Ted Cruz Rises to The Top in Polls

[glenn1]

I already said that I was for a system of increased progressivity. Why did you not bother to read the initial post you replied to? Maybe instead of other people not being truthful you are incompetent.



What you just said is that you think one of the greatest benefits of a flat tax is that poor people pay a larger portion of their income in taxes than rich people do, despite the declining marginal value of money. I find that to be a forehead-slapping level of stupidity as far as public policy goes.

The idea that poor people have no skin in the game is in large part a conservative fantasy, as they focus exclusively on federal income taxes instead of total tax/fee burden. I don't know about your wallet, but mine doesn't seem to care which entity my tax dollars go to.

That's why I specifically said federal income taxes in my post. That your locality/state decides to sales tax you at exorbitant rates is moot when talking about federal taxes. Plus it's doubly stupid as in our crazy ass tax system states like yours are subsidized by the federal government tax system as people with greater incomes like yours can itemize the higher local taxes on your federal return. Thus the middle class in low tax burden states get triply fucked over by your preference. If you want a more progressive tax system start with removing this benefit for blue staters like you since the state tax deduction most benefits the affluent - those with incomes exceeding $100,000 (top 11% of taxpayers) claimed nearly 60 percent of the value of that deduction in 2005.

 

[fskimospy]

That's why I specifically said federal income taxes in my post. That your locality/state decides to sales tax you at exorbitant rates is moot when talking about federal taxes. Plus it's doubly stupid as in our crazy ass tax system states like yours are subsidized by the federal government tax system as people with greater incomes like yours can itemize the higher local taxes on your federal return. Thus the middle class in low tax burden states get triply fucked over by your preference. If you want a more progressive tax system start with removing this benefit for blue staters like you since the state tax deduction most benefits the affluent - those with incomes exceeding $100,000 (top 11% of taxpayers) claimed nearly 60 percent of the value of that deduction in 2005.

I agree that the federal deduction for state taxes paid and the mortgage interest deduction should both be eliminated. They are inefficient.

Of course I could always put on my glenn hat for a minute and say 'sounds like a personal problem. If people want to take advantage of that they are free to come to a high income tax state!'. Not really for me though.

 

[Sheik Yerbouti]

like a bigger turd floating the to the top of a septic tank.

 

[glenn1]

I agree that the federal deduction for state taxes paid and the mortgage interest deduction should both be eliminated. They are inefficient.

Of course I could always put on my glenn hat for a minute and say 'sounds like a personal problem. If people want to take advantage of that they are free to come to a high income tax state!'. Not really for me though.

Inefficiency has nothing to do with it, it's stupid and wrong.

If you have two otherwise equal people making $50k their federal income tax burden should be identical whether they live in Manhattan NY or Manhattan KS, but subsidizing state tax burdens means that is not the case.

 

[fskimospy]

Inefficiency has nothing to do with it, it's stupid and wrong.

Inefficiency has everything to do with it. That's why it's stupid.

If you have two otherwise equal people making $50k their federal income tax burden should be identical whether they live in Manhattan NY or Manhattan KS, but subsidizing state tax burdens means that is not the case.

I'm not necessarily sure that they should have an identical federal tax burden, but for the sake of argument I'll agree with you on that part. Now let's get to eliminating that stupid mortgage interest deduction, right?

 

[cliftonite]

Inefficiency has everything to do with it. That's why it's stupid.



I'm not necessarily sure that they should have an identical federal tax burden, but for the sake of argument I'll agree with you on that part. Now let's get to eliminating that stupid mortgage interest deduction, right?

Looks like the cost for the mortgage deduction would be ~70 billion and the cost for state income tax ~90 billion. Since his argument is applicable to both, I guess both should be eliminated.

 

[s0me0nesmind1]

Inefficiency has nothing to do with it, it's stupid and wrong.

If you have two otherwise equal people making $50k their federal income tax burden should be identical whether they live in Manhattan NY or Manhattan KS, but subsidizing state tax burdens means that is not the case.

I don't quite see a problem with it.

Personally, I live by the simple notion that a taxed dollar is a dollar that has been taxed. It should NOT be taxed again. Hence, things like death taxes need to be done away with. When someone dies the last thing that should bring (other than sorrow) is the tax collector looking for excise taxes.

Everyone benefits from the deductions though.

States pick different poisons for generating their revenue:
1) High Income Tax (CA, for example)
2) High Property Taxes (IL, TX for example)
3) High State Sales Tax

Each one of those 3 state related taxes have states that are at 0% or much lower than others (property taxes)

NOMAD - The 5 states without sales tax (New Hampshire, Oregon, Montana, Alaska, Delaware).
~8 States without Income tax
States with < 1% Property tax, etc..

