Tax Reform

[hipsterdufus]

I wanted to see if anyone is interested in talking about tax reform?

The first place I would like to start is payroll taxes. This is a tax that over 75% of Americans pay and if congress wanted to lower taxes on something that would help the vast majority of Americans - this would be a great place to start.

As it currently stands, payroll taxes stop being paid at $90,000. One suggestion to fix Social Security is to raise the limit to say $1,000,000 that people pay payroll taxes.

Another suggestion is a doughnut hole. Leave a gap from say 150K to 450K (arbitray figures) then kick the payroll tax back in after 450K a year.

The taxes that are currently on the table - estate, dividend, capital gains etc are really giveaways to the rich - sure Middle Class Americans may see a little benefit from eliminating the estate tax. I think the cap right now is 1 million tax free. The number of Americans set to inherit that much is relatively small.

I also think that all income should be treated equally - whether it's from wages, capital gains, dividends or salaries. Treat it all equally.

I also think that we should close corporate loopholes that encourage American corporations to set up shop overseas. I would also propose an oversight commitee that would be in charge of eliminating corporate loopholes in the future.

 

[Kandahar]

I wanted to see if anyone is interested in talking about tax reform?

The first place I would like to start is payroll taxes. This is a tax that over 75% of Americans pay and if congress wanted to lower taxes on something that would help the vast majority of Americans - this would be a great place to start.

As it currently stands, payroll taxes stop being paid at $90,000. One suggestion to fix Social Security is to raise the limit to say $1,000,000 that people pay payroll taxes.

Another suggestion is a doughnut hole. Leave a gap from say 150K to 450K (arbitray figures) then kick the payroll tax back in after 450K a year.

Why not just eliminate payroll taxes altogether? If they currently stop being paid at $90K, I would venture to guess that they don't comprise a significant portion of government tax receipts. Eliminating them would give the average person a LOT more money without significantly impacting federal revenue.

The taxes that are currently on the table - estate, dividend, capital gains etc are really giveaways to the rich - sure Middle Class Americans may see a little benefit from eliminating the estate tax. I think the cap right now is 1 million tax free. The number of Americans set to inherit that much is relatively small.

Bad idea...if I'm a multimillionaire, what incentive do I have to keep working or investing my money into the economy if I can't pass it on to my children anyway? Why shouldn't I just blow it all on a cheap thrills instead of, say, starting a new business?

I also think that all income should be treated equally - whether it's from wages, capital gains, dividends or salaries. Treat it all equally.

But it's not currently being treated equally. Capital gains and dividend income is dealt with more harshly. The company I've invested in has to pay corporate taxes, then when they give me my share of the profits I have to pay taxes on it AGAIN. If you want capital gains and dividend income to be treated equally with wages in terms of taxation, we should eliminate the former.

I also think that we should close corporate loopholes that encourage American corporations to set up shop overseas. I would also propose an oversight commitee that would be in charge of eliminating corporate loopholes in the future.

It's not that simple. There aren't any easily fixable "loopholes" that can be closed to make a corporation stay where it doesn't want to. There's a reason that corporations relocate to places like Bermuda: because there's no corporate tax there. If corporate relocation is a serious problem (and I'm not sure it is), we'll need to simply make the United States more competitive by lowering our own corporate tax rates.

 

[Stinger]

I wanted to see if anyone is interested in talking about tax reform?

The first place I would like to start is payroll taxes. This is a tax that over 75% of Americans pay and if congress wanted to lower taxes on something that would help the vast majority of Americans - this would be a great place to start.

Then get rid of the charade that they are insurance or retirement programs. Get rid of the SS administration, the Medicare and Medicaid departments and make it one big welfare program which is what you are suggesting they are. This help you want for the "vast majority of Americans" is a wealth transfer scheme and nothing more so let's call it for what it is.

As it currently stands, payroll taxes stop being paid at $90,000. One suggestion to fix Social Security is to raise the limit to say $1,000,000 that people pay payroll taxes.

And the amount of benifit one can recieve also stops at a certain level. Just as with other things in life if Bill and Bob pay the same they should get the same.

The taxes that are currently on the table - estate, dividend, capital gains etc are really giveaways to the rich - sure Middle Class Americans may see a little benefit from eliminating the estate tax. I think the cap right now is 1 million tax free. The number of Americans set to inherit that much is relatively small.

Except that it is the estate that is taxed. There could be 20 - 30 inheritors of the 1 million and most of them could be middle class or poor and their inheritance would be cut buy the tax that has to be paid by the estate. So it is a specious arguement people make about only so many ESTATES are effected.

I also think that all income should be treated equally - whether it's from wages, capital gains, dividends or salaries. Treat it all equally.

Flat tax or NST so that everyones income is treated equally.

I also think that we should close corporate loopholes that encourage American corporations to set up shop overseas. I would also propose an oversight commitee that would be in charge of eliminating corporate loopholes in the future.

Then stop taxing their overseas income, which they pay tax on in that particular country, and only tax their domestic income like most countries do. And what specific loopholes are you talking about, most loopholes are set up so that companies do things that the government (or some group which gets government to create the loophole) want them to do. Like donate to charities, or invest in more research, invest in better (cleaner for instance) equipment or even invest in poor foriegn countries to help those countries (you know the shops overseas you want to eliminate).

 

[hipsterdufus]

Why not just eliminate payroll taxes altogether? If they currently stop being paid at $90K, I would venture to guess that they don't comprise a significant portion of government tax receipts. Eliminating them would give the average person a LOT more money without significantly impacting federal revenue.

