Until the tax codes are changed, this is really quite irrelevant.
You still have a tax system that is far too complex and provides too many incentives and opportunities for individuals and corporations to avoid paying whatever tax rate may apply to their income/gross profits.
Joe wrote: Thats exactly right Omni, its the deductions and loopholes (same thing). Not rates.
Of course this has been known forever and is not likely to change.
Exactly, never going to change. Congress & politicans will lose their influence and campaign donations if they can no longer hand out tax breaks and subsidies.
At most, we will see some window dressing without real changes.
And the OP's plan? Doesn't make any sense. If you are Paris Hilton, not working but spending all your income and part of your wealth on cars, purses, and shoes, you can be creating more jobs than the small business owner who hires somebody to sweep the street outside his business. Little difference between direct hiring and indirect hiring.
Thomas Sowell: There are no solutions, just trade-offs.
And if you are buying perfume from France, clothing from Mexican and Indonesian sweat-shops, and shoes & handbags from China, tell me again how this indirect consumerism by someone like Paris Hilton creates jobs in the US?
SS109 wrote: And the OP's plan? Doesn't make any sense. If you are Paris Hilton, not working but spending all your income and part of your wealth on cars, purses, and shoes, you can be creating more jobs than the small business owner who hires somebody to sweep the street outside his business. Little difference between direct hiring and indirect hiring.
While I'll agree there may be some indirect effect on jobs, the wealthy already have plenty of money for discretionary spending. If you let them keep more, they tend to save it and not spend it. The opposite applies for lower income and middle class people. Giving it to the government will also have an indirect effect on jobs, not that I suggest giving more to the government. They spend about 40% on entitlements which won't do much other then hiring some paper pushers, but they also spend about 40% on defense and discretionary spending which would add some jobs.
And my proposal isn't talking about a huge tax increase here, just going back from 35% to 39.6% for the top bracket for those making over $250K and not hiring anybody. That group did very well during the Clinton years with that rate. And right now that group is paying close to a historic low in total effective federal income tax, around 19% as I recall (after all the deductions).
My proposal isn't what I would do as a "final" solution, though. I was just trying to come up with something within our current way too complicated tax code. I prefer something more along what Joe mentioned. Reduce the tax brackets to just two or three. Get rid of all deductions, shelters, and credits.
One huge problem I have with the Ryan (and Pawlenty) plan, though, is that it doesn't tax capital gains or dividends at all. That would be a huge tax savings for the wealthy, many of whom get most of their income through capital gains. Let's face it, government isn't going to accept significantly less revenue (as we see now), so if you cut taxes for the rich you are going to have to make up for it by taxing someone else even more.
So I'd suggest taxing capital gains at a lower rate (say 15-20%) until you reach a certain large income (say $1 million or so). If over that income your capital gains get taxed at a rate closer to your upper tax bracket, or maybe 10% less (you are taking risk and many investments creating capital gains do help the economy).
LadyJazzer wrote: And if you are buying perfume from France, clothing from Mexican and Indonesian sweat-shops, and shoes & handbags from China, tell me again how this indirect consumerism by someone like Paris Hilton creates jobs in the US?
So now progressives embrace the isolationism they once railed against? My memory must be failing me, but I could have sworn that one of the main reasons the progressives supported the creation of the League of Nations and the United Nations was that it would tie all nations together economically and thus make future wars less likely. And now that this economic umbilical cord is a reality, only now do they understand the folly of their idealism? Only now do they understand that while free trade may stop wars it also reduces the value of the labor and production of the more advanced nations when they have to compete directly with emerging nations? Only now do they see that after selling to other nations the machines necessary to become an industrial nation like themselves that they must purchase the results of the industry of the nation they sold the machines to in order to be repaid the loans issued with which to purchase the machines?
And they say conservatives are clueless.............
LadyJazzer wrote: And if you are buying perfume from France, clothing from Mexican and Indonesian sweat-shops, and shoes & handbags from China, tell me again how this indirect consumerism by someone like Paris Hilton creates jobs in the US?
So now progressives embrace the isolationism they once railed against? My memory must be failing me, but I could have sworn that one of the main reasons the progressives supported the creation of the League of Nations and the United Nations was that it would tie all nations together economically and thus make future wars less likely. And now that this economic umbilical cord is a reality, only now do they understand the folly of their idealism? Only now do they understand that while free trade may stop wars it also reduces the value of the labor and production of the more advanced nations when they have to compete directly with emerging nations? Only now do they see that after selling to other nations the machines necessary to become an industrial nation like themselves that they must purchase the results of the industry of the nation they sold the machines to in order to be repaid the loans issued with which to purchase the machines?
And they say conservatives are clueless.............
Gee, no demagoguery here!
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LadyJazzer wrote: And if you are buying perfume from France, clothing from Mexican and Indonesian sweat-shops, and shoes & handbags from China, tell me again how this indirect consumerism by someone like Paris Hilton creates jobs in the US?
When I was working retail, the margins were huge. We would buy it for $5 and sell it for $10 so at least 40% of the money stayed in this country creating jobs. And the boutiques where Ms. Hilton shops have even higher margins.
Thomas Sowell: There are no solutions, just trade-offs.
PrintSmith wrote: Sorry Joe, can't go along with you on taxing the consumer twice. Once when they earn the money and once again when they spend it. Either collect income taxes from the businesses or the population, not both. If you want the businesses to collect the taxes, all well and good, eliminate the individual income taxes. If you want to tax individual income, all well and good, but don't tax the individual twice by hiding the second one in the cost of the goods and services they consume. I would much prefer a government that taxed me once and then kept their grubby hands outta my pockets thank you very much. Tax my consumption or tax my income, not both.
The idea of double taxation is something to consider. Corporate profits are taxed twice, once as net income, then again as dividends or cap gains to shareholders. Also state and local property and sales taxes, if not deducted (itemized). So that is an argument to keep those deductions. It is a very complex calculation to figure out taxable income vs. gross income. I just like the idea of lower marginal rates as an incentive to work and earn, instead of search for deductions and loopholes. More producers, less lawyers and accountants.
The problem with allowing any deductions/credits, is the politicians can't control themselves. Start with 3 or 4 common sense deductions, and soon there are 100's and tax accountants up the wazzoo.
The reason I like gas taxes is they are broadly applied to users. Easy to track revenue and expenditures.
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