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Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 6:18 am
by MeDeFe
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 7:52 am
by thegreekdog
Baron Von PWN wrote:Well I suspect the Janitor and possibly the Teacher may have actual need of direct government services. Whether these be health care services they could not personal afford (though i'm sure a teacher would have good benefits from their union) or some other form of direct government service.
The carpenter and Broker probably would be fully capable of providing for themselves without any help from the government. However they and all other members of society (from the lowest to the wealthiest) benefit from what I consider "indirect" government services. That is; creation of law and order through maintenance of police and a justice system, maintenance of infrastructure, creation of new infrastructure Conduct of foreign affairs (gaining trade agreements giving access to foreign markets and cheaper goods, reducing security risks) and the variety of other services which government undertakes. Those type of services are the superstructure upon which the rest of society is built. That is government's purpose to provide the basic stuff of society which allows it to continue to function.
Services which allow for a safe and orderly place to conduct business, allow you to be reasonably certain the products you buy wont kill you, allows you to gain access to as many markets as possible to gain the most clients as well as have the greatest variety of sellers. Large debts increase the costs of government and increase the risk of default which threaten governments vital services. I think safeguarding those things are worth more than the downsides of higher taxes on 2% of society.
Bear in mind I think the lowest taxes are the best taxes, providing the State is not facing financial troubles.
I'm suggesting that most employees/workers (i.e. people who work to attain wealth, rather than people who accumulate wealth indirectly) are using similar government services (fire, police, roads, etc.) I was not making a point that the janitor needed more government services (although maybe he does). The point I was making was that unless you own a business and/or achieve wealth through investment, everyone uses the same government services (fire, police, roads, etc.) People that own businesses or invest have the same government services (fire, police, roads, etc.), but also have additional government services above and beyond the employees/workers group (tax incentives among them).
This all stems from stuff that rockfist and jimboston have indicated - I believe the definition of "wealthy" or "rich" is not applied correctly for tax purposes. Someone living off of a trust or an estate, someone that is a CEO, someone that is on multiple boards of directors... these people are not engaged in the same income-producing activities as people who work for a living (whether janitor or law firm partner), but I would argue they are using more government services. So, I have a problem with a working couple making $250K being considered wealthy and subject to the same taxing scheme as someone making $1 million off of investments or as a CEO of a multinational corporation. I'm not saying the $250K people are the same as the $35K people, that's unfair. What I am saying is that the $250K people use the same services as the $35K people and less than the $1 million people and are paying more than their fair share of taxes. I believe this is unfair and I certainly don't think we should raise taxes on the $250K people.
That being said, I also think raising taxes on the $1 million people will have a negative effect on the economy, but as you've indicated (and I agree), the marginal effect is worth the benefit to the deficit.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 8:10 am
by Baron Von PWN
Night Strike wrote:\
Baron Von PWN wrote:I don't think the guy making 300k$ after taxes is going to be suffering all that much.
You have NO RIGHT to determine how much anybody will suffer, including those who are richer than you. It's amazing you think you can steal more money from rich people just because they don't suffer like you do. The hubris is astounding!
Who ever said I'm suffering? What I'm saying is Somebody who clears 300k after taxes is not likely to have all that many financial problems. If they do they are quite likely to have many more alternatives to resolving those problems than someone clearing say 30k. Its amazing you view your government as a thief.
Night Strike wrote:Baron Von PWN wrote:I don't know how the American tax system works, but presumably both individuals could file their taxes separately and thus pay a lower rate. It seems unreasonable to me that simply because you are married your incomes are added together for tax purposes.
Filing separately means you're taxed at the single person's income rate, which is higher than the married filing jointly rate (more deductions for filing jointly), so it's actually the opposite of what you thought.
.
Thanks for clearing that up. As I said I don't know the intricacies of the American tax systems.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 9:02 am
by thegreekdog
First off - did you watch this entire thing? His speech is two hours long.
