My plan to fix the economy:

[alkemyst]

Corporations get taxed on their profit (net income), not gross income. But individuals are taxed on gross income. The way I see it, people shouldn't be taxed on the money they need for food and shelter the same way a corporation isn't taxed for the money they spent on raw supplies to make their products (for example, along with a lot of other things). Of course, you can't expect people to write off all their vital expenses, and there'd still have to be a limit to this, since you can spend a lot more than you need on a food, shelter, clothes, etc. That's why there isn't some flat tax for everyone, people making poverty levels shouldn't fork over 15% of what's already too little to spend on what they need.

In a lot of countries, the first X amount you make is simply not taxed, and there's a flat rate above that. X varies depending on the size of your household. Taxes here effectively do this as well with earned income credits, but managing this is a big hassle. It'd be a lot better if these people didn't have to file at all. I suppose there'd still be the complication of people being too dumb to know how much money they made without something guiding them through it.

One other issue is that cost of living varies a lot from location to location, so I would prefer that the cut-off you have to pay taxes on also varies with location in addition to number of dependents.

This is what the standard and itemized deductions cover. Everyone gets a break on income right off the bat.

 

[Incorruptible]

This is about 90% of the problem that will prevent us from reaching a fair tax.

The rich and poor both want their entitlements while paying the least possible.

The poor seem to want to punish the rich with taxes.

The rich want to limit the entitlements to the poor by capping them on time or totals.

Add in the bipartisan clusterfu*k that becomes almost gang-like in mentality and we are going nowhere fast.

Meanwhile the middle class gets crushed by both sides.

The poor have no right to other peoples money so entitlement do need to be reformed and cut.

The rich have no right to money from the middle class so stop the endless printing of money and corporate welfare/subsidies. Also reform the tax system with a flat tax.

 

[alkemyst]

The poor have no right to other peoples money so entitlement do need to be reformed and cut.

The rich have no right to money from the middle class so stop the endless printing of money and corporate welfare/subsidies. Also reform the tax system with a flat tax.

Your argument is flawed based on the fact that through taxes (however most of this is local tax than federal) is how someone can use / have roads, schools, libraries, etc built.

Once you have socialistic aspects in play, the hot potato game starts to push holding the problem to someone else.

 

[Exophase]

This is what the standard and itemized deductions cover. Everyone gets a break on income right off the bat.

Yes, I referred to it but I should have said standard deductions instead of only EITC. What I'm trying to say is that a) determining the number should be a lot simpler and b) if you make below this you shouldn't have to file. AFAIK this is closer to what a lot of other countries do.

That'd also mean this whole business of your employer withholding money which you then file to get a refund on should end.

 

[alkemyst]

Yes, I referred to it but I should have said standard deductions instead of only EITC. What I'm trying to say is that a) determining the number should be a lot simpler and b) if you make below this you shouldn't have to file. AFAIK this is closer to what a lot of other countries do.

That'd also mean this whole business of your employer withholding money which you then file to get a refund on should end.

In general, it's best to always file; however; if you don't owe taxes a lot of times you can get by without doing so.

Withholding is there because too many would not have the tax money come April 15th. Even with withholding many have to go on payment plans.

Would you have all these people thrown in jail if they can't pay?

 

[Exophase]

In general, it's best to always file; however; if you don't owe taxes a lot of times you can get by without doing so.

The cutoff for not needing to file is very low, only $10k for single status. I think the minimum for where you shouldn't have to pay taxes and shouldn't have to file should be a lot higher than that.

Withholding is there because too many would not have the tax money come April 15th. Even with withholding many have to go on payment plans.

Would you have all these people thrown in jail if they can't pay?

You're right, people have a really serious problem with money where they can't put it aside. Maybe the employer could privately withhold it then supply it to you to pay your taxes, if necessary.

But no, I don't think they should be thrown in jail, the same way people who are self-employed but haven't paid taxes aren't usually thrown in jail but instead heavily fined. And possibly have their wages and/or bank account garnished in the future.

 

[ElFenix]

Yes, I referred to it but I should have said standard deductions instead of only EITC. What I'm trying to say is that a) determining the number should be a lot simpler and b) if you make below this you shouldn't have to file. AFAIK this is closer to what a lot of other countries do.

That'd also mean this whole business of your employer withholding money which you then file to get a refund on should end.

eh? you don't have to file if you make below $10,000 as an individual. also, determining standard deduction and number of exemptions is dead simple. it's all the other crap that's complicated.

But no, I don't think they should be thrown in jail, the same way people who are self-employed but haven't paid taxes aren't usually thrown in jail but instead heavily fined. And possibly have their wages and/or bank account garnished in the future.

how many people are actually thrown in jail for simply not paying taxes?

 

[alkemyst]

The cutoff for not needing to file is very low, only $10k for single status. I think the minimum for where you shouldn't have to pay taxes and shouldn't have to file should be a lot higher than that.

http://www.irs.gov/Individuals/Do-You-Need-to-File-a-Federal-Income-Tax-Return?-

I was not aware of W2 income being a basis for not filing.

You're right, people have a really serious problem with money where they can't put it aside. Maybe the employer could privately withhold it then supply it to you to pay your taxes, if necessary.

Dangerous if that employer files their own bankruptcy or skips town.

But no, I don't think they should be thrown in jail, the same way people who are self-employed but haven't paid taxes aren't usually thrown in jail but instead heavily fined. And possibly have their wages and/or bank account garnished in the future.

Most that can't pay their taxes couldn't pay the fines either.

You have good ideas, but these have been hashed out already by many.

 

[ElFenix]

http://www.irs.gov/Individuals/Do-You-Need-to-File-a-Federal-Income-Tax-Return?-

I was not aware of W2 income being a basis for not filing.

page 6 and 7 of this year's 1040 instructions

 

[Incorruptible]

The most important things to be done to fix the economy would be cutting spending, taxes and freeing up the market to create jobs but this isn't going to happen though.

 

[Exophase]

eh? you don't have to file if you make below $10,000 as an individual. also, determining standard deduction and number of exemptions is dead simple. it's all the other crap that's complicated.

Odd that you responded to this and then the followup where I addressed it..

how many people are actually thrown in jail for simply not paying taxes?

That's what I was saying. I think you misinterpreted my response here. When I said "the same way" I'm referring to people not being thrown in jail, not people being thrown in jail.