a few ways to make it up. First is raising the price which directly passes the tax increase or indirectly if they "average citizen" buys products or services from the first company. Second is by paying less dividends directly affect investors (again average citizens). They could take a loss impacting their stock, thereby affecting the average citizens by decreased value of 401ks and such.


Congress knows that many Americans are ignorant and they are very skillful as pitting one group against another.

Couldn't you equally well argue that people don't pay taxes, they merely collect them from corporations and pass them on to the government?

The difference is that corporations produce nothing. Everything that corporations produce only comes about due to citizens. Corporations are just the face used to escape liability and taxes.

 

[BoberFett]

Originally posted by: heartsurgeon
the goal should be to find that level of taxation (and distribution) that minimizes the drag on the growth of the economy, and maximizes TOTAL TAX REVENUE.

Bull. The ideal level of taxation is only taxing that which is needed to run the required functions of government. What you described is the supply/demand function. I don't want my government seeing me as something to profit from.

 

[dullard]

Originally posted by: BoberFett
Bull. The ideal level of taxation is only taxing that which is needed to run the required functions of government. What you described is the supply/demand function. I don't want my government seeing me as something to profit from.

If you take heartsurgeon's suggestion literally, it means that he and Republicans want to get the most tax possible out of citizens. His words say that it doesn't matter that we are paying more money to the government, all that matters is the number label on the tax.

What a sad world that would be when Republicans argue that they want the most money possible to go to the government.

 

[CADsortaGUY]

Originally posted by: BoberFett

Originally posted by: heartsurgeon
the goal should be to find that level of taxation (and distribution) that minimizes the drag on the growth of the economy, and maximizes TOTAL TAX REVENUE.

Bull. The ideal level of taxation is only taxing that which is needed to run the required functions of government. What you described is the supply/demand function. I don't want my government seeing me as something to profit from.

Very true. However I think I could edit HS's comment to address that. "...minimizes the drag on the growth of the economy, and yet doesn't destroy TAX REVENUE."

As for dullards graph - Yes, it's true that o or 100 are produce no revenue but just because you allow someone to pick a percent and or $ figure doesn't mean the pie stays the same. You see, as the pie(GDP) increases it skews your curve and optimization point. It should also be noted that just because revenue is "optimized" doesn't mean it should all be collected and used by the government.

 

[dullard]

Originally posted by: CADsortaGUY
As for dullards graph - Yes, it's true that o or 100 are produce no revenue but just because you allow someone to pick a percent and or $ figure doesn't mean the pie stays the same. You see, as the pie(GDP) increases it skews your curve and optimization point. It should also be noted that just because revenue is "optimized" doesn't mean it should all be collected and used by the government.

I said it'll move a bit; but probably it will move far less than what you are thinking. Most of the time the whole chart moves up (if GDP grows) and down (if GDP shrinks), but the optimum tax rate is fairly steady. The optimum tax rate is more of a function of society's goals and less a function of current economic state or of government policies. We are talking about the location when someone says "I have enough stuff, and it isn't worth working harder for more". This point of diminishing returns is a very personal decision for every laborer, and for every business. Whether the economy is growing at 1% or at 4% has little effect on these personal decisions.

And reread my post. It clearly says if we are at too high of a tax rate, then we should lower it. And it clearly says if we are on the other side, we should only raise it if absolutely necessary. You make it sound like I wanted to find that optimum - and that statement is not true.

My main points from the post above:
(1) We should be on the left side of that graph, and if we aren't we should lower taxes to reach that point.
(2) Once we are on the left side, then Heartsurgeon's post is 100% incorrect. If we need more revenue, we have to raise taxes. I don't say we should raise taxes, but that is the most direct way to raise revenue in that situation.
(3) Pick an amount of money that we are to spend. If that amound of money is below the maximum on that chart, then it crosses the chart in two locations (one on the green side, and one on the yellow side). We should choose the yellow side of those two points.

Other important points, not specified above:
(4) We don't have to match government proceeds to spending exactly as #3 implies. But that is a darn good starting point. And we shouldn't vary too far from that point without a strong reason.

 

[CADsortaGUY]

Originally posted by: dullard

Originally posted by: CADsortaGUY
As for dullards graph - Yes, it's true that o or 100 are produce no revenue but just because you allow someone to pick a percent and or $ figure doesn't mean the pie stays the same. You see, as the pie(GDP) increases it skews your curve and optimization point. It should also be noted that just because revenue is "optimized" doesn't mean it should all be collected and used by the government.

