Dean,

Guess I'm lost with your post. Maybe your thinking I'm saying businesses shouldn't pay taxes. My position:

1. Flat tax for all individuals with some relief for the poor
2. No sales tax. Would allow poor to pay a small income tax rate
3. All incomes and earnings are taxable income
4. No individual deductions or credits
5. Corporate pay flat tax on profits. However use a realistic revenue-expenses approach to profits. No acceleration of deductions and no credits (ie like oil and gas, alternative, farm, etc).

Again I know it's not realistic, but that would be equal.

"Bottom line is that the electorate needs to quit voting the party line, and make decisions based on what the candidate stands for -- only it ain't gonna happen."

We'll get there, Nick, IMO. Eventually. After enough hard lessons. It is said that you can even reason with a donkey, but first you have to hit them between the eyes with a 2 X 4. Of course, that probably won't do you and I much good. :=(

"This is funny"

ROTFL!

It was beyond sweet for me to listen to his concession speech on PBS. It was one of the high points of the evening. Now if only Big Bird had been there to introduce him. ;0)

"Again I know it's not realistic, but that would be equal."

You know, Brad, you'd make a good centrist of either party. Maybe there's hope after all. I think you and I would agree that whatever workable solutions are out there are going to be somewhere in the middle. What you are proposing is well worth serious discussion, IMO. Wouldn't it be something if moderates of both parties told their leadership to stuff it and formed a new party?

"+1 When an college educated person can't understand the tax code, something is seriously wrong."

I'm a CPA and I don't do my business or personal taxes. I pay PWC to handle because it just to time consuming to keep up with all the changes. Since 1986 their have been over 15000 changes to the tax code. I believe in the last 4 years we have seen over 2000 changes. This is just on the federal level.

I remember a magazine that use to have 50 CPA's prepare a tax return with the same information. They consistently all came up with different numbers and some where very different.

Capital gains tax isn't really an issue for me, but the estate tax really burns me up. That is double taxation anyway you look at it.

"I remember a magazine that use to have 50 CPA's prepare a tax return with the same information. They consistently all came up with different numbers and some where very different."

I've had that experience when asking the IRS about specific items on my tax return. That was about the time I reluctantly hired an "expert". Sad.

Tom,

"Wouldn't it be something if moderates of both parties told their leadership to stuff it and formed a new party?"

+1

Edited by wufpackfn on 11/08/2012 19:15:10 MST.

+1 When an college educated person can't understand the tax code, something is seriously wrong.
---------------

Our government makes everything difficult. I am thinking about retiring. So I was looking into Social Security. Seems it is going to be best if I apply at age 66 and suspend my payments, and collect 1/2 of my wife's benefits while pulling out of my 401k. Then at age 70 start drawing out of my own Social Security account -- what ticks me off is that I could not easily get this information from the SSA. Of course all of this is contingent on me living that long :)

I really don't buy that a flat tax is going to make taxes so easy that everyone does their own taxes. The rate is easy to look up. Or the tax program you have does it automatically.

While I agree with simplifying the tax code to the extent possible, I think its just fantasy to think we can make any system that easy. Financial issues are complex because of the high number of different types of transactions we do, not because the rate is progressive.

While the flat tax is more intuitive in a vacuum, it runs into trouble when you put numbers to it. First, virtually every flat tax rate proposed raises less money, thus creating a bigger deficit. The ultra-rich make so, so, so much more money than the middle class that a reduction in their rate is going to reduce overall revenue even if the middle class pays more.

Second, virtually every flat tax plan increases the tax burden on the middle class. That just seems like a bad idea to me when the middle class is struggling so badly to keep its numbers up. This is true even if you get rid of deductions.

I can agree with many of you that we need to tax capital gains more. I understand the argument that its a double tax, but the capital gains tax only applies to the income created, not to the principal put in.

The estate tax draws a lot of emotional dislike that you mention, Brad. But to me, it passes both the fairness argument and the pragmatism argument. I think its fair because we are talking about money going to someone who did not earn it. Its kinda like winning the lottery. If we have to tax somebody(and we do), this seems like a better source of taxes than taking people's hard earned money. I don't have a problem, from a fairness standpoint, taxing unearned money a kid receives from his parents. I do understand that that money has already been taxed; but really, we are often taxed twice. Also, the kid receiving the money has never been taxed even once.

From a pragmatic standpoint(which no one here besides me seems to like), there is actually money there to be taxed, and the deceased no longer has any need of it. Most people also don't know that an estate tax applies only to VERY large estates. And it doesn't apply to assets that don't go into the estate, like jointly owned property.

Edited by alexdrewreed on 11/09/2012 16:01:52 MST.

Ben

Sure rate is easy to look up. It's calculating taxable income that is bear. I'm calling for overall simplicity with both.

Your comment about benefiting wealthy and hurting middle class is not true unless you think wealthy would burden the majority of taxes just because.

Lets just disagree on estate tax. I work hard for my money and pay a lot of taxes so I feel I should be able to pass to my kids without more taxes. How do generations ever get ahead. Should be some reward for hard work. Yet our society is placing less and less emphasis on it. The emphasis is just take what someone else has

Forget percentages. Everyone pays the same price of admission, just like going to a movie.

