Flat Tax or Income Tax.

[Pacridge]

Some current tax information for some of you

Death tax kills small businesses- It taxes the assets of a business not just the cash withholds so if your business is worth 2.000.000 and the only cash withholding is 10.000 you may have to pay quite a large sum (i.e. sell the business)Thats assuming the deceased owned the business but it goes for estates as well

I live in Oregon. We have, statistically one of the largest, by percentage of overall, small business generated economies in the nation. A few years back a group did a study trying to make that direct link. They found one business, some small company that made pellet stoves I believe, that was closed due to the estate taxes due on the business. That company was having financial problems long before the death of the owner.

Most small businesses are family owned. Most of the time the ownership of the small business is divided between several family members. Often by the time one member passes away that ownership has been transfer to another younger member of the family and no taxes are collected when someone passes away.

Also the tax rates vary depending on the estate. If the estate/business is worth less then a million, the tax is zero. That's hard assets. Money equipment etc. If you're inheriting 1.5 million of hard assets your tax would be 1.6%. I would think if you had 1.5 million in assets you would have no problem acquiring a loan of 240K to pay your taxes.

Here's a link for you:

http://www.factcheck.org/article328.html

The rich dont pay more in Social Security taxes- The cut off is 87.900
after that point its ssc and medicare tax free

That numbers old. Currently it's at 90k
http://ssa-custhelp.ssa.gov/cgi-bin...SZwX2N2PTEuNyZwX3BhZ2U9MQ**&p_li=&p_topview=1

The Fair Tax should not increase the prices of some goods by much-
Currently everything you buy already has 22% tax built into the price
so if the flat tax was implimented it would keep the price about the same give or take a few percentage points

This would level the playing field for corporations and eliminate the need to high power corp tax lobbyists. The corporations would still pay the same taxes you would for their supplies.

Interesting. I'll go do some checking on this. You listed a web site? I'll go look. Thanks.

 

[Mikkel]

Some current tax information for some of you

Death tax kills small businesses- It taxes the assets of a business not just the cash withholds so if your business is worth 2.000.000 and the only cash withholding is 10.000 you may have to pay quite a large sum (i.e. sell the business)Thats assuming the deceased owned the business but it goes for estates as well

This claim is bogus. I work in a Small Business Loan office, and as Pacridge has already pointed out this is not the case. I have never seen a small business close because of estate tax working here. If the inheritors want to keep the business, they'll keep it.

 

[TJS0110]

Some current tax information for some of you

Death tax kills small businesses- It taxes the assets of a business not just the cash withholds so if your business is worth 2.000.000 and the only cash withholding is 10.000 you may have to pay quite a large sum (i.e. sell the business)Thats assuming the deceased owned the business but it goes for estates as well

Your assuming this person kept control of there business until the day they died, or they died ubruptly.

 

[IndiConservative]

Your assuming this person kept control of there business until the day they died, or they died ubruptly.

Yea I did some rechecking on that and found that it isn't all to common. Sorry for the error.

That numbers old. Currently it's at 90k

I knew it was 90.000 but I wanted to have something to verify it on and I used the IRS webpage.

Interesting. I'll go do some checking on this. You listed a web site? I'll go look. Thanks.

It's averaged at 22% for goods and 25% for services
http://www.fairtaxvolunteer.org/smart/faq-main.html#1

Its a FAQ the answer is on Question 15 and 17

 

[Hume]

There shouldn't be a flat tax, there shouldn't even be a percentage tax. You should pay for what you use.

Example, you use the public schools; you pay into that system for your town. If your town spends more per head, you pay more. If less, you pay less.

You subscribe into Medicare, you pay that. You chose to privately insure (or not at all) you don't.

Everyone pays a flat sum into military because we're all equally protected by that, and you pay police and fire based on town spending. If you chose to privately hire a security guard (or perhaps your community does), thats your decision.

This is how it should be. People shouldn't pay because they can, they should pay because they are utilizing services.

