[General Battuta]

Because I'm not restarting the same one we have now.  I'm starting with a fresh slate - one that we'll hopefully have a better time of keeping clean.

As for closing the loopholes, I honestly think there's not a whole lot of time for it.

Okay so can you like list the differences between your idea and the present system?

Every single addition besides what I said is a difference. What I proposed would be the extent of the tax code.

If your goal is to put more taxes on the rich and relieve the poor why are you lowering the minimum wage and reducing the tax burden on the rich?

I did not say that was my goal.

Clearly not, because you did one better and actually put forth numbers which achieved the opposite, so making life easier for the rich and harder for the poor is not just your goal but actually the outcome of your policy. 

Though I misspoke, instead of minimum wage I meant 'minimum tax ceiling', i.e. the cutoff below which you pay no taxes.

Like Mustang said, your numbers have the poor paying more and the rich paying less.

[Mustang19]

Whaaaat is going on here. From what I can comprehend UT wants people below either $14,000 or $30,000 to not pay tax. And the lowest bracket is currently 5% so this would actually lower taxes for everyone.

Anyway jr2 posted this really cool article for us to talk about so we can do that. The guy in the article raises some good points, EITC helps low income families feed their kids and the IRS should clarify qualification for phase outs. But a right lib sicko like me would be against the mortgage interest deduction since home ownership reduces labor market flexibility and discourages people from seeking jobs outside their local area, while fewer brackets would make for a flatter tax model at the top which is good for work incentives.

[General Battuta]

Whaaaat is going on here. From what I can comprehend UT wants people below either $14,000 or $30,000 to not pay tax. And the lowest bracket is currently 5% so this would actually lower taxes for everyone.

If you don't get all your money back with an income that low something's funny. I can't recall paying a cent in taxes when my income was in those brackets though I may be hallucinating.

[Mustang19]

http://en.wikipedia.org/wiki/US_Income_tax#Year_2010_income_brackets_and_tax_rates

Marginal Tax Rate[5]    Single    Married Filing Jointly or Qualified Widow(er)    Married Filing Separately    Head of Household
10%    $0 – $8,375    $0 – $16,750    $0 – $8,375    $0 – $11,950
15%    $8,376 – $34,000    $16,751 – $68,000    $8,376 – $34,000    $11,951 – $45,550
25%    $34,001 – $82,400    $68,001 – $137,300    $34,001 – $68,650    $45,551 – $117,650
28%    $82,401 – $171,850    $137,301 – $209,250    $68,651 – $104,625    $117,651 – $190,550
33%    $171,851 – $373,650    $209,251 – $373,650    $104,626 – $186,825    $190,551 - $373,650
35%    $373,651+    $373,651+    $186,826+    $373,651+

Odds are the IRS didn't even bother to issue a form. That seems to happen quite often; I never receive one. Congratulations on your inadvertent tax fraud. Unless your income came from mowing your neighbor's lawn or something you probably had payroll taxes. But unless it gets deposited in a bank or otherwise written down somewhere there's no way for the IRS to know what you made on odd jobs. Or if you did get a form you got back mad deductions.

[General Battuta]

I always get mad deductions natch

But yeah I did a form and everything, there were just enough obvious deductions to get everything back where it belongs (my dealer)

[MP-Ryan]

Read a radical proposal a couple months ago, actually from two different sources at opposite ends of the political left/right scale, and both came to a single interesting conclusion:

