Wow. Do I own myself?
Not only do I not own myself, but am in constant threat of losing what I don't own. Do I own myself when I work the first half of every year to pay taxes? What if we could choose which taxes are worth while and only pay those like we do charities? Our payroll dept. could automatically deduct the taxes like they do now. This would eliminate the need to vote on taxes. If a program doesn't get enough money, then that would mean the majority don't want it.
posted on February 25, 2002 02:07:46 PM new
Hey!! What about my home mortgage deduction, child tax credits, property tax deduction, state and local tax deductions??
System works fine for me as it is. A flat tax would double my taxes.
posted on February 25, 2002 02:37:12 PM newA flat tax would double my taxes.
My husband agrees with you. But I wonder.....if everyone had to pay the 10% with no deductions all the way up to Bill Gates, is it possible they would end up lowering the rate because they are now collecting enough without all the deductions or loop holes for people to use?
posted on February 26, 2002 10:06:48 AM new
The practical problems with such a simple system is how to implement it. You can't "just do it", or you will cause a lot of problems.
For example, we have 8 kids and a large house (and mortgage). Most of the kids were adopted. If the 10% flat tax had been implemented, I couldn't have afforded to adopt the kids...and they would have stayed as foster kids forever, costing taxpayers even more. (not to mention the bad effects on the kids too) Bad news, we all agree? Or the government could have gotten much more involved, running state-owned orphanages, hiring more civil servants as social workers, etc., sending over the Army Core of Engineers to put an addition on my house, etc., so as to make the cost of adoption free, and thus affordable without a tax credit. This doesn't sound great to me either.
And right now, if you throw out all the deductions, I'm bankrupt, again because I could afford to do all these great things thanks to the tax structure. Even if taxing bill gates lowers the rate to, say, 8%, i'm still screwed.
Personally, I'm not in favor of a non-progressive (everyone pays the same amount, whether you are a pauper or a millionaire) tax just to save paperwork. I'm actually quite OK with filling out a few forms and saving a lot of money.
The question is: is the goal of a flat tax to make taxes simpler? Tax the poor (or rich) more? or what? And does achieving that goal result in more, or less, pain for everyone as a whole?
posted on February 26, 2002 11:32:26 AM new
Hello CaptainKirk!
Your efforts to adopt 8 children are admirable.
However, you do it at everyone else's personal costs.
Because if a mere 8% would bankrupt you, then that means that I can't do as I please with a 30% tax bracket! Why should I have MY taxes raised to support you and your adoptees? I don't mean that in a cruel sense, but rather, your option to adopt kids was your choice and I had no say-so in it and you never had to come out publically and justify why everyone else should have thier taxes raised.
I can pay less and those kids can get taken care of by the state. You aren't saving me any monney by adopting those kids -- you are costing me and others more, IMO.
Certainly, though, you are quite correct that a sudden change to a flat tax would trash this economy and all of the lives of Americans both high and low everywhere. I don't think that anyone was suggesting that we do that. Yet, we have to start somewhere and better now than later.
I propose that as we close loopholes, we reduce the percentage amount taxed. When all loopholes are closed, then we'll talk hard times. Would that work for all of you?
Borillar
"Real friends don't let friends vote republican"
posted on February 26, 2002 12:18:51 PM new
Also, the flat tax on "income" is very tricky too.
People that own business or have some control as Gates does over how and when he is paid throw a wrench in it.
These big shots get free vacations, transportation, housing allowances, and a lot of other things that are not considered income.
If you or I want to go to the Caribean for vacation, our taxed income pays for it. If these big wigs go, it is for a convention, research, business meetings etc., and the company pays for it.
It becomes very hard for the IRS to distinguish what is a business expense and what is income when dealing with key people in organizations. Bill Gates, just as other top dogs don't just "work" for the company, they represent the company 24-7. Nearly everything they do can be construed as furthering the companies business.
Also when they travel, that administrative assisant that goes along at company expense can be their wife, girlfriend, or even a hooker.
That GMC motor home they travel in is listed on the company books as a 1 1/4 ton truck.
Getting benefits instead of income is also a way to transform income. Valet and limo service is one, as well as house keeping, 100% insurance benefits that cover manicures for his/her hangnail problem.
Then we have entertainment expenses. Take someone who is a potential customer/partner/employee/consultant to the movies, theatre, meals etc., and the top dogs expense it through the company.
There are myriad ways for these people to get the benefit of income without it being listed or taxed as income.
If the IRS gets tough with them, they just call the congressman they donated $$ to to get the IRS off the companies back.
You'd be surprised the perks that are had without it being considered income, and yet expensed off the company books.
posted on February 26, 2002 12:41:56 PM new
Borillar, why do you think that we would pay more as taxpayers to house, clothe,feed, and school captainkirk's children than he does with his tax deduction?
