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Real Tax Simplification Impossible?
Old 11-01-2005, 01:57 PM   #1
 
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Real Tax Simplification Impossible?

Since I don't like overly complex things like income tax forms, these changes sound good to me. But I have a feeling that everyone who thinks there taxes might go up at all, will fight it tooth and claw.

Bush panel proposes broad tax-law changes

WASHINGTON - Chosen to find a simpler way to tax the nation, a presidential panel on Tuesday recommended two designs that would rewrite virtually every tax law for individuals and businesses.

Treasury Secretary John Snow called the propoposals “bold recommendations” but he did not indicate what ideas the administration would embrace.

“Their advice is the starting point, and I look forward to reading their recommendations and considering them carefully before I make a recommendation to the president,” Snow said in a statement.

Under the panel’s plan, most deductions, credits and other tax breaks would be eliminated along with much of the paperwork and equations that baffle taxpayers under a drastically simplified income tax.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 02:00 PM   #2
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Re: Real Tax Simplification Impossible?

This stuff is DOA. Every special interest group will fight tooth and nail and the administration is basically pushing on a string because they are in the siht with voters, prosecutors, Congress, etc.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 02:08 PM   #3
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Re: Real Tax Simplification Impossible?

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Originally Posted by TromboneAl
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 03:24 PM   #4
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Re: Real Tax Simplification Impossible?

Tax simplification is certainly possible if an ordinary citizen with common sense were put in charge of it, but not possible for the politicians.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 03:51 PM   #5
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Re: Real Tax Simplification Impossible?

Quote:
This stuff is DOA.* Every special interest group will fight tooth and nail and the administration is basically pushing on a string because they are in the siht with voters, prosecutors, Congress, etc.
Because the AMT tax will soon start to bite middle income families some suggest that the AMT must be eliminated or way rolled back. However the AMT is projected to bring in big bucks ( If I recall correctly it will bring in a $trillion over the next decade). So many have called for offsetting changes to tax law to pay for the AMT loss of revinue.

Sure special interests will scream loud. But not as loud as a millions of middle income families with kids. Oh Yes - Changes are a commin - you just watch. It just remains to be seen who gets hit and who does not. It is likely that some version of the AMT will remain but just on the Uber-rich who the AMT was designed to catch.

Also, growth based tax policy is taking place world-wide and the US is likely to change tax policy to some degree along those lines. We don't want to get left behind as globalism takes hold anymore than needed due to tax policy.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 03:55 PM   #6
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by MasterBlaster


Because the AMT tax will soon start to bite middle inocme families some suggest that the AMT must be eliminated or way rolled back. However the AMT is projected to bring in big bucks ( If I recall correctly it will bring in a $trillion over the next decade). So many have called for offsetting changes to tax law to pay for the AMT loss of revinue.

Sure special interests will scream loud. But not as loud as a middle income family with kids. Changes are coming. It just remains to be seen who gets hit and who does not. It is likely that some version of the AMT will remain but just on the Uber-rich who the AMT was designed to catch.

Also, growth based tax policy is taking place world-wide and the US is likely to at-least some degree to change tax policy in that vein. We don't want to get left behind anymore that needed due to tax policy.
Maybe, maybe not. But its not going to happen in the next 12 months. The AMT doesn't hit enough people to actually swing enough votes and the Administration has no ability to push anything even remotely upsetting through Congress right now.

Oh, and I know the loony right loves the udea of a flat tax, but I can't see it happening.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 03:57 PM   #7
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Re: Real Tax Simplification Impossible?

This doesn't have anything to do with the looney right or the looney left.

It's all about correcting goofy tax policy that we have right now. What's with taxing families with a tax designed for billionaires ? The status quo won't last.

By the way you are wrong about the number of families that the AMT will affect.

And from what I've read it will happen in the next three years.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 04:09 PM   #8
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Re: Real Tax Simplification Impossible?

I would love to see a simple tax code, a fair tax code, a growth and investment oriented tax code, a job friendly tax code, a balance budget, peace on earth, etc.

but......, I'm with brewer 1... on this one.* Just don't see the will in congress or the executive.

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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 04:10 PM   #9
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by MasterBlaster
This doesn't have anything to do with the looney right or the looney left.

It's all about correcting goofy tax policy that we have right now. What's with taxing families with a tax designed for billionaires ? The status quo won't last.

By the way you are wrong about the number of families that the AMT will affect.

And from what I've read it will happen in the next three years.
The flat tax idea is a nutty far right wing delusion. *The AMT is another thing entirely.

I detest the AMT, but I doubt it will be changed significantly in the near future. *Why? *Because there is no palatable place to get the lost revenue from. *We are finally having to exercise some fiscal restraint, so just putting it on the national credit card won't do. *I would bet that the whole thing gets punted until after the 2006 elections, and then we'll see. *By then we will likely be talking about tax increases, not tax cuts.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 04:15 PM   #10
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Re: Real Tax Simplification Impossible?

