What's new
By:
USCHO Fan Forum

This is a sample guest message. Register a free account today to become a member! Once signed in, you'll be able to participate on this site by adding your own topics and posts, as well as connect with other members through your own private inbox!

  • The USCHO Fan Forum has migrated to a new plaform, xenForo. Most of the function of the forum should work in familiar ways. Please note that you can switch between light and dark modes by clicking on the gear icon in the upper right of the main menu bar. We are hoping that this new platform will prove to be faster and more reliable. Please feel free to explore its features.

Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Status
Not open for further replies.
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Almington said:
True, depends on what you consider an asset purchase.
Click to expand...

I was thinking more along the lines of deposit to savings, similar to the accounts they used prior to the repeal of Glass-Steagall where banks would put depositor's money into interest bearing accounts on nights and weekends, and then bring it back to M1 during business hours. What would stop me from putting all of my earnings into savings on December 28th, and then taking them back on January 4th?
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FreshFish said:
This idea would eliminate the distinctions between personal income tax, dividend tax, capital gains tax, gift tax, and estate tax, and replace them all with a very neat, tidy structure (this is for personal income tax not corporate tax)

1) List all cash that flows into the household, from any source:
> earned income
> investment income
> asset sales
> withdrawals from savings
> insurance claims
> gifts received
> inheritances
> loan principal
> scholarships
> government benefits
> etc.
​
Click to expand...
My problem with this is that you would create a cash lock on many activities. People looking to avoid taxes, would never sell assets they hold, stocks, land, houses, etc. when it's not wise to hold them. You'd also see people keeping money away from investing it for the same concerns. It's the old, oversimplified outlook on investing, if I have $100 and split it evenly between two stocks, one company goes bankrupt while the other doubles in value; I'll still have $100 of stock until I sell the investment that doubled. Then I'll only have $90 (assumed 20% rate). Again, it's an oversimplified example, but it's exactly the thought process that many people would have.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

St. Clown said:
My problem with this is that you would create a cash lock on many activities. People looking to avoid taxes, would never sell assets they hold, stocks, land, houses, etc. when it's not wise to hold them. You'd also see people keeping money away from investing it for the same concerns. It's the old, oversimplified outlook on investing, if I have $100 and split it evenly between two stocks, one company goes bankrupt while the other doubles in value; I'll still have $100 of stock until I sell the investment that doubled. Then I'll only have $90 (assumed 20% rate). Again, it's an oversimplified example, but it's exactly the thought process that many people would have.
Click to expand...

Actually, if people wanted to completely get out of paying income taxes, they could invest in municipal bonds upon retirement.

The government is a monopoly with a loyalty clause. Once you understand that, then you can look into how to fix it.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

St. Clown said:
My problem with this is that you would create a cash lock on many activities. People looking to avoid taxes, would never sell assets they hold, stocks, land, houses, etc. when it's not wise to hold them. You'd also see people keeping money away from investing it for the same concerns. It's the old, oversimplified outlook on investing, if I have $100 and split it evenly between two stocks, one company goes bankrupt while the other doubles in value; I'll still have $100 of stock until I sell the investment that doubled. Then I'll only have $90 (assumed 20% rate). Again, it's an oversimplified example, but it's exactly the thought process that many people would have.
Click to expand...

We need economic growth. that is the # 1 priority by far. Under Secretary Morgenthau's (updated) plan, there is no tax when you sell a stock in order to buy another stock. that makes very good economic sense: people should position their investment assets where they see the best opportunity; collectively over the breadth of the economy that helps promote growth.

I guess I should have provided some context first. The number one priority during WWII was to increase the savings rate. Our number one priority today is to get the economy growing. Currently, the tax code is an impediment to growth.

So many otherwise intelligent people have a massive blind spot: a lower percentage of a much larger base is far better than a higher percentage of a much smaller base. It's not the rate that matters, it is the end result: how much revenue is generated by a particular rate?


Similary response to Almington: one very powerful principle of tax policy is to impose a tax only once (on the recognition that all taxes distort decision-making, and so it is best to keep these distortions to a minimum). The income tax is the wrong tool to use if you want to redistribute wealth: if you want to redistribute wealth, then use a wealth tax. We've done so for nearly a century in the form of the estate tax and it has worked very well at its professed ends. Seems weird to me that neither the R nor the D tout the success of this compromise, which has gained widespread public acceptance as well.
 
Last edited:
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FlagDUDE08 said:
Actually, if people wanted to completely get out of paying income taxes, they could invest in municipal bonds upon retirement.

The government is a monopoly with a loyalty clause. Once you understand that, then you can look into how to fix it.
Click to expand...
That's certainly true in the current tax law, but would that hold true in the proposed tax law?

unofan said:
Except you got to write off the loss of the other $50 at some point, too. So you're still at $100.
Click to expand...
Yeah, I get that. I figure it would have to be the case going forward, but with so much emphasis on getting new investors into the markets, I've heard arguments like the one I gave by people who are ignorant of both investing and how tax law works currently. So perhaps my critique was skewed more upon my experiences than just what I saw in the proposal.