 

[edb19]

There is currently a bill before the house and senate for the "Fair Tax" HR 25 & SB 25 . Its like the Flat tax only it answers questions about how it affects poor people and other problems take a look at the link. If you like it tell your congressmen/women and senators you want it.

Neal Bortz is also starting to go around the country to hype it up

http://www.myfairtax.org/index.html

Just bought his book - the idea actually makes sense. I'll be writing my congresswoman (not that I expect her to support it) and my senators (who are iffy).

 

[128shot]

There shouldn't be a flat tax, there shouldn't even be a percentage tax. You should pay for what you use.

Example, you use the public schools; you pay into that system for your town. If your town spends more per head, you pay more. If less, you pay less.

You subscribe into Medicare, you pay that. You chose to privately insure (or not at all) you don't.

Everyone pays a flat sum into military because we're all equally protected by that, and you pay police and fire based on town spending. If you chose to privately hire a security guard (or perhaps your community does), thats your decision.

This is how it should be. People shouldn't pay because they can, they should pay because they are utilizing services.

I'm catching on :agree

 

[Iriemon]

There shouldn't be a flat tax, there shouldn't even be a percentage tax. You should pay for what you use.

Example, you use the public schools; you pay into that system for your town. If your town spends more per head, you pay more. If less, you pay less.

You subscribe into Medicare, you pay that. You chose to privately insure (or not at all) you don't.

Everyone pays a flat sum into military because we're all equally protected by that, and you pay police and fire based on town spending. If you chose to privately hire a security guard (or perhaps your community does), thats your decision.

This is how it should be. People shouldn't pay because they can, they should pay because they are utilizing services.

What do you do with kids who can't afford the schools?

I like having a country were even poor kids can get an education and a chance to better themselves.

What do you do with the little old ladies who didn't save enough money?

I like having a country where I don't have to see grannies begging on stop lights.

What do you do with the kids whose parent doesn't have enough money to pay for health or medical care?

I like living in a country where I don't have to see pictures of kids starving to death.

 

[Iriemon]

Some current tax information for some of you

Death tax kills small businesses- It taxes the assets of a business not just the cash withholds so if your business is worth 2.000.000 and the only cash withholding is 10.000 you may have to pay quite a large sum (i.e. sell the business)Thats assuming the deceased owned the business but it goes for estates as well

The Estate tax doesn't kill businesses. It may require a business to be sold if estate that owns the business doesn't have enought $$ to pay the tax.

The rich dont pay more in Social Security taxes- The cut off is 87.900
after that point its ssc and medicare tax free

Medicare is taxed on all income.

This would make everyone pay the same taxes. Used cars cannot be taxed only new cars and only newly built houses can be taxed after that no taxes on them. It makes sense please review the website again

Why would anyone buy new cars and pay a 25% premium?

 

[Hume]

What do you do with kids who can't afford the schools?

I like having a country were even poor kids can get an education and a chance to better themselves.

What do you do with the little old ladies who didn't save enough money?

I like having a country where I don't have to see grannies begging on stop lights.

What do you do with the kids whose parent doesn't have enough money to pay for health or medical care?

I like living in a country where I don't have to see pictures of kids starving to death.

Did you intentionally write that post in the most irritating format possible? The cliches were especially irritating ("little old ladies" "chance to better themselves")

Do you also like living in a world where people are forced to give up their own money for charity? Initially that's what all these services are; charity. Ideally people would donate into these systems, or give funds to schools who offer scholarship to poor kids who show promise. If they don't; its their money. You can be righteous and give your money; whatever helps you sleep at night. But don't force others to.

The "little old lady" who didn't save money; it's her fault anyway.

The people who can't afford food or medicare need to get a job and stop relying on others to care for them. America is the only place where someone can be a lazy load yet still live a decent life. What entitles these guys to food if they don't work?

 

[IndiConservative]

The Estate tax doesn't kill businesses. It may require a business to be sold if estate that owns the business doesn't have enought $$ to pay the tax.

