Author Topic: Tax Policy  (Read 312936 times)

G M

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Re: Lois Lerner flunky and 87,000 agents with guns and ammo
« Reply #1100 on: September 01, 2022, 10:01:39 PM »
Are they going to live in walled green zones and move in armored convoys ?


These people are totalitarians with guns, and 87,000 of them with lots of guns and ammo are coming for we the American people.
=================
https://pjmedia.com/.../obama-era-tea-party-targeter...
Obama-Era Tea Party Targeter Appointed to Create IRS Office Overseeing 87,000 New Agents
BY ATHENA THORNE AUG 29, 2022 4:57 PM ET
(IRS)

Nikole Flax worked under Lois Lerner in the Obama administration IRS while the agency infamously targeted conservative political organizations such as the Tea Party by slow-walking and suppressing their tax-exempt applications. She was also one of seven executives whose hard drives mysteriously self-destructed, preventing House investigators from viewing her emails. Now, the career IRS executive has been tapped to establish a new, centralized office in charge of implementing the Democrats’ latest tax and spending bill, including oversight of the 87,000 new IRS agents the bill authorizes.

IRS Commissioner Charles Rettig sent an agency-wide email on Aug. 19, writing, “This is a historic time for the IRS, and we are working to move quickly to begin work on the Inflation Reduction Act signed into law earlier this week.”

He then announced the new department: “A key part of our efforts will be the creation of a new, centralized office for implementation of all IRS-related provisions. Building off our successes implementing other major legislative bills, the IRA 2022 Transformation & Implementation Office will work across the IRS and oversee our implementation efforts.”

Rettig revealed that Nikole Flax, current deputy commissioner in charge of the Large Business & International Division, would be tasked with building the new centralized office.

“We have a unique, once-in-a-generation opportunity to transform the IRS in a way to help taxpayers and fundamentally improve our tax administration work that is vital to the success of our country,” Rettig’s email quoted Flax as saying. “This is an exciting opportunity, and we will be moving quickly with our work.”

It turns out that Flax has been with the IRS since way back in the Obama days. Art Moore at WND reminds us that “In May 2014, the Treasury Department’s inspector general for tax administration concluded in a report that the IRS delayed the processing of applications for tax-exempt status by certain conservative groups and sought private information that was later deemed unnecessary.”

The Eric Holder (aka “Obama’s Wingman”) Justice Dept. spent two years investigating the head of the Exempt Organizations division, Lois Lerner, before deciding — you’ll never believe it! — not to bring any charges.

Moore directs us to a contemporaneous article by journalist and former swamp creature Jeff Bergner. In a historical footnote rendered all the more galling by the recent jackbooted raid of former President Trump’s home in search of missing documents, Moore wrote:
The computer hard drive of former IRS employee Lois Lerner — she who refused to testify so as not to incriminate herself about targeting conservative political groups — crashed. It seems, too, that the IRS has no way to retrieve her email exchanges with other governmental entities (though it could ask these entities for cooperation) because there is no backup system.

Then Bergner discussed the latest intolerable Biden administration appointee:

Less well known is that apparently six other IRS computer hard drives crashed in exactly the same time frame. Every one of these belonged to an IRS employee in Cincinnati’s tax-exempt office or at headquarters in Washington, D.C. Each of these six other employees played a role in targeting tea party groups.…

One of the missing computer hard drives belonged to Nikole Flax, chief of staff to the then-commissioner of the IRS. Flax, by the way, visited the White House no fewer than 31 times during the period the tea party was targeted between 2010 and 2012.
Need more? The Daily Caller also reported in 2014 on a secretive program Lerner and Flax set up in which they collected information from conservative groups:

…Lois Lerner spoke at a 2010 government conference where Lerner’s underling Nikole Flax announced the new IRS program scrutinizing groups applying for tax-exempt status.

Both Lerner and Flax experienced “computer crashes” that led to the permanent deletion of their emails, according to the IRS, which said it cannot hand over their emails to congressional investigators on two House committees.

Both Lerner and Flax briefed fellow government bureaucrats on the new targeting at the conference, where Lerner appeared at a workshop called “Will the IRS Come Knocking?”

Flax announced the new program scrutinizing groups at the Washington Non-Profit Legal & Tax Conference at the Grand Hyatt in Washington, D.C. from February 18-19, 2010. At the time, Flax worked under Lerner in the Exempt Organizations office.…

The IRS began flagging tea party applications in February 2010, the month of the Washington conference.

Flax went on to serve as chief of staff to IRS commissioner Steven T. Miller.

Flax made 31 visits to the White House between July 12, 2010 and May 8, 2013, according to White House visitor logs. Flax’s visits started in the early days of the IRS targeting program and ended just two days before the IRS scandal broke on May 10, 2013. Flax met twice in the Eisenhower Executive Office Building with Jeanne Lambrew, a top adviser to President Obama who exchanged confidential information on conservative groups with Lerner.

In a functioning government, someone like Flax would have been canned and prosecuted for her apparent politicization and abuse of authority. In a Democrat-run swamp, she is given even more power to harass and suppress political opposition.

“We are well beyond the issue of political targeting by a powerful but supposedly neutral government agency,” wrote Bergner back in 2014. “We are into a massive political cover-up, which hints strongly at destruction of records and obstruction of justice. It is no wonder the American public’s confidence in government is at an all-time low.” He was correct, but since no consequences are ever visited upon Leftist governmental operatives, we shouldn’t be surprised to see them continue to clamp down.


DougMacG

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Americans Spent More on Taxes Than on Food, Health Care, Education, and Clothing
« Reply #1102 on: September 12, 2022, 06:20:25 PM »
 Americans Spent More on Taxes Last Year Than on Food, Health Care, Education, and Clothing Combined
And Still Ran a Trillion Dollar Deficit.

Try to fit that in a subject line.

https://reason.com/2022/09/12/americans-spent-more-on-taxes-last-year-than-on-food-health-care-education-and-clothing-combined/
« Last Edit: September 12, 2022, 06:26:06 PM by DougMacG »

Crafty_Dog

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WSJ: Child Tax Credit is a Failed Experiment
« Reply #1103 on: November 29, 2022, 06:01:40 AM »
The Child Tax Credit Is a Failed Experiment
I introduced the idea in a 1993 Heritage Foundation paper. It was a lot better in theory than in practice.
By Scott A. Hodge
Nov. 28, 2022 1:08 pm ET


Advocates are pushing Congress to extend and make permanent the temporary expansion of the child tax credit included in the American Rescue Plan of 2021, claiming this would reduce childhood poverty. I was one of the inventors of the child tax credit, nearly 25 years ago—and I think it’s a bad idea.

Since the child tax credit was enacted in 1997, it has become one of the largest federal income transfer programs. It is one of the leading reasons that more than 40% of all filers pay no income tax. The beleaguered Internal Revenue Service isn’t the right agency to play such a big role in addressing poverty.

The child tax credit made its debut in my February 1993 Heritage Foundation paper titled “Putting Families First: A Deficit Reduction and Tax Relief Strategy.” The strategy called for a cap on the growth of federal spending, which would not only reduce the deficit but also fund pro-growth and pro-family tax relief. The pro-growth elements were faster expensing for capital purchases and a reduction in the tax rate on capital gains.

