Foreign policy isn’t domestic policy…
Credit card statement. One doesn’t have to demonstrate all spending, just an amount up to the threshold for a rebate. Utilities alone will get you to $5,000. I cannot deny that just transposing a W2 is easier, but if the 1040 form is that easy, why does H&R Block exist?
To anyone who buys the latest Dubya bullshit: I’ve got some gold and diamond mines for sale in Jersey City. :lol:
Credit card statement. One doesn’t have to demonstrate all spending, just an amount up to the threshold for a rebate. Utilities alone will get you to $5,000. I cannot deny that just transposing a W2 is easier, but if the 1040 form is that easy, why does H&R Block exist?[/quote]
Right. People buy literally everything on credit cards, and everyone out there has one they can use for every purchase.
H&R block isn’t going anywhere - you’re already talking about exemptions and deductions. People will do the same rational thing they do now - pay someone else to do it.
I wish.
Right now it takes me several days. In a typical year, I need to process W2’s from several (i.e. 3 or more) different employers, plus 1099s, income from four different small businesses, and investments. Then I need to deal with mortgage, student loans, insurance, child support, business expenses, generated 1099s, and depreciation on durable goods owned respectively by said four small businesses. All of this to find out that none of the friggin’ tax cuts apply to us anyways.
However, nothing was worse than the three month period in which we had a nanny (before she ran away to live a life of crime with her deadbeat boyrfriend) and I discovered why all those politicians are getting nailed for not paying nanny-taxes. It’s not the money, it’s the paperwork. We had to apply for a federal EIN, then generate a 1099 form set (copies to the fed and state tax agencies in addition to the employee) withhold federal, state, and social security taxes and separately pay California unemployment insurance (copies to several different P.O boxes in Sacramento, each in differently sized envelopes). I was still getting nasty-grams from the Franchise Tax Board for sending the wrong form to the wrong P.O. Box six months after my one employee had quit.
Flat tax? Bring it the fuck on.
I’d agree with that. If we switched to a “commerce” or sales tax system wouldn’t we still need an enforcement agency to force people to cough it up? Also I’d rather have the tax man go over how much I made and how much I deducted in an audit than have them review every thing I bought and sold in a single year.
I’d think that an IRS audit of every purchase and sale you made would make most conservatives freak out about a system like this.
I wish.
Right now it takes me several days. In a typical year, I need to process W2’s from several (i.e. 3 or more) different employers, plus 1099s, income from four different small businesses, and investments. Then I need to deal with mortgage, student loans, insurance, child support, business expenses, generated 1099s, and depreciation on durable goods owned respectively by said four small businesses. All of this to find out that none of the friggin’ tax cuts apply to us anyways.
However, nothing was worse than the three month period in which we had a nanny (before she ran away to live a life of crime with her deadbeat boyrfriend) and I discovered why all those politicians are getting nailed for not paying nanny-taxes. It’s not the money, it’s the paperwork. We had to apply for a federal EIN, then generate a 1099 form set (copies to the fed and state tax agencies in addition to the employee) withhold federal, state, and social security taxes and separately pay California unemployment insurance (copies to several different P.O boxes in Sacramento, each in differently sized envelopes). I was still getting nasty-grams from the Franchise Tax Board for sending the wrong form to the wrong P.O. Box six months after my one employee had quit.
Flat tax? Bring it the fuck on.
–milo
http://www.starshatter.com[/quote]
- You’re an edge case.
- A VAT would probabliy increase your taxes by 20%.
- “Eliminating the income tax” isn’t the only way to simplify the system, you know.
Proof?
- “Eliminating the income tax” isn’t the only way to simplify the system, you know.
I’ll be interested in seeing Kerry’s counterplan, assuming this gains any traction.
Of course we are. That doesn’t invalidate my desire for a simplified tax code.
- A VAT would probabliy increase your taxes by 20%.
I don’t believe you have a valid basis for making that assumption. If you do, I’d love to hear it.
- “Eliminating the income tax” isn’t the only way to simplify the system, you know.
Nor did I suggest it was. I’d love a flat-rate income tax with no deductions (or just one standard deduction). Almost none of them apply to us anyways.
Well, I’m for it!, so it must be wrong, right?
:lol: :lol: :P
Say good bye to:
– Mortgage deduction
– 401K and IRA tax benefits
– 529 college savings plans
– Pretax medical and childcare deductions
I suspect both the real estate and mutual fund industries will vigorously oppose this. For that reason alone, it’s probably DOA.
The evidence that a revenue-neutral VAT would raise everyone’s taxes except for the rich is simple.
- VAT-taxable consumption spending as a percentage of income has an inverse relationship to total income. The very rich spend virtually none of their money on stuff that would be taxed.
- The rich are a major, major source of revenue from the income tax. Remember all those quotes about the “top 50% of earners pay 90% of the income taxes?”
- There’s only one place for that money to come from if the rich aren’t paying it.
Here’s a quick shorthand:
- The top 1% of earners pay 25% of the taxes.
- They’d pay virtually no taxes under a VAT plan.
- Therefore, everyone else’s taxes would have to go up by at least 25%.
