Tax Reform - 1950s Tax Code

[Army of GOD]

I can only imagine how large tgd's boner is with all of this tax talk


I should bring back my tax comics

[thegreekdog]

Ha... poor old Bernie - "moving towards" - cracks me up. When did he say that? 1789?

I can only imagine how large tgd's boner is with all of this tax talk


I should bring back my tax comics

Agreed on both counts.

[PLAYER57832]

OK, from the outset, I disagree with your lumping stocks, stock dividends and sales profits together. I also disagree with your assessment of "double tax", though its sort of a semantic discussion.

I don't think I lumped stocks, dividends, and sales profits together. I guess a basic understanding of the Internal Revenue Code is necessary here and I should not assume everyone knows it.

You did not specify, but part of my issue is that there should not be so many distinctions. Out tax code needs to be seriously simplified. You should not have to have an advanced degree and years of experience just to understand the tax codes.

As to your second sentence, it is not something with which you can disagree. It is fact. Corporations have owners. Those owners are shareholders, usually individuals; if the owners are entities, the owners of those entities are individuals (etc.). In any event, the ultimate owners of any business are individuals. So if a corporation earns $100 of income, that income is taxed at the corporate level. If that $100 (less taxes) is distributed to the owner, an individual, it is taxed again to that individual. Hence, it is taxed twice. If, however, the business is a partnership (or other passthrough entity), the $100 is taxed once, at the individual level.

I am not actually saying you are wrong, just that putting this out as a major problem is way off base. Begin with the fact that a partnership assumes full liability, oftentimes even into personal possessions over and beyond the business. Corporations are heavily shielded and stockholders are shielded even more. Stockholders only pay taxes when they actually take a payout. Not getting into the other products because I am talking more general issues, not specifics.

Our whole current tax structure is more or less based on the idea that we need to encourage production, use of resources, and sales of ... anything at all. My argument is that whole concept is just wrong, and this is far from just my idea.

I think the tax code works that way to a certain extent. Non-cynics would say that the tax code also works as a public policy encouraging device. For example, we have non-profit entities (or exempt organizations). As another example, we have credits and deductions for environmentally friendly products and activities. Depending upon Congress or the president, these public policies may be different. However, most politicians want to encourage some sort of manufacturing and/or technology jobs. I find this weird since the US economy is mainly a service economy, but whatever.

i would say it should and could, but doesn't in any really effective way.

One of the biggest changes I might like to see is that while I think EVERYONE should pay some taxes, even people getting benefits(more of a psychological issue than a real cost/benefit issue) we should consider adding in things like volunteer service as a potential component, particularly for lower income individuals.

Having everything in our system is tied to money is itself a big problem. That makes sense to those making the policies because they tend to be people oriented toward making lots of money, as a value choice. The problem is that none of this advances society. Take an extreme example... should we celebrate Mother Teresa, Bill Gates, Einstein, John Muir ... or maybe all of the above. I would argue that Bill Gates is currently the one who is far above everyone else right now, but that the world could more easily do without him than the others (and those are not necessarily even the best examples, but enough to give the drift of what I mean.

Anyway, here are some things I would like to see:
1. include some volunteer time along with money for taxes.
2. Tie taxes better to expenses/costs.
Examples:
----a tax on ALL shipping to help pay for roads, rails, airports, harbors, etc.

---- a tax on ALL "wrapping and packaging" materials, higher for items not readily recyclable/reusable to pay for garbage disposal and recycling

---- a broad, low point of sale tax along with specific sales taxes designed to pay specifically for costs inherent in the production or use of various products. Example.. alcohol taxes would go toward medical, law enforcement, fire as well as research. Taxes on restaurants and fast foods would help support things like school lunch programs.