I'm not sure where I stand on a flat tax. We've never had a more complicated return with fewer deductions than the one we filed this year. But I expect next year's to be quite different because there will be fewer sources of income and more deductions although about the same, if not more, money. Poorer or older people who have paid off their mortgages will bear the brunt as deductions are phased out in a flat tax situation. They'll pay their 10% as I pay 10% less deductions.
[ edited by saabsister on Feb 26, 2002 05:45 PM ]
posted on February 26, 2002 03:53:20 PM new
I'd be happy if I was just taxed once on my money. Instead, I'm taxed when I earn it, taxed when I spend it, taxed again if I sell what I bought, taxed for items to go to certain budgets (gas, road, use, school), then bonded and measured to pay again for those budgets that didn't get the tax they were supposed to get.
`·. >(((º>`·.¸.¸>
ahwahneeliz
>(((º>¸¸.·.>((º>··.¸><((((ºcJ
posted on February 26, 2002 10:34:03 PM new
REAMOND, from reading your post, it groks like a Flat Tax with NO Deductions would solve the problem with Bill Gates and his business dealings instead of increasing the problems. Get rid of the deductions, reduce the tax percentage equally at the same time, and you reduce paperwork and fraud.
saabsister, if captainkirk paid the same share of taxes that I do, then I wouldn't make a comparison of any sort. But if he captain pays such a small percentage and I pay such a wopping one, doesn't that suggest something? Doesn't it suggest that if he didn't adopt those kids and paid his fair share of taxes, then those kids would be taken care of AND lower my tax rate. I mean, if there is a shortfall in the tax income, it has to be made up somewhere -- right?
Yeah, I'm kinda pissed at being taxed every which way to Kingdom Come! Just ONE SINGLE TAX -- PLEASE!
Borillar
"Real friends don't let friends vote republican"
posted on February 26, 2002 11:48:14 PM new
Bor- How will a flat tax get rid of any of the perks I mentioned ?
How can you have a business not deduct anything for its expenses to determine its net "income"?
Are you suggesting just taxing the gross receipts for businesses ? That would be ridiculous and impossibly futile.
Businesses that have high gross receipts would end up paying more in taxes than a business that has a lower gross, but a higher profit margin. We would actually be taxing businesses that may have lost money more than a business that actually made a lot of money.
posted on February 27, 2002 09:47:37 AM new
"Your efforts to adopt 8 children are admirable.
However, you do it at everyone else's personal costs"
LOL! One of the biggest laughs in the world.
One of the saddest, also.
Do you know how much it costs the state to maintain a child these days? I dont have the number on my fingertips, but I know that foster care, for example, runs maybe $25 per day, plus expenses, plus the social services workers. I'd be shocked if its less than $20K per child annually. (remember that it costs the state $50K or more to take care of a prisoner, so the $20K makes sense to me). The state has to pay for everyone's time to take care of kids if they have charge of the child. When I adopt them, I spend my time for free...so the state gets a great savings. Taxes go down, one way or the other. Yes, I get some sort of annual tax break, but its far less than $20K per person.
Giving me an adoption tax credit plus child credits is the biggest deal for taxpayers ever. (and for the kids too,of course). You, and every other taxpaper, should buy me a beer every weekend for helping you out. Actually, you should buy me a lot more than a beer, but my needs are modest.
posted on February 27, 2002 11:16:17 AM new
Just some extra thoughts on this topic of how my adoption of kids "costs" you money.
When state kids turn 18 and are on their own, and they go to college, how much do they pay for tuition? zero. No family, no income, no tuition cost. Who pays for their college? Why you do of course. When I adopt them, who pays for college? Why, I do, of course.
And what do you want to bet that a higher percentage of orphanage/foster kids get into criminal/legal problems in life? who pays for that? Why you do of course.
Still think I'm somehow ripping you off by adopting these kids and spending MY money for food, clothing, medical, housing, transportation, and college..all for a measly $3K or so annual tax break?
If I really did want to take advanage of taxpayers, I'd have 6 foster kids. Instead of my wife being a full time homemaker, at $0 per year income, she'd be a full time homemaker at $40K per year. But we, like most people, want to do the right thing for the kids (and us), and that is to have a real family, not some sort of state-sponsored boarding school.
Anyway, enough venting on the topic.
PS - well, almost enough. At least 3 of my adopted kids have moderate to severe learning disabilities, which are fairly common amongst the kids we adopt. We can't even begin to describe the work that causes us, as we deal with their issues. (my wife is a trained teacher, with several master's degrees in special education) Our incremental payment? Zero. Care to imagine what the state would be paying professionals in our place? Lets start the bidding at $50/hour and move up from there.