For those that don't want to listen to people talk for an extended period of time, here are Senator Sanders's reasons that the extension of the Bush II tax cuts is a bad idea (in a nutshell)... I will continuously edit this post:
(1) Large national debt ($13.8 trillion)
(1a) - Large deficit ($1.4 trillion)
(2) Middle class is collapsing and poverty is increasing.
(3) Huge cuts for the wealthy, war in Iraq/Afghanistaion, bailouts, stimulus package --> All added to the national debt.
(4) We shouldn't be giving tax breaks to millionaires and billionaires who don't need it and don't want it.
For what it's worth, I agree with all of these things. I note, however, that millionaires and billionaires are different animals than a couple making $250K a year. So, again, let's talk about whether the definition of wealthy is appropriate. Yeah, Bill Gates and Warren Buffet don't want the tax break, but they make a whole lot more money than someone making $250K. Also, as I've stated in other places, Gates and Buffet (and others) can pay additional taxes if they want. I mean, seriously, give some money to the government if you want.
Seriously - why can't the people making $1 million (or $5 million or $10 million or more) be considered the wealthy? Just raise taxes on those guys. I mean they want to pay more taxes, right? Make them pay more. I think if you raise the bar on who is considered wealthy, you'd get a lot of support from the public on raising taxes on the rich. I really do. I mean, listening to this guy, he's talking about millionaires and billionaires who won't be hurt by this. I agree. But he's completely ignoring the people who are considered wealthy who will be hurt by this.
(5) Those people who make their living off of their investments will continue to pay a substantially lower tax rate than firemen, teachers, nurses, carpenters, and virtually all other working people of this country (he didn't mention lawyers, but I'll include them).
AGREED!
(6) Horrendous proposal regarding the estate tax.
AGREED! I think the estate tax should be imposed at a 100% rate with a $1 million exemption (or maybe $1 million per person... something like that).
(7) Payroll tax holiday is bad because Republicans are trying to show that social security fails (because they are taking money out of social security by having this payroll tax holiday).
I think he's being an idiot on this one.
(8) We can improve the economy by building infrastructure. The reason that we have a bad economy is because there is a crumbling infrastructure. The reason that jobs are going overseas is because of a poor infrastructure.
I think he's being partially an idiot on this one. I think we do need to improve infrastructure, but the reason we're losing jobs has virtually nothing to do with infrastructure. He says "look at China investing in infrastructure!" I say, "What are Chinese workers getting paid?" We start paying our employees 50 cents an hour, this senator will be out of a job.
I had to stop at 1:18:35
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 9:37 am
by rockfist
You no nothing about potential energy Illiad. If you did you would not make your statements. You have the potential to leverage yourself up - once, you have the potential to raise taxes to levels that generate high revenue - once. Its you who are naive if you think these things can be repeated over and over again. Our society and economy were much healthier before the wars because we had much more potential energy and did not have to drain large portions of the economy into the military industrial complex. Producing weapons does not yield any potential future growth - the weapons are a strictly consumption good.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 9:50 am
by Aradhus
Why is he being an idiot on 7 TGD? Payroll tax funds social security. Some republicans have already said they intend to do what he's saying.
Also, who is wealthy, at what rate do we tax, etc, is a good topic. It increases the chance that the discussion focuses on effiency instead of ideology.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 10:09 am
by Aradhus
I know,
man, people on medicaid, food stamps, unemployment benefits, are really benefiting in your society, they're making out like
bandits.
Also, I don't know that much about the early 1900s prior to ww1, but I would've thought Britain had more leverage economically and militarily than the US.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 11:53 am
by thegreekdog
Aradhus wrote:Why is he being an idiot on 7 TGD? Payroll tax funds social security. Some republicans have already said they intend to do what he's saying.
Also, who is wealthy, at what rate do we tax, etc, is a good topic. It increases the chance that the discussion focuses on effiency instead of ideology.
He's being an idiot because it has nothing to do with his premise (which is to reduce the deficit).