The pro-family component was a $500-a-child tax credit. The tax code wasn’t sheltering as much income of families with children as it did during the 1950s, and the credit was a simple way of remedying that problem. A credit reduces a family’s tax bill dollar for dollar, while a deduction does so indirectly by reducing taxable income.


Key elements of this plan made their way into the 1994 House Republicans’ Contract with America. Congress enacted the $500 child tax credit as part of the Taxpayer Relief Act of 1997, and it grew from there.

The Bush tax cuts in 2001 temporarily doubled the credit to $1,000 and made it partly refundable for some families whose tax liability was less than the credit. That provision was extended in 2010 and made permanent in 2012. The 2017 Tax Cuts and Jobs Act doubled the credit again, to $2,000, and eased the limits on refundability. Each expansion meant fewer households on the tax rolls.

Last year the American Rescue Plan included another temporary expansion, to $3,000 a child and $3,600 for children under 6. It also required the IRS to distribute half these benefits to taxpayers monthly instead of waiting until tax season the following year.

The expanded credit was one of many relief programs available to families in 2021, and it contributed significantly to increasing the number of households with little or no income-tax liability. According to a Tax Policy Center estimate, some 74 million tax filers—or nearly half (48.3%) of all filers in 2021—had no income tax liability.

A study by the Paris-based World Inequality Lab titled “Why is Europe More Equal Than the U.S.?” determined that the U.S. tax system is more progressive than European systems and redistributes more to the bottom 50% of taxpayers than European systems. The child tax credit is one reason why. Even post-pandemic, the Tax Policy Center estimates that 44 million tax filers will have no income tax liability in 2022.


Can we have a sustainable tax system if the number of nonpayers continues to grow? Expanding the child tax credit would take our redistributionist tax code to a new level. Although 2021 was a pandemic year, it gives us a picture of what that world would look like.

Handing a family $3,000, $6,000 or even $9,000 in cash is certainly palliative, but does it truly improve long-term living standards? No. On the contrary, recent studies estimating the economic effects of the proposed expansion suggest that it would cause people to leave the workforce, reduce work effort, and lower capital investment, ultimately shrinking economic output.

A recent study by economists at the University of Chicago determined that without any changes in behavior, expanding the credit would reduce child poverty by 34% and “deep” child poverty—families whose income is less than half the poverty level—by 39%. But those gains would come at a cost: the diminution of the workforce by 1.5 million people. Consequently, fewer working parents would diminish the child tax credit’s impact on reducing child poverty by more than a third, to 22% from the initial estimate of 34%.

A new study by Congress’s Joint Committee on Taxation assesses both the budgetary and economic impact of expanding the child tax credit. First, JCT determined that it would be a budget-buster, reducing revenue by more than $1.3 trillion over the next decade. By contrast, all provisions of the 2017 Tax Cuts and Jobs Act combined reduced revenues by roughly $1.5 trillion over a decade.

The child tax credit is a drain not only on the federal budget but on the nation’s economy. JCT’s economic models predict that over a decade the policy would reduce the labor supply by 0.2% and reduce the amount of capital by 0.4%. As a result of the reduced supply of labor and capital investment, gross domestic product would shrink by 0.2%.

Aside from the effect on redistribution, nonpayers and the economy, the policy did something worse to the way we think about taxes—it conditioned conservative and liberal lawmakers alike to use the tax code for all manner of social policy.

In the 25 years since the child tax credit was enacted, the number of tax credits has proliferated. There are now tax credits for adoption, daycare expenses, college costs, electric vehicles, solar panels, housing and energy-efficient refrigerators. The Inflation Reduction Act alone created or renewed 26 credits for climate and energy industries. No wonder the IRS is dysfunctional—it’s not equipped to be a social-service agency.

The “put money in people’s pockets” approach of the child tax credit might have been good politics, but 25 years’ experience shows it was bad policy. The country needs a tax agenda that promotes growth and opportunity, not handouts and redistribution.

Mr. Hodge is president emeritus and a senior policy adviser at the Tax Foundation.

Crafty_Dog

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WSJ on disclosure of tax returns
« Reply #1104 on: December 18, 2022, 07:22:32 AM »
Many norms have been broken in American politics in recent years, and one of them is the use of private tax returns as a political weapon. The trend is destructive, as a pair of events this week illustrate.

The first is a useful lawsuit by hedge-fund manager Ken Griffin against the Internal Revenue Service seeking damages for the leak of his tax records to ProPublica. In June 2021 and in articles since, the left-wing website has published the confidential tax data of Mr. Griffin, who runs Citadel Securities, and other wealthy Americans.

ProPublica used the tax data to argue that the rich don’t pay enough taxes, and the first article came out when Democrats were making the case for a wealth tax. ProPublica has never disclosed how it obtained the tax records, and the IRS claims to be investigating the leak but has produced nothing.

Leaking tax data is a crime, and Mr. Griffin’s suit alleges that “the IRS made these unlawful disclosures knowingly, or at the very least negligently or with gross negligence.” Congrats to Mr. Griffin for taking on the tax agency, and perhaps his suit will turn up information that the Biden Administration hasn’t on the tax disclosures.

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Meanwhile, the House Ways and Means Committee may release some or all of Donald Trump’s tax returns that it obtained after a long court fight. The committee is meeting next week to discuss the matter and could vote to release the private returns as part of a report to the House.

This would be a mistake and set a precedent likely to torment more than the former President. We thought Mr. Trump should have done what other recent presidential candidates have done and release his returns when he ran in 2016. But he didn’t, and voters elected him anyway.

Releasing the tax records now, when Mr. Trump has left office and there are less than three weeks left in the current Congress, would serve no legislative purpose. The only point would be to embarrass the former President, perhaps to show he paid little tax. Democrats would set a new standard that means many more Americans will have their tax records targeted for politicized disclosure.

Crafty_Dog

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Moore's Law for Everything
« Reply #1105 on: December 26, 2022, 09:59:26 AM »
https://moores.samaltman.com/

Moore's Law for Everything
by Sam Altman · March 16, 2021

My work at OpenAI reminds me every day about the magnitude of the socioeconomic change that is coming sooner than most people believe. Software that can think and learn will do more and more of the work that people now do. Even more power will shift from labor to capital. If public policy doesn’t adapt accordingly, most people will end up worse off than they are today.

We need to design a system that embraces this technological future and taxes the assets that will make up most of the value in that world–companies and land–in order to fairly distribute some of the coming wealth. Doing so can make the society of the future much less divisive and enable everyone to participate in its gains.

In the next five years, computer programs that can think will read legal documents and give medical advice. In the next decade, they will do assembly-line work and maybe even become companions. And in the decades after that, they will do almost everything, including making new scientific discoveries that will expand our concept of “everything.”

This technological revolution is unstoppable. And a recursive loop of innovation, as these smart machines themselves help us make smarter machines, will accelerate the revolution’s pace. Three crucial consequences follow:

This revolution will create phenomenal wealth. The price of many kinds of labor (which drives the costs of goods and services) will fall toward zero once sufficiently powerful AI “joins the workforce.”

The world will change so rapidly and drastically that an equally drastic change in policy will be needed to distribute this wealth and enable more people to pursue the life they want.

If we get both of these right, we can improve the standard of living for people more than we ever have before.

