extranormal's Wealth Redistribution

In reply to fast_eddie_72:

Sure - the point is that you shouldn't bandaid a screwed up system with crazy high tax rates because the "maybe" part are the folks who are kinda rich but not enough to buy islands to create tax shelters and so on. You're only screwing the good guys by raising the rates.

That's like saying

This cylinder head flows like crap, I think I'll get a cam with 1.5" of lift

Whoa man! you're going to break stuff!

But I need more flow!!

There is a better way than just raising rates on the rich - that's stupid and, if history shows us anything, it won't actually result in any revenue increase!

fast_eddie_72 wrote:

tuna55 wrote: In reply to fast_eddie_72: Quite nicely put, actually. I agree with what you're saying to boot.

Not kidding when I say, that kinda makes my day.

Glad to do it!

oldsaw wrote: You need a perfect analogy to absorb the point?

Certainly not! But a vaguely analogous analogy would make whatever point they think they’re making a lot better.

carguy123 wrote: So even if a rich person paid in $1,000,000 a year in taxes and 47% of America paid no taxes then the rich have had their taxed dropped unfairly low? BTW Those are real figures.

That is a real figure but not in context they do not pay federal taxes. They still feed money into medicare and the standard deductions that the state has.

Going to out myself a bit here. I am in the 250K+ tax bracket If you gave me a flat tax that was lower then I pay now I would support it fully. VAT tax overall even better. I live a GRM style lifestyle but still get racked over the coals on income tax. I also imagine I use a whole lot less social services then people in a lower bracket and buy less. Tax me on what I spend not what I make and I would be happy.

Additionally

Lower the rate to like a even 20ish percent raise capital gains tax that same reasonable level or treat it like income and it would be great. I could actually make common sense investment decisions instead of having to hire somebody to basically do the math for me to lower my total taxable income.

In reply to wearymicrobe:

I think that makes sense. Capital gains are income, and the flat tax should be the same. I'd even go further and say that profit is income, and the company should be charged the same percentage of tax as if they were a person.

I already warned my wife any presidential candidate with a real shot at winning that hangs their hat on flat tax or fair tax will get my vote.

My argument has always been that even drug dealers have to buy toilet paper.

fast_eddie_72 wrote:

oldsaw wrote: You need a perfect analogy to absorb the point?

Certainly not! But a vaguely analogous analogy would make whatever point they think they’re making a lot better.

I know that want directed at me, but I just couldn't hold my attention on some bad animation that was made in a few minutes. ADHD. A blessing and a curse.

FWIW, not saying it's right, wrong, good, bad, etc., but...

The reason capital gains are taxed at a lower rate, and some believe they should have no tax, is based on the theory that capital investment is good for everyone. If I've got $1M sitting in a CD, it's not doing anyone any good. But if I invest that $1M in an injection molding company, which allows them to buy a new molding machine, then that $1M has gone toward the employees who run that machine, maintain it, the ones who designed and built it in the first place, etc. Capital investments are the key to economic growth, so they should be encouraged. That's the theory at least.

flat tax + VAT- not a bad idea. If you want that expensive toy, then you get to pay for it....I admit to lusting after a convertible R8 that I saw at an audi dealership until the wife reminded me that no way no how forget about it

^So a flattax + PLUS the fairtax. No thanks.

I either want the fairtax (www.fairtax.org read up on it). Which is basically (assuming we continue the same level of gov't funding), a 23% Federal sales tax and that would be in addition to any state/local/county taxes.

I think in my suburb that would put the "effective" sales tax rate right at 32.2%.

OR

I would go for the proposal by Obama's debt reduction panel. Three tax brackets (8%, 14%, 22%) and NO writeoffs/deductions/refunds/credits/etc.

But, the politicians can use the tax rates as a form of social engineering and for control/incentives.

So tax code reform, basically, is probably not going to happen in the forseeable future.

cardiacdog wrote: flat tax + VAT- not a bad idea. If you want that expensive toy, then you get to pay for it....I admit to lusting after a convertible R8 that I saw at an audi dealership until the wife reminded me that no way no how forget about it

no VAT - that's a terrible idea. Someone always gets to decide what constitutes an expensive new toy, and that person is never going to be honest.

tuna55 wrote: There is a better way than just raising rates on the rich - that's stupid and, if history shows us anything, it won't actually result in any revenue increase!

prove it. Cause of all the people I've ever seen float this.. They've never been able to prove it.. Also explain IKE and why his high tax rates were such a failure..

z31maniac wrote: I would go for the proposal by Obama's debt reduction panel. Three tax brackets (8%, 14%, 22%) and NO writeoffs/deductions/refunds/credits/etc.

