How would you reform the tax code?

[MarginOfError]

Flat Tax.

Isn't tithing a great example.

Tithing actually is not a great example, although it would be if the only thing the Church asked for was tithing. But the Church also asks for fast offering, humanitarian aid, PEF, missionary donations, etc. The truth of the matter is that the Church does ask for more from the wealthier. It also instructs leaders administering welfare to use government welfare sources as much as possible--as much as the Church takes in, it still isn't enough.

So if you want to make an analogy of the Kingdom of God to the kingdoms of men, then the kingdoms of men would not be supported by a flat tax any more than the Kingdom of God is.

[miztrniceguy]

MoE, the excise tax on gasoline would stay in place with consumption tax, and even increased. Since we would have more net pay, we would be able to afford mor tax on gas to pay for roads, etc.

[Elphaba]

I admit I have no idea how taxes should be collected. I do know two things:

1. I am completely against taxing consumption for necessary items.

2. If it weren't for SSA, I'd be out on my a**.

Elphaba

[Hemidakota]

1. A flat tax? Everyone would pay a fixed percentage of their income.

Flat tax only works if the people are in-charge of it or a permanent 10-percent taxation. A good example is the UK VAT tax. It simple doesn't work.

[Traveler]

Some of the problems that Americans do not seem to understand about taxes and the evolutions of governments powerful enough to demand taxes.

1: Tax cuts in one area (like income) are more likely (always) to cause other taxes to be increased. Never in the history of the world has a government voluntarily cut its own budgets. Some have gotten smart enough to realize that by cutting certain taxes that tax revenue can, in certain circumstances, will increase.

2: Taxes raised for legitimate program will quickly be diverted to wasteful or corrupt programs. This is a natural evolution of power in government. How many times have we been told that the money collected or spent is not enough to solve the problem. During the Kennedy – Johnston great society era Americans were promised that if 2% of the GNP were diverted to social programs that poverty would no longer exist. The truth is that we are now diverting close to 20% and poverty is worse now – and our current government has initiated a stimulus that will double this percent over the next 10 years.

3: How to tell if a politician is lying – when they say that if elected they will cut taxes or tax burdens. Never in the history of the USA has the government – by edict – has never deliberately reduced its revenue sources.

4: The two greatest sources of government waist in revenue management come from, and in this order: First – surplus revenues and Second – debt.

I submit that any changes in the taxing system that does not address the mentioned issues the tax problems will only get worse. Many a shifty politician has insinuated that if we limit taxes that spending will be curtailed. Two things are needed for tax cutting of wasteful and corrupt programs.

First – spending must be limited and programs not allowed to grandfather. Any program that does not meet fiscal targets must be automatically canceled. It is this principle in capitalism that maintains efficient competition.

Second - any surplus must be returned to the people in the same proportions in which they were collected. Any other method invites graft and corruption.

The Traveler

[Traveler]

A note about flat tax. If every American was assessed a flat tax to match government spending the amount would not be anywhere 10% as so many suggest – it would be closer to 50% to 60%.

Also the suggestion concerning corporate tax. No corporation can operate at a loss. In a competitive world a corporate tax does two things – forces jobs to less tax restrictive countries and hides the tax burden on all citizens associated with the goods and services provided the corporations paying the tax.

The Traveler

[a-train]

I can see where you get the idea to abolish the SSA, Medicare and Medicaid, but abolishing the IRS seems to imply that you want to abolish taxation entirely. If you actually believe that, then I'll have to call you a fool.

If the income tax were the only tax, then I could see how that would follow, but less than 1/3 of government revenue is appropriated through income tax.

This is a typical argument raised against opponents of the IRS. They are misrepresented as opponents to ALL taxes and ALL government spending. Those who misrepresent us either do so willfully, or are simply living in some state of total misinformation wherein they assume that the only taxation in America is the income tax. Either way, they are quite incorrect. They always talk about things like bridges crumbling either without knowing or by simply denying that the vast majority of them are built with funds not raised by the IRS.

My history teacher went on a tangent yesterday about how stupid IRS opponents are. He smuggly said: "I like having people, you know, sort of WATCH OVER THE AIRPORTS!" I simply said: "The FAA is funded by excise taxes on the airline industry, not the income tax." He promptly changed the subject.

-a-train

Edited April 16, 2009 by a-train

[Traveler]

If the income tax were the only tax, then I could see how that would follow, but less than 1/3 of government revenue is appropriated through income tax.