I agree that it is a good discussion topic. It also will never come up in real life apparently. I have been trying for years to get through to my representatives on this one but they've ignored me.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 1:38 pm
by Night Strike
Baron Von PWN wrote:Night Strike wrote:Baron Von PWN wrote:I don't know how the American tax system works, but presumably both individuals could file their taxes separately and thus pay a lower rate. It seems unreasonable to me that simply because you are married your incomes are added together for tax purposes.
Filing separately means you're taxed at the single person's income rate, which is higher than the married filing jointly rate (more deductions for filing jointly), so it's actually the opposite of what you thought.
.
Thanks for clearing that up. As I said I don't know the intricacies of the American tax systems.
Sorry, I messed that up. Married filing separately is actually worse than filing as a single person once you get above $66k, according to the 2008 tax table (this according to the wife, who is an accounting student).
radiojake wrote:Just waiting for Nightstrike to post without mentioning the words 'Wealth Re-distribution'
according to this page, the USA has 4.6% of the world population, yet has 25.4% of World Net Worth
http://en.wikipedia.org/wiki/World_dist ... _of_wealth Totally sounds like a wealth re-distribution racket is occuring.
Wake up and realise that you live in on of the most priviliged countries in the entire world, and no matter how bad you feel you may have it, you will undoubtedly have it better than atleast 75% of people globally, possibly more.
Which is why things like global climate change policies are nothing more than sending money from the developed countries to the undeveloped ones. There are many radicals and progressives who want to destroy the US by giving all our money to other countries to form a global society. Furthermore, do you really think the US can keep that wealthy status if the government takes 60, 70, 80, 90 percent of a person's income? People came to the US because of our climate for positive business growth, but they will leave due to onerous government taxes and regulations if progressives keep having their way in our government. Why do you think so much money is kept in foreign bank accounts? To avoid taxes. Cut the taxes and all that money for purchases and investments would come flooding back into our country and you would see another economic boom.
Aradhus wrote:I know,
man, people on medicaid, food stamps, unemployment benefits, are really benefiting in your society, they're making out like
bandits.
Since when do they have to make out with a bunch of money from the government services. You just stated that the rich receive more benefits from our society, and I say that is a complete fallacy because it's the poor who get tons of government benefits.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 2:41 pm
by BigBallinStalin
rockfist wrote:You no nothing about potential energy Illiad. If you did you would not make your statements. You have the potential to leverage yourself up - once, you have the potential to raise taxes to levels that generate high revenue - once. Its you who are naive if you think these things can be repeated over and over again. Our society and economy were much healthier before the wars because we had much more potential energy and did not have to drain large portions of the economy into the military industrial complex. Producing weapons does not yield any potential future growth - the weapons are a strictly consumption good.
Concede. Just concede. What you said earlier was so stupid and wrong. Just reread his post, and maybe you'll learn somethin...
Potential energy? What are you babbling about? What's that measured in? M for Maybe's?
I got it! Use wikipedia, and read about the United States in the early 1900s, and up to ww1.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 2:45 pm
by BigBallinStalin
@TGD
Regarding the term "wealthy" and how it should be readjusted, I'm in agreement.
thegreekdog wrote:[(6) Horrendous proposal regarding the estate tax.
AGREED! I think the estate tax should be imposed at a 100% rate with a $1 million exemption (or maybe $1 million per person... something like that).
Are you saying you're in favor of a 100% tax rate on estate while providing a $1 million exemption per person?
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 2:47 pm
by thegreekdog
BigBallinStalin wrote:@TGD
Regarding the term "wealthy" and how it should be readjusted, I'm in agreement.
thegreekdog wrote:[(6) Horrendous proposal regarding the estate tax.
AGREED! I think the estate tax should be imposed at a 100% rate with a $1 million exemption (or maybe $1 million per person... something like that).
Are you saying you're in favor of a 100% tax rate on estate while providing a $1 million exemption per person?
