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mlyonsd
05-29-2010, 05:31 PM
Clinton: Rich 'Not Paying Their Fair Share' in Taxes


Published May 28, 2010
| FOXNews.com

The rich are not being taxed enough and the economy is suffering for it, Secretary of State Hillary Clinton said Thursday.

The former first lady broached the subject during a national security discussion at the Brookings Institution. She lamented that the United States has lowered taxes on the wealthy and said nations around the world need to "increase their public revenue collections" to spur investment.

"The rich are not paying their fair share in any nation that is facing the kind of employment issues (the United States is), whether it's individual, corporate, whatever the taxation forms are," she said.

Clinton pointed to Brazil's high taxation as an example that other countries should strive toward.

"Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what -- it's growing like crazy. And the rich are getting richer, but they're pulling people out of poverty," she said. "There is a certain formula there that used to work for us until we abandoned it, to our regret in my opinion."

Clinton cautioned that she was not speaking for the Obama administration as a whole.

While the president wants to phase out the Bush-era tax cuts for the wealthy, he has persistently battled the perception that his policies will lead to across-the-board taxes for more than just the rich.

The president said at a Democratic Party fundraiser last month that anti-tax Tea Party activists should "be saying thank you" to him for the tax cuts passed by his administration.

mikey23545
05-29-2010, 05:42 PM
Ah, the old siren song of class warfare...

Truly, this is the most divisive presidency in the history of the republic...

mlyonsd
05-29-2010, 08:25 PM
Ah, the old siren song of class warfare...

Truly, this is the most divisive presidency in the history of the republic...

Pretty obvious the dem vision is spend and tax us all into the same class.

No worries, they'll publicly announce where you can pick up your free cheese.

DaneMcCloud
05-29-2010, 08:31 PM
I somewhat agree.

I don't know how many people here make $500k+. But I can tell you that without a doubt, many of those people pay far less in taxes than others through tax shelters, income properties, etc.

I'll never forget reading that President Bush earned $800k in like 2003 or 2004, yet only paid 25% in total taxes. Meanwhile, I paid more than 35% because I don't have the kind of tax shelters that someone with greater wealth is afforded.

Our tax system is completely fucked due to all of the loopholes and there are times when I don't care and times when I'm pissed, especially when I hear that someone of equivalent income is paying a smaller percentage due to the tax laws.

That's why blanket statements don't work.

ChiefaRoo
05-29-2010, 09:59 PM
I somewhat agree.

I don't know how many people here make $500k+. But I can tell you that without a doubt, many of those people pay far less in taxes than others through tax shelters, income properties, etc.

I'll never forget reading that President Bush earned $800k in like 2003 or 2004, yet only paid 25% in total taxes. Meanwhile, I paid more than 35% because I don't have the kind of tax shelters that someone with greater wealth is afforded.

Our tax system is completely ****ed due to all of the loopholes and there are times when I don't care and times when I'm pissed, especially when I hear that someone of equivalent income is paying a smaller percentage due to the tax laws.

That's why blanket statements don't work.

I think pols and some people worry too much about what others have and what they do with it. Envy is a terrible human emotion. Maybe the worst of all emotions.

I think all reasonable people can agree that America should take care of it's sick and poor. The social safety net is a good thing.

That being said, it's much better to aspire to achieve your personal financial goals and not worry about the other guy.

I'm tired of politicians trying to not only re-cut the pie over and over but also they keep changing the size of the pie.

America is for achievers, doers, winners. Winning is a very democratic thing because success is measured at the personal level for each of us. We shouldn't want the Govt. to tell us what success or failure is and we sure as hell don't need to have politicians like Hillary Clinton or Barack Obama telling hundreds of millions of people that because some guy makes more and pays a little less because he has a superior accountant and better financial strategies they should vote the pols more power over all of us so they can better tax us.

FU&K them. We're already paying enough. Stay out of our lives.

RNR
05-29-2010, 10:15 PM
.

FU&K them. We're already paying enough. Stay out of our lives.

this times a million~

DaneMcCloud
05-29-2010, 10:29 PM
FU&K them. We're already paying enough. Stay out of our lives.

I understand what you're staying but I also think it's extremely unfair that two people earning the same exact salary pay different tax rates because of shelters, assets, write-offs, etc.

It's a fucking joke.

ChiefaRoo
05-29-2010, 10:45 PM
I understand what you're staying but I also think it's extremely unfair that two people earning the same exact salary pay different tax rates because of shelters, assets, write-offs, etc.

It's a ****ing joke.

I get that to a degree.

My advice on that would be to find a kick ass investment advisor who can set you up, a great accountant who can advise you on tax items and to live in a State with a tax structure that is friendly to your interests and earnings.

DaneMcCloud
05-29-2010, 10:55 PM
I get that to a degree.

My advice on that would be to find a kick ass investment advisor who can set you up, a great accountant who can advise you on tax items and to live in a State with a tax structure that is friendly to your interests and earnings.

Dude, I have a financial adviser that handles people that are worth in excess of $100 million dollars. We have an accountant in BH is absolutely amazing (and I know because we've been through a few). We've got a tax attorney that set up our Living Trust that is, to say the least, the best guy in Cali and maybe the best in the US. I'm a sharp guy (contrary to my posts on CP) and my wife is extremely smart.

The problem is this: We don't come from old money. All of our assets, Money Markets, 401k's, 529's, Uni 401's, investments, etc. are all earned by me and my wife. No parents, no aunts, no uncles, no nothing. Just US.

The thing is that with Old Money (which comprises a HUGE part of the Eastern Seaboard), it that they have a shit ton of prior investments, real estate and so on that goes on for GENERATIONS. We can't compete with that. We have to earn our asses off and buy more property in order to reduce our taxable income, which is fucking absolutely ridiculous. Essentially, we have to become real estate prospectors and hope our investments don't bottom out.

I was seriously looking at properties in Arizona and Las Vegas in 2006 & 2007 and came close to pulling the trigger several times. The net result would have been that we'd have LOST OUR ASSES on those properties. Properties that were valued at $1.2 million are now broken and stripped and go for $300k. Properties that were $800k are now broken and stripped and go for $175-$200k. We wouldn't have broken even for DECADES.

The bottom line is that our tax code is unbelievably unfair and it just gets worse with the more money you earn, especially new money.

I think that most Americans aren't even aware of this because it only affects about 3% but let me tell you, my old friend, it sucks ass.

notorious
05-29-2010, 11:30 PM
If you succeed, you get punished.


That's the American way.

ChiefaRoo
05-29-2010, 11:36 PM
Dude, I have a financial adviser that handles people that are worth in excess of $100 million dollars. We have an accountant in BH is absolutely amazing (and I know because we've been through a few). We've got a tax attorney that set up our Living Trust that is, to say the least, the best guy in Cali and maybe the best in the US. I'm a sharp guy (contrary to my posts on CP) and my wife is extremely smart.

The problem is this: We don't come from old money. All of our assets, Money Markets, 401k's, 529's, Uni 401's, investments, etc. are all earned by me and my wife. No parents, no aunts, no uncles, no nothing. Just US.

The thing is that with Old Money (which comprises a HUGE part of the Eastern Seaboard), it that they have a shit ton of prior investments, real estate and so on that goes on for GENERATIONS. We can't compete with that. We have to earn our asses off and buy more property in order to reduce our taxable income, which is ****ing absolutely ridiculous. Essentially, we have to become real estate prospectors and hope our investments don't bottom out.

I was seriously looking at properties in Arizona and Las Vegas in 2006 & 2007 and came close to pulling the trigger several times. The net result would have been that we'd have LOST OUR ASSES on those properties. Properties that were valued at $1.2 million are now broken and stripped and go for $300k. Properties that were $800k are now broken and stripped and go for $175-$200k. We wouldn't have broken even for DECADES.

The bottom line is that our tax code is unbelievably unfair and it just gets worse with the more money you earn, especially new money.

I think that most Americans aren't even aware of this because it only affects about 3% but let me tell you, my old friend, it sucks ass.

You're on the right track Dane. However, Old money/wealth, cannot be passed generationally without a big insurance policy that the primary estate holder carries due to the death/estate tax in the US. Money to pay the premiums every year to keep it in place is substantial. . The annualized premiums may not be a tax per se but they are significant and are a burden everyone in the US with an estate above a certain amount has to pay. How do the uber rich get around that? I'd like to know if they can.

PM me. I'd like to know more detail about how to use real estate to shelter tax obligations. I don't know much about it.

DaneMcCloud
05-29-2010, 11:42 PM
You're on the right track Dane. Old money/wealth, cannot be passed generationally without a big insurance policy that the primary estate holder carries. Money to pay the premiums every year to keep it in place is substantial. . The annualized premiums may not be a tax per se but they are significant.

PM me. I'd like to know more detail about how to use real estate to shelter tax obligations. I don't know much about it.

That's not true. Things can be willed down with little tax penalty to the person(s) being willed. My lawyer told me an interesting story about a dying man willing 85 houses to his daughter. It's ALL about having the right lawyer, a Living Trust (which we have) etc.

The Estate Tax wasn't reduced under Bush for a reason (and I voted for the guy in 2000). which was to protect his investments.

The older I become, the more money I earn, the more crooked and twisted I've found our system has become. It's INSANE that Vanderbilt heirs STILL receive money from NY because of something that fucking robber baron designed in the late 1800's.

I was horrified but at the same time happy that my wife almost took out one of those bitches one night in Manhattan a few years back.

Seriously guys, the stories I could tell...

I'm not joking.

ChiefaRoo
05-30-2010, 12:05 AM
Your wife almost ran over a Vanderbilt in NYC? You should start a thread on that.

Getting back to Clinton's statement. I'd like to know her definition of rich. Most likely it includes a huge chunk of the middle class.

go bowe
05-30-2010, 12:56 AM
Pretty obvious the dem vision is spend and tax us all into the same class.

No worries, they'll publicly announce where you can pick up your free cheese.that's good cheese too...

patteeu
05-30-2010, 12:50 PM
I somewhat agree.

I don't know how many people here make $500k+. But I can tell you that without a doubt, many of those people pay far less in taxes than others through tax shelters, income properties, etc.

I'll never forget reading that President Bush earned $800k in like 2003 or 2004, yet only paid 25% in total taxes. Meanwhile, I paid more than 35% because I don't have the kind of tax shelters that someone with greater wealth is afforded.

Our tax system is completely ****ed due to all of the loopholes and there are times when I don't care and times when I'm pissed, especially when I hear that someone of equivalent income is paying a smaller percentage due to the tax laws.

That's why blanket statements don't work.

What kind of "shelters" are you talking about. The 1986 Tax Reform cleaned up a lot of the shadier shelters. More legit deductions like tax-free municipal bonds can dramatically reduce a wealthy person's effective tax rate but that doesn't mean that they are getting away with a windfall. Instead of the Feds getting revenue, they are effectively subsidizing local government bonds and the wealthy person ends up in about the same shape after-tax as if they had invested in taxable corporate bonds.

patteeu
05-30-2010, 01:50 PM
Another example of a rich guy not paying a very high effective tax rate but not really making out like a bandit would be a guy making big donations to charity. Take a guy like Dick Cheney, for instance. When he decided to resign from his high dollar job with Haliburton to take a huge paycut in service to his country, he donated millions to charity in order to avoid the appearance of a conflict of interest. That extraordinary generousity was, of course, tax deductible and it had the effect of lowering his effective tax rate substantially (I don't have the numbers at my fingertips). But it was the three designated charities (a university, a hospital, and a youth group) that benefitted, not the Cheneys.

The charitable deduction was a conscious decision on the part of the government to subsidize qualifying charities through the tax code not a tax shelter that allows fat cats to avoid paying their fair share.

patteeu
05-30-2010, 01:53 PM
I understand what you're staying but I also think it's extremely unfair that two people earning the same exact salary pay different tax rates because of shelters, assets, write-offs, etc.

It's a ****ing joke.

Example please? If they're making the same salary, what's stopping the other guy from taking advantage of the same "shelters"?

go bowe
05-30-2010, 01:54 PM
The charitable deduction was a conscious decision on the part of the government to subsidize qualifying charities through the tax code...yet another example of big government run amok...

notorious
05-30-2010, 01:57 PM
Fair Tax will fix everything.

banyon
05-30-2010, 02:05 PM
Another example of a rich guy not paying a very high effective tax rate but not really making out like a bandit would be a guy making big donations to charity. Take a guy like Dick Cheney, for instance. When he decided to resign from his high dollar job with Haliburton to take a huge paycut in service to his country, he donated millions to charity in order to avoid the appearance of a conflict of interest. That extraordinary generousity was, of course, tax deductible and it had the effect of lowering his effective tax rate substantially (I don't have the numbers at my fingertips). But it was the three designated charities (a university, a hospital, and a youth group) that benefitted, not the Cheneys.

He didn't take a pay cut to perform government service, you have the chain of events wrong. He cashed in from his government connections to get the Halliburton job in the first place back when he was SecDef.

DaneMcCloud
05-30-2010, 02:05 PM
Example please? If they're making the same salary, what's stopping the other guy from taking advantage of the same "shelters"?

I've already explained this so please re-read.

You know Pat, I respect you and like you. But the difference between you and me in this issue is that this is reality for me, not theory.

I don't have the resources in which to purchase multiple income properties in which I could write off the interest. And someone earning $800k per year versus me making $800k per year may have more "expenses" and a much higher mortgage, which would further allow them to have a lower taxable income.

I'm not a CPA, which is why I employ a CPA to help write off and reduce my taxable earnings. Each year, we're given the option of putting "X" amount of money into tax sheltered accounts or pay that money in taxes.

I think it's outright ridiculous that I have to hire someone whose only duty is to hide and protect my earnings from the government due to "loopholes" and that some people are better at this than others.

banyon
05-30-2010, 02:06 PM
Why is Hillary Clinton harping on this? I thought she was the Secretary of State? With Iran, North Korea, and the Greek Debt crisis, doesn't she have enough on her hands?

Bump
05-30-2010, 02:10 PM
Another example of a rich guy not paying a very high effective tax rate but not really making out like a bandit would be a guy making big donations to charity. Take a guy like Dick Cheney, for instance. When he decided to resign from his high dollar job with Halliburton to take a huge pay cut in service to his country, he donated millions to charity in order to avoid the appearance of a conflict of interest. That extraordinary generosity was, of course, tax-deductible and it had the effect of lowering his effective tax rate substantially (I don't have the numbers at my fingertips). But it was the three designated charities (a university, a hospital, and a youth group) that benefitted, not the Cheney's.

The charitable deduction was a conscious decision on the part of the government to subsidize qualifying charities through the tax code not a tax shelter that allows fat cats to avoid paying their fair share.


FYP

"Bob" Dobbs
05-30-2010, 02:16 PM
Why is Hillary Clinton harping on this? I thought she was the Secretary of State? With Iran, North Korea, and the Greek Debt crisis, doesn't she have enough on her hands?Perhaps to position herself for 2012? Methinks that while the Dems have Obama as plan A, plan B has a real shot at the nomination since BO's popularity keeps nosediving.

DaneMcCloud
05-30-2010, 02:19 PM
Perhaps to position herself for 2012? Methinks that while the Dems have Obama as plan A, plan B has a real shot at the nomination since BO's popularity keeps nosediving.

Actually, Obama's approval ratings are on the rise. Furthermore, he would have to do something monumentally stupid to not get his party's nomination in 2012 and if so, there's no way Hilary Clinton could win the Presidency.

The Quinnipiac University survey showed that 48 percent of voters gave Obama a positive approval rating, compared to 43 percent who disapproved. Most respondents however were pessimistic on the White House's economic management.

http://www.google.com/hostednews/afp/article/ALeqM5gZ_lqeJNwwa6wbVBNzsUADEadTxQ

"Bob" Dobbs
05-30-2010, 02:23 PM
Maybe... but she still needs to position herself to run... just in case.

DaneMcCloud
05-30-2010, 02:39 PM
Maybe... but she still needs to position herself to run... just in case.

Not really. If Obama and the Democrats fuck up so badly that he can't even win the nomination, I think she would be the last person they'd put out there as their candidate.

vailpass
05-30-2010, 02:56 PM
As long as estate tax isn't part of her planned increase. Bastards take enough as it is, taxing a familie's holdings multiple times.

DaneMcCloud
05-30-2010, 03:02 PM
As long as estate tax isn't part of her planned increase. Bastards take enough as it is, taxing a familie's holdings multiple times.

According to my lawyer, even if they do, there are ways around it.

banyon
05-30-2010, 03:04 PM
As long as estate tax isn't part of her planned increase. Bastards take enough as it is, taxing a familie's holdings multiple times.

Yeah, millionaires are taking it in the shorts, that's who we need to worry about right now. They've already increased the cap beyond absurdity. C'mon.

DaneMcCloud
05-30-2010, 03:18 PM
Yeah, millionaires are taking it in the shorts, that's who we need to worry about right now. They've already increased the cap beyond absurdity. C'mon.

Fuck you.

I just fucking LOVE IT when I see people here going whacky about putting earnings caps on Wall Street positions or screams of "socialism", but yet sure, let's tax people who've died and gathered wealth AGAIN.

Your post illustrates why 99% of the posts in this forum are nothing more than worthless posturing and bullshit.

"Bob" Dobbs
05-30-2010, 03:18 PM
Not really. If Obama and the Democrats fuck up so badly that he can't even win the nomination, I think she would be the last person they'd put out there as their candidate.Maybe this should be its own thread, but who do you think the Dems would put out there for the nomination, assuming BO becomes unelectable, if not Hillary?

DaneMcCloud
05-30-2010, 03:21 PM
Maybe this should be its own thread, but who do you think the Dems would put out there for the nomination, assuming BO becomes unelectable, if not Hillary?

Dude, I'm a registered Independent and really don't follow politics closely until it's a Presidential election year. Even if I wanted to vote for an Independent or a Republican, it wouldn't matter because this state is decidedly Democrat.

banyon
05-30-2010, 03:24 PM
**** you.

I just ****ing LOVE IT when I see people here going whacky about putting earnings caps on Wall Street positions or screams of "socialism", but yet sure, let's tax people who've died and gathered wealth AGAIN.

Your post illustrates why 99% of the posts in this forum are nothing more than worthless posturing and bullshit.

Are you being sarcastic?

They raised the cap to $5 million. You don't get taxes on one penny until you start passing that point. You think that's too low? Do you think we need to go back to the days of dynastic wealth like the Astors/Carnegies/Morgans, etc.?

I'm not sure why what I said riled you.

healthpellets
05-30-2010, 03:25 PM
Yeah, millionaires are taking it in the shorts, that's who we need to worry about right now. They've already increased the cap beyond absurdity. C'mon.

really? would you support a new tax law that stated any income earned by anyone that exceed $1M would be taxed at 100%?

banyon
05-30-2010, 03:25 PM
really? would you support a new tax law that stated any income earned by anyone that exceed $1M would be taxed at 100%?

Of course not. Don't be stupid. There's a reasonable balance to these things.

"Bob" Dobbs
05-30-2010, 03:26 PM
I guess my real question is, who among the dems has a realistic shot at the nomination besides BO? I'm asking everyone, not necessarily just you, Dane.

DaneMcCloud
05-30-2010, 03:28 PM
Maybe this should be its own thread, but who do you think the Dems would put out there for the nomination, assuming BO becomes unelectable, if not Hillary?

Dude, I'm a registered Independent and really don't follow politics closely until it's a Presidential election year. Even if I wanted to vote for an Independent or a Republican, it wouldn't matter because this state is decidedly Democrat.

banyon
05-30-2010, 03:28 PM
I guess my real question is, who among the dems has a realistic shot at the nomination besides BO? I'm asking everyone, not necessarily just you, Dane.

The last time a sitting president was not renominated by his party was 1856 and Franklin Pierce. It's just not going to happen.