This is a typical argument raised against opponents of the IRS. They are misrepresented as opponents to ALL taxes and ALL government spending. Those who misrepresent us either do so willfully, or are simply living in some state of total misinformation wherein they assume that the only taxation in America is the income tax. Either way, they are quite incorrect. They always talk about things like bridges crumbling either without knowing or by simply denying that the vast majority of them are built with funds not raised by the IRS.

My history teacher went on a tangent yesterday about how stupid IRS opponents are. He smuggly said: "I like having people, you know, sort of WATCH OVER THE AIRPORTS!" I simply said: "The FAA is funded by excise taxes on the airline industry, not the income tax." He promptly changed the subject.

-a-train

Just wondering a-train, would you agree that any hidden tax in which a citizen does not know that they are paying is a repressive tax by all definations on all citizens especially the less affluent that must rely on the goods and services for which they must pay taxes indirectly?

I wonder what your history teacher would say about that?

The Traveler

[a-train]

Just wondering a-train, would you agree that any hidden tax in which a citizen does not know that they are paying is a repressive tax by all definations on all citizens especially the less affluent that must rely on the goods and services for which they must pay taxes indirectly?

I wonder what your history teacher would say about that?

The Traveler

I don't know that a "hidden tax" becomes less repressive as one discovers it, thus I don't think it is more repressive so long as it is hidden.

Defining "hidden tax" can be difficult. For example:

Suppose a local retail outlet pays a tax in connection with its business license issued by the city (such is the case in my area). The tax, paid annually, is part of the broader cost structure of the business and is not levied strictly on goods sold. Thus, while we could devide the tax payment by the total sales of the business for the year and arrive at a percentage-of-dollar-sales figure for it, we would find that this might be so negligible that the amount would be less than a penny per dollar or so volatile that we could only figure the amount in retrospect. In which cases, the customer would either not take into consideration the tiny fractional taxation or could not be notified of what portion of the sale price covers the tax in advance.

The additional argument here is that the taxation was not on the product at all, but on the business entity selling it. Therefore, while it should be taken into consideration by the business as it prices items, it does not actually effect the market for those items. So is it a "repressive hidden tax"?

A great deal of Americans do not know that employers must match their social security withholdings. That IS a hidden direct tax. For those of us who know how it works, it unfortunately doesn't become less repressive. Of course, business owners who can afford to incorporate will take earnings in the form of draws which do not incur social security taxation. And those with enough capital to live on dividends on investments in public equities will pay no social security at all.

I personally like transparent taxation. For example, I like toll-roads. I travel from Kansas City to Dallas from time to time and take the Kansas Turnpike. That is the nicest part of the trip. Smooth open roads with great stripes and nice clean rest stops are the boon of the Turnpike. But there is a literal line in the concrete at the end of it over which one passes into Oklahoma where the concrete turns rough and which marks the annoying construction that irks the traveler for a whole state.

With a toll road, the revenue required to upkeep it is easily adjusted to an appropriate level and the users of the roadway are the funders thereof. Those who live in the area but do not use the roadway are not forced to fund it. The argument is made that they do fund it when they buy goods shipped to their area on trucks which traveled the toll-road. This is true, but it at least lowers that expense proportionally to the extent that the road is traveled by foreigners paying their tolls.

I also like the idea of taxing business entities at least better than taxing individuals for the sheer fact that the volume of taxpayers to track would be dramatically reduced. That said, transparent excise taxes collected and paid by providers of goods and services are far more efficient than any direct income taxes. We could implement such a tax and utilize the respective state sales tax structures for collection while cutting the costs of the IRS completely from the budget.

If we follow the Keynesian model, it would suggest that consumers would largely spend their newfound income (from the abolition of the SSA and the IRS) at the same marginal propensity as before. Thus, savings would go up, but I don't know that this is bad.

Imagine how such a change would play into business considerations when American operations no longer involved any corporate tax or withholdings for employees. I would expect new capital flows into the country.

The reality is that we already have enough excise taxes to fund the federal government without adding any new ones. We simply need to reduce the cost of government.

-a-train

[Elphaba]

My history teacher went on a tangent yesterday about how stupid IRS opponents are. He smuggly said: "I like having people, you know, sort of WATCH OVER THE AIRPORTS!" I simply said: "The FAA is funded by excise taxes on the airline industry, not the income tax." He promptly changed the subject.

You would soooo scare me if I were your teacher.