Because we are at the beginning of this tectonic shift, we have a rare opportunity to pivot toward the future. That pivot can’t simply address current social and political problems; it must be designed for the radically different society of the near future. Policy plans that don’t account for this imminent transformation will fail for the same reason that the organizing principles of pre-agrarian or feudal societies would fail today.

What follows is a description of what’s coming and a plan for how to navigate this new landscape.

Part 1
The AI Revolution
On a zoomed-out time scale, technological progress follows an exponential curve. Compare how the world looked 15 years ago (no smartphones, really), 150 years ago (no combustion engine, no home electricity), 1,500 years ago (no industrial machines), and 15,000 years ago (no agriculture).

The coming change will center around the most impressive of our capabilities: the phenomenal ability to think, create, understand, and reason. To the three great technological revolutions–the agricultural, the industrial, and the computational–we will add a fourth: the AI revolution. This revolution will generate enough wealth for everyone to have what they need, if we as a society manage it responsibly.

The technological progress we make in the next 100 years will be far larger than all we’ve made since we first controlled fire and invented the wheel. We have already built AI systems that can learn and do useful things. They are still primitive, but the trendlines are clear.

Part 2
Moore's Law for Everything
Broadly speaking, there are two paths to affording a good life: an individual acquires more money (which makes that person wealthier), or prices fall (which makes everyone wealthier). Wealth is buying power: how much we can get with the resources we have.

The best way to increase societal wealth is to decrease the cost of goods, from food to video games. Technology will rapidly drive that decline in many categories. Consider the example of semiconductors and Moore’s Law: for decades, chips became twice as powerful for the same price about every two years.

In the last couple of decades, costs in the US for TVs, computers, and entertainment have dropped. But other costs have risen significantly, most notably those for housing, healthcare, and higher education. Redistribution of wealth alone won’t work if these costs continue to soar.

AI will lower the cost of goods and services, because labor is the driving cost at many levels of the supply chain. If robots can build a house on land you already own from natural resources mined and refined onsite, using solar power, the cost of building that house is close to the cost to rent the robots. And if those robots are made by other robots, the cost to rent them will be much less than it was when humans made them.

Similarly, we can imagine AI doctors that can diagnose health problems better than any human, and AI teachers that can diagnose and explain exactly what a student doesn’t understand.

“Moore’s Law for everything” should be the rallying cry of a generation whose members can’t afford what they want. It sounds utopian, but it’s something technology can deliver (and in some cases already has). Imagine a world where, for decades, everything–housing, education, food, clothing, etc.–became half as expensive every two years.

We will discover new jobs–we always do after a technological revolution–and because of the abundance on the other side, we will have incredible freedom to be creative about what they are.

Part 3
Capitalism for Everyone
A stable economic system requires two components: growth and inclusivity. Economic growth matters because most people want their lives to improve every year. In a zero-sum world, one with no or very little growth, democracy can become antagonistic as people seek to vote money away from each other. What follows from that antagonism is distrust and polarization. In a high-growth world the dogfights can be far fewer, because it’s much easier for everyone to win.

Economic inclusivity means everyone having a reasonable opportunity to get the resources they need to live the life they want. Economic inclusivity matters because it’s fair, produces a stable society, and can create the largest slices of pie for the most people. As a side benefit, it produces more growth.

Capitalism is a powerful engine of economic growth because it rewards people for investing in assets that generate value over time, which is an effective incentive system for creating and distributing technological gains. But the price of progress in capitalism is inequality.

Some inequality is ok–in fact, it’s critical, as shown by all systems that have tried to be perfectly equal–but a society that does not offer sufficient equality of opportunity for everyone to advance is not a society that will last.

The traditional way to address inequality has been by progressively taxing income. For a variety of reasons, that hasn’t worked very well. It will work much, much worse in the future. While people will still have jobs, many of those jobs won’t be ones that create a lot of economic value in the way we think of value today. As AI produces most of the world’s basic goods and services, people will be freed up to spend more time with people they care about, care for people, appreciate art and nature, or work toward social good.

We should therefore focus on taxing capital rather than labor, and we should use these taxes as an opportunity to directly distribute ownership and wealth to citizens. In other words, the best way to improve capitalism is to enable everyone to benefit from it directly as an equity owner. This is not a new idea, but it will be newly feasible as AI grows more powerful, because there will be dramatically more wealth to go around. The two dominant sources of wealth will be 1) companies, particularly ones that make use of AI, and 2) land, which has a fixed supply.

There are many ways to implement these two taxes, and many thoughts about what to do with them. Over a long period of time, perhaps most other taxes could be eliminated. What follows is an idea in the spirit of a conversation starter.

We could do something called the American Equity Fund. The American Equity Fund would be capitalized by taxing companies above a certain valuation 2.5% of their market value each year, payable in shares transferred to the fund, and by taxing 2.5% of the value of all privately-held land, payable in dollars.

All citizens over 18 would get an annual distribution, in dollars and company shares, into their accounts. People would be entrusted to use the money however they needed or wanted—for better education, healthcare, housing, starting a company, whatever. Rising costs in government-funded industries would face real pressure as more people chose their own services in a competitive marketplace.

As long as the country keeps doing better, every citizen would get more money from the Fund every year (on average; there will still be economic cycles). Every citizen would therefore increasingly partake of the freedoms, powers, autonomies, and opportunities that come with economic self-determination. Poverty would be greatly reduced and many more people would have a shot at the life they want.

A tax payable in company shares will align incentives between companies, investors, and citizens, whereas a tax on profits does not–incentives are superpowers, and this is a critical difference. Corporate profits can be disguised or deferred or offshored, and are often disconnected from share price. But everyone who owns a share in Amazon wants the share price to rise. As people’s individual assets rise in tandem with the country’s, they have a literal stake in seeing their country do well.

Henry George, an American political economist, proposed the idea of a land-value tax in the late 1800s. The concept is widely supported by economists. The value of land appreciates because of the work society does around it: the network effects of the companies operating around a piece of land, the public transportation that makes it accessible, and the nearby restaurants, coffeeshops, and access to nature that makes it desirable. Because the landowner didn’t do all that work, it’s fair for that value to be shared with the larger society that did.

If everyone owns a slice of American value creation, everyone will want America to do better: collective equity in innovation and in the success of the country will align our incentives. The new social contract will be a floor for everyone in exchange for a ceiling for no one, and a shared belief that technology can and must deliver a virtuous circle of societal wealth. (We will continue to need strong leadership from our government to make sure that the desire for stock prices to go up remains balanced with protecting the environment, human rights, etc.)

In a world where everyone benefits from capitalism as an owner, the collective focus will be on making the world “more good” instead of “less bad.” These approaches are more different than they seem, and society does much better when it focuses on the former. Simply put, more good means optimizing for making the pie as large as possible, and less bad means dividing the pie up as fairly as possible. Both can increase people’s standard of living once, but continuous growth only happens when the pie grows.

Part 4
Implementation and Troubleshooting
The amount of wealth available to capitalize the American Equity Fund would be significant. There is about $50 trillion worth of value, as measured by market capitalization, in US companies alone. Assume that, as it has on average over the past century, this will at least double over the next decade.

There is also about $30 trillion worth of privately-held land in the US (not counting improvements on top of the land). Assume that this value will roughly double, too, over the next decade–this is somewhat faster than the historical rate, but as the world really starts to understand the shifts AI will cause, the value of land, as one of the few truly finite assets, should increase at a faster rate.

