Tax Cuts Extended to All Americans

[BTravlin]

Get rid of the entire convoluted tax code.

Americans For Fair Taxation: Americans For Fair Taxation

The amount of time and money spent with accountants and tax attorneys now wasted trying to minimize tax liabilities could be put to better use and grow the economy by being more efficient. Accountants and tax attorneys won't like it but they're smart and can adapt. Politicians won't be so easily corrupted because they won't have near the opportunity to create mischief on behalf of lobbyists bearing gifts. Taxes are paid based on consumption so the rich will pay significant taxes to enjoy their privileged lifestyles.

[GregLee]

Quote:

Originally Posted by ERD50 But it is just a simple economic fact of life that if you reduce the effective compensation for a position, you are going to reduce the demand for that position. Just as raising the price of a product reduces demand for the product. How can anyone argue that?

That is less a "simple economic fact of life" than it is an economic theory. I think it holds true more for routine work than higher level endeavor. Are entrepreneurs more like sign painters or more like artists?

[SunsetSail]

Quote:

Originally Posted by BTravlin Get rid of the entire convoluted tax code. Americans For Fair Taxation: Americans For Fair Taxation The amount of time and money spent with accountants and tax attorneys now wasted trying to minimize tax liabilities could be put to better use and grow the economy by being more efficient. Accountants and tax attorneys won't like it but they're smart and can adapt. Politicians won't be so easily corrupted because they won't have near the opportunity to create mischief on behalf of lobbyists bearing gifts. Taxes are paid based on consumption so the rich will pay significant taxes to enjoy their privileged lifestyles.

I fit into the category of people you say won't like it, but I'm all for it. I may be retired by the time they unwind the old system so I can afford to support what I think is right for the country and ignore the personal effect on me. Even if I'm not retired, I'm confident in my ability to adapt to something new.

[ERD50]

Quote:

Originally Posted by GregLee That is less a "simple economic fact of life" than it is an economic theory. I think it holds true more for routine work than higher level endeavor. Are entrepreneurs more like sign painters or more like artists?

One can always find exceptions. Some do the work they love for free or for status or something else. Certainly Bill Gates didn't work the last 10 years as CEO for the money.

But in general, reducing the effective compensation for a position (including high level positions) is going to reduce demand for that position. The higher the tax rate on each incremental dollar earned, the less motivated someone is to work for that extra dollar. For businesses, it often takes risk and investment to earn that extra dollar. If the ROI is less, the attractiveness of the investment is less. That money will seek alternatives. Maybe in a different country. The wealthy are also the most mobile.

Call it a theory if you want, but I see it as certain as the Sun will rise in the East. Gravity is a theory too, but last time I checked things fall and go 'whump'.

-ERD50

[Westernskies]

Quote:

Originally Posted by jdw_fire my rationale is simple, the people who have the highest incomes are benefitting the most from this country so they should pay a much larger share of the cost of running this country.

I really don't understand this statement.

How do I benefit more from living in this country than someone else who lives in this country? We both get one vote, are able to utilize the same public infrastructure like roads, bridges, and schools, enjoy the same legal protections under our Constitution, are served by the same Police, Fire, Military, etc. We own the same share of our National Parks, public lands, coastal waterways, etc.

I still believe success is primarily a question of personal choices (sorry, Martha)

Here's why I don't understand your statement of disproportionate benefits:

I went to a public high school, paid 100% of my way through a public State College; didn't qualify for any US Financial Aid Programs, but I did qualify for a school work-study program; albeit below minimum-wage. I worked almost full-time at a variety of mostly minimum wage jobs through 4-1/2 years of college; my folks still had 3 kids at home in High School, and weren't able to help me out financially at all. (I also ended up with a few thousand in student loans; I had field courses one summer and couldn't work full-time like I usually did- but I also accepted that financial obligation and paid them off promptly after I graduated and went to work.)
What I did was an option for nearly everyone in this country.

After graduating, I entered the private-sector workforce in 1981, in the middle of the last Great Recession- and ended up taking an entry-level job way outside my degree; there were simply no jobs available in my field of study. I ended up working at several different companies, as the recession lingered and businesses struggled. With my degree, I could have taken a career in government service, but I preferred the opportunities offered in the private sector over the security of a civil service position. Fast forward 30 years- after a career defined by my willingness to travel ~40 weeks/year, and work 60+ hours many weeks (major factors in not having kids, an expensive divorce, etc.) I was able to earn my way into the 1% tier.