I'm saying I could go either of two ways:
(1) 100% tax on estates with a $1 million exemption per decedent.
(2) 100% tax on estates with a $1 million exemption per beneficiary.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 2:54 pm
by BigBallinStalin
Be forewarned: all the questions are really just one question. Let me rant and rave a bit. Thanks!]
But why should the government be allowed take that?
Wouldn't there be the potential for the government to find itself with vast amounts of land, some businesses, and of course the cash?
Why let the government receive this? Just give it to the dead guy's ungratefuls who will spend it wisely or blow it all. Either way, most of it goes back into the economy, so why let the government absorb it and in my opinion waste it (or at least drop it into inefficient or unnecessary programs, expenses, yada yada)?
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 2:59 pm
by thegreekdog
BigBallinStalin wrote:Be forewarned: all the questions are really just one question. Let me rant and rave a bit. Thanks!]
But why should the government be allowed take that?
Wouldn't there be the potential for the government to find itself with vast amounts of land, some businesses, and of course the cash?
Why let the government receive this? Just give it to the dead guy's ungratefuls who will spend it wisely or blow it all. Either way, most of it goes back into the economy, so why let the government absorb it and in my opinion waste it (or at least drop it into inefficient or unnecessary programs, expenses, yada yada)?
I have more than one answer to your one question:
(1) Real property and tangible property (i.e. not cash) would be taxed on their value. The land or property itself wouldn't just go to the government. I may have to think about an alternative to this, in any event.
(2) This is really the answer to your question - Money gained by beneficiaries from an estate is not money earned by the beneficiaries. Therefore, I would prefer to tax this than to tax earned income (or investment income for that matter). Furthermore, estates passing from generation to generation smacks of feudalism and, last I checked, we didn't like feudalism here in the USA.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 3:46 pm
by rockfist
With a one million dollar limit on that you would force the break-up or sale of many small to mid sized business or even family farms. I'm not in favor of an estate tax at all, but I would fight super hard against that limit.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 3:48 pm
by thegreekdog
rockfist wrote:With a one million dollar limit on that you would force the break-up or sale of many small to mid sized business or even family farms. I'm not in favor of an estate tax at all, but I would fight super hard against that limit.
Why would small businesses or family farms break up as a result of the estate tax? In the interest of full disclosure, while I am a tax attorney, I know little about estate taxes.
In any event, there are ways to get around this (for example, an exemption for an active small business; then you define the terms "active" and "small business" and viola, you have your exemption).
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 3:55 pm
by BigBallinStalin
thegreekdog wrote:BigBallinStalin wrote:Be forewarned: all the questions are really just one question. Let me rant and rave a bit. Thanks!]
But why should the government be allowed take that?
Wouldn't there be the potential for the government to find itself with vast amounts of land, some businesses, and of course the cash?
Why let the government receive this? Just give it to the dead guy's ungratefuls who will spend it wisely or blow it all. Either way, most of it goes back into the economy, so why let the government absorb it and in my opinion waste it (or at least drop it into inefficient or unnecessary programs, expenses, yada yada)?
I have more than one answer to your one question:
(1) Real property and tangible property (i.e. not cash) would be taxed on their value. The land or property itself wouldn't just go to the government. I may have to think about an alternative to this, in any event.
The land wouldn't except for cases where people couldn't afford the tax on the value. In which case, they would have to sell their land (most likely directly to the government--depending on the rules and regulations).
Such a tax seems like a great way for the government to expand itself into private affairs--unless maybe it did some charitable or "aw, that's really nice" with the land, but I'm just skeptical about their intentions.
TGD wrote:(2) This is really the answer to your question - Money gained by beneficiaries from an estate is not money earned by the beneficiaries. Therefore, I would prefer to tax this than to tax earned income (or investment income for that matter). Furthermore, estates passing from generation to generation smacks of feudalism and, last I checked, we didn't like feudalism here in the USA.
But there already is an estate tax on Money Gained from the Dead (future title for a zombie flick), so why increase it?