DaneMcCloud
05-30-2010, 03:29 PM
Are you being sarcastic?

They raised the cap to $5 million. You don't get taxes on one penny until you start passing that point. You think that's too low? Do you think we need to go back to the days of dynastic wealth like the Astors/Carnegies/Morgans, etc.?

I'm not sure why what I said riled you.

$5 million dollars isn't that much money, especially when you factor in real estate, insurance and lifetime savings.

Why in the world would you advocate that people be taxed ONCE AGAIN for everything they've rightfully earned?

JFC. Just because it wouldn't affect YOU doesn't mean that it wouldn't affect millions of other Americans.

And those people you mentioned have heirs that are still living off the trusts of their grandparents and great grand parents.

Thankfully.

banyon
05-30-2010, 03:35 PM
$5 million dollars isn't that much money, especially when you factor in real estate, insurance and lifetime savings.

Why in the world would you advocate that people be taxed ONCE AGAIN for everything they've rightfully earned?

JFC. Just because it wouldn't affect YOU doesn't mean that it wouldn't affect millions of other Americans.

And those people you mentioned have heirs that are still living off the trusts of their grandparents and great grand parents.

Thankfully.

People aren't taxed twice. Taxation is on the transfer of money, not the individual. All of the taxes in the Code are based on that principle. And like I said in the earlier post, it's a balance. Even after the $5 mil, then the max rate is 35% (assuming you are in the top tax bracket).

I don't know that it won't affect me, so that has nothing to do with the discussion.

Like you say, it doesn't completely stop those great grandchild trust fund babies anyway, so I'm not sure what your grave societal ill is here that you are lamenting. Oh, no, the wealthy people that were enabled by our country to prosper greatly might have to give a few dimes back, the horror!

vailpass
05-30-2010, 03:38 PM
**** you.

I just ****ing LOVE IT when I see people here going whacky about putting earnings caps on Wall Street positions or screams of "socialism", but yet sure, let's tax people who've died and gathered wealth AGAIN.

Your post illustrates why 99% of the posts in this forum are nothing more than worthless posturing and bullshit.

X10
Where is the justice in taking the assets a man has earned and already paid taxes on and taxing them again at the penalty of his heirs?
What did he do wrong to be penalized with double taxation? And yes, you can argue that it isn't the man being taxed but his heirs however that is semantics: the same assets are still being taxed twice.

HolyHandgernade
05-30-2010, 03:45 PM
Ah, the old siren song of class warfare...

Truly, this is the most divisive presidency in the history of the republic...

More divisive than Lincoln. Hyperbole much?

banyon
05-30-2010, 03:45 PM
X10
Where is the justice in taking the assets a man has earned and already paid taxes on and taxing them again at the penalty of his heirs?
What did he do wrong to be penalized with double taxation? And yes, you can argue that it isn't the man being taxed but his heirs however that is semantics: the same assets are still being taxed twice.

The same assets are taxed every time there is a transfer of money, it isn't limited to estate taxes. If I make a salary, then I pay income taxes on that money, when I go spend it at the local grocery store, I pay sales tax on the same money, then the grocery corporation pays corporate income tax on the money, then when they pay their employees' salaries, those employees pay income taxes on the same money.

And no, the individual is not taxed 2x, he is taxed 1x and then when the money is transferred the heir is taxed 1x, and again, only if they are receiving > $5 mil, which isn't very many people.

We have way worse problems in the tax code to worry about than appeasing some of the wealthiest individuals with yet another way to shirk out of contributing to public revenue.

DaneMcCloud
05-30-2010, 03:50 PM
People aren't taxed twice. Taxation is on the transfer of money, not the individual. All of the taxes in the Code are based on that principle. And like I said in the earlier post, it's a balance. Even after the $5 mil, then the max rate is 35% (assuming you are in the top tax bracket).

I don't know that it won't affect me, so that has nothing to do with the discussion.

Like you say, it doesn't completely stop those great grandchild trust fund babies anyway, so I'm not sure what your grave societal ill is here that you are lamenting. Oh, no, the wealthy people that were enabled by our country to prosper greatly might have to give a few dimes back, the horror!

Oh, just shut the fuck up. You're just another idiotic, myopic jackass that doesn't live in the real world.

And fucking TELL ME that a death tax doesn't tax me twice: I fucking pay outrageous property tax, income tax and more, yet when I die, the assets that I've acquired over my lifetime aren't taxed again?

WTF?

DaneMcCloud
05-30-2010, 03:52 PM
And no, the individual is not taxed 2x, he is taxed 1x and then when the money is transferred the heir is taxed 1x, and again, only if they are receiving > $5 mil, which isn't very many people.

We have way worse problems in the tax code to worry about than appeasing some of the wealthiest individuals with yet another way to shirk out of contributing to public revenue.

Again, Fuck You.

What do you mean "not very many people"? Where'd you get your stats, Einstein? Because quite a frankly, I know a fucking SHIT TON of people with whom the Estate Taxes affect. There are more than 250,000 people in Los Angeles County that earn in excess of $1 million per year and millions that earn $300k plus. Are you going to tell us that those people won't be affected?

You're fucking full of shit on this subject and most likely, in general.

RNR
05-30-2010, 03:55 PM
Oh, just shut the **** up. You're just another idiotic, myopic jackass that doesn't live in the real world.

And ****ing TELL ME that a death tax doesn't tax me twice: I ****ing pay outrageous property tax, income tax and more, yet when I die, the assets that I've acquired over my lifetime aren't taxed again?

WTF?

It is a double tax ain't no fancy words going to change that fact~

banyon
05-30-2010, 03:59 PM
Again, **** You.

What do you mean "not very many people"? Where'd you get your stats, Einstein? Because quite a frankly, I know a ****ing SHIT TON of people with whom the Estate Taxes affect. There are more than 250,000 people in Los Angeles County that earn in excess of $1 million per year and millions that earn $300k plus. Are you going to tell us that those people won't be affected?

You're ****ing full of shit on this subject and most likely, in general.

Yes, I'm telling you that those people won't be affected, because that's the law that Congress passed altering the cap.

Read it for yourself. See if I'm "full of shit" or if perhaps you made some faulty assumptions.

http://www.govtrack.us/congress/amendment.xpd?session=111&amdt=s873

SA 873. Mrs. LINCOLN (for herself, Mr. Kyl, Mr. Nelson of Nebraska, Mr. Grassley, Mr. Pryor, Mr. Roberts, Ms. Landrieu, Mr. Enzi, and Ms. Collins) submitted an amendment intended to be proposed by her to the concurrent resolution S. Con. Res. 13, setting forth the congressional budget for the United States Government for fiscal year 2010, revising the appropriate budgetary levels for fiscal year 2009, and setting forth the

appropriate budgetary levels for fiscal years 2011 through 2014; as follows:

At the appropriate place in title II, insert the following:

SEC. __. DEFICIT-NEUTRAL RESERVE FUND FOR ESTATE TAX RELIEF.

The Chairman of the Senate Committee on the Budget may revise the allocations of a committee or committees, aggregates, and other appropriate levels and limits in this resolution for one or more bills, joint resolutions, amendments, motions, or conference reports that would provide for estate tax reform legislation establishing--

(1) an estate tax exemption level of $5,000,000, indexed for inflation,


(2) a maximum estate tax rate of 35 percent,


(3) a reunification of the estate and gift credits, and

(4) portability of exemption between spouses, and

provided that such legislation would not increase the deficit over either the period of the total of fiscal years 2009 through 2014 or the period of the total of fiscal years 2009 through 2019.

(As printed in the Congressional Record for the Senate on Apr 1, 2009.)


I'm not sure why you feel the need to insult me to try to make your point, nor did I speak to you in such a way to merit such comments, but it certainly doesn't make me sound like the one who doesn't know what he is talking about.

vailpass
05-30-2010, 04:02 PM
The same assets are taxed every time there is a transfer of money, it isn't limited to estate taxes. If I make a salary, then I pay income taxes on that money, when I go spend it at the local grocery store, I pay sales tax on the same money, then the grocery corporation pays corporate income tax on the money, then when they pay their employees' salaries, those employees pay income taxes on the same money.

And no, the individual is not taxed 2x, he is taxed 1x and then when the money is transferred the heir is taxed 1x, and again, only if they are receiving > $5 mil, which isn't very many people.

We have way worse problems in the tax code to worry about than appeasing some of the wealthiest individuals with yet another way to shirk out of contributing to public revenue.

Buying goods and services is not the same principle as passing on assets to future generations. I understand there are other issues to consider, I understand estate taxes are going to happen, my principals tell me that estate taxes should be kept to a minimum.

DaneMcCloud
05-30-2010, 04:05 PM
It is a double tax ain't no fancy words going to change that fact~

Yep.

And if I earn enough money during my lifetime to provide for the next few generations of my family, some people think it's "okay" for a large portion to be paid to the government because my time on this earth had expired, because you know, it's a bad thing.

Fucking insane.

banyon
05-30-2010, 04:06 PM
Yep.

And if I earn enough money during my lifetime to provide for the next few generations of my family, some people think it's "okay" for a large portion to be paid to the government because my time on this earth had expired, because you know, it's a bad thing.

****ing insane.

Your kids and grandkids can't live on $5 million +?

DaneMcCloud
05-30-2010, 04:08 PM
I'm not sure why you feel the need to insult me to try to make your point, nor did I speak to you in such a way to merit such comments, but it certainly doesn't make me sound like the one who doesn't know what he is talking about.


What I'm telling you is that I think you're fucking insane to advocate a $5 million dollar cap on earnings, or that you even advocate a death tax whatsoever, or that you think that "millionaires" are the LAST people we should be concerned with in regards to taxation, death taxes and trusts.

KC native
05-30-2010, 04:08 PM
Again, Fuck You.

What do you mean "not very many people"? Where'd you get your stats, Einstein? Because quite a frankly, I know a fucking SHIT TON of people with whom the Estate Taxes affect. There are more than 250,000 people in Los Angeles County that earn in excess of $1 million per year and millions that earn $300k plus. Are you going to tell us that those people won't be affected?

You're fucking full of shit on this subject and most likely, in general.

Wealth Transfer Taxes: How many people pay the estate tax?

The 2001 tax act, The Economic Growth and Tax Relief Reconciliation Act (EGTRRA), raised the estate tax exemption to $1 million in 2002 and to $3.5 million in a series of steps through 2009, sharply reducing the number of estates that have to pay estate taxes. For 2010 only, the estate tax is eliminated. The tax reverts to its pre-EGTRRA status in 2011 with a $1 million exemption, leading to a large increase in the number of estates owing the tax.

* Almost 33,000 estates filed returns in 2007 but fewer than half - only 14,700 - of those estates had to pay any estate tax at all. Estate tax liability totaled $21.2 billion.
* Estates must file tax returns within nine months of the decedent’s death and taxable estates usually wait as long as possible before filing. Thus, most returns filed in 2007 were for people dying in 2006 when the estate tax exemption was $2 million. About 2.4 million people died in that year; of those, only 1 in 73 generated an estate tax return and only 1 in 163 had to pay any estate tax.
* In 2009, the estate tax exemption will increase to $3.5 million. TPC projects that 14,900 estate tax returns will be filed for people who died in that year, of which only 5,500 will owe estate tax totaling about $13.8 billion.
* After a single year hiatus in 2010, the estate tax will return in 2011 with a $1 million exemption and many more estates will have to file returns. TPC estimates that 108,200 estates of people dying that year will file estate tax returns and 44,200 of those estates will pay taxes totaling $34.4 billion.



http://www.taxpolicycenter.org/briefing-book/key-elements/estate/how-many.cfm

DaneMcCloud
05-30-2010, 04:10 PM
Like you say, it doesn't completely stop those great grandchild trust fund babies anyway, so I'm not sure what your grave societal ill is here that you are lamenting. Oh, no, the wealthy people that were enabled by our country to prosper greatly might have to give a few dimes back, the horror!

So you're telling us that in essence, you're a socialist?

vailpass
05-30-2010, 04:10 PM
Your kids and grandkids can't live on $5 million +?

What business is that of yours or the governments?

DaneMcCloud
05-30-2010, 04:11 PM
http://www.taxpolicycenter.org/briefing-book/key-elements/estate/how-many.cfm

The simple fact that anyone has to pay AT ALL is absurd.

Not a $5 million dollar cap.

banyon
05-30-2010, 04:12 PM
What I'm telling you is that I think you're ****ing insane to advocate a $5 million dollar cap on earnings, or that you even advocate a death tax whatsoever, or that you think that "millionaires" are the LAST people we should be concerned with in regards to taxation, death taxes and trusts.

What are you talking about? I'm not promoting a $5 million cap on earnings. Where did you get that idea. Yes that would be insane. I was talking about the $5 million exemption on the estate tax.

Yes, I think the increased exemption and lowered max rate that I already referred to make this a burden to very few people and whining about it is silly.

DaneMcCloud
05-30-2010, 04:12 PM
Your kids and grandkids can't live on $5 million +?

Are you joking? I'm taking it that you ARE a socialist, because what you're saying sure isn't capitalism.

DaneMcCloud
05-30-2010, 04:13 PM
What are you talking about? I'm not promoting a $5 million cap on earnings. Where did you get that idea. Yes that would be insane. I was talking about the $5 million exemption on the estate tax.

Yes, I think the increased exemption and lowered max rate that I already referred to make this a burden to very few people and whining about it is silly.

Well, it would affect ME, buddy.

I'm sorry that it won't affect you but 99% of all of the bullshit that goes on in this forum rarely affects anyone, period.

banyon
05-30-2010, 04:13 PM
So you're telling us that in essence, you're a socialist?

So, we've transitioned from angry insults to labels? I guess that's some measure of progress. But no, the estate tax does not mean that the government owns or controls the means of production in the economy.

banyon
05-30-2010, 04:15 PM
Are you joking? I'm taking it that you ARE a socialist, because what you're saying sure isn't capitalism.

You don't think your great grandchildren should ever have to contribute or work for a living like regular people?

That ain't capitalism either, it's plutocracy.

banyon
05-30-2010, 04:16 PM
What business is that of yours or the governments?

It's my business in this thread discussion because Dane brought up what a tremendous burden it would be to ask his great grandkids to lift a finger.

DaneMcCloud
05-30-2010, 04:16 PM
So, we've transitioned from angry insults to labels? I guess that's some measure of progress. But no, the estate tax does not mean that the government owns or controls the means of production in the economy.

That's what you're protecting.

And who are you or anyone else to determine what my grandkids (who don't even exist) can or can't live on?

Do you live in a city where a decent home will cost you in the millions of dollars? Do you live in a city where the cost of living is extremely high? Where public education is shit and private education is as much as $25k per year per student?

Why should I have to give my hard earned money back to the government just because I die? It should ALL go to MY family.

This is a ridiculous argument. And you lose.

vailpass
05-30-2010, 04:17 PM
You don't think your great grandchildren should ever have to contribute or work for a living like regular people?

That ain't capitalism either, it's plutocracy.

Who says they won't pay taxes? This sound familiar?:

The same assets are taxed every time there is a transfer of money, it isn't limited to estate taxes. If I make a salary, then I pay income taxes on that money, when I go spend it at the local grocery store, I pay sales tax on the same money, then the grocery corporation pays corporate income tax on the money, then when they pay their employees' salaries, those employees pay income taxes on the same money.

DaneMcCloud
05-30-2010, 04:17 PM
You don't think your great grandchildren should ever have to contribute or work for a living like regular people?

That ain't capitalism either, it's plutocracy.

More assumptions from an ASS.

Who says that my children or grandchildren won't or wouldn't work?

I think you have an overinflated sense of $5 million dollars.

It's just not that much money outside of the Midwest.

banyon
05-30-2010, 04:17 PM
Well, it would affect ME, buddy.

I'm sorry that it won't affect you but 99% of all of the bullshit that goes on in this forum rarely affects anyone, period.

You don't know that it won't affect me, so stop saying it and acting like it's relevant to the question about whether the principle is just or not.

DaneMcCloud
05-30-2010, 04:19 PM
You don't know that it won't affect me, so stop saying it and acting like it's relevant to the question about whether the principle is just or not.

Give me fucking break. There is no way it affects you.

Don't try to pretend like you're some kind of civil servant saint that would willingly leave a huge portion of his money to the Federal Government of your own volition.

banyon
05-30-2010, 04:20 PM
That's what you're protecting.

And who are you or anyone else to determine what my grandkids (who don't even exist) can or can't live on?

Do you live in a city where a decent home will cost you in the millions of dollars? Do you live in a city where the cost of living is extremely high? Where public education is shit and private education is as much as $25k per year per student?

Why should I have to give my hard earned money back to the government just because I die? It should ALL go to MY family.

This is a ridiculous argument. And you lose.

I'm arguing to determine what your grandkids get because this is a public policy argument and yes, public policies do impact the public, we don't just live in a little aristocratic bubble.

You don't give anything to the government, because by definition you would be deceased. Your heirs would take 65% of what you pass on, plus the $5 million exemption, plus whatever they are under 35% if they aren't in the highest income tax bracket.

Also, who forces you to live in an area with such inflated costs of living?

banyon
05-30-2010, 04:22 PM
Give me ****ing break. There is no way it affects you.

Don't try to pretend like you're some kind of civil servant saint that would willingly leave a huge portion of his money to the Federal Government of your own volition.

For the time being, I am a civil servant, and with my experience level, I could easily find a private job that paid about 3-4x what I currently make.

But my father invested wisely and bought Wal-Mart stock in the 80's and it grew fairly large, so yes, it could in fact impact me, despite your incorrect assumptions.

But if it does or doesn't, it shouldn't impact an argument about public policy.

banyon
05-30-2010, 04:24 PM
Who says they won't pay taxes? This sound familiar?:

The same assets are taxed every time there is a transfer of money, it isn't limited to estate taxes. If I make a salary, then I pay income taxes on that money, when I go spend it at the local grocery store, I pay sales tax on the same money, then the grocery corporation pays corporate income tax on the money, then when they pay their employees' salaries, those employees pay income taxes on the same money.

I didn't say they wouldn't pay taxes. But if they are just sitting on their rears collecting cap gains and dividend income, they will pay those taxes at a lower rate than working people, or particularly people who pay SSA taxes.

DaneMcCloud
05-30-2010, 04:32 PM
Also, who forces you to live in an area with such inflated costs of living?

LMAO

Who forces YOU to live in an area where everything is extremely undervalued in comparison to the the population centers?

Idiotic argument.

DaneMcCloud
05-30-2010, 04:34 PM
For the time being, I am a civil servant, and with my experience level, I could easily find a private job that paid about 3-4x what I currently make.

But my father invested wisely and bought Wal-Mart stock in the 80's and it grew fairly large, so yes, it could in fact impact me, despite your incorrect assumptions.

But if it does or doesn't, it shouldn't impact an argument about public policy.

If your father has a bunch of Wal-Mart stock, why do you have a job?

:rolleyes:

There should be absolutely NO death tax, period.

Why anyone would advocate and argue such is beyond me, especially people who advocate capitalism.

banyon
05-30-2010, 04:37 PM
LMAO

Who forces YOU to live in an area where everything is extremely undervalued in comparison to the the population centers?

Idiotic argument.

The shoe is not on the other foot, because I wasn't the one complaining. I don't have problems with overinflated prices, you stated that you do. They are purportedly so unbearable that if your grandkids are forced to take only 65% of their inheritance over $5 million, then they will have to eat their shoes for dinner every night.

I did choose where I live, I am not originally from Kansas, but I would not live in LA or NY and the overinflated cost of living is definitely one of the factors in consideration.

banyon
05-30-2010, 04:39 PM
If your father has a bunch of Wal-Mart stock, why do you have a job?

:rolleyes:

:spock: Uh, because I need to eat and have a roof over my head and I have an ounce of career ambition, and my father isn't dead?


There should be absolutely NO death tax, period.

Why anyone would advocate and argue such is beyond me, especially people who advocate capitalism.