I said it'll move a bit; but probably it will move far less than what you are thinking. Most of the time the whole chart moves up (if GDP grows) and down (if GDP shrinks), but the optimum tax rate is fairly steady. The optimum tax rate is more of a function of society's goals and less a function of current economic state or of government policies. We are talking about the location when someone says "I have enough stuff, and it isn't worth working harder for more". This point of diminishing returns is a very personal decision for every laborer, and for every business. Whether the economy is growing at 1% or at 4% has little effect on these personal decisions.

And reread my post. It clearly says if we are at too high of a tax rate, then we should lower it. And it clearly says if we are on the other side, we should only raise it if absolutely necessary. You make it sound like I wanted to find that optimum - and that statement is not true.

My main points from the post above:
(1) We should be on the left side of that graph, and if we aren't we should lower taxes to reach that point.
(2) Once we are on the left side, then Heartsurgeon's post is 100% incorrect. If we need more revenue, we have to raise taxes. I don't say we should raise taxes, but that is the most direct way to raise revenue in that situation.
(3) Pick an amount of money that we are to spend. If that amound of money is below the maximum on that chart, then it crosses the chart in two locations (one on the green side, and one on the yellow side). We should choose the yellow side of those two points.

Other important points, not specified above:
(4) We don't have to match government proceeds to spending exactly as #3 implies. But that is a darn good starting point. And we shouldn't vary too far from that point without a strong reason.

That's fine, I was addressing two different pieces of the discussion and probably mixed them a bit.

However, I still disagree with the yellow side raising to increase revenue. If you lower taxes in a way that sprus economic growth you can move the optimization point(that's what I'm going to call it) to the left(or rather raise the curve which will broaden it) which may put your revenue goal back in reach.

 

[dullard]

Originally posted by: CADsortaGUY
However, I still disagree with the yellow side raising to increase revenue. If you lower taxes in a way that sprus economic growth you can move the optimization point(that's what I'm going to call it) to the left(or rather raise the curve which will broaden it) which may put your revenue goal back in reach.

That argument, while it may be true, is overused. Most of the time, examples people bring up are just completely false. But I won't go as far as saying it won't happen.

Suppose your family brings in $50,000 per year (inflation adjusted it stays at $50,000). And you spend $50,000 per year (inflation adjusted). Thus, each year, your gross family product (GFP) is $50,000. Then one year you go out and get a $5,000 loan in addition to your normal $50,000 income. Guess what? Your family now spent $55,000 and your GFP soared up 10%! What a fantastic way to instantly boost how well your family does! Using this logic, you can get more and more loans each and every year and your total goods will increase every year! Sounds wonderful, that is, until you look at your loan bills piling up. Fundamentally, your families economy was still unchanged at just $50,000 a year.

Same goes with the government. We can borrow money (say by lowering taxes), and the GDP will go up. But that doesn't necessarilly mean the economy is fundamentally any better or that tax revenue will be any higher. We have to add in debt to the GDP picture to get anything meaningful. And yet, no one ever does this analysis when considering the effect of tax cuts.

Yes, you can make the economy APPEAR better using the commonly used measurements, but fundamentally, a tax cut often has no impact on the economy.

 

[Rogodin2]

My corporation for the last two years hasn't paid any federal tax, BUT my state department of revenue receives a monthly B&O and retail tax check.

Rogo

 

[CADsortaGUY]

Originally posted by: dullard

Originally posted by: CADsortaGUY
However, I still disagree with the yellow side raising to increase revenue. If you lower taxes in a way that sprus economic growth you can move the optimization point(that's what I'm going to call it) to the left(or rather raise the curve which will broaden it) which may put your revenue goal back in reach.

That argument, while it may be true, is overused. Most of the time, examples people bring up are just completely false. But I won't go as far as saying it won't happen.

Suppose your family brings in $50,000 per year (inflation adjusted it stays at $50,000). And you spend $50,000 per year (inflation adjusted). Thus, each year, your gross family product (GFP) is $50,000. Then one year you go out and get a $5,000 loan in addition to your normal $50,000 income. Guess what? Your family now spent $55,000 and your GFP soared up 10%! What a fantastic way to instantly boost how well your family does! Using this logic, you can get more and more loans each and every year and your total goods will increase every year! Sounds wonderful, that is, until you look at your loan bills piling up. Fundamentally, your families economy was still unchanged at just $50,000 a year.