Payroll generate significant revenue for the governtmet. Eliminate them? Fine, but where will we make up the difference?

Bad idea...if I'm a multimillionaire, what incentive do I have to keep working or investing my money into the economy if I can't pass it on to my children anyway? Why shouldn't I just blow it all on a cheap thrills instead of, say, starting a new business?

No one wants to take the money away, it should be taxed though. Look at the Walton family. When Sam died, he made his heirs some of the richest people in America. Did they earn it? Maybe, maybe not. When Sam's kids die and pass the money on to their children, did they earn it? Maybe, maybe not. All I'm saying is that it should be taxed. The Walton famiy is notorious for not giving money to charities - only recently, with Katrina, did they invest some Walmart money (not their own) into relief efforts. Did you ever see the underground bunker at the Walton estate? It's built to withstand a nuclear attack.

Another point is that charities stand to loose billions of dollars if the estate tax is repealed.

But it's not currently being treated equally. Capital gains and dividend income is dealt with more harshly. The company I've invested in has to pay corporate taxes, then when they give me my share of the profits I have to pay taxes on it AGAIN. If you want capital gains and dividend income to be treated equally with wages in terms of taxation, we should eliminate the former.

Agreed, if the corporation is actually paying taxes.

It's not that simple. There aren't any easily fixable "loopholes" that can be closed to make a corporation stay where it doesn't want to. There's a reason that corporations relocate to places like Bermuda: because there's no corporate tax there. If corporate relocation is a serious problem (and I'm not sure it is), we'll need to simply make the United States more competitive by lowering our own corporate tax rates.

You're right about Bermuda. Here are some answers to what I consider un-American activity by corporations that avoid paying their fair share.

Recommendations:

1) CLOSE THE OFFSHORE REINCORPORATION LOOPHOLE. Companies that move their headquarters offshore in name only should be taxed as if they are still incorporated in the U.S.

2) INCREASE DISCLOSURE. The secrecy surrounding corporate tax-reduction strategies should be eliminated. Investors have a right to a clearer picture of the financial health of a company's core business, while all citizens have a right to understand how much corporations are paying in taxes.

3) STOP GIVING CONTRACTS TO TAX TRAITORS. Bar companies that have moved offshore from receiving taxpayer money in the form of government contracts.

4) ELIMINATE AUDITOR CONFLICTS. The loopholes in the Sarbanes-Oxley Accounting Reform Act and SEC regulations that continue to allow auditing firms to be paid to provide tax strategy consulting to their audit clients should be closed.

http://www.citizenworks.org/corp/tax/taxbreif.php

 

[Stinger]

Payroll generate significant revenue for the governtmet. Eliminate them? Fine, but where will we make up the difference?

Good point and in fact "Payroll" taxes are "suppose" to not be taxes at all but just the paying for specific government insurance programs.

No one wants to take the money away, it should be taxed though.

Why? It was taxed when it was earned.

Look at the Walton family. When Sam died, he made his heirs some of the richest people in America. Did they earn it?

That should be none of the business of the tax system. Envy is not a good reason to invoke a tax.

Maybe, maybe not. When Sam's kids die and pass the money on to their children, did they earn it? Maybe, maybe not.

So what. Sam did and it was his money to do with as he pleased. Any money they earn on the money invested or gains on property is subject to taxes.

All I'm saying is that it should be taxed. The Walton famiy is notorious for not giving money to charities

Where on earth do you get that idea, not that this thread should become a thread strictly about Wal-Mart your assertions requires so facts being posted

Wal-Mart heirs pour riches into education reformBy Jim Hopkins, USA TODAY
Wal-Mart's founders transformed U.S. business. Now they are taking on a very different subject: the nation's public schools. The Waltons — the USA's richest family — have quietly become top philanthropists in education reform, including controversial charter-school and school-voucher causes............
John Walton, one of founder Sam Walton's four children, says the family expects to donate as much as 20% of its $100 billion in Wal-Mart stock.

You're right about Bermuda. Here are some answers to what I consider un-American activity by corporations that avoid paying their fair share.

Which doesn't get the individual out of paying income taxes or the company paying taxes on profits earned here. Tell me if this was such a good thing why don't MOST company's do it? The fact is very few do. Change our tax system so that companies here do not pay taxes on profits earned abroad ( like other countries do or rather don't do) and you'd get rid of most of it.

 

[Billo_Really]

63% of corporations do not pay taxes.

 

[hipsterdufus]

So what. Sam did and it was his money to do with as he pleased. Any money they earn on the money invested or gains on property is subject to taxes.

I agree, but if the Estate Tax is eliminated, then these perpetual multibillion dollar transfers to heirs would not be taxable.

 

[Stinger]

I agree, but if the Estate Tax is eliminated, then these perpetual multibillion dollar transfers to heirs would not be taxable.

It has already been taxed when it was earned. It an envy tax and our tax system should not be based on one persons envy of another.

 

[Kandahar]

I agree, but if the Estate Tax is eliminated, then these perpetual multibillion dollar transfers to heirs would not be taxable.

So be it. If junior gets all of his daddy's money, one of two things will happen:

1. He'll be responsible with it (thus contributing to the economy, creating new jobs, and generally benefitting society).
2. He'll be irresponsible with it (thus transfering money from the wealthy back to society anyway).

Studies have shown that the generations who actually earn the money are much more responsible with it than future generations. But with an estate tax, people create elaborate schemes to keep the money in their families for generations.