I already addressed this earlier in the post and admitted it doesn't happen often.
Still i think its crap you have to pay taxes on stuff that has already been taxed.

Why would anyone buy new cars and pay a 25% premium?

All items cars to cereal have a 20% to 25% tax built into them now . So it wouldn't change the price much or maybe not at all.

 

[edb19]

Still i think its crap you have to pay taxes on stuff that has already been taxed.

Amen to that - estate taxes are a horrendous practice.

I'm not a fan of taxing savings either. We're told to plan ahead, save for our retirement, for college, for a rainy day - whatever, also to invest in our future. But we get taxed (sometimes at pretty high rates) when we do so.

 

[Iriemon]

I already addressed this earlier in the post and admitted it doesn't happen often.
Still i think its crap you have to pay taxes on stuff that has already been taxed.

If it is crap that money an heir receives is taxed because it is taxed before, why do I have to pay a tax on money that is paid to me for my services? They person who pays me has already paid a tax on the money they pay me.

All items cars to cereal have a 20% to 25% tax built into them now . So it wouldn't change the price much or maybe not at all.

So you add a 25% tax, and the price doesn't change. I'm going to have to look a little more closely at how this magic is accomplished.

 

[Iriemon]

Amen to that - estate taxes are a horrendous practice.

I'm not a fan of taxing savings either. We're told to plan ahead, save for our retirement, for college, for a rainy day - whatever, also to invest in our future. But we get taxed (sometimes at pretty high rates) when we do so.

Why is it a horrendous practice for Paris Hilton to inherit $28 million income and not pay a dime of tax, so that someone who works for and earns their income pays MORE tax?

 

[Iriemon]

Did you intentionally write that post in the most irritating format possible? The cliches were especially irritating ("little old ladies" "chance to better themselves")

Do you also like living in a world where people are forced to give up their own money for charity? Initially that's what all these services are; charity. Ideally people would donate into these systems, or give funds to schools who offer scholarship to poor kids who show promise. If they don't; its their money. You can be righteous and give your money; whatever helps you sleep at night. But don't force others to.

The "little old lady" who didn't save money; it's her fault anyway.

The people who can't afford food or medicare need to get a job and stop relying on others to care for them. America is the only place where someone can be a lazy load yet still live a decent life. What entitles these guys to food if they don't work?

I did not write it in the most irritating format possible. I was describing your vision of America. If that is irritating to you, I can agree with that. The reason we don't have to be irritated with things like old ladies begging in the street is becuase of things like social security.

 

[edb19]

Why is it a horrendous practice for Paris Hilton to inherit $28 million income and not pay a dime of tax, so that someone who works for and earns their income pays MORE tax?

Look - I criticize the media more than anyone I know for the attention Paris Hilton receives. Without question, she's a bimbo and an embarassment to hard working women who manage both a home and a job. However, her grandfather worked hard, made good investments and left his family an incredible trust fund.

The practice of inheritance tax is bad because it punished him (Conrad Hilton) for all his hard work. Here in Toledo there was a locally owned grocery chain (founded in the 20's I believe) - 4 stores. They offered outstanding customer service and great products - including things the national chains didn't. The founder/owner died about 6 years ago. His heirs had to sell the stores because of inheritance taxes. That's a loss to the community. As an aside - the national chain they sold to just closed all their Toledo area stores. I grew up in a farming family. Many family farms are sold to pay inheritance taxes. I know of several small family business owners that worry about what will happen to their business when they pass away.

Seems to me that the Paris Hilton's are the exception and the small business owners are the rule.

Personally, I don't agree with income tax either. The founding fathers never intended an income tax - heck, the constitution needed to be amended to allow for it. I work extremely hard - generally 45-50 hours at the office plus I bring work home. The government doesn't deserve one red cent of what I've earned.