Regarding feudalism, well.. what do you mean exactly when you use that broad term?
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 3:58 pm
by rockfist
BigBallinStalin wrote:rockfist wrote:You no nothing about potential energy Illiad. If you did you would not make your statements. You have the potential to leverage yourself up - once, you have the potential to raise taxes to levels that generate high revenue - once. Its you who are naive if you think these things can be repeated over and over again. Our society and economy were much healthier before the wars because we had much more potential energy and did not have to drain large portions of the economy into the military industrial complex. Producing weapons does not yield any potential future growth - the weapons are a strictly consumption good.
Concede. Just concede. What you said earlier was so stupid and wrong. Just reread his post, and maybe you'll learn somethin...
Potential energy? What are you babbling about? What's that measured in? M for Maybe's?
I got it! Use wikipedia, and read about the United States in the early 1900s, and up to ww1.
Every government has a certain credit capacity and a marginal tax rate that generates the highest revenue. Once you borrow to your capacity given your marginal tax rate you can only borrow more until you reach the highest marginal tax rate which generates the most revenue. But any increase in taxation hurts the future growth of the economy and diminishes the potential tax base in the future.
If you build a bomb it is money spent that will not lead to any future economic growth. If you build a factory it might.
That is potential and its real. And our country's was the highest before the wars and military spending and taxation.
I do concede that other countries expended more of their potential in those wars than we did and that our military was stronger relative to most of the world at the end of the conflicts than at the start, but our potential for future endeavors was indeed diminished by our involvement.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 4:17 pm
by BigBallinStalin
rockfist wrote:BigBallinStalin wrote:rockfist wrote:You no nothing about potential energy Illiad. If you did you would not make your statements. You have the potential to leverage yourself up - once, you have the potential to raise taxes to levels that generate high revenue - once. Its you who are naive if you think these things can be repeated over and over again. Our society and economy were much healthier before the wars because we had much more potential energy and did not have to drain large portions of the economy into the military industrial complex. Producing weapons does not yield any potential future growth - the weapons are a strictly consumption good.
Concede. Just concede. What you said earlier was so stupid and wrong. Just reread his post, and maybe you'll learn somethin...
Potential energy? What are you babbling about? What's that measured in? M for Maybe's?
I got it! Use wikipedia, and read about the United States in the early 1900s, and up to ww1.
Every government has a certain credit capacity and a marginal tax rate that generates the highest revenue. Once you borrow to your capacity given your marginal tax rate you can only borrow more until you reach the highest marginal tax rate which generates the most revenue. But any increase in taxation hurts the future growth of the economy and diminishes the potential tax base in the future.
If you build a bomb it is money spent that will not lead to any future economic growth. If you build a factory it might.That is potential and its real. And our country's was the highest before the wars and military spending and taxation.
I do concede that other countries expended more of their potential in those wars than we did and that our military was stronger relative to most of the world at the end of the conflicts than at the start, but
our potential for future endeavors was indeed diminished by our involvement.
What if I use a million bombs on a country, and then bill that country for rebuilding it through US firms?
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 4:40 pm
by MeDeFe
thegreekdog wrote:First off - did you watch this entire thing? His speech is two hours long.
I think he actually goes on for something like seven and a half hours total. And I'm on it, it's good to see there's at least one person in the US legislative branch with a functioning head and conscience.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 4:42 pm
by rockfist
That isn't what happened in WWI and WWII from the US side. If you are referring to Iraq, we aren't billing enough because it is STILL costing us money.
But seriously we botched that conflict in so many ways its hard to believe. We could've been rid of Sadam for about 10 million dollars at most, but we had to do this "nation building" shit...
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 4:58 pm
by jimboston
Baron Von PWN wrote:jimboston wrote:A married couple in a major metropolitan area with earnings in excess of $250K... who both work... and who have two kids. This family is NOT "wealthy".
