Death and Taxes

[cannon_fodder]

While death and taxes are both inevitable and both usually considered unpleasant, the only difference is you don't have to work just to figure out how to die.  Likewise, figuring out how much you owe in taxes shouldn't be so much damn work.

Between personal taxes, my little investment firms taxes, and screwing with employment taxes at work I spend insane hours just trying to figure out how much money I need to send in.  For gods sake.  I work for a small company and only handle part of the tax issue - and its still a good chunk of my job.  I cant imagine the BILLIONS G.E. spends on tax compliance BS.

"It clearly says in publication 15..." Hey, the 64 pages of Publication 15-E don't "clearly say" a god damn thing.  I hold an accounting degree, a finance degree, and a law degree and its still a ton of work to try and comply.  I want to give you the money I owe, there is no need fighting the system from the collections side.  I know that.  I want to give you the money.

For gods sake, just tell me how much I farkin owe and I'll pay it.  I'll pay you what I owe in Income Tax, SS tax, Medicaid tax, Capital Gains Tax, Qualified Dividend arrears, Unemployment, 941 with holding... whatever.  Just please, for the love of god, tell me how much I owe and when I should pay.  Dont refer me to a 64 page document that is more concerned with sealing loopholes than explaining what everyone is supposed to do.

and by the way, I hate you.

XoXo,

A Tax Payer

[cannon_fodder]

One more thing.  When I go anywhere else for goods or services I get a receipt that tells me what I am purchasing - right after the nice man at the counter tells me how much I owe. Even property taxes are done this way.

I hate you so very much.

[Conan71]

The IRS is a complicated and convoluted system.

How do you feel about the "Fair Tax" or "Flat Tax" solutions?

The Fair Tax sounds like it would simplify tax collection and the tax codes on the surface, but what would it do to shrink the admin costs of the IRS?

Taxes would be collected regardless of immigration status, and the tax wouldn't be punitive on any income level due to rebates for those below the poverty level.

However, I'm always skeptical of the "free lunch".  What's the catch?

[rwarn17588]

The "free lunch" may be that the flat tax won't collect enough money. But I'm not sure.

And it's not like payroll deductions would end. You still have Medicare, Social Security and state taxes.

Any estimates on how much money a flat tax would generate, compared to the current system?

[iplaw]

Flat tax blows, the fair tax is where it's at.

[Conan71]

From what I've read of the "flat tax" there are concerns about collecting enough revenue.  So far it looks like primarily former Soviet bloc countries like Russia, Lithuania, etc. are using this system.  Three or four affluent countries are the UAE, Saudi Arabia, and Bahrain.

One example is what Dick Armey proposed:

"Married couples filing jointly to deduct $26,200, unmarried heads of household to deduct $17,200, and single adults, $13,100. $5,300 would be deducted for each dependent. A household would pay tax at a flat rate of 17% on the excess. Businesses would pay a flat 17% rate on all profits." His proposal excluded taxes on capital gains.  (I'm loathe to use Wiki but sometimes you can find quick info).

Based on exclusions for capital gains and other wealth-building income, this would never pass muster with Democrats and would be used as a wedge issue even though there are a lot of Democrats in Congress who make plenty on capital gains in personal investments.

The "fair tax" is a 23% national sales tax on goods.  IOW, I believe the way it works is that item at the dollar store would now ring out at about $1.32.

From fairtax.org:

"The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax  administered primarily by existing state sales tax authorities."

So that would do away with all payroll taxes.  They promise SS and Medicare would be totally funded.

I've not read Boortz' book on this, though I keep promising myself I will.  I've heard tidbits about it on his show from time-to-time.

[cannon_fodder]

RWARN:

Any tax system implemented will be adjusted to raise the same revenue.  Simply the means of collection would change.

I love the Fair Tax.  It taxes people who want to SPEND money.  Saving money wouldnt cost you.

For most, it would spread the tax burden out over your life.  Currently, you get taxed when you are working and dont pay much when retired.  Under the fair tax that burden would be spread out evenly.  That makes sense, it would give everyone more money to invest and retire upon and more accurately reflect the services you 'buy' from the government.

Not to mention those that want to be frugal can avoid taxes if they really want to.  Ie. Dont buy new things.

But MOST importantly, even better than making taxes inherently easier, is it will force people to recognize HOW MUCH they are spending on taxes.  Currently, most people have no clue what their net taxes are.  If the federal sales tax rate was 26% you would damn well know.  Even if you were rebated more money than you spend on taxes - you still realize how much damn money they take from you.

[Chicken Little]

quote:Originally posted by iplaw

Flat tax blows, the fair tax is where it's at.

They are both inferior.  Consumption as a percentage of income goes down as a family gets wealthier.  The wealthy would no longer have to pay a premium to live in this great country of ours.  In fact, they'd get a discount.  

Both just shift the burden onto the middle class.  No thanks, I'd rather stick with a progressive tax.  The rich can afford to pay more for things.  They don't need us to subsidize them.

[iplaw]

quote:Both just shift the burden onto the middle class.

Could you please explain how you came to this conclusion?  Have you read the Fair Tax plan?

[Conan71]

quote:Originally posted by Chicken Little

quote:Originally posted by iplaw

Flat tax blows, the fair tax is where it's at.