Elph

[MarginOfError]

If the income tax were the only tax, then I could see how that would follow, but less than 1/3 of government revenue is appropriated through income tax.

This is a typical argument raised against opponents of the IRS. They are misrepresented as opponents to ALL taxes and ALL government spending. Those who misrepresent us either do so willfully, or are simply living in some state of total misinformation wherein they assume that the only taxation in America is the income tax. Either way, they are quite incorrect. They always talk about things like bridges crumbling either without knowing or by simply denying that the vast majority of them are built with funds not raised by the IRS.

My history teacher went on a tangent yesterday about how stupid IRS opponents are. He smuggly said: "I like having people, you know, sort of WATCH OVER THE AIRPORTS!" I simply said: "The FAA is funded by excise taxes on the airline industry, not the income tax." He promptly changed the subject.

-a-train

My statement that you are opposed to all taxation and all government spending is derived by your statement that the IRS should be abolished. You must recognize that the IRS oversees the collection of excise, gift, and estate taxes in addition to income tax (both individual and corporate). So, if you abolish the IRS, you abolish the organization that collects, documents, and tracks that money. To abolish the IRS would effectively abolish taxation as there would be nothing to collect any taxes or any kind (unless of course you create a new organization by a different name, but something about a rose comes to mind).

Now, if you want to revise your statement to “abolish the income tax,” then I think you’re more fairly representing your own views, assuming I correctly understand what you're saying.

[rameumptom]

I prefer the FAIR Tax (Americans For Fair Taxation: Americans For Fair Taxation), but will gladly settle for a flat tax.

Still, the issue ain't just what type of tax. The issue is getting DC to stop spending money like drunken sailors. They don't need to raise taxes or change them as long as they can continue printing money out of thin air, or borrow.

I don't mind paying some taxes, as long as I get a good bang for my buck, and we only spend what we take in.

[Elphaba]

Reading this thread, it occurs to me that even the few people here with their various suggestions as to how to reform the tax code don't agree with each other.

Yet many of you insist the government should do it your way.

This thread has been very illuminating.

Elphaba

[bytor2112]

Off subject a bit.......I am against a Nationalized Healthcare program, mainly because I believe the government will ruin the quality of health care that we receive. That being said, I am appalled that some people suffer terribly because they can't afford treatment or surgery for serious, life threatening illness when our government wastes billions of our tax dollars and funnels money in the form of foreign aid.

[Guest]

Reading this thread, it occurs to me that even the few people here with their various suggestions as to how to reform the tax code don't agree with each other.

Yet many of you insist the government should do it your way.

This thread has been very illuminating.

Elphaba

I don't see where in this post they said, "i insist it be done my way". I think this is an exchange of ideas that could possibly work with more emphatic comments about what surely doesn't work. I don't see anybody here who are experts or pretends to be one. Just a bunch of people piling on their wish lists...

In a room of 20 people, you will always get different suggestions. That's a good thing. It's bad if you have a room of 20 people and all of them agree that the current system is bad, complete with heated bashing, but none of them can give an alternative solution.

[Elphaba]

I don't see where in this post they said, "i insist it be done my way". I think this is an exchange of ideas that could possibly work with more emphatic comments about what surely doesn't work. I don't see anybody here who are experts or pretends to be one. Just a bunch of people piling on their wish lists...

No offense, but you're new. You haven't been here long enough to know what we all obssess about. Give it six months, then we'll talk.

In a room of 20 people, you will always get different suggestions. That's a good thing. It's bad if you have a room of 20 people and all of them agree that the current system is bad, complete with heated bashing, but none of them can give an alternative solution.

My point exactly.

Elphaba

Edited April 17, 2009 by Elphaba

[rameumptom]

I don't see where in this post they said, "i insist it be done my way". I think this is an exchange of ideas that could possibly work with more emphatic comments about what surely doesn't work. I don't see anybody here who are experts or pretends to be one. Just a bunch of people piling on their wish lists...

In a room of 20 people, you will always get different suggestions. That's a good thing. It's bad if you have a room of 20 people and all of them agree that the current system is bad, complete with heated bashing, but none of them can give an alternative solution.

Actually, I am THE expert. So, when the country becomes humble and wise enough to listen, I'll carry everyone through the difficult times to our new and free Utopia.

Two rules I'd like to see instituted, which the Founding Fathers all thought were excellent ideas: 1. having the Senate elected by their appropriate state legislatures (gives the states more power, the Feds less), and 2. Term limits for Congress (this was actually among the first 12 Amendments sent to the states to vote upon, and could have become part of our Bill of Rights).