Each of those 3 has a deduction for income taxes, so I guess my point is that everyone can take advantage of those deductions.

 

[glenn1]

Looks like the cost for the mortgage deduction would be ~70 billion and the cost for state income tax ~90 billion. Since his argument is applicable to both, I guess both should be eliminated.

Yes, completely on board with the mortgage interest deduction being done away with, along with deductions for education loans and other consumption based activities. Your tax bill shouldn't depend on knowing what other taxes you pay, or what purchases you make.

Now if you want to talk about a VAT system as a complete replacement of taxes on capital gains and other investment gains then I'm all ears because that truly is an inefficient and distortion causing tax system. There should be rough parity in the tax burden of both those who are primarily savers and primarily consumers since both are largely a function of age/lifecyle.

 

[fskimospy]

I don't quite see a problem with it.

Personally, I live by the simple notion that a taxed dollar is a dollar that has been taxed. It should NOT be taxed again. Hence, things like death taxes need to be done away with. When someone dies the last thing that should bring (other than sorrow) is the tax collector looking for excise taxes.

Well I mean every dollar is taxed multiple times. You are taxed on it when you make it in income and you pay the tax when you buy something with it.

The issue here is that states with high income taxes are in effect being subsidized by states with lower ones, and state taxes seem like a strange thing for the feds to subsidize, no? I don't see any benefit in it.

 

[s0me0nesmind1]

Well I mean every dollar is taxed multiple times. You are taxed on it when you make it in income and you pay the tax when you buy something with it.

The issue here is that states with high income taxes are in effect being subsidized by states with lower ones, and state taxes seem like a strange thing for the feds to subsidize, no? I don't see any benefit in it.

Eh, the ones that are likely to have the higher taxes (CA, NY) are likely to have more income to pay for such high taxes. So in reality, they will be paying for it in their progressive income tax anyhow. Hence why ~$120k in areas of California is equivalent to ~$60k in my area.

Overall though, I agree. Feel free to scrap it all. I have high property taxes, but my house is so low-cost in my state that even if I pay our house taxes TWICE, add in my sales taxes, mortgage interest... I STILL can't get past the married standard deduction =[

 

[fskimospy]

Eh, the ones that are likely to have the higher taxes (CA, NY) are likely to have more income to pay for such high taxes. So in reality, they will be paying for it in their progressive income tax anyhow.

But that's the thing, those high taxes are being made lower by the federal government by allowing people to deduct what they pay in them. It's a subsidy.

Hence why ~$120k in areas of California is equivalent to ~$60k in my area.

I'm pretty sure that has almost nothing to do with tax rates and almost everything to do with property values.

Overall though, I agree. Feel free to scrap it all. I have high property taxes, but my house is so low-cost in my state that even if I pay our house taxes TWICE, add in my sales taxes, mortgage interest... I STILL can't get past the married standard deduction =[

Sounds like a good problem to have, really, haha.

 

[kage69]

I don't understand how he reconciles this with his Tea Party image.

Clearly a gotcha question! What's wrong with you?

Expecting any of the GOP hopefuls to substantiate their positions and make sense means you love the lame stream media and their softball questions, probably hate Merica too.

 

[Brian Stirling]

It's hard for me to imagine how his tax plan would do anything other than blow a huge hole in the budget. We would experience massive deficits if implemented as described, ones that I can think of no plausible way he would close by cutting spending.

I'm actually totally in favor of a national VAT to replace the income tax, but it has to be implemented responsibly and this one is not.

How would this VAT be implemented? If it's revenue neutral and the same rate for everyone then all this does is lower the taxes on the wealthy and raise them for everyone else as every sales type tax is regressive. I doubt you'd be in favor of that so perhaps you can enlighten me as to how this is suppose to work without raising the net taxes of the poor and middle class.

One of the things that gets missed in the tax issue when talking about the 47% that don't pay taxes is that they do pay taxes in the form of sales taxes and licensing fees etc. In fact, in states like Florida and Nevada where there is no state income tax the state compensates by having very high licensing fees. They still need to cover the costs for roads and police etc and without a progressive income tax the end result is a collection of regressive sales taxes and fees.


Brian

 

[s0me0nesmind1]

How would this VAT be implemented? If it's revenue neutral and the same rate for everyone then all this does is lower the taxes on the wealthy and raise them for everyone else as every sales type tax is regressive. I doubt you'd be in favor of that so perhaps you can enlighten me as to how this is suppose to work without raising the net taxes of the poor and middle class.