I'm not going to apologize to anyone for getting there, nor am I going to support onerous taxation that will take a disproportionate share of what I earned to make up for someone who chose not to take advantage of public education opportunities, didn't want to work as hard as I did, or made personal choices (alcohol, drugs, daytime television, unmarketable degree, work ethic etc.) that kept them from reaching the same income level. There are people who legitimately need our help (folks with mental or physical disabilities, short-term unemployment, etc); I have no problem with my tax dollars helping them, but I do have a problem being specifically targeted to fund irresponsible government spending.

What "special benefits" am I receiving from our Government that would require me to pay a disproportionately larger share of Federal Income tax? I already pay the required State and Federal income taxes, property taxes, sales taxes, etc on what I earn, own, and spend.

Sorry for the long-winded reply, but yeah, I'm pissed...

[FUEGO]

Quote:

Originally Posted by Westernskies What "special benefits" am I receiving from our Government that would require me to pay a disproportionately larger share of Federal Income tax? I already pay the required State and Federal income taxes, property taxes, sales taxes, etc on what I earn, own, and spend.

You gots more dan me and I wants some of dat.

[Danmar]

Quote:

Originally Posted by GregLee I'm convinced of the importance of small businesses to our economy, but since not all small business owners are rich and not all rich people are small business owners, I don't think it is clear that increasing taxes for the rich will harm the economy.

agree

[Danmar]

Western Skies: My story is similar to your's but I certainly feel like I have gotten more out of our society than the average guy. It wasn't all me. Luck certainly had a large role to play. I don't think I would have been as successful if luck would have had me born in a third world country. I pay a ton of tax (some years over $1mm) and I feel very lucky to do so.

[samclem]

Quote:

Originally Posted by Danmar Western Skies: My story is similar to your's but I certainly feel like I have gotten more out of our society than the average guy. It wasn't all me. Luck certainly had a large role to play. I don't think I would have been as successful if luck would have had me born in a third world country. I pay a ton of tax (some years over $1mm) and I feel very lucky to do so.

If you'd like to feel even luckier, I'll let you pay mine.

Of course I feel fortunate to have been born in the US. But I think the best way to pass on that opportunity to the next generation is to insist on keeping government small and the private sector (where opportunities are created) large. Every dollar I pay in taxes is a dollar that's not available to a private company, which will use it to generate more dollars (and opportunities).

I'm always surprised when people say they would like to pay more taxes (and I realize that's not what you said). First--if they want to, it is easy to send the Treasury extra money anytime they want to. Secondly--do they really know of no private entity that would make more efficient use of their money? It is hard to believe. I think a lot of people want to be heard saying these things, but that's not the same as doing them.

[jdw_fire]

Quote:

Originally Posted by Westernskies I really don't understand this statement. How do I benefit more from living in this country than someone else who lives in this country?...

you benefit more from this country by a very objective measure, the size of your income.

yes i see that you think you earned it and you think you didnt get any benefit from this country beause you didnt get any direct monatary help from the government, but you have benefitted from this country (and by the very objective measure called income, benefitted more than most)
if it wasnt for this country there is a likelyhood that you wouldnt be as well off (no matter how much effort you personnally put in) and you wouldnt have as high an income. your very long post seems to document that you worked the system that was in this country to your great advantage and that is why you have a higher income, basicly you worked the system and the system responded with more money for you than most, well done you. but you know something, the last part of that last sentance is saying the same thing that i said (since you personalized it i will too) "you are benefitting more from this country", you have just added that you worked hard to realize that higher benefit.

your main complaint about taxes is what they are spent on and that is an entirely different topic. what i said about who should pay the taxes applies no matter what said taxes are spent on. if you dont like what "we the people" are spended tax money on then by all means change that.

Quote:

Originally Posted by Westernskies What "special benefits" am I receiving from our Government ...

you misquote me, i didnt say you got and "special benefits"

[FIREd]

Quote:

Originally Posted by Danmar Western Skies: My story is similar to your's but I certainly feel like I have gotten more out of our society than the average guy. It wasn't all me. Luck certainly had a large role to play. I don't think I would have been as successful if luck would have had me born in a third world country. I pay a ton of tax (some years over $1mm) and I feel very lucky to do so.

But since people born in third world countries usually don't pay taxes in Canada or benefit from taxes paid in Canada, what did you receive from Canadian society that other Canadians did not to justify the millions more you paid in taxes? Did you attend better public schools? Did you receive better healthcare? Did you use Canadian infrastructure more than the average Canadian citizen? Just curious.