This was also the reason the flat tax never went anywhere. Hilariously, a VAT will raise everyone’s taxes even more than a flat tax…
OK, I understand all the arguments against it, but the argument for it, is that it is transparent.
My next auto costs $$, my new boat costs $$. It’s all done at point of sale, I don’t have to fart around with accountants, I don’t have to figure if I can really afford something, I know how much money I have available, and how much whatever I would like to buy will cost me.
I realize that almost everyone here has more education than me, but I think that you all should realize that most people in the US have less education than you.
I don’t want a free ride, I have worked all my life, and I just don’t want the government messing with me any more that neccesary.
Jason:
Yes, my point exactly. The top 5% of income earners pay 50% of the taxes under the existing system.
And?
And what percentage of national wealth do the top 5-percent have?
Are you having trouble following the thread?
‘…and therefore Jason does not have a valid basis for assuming that my taxes would be higher under a flat tax or a VAT.’
I have no idea. I am simply refuting Jason’s claim that my taxes would go up under a flat tax or a VAT.
I have no idea. I am simply refuting Jason’s claim that my taxes would go up under a flat tax or a VAT.[/quote]
Are you sure that’s what you’re doing? It doesn’t look that way to me.
Milo, you’ll note that Jason said a VAT would probably increase your taxes by 20%. I believe that in fact is a true statement, without having any clue at all about your family income. Statistically speaking it is in fact more likely than not based upon the stats Jason quoted later, that a VAT would increase your taxes by around 20%, depending on how the VAT was structured and what your actual income levels, and expenses are. Of course neither I nor Jason can state with certainty that a VAT would raise your taxes, since we don’t have your financial info. But as a matter of statistical probability its a meaningful statement. Bottom line, a VAT would raise the taxes of more people than it would reduce, given the way our current tax system is structured. Now that’s not necessarily a bad thing in and of itself, but it may well render the idea a political non-starter.
Look, I definitely feel the US would benefit from tax reform in the form of reducing loopholes, deductions, tax incentives, and all that other complicated BS. And I’d be willing to agree to flatten the tax rates in exchange for a simpler and more efficient system. But of course the devil is going to be in the details.
Our tax system is currently so complicated its hard to have a meaningful discussion. For example, the overall “tax rate” in this country in terms of the total size of government spending compared to GDP is about 32%. The total tax collection is only about 28% (ie, we have a deficit of around 4% of GDP, most of it at the federal level). Of that share I don’t know exactly how much is federal vs state - I think the feds spend about 22% of GDP and tax about 18% and the combined state/city/local is about 10% nationwide. Of the Federal 18%, around a quarter or third or so is payroll tax, which is not just a flat tax but is a regressive flat tax (equal to 13.5% of all wages under $85,000, combining employee and employer contributions). The progressive part of our tax system is the remaining 12-15% of GDP, which are the federal income, capital gains and corporate taxes.
So part of federal taxes are progressive, part are regressive. At the state level you have both progressive income taxes and regressive sales taxes, plus property taxes which can be either or both.
One of the slick things politicians will do is make statements as if they were talking about all taxes, but instead only specify a small subset. For example that figure “50% of the taxes are paid by the top 20% of earners” is only true if you look at federal income taxes, without looking at payroll taxes. Federal revenues if you combine all forms is a lot closer to flat than you think. And if you add in state and local taxes, the tax scheme gets even flatter in states that rely on a large sales tax.
Frankly I’d be happy to have a grand tax compromise: remove the entire current federal tax structure (income tax, capital gain tax, payroll tax, corporate tax) and just have a single flat tax on all income which includes everything: earnings, capital gains, dividends, inheiretence, every form of income, with no deductions other than a flat $10K per adult / $5K per child. This would raise taxes on many middle class families but not all of them, and I’d argue that the simplicity would balance out the downsides.
However, there are 2 big problems:
First, the midddle class homeowners who are relying on the massive mortage interest subsidy would scream bloody murder - also the finance and real estate markets would go apeshit. Overall my grand compromise is probably dead on arrival.
Second, nobody is currently proposing such an overall restructuring. Note that Hastert suggested replacing the income tax with a VAT - he didn’t say squat about the payroll tax which is sapping low earners with a stiff regressive tax already, and he didn’t include corporate tax or capital gains, which currently allow people who make their living off investments to pay approximately one half the marginal rate of a person who makes a living off of labor.
And of course, no matter what you did, you’d still need SOME tax enforcement agency to collect it. Remember the 80/20 rule people: 20% of the people create 80% of the problems. You can’t structure a tax system around what you hope “most people” will do: you have to take into account what the unscrupulous 20% will do or you will end up with what I call the 80/20 snowball: you start out with cheating amongst the small fraction of the public who are cheaters by nature but pretty soon it spreads, as people see that it works and also become envious of the successful cheaters. Cheating is like rot: it only takes a few bad apples…
If you really want to reform the tax system, you can’t play games with rhetoric, and you can’t just say “nuke the IRS” (YAY WE ALL HATE PAYING THE IRS SO LETS JUST SCRAP EM YAY).
There are some good comprehensive reform packages out there, but nobody wants to bite the political bullet on them.
Dan