Link to this, please? First I've heard of it. It's actually somewhat reasonable compared to what we do now. It's hard to imagine that coming out of this whitehouse.

huge-O-chavez wrote:

tuna55 wrote: There is a better way than just raising rates on the rich - that's stupid and, if history shows us anything, it won't actually result in any revenue increase!

prove it. Cause of all the people I've ever seen float this.. They've never been able to prove it.. Also explain IKE and why his high tax rates were such a failure..

Nope, no feeding the troll, so to speak, my friend. My point was more along the lines of rich people finding creative loopholes anyway.

The problem with a "fair" flat tax is that the truly wealthy don't actually have income, they have wealth, which is often continually growing without much effort on their part. In a flat tax, for example, a guy whose real estate holdings double in value won't be taxed at all as his wealth grows (because he can break even or possibly claim a loss on the buildings' operation), while the poor working slobs that pay the rent that allows him to grow that wealth will get soaked for a quarter of everything they have, in addition to the indignity of actually having to EARN through WORK what little wealth they can accumulate. A sales tax is even worse. Poor people spend every cent they get because they generally don't have any choice about it. The more income you have, the more you can afford not to spend all of it, so the tax will end up being susbtantially regressive, and will serve to discourage sales of goods and services to boot. Win-Win!

Not that these problems can easily be avoided, but I have always found it a bit perverse that wealth created from nothing through work is taxed at a much, much higher rate than any other sort of accumulated wealth. But I guess it just demonstrates who's really making the rules.

tuna55 wrote:

z31maniac wrote: I would go for the proposal by Obama's debt reduction panel. Three tax brackets (8%, 14%, 22%) and NO writeoffs/deductions/refunds/credits/etc.

Link to this, please? First I've heard of it. It's actually somewhat reasonable compared to what we do now. It's hard to imagine that coming out of this whitehouse.

Link: http://www.bankrate.com/financing/taxes/debt-panel-suggests-tax-changes/

You don't hear about it because those who support the administration's agenda don't want you to hear about it; Obviously, that includes the White House.

tuna55 wrote:

huge-O-chavez wrote:

tuna55 wrote: There is a better way than just raising rates on the rich - that's stupid and, if history shows us anything, it won't actually result in any revenue increase!

prove it. Cause of all the people I've ever seen float this.. They've never been able to prove it.. Also explain IKE and why his high tax rates were such a failure..

Nope, no feeding the troll, so to speak, my friend. My point was more along the lines of rich people finding creative loopholes anyway.

so you can't prove and are just spitting regurgitated rhetoric with no proof? Nice man..

You and Mr. Kyl and his 90%* of what planned parenthood does is abortions statement make a nice pair..

• Not to be considered a factual statement or whatever his office said afterward and he was to learn he was 87% off on his number.

huge-O-chavez wrote:

tuna55 wrote: There is a better way than just raising rates on the rich - that's stupid and, if history shows us anything, it won't actually result in any revenue increase!

prove it. Cause of all the people I've ever seen float this.. They've never been able to prove it.. Also explain IKE and why his high tax rates were such a failure..

Its a effort thing. The higher the taxes the more I can spend investing my money in ways to avoid it.

The higher the tax the less I actually have to make on a investment and the more willing someone is to move into interesting tax structures. Additionally if the penalty for being caught is not a true deterrent you have even less reason to play by the intent of the rules and more willing you are to follow "the letter of the law" and all the mistakes there in. to your advantage.

I'm not opposed to the overhaul ideas. I just doubt they are possible. I am all for simplification. For indiviudal taxes -

• Start with taxing all types of income at the same rate, whether it be investment income or wages.

• Do away with itemized deductions. If anything is so important that we must keep it, make it an adjustment to AGI.

• Do away with personal exemptions. As much as I adore my little exemptions, I don't wish to help pay for someone else to have five kids.

• Do away with tax credits. You want a Chevy Volt? Fine. I don't want to help pay for it.

Do away with AMT. Only CPAs understand it anyway. Some CPAs, come to think of it. Most CPAs don't understand AMT.

wearymicrobe wrote: Its a effort thing. The higher the taxes the more I can spend investing my money in ways to avoid it.

I'll buy that, but don't know a true way to quantify it.

The big response of high taxes on the rich stifling growth just dosen't hold water.

Check out these two charts...