Same goes with the government. We can borrow money (say by lowering taxes), and the GDP will go up. But that doesn't necessarilly mean the economy is fundamentally any better or that tax revenue will be any higher. We have to add in debt to the GDP picture to get anything meaningful. And yet, no one ever does this analysis when considering the effect of tax cuts.

Yes, you can make the economy APPEAR better using the commonly used measurements, but fundamentally, a tax cut often has no impact on the economy.

Uhh that analogy doesn't wash for one and then you'll have very little real company(except leftwing economists) backing up your last sentence.

Your analogy fails because taxcuts are not loans. Tax cuts are a reduction in rates being paid per whatever is being taxed. The resulting "extra" money is used a seen fit thus driving demand and economic growth. The only way your family analogy could even remotely relate is if that loan was for doing something that increased you income but that is still quite a stretch.

 

[dullard]

Originally posted by: CADsortaGUY
Your analogy fails because taxcuts are not loans. Tax cuts are a reduction in rates being paid per whatever is being taxed. The resulting "extra" money is used a seen fit thus driving demand and economic growth. The only way your family analogy could even remotely relate is if that loan was for doing something that increased you income but that is still quite a stretch.

If the government is at a revenue neutral point, and cuts taxes, then the government issues bonds (loans) to make up for it. Cutting taxes without cutting spending is borrowing money. Thus, the analogy is correct. It even works just fine for when the government is already in the red or black. Heck it works if the family uses the loan for education or blows it on veal and fish eggs.

A tax cut now means the government takes out a loan. And I would think you'd agree with me, that much of what the government does with its money usually isn't a good investment for the future. Most of what occurs is that the government tax cut, when combined with a bond loan, is money redistribution. Those with money (ie who buy bonds) have their money moved to others (ie people who recieved the tax cut). Moving money from one person to another, doesn't really create any new money to stimulate the economy. People who bought the bonds reduce consumption to pay for the bonds. People who received the tax cut increase consumption due to more money. It mostly offsets.

Or do you believe money/wealth redistribution is a strong way to stimulate the economy? If so, give me good reasons. And if those reasons are valid, should we focus on this redistribution far more than we do now?

 

[CADsortaGUY]

Originally posted by: dullard

Originally posted by: CADsortaGUY
Your analogy fails because taxcuts are not loans. Tax cuts are a reduction in rates being paid per whatever is being taxed. The resulting "extra" money is used a seen fit thus driving demand and economic growth. The only way your family analogy could even remotely relate is if that loan was for doing something that increased you income but that is still quite a stretch.

If the government is at a revenue neutral point, and cuts taxes, then the government issues bonds (loans) to make up for it. Cutting taxes without cutting spending is borrowing money. Thus, the analogy is correct. It even works just fine for when the government is already in the red or black. Heck it works if the family uses the loan for education or blows it on veal and fish eggs.

A tax cut now means the government takes out a loan. And I would think you'd agree with me, that much of what the government does with its money usually isn't a good investment for the future. Most of what occurs is that the government tax cut, when combined with a bond loan, is money redistribution. Those with money (ie who buy bonds) have their money moved to others (ie people who recieved the tax cut). Moving money from one person to another, doesn't really create any new money to stimulate the economy. People who bought the bonds reduce consumption to pay for the bonds. People who received the tax cut increase consumption due to more money. It mostly offsets.

Or do you believe money/wealth redistribution is a strong way to stimulate the economy? If so, give me good reasons. And if those reasons are valid, should we focus on this redistribution far more than we do now?

No tax cuts are not loans. Never have been and never will be. IF the gov't spends beyond their revenue and issues bonds - that is a seperate issue. You see, tax-cuts don't have a "cost" - spending does. It "costs" when you SPEND.

No, I don't think the redistribution of money is a good way to spur the economy - that's why I want people to be able to keep more of their own money so THEY can choose what to invest in or buy(which spurs the economy).

 

[bctbct]

I would like to see the mortgage deduction go away. The amount of relief you receive is based on the lifestyle you want to live....I am tired of paying for that. Get a mortagage you can afford on your own.