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| Posted by: sarge33rd
- [76442923] Mon, Feb 18, 2008, 09:32
Nobody likes them, most recognize their necessity, most want them to be "simpler". I put this notion forth in my college poli-sci days. I have no clue, as to how "revenue neutral" it would/wouldnt be, but I am curious as to the perception of the idea, on a wider exposure basis than I could get from my classmates.
1) Objective
Streamline the tax filing process and remove "special interest" lobbying from having ANY input.
Ease the burden on the "working poor"
Incentivize marriage (disincentivize divorce) to try and decrease the nr of single-parent households.
Promote Philanthropy/charity. To that end, the ONLY deduction allowed would be an amount equal to 125% of the amount donated/given.
1st 25k single or 60k (1.4 times the single exemption amount.) married, ZERO tax liability.
Next 40k taxed at 10%. Period. No exemptions, no deductions, nada.
Next 50k taxed at 20%. Period.
Next 50k taxed at 30%.
Next 50k taxed at 40%,
Any earnings beyond this level, taxed at 50%.
Single person earning 120k
95k taxable.
40k @ 10% = 4k
50k @ 20% = 10k
5k @ 30% = 1500
Total tax bill: $15,500
Same person donates 4k, gets a 5k deduction. So the last 5k @ 30% would "go away" and total Tax Bill would be: $14,000
Married couple with 120k income:
60k exempt
60k taxable
40k at 10% = 4k
20K at 20% = 4k
Total Tax Bill: $8,000
If this couple donated 4k to charity, they would get a 5k deduction.
40k at 10% = 4k
15k @ 20$ = 3k
Total: 7k
Self-employed...
First, these returns would get the living hell audited out of them. I know FAR too many SE types, who write off day-to-day living expenses as "business" expenses, when they aren't.
Taxed as above, using business profit as the income figure to be taxed.
Business Profit = Revenue - cost of sales - fixed costs - employee costs - operating expenses.(Utilities, gas/oil for vehicles etc)
Corporate Profit Tax
As per SE to determine Business Profit, taxed as per individual w/o any level of tax exemption. (ie, EVERY dollar of profit, gets taxed.)
$15,000,000 in business profit =
40k @ 10% = 4k
50k @ 20% = 10k
50k @ 30% = 15,500
50k @ 40% = 20k
14,305,000 @ 50% = 7,152,500
Total Tax Bill: $7,202,000
Donate $800,000 = $1,000,000 deduction. Reduces tax bill by $500,000 in the above example. (IOW, it would only "cost" 300k to provide 800k support to the citizenry.
Want to decrease tax liability? Pay your employees more and/or provide more benefits. This would increase "employee expenses" and in turn decrease business profit.
GROSSLY over simplified form my actual presentation, but pretty close as I recall it. The presonal exemption (25k single, 60k married; would be increased annually by $2,500. just to be arbitrary. *shrug*
Thoughts?
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| | | 1 | steve houpt
ID: 451161019
Mon, Feb 18, 2008, 09:46
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sarge - anything 'simpler' has to be great. But legislators do not like 'simple'. Even if your plan was widely accepted, there would be a tons of 'ammendments' within months to help the 'unintended' that are 'hurt' by a simple plan.
Even paying no taxes would hurt those who are used to Earned Income Tax Credit. That would be ammendment #1. Add EITC.
I had been meaning to post some questions on Fair Tax' and finally spent the morning doing it.
Will look at numbers later.
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| | | 2 | Texas Flood
ID: 361221721
Mon, Feb 18, 2008, 10:30
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I was self employed for over twenty years and I would wager that
as a small corp. with only 9 employees I have paid more dollars
out in taxes than most of my "Working for the Man" counter
parts. This would include both my corporate and personal
returns. I did survive two audits and had to pay both my
attorney and CPA to help me through the process.
As for your comment about self employed "Types" I would be
willing to further bet you that the average working stiff cheats as
much on his return as most of us self employed types. Its also
easier for the stiff to get away with it because his odds of
actually getting audited are much lower than a corporation.
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| | | 4 | sarge33rd
ID: 76442923
Mon, Feb 18, 2008, 13:54
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I understand your "irritation" TF with my generalization. I too was a SE type in the past and on the advice of my accountant (under the tax laws of the time), my then-wife also became a SE entity. She bought and leased car(s). Well, A car anyway. As such, the cost of the car was her "cost of goods" and was then 100% deductible. My lease payment, as an "over the road salesman", was 100% deductible. She bought the car, I leased it from her, and we deducted both the cost of the car on her part (to offset the lease payment she received) and I deducted 100% of the lease payment made, as a "business expense". Legal? At the time...yes. Ethical? Hardly.
SH...REALLY good to see you poking about again. WB in case I hadnt said it before.
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| | | 5 | nerveclinic
ID: 105222
Mon, Feb 18, 2008, 15:34
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Sarge
I have no clue, as to how "revenue neutral" it would/wouldn't be, but I am curious as to the perception of the idea
Would this increase or decrease the deficit or do you even know?
