POLL: How would you rather be taxed?

[Zenmervolt]

<<Therefore it would be extremely unfair if the US was change to a flat rate tax. Rich people would pay almost nothing after deductions and claims while everyone else pay the same.>>

Simple fix: No deductions. A flat tax is exactly that, flat. Everyone pays a fixed percentage. Period. You want a deduction? Too bad. I'm in favor of a flat tax with no deductions paid yearly. The problem with a sales tax is that is disproportionally hits poorer people. They don't pay more money, but since everybody buys the staple items for modern life (bread, milk, butter, etc) then the poorer persons end up paying a greater percentage of income in sales tax. Now, if we could work out which items were to be taxed (for example, don't tax the staple items, but tax only "luxury" items) then we're once again into the wealth redistribution programs which aren't good at all. A flat income tax is, IMO, the most fair means of financing the government because all groups pay the same percentage of income.

ZV

 

[b0mbrman]

<< Get rid of the income tax and switch to a national sales tax.
It's less intrusive, requires less paperwork and tax code (so it's simpler), and is absolutely fair. >>


Yes *and* we also get to collect off illegal immigrants

 

[Geekbabe]

Anything would be better than what we have now, even with a CPA it's still confusing as hell !

Between Quickbooks, the ever growing piles of receipts and the daily business journel..oy, my head hurts sometimes !!

I really wish things were simpler so that I could concentrate more on what I do best instead of the endless number crunching and bookkeeping required to pay the taxman his his cut !

 

[hans007]

flat tax. down with social engineering.


besides we could lay off the entire IRS and save billions.

 

[Platinum]

Sorry about the confusion Skoorb...your italics ended before that quote...but back to your example. Of course, writing it off to a charity will make you lose more money. But what if you're giving 100,000 to a politician(I forgot what the cap is so don't bomb me on that pls) and writing it off as a "gift". You save taxes, then the politician, in return, gives your company some sort of monetary relief. Its scams like these I'm referring to when I say rich people get breaks.

 

[vi edit]

<< Not sure if this is your quote or you're quoting the other guy...but how can I, for example, donate 100,000 to charity so I can write it off if I don't have that much? Sure, everyone has "access" to loopholes, but most of these people do not have money to fully utilize them like rich people can. >>



Fairly simple, assuming you are fairly handy/inventive.

Just set yourself up as self employed - Find something you are good at, and then sell your services out of your home.

This way you get to claim a percent of your monthly mortgage/rent, utilities, and property tax off each month. You can also depreciate your house as well. These things combined can add up to thousands of dollars a year in tax reducers. Works well for a couple years, until you have to post a profit

Other things are donating old clothes, furniature, and toys to charity like goodwill. You can claim hundreds of $$ in charitable donations, just by cleaning out your closet.

 

[Geekbabe]

<<

<< Not sure if this is your quote or you're quoting the other guy...but how can I, for example, donate 100,000 to charity so I can write it off if I don't have that much? Sure, everyone has "access" to loopholes, but most of these people do not have money to fully utilize them like rich people can. >>



Fairly simple, assuming you are fairly handy/inventive.

Just set yourself up as self employed - Find something you are good at, and then sell your services out of your home.

This way you get to claim a percent of your monthly mortgage/rent, utilities, and property tax off each month. You can also depreciate your house as well. These things combined can add up to thousands of dollars a year in tax reducers. Works well for a couple years, until you have to post a profit

Other things are donating old clothes, furniature, and toys to charity like goodwill. You can claim hundreds of $$ in charitable donations, just by cleaning out your closet. >>




He can do all that,but he best be sure to get a really good CPA to advise him on the documentation he'll need to keep because the rules about deductions for business run
out of the home are pretty strict.

 

[StageLeft]

<< Sorry about the confusion Skoorb...your italics ended before that quote...but back to your example. Of course, writing it off to a charity will make you lose more money. But what if you're giving 100,000 to a politician(I forgot what the cap is so don't bomb me on that pls) and writing it off as a "gift". You save taxes, then the politician, in return, gives your company some sort of monetary relief. Its scams like these I'm referring to when I say rich people get breaks. >>

Yeah well now you're talking about criminal activites then

 

[Platinum]

Fairly simple, assuming you are fairly handy/inventive.

