IRS Drastically Increases Its Audits Of Richest Taxpayers

archer wrote:

residenttroll wrote:

archer wrote: I disagree with a flat tax...it does punish the lower and middle classes which we don't need, especially right now, but I am definitly in favor of redoing our tax code....it has become so complicated that even the tax professionals and the IRS agents cannot fully understand. It needs to be simple, fair, and without loopholes. Those who make modest salaries should be able to pay the minimum owed just as those wealthy taxpayers do now with the help of their high priced tax lawyers and accountants. Corporate tax rates need to be lowered, but again the tax loopholes and complicated codes need to be replaced with a tax code that is simple and applies equally to every corporation.

The flat tax doesn't punish the lower class - huge myth!

:rofl

This from our resident accountant.....right.

ArmChair, I would give you a little education about the current tax vs. flat tax system...but within two posts you would be calling me Tim Geithner - I'll pass.

Here are a couple of things to think about....

1) What's the embedded taxes in food?
2) What's the embedded taxes in fuel?
3) What's the embedded taxes in housing?
4) What's the embedded taxes in cell phones, plain old phone service and cable?


Come on ArmChair, educate me! What would happen to those embedded taxes if we went to a flat tax? What would happen to prices of these products lost their embedded taxes?

residenttroll wrote: Here are a couple of things to think about....

1) What's the embedded taxes in food?
2) What's the embedded taxes in fuel?
3) What's the embedded taxes in housing?
4) What's the embedded taxes in cell phones, plain old phone service and cable?


Come on ArmChair, educate me! What would happen to those embedded taxes if we went to a flat tax? What would happen to prices of these products lost their embedded taxes?

Maybe I need to be educated too, but I don't see what those "embedded" taxes have to do with the flat tax. Are you talking about a value added tax, or national sales tax? A VAT would affect embedded taxes, but I don't see how a flat tax would.

The flat tax (let's assume 17%, which is one number I've heard) would in general increase the tax burden for the middle class (especially those who own homes and take a mortgage deduction which would probably be eliminated). And it would generally reduce taxes for those with very high income (over $1 million or so) since they currently pay 35% federal tax on most of their income.

A middle class person could be in the 25 or 28% tax bracket, but that doesn't mean how much they actually pay in taxes. After taking all their deductions, credits, and exemptions , they might only have a tiny part of their income in the 25% bracket (maybe none, and they go to the 15% bracket), especially if they have a big home mortgage. For example, after I take all my deductions and exemptions, I end up only paying a net tax of around 10%. Just look at your last tax return and divide the actual tax you paid by your adjusted gross income. So for me at least, a flat tax would raise my federal tax by about 70%, assuming the flat tax takes away all deductions and exemptions.

Also, a family of four under the current tax system can make over $50,000 and end up owing zero tax. With a flat tax they'll lose the child tax credit and end up owing tax.

I suppose I could still support a "flat tax", but I think you still need some tax brackets (maybe 3-4) to make it fair, and less a burden on the middle class while less a huge gift to the very rich.

OK, off topic. Maybe we need a flat tax topic?

the nice thing about numbers....you can make them say just about whatever you want them to....most especially if you are trying to screw one portion of the population over another. The proponents of a flat tax claim it levels the playing field for all taxpayers, when in fact it is advantageous to the upper class and the lower class and increases the burden on the middle class. Most economists will tell you that the greater the burden placed upon the middle class the more harm you do to our economy. A flat tax can never be an equal tax because the cost of goods being the same, you are taking substantially more buying power away from the middle class while hardly touching that of the other two classes. Pineinthegrass's post explains much of that nicely.

I won't get into a pissing match with you RT......you believe what you want to believe because you have been told to do so by the conservative powers that be.....the fact that you think they have your best interests at heart does surprise me, but then you may well be in the upper class and a flat tax would be more than welcome. For the majority of this country that sits in the middle it could be catastrophic, severely eroding their ability to buy a home, educate their children, and buy the goods and services that fuel our economy. Be careful what you wish for, as you may yet get it.

A tiered tax system, with limited deductions, based more on what fuels our economy than on special interests seems the most logical way to go. And it needs to be simple, clear, and without loopholes.

A number of flat tax plans I see would provide subsidies to lower income Americans.

Personally I prefer replacing income tax with a VAT tax. Should be a favorite of enviromentalists, people would be encouraged to save, recycle goods, and decrease consumption.

