Sunset sound

[john12ax7]

Again, have a look at the facts in the link I provided.

The joke's on you if you think something as silly as facts will convince people in this crowd.

 

[AnalogPackrat]

Interesting that you didn't answer the actual question.

A flat tax is a better solution. It is as fair as any other and has benefits like simplicity ( which leads to fewer loopholes and lower administrative overhead in public and private sector) and forcing skin in the game for everyone. Why is it fair to take a higher percentage from a minority of people (who are already funding most of government)?

You obviously do not understand this topic. So maybe stop accusing others of not understanding?

Right.

 

[living sounds]

Maybe work hard to make your own wealth instead of being jealous of, or offended by, that of others. Life simply isn't "fair" the way you think it should be. Wanting to control others (including what they do with their wealth) is a sure sign of authoritarianism.

Back with the ad hominems. And (incorrect) assumptions. And putting words in my mouth.

The rigged system is "controlling others". You just lack the capacity and/or will to realize it.

 

[AnalogPackrat]

Back with the ad hominems.

Where? You seem overly sensitive to simple questioning. I guess you'll interpret that as an attack, too.

And (incorrect) assumptions. And putting words in my mouth.

Clarify by answering instead of whining.

The rigged system is "controlling others". You just lack the capacity and/or will to realize it.

No, I see that. Every system made and run by humans is flawed. The difference is the net effects (positive and negative) of these flaws. Some systems are better for prosperity and growth while others lead to waste and stagnation (or worse). Pragmatism > idealism.

 

[cyrano]

There is a simple solution to taxes. An American economist has done the math. Abolish all taxes on wages and on wealth. Increase VAT (sales tax). Those who live a simple life, pay just a little. Those who like to spend fortunes, pay a lot. No sales tax on food. High sales tax on luxury goods and goods that cost society a lot, like cars.

In fact, it's so simple a lot of people don't believe it. It should be complicated, no?

 

[ruffrecords]

There is a simple solution to taxes. An American economist has done the math. Abolish all taxes on wages and on wealth. Increase VAT (sales tax). Those who live a simple life, pay just a little. Those who like to spend fortunes, pay a lot. No sales tax on food. High sales tax on luxury goods and goods that cost society a lot, like cars.

In fact, it's so simple a lot of people don't believe it. It should be complicated, no?

Much too simple. There has to be exceptions beyond just food. What about healthcare, education. Surely anything that promotes the health, and skill of the work force should be free?

Cheers

Ian

 

[living sounds]

There is a simple solution to taxes. An American economist has done the math. Abolish all taxes on wages and on wealth. Increase VAT (sales tax). Those who live a simple life, pay just a little. Those who like to spend fortunes, pay a lot. No sales tax on food. High sales tax on luxury goods and goods that cost society a lot, like cars.

In fact, it's so simple a lot of people don't believe it. It should be complicated, no?

This is a regressive tax system. The poor have to spend all their income, so they pay a much higher rate of their income in tax than the wealthy, who only actually spend a small portion of it and can keep the rest in investments that grow in value. And they can spend it outside the system (other countries). And surely will find other ways around it.

There is no simple solution. And none with unintended consequences or massive invasions of privacy.

I don't want to live in a world of digital central bank currencies with total transparency of transactions. Some plans seem to point in that direction. But the way humans behave we sooner or later land in a situation like the current one, with massive inequality and escalating societal conflicts.

 

[AnalogPackrat]

In the US too much money is made from keeping things complicated. As I understand it, in a lot of countries many people don't need to file taxes, the government already has all the information so you just get a bill or check depending on what you owe or are due refund.

Obama tried to bring this to the US. It wouldn't even change the tax code, just unburden many from the time and expense of filing. It was of course shut down.

The last thing I want is that. Do you really trust the government with that kind of power? Who checks the IRS? And all the details about what you might be able to do to legally lower your tax burden are hidden because you didn't get to check with your iwn tax SW or accountant. And new laws get passed and hey, your income tax is higher. But don't worry, citizen. We at the IRS have figured it out for you. Trust us, the deductions are correct. Also, send us another $10k by April 15th or we'll take $12k from what ever of your accounts we choose.