I've already stated my reasons, but you've chosen to ignore those in lieu of insults and personalizations.

DaneMcCloud
05-30-2010, 04:41 PM
The shoe is not on the other foot, because I wasn't the one complaining. I don't have problems with overinflated prices, you stated that you do. They are purportedly so unbearable that if your grandkids are forced to take only 65% of their inheritance over $5 million, then they will have to eat their shoes for dinner every night.

I did choose where I live, I am not originally from Kansas, but I would not live in LA or NY and the overinflated cost of living is definitely one of the factors in consideration.

LMAO

You're insane if you think that New York, Los Angeles and San Francisco are "overinflated".

There are many reasons why the real estate is higher in those locations than in Kansas but mainly because those are the cities in which everything "happens".

As I mentioned earlier, there are more than 250,000 people in Los Angeles County that earn in excess of $1 million per year. Those people couldn't earn that type of money in Kansas.

DaneMcCloud
05-30-2010, 04:44 PM
They are purportedly so unbearable that if your grandkids are forced to take only 65% of their inheritance over $5 million, then they will have to eat their shoes for dinner every night.



You just don't get it, do you?

:shake:

banyon
05-30-2010, 04:47 PM
LMAO

You're insane if you think that New York, Los Angeles and San Francisco are "overinflated".

There are many reasons why the real estate is higher in those locations than in Kansas but mainly because those are the cities in which everything "happens".

As I mentioned earlier, there are more than 250,000 people in Los Angeles County that earn in excess of $1 million per year. Those people couldn't earn that type of money in Kansas.

The market certainly thought they were overinflated, that's why so many people are upside down now in CA in their mortgages.

banyon
05-30-2010, 04:51 PM
You just don't get it, do you?

:shake:

Not the way you've portrayed it, certainly. Basically your argument consisted of "IT'S NOT FAIR, WHAT ABOUT MY GRANDKIDS YOU SUCK YOU'RE A COMMUNIST MORON", and then rinse and repeat.

I point out the limitations, apparently educate you on what the current exemption levels are (after you insulted me and pretending I was making it up, then didn't acknowledge that it wasn't after all made up) attempt to discuss the concepts involved, but clearly 'I just don't get it".

I guess that's a way to sign off if you're done with rational debate.

DaneMcCloud
05-30-2010, 04:56 PM
Not the way you've portrayed it, certainly. Basically your argument consisted of "IT'S NOT FAIR, WHAT ABOUT MY GRANDKIDS YOU SUCK YOU'RE A COMMUNIST MORON", and then rinse and repeat.

I point out the limitations, apparently educate you on what the current exemption levels are (after you insulted me and pretending I was making it up, then didn't acknowledge that it wasn't after all made up) attempt to discuss the concepts involved, but clearly 'I just don't get it".

I guess that's a way to sign off if you're done with rational debate.

You're a fucking idiot, period. Now I see why you're so disliked by so many in this forum.

The bottom line, Dickwad, is that the Federal Government should have ANY participation in income passed from one generation to the next. The money had already been taxed by Federal Government ONCE - there's no reason to do it again.

And we're not just talking about earnings, we're talking investments, real estate holdings, insurance policies, etc. Advocating that the Government should be entitled to 35% is insane and without a doubt, you'd feel otherwise if it affect YOU and YOUR earnings.

patteeu
05-30-2010, 04:59 PM
I've already explained this so please re-read.

You know Pat, I respect you and like you. But the difference between you and me in this issue is that this is reality for me, not theory.

I don't have the resources in which to purchase multiple income properties in which I could write off the interest. And someone earning $800k per year versus me making $800k per year may have more "expenses" and a much higher mortgage, which would further allow them to have a lower taxable income.

I'm not a CPA, which is why I employ a CPA to help write off and reduce my taxable earnings. Each year, we're given the option of putting "X" amount of money into tax sheltered accounts or pay that money in taxes.

I think it's outright ridiculous that I have to hire someone whose only duty is to hide and protect my earnings from the government due to "loopholes" and that some people are better at this than others.

Except that you didn't really explain it, you spoke in vague generalities. With rare exceptions, deductions are in place for logical, defensible reasons. Most of those reasons fall into one of two categories. The first is a deduction for a legitimate expense that is directly related to income. Purchasing capital equipment, advertising expenses, and office overhead fall into this category. The other is a deduction designed to subsidize something that the government wants to encourage. Charities, local governments, hybrid car purchases, etc. fall into this category. It's wrong to denigrate either of these types of tax deductions as an unfair "shelter" whether you agree with them or not.

Since you didn't really explain why owning land was such a valuable shelter in your previous post, it's hard to speak directly to your example, but the people that own this land are the people who took the risk that you decided not to take when you didn't get into the Las Vegas land scene a few years ago (lucky for you, in this case). Some of those land owners have taken a bath, at least on paper, over the past few years. A bath that you've avoided by not getting in the game.

I couldn't agree more with your last paragraph. I'm in favor of a flat tax on consumption and doing away with the complex, deduction-riddled income tax code. The simpler and the broader-based, the better, as far as I'm concerned.

DaneMcCloud
05-30-2010, 05:00 PM
The market certainly thought they were overinflated, that's why so many people are upside down now in CA in their mortgages.

Really? How many people would that be? Again, I don't think you have a clue as to what you speak about.

There are certain cities and pockets that are affected but it was not statewide. Stockton, California is the worst affected area because it is a 60-70 minute drive from Silicon Valley and SF. Homes that were reasonably priced at $200-250k suddenly doubled due to the increase in jobs and the fact that San Francisco is extremely expensive.

That certainly didn't happen in all of Los Angeles or San Diego for that matter. The homes in my neighborhood and surrounding neighborhoods didn't see a drop in prices, whatsoever. And home sales have continued to be brisk.

The places hardest hit were Las Vegas (by far - 1 in 20 homes in foreclosure) and the Phoenix area. But the reasons weren't specific to the cities or locations, it was from overbuilding and in the case of Las Vegas, mortgage lenders giving loans to people that should have been otherwise not qualified.

So if you want to debate THIS topic, get your facts straight.

banyon
05-30-2010, 05:02 PM
You're a ****ing idiot, period. Now I see why you're so disliked by so many in this forum.

The bottom line, Dickwad, is that the Federal Government should have ANY participation in income passed from one generation to the next. The money had already been taxed by Federal Government ONCE - there's no reason to do it again.

And we're not just talking about earnings, we're talking investments, real estate holdings, insurance policies, etc. Advocating that the Government should be entitled to 35% is insane and without a doubt, you'd feel otherwise if it affect YOU and YOUR earnings.

I don't trade in insults in lieu of reason, but apparently that's what you've limited yourself to. It certainly makes for a cheaper discussion and lowers the quality of the forum to make these political threads personal, so I won't join you in your hateful posting.

And no, the 35% max rate isn't insane, in fact it was much higher for decades and the wealthy have managed somehow just the same. In fact, the 35% rate and $5 mil exemption was passed by a majority of our elected officials in Congress and I don't view them all as insane. Simply reiterating that you don't think it's fair is not a policy position.

DaneMcCloud
05-30-2010, 05:03 PM
Except that you didn't really explain it, you spoke in vague generalities. With rare exceptions, deductions are in place for logical, defensible reasons. Most of those reasons fall into one of two categories. The first is a deduction for a legitimate expense that is directly related to income. Purchasing capital equipment, advertising expenses, and office overhead fall into this category. The other is a deduction designed to subsidize something that the government wants to encourage. Charities, local governments, hybrid car purchases, etc. fall into this category. It's wrong to denigrate either of these types of tax deductions as an unfair "shelter" whether you agree with them or not.

Since you didn't really explain why owning land was such a valuable shelter in your previous post, it's hard to speak directly to your example, but the people that own this land are the people who took the risk that you decided not to take when you didn't get into the Las Vegas land scene a few years ago (lucky for you, in this case). Some of those land owners have taken a bath, at least on paper, over the past few years. A bath that you've avoided by not getting in the game.

I couldn't agree more with your last paragraph. I'm in favor of a flat tax on consumption and doing away with the complex, deduction-riddled income tax code. The simpler and the broader-based, the better, as far as I'm concerned.

Pat, I don't have the resources (i.e. capital) to make further investments that I can use as write-offs and expenditures, so my "net" income line is much higher than someone that has those resources at their disposal.

So while we may earn the same exact gross income, I don't have as many deductions as some others may have, which results in me paying a higher percentage to the state and Federal government.

DaneMcCloud
05-30-2010, 05:06 PM
I don't trade in insults in lieu of reason, but apparently that's what you've limited yourself to. It certainly makes for a cheaper discussion and lowers the quality of the forum to make these political threads personal, so I won't join you in your hateful posting.

And no, the 35% max rate isn't insane, in fact it was much higher for decades and the wealthy have managed somehow just the same. In fact, the 35% rate and $5 mil exemption was passed by a majority of our elected officials in Congress and I don't view them all as insane. Simply reiterating that you don't think it's fair is not a policy position.

JFC.

You've insulted "millionaires" in this thread. You've insulted my non-existent grandchildren. You've championed the wealthy paying higher taxes. You've insinuated that I don't need to live on the West Coast. And finally, you've made it clear that those people who have earned and are leaving money beyond the $5 million dollar cap have essentially, "earned enough".

Yeah, you're just an innocent bystander.

:rolleyes:

Brock
05-30-2010, 05:07 PM
I don't mind higher income rates on rich people that much. I do mind taxing that money again when it passes hands via inheritance. They already took their cut once.

banyon
05-30-2010, 05:12 PM
JFC.

You've insulted "millionaires" in this thread. You've insulted my non-existent grandchildren. You've championed the wealthy paying higher taxes. You've insinuated that I don't need to live on the West Coast. And finally, you've made it clear that those people who have earned and are leaving money beyond the $5 million dollar cap have essentially, "earned enough".


Yeah, you're just an innocent bystander.

:rolleyes:

You're the only one who wanted to personalize the insults, that's the main difference in how this thread played out.

Your last bolded statement is a total fabrication. I don't know what prevents you from understanding the distinction between a "cap" and an "exemption", but people are free to earn whatever they would like to beyond $5 million and the policy I argued doesn't change that. It's simply if they have an estate of over $5 million, then the assets greater than $5 million will be taxed at 35% when they are passed on. They can pass on a billion, or a trillion for all I care, it just won't be tax-exempt.

banyon
05-30-2010, 05:15 PM
Really? How many people would that be? Again, I don't think you have a clue as to what you speak about.

There are certain cities and pockets that are affected but it was not statewide. Stockton, California is the worst affected area because it is a 60-70 minute drive from Silicon Valley and SF. Homes that were reasonably priced at $200-250k suddenly doubled due to the increase in jobs and the fact that San Francisco is extremely expensive.

That certainly didn't happen in all of Los Angeles or San Diego for that matter. The homes in my neighborhood and surrounding neighborhoods didn't see a drop in prices, whatsoever. And home sales have continued to be brisk.

The places hardest hit were Las Vegas (by far - 1 in 20 homes in foreclosure) and the Phoenix area. But the reasons weren't specific to the cities or locations, it was from overbuilding and in the case of Las Vegas, mortgage lenders giving loans to people that should have been otherwise not qualified.

So if you want to debate THIS topic, get your facts straight.

Your personal anecdotes don't comport with the Case-Shiller price index.

http://financemymoney.com/wp-content/uploads/2009/09/case-shiller-california.png

http://financemymoney.com/california-housing-still-over-priced-examining-case-shiller-data-and-seasonal-distortions-the-impact-of-shadow-inventory-on-price/

If you can't see the bubble in this graph, then you might be impervious to "facts".

DaneMcCloud
05-30-2010, 05:17 PM
I don't mind higher income rates on rich people that much. I do mind taxing that money again when it passes hands via inheritance. They already took their cut once.

The problem is, as I stated earlier, unfair that two "wealthy" people may earn the same exact amount in a calendar year, yet pay a different percentage of taxes due to loopholes.

It should be straight across the board. The tax code in this country is insane.

DaneMcCloud
05-30-2010, 05:19 PM
Your personal anecdotes don't comport with the Case-Shiller price index.

http://financemymoney.com/wp-content/uploads/2009/09/case-shiller-california.png

http://financemymoney.com/california-housing-still-over-priced-examining-case-shiller-data-and-seasonal-distortions-the-impact-of-shadow-inventory-on-price/

If you can't see the bubble in this graph, then you might be impervious to "facts".

I just love people that back up their shit with website data.

The Case Shiller is the best indicator of market trends but it does have its flaws.

Why don't you look up 90068 and the surrounding areas on californiamoves.com and tell me that prices are low.

Brock
05-30-2010, 05:19 PM
The problem is, as I stated earlier, unfair that two "wealthy" people may earn the same exact amount in a calendar year, yet pay a different percentage of taxes due to loopholes.

It should be straight across the board. The tax code in this country is insane.

I agree 100 percent.

mlyonsd
05-30-2010, 05:22 PM
The entire elevated income tax system is insane.

It promotes government over spending by allowing career politicians to practice class warfare. It allows politicians like Clinton to hide their wasteful ways by claiming a certain class isn't paying their fare share when in reality there are people that aren't paying anything.

2bikemike
05-30-2010, 05:23 PM
Pat, I don't have the resources (i.e. capital) to make further investments that I can use as write-offs and expenditures, so my "net" income line is much higher than someone that has those resources at their disposal.

So while we may earn the same exact gross income, I don't have as many deductions as some others may have, which results in me paying a higher percentage to the state and Federal government.

I don't understand. The way you talk you have buckets of money yet you say you can't make further investments in investment property.

I am not trying to be a dick I just don't understand how you can be as rich as you claim to be and not be able to make the same investments that I have made in investment property. Especially in todays climate with investment property being extremely affordable.

RNR
05-30-2010, 05:23 PM
I agree 100 percent.

That and a government that has some sort of budget and controls its spending so it does not have to tax the living shit out of us~

banyon
05-30-2010, 05:26 PM
I just love people that back up their shit with website data.

The Case Shiller is the best indicator of market trends but it does have its flaws.

Why don't you look up 90068 and the surrounding areas on californiamoves.com and tell me that prices are low.

So, earlier I claimed that home prices in California were overinflated. Then you wanted to limit it to LA, SF, and SD. Now you want to change the argument again to include just your zip code? What's next, perhaps the value of just the houses on your street?

I didn't make an argument about 90068, but I certainly met my burden of proof on the idea that housing prices in Calif. crashed.

It's not like some crazy fact I made up out of thin air either. It's been constantly discussed in the news for the past 2 years. Denying that it happened, is frankly kind of bizarre.

2bikemike
05-30-2010, 05:26 PM
The entire elevated income tax system is insane.

It promotes government over spending by allowing career politicians to practice class warfare. It allows politicians like Clinton to hide their wasteful ways by claiming a certain class isn't paying their fare share when in reality there are people that aren't paying anything.

And still getting a refund

banyon
05-30-2010, 05:27 PM
And still getting a refund

Those people do pay taxes.

Sales taxes and SSA taxes actually hit them disproportionately hard.

mlyonsd
05-30-2010, 05:34 PM
Those people do pay taxes.

Sales taxes and SSA taxes actually hit them disproportionately hard.

Being lazy here by not searching the thread....what are SSA taxes?

I disagree on your sales tax comment though.

DaneMcCloud
05-30-2010, 05:34 PM
I don't understand. The way you talk you have buckets of money yet you say you can't make further investments in investment property.

I am not trying to be a dick I just don't understand how you can be as rich as you claim to be and not be able to make the same investments that I have made in investment property. Especially in todays climate with investment property being extremely affordable.

I'm not saying that I cannot make further investments.

I'm stating that it's ridiculous that I have to do so in order to get tax breaks.

banyon
05-30-2010, 05:36 PM
Being lazy here by not searching the thread....what are SSA taxes?

I disagree on your sales tax comment though.

Social Security.

Why do you disagree about sales taxes? That's a commonly accepted idea that even Republicans usually bring up like they did here in Kansas when we raised it 1 cent for the next 3 years.

2bikemike
05-30-2010, 05:36 PM
Those people do pay taxes.

Sales taxes and SSA taxes actually hit them disproportionately hard.

I'm all for ending the Ponzi Scheme called Social Security.

DaneMcCloud
05-30-2010, 05:38 PM
So, earlier I claimed that home prices in California were overinflated. Then you wanted to limit it to LA, SF, and SD. Now you want to change the argument again to include just your zip code? What's next, perhaps the value of just the houses on your street?

I didn't make an argument about 90068, but I certainly met my burden of proof on the idea that housing prices in Calif. crashed.

It's not like some crazy fact I made up out of thin air either. It's been constantly discussed in the news for the past 2 years. Denying that it happened, is frankly kind of bizarre.

The reality of the situation is that while some individual markets crashed (like the aforementioned Stockton), it didn't collapse statewide.

A $2 million dollar home in Los Angeles circa 2006 is most likely worth $2 million dollars in 2010.

The people that were affected the most were affected for a reason, not a full scale price correction like what occurred in cities like Stockton and Las Vegas.

Furthermore, there has been more of an issue with regards to housing in the non-single family type housing (Apartments, Condos, etc.) due to overbuilding.

2bikemike
05-30-2010, 05:39 PM
I'm not saying that I cannot make further investments.

I'm stating that it's ridiculous that I have to do so in order to get tax breaks.

Oh I thought you were arguing that you couldn't and those options weren't available to you.

mlyonsd
05-30-2010, 05:43 PM
Social Security.

Why do you disagree about sales taxes? That's a commonly accepted idea that even Republicans usually bring up like they did here in Kansas when we raised it 1 cent for the next 3 years.

Why should someone pay a higher tax for a big screen tv?

And when it comes to SS taxes I think every American should pay the same rate. I think the same about health care too.

banyon
05-30-2010, 05:45 PM
Why should someone pay a higher tax for a big screen tv?

The tax rate on TV's is the same as everything else (with some minor exceptions like cigarettes and alcohol), so I don't follow your point here.

And when it comes to SS taxes I think every American should pay the same rate. I think the same about health care too.

On this we agree.

banyon
05-30-2010, 05:49 PM
The reality of the situation is that while some individual markets crashed (like the aforementioned Stockton), it didn't collapse statewide.

A $2 million dollar home in Los Angeles circa 2006 is most likely worth $2 million dollars in 2010.

The people that were affected the most were affected for a reason, not a full scale price correction like what occurred in cities like Stockton and Las Vegas.

Furthermore, there has been more of an issue with regards to housing in the non-single family type housing (Apartments, Condos, etc.) due to overbuilding.

The fact is, that on average and in aggregate, home prices crashed in those areas. There may have been a few unaffected pockets, but not enough to make the averages different than they were. This is even true if we are talking median and not just a simple average:

http://financemymoney.com/wp-content/uploads/2009/09/california-median-price.png

DaneMcCloud
05-30-2010, 05:53 PM
The fact is, that on average and in aggregate, home prices crashed in those areas. There may have been a few unaffected pockets, but not enough to make the averages different than they were. This is even true if we are talking median and not just a simple average:

http://financemymoney.com/wp-content/uploads/2009/09/california-median-price.png

$600k?

About the only thing you can buy for $600k is a crappy old apartment turned condo in the Valley.

1,000 square foot houses are selling for $1 million or more in the surrounding area. Those numbers are extremely deceiving.

If you don't believe me, again, visit californiamoves.com and search out any Los Angeles zip code (forget about OC, you won't find anything there).

Hell, homes in South Central go for $350-700k.

Internet sites like this just don't tell the entire story.

mlyonsd
05-30-2010, 05:59 PM
The tax rate on TV's is the same as everything else (with some minor exceptions like cigarettes and alcohol), so I don't follow your point here.


That's what I get for jumping into the middle of a discussion. Why do you think sales tax is shared disproportinately?

banyon
05-30-2010, 06:05 PM
That's what I get for jumping into the middle of a discussion. Why do you think sales tax is shared disproportinately?

