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allison

Federal Tax Reform is SEXY

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Okay, Fence Sitter wants to talk about Federal Tax reform, and it's enough off topic from the local politics thread that I'm going to paste his post here and see if this discussion talkes off:

 

thread drift...

 

i think i am the genious that can reform taxes...

okay here we go...

 

-everyone gets 10% income tax and %5 sales tax...

-smokers get 60% 'smoking tax' (purchase of cigaretts etc)

-drinkers get a 20% 'alcohol tax'(on purchaswe of alcohol)

-have kids, get $500 per year per kid (up to 3 kids)

-make more than $500,000 per annum? 30% income tax

-make more than 7 figures, 40% tax

-make less tahn $18,000 0% income tax

-make under $20,000 with kids 0%

 

c'est finis...wasn't so hard was it...some punk ass 21 year old university student just did what 100's of guys making 6-7 figures couldn't do...hmm something is wrong with this picture...

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Is that the strive to be a loser tax idea.

 

I agree with the make less pay less idea. But things can be more complicated than that.

 

[ 11-13-2002, 08:57 PM: Message edited by: Cpt.Caveman ]

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quote:

Originally posted by allison:

-everyone gets 10% income tax and %5 sales tax...

-smokers get 60% 'smoking tax' (purchase of cigaretts etc)

-drinkers get a 20% 'alcohol tax'(on purchaswe of alcohol)

-have kids, get $500 per year per kid (up to 3 kids)

-make more than $500,000 per annum? 30% income tax

-make more than 7 figures, 40% tax

-make less tahn $18,000 0% income tax

-make under $20,000 with kids 0%

 

. . hmm something is wrong with this picture...

Sure is. So let me see if I have this correct: smokers get taxed more than drinkers. Why? People who are successful get taxed progressively more? Why? Success is punished under your system. That seems to be completely against many of the principles upon which our country was founded.

 

I agree philosophically with a flat tax--but only if its across the board with absolutely no deductions--not even for kids.

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C'mon Rob -

 

The rich get taxed more because they can afford it. 35% of a poor person's income means a lot more to that person with respect to meeting basic needs than 35% of a fat cat's income. That's the theory behind the progressive tax that has been in place for years. I say tax the rich. The republican line is that the flat tax, theoretically, generates the same amount of income for the government, but it generates more savings ... which is supposed to stiulate the economy. What that really means is that the rich are taxed less (creating more savings) and the poor are taxed more, increasing the disparity in wealth. The flat tax is little more than trickle down economics dressed up in new clothes.

 

I say legalize it and tax the sinners. [Cool]

 

Hey, you wanna climb this weekend? The woman is off to City of Rocks (ain't it gonna be cold?), and Red Rocks gave me an itch I need scratch.

 

- Chris

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quote:

Originally posted by Winter:

C'mon Rob -

 

The rich get taxed more because they can afford it. 35% of a poor person's income means a lot more to that person with respect to meeting basic needs than 35% of a fat cat's income. That's the theory behind the progressive tax that has been in place for years. I say tax the rich. The republican line is that the flat tax, theoretically, generates the same amount of income for the government, but it generates more savings ... which is supposed to stiulate the economy. What that really means is that the rich are taxed less (creating more savings) and the poor are taxed more, increasing the disparity in wealth. The flat tax is little more than trickle down economics dressed up in new clothes.

- Chris

Sure, fuck the rich; they can take it. [Roll Eyes][hell no] That system punishes people for being successful; what complete bullshit.

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I'm hoping to go BC skiing this weekend. Maybe can incorporate the two and do some choss climbing at Illumination Rock or hit Pete's Pile on the way home. French's?

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Greg W -

 

Flame on dude. 35% of a rich person's income means less to that person in meeting their basic needs than 20% of the income of a poor mother with three kids. The rick aren't getting punished. That's the theory behind the progressive tax. Anyone crying fairness over the flat tax either has no idea about a poor family's budget or simply wants to fuk the poor.