[jdw_fire]

Quote:

Originally Posted by samclem ... I think the best way to pass on that opportunity to the next generation is to insist on keeping government small and the private sector (where opportunities are created) large. Every dollar I pay in taxes is a dollar that's not available to a private company, which will use it to generate more dollars (and opportunities).

here you go with the same mixing of topics. i agree with you that a smaller government is the better government and that our government spends money on things we shouldnt but that is a totally different subject than discussing who should pay the largest portion of the bill for whatever spending our government chooses to do does.

[M Paquette]

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Originally Posted by Westernskies Here are a few facts about those insignificant small business owners; many of whom would be negatively impacted by higher taxes, from the US Department of Commerce to chew on... (#4 is especially interesting with unemployment hovering around 10%) How important are small businesses to the U.S. economy? Small firms: • Represent 99.7 percent of all employer firms. • Employ half of all private sector employees. • Pay 44 percent of total U.S. private payroll. • Generated 65 percent of net new jobs over the past 17 years. • Create more than half of the nonfarm private GDP. • Hire 43 percent of high tech workers (scientists, engineers, computer programmers, and others). • Are 52 percent home-based and 2 percent franchises. • Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008. • Produce 13 times more patents per employee than large patenting firms. Source: U.S. Dept. of Commerce, Census Bureau and Intl. Trade Admin.; Advocacy-funded research by Kathryn Kobe, 2007 (www.sba.gov/advo/research/rs299tot.pdf) and CHI Research, 2003 (www.sba.gov/advo/research/

Yah. By the way, those numbers use the Small Business Administration definition of a small business, that is, 500 or fewer employees for most industries (1,000 for oilseed processing, oil refining, breakfast cereal manufacturing, canning, space vehicle propulsion unit manufacturing, etc.), or a revenue based limit for some industries. The whole ugly table is at the link.

The real trick here is to switch between the SBA definition and the IRS definition for a small business filing a 1040 (individual/joint tax rates) in mid-conversation without letting your debate opponent know. The IRS counts a 1040 as being a business filing if it includes a Schedule C, C-EZ, E, F, Form 2106 or 2106-EZ. These are sole proprietorships and partnerships, and typically a single person or couple, or a small firm of about 6 partners (2008 data).

The vast majority of the SBA small businesses are "C" Corporations, and file corporate tax returns at corporate rates. They are unaffected by any deals being done involving the individual/joint rates for 1040 filers.

When you read the lines about a small business being affected by individual income tax rate changes, that phrase is using the IRS definition. When you read the bit about small business creating most of the jobs, the context switches to the SBA definition. If you can do this smoothly within a single sentence, without smirking or breaking out in laughter, you may have a career in politics.

If you believe the IRS and SBA definitions are the same, however, you may be suffering from ideological meme poisoning, and a long vacation in the countryside away from radio and television is suggested.

[Westernskies]

Quote:

Originally Posted by jdw_fire you benefit more from this country by a very objective measure, the size of your income. you misquote me, i didnt say you got and "special benefits"

Sigh.... I realize that your personal belief in redistribution of wealth is not going to change, and I respect your right to believe that. Just keep your hands of out my pockets.

My income is high because I made personal lifestyle sacrifices and worked harder for it than others may have. My choice, not because I received any additional benefits from the government that would warrant me being targeted for additional taxes.

Anyway, looks like the tax increase will become a moot point for the next couple of years, thanks to BHO, my new BFF :

Obama predicts success for tax deal - CNN.com

[Texas Proud]

Quote:

Originally Posted by BTravlin Get rid of the entire convoluted tax code. Americans For Fair Taxation: Americans For Fair Taxation The amount of time and money spent with accountants and tax attorneys now wasted trying to minimize tax liabilities could be put to better use and grow the economy by being more efficient. Accountants and tax attorneys won't like it but they're smart and can adapt. Politicians won't be so easily corrupted because they won't have near the opportunity to create mischief on behalf of lobbyists bearing gifts. Taxes are paid based on consumption so the rich will pay significant taxes to enjoy their privileged lifestyles.

I went in and did a calculation... the fair tax does not seem that 'fair' to me... it would cost me over $6K more in taxes...


Now, if I were still single with no kids.... I might like it...


BTW, you seem to think that the rich will not change their spending in order to avoid the tax... wishful thinking... if I were rich, I could buy a lot of what I want to consume overseas...

[Texas Proud]

Westernskies....


Remember that a state university is usually heavily subsidized by the state to keep the tuition down.... so even if you paid 100%... you did not pay the full cost of your education...

Not saying that you are right or wrong other things you say... but you did get a benefit that people who do not attend state unis get...