---- more "point of production" taxes. All products would be taxed at some rate, but some things would be taxed more highly. Base products -- raw goods, minerals, timber, etc should be taxed at the very highest rate, (with a significant portion of the tax going to mitigation of damages/inherent impacts of the item. These taxes would be in addition to penalties and point of sale type taxes. Things like minerals that are not reproducible should be taxed at a particularly high rate. (right now, its almost the opposite) Things like timber that take a long time to reproduce should be taxed, but also protected. I would change that rate to tax when harvested and sold, rather than the current "steady" tax that has to be paid whether timber is harvested or not (I would allow bigger entities with huge holdings to perhaps pay yearly installments like today, but smaller holders should not be taxed unless they actually harvest.) In many cases, holders of natural areas should get a tax bonus by NOT harvesting..because the benefit to society as a whole is worth payment. (many of these might work like living trusts that would pay out while a person and their spouse are living, then would revert to the government--either park, refuge, forest, etc. when they die. It could include a provision to give payment to children if the owner dies prematurely, a special life insurance type provision). Manufactured products would be taxed commensurate with the pollution, other outputs. ETC.



---- Social Security (several changes) A. I would double the percentage that lower income people and younger people (often, but not always, the same) have to pay. This extra would be more heavily protected than the standard payment. I would like to see a guaranteed rate similar to the "G" fund for federal employees, perhaps lower, but that money is absolutely guaranteed to the person . However, it would not be available for loan, like the traditional 401K is. People with a higher income might have the option of participating (?).
For younger people, the reason is that anything they pay now will be worth more than larger amounts paid later.
Poorer individuals are those most likely to depend solely upon social security for their retirement.


---- Social Security B Change the way non- working spouses are handled for younger employees (offhand, thinking of 50 and above as the absolute cut off, 30-50 with an option and anyone under 30 required to do the new system, though those numbers could change). Eliminate spousal support completely. Instead, require that married (or civil union joined) individuals pay a 1/4 of current rate toward their spouse's social security contribution. I would actually tie this with a provision to allow some kind of financial "civil union" with other individuals (a disabled relative, for example). There would be no limit to the number of people to whom you could give money, but anyone other than an official spouse might be optional/could be time-limited. Also eliminate the high income limit.

---- Social Security C Separate disability from retirement. Keep the standard program for retirement. Create a new system for disabled individuals. (Folks would be gradually shifted to other system as it takes hold). Initial contributions would start at maybe 1-2% (actuaries would have to value realistically). I believe separating the two will make each more equitable and easier to manage, plus I think they just need to be separate. Retirement should not be impacted by the number of people who apply for disability.

Employer/Employee taxes --- A. I would tax employers who pay less than what would equal $50,000 in wages equivalent of the extra social security tax, medicaid taxes, disability taxes, etc for those employees. Basically, low wages hurt us all, this rectifies a part of that. Although a lot of these workers are younger, I would not adjust for that. It should just be a base rate.

Employer/Employee taxes --- B. Tax employers who hire non-citizens. The rate should be low, but should be intended to compensate for the lost taxes from hiring citizens. For example, they might have to pay extra social security tax (similar to for low income workers), because even though non citizens generally do pay this tax, they don't pay for life and can be said to be limiting the income of a citizen.

Employer/Employee taxes --- C. Instead of the current "all or nothing" type employer paid insurance system, I would create a new type of fund similar to (but NOT the same as) the current Health spending accounts. The money put into this fund would not be taxable. However, there would be no yearly limit. The money would accrue. It could be used to buy insurance or to pay for medical care (of basically any legal type). The employer would be required to contribute an amount proportionally equal to that of a full-time employee for all employees not full-time, not offered insurance. A half-time employee, for example would receive 1/2 the amount of the average employee policy. Employees eligible for insurance could opt for this payment instead. The contribution amount might be a set, state or nation-wide rate or might be based on the companies' own payments, at least to start. Eventually I would like to see the payments the same nation-wide and to have employees able to select policies off the marketplace themselves at group rates. That is, move our health insurance system away from employers and into full employee responsibility.

ETC.
Oh, yeah, and I would have a flat income tax with almost no deductions. I am not even sure I like the "per child" deduction. I would like tax deductions basically JUST for things that will save tax payers money in the long run. An exception (though its not really one if you think about it) would be a tax credit or even subsidy to help keep a few critical industries here. The number of these would have to be small and there would absolutely have to be SOLID expiration/review provisions. I mean things that come in automatically, that don't have to be voted on. For example, steel might be included, but if steel is no longer used in production of tanks, ships, etc.. then it would expire (just as an off-the-cuff example, the details would be tricky).