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quote:

Originally posted by Winter:

Greg W -

 

Flame on dude. 35% of a rich person's income means less to that person in meeting their basic needs than 20% of the income of a poor mother with three kids. The rick aren't getting punished. That's the theory behind the progressive tax. Anyone crying fairness over the flat tax either has no idea about a poor family's budget or simply wants to fuk the poor.

Of course they are being punished. They are being forced to shell out a LARGER PERCENTAGE of THEIR earnings. Why should I strive to be as successful as I possibly can if I know that the government will just reward me by taking more of it? The very fact that the income tax is progressive shows the inequity in the system.

 

No flaming, Winter; flaming is so yesterday in the cyber-climbing community [Roll Eyes][Wink]

 

Greg W

 

[ 11-14-2002, 09:27 AM: Message edited by: Greg W ]

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quote:

Originally posted by Winter:

or simply wants to fuk the poor.

haven't those exact words been spoken in an earlier topic? [Confused] It's hardly hypothetical.

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Let's try this again. The rich are not getting punished, because they are giving up FAR LESS of their basic needs in taxes then are the poor. 20% to a poor person means food from the table. 35% from a rich guy means one less vacation home. You can focus all you want on the percentages, but that's a convenient way to avoid the large impact that a small amount of money has on a poor person compared to the small impact that a large amount of money has on a rich person.

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Winter - I understand what you say; I've heard it before. My point comes from the belief in personal freedom and property rights. Given that, my view is that if one individual is taxed at a different rate (percentage rate is the only way to truly bring equity to those of different financial levels) is unfair. What someone can afford is immaterial (in my view) as ALL the money they earn is theirs to do with as they will. Why should the government be able to say to a wealthy entrepreneur, "you can afford to live with less so we're going to take X amount"?

 

A great book on this is Capitalism and Freedom by Milton Friedman.

 

Greg W

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quote:

Originally posted by Greg W:

Why should the government be able to say to a wealthy entrepreneur, "you can afford to live with less so we're going to take X amount"?


Perhaps so the government can get enough money to defend our great nation and provide infrastructure without making the vast majority of those (the less than uber-wealthy) go broke.

 

I don't know how much money you make Greg, but I'd bet that if we converted to a flat tax at a rate high enough to bring in the current amount of revenue then you would be paying a higher rate. Are you down with that?

 

Upping the percentage on people who make peanuts does not make you much money until you REALLY gouge.

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Chuck - I am down with equality. Haven't figured out what a flat tax would do to me; I know there are websites that will figure it out. I am not completely against a sales tax (more Constitutional, IMO). I know what many will say, but I think it will force people to spend smarter.

 

Greg W

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I'm not an economist, but I play one on cc.com. Intuitively though, it would seem that a flat rate coupled with zero deductions would make the tax-field a lot more equitable. People falling into the lower echelons of the income strata already have fewer deductions--if any--then those falling at the opposite end of the spectrum. Eliminate deductions and the field becomes more level because the rich would end up paying more under a flat rate system then they do now. The zero deduction clause would not affect the poor much at all while it would affect the rich significantly.

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Too true, rbw. People in the higher tax brackets have investments and other vehicles to shelter income. Do away with all that (including the mortgage interest deduction) and the field gets a lot flatter.

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A sales tax is unequitable the other way. The poor are taxed a greater percentage of their income.

 

If switching to a sales tax, the rate charged would obviously need be higher than the current income tax rates. Are you down with paying greater than 35% tax on everything you buy?

 

As long as people are not tricked into it, you can be assured that a flat tax or a sales tax are NOT ever going to happen. Look what happened here in Washington, people voted 2 to 1 to gut our infrastructure spending because it'd save them $50 every two years on their car tabs. [Roll Eyes] I doubt many people are going to support a 35-50% sales tax or a doubling of their income-tax rate.

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Hey--who let Mr. Reality into the classroom? I thought this was a hypothetical discussion. How can we solve the worlds problems if someone keeps injecting pragmatism into it?

