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The Uncensored Tax Plan

How, exactly, do landlords neither engage in business activities nor provide a service? Why are their tenants paying them?
Because they don't regularly participate. It's the nature of rentals, that streams of revenue flow without working for it in the same way an employee works, or a self-employed farmer works.
 
Because they don't regularly participate. It's the nature of rentals, that streams of revenue flow without working for it in the same way an employee works, or a self-employed farmer works.

That seems to assume that other business owners work considerably harder than a landlord. Granted that landlords may work fewer hours, but that’s the nature of owning a business of renting (out) anything.
 
Because if I earn 250k at my W2 job, I will most certainly buy a cattle farm and annually write off 50k of cattle/supplies building my herd, obtaining a whopping 40% IRS contribution to my venture. I will build my herd, and pass to my heirs, as they enjoy the step up in basis and the sale of the cattle at FMV without tax.

I believe his plan has no deductions allowed.
 
I believe his plan has no deductions allowed.
I think he would mean personal deductions, standard deductions, child credits, etc.

You can't really tax a business on gross.
 
I've dealt with many posters here who support it. You don't have to tell me how crazy it is.
Yeah, that's insane. If Walmart were taxed on gross in 2024, they'd have had a 136 BILLION federal tax liability.

Meaning, they would cease to exist in 2025.
 
That (bolded above) seems to imply the (annual) taxation of unrealized capital gains.

I apologize if it seems that way - certainly not.

Unrealized gains are not income.


If someone buys an asset (e.g. a stock share or some real estate at fair market value, holds it for some period of time and later sells that asset at fair market value then they have only enough ‘income’ to buy that same asset at it’s current fair market value. Essentially, what’s being taxed is that asset’s inflation.

Agreed, Only realized gains are income.
 
The same thing happens with realized capital gains - you get taxed for inflation.

The same thing happens with an annual raise or COLA - you get taxed for inflation.

This just puts everyone under the same rules.
 
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Because if I earn 250k at my W2 job, I will most certainly buy a cattle farm and annually write off 50k of cattle/supplies building my herd, obtaining a whopping 40% IRS contribution to my venture. I will build my herd, and pass to my heirs, as they enjoy the step up in basis and the sale of the cattle at FMV without tax.

I have no idea what you are trying to say.
 
That's to the IRS for regular income tax. You realize people also pay payroll taxes to Social Security and Medicare, as well as state income taxes, right?

You tried these red herring fallacies before.

This is a proposal for income taxes.
 
The same thing happens with and annual raise or COLA - you get taxed for inflation.

This just puts everyone under the same rules.

The comparison doesn't work because capital gains are taxed on nominal gains, even if all you did was keep pace with inflation - meaning you’re taxed on income you didn't get. In contrast, a cola or raise gives you actual spendable cash, and even if it's inflation-adjusted, so at least you're not paying tax on gains you never made. Plus, capital gains taxes are triggered only when you sell, meaning you might owe taxes on gains you didn't receive without having liquid cash. There’s also no inflation adjustment for capital gains like there is for wage thresholds or Social Security, so pretending it's “the same rule for everyone” is just wrong.
 
I think he would mean personal deductions, standard deductions, child credits, etc.

You can't really tax a business on gross.

All Income of individuals in excess of $200,000 shall be taxed at a rate of 40%.

All proceeds of any business flow through to individuals. Whether though salaries, stipends, annuities, dividends, or capital gains which are all taxed at the same rate. To tax the income of a business is by definition double taxation and hence prohibited under this plan.
 
The comparison doesn't work because capital gains are taxed on nominal gains, even if all you did was keep pace with inflation - meaning you’re taxed on income you didn't get.

COLA is calculated on the rate of inflation, even if all you did was keep pace with inflation - meaning you’re taxed on income you didn't get.

In contrast, a cola or raise gives you actual spendable cash, and even if it's inflation-adjusted, so at least you're not paying tax on gains you never made.

False, COLA and all raises are taxed, often harshly. Bonuses are taxed at an extreme rate.

Plus, capital gains taxes are triggered only when you sell, meaning you might owe taxes on gains you didn't receive without having liquid cash. There’s also no inflation adjustment for capital gains like there is for wage thresholds or Social Security, so pretending it's “the same rule for everyone” is just wrong.

It is the same. Identical. It treats income from investment the same as income from labor. There is no logic that supports favoring income from investments over income from labor.
 
