A reply to an argument against government aid to the poor

[Evo]

A flat tax on income is fair.

However, a business has direct (cash) expenses such as Cost of Goods Sold, Labor, Occupancy, Marketing, and G&A that must be considered. The cash payments on debt service (or leased equipment) must also be accounted for - rather than depreciation.

The recipients of those funds may also have expenses - eventually though every dollar of profit would be taxed by the person who realized the final profit.

Currently businesses are allowed to lose money for three years, right? Or has that been changed? Many people *go into business* for those three years, even if they aren't serious about running a business, it just allows them to avoid taxes and get low government subsidized loans. It's pretty much a scam at taxpayer's expense, IMO.

We need to distinguish between individual income tax and business income tax. They are two completely different animals.

I would think most of us are concerned with individual income tax since the topic is individual welfare.

 

[mege]

A flat tax on income is fair.

However, a business has direct (cash) expenses such as Cost of Goods Sold, Labor, Occupancy, Marketing, and G&A that must be considered. The cash payments on debt service (or leased equipment) must also be accounted for - rather than depreciation.

The recipients of those funds may also have expenses - eventually though every dollar of profit would be taxed by the person who realized the final profit.

Why would those things need to be evaluated under a flat tax system, if applied as such to businesses? That is the type of business-tax gamesmanship that we're trying to avoid (but I don't have a good solution because there are companies that have high taxable revenues but are losing money in the short term)

 

[mege]

I would think most of us are concerned with individual income tax since the topic is individual welfare.

And individual taxes are 5-8x the revenue of corporate taxes in recent years.

 

[daveyrocket]

Currently businesses are allowed to lose money for three years, right? Or has that been changed? Many people *go into business* for those three years, even if they aren't serious about running a business, it just allows them to avoid taxes and get low government subsidized loans. It's pretty much a scam at taxpayer's expense, IMO.

We need to distinguish between individual income tax and business income tax. They are two completely different animals.

I would think most of us are concerned with individual income tax since the topic is individual welfare.

The way the system currently works, an individual can go into business for themselves without going through the trouble of incorporating and having separate bank accounts for the business, keeping two sets of books, etc. As far as taxes are concerned, they *are* the business and they pay taxes as a single entity, the individual.

Now consider this scenario. An individual has a small business that brings in $150k, and costs $100k to run, leaving them with $50k to pay their mortgage and feed their kids. But since you have a flat tax system, they can't write off any of the business expenses and they end up paying 3 times the amount of money that someone with a $50k job working for someone else would. How is that fair? What if they actually lose money on their business? Then they have to pay taxes on top of the loss? What if the business grows and they want to hire employees? Then you are taxing incomes twice. That's not fair either.

A huge number of businesses use this model. Plumbers, electricians, doctors, accountants, mom-and-pop restaurants, etc. Many small professional-type businesses start out this way because of the simplicity. Many end up staying this way throughout their entire lifetimes. I used to work for a computer store that was open for 20 years or so, did about a million dollars in business a year with about 6 employees and it was never incorporated or anything.

If you want to distinguish individual and business taxes by allowing businesses to write off expenses, you've defeated the purpose that you set out to do. For starters, the very rich have most of their assets wrapped in business entities anyway. So nothing changes there. But you wind up punishing people who want to be entrepreneurs but don't want or need to spend their time dealing with government red tape to create a business tax entity, setting up separate bank accounts, etc. It would end up choking off entrepreneurship except among those willing / able to hire a lawyer and an accountant to handle that stuff, or those that have enough of that knowledge already.

 

[Evo]

If you want to distinguish individual and business taxes

I meant that we need to clarify what we are discussing in this thread, the topic is about welfare to individuals, so discussing businesses wouldn't apply. We really need to stick to *individuals* for the sake of not getting off topic.

 

[WhoWee]

Currently businesses are allowed to lose money for three years, right? Or has that been changed? Many people *go into business* for those three years, even if they aren't serious about running a business, it just allows them to avoid taxes and get low government subsidized loans. It's pretty much a scam at taxpayer's expense, IMO.

We need to distinguish between individual income tax and business income tax. They are two completely different animals.

I would think most of us are concerned with individual income tax since the topic is individual welfare.

I'm thinking of the small business owner. A family owned pizza shop for instance. While the gross profit on sales might be 70% - the net cash flow after all expenses might be 15%.

If gross revenues are $300,000 and net cash flow $45,000 then a flat tax of $4,500 to $6,750 is reasonable.