Of course, if we increase the tax burden on holding land, its value will diminish relative to other investment assets, which is a good thing for society because it makes a fundamental resource more accessible and encourages investment instead of speculation. The value of companies will diminish in the short-term, too, though they will continue to perform quite well over time.

It’s a reasonable assumption that such a tax causes a drop in value of land and corporate assets of 15% (which only will take a few years to recover!).

Under the above set of assumptions (current values, future growth, and the reduction in value from the new tax), a decade from now each of the 250 million adults in America would get about $13,500 every year. That dividend could be much higher if AI accelerates growth, but even if it’s not, $13,500 will have much greater purchasing power than it does now because technology will have greatly reduced the cost of goods and services. And that effective purchasing power will go up dramatically every year.

It would be easiest for companies to pay the tax each year by issuing new shares representing 2.5% of their value. There would obviously be an incentive for companies to escape the American Equity Fund tax by off-shoring themselves, but a simple test involving a percentage of revenue derived from America could address this concern. A larger problem with this idea is the incentive for companies to return value to shareholders instead of reinvesting it in growth.

If we tax only public companies, there would also be an incentive for companies to stay private. For private companies that have annual revenue in excess of $1 billion, we could let their tax in equity accrue for a certain (limited) number of years until they go public. If they remain private for a long time, we could let them settle the tax in cash.

We’d need to design the system to prevent people from consistently voting themselves more money. A constitutional amendment delineating the allowable ranges of the tax would be a strong safeguard. It is important that the tax not be so large that it stifles growth–for example, the tax on companies must be much smaller than their average growth rate.

We’d also need a robust system for quantifying the actual value of land. One way would be with a corps of powerful federal assessors. Another would be to let local governments do the assessing, as they now do to determine property taxes. They would continue to receive local taxes using the same assessed value. However, if a certain percentage of sales in a jurisdiction in any given year falls too far above or below the local government’s estimate of the property’s values, then all the other properties in their jurisdiction would be reassessed up or down.

The theoretically optimal system would be to tax the value of the land only, and not the improvements built on top of it. In practice, this value may turn out to be too difficult to assess, so we may need to tax the value of the land and the improvements on it (at a lower rate, as the combined value would be higher).

Finally, we couldn’t let people borrow against, sell, or otherwise pledge their future Fund distributions, or we won’t really solve the problem of fairly distributing wealth over time. The government can simply make such transactions unenforceable.


ccp

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ccp

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mccarthy for national sales tax?
« Reply #1109 on: January 19, 2023, 07:45:03 AM »
https://www.semafor.com/article/01/18/2023/republicans-worry-a-national-sales-tax-bill-would-be-a-political-gift-for-democrats

this would be a  political blunder

what is fair (though crats and media will demonize that too)
would be flat tax

and cut out most if not all loopholes

in MHO


Crafty_Dog

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Re: Tax Policy
« Reply #1110 on: January 19, 2023, 02:11:18 PM »
Flat tax would leave us with the IRS in place with all the attendant legal accounting obligations.

Getting rid of EVERTHING and its attendant corruption, getting rid of the paperwork/accounting burdens should have one helluva lot of appeal for a lot of people.

I am concerned that for most citizens, the intelectual groundwork/familiarization has not been done really.

This will need someone with the character, communications skills, and testosterone to lead the charge. 

Who do they have in mind? 

DougMacG

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Tax Policy, Fair tax, flat tax, 9-9-9
« Reply #1111 on: January 20, 2023, 11:15:59 AM »
"Fair" Tax, from a conservative and a practical standpoint, requires the repeal of the 16th amendment, which is never, never, never, never, never going to happen.

https://constitution.congress.gov/constitution/amendment-16/#:~:text=The%20Congress%20shall%20have%20power,to%20any%20census%20or%20enumeration.

If we had 2/3 of the Congress and 3/4 of the legislatures supporting tax reform, we wouldn't be talking about tax reform, we'd already have it.

With that in mind, any Republican talk of a consumption tax is a gift to the democrats.

Additional point on the fair tax, we are asking conservatives to favor a 30% tax on all housing payments, food etc. and to support selectively issued, massive "prebate" checks to anyone the Democrats want. Illegal aliens for example, aren't they all low in reported income?  What could go wrong?  Come to think of it, if there were no income tax, how would you know who is low income?  Start removing major categories like housing, food, medical, and the tax rate goes up astronomically.  That is conservative?That is reform?  That is a political winner? I don't think so.

Great point by crafty on the flat tax:
'Flat tax would leave us with the IRS in place with all the attendant legal accounting obligations."

Right!

My problem is with the words longer than the holy Bible that define calculating income in a complicated business. Anybody can multiply 99% or 0% times income to calculate the tax. For example, flat tax would still define inflationary gain as ordinary income.

Main point again is that, if we had majorities or supermajorities willing to remove the progressivity in the tax code, we wouldn't have a tax problem.

I'm no longer against the progressivity in the tax code. The argument is, how steep should that slope be?

Given the above, in my mind, we are stuck with the current structure of the tax apparatus.

We still should scrap the entire tax code and rewrite it in the current structure to be simple and fair, and to prohibit unelected bureaucrats and technocrats from writing enforceable laws.

As in the side, one day I decided to rewrite the tax code. I came up with, I thought, the greati dea of continuously variable tax rates, from some minimum tax rate up to some statutory maximum. Long story short, it didn't work. There isn't some easy, magic way out of this.

Best policy idea I remember was Herman Cain's 9-9-9.  The good part was the focus on low rates, to minimize the distance for the economic activity. But it failed the test describe above. It opens the Federal consumption tax without closing off any others. What do tax rates do after they are initially enacted? Go up, go up, go up. We don't need more political gifts for Democrats. We give them enough already.
« Last Edit: January 20, 2023, 11:39:40 AM by DougMacG »

DougMacG

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Re: Tax Policy
« Reply #1112 on: January 20, 2023, 12:27:44 PM »
Taxation happens in the context of spending. See budget summary (2022).

https://fiscaldata.treasury.gov
2022 United States federal budget:
Taxes = $4.896 trillion (actual) 19.6% of GDP
Total expenditures   $6.272 trillion (actual) 25.1% of GDP
Deficit   $1.375 trillion (actual) 5.5% of GDP

The problem is the spending. 

For the conservatives, any proposal that raises less than $5 trillion isn't serious.

For the Left, any proposal that punishes production, and all of them do, will not raise more revenue, no matter how high they hike the rates.  Our experience before and after 2008 has proven that.

For an admission of that, see Charlie Gibson interview with candidate Barack Obama, April 2008.

https://taxfoundation.org/obama-and-gibson-capital-gains-tax-exchange/

If not through Obama 2008, avid readers of History have known since 1377 that more and more taxes levied don't necessarily bring in more and more money:

"In the early stages of the state, taxes are light in their incidence, but fetch in a large revenue...As time passes and kings succeed each other, they lose their tribal habits in favor of more civilized ones. Their needs and exigencies grow...owing to the luxury in which they have been brought up. Hence they impose fresh taxes on their subjects...[and] sharply raise the rate of old taxes to increase their yield...But the effects on business of this rise in taxation make themselves felt. For business men are soon discouraged by the comparison of their profits with the burden of their taxes...Consequently production falls off, and with it the yield of taxation."