One of the things that gets missed in the tax issue when talking about the 47% that don't pay taxes is that they do pay taxes in the form of sales taxes and licensing fees etc. In fact, in states like Florida and Nevada where there is no state income tax the state compensates by having very high licensing fees. They still need to cover the costs for roads and police etc and without a progressive income tax the end result is a collection of regressive sales taxes and fees.


Brian

State/Local Sales Tax != Federal Taxes

Please never equate the two. One can contribute to our national debt that is under crisis (and all the systems under it such as SS, Medicare, Medicaid, etc..) and the other funds State/Local. HUGE difference.

If we want out of the crisis that we are currently in, we need to turn that 47% of takers into giving at least SOME amount of contribution. It's one thing to complain about people paying way less taxes than others (which is already bad enough), but when 47% of this nation is TAKING from what the other 53% is giving, how the fuck do you think that is in anyway sustainable?

 

[fskimospy]

How would this VAT be implemented? If it's revenue neutral and the same rate for everyone then all this does is lower the taxes on the wealthy and raise them for everyone else as every sales type tax is regressive. I doubt you'd be in favor of that so perhaps you can enlighten me as to how this is suppose to work without raising the net taxes of the poor and middle class.

As I mentioned earlier it's implemented in a way that maintains the progressive nature of our current system through a 'prebate'. Basically you get money from the government every year that covers the VAT for the first say, $40,000 of consumption you make. (totally made up number). That means in effect you pay $0 in taxes for your first $40k in purchases and then you pay the 30% VAT (made up number) on everything from that point on up. By adjusting the amount of money that's prebated you adjust the progressivity of the system because if you only make/spend $40,000 a year under this scheme you pay $0 in VAT but if you make/spend $200,000 that year you pay ~$48,000 in VAT.

One of the things that gets missed in the tax issue when talking about the 47% that don't pay taxes is that they do pay taxes in the form of sales taxes and licensing fees etc. In fact, in states like Florida and Nevada where there is no state income tax the state compensates by having very high licensing fees. They still need to cover the costs for roads and police etc and without a progressive income tax the end result is a collection of regressive sales taxes and fees.

Brian

Yep. State politicians have gotten very good at hiding taxes in other things.

 

[fskimospy]

State/Local Sales Tax != Federal Taxes

Please never equate the two. One can contribute to our national debt that is under crisis (and all the systems under it such as SS, Medicare, Medicaid, etc..) and the other funds State/Local. HUGE difference.

If we want out of the crisis that we are currently in, we need to turn that 47% of takers into giving at least SOME amount of contribution. It's one thing to complain about people paying way less taxes than others (which is already bad enough), but when 47% of this nation is TAKING from what the other 53% is giving, how the fuck do you think that is in anyway sustainable?

This won't change a thing, as the bottom 47% don't comprise a large enough part of the national income to matter. (the bottom 40% or so of incomes earn about 11% of the national income. Taxing them isn't going to do shit other than make their lives miserable.)

There is simply no rational reason to base our evaluation of an individual's stake in society based on their level of contribution to the federal income tax which is simply one tax/fee among many. When the modern income tax originated in 1916 almost nobody but the highest earners paid any meaningful amount so your numbers would be something like 'ONLY 5% OF PEOPLE ARE PAYING FOR EVERYONE ELSE', yet we got along just fine. It's just not a particularly relevant number.

 

[bshole]

This won't change a thing, as the bottom 47% don't comprise a large enough part of the national income to matter. (the bottom 40% or so of incomes earn about 11% of the national income. Taxing them isn't going to do shit other than make their lives miserable.)

Um rigggghhht. Because you really really care about the poor. Never mind that you whole heartedly support a vicious regressive energy tax that will up the energy rates on poor Wisconsinites by up to 25% (nearly $1K in disposable income erased). Wisconsin is suing the federal government over this because we actually DO CARE about the poor and don't just pay sanctimonious lip service to it as you are doing.

 

[ElFenix]

That's why I specifically said federal income taxes in my post. That your locality/state decides to sales tax you at exorbitant rates is moot when talking about federal taxes.

federal personal income taxes don't collect that much more revenue than federal payroll taxes at this point.

i love how people intentionally leave out federal payroll taxes in order to claim the poors don't pay taxes.

like this guy

If we want out of the crisis that we are currently in, we need to turn that 47% of takers into giving at least SOME amount of contribution.