Because the purchase of household staples and the tax that accompanies it will consume a larger share of the poorer person's income.

If you are living paycheck to paycheck, then paying 28% (using the 23% figure from the fairtax, plus @5% for state and local) on a grocery bill of $200 will set you back pretty good, $56. If you are making minimum wage, then that's significant.

But if you have larger discretionary income, then that's not going to eat into your essential budget nearly as much. Plus, for people who make money trading/investing, they are going to be able to accumulate wealth without any tax on it at all.

banyon
05-30-2010, 06:06 PM
$600k?

About the only thing you can buy for $600k is a crappy old apartment turned condo in the Valley.

1,000 square foot houses are selling for $1 million or more in the surrounding area. Those numbers are extremely deceiving.

If you don't believe me, again, visit californiamoves.com and search out any Los Angeles zip code (forget about OC, you won't find anything there).

Hell, homes in South Central go for $350-700k.

Internet sites like this just don't tell the entire story.

In any event, this was a tertiary point, and you've narrowed the focus of it far beyond my initial claim. I won't pretend to know more than you about houses in your neighborhood, nor would such a discussion impact the original point I made.

DaneMcCloud
05-30-2010, 06:20 PM
In any event, this was a tertiary point, and you've narrowed the focus of it far beyond my initial claim. I won't pretend to know more than you about houses in your neighborhood, nor would such a discussion impact the original point I made.

Yes, it would.

Your claim is incorrect. You do not have first hand knowledge of California, only "tertiary" knowledge through websites.

Again, take a look at www.californiamoves.com (http://www.californiamoves.com) and tell me that housing prices have "collapsed".

You're making a broad generalization based of second and third hand information. This is a state that has over 40 million residents and passing that generalization off as fact.

California is NOT Las Vegas. I'd urge do a search on $600k homes in the Los Angeles, San Francisco, Oakland, Orange County and San Diego markets as proof.

mlyonsd
05-30-2010, 06:24 PM
Because the purchase of household staples and the tax that accompanies it will consume a larger share of the poorer person's income.

If you are living paycheck to paycheck, then paying 28% (using the 23% figure from the fairtax, plus @5% for state and local) on a grocery bill of $200 will set you back pretty good, $56. If you are making minimum wage, then that's significant.

But if you have larger discretionary income, then that's not going to eat into your essential budget nearly as much. Plus, for people who make money trading/investing, they are going to be able to accumulate wealth without any tax on it at all.

So when you say disproportionate do you think it's also unfair?

vailpass
05-30-2010, 06:39 PM
I didn't say they wouldn't pay taxes. But if they are just sitting on their rears collecting cap gains and dividend income, they will pay those taxes at a lower rate than working people, or particularly people who pay SSA taxes.

What on earth do you think gives anyone the right to say how someone is allowed to live, earn, etc.?
Scary stuff.

patteeu
05-30-2010, 06:58 PM
Another example of a rich guy not paying a very high effective tax rate but not really making out like a bandit would be a guy making big donations to charity. Take a guy like Dick Cheney, for instance. When he decided to resign from his high dollar job with Halliburton to take a huge pay cut in service to his country, he donated millions to charity in order to avoid the appearance of a conflict of interest. That extraordinary generosity was, of course, tax deductible and it had the effect of lowering his effective tax rate substantially (I don't have the numbers at my fingertips). But it was the three designated charities (a university, a hospital, and a youth group) that benefited, not the Cheney's Cheneys.

The charitable deduction was a conscious decision on the part of the government to subsidize qualifying charities through the tax code not a tax shelter that allows fat cats to avoid paying their fair share.

FYP

Thanks for being there for me, but I had to FYFYP. Please double check your work.

DaneMcCloud
05-30-2010, 07:00 PM
What on earth do you think gives anyone the right to say how someone is allowed to live, earn, etc.?
Scary stuff.

Oh, come on Man! It's Banyon. You know, Banyon.

:rolleyes:

I'm sure he's all for raising the Capital Gains taxes as well because, you know, they only affect a few people.

:shake:

patteeu
05-30-2010, 07:01 PM
He didn't take a pay cut to perform government service, you have the chain of events wrong. He cashed in from his government connections to get the Halliburton job in the first place back when he was SecDef.

He took a huge pay cut to serve us as the Vice President. No one can ever say that Dick Cheney didn't pay his fair share, both in taxes and in service. :thumb:

DaneMcCloud
05-30-2010, 07:02 PM
He took a huge pay cut to serve us as the Vice President. No one can ever say that Dick Cheney didn't pay his fair share, both in taxes and in service. :thumb:

So, he didn't receive any ancillary income while serving as President from 2001-2008?

patteeu
05-30-2010, 07:11 PM
Your kids and grandkids can't live on $5 million +?

$5 million will only buy you a couple loafs of bread and a cardboard "out of work" sign after Obama gets done with us. ;)

patteeu
05-30-2010, 07:13 PM
So, he didn't receive any ancillary income while serving as President from 2001-2008?

If you mean from Halliburton, then no. If you mean interest from investments, of course he did, just like Obama or any other President/VP. But his total income was far less than it would have been if he'd remained CEO of Halliburton.

DaneMcCloud
05-30-2010, 07:17 PM
If you mean from Halliburton, then no. If you mean interest from investments, of course he did, just like Obama or any other President/VP. But his total income was far less than it would have been if he'd remained CEO of Halliburton.

But since Halliburton received several government contracts while he was President and presumably, he held a large amount of Halliburton stock, I think that the income disparity isn't quite as great as you believe it be.

Leaving Halliburton for the presidency arguably did more for his net worth than just remaining as CEO.

KC native
05-30-2010, 07:26 PM
Yes, it would.

Your claim is incorrect. You do not have first hand knowledge of California, only "tertiary" knowledge through websites.

Again, take a look at www.californiamoves.com (http://www.californiamoves.com) and tell me that housing prices have "collapsed".

You're making a broad generalization based of second and third hand information. This is a state that has over 40 million residents and passing that generalization off as fact.

California is NOT Las Vegas. I'd urge do a search on $600k homes in the Los Angeles, San Francisco, Oakland, Orange County and San Diego markets as proof.


:spock: So you're using a real estate agency's website over Case-Schiller data? Just because a house is listed at a price doesn't mean it is going to sell for that price.

DaneMcCloud
05-30-2010, 07:30 PM
:spock: So you're using a real estate agency's website over Case-Schiller data? Just because a house is listed at a price doesn't mean it is going to sell for that price.

Gee, thanks Genius.

:rolleyes:

One of my very best friends is one of the top real estate agents in Los Angeles and was even on the TV show, Million Dollar Listing. I speak with him nearly daily and I'm meeting him (and a bunch of dudes that ALSO happen to be in real estate, commercial and law) for dinner tonight. His business has been absolutely nonstop through the "crash" and he's having his best year on record this year.

I also see houses moving constantly in my neighborhood. A 3 bed, 3 bath went two weeks ago for $1.5 million and was only on the market for a week.

Furthermore, this isn't Kansas or Missouri. You price your shit right and it moves. It's extremely uncommon for a home to sit on the market for 2 months, let alone a month. I know people that have sold their homes the first day it's on the market.

Again, this isn't the Midwest.

patteeu
05-30-2010, 07:31 PM
Pat, I don't have the resources (i.e. capital) to make further investments that I can use as write-offs and expenditures, so my "net" income line is much higher than someone that has those resources at their disposal.

So while we may earn the same exact gross income, I don't have as many deductions as some others may have, which results in me paying a higher percentage to the state and Federal government.

I don't know why you don't think that's fair though. You don't make money off of deductions. You make money off the risk that leads to deductions. But that risk is not usually guaranteed to make you money which is why it's called risk. Someone who makes the same salary as you but who has disposable assets available for investment might invest that money in a business with a lot of upfront cost and potential downstream revenue. He gets to deduct that cost leading to a lower tax burden, but there's no guarantee that the revenue will ever develop. If it doesn't, he ends up losing his capital and the value of his deductions are of little consolation compared to the amount he loses. If the revenue does develop, he ends up with a higher income stream than you (salary + investment income) and he pays significantly higher tax than you in the out years.

I'm with you to an extent. The progressive tax structure penalizes people trying to earn their way to wealth as compared to those who are already wealthy, but it's not because of unfair deductions. It's because existing wealth isn't taxed (leaving aside the death tax, of course). Only change in wealth is taxed. You can sit on a pile of $1 billion dollars and owe zero tax if you don't invest it, but if you're making $100 million dollars per year it will take you 17 years rather than 10 to collect $1 billion because of the ~40% tax bite each year (even if you save every penny).

KC native
05-30-2010, 07:35 PM
Gee, thanks Genius.

:rolleyes:

One of my very best friends is one of the top real estate agents in Los Angeles and was even on the TV show, Million Dollar Listing. I speak with him nearly daily and I'm meeting him (and a bunch of dudes that ALSO happen to be in real estate, commercial and law) for dinner tonight.

Furthermore, this isn't Kansas or Missouri. You price your shit right and it moves. It's extremely uncommon for a home to sit on the market for 2 months, let alone a month. I know people that have sold their homes the first day it's on the market.

Again, this isn't the Midwest.

Sorry but the empirical data tells a completely different story. Case-Schiller indices are pretty much the be all of real estate reporting.

Shit, during the meltdown real estate agents and their advocacy groups were saying it was a perfect time to buy houses despite the mountain of foreclosures and resets on the way.

KC native
05-30-2010, 07:37 PM
Here's a more recent graph of Case Schiller with more that just Cali in it for comparison.

http://www.ritholtz.com/blog/wp-content/uploads/2010/04/case_shiller_5389_image007.png

and another

http://www.ritholtz.com/blog/wp-content/uploads/2010/04/CaseShillerCitiesFeb2010.jpg

DaneMcCloud
05-30-2010, 07:40 PM
I don't know why you don't think that's fair though. You don't make money off of deductions. You make money off the risk that leads to deductions. But that risk is not usually guaranteed to make you money which is why it's called risk. Someone who makes the same salary as you but who has disposable assets available for investment might invest that money in a business with a lot of upfront cost and potential downstream revenue. He gets to deduct that cost leading to a lower tax burden, but there's no guarantee that the revenue will ever develop. If it doesn't, he ends up losing his capital and the value of his deductions are of little consolation compared to the amount he loses. If the revenue does develop, he ends up with a higher income stream than you (salary + investment income) and he pays significantly higher tax than you in the out years.

Because there shouldn't be a risk involved when paying taxes. If the tax code says 35%, then it should be 35%. It shouldn't be "35%, unless you do w, x, y, z".

I'm with you to an extent. The progressive tax structure penalizes people trying to earn their way to wealth as compared to those who are already wealthy, but it's not because of unfair deductions. It's because existing wealth isn't taxed (leaving aside the death tax, of course). Only change in wealth is taxed. You can sit on a pile of $1 billion dollars and owe zero tax if you don't invest it, but if you're making $100 million dollars per year it will take you 17 years rather than 10 to collect $1 billion because of the ~40% tax bite each year (even if you save every penny).

Look Pat, I'm a simple guy. If my wife and I earn $500k in a given year, I want to pay my mortgage, for my cars, my utilities, vacation a couple of weeks per year, visit our families and live life. I don't want to become a slumlord because it'll save me 10% on my Federal Income tax return.

I think that it's unfair that at this point, that's my option because we invest as much as we'll legally able and quite frankly, that's iffy at best these days, seeings how we lost 35% of our portfolio value when the market crashed (we're climbing back up but we're not even yet).

Honestly, I don't think it's too much to ask of our tax code.

patteeu
05-30-2010, 07:40 PM
But since Halliburton received several government contracts while he was President and presumably, he held a large amount of Halliburton stock, I think that the income disparity isn't quite as great as you believe it be.

Leaving Halliburton for the presidency arguably did more for his net worth than just remaining as CEO.

He divested himself of his Halliburton stock and pledged the proceeds from future stock options to charity when he became VP (or when he became the nominee for VP, I can't remember which).

DaneMcCloud
05-30-2010, 07:42 PM
Sorry but the empirical data tells a completely different story. Case-Schiller indices are pretty much the be all of real estate reporting.

Shit, during the meltdown real estate agents and their advocacy groups were saying it was a perfect time to buy houses despite the mountain of foreclosures and resets on the way.

Your empirical data is incorrect.

I challenge you to find a single family home property for $600k or less in Los Angeles, SF, San Jose, Oakland, San Diego, OC or Santa Barbara. For the most part, they just do not exist.

DaneMcCloud
05-30-2010, 07:45 PM
Here's a more recent graph of Case Schiller with more that just Cali in it for comparison.



and another



I don't know where they're getting their data because I can absolutely assure you, I can't find a 4,000 square foot home in Beverly Hills or Hancock Park or Silverlake or any number of cities for under $2 million dollars and most likely, $3-$4 million.

They're probably including unsold condos in that figure, which would make it closer to the mark in some cases.

But not existing single family home sales.

Again, these numbers are arbitrary.

DaneMcCloud
05-30-2010, 07:47 PM
He divested himself of his Halliburton stock and pledged the proceeds from future stock options to charity when he became VP (or when he became the nominee for VP, I can't remember which).

Are you trying to convince me that he's not pure evil incarnate?

:D

KC native
05-30-2010, 07:51 PM
I don't know why you don't think that's fair though. You don't make money off of deductions. You make money off the risk that leads to deductions. But that risk is not usually guaranteed to make you money which is why it's called risk. Someone who makes the same salary as you but who has disposable assets available for investment might invest that money in a business with a lot of upfront cost and potential downstream revenue. He gets to deduct that cost leading to a lower tax burden, but there's no guarantee that the revenue will ever develop. If it doesn't, he ends up losing his capital and the value of his deductions are of little consolation compared to the amount he loses. If the revenue does develop, he ends up with a higher income stream than you (salary + investment income) and he pays significantly higher tax than you in the out years.

I'm with you to an extent. The progressive tax structure penalizes people trying to earn their way to wealth as compared to those who are already wealthy, but it's not because of unfair deductions. It's because existing wealth isn't taxed (leaving aside the death tax, of course). Only change in wealth is taxed. You can sit on a pile of $1 billion dollars and owe zero tax if you don't invest it, but if you're making $100 million dollars per year it will take you 17 years rather than 10 to collect $1 billion because of the ~40% tax bite each year (even if you save every penny).

I'm defending Dane on this one. There are accountants and lawyers that make damn good money devising tax evasion structures. Usually you have to come to the table with $10 million to play though.

KC native
05-30-2010, 07:53 PM
Your empirical data is incorrect.

I challenge you to find a single family home property for $600k or less in Los Angeles, SF, San Jose, Oakland, San Diego, OC or Santa Barbara. For the most part, they just do not exist.

No, it's not. Case-Schiller is the standard for real estate reporting. It is the data that investment professionals use.

patteeu
05-30-2010, 07:54 PM
Because there shouldn't be a risk involved when paying taxes. If the tax code says 35%, then it should be 35%. It shouldn't be "35%, unless you do w, x, y, z".

Should a guy who pays $50,000 for a piece of machinery in order to make $100,000 pay the same tax rate on that gross income as the guy who makes $100,000 for a job that requires no equipment even though the 2nd guy brings home twice as much as the first guy after expenses? Using your 35% rate, the first guy ends up with $15,000 while the second guy banks $65,000. Is that the kind of fairness you're looking for?

Look Pat, I'm a simple guy. If my wife and I earn $500k in a given year, I want to pay my mortgage, for my cars, my utilities, vacation a couple of weeks per year, visit our families and live life. I don't want to become a slumlord because it'll save me 10% on my Federal Income tax return.

I think that it's unfair that at this point, that's my option because we invest as much as we'll legally able and quite frankly, that's iffy at best these days, seeings how we lost 35% of our portfolio value when the market crashed (we're climbing back up but we're not even yet).

Honestly, I don't think it's too much to ask of our tax code.

If the tax code penalized landlords the way you want it to (by not allowing them to deduct legitimate business expenses), people who rent would find it a lot more difficult to find housing. The only fair way to get rid of deductions like you want to do is to change the tax base from income to something like consumption or wealth. You'd probably prefer a wealth tax because it would hit old wealth hard and let people who live lavish lifestyles off of their annual salaries off easy. I'd prefer a consumption tax that would hit big spenders relatively hard whether they are spending salary or savings and it would allow more miserly people to grow their wealth without a heavy tax load.

KC native
05-30-2010, 07:55 PM
I don't know where they're getting their data because I can absolutely assure you, I can't find a 4,000 square foot home in Beverly Hills or Hancock Park or Silverlake or any number of cities for under $2 million dollars and most likely, $3-$4 million.

They're probably including unsold condos in that figure, which would make it closer to the mark in some cases.

But not existing single family home sales.

Again, these numbers are arbitrary.

Here's the a little background on Case-Schiller

http://www2.standardandpoors.com/spf/pdf/index/SPCS_MetroArea_HomePrices_Methodology.pdf
Introduction
The S&P/Case-Shiller® Metro Area Home Price Indices are designed to be a reliable
and consistent benchmark of housing prices in the United States. Their purpose is to
measure the average change in home prices in a particular geographic market. They
cover ten major metropolitan areas (Metropolitan Statistical Areas or MSAs), which
are also aggregated to form a national composite. The indices measure changes in
housing market prices given a constant level of quality. Changes in the types and
sizes of houses or changes in the physical characteristics of houses are specifically
excluded from the calculations to avoid incorrectly affecting the index value.

Partnership
These indices are generated and published under agreements between Standard &
Poor’s, Fiserv and MacroMarkets LLC.

Highlights
The S&P/Case-Shiller Metro Area Home Price Indices use the “repeat sales method”
of index calculation – an approach that is widely recognized as the premier
methodology for indexing housing prices – which uses data on properties that have
sold at least twice, in order to capture the true appreciated value of each specific sales
unit.

Please refer to the Repeat Sales Methodology section for details.

The S&P/Case-Shiller Metro Area Home Price Indices originated in the 1980s by
Case Shiller Weiss's research principals, Karl E. Case and Robert J. Shiller. At the
time, Case and Shiller developed the repeat sales pricing technique. This
methodology is recognized as the most reliable means to measure housing price
movements and is used by other home price index publishers, including the Office of
Federal Housing Enterprise Oversight (OFHEO).

Eligibility Criteria
To be eligible for inclusion in the indices, a house must be a single-family dwelling.
Condominiums and co-ops are specifically excluded. Houses included in the indices
must also have two or more recorded arms-length sale transactions. As a result, new
construction is excluded.

patteeu
05-30-2010, 07:55 PM
I'm defending Dane on this one. There are accountants and lawyers that make damn good money devising tax evasion structures. Usually you have to come to the table with $10 million to play though.

Specifics, please. Tax avoidance is not tax evasion, btw.

KC native
05-30-2010, 07:57 PM
Specifics, please. Tax avoidance is not tax evasion, btw.

They are very protective of the specifics so I'm not privy to them but there has been several article written about it. I'll try to dig it up a little later for you.

DaneMcCloud
05-30-2010, 08:08 PM
No, it's not. Case-Schiller is the standard for real estate reporting. It is the data that investment professionals use.

Dude, the housing market did not crash in Los Angeles, SF, etc. There were a shitload of condos created from old buildings, new condos, etc. that are skewing those numbers.

A few years back, there were Downtown LA condos that were going for $800k that are now $400k due to overbuilding. Those numbers probably factor into the numbers you provided but for single family homes, I'm talking your basic 1,000-4,000 square foot homes, those numbers are ridiculously high.

It was 950 per square foot to buy in Santa Monica or Brentwood in 2006 and it's the same today. My neighborhood runs roughly $650 per square foot and it's unchanged by the market.

There are some pockets such as Stockton where the prices were artificially inflated and corrected themselves (much like Las Vegas) but that was not the norm for SoCal or NorCal or San Diego or the SF Bay.