You tried these red herring fallacies before.

This is a proposal for income taxes.
You need to throw in "individual" or many will believe you're talking about corporate/business taxes as well.
I still prefer what I posted in post #15, every individual with a gross income equal to or more than 1/4 of a years Federal minimum wage should file a return and pay a tax.
 
All Income of individuals in excess of $200,000 shall be taxed at a rate of 40%.

All proceeds of any business flow through to individuals. Whether though salaries, stipends, annuities, dividends, or capital gains which are all taxed at the same rate. To tax the income of a business is by definition double taxation and hence prohibited under this plan.
Sole-prop businesses currently flow thru to individuals via cash basis net income or net loss - not salaries, stipends, annuities, dividends, or capital gains.

How do you propose the net income/net loss of a cattle farm be accounted for?
 
Sole-prop businesses currently flow thru to individuals via cash basis net income or net loss - not salaries, stipends, annuities, dividends, or capital gains.

Flows through to individuals You just answered the question.

How do you propose the net income/net loss of a cattle farm be accounted for?

Use P&L's to find the amount disbursed to the owner each year.
 
Flows through to individuals You just answered the question.


Use P&L's to find the amount disbursed to the owner each year.
Disbursements aren't currently taxed to owners, just the cash basis net income without regard to disbursements and distributions. Since the net income flows to the owner, then so should the net losses.
 
Disbursements aren't currently taxed to owners, just the cash basis net income without regard to disbursements and distributions. Since the net income flows to the owner, then so should the net losses.

And?

I'm proposing replacing the corrupt system in place.
 

Why? Well, you asked for rational reasons.

The attempt in my original post was to draw attention to the millions of filers who either supplement W2 income with sole props, or have larger revenue sole props. As it is, incremental increases in federal margins are relatively slow and steady. From 10% to 12% to 22% to 24% to 32% to 35%, and finally to 37%. This relatively smooth increase in margins reduces the likelihood of margin manipulation by sole props/partnerships/s-corps. We know W2 income is largely outside of the taxpayer control. But small businesses have immense control over reported net income via asset purchases, cash basis cost of goods purchases, income receipt timing schemes, etc. Your scenario highlights a taxable cliff at 250k, whereby small businesses could manipulate with taxpayer-subsidized 40% discounts on those businesses, all the way from a 0%. For example, given the opportunity, a sole prop taxpayer would certainly buy down his net income from 350k to 250k, with an IRS subsidized 40% on the 100k asset purchase. To me, an immediate 0-40% margin increase creates a moral hazard between a sole-prop taxpayer and the IRS, and overwhelmingly encourages tax schemes that would entice small biz far too much for my liking.
 
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I propose a one line tax code:

All Income of individuals in excess of $200,000 shall be taxed at a rate of 40%. Income below the threshold is not taxed. There shall be no exemptions, deductions, loopholes, adjustments, or any other attempt to alter said tax. Congress shall adjust the threshold to keep pace with inflation every ten years.

Provide rational reasons to oppose this how do you propose
I propose a one line tax code:

All Income of individuals in excess of $200,000 shall be taxed at a rate of 40%. Income below the threshold is not taxed. There shall be no exemptions, deductions, loopholes, adjustments, or any other attempt to alter said tax. Congress shall adjust the threshold to keep pace with inflation every ten years.

Provide rational reasons to oppose this.

When Murray Rothbard initially proposed this in the 1980's, he set the threshold at $100K - but 50 years of inflation, the most insidious of taxes, have reduced the wealth of average Americans by half. This is why I included an index for inflation, which he had not.

If we get another Joe Biden and the buying power of the dollar declines to half of what it is today, the threshold doubles to compensate.
How do you propose dealing with 1120-S pass through income? Small business owners, especially those filing on an accrual basis would be at a disadvantage. A sub S small business election, whether for an LLC or a sub s corp is required to pass through business income on personal returns, in the case of accrual based accounting, often times well before the money is actually collected. If you want to see lots of layoffs, this is your plan!
 
And?

I'm proposing replacing the corrupt system in place.
That's what I have been trying for some time to begin a discussion on doing. Post #15 for example.
And the tax computation to go along with it:

MyTaxTable.png
Note that those with income not exceeding the GNI per person would pay a FLAT tax rate, with those earning more would pay a progressive rate, unlike currently.
 
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