The USCHO Budget Thread (warning: political)

[Kepler]

Re: The USCHO Budget Thread (warning: political)

Five things:

1.) Assuming that you are getting rid of all other taxes, you have to have a tax rate on all income, maybe 5 to 10% on income below the cap and then a higher rate above it. Basically will match the current payroll taxes that people currently pay.

2.) I doubt that your points would be anywhere near that linear, given how long the tail is on income. After 50K the number of people who make that amount of money falls quickly.

3.) Each person files taxes individually, no more filing jointly.

4.) I don't think getting rid of excise taxes is needed, I think that user taxes are among the least objectionable.

5.) Because you are getting rid of all payroll taxes you have to do something to change corporate tax structure as well. Considering that you are no longer separating capital gains from regular income, I'd have no problem doing away with the corporate tax completely and just have that money be taxed once as general income of the corporation owners, assuming that corporations are willing to support legislation that removes their person status and prevents corporations from spending money on political campaigns or donating to political campaigns or PACS (which is a debate for a different thread).

1. That's a good idea, since then everybody has skin in the game. 10% is a nice, round number. All dollars under E are taxed 10%, no matter what E and R are.

2. I think that's only when you consider the current definition of "income." If we had a complete picture of the economic distribution we would know. My intuition is there is an immense amount of benefit that is not currently captured as straight income, everything from use of the corporate jet to Mets tickets. (Although that's a questionable benefit.) Privatizing all "corporate" expenses and benefits simply tags them to the person who gets the advantage of them. That's now taxable income, just like my performance bonus is.

3. Yes.

4. No, the whole idea is not to "hide" taxation within the system. Insofar as producers have to personally pay higher taxes, there will be a ripple through the pricing structure where they have to ask for higher prices to make business worthwhile, so it's probably a wash anyway.

5. I wouldn't tax corporations at all. If you own a private corporation and you realize some gain from it, you get taxed on that as income. If you are a shareholder of a public corporation, likewise. If you are an officer who draws a salary, you pay taxes the same way an employee would. Corporations wouldn't exist in the tax code -- they would just be a private machine that moves around money that then gets taxed as income by whatever flesh and blood human gets it. Since you touch on campaign finance reform, all contributions to any political organization or candidate would simply be from private individuals as a matter of public record -- all other contributions would be illegal. Whether or not we want a cap on any individual's total contribution would be a completely separate political battle.

 

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

Do you not think that people earning their income from capital gains take those same deductions?

The point is that they start from a lower point. If those deductions lower your effective rate to 17%, imagine what it does for those who start out at 15%?

You can't deduct from Capital Gains.

 

[unh_hockey]

Re: The USCHO Budget Thread (warning: political)

You can't deduct from Capital Gains.

http://www.bankrate.com/finance/money-guides/capital-losses-can-help-cut-your-tax-bill-1.aspx

 

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

Wait, how did I miss this gem?

Because overall revenue is now 12% higher 10 years later, the bush tax cuts increased revenue? That's what you're basing this **** on?

If there's merely 1.1% inflation per year over those 10 years, the entire "increase" in revenue is wiped out simply by inflation. That also ignores the increase in population during the same time, which would reflect a lowering of the per capita revenue. And those are just the 2 easily recognizable factors.

You are completely full of crap. Thanks for finally providing your numbers to show why.


EDIT: Math fail on my part. 22%, not 12%. Still gets eaten up entirely by inflation of 2%/year, which is pretty standard. The rest of my post stands.

Ok, so repeal the top rate cut and run the numbers. You would be at a revenue of $2.27T in revenue and $3.8T in expenses. Pretty sure that my premise that we have a spending problem, not a revenue problem still holds.

*if you repeal all rates you get reveune of $2.42T. Still a huge gap.

 

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

http://www.bankrate.com/finance/money-guides/capital-losses-can-help-cut-your-tax-bill-1.aspx

Sorry, I should have clarified as standard deductions. Yes, you can deduct losses (kinda makes sense though since you lost money and it balances out with your gains), but thats only up to $3,000.

 

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

Because clearly the high point of the laffer curve is at 15%...

Prove that, and you'll win a farking Nobel Prize.

That number has nothing to do with the Laffer Curve. Its the number economists have come up with that will replace our current revenue. Learn something about economics or at least do a little research before wading into the waters.

 

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

I've got a degree in economics from an ivy league institution, jack***. And a few masters level credits on top of that which I took for fun.

