Tax change a-comin...

Slow_Hand

January 25, 2007 04:24

Lawmakers hand out band-aids on a cut-by-cut and scrape-by-scrape basis. They do not look at the cause of the bleeding nor do they care about the patient's outcome. Their approach is a simple one. Stop the bleeding one wound at a time.

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fastcarsgofast

January 25, 2007 04:27

quote:Originally posted by Slow_Hand
Lawmakers hand out band-aids on a cut-by-cut and scrape-by-scrape basis. They do not look at the cause of the bleeding nor do they care about the patient's outcome. Their approach is a simple one. Stop the bleeding one wound at a time.
Or they just pour salt on the wound. You know to stop an infection.

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Permanently deleted user

January 25, 2007 04:35

It is just another democrat tax raise. They are going to raise our taxes anyway they can and they don't care about what concequences it might have on anyone!

The only tax thing I would be in favor of is a flat tax. Every man and woman pays 5% period! No deductions, no nothing! And it don't matter your income source, you pay 5% on the gross income.

And before alot of you scream about this, I am all for it and this would put me from paying no taxes (as my income is tax free) to also paying 5%. I would gladly pay that knowing that those like Bill Gates and the like are also paying their 5%.

With this tax system our country would have more comming in than they would know what to do with, and could do away with a sales tax and the likes.

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dlrjj

January 25, 2007 07:09

Kevin, the flat tax idea always sounds good in concept, but the rate would have to be around 20%+ in order to use it as a sole source.[:)]

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Mercury

January 25, 2007 07:32

If you are running your business so close that a 7% or so sales tax will put you out of business, you are in trouble any way.

I ship a few hundred packages a month.......if they pass a sales tax on online items......I'm going to ignroe it. [:p][:p][:p][:p][:p]

Screw it. Tired of the BS.

Merc

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Permanently deleted user

January 25, 2007 08:29

quote:Originally posted by dlrjj
Kevin, the flat tax idea always sounds good in concept, but the rate would have to be around 20%+ in order to use it as a sole source.[:)]
I would agree with you except for one key thing I stated.

That being "all income sources". This includeing welfare, disability, and anything else you can come up with. That is why I said it would move me from tax exempt to paying 5%. My VA disability and my SSD would become taxable income and therefore I would pay my share.

But one thing is for sure, the current system favors those who make more money as they get all the deductions. I know this well from when I still worked. With the lower paying jobs I had I paid a higher percentage of my income in fedral income tax. But later when I moved into higher paying jobs I was able to deduct alot more on my tax forms and therefore paid a lower percentage.

My 5% figure may be a little off but I in no way think it would be much higher than that if it went to a true flat tax.

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T1jetmech

January 25, 2007 08:58

I'm gonna have to find the link I was reading on this very subject. The article was stating the same thing about a flat tax for every income. To maintain current Gov. spending and cover expected cost of future expendentures the flat rate would need to be 17.8% the fist year and 21% each subsequent year. I would take that over the current system of tax breaks and shelters for the rich. There were some down sides of it too. Like those who are living on a fixed income that is not taxed right now might not have enough to make ends meet after the tax hits em. So you end up hurting the ones that can't afford the hit, and the rich couldn't care less that they have to pay out alittle more. It isn't as easy as "just do it."

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dlrjj

January 25, 2007 08:59

Flat taxes keep coming back as an idea, but the numbers never match up to actual revenue and spending. The rate would have to be around 20% minimum, and that's only if the spending and revenue projections are near accurate. Spending usually runs more and revenue is a crap shoot whether it is more or less. Here's some Federal budget figures (guesses) projected out a few years.

