Poll: Future Tax Rates Will Be Higher

[Fedup]

Take a lesson from our neighbors to the south. They buy houses and condos. They do not trust banks. They rent them out and do not declare the income. They buy stuff for cash and avoid the VAT.

It is tax anarchy because the government is not trusted. The real estate industry does not report sales to the government except to capture capital gains. So if you buy and hold, you are fine.

We can learn a lot from the Mexicans!

(Did I mention that I own property there? 95% of the owners do not declare rental income.)

Is that legal or illegal to do that?

 

[kcowan]

Is that legal or illegal to do that?

As I said, it is tax anarchy against a government that is not trusted.

(In case the word is not understood, anarchy is illegal protest.)

But maybe they are just more advanced than we are?

 

[Fedup]

As I said, it is tax anarchy against a government that is not trusted.

(In case the word is not understood, anarchy is illegal protest.)

But maybe they are just more advanced than we are?

I hope that was not a serious comment. Wasn't Mexico described as a failed state a few years ago? I'm not sure I want USA to be that advanced. Thanks but no thanks.

 

[Closet_Gamer]

To OP's original topic...

I think taxes must go up but I don't believe we'll see much change in rates.

I think (hope) that the "close tax preferences in exchange for lower rates" meme will be replaced by a decision to close tax preferences while maintaining the same rates. The easiest way to do that is just to slap a hard deduction cap (e.g., $20K) and a hard rate (e.g. 28%) that can be deducted. It ducks a lot of the politics because if you want to use your deduction for charity, mine for mortgage interest and a third person for college payments, knock yourself out but there is a hard limit. Blow away the corporate welfare along the way. For good measure, sweep the state income tax deduction into that cap as well and level that playing field.

In some ways these changes will be difficult because the really engaged people will fight hard...but to the broad un-engaged masses who have to hang in for longer than a tweet the avg citizen will just hear "no changes in tax rates and we balance the budget". Perhaps leavened with a populist, updated version of the AMT that whaps anyone making >$5-10M/yr on the knuckles.

Other taxes/fees will likely go up and probably should. In particular, our rotting infrastructure will need to be upgraded/replaced. Buckle up for gas taxes, etc.

 

[Koolau]

In some ways these changes will be difficult because the really engaged people will fight hard...

Please, do keep in mind that it is our gummint that is responsible for all the "loop-holes" which most of us use to one extent or another. Gummint picks winners and losers through tax policy. In the "vacuum" of reality (not politics) such policy is neither right nor wrong. We can argue all day about what should be or shouldn't be "done away with" in the way of loop holes. True, "fat cats" (of which I could be considered one by anyone making/taking LESS from pension/SS/etc.) fight for their particular tax "haven", but the folks we elect make the final decision. We might all keep that in mind as we think about coming elections.

This is not meant to be political nor is it a sermon, just sayin'... Of course, YMMV.

 

[kcowan]

I hope that was not a serious comment. Wasn't Mexico described as a failed state a few years ago? I'm not sure I want USA to be that advanced. Thanks but no thanks.

It is a serious comment. That is the direction I fear that the US is headed if they keep loading on tax breaks for the rich and screwing the middle class.

(As for the "failed state" comment, I find that has little credibility unless it is in the context of the government controlling its citizens. Yes they have failed to do that!)

 

[Senator]

From a sheer demographic standpoint, there will be less taxpayers in the future. The richest generation is retiring, the next generation is not going to be near the same income.

Sure, there will be some STEM jobs, but with manufacturing being done in lower wage countries, there will be lower wages and lower taxes paid.

Robots will be doing a lot of work, bringing in lower page workers to replace higher paid workers will continue. Technology will continue to make many jobs obsolete. Not everyone can be a robot mechanic. We do not need that many, and many people do not have the aptitude necessary.

New college grads cannot get good jobs and they miss some prime years building a career. Most of the population growth is from lower skilled individuals. That is why a fast food server will eventually become a lifetime career, not a stepping stone to the workforce.

In the Baby Boom generation, back in the 60s, there was no such thing as getting paid to do nothing. You worked if you wanted to eat. There was a stigma to getting assistance. In today's world, it's no big deal.

So you have the highest paid people in the USA, paying the most in taxes, retiring. They are replaced by lower skilled and lower paid people.

Do the math. It's probably a exponential equation that tax collections, unless adjusted, will be a smaller and smaller amount than what is needed.

 

[scrinch]

....tax anarchy... In case the word is not understood, anarchy is illegal protest.

