Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

sebster wrote:grant a tax credit for tax already paid by the corporation.

Why would we want to do that?

The corporation is a separate entity and thus is taxed separately.

Melissia wrote:Why would we want to do that?

The corporation is a separate entity and thus is taxed separately.

Because we don't care about the entity, we care about the income stream to the individual.

dogma wrote:

Orlanth wrote:
This proved my point. Increasing top rate of tax will make some people 'happy', but that doesn't lead to vote for you levels of happy.

In this cycle, it does.

Orlanth wrote:
People are not really motivated that much of the other guy takes a hit and they like it..
People are motivated a little more if the otjher guy takes a hit and they dont like it.
People are motivated a lot more if they take a bonus.
And people are motivated most of all if they take a hit themselves.

Tax the rich causes emotion 1 and 4. It won't do a lot for the 'poor', and thoroughly alienates the 'rich'. Its bad politics sir.

I completely disagree with you. Revolutions have begun over the perception that boons are handed out to some people, and not others. Successful revolutions have resulted in the group receiving the boon being whipped through the streets, so to speak.

This isn't a revolution, but to pretend that the hierarchy of motivation you've described is omnipresent is uniform, and universally applicable is, well, ignorant of reality. I don't mean that offensively, I just have no better language to express my position.

Orlanth wrote:
He needs to buy a vote block and if he is writing off sections of the US electorate, which a tax hike will do, it can only be to gain resources to build support elsewhere.

Simply "taxing the rich" does that.

I beleive we are talking about the USA: reasonable standards of living for the majority, an underclass that normally dont vote, and high cases of voter apathy.

You are describing petty dictatorships with the rich in their limos passing impoverished peasants starving in the streets who are quietly becoming self empowered majority. Sure your version can be the truth, in central america and places like Moscow 1917, but that a far cry from New York and LA in 2012.

sebster wrote:Because we don't care about the entity, we care about the income stream to the individual.

The corporation IS an individual according to law, and that IS its income. So it gets taxed.

If you want to no longer tax Corporations, that's fine, but you should also curtail their legal rights as separate entities in the process.

Orlanth wrote:
I beleive we are talking about the USA: reasonable standards of living for the majority, an underclass that normally dont vote, and high cases of voter apathy.

It usually isn't the underclass that gets upset about favoritism, its the middle class, and they aren't always upset because they aren't favored. Often they're vindictive because other people are favored, or because other people seem to be "oppressed". About 2/3 of the US population favors increasing taxes on people earning more than 200,000 per anum.

Orlanth wrote:
You are describing petty dictatorships with the rich in their limos passing impoverished peasants starving in the streets who are quietly becoming self empowered majority. Sure your version can be the truth, in central america and places like Moscow 1917, but that a far cry from New York and LA in 2012.

Peasants almost never rebel, its an axiom of political science that has been proven time and again (If you want a stable dictatorship, keep them poor and dumb.). The basic reason for this is that peasants live lives of subsistence, when they rebel they are universally risking death because they're that close to the edge. The middle class rebels, and very rarely the peasants will revolt in concurrence; usually because the middle class pushed them to (think Sandinista).

The point, though, isn't the the US in on the edge of a revolution, the point is that the sentiment that causes revolution in the middle class often causes that same class to favor retributive action (or at least action that looks retributive) against certain groups; in this case the wealthy.

d-usa wrote:Old people hoard tiny dogs and get cranky.

Wins thread.

sebster - I do agree that the tax system here is really screwy and it takes years of studying in university to be able to make sense of it all.

It would be overall wonderful if there was simply a flat tax on all earnings no matter thier source at the level of the individual. No deductions of any kind, then everyone would truly be paying thier fair share. The current rate being proposed by flat tax proposals is about 15%. It will probably never happen in my lifetime, if ever under the current system, but I do love the idea of doing basic math on a postcard or bar napkin, whatever, $10,000 earned, $1500 owed. Done.

It would be overall wonderful if there was simply a flat tax on all earnings no matter thier source at the level of the individual. No deductions of any kind, then everyone would truly be paying thier fair share. The current rate being proposed by flat tax proposals is about 15%. It will probably never happen in my lifetime, if ever under the current system, but I do love the idea of doing basic math on a postcard or bar napkin, whatever, $10,000 earned, $1500 owed. Done.

A 15% flat tax solely levied on end line income would bankrupt the nation immediately. The reason flat tax plans never make it outside of the planning stages is because they're fundamentally dysfunctional. To make that work you would have to start making exceptions (on most of the things already excepted) to avoid having people lose their capability of paying their rent and at that point in order to avoid massive deficits you'd have to start axing everything. Flat tax plans aren't tax plans, their just another way of saying "cut all spending". Hence libertarian love of flat taxes. You can simplify the tax code without destroying the country, you just have to alter and simplify the way people have their taxes reduced or excepted and you need to stop sliding tax breaks into every bill written every single day. It wouldn't be so confusing if people didn't use it as a soft stimulus.

ShumaGorath wrote:

It would be overall wonderful if there was simply a flat tax on all earnings no matter thier source at the level of the individual. No deductions of any kind, then everyone would truly be paying thier fair share. The current rate being proposed by flat tax proposals is about 15%. It will probably never happen in my lifetime, if ever under the current system, but I do love the idea of doing basic math on a postcard or bar napkin, whatever, $10,000 earned, $1500 owed. Done.