Back to going after high income taxpayers, just because the goverment has passed tax laws doesn't make them just. If we can debate a just war, we should also debate a just tax code, 10% for everyone with no exemptions and make it very easy to file. Instead we have a tax code so complicated the IRS will give you different answers to different question depending on who you call.

If you make over $1-million, then you have CPA's that know the law, and what is--and isn't--legal. (If not, you SHOULD.) Sorry, I won't buy the "unjust laws" b.s. The tax-laws are the same for everybody... You don't like 'em? Change 'em. In the meantime, you break 'em--you pay. Simple.

LadyJazzer wrote: If you make over $1-million, then you have CPA's that know the law, and what is--and isn't--legal. (If not, you SHOULD.) Sorry, I won't buy the "unjust laws" b.s. The tax-laws are the same for everybody... You don't like 'em? Change 'em. In the meantime, you break 'em--you pay. Simple.

Don't agree, the tax laws aren't the same for everybody and can be interpeted many different ways.

And I don't agree with you... The law is the law. Some things can be interpreted differently, (hence the need for CPA's). But even if you were right, then it would behoove one making over $1-million to err on the side of legality, wouldn't it...

LadyJazzer wrote: Interesting... 60 Minutes (CBS) is running a story right now on off-shore tax havens... Hmmmm Some $60 Billion in taxes being hidden offshore, by corporations... Who knew...?

Apparently CBS knows and that means it's not hidden. Besides, if your company earns it's income overseas, why should they not be allowed to keep money out of the USA? Since 2001 95% of what my company makes is with foreign entities. I pay their taxes and then get to pay US taxes as well because I bring everything back into the US. Why should I continue to do that when most of my life is spent overseas? It makes business sense to keep the money offshore and invested in the same currency one uses most of the time. I do not consider that a tax haven at all.

Things like this originate because the US and Philippines are the only two countries that tax their citizens when they work overseas. And if you elect to keep a foreign bank account, you still need to declare it on your taxes. Why should that be? You are not living in the US, you are not putting a drain on the US, you certainly do not get any protection from the US when all hell breaks loose (i.e. Gulf War experiences), you pay a premium for all services performed by the US consulate (try $100 on for size just to get a notarization). Yep, as an expatriate you really get a warm fuzzy feeling about how well the US takes care of you. It's best to keep your money offshore, so when you need help you can at least buy it because it sure as hell is not coming from the USA. Sorry, but those are painfully-earned facts.

If you had actually watched the CBS piece, it was not about "income earned overseas"...It was about creating a "corporate presence" with nothing more than a PO Box at an empty building to manipulate the system and take advantage of the lower tax rates while NOT doing business there. CBS paid a visit to this building and asked one of the other tenants if they knew anything about this company's "alleged" presence, and the response was, "There is a conference room upstairs that they have a sign-up sheet for--but they never use it."

Sorry... I'm not going to go all bleeding-heart for a company whose sole presence is a mailbox, but continues to game the system to hide their income from taxes.

(There were, in fact, 2 or 3 other U.S. "companies", i.e., large corporations, with PO Boxes at the same address and they were doing the same thing. CBS made sure to show the names of the other companies, and gave the numbers that they paid in taxes last year.)

Tax-cheating is still tax-cheating.

LadyJazzer wrote: If you had actually watched the CBS piece, it was not about "income earned overseas"...It was about creating a "corporate presence" with nothing more than a PO Box at an empty building to manipulate the system and take advantage of the lower tax rates while NOT doing business there. CBS paid a visit to this building and asked one of the other tenants if they knew anything about this company's "alleged" presence, and the response was, "There is a conference room upstairs that they have a sign-up sheet for--but they never use it."

Sorry... I'm not going to go all bleeding-heart for a company whose sole presence is a mailbox, but continues to game the system to hide their income from taxes.

(There were, in fact, 2 or 3 other U.S. "companies", i.e., large corporations, with PO Boxes at the same address and they were doing the same thing. CBS made sure to show the names of the other companies, and gave the numbers that they paid in taxes last year.)

Tax-cheating is still tax-cheating.

No, I did not watch it. Guilty as charged. But, don't you feel bad for those companies that are trying to and apparently successfully evade taxes :jk2: There are always some looking to get around the system. Now I need to start thinking..... lol