[samclem]

Quote:

Originally Posted by ERD50 The more I think about something I said earlier, the more I'm beginning to believe in it - if we want people to really understand this whole Federal deficit and spending issue, maybe we need to raise Federal Income Taxes on everyone. If that 50% of filers that on average provide only 1 or 2% of the FIT revenue (or get a credit) suddenly saw they had to pay a flat 10% because of all the government spending and interest, there might be a whole lot more people pushing for real solutions when they go to the ballot box. As long as some 'rich guy' is paying the bill, why should the majority of voters give a hoot about Federal spending?

Across all individual returns, taxpayers pay about 12.5% of AGI in FIT. And, AGI is after deductions for IRAs, SEPs, HSA's, etc. So, if we just had a flat tax on all income for everyone, it would come out to something very close to the 10% you mentioned. If we restructured our tax code to this single 10% rate with no deductions or exemptions of any type, the government would take in the same amount in individual taxes as it does today. We could think of this as "what every US citizen who earned money must pay to support our common government and the tasks we've given it." It's a basic obligation, the price that EVERYONE pays to live in a civilized society that protects individual freedoms and national interests. It's a low rate, and that reduces cheating. It's a flat rate that is universally applied, and that reinforces the fact that it's everyone's obligation to support these common tasks.
After that, if we decide that people/families all deserve some type of payment from the government (i.e. redistributions from other taxpayers) that would have the same general impact on take home pay as today's standard deduction, personal exemption, etc, then that would be a spending program. So would various programs for low income people (functioning like the EITC does today).

I think there are some important advantages to this construct. As a society, we dance around the very basic and important question of "who owns that money that I earned? Is it all mine, and the government confiscates some of it? Or did some of it always belong to the government?". This makes it explicit: No matter who earns it, no matter how much they earn, no mater how you earned it (wages, interest, real cap gains, etc) the federal government, as the agent of the American people, has a right to 10% of it starting with the very first dollar. Done.

While the idea that the government "owns" part of what I earn stings a bit, that's the way things are now and it serves everyone to get it out there and make it explicit, clear, and universal.

Full disclosure: My taxes would go up under this plan.

[Westernskies]

Quote:

Originally Posted by Texas Proud Westernskies.... Remember that a state university is usually heavily subsidized by the state to keep the tuition down.... so even if you paid 100%... you did not pay the full cost of your education... Not saying that you are right or wrong other things you say... but you did get a benefit that people who do not attend state unis get...

In-state Tuiton costs, financial aid guidelines, and course requirements were the same for everyone at the state university that I attended, and openly available to everyone, regardless of race, gender or financial means. In fact, financial aid opportunities were available for those who couldn't afford the tuition.

How did I get a benefit that people who chose not to attend not get? The opportunities were the same.

[MichaelB]

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Originally Posted by Westernskies Sigh.... I realize that your personal belief in redistribution of wealth is not going to change, and I respect your right to believe that. Just keep your hands of out my pockets. My income is high because I made personal lifestyle sacrifices and worked harder for it than others may have. My choice, not because I received any additional benefits from the government that would warrant me being targeted for additional taxes. Anyway, looks like the tax increase will become a moot point for the next couple of years, thanks to BHO, my new BFF : Obama predicts success for tax deal - CNN.com

Sigh. You had a little help. Healthcare, nutrition, education, safety, security. Clean water, public utilities, infrastructure. Legal process. Just to name a few.

Hard work and personal choice matter but our individual achievements are enabled by the efforts of others, and we each have the obligation to enable others in kind. The greater the success the greater the obligation. That’s how the system works.

[jdw_fire]

Quote:

Originally Posted by Westernskies Sigh.... I realize that your personal belief in redistribution of wealth is not going to change,and I respect your right to believe that. Just keep your hands of out my pockets.

again i think you missed my point. redistribution of wealth is HOW YOU SPEND money. there are a lot of things that the government should spend on that arent redistribution of wealth, like roads, clean water supply, sewer systems, defence, etc. i wasnt talking about how the money is spent, i am talking about how the money we need to run this country is collected. i am not in favor of alot that we (our government) currently spend money on. again you have said i said something i didnt say.

Quote:

Originally Posted by Westernskies My income is high because I made personal lifestyle sacrifices and worked harder for it than others may have. My choice, not because I received any additional benefits from the government that would warrant me being targeted for additional taxes.

i already saw that you think that you are solely responsible for your high income and living in this country has nothing to do with it but you are wrong, i am sure living in this country had alot to do with it, so one of the ways you are benefitting from living in this country is the size of your income.

and yet again you say i said something i didnt say. i said "benefitting the most from this country" and nothing about "any additional benefits from the government". please dont misquote me.