Table S-1. Budget Totals
(Dollar amounts in billions)

2004 2005 2006 2007 2008 2009 2010

Budget Totals:
Receipts 1,880 2,053 2,178 2,344 2,507 2,650 2,821
Outlays 2,292 2,479 2,568 2,656 2,758 2,883 3,028
Deficit #8722;412 #8722;427 #8722;390 #8722;312 #8722;251 #8722;233 #8722;207

Gross Domestic Product (GDP) 11,553 12,227 12,907 13,617 14,349 15,111 15,906

Budget Totals as a Percent of GDP:
Receipts 16.3% 16.8% 16.9% 17.2% 17.5% 17.5% 17.7%
Outlays 19.8% 20.3% 19.9% 19.5% 19.2% 19.1% 19.0%
Deficit 3.6% 3.5% 3.0% 2.3% 1.7% 1.5% 1.3%

Here's a link to the numbers in charts that print better.

http://www.whitehouse.gov/omb/budget/fy2006/tables.html

Flat taxes can work, and Bill Gates would be grateful for the reduction from his current rates, but it's going to have to be 20%+ regardless. Nearly 97% of all income taxes are paid by the upper half of income earners in the country. Despite anecdotal stories to the contrary, and the fact that you may have had some deductions at a moment in time, the progressivism of the Federal tax code is easy to establish by looking at the quintile breakdown from the IRS.

The figures I've given you simply show the percent of the entire output of the country as being spent by the Federal government. The future projections are almost always lower, since no politician wants it to appear that they are doing anything but bringing the tax burden down rather than increasing it.

I'm not knocking your preference for the flat tax, just pointing out the size it would have to entail as a sole source tax. We have a flat tax for our state income tax here in Indiana, with a rate of 3.4% just for the state taxes, and that's in addition to sales and other taxes.[:)]

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slipgate

January 25, 2007 09:08

quote:Originally posted by git_r_done
quote:Originally posted by dlrjj
Kevin, the flat tax idea always sounds good in concept, but the rate would have to be around 20%+ in order to use it as a sole source.[:)]
I would agree with you except for one key thing I stated.

That being "all income sources". This includeing welfare, disability, and anything else you can come up with. That is why I said it would move me from tax exempt to paying 5%. My VA disability and my SSD would become taxable income and therefore I would pay my share.

But one thing is for sure, the current system favors those who make more money as they get all the deductions. I know this well from when I still worked. With the lower paying jobs I had I paid a higher percentage of my income in fedral income tax. But later when I moved into higher paying jobs I was able to deduct alot more on my tax forms and therefore paid a lower percentage.

My 5% figure may be a little off but I in no way think it would be much higher than that if it went to a true flat tax.

"the current system favors those who make more money as they get all the deductions" - interesting view point. If I make more money so I save some of that money, yes, there are deductions for certan kinds of investments. If I buy a house because I make more money, I get a deduction for that. If I buy a racehorse bucause I make more money yes there are ways to set that up so that I can deduct the losses.

If I make less money and don't save any of it (either because I need it all to live or because I am just irresponsible) then I don't get the deduction. If I live in an apartment, I get no home deduction and if I can't afford a racehorse well, you get the picture.

Deductions aren't just hanging off the money tree and as I get to certain levels, I pick and choose what I want.

Buying that race horse resulted in tax for the seller and the buyer. Tax was paid on the food to feed it. Tax on the winnings. Tax on the ractrack where bets were placed. I suspect the state took in more income from the purchase of the racehorse than they lost in deductions related to that horse.

Kind of a "chicken and egg" thing.

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dlrjj

January 25, 2007 09:16

quote:Originally posted by slipgate
quote:Originally posted by git_r_done
quote:Originally posted by dlrjj
Kevin, the flat tax idea always sounds good in concept, but the rate would have to be around 20%+ in order to use it as a sole source.[:)]
I would agree with you except for one key thing I stated.

That being "all income sources". This includeing welfare, disability, and anything else you can come up with. That is why I said it would move me from tax exempt to paying 5%. My VA disability and my SSD would become taxable income and therefore I would pay my share.

But one thing is for sure, the current system favors those who make more money as they get all the deductions. I know this well from when I still worked. With the lower paying jobs I had I paid a higher percentage of my income in fedral income tax. But later when I moved into higher paying jobs I was able to deduct alot more on my tax forms and therefore paid a lower percentage.

My 5% figure may be a little off but I in no way think it would be much higher than that if it went to a true flat tax.