Simplify the damned thing and reduce wasteful government spending.

 

[Matador]

Why is it fair for the wealthiest to pay a lower percentage?

A progressive system is linear when you factor in the marginal utility of a dollar.

 

[AnalogPackrat]

Why is it fair for the wealthiest to pay a lower percentage? Why is there so much outrage when poor people get a break, but not comparable outrage when the wealthiest get a break?

I'm not advocating for breaks. Flat tax. I asked why it's fair for the top 2-3% to pay the majority of taxes and no one has answered.

 

[JohnRoberts]

There is a simple solution to taxes. An American economist has done the math. Abolish all taxes on wages and on wealth. Increase VAT (sales tax). Those who live a simple life, pay just a little. Those who like to spend fortunes, pay a lot. No sales tax on food. High sales tax on luxury goods and goods that cost society a lot, like cars.

this is old news but sales taxes are regressive (opposite of progressive), hitting poor people harder than the rich. The poor spend a larger percentage of their income on routine sustenance spending.

In fact, it's so simple a lot of people don't believe it. It should be complicated, no?

nah
======
Taxation is the wrong tool to fix imagined societal inequities.

Taxation needs to raise only enough revenue to support the basic government functions, like border security..... not giving illegal immigrants debit cards.

Sadly taxation these days is only viewed as a mechanism to punish wealthy people for their success. Modern monetary theory suggests that government can just borrow/print all the money that they can imagine spending.

Of course opinions vary....

JR

 

[AnalogPackrat]

It's a pointless discussion when everything continues to be lumped together. I have friends in the 1%, they get hammered when it comes to taxes.. Their bosses, who are 0.1%+, pay less. That to me is more outrageous than a poor person receiving help.

Honest question: by what specific mechanisms are the 0.1% legally avoiding taxation that impacts the 1%?

I am familiar with getting hammered as the last two years before I retired I was in the 1% and in CA where state income tax took another 10-12% (for which we received poor schools, poor roads, and crappy gov service at the DMV, etc.).

The problem with having only a minority of people paying the majority of taxes is that those paying less are not as upset about the lack of service/infrastructure as they would be if they saw their reasonably equal share being wssted. Too many are happy to keep taking and not contribute. They keep voting for the give-aways and the politicians who support it. The progressive tax system is a big part of the problem.

 

[Matador]

There is some truth to that and a legitimate debate to be had.

You could do something like a baseline cost of living at 0% and then a fixed % above that.

Or just have a continuous function that reaches an asymptotic limit (always thought multiple stepoed tax brackets were ridiculous.)

I would also eliminate all exemptions, credits, deductions, etc. All income is income. Take income, multiply by function, done.

100% agreed. In addition, cost of living is good to consider given it can span two or three orders of magnitude just crossing over a state border.

Person A make $100k and pays 20% and Person B makes $10 million and pays 20%, that might seem fair.

Except person A has $50K, and person B has 8 million.

 

[JohnRoberts]

Another aspect would be the more money you have, the less you need money, so the easier to hoard wealth and assets and not pay taxes. Put 1 million in the S&P 30 years ago, it's about 10 million today. Give it to your heir and the 9 million gain is tax free due to stepped up cost basis. The heir would also then collect qualified dividend income, about $150k a year, at lower tax rates than someone having a job. In a few decades this could then be passed on again.

So millions are made, all at an overall tax rate of a few % and dropping. (Notice the shift to share buybacks). Meanwhile how much has the guy doing roofing in July been paying? An order of magnitude higher for hard labor. It's beyond ridiculous when you delve into the details.

These are just non-esoteric things a layman can do. Haven't even touched on more complex things or the detrimental effects of something like fiat money.

