Fine, eliminate all deductions and credits. Treat all income the same, whether it’s from a W-2 or capital gains. Create 4 or 5 tax brackets, & you have a one page return for all.Then wait for the rebellion.
4my: We grew up poor. Dad worked summers at a second job while Mom raised us kids. DON’T TELL ME THE POOR ARE LAZY!!! Do you think Lindsay Lohan , Paris Hilton and other RICH CELEBRITIES are hard working simply because they get their names in the news? Get your head out of your backside and actually LOOK at what REGULAR people go through! Or maybe read something other than Reagan era political fiction!
No one I know thinks that the government should “take care of” people — we do believe that certain social services are a good idea, both for individuals and for society — social security, public health, highway construction, fire departments, unemployment insurance, a good (single-payer) health insurance system, and welfare when people really have no alternative. I don’t believe people should be paid not to work. Work is good for the soul. Or, better, good work is good for the soul.
It was necessary to delete my original comment because I noticed others had answered the question it proposed very well. I’ll just note the following.^ History of the Income Tax 1http://www.infoplease.com/ipa/A0005921.html^Income Tax and the Civil Warhttp://www.civilwar.org/education/history/warfare-and-logistics/logistics/tax.html^From about.comhttp://history1900s.about.com/od/1910s/a/incometax.htm^That’s the history. How we enact tax reform will depend on thoughtful bipartisan cooperation and the ability of voters to communicate ideas to open minded legislators.Before any one says, “We’re doomed.” realize, it’s not impossible, but it will take voter participation and communication.Respectfuly,C.
“why not one tax bracket…oh wait that would be unfair to the “poor” “read LAZY’”
Due to circumstances beyond my control (involving a future ex-wife and her attorney from hell), I found myself instantly poor. Happened while I was at work; came home and found the house empty and the bank accounts empty. Although the bills were joint, my ex didn’t pay any of them, as she knew I cared more about my credit as a business owner than she cared about hers. In order to continue to remain in good standing with my creditors, I had to continue to make payments for stuff I no longer had. And I had far less income to make that happen.
It taught me a lot. Mostly, what it taught me was how many people made judgments about how I got to be where I was. Sometimes you have to be on the other side to know what the other side is really like.
I truly hope you never have to find out for yourself, but there’s a reason “walk a mile in my shoes” is a common phrase.
“The complaint heard most often is the extremely disparate treatment of income from actual labor (taxed higher) than from investments (why tax it at all they say).”
I’m assuming you’re talking about capital gains as being an unfair tax rate. For reference, the origin of our tax system goes back to the middle ages. Income from your labors was considered your measure of wealth. Selling land or farming equip or personal items to another was considered incidental and not significant to wealth measurement i.e. not taxable at the same rate as labor. .
Fast forward a few hundred years and the first argument for long term capital gains (held longer than one year) is first and foremost they are subject to double taxation. First you work and earn money, are taxed on that income, invest it and then are taxed again when you liquidate the investment. A reduced rate for long term capital gains (the profit) was considered “fair.”
Now when you are talking about short term capital gains (held for less than one year) it is a different matter. They are taxed at the ordinary income rate, on average 28%.
No matter how you slice it, there is always going to be an argument of “fairness” in taxation. Flat taxes are harder on low income earners. Vat taxes are harder on low income earners. Our progressive tax system actually works well for our culture but is incredibly complex and is always being considered “unfair” to one income level or another. As it is now it definitely favors low income people for lower tax rates and many refundable credits not available to middle and upper class taxpayers. I do have a strong background in this, been an accountant for 30 years. I’m just post this for informational purposes, I have no (stated) position
Last but not least, the “Fair tax” is an interesting concept but has many questions of administration, implementation and whether it is a true improvement on our existing system.Thus endeth the long drawn out dialog.
“Others have called you for your comment but I will try a different tact. At first blush your comment looks to be condescending, arrogant and based in ignorance.”
You are bending over backwards to be nice. It sounded to me just like you detailed: condescending, arrogant and based on ignorance. I would add bigoted since it insults all low income earners and the unemployed.
I originally wrote "A reduced rate for long term capital gains (the profit) was considered “fair.”