You're really barking up the wrong tree if that's your best come back.

Then you should know that 15% is the replacement rate of a flat tax. You should also be able to follow an arguement about spending increases instead of inferring that I was saying the Bush Tax cuts were a huge revenue booster.

You REALLY should know that you can't take the deductions you were talking about off of capital gains.

 

[unofan]

Re: The USCHO Budget Thread (warning: political)

Then you should know that 15% is the replacement rate of a flat tax.

Again, that 15% actually generates more revenue than a higher rate.

Clearly these two statements are the exact same thing and not you moving the goalposts after you've been called out on your b.s.

 

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

Clearly these two statements are the exact same thing and not you moving the goalposts after you've been called out on your b.s.

They are two completely different statements. The first is self explanatory. The second is purely about capital gains.

With your education you know how that raising the capital gains tax actually brings in less revenue.

 

[Kepler]

Re: The USCHO Budget Thread (warning: political)

This actually argues that the absolute maximum on the Laffer curve is at a 60% tax rate.

 

[ScoobyDoo]

Re: The USCHO Budget Thread (warning: political)

The good news is once the US finishes it's transformation into an oligarchy then balancing the budget will become a non-issue.

 

[unh_hockey]

Re: The USCHO Budget Thread (warning: political)

This actually argues that the absolute maximum on the Laffer curve is at a 60% tax rate.

lynah, this ones for you

so 60% is where the airplane , aka the masses, stall and cease working. excellent!

 

[Tundra]

Re: The USCHO Budget Thread (warning: political)

You REALLY should know that you can't take the deductions you were talking about off of capital gains.

That's not true. I'm not sure why you think you can't take standard deductions or any deductions if you make all your money via interest income (schedule B) or capital gains (schedule D) since they both get reported on 1040 as income. only difference is long-term capital gains is capped at 10-15% max tax rate.

There is 2 types of capital gains anyways: short term taxed as ordinarily income and long term (held 12month+) taxed at 15% max? or what it's set at now.

 

[joecct]

Re: The USCHO Budget Thread (warning: political)

5. I wouldn't tax corporations at all. If you own a private corporation and you realize some gain from it, you get taxed on that as income. If you are a shareholder of a public corporation, likewise. If you are an officer who draws a salary, you pay taxes the same way an employee would. Corporations wouldn't exist in the tax code -- they would just be a private machine that moves around money that then gets taxed as income by whatever flesh and blood human gets it. Since you touch on campaign finance reform, all contributions to any political organization or candidate would simply be from private individuals as a matter of public record -- all other contributions would be illegal. Whether or not we want a cap on any individual's total contribution would be a completely separate political battle.

Didn't the Dartmouth College case declare corporations to be people in the eyes of the law??? Congress (and maybe the States if it involves the Constitution) would have to undo some pretty long held precedents to change that. Don't see that happening, however desirable that may be as too many $$ are at stake (in all ways).

The Washington Post put forth an idea that Medicare has now been endowed with "third rail" status like Social Security. Well, if you can't touch Medicare and Social Security, there targets of entitlement reform have just gotten a lot smaller (or the smaller entitlements just became bigger targets).

Oh an one more, just to fan the flames

 

[Almington]

Didn't the Dartmouth College case declare corporations to be people in the eyes of the law??? Congress (and maybe the States if it involves the Constitution) would have to undo some pretty long held precedents to change that. Don't see that happening, however desirable that may be as too many $$ are at stake (in all ways).

Congress would only have to change the law. I believe that in exchange for getting rid of corporate taxes that corporations would gladly give up the ability to donate to political campaigns. I think that, by and large, most corporations found it a PR difficulty that it is best to avoid completely. Again, a topic for another thread.

 

[Tundra]

Re: The USCHO Budget Thread (warning: political)

That's not true. I'm not sure why you think you can't take standard deductions or any deductions if you make all your money via interest income (schedule B) or capital gains (schedule D) since they both get reported on 1040 as income. only difference is long-term capital gains is capped at 10-15% max tax rate.

There is 2 types of capital gains anyways: short term taxed as ordinarily income and long term (held 12month+) taxed at 15% max? or what it's set at now.

Well since no one has common sense and never seem to back up their claim.