And I like the idea of incurring no taxes on capital gains so long as the investment is rolled over into a new investment. Tracking the taxable event could become complicated, but it would help investors be more responsive to economic climate than letting tax externalities impact decisions.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

flat tax. we are all equal under the law. every citizen pays x% of all incoming $$$. no deductions.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Thoughtful essay on what's wrong with government policy toward small business and a sensible suggestion on how to improve it.

(basically, the SBA started in 1953 and has not responded in the interim to technological change. We need to distinguish between types of small business, "one size fits all" adiminstrative rules no longer apply.)
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

St. Clown said:
That's certainly true in the current tax law, but would that hold true in the proposed tax law?
Click to expand...

As it were listed, no, although DRIPs and similar activity with purchasing new bonds would result in tax exemption.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

huskyfan said:
flat tax. we are all equal under the law. every citizen pays x% of all incoming $$$. no deductions.
Click to expand...
Any exclusions, like muni bond interest?

That's why I prefer the fair tax (or somebody called it the e-tax). The tax is collected at point of sale, not by a tax return. You can't hide your income as you have to spend it on something whether it be a Chevy or a Porsche, a split level or a mansion. We're all taxed equally, but some of us who spend more will pay more.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

joecct said:
Any exclusions, like muni bond interest?

That's why I prefer the fair tax (or somebody called it the e-tax). The tax is collected at point of sale, not by a tax return. You can't hide your income as you have to spend it on something whether it be a Chevy or a Porsche, a split level or a mansion. We're all taxed equally, but some of us who spend more will pay more.
Click to expand...

But of course, it's far easier to spend $10,000 than $10,000,000. The richer you get, the less you spend as a percentage of income, especially on necessities. Which is why sales taxes are inherently regressive.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

unofan said:
But of course, it's far easier to spend $10,000 than $10,000,000. The richer you get, the less you spend as a percentage of income, especially on necessities. Which is why sales taxes are inherently regressive.
Click to expand...

Then why have the money? All money is eventually spent unless your Scrooge McDuck and just want to have it to take a swim. Savings and investment is simply deferred spending.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

One of the really sad, sad things about any conversation about tax policy is how quickly it devolves to competing opinions bereft of data. We now have reams of information available from IRS data and historical statistics, yet policy makers by and large still continue to ignore it entirely.

Can you imagine the outrage if medicine were practiced in this manner? "I don't care what the drug efficacy studies indicate, I have a right to my opinion and I believe that...." I would hope that people would be outraged, though I'm not so sure.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FreshFish said:
One of the really sad, sad things about any conversation about tax policy is how quickly it devolves to competing opinions bereft of data. We now have reams of information available from IRS data and historical statistics, yet policy makers by and large still continue to ignore it entirely.

Can you imagine the outrage if medicine were practiced in this manner? "I don't care what the drug efficacy studies indicate, I have a right to my opinion and I believe that...." I would hope that people would be outraged, though I'm not so sure.
Click to expand...

Aren't there some religious medical practices that already do this, and didn't it cause an appellate court suit? I would not be surprised if another suit regarding the PPACA comes up, where the religious administrators claim that the tax is a burden on their free exercise of religion...
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FlagDUDE08 said:
Aren't there some religious medical practices that already do this, and didn't it cause an appellate court suit? I would not be surprised if another suit regarding the PPACA comes up, where the religious administrators claim that the tax is a burden on their free exercise of religion...
Click to expand...
Not the tax, but the what they have to cover that is contrary to their beliefs.

A poorly written law implemented by people with an agenda.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Wow, this is pretty remarkable.

A liberal think tank puts out a study about income inequality, and guess what they found? The states with the most "progressive" policies have the highest levels of income inequality:

a liberal think tank called the Center on Budget and Policy Priorities released a state-by-state study of income inequality....

...California, New York, Massachusetts and Illinois all rank in the top 10 for "greatest income inequality between top and the bottom."

Over the same decades covered by the study, there's been a growing scholarly consensus that the blue state social model of high taxes and generous social welfare benefits risks creating a culture of dependency and slow growth. That's why Bill Clinton signed welfare reform. There are mountains of empirical data showing more job creation in states that tax and regulate lightly. Weak economies do not reduce inequality.
Click to expand...

Naturally the authors of the study then disregard their own data entirely when it comes time to making recommendations, which in itself is quite telling, eh?
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

joecct said:
Not the tax, but the what they have to cover that is contrary to their beliefs.
Click to expand...

Quakers have to pay for the military. So cry me a river if the Catholic Church has to pay for birth control.
 
Status
Not open for further replies.
Back
Top