  - Ibn Khaldun, 'The Muqaddimah' (introduction to history) books.google.com
https://firehydrantoffreedom.com/index.php?topic=1467.msg63568;topicseen#msg63568
« Last Edit: January 20, 2023, 01:10:30 PM by DougMacG »

ccp

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Re: Tax Policy
« Reply #1113 on: January 20, 2023, 01:10:56 PM »
Great point by crafty on the flat tax:
'Flat tax would leave us with the IRS in place with all the attendant legal accounting obligations."

I disagree

get rid of deductions and everyone pays same rate

can do it on post card .

I suppose either way
the LEFT will scream hoot stamp their feet that this hurts the poor and is a "tax break" for the rich  ignoring who really pays the bulk of taxes as it is.

« Last Edit: January 20, 2023, 01:44:18 PM by ccp »

Crafty_Dog

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Re: Tax Policy
« Reply #1114 on: January 20, 2023, 02:39:18 PM »
"The problem is the spending."

Yes, AND the problem are the constrictions on Supply due to the tax code.

"I disagree.  Get rid of deductions and everyone pays same rate.  Can do it on post card."

Umm, for a simple wage earner perhaps, but what about businesses and people that have costs and revenues?

DougMacG

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Re: Tax Policy
« Reply #1115 on: January 20, 2023, 03:59:31 PM »
Great point by crafty on the flat tax:
'Flat tax would leave us with the IRS in place with all the attendant legal accounting obligations."

I disagree

get rid of deductions and everyone pays same rate

can do it on post card .

I suppose either way
the LEFT will scream hoot stamp their feet that this hurts the poor and is a "tax break" for the rich  ignoring who really pays the bulk of taxes as it is.

Not for me.  I've had years where the return is 22 pages and the bottom line rounds to zero.  The calculation of income IS the return. It doesn't fit on a postcard unless they take my word for net income.
« Last Edit: January 20, 2023, 04:11:22 PM by DougMacG »

Crafty_Dog

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Re: Tax Policy
« Reply #1116 on: January 20, 2023, 04:01:50 PM »
And net income requires keeping track of both costs and revenues.

DougMacG

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Tax Policy, cutting the taxes of the rich on the backs of the poor?
« Reply #1117 on: January 20, 2023, 04:50:17 PM »
Adding this to the discussion:

Eliminating a federal tax return doesn't make the state income tax (and return) go away. State return requires "all the federal schedules ". 

My state tax was greater than my federal tax the last or 3 years.  It's also a longer return because it's the state plus the federal.

On the flat tax, it comes down to politics, not just math.  The flat tax rate will be somewhere between 0 and the highest current tax rate. They used to shoot for something like 19%. Now write the attack ad against that. The super rich will have their taxes cut in half while the poor have an infinite percentage increase, from zero to 19 or 20%.  It won't sell.

The best policy I think is to be flatter and fairer, but every time they made the progressivity steeper, they also made it irreversible.  To reverse it to overcome the impossible, the attack ad that writes itself.
« Last Edit: January 20, 2023, 05:53:01 PM by DougMacG »

ccp

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Re: Tax Policy
« Reply #1118 on: January 20, 2023, 05:29:25 PM »
 The flat tax rate will be somewhere between 0 and the highest current tax rate. They used to shoot for something like 19%. Now write the attack ad against that. The super rich will have their taxes cut in half while the poor have an infinite percentage increase, from zero to 19 or 20%.

but do the super rich really pay ~ 39 %

but what about the proposed *federal income tax*

How would THAT work with businesses?

this is what I read Republicans propose





 

DougMacG

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Re: Tax Policy
« Reply #1119 on: January 20, 2023, 06:02:46 PM »
"but do the super rich really pay ~ 39 %"


In terms of reported income, for individuals, every dollar over 42,000 is taxed in the twenties percent and every dollar over 170 is taxed in the thirties.  In the higher incomes, in the bad states, add close to 10% state income tax to that.

As far as I know, we don't have exclusions like they had for the Kennedy and even the Reagan tax reforms. I only know of one loophole, and it doesn't apply to me.

ccp

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Re: Tax Policy
« Reply #1120 on: January 20, 2023, 08:00:57 PM »


"but what about the proposed *federal income tax*"
I misspoke

I meant what about the proposed Federal *SALES* tax some Republicans are pushing

I can hear 1,000 miles away the Dems saying how it would hurt the poor and the rich will not notice.....

"As far as I know, we don't have exclusions like they had for the Kennedy and even the Reagan tax reforms. I only know of one loophole, and it doesn't apply to me."

I didn't know .  I must not be super rich.

Crafty_Dog

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WSJ: Politically the Fair Tax bill is really stupid
« Reply #1121 on: January 21, 2023, 08:34:13 PM »
he GOP’s Fair Tax Masochism
A national sales-tax proposal is a gift to Democratic campaigns to retake the House.
By The Editorial BoardFollow
Updated Jan. 20, 2023 6:35 pm ET

Rule No. 1 in the legislative handbook is to make your opponent take the tough votes, but House Republicans may be reading it backwards. They’re set to vote on a national sales tax that won’t become law but will give Democrats a potent campaign issue.


The plan is called the Fair Tax and its premise is simple: Replace every existing federal tax with a new national tax on sales. The most recent version, introduced by Georgia Rep. Buddy Carter, would slap a 23% tax on “gross payments.” That rate includes the sticker price for any purchase plus the tax paid, which means the true rate would be about 30%. The Fair Tax rate would be on top of state sales taxes.

The bill would in turn repeal federal taxes on income, payrolls and estates. It would also eliminate the Internal Revenue Service, but hold the applause—it would replace it with a new Sales Tax Bureau and Excise Tax Bureau.

The new bureaucracies would have to keep track of the inevitable exceptions to the tax introduced by politicians that would erode the tax base. A 30% tax on food and healthcare—really? The bill would offset the tax’s regressive nature in part by a hefty new rebate, charmingly titled a “family consumption allowance.”

The Fair Tax is based on the reasonable theory that levies on consumption distort the economy less than our current taxes on work and investment. Killing the income tax also sounds good until you realize that a future Congress could restore it if the Constitution’s 16th Amendment isn’t repealed. The bill tries to dodge this with a provision that would end the sales tax in seven years unless the 16th Amendment is repealed. Good luck with that.

The point is that a consumption tax might make sense if Congress were writing the tax code from scratch. But it isn’t, and we could end up with both a national income and sales tax, the later of which could evolve over time into a value-added tax.

The Fair Tax has been floating around since the 1990s. So why has it shot to the top of the House GOP agenda now? News reports say Kevin McCarthy promised Mr. Carter and Freedom Caucus members a vote on the bill in return for their support in his quest for the Speakership.

Republicans have been mum about the vote’s timing, but Democrats aren’t waiting. “It would raise taxes on the middle class by taxing thousands of everyday items, from groceries to gas,” President Biden said last week. Democratic Reps. Pramila Jayapal and Don Beyer have chimed in on Twitter to call the tax a death blow to middle-class pocketbooks.