DaneMcCloud
05-30-2010, 08:10 PM
Hey guys, thanks for the interesting conversation. I'm about to head out for dinner with a close friend who's moving his family back to Manhattan (NY) this week. And we're leaving for an eight day Cabo vacation at 7:30 PST tomorrow morning, so I'll excuse myself from the conversation now.

Have a great holiday weekend!

KC native
05-30-2010, 08:11 PM
Dude, the housing market did not crash in Los Angeles, SF, etc. There were a shitload of condos created from old buildings, new condos, etc. that are skewing those numbers.

A few years back, there were Downtown LA condos that were going for $800k that are now $400k due to overbuilding. Those numbers probably factor into the numbers you provided but for single family homes, I'm talking your basic 1,000-4,000 square foot homes, those numbers are ridiculously high.

It was 950 per square foot to buy in Santa Monica or Brentwood in 2006 and it's the same today. My neighborhood runs roughly $650 per square foot and it's unchanged by the market.

There are some pockets such as Stockton where the prices were artificially inflated and corrected themselves (much like Las Vegas) but that was not the norm for SoCal or NorCal or San Diego or the SF Bay.

Condos are specifically excluded.

Eligibility Criteria
To be eligible for inclusion in the indices, a house must be a single-family dwelling.
Condominiums and co-ops are specifically excluded. Houses included in the indices
must also have two or more recorded arms-length sale transactions. As a result, new
construction is excluded.

googlegoogle
05-30-2010, 09:20 PM
Why don't rich democrats like her cut a big check and put to work some of the unemployed then if she thinks spending on useless items will help.

She wont. She's just a hypocrite.

go bowe
05-30-2010, 09:33 PM
So, he didn't receive any ancillary income while serving as President from 2001-2008?ROFL ROFL ROFL

go bowe
05-30-2010, 09:36 PM
**** you.

I just ****ing LOVE IT when I see people here going whacky about putting earnings caps on Wall Street positions or screams of "socialism", but yet sure, let's tax people who've died and gathered wealth AGAIN.

Your post illustrates why 99% of the posts in this forum are nothing more than worthless posturing and bullshit.don't forget that other 1% of pure comedy gold...

patteeu
05-31-2010, 07:32 AM
Hey guys, thanks for the interesting conversation. I'm about to head out for dinner with a close friend who's moving his family back to Manhattan (NY) this week. And we're leaving for an eight day Cabo vacation at 7:30 PST tomorrow morning, so I'll excuse myself from the conversation now.

Have a great holiday weekend!

Based on the way you inexplicably went off on banyon in this thread, I think some rest and relaxation is a good idea. Have a great time in Cabo! :)

Brainiac
05-31-2010, 02:07 PM
Clinton: Rich 'Not Paying Their Fair Share' in Taxes


Published May 28, 2010
| FOXNews.com

The rich are not being taxed enough and the economy is suffering for it, Secretary of State Hillary Clinton said Thursday.

The former first lady broached the subject during a national security discussion at the Brookings Institution. She lamented that the United States has lowered taxes on the wealthy and said nations around the world need to "increase their public revenue collections" to spur investment.



Most of the discussion in this thread has ignored Hillary's appalling lack of understanding about how an economy works. I guess we just take it for granted these days that the politicians don't know what the f#ck they are talking about.

go bowe
05-31-2010, 03:56 PM
Most of the discussion in this thread has ignored Hillary's appalling lack of understanding about how an economy works. I guess we just take it for granted these days that the politicians don't know what the f#ck they are talking about.could she have meant spur investment in our bonds and such by keeping the bond ratings up and our bonds attractive to investors (people who purchase our debt)?

of course i have a basic lack of understanding about how an economy works, other than what i hear on communist news network and real time...

mlyonsd
05-31-2010, 04:46 PM
could she have meant spur investment in our bonds and such by keeping the bond ratings up and our bonds attractive to investors (people who purchase our debt)?

of course i have a basic lack of understanding about how an economy works, other than what i hear on communist news network and real time...

You mean so we can borrow more?

go bowe
05-31-2010, 07:22 PM
You mean so we can borrow more?yes, that's it...

actually it's more about keeping the interest rates down on the money we're going to borrow anyway...

maybe...

Saul Good
05-31-2010, 09:37 PM
Because the purchase of household staples and the tax that accompanies it will consume a larger share of the poorer person's income.

If you are living paycheck to paycheck, then paying 28% (using the 23% figure from the fairtax, plus @5% for state and local) on a grocery bill of $200 will set you back pretty good, $56. If you are making minimum wage, then that's significant.

But if you have larger discretionary income, then that's not going to eat into your essential budget nearly as much. Plus, for people who make money trading/investing, they are going to be able to accumulate wealth without any tax on it at all.

This is why I came up with the idea (I'm sure that I'm not the only one, but it was original to me) of an across-the-board prebate. If, for example, you say that the first $20,000 of spending should not be taxable because it's the level of subsistence, you give a prebate that effectively prevents the first $20,000 from being taxed. If the rate is 30%, everyone who earns an income gets a $6,000 prebate check.

This solves that problem and also gives the economy an annual goosing.

banyon
05-31-2010, 09:40 PM
This is why I came up with the idea (I'm sure that I'm not the only one, but it was original to me) of an across-the-board prebate. If, for example, you say that the first $20,000 of spending should not be taxable because it's the level of subsistence, you give a prebate that effectively prevents the first $20,000 from being taxed. If the rate is 30%, everyone who earns an income gets a $6,000 prebate check.

This solves that problem and also gives the economy an annual goosing.

Doesn't that just shift the burden to the middle and not the lower class?

Saul Good
05-31-2010, 09:51 PM
Doesn't that just shift the burden to the middle and not the lower class?

I don't think so. A flat tax is regressive. As conservative as I am, I'll admit that this is the case. I'm basically removing a tax on production and on necessities. I would much rather promote production, savings, and investment by taxing consumption over production.

This would also close up all of the loopholes in the current code in addition to recovering lost revenues from those who have moved money into foreign accounts. If you want to spend it, you're going to pay your taxes. It's pretty simple. I can't even fathom how much money it would save in terms of enforcing the current code.

banyon
05-31-2010, 09:56 PM
I don't think so. A flat tax is regressive. As conservative as I am, I'll admit that this is the case. I'm basically removing a tax on production and on necessities. I would much rather promote production, savings, and investment by taxing consumption over production.

This would also close up all of the loopholes in the current code in addition to recovering lost revenues from those who have moved money into foreign accounts. If you want to spend it, you're going to pay your taxes. It's pretty simple. I can't even fathom how much money it would save in terms of enforcing the current code.

If we are talking about the Fairtax, let me pose a question I have recently thought about: Why wouldn't corporations just be incentivized to buy materials and goods from outside the country when they wouldn't have the corresponding consumption tax? If there is no accompanying tariff change, wouldn't every company with a brain do that?

notorious
05-31-2010, 10:06 PM
If we are talking about the Fairtax, let me pose a question I have recently thought about: Why wouldn't corporations just be incentivized to buy materials and goods from outside the country when they wouldn't have the corresponding consumption tax? If there is no accompanying tariff change, wouldn't every company with a brain do that?

A tax/tariff would have to be applied to any import coming in. What would be hard to enforce is companies outside of the US would state that their product is priced a lot lower then the actual price payed to avoid a huge tax hit on their importing customers in the US.


What I think is great about the fair tax is that people that are in debt would get access to 100% of their money to pay back the lenders. Students coming out of college would get a lot better shot at getting out of the huge hole they dug getting eductated.


I don't know how it would apply to stock. If you purchased stock, would a person be hit with x% sales tax?

banyon
05-31-2010, 10:09 PM
A tax/tariff would have to be applied to any import coming in. What would be hard to enforce is companies outside of the US would state that their product is priced a lot lower then the actual price payed to avoid a huge tax hit on their importing customers in the US.


What I think is great about the fair tax is that people that are in debt would get access to 100% of their money to pay back the lenders. Students coming out of college would get a lot better shot at getting out of the huge hole they dug getting eductated.


I don't know how it would apply to stock. If you purchased stock, would a person be hit with x% sales tax?

Does the Fairtax have such a tarriff/tax built into it? I've never heard such.

KC native
05-31-2010, 10:29 PM
A tax/tariff would have to be applied to any import coming in. What would be hard to enforce is companies outside of the US would state that their product is priced a lot lower then the actual price payed to avoid a huge tax hit on their importing customers in the US.


What I think is great about the fair tax is that people that are in debt would get access to 100% of their money to pay back the lenders. Students coming out of college would get a lot better shot at getting out of the huge hole they dug getting eductated.


I don't know how it would apply to stock. If you purchased stock, would a person be hit with x% sales tax?

That would run afoul of WTO agreements and other trade agreements to which the US is party.

Taco John
05-31-2010, 10:54 PM
I somewhat agree.

I don't know how many people here make $500k+. But I can tell you that without a doubt, many of those people pay far less in taxes than others through tax shelters, income properties, etc.

I'll never forget reading that President Bush earned $800k in like 2003 or 2004, yet only paid 25% in total taxes. Meanwhile, I paid more than 35% because I don't have the kind of tax shelters that someone with greater wealth is afforded.

Our tax system is completely ****ed due to all of the loopholes and there are times when I don't care and times when I'm pissed, especially when I hear that someone of equivalent income is paying a smaller percentage due to the tax laws.

That's why blanket statements don't work.


You can't get pissed at them because you aren't smart enough to protect your own assetts.

Garcia Bronco
06-01-2010, 07:40 AM
I understand what you're staying but I also think it's extremely unfair that two people earning the same exact salary pay different tax rates because of shelters, assets, write-offs, etc.

It's a ****ing joke.

That's exactly why everyone should pay the same percentage...no loop holes, no deductions or credits....a flat tax at 5 percent.

Brainiac
06-01-2010, 07:50 AM
http://www.american.com/graphics/2007/november/Guess%20Who%20Really%20Pays%20the%20Taxes.jpg

The top 1% earn 19% of the income and pay 37% of the taxes.

The top 10% earn 44% of the income and pay 68% of the taxes.

The top 25% earn 66% of the income and pay 85% of the taxes.

And as we recently learned, the bottom 47% pay ZERO income taxes.

People can show all the anecdotal evidence they want, and they can bitch all they want about Bush paying "only" $200,000 in taxes in a given year, but the numbers don't lie. Anyone who says that overall the rich don't pay their fair share in taxes is not basing the argument on numbers: they are basing it on class envy.

I was once talking about tax rates with a very liberal friend of mine. I mentioned the Laffer curve and how raising the marginal tax rate can actually cause a decrease in government revenues, and that lowering it can cause revenues to increase because of the resulting increase in economic activity.

He didn't try to question whether or not the Laffer curve is an accurate theory. He didn't care. All he cared about was wanting to raise taxes on the rich because it just wasn't "fair" for them to have so much while he has so little. He said that he would vote to raise taxes on the rich even if it didn't bring in a single penny of additional revenue, because it's just not right for the rich not to pay more taxes than they do today.

The said thing is that my liberal friend's vote counts just as much as anybody else's vote. I suspect that many people feel exactly the same way that he does, and they base their votes strictly on emotion and wanting to stick it to the "big guys" in favor of the "little guys".

I'm pretty sure Hillary Clinton knows better, and that she is simply pandering to her constituency.

patteeu
06-01-2010, 08:07 AM
That would run afoul of WTO agreements and other trade agreements to which the US is party.

This may or may not be technically true, but for practical purposes it's untrue. One attractive feature of a consumption-based tax like the fair tax is that international trade agreements allow such taxes to be applied to imports and stripped from exports. In other words, there would be a legal way to do this although technically speaking it may not be allowable to characterize/implement it as a tariff.

chris
06-01-2010, 08:30 AM
don't forget that other 1% of pure comedy gold...


Dane,

Banyon, Kotter, and KC Native are pure comedy. Their pompous, self-righteous, looter mentality is a blast to read. They ALWAYS have an answer to everything. I mean, who is Banyon to state one can't have more than $5MM to leave to their heirs/others? There are many, many business owners who are losing years of earned wealth over this double taxation.

What you propose is a flat tax. I spend more than the average USA taxpayer earns to legally avoid paying taxes. What a waste of time and money. Sorry, if a flat tax, or Fairtax is passed, politicians lose power. So will never happen.

I am now being advised to move capital out of the USA and to more stable stock markets, such as New Zealand, where the Governments have their budgets under control.

As long as spend, borrow, and tax politicians in both parties are in control, USA is screwed. Nero is playing while Rome burns.

chris
06-01-2010, 08:32 AM
http://www.american.com/graphics/2007/november/Guess%20Who%20Really%20Pays%20the%20Taxes.jpg

The top 1% earn 19% of the income and pay 37% of the taxes.

The top 10% earn 44% of the income and pay 68% of the taxes.

The top 25% earn 66% of the income and pay 85% of the taxes.

And as we recently learned, the bottom 47% pay ZERO income taxes.

People can show all the anecdotal evidence they want, and they can bitch all they want about Bush paying "only" $200,000 in taxes in a given year, but the numbers don't lie. Anyone who says that overall the rich don't pay their fair share in taxes is not basing the argument on numbers: they are basing it on class envy.

I was once talking about tax rates with a very liberal friend of mine. I mentioned the Laffer curve and how raising the marginal tax rate can actually cause a decrease in government revenues, and that lowering it can cause revenues to increase because of the resulting increase in economic activity.

He didn't try to question whether or not the Laffer curve is an accurate theory. He didn't care. All he cared about was wanting to raise taxes on the rich because it just wasn't "fair" for them to have so much while he has so little. He said that he would vote to raise taxes on the rich even if it didn't bring in a single penny of additional revenue, because it's just not right for the rich not to pay more taxes than they do today.

The said thing is that my liberal friend's vote counts just as much as anybody else's vote. I suspect that many people feel exactly the same way that he does, and they base their votes strictly on emotion and wanting to stick it to the "big guys" in favor of the "little guys".

I'm pretty sure Hillary Clinton knows better, and that she is simply pandering to her constituency.

Well said. So true!!

banyon
06-01-2010, 09:11 AM
http://www.american.com/graphics/2007/november/Guess%20Who%20Really%20Pays%20the%20Taxes.jpg

The top 1% earn 19% of the income and pay 37% of the taxes.

The top 10% earn 44% of the income and pay 68% of the taxes.

The top 25% earn 66% of the income and pay 85% of the taxes.

And as we recently learned, the bottom 47% pay ZERO income taxes.

People can show all the anecdotal evidence they want, and they can bitch all they want about Bush paying "only" $200,000 in taxes in a given year, but the numbers don't lie. Anyone who says that overall the rich don't pay their fair share in taxes is not basing the argument on numbers: they are basing it on class envy.

I was once talking about tax rates with a very liberal friend of mine. I mentioned the Laffer curve and how raising the marginal tax rate can actually cause a decrease in government revenues, and that lowering it can cause revenues to increase because of the resulting increase in economic activity.

He didn't try to question whether or not the Laffer curve is an accurate theory. He didn't care. All he cared about was wanting to raise taxes on the rich because it just wasn't "fair" for them to have so much while he has so little. He said that he would vote to raise taxes on the rich even if it didn't bring in a single penny of additional revenue, because it's just not right for the rich not to pay more taxes than they do today.

The said thing is that my liberal friend's vote counts just as much as anybody else's vote. I suspect that many people feel exactly the same way that he does, and they base their votes strictly on emotion and wanting to stick it to the "big guys" in favor of the "little guys".

I'm pretty sure Hillary Clinton knows better, and that she is simply pandering to her constituency.

Saying poor people don't pay taxes is cute, but it doesn't include FICA, Medicare, Medicaid, unemployment, sales, or property taxes.

Also, Bush didn't know where he was on the Laffer curve and sure enough, we got a decline and not an increase in revenues as the conservative think tanks found out.

banyon
06-01-2010, 09:37 AM
Dane,

Banyon, Kotter, and KC Native are pure comedy. Their pompous, self-righteous, looter mentality is a blast to read. They ALWAYS have an answer to everything. I mean, who is Banyon to state one can't have more than $5MM to leave to their heirs/others? There are many, many business owners who are losing years of earned wealth over this double taxation.

Good grief. I wish you guys would learn 1 ounce of reading comprehension. I claimed nothing of the kind. I claimed that the 5 mil exemption threshold was reasonable (which it is and is higher than it has been in decades). People are free to pass on billions or trillions if they wish, it just won't be tax exempt over $5 million.[/QUOTE]

banyon
06-01-2010, 09:38 AM
This may or may not be technically true, but for practical purposes it's untrue. One attractive feature of a consumption-based tax like the fair tax is that international trade agreements allow such taxes to be applied to imports and stripped from exports. In other words, there would be a legal way to do this although technically speaking it may not be allowable to characterize/implement it as a tariff.

Can you answer my question about imports?

chris
06-01-2010, 09:59 AM
Good grief. I wish you guys would learn 1 ounce of reading comprehension. I claimed nothing of the kind. I claimed that the 5 mil exemption threshold was reasonable (which it is and is higher than it has been in decades). People are free to pass on billions or trillions if they wish, it just won't be tax exempt over $5 million.[/QUOTE]

"5 mil exemption threshold was reasonable"

See what I mean?

Looters Alert!

ROFL

notorious
06-01-2010, 10:06 AM
I am not fully educated on the Fair Tax system, but it sounds like an interesting concept to me.


With that said, I will not try to argue for/against it and make myself look like an idiot.

Brainiac
06-01-2010, 10:35 AM
Saying poor people don't pay taxes is cute, but it doesn't include FICA, Medicare, Medicaid, unemployment, sales, or property taxes.

Also, Bush didn't know where he was on the Laffer curve and sure enough, we got a decline and not an increase in revenues as the conservative think tanks found out.

Go read my post again. I didn't say poor people pay zero taxes. I said they pay zero INCOME taxes. I knew a Lefty would jump in and talk about payroll taxes and other taxes.

By the way, the last time I checked, rich people pay FICA, Medicare, Medicaid, unemployment, sales, and property taxes too. They also pay a hell of lot more of them (at least in regard to sales taxes and property taxes).

I am glad to see that you at least acknowledge the existence of the Laffer curve, and I agree that it sure looks like the Bush tax cuts pushed us to the left of the apex of the curve and resulted in decreased revenue. However, returning to the confiscatory tax policies of the pre-Reagan era is NOT the way to go.

Cue for KC Native to jump in and deny that the Reagan tax cuts increased total tax revenue in 4, 3, 2, 1, ...

banyon
06-01-2010, 11:51 AM
Go read my post again. I didn't say poor people pay zero taxes. I said they pay zero INCOME taxes. I knew a Lefty would jump in and talk about payroll taxes and other taxes.

Fair enough, but the point still needed to be made.

By the way, the last time I checked, rich people pay FICA, Medicare, Medicaid, unemployment, sales, and property taxes too. They also pay a hell of lot more of them (at least in regard to sales taxes and property taxes).

Actually for SSA there is a maximum cap on earnings where it is applied of $90k. They also pay lower tax rates on capital gains, dividends, etc.

banyon
06-01-2010, 11:52 AM
"5 mil exemption threshold was reasonable"

See what I mean?

Looters Alert!

ROFL

Do you even understand what we are talking about?

KC native
06-01-2010, 12:47 PM
Go read my post again. I didn't say poor people pay zero taxes. I said they pay zero INCOME taxes. I knew a Lefty would jump in and talk about payroll taxes and other taxes.

By the way, the last time I checked, rich people pay FICA, Medicare, Medicaid, unemployment, sales, and property taxes too. They also pay a hell of lot more of them (at least in regard to sales taxes and property taxes).

I am glad to see that you at least acknowledge the existence of the Laffer curve, and I agree that it sure looks like the Bush tax cuts pushed us to the left of the apex of the curve and resulted in decreased revenue. However, returning to the confiscatory tax policies of the pre-Reagan era is NOT the way to go.