From the cold, dispassionate view of my shipmate, Mr. Spock, we are fools, donating valuable time for zero payment. Oh well.
posted on February 27, 2002 06:08:12 PM new"How can you have a business not deduct anything for its expenses to determine its net "income"?"
Net Profit is determined by Gross Sales Receipts minus Cost-of-Goods and Freight. That's not a deduction - that's standard accounting practices to determine how much moeny you actually made.
Then, Net Profit subtracts operating costs in order to determine Net Profit. That's how it's typically done right now. I suggest that a single Flat Tax Rate applied to Net Profit, not Net Income.
Borillar
"Real friends don't let friends vote republican"
posted on February 27, 2002 06:18:59 PM new"And what do you want to bet that a higher percentage of orphanage/foster kids get into criminal/legal problems in life? who pays for that?"
Captainkirk, using emotionalism won't answer why I pay such a high tax rate and you don't.
"Still think I'm somehow ripping you off by adopting these kids and spending MY money for food, clothing, medical, housing, transportation, and college.."
I hate to seem crass, but for the sake of this debate, adopting those kids was YOUR choice - not mine. How would you feel if I went out and bought 6 brand new cars and to make it more affordable to me, I get my tax rate lowered and you get yours raised up to compensate for it?
"all for a measly $3K or so annual tax break?"
And if the amount is so measely, then of course you won't mind paying your fair share of it in a Single Flat Tax Rate scheme? Right?
Borillar
"Real friends don't let friends vote republican"
posted on February 27, 2002 06:33:08 PM new I wonder if the professor who teachesthis course has to devote alecture or two to the issue of taxation?
Since that's where this particular discussion has gone, and to give Borillar a new limb to swing from, I suggest we abolish all income taxes and rely heavily upon a steep (20%?) sales tax. The rich get taxed, the poor get taxed. If you don't buy, you don't pay. Perhaps this would encourage people to save more than they spend, and develop a healthy relationship towards money that isn't engendered by our living-beyond-our-means system of credit and buying "on time".
posted on February 28, 2002 05:56:51 AM new
""And what do you want to bet that a higher percentage of orphanage/foster kids get into criminal/legal problems in life? who pays for that?"
Captainkirk, using emotionalism won't answer why I pay such a high tax rate and you don't. "
You've COMPLETELY missed the point. I wasn't being emotional. Not at all. The POINT is that I am SAVING you even MORE money by using MY time to help raise kids so that they are less likely to end up in the legal system.
And you also missed the point that I was addressing your absurd comment that I was somehow costing you money by adopting kids and getting the tax breaks. I did notice you completely ignored the rest of my discussion where I show how utterly wrong you are.
""all for a measly $3K or so annual tax break?"
And if the amount is so measely, then of course you won't mind paying your fair share of it in a Single Flat Tax Rate scheme? Right? "
You missed the point again (why am I not surprised at this point?). The "measely" here is a comparison of the amount the state gives me ($3K) versus the amount I save them ($20K). The state (and hence taxpayers like you) is getting an INCREDIBLY bargain by having me spend my time and money to raise the kids. Paying me off wiht $3K of savings is a fantastic deal for the state..and you. And yes I would mind paying a flat tax, since that would be a COMPLETE change of rules mid-stream. Want to change the rules for FUTURE kids? Well, then we can have a discussion. But giving tax incentives to me to adopt kids, thus saving TONS of money for government, then yanking them away would be incredibly obnoxious. As I said, I went out on the limb, financially, to adopt these kids because we believe kids should be raised, if possible, in a FAMILY, not an orphanage. The "measely" tax breaks are crucial to me, as I said above.
"I hate to seem crass, but for the sake of this debate, adopting those kids was YOUR choice - not mine. How would you feel if I went out and bought 6 brand new cars and to make it more affordable to me, I get my tax rate lowered and you get yours raised up to compensate for it? "
Obviously I wouldn't like it. But its not the same thing. The point is, incentives to adopt kids SAVE taxpayers money. Incentives to buy cars don't (at least so far as I can see, but if they do, then I'd be all for it, because BOTH our tax rates would go down).
The bottom line - you want to see your taxes go up? Compute the tax rate if the state had to support every adopted kid. Start building orphanages, hire staff to watch them, buy cars and buses to transport them, pay doctors to keep them healthy, etc. Then you would REALLY be angry at your taxes.
posted on February 28, 2002 06:30:47 AM new
Bor- There is FAR more that goes into figuring "net profit" than cost of goods and freight. What about equipment and depreciation ? What about wages ? What about ancillary costs such as marketing and sales, accounting, legal, etc. ? Even "gross profits" on form IRS form C allow for labor and "other costs".
Bor, I hope you're not doing your own income taxes.
posted on February 28, 2002 09:30:31 AM new" Want to change the rules for FUTURE kids? Well, then we can have a discussion."