This family makes more than 98.5% of American households(2005).(sauce;http://en.wikipedia.org/wiki/Household_income_in_the_United_States). At what point would you consider a family to be wealthy?
JIMBOSTON ANSWER:
1 - Wealth does not equate to income. The two words a NOT synonymous. Wealth is a possession or a "state of being". Income is a measure of what one EARNS from work, and/or what one "takes in" from other sources... depending how it is being used. The tax code has different rates based on the type of income.
2 - I would define wealth based on a person's or family's ability to lead a "carefree" life. A family that has two breadwinners working 50+ hours a week... who can afford their bills and some luxuries, but has very little savings or retirement is not "wealthy". The family described by me previously could still be living paycheck-to-paycheck... and could be in a situation where they both MUST work in order to pay the mortgage.
I have not and do not suggest that "wealth" in this manner should be the basis of the tax code. The whole term is misused by socialists on the left to work-up their base. jimboston wrote:First... the tax rate for a married couple where both work and earn $250K combined is the same as a couple where one partner works and earns $250K. Yet the family where both work has expenses (related to childcare) that the family with one breadwinner does not have.
To those who want to tax the "rich"... is that "fair".
I don't know how the American tax system works, but presumably both individuals could file their taxes separately and thus pay a lower rate. It seems unreasonable to me that simply because you are married your incomes are added together for tax purposes. Either way i would not consider the situation you describe as fair, and yet if your household makes over 250k a year, you earn more than 98.5% of Americans. Obviously the vast majority of Americans are able to get by alright on much less than that.
JIMBOSTON ANSWER:
I think your comment bolded by me is the only response I need. Your presumption is incorrect. I don't understand how you can be involved in a thread about US Taxes when you don't know how our tax code works.jimboston wrote:Sure... there are deductions for childcare... but they are so low as to be nearly meaningless. I had two kids in daycare at one point. Now I have only one. Still... we are "too rich" to qualify for subsidized care (even if we wanted it)... so we pay for private care. We burn through our deduction by March with only one kid in daycare. The deductions cover about 25% of actual expense.
Then... if we both work we have all kinds of expenses that a single-worker-family does not have. We have to maintain 2 cars... have 2 commutes, and spend twice as much on gas. We have to buy and dryclean twice as much clothing. We have to prepare and pack twice as many lunches or eat-out lunch more often. We have less time at home for dinners... so we tend to eat out dinners more often too. I could go on and on.
I am not advocating a single-income family should therefore pay more. I am pointing out additional flaws in the existing tax code.
This arbitrary number of what level of income makes one "rich" and someone else 'not rich" is idiotic. My family with both my wife and myself could earn substantially more than a family across the street from me, where only the husband works... yet because of these other factors, my lifestyle may be significantly lower.
Then there is housing. Forget about different areas and neighborhoods. I may live across the street from a couple with kids the same age and the couple the same age. (This is not the case for me but is for others.) Family1 buys the home exactly the same as Family2... right across the street, same lot size, same neighborhood, same size house, etc. Yet Family2 bought in 1996, and Family1 buys in 2001. Family1 is going to be paying a mortgage that's probably $700-$1000 higher per month. So now to have the "same lifestyle" and be "fair" F1 would need to earn $12K more per year... but wait now after taxes they need to earn $18K-$20K more per year. Yes... your mortgage interest is deductible, but not the mortgage itself.
Again a household earning 250k a year makes more than 98% of other American households. If they are having difficulty paying the bills perhaps they need to re-access their spending habits.
JIMBOSTON ANSWER:
Idiot... did you even read what I wrote? Half of the expenses are related to the fact that both parents are working. Please read before commenting.jimboston wrote:What's the point of this rant? Is that you can't legislate "fairness" into the tax code the way the gov't has tried to do. Every time they try to fix one "inbalance" they create three more.
In a world with a Flat Tax (i.e. Flat % for idiots who don't understand the concept of a Flat Tax)(and no deductions)... people with more income pay more still. Fine... but at least it is clean and simple and easy to understand. I actually could argue for a "Flat Number"... but frankly it's not workable either.
