Time to tax capital gains as ordinary inc [W167]

[Gipper]

OK, now I get it.

YOU like the existence of a complicated tax system because you make your living from it. Geesh, how could I have not recognized that earlier.

PEOPLE, other than accountants, tax attorneys, and IRS employees do not like complicated tax systems and don't even enjoy filling out their returns. I do my own tax returns and accounting, but I promise I don't like having to scrounge for deductions any more than I like having to fill out the form or sign my name to the check.

Your viewpoint is distorted by personal bias.

It shouldn't be that hard. Aren't you among the 90% that know all deductions and what all you cannot deduct?

 

[imagep]

It shouldn't be that hard. Aren't you among the 90% that know all deductions and what all you cannot deduct?

I think I may have "outed" HOJ on his profession, and thus his personal selfish motivation in desiring an overly complicated tax system.

 

[head of joaquin]

$400,000 worth of standardized deduction isn't enough?

I understand the concept and your intent. The problem is for schedule C income, somebody could make $1M but spent $1M to make it. So you can't tax the gross receipts. You have to use business deductions. So we're back to deductions, and you haven't solved the "problem" (and I still don't know what problem you're trying to solve with a flat tax)

I own two businesses, one is filed on a Schedule C, I have a good understanding of accounting and preparing income taxes. Those aren't deductions from income, they are business expenses that are subtracted from business revenue. I think that this is obvious, and some of you guys are playing semantic games.

Well, but if you are going to allow business deductions (and I can't see how you can't but do so), you haven't solved the problem at all. You aren't imposing a flat tax at all. All you've done is taken away standardized deductions for workers, which isn't a problem anyway. It takes about 30 minutes for a typical employee to prepare his 1040, deductions and all.

It would appease those on the far right, while creating an income taxless environment for 99% of Americans.

No, it wouldn't. But in any case that's not reason enough to lower taxes on billionaires. We need to raise the rates not lower them. The top bracket is phased out of most deductions anyway due to AMT. So all you've done is reduced the taxes of the richest Americans. Why? What has that solved?

So not having to pay or even file an income tax form wouldn't benefit most Americans? Rediculous. And it is much more practical for those who have businesses than our tax system is now. The would obviously get to deduct the same business operating expenses from their business revenue to result in a net taxable income figure - just like they do now, except for most small business owners wouldn't even have to file a personal income tax because they wouldn't owe anything.

Excepting the lower brackets from paying any income taxes is a good idea. It has nothing to do with a flat tax.

I'm not sure where you guys came up with this concept that a flat tax would apply to gross business income. I didn't suggest that, and it's an idea that is so ludicrous that I find it hard to believe that anyone would even for one second believe that it would be the case. A dollar of business revenue is not the same as a dollar of income. I thought you were a tax attorney and understood accounting concepts?

If businesses still are going to use deductions, so much for the flat tax there. What problem have you solved by imposing a flat tax on the personal income the wealthy? All that does is lower their income taxes?

1) It simplifies our lives.
2) It makes the income tax system much more progressive
3) It should be a compromise that is politically viable as it lowers everyones taxes, without letting the rich totally off the hook.

It isn't complex for 90% of Americans. Like I say, if you're an employee, it takes about 30 minutes to fill out a 1040, and due to payroll deductions, you usually get a refund or owe nothing. So you're not really making it much more simple for them.

You're not making it simpler for business. Business has to use deductions since you can't tax gross receipts without bankrupting them. So no benefit there.

All you've done is made it "easier" for the top bracket to file their returns and you reduced their rates. What the heck does that solve? I don't care if it's theoretically more progressive since you've excluded the lower brackets. It's still lowering taxes on the wealthy and that has bad economic consequences for well known reasons.

 

[head of joaquin]

I think I may have "outed" HOJ on his profession, and thus his personal selfish motivation in desiring an overly complicated tax system.

Yeah, I'm really worried that a flat tax proposal on a political website will result in fewer clients for my practice. Come on. The flat tax is just a stupid idea that doesn't solve any problem. That's why I oppose it. It falls apart upon scrutiny.

 

[head of joaquin]

OK, now I get it.

YOU like the existence of a complicated tax system because you make your living from it. Geesh, how could I have not recognized that earlier.

PEOPLE, other than accountants, tax attorneys, and IRS employees do not like complicated tax systems and don't even enjoy filling out their returns. I do my own tax returns and accounting, but I promise I don't like having to scrounge for deductions any more than I like having to fill out the form or sign my name to the check.

Your viewpoint is distorted by personal bias.

Since you've already exempted business from the flat tax scheme and since most tax lawyering involves business, nope. My opposition to a flat tax is based on the fact that it's a stupid idea, not on my practice.

 

[imagep]

I understand the concept and your intent. The problem is for schedule C income, somebody could make $1M but spent $1M to make it. So you can't tax the gross receipts. You have to use business deductions. So we're back to deductions, and you haven't solved the "problem" (and I still don't know what problem you're trying to solve with a flat tax)

Just keep on trying to cloud the issue. You know darned well that the business revenue entered on line 1 of the schedule C isn't transfered to the the front page of the 1040 without subtracting out for business expenses.