What's the point of even considering a new tax policy if we don't know the impact it would have on the tax base?
Obviously to determine whether a new tax policy makes sense we have to know where it would impact the budget, deficit, total tax receipts...
Other wise we are just playing "make believe" right?
Just a quick instinctive look makes me think you've just tripled the deficit but without the heavy lifting analysis I don't really know.
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| | | 7 | sarge33rd
ID: 76442923
Mon, Feb 18, 2008, 20:10
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That does it for me. I'm voting Obama.
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| | | 8 | J-Bar
ID: 511461818
Mon, Feb 18, 2008, 20:44
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like that was in question
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| | | 9 | Weykool
Leader
ID: 41750315
Mon, Feb 18, 2008, 21:20
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Beware of things that are "Simpler".
In 1986 I was working at a CPA firm preparing taxes.
There was all this talk about "Tax Simplification".
I made the comment to the partner that I thought simplifying things would be a good idea.
He remarked that I might not have a job when the bill passed.
Well guess what.....the Tax simplification act only made the tax laws more complex.
Prior to that there was no such thing a "Passive Activity Losses".
How many people can really tell you the difference between "Active Realestate losses" and "Passive Realestate losses".
Add to all the confusion there was a phase out period to deduct these losses.
Prior to 1986 there we 3-4 acceptable depreciation methods.
With the AMT and new deprediation lives there were now 6-8 different depreciation calculations required for a business to file a tax return.
Needless to say the new simpler laws were anything but.
Beware of snake oil salesmen selling the simplified tax plan.
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| | | 10 | Madman
ID: 14139157
Mon, Feb 18, 2008, 22:30
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The 3/1/07 FEC ruling: link
"Press reports indicate that certain candidates and potential candidates for the 2008 presidential election have decided that, if they become their parties' nominees, they will choose not to receive public funds in the general election but will, instead, fund their campaigns exclusively with private contributions within the confines of FECA."
One such press example: NYT, March, 2007:
NYT, March, 2007 "Senator John McCain joined Senator Barack Obama on Thursday in promising to accept a novel fund-raising truce if each man wins his party’s presidential nomination. ...
On Thursday, a spokesman for Mr. McCain said that he would take up Mr. Obama on a proposal for an accord between the two major party nominees to rely just on public financing for the general election.
Such a pact would eliminate any financial edge one candidate might have and limit each campaign to $85 million for the general election. The two candidates would have to return any private donations that they had raised for that period.
Mr. Obama laid out his proposal last month to the Federal Election Commission, seeking an opinion on its legality. The commissioners formally approved it on Thursday.
The manager of Mr. McCain’s campaign, Terry Nelson, said he welcomed the decision.
“Should John McCain win the Republican nomination, we will agree to accept public financing in the general election, if the Democratic nominee agrees to do the same,” Mr. Nelson said.
A spokesman for Mr. Obama, Bill Burton, said, “We hope that each of the Republican candidates pledges to do the same.”
Mr. Burton added that if nominated Mr. Obama would “aggressively pursue an agreement” with whoever was his opponent. "
Obama proposed the terms, McCain accepted. If any other Republican had won the nomination, Obama committed to aggressively pursuing a deal with them. Kind of like what McCain is doing to try to talk Obama into doing what Obama proposed. Who woulda thunk ... McCain = '07 Obama???
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| | | 11 | Perm Dude
ID: 2138188
Mon, Feb 18, 2008, 23:04
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Kind of like what McCain is doing to try to talk Obama into doing what Obama proposed.
This doesn't appear to be true. Or, at best, misstates what Obama said. McCain is painting this as Obama trying to get out of a pledge.
From the link (bold is mine):
Obama's precise statement was, and has always been, "If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election." That's an artful statement, and it's not artful in a "meaning of 'is'" sense -- it's exactly the right answer. A commitment to "preserve a publicly financed election" would have to mean much more than whether both participate in the system. It would require some significant agreement about how to handle outside money, 527s, "Swift Boat"-type attack groups, party money, etc., and other factors that have undermined the last two publicly financed elections, from both sides. It is hardly an evasion to describe this as an agreement to be negotiated, rather than a simple pledge.
McCain's efforts at trying to not be bound by public financing rules in the primary while agreeing, if necessary, to continue in the race so that public financing could pay off campaign debts, leaves him a little short in the whole "standing to complain" department, however.
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| | | 12 | sarge33rd
ID: 76442923
Tue, Feb 19, 2008, 08:48
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re 8...it was very much in question. Then it appears that McCain has decided the campaign reform laws he co-wrote/sponsored, shouldn't apply to him.
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| | | 13 | Madman
ID: 230542010
Wed, Feb 20, 2008, 14:12
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PD 11 -- glad to see that the NYTimes did not report on Obama's position correctly, including taking the quote from his campaign manager entirely out of context. He also tricked the FEC, apparently.