The best tax reform would be to eliminate income taxes entirely (on individuals and corporations) and implement goods/services taxes on all consumables at flat percentage rates, and targeted to industry (e.g. a general consumption/service tax, fuel taxes, electronics recycling taxes, etc).  This accomplishes several basic objectives:
1.  All persons pay taxes equally according to their consumption, as opposed to disproportionately based on their wealth (and ability to dodge taxes, since we all know that a large proportion of wealthy persons and corporations pay no taxes in the current system).  Buy a bigger plane, you pay more for it.  Businesses are equally subject to such a tax which eliminates the need for corporate income taxation.
2.  Eliminates taxation loopholes and ensures automatic collection.  If taxes are owed based on consumption, they are collected by the seller and required to be forwarded to the taxing authority.  This prevents people from dodging their taxes, and audits would ensure corporate record-keeping was accurate and the correct amounts were forwarded.  No more tax havens for the wealthy - and no more "business write-offs."
3.  Consumption-based taxation gives incentive for people to reduce usage and increase self-sufficiency.
4.  For low-income earners who are typically the hardest hit, a tax rebate could be issued quarterly to those below a set income threshold in percentage increments.  This is already done for federal taxes in Canada.  This ensures that the poor are not disproportionately affected on consumption of essential goods.

I strongly favour this type of taxation format because it is fair and difficult to avoid, and because it targets human behaviour.  Right now if you want to reduce your tax burden you have a variety of options which always involve either earning less, OR dabbling in financial instruments that allow for deferred taxes or relieved taxes if you have the necessary disposable income to do so, which eliminates all of the lower classes and much of the middle class.  Only the top earners benefit from the current taxation scheme used in most of the G8.

Also, corporate taxes are so full of loopholes that they are ridiculous - large corporations pay no tax, while small entrepreneurs pay their full amount, which is why high corporate taxes are universally bad - they stifle grow.  Taxation should be aimed at people and entities which accumulate and consolidate wealth, not those which cause quantifiable gains in wealth through job creation and innovation.

[Mustang19]

Sales tax/values added tax. Every other country has it.

It's good because it taxes consumption not work. The complaints are typically about how it's flat and the complexity of the rebate system required. I don't really know how that works in Europe. But it does encourage saving which is good for growth and economic stability.

[Mikes]

Sales tax/values added tax. Every other country has it.

It's good because it taxes consumption not work. The complaints are typically about how it's flat and the complexity of the rebate system required. I don't really know how that works in Europe. But it does encourage saving which is good for growth and economic stability.

It's also making things more expensive and is incredible ... "visible"... 

I remember the uproar in Germany as that tax got raised a few percent some years back... and we always had it to begin with.

Seriously... I wanna see how that gets "sold" in the US (of all countries). Political suicidide, propably.

[jr2]

Read a radical proposal ...

I like it. 

[Unknown Target]

Read a radical proposal a couple months ago, actually from two different sources at opposite ends of the political left/right scale, and both came to a single interesting conclusion:

The best tax reform would be to eliminate income taxes entirely (on individuals and corporations) and implement goods/services taxes on all consumables at flat percentage rates, and targeted to industry (e.g. a general consumption/service tax, fuel taxes, electronics recycling taxes, etc).

This sounds like sales tax?

Don't get me wrong, I think it's a good idea. I'm just saying I think we already have something like that on the books right now.

I wonder if things would be helped along if people started saying "tax us this amount and in these ways and let's use that money to maintain X", with X being decided upon by the group.

Why don't we name our taxes by what they're paying for instead of what they're on? Instead of always referring to the tobacco tax, why don't we refer to it as a cancer research tax?

[StarSlayer]

Read a radical proposal a couple months ago, actually from two different sources at opposite ends of the political left/right scale, and both came to a single interesting conclusion:

The best tax reform would be to eliminate income taxes entirely (on individuals and corporations) and implement goods/services taxes on all consumables at flat percentage rates, and targeted to industry (e.g. a general consumption/service tax, fuel taxes, electronics recycling taxes, etc).

This sounds like sales tax?

Don't get me wrong, I think it's a good idea. I'm just saying I think we already have something like that on the books right now.

I wonder if things would be helped along if people started saying "tax us this amount and in these ways and let's use that money to maintain X", with X being decided upon by the group.

Sales tax are generally by state, some like MA have them others like NH do not.