That's very generous of you. I might call it illegal protest if they gave the unpaid taxes to the poor (other poor). If they keep the unpaid taxes, I might call it something less noble.

I live in a country where it is estimated that about 8% of those who owe taxes actually pay them, and the other 92% "illegally protest." It hasn't lead to a more enlightened and honest government here.

Sent from my XT1254 using Tapatalk

 

[Fedup]

It is a serious comment. That is the direction I fear that the US is headed if they keep loading on tax breaks for the rich and screwing the middle class.

(As for the "failed state" comment, I find that has little credibility unless it is in the context of the government controlling its citizens. Yes they have failed to do that!)

If you google "is Mexico a failed state", it's out there with lots of links. But I think the wsj back in 2008 is where I first read of it. It's probably to do with controlling of the drug problem, corruption, and violence from gangs.

 

[traineeinvestor]

Just curious, since Hong Kong is now part of P.R.C., how does a city generate a tax surplus that doesn't just go into the national government's coffers? How does a city run a tax surplus?


Sent from my iPhone using Early Retirement Forum

Under the Basic Law (HK's constitution), Hong Kong has a high degree of autonomy over its own internal affairs - including its finances. In effect, taxes raised in Hong Kong stay in Hong Kong. The PRC government has control over foreign affairs and is the final decision making authority when it comes to questions of interpretation of the Basic Law. All the political rhetoric and posturing aside, in practice, the PRC government has more or less let HK do its own thing since the 1997 handover.

The current arrangement lasts for 50 years from the handover (expires in 2047) at the moment there are no arrangements in place for what happens post 2047 but I would expect a lot of screaming and yelling and demands being made after which we will probably see something pretty similar to what we have now for the next 50 years.

 

[kcowan]

I live in a country where it is estimated that about 8% of those who owe taxes actually pay them, and the other 92% "illegally protest." It hasn't lead to a more enlightened and honest government here.

Well I never said that the government was more enlightened. Just different. They create no illusion of being for the people.

If you google "is Mexico a failed state", it's out there with lots of links. But I think the wsj back in 2008 is where I first read of it. It's probably to do with controlling of the drug problem, corruption, and violence from gangs.

Yes I understand editorial opinions. They make good covers for the bottom of a bird cage.

But as for the quality of government, I could not judge that. They seem to stay out of the way more than NOTB. Is that good? Sometimes yes and other times no. We don't see widespread protests.

The drug cartels are mostly invisible to regular citizens, same as everywhere else.

 

[devans0]

The labor force is growing and projected to continue @ 0.5% per year for the next decade.

But relatively speaking, more oldsters drawing SS and medical will either mean a cut in services, an increase to pay for it or both. My guess is both, but seeing USA medical costs compared to the rest of the world, there will be a lot of pressure to contain the costs too.

 

[Fedup]

Well I never said that the government was more enlightened. Just different. They create no illusion of being for the people.
Yes I understand editorial opinions. They make good covers for the bottom of a bird cage.

But as for the quality of government, I could not judge that. They seem to stay out of the way more than NOTB. Is that good? Sometimes yes and other times no. We don't see widespread protests.

The drug cartels are mostly invisible to regular citizens, same as everywhere else.

You mean the violence doesn't bother you even if it doesn't affect you? Then why would the income disparity bothers you then? It doesn't make sense what you wrote.
I visited Mexico in 1992, after that I stayed out because of warnings from state government.
As recently, my kid's employee knows of somebody in the movie industry went down there and was kidnapped and killed. So I'm sure it's not the same as everywhere else.

 

[kcowan]

So I'm sure it's not the same as everywhere else.

Then I hope you stay away. Life is too short to worry. We all have to feel good about our own decisions.

Income disparity does bother me because I see it every day but there is nothing I can do to change it. (We are generous in dealing with such people and contributing to charities.) And the people that are affected do not protest.

 

[John Galt III]

There's always the wholesale tax on goods. Don't they already have a tax on lots of things at wholesale level? Consumer doesn't know his purchase price includes wholesale tax, doesn't get angry at politician.

 

[kcowan]

There's always the wholesale tax on goods. Don't they already have a tax on lots of things at wholesale level? Consumer doesn't know his purchase price includes wholesale tax, doesn't get angry at politician.

There is customs duty but no manufacturing taxes (NAFTA), and retail sales tax on all goods and services. But cash is king and avoids the sales tax regularly. Many workers refuse to work for anything but cash.