by cgervasi » Sat May 18, 2013 7:32 pm
by Halgy » Mon May 20, 2013 8:50 pm
by Fast Eddie B » Tue May 21, 2013 5:24 am
by Atanamis » Tue May 21, 2013 5:35 am
If the goal were simplification, it would define all incoming transfers of money to an individual as income, whether earned, capital gains, or inherited. As I've said in other threads, my preference would be more like Halgy's of using progressive marginal rates without itemized deductions. Add up all your income from any source, apply the marginal rates to it, and send in your return. That should be as complicated as it gets.Fast Eddie B wrote:I just wonder how many pages it would take to define "income".
I just faced this when I tried to contribute to my IRA a couple years back. The income I had was not "earned income", and hence did not qualify.
by Dr. Strangelove » Tue May 21, 2013 6:13 am
by drtrech » Tue May 21, 2013 6:36 am
by Atanamis » Tue May 21, 2013 7:10 am
If they want to use it here, they would have to import it and could be charged a use tax equal to the consumption tax rate. This is a well understood problem with a commonly used solution.drtrech wrote:With a high consumption tax, the wealthy will simply outsource and offshore their spending.
by ryanm » Tue May 21, 2013 7:28 am
by Atanamis » Tue May 21, 2013 8:11 am
The upside is that reinvestment and making income are encouraged, as is consumption of used goods (which are exempt from consumption tax). It does indeed assume the wealthy will continue to consume, but then an income tax assumes they will continue to amass wealth. Any tax scheme makes assumptions. That said, I would be perfectly willing to layer a 2% wealth tax on all wealth over $5 million. I picked that number as one that would readily cover all middle class retirees. That way we have a tax on hoarding, in addition to the one imposed by intentional currency inflation. You are simply wrong in suggesting a 14% flat tax would bring in more revenue, the mean effective tax rate in 2009 was 17.4%, and was the lowest it has been in 30 years. It would take at least an 18% flat tax to remain revenue neutral, and a 22% one to return to historical norms.ryanm wrote:The downside is that hoarding is encouraged, which hurts the economy.
by Fast Eddie B » Tue May 21, 2013 8:54 am
Atanamis wrote:If the goal were simplification, it would define all incoming transfers of money to an individual as income, whether earned, capital gains, or inherited.
by Dr. Strangelove » Tue May 21, 2013 11:22 am
by ryanm » Tue May 21, 2013 9:48 pm
Atanamis wrote:The upside is that reinvestment and making income are encouraged, as is consumption of used goods (which are exempt from consumption tax).
It would take at least an 18% flat tax to remain revenue neutral, and a 22% one to return to historical norms.
If you truly own an LLC, I would highly recommend you talk about this with your accountant or tax attorney since you don't seem to understand the law in this area.
by Atanamis » Wed May 22, 2013 8:26 am
This is a nonsensical statement. Who do you believe would pay paying this "corporate tax"? Do you think this would just be magical money that would be paid by a "legal person"? This money would come from real people, just like it does today. The entire POINT of a flat tax system is to simply the tax code, and maintaining a ridiculous corporate tax system in parallel would defeat the entire point.ryanm wrote:It would take at least an 18% flat tax to remain revenue neutral, and a 22% one to return to historical norms.
Either would be a tax break for me. But you're also assuming no corporate tax. If corporations paid the same rates it would balance out at a much lower percentage.
I know many people in your position, including several who will be big trouble if they ever get audited. Be very careful about thinking that you can hide personal benefits you consume by packaging them as "corporate expenses". Doing this is entirely illegal, and if you ever get audited you will pay damages for the violation. Make sure you discuss with your accountant "work" expenses that are in fact personal. Like I mentioned, even things like driving to your primary place of employment are technically not considered work expenses, and claiming them as such is illegal:ryanm wrote:I truly do. I haven't used it for anything in several years since I'm no longer self employed, and my employer manages payroll taxes for me. When I was doing business for myself I had an accountant that managed the taxes for me, being not at all interested in the day-to-day paperwork, and focusing on the actual work. I may need to close it, since its not making any money anymore.If you truly own an LLC, I would highly recommend you talk about this with your accountant or tax attorney since you don't seem to understand the law in this area.
http://www.foxbusiness.com/personal-finance/2011/03/31/dont-dare-deduct-expenses/ wrote:You can't deduct the cost of your main home telephone land line, even if you primarily use that phone for your business. The IRS says that the first hard-wired phone line in your home is considered a nondeductible personal expense.
The cost of getting to and from your workplace is never deductible. Taking public transportation or driving to work is a personal expense, regardless of how far your home is from your office. And no, you can't deduct commuting expenses even if you work during the commute.
by drobviousso » Wed May 22, 2013 8:43 am
cgervasi wrote:Suppose for a moment that you could link the two, maybe in the form of a Constitutional amendment that requires a flat tax and no deductions. That would do absolutely nothing for businesses calculating their income. If they buy a large machine this year, can they deduct it all at once or must they depreciate it?
by Halgy » Wed May 22, 2013 2:56 pm