My point in this was that only the profit was taxed and that was the reason cap. gains was taxed at a lower rate. Where double taxation exists is with dividends. Corporations pay tax on income, issue a dividend to shareholders and then the shareholders pay income tax on the dividend. The corporation pays tax once and the taxpayer a second time on the same earnings of the corporation.*I apologize if I didn’t make my post a little clearer. Just for reference, what changes in your example is the “basis” of the investment, but only when it is liquidated. Year 2 the basis for your investment is 120. You started with 100, made a 20% return, sold it, paid tax on $20, then added that to the original $100. Then you just "let it ride until the end of year 3. Your investment has accumulated gains of 24 + 28.80 assuming a 20% gain. When you cash out, you still have a basis of 120 and a taxable gain of 52.80. if you were to reinvest that gain, the new basis for your investment would be 120 + 52.80 = 172.80. You are not taxed on the “basis,” only on the profit when liquidated.*My discussion of Capital Gains was just to explain why it was taxed at a reduced rate. I wish I had a bigger “blackboard” so i could show the detail flow better. Let me know if you have more questions and I’ll try to answer them. It’s obviously a complex subject and full of exceptions, allowances, various types of capital investments etc.
Mickey and Trusted: Thanks for the discussion/examples. It helps this math-challenged person think it through. Now, what about hedge fund managers moving money/betting on margins, etc.? Making money on top of money, but getting taxed on it as"unearned" income? If they worked for it, as they obviously did, then it should be taxed as “earned” income. It’s not like they let it sit and collect interest.
Totally the wrong response- you’ll end up taxing no rich- they’ll move overseas. The correct response is bring in a transfer tax between financial accounts of different identities of 1%- its so low it won’t discourage the American rich.
Uncle Joe Premium Member about 11 years ago
Fine, eliminate all deductions and credits. Treat all income the same, whether it’s from a W-2 or capital gains. Create 4 or 5 tax brackets, & you have a one page return for all.Then wait for the rebellion.
Sleuth about 11 years ago
New tax form
1) What money did you receive last year?2) Send it!
edward thomas Premium Member about 11 years ago
4my: We grew up poor. Dad worked summers at a second job while Mom raised us kids. DON’T TELL ME THE POOR ARE LAZY!!! Do you think Lindsay Lohan , Paris Hilton and other RICH CELEBRITIES are hard working simply because they get their names in the news? Get your head out of your backside and actually LOOK at what REGULAR people go through! Or maybe read something other than Reagan era political fiction!
lonecat about 11 years ago
It’s good to see the sentiment expressed so clearly. I bet you think you’re a Christian, too.
lonecat about 11 years ago
Yeah, when Andrew Jackson said “Let’s take care of the Indians” he had social services in mind.
lonecat about 11 years ago
No one I know thinks that the government should “take care of” people — we do believe that certain social services are a good idea, both for individuals and for society — social security, public health, highway construction, fire departments, unemployment insurance, a good (single-payer) health insurance system, and welfare when people really have no alternative. I don’t believe people should be paid not to work. Work is good for the soul. Or, better, good work is good for the soul.
chazandru about 11 years ago
It was necessary to delete my original comment because I noticed others had answered the question it proposed very well. I’ll just note the following.^ History of the Income Tax 1http://www.infoplease.com/ipa/A0005921.html^Income Tax and the Civil Warhttp://www.civilwar.org/education/history/warfare-and-logistics/logistics/tax.html^From about.comhttp://history1900s.about.com/od/1910s/a/incometax.htm^That’s the history. How we enact tax reform will depend on thoughtful bipartisan cooperation and the ability of voters to communicate ideas to open minded legislators.Before any one says, “We’re doomed.” realize, it’s not impossible, but it will take voter participation and communication.Respectfuly,C.
I Play One On TV about 11 years ago
“why not one tax bracket…oh wait that would be unfair to the “poor” “read LAZY’”
Due to circumstances beyond my control (involving a future ex-wife and her attorney from hell), I found myself instantly poor. Happened while I was at work; came home and found the house empty and the bank accounts empty. Although the bills were joint, my ex didn’t pay any of them, as she knew I cared more about my credit as a business owner than she cared about hers. In order to continue to remain in good standing with my creditors, I had to continue to make payments for stuff I no longer had. And I had far less income to make that happen.