[Elphaba]

Actually, I am THE expert. So, when the country becomes humble and wise enough to listen, I'll carry everyone through the difficult times to our new and free Utopia.

See what I mean?

I told anatessa to give it six months. I should have known better, as six days is probably more like it.

Elphaba

[Palerider]

Actually, I am THE expert. So, when the country becomes humble and wise enough to listen, I'll carry everyone through the difficult times to our new and free Utopia.

Two rules I'd like to see instituted, which the Founding Fathers all thought were excellent ideas: 1. having the Senate elected by their appropriate state legislatures (gives the states more power, the Feds less), and 2. Term limits for Congress (this was actually among the first 12 Amendments sent to the states to vote upon, and could have become part of our Bill of Rights).

we need term limits real bad....I could think of plenty of names on both sides of the aisle that need to go away....:)

[MarginOfError]

we need term limits real bad....I could think of plenty of names on both sides of the aisle that need to go away....:)

I'm not sure term limits would work, actually. I mean, it's hard enough to find anyone worth while to put in Congress, can you imagine having to find new people all the time.

Instead, I think it would make more sense to have limits on the number of consecutive terms. If a person serves two terms in the House, they have to wait two more terms before running again. This would allow them to be able to work without worrying about reelection, but also allow them to run again if people liked them. In the interim, the public is likely to forget they did in the House the first time around.

But, of course, my suggestion works on the assumption that Congressmen and Senators would make better decisions if they didn't have to immediately worry about reelection. I'm not entirely sure that there's any assumption under which they would make good decisions.

Having thought about it, I think I should just be the Grand Supreme Dictator of the United States of America and I can tell everyone what to do.

[rameumptom]

Term limits are simple and ensures no one gets in that stays in and ends up corrupted by the system. There are many who entered the Congress with dreams of doing good stuff, who after decades, are only peddlers for whatever their lobbyist constituents want from them.

Better to have all people in for one term, two tops, and then seek out another decent person who hasn't been tarnished by all of it.

[a-train]

My statement that you are opposed to all taxation and all government spending is derived by your statement that the IRS should be abolished. You must recognize that the IRS oversees the collection of excise, gift, and estate taxes in addition to income tax (both individual and corporate). So, if you abolish the IRS, you abolish the organization that collects, documents, and tracks that money. To abolish the IRS would effectively abolish taxation as there would be nothing to collect any taxes or any kind (unless of course you create a new organization by a different name, but something about a rose comes to mind).

Now, if you want to revise your statement to “abolish the income tax,” then I think you’re more fairly representing your own views, assuming I correctly understand what you're saying.

The IRS was created for the purpose of collecting an income tax in 1862. Before its creation, all other federal taxes were collected without it. Now, I suppose it is true that we could keep all federal tax collection under the roof of the IRS and abolish particular taxes including the individual income tax. That said, I think we should abolish not just the individual income tax, but also the estate tax, corporate income taxes, gift taxes, and employment taxes. More importantly, we need to end the massive spending which gives the impetus to collect these outrageous tax revenues. In a nutshell, we need to abolish the Welfare/Warfare State and embrace individual freedom.

-a-train

[lilered]

I am in favor of a flat tax on gross income. To me, this would be a fair way to apply a tax principle. Using as a basis of 10%, then if one makes, say 15K, then their tax bill would be $1500, if one makes 1.5 M annually, they would pay $1500, (no deductions). I am against using net income because their are numerous different deductions that could be withheld that everyone would not have nor afford. Example 401K, medicial, dental, stock purchases, etc.

The arguement that only businesses find loopholes for taxes is erroneous. I know several folks who hide income from the government in various ways. I.E. Small home businesses such as crafts, sewing, baby sitting, homecare, house sitting, garage sales.

For business I am not sure how a flat tax would work . Everyone I know who runs a small business has a much greater opportunity for using their business for personal gain. I.E. Company Vehicles for all company officers (Husband and Wife joint owners), buying things thru the busines, then taking them home for personal use. I.E. Boats, Summer homes, Motorhomes, Trailers, Tools, etc.

[a-train]

I am in favor of a flat tax on gross income.

But why tax a person's income at all? We could run government without taxing income. We did for decades. Why tax income at all?

-a-train

[MarginOfError]

But why tax a person's income at all? We could run government without taxing income. We did for decades. Why tax income at all?

-a-train

Simple--I like the services provided by taxing income.