1st this graph

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

Here's what I think.. Between 1950ish and 1970ish you had effectively the same really high tax % on high earners. Revenue from taxes was relatively flatish as a % of GDP. We had some pretty hard recessions in the 70's and 80's and it didn't really affect tax receipts after then (Marginal rates were still very high on the rich.) Throughout that time, we had our ups and downs, but overall our economy grew. I'd say that the actual tax rate on the rich had no overall effect on growth and also had no effect on returns as a % of GDP. GDP went up rates on the Rich came down, but overall % stayed the same.

Now. I think this says that the tax % on the rich dosen't create or kill jobs nor does raising the rates cause tax returns to go down.. nor go up..

What is most interesting is what actually caused the tax returns to drop as a % of GDP in 2002-2003 and 2008 timeframes (Try to exclude the effect of the recessions in those era's... Because over the previous 50+ years we had higher taxes and greater stability)...

Not so cut and dry is it..

(Ha Tuna.. Try to flavor my above post as trolling).. HA!

Josh wrote: The problem with a "fair" flat tax is that the truly wealthy don't actually have income, they have wealth, which is often continually growing without much effort on their part. In a flat tax, for example, a guy whose real estate holdings double in value won't be taxed at all as his wealth grows (because he can break even or possibly claim a loss on the buildings' operation), while the poor working slobs that pay the rent that allows him to grow that wealth will get soaked for a quarter of everything they have, in addition to the indignity of actually having to EARN through WORK what little wealth they can accumulate. A sales tax is even worse. Poor people spend every cent they get because they generally don't have any choice about it. The more income you have, the more you can afford not to spend all of it, so the tax will end up being susbtantially regressive, and will serve to discourage sales of goods and services to boot. Win-Win! Not that these problems can easily be avoided, but I have always found it a bit perverse that wealth created from nothing through work is taxed at a much, much higher rate than any other sort of accumulated wealth. But I guess it just demonstrates who's really making the rules.

Correct me if I'm wrong, but if you have money, and you want to make money, you invest it. If you invest it and you make money, you must report that to the IRS. I make under 30g a year and don't get to invest outside of savings.

In reply to huge-O-chavez:

Dude, you're trying to make this into a pissing match. You win 100 internets.

The point I am trying to make is not quantifiable. You can't go and get data on how many tax cheats there are and how many loopholes there are. It's like asking me to prove there are less than 100 black holes in the universe.

I made an assertion that the tax rate would be more appropriate if less (or no) loopholes were available, and that by doing to the federal government would get more money. What I am (STILL) trying to get through your head is that if you taxed people what you say you taxed them, the uber rich guy with 10 swiss bank accounts and a team of accountants would be on equal footing with the guy who just crested 250k in his start-up business. The start ups would prosper as a result, the uber rich would have to waste less, the landscape would be more competitive, stock prices would go up, etc... THE FEDERAL GOVERNMENT WOULD HAVE MORE MONEY FOR LESS TAXES. Then I'd lower the tax rates, because the federal government shouldn't have that much money, but that's for another thread.

In reply to tuna55:

Loopholes means different things to different people. Are you saying that we should get rid or everything that allows a person in a certain tax bracket not to pay that rate? I'd go for that.

DILYSI Dave wrote: FWIW, not saying it's right, wrong, good, bad, etc., but... The reason capital gains are taxed at a lower rate, and some believe they should have no tax, is based on the theory that capital investment is good for everyone.

That's exactly right. Add to that this:

Josh wrote: The problem with a "fair" flat tax is that the truly wealthy don't actually have income, they have wealth, which is often continually growing without much effort on their part.

It all takes us steps away from the basic idea. What’s the basic idea?

Here it is. We have a government. It costs $X to run it. Debate what we do elsewhere. Right now it costs $X. Make it cost <$X and we can adjust. But for now, we need $X to pay the bills. (We’re not doing that, and that is the problem)

The wealthy, if they could say what they mean, would say we’re all Americans and we should all pay the same amount. No percentage of anything- I’m 100% American and you’re %100 American. So we pay the same. If there were 100 people in the country, they should all pay $X/100. But if we did that a lot of people would owe more than they make. That won’t work. We’d have no labor force.

So we all agreed a long time ago that we’d have a graduated tax code. But let’s call it what it is- from each according to his ability. There’s a good bit of cognitive dissonance on this

And I wasn’t going to get long winded. I’ll stop before I get into the myth of the “self-made man”. Read Malcolm Gladwell’s Outliers for more insight into that…