"the current system favors those who make more money as they get all the deductions" - interesting view point. If I make more money so I save some of that money, yes, there are deductions for certan kinds of investments. If I buy a house because I make more money, I get a deduction for that. If I buy a racehorse bucause I make more money yes there are ways to set that up so that I can deduct the losses.

If I make less money and don't save any of it (either because I need it all to live or because I am just irresponsible) then I don't get the deduction. If I live in an apartment, I get no home deduction and if I can't afford a racehorse well, you get the picture.

Deductions aren't just hanging off the money tree and as I get to certain levels, I pick and choose what I want.

Buying that race horse resulted in tax for the seller and the buyer. Tax was paid on the food to feed it. Tax on the winnings. Tax on the ractrack where bets were placed. I suspect the state took in more income from the purchase of the racehorse than they lost in deductions related to that horse.

Kind of a "chicken and egg" thing.
Very good, and very correct in your evaluation. Targeted deductions are frequently some of the most tax profitable things that can be done.[:)]

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Permanently deleted user

January 25, 2007 09:32

quote:Originally posted by slipgate
quote:Originally posted by git_r_done
quote:Originally posted by dlrjj
Kevin, the flat tax idea always sounds good in concept, but the rate would have to be around 20%+ in order to use it as a sole source.[:)]
I would agree with you except for one key thing I stated.

That being "all income sources". This includeing welfare, disability, and anything else you can come up with. That is why I said it would move me from tax exempt to paying 5%. My VA disability and my SSD would become taxable income and therefore I would pay my share.

But one thing is for sure, the current system favors those who make more money as they get all the deductions. I know this well from when I still worked. With the lower paying jobs I had I paid a higher percentage of my income in fedral income tax. But later when I moved into higher paying jobs I was able to deduct alot more on my tax forms and therefore paid a lower percentage.

My 5% figure may be a little off but I in no way think it would be much higher than that if it went to a true flat tax.

"the current system favors those who make more money as they get all the deductions" - interesting view point. If I make more money so I save some of that money, yes, there are deductions for certan kinds of investments. If I buy a house because I make more money, I get a deduction for that. If I buy a racehorse bucause I make more money yes there are ways to set that up so that I can deduct the losses.

If I make less money and don't save any of it (either because I need it all to live or because I am just irresponsible) then I don't get the deduction. If I live in an apartment, I get no home deduction and if I can't afford a racehorse well, you get the picture.

Deductions aren't just hanging off the money tree and as I get to certain levels, I pick and choose what I want.

Buying that race horse resulted in tax for the seller and the buyer. Tax was paid on the food to feed it. Tax on the winnings. Tax on the ractrack where bets were placed. I suspect the state took in more income from the purchase of the racehorse than they lost in deductions related to that horse.

Kind of a "chicken and egg" thing.
The problem with all those extra deductios is it is resulting in a lower percentage of the income being taxed.

Yes Bill Gates pays a higher dollar amount in income taxes than joe blow working for Acme Co. on the corner that makes $40k a year.

But use a for instance in percentages. Joe Blow pays 20% of that $40k but because of the deductions that Gates can get with his extra he only pays 3% on his 1billion a year income

Why not make it 10% straight across the board! To me that would seem like the more fair and American thing to do. That way everyone pays their fair share based upon there true income and not what they can hide in tax shelter accounts to keep the government from getting it.

And like I said, I would have to start paying if this took place. Right now I don't pay nothing and don't even file at the end of the year. So what ever the percentage cameout to be I would have to pay it.

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dlrjj

January 25, 2007 09:45

Kevin I've got to go to town right now, but I can get the figures for you when I return if you wish. The upper income people not only pay vastly more in taxes, but they also pay more in percent as group, and that is easily proven. There are always specific circumstances or instances where someone pays a smaller percent for a given year, and a multi billion dollar donation by a man like Gates in a given year would be one reason why he might have had income, but paid few, if any, taxes on occasion.

If he gave away more stored wealth than he earned in a given year, the NET result is a negative, and no tax bill. It looks like he got away with something, but he paid a pretty steep price to do it, and the tax codes try to encourage that type of generous giving.