These attacks don’t take much imagination when inflation is running hot, and the Fair Tax has hurt GOP candidates before. When tea party Republicans ran on the idea in 2010, Democratic groups ran ads that blasted the sales tax but ignored the other tax cuts. Few voters listen to a second sentence after they hear about a 30% tax on everything they buy.

The tax issue is a rare GOP advantage these days, and Republicans would be crazy to squander it with a Fair Tax vote. If Mr. Carter and other supporters insist on a masochistic vote, the GOP could invoke the Freedom Caucus’s demand for “regular order” and kill the Fair Tax in the Ways and Means Committee.

DougMacG

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Re: Tax Policy, No tax on inflation
« Reply #1122 on: January 22, 2023, 06:53:07 AM »
Sweeping tax reform in a way that is beneficial to the American people is off the table until the White House and Senate change hands.  Everything happening in the meantime in this regard in the Republican House is about positioning and messaging, so far all negative.

What can or should they do now?

1.  Attack all taxation on inflation.  Get the message out, government can't profit from inflation.  The moral hazard is just too great for government to continue and accelerate inflation, and inflation is killing us.

2.  Simplify.  The tax code needs to be far simpler and more understandable.  Attack the complexity and put the blame for it on Democrats.  It's true and it's good political messaging.

3.  Stop the expansion of the IRS. The taxpayers are not the enemy.

4.  Cut spending first before cutting taxes.  More than a trillion a year needs to come off the top before the growing burden of federal taxation can be alleviated.

One extra point, pin inflation on the Dems.  "We all knew...".  Getting Democrats out of power is the first step in tax reform. Make them own the results of their policies. Fighting amongst ourselves and other missteps and distractions is how they avoid that.
« Last Edit: January 22, 2023, 07:00:40 AM by DougMacG »

ccp

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Phil Gramm on C span ' The Myth of American Inequality '
« Reply #1123 on: January 22, 2023, 07:35:29 AM »
https://www.c-span.org/video/?522780-1/the-myth-american-inequality

I only was able to see about 15 to 20 minutes of this but

it sounded really interesting
what I got out of it is some groundbreaking "data crunching" (it is all how you interpret and get the data )


has found wealth inequality if not near what the simple census data shows
when  you account for wealth transfer and other factors
such as the people at the  bottom quintile of incomes work only 17 hrs
 and are employed , I think he states ~ 37% of the time
while higher incomes work longer hours get less free benefits and taxed more
so in the end there really is less of wealth gap between the top 5th and bottom 5th of Americans

Additionally the take away is that the government welfare programs take away work incentive at the bottom and leads to resentment at higher quintiles say at least above the second quintile


the Feds and economists
 always use Census data to determine wealth " inequality

Crafty_Dog

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Re: Tax Policy
« Reply #1124 on: January 22, 2023, 01:07:50 PM »
"what I got out of it is some groundbreaking "data crunching" (it is all how you interpret and get the data ) has found wealth inequality if not near what the simple census data shows when  you account for wealth transfer and other factors such as the people at the  bottom quintile of incomes work only 17 hrs  and are employed , I think he states ~ 37% of the time while higher incomes work longer hours get less free benefits and taxed more so in the end there really is less of wealth gap between the top 5th and bottom 5th of Americans

"Additionally the take away is that the government welfare programs take away work incentive at the bottom and leads to resentment at higher quintiles say at least above the second quintile"

Well summarized.

DougMacG

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It's official, Republican tax cuts paid for themselves
« Reply #1125 on: January 23, 2023, 01:12:17 PM »
It's official, Republican tax cuts paid for themselves.

https://www.washingtonexaminer.com/restoring-america/courage-strength-optimism/its-official-trumps-tax-cuts-paid-for-themselves

This should go in the media thread, since they won't cover it.

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9th Circuit upholds Wealth Tax
« Reply #1126 on: January 26, 2023, 03:11:29 AM »
The Ninth Circuit Upholds a Wealth Tax
The Supreme Court should review the ruling, which ignores constitutional limits on the taxing power.
By Christopher Cox and Hank Adler
Jan. 25, 2023 4:11 pm ET


The 16th Amendment authorizes the federal government only to tax income, but some members of Congress would love to tax wealth as well. That is widely understood to be unconstitutional, but a recent ruling from the Ninth U.S. Circuit Court of Appeals upholding a form of wealth tax could upend that conventional wisdom if it is allowed to stand.

The case, Moore v. U.S., involves a unique provision of the 2017 Tax Cuts and Jobs Act, which imposed a one-time retroactive tax applicable to individual U.S. shareholders of foreign corporations. Under previous law, U.S. taxpayers had to pay taxes on overseas corporate income when that income was repatriated to the U.S. in the form of dividends. The 2017 act abolished the tax on overseas income, bringing the U.S. tax system into line with those of most other developed countries. But it also created a “mandatory repatriation tax” on the corporation’s undistributed income since 1986, payable not by the corporation but its shareholders.

The result was that without selling their stock or receiving a dividend, U.S. investors were deemed to have received “income” and suddenly became liable for the new tax.

The plaintiffs are a couple, Charles and Kathleen Moore, who purchased 11% of a small foreign corporation in 2005. The Moores were passive investors, never participating in management of the corporation. The corporation never paid dividends. More than a decade after their investment, they suddenly became liable for a hefty tax bill under the new law, which applied to any shareholder with an interest of more than 10%.

The Ninth Circuit’s three-judge panel ruled that it didn’t matter that the Moores never received any money from their investment. A dividend, stock sale or other realization event wasn’t necessary, the court said, because there is “no set definition of income under the Sixteenth Amendment.” That is a remarkable concept: The operative word in a key provision of the Constitution has no fixed meaning. The ruling upends a bedrock principle of taxation, which is that to create taxable income, there must be a transaction, or “realization.” That’s what distinguishes an income tax from a tax on property or wealth.

The Moores petitioned for a rehearing by an 11-judge panel of the Ninth Circuit but were denied. Four judges dissented from the denial, noting that based on Supreme Court precedent, federal case law and the history of the 16th Amendment, ordinarily a realization event must occur in order for there to be taxable income. The Moores plan to seek Supreme Court review.

Much hangs on the future of this case. If Moore is allowed to stand, Congress would have a green light to tax every U.S. investor in a domestic corporation in the same way. There would be no constitutional bar to requiring that shareholders pay income tax on their proportionate share of accumulated and undistributed earnings of every corporation in which they, or even their 401(k) plan, hold stock.

That isn’t all. With Moore as precedent and no realization requirement to bound the meaning of “income,” Congress could extend the income tax to include unrealized asset appreciation of any kind. Stamp collections, coin collections, art on the living-room wall—all suddenly would be sources of “income” without yielding the taxpayer a cent. What’s more, since appreciation, unlike realization, is a constantly changing process, the frequency of measurement of the “income” would be at the whim of Congress and the Internal Revenue Service.

Moore provides the Supreme Court the opportunity to rule that when the states ratified the 16th Amendment in 1913, they didn’t give Congress unchecked authority to tax. Accepting the case for review would also permit the justices to address the Constitution’s limits, if any, on retroactive taxation. The Ninth Circuit’s three-judge panel ruled that even though the mandatory repatriation tax reaches back to 1986, it doesn’t violate the right to due process under the Fifth Amendment. In 1938 and again in 1994, the Supreme Court upheld tax laws that reached back one year, but the justices have never considered decadeslong retroactivity.