 

[jambaugh]

And individual taxes are 5-8x the revenue of corporate taxes in recent years.

Don't forget some of those individual taxes are double taxes on the same profit the corporation makes. The corp. pays taxes on profits before paying dividends and capital expenditures which contribute to capital gains. Corporate taxes should be zero. The profits are already taxed via income tax on executive bonuses dividends and capital gains. (Although as a practical matter we'd need to add provisions for a modified mark to market annual capital gains tax.)

But by the same token Corporate tax rates or they plus dividend rates, should be no less and no greater than the highest income tax rate. Neither incorporating nor failing to incorporate should be motivated by tax advantage. This way small businesses and individual enterprises are not put at a disadvantage tax-wise to larger corporations.

But this is off topic.

 

[daveyrocket]

I'm thinking of the small business owner. A family owned pizza shop for instance. While the gross profit on sales might be 70% - the net cash flow after all expenses might be 15%.

If gross revenues are $300,000 and net cash flow $45,000 then a flat tax of $4,500 to $6,750 is reasonable.

An in order to do that, you have to allow the small business owner to make deductions. Really, that's no different than the current system in the US.

 

[daveyrocket]

I meant that we need to clarify what we are discussing in this thread, the topic is about welfare to individuals, so discussing businesses wouldn't apply. We really need to stick to *individuals* for the sake of not getting off topic.

The point of my post was that there are *individuals* who go into business, and for tax purposes, they pay taxes as an individual. They don't have a special tax class. They don't file taxes separately for their business. As far as taxes are concerned, they *are* the business. They add up revenues and deduct expenses for their business on their personal taxes. A flat tax rate that doesn't allow individuals to make deductions would eliminate this business model and add significant barriers to entrepreneurship except for people who already have access to vast resources. IMO, that's a very bad thing. Discussing this type of business does apply because they aren't required to file to create a separate tax entity.

But here's another scenario to consider. Man and woman get divorced. Man has a job paying $50k, woman is unemployed. The court orders man to pay $12k a year to woman in alimony or child support. Since the man is not allowed to deduct the alimony, not only has the government forced him to give up that money (he has no choice on what to spend it on, and can't make decisions to manage that expense), he still gets taxed on it. Then that $12k is income for the woman, and the government taxes it again. It's not fair for Uncle Sam to take advantage of people's misfortune in order to line its own pockets.

 

[WhoWee]

An in order to do that, you have to allow the small business owner to make deductions. Really, that's no different than the current system in the US.

The profits of a business typically flow to the owner as income. The expenses paid by the business flow to another business (or perhaps an employee) - someone will eventually earn a profit/realize income and pay taxes on those funds.

 

[daveyrocket]

I'm talking about people who file taxes as self-employed. The revenues of their business are their income, and the expenses are their personal deductions. They do this on their individual tax returns, and they don't file separate taxes for their business.

 

[WhoWee]

The point of my post was that there are *individuals* who go into business, and for tax purposes, they pay taxes as an individual. They don't have a special tax class. They don't file taxes separately for their business. As far as taxes are concerned, they *are* the business. They add up revenues and deduct expenses for their business on their personal taxes. A flat tax rate that doesn't allow individuals to make deductions would eliminate this business model and add significant barriers to entrepreneurship except for people who already have access to vast resources. IMO, that's a very bad thing. Discussing this type of business does apply because they aren't required to file to create a separate tax entity.

That is total nonsense. Please support how someone can deduct business expenses personally and yet not file a business return.

 

[ThomasT]

@ jambaugh
As you mentioned, some things have been clarified. In the interest of simplification and a timely resolution, I'm going to focus on your two points below.

I should note that I don't want to argue anything about fairness, or whether aid to the poor can be justified in some/any moral sense. My only reasons for advocating government welfare to the poor are entirely selfish, and they are 1) that it minimizes the presence of homeless/indigent people on the streets and, in particular, their encroachment into the 'nicer' areas (wrt this I was somewhat disappointed to find that there seemed to be an increase, from my memory of the 70's, in the number of homeless/indigent people wandering the streets of Fort Lauderdale), and 2) that it benefits the general economy.

I seek to argue on two points.
1.) I assert that over the long term an aggregate, more harm is done by governmental social welfare than good. And I define "harm" here in the same value system used to justify the social welfare.