Don't get caught up in the myth that the wealthy don't pay their "fair share", the numbers can easily show that they do, and that the amount of money raised by taxes could not have been obtained if they didn't. There just is not enough money in the hands of the rest of the population to have even begun to pay the kind of taxes that would have required. The myth lives, but reality is reality. Catch you later.[:)]

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neacpa

January 25, 2007 10:45

It is so easy to say the rich doesn't pay their fair share of taxes, when nothing is further from the truth. Let me give you a few examples:

Example 1 - man/wife file joing with $40k of income, two kids and daycare. They pay no taxes (other than SS) and receive $600 back. (I don't think this quite paying 20%)

Example 2 - single parent with two kids and $25k of income. He/she pays zero taxes and received $3,600 back. (Is this paying 20%?)

Example 3 - man/wife file joint with $37k of income. No kids. Taxes are around $2,200. (Is this paying 20%?)

Example 4 - single person with $31k of income. Taxes are around $3,000. (We're getting closer to that 20%!!)

Example 5 - single person with $98k of income. No deductions whatsoever. Taxes are around $19k. (Dang, we're almost there!!)

Example 6 - man/wife earns $470k of income. Generous contributions. Taxes are around $125k. (Bingo!! We have it)

As I've said before, the earned income tax credit is the biggest tax fraud issue ever and has turned the tax system into a welfare system.
If you think you saw civil unrest in New Orleans after Katrina, that would be a drop in the bucket as what would happen nationwide if the earned income tax credit was repealed. People now look at that the government owes it to them.

If you are thinking that the 5% flat tax would apply to the GROSS income instead of the NET income (after business expenses), then a LOT of business owners (large and small) would be up in arms. A lot of gun dealers advertise they sell guns 10% over cost. This 5% flat tax would immediately eat up half of the gross profit. Then guess what? They will be forced to either increase prices (which will then increase the taxes), cut costs (labor?), or close the doors. A lot of employers give generous bonuses and benefits to their employees simply because of the tax benefits. Without those tax incentives, a lot of that will disappear. There is a huge variance in the gross profit percentages in different industries. Restaurants usually have a pretty high GP%, while oil jobbers do not. Convenience stores that I have experience with try to run a 7 to 9 percent margin on fuel sales and 25 percent margin on the inside sales.

I had this little story in a joke file that I have.

Once upon a time, there was a little red hen who scratched about the barnyard until she uncovered some grains of wheat. She called her neighbors and said, "If we plant this wheat, we shall have bread to eat. Who will help me plant it?"

"Not I," said the cow. "Not I," said the duck. "Not I,", said the pig. "Not I", said the goose. "Then I will plant the wheat myself," said the little red hen. And she did.

The wheat grew tall and rippened into golden grain. "Who will help me reap my wheat?" asked the little red hen.

"Not I", said the duck. "Out of my classification," said the pig. "I'd lose my seniority," said the cow. "I'd lose my unemployment compensation," said the goose. "Then I will reap the wheat myself," said the little red hen. And she did.

At last, it came time to bake the bread. "Who will help me bake the bread?" asked the little red hen.

"That would be overtime for me," said the cow. "I'd lose my welfare benefits," said the duck. "I'm a dropout and never learned how," said the pig. "If I am the only helper, that's discriminatory," said the goose. "Then I will bake the brad myself," said the little red hen. And she did.

She baked five loaves and held them up for her neighbors to see. They all wanted some, of course. In fact, each demanded a share. But the little red hen said, "No, I can eat the five loaves of bread myself."

"Excess profits," cried the cow. "Capitalist leach," screamed the duck. "I demand equal rights", yelled the goose. And the pig just grunted. And then they painted "unfair" picket signs and marched around and around the little red hen, shouting obscenities.

When the government agent came he said to the little red hen, "You must not be so greedy." "But I earned the bread myself," said the little red hen.

"Exactly," said the agent. "That is the wonderful free enterprise system. Anyone in the barnyard can earn as much as he wants. But under our modern government regulations, the productive workers will divide their profits with the idle."

And they lived happily ever after, including the little red hen, who smiled and clucked, "I am grateful, I am grateful."

But her neighbors wondered why she never again baked any more bread.

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Tax change a-comin...

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