That sounds easy.... I converted my IRA to Roth years ago and paid taxes on the full contributions at that time, so I would be tax free later. Wouldn't it be funny if they started taxing the asset value (wealth) not income.

I've found the easiest way to enjoy low tax rates is not make much income. For this to work you need to live in a modest low cost area. The last time I checked I couldn't find a cheaper place to live than right here in small town MS.

JR

 

[cyrano]

There are very few very wealthy people who got rich by hard work. It's basically "quantité négligeable".

And those who inherited their wealth, their forefathers didn't get rich by being honest and friendly.

Besides, some of the rich have asked to be taxed. A lot of them even told us they pay no taxes at all. So it's hardly unfair to make the wealthy pay a higher ratio as they can hire experts to avoid taxes.

And then there are the most wealthy: the big corporations. I really don't see why they wouldn't pay a lot more taxes, especially for the pollution they cause. All it takes is some worldwide cooperation. And it's just that that gets sabotaged time and time again by the US...

It's not about intelligence or even business smart if you want to get rich. It's about access to capital and belonging to the right family or group. Once you own a few billion, making money is easy.

There are exceptions to the rule, like the Johnson and Philips families, but there aren't many. In fact, the only reason why Bill Gates got to where he is now, is because he's a descendant of a family of bankers. He was able to take on IBM since he had his daddy backing up. IBM knew they couldn't sue him for what he did. If he would've been your average America country boy, they'd have sued him into oblivion.

 

[cyrano]

Basically don't be an employee who receives w2 wages. Things like stock based income can receive favorable capital gain treatment. You can setup as an S Corp, do the same work, but are then considered a business and get all kinds of write-offs and deductions available. Retirement account limits go up.

All this isn't strictly a 1%, 0.1% thing. It's just that the higher you go the more options that are generally available. I am just scratching the surface here.

That's not even the core of the matter. If you're really wealthy, you'll borrow money. That's deductible and easily used to create more money. Another trick is you give a loan to a foreign subsidiary. Again deductible. That loan never gets paid back. The tax services can't easily check that, since payback is years into the future. And usually the foreign subsidiary will go broke, so the money's basically gone. Only, the subsidiary already lent the money to another subsidiary. That's why it went broke. Etc.

The law has been changed here very recently. Up until now, there were thousands of companies that had their head office in Brussels. All it required was half a person as personnel and an address. You could find very small offices in Brussels very cheaply. These head offices never paid much taxes, since their operational subsidiaries were outside of the EU. You can hire a specialised lawyer to do all of that. Less than 10.000€ startup fee and less than 4.000€ running costs per year.

 

[AnalogPackrat]

Another aspect would be the more money you have, the less you need money, so the easier to hoard wealth and assets and not pay taxes. Put 1 million in the S&P 30 years ago, it's about 10 million today. Give it to your heir and the 9 million gain is tax free due to stepped up cost basis. The heir would also then collect qualified dividend income, about $150k a year, at lower tax rates than someone having a job. In a few decades this could then be passed on again.

So millions are made, all at an overall tax rate of a few % and dropping. (Notice the shift to share buybacks). Meanwhile how much has the guy doing roofing in July been paying? An order of magnitude higher for hard labor. It's beyond ridiculous when you delve into the details.

These are just non-esoteric things a layman can do. Haven't even touched on more complex things or the detrimental effects of something like fiat money.

I'm aware of all of those things and have participated in several. Not seeing the big problem, honestly. Cap gains at 15-20% (plus more in some states that also collect at that level) is non-trivial. Those only earn when invested in businesses that succeed and employ others.

I was an independent contractor for a couple of years (before CA ruined that with AB-5). Never set up an S-corp, but I can tell you that it's no cakewalk being independent or running a small business. I had to pay the entire 15% S.S./Medicare rather than the usual 50-50 split with employer. While my SEP-IRA contribution limit was about 3x the 401(k) limit, I did not receive employee matching nor any bonus/RSU. To earn as much as I did as employee with those benefits I had to charge a large hourly rate (yes, I understand the fully burdened cost of a full time employee) and that all showed up as 1099 income. My taxes were not lower.