 

[Brian Stirling]

As I mentioned earlier it's implemented in a way that maintains the progressive nature of our current system through a 'prebate'. Basically you get money from the government every year that covers the VAT for the first say, $40,000 of consumption you make. (totally made up number). That means in effect you pay $0 in taxes for your first $40k in purchases and then you pay the 30% VAT (made up number) on everything from that point on up. By adjusting the amount of money that's prebated you adjust the progressivity of the system because if you only make/spend $40,000 a year under this scheme you pay $0 in VAT but if you make/spend $200,000 that year you pay ~$48,000 in VAT.



Yep. State politicians have gotten very good at hiding taxes in other things.

I'm not in principle against a national sales tax. In fact, an adjustable sales tax could be a better way to control inflation than raising/lowering the fed rate. If the bottom rate was lowered and/or the standard deduction increased and the difference made up with a national sales tax it would be easier to adjust that rate than the withholding tables. When times are good the rate would be raised to pay down the debt, but when times are not so good the rate is lowered to spur consumption. I think this is a better inflation control than changing the fed rate.

For this to work the adjustments need to be automatic. Add in some smarts in a predictive way and you could eliminate a problem before it manifests itself.


Brian

 

[Jhhnn]

Personally, I live by the simple notion that a taxed dollar is a dollar that has been taxed. It should NOT be taxed again. Hence, things like death taxes need to be done away with.

Hogwash. That leaves capital gains on investment & property appreciation bequeathed through inheritance totally un-taxed for people who've done nothing to earn it.

 

[Jhhnn]

Ted Cruz? I love it. America's conservatives apparently put on beer goggles whenever they're looking for Mr Right, Mr Rick Parry.

 

[s0me0nesmind1]

federal personal income taxes don't collect that much more revenue than federal payroll taxes at this point.

i love how people intentionally leave out federal payroll taxes in order to claim the poors don't pay taxes.

like this guy

Yes, because Social Security tax and Medicare tax is the equivalency to Income Tax 🙄

Because, people don't take more out of Social Security than they put in, right? That's certainly not why we are having huge issues as an impending doom clock is counting down for when Social Security runs out of money, right?

 

[Fanatical Meat]

Or we could go the Bush/Trump way....I say Trump because he essentially took Bush's plan and increased everything to be more extreme.

http://money.cnn.com/2015/12/08/pf/taxes/bush-tax-plan/index.html?iid=hp-toplead-dom

The average tax cut for everyone amounts to 3.9% of income, or $2,800. But for those in the top 0.1%, the average tax cut would be 12%, or $800,000.

The Bush campaign said it plans to pay for the revenue loss through spending cuts. But cutting $6.8 trillion is very hard.
Len Burman, who runs the Tax Policy Center, noted that by 2026 an estimated $715 billion would have to be slashed. That's roughly the same amount projected to be spent on all of defense that year or on all of nondefense federal programs other than entitlements.

Lets see a marginal tax cut for me but enormous cuts in things I'd likely need at some point like SS or unemployment. Super rich get even a bigger cut and I'll bet the loss of SS really doesn't impact them all that much.

 

[ElFenix]

Yes, because Social Security tax and Medicare tax is the equivalency to Income Tax 🙄

who made the claim they're equivalent? you claimed that the 47% of people who barely pay income tax are takers. i pointed out that's only the case if you ignore the payroll tax.

please, without looking, take a guess at what the relative sizes of the payroll tax vs. the federal personal income tax is. bonus points if you add in the federal corporate income tax as well for comparison. just relative sizes, not absolute revenue.

Because, people don't take more out of Social Security than they put in, right? That's certainly not why we are having huge issues as an impending doom clock is counting down for when Social Security runs out of money, right?

the vast majority of people get more out of government than they put in. heck, the federal government pays out more in goods and services than it takes out every year.

as for social security, it isn't running out of money. the tax rate may need adjusting, but this wouldn't be the first time that has happened. what's happening is that social security's payroll tax is no longer covering its outflows by itself. not the first time that has happened either.

maybe this time we won't do something so exceedingly stupid as give social security a 20+% surplus every year.

 

[glenn1]

federal personal income taxes don't collect that much more revenue than federal payroll taxes at this point.

i love how people intentionally leave out federal payroll taxes in order to claim the poors don't pay taxes.

like this guy

Already addressed that point in an earlier post. I specifically excluded payroll taxes because they are basically deferred earnings that go into a pass-through account linked to your social security number. Thus they aren't truly available for general government operating purposes as the money is already pledged and payable to you as benefits at some future point; in accounting terms payroll taxes aren't income but rather are a liability to the government as Unearned Revenue and future account payable to the person who paid the payroll tax. And yes I know that money is fungible and that SS is running a surplus right now that is used interchangeably with the general fund in a way that would be illegal if it occurred in the private sector, but the same principle applies.