My current opinion is that there is an increasing percentage of people in our society who could work but who are just not needed in the workforce (in addition to the people who are just unemployable). So, one question concerns whether it's beneficial to the economy to give all of them aid, or only some of them, or none of them, or what.

I don't have any definitive ideas on this -- just the gut feeling from my own experience in several businesses that the aid helps the general economy both in the short and long term.

So, I'm interested to see what you (or any other posters) have to say about the net harm done by governmental social welfare.

2.) I assert that even if point 1.) were definitively not true, the coercive nature of governmental social welfare makes it unjust. We should reap what we in the private sector, sow even if it is starving mobs looting our property out of desperation.
(this one may come down to a matter of my own distinct value system but let's explore it and see.)

I thought we agreed that government is, necessarily, coercive, and that that's not necessarily a bad thing. So is it the coercive nature of government associated with social welfare programs, or just social welfare programs that you want to argue against? The latter I should think.

And your first argument is that we should, apparently collectively, 'reap what we sow'. But how, in what way, did the rest of us produce the bad attitudes and behavioral problems (drugs, alcohol, etc.) that characterize the otherwise employable homeless and indigent?

The way I look at it, the idea is to minimize the disruption to normal society that the homeless and indigent (for whatever reasons) cause -- and I think (pending further enlightenment on the subject) that government social welfare does that to a certain extent.

 

[WhoWee]

I'm talking about people who file taxes as self-employed. The revenues of their business are their income, and the expenses are their personal deductions. They do this on their individual tax returns, and they don't file separate taxes for their business.

Enough misinformation.
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Your assertion that "revenues of their business are their income, and the expenses are their personal deductions" is incorrect and quite naive.

 

[daveyrocket]

That is total nonsense. Please support how someone can deduct business expenses personally and yet not file a business return.

It's not nonsense, it's used all over the place. It's clear you know nothing about self-employment.

http://en.wikipedia.org/wiki/Sole_proprietorship
A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business.

http://www.irs.gov/businesses/small/article/0,,id=98202,00.html
See where in the table it says that if you are liable for income tax, you use form 1040, the personal income tax form.

http://www.nolo.com/legal-encyclopedia/how-sole-proprietors-are-taxed-30292.html
As a sole proprietor you must report all business income or losses on your personal income tax return; the business itself is not taxed separately. (The IRS calls this "pass-through" taxation, because business profits pass through the business to be taxed on your personal tax return.) ... The main difference between reporting income from your sole proprietorship and reporting wages from a job is that you must list your business's profit or loss information on Schedule C (Profit or Loss from a Business), which you will submit to the IRS along with Form 1040. You'll be taxed on all profits of the business -- that's total income minus expenses -- regardless of how much money you actually withdraw from the business.

(All this is US tax stuff.)

 

[daveyrocket]

Enough misinformation.
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Your assertion that "revenues of their business are their income, and the expenses are their personal deductions" is incorrect and quite naive.

Schedule C is attached to 1040, your *personal income tax form*. Taxes for the sole proprietorship business and *not* assessed separately.

 

[russ_watters]

Davey, do yourself a favor and actually have a look at the Schedule C form. You are quite wrong about what it means to be self employed and there is no logical reason to think an individual tax reform would necessarily affect the schedule C. Politicians do dumb things sometimes, but they aren't all complete idiots.

 

[WhoWee]

It's not nonsense, it's used all over the place. It's clear you know nothing about self-employment.

http://en.wikipedia.org/wiki/Sole_proprietorship
A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business.

http://www.irs.gov/businesses/small/article/0,,id=98202,00.html
See where in the table it says that if you are liable for income tax, you use form 1040, the personal income tax form.

http://www.nolo.com/legal-encyclopedia/how-sole-proprietors-are-taxed-30292.html
As a sole proprietor you must report all business income or losses on your personal income tax return; the business itself is not taxed separately. (The IRS calls this "pass-through" taxation, because business profits pass through the business to be taxed on your personal tax return.) ... The main difference between reporting income from your sole proprietorship and reporting wages from a job is that you must list your business's profit or loss information on Schedule C (Profit or Loss from a Business), which you will submit to the IRS along with Form 1040. You'll be taxed on all profits of the business -- that's total income minus expenses -- regardless of how much money you actually withdraw from the business.

(All this is US tax stuff.)

Form 1040 line 12 pulls data from schedule C
http://www.irs.gov/pub/irs-pdf/f1040.pdf

Schedule C is the Business tax form I posted a few minutes ago.
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Again - stop with the misinformation - please.