Oh, and don't forget medical insurance. At the time I was thin on cash, had a mortgage, prop tax, etc. Thanks to the ACA, insurance rates, which were already high, increased further. I decided that my healthy lifestyle made it worth the risk to go uninsured and pay the uninsured penalty for two years rather than $1200/mo in insurance I rarely used. I paid out-of-pocket for health care and usually could negotiate a lower fee because no paperwork was needed.

Stock is not tax free. Restricted Share Units, the common way to provide incentive pay these days, is taxed as income when the shares vest. When sold, capital gains (or losses) are calculated if they were held for a year post-vest, or as income otherwise (short term gain).

People accumulating wealth is not a terrible thing. The extra homes they have employ people in construction, design, and maintenance. Their "luxury goods" do the same. They pay property tax and fuel tax. If there's a legal dodge, who wouldn't take it? Simplify the tax code to reduce gaming.

I also know people in the 0.5-0.1% including one of my best friends. I've known him for 25 years. He's a few years younger than I am. He didn't finish his BS in CompSci, but is one of the sharpest SW guys I know. He's worked at a series of startups, only one of which was semi-successful. He didn't get rich there. He saved and bought his first home and a couple of rental properties during those years.

He ended up at a big tech company as a low level manager about 14 years ago. That's where he made it. He still works long hours. Has bought more rental properties (outside of CA). Likely retiring soon in his mid-50s like I did. We worked for it. We made mistakes, learned from them, and moved on. We paid our taxes and made our charitable donations, lived within the law, lived within our means. But now we're wealth-hoarding rich bastards who should pay more. Pffft.

 

[pucho812]

If the government can print money at whim to pay for things, then why even tax anyone anything?

 

[AnalogPackrat]

It depends how the wealth is accumulated. Look at what happened just recently with pandemic money.

I opposed the stimulus money. It was obviously a stupid idea and now you can see why. Overly complex "solutions" 1) fail in unexpected ways and 2) are ripe for gaming. You claim to want less government, well add this bad outcome to your list of justifications.

Some wealthy people were gifted money to buy 2nd, 3rd, or more properties. Giving wealthy people money is a good thing because they can then employ people to take care of it?

I'm not supporting government giveaways (aka wealth redistribution) of any kind.

If someone gives me a house I will gladly hire a maintenence crew.

See above.

All this ftee money to the wealthy then also priced honest working people out of the market, setting them back years from purchasing a home.

As did shutting down businesses that then had to let employees go. Big stupid government is the main problem.

In the worst cases people were priced out of housing entirely, homelessness exploded, as well as its associated problems as evidenced by this thread.

Again, thank your governor and the others like him.

Capitalism is a good thing, it's the best way to grow the economic pie. But we have a system of grift.

We enable that grift with overly complex and large government. Government is rarely the best solution, and when it is, it must be constrained. We've failed to do that for some 80-90 years and here we are, reaping the "rewards."

There has been a systematic gradual theft of wealth from honest working people going on for decades. The pandemic turned it into a step function.

I don't disagree. I think two big problems need to be addressed. 1) Corporations should not have the same rights as people. They are not citizens. 2) Money is not speech. Implement stricter and simplified campaign finance regulation. I don't have a problem with high wealth, but we've allowed that wealth to easily buy power. That is and always has been something to avoid: concentration of power in too few people.

 

[AnalogPackrat]

Ok, so what do we do about what has already been given away? There is a portion of society that was gifted 3rd base to the detriment of everyone else. It doesn't make sense to simply say no more freebies, play ball. The logical thing is send them back to the batters box with everyone else, and then you can announce no more freebies, play ball.

Water under the bridge along with all the billions gone to welfare and similar programs. What is it with the continual attempts to rehash and "correct" everything that we now deem "bad" that happened in the past? You can't erase history or right past wrongs. Pragmatism is dead.