The Ninth Circuit approved of the extraordinary retroactivity of the Mandatory Repatriation Act because otherwise, in its view, shareholders of corporations with undistributed earnings would achieve a “windfall” by not paying taxes on “earnings that have not yet been distributed.”


Yet the long-established rationale for a separate corporate-level tax is that it prevents undistributed earnings from going untaxed. Further, those earnings would be taxed again whenever paid to shareholders, just as are dividends of all companies.

There is one more extraordinary feature of the tax law at issue in Moore. The rate of tax varies depending on the corporation’s balance-sheet liquidity. The greater the ratio of liquid to illiquid assets, the higher the tax rate. That distinction gives away the game. Liquidity is unrelated to income—it is solely a function of assets and liabilities. This is a tax on a corporation’s balance sheet, passed through to individual shareholders.

The Moore case will solidify, revitalize or obliterate the long-established norm of federal income taxation that a realization event is required before there is taxable “income” in the constitutional sense. If the justices accept the case for review, they can finally lay to rest the notion that the 16th Amendment is based on a term with “no set definition.”

What if they decline? The Ninth Circuit’s dissenters answered that question: “Divorcing income from realization opens the door to new federal taxes on other types of wealth without the constitutional requirement of apportionment.”

Mr. Cox served as chairman of the Securities and Exchange Commission, 2005-09, and a U.S. representative from California, 1989-2005. Mr. Adler is a professor of accounting at Chapman University.


ccp

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Dems bomb the "fair tax" on national sales tax
« Reply #1127 on: January 26, 2023, 05:39:02 AM »
of course :

https://www.msn.com/en-us/news/other/democrats-hammer-gop-plan-to-impose-national-sales-tax-abolish-irs/ar-AA16K00R

the usual

"this hurts the poor more "

(and indeed that probably is true ! - not that I am against it since I am not for progressive taxation )

DougMacG

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Re: 9th Circuit upholds Wealth Tax
« Reply #1128 on: January 26, 2023, 06:47:08 AM »
From the article:
"The Ninth Circuit’s three-judge panel ruled that it didn’t matter that the Moores never received any money from their investment. A dividend, stock sale or other realization event wasn’t necessary, the court said, because there is “no set definition of income under the Sixteenth Amendment.” "

  - Depends on what the meaning of income is?

They mean, depends on what the changing meaning of income is.  Income has had clearly defined meaning since 1913, as the article goes on to point out.

A 3 judge panel, or one swing vote in the 9th Circus changes that?  In what kind of country does that happen?

As opposed to the property tax, another wealth tax, the sales tax and income tax are attached to transactions, money changing hands, where the government can rather easily demand and take what it decides is it's share.

With unrealized gains, the taxpayer must pay the tax out of other income, often paying the tax with after tax income.  After double taxed income.

What if the taxpayer doesn't have extra 'other income'?  Then the tax forces the sale of the asset, changing the ownership of the asset against the will of the (former) owner.

Think family farm, for example.  On top of your property tax and all other escalating costs, if large corporations (and foreign powers) are buying up similar properties and driving up the tax value of the rest, this has the power to force the rest to sell to them too. Great.

In America, we used to have at least some protections against that.

The family farm was an example.  Same applies to ALL individual or family owned businesses and assets.  If all your life is invested in building one business, you don't have other income to pay for what government thinks is the value of your asset.  They are already fully taxing the income of the business. This is on top of that.

On my street where lakeshore values have gone crazy, one neighbor whose example is even worse than mine, he paid 33k for his house in the early 1970s.  His property tax is now 28k per year.  The old properties are in high demand by rich people for teardown.  His tax per year is on track to pass his entire purchase price, every year, in a couple years.  Now put a "wealth" tax on top of that.  A couple million of 'wealth' times say 10% would bring hundreds of thousands in taxes.  Out of what?  The property does not produce any income.  By definition.  If it did, we already have at least two taxes on that, federal and state, plus city fees.

Why don't we just handcuff and remove the guy from his home or business, maybe with swastika uniforms, if we want him out and the richer and more powerful and connected in.

The question is, what kind of country do we want?!  And who really owns your asset, you or the government?

How about gold?  It goes up, you must sell some to pay the tax every year. How much do you have in the long run if they take some every year? How about crypto?  They already ask on form 1040 if you bought or otherwise acquired any crypto.  If it goes up, you owe.  It goes down, you think you're going to get a full tax deduction?  Dream on.  Deductions are called loopholes and are all under attack.

Do people still think the elections that determine who picks and confirms who sits in the Supreme Court don't matter?

We don't care if Fetterman, Biden and Warlock et al decide who decides what the meaning of income is?!?!

It used to be, if it moves, tax it.  Now it's if it exists, tax it.

Pretty soon only the extremely rich will be able to afford being rich.
« Last Edit: January 26, 2023, 07:09:55 AM by DougMacG »

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Re: Dems bomb the "fair tax" on national sales tax,
« Reply #1129 on: January 26, 2023, 09:06:57 AM »
of course :

https://www.msn.com/en-us/news/other/democrats-hammer-gop-plan-to-impose-national-sales-tax-abolish-irs/ar-AA16K00R

the usual

"this hurts the poor more "

(and indeed that probably is true ! - not that I am against it since I am not for progressive taxation )

Yes.  "Of course."

I'm not for progressive taxation either but losing all elections sucks.

From the article:
"The Fair Tax Act, sponsored by Rep. Earl L. “Buddy” Carter (R-Ga.) and introduced this month, would do away with income, payroll, estate and gift taxes, and instead impose a 23 percent national sales tax. It would also eliminate funding for the IRS after fiscal 2027."

  - Um, no it wouldn't.  Rescinding the 16th amendment would and isn't the least bit realistic.  Whomever we elect in 2026 will determine what the 2027 IRS budget will look like.  Proposing a 30% national sales tax, bound to be misread, didn't help our cause.

I assume this vote (McCarthy opposes) was part of the Speaker negotiations. Unforced errors. First level thinking.  Self inflicted wounds. Maybe we are the stupid party.   (

Crafty_Dog

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Re: Tax Policy
« Reply #1130 on: January 26, 2023, 02:15:11 PM »
"The Fair Tax Act, sponsored by Rep. Earl L. “Buddy” Carter (R-Ga.) and introduced this month, would do away with income, payroll, estate and gift taxes, and instead impose a 23 percent national sales tax. It would also eliminate funding for the IRS after fiscal 2027."

  - Um, no it wouldn't.  Rescinding the 16th amendment would and isn't the least bit realistic.  Whomever we elect in 2026 will determine what the 2027 IRS budget will look like.  Proposing a 30% national sales tax, bound to be misread, didn't help our cause.

=====================

Where is the 30% number coming from?

My condensed assessment-- very good idea but needs lots of groundwork familiarizing the American people with the idea first.

DougMacG

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Re: Tax Policy
« Reply #1131 on: January 26, 2023, 04:21:28 PM »
"The Fair Tax Act, sponsored by Rep. Earl L. “Buddy” Carter (R-Ga.) and introduced this month, would do away with income, payroll, estate and gift taxes, and instead impose a 23 percent national sales tax. It would also eliminate funding for the IRS after fiscal 2027."