 

[daveyrocket]

The tax code for individuals is simple at a coarse scale.

Income - Deductions = Adjusted gross income.

Anything that adds to your AGI is income, and anything that subtracts from it is a deduction. It's simple. You pay a tax on your AGI (not a flat tax, but the tax paid is a piecewise linear function of the AGI). (I'm ignoring things like credits which aren't really relevant). Business expenses are a deduction because they reduce your AGI.

This is what I was originally responding to:

I would instead like to see a flat tax rate of something like 10-15% across the board. No deductions, no exemptions.

(emphasis mine)
If you take a loss on your business, that's a deduction. The business expenses themselves are a deduction, and it goes on your personal income tax if you're a sole proprietor.

Business expenses are a deduction. It's a fact. They're a deduction for a corporation, and they're a deduction for sole proprietorship. If you want to say, certain types of deductions are allowed for individuals and other types aren't, then that's fine. But that's not qualitatively different than the current situation in the US. You can't deduct money you spend on food to feed your kids, but if you take a client out to lunch you can deduct the cost of the lunch if you pay it.

Have you been self-employed? I have. Have you hired a tax accountant and had discussions with him over how taxes for your self-employment business work? I have. Do you have experience on this, or are you just dropping things you read off wikipedia?

 

[WhoWee]

The tax code for individuals is simple at a coarse scale.

Income - Deductions = Adjusted gross income.

Anything that adds to your AGI is income, and anything that subtracts from it is a deduction. It's simple. You pay a tax on your AGI (not a flat tax, but the tax paid is a piecewise linear function of the AGI). (I'm ignoring things like credits which aren't really relevant). Business expenses are a deduction because they reduce your AGI.

This is what I was originally responding to:
(emphasis mine)
If you take a loss on your business, that's a deduction. The business expenses themselves are a deduction, and it goes on your personal income tax if you're a sole proprietor.

Business expenses are a deduction. It's a fact. They're a deduction for a corporation, and they're a deduction for sole proprietorship. If you want to say, certain types of deductions are allowed for individuals and other types aren't, then that's fine. But that's not qualitatively different than the current situation in the US. You can't deduct money you spend on food to feed your kids, but if you take a client out to lunch you can deduct the cost of the lunch if you pay it.

Have you been self-employed? I have. Have you hired a tax accountant and had discussions with him over how taxes for your self-employment business work? I have. Do you have experience on this, or are you just dropping things you read off wikipedia?

My links were to the IRS - please stop the misinformation and show where I posted a Wiki link or retract that nonsense.

Given your extensive business experience, how do you defend this statement "Originally Posted by daveyrocket
I'm talking about people who file taxes as self-employed. The revenues of their business are their income, and the expenses are their personal deductions. They do this on their individual tax returns, and they don't file separate taxes for their business."

Does a self employed carpet cleaner not pay for equipment, maintenance, supplies, (possibly) labor, business insurance, a commercial vehicle, fuel for that vehicle, a yellow page ad, legal and accounting, permits, office equipment and supplies, telephone, (perhaps) a storage building with utilities and insurance, a business phone number, and other business related expenses?

IMO - it would not be fair to tax him on the gross revenues under a flat tax system, as the above detailed expenses would flow to other businesses (or an employee). Taxing all businesses on gross revenues would result in double taxation.

 

[daveyrocket]

My links were to the IRS - please stop the misinformation and show where I posted a Wiki link or retract that nonsense.

Given your extensive business experience, how do you defend this statement "Originally Posted by daveyrocket
I'm talking about people who file taxes as self-employed. The revenues of their business are their income, and the expenses are their personal deductions. They do this on their individual tax returns, and they don't file separate taxes for their business."

Does a self employed carpet cleaner not pay for equipment, maintenance, supplies, (possibly) labor, business insurance, a commercial vehicle, fuel for that vehicle, a yellow page ad, legal and accounting, permits, office equipment and supplies, telephone, (perhaps) a storage building with utilities and insurance, a business phone number, and other business related expenses?

IMO - it would not be fair to tax him on the gross revenues under a flat tax system, as the above detailed expenses would flow to other businesses (or an employee). Taxing all businesses on gross revenues would result in double taxation.

Absolutely they pay for those things, and it would absolutely be unfair to not allow them to deduct those expenses. If their business is a sole proprietorship, they itemize their expenses on Schedule C and attach it to their personal income tax return when they file. Schedule C is not filed separately from a personal income tax form, and the business is not taxed separately. It's all part of the personal income taxes. The income from the business is added to their income, and the expenses are subtracted to contribute to the AGI. If the business expenses exceed the business income, the loss is still subtracted from their personal income from other sources.