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quote:

Originally posted by rbw1966:

People falling into the lower echelons of the income strata already have fewer deductions--if any--then those falling at the opposite end of the spectrum.

Sorry Rob, that's wrong. People falling into the lower echelons have the most deductions, in terms of percentage of their income. It's called the "standard deduction". If you fall below a certain level you pay no income tax.

 

Normal workin' folks (< 100k/yr) with a home loan are getting a little less but the next biggest deduction, in terms of % of their income. My family deducts probably > 20% of our income. Do you really think that those making > 100K, > 500K are able to find ways to shield 20% of their income from taxes?

 

This myth of huge tax shelters for the wealthy is a diversion to make the common people think that a flat tax will lower their taxes and hurt the wealthy. It is a trick used against people who aren't very mathematically minded. As I alluded to in my previous post, this is the only hope flat-taxers have. They will need to trick the vast majority of people who will get their taxes burden raised, to think they will be getting a better deal. Perhaps Greg will vote to raise his taxes on the basis of the equality aesthetic, but not many voters are this altruistic.

 

From a practical point of view, eliminating deductions on mortgage interest ain't gonna happen either. There's too many people out there paying a lot of mortgage interest, as well as too many powerful banking interests making too much money off of mortgage interest, as well as too many people in this country making their livelihood via home construction and sales.

 

[ 11-14-2002, 10:41 AM: Message edited by: chucK ]

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Well, thank god we've got a Republican President and Congress and none of these socialist ideas will come to fruition. What is more likely is the elimination or reduction of capital gains taxes and estate taxes.

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Ok... hehe... this should be good.

 

How about this:

 

Income taxes re-distribute wealth from those who have it to those that don't. The wealthy choose (even if they don't realize that they made the choice) to pay more in taxes because as bad as the IRS is, it is much better than having that wealth redistributed by more coercive means.

 

To put it another way:

 

The greater the number of people who are less wealthy than you, the greater the number of "payoffs" you have to make to keep them from trying to take away what you have by force.

 

If you apply that to our skewed income curve you would probably find that the percentage of income required for "payoffs" would increase as income exceeded the median. (partilularly if the people who recieve the payoff collude)

 

Flame on!

 

(and yes I do know that I used income and wealth interchangably and that is wrong... just sick and wrong....)

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quote:

Originally posted by vegetablebelay:

Well, thank god we've got a Republican President and Congress and none of these socialist ideas will come to fruition. What is more likely is the elimination or reduction of capital gains taxes and estate taxes.

It cracks me up that the same people who say the flat tax is good because it will eliminate all those terrible loopholes for the rich, also back reduction of capital gains and estate taxes! [laf]

 

For those of you who don't know, the "reductions" of the estate taxes that Bush is pushing for, are reductions to the higher rates paid by people inheriting amounts in the millions of dollars (there is currently no estate tax on inheritances of less than 625K $).

 

[ 11-14-2002, 10:54 AM: Message edited by: chucK ]

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Or how about this (I agree with chuck BTW) - we go with the flat and no deductions, and EVEN apply it to corporations? Just like with real people, corporations would pay tax on every dollar that comes in the door regardless of what it cost them to make that dollar - no deductions for salaries, depreciation of equipment, business lunches, and all those other deductions. People don't get to deduct what their car, food, clothes that are necessary for them to earn a buck, but coporations do. I think this what has scared the flat taxers off in recent years because if you treated corporations like we treat people, well, they would probably be bankrupt before the ink on the bill changing the tax code was dry.

 

Food for thought?

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I agree with Poseur: corporations get the legal benefit of being treated as individuals so why not tax them the same?

 

I think we're on to something.

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"Upping the percentage on people who make peanuts does not make you much money until you REALLY gouge."

 

And yet these same people are the ones who demand the most services. What we have is people who do not generate enough resources for themselves, demanding someone *else* work to serve them.

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