It taught me a lot. Mostly, what it taught me was how many people made judgments about how I got to be where I was. Sometimes you have to be on the other side to know what the other side is really like.
I truly hope you never have to find out for yourself, but there’s a reason “walk a mile in my shoes” is a common phrase.
Mickey 13 about 11 years ago
“The complaint heard most often is the extremely disparate treatment of income from actual labor (taxed higher) than from investments (why tax it at all they say).”
I’m assuming you’re talking about capital gains as being an unfair tax rate. For reference, the origin of our tax system goes back to the middle ages. Income from your labors was considered your measure of wealth. Selling land or farming equip or personal items to another was considered incidental and not significant to wealth measurement i.e. not taxable at the same rate as labor. .
Fast forward a few hundred years and the first argument for long term capital gains (held longer than one year) is first and foremost they are subject to double taxation. First you work and earn money, are taxed on that income, invest it and then are taxed again when you liquidate the investment. A reduced rate for long term capital gains (the profit) was considered “fair.”
Now when you are talking about short term capital gains (held for less than one year) it is a different matter. They are taxed at the ordinary income rate, on average 28%.
No matter how you slice it, there is always going to be an argument of “fairness” in taxation. Flat taxes are harder on low income earners. Vat taxes are harder on low income earners. Our progressive tax system actually works well for our culture but is incredibly complex and is always being considered “unfair” to one income level or another. As it is now it definitely favors low income people for lower tax rates and many refundable credits not available to middle and upper class taxpayers. I do have a strong background in this, been an accountant for 30 years. I’m just post this for informational purposes, I have no (stated) position
Last but not least, the “Fair tax” is an interesting concept but has many questions of administration, implementation and whether it is a true improvement on our existing system.Thus endeth the long drawn out dialog.
Mickey 13 about 11 years ago
“Others have called you for your comment but I will try a different tact. At first blush your comment looks to be condescending, arrogant and based in ignorance.”
You are bending over backwards to be nice. It sounded to me just like you detailed: condescending, arrogant and based on ignorance. I would add bigoted since it insults all low income earners and the unemployed.
Mickey 13 about 11 years ago
I originally wrote "A reduced rate for long term capital gains (the profit) was considered “fair.”
My point in this was that only the profit was taxed and that was the reason cap. gains was taxed at a lower rate. Where double taxation exists is with dividends. Corporations pay tax on income, issue a dividend to shareholders and then the shareholders pay income tax on the dividend. The corporation pays tax once and the taxpayer a second time on the same earnings of the corporation.*I apologize if I didn’t make my post a little clearer. Just for reference, what changes in your example is the “basis” of the investment, but only when it is liquidated. Year 2 the basis for your investment is 120. You started with 100, made a 20% return, sold it, paid tax on $20, then added that to the original $100. Then you just "let it ride until the end of year 3. Your investment has accumulated gains of 24 + 28.80 assuming a 20% gain. When you cash out, you still have a basis of 120 and a taxable gain of 52.80. if you were to reinvest that gain, the new basis for your investment would be 120 + 52.80 = 172.80. You are not taxed on the “basis,” only on the profit when liquidated.*My discussion of Capital Gains was just to explain why it was taxed at a reduced rate. I wish I had a bigger “blackboard” so i could show the detail flow better. Let me know if you have more questions and I’ll try to answer them. It’s obviously a complex subject and full of exceptions, allowances, various types of capital investments etc.
edward thomas Premium Member about 11 years ago
Mickey and Trusted: Thanks for the discussion/examples. It helps this math-challenged person think it through. Now, what about hedge fund managers moving money/betting on margins, etc.? Making money on top of money, but getting taxed on it as"unearned" income? If they worked for it, as they obviously did, then it should be taxed as “earned” income. It’s not like they let it sit and collect interest.
cloa513 about 11 years ago
Totally the wrong response- you’ll end up taxing no rich- they’ll move overseas. The correct response is bring in a transfer tax between financial accounts of different identities of 1%- its so low it won’t discourage the American rich.