I'm not even going to read the rest of your post because you are trying to distort this issue to the point it is disgusting. I've really enjoyed you being on this forum, your one of my favorite posters, and one that I almost always agree with, and one that until know I really respected, but on this issue, you are just flat out full of ****. You are trying to cloud the issue because my suggestion runs contrary to your own employment. I am amazingly disappointed in you, I thought you were a bigger guy than that.

 

[imagep]

Since you've already exempted business from the flat tax scheme and since most tax lawyering involves business, nope. My opposition to a flat tax is based on the fact that it's a stupid idea, not on my practice.

Your objection to it was only because of your false and rediculous claim that it would somehow apply to the gross revenues of a business. Now that we have resolved that issue, do you have any more objections which make it a "stupid" idea?

 

[head of joaquin]

I believe he has in the past claimed to be a tax attorney. Yea, I am finding some of his posts really bizare for a tax attorney.

The only thing bizarre is the flat tax fantasy, which violates basic tax and accounting principles that you could have learned in a high school accounting class.

You've already admitted that you'd exempt business income from the flat tax. That pretty much moots the entire scheme. You haven't simplified anything. All you've proposed is lowering the rates on the rich. Yeah, that's a real problem: high taxes on the rich.

 

[head of joaquin]

Your objection to it was only because of your false and rediculous claim that it would somehow apply to the gross revenues of a business. Now that we have resolved that issue, do you have any more objections which make it a "stupid" idea?

Now that you've admitted that your flat tax scheme won't apply to business, there isn't much left of it except for lowering rates on the personal income of the rich.

So that's the problem you want to solve?

 

[head of joaquin]

Just keep on trying to cloud the issue. You know darned well that the business revenue entered on line 1 of the schedule C isn't transfered to the the front page of the 1040 without subtracting out for business expenses.

I'm not even going to read the rest of your post because you are trying to distort this issue to the point it is disgusting. I've really enjoyed you being on this forum, your one of my favorite posters, and one that I almost always agree with, and one that until know I really respected, but on this issue, you are just flat out full of ****. You are trying to cloud the issue because my suggestion runs contrary to your own employment. I am amazingly disappointed in you, I thought you were a bigger guy than that.

Once you've admitted that flat taxes can't apply to businesses (and of course they can't; it makes no sense), there is little left of the scheme.

All you're doing is "simplifying" reporting for the top brackets by lowering their rates and taking away deductions that mostly don't exist anyway, due to AMT.

What problem does that solve exactly?

 

[Dittohead not!]

Simplifying the tax system is not about making it easier to file taxes. Most of us can figure out Turbo Tax, and those who have more complex returns are well advised to pay a CPA. No, simplifying and getting rid of this deduction, that deduction ,and simply lowering the overall rate makes taxes more fair. Why, for example, should a family who is paying off a mortgage at a grand a month get to subtract $12,000 from their net income, but a family paying the same in rent can not?

And why, to go back to the premise of this thread, should a family making $50,000 in earned income and another $50 in capital gains pay less than the family that makes the whole hundred grand in earned income?

 

[head of joaquin]

Putting it lightly.

He rather embarrassed himself on this thread.

The entire discussion has gone over your head, but it's fun to watch you pretend.

Hey tell us, how does AMT impact the discussion of the flat tax? Elaborate for us, will you.

 

[head of joaquin]

Simplifying the tax system is not about making it easier to file taxes. Most of us can figure out Turbo Tax, and those who have more complex returns are well advised to pay a CPA. No, simplifying and getting rid of this deduction, that deduction ,and simply lowering the overall rate makes taxes more fair. Why, for example, should a family who is paying off a mortgage at a grand a month get to subtract $12,000 from their net income, but a family paying the same in rent can not?

And why, to go back to the premise of this thread, should a family making $50,000 in earned income and another $50 in capital gains pay less than the family that makes the whole hundred grand in earned income?

That's an entirely different question. Whether the mortgage interest deduction is fair or good public policy (I think it is) is something that can be discussed on the merits. But the issue is not, "it's a deduction, it's complex and evil". The issue is, is this a rational deduction.

Deductions are good things. I personally want a lot of them.

 

[imagep]

The only thing bizarre is the flat tax fantasy, which violates basic tax and accounting principles that you could have learned in a high school accounting class.

You've already admitted that you'd exempt business income from the flat tax. That pretty much moots the entire scheme. You haven't simplified anything. All you've proposed is lowering the rates on the rich. Yeah, that's a real problem: high taxes on the rich.

No, under the plan I presented, 99% of people wouldn't pay a penny in income tax. Again, your personal bias towards desiring a complicated income tax system, and thus your personal employment, is really screwing with your thought process.