I'd like to see us go back to the days when serving in Congress was a part time job, when representatives and senators had real jobs that occupied their lives for 9-10 months of the year, when they didn't have expense accounts and staffs larger than the one at my office. We live in a free market society and personally I think the private sector can do a better job of managing the country, providing education, building roads and bridges, taking care of the national parks and such than the government does. The government's role in our lives should be extremely limited.

 

[Iriemon]

Re: Flat Tax

According to the BEA, gross personal income nationally is a little over 10 trillion annually. http://www.bea.doc.gov/bea/newsrel/pinewsrelease.htm

The Govt last year spent at least $2.3 trillion, probably more like 2.5 when you add in off budget items like the cost of the wars.

http://cbo.gov/showdoc.cfm?index=1821&sequence=0

The math reveals that if you want to have a flat tax on all income, the tax rate will have to be about 25%.

People have already commented on the inequity of slapping that tax on someone who is on the subsistance level. A guy making minimum wage makes about $10k, so after paying a flat tax his income drops to $7.5k. I agree with those who think this is harsh; it is tough enough to live on 10k. I am personally just thrilled the guy is working, and don't want to disincentive him further.

People have argued that it is unfair that the rich should pay more. Others have pointed out that they can afford it. I agree that he guy making 10k should not be taxed 2.5k so the wealth guy can buy a little bigger yacht. Others argue it is unfair to tax someone more because of their success. Part of their success comes from living in this country in an environment that gives them the opportunity to have that success; arguably it is fair since they have benefited more from that environment and opportunity they should pay more.

Finally, to the extent that the lower and middle classes can afford to live a decent life, it benefits the wealthy by reducing social unrest.

I am not arguing to "soak the rich," but a progressive tax structure makes more sense, IMO.

 

[Iriemon]

Look - I criticize the media more than anyone I know for the attention Paris Hilton receives. Without question, she's a bimbo and an embarassment to hard working women who manage both a home and a job. However, her grandfather worked hard, made good investments and left his family an incredible trust fund.

The practice of inheritance tax is bad because it punished him (Conrad Hilton) for all his hard work. Here in Toledo there was a locally owned grocery chain (founded in the 20's I believe) - 4 stores. They offered outstanding customer service and great products - including things the national chains didn't. The founder/owner died about 6 years ago. His heirs had to sell the stores because of inheritance taxes. That's a loss to the community. As an aside - the national chain they sold to just closed all their Toledo area stores. I grew up in a farming family. Many family farms are sold to pay inheritance taxes. I know of several small family business owners that worry about what will happen to their business when they pass away.

Seems to me that the Paris Hilton's are the exception and the small business owners are the rule.

Personally, I don't agree with income tax either. The founding fathers never intended an income tax - heck, the constitution needed to be amended to allow for it. I work extremely hard - generally 45-50 hours at the office plus I bring work home. The government doesn't deserve one red cent of what I've earned.

I'd like to see us go back to the days when serving in Congress was a part time job, when representatives and senators had real jobs that occupied their lives for 9-10 months of the year, when they didn't have expense accounts and staffs larger than the one at my office. We live in a free market society and personally I think the private sector can do a better job of managing the country, providing education, building roads and bridges, taking care of the national parks and such than the government does. The government's role in our lives should be extremely limited.

An inheritance tax is off topic of this thread, so I started a new one and will respond in the new thread.

 

[IndiConservative]

If it is crap that money an heir receives is taxed because it is taxed before, why do I have to pay a tax on money that is paid to me for my services? They person who pays me has already paid a tax on the money they pay me.

So I take it you like paying more taxes? The flat tax would do away with income taxes and the death tax. The problem is that it has already been taxed sometimes over and over again. Property taxes ,Road taxes ,Sales taxes etc.
So once again you have to pay another tax on it afteryour dead. Thats a bit crappy if you ask me

So you add a 25% tax, and the price doesn't change. I'm going to have to look a little more closely at how this magic is accomplished.

