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Our Low-Tech Tax Code
theodp writes "After establishing that nothing can excuse Joe Stack's murderous intentional plane crash into an IRS office, a NY Times Op-Ed explains the reference in Stack's suicide note to an obscure federal tax law — Section 1706 of the 1986 tax act — which the software engineer claimed declared him a 'criminal and non-citizen slave' and ruined his career. Interestingly, a decade-old NY Times article on Section 1706 pretty much agreed: 'The immediate effect of these [Section 1706] audits is to force individual programmers ... to abandon their dreams of getting rich off their high-technology skills.' Section 1706, the NYT Op-Ed concludes, 'is an example of how Congress enacted a discriminatory law that hurt thousands of technology consultants, their staffing firms and customers. And despite strong bipartisan efforts and unbiased studies supporting that law's repeal, it remains on the books.'"
I read the article, but can't figure out how it got him into legal trouble? It sounds like the law makes it less beneficial to be an independent contractor but doesn't explain how it could get Stack into $10,000 of legal fees.
Or, was this just one of a litany of complaints?
Waltz, nymph, for quick jigs vex Bud.
I remember when this law was passed. At the time, many large companies were switching to having huge numbers of contractors instead of regular employees. Uniformly, these companies denied any benefits, like health insurance. Job security was also lower. I personally did a lot of contract work at the time. After the law passed, the big companies were forced to hire most of those contractors, with benefits. I think this improved things generally all around. For some reason, full employment creates a bond of loyalty from the employee, and sometimes from the company, which is never there as a contractor. More programmers got health care. It was a good thing.
As a contractor, I was not personally effected, because I was an actual contractor, with multiple clients, self-employment taxes, and all. All you need to not be effected by the law is to be an actual contractor.
Celebrate failure, and then learn from it - Nolan Bushnell
This maundering plea says if you have been ripping someone off for a long time, your ripping off is "acceptable," and therefore it should be sanctioned. What sophistry! Perhaps we can let every drug dealer with ten years of experience off the hook for all illicit activity, past and future? How about mass murders in cold cases? Can they keep on murdering since they already got away with it? Clearly, these companies are trying to circumvent their (minimal) responsibility as employers. They should pay what they owe and shut the hell up about it.
I even settle for "I get the gist of it", given that it's tax law we're talking here and the last person understanding that went into an asylum a few moments after he has been illuminated.
Since that pretty much might apply to me under certain circumstances, what the hell does that mean?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
That was me. And, incidentally, "low-tech" has nothing to do with this. If you read TFA, you'll see that Senator Moynihan was led down the garden path by IBM, whom the section helped to the tune of $60M a year...
Even he renounced the change, but they could never get it repealed.
From TFA: In an earlier interview, Tom Burger, the director of employment taxes for the I.R.S., said one of the agency's difficulties ''is that, and I need to pick my words carefully, Congress passes laws, often without asking us about them, and then tells us to enforce them.''
Translation: Politicians make laws without knowing jack about the consequences and not even bothering to ask those that could tell them what kind of can of worms they are about to open. And then they're too pussy to admit they blundered.
Sounds familiar? A law gets passed that should cure some problem with the economy and the only thing it accomplishes is to cause troubles where there were none before while the problem continues to exist.
If I get that right, the law aimed at eliminating the "fake freelancing", where companies pretty much forced programmers into freelancing instead of hiring them, resulting in cheaper labour for them and shifting the risk and insurance burden on their not-quite-really-employee. Now, that still exists, with programmers now being passed about like slaves by temp agencies where they enjoy little less risk or much more insurance while at the same time losing their freedom entirely, while those companies still get the cheap programming labour they wanted, and at the same time the whole deal also keeps those programmers that are good and sought after enough to actually be (really) self employed and successful at it from actually being this.
Sounds very familiar...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I know a half-dozen guys that work as independent programmers and have generally only heard good things about their experience, excluding times of no work and shitty projects. I've never heard of this law or anyone impacted by it.
What's the deal?
this is how it happens :
- you let individuals or groups to amass unlimited wealth
- eventually some reach the wealth level with which they can influence democratic processes or representatives
- the first individuals or groups to reach the above level start protecting their interests in lieu of everyone else
- laws do not work against this, because if you can influence democracy and its representatives, you can MAKE laws, as in the current example we are discussing (contract law)
- 'the people' get the shaft
Read radical news here
The more interesting part of the tax provision was that it was introduced by Patrick Moynihan as a favor to IBM. A $60m tax cut type of favor. I'm not saying Joe was right in what he did, but it is rather apparent that to be noticed by government, you must either be insanely rich or insanely violent.