Let's stick to a couple of basic facts that I think we can agree on:
1) Business expenses are deductible.
2) A sole proprietorship is not taxed separately from its owner.

The logical conclusion, and the reality of the current system, is that the deductions that come from the business are a part of the personal income tax form.

I think we can both agree that (1) is as it should be. I'm not sure about your opinion on (2) but I would argue that (2) is important for reducing the barrier to entry for entrepreneurs.

 

[russ_watters]

davey, Mech _E did not intend what you are attributing to him. You are overinterpreting.

 

[daveyrocket]

Then I'd like to hear a clarification of what he meant by "no deductions."

Also, I posted this example, which has nothing to do with businesses. And maybe it got lost in the other discussion, but I'd like to know how this scenario would work and be fair in a system of "no deductions."

But here's another scenario to consider. Man and woman get divorced. Man has a job paying $50k, woman is unemployed. The court orders man to pay $12k a year to woman in alimony or child support. Since the man is not allowed to deduct the alimony, not only has the government forced him to give up that money (he has no choice on where that money goes, and can't make decisions to manage that expense), he still gets taxed on it. Then that $12k is income for the woman, and the government taxes it again. It's not fair for Uncle Sam to take advantage of people's misfortune in order to line its own pockets.

 

[SixNein]

Have you been self-employed? I have. Have you hired a tax accountant and had discussions with him over how taxes for your self-employment business work? I have. Do you have experience on this, or are you just dropping things you read off wikipedia?

I have, and you are correct. In a sole proprietorship, there is no legal separation between the business and the individual. If a sole proprietorship gets sued, personal and business assets are treated the same. The same is true for taxation.

-IMO-
Please forgive me for a second for venturing off topic. But why do many scientists and mathematicians tend to stop thinking rigorously or scientifically about government? I'm beginning to wonder if there is even a point to discussing politics because nobody is really willing to study government scientifically. I'll be the first to admit that there is a great deal of uncertainty involved in government, but there is a great deal of uncertainty in studying the universe. Why has nobody been bold enough to declare ideology dead?

I'm beginning to think Leibniz had the right idea.We need to start looking at government from an entirely different angle so that we can calculate who is right and wrong. I'm willing to bet that liberals and conservatives both would discovery a great many things they believe are wrong.
-/IMO-

 

[SixNein]

IMO - it would not be fair

What makes you think that the fair tax system is not as corruptible as our current tax system? The greatest problem we have in our current tax system is the countless loopholes.

In my mind, the only way to fix the tax system is to close all loop holes then hand the responsibility over to an independent agency like the fed so that politics is kept as far away from it as possible.

 

[WhoWee]

What makes you think that the fair tax system is not as corruptible as our current tax system? The greatest problem we have in our current tax system is the countless loopholes.

In my mind, the only way to fix the tax system is to close all loop holes then hand the responsibility over to an independent agency like the fed so that politics is kept as far away from it as possible.

Just for the record, I bolded the part you selected, my full quote was:
"IMO - it would not be fair to tax him on the gross revenues under a flat tax system, as the above detailed expenses would flow to other businesses (or an employee). Taxing all businesses on gross revenues would result in double taxation."

Did I comment on the potential for corruption - feels like a troll?

Please define a loop hole. As for "then hand the responsibility over to an independent agency like the fed so that politics is kept as far away from it as possible" - care to elaborate how that might work?

 

[SixNein]

Just for the record, I bolded the part you selected, my full quote was:
"IMO - it would not be fair to tax him on the gross revenues under a flat tax system, as the above detailed expenses would flow to other businesses (or an employee). Taxing all businesses on gross revenues would result in double taxation."

Did I comment on the potential for corruption - feels like a troll?

Please define a loop hole. As for "then hand the responsibility over to an independent agency like the fed so that politics is kept as far away from it as possible" - care to elaborate how that might work?

Well, I'm not commenting on any particular point you were making; instead, I'm commenting on your overall argument for a 'fair' tax system. Sorry for the misunderstanding.