A corporation pays income taxes. They pass those income taxes to you the consumer through there goods. Its estimated that the taxes they pass on to you through there products is between 20%-25%. So if they no longer have to pay income taxes through the fair tax the will remove the 20%-25% from the price of the goods and it will be replaced by the federal sales tax.
I'm anticipating you saying "What will stop them from keeping the price the same and then adding the tax on to it?"

Its the free market system where you can choose to buy products from people who are honest. If the ones that are not honest don't change they will be run out of business. I'm sure the people pushing this legislation would be smart to keep an eye on who is and isn't adjusting there prices.

 

[IndiConservative]

Re: Flat Tax

According to the BEA, gross personal income nationally is a little over 10 trillion annually. http://www.bea.doc.gov/bea/newsrel/pinewsrelease.htm

The Govt last year spent at least $2.3 trillion, probably more like 2.5 when you add in off budget items like the cost of the wars.

http://cbo.gov/showdoc.cfm?index=1821&sequence=0

The math reveals that if you want to have a flat tax on all income, the tax rate will have to be about 25%.

People have already commented on the inequity of slapping that tax on someone who is on the subsistance level. A guy making minimum wage makes about $10k, so after paying a flat tax his income drops to $7.5k. I agree with those who think this is harsh; it is tough enough to live on 10k. I am personally just thrilled the guy is working, and don't want to disincentive him further.

People have argued that it is unfair that the rich should pay more. Others have pointed out that they can afford it. I agree that he guy making 10k should not be taxed 2.5k so the wealth guy can buy a little bigger yacht. Others argue it is unfair to tax someone more because of their success. Part of their success comes from living in this country in an environment that gives them the opportunity to have that success; arguably it is fair since they have benefited more from that environment and opportunity they should pay more.

Finally, to the extent that the lower and middle classes can afford to live a decent life, it benefits the wealthy by reducing social unrest.

I am not arguing to "soak the rich," but a progressive tax structure makes more sense, IMO.

You need to read how the fair tax addresses these issues.
http://www.myfairtax.org/index.html

Poor people won't have it stuck to them.
BTW Paris Hilton needs to be taxed just for breathing because she makes it hard for me to do so. :lol:

 

[Iriemon]

Re: Flat Tax

You need to read how the fair tax addresses these issues.
http://www.myfairtax.org/index.html

The so-called "fair tax" is VAT or a sales tax; I was address a flat income tax.

 

[Iriemon]

So I take it you like paying more taxes?

I cannot understand how you would make that inference from my posts.

The flat tax would do away with income taxes and the death tax. The problem is that it has already been taxed sometimes over and over again. Property taxes ,Road taxes ,Sales taxes etc.

Do you mean the so-called "fair tax"?

So once again you have to pay another tax on it afteryour dead. Thats a bit crappy if you ask me

After I'm dead, I'm not going to suffer a lot from an estate or inheritance. The estate tax is an effectively a tax on inheritance. Personally, I think it would be more sense to tax it as income to the heirs.

A corporation pays income taxes. They pass those income taxes to you the consumer through there goods. Its estimated that the taxes they pass on to you through there products is between 20%-25%. So if they no longer have to pay income taxes through the fair tax the will remove the 20%-25% from the price of the goods and it will be replaced by the federal sales tax.
I'm anticipating you saying "What will stop them from keeping the price the same and then adding the tax on to it?"

This is "fair tax" issue, not a "flat tax" issue. I responded to it in the "fair tax" thread

 

[IndiConservative]

I cannot understand how you would make that inference from my posts.



Do you mean the so-called "fair tax"?



After I'm dead, I'm not going to suffer a lot from an estate or inheritance. The estate tax is an effectively a tax on inheritance. Personally, I think it would be more sense to tax it as income to the heirs.



This is "fair tax" issue, not a "flat tax" issue. I responded to it in the "fair tax" thread

My bad all of these should have been posted to the fair tax thread.

You said that you think that heirs should be taxed. You want more taxes. I mean its just being transfered from one person to another. Not much more than that. I suppose this should be taken up in the other thread though.