The 2012 budget is $6.4 trillion. There are over 311 million people in this country. That means each person is responsible for $20,539 each (including Social Security). If everyone had to pay their fair share, don't you think everyone would be voting to reduce the budget and government spending? You bet!!

Reminds me of the Trail Communism thread. I am getting old, someone needs to carry my pack on the trail.

Is everyone here on BPL paying their fair share?

Going from a progressive tax to a flat tax is absolutely going to benefit the rich and burden the middle class. By definition, a flat tax puts more burden on the middle class and less on the rich than a progressive tax. You can do a lot of things to try to offset this, as you have mentioned, but I don't know how you can really dispute that a flat tax will tax rich less and the middle class more than a progressive system. Deductions, etc. are a whole separate issue from a flat tax.

Since you agree that the rate is easy to look up, I assume you would agree that all this argument about a flat tax being significantly simpler is hooey.

On estate tax, I just don't see it as an issue of a reward for hard work. Its a reward for having a rich daddy, which rich kids did not do any "hard work" for. If they did do hard work to earn it, they should have been paid for it as they did it or else they were really just avoiding income taxes by deferring income until the death of a parent, and they did not get taxed twice. My kids didn't do any "hard work" to inherit my money. My kids work different amounts based on their own priorities, and they will earn the money they work hard for. In reality, they won't be taxed on any inheritance anyway because I am not a multimillionaire(even straight millionaires don't pay estate taxes; the threshold is high), so the estate tax does not apply.

I like your simplicity, Nick. No records need to be kept. We all just pay our bill. We might spend a bit more money on tax collectors, though. Its going to take some real torture to get my 14 year old son to work enough to pay off that bill. Soccer practice pays really poorly.

I've been trying to follow the election from a European viewpoint. There doesn't seem to be much difference between them. Both of them are beholden to the money that elected them? Maybe Obama cares more about the disadvantaged in society?
Or is it simply a case of Obama waiting a while to wage war on Iran, and Romney would have had the bombs falling yesterday?

Ben,

It is simplistic and maybe not practical. But the thought process is that everyone needs to participate and take care of themselves. Of course parents will have to pay the bill for their children. Might stop welfare mothers who have more kids than they can support.

As for the truly poor, that is what charities are for. The government should not be our charity mechanism.

I know that these post are going to generate a lot hate. But something to consider... a lot of people take more than they produce. For those who feel that it is right to take from those with ability and give to those with needs; the people with ability get tired of carry the weight and often give up, deciding to join the needy.

@ Mike. That's a pretty good analysis, actually. Especially with the question makes included.

Mike,

You are correct. We got to vote for Twiddledee or Twiddledum. And yes, they are beholden to those who financed them. This is a huge problem here; business get favors and franchises from government. All the more reason to limit/reduce government as the founding fathers intended.

Yes, Obama cares more about the disadvantaged in society. As I stated earlier, God is on his side; and he wants to re-distribute wealth. Not a concept our forefathers intended. But I do feel he is a good person. Just don't agree with his social and economic views.

Mitt; I don't trust him.

Ron Paul was the only one with the right ideas -- at least most of his ideas. But God is on his side too, and he sees his religious beliefs as somewhat of a blueprint for what is morally right.

I work with the poor a lot. They are varied. A LOT of them simply don't have the ability to earn a living. A fair amount of the poor do not have the mental/emotional ability to hold down a job; I wouldn't hire them and neither will anyone else, for very long anyway. Another fair portion have physical disabilities. I see them; they are not like the Easter Bunny. I know a lot of people are skeptical of this, but I can tell you, they are there.

I think charities do a lot of good work. But charities can put conditions on their benefits. Should grandma have to be catholic to get her medicare? Or evangelical?

You live in California. You work 60 hours per week at minimum wage ($8.00). You earn slightly less than $2000 dollars per month.
Subtract 25% (hypothetical) for a flat tax.
You are left with $1500 dollars.
Median rent is is over $1000 for a one bedroom.
You now have $125 dollars per week for everything else.

Do the math on someone that makes 3X as much. Subtract the 25% flat tax.
At the end of the day, at least they can pay median rent and have some money left over to live.

This is the simple argument for a progressive tax.

So tell me the person working 60 hours per week at minimum wage lazy?

I suppose some will say they should go to night school in addition to working 60 hours per week. Can they even afford school? Anyone seen how impacted classes are at the community college level lately? Good luck getting what you need.
(Funny, the Fed gives money to multi-billion dollar corporations at 0%.
Yet a student can't get a 0% loan from the government or anyone else.)

Yeah, yeah, pick yourself up by your own bootstraps. It's the American Way. Rugged individualists and the self-mad man that owes nothing to nobody.
It seems to me that the people at the bottom would simply like to see this logic applied to those at the top as well.

I disagree with you re charity Nick. If a family member has a problem, you take care of them.
On a bigger scale, if a tribe member had a problem, you take care of them.

Modern 'man' has developed because we can afford to pay members of the tribe to not produce food. We need folk to spend their energies on other tasks that help us move forward as a species.

Animals eat each other.