 

[imagep]

Once you've admitted that flat taxes can't apply to businesses (and of course they can't; it makes no sense), there is little left of the scheme.

All you're doing is "simplifying" reporting for the top brackets by lowering their rates and taking away deductions that mostly don't exist anyway, due to AMT.

What problem does that solve exactly?

What problem do you solve? I dunno, but whatever problem that is, my plan would eliminate 99% of the guys who do what you do for a living.

 

[imagep]

That's an entirely different question. Whether the mortgage interest deduction is fair or good public policy (I think it is) is something that can be discussed on the merits. But the issue is not, "it's a deduction, it's complex and evil". The issue is, is this a rational deduction.

Deductions are good things. I personally want a lot of them.

Then you should have loved the $400k standard deduction that I suggested.

 

[Gipper]

I think I may have "outed" HOJ on his profession, and thus his personal selfish motivation in desiring an overly complicated tax system.

Hell, as an accountant I really wouldn't weep for a complicated tax system. He's created a huge need for my profession. Of course, the drawback is that most of those jobs are public sector.

 

[head of joaquin]

No, under the plan I presented, 99% of people wouldn't pay a penny in income tax. .

I understand that. The point is, you could exempt those lower brackets from income tax without lowering rates on the upper brackets. The two are totally unrelated.

Again, your personal bias towards desiring a complicated income tax system, and thus your personal employment, is really screwing with your thought process

Flat taxer AND mindreader, eh. Somehow they seem to fit together.

 

[head of joaquin]

Then you should have loved the $400k standard deduction that I suggested.

I do. But you don't have to have a lower flat tax on the upper brackets also. The two are unrelated.

 

[head of joaquin]

What problem do you solve? I dunno, but whatever problem that is, my plan would eliminate 99% of the guys who do what you do for a living.

You can do that without lowering rates on the upper brackets. So why again, why a flat tax?

 

[Dittohead not!]

That's an entirely different question. Whether the mortgage interest deduction is fair or good public policy (I think it is) is something that can be discussed on the merits. But the issue is not, "it's a deduction, it's complex and evil". The issue is, is this a rational deduction.

Deductions are good things. I personally want a lot of them.

Most of us do, and so we base economic decisions on them quite a lot of the time. This is how the government has just a bit more control over what we buy, how we invest, what we do. If you think government control is a good thing, then of course you're for deductions. If not, then you'd be more for a simpler system and fewer deductions.

 

[head of joaquin]

Most of us do, and so we base economic decisions on them quite a lot of the time. This is how the government has just a bit more control over what we buy, how we invest, what we do. If you think government control is a good thing, then of course you're for deductions. If not, then you'd be more for a simpler system and fewer deductions.

What's wrong with making good public policy with tax policy?

Besides, almost all deductions are strictly related to economic reality. The mortgage interest deduction isn't, but the dependent child deduction is. The charitable deduction isn't, but the health care expense deduction is. And so on.

Finally, the system is not complex for 90% of Americans. It's rather simple. It's only complex for businesses and there's a good reason for that: economic reality. Even flat taxers don't propose a flat tax on gross receipts (except the particularly loony ones). So the more you look at the flat tax, the more it vanishes into irrelevancy and pseudosolution.

 

[Dittohead not!]

What's wrong with making good public policy with tax policy?

Besides, almost all deductions are strictly related to economic reality. The mortgage interest deduction isn't, but the dependent child deduction is. The charitable deduction isn't, but the health care expense deduction is. And so on.

Finally, the system is not complex for 90% of Americans. It's rather simple. It's only complex for businesses and there's a good reason for that: economic reality.

Making good public policy according to whom? The question is not what is or is not good policy so much as who gets to decide. Who is to say that the mortgage deduction isn't good policy if it encourages home ownership? On the other hand, it's not fair to renters. Child care deduction? Shouldn't parents foot the bill for that without a subsidy? Shouldn't charitable contributions be encouraged? Who decides?

 

[Gipper]

Making good public policy according to whom? The question is not what is or is not good policy so much as who gets to decide. Who is to say that the mortgage deduction isn't good policy if it encourages home ownership? On the other hand, it's not fair to renters. Child care deduction? Shouldn't parents foot the bill for that without a subsidy? Shouldn't charitable contributions be encouraged? Who decides?

The ever-benevolent government.

 

[head of joaquin]

Making good public policy according to whom? The question is not what is or is not good policy so much as who gets to decide. Who is to say that the mortgage deduction isn't good policy if it encourages home ownership? On the other hand, it's not fair to renters. Child care deduction? Shouldn't parents foot the bill for that without a subsidy? Shouldn't charitable contributions be encouraged? Who decides?

According to our elected representatives, who we put into office to carry out our vision of the future. That's how our system works. I can't think of a better one, can you? If people don't take their vote seriously then they deserve poor representation. Democracy is for adults, not adolescents.

If you don't like the current deductions, convince your fellow voters and vote in reps who will change the law. I think you'll lose on the merits on the ones you cited.