Possible tax changes in 2010 and beyond

[MichaelB]

As far as closing corp loopholes and trying to fight offshore corpoarate HQ's to hide profits - I'll go back to my KISS principle: Eliminate corporate taxes. The public just pays for them (and compliance, and loophole costs) in the products/services, and it makes us less competitive overseas. Phase them out over the next 5 years, and you would have eliminated probably 80% of the tax code right there.
-ERD50

I fully agree. In addition, it adds to US productivity - so many of our brightest are using their talents to help others avoid taxes, an economically unproductive labor.

Michael

[OAG]

IMHO any time Congress creates a program that costs money (and they all do) they should also SUNSET the cost. Programs created today to solve a current problem may or may not be needed in 5 years. Why not review it then and either extend it or let it die and/or reallocate the costs to something else. Florida is one state (and I am guessing there are many more) have a Sunset provision in new entitlement programs - and it seems to work somewhat well. Of course States have a perceived problem of the "balanced budget" which most get around by "floating a 30 year Bond" issue.

[free4now]

I remember my parents spending ridiculous amounts of time on taxes when I was in school. Partly because all the calculations were manual, before the advent of turbotax. Turbotax also helps guide you as to what deductions or credits you might qualify for; before that I assume you would have to essentially do all the worksheets manually before you would know. But I also remember hearing about deducting credit card interest, tracking medical bills, and lots of creative accounting.

Luckily by the time I no longer could use the 1040EZ, turbotax was on the scene, and there weren't many big loopholes. I remember when I paid six figure tax bills for cashing out stock options and my parents thought I was insane not to hire a tax accountant to see how to save on taxes. Back in their day it would have been insane not do do so. But when I did it, the NQ options were ordinary income and there was really nothing you could do to get around paying the tax, so I just used turbotax.

[youbet]

Originally Posted by HFWR

Of course, one could argue ad nauseum about what programs need cut/increased, blah blah blah, but, in the end, the outgo needs to be matched by income.

Agreed. I'm all for balancing the budget. I'm just very curious about whose back the budget will get balanced on!

Barrack is going to need more money, yet is promising tax cuts for the middle class. Obviously high wage earners will get hit with a toll, but how far down will it go? $120k? $100k? $80K? $60K? He's gotta draw a line somewhere below which it's middle class and therefore lower taxes and above which it's higher taxes to both make up for the reduction for the middle class and to fund the new programs. I'm just curious and trying to figure it out.

I'd also like to know the details of his thinking about LT cap gain tax increases. He's mentioned going to 25% and hinted that perhaps low wage earners might stay at 15%...... but all hints during interviews at this point. His web site is no help.

I don't blame him for not revealing his plans in actual dollar levels yet. Nothing to gain and everything to lose. Still, sure would be nice to know what he has in mind.

[Basenji]

Originally Posted by BoutDone

It does not take a fortune teller to determine that under Obama, taxes will increase - significantly. Fewer ERs to be sure.

The Bush/McCain invasion and long-term occupation of Iraq is now widely expected to cost well over a TRILLION dollars (multiply that by two or three or more to include opportunity costs, along with other still-unrecognized costs related to long term effects on military personnel and equipment).

If the situation in Iraq improves enormously by 2013, McCain hopes to keep many tens of thousands of troops there (and many more if events do not go so well). So, under McCain's best-case scenario, he will probably demand another trillion dollars or so.

McCain budgets and deficits could make even the unprecedentedly large Bush budgets and deficits appear small (of course, the Clinton budgets would seem even smaller by comparison).

And that's just one of the issues on which McCain wants to spend far more federal taxpayer money.

[Basenji]

Originally Posted by BoutDone

Deficits do not increase when taxes are cut - they increase when spending isn't cut.

Government coffers have always increased when taxes are cut.

and "What the [non-partisan Congressional Budget Office] found, as study after study has shown, was that any new revenue that tax cuts brought in paled in comparison with their cost. This is why the deficit jumped under the last two tax-cutting presidents (Ronald Reagan and George W. Bush) and fell under the last two tax-raising presidents (George H. W. Bush and Bill Clinton)."

Quotation from article describing the findings of John McCain's top economic adviser, Douglas Holtz-Eakin, former director of the CBO at the time that it determined that recent tax cuts did not "pay for themselves."

http://www.nytimes.com/2008/04/23/bu...leonhardt.html

Almost all economists now agree that tax cuts reduce net government revenues unless one is starting from a very high tax level, say, 60-70% or higher. Even Reagan's budget director, David Stockman, the father of "supply-side" trickle-down economics, eventually acknowledged that this political concept failed and resulted in increasingly larger federal deficits and a rapidly expanding national debt.

Here is another quote from that article:
"As Mr. McCain’s plan currently stands, The Economist magazine concluded that it 'will not come anywhere close to paying for the tax cuts.' Most telling, I spoke over the past week with several other economists who admire Mr. McCain and have advised him over the years. None would defend his current fiscal package (or be quoted)."

[youbet]

Originally Posted by Basenji

and "What the [non-partisan Congressional Budget Office] found, as study after study has shown, was that any new revenue that tax cuts brought in paled in comparison with their cost. This is why the deficit jumped under the last two tax-cutting presidents (Ronald Reagan and George W. Bush) and fell under the last two tax-raising presidents (George H. W. Bush and Bill Clinton)."

I thought the numbers show that deficits are growing under Bush because of increased spending. That is, tax revenues are up to all time highs, but spending has increased even faster. You seem to be implying that tax revenues are down, which isn't true.

[Spanky]

Originally Posted by ziggy29

Yeah. Back in the late '70s, I remember seeing my dad spending hours and hours with receipts and credit card statements, looking for everything that could possibly be a writeoff.

Frankly, I much prefer the tax code simpler: lower marginal rates, fewer special-interest writeoffs.

That would make the tax attorneys and accounts unhappy since they might have to change career.