Where do you guys get the flat tax ?

Did I post anything about the flat tax ?

I agree that a flat tax is DOA.


The tax modifications are (in theory) supposed to be revinue neutral. So they are not talking about tax cuts. They are talking about how to pare back the big bite of the AMT on middle class families with smart offsetting taxes.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 04:21 PM   #11
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Re: Real Tax Simplification Impossible?

"growth based tax policy" is usually code for flat tax.

One last time: yes, they need this to be revenue neutral. However, the changes elsewhere in the tax code will never pass, so the AMT will have to stay more or less as is.

Here's a radical thought: maybe we should keep the AMT. It is pretty simple and if left in place wil gradually become the de facto tax code for pretty much everybody.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 04:54 PM   #12
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Re: Real Tax Simplification Impossible?

AMT is the Alternative Min. Tax, right? I've heard/read about it before, but I dont see the advantage/disadvantage of it. I'll have to read into it more.

Anyone have a concise 1 paragraph summary of the AMT>

Thanks
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 05:10 PM   #13
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by thefed
Anyone have a concise 1 paragraph summary of the AMT>

Thanks
How is this?

"Alternative Minimum Tax
The Alternative Minimum Tax (AMT) system exists as a parallel income tax system in the United States. The AMT system uses different rules for determining taxable income and allowable deductions, and uses a simple 26/28% rate calculation to determine the Tentative Minimum Tax (TMT). The TMT is compared to the income tax amount calculated for the taxpayer; if the regular income tax amount is greater than the TMT, no special action is required. If the TMT is greater than the tax calculated using the regular rules, the difference between the TMT and the regular tax is added to the regular tax amount, so that the taxpayer is obligated to pay the full amount of the TMT, though some of that tax is considered regular tax and some is considered AMT. The portion of the tax which is considered AMT may be available in later years as a Minimum Tax Credit, reducing the regular income tax due in later years, but only to the taxpayer's TMT level in those later years.

The AMT was introduced in 1970. It targeted very high incomes which were subject to many exemptions under the mainstream tax code of the time.

Critics of the AMT claim that it suffers from two flaws:

It is an extremely complicated system of rules, leading to high compliance costs
It inexplicably does not correct for inflation, leading to nonsensical effects as time goes by. By 2004, middle-class incomes were starting to become subject to the AMT. "
Source Wikipedia
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 05:52 PM   #14
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Re: Real Tax Simplification Impossible?

Quote:
The flat tax idea is a nutty far right wing delusion.
Care to elaborate...

Quote:
Here's a radical thought: maybe we should keep the AMT.
Someone once said "the surest way to get rid of a bad law is to strictly enforce it..."
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 05:54 PM   #15
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Re: Real Tax Simplification Impossible?

Odds are at least something will be done with AMT for next year. The number of taxpayers subject to the AMT is expected to increase from about 3 million in 2004 to an estimated 21 million in 2006.

The standard exemption for the AMT is scheduled to decrease in 2006. For 2005, the AMT exemption is $58,000 for joint returns and $40,250 for single taxpayers. In 2006, the basic AMT exemption is scheduled to decrease to its prior law levels of $45,000 for joint returns and $35,750 for unmarried taxpayers. So at a minimum, I expect Congress will at least tweak that number. Otherwise, I'll bet a lot of middle income people here with a fair number of deductions and with some capital gain income will get hit with AMT in 2006.

We have paid AMT for a number of years now. It is just a way for the government to have a higher tax rate without admitting it.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 05:55 PM   #16
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by Have Funds, Will Retire
Care to elaborate...

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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 06:05 PM   #17
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by Michael
Tax simplification is certainly possible if an ordinary citizen with common sense were put in charge of it, but not possible for the politicians.
The key being "citizen" and not "citizens". The minute you get a group of people with conflicting views on what's "fair" and what constitutes their no-budge issues we'll end up at best with a different kind of Gordian knot and not real simplification.

Heck, look at what was achieved in 1986. Pretty impressive results after a massive effort. Look at the long term results.... right back where we started.
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Old 11-01-2005, 06:52 PM   #18
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Re: Real Tax Simplification Impossible?

Taxes should be really simple. And they would be if the code wasn't used to advance every special interest of every kind.

No deductions.
One relatively high universal exemption.
One set of tax tables.
All income is calculated off the same tables.
All income is taxable.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 07:38 PM   #19
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by . . . Yrs to Go
Taxes should be really simple...
And the whole world should be at peace, nobody should go to bed hungry, and we should cure all diseases.
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Re: Real Tax Simplification Impossible?
Old 11-01-2005, 07:46 PM   #20
 
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Re: Real Tax Simplification Impossible?

Quote:
Originally Posted by Austin_Explorer
Heck, look at what was achieved in 1986.* Pretty impressive results after a massive effort.* Look at the long term results.... right back where we started.
Tell me what impressive result was achieved in 1986.
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