They are both inferior.  Consumption as a percentage of income goes down as a family gets wealthier.  The wealthy would no longer have to pay a premium to live in this great country of ours.  In fact, they'd get a discount.  

Both just shift the burden onto the middle class.  No thanks, I'd rather stick with a progressive tax.  The rich can afford to pay more for things.  They don't need us to subsidize them.

Only if you look at a wealthy family's investments as being stagnant or in a vaccum.

Gross reciepts on sales from a family with an income of $400,000 is going to be quite a bit more than a family with an income of $80,000.  Any way you slice it whomever has more money, is going to be putting more tax back into the system.  As long as there aren't exemtions for luxury items, I don't see how this works out to be relief for the wealthy. With the exception that they are not taxed for saving money which will wind up back in the economy via investments and eventually spent by someone else as discretionary income.  

Savings gets ploughed into investments, which do include companies, whether it's direct or indirect action on the part of the saver, which helps create more jobs and more income base.

[Chicken Little]

quote:Originally posted by iplaw

quote:Both just shift the burden onto the middle class.

Could you please explain how you came to this conclusion?  Have you read the Fair Tax plan?

I've already explained it.  In our progressive system, the tax rate rises as income rises.  The rich pay more because they can afford to pay more.

In these other two, the rich will pay less, proportionally, than the rest of us because consumption, as a proportion of income, drops as income rises.

If the rich pay less, and in your fair tax proposal the poor pay less (because of rebates), then who picks up the slack?

[iplaw]

quote:Originally posted by Chicken Little
If the rich pay less, and in your fair tax proposal the poor pay less (because of rebates), then who picks up the slack?

Well, you answered my question at least.  You haven't read anything about it have you?

[Chicken Little]

quote:Originally posted by Conan71


Only if you look at a wealthy family's investments as being stagnant or in a vaccum.

Gross reciepts on sales from a family with an income of $400,000 is going to be quite a bit more than a family with an income of $80,000.  Any way you slice it whomever has more money, is going to be putting more tax back into the system.  As long as there aren't exemtions for luxury items, I don't see how this works out to be relief for the wealthy. With the exception that they are not taxed for saving money which will wind up back in the economy via investments and eventually spent by someone else as discretionary income.  

Savings gets ploughed into investments, which do include companies, whether it's direct or indirect action on the part of the saver, which helps create more jobs and more income base.

You are going to have to do better than "quite a bit more".

Let's say that the family that earns $80K spends 80% of of its income on goods and services with a 23% sales tax.  That means they would pay $14,720 in taxes.

So,
14,720/80,000 = an effective tax rate of 18.4%

And if the family making $400,000 spends 60% of their income on goods and services, you're right, it is quite a bit more.  At 23% they'd pay $55,200 in taxes.

And,
55,200/400,000 = yields an effective tax rate of 13.8%

So, the "rich" family pays less, proportionally, than the "middle-class" family.  This is exactly the opposite of the system that we have today.  Yes, there are administrative issues with our system, without a doubt.  But the progressive system just seems fairer to me.

[Chicken Little]

quote:Originally posted by iplaw

quote:Originally posted by Chicken Little
If the rich pay less, and in your fair tax proposal the poor pay less (because of rebates), then who picks up the slack?

Well, you answered my question at least.  You haven't read anything about it have you?

I know what he's pitching, and I think it's a con.  Neal Boortz loses me when he says things like "Why didn't some of these students fight back?".  I just don't think he's a credible source of information.

[Wilbur]

quote:Originally posted by cannon_fodder

While death and taxes are both inevitable and both usually considered unpleasant, the only difference is you don't have to work just to figure out how to die.  Likewise, figuring out how much you owe in taxes shouldn't be so much damn work.

Between personal taxes, my little investment firms taxes, and screwing with employment taxes at work I spend insane hours just trying to figure out how much money I need to send in.  For gods sake.  I work for a small company and only handle part of the tax issue - and its still a good chunk of my job.  I cant imagine the BILLIONS G.E. spends on tax compliance BS.

"It clearly says in publication 15..." Hey, the 64 pages of Publication 15-E don't "clearly say" a god damn thing.  I hold an accounting degree, a finance degree, and a law degree and its still a ton of work to try and comply.  I want to give you the money I owe, there is no need fighting the system from the collections side.  I know that.  I want to give you the money.

For gods sake, just tell me how much I farkin owe and I'll pay it.  I'll pay you what I owe in Income Tax, SS tax, Medicaid tax, Capital Gains Tax, Qualified Dividend arrears, Unemployment, 941 with holding... whatever.  Just please, for the love of god, tell me how much I owe and when I should pay.  Dont refer me to a 64 page document that is more concerned with sealing loopholes than explaining what everyone is supposed to do.

and by the way, I hate you.

XoXo,

A Tax Payer

You left out:  sales tax, cable tv tax, electricity tax, natural gas tax, life insurance tax, cell phone tax, telephone tax, 911 fees, fcc fees, internet tax, excise tax, gasoline tax, .......

Using Quicken, I track every penny of tax I pay, including all of the above.  55% of my income so far this year has gone to taxes.  Can't wait until July 15, when I can start paying myself!