Flat Tax is the least-bad option.
I agree the Tax code should have as few deductions as possible(and as a result lower rates). I disagree a flat tax is a better system, it places a heavier burden on those with lower incomes and at the same time would likely starve the state of funds. Any flat rate would have to provide the same level of funds as the current system. This would mean an increase for the lowest income earners and a tax cut for the highest earners, effectively a shifting of the state burden onto the poorest members of society. Yes you are paying the same percentage of your income, however after tax your absolute incomes are very different. Anyone currently paying more than whatever the flat rate would be getting more anyone bellow would be paying more off of an already smaller income.
JIMBOSTON ANSWER:
1 - How would it put a heavier burden on lower income people if the rate was 15%?
(It may put a heavier burden on people who are below the current threshold and pay no tax... I honestly don't give a flying f*ck.)
2 - How would it impact State funds?
(Federal taxes go to federal coffers... perhaps some pet pork-barrel projects would have to be cut, but so be it.)
3 - Why would any adjusted system have to provide the same level of funds as the current system? Why can we not force our gov't to cut waste and get rid of programs that are redundant and provide minimal benefit to society?
4 - your last point makes no sense.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 5:06 pm
by rockfist
thegreekdog wrote:rockfist wrote:With a one million dollar limit on that you would force the break-up or sale of many small to mid sized business or even family farms. I'm not in favor of an estate tax at all, but I would fight super hard against that limit.
Why would small businesses or family farms break up as a result of the estate tax? In the interest of full disclosure, while I am a tax attorney, I know little about estate taxes.
In any event, there are ways to get around this (for example, an exemption for an active small business; then you define the terms "active" and "small business" and viola, you have your exemption).
Let's say you have a business worth $10MM and to make the story interesting you employ 75 people in a small town doing product sales...you don't make anything you just do distribution. You are really old and you die. Under your plan your beneficiaries get to keep $1MM. Let's say there are four of them. They inherit the whole business and each one owes each $1.5MM to the government in estate taxes. Well and good if they have $1.5MM in other assets that they can use to pay, but if they don't, they can only borrow against the value of the business from a bank or sell a portion of it to get the cash to pay the tax. A bank may not want to lend a lot of extra money out during a generational conversion (they are considered high risk).
Yes, in theory one could have a life insurance policy on the owner to pay the taxes, but your proposal is new...so why would that policy be in place before it passed? If the owner is really old they may not be able to even get life insurance enough to cover it. Its quite easy to get life insurance up to $500K or so, not so easy to get more than that...trust me I know I have to take a physical to get my life insurance and I have been working my ass off to get my cholesterol down before I take the physical...for both my health and cost reasons.
Increase the numbers a bit and this is a true story that happened in my hometown. And the business got bought out by a conglomerate - and of 250 employees only 20 got to keep their jobs.
I would not want to rely on legal language to define what a small business or an operating business is. I don't trust the courts or the politicians to define it fairly or correctly.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 5:07 pm
by Timminz
jimboston wrote:A family that has two breadwinners working 50+ hours a week... who can afford their bills and some luxuries, but has very little savings or retirement is not "wealthy". The family described by me previously could still be living paycheck-to-paycheck... and could be in a situation where they both MUST work in order to pay the mortgage.
A couple that bought too much house, and that feels they can spend money on "luxuries", while failing to think about anything beyond the immediate-term, are just a couple of morons. They're making more than enough money to get by, yet they insist on living beyond their means. They get no sympathy from me, and I'm supposed to be one of the bleeding-hearts, here.
Re: The Rich and Taxes: A Debate
Posted: Tue Dec 14, 2010 5:10 pm
by Timminz
rockfist wrote:A bank may not want to lend a lot of extra money out during a generational conversion (they are considered high risk)
Why is that? Is it because, historically, they've been horrible moves for those businesses?