Define tax loopholes:

(Tax Loophole) An ambiguity, omission, discrepancy, uncertainty, vagueness, or exception (as in a tax law, tax regulation, tax ruling, and tax court case or decision) that provides a way to avoid a specific tax without violating its literal requirements; esp. ...

www.income-tax-planning.com/tax-terms-dictionary.htm

Loopholes are special exceptions in the tax code which allows those who qualify (virtually always corporations and special categories of rich people) to escape paying part of their taxes. ...

www.massline.org/Dictionary/T.htm

On an independent agency, it would work the same way as let's say interest rates. I don't see any point to trying to fix our tax system unless we get it off the table of election cycles.

 

[WhoWee]

Well, I'm not commenting on any particular point you were making; instead, I'm commenting on your overall argument for a 'fair' tax system. Sorry for the misunderstanding.

Define tax loopholes:


On an independent agency, it would work the same way as let's say interest rates. I don't see any point to trying to fix our tax system unless we get it off the table of election cycles.

That's fine - just looking for clarity. As per loopholes - I wanted to make sure we weren't referring to standard business deductions as anything other than an expense item.

As per the independent agency - you want it to set tax policy - not replace the IRS for enforcement - correct?

 

[BobG]

I'm talking about people who file taxes as self-employed. The revenues of their business are their income, and the expenses are their personal deductions. They do this on their individual tax returns, and they don't file separate taxes for their business.

This is not correct. They list their expenses on Schedule C and subtract them from the money they brought in. Only the net profit on the business or self-employment is considered income. You don't even have to itemize deductions to have your self-employment expenses deducted from your self-employment revenues.

For example, I was a soccer referee in my spare time and also held down a full time job. I reported my refereeing income on Schedule C and deducted the expenses related to refereeing (travel, uniforms, equipment, registration fees, insurance fees, etc). Only the net profit from refereeing was reportable income. On the other hand, I also had to pay a self-employment social security tax, which was a personal exemption from my total income (vs a refereeing expense).

Edit: Actually, reading one of your later posts, I think the point you're trying to make is that because the Schedule C is part of your personal income tax form, a flat tax would eliminate the business expenses that are listed on Schedule C. I don't think that would be the effect of eliminating personal deductions. The personal deductions that would be eliminated would be for dependents? Education credits? Child care credits? I'm not really sure if they're proposing a true elimination of all personal deductions or a semi-flat tax that would be at least in the remote realm of possibility.

But I'd be all for taxing married couples at the same rate as single people - why should a couple get a lower tax rate when their living expenses per person are lower than a single person's?

 

[BobG]

But here's another scenario to consider. Man and woman get divorced. Man has a job paying $50k, woman is unemployed. The court orders man to pay $12k a year to woman in alimony or child support. Since the man is not allowed to deduct the alimony, not only has the government forced him to give up that money (he has no choice on what to spend it on, and can't make decisions to manage that expense), he still gets taxed on it. Then that $12k is income for the woman, and the government taxes it again. It's not fair for Uncle Sam to take advantage of people's misfortune in order to line its own pockets.

This is a valid point. Theoretically, it could be solved by not taxing an ex-spouse on alimony, since it's already been taxed once. However, that would royally screw anyone already paying alimony, since, at least hopefully, the tax consequences were considered when the amount of alimony was agreed to. There is no fair way to get from here (current tax regulations) to there (flat tax).

(You don't get to deduct child support. One of the parents already gets a tax deduction for supporting their children. They don't get an extra deduction just because they divorce.)

 

[SixNein]

That's fine - just looking for clarity. As per loopholes - I wanted to make sure we weren't referring to standard business deductions as anything other than an expense item.

As per the independent agency - you want it to set tax policy - not replace the IRS for enforcement - correct?

Yes, just like the fed sets monetary policy.

 

[WhoWee]

Yes, just like the fed sets monetary policy.

That would put a great deal of power into the hands of the Fed Chairman.

 

[Tosh5457]

Redistribution of wealth to lower income families boost the economy. Economy is very dependant on consumption, and consumption mainly comes from low or median income families, while rich families consume less as a percentage of their income. If there is a very high and rising inequality, consumption will drop and consequently the investment expectations will be worse.

You can argue that if that money stayed with the rich, it would be saved rather than used to consume and that would be more beneficial. Savings make interest taxes go lower, incentivating investment. But if the investment expectations are bad because of low consumption, lower interest rates wouldn't help much.

 

[Evo]

Temporarily closed pending cleanup to bring this back to the topic.

Those of you that wish to discuss corporate taxes, please start another thread. I'll postpone deleting posts until tomorrow, so that you can copy anything you wish to use in your new thread.