A 15% flat tax solely levied on end line income would bankrupt the nation immediately. The reason flat tax plans never make it outside of the planning stages is because they're fundamentally dysfunctional. To make that work you would have to start making exceptions (on most of the things already excepted) to avoid having people lose their capability of paying their rent and at that point in order to avoid massive deficits you'd have to start axing everything. Flat tax plans aren't tax plans, their just another way of saying "cut all spending". Hence libertarian love of flat taxes. You can simplify the tax code without destroying the country, you just have to alter and simplify the way people have their taxes reduced or excepted and you need to stop sliding tax breaks into every bill written every single day. It wouldn't be so confusing if people didn't use it as a soft stimulus.

In other words, flat tax rates don't work because the system is built around and completely reliant upon a certain slice of society paying far more than their "fair share".

sourclams wrote:

ShumaGorath wrote:

It would be overall wonderful if there was simply a flat tax on all earnings no matter thier source at the level of the individual. No deductions of any kind, then everyone would truly be paying thier fair share. The current rate being proposed by flat tax proposals is about 15%. It will probably never happen in my lifetime, if ever under the current system, but I do love the idea of doing basic math on a postcard or bar napkin, whatever, $10,000 earned, $1500 owed. Done.

A 15% flat tax solely levied on end line income would bankrupt the nation immediately. The reason flat tax plans never make it outside of the planning stages is because they're fundamentally dysfunctional. To make that work you would have to start making exceptions (on most of the things already excepted) to avoid having people lose their capability of paying their rent and at that point in order to avoid massive deficits you'd have to start axing everything. Flat tax plans aren't tax plans, their just another way of saying "cut all spending". Hence libertarian love of flat taxes. You can simplify the tax code without destroying the country, you just have to alter and simplify the way people have their taxes reduced or excepted and you need to stop sliding tax breaks into every bill written every single day. It wouldn't be so confusing if people didn't use it as a soft stimulus.

In other words, flat tax rates don't work because the system is built around and completely reliant upon a certain slice of society paying far more than their "fair share".

Yes, because they recieve an unfair amount of money. A hedge fund manager hour doesn't contain six thousand times the amount of work as some janitor in a schools work hour. It probably contains significantly less. There is a fundamental inadequacy in the income statistics of America. We have the highest income disparity in the west and it's been getting steadily worse for decades. So yeah. They get to pay more than their "fair share" because they "don't deserve the share that they have". You want flat taxes then you need to fix income disparity. Until incomes are at least somewhat sane than taxes can't be even across all people.

sourclams wrote:
In other words, flat tax rates don't work because the system is built around and completely reliant upon a certain slice of society paying far more than their "fair share".

If by "system" you mean "modern, capitalist, nation-states" then yes.

You might be able to get away with a flat tax if you include allowances and deductions. You might also be able to get away with something like the FairTax, though whether or not its revenue neutral, and whether or not you want a 23% tax on consumption, is up for debate.

Melissia wrote:The corporation IS an individual according to law, and that IS its income. So it gets taxed.

No, that's not how it works. That's how a lot of leftists on the internet like to pretend it works, but it just isn't true.

A corporation is treated like a person, for general convenience, in certain ways. So it can own property, and employ people, just like a person can. But it doesn't get to vote in elections, and it can't stand for office... because it is not actually a person.

If you want to no longer tax Corporations, that's fine, but you should also curtail their legal rights as separate entities in the process.

I couldn't give half a feth about whether we tax corporations. It doesn't matter because the only reason they generate profit is to allocate to shareholders. So tax that income like all other income received by the shareholder.

It couldn't be simpler, unless people decide to make it complicated by throwing in all kinds of nonsense that doesn't relate.


Automatically Appended Next Post:

Shadowseer_Kim wrote:sebster - I do agree that the tax system here is really screwy and it takes years of studying in university to be able to make sense of it all.

Your system is very odd, in a whole lot of ways. The biggest issue is reflected in Melissia's complaint above - there's no underlying logic to the system, it's just a grab bag of individual complaints about tiny subsystems. What is needed is central piece of logic, which would almost certainly be - tax people's income each year, treating all income the same regardless of source.

Agree to that and most reforms will fall naturally out of the system.

It would be overall wonderful if there was simply a flat tax on all earnings no matter thier source at the level of the individual. No deductions of any kind, then everyone would truly be paying thier fair share. The current rate being proposed by flat tax proposals is about 15%. It will probably never happen in my lifetime, if ever under the current system, but I do love the idea of doing basic math on a postcard or bar napkin, whatever, $10,000 earned, $1500 owed. Done.

There's a few problems with that. The first is that a flat tax hardly simplifies things. The progressive tax rates in the US can be plotted out in five lines on an excel spreadsheet, it's not that complicated. What's complicated is determining how much income a person actually earned in a year. Move to a flat tax and you'd reduce 100,000 pages of tax law down to 99,999.5 pages.

The second is that a lot of deductions are related to work. Consider two businesses with shop fronts next to each other, a lawyer on the left and a plumbing goods store on the right. Both generate about $500,000 a year in turnover. The lawyer cuts a cheque for the rent, and walks away with $470,000 in income for the year. But the plumber, in addition to the rent, pays about $250,000 for the cost of all the merchandise he brings into the store each month, leaving him with about $220,000 in actual money to take home. Does it make sense to tax them both purely on their revenue?

That said, I do agree with pulling out a lot of the non-income related deductions, all the nonsense like interest rate payments on houses and the like.


Automatically Appended Next Post:

sourclams wrote:In other words, flat tax rates don't work because the system is built around and completely reliant upon a certain slice of society paying far more than their "fair share".

No, flat taxes don't work because you can't set the rate high enough to generate enough money to run government in a modern economy, and low enough not to really, really screw over the poor. A bunch of countries in South America have tried it, and they all gave it up or went bankrupt.