Cue for KC Native to jump in and deny that the Reagan tax cuts increased total tax revenue in 4, 3, 2, 1, ...


When you can separate the increase in revenue from a return to cyclical growth and due to the tax cuts, let me know. As of now, no one has been able to. So, if you're looking for some notoriety then get to working.

Until then, I'm staying with the empirically based stance that the baby boomers are responsible for that growth and Reagan was in the right place at the right time. Oh, and let's not forget that Volcker broke inflation first too.

Oh, and who is proposing an increase to pre-Reagan marginal tax rates?

Brainiac
06-01-2010, 01:53 PM
Fair enough, but the point still needed to be made.



Actually for SSA there is a maximum cap on earnings where it is applied of $90k. They also pay lower tax rates on capital gains, dividends, etc.
The rich pay lower tax rates than the poor on capital gains and dividends?

Brainiac
06-01-2010, 01:54 PM
Oh, and who is proposing an increase to pre-Reagan marginal tax rates?
Nobody.



Yet.

banyon
06-01-2010, 02:19 PM
The rich pay lower tax rates than the poor on capital gains and dividends?

No, cap gains and dividends comprise a much larger pct of their income, so they pay a lower effective rate, not to mention tax avoidance schemes that have already been brought up.

mlyonsd
06-01-2010, 02:23 PM
No, cap gains and dividends comprise a much larger pct of their income, so they pay a lower effective rate, not to mention tax avoidance schemes that have already been brought up.

Their money is invested in business. It creates jobs and people from ending up on the government tit. And they do it at a risk.

patteeu
06-01-2010, 02:27 PM
Can you answer my question about imports?

I can't give you a complete answer. I don't know if the Fair Tax proposal itself addresses this issue, but I'm confident that it would be addressed by applying the tax to those imports and that doing so would be acceptable under our trade agreements.

Foreign materials purchased overseas and used overseas would not be exposed to the tax, as far as I know.

banyon
06-01-2010, 02:32 PM
Their money is invested in business. It creates jobs and people from ending up on the government tit. And they do it at a risk.

People with regular jobs these days are at risk too.

patteeu
06-01-2010, 02:34 PM
Saying poor people don't pay taxes is cute, but it doesn't include FICA, Medicare, Medicaid, unemployment, sales, or property taxes.

Also, Bush didn't know where he was on the Laffer curve and sure enough, we got a decline and not an increase in revenues as the conservative think tanks found out.

It's very possible that we were on the wrong side of the Laffer curve for people in lower tax brackets but still on the right side of it for the wealthy. That's Arthur Laffer's opinion of the Bush tax policy, at least.

banyon
06-01-2010, 02:34 PM
I can't give you a complete answer. I don't know if the Fair Tax proposal itself addresses this issue, but I'm confident that it would be addressed by applying the tax to those imports and that doing so would be acceptable under our trade agreements.

Foreign materials purchased overseas and used overseas would not be exposed to the tax, as far as I know.

Why would you be confident of that if it's not part of the drafted bill? Why wouldn't they think of that? Couldn't it be a pretty big deal?

banyon
06-01-2010, 02:34 PM
I can't give you a complete answer. I don't know if the Fair Tax proposal itself addresses this issue, but I'm confident that it would be addressed by applying the tax to those imports and that doing so would be acceptable under our trade agreements.

Foreign materials purchased overseas and used overseas would not be exposed to the tax, as far as I know.

Why would you be confident of that if it's not part of the drafted bill? Why wouldn't they think of that? Couldn't it be a pretty big deal? 20% extra on materials I would think would motivate a hell of a lot of businesses.

mlyonsd
06-01-2010, 02:34 PM
People with regular jobs these days are at risk too.

Pulling money from the stock market puts people with regular jobs at more risk.

banyon
06-01-2010, 02:36 PM
Pulling money from the stock market puts people with regular jobs at more risk.

That might have been true 30 years ago, but nowadays, it doesn't matter if Wall Street is doing well or poorly. If your job can be outsourced and they can increase profits, then it will.

patteeu
06-01-2010, 02:37 PM
Good grief. I wish you guys would learn 1 ounce of reading comprehension. I claimed nothing of the kind. I claimed that the 5 mil exemption threshold was reasonable (which it is and is higher than it has been in decades). People are free to pass on billions or trillions if they wish, it just won't be tax exempt over $5 million.[/QUOTE]

I don't agree with your pro death tax position, but I agree that your position is being pretty seriously distorted.

mlyonsd
06-01-2010, 02:47 PM
That might have been true 30 years ago, but nowadays, it doesn't matter if Wall Street is doing well or poorly. If your job can be outsourced and they can increase profits, then it will.

Taking away a business's capital is going to make that happen at a faster rate. We could go on all day. ;)

patteeu
06-01-2010, 02:57 PM
Why would you be confident of that if it's not part of the drafted bill? Why wouldn't they think of that? Couldn't it be a pretty big deal? 20% extra on materials I would think would motivate a hell of a lot of businesses.

I don't know how comprehensive the drafted bill is. It may well be addressed.

healthpellets
06-01-2010, 04:03 PM
Saying poor people don't pay taxes is cute, but it doesn't include FICA, Medicare, Medicaid, unemployment, sales, or property taxes.



But we do have the EITC for those at/below the poverty line to recoup those taxes paid.

Also, you had a question about imports and the FairTax.

We'll start with the actual text of HR 25 (2009).

http://www.opencongress.org/bill/111-h25/text?version=ih&nid=t0:ih:212

‘(c) Coordination With Import Duties- The tax imposed by this section is in addition to any import duties imposed by chapter 4 of title 19, United States Code. The Secretary shall provide by regulation that, to the maximum extent practicable, the tax imposed by this section on imported taxable property and services is collected and administered in conjunction with any applicable import duties imposed by the United States.

You can read the remainder of the HR 25 here: http://www.opencongress.org/bill/111-h25/text

The FairTax is simple. It's a 23% national sales tax. Each family gets a prebate every month that will account for "necessities" so that you're not paying a 23% sales tax on those necessary items. The 23% sales tax is only applied to items that are NEW at purchase.

A family of two adults and two kids, according to 2005 numbers, would have received a total prebate of ~25K, broken down to 12 monthly payments of ~$490. Now of course a family that makes about 25K a year is going to be spending that money differently than a family than makes 100K a year. But that's the freedom of the FairTax. You can spend that money however you wish.

Everything new above and beyond that is taxed at that rate. Economists theorize that in to each product purchased, there exists approximately 22% built in cost due to taxes passed on during the production process. So in essence you're paying approximately 1% more to take home all of your paycheck.

Granted, that's a very simplified breakdown and there is more to it. But for anyone to claim that it hurts the poor or middle class is simply not being truthful, imo. In fact, since the working poor would be taking home more of their paychecks, they could theoretically invest in more education or self-improvement.

All in all, it seems like a very solid solution to me.

chris
06-01-2010, 07:27 PM
But we do have the EITC for those at/below the poverty line to recoup those taxes paid.

Also, you had a question about imports and the FairTax.

We'll start with the actual text of HR 25 (2009).

http://www.opencongress.org/bill/111-h25/text?version=ih&nid=t0:ih:212



You can read the remainder of the HR 25 here: http://www.opencongress.org/bill/111-h25/text

The FairTax is simple. It's a 23% national sales tax. Each family gets a prebate every month that will account for "necessities" so that you're not paying a 23% sales tax on those necessary items. The 23% sales tax is only applied to items that are NEW at purchase.

A family of two adults and two kids, according to 2005 numbers, would have received a total prebate of ~25K, broken down to 12 monthly payments of ~$490. Now of course a family that makes about 25K a year is going to be spending that money differently than a family than makes 100K a year. But that's the freedom of the FairTax. You can spend that money however you wish.

Everything new above and beyond that is taxed at that rate. Economists theorize that in to each product purchased, there exists approximately 22% built in cost due to taxes passed on during the production process. So in essence you're paying approximately 1% more to take home all of your paycheck.

Granted, that's a very simplified breakdown and there is more to it. But for anyone to claim that it hurts the poor or middle class is simply not being truthful, imo. In fact, since the working poor would be taking home more of their paychecks, they could theoretically invest in more education or self-improvement.

All in all, it seems like a very solid solution to me.

I would vote for this in a heart beat.

Of course, the exemptions for home interest, etc. would go away.

It will never happen. Class warfare wins votes.

healthpellets
06-02-2010, 02:40 PM
yes, i think a majority of Americans would if it were put to a Constitutional Amendment vote. but we know that will never happen.

blaise
06-02-2010, 02:49 PM
I like how people say estate taxes are okay because they only affect a small percent of the population. As if that's a way to justify something.

banyon
06-02-2010, 03:23 PM
‘(c) Coordination With Import Duties- The tax imposed by this section is in addition to any import duties imposed by chapter 4 of title 19, United States Code. The Secretary shall provide by regulation that, to the maximum extent practicable, the tax imposed by this section on imported taxable property and services is collected and administered in conjunction with any applicable import duties imposed by the United States.


So you would agree that this doesn't require customs to do anything with respect to the Fairtax other than to collect it in addition to existing duties?

Count Zarth
06-02-2010, 03:29 PM
They are purportedly so unbearable that if your grandkids are forced to take only 65% of their inheritance over $5 million, then they will have to eat their shoes for dinner every night.


Yeah, but do you know how much Gucci costs?

A lot more than a nice ribeye.

Count Zarth
06-02-2010, 03:35 PM
we're leaving for an eight day Cabo vacation at 7:30 PST tomorrow morning, so I'll excuse myself from the conversation now.

CABO!??!? DAMN YOU MUST BE RICH!

The Mad Crapper
06-02-2010, 04:16 PM
CABO!??!? DAMN YOU MUST BE RICH!

ROFL

What a dick that guy is. Hey look everybody! I'm going to Cabo! I make $500 K a year!

Count Zarth
06-02-2010, 04:22 PM
Dane has moved from name dropping to island dropping.

healthpellets
06-02-2010, 04:50 PM
So you would agree that this doesn't require customs to do anything with respect to the Fairtax other than to collect it in addition to existing duties?

isn't that the way you read it?

banyon
06-02-2010, 06:36 PM
isn't that the way you read it?

Right, that's the point I was making, that it's a potential source of serious capital outflows.

healthpellets
06-02-2010, 06:49 PM
Right, that's the point I was making, that it's a potential source of serious capital outflows.

how would you change it?

banyon
06-02-2010, 07:34 PM
how would you change it?

I'm not persuaded it's feasible for many other reasons, but this one came to mind.

I'm not sure it is fixable unless you radically somehow revise all of our free trade agreements.

mlyonsd
06-02-2010, 07:36 PM
I'm not sure it is fixable unless you radically somehow revise all of our free trade agreements.

Damn. If sometime I get a chance to buy you a beer I will. Free trade sucks.

KC native
06-02-2010, 07:38 PM
Damn. If sometime I get a chance to buy you a beer I will. Free trade sucks.

True free trade doesn't suck. The problem is that true free trade doesn't exist for a variety of reasons.

healthpellets
06-02-2010, 07:43 PM
ok, someone break it down for me like i'm 7. why is the import issue an issue?

banyon
06-02-2010, 07:46 PM
Damn. If sometime I get a chance to buy you a beer I will. Free trade sucks.

I will drink it. :thumb:

banyon
06-02-2010, 07:57 PM
ok, someone break it down for me like i'm 7. why is the import issue an issue?

Suppose I am Company XYZ and I specialize in finished wood products. I am headquartered in the Pacific Northwestern US. Most of my revenues historically came from making and selling products in the US. Like most companies over a certain size, though international sales have comprised a larger and larger share of my revenues until now, I actually sell more overseas than I do here.

But like many finished product manufacturers (or upstream manufacturers) I buy my unfinished materials in the US, perhaps timber or partially finished products from Idaho and Montana. Purchase of these materials (and unfinished products), of course provides jobs and income for this country.

Now the "Fairtax" is enacted. I now pay a sales tax of 23% on these same materials and products if I continue to purchase them in MT and ID. But I know of a plant in Canada that makes these same unfinished products and has these raw materials. If international sales are a growing chunk >50 % of my revenues, why would I pay a 20+% surcharge on my costs when I can just contract with the Canadians and continue to sell internationally? Best of all, since the Fairtax eliminated corporate income taxation, I can just sit and count my extra money, right?

Brainiac
06-02-2010, 08:22 PM
I've never understood why some people are so in love with the "fair" tax.

There are many excellent articles available online that debunk it. One of my favorites was published in the Wall Street Journal a couple of years ago, and is called Fair Tax, Flawed Tax. It can be found here (http://www.opinionjournal.com/extra/?id=110010523).

Among other things, this article points out that the authors claim that the Fair Tax would impose a 23% sales tax on retail items, yet the tax as proposed by the authors is actually a 30% tax. The math that they use to arrive at the 23% rate is at best creative, and at worst, an insult to the intelligence of anyone who can do arithmetic.

If an item costs $100, the amount of sales tax added to that $100 will be $30. That's a 30% tax rate. Not according to the guys pimping the "fair" tax: they call that a 23% rate. They divide $30 into $130 and come up with 23%. That's not only stupid, it's insulting. That's NOT how you calculate a sales tax rate.

When the proponents of the tax started out with a deception like that, they lost all credibility.

"Every complex problem has a simple solution, and it's usually wrong." That is one my favorite sayings. I don't know who originated it, but the first time I heard it was when Ronald Reagan said it it a debate a very long time ago.

It applies perfectly to the "fair" tax.

patteeu
06-03-2010, 12:39 AM
I'm not persuaded it's feasible for many other reasons, but this one came to mind.

I'm not sure it is fixable unless you radically somehow revise all of our free trade agreements.

Why would you need to do that?

patteeu
06-03-2010, 12:43 AM
Suppose I am Company XYZ and I specialize in finished wood products. I am headquartered in the Pacific Northwestern US. Most of my revenues historically came from making and selling products in the US. Like most companies over a certain size, though international sales have comprised a larger and larger share of my revenues until now, I actually sell more overseas than I do here.

But like many finished product manufacturers (or upstream manufacturers) I buy my unfinished materials in the US, perhaps timber or partially finished products from Idaho and Montana. Purchase of these materials (and unfinished products), of course provides jobs and income for this country.

Now the "Fairtax" is enacted. I now pay a sales tax of 23% on these same materials and products if I continue to purchase them in MT and ID. But I know of a plant in Canada that makes these same unfinished products and has these raw materials. If international sales are a growing chunk >50 % of my revenues, why would I pay a 20+% surcharge on my costs when I can just contract with the Canadians and continue to sell internationally? Best of all, since the Fairtax eliminated corporate income taxation, I can just sit and count my extra money, right?

About the Fair Tax (http://www.fairtax.org/site/PageServer?pagename=about_main):

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

patteeu
06-03-2010, 12:45 AM
I've never understood why some people are so in love with the "fair" tax.

There are many excellent articles available online that debunk it. One of my favorites was published in the Wall Street Journal a couple of years ago, and is called Fair Tax, Flawed Tax. It can be found here (http://www.opinionjournal.com/extra/?id=110010523).

Among other things, this article points out that the authors claim that the Fair Tax would impose a 23% sales tax on retail items, yet the tax as proposed by the authors is actually a 30% tax. The math that they use to arrive at the 23% rate is at best creative, and at worst, an insult to the intelligence of anyone who can do arithmetic.

If an item costs $100, the amount of sales tax added to that $100 will be $30. That's a 30% tax rate. Not according to the guys pimping the "fair" tax: they call that a 23% rate. They divide $30 into $130 and come up with 23%. That's not only stupid, it's insulting. That's NOT how you calculate a sales tax rate.

When the proponents of the tax started out with a deception like that, they lost all credibility.

"Every complex problem has a simple solution, and it's usually wrong." That is one my favorite sayings. I don't know who originated it, but the first time I heard it was when Ronald Reagan said it it a debate a very long time ago.

It applies perfectly to the "fair" tax.

If your primary criticism of the Fair Tax is that the tax rate is characterized in a different way than you prefer, it doesn't really sound like much of a criticism. Is there something more substantial that bothers you?

banyon
06-03-2010, 08:18 AM
About the Fair Tax (http://www.fairtax.org/site/PageServer?pagename=about_main):

You think that the Fairtax is limited to chain box store purchases or something?

patteeu
06-03-2010, 01:21 PM
You think that the Fairtax is limited to chain box store purchases or something?

I think it's limited to retail sales, which is different than what you described. So I think your concern on that particular count is unwarranted.

Brainiac
06-03-2010, 01:52 PM
If your primary criticism of the Fair Tax is that the tax rate is characterized in a different way than you prefer, it doesn't really sound like much of a criticism. Is there something more substantial that bothers you?
Yes, there are plenty of other things that bother me about it.

Money Magazine published an excellent article in 2005 called Just How Fair is the 'Fair Tax'? (http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/index.htm). This article includes a quote from economist William Gale of the Brookings Institution, who says the 23% rate is "way too low" to replace existing income tax revenues. It would result in a shortfall of $7 trillion over 10 years. If you support the Fair Tax because a rate of 23% doesn't sound bad to you, you should be aware that the bill that congressman John Linder introduced does not fix the rate of 23% indefinitely. It doesn't fix the rate for 20 years. It doesn't fix the rate for 10 years. Nor does it fix the rate for 5 years, or even 2 years. The 23% rate is the rate for the first year only. The rate in subsequent years will be recalculated. Don't take my word for this: go read the text of H.R. Bill 25 (http://www.govtrack.us/congress/billtext.xpd?bill=s110-1025) yourself.

The article in Money Magazine also uncovers a huge flaw in the prediction by the authors that retail prices would fall by approximately 22% because of the removal of the existing "embedded taxes". This is a crucial assumption that the authors make so that they can later argue that even though you're paying an additional 23% sales tax, the total price of the things you buy will be approximately the same as the price you pay today. The Money Magazine article demonstrates that the only way this could really happen would be if each worker's salary is cut by that amount. The article sums up this omission with the understated comment "That's a pretty big thing to leave out". The author of the article confronted Neal Boortz with this damning fact. Boortz grudgingly admitted that the author was correct. Boortz followed up with the claim that it's a complicated subject, the book is not intentionally misleading, and that future editions of The Fair Tax Book will contain a correction. This is yet another example showing how the Fair Tax is a fairy tale built on a house of cards. The house comes tumbling down if you look closely enough at the details. The bottom line is that keeping 100% of your paycheck doesn't put any additional money in your pocket if your salary is reduced by 22% or more.

I like to read reviews of controversial books on Amazon.com's web site. My favorite review is called Unfortunately, The Author's Presentation is Fatally Flawed (http://www.amazon.com/review/R2N7ORR3GBR074/ref=cm_cr_rdp_perm). One of my favorite quotes from the review is this:

Before you begin believing blindly that the FairTax is the only way to go, ask yourself this question: does it bother you that the authors give absolutely NO evidence that a 23% consumption tax will actually replace the federal revenues generated by the current tax structures? They "say" 23% is all it will take, but do they show us a calculation? Do they cite a study? Do they do ANYTHING demonstrative to back up their claims? No, no, and no. Their entire justification for the FairTax is built around rhetoric ONLY. They don't compare contrast calculations. They don't even put forth the gross dollars we're talking about here. What they do instead is say [paraphrasing], "The FairTax idea is so simple, this book didn't need to be very long." Well, if you're just going to say, "My idea works, but I'm not going to prove it to you," then I agree, your argument doesn't need to be longwinded.

I know Neal Boortz loves to pimp this idea on his radio show and his web site. But it sounds like a pretty half-baked scheme to me. The problem with our government is that it spends too damn much money. Replacing the income tax with a sales tax does nothing to address what the real problem is.