Obama's op-ed on funding includes this shocker: "And the agreement may have to address the amounts that Senator McCain, the presumptive nominee of his party, will spend for the general election while the Democratic primary contest continues."
He's slick, no doubt about it.
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| | | 14 | Perm Dude
ID: 36118207
Wed, Feb 20, 2008, 14:20
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I'm not sure where "tricking the FEC" comes in. Asking for an opinion from them on a possible course of action isn't the same as committing oneself to that action. Where, exactly, are you saying he committed himself to a course of action and is now breaking that promise?
Being careful with his words ("slick," in your parlance) isn't a bad thing. I'm not saying this of you, but sometimes people believe someone to say something he didn't, then blame him for their mistake. I don't see Obama altogether blameworthy in this case.
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| | | 15 | Madman
ID: 230542010
Wed, Feb 20, 2008, 14:43
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Obama's initial letter to the FEC ... letter ... note the absence of caveats and what-ifs ... which was relevant, since his argument was that his request was helping to *preserve* CF integrity, not make it a political weapon.
A salient Commentary by Democracy 21. I think both of their criticisms are valid -- one technical and one philosophical. The technical comment is that Obama's request was in direct violation of the law. If you acknowledge receipt, then you have accepted, for at least the time period during which you retained the funds.
But the broader point is that the Obama-created CFR loophole is subversive to the intent. The act of collecting monies was deemed to be deleterious. Obama's "solution" doesn't absolve anyone of that activity, nor does it effectively eliminate money from politics.
Lastly, it has many deleterious side effects. By effectively post-poning one's commitment to public financing, it allows candidates to get more information on the lay of the landscape, and hedge their bets. Not unlike Obama's still vague list of requirements that McCain will have to meet before Obama will agree to follow Obama's own proposal.
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| | | 16 | Perm Dude
ID: 36118207
Wed, Feb 20, 2008, 15:06
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By effectively post-poning one's commitment to public financing, it allows candidates to get more information on the lay of the landscape, and hedge their bets.
You say this as though it were a bad thing, Madman. I thought conservatives were supposed to be naturally cautious. All this time you were just "hedging?"
:)
Obama's letter talks about "if Senator Obama becomes a candidate." You might not call this a "what if" but it is hard to see it as otherwise. As far as Obama is concerned, he becomes a candidate for President once he accepts the nomination. He wants to know if he can accept public financing at that time by refunding general election funds he received prior to becoming a candidate.
A valid question, IMO, since he still has to negotiate with John "There's nothing to talk about" McCain. This all is probably moot, then, since McCain obvious isn't going to even negotiate with Obama on the point. And the point isn't public financing, but outside spending. Obama isn't stupid: He remembers that the tone and direction of the 2004 election was strongly influenced by outside spending and this is where he would want to negotiate with McCain. I don't believe he'd just agree to accept a spending limit without some agreement in place on outside spending and how the campaigns will deal with that.
Meanwhile, Democracy 21's opinion skips over the fact that Obama is not, in fact, his party's nominee, spending all its time on word parsing while neglecting the whole question of standing. Now, there will come a question if Obama accepts the nomination what to do about the money already received for a possible general election (which is why he asked for the advisory opinion). Obama is not, then, in violation of any law. Yet.
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| | | 17 | Madman
ID: 230542010
Wed, Feb 20, 2008, 15:17
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PD -- he's not in violation of the law because the FEC has the authority to regulate and interpret the statutes. But I think they made the wrong call back in March to allow this sort of thing.
I understand that the point is outside spending. But I haven't seen any good evidence that Obama mentioned that last year, back when he asked Republicans to join him and McCain did.
I also don't know how you regulate 527's and other outside spending.
And surely you would agree that McCain's primary spending shouldn't be put on the table any more than Obama's.
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| | | 18 | Perm Dude
ID: 36118207
Wed, Feb 20, 2008, 15:28
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Fair enough (on the March FEC letter). Perhaps things might go differently if Bush actually tried to appoint someone good to the commission, instead of trying to force back Hans A. von Spakovsky. But Bush chose to let the Commission go dark if he didn't get his way (much like the expired Protect America Act).
I don't know if any agreement between the candidates can regulate or control 527's and other pieces of outside spending. But it can be managed better and there can be put into place a system of responses by the campaigns. I don't think the candidates are powerless in the regard. Kind of like the President and the US economy: Lots of unclear influence that is hard to quantify but is more than zero and better in some areas than others.
pd
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| | | 19 | Madman
ID: 14139157
Wed, Feb 20, 2008, 23:20
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"Kind of like the President and the US economy: Lots of unclear influence that is hard to quantify but is more than zero and better in some areas than others." ... more than zero if you're talking about absolute value ... unfortunately it is negative in many respects, as well ... I'd agree with the analogy, but am much more skeptical about the influence of the candidate or the power of the President vis a vis "job creation" etc. It's a free country, and that even refers to political speech. Mostly. Both Obama and McCain have their problems on that dimension, obviously, insofar as they would aspire to limit and coordinate our discussions.
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