  - Um, no it wouldn't.  Rescinding the 16th amendment would and isn't the least bit realistic.  Whomever we elect in 2026 will determine what the 2027 IRS budget will look like.  Proposing a 30% national sales tax, bound to be misread, didn't help our cause.

=====================

Where is the 30% number coming from?

My condensed assessment-- very good idea but needs lots of groundwork familiarizing the American people with the idea first.

Some say 23%, some say 30%. Depends on whether you measure inclusive or exclusive.  If calculated like a sales tax, it's 30% added to the total.

https://buddycarter.house.gov

https://www.vox.com/policy-and-politics/2023/1/26/23563563/fairtax-national-sales-tax-kevin-mccarthy


Crafty_Dog

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Re: Tax Policy
« Reply #1132 on: January 26, 2023, 04:24:17 PM »
Confused.

Aren't total federal revenues approximately 20% of GDP?

DougMacG

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Re: Tax Policy
« Reply #1133 on: January 26, 2023, 06:19:59 PM »
Confused.

Aren't total federal revenues approximately 20% of GDP?

I will have to find a source for the math.  Is the tax on everything? Business purchases, labor, services, government purchases, investments, homes?

It has to raise enough to replace all federal taxes, estate, corporate, individual, FICA, etc.  And then you still have state income taxes in 42 states.

DougMacG

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Re: Tax Policy, fair tax inclusive, exclusive
« Reply #1134 on: January 27, 2023, 07:06:21 AM »
exclusive, inclusive math:

$100 goods + 30% tax = $130 you pay

Of that $130 you pay, 30/130 (23%) is tax.

Proponent/sponsor Rep Carter calls 30% a myth because 23% sounds smaller, but both are true and opponents calling it a 30% national sales tax is true by all current conventions.

Why is that greater than something like 19.8% (?) current actual, I can't remember, but think it has to do with government purchases paying government taxes being a no gain event.  These numbers come from the sponsor's site.

The whole thing is a non starter because:
1. You can't repeal the 16th amendment.
The rest of the reasons are academic, moot.
2. The prebates are a mess.  How do you know who is low income, everyone might want to be.  What is the amount that gets mailed out monthly, quarterly? How many checks? How is it updated? What could go wrong?
3. You can't repeal progressivity.  Read any poll, such as 2022 midterms.
4. 30% is too big an incentive for black market, gray market, underground economy, barter, buy from friends or do without.
5. Start making exceptions (food, clothing, medicine, doctor visits) and that rate that's already too high spirals upward.  What is the tax on free health care, 30% times nothing, or again, government pays government the tax on underlying value and no money is raised.
6. What percent of Americans favor zero income tax on trillionaires?  Not even all trillionaires agree on that!

Proposing new taxes without any indication the old ones will go away is not playing with a little fire; it's more like playing with massive nuclear weapons.

There isn't some easy, magical or painless way to pay for massive, out of control spending. The first step toward a less painful and intrusive tax system would be to spend far less. The cradle to grave government spending approach doesn't lend itself to having a vibrant private sector or a low impact tax system, ever!

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Re: Tax Policy, fair tax inclusive, exclusive
« Reply #1135 on: January 27, 2023, 07:16:58 AM »
exclusive, inclusive math:

$100 goods + 30% tax = $130 you pay

Of that $130 you pay, 30/130 (23%) is tax.

Proponent/sponsor Rep Carter calls 30% a myth because 23% sounds smaller, but both are true and opponents calling it a 30% national sales tax is true by all current conventions.

Why is that greater than something like 19.8% (?) current actual, I can't remember, but think it has to do with government purchases paying government taxes being a no gain event.  These numbers come from the sponsor's site.

The whole thing is a non starter because:
1. You can't repeal the 16th amendment.
The rest of the reasons are academic, moot.
2. The prebates are a mess.  How do you know who is low income, everyone might want to be.  What is the amount that gets mailed out monthly, quarterly? How many checks? How is it updated? What could go wrong?
3. You can't repeal progressivity.  Read any poll, such as 2022 midterms.
4. 30% is too big an incentive for black market, gray market, underground economy, barter, buy from friends or do without.
5. Start making exceptions (food, clothing, medicine, doctor visits) and that rate that's already too high spirals upward.  What is the tax on free health care, 30% times nothing, or again, government pays government the tax on underlying value and no money is raised.
6. What percent of Americans favor zero income tax on trillionaires?  Not even all trillionaires agree on that!

Proposing new taxes without any indication the old ones will go away is not playing with a little fire; it's more like playing with massive nuclear weapons.

There isn't some easy, magical or painless way to pay for massive, out of control spending. The first step toward a less painful and intrusive tax system would be to spend far less. The cradle to grave government spending approach doesn't lend itself to having a vibrant private sector or a low impact tax system, ever!

Proposing new taxes without any indication the old ones will go away is not playing with a little fire; it's more like playing with massive nuclear weapons.

Crafty_Dog

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Re: Tax Policy
« Reply #1136 on: January 27, 2023, 08:23:48 AM »
Agreed that by proper conventions the number is 30%.

Not exercising the power of the 16th Amendment does not require its repeal.

Of course the repeal of other taxes is the core of this idea.

Still not comprehending how matching current revenues (approx 20% of GDP) could require a 30% rate.

DougMacG

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Tax Policy, 80% federal tax? California cannibus
« Reply #1137 on: January 30, 2023, 01:41:13 PM »
https://www.sfgate.com/cannabis/article/jerry-garcia-cannabis-leaving-california-17741843.php

I don't know why they call it legal cannabis. It's not legal until you pay the tax.

DougMacG

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Fair tax continued
« Reply #1138 on: February 01, 2023, 11:10:27 AM »
quote author=Crafty_Dog
...
"Not exercising the power of the 16th Amendment does not require its repeal."
...
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My view, if you don't repeal the income tax amendment, it will come back - in addition to the new consumption taxes that for the moment took its place.

I'm not sure why you see that differently.  Doesn't all of western Europe have both a consumption tax and an income tax?

If we somehow ever win an election, cf. 2016 and tax reform 2017, isn't it also a certainty we will lose an election sometime after that. (To state the obvious.)

Unfortunately and ironically, when growth policies work, attention shifts to other priorities.

While nobody likes the tax code as is, the vast majority in polling, support progressive taxation.

Almost no one thinks Warren buffett's secretary should be taxed at the same rate as her boss.  It's a non-starter politically.

Because of that, both fair tax and flat tax are moot, unicorns and distractions from currently realistic proposals, IMHO.

Also, tax cutting and tax rate cutting will not be center stage in the era of 1.6 trillilso,on dollar deficits.

Realistic proposals:
1. No new taxes.
2. Clean up the tax code.
3. Cut spending first.
4. Return tax law to the lawmakers. Depower the bureaucracy.
5. No tax bills reach the floor that don't enhance economic growth.
6. No tax on inflation, ever.




« Last Edit: February 01, 2023, 11:23:26 AM by DougMacG »

Crafty_Dog

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Re: Tax Policy
« Reply #1139 on: February 01, 2023, 04:06:49 PM »
"Not exercising the power of the 16th Amendment does not require its repeal."
...
-----------
My view, if you don't repeal the income tax amendment, it will come back - in addition to the new consumption taxes that for the moment took its place.

I'm not sure why you see that differently.

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My words to not contradict yours.