I've already suggested such a thing. Perhaps, in the midst of your anguish over my seemingly impenetrable mind, you've missed much of what I've had to say. I never suggested that we implement such a system all at once. In fact, in many posts inthis thread, I have repeatedly discussed incremental steps.
posted on February 28, 2002 09:35:00 AM new
plsmith, you know, I looked into that and quickly decided that it was not the way to go. The reason being is that rich people will be able to purchase whatever they want under the guise of "doing business"; that is, as if they are buying it for the business, rather than for themselves. For instance, you or I go down to the car lot and purchase a new car. We pay Federal Income Tax on it. A person with a reasonably large business, say 100+ employees, will arrange to purchase that very same car for the business and it becomes part of the selling inventory. But just like in real life, Dealers get to drive the newest car for free, so would this businessperson get to drive that car tax free. Do you see how that works?
That's why I keep saying that EVERYONE pays a flat tax rate with NO deductions would be the most FAIR way for taxation.
posted on February 28, 2002 09:48:29 AM new"Bor- There is FAR more that goes into figuring "net profit" than cost of goods and freight."
Reamond, I wanted to distinguish the difference in concept between Net Profit and Net Income. I used standard accounting practices - you use IRS Tax Form Terminology.
So, let's get this straighten out once and for all.
In a business, you take your Gross Sales/Receipts and subtract out your direct investment; i.e. purchase cost and delivery freight in order to figure out how much money that you made.
THEN, and only then, do you start to subtract out the costs of operation, which has nothing directly to do with income generation; e.g. the costs incurred while doing business is different from those direct costs incurred in the initial purchase of your inventory.
THEN, after subtracting out operating expenses, most businesses then subtract out labor costs.
Then, you have a teeny-tiny amount of money left. That's what you've been calling "Net Income" -- right?
Well, I'm saying that this final amount is NOT what I would suggest that we tax as income. In order to make a No Deductions Single Flat Tax Rate work, the taxation would have to be at the front end - the amount of profit where the cost of goods and freight get taken out of Gross Sales/Receipts.
Right now, what they do is to tax the last amount in that chain. Because a government naturally always wants to raise taxation and raising taxes on businesses would hurt the economy, they dole out generous deductions, which equates to a giant tax break. Believe me: when I went into business for myself, I've NEVER paid so low an amount of taxes! When I was a working stiff, my tax load was incredible. Now it is still high, but a lot lower due to write offs because I am self-employed.
posted on February 28, 2002 10:36:50 AM new
Bor- You idea is what Europe uses, it is called a VAT tax, and it is a mess.
Trying to figure out the purchase price of goods sold has proved more convuluted than our system.
What the VAT has produced is companies shifting profits to subsidiaries in other countries by legally inflating the cost of the goods coming into the VAT tax countries. The $5 widgit becomes a $15 widgit from their subsidiary in Costa Rica, which bought the widgit from Indonesia for $4. So instead of being taxed on a cost basis of $4, the cost basis is instead $15, with the $11 profit being realized in Costa Rica rather than the VAT jurisdiction.
Since VAT doesn't tax consolidated profits, these companies get away with in some cases paying no taxes. But even if the consolidated profits were used in the VAT basis, the companies would just not consolidate the profits.
posted on February 28, 2002 01:07:13 PM new
"Perhaps, in the midst of your anguish over my seemingly impenetrable mind, you've missed much of what I've had to say"
I don't think I've missed what you have to say. And I'm not particularly "anguished" by what you say, just more surprised that you continue to make nonsensical statements and conveniently ignore acknowledging that you've made a big mistake here with your "captain kirk is costing me money" hypothesis.
You do agree, by now, that i have, in fact, saved you, and every other taxpayer, money by adopting kids? Even though I get tax credits, the amount of those credits are less than the state would pay to take care of the kids?
A simple "yes" or "no" answer would be sufficient.
posted on February 28, 2002 02:10:54 PM new
Wow! That really is a problem, REAMOND. Of course, business will always find a way to give itself a tax advantage - legal or illegal sometimes. I suspect, though, that the VAT tax program may not be the Single Flat Tax Rate with No Deductions and does make some allowances. If it is the same plan, there must be a way to do this so that businesses all pay their fair share. Hmmm.
Are you still in doubt as to whether or not you were completely wrong in your initial hypothesis ("captain kirk is costing me money by adopting kids" ), or are you just afraid to admit being wrong publically?
Just wondering since you did post after my last one.
neither situation paints a particularly good picture for you in any case.
posted on March 8, 2002 04:40:46 AM new
How about a sales tax plan with no loop holes, exemptions, etc? That way if the average guy has to pay tax for his car (like he does now), the rich and big business would also have to pay that tax for his car.
How would this work. It sounds fair. Any body care to shoot holes in this idea?