Just set yourself up as self employed - Find something you are good at, and then sell your services out of your home.

This way you get to claim a percent of your monthly mortgage/rent, utilities, and property tax off each month. You can also depreciate your house as well. These things combined can add up to thousands of
dollars a year in tax reducers. Works well for a couple years, until you have to post a profit

Other things are donating old clothes, furniature, and toys to charity like goodwill. You can claim hundreds of $$ in charitable donations, just by cleaning out your closet.

Well, my assumption was based on the "average person" so he/she is probally an ordinary 9-5 worker with no inventive creativity

So let's say your theory work, it would only help a few "inventive" person. One other thing...everyone keep saying flat rate tax is fair and nice...I don't mind paying flat rate if its LESS than what i'm paying now. How would you all feel if the flat rate is, let's say 30% of ALL your income? (Assuming you make less than 100g a year)

 

[vi edit]

<< So let's say your theory work, it would only help a few "inventive" person. One other thing...everyone keep saying flat rate tax is fair and nice...I don't mind paying flat rate if its LESS than what i'm paying now. How would you all feel if the flat rate is, let's say 30% of ALL your income? (Assuming you make less than 100g a year) >>



That would never happen. When Forbes was running for presidency and pushing his flat tax rate, I think he was shooting for around 16%. After my deductions, that's still lower than I'd currently be paying.

 

[Platinum]

Yeah well now you're talking about criminal activites then

Ok, how about this example...what if a person living in New York bought a house and have to pay state income tax. That person (rich) then goes buy a house in Texas, where there is NO state income tax, and claims his residence there. That person just avoided tax because he's rich AND he get's a condo in which he can charge rent to his friend or someone for like 6 months, cuz I believe as long as you live in a domicile for 6 months a year, you can claim that as your residence. George W. Bush sr did this...

 

[vi edit]

<< Yeah well now you're talking about criminal activites then

Ok, how about this example...what if a person living in New York bought a house and have to pay state income tax. That person (rich) then goes buy a house in Texas, where there is NO state income tax, and claims his residence there. That person just avoided tax because he's rich AND he get's a condo in which he can charge rent to his friend or someone for like 6 months, cuz I believe as long as you live in a domicile for 6 months a year, you can claim that as your residence. George W. Bush sr did this... >>



Quite a few people do this actually, members of armed services being one of the biggest "abusers" I believe. That, and I'm sure there's quite a bit of it going on in border states like MN and SD.

 

[Platinum]

That would never happen. When Forbes was running for presidency and pushing his flat tax rate, I think he was shooting for around 16%. After my deductions, that's still lower than I'd currently be paying.

I guess what I'm trying to say is...since US is a democratic country, meaning majority rules...if flat tax rate is gonna hurt more people than help, we should just stick to the current progressive rate.

 

[CPA]

I wonder if some of you have ever heard of Alternative Minimum Tax (AMT). Basically, once you reach a certain Adjusted Gross Income (AGI) your deductions are reduced significantly. Most wealthy people take care of their own outside of the income tax filings. for example, trusts, options and other tax sheltered vehicles.

Additionally, the top 5% of all wage earners in this country pay 95% of all taxes. 80K will get you into the top 5%. I don't consider someone making 80K rich.

Finally, I am all for a system, whether flat or sales tax, that doesn't allow people to receive more money back than the paid in, also known as the Earned Income Credit. What a scam that is. Redistribution of wealth is a tenet of communism, not capitalism.

 

[vi edit]

etech, posted this in the "other" tax thread. I personally think that it is one of the best tax plans we could implement.

I like the idea of a flat tax only I would add one exemption. X amount of dollars of income would not be taxed.

Assume X is $20,000 and the flat tax is 10%.

Income of $25,000, you pay 10% of $5,000.
Income of $250,000, you pay 10% of $230,000.

Simple and efficient.

 

[Platinum]

Additionally, the top 5% of all wage earners in this country pay 95% of all taxes. 80K will get you into the top 5%. I don't consider someone making 80K rich.

Really? I always thought it was much higher, like somewhere in the 150k area to get to the top 5%.

etech, posted this in the "other" tax thread. I personally think that it is one of the best tax plans we could implement.