Brainiac
06-03-2010, 01:59 PM
Suppose I am Company XYZ and I specialize in finished wood products. I am headquartered in the Pacific Northwestern US. Most of my revenues historically came from making and selling products in the US. Like most companies over a certain size, though international sales have comprised a larger and larger share of my revenues until now, I actually sell more overseas than I do here.

But like many finished product manufacturers (or upstream manufacturers) I buy my unfinished materials in the US, perhaps timber or partially finished products from Idaho and Montana. Purchase of these materials (and unfinished products), of course provides jobs and income for this country.

Now the "Fairtax" is enacted. I now pay a sales tax of 23% on these same materials and products if I continue to purchase them in MT and ID. But I know of a plant in Canada that makes these same unfinished products and has these raw materials. If international sales are a growing chunk >50 % of my revenues, why would I pay a 20+% surcharge on my costs when I can just contract with the Canadians and continue to sell internationally? Best of all, since the Fairtax eliminated corporate income taxation, I can just sit and count my extra money, right?
I think the Fair Tax is a horrible idea. However, what you described sounds more like a Value Added Tax than the Fair Tax.

For the record, I also think a VAT is a horrible idea. I hate the idea of any tax where the tax is hidden from the taxpayer.

healthpellets
06-03-2010, 01:59 PM
what's the real problem?

and it seems that you'd prefer the current scheme over the implementation of the FairTax?

healthpellets
06-03-2010, 02:01 PM
I think the Fair Tax is a horrible idea. However, what you described sounds more like a Value Added Tax than the Fair Tax.

For the record, I also think a VAT is a horrible idea. I hate the idea of any tax where the tax is hidden from the taxpayer.

i have a pretty good feeling that after November, we're going to be hearing a good deal about a VAT.

Brainiac
06-03-2010, 02:03 PM
what's the real problem?

and it seems that you'd prefer the current scheme over the implementation of the FairTax?
My problems with the Fair Tax are that the tax is hidden from the taxpayer, the tax can be raised each year, that there is no guarantee that the tax rate they are using to sell the idea (23%, 30%, or whatever number you like) would replace a sufficient amount of tax revenue to eliminate the income tax, and that this type of massive change would almost certainly have unintended side effects that could lead to economic chaos.

I'd rather keep an income tax where everybody knows EXACTLY how much tax they pay and instead spend our energies trying to stop the explosion in government spending. The Fair Tax does nothing to solve what our real problems are.

Brainiac
06-03-2010, 02:06 PM
My other problem with the Fair Tax is that everybody who supports it thinks that everybody will be better off.

Guess what? That's impossible. There is no way that you can make EVERYBODY better off simply by shifting how you collect taxes, especially when the stated goal is to keep tax revenues the same. If somebody winds up paying less taxes, somebody else will pay more. When you make a goal to be revenue neutral, it's a zero sum game.

patteeu
06-03-2010, 02:07 PM
Yes, there are plenty of other things that bother me about it.

Money Magazine published an excellent article in 2005 called Just How Fair is the 'Fair Tax'? (http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/index.htm). This article includes a quote from economist William Gale of the Brookings Institution, who says the 23% rate is "way too low" to replace existing income tax revenues. It would result in a shortfall of $7 trillion over 10 years. If you support the Fair Tax because a rate of 23% doesn't sound bad to you, you should be aware that the bill that congressman John Linder introduced does not fix the rate of 23% indefinitely. It doesn't fix the rate for 20 years. It doesn't fix the rate for 10 years. Nor does it fix the rate for 5 years, or even 2 years. The 23% rate is the rate for the first year only. The rate in subsequent years will be recalculated. Don't take my word for this: go read the text of H.R. Bill 25 (http://www.govtrack.us/congress/billtext.xpd?bill=s110-1025) yourself.

The article in Money Magazine also uncovers a huge flaw in the prediction by the authors that retail prices would fall by approximately 22% because of the removal of the existing "embedded taxes". This is a crucial assumption that the authors make so that they can later argue that even though you're paying an additional 23% sales tax, the total price of the things you buy will be approximately the same as the price you pay today. The Money Magazine article demonstrates that the only way this could really happen would be if each worker's salary is cut by that amount. The article sums up this omission with the understated comment "That's a pretty big thing to leave out". The author of the article confronted Neal Boortz with this damning fact. Boortz grudgingly admitted that the author was correct. Boortz followed up with the claim that it's a complicated subject, the book is not intentionally misleading, and that future editions of The Fair Tax Book will contain a correction. This is yet another example showing how the Fair Tax is a fairy tale built on a house of cards. The house comes tumbling down if you look closely enough at the details. The bottom line is that keeping 100% of your paycheck doesn't put any additional money in your pocket if your salary is reduced by 22% or more.

I like to read reviews of controversial books on Amazon.com's web site. My favorite review is called Unfortunately, The Author's Presentation is Fatally Flawed (http://www.amazon.com/review/R2N7ORR3GBR074/ref=cm_cr_rdp_perm). One of my favorite quotes from the review is this:

Before you begin believing blindly that the FairTax is the only way to go, ask yourself this question: does it bother you that the authors give absolutely NO evidence that a 23% consumption tax will actually replace the federal revenues generated by the current tax structures? They "say" 23% is all it will take, but do they show us a calculation? Do they cite a study? Do they do ANYTHING demonstrative to back up their claims? No, no, and no. Their entire justification for the FairTax is built around rhetoric ONLY. They don't compare contrast calculations. They don't even put forth the gross dollars we're talking about here. What they do instead is say [paraphrasing], "The FairTax idea is so simple, this book didn't need to be very long." Well, if you're just going to say, "My idea works, but I'm not going to prove it to you," then I agree, your argument doesn't need to be longwinded.

I know Neal Boortz loves to pimp this idea on his radio show and his web site. But it sounds like a pretty half-baked scheme to me. The problem with our government is that it spends too damn much money. Replacing the income tax with a sales tax does nothing to address what the real problem is.

The problem I have with your assessment is that the current taxes we pay aren't limited to their current rate either and it's a lot easier to raise rates in a multi-rate progressive tax system (not to mention a patchwork system of multiple types of taxes) than it is in a system that has only 1 rate (2 if you count the zero rate exemption for the first $X thousand dollars). Jerry Brown, noted liberal from California, ran for the Presidency on a flat tax idea as a political reform because he recognized that it was a lot harder for Congress to play games (e.g. sell favors) under a relatively simple, single rate tax scheme than it is for them to do so with our current system.

From my POV, the ultimate rate we pay to raise a specific amount of revenue is secondary the shape of the tax system. We can argue about the tradeoff between rate and revenue later. The flatter the tax and the broader the base, the lower the rate can be. If you can't make a Fair Tax work at 23% (30%), you can bet that a huge number of people are paying a significantly higher rate today to cover for those who are paying less than that amount. It's just that in today's system, many of our taxes are hidden, therefore allowing politicians to levy a heavier tax load on the citizenry than they could with a more transparent system.

patteeu
06-03-2010, 02:08 PM
I think the Fair Tax is a horrible idea. However, what you described sounds more like a Value Added Tax than the Fair Tax.

For the record, I also think a VAT is a horrible idea. I hate the idea of any tax where the tax is hidden from the taxpayer.

That's an interesting position given your preference for the current system over the Fair Tax proposal.

patteeu
06-03-2010, 02:10 PM
My problems with the Fair Tax are that the tax is hidden from the taxpayer, the tax can be raised each year, that there is no guarantee that the tax rate they are using to sell the idea (23%, 30%, or whatever number you like) would replace a sufficient amount of tax revenue to eliminate the income tax, and that this type of massive change would almost certainly have unintended side effects that could lead to economic chaos.

I'd rather keep an income tax where everybody knows EXACTLY how much tax they pay and instead spend our energies trying to stop the explosion in government spending. The Fair Tax does nothing to solve what our real problems are.

Huh? How is the Fair Tax hidden? It's more transparent than our current collection of taxes. And, as I already pointed out, our current tax rates can be raised every year too so that's not a discriminator, except that it would be harder to raise a single rate, transparent tax than it is to raise taxes on "someone else" under the current system.

Brainiac
06-03-2010, 02:11 PM
The problem I have with your assessment is that the current taxes we pay aren't limited to their current rate either and it's a lot easier to raise rates in a multi-rate progressive tax system (not to mention a patchwork system of multiple types of taxes) than it is in a system that has only 1 rate (2 if you count the zero rate exemption for the first $X thousand dollars). Jerry Brown, noted liberal from California, ran for the Presidency on a flat tax idea as a political reform because he recognized that it was a lot harder for Congress to play games (e.g. sell favors) under a relatively simple, single rate tax scheme than it is for them to do so with our current system.

From my POV, the ultimate rate we pay to raise a specific amount of revenue is secondary the shape of the tax system. We can argue about the tradeoff between rate and revenue later. The flatter the tax and the broader the base, the lower the rate can be. If you can't make a Fair Tax work at 23% (30%), you can bet that a huge number of people are paying a significantly higher rate today to cover for those who are paying less than that amount. It's just that in today's system, many of our taxes are hidden, therefore allowing politicians to levy a heavier tax load on the citizenry than they could with a more transparent system.
Don't get me wrong. There are many things about our current system that absolutely suck. I think the only truly "fair tax" would be a flat tax on income, that treats all income the same, and has no deductions or exemptions or credits.

Now THAT would be simple to understand and administer.

patteeu
06-03-2010, 02:15 PM
My other problem with the Fair Tax is that everybody who supports it thinks that everybody will be better off.

Guess what? That's impossible. There is no way that you can make EVERYBODY better off simply by shifting how you collect taxes, especially when the stated goal is to keep tax revenues the same. If somebody winds up paying less taxes, somebody else will pay more. When you make a goal to be revenue neutral, it's a zero sum game.

The country will be better off if we shift our tax base to consumption from production (we need to become producers for the world market, not consumers for global producers), but I'm not under any illusion that everyone will pay less tax under the Fair Tax.

If I had my way, there wouldn't even be an exemption/rebate for the first $X thousand dollars of consumption, but I realize that that's even more of a political non-starter than the Fair Tax is to begin with. I'm not sure there's any truth to the idea that most Fair Tax supporters think everyone would be better off under the Fair Tax in the short run.

Brainiac
06-03-2010, 02:27 PM
Huh? How is the Fair Tax hidden? It's more transparent than our current collection of taxes. And, as I already pointed out, our current tax rates can be raised every year too so that's not a discriminator, except that it would be harder to raise a single rate, transparent tax than it is to raise taxes on "someone else" under the current system.
Every year you prepare your income tax (or at least you sign it after somebody else prepared it), and it's painfully obviously how much income tax you paid. You may not be aware of changes in the tax rates that are made from year to year, but you know your total taxes paid.

There is no such awareness of the taxes you pay if you go to a Fair Tax or a VAT. The tax is hidden in the price of the goods you buy. You may be aware that in the first year the tax is 30% (if you figure it correctly) or 23% (if you accept Neal Boortz's calculation), but you don't have a document like a tax return that hits you over the head and makes it painfully obviously how much you paid.

And again, what problem does the Fair Tax solve? If Obama increases spending by hundreds of billions or trillions of dollars each year, why waste our time tinkering with tax collection methods instead of trying to rein in government spending?

Brainiac
06-03-2010, 02:31 PM
Example: I can tell you exactly how much income tax I've paid every year since I filed my first income tax return 30 years ago. I can't even begin to estimate how much I've paid in gasoline taxes, because those taxes are completely hidden from me. They are simply a component of the retail price. I may bitch about increases in gasoline prices, but without spending time and doing research I have no idea how much of the increases are due to tax increases and how much are due to rising oil prices.

healthpellets
06-03-2010, 02:31 PM
Every year you prepare your income tax (or at least you sign it after somebody else prepared it), and it's painfully obviously how much income tax you paid. You may not be aware of changes in the tax rates that are made from year to year, but you know your total taxes paid.

There is no such awareness of the taxes you pay if you go to a Fair Tax or a VAT. The tax is hidden in the price of the goods you buy. You may be aware that in the first year the tax is 30% (if you figure it correctly) or 23% (if you accept Neal Boortz's calculation), but you don't have a document like a tax return that hits you over the head and makes it painfully obviously how much you paid.

And again, what problem does the Fair Tax solve? If Obama increases spending by hundreds of billions or trillions of dollars each year, why waste our time tinkering with tax collection methods instead of trying to rein in government spending?

i'd bet that every time the FairTax went up, there'd be some MSM coverage.

but we're talking about people who, when you ask them how much they paid in taxes in 2008 say "nothing. i got $200 back". so, ya.

banyon
06-03-2010, 03:04 PM
I think it's limited to retail sales, which is different than what you described. So I think your concern on that particular count is unwarranted.

Reading the bill:

http://www.opencongress.org/bill/111-h25/text

The distinction actually appears to turn on whether the item is "used" or is "used for business purposes".

13‘(2) To tax all consumption of goods and services in the United States once, without exception, but only once.

16) USED PROPERTY- The term `used property' means--

`(A) property on which the tax imposed by section 101 has been collected and for which no credit has been allowed under section 202, 203, or 205, or

`(B) property that was held other than for a business purpose (as defined in section 102(b)) on December 31, 2010.

‘(1) BUSINESS AND EXPORT PURPOSES- No tax shall be imposed under section 101 on any taxable property or service purchased for a business purpose in a trade or business.


2‘(2) INVESTMENT PURPOSE- No tax shall be imposed under section 101 on any taxable property or service purchased for an investment purpose and held exclusively for an investment purpose.


‘(3) STATE GOVERNMENT FUNCTIONS- No tax shall be imposed under section 101 on State government functions that do not constitute the final consumption.

‘(b) Business Purposes- For purposes of this section, the term ‘purchased for a business purpose in a trade or business’ means purchased by a person engaged in a trade or business and used in that trade or business--

This appears to address my concern, but generates a host of new questions.

A) If there are no personal income tax returns and no personal tax enforcement mechanisms, what's to prevent people from claiming that their purchases are for business purposes and thus easily evade the tax?

B) Isn't this a windfall for people who deal in used products? Wouldn't there be a perverse incentive not to buy new products? Auto dealers would have to conduct (likely sham transactions) by selling to each other (for minimal amounts) and then calling it "used"? Also, what's to stop anyone else from evading the tax this way?

C) How do they know if the item has had the tax applied to it or not? i can't find any kind of "product registry" or anything that would provide them with that info.

patteeu
06-05-2010, 10:20 AM
Every year you prepare your income tax (or at least you sign it after somebody else prepared it), and it's painfully obviously how much income tax you paid. You may not be aware of changes in the tax rates that are made from year to year, but you know your total taxes paid.

There is no such awareness of the taxes you pay if you go to a Fair Tax or a VAT. The tax is hidden in the price of the goods you buy. You may be aware that in the first year the tax is 30% (if you figure it correctly) or 23% (if you accept Neal Boortz's calculation), but you don't have a document like a tax return that hits you over the head and makes it painfully obviously how much you paid.

And again, what problem does the Fair Tax solve? If Obama increases spending by hundreds of billions or trillions of dollars each year, why waste our time tinkering with tax collection methods instead of trying to rein in government spending?

That's simply not true. For some implementations of the VAT and for some other taxes like the gas tax, it's true that the tax is hidden in the price of a product (although that's an implementation issue not an inherent flaw). It's NOT TRUE that the Fair Tax is hidden in the price of a product. Every time you buy something, the amount of tax you pay would be itemized like it is on sales tax receipts in most states today.

The two major problems that the Fair Tax addresses are (1) it shifts the tax base from production (income) to consumption which would improve our alignment with the global economy, and (2) it reforms our political system by reducing the opportunity for politicians to sell tax benefits to special interests and by putting everyone in the same tax boat so that there isn't a constant built-in incentive for class warfare over the level of progressivity in the tax code.

Government spending should be reigned in as well, but by you surely can see that Obama has much of his support for vast new spending programs because he's convinced a large group of people that only the wealthy are going to end up getting the bill. That's a perverse opportunity provided by the complex, progressive tax system that we have today. That type of tomfoolery wouldn't be available to him if we have a more transparent, flat rate system like the Fair Tax.

patteeu
06-05-2010, 10:37 AM
Reading the bill:

http://www.opencongress.org/bill/111-h25/text

The distinction actually appears to turn on whether the item is "used" or is "used for business purposes".







This appears to address my concern, but generates a host of new questions.

A) If there are no personal income tax returns and no personal tax enforcement mechanisms, what's to prevent people from claiming that their purchases are for business purposes and thus easily evade the tax?

B) Isn't this a windfall for people who deal in used products? Wouldn't there be a perverse incentive not to buy new products? Auto dealers would have to conduct (likely sham transactions) by selling to each other (for minimal amounts) and then calling it "used"? Also, what's to stop anyone else from evading the tax this way?

C) How do they know if the item has had the tax applied to it or not? i can't find any kind of "product registry" or anything that would provide them with that info.

We have all kinds of implementation issues with the current tax scheme. Bartering and black market sales aren't captured, for example. You won't find a flawless tax system, in that regard. I'm sure that there would be flaws, both anticipated and unanticipated, in a Fair Tax implementation that would have to be fine tuned over time if they aren't addressed in the original bill, but I don't see that as anything close to a showstopper.

BTW, what's wrong with a system where the value of products is maximized (though a thriving used product market). I think that in the long run, we're better off as a group if we squeeze all the usefulness out of a product instead of discarding partially used products when we're tired of them and buying new. IOW, I wouldn't call that a perverse incentive. It may even be an underappreciated feature.

Do states keep product registry's for their sales tax systems? I honestly don't know how it works, but I always assumed they just made rules about what types of sales would be considered "retail" and what types are considered something else and I never gave much thought to how that is policed.

banyon
06-05-2010, 11:14 AM
We have all kinds of implementation issues with the current tax scheme. Bartering and black market sales aren't captured, for example. You won't find a flawless tax system, in that regard. I'm sure that there would be flaws, both anticipated and unanticipated, in a Fair Tax implementation that would have to be fine tuned over time if they aren't addressed in the original bill, but I don't see that as anything close to a showstopper.

The flaws I'm talking about aren't minor. The system AFAICT requires EVERY consumer to be honest about the purpose of their purchase, and if they aren't honest, there's no mechanism to follow up on it. That's a substantial departure from people evading income taxes, but there being an ability of the IRS to conduct audits.

BTW, what's wrong with a system where the value of products is maximized (though a thriving used product market). I think that in the long run, we're better off as a group if we squeeze all the usefulness out of a product instead of discarding partially used products when we're tired of them and buying new. IOW, I wouldn't call that a perverse incentive. It may even be an underappreciated feature.

Well, it creates a disincentive to have production jobs and a manufacturing base. Lots of third world countries have huge markets in used junk, but they aren't competitive globally. A true communistic (small "c" commune) style approach would do well with such a principle, but I didn't think you were into that. If you wanted to change the rules of global competition, then perhaps this would work, but otherwise you are potentially relegating us to a junk economy status that won't compete.

Do states keep product registry's for their sales tax systems? I honestly don't know how it works, but I always assumed they just made rules about what types of sales would be considered "retail" and what types are considered something else and I never gave much thought to how that is policed.

States don't have product registries. They don't have any need to have them either. However, when your system is based on only taxing a product one, making sure it is used for personal consumption, then a registry of some kind becomes vital, or you can't figure out if an item has been taxed, used, or used in business.

Brainiac
06-05-2010, 01:00 PM
That's simply not true. For some implementations of the VAT and for some other taxes like the gas tax, it's true that the tax is hidden in the price of a product (although that's an implementation issue not an inherent flaw). It's NOT TRUE that the Fair Tax is hidden in the price of a product. Every time you buy something, the amount of tax you pay would be itemized like it is on sales tax receipts in most states today.
Are you sure about that? If that's the case, then we should be getting receipts that look something like this:

Groceries......................$100
Fair Tax (23%) ..............$ 30
Local Sales Tax .............$ 13
Total............................$143

I'm not sure I believe that will happen. I think it's more likely that receipts of the future will look something like this:

Groceries (including the Fair Tax) ........... $130
Local sales tax.................................... $ 13
Total................................................. $143

When it's done the second way, it will be a simple matter to keep the tax hidden and to raise it every year. The vast majority will bitch about inflation and rising prices. A small minority will say "Hey, it's not inflation! They just keep raising the damn Fair Tax!". And the vast majority will ignore them.