It looks like AMT (alternate minimum tax) does disallows standard deductions (you can still itemize deductions) if you go over certain amount. which is one reason I back (SIMPLE) tax code: flat or progressive. too much junk in our tax/law codes.
I think the flat rate should be 50% with HUGE standard/personal deduction.

http://www.amtblog.com/tax-court-de...imum-tax-revealing-costly-amt-taxpayer-errors

Mr. and Mrs. Fritz filed their tax return without attaching Form 6251, �Alternative Minimum Tax � Individuals.� They promptly received a notice from the IRS informing them that they owed exactly $7,007 more in AMT. The Fritz�s tax return was relatively simple � $329,000 of total income, the majority of which � $283,000 � was long-term capital gain and qualifying dividends. The Fritzes took the standard deduction, apparently because this was greater than their itemized deductions, as well as the deduction for their personal exemptions.

Alternative Minimum Tax problem

Two AMT issues caused the Fritz�s Alternative Minimum Tax problem.

Loss of the standard deduction and the deduction for personal exemptions

Because of this, Alternative Minimum Taxable Income (AMTI) is always higher than Regular Tax taxable income by these amounts

There are several things the Fritzes could have done to reduce, and likely eliminate, their Alternative Minimum Tax.

Itemizing deductions instead of taking the standard deduction � If the Fritzes had home mortgage interest, or if they had made any charitable contributions, they could have reduced their AMT by itemizing deductions instead of taking the standard deduction. This, unfortunately, is a common error for AMT payers. If they had had, for example, just $1,000 in interest or contributions, they would have directly reduced their Alternative Minimum Tax by $280. They weren�t required to take the standard deduction; they did it because it was larger than their itemized deductions, and they just didn�t think about the AMT.

Spread the capital gain over two or more years � The timing of when to sell securities and realize capital gains is entirely within the control of a taxpayer. Not spreading their very large gain of $246,000 over just two years was a costly mistake on the part of the Fritzes. If they had instead recognized half of their capital gain in the current year and pushed the other half to the following year, they would have lost over $30,000 less of their AMT exemption, most likely removing them entirely from the AMT!

 

[Almington]

It looks like AMT (alternate minimum tax) does disallows standard deductions (you can still itemize deductions) if you go over certain amount. which is one reason I back (SIMPLE) tax code: flat or progressive. too much junk in our tax/law codes.
I think the flat rate should be 50% with HUGE standard/personal deduction.

http://www.amtblog.com/tax-court-de...imum-tax-revealing-costly-amt-taxpayer-errors

I think that most of us here agree that the tax code is a convoluted pile of junk and that the amt, while reasonably intentioned originally, has become at benchmark for poor tax policy.

Sadly, everyone wants tax reform, until they discover that they are a "loser" who gets to pay more in taxes. Then the currents system is just fine.

Repeal all the Bush tax cuts, at brackets at $1M of 45% and $10M at 50%, and then make up the difference through across the board cuts to everything of an equal percentage. Spending can then be reallocated based on priorities given the budget constraints.

 

[Bakunin]

Re: The USCHO Budget Thread (warning: political)

Sadly, everyone wants tax reform, until they discover that they are a "loser" who gets to pay more in taxes.

Sadly, it's the same way with spending. People are all for "fiscal responsibility" until their pet programs are axed.

Unless there's some serious attempt at spreading the pain across all groups, nobody is likely to support any serious reform of anything (and even if there's a fair approach to this problem, it will still be an uphill battle).

 

[joecct]

Re: The USCHO Budget Thread (warning: political)

Sadly, it's the same way with spending. People are all for "fiscal responsibility" until their pet programs are axed.

Unless there's some serious attempt at spreading the pain across all groups, nobody is likely to support any serious reform of anything (and even if there's a fair approach to this problem, it will still be an uphill battle).

And the solution is the ostrich? Because that seems to be what the Congre$$ is doing and we're letting them.

 

[unh_hockey]

Re: The USCHO Budget Thread (warning: political)

stepping back a little bit, I got an interesting article outlining France’s financial crisis

http://www.nationalreview.com/artic...s-revolution-france-kevin-d-williamson?page=1

Basically they had significant inflation, quantitative easing, and eventually laws which were enforced severely. I am not familiar with France's history, so cannot validate all historical facts from this article, but if what they are saying is true - history could and is repeating itself.

So what can we glean from history? The first is clear: paper currency is destined to fail. Another is that we are destined for financial trouble when we are unwilling to tax, and unable to raise money to pay off debt. The last, and most important is that when the inevitable occurs, its going to be very painful for everyone involved.