But what difference is this than a flat tax? Other than the fact that you sorta have a "standard deduction" of x amount from your income.

 

[vi edit]

<< But what difference is this than a flat tax? Other than the fact that you sorta have a "standard deduction" of x amount from your income. >>



It basically prevents the poor from getting screwed over, and it helps out the middle class quite a bit by giving them a break.

 

[Platinum]

It basically prevents the poor from getting screwed over, and it helps out the middle class quite a bit by giving them a break.

Well, if your concern is for poor people not to get screw over, then an increase on the standard deduction for the current progressive tax rate will do the trick.

I feel that progressive system is pretty fair as is. I mean, everyone pays the same for the first 25-26g that they make. Think about this...let's say we switch to a flat rate plan and we keep the tax revenue going to the IRS the same. If, according to CPA, only 5% of the people are paying for 95% of the revenue, we would have to raise the flat rate to a much higher rate than what the other 95% of the people are currently paying. That doesn't sound very democratic. Sure 5% of the population would be happy that they know they aren't supporting some lazy @ss's welfare check, but the other 95% of the people will suffer due to this.

 

[CPA]

<< Additionally, the top 5% of all wage earners in this country pay 95% of all taxes. 80K will get you into the top 5%. I don't consider someone making 80K rich.

Really? I always thought it was much higher, like somewhere in the 150k area to get to the top 5%.

. >>



I clearly recall hearing that figure on a radio show which was discussing tax issues on afternoon. Granted it was several years ago. But I recall being quite suprised that my household was close to being considered in the top 5% of all wage earners.

 

[mithrandir2001]

The chance of a flat tax happening is pretty much nil. You cannot get rid of the mortgage interest deduction. If you did, the entire housing market would collapse from declining real estate asset values and it would create tremendous harm for our economy. If you kept the interest deduction, then the flat tax rate would have to be around 25%. Since this isn't much less than what the majority of people pay now, there isn't much populist fervor for a flat tax. The people who want it most are the truly affluent types would pay far fewer taxes.

I would keep the progressive tax system but would rewrite it from scratch, creating fewer brackets and a lower top-end rate. I would put emphasis, however, on reeling back government spending because the less the government needs, the less it has to tax and the easier it would be to gain support for a new tax system.

 

[ThaGrandCow]

<< How about not the hell at all? >>

Ok, fine. Say goodbye to roads, cops, military, and prettymuch everything that keeps us out of the same level as the afghanis.

 

[shifrbv]

I think we need to curb back the federal portion of taxes and shift most of it off to the states. It's easier to control and influence on a local level than a national level.

As far as:

Then who would pay for roads, police, street lights, etc?

It could go back to the way it used to be. If you used these items, you paid for them. Roads used to be "toll roads" for many years in the US. They were private enterprises. It seems that since the government has got involved in alot of things, they haven't made much of a difference. Amtrak was a complete bust. Most roads and bridges are collapsing and in need of repair. Education is in shambles and it seems like the only thing we have to show for most of this stuff is alot of dead weight.

We need to go back to the way it used to be where people dealt with matters on a community level and most had no contact with the federal government outside of the post office.

 

[charrison]

current tax stats.

120k a year gets you in the top 5%. This group pays 55% of all income taxes.
100k gets you in the top 10%
26k gets you in the top 50% this groups pays 96% of all taxes.
the bottom 50% pay 4% with over 13Million getting back more than they paid in(upto $3500) via EITC.


The lower 50% can easily outvote the upper 50% on how to spend the tax dollars. The lower 1/2 pays almost nothing in taxes.

 

[charrison]

Platinum,

That almost sounds resonable until you realize that texas has heavy property tax(almost 3% in county I live). I welcome out of staters to come buy a 300k house here in Texas and live somewhere else

 

[hans007]

yeah taht is the problem is there are so many people who dont pay jack , that they can outvote the rest. Personally the flat tax from studies by economist would supposedly boost the economy since people would work harder since they wouldnt get screwed and spend more, since they 'd have more money.

i really think its unfair, then again i plan to be rich someday, but well i'll have earned it which is why its unfair.