The two major problems that the Fair Tax addresses are (1) it shifts the tax base from production (income) to consumption which would improve our alignment with the global economy, and (2) it reforms our political system by reducing the opportunity for politicians to sell tax benefits to special interests and by putting everyone in the same tax boat so that there isn't a constant built-in incentive for class warfare over the level of progressivity in the tax code.

Government spending should be reigned in as well, but by you surely can see that Obama has much of his support for vast new spending programs because he's convinced a large group of people that only the wealthy are going to end up getting the bill. That's a perverse opportunity provided by the complex, progressive tax system that we have today. That type of tomfoolery wouldn't be available to him if we have a more transparent, flat rate system like the Fair Tax.
OK, I have to agree with that. It would be nice to do away with the idea that Obama's constituency can vote to spend and spend and spend, all based upon the assumption that only the rich bastards will have to pay for it.

patteeu
06-06-2010, 06:43 AM
The flaws I'm talking about aren't minor. The system AFAICT requires EVERY consumer to be honest about the purpose of their purchase, and if they aren't honest, there's no mechanism to follow up on it. That's a substantial departure from people evading income taxes, but there being an ability of the IRS to conduct audits.

Sorry. I don't buy the idea that it's an honor system. State sales taxes aren't based on an honor system and this one wouldn't be either.

Well, it creates a disincentive to have production jobs and a manufacturing base. Lots of third world countries have huge markets in used junk, but they aren't competitive globally. A true communistic (small "c" commune) style approach would do well with such a principle, but I didn't think you were into that. If you wanted to change the rules of global competition, then perhaps this would work, but otherwise you are potentially relegating us to a junk economy status that won't compete.

No, it doesn't. It reduces the size of the US consumer market, but at the same time reduces the tax burden on production. Production jobs and a manufacturing base will be relatively more competitive with foreign producers both here and abroad. This wouldn't be a change in the rules of global competition, it's an adaptation to the rules that already exist. Right now, we spit into the wind.

States don't have product registries. They don't have any need to have them either. However, when your system is based on only taxing a product one, making sure it is used for personal consumption, then a registry of some kind becomes vital, or you can't figure out if an item has been taxed, used, or used in business.

Why is there a difference between what states need to operate a sales tax and what the fed's would need for the fair tax?

BucEyedPea
06-06-2010, 06:51 AM
Are you sure about that? If that's the case, then we should be getting receipts that look something like this:

Groceries......................$100
Fair Tax (23%) ..............$ 30
Local Sales Tax .............$ 13
Total............................$143

I'm not sure I believe that will happen. I think it's more likely that receipts of the future will look something like this:

Groceries (including the Fair Tax) ........... $130
Local sales tax.................................... $ 13
Total................................................. $143



According to the people who wrote the book on this tax, prices would drop first before the new tax is added. It would drop because of income tax cost already passed along at each stage of production that ends up in the final price.

patteeu
06-06-2010, 01:31 PM
Are you sure about that? If that's the case, then we should be getting receipts that look something like this:

Groceries......................$100
Fair Tax (23%) ..............$ 30
Local Sales Tax .............$ 13
Total............................$143

I'm not sure I believe that will happen. I think it's more likely that receipts of the future will look something like this:

Groceries (including the Fair Tax) ........... $130
Local sales tax.................................... $ 13
Total................................................. $143

When it's done the second way, it will be a simple matter to keep the tax hidden and to raise it every year. The vast majority will bitch about inflation and rising prices. A small minority will say "Hey, it's not inflation! They just keep raising the damn Fair Tax!". And the vast majority will ignore them.

I agree with you about this, but Fair Tax proponents are pushing for a tax that would be visibly applied like your first example, not hidden like the typical European VAT is. Of course, without a constitutional amendment, it is impossible to bind future Congresses from hiding the tax and doing all the things you fear.

It's not going to happen anyway so it's all theoretical as far as I'm concerned.

Brainiac
06-06-2010, 01:32 PM
According to the people who wrote the book on this tax, prices would drop first before the new tax is added. It would drop because of income tax cost already passed along at each stage of production that ends up in the final price.

Yes, I am well aware that Neal Boortz makes that claim. The only problem is that it isn't true.

According to Boortz, retail prices would fall by approximately 22% because of the removal of the existing "embedded taxes". Do you really believe that? I don't.

If you Google "fair tax embedded taxes" you'll find lots of blogs written by Fair Tax supporters who claim that retail prices would indeed fall by that amount. You'll also find an article on factcheck.org that I find to be a lot more credible: http://www.factcheck.org/taxes/unspinning_the_fairtax.html.

There's obviously a lot of intelligent people on both sides of this argument. However, it seems to me that the burden of proof is on the side that wants to make a drastic change. In my opinion they haven't met that burden.

BucEyedPea
06-06-2010, 01:35 PM
Yes, I am well aware that Neal Boortz makes that claim. The only problem is that it isn't true.

According to Boortz, retail prices would fall by approximately 22% because of the removal of the existing "embedded taxes". Do you really believe that? I don't.

If you Google "fair tax embedded taxes" you'll find lots of blogs written by Fair Tax supporters who claim that retail prices would indeed fall by that amount. You'll also find an article on factcheck.org that I find to be a lot more credible: http://www.factcheck.org/taxes/unspinning_the_fairtax.html.

There's obviously a lot of intelligent people on both sides of this argument. However, it seems to me that the burden of proof is on the side that wants to make a drastic change. In my opinion they haven't met that burden.
FactCheck is Annenberg which is left-wing and progressive. I'm not likely to trust their data either. 'Er well on anything economic. Not exactly un-biased either. I mean Obama and Ayers have connections to it.

Perhaps no one can claim what will happen with prices either way. I do know that competition leads them to more affordable levels in general.

banyon
06-06-2010, 01:41 PM
Sorry. I don't buy the idea that it's an honor system. State sales taxes aren't based on an honor system and this one wouldn't be either.

State sales taxes don't allow you to evade them at the register by stating to the clerk "hey, this is a business use". You just pay them whether you're in business or not, so with this tax, whether you acknowledge it or not, it's a new problem.



No, it doesn't. It reduces the size of the US consumer market, but at the same time reduces the tax burden on production. Production jobs and a manufacturing base will be relatively more competitive with foreign producers both here and abroad. This wouldn't be a change in the rules of global competition, it's an adaptation to the rules that already exist. Right now, we spit into the wind.

It's a huge change. Do you think a business is seriously not going to think about the question, "well I could produce new products and have my customers pay a 23% tax, or I could deal in used items (or produced new somewhere else and then used here) and have them pay no taxes whatsoever."? You think that doesn't impact business decisions?


Why is there a difference between what states need to operate a sales tax and what the fed's would need for the fair tax?

Because the states don't make any distinctions between whether an item has been taxed previously, has been "used", or is "used for a business purpose", so they don't have a need to track or audit that data, whereas the feds would.

The more holes I see in the ability to collect revenue from this plan, the more I see this proposal as the death knell for our spiraling out of control debt problems.

Brainiac
06-06-2010, 01:43 PM
FactCheck is Annenberg which is left-wing and progressive. I'm not likely to trust their data either. 'Er well on anything economic. Not exactly un-biased either. I mean Obama and Ayers have connections to it.

Perhaps no one can claim what will happen with prices either way. I do know that competition leads them to more affordable levels in general.
I don't truly trust any site. I think we can agree that the only reasonable way to approach any issue is to weigh the evidence from multiple sites and draw your own conclusion.

banyon
06-06-2010, 01:45 PM
FactCheck is Annenberg which is left-wing and progressive. I'm not likely to trust their data either. 'Er well on anything economic. Not exactly un-biased either. I mean Obama and Ayers have connections to it.

Perhaps no one can claim what will happen with prices either way. I do know that competition leads them to more affordable levels in general.

Er:


Annenberg traveled to Washington, D.C. in May 2007 to attend the state dinner for Queen Elizabeth II, hosted by President George W. Bush.[17] The following month, she accepted the prestigious Philadelphia Award, an honor given to those in the Philadelphia region who worked to better the area.[18]

Most recently before her death, Annenberg became an honorary board member of the Richard Nixon Library and Birthplace Foundation and an honorary fellow of the Royal Academy of Arts.[11]

Ambassador's wife
Upon her husband's appointment as the United States Ambassador to the United Kingdom in 1969, Mrs. Annenberg ordered a renovation of the thirty-five room Winfield House, the ambassador's official London residence. The total cost of the project was about US$1 million and took six months to complete.[5] While in London, Leonore founded the American Friends of Covent Garden,[3] an organization designed to foster goodwill between the U.S. and Great Britain through musical expression.[6]


[edit] Chief of Protocol

Walter and Leonore Annenberg with President Ronald Reagan, 1981
Annenberg with former Presidents Nixon, Ford, and Carter during a flight to the funeral of Anwar Sadat, October 1981The Annenbergs contributed substantially to Ronald Reagan's 1980 presidential campaign, and upon Reagan's election in 1981, Lee Annenberg was named as Chief of Protocol of the United States. This position placed her in charge of advising the President, Vice President, and Secretary of State on matters dealing with diplomatic protocol, and formally welcoming foreign dignitaries upon their arrival to the United States.[7] Annenberg oversaw a staff of 60 who worked on myriad details, ranging from the choice of the state gifts that will be given to the guest, to the bathrooms the foreign delegation may visit.[8] She said of her position, "It's all about making your guests feel respected and welcome."[9]

As Chief of Protocol, she achieved the rank of Ambassador.[7] Friends of Ronald and Nancy Reagan, the Annenbergs hosted the Reagans annually at their Rancho Mirage, California estate, "Sunnylands".[5] Annenberg resigned her post in January 1982, stating that she wanted to spend more time with her husband


Lee Annenberg resided in Rancho Mirage, California prior to her death on March 12, 2009, aged 91. According to a family spokesperson, Leonore Annenberg died at Eisenhower Medical Center of natural causes. [19] At the time of her death, Annenberg had been in declining health.[20]

At the announcement of her death, statements were issued by former President George H. W. Bush and Barbara Bush, as well as former First Lady Nancy Reagan. Mrs. Reagan called Annenberg "a dear and longtime friend" and praised the Annenberg's philanthropic work as having "left an indelible print on education in the United States". [2]

http://en.wikipedia.org/wiki/Leonore_Annenberg

patteeu
06-07-2010, 07:50 AM
State sales taxes don't allow you to evade them at the register by stating to the clerk "hey, this is a business use". You just pay them whether you're in business or not, so with this tax, whether you acknowledge it or not, it's a new problem.

You're being ridiculous.

What makes you think the Fair Tax would operate differently than a state sales tax? Do grocery stores/food distributers pay state sales tax to farmers who provide corn, milk and beef?

I don't see this new problem that you think exists. If a sale would be subject to a state sales tax, it would also be subject to the Fair Tax. In any event, whatever the problem is that you think you've identified, it's an implementation issue if it even exists, not an inherent problem of the Fair Tax.

It's a huge change. Do you think a business is seriously not going to think about the question, "well I could produce new products and have my customers pay a 23% tax, or I could deal in used items (or produced new somewhere else and then used here) and have them pay no taxes whatsoever."? You think that doesn't impact business decisions?

I don't think this problem is real. I don't think there's a problem with businesses buying wholesale products either here or overseas without paying the Fair Tax. The tax is on domestic consumption not on production and that's a good thing. If a business imports a product from overseas and then tries to sell it here, the Fair Tax will apply. If a business exports a product made from domestic raw materials for sale in a foreign market, the Fair Tax won't apply (but foreign taxes will).




Because the states don't make any distinctions between whether an item has been taxed previously, has been "used", or is "used for a business purpose", so they don't have a need to track or audit that data, whereas the feds would.

The more holes I see in the ability to collect revenue from this plan, the more I see this proposal as the death knell for our spiraling out of control debt problems.[/QUOTE]

Maybe I don't understand how most state sales taxes work. Do grocery stores/food distributers pay state sales tax to farmers who provide corn, milk and beef?

BigChiefFan
06-07-2010, 07:54 AM
Easy for the Clinton's to say, given that they don't PAY FEDERAL TAXES, either.

banyon
06-07-2010, 10:08 AM
You're being ridiculous.

What makes you think the Fair Tax would operate differently than a state sales tax? Do grocery stores/food distributers pay state sales tax to farmers who provide corn, milk and beef?

I don't see this new problem that you think exists. If a sale would be subject to a state sales tax, it would also be subject to the Fair Tax. In any event, whatever the problem is that you think you've identified, it's an implementation issue if it even exists, not an inherent problem of the Fair Tax.

No, based on the legislation we've already reviewed, it creates new exceptions that aren't part of ordinary sales tax. Those are the exceptions I'm referring to. I'm not sure whether you are being intentionally obtuse here or what.



I don't think this problem is real. I don't think there's a problem with businesses buying wholesale products either here or overseas without paying the Fair Tax. The tax is on domestic consumption not on production and that's a good thing. If a business imports a product from overseas and then tries to sell it here, the Fair Tax will apply. If a business exports a product made from domestic raw materials for sale in a foreign market, the Fair Tax won't apply (but foreign taxes will).

you're pretty much not granting the premise that the Fairtax has this one time use tax and doesn't tax used goods. That is nice if that was the legislation that was proposed, but it flat out isn't. The language is right there, and i already provided it to you.



Maybe I don't understand how most state sales taxes work. Do grocery stores/food distributers pay state sales tax to farmers who provide corn, milk and beef?

Farmers file for exemptions from state sales taxes or get a rebate in most states. Still, that has a way to audit and check fraud. This doesn't.

patteeu
06-07-2010, 11:28 AM
No, based on the legislation we've already reviewed, it creates new exceptions that aren't part of ordinary sales tax. Those are the exceptions I'm referring to. I'm not sure whether you are being intentionally obtuse here or what.





you're pretty much not granting the premise that the Fairtax has this one time use tax and doesn't tax used goods. That is nice if that was the legislation that was proposed, but it flat out isn't. The language is right there, and i already provided it to you.





Farmers file for exemptions from state sales taxes or get a rebate in most states. Still, that has a way to audit and check fraud. This doesn't.

I guess I don't understand your concern. I haven't intended to grant any premise other than that the Fair Tax would function like the state sales taxes which I presumed would only be applicable to retail sales of new products. Maybe you could refresh my memory about what you're worried is missing.

banyon
06-07-2010, 12:03 PM
I guess I don't understand your concern. I haven't intended to grant any premise other than that the Fair Tax would function like the state sales taxes which I presumed would only be applicable to retail sales of new products. Maybe you could refresh my memory about what you're worried is missing.

I don't know how much more clearly to explain that these loopholes drawn into the bill as proposed are too wide and there's no way to audit it. Those are critical concerns if your intent is to collect revenue and sustain our government and ability to pay our debts. I guess you think it's all just optimistically going to work out all right in the end, right? After all nothing goes wrong in government legislation, right?

Maybe if I boil it down to a simple example. Bill Gates walks down to Wal-Mart and buys every product in the store. They ask him at the register and he says "Oh, this is a business purpose", then he stores every product in his underground bunker for personal use until he needs it for the Apocalypse.

Now, how is the government going to verify that the goods are, in fact, used for a business purpose?

This situation repeats itself in enough numbers, or with the same analysis of "used" or "already taxed" items (the other "Fairtax" exclusions), and now where is your revenue? Not only that, where is the mechanism to recover the revenue? The business doesn't keep track of who its customers are and whether they are using them for business purposes, and there's no personal income taxes or personal audits to check anymore either. So how do they find that out? How do they find out if a product is "used" or already taxed"?

Hydrae
06-07-2010, 02:02 PM
I don't know how much more clearly to explain that these loopholes drawn into the bill as proposed are too wide and there's no way to audit it. Those are critical concerns if your intent is to collect revenue and sustain our government and ability to pay our debts. I guess you think it's all just optimistically going to work out all right in the end, right? After all nothing goes wrong in government legislation, right?

Maybe if I boil it down to a simple example. Bill Gates walks down to Wal-Mart and buys every product in the store. They ask him at the register and he says "Oh, this is a business purpose", then he stores every product in his underground bunker for personal use until he needs it for the Apocalypse.

Now, how is the government going to verify that the goods are, in fact, used for a business purpose?

This situation repeats itself in enough numbers, or with the same analysis of "used" or "already taxed" items (the other "Fairtax" exclusions), and now where is your revenue? Not only that, where is the mechanism to recover the revenue? The business doesn't keep track of who its customers are and whether they are using them for business purposes, and there's no personal income taxes or personal audits to check anymore either. So how do they find that out? How do they find out if a product is "used" or already taxed"?

I know when I was working retail in Arizona, a company could be exempted from paying sales tax. They would provide their tax ID number and have a form on file at the store. I would expect it would be a fairly easy process then to audit the purchases against that tax ID to prevent what I believe are your concerns here.

Also, if a business (talking larger business, not mom and pop) is buying at the retail level they probably are having greater issues than whether they are paying taxes at the register.

BucEyedPea
06-07-2010, 02:30 PM
I don't truly trust any site. I think we can agree that the only reasonable way to approach any issue is to weigh the evidence from multiple sites and draw your own conclusion.

Or observe on one's own in life. But that's not allowed on this board. It's anecdotal. We must only rely on experts and elites for what is happening.

I just don't think anyone can predict exactly how all things will fall out.
I mean afterall, human behavior is involved.

banyon
06-07-2010, 08:35 PM
Or observe on one's own in life. But that's not allowed on this board. It's anecdotal. We must only rely on experts and elites for what is happening.

I just don't think anyone can predict exactly how all things will fall out.
I mean afterall, human behavior is involved.

You were talking about a specific legislative proposal that has been submitted in writing. There are actual facts that can be confirmed and discussed.

It shouldn't just be about what you saw at the mall, or what your smart friend told you.

banyon
06-07-2010, 08:41 PM
I know when I was working retail in Arizona, a company could be exempted from paying sales tax. They would provide their tax ID number and have a form on file at the store. I would expect it would be a fairly easy process then to audit the purchases against that tax ID to prevent what I believe are your concerns here.

You and patteeu both miss my point, and perhaps I didn't do a good job of stating it, so I'll try again.

In the sales tax scheme you list, it's the company's responsibility to keep track of who was exempted from their tax. They take down the tax exempt number and if it's given fraudulently, the auditors can try to track that down by seeing who was issued the number or who might have had access to it. The number of people trying to evade a 2-8% tax probably isn't very high, particularly on small purchases.

In the Fairtax, there aren't any tax exempt cards. You simply say that you are using an item for a business purpose and then the tax is avoided. There's no duty on the part of the clerk to take down an ID number, a name, anything. So when the Fairtax collection service comes to check at the store to see why they didn't receive any revenue, the business will say "gosh everyone told us it was for the business purpose lady". And maybe then they'll say, "who did?" , "Gosh lady we don't know, we weren't supposed to ask any questions under the law or keep any records."

BucEyedPea
06-07-2010, 09:02 PM
I always amazes me how some people like to have a one way conversation with themselves. Kinda sad.

banyon
06-07-2010, 09:17 PM
I always amazes me how some people like to have a one way conversation with themselves. Kinda sad.

How do you know who I am responding to? Especially since I responded to Hydrae as well and actually was having a conversation as normal people do.

Oh, I KNOW, you "peeked", like you do everytime so you can keep replying in the fake ignore infantile game.

And it's even funnier the 8000th time!

Do you know what you look like with these antics? Have you thought about it at all? Or are you just totally self-absorbed and oblivious?