[Unknown Target]

Read a radical proposal a couple months ago, actually from two different sources at opposite ends of the political left/right scale, and both came to a single interesting conclusion:

The best tax reform would be to eliminate income taxes entirely (on individuals and corporations) and implement goods/services taxes on all consumables at flat percentage rates, and targeted to industry (e.g. a general consumption/service tax, fuel taxes, electronics recycling taxes, etc).

This sounds like sales tax?

Don't get me wrong, I think it's a good idea. I'm just saying I think we already have something like that on the books right now.

I wonder if things would be helped along if people started saying "tax us this amount and in these ways and let's use that money to maintain X", with X being decided upon by the group.

Sales tax are generally by state, some like MA have them others like NH do not.

Pretty sure there's a federal tax on top of that. I lived in a US territory where we had no sales tax, the reason I was told being that since we didn't have a representative in Congress, we don't have a federal income tax...oh, it was an income tax, not a sales tax. My bad.

[General Battuta]

The thing I like about MP-Ryan's proposal is - if I'm reading it correctly - that it moves the actual reporting of taxes away from the individual with the most incentive to conceal them. Tax information would be collected by the seller, which makes psychological sense.

[Unknown Target]

The thing I like about MP-Ryan's proposal is - if I'm reading it correctly - that it moves the actual reporting of taxes away from the individual with the most incentive to conceal them. Tax information would be collected by the seller, which makes psychological sense.

Why wouldn't the seller be just as likely to want to conceal it? If you collected all this extra money that you were supposed to send the government, then you could have the incentive to underreport your sales, thus lowering the amount of sales tax you would owe. However, since you're not reporting individual taxes, you could have all that money left over and no one would know unless you made it known in some way - such as living in the middle of suburbia but buying a private jet.

[General Battuta]

You raise a good point, but reread his point #2. Corporate record-keeping is more far more robust, by necessity; especially publicly traded corporations must accurately report their revenue in order for everything to work out. Underreporting ultimately works against them because strong revenues will attract even more revenue. And auditing would be simpler because there are fewer points to hit up and better records to work with.

Psychologically, them, the incentive to underreport income at the corporate level is lower simply because a corporation gains from having strong revenue above and beyond the value of the revenue, whereas a person does not to the same degree.

[Unknown Target]

I've quoted his point 2 for reference below.

To your first point, you're correct, but that in combination with his point 2 would only mean that you've eliminated tax loopholes for the very wealthy. However, for middle class business owners you've opened up the temptation for them to want to under report their sales and garner a lot of taxables. Whether or not that's a problem at the moment, I don't know - that would depend on how many of those individuals are left these days. The word on the street these days is that there probably isn't, at least, not in a lot of areas - small computer repair shops are an endangered species in the US.

2.  Eliminates taxation loopholes and ensures automatic collection.  If taxes are owed based on consumption, they are collected by the seller and required to be forwarded to the taxing authority.  This prevents people from dodging their taxes, and audits would ensure corporate record-keeping was accurate and the correct amounts were forwarded.  No more tax havens for the wealthy - and no more "business write-offs."

[jr2]

I'd rather have the middle class making off with a bit of the public's money than the upper class.  I'm guessing the middle class person wouldn't be able to get away with as much as an upper class person would.  Right?

EDIT: Because the middle class person would raise suspicion if he actually started using that money.  And if it's sales tax we're talking then it's a percentage of what he's sold, which would not be worth as much as the things an upper class person would sell, meaning the actual monetary value of what the public (represented by the government) lost would be less.

[Unknown Target]

I'd rather have the middle class making off with a bit of the public's money than the upper class.

Then that's not a very fair tax code, is it?

[General Battuta]

I'd rather have the middle class making off with a bit of the public's money than the upper class.

Then that's not a very fair tax code, is it?

Certainly more fair than the other way around.

[Unknown Target]

I'd rather have the middle class making off with a bit of the public's money than the upper class.

Then that's not a very fair tax code, is it?

Certainly more fair than the other way around.

For the moment, yes. If this one tax were to turn us around, maybe 300 years from now the rich would broke and we'd have the same problem all over again.

Beyond that, though, I don't think this tax would turn us around.