What changed under Obama? Nothing Good
Substitue "Mohammed al-Mohammed" for "Joe Stack" and "Section 1706 of the 1986 tax act" with "United Nations General Assembly Resolution 46/86" and you'll see what you folks are all doing - you're making up excuses for a terrorist because he happens to share your political views. This guy was a fundamentalist libertarian terrorist.
If it was part of this nutjob's manifesto, now if Congress repeals the law it will look like the government can be swayed by terrorism. Since the government never ever wants to appear to be that way, this law will now have to remain on the books forever.
Way to go.
Weaselmancer
rediculous.
I remember when this law was passed. At the time, many large companies were switching to having huge numbers of contractors instead of regular employees. Uniformly, these companies denied any benefits, like health insurance. Job security was also lower. I personally did a lot of contract work at the time. After the law passed, the big companies were forced to hire most of those contractors, with benefits.
I remember that too. That was during The Bubble.
And then after the bubble? Why most of those people were laid off. Only instead of being able to get by with smaller amounts of work the way mot people do, they spent years unemployed because they couldn't contract anymore and they couldn't find permanent work either.
I don't know why on earth you would say "job security was lower" because contractors at least always had a defined term of work and only in the most extreme circumstances would you be able to get rid of them even if you as an employee thought they sucked. Meanwhile at any moment Hammer Of Rightsizing could come down on you as an employee.
As for healthcare, there are a lot of people with spouses also working that can cover the health angle or you can opt to go with the catastrophic coverage (still pretty cheap) along with the tactic of setting aside something more than the $2-$3k deductible in a medical savings plan. Then you are covered for the big things but also can do the small stuff too if you want.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The question I have is whether this guy is the tip of the iceberg or whether he's just another wing nut who can't admit when he's lost whatever argument he got in.
He does make some complaints in his screed about the kinds of issues that even rational people are worried about -- big government, big corporations and a "system" that feels stacked against individuals; some of these issues have been kicking around among conspiracy theorists and paranoids forever, yet a Treasury run by ex-bankers that loans out a trillion dollars to bankers and others who make sure the banks get paid is only too real.
Is unemployment and the rest of it going to create more of these guys?
Those...few thousand of contractor filings vs. a few dozen business filings. Surely that was enough to drive this law, right? After all, when the IRS is handling 140 Million taxpayer submissions, those few thousand documents were breaking them.
I think you are trying too hard to make this about the big bad IRS. Seems that this special condition for contractors was repealed to prevent corporations from skating on health care and to foster company loyalty. After all, too much employment thrashing is bad for the economy's efficiency.
The issue with this would impact someone who forms his own contracting firm and starts to deduct business expenses like getting from home to the job site, home office costs, etc... If he is later declared to be an employee, all those deductions get disallowed and he owes the back taxes. I suspect that, if he incorporated and paid himself mostly by distributions, he also paid his taxes at capital gains rates instead of the wage rates. That's a privilege restricted to lawyers, doctors, financial consultants, investment fund managers, and corporate officers.
Now, originally, the law's effect would have been balanced by the way that it kept companies like Microsoft and IBM from just making everyone a contractor to remove benefits, but the corporation quickly figured out that they could use temp agencies as a middle-man. It wasn't until a major lawsuit in the late 1990s that companies became sensitive to the idea that if it walks like a duck (employee) and quacks like a duck (employee), then it is a duck (employee) that can sue you for benefits. After that suit, many companies started brining contractors back on the payroll to avoid later class action claims.
Yes and no. I don't think $70K with a few years experience is unheard of, but it's also outside the normal distribution.
Many companies are in places with absolutely mind-numbing costs of living. Many also seem to realize that non-professional development experience is still valuable. The combination of the two can make the salaries for some "new" programmers pretty impressive.
The fix is simple. Federal sales tax. Period.
No IRS. No tax code other than a percentage and what items will remain tax free (food, medicine, etc).
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
Yeah this poor guy could only afford a nice house and a plane. Just imagine, without that terrible law, he could have been able to afford a two engine plane and a slightly nicer house!
I was traveling through airports when I happened to see this story on the news, so I haven't caught up on all the details, but one thing disturbed me: the lying heads went on and on about how mentally disturbed this man must have been, and how could we identify such mentally disturbed people in the future, but never once did they ponder whether this was a rational response to an untenable situation. Never once did they question the role of a convoluted, maddening, and probably illegal tax code.
It is difficult living in a country where there is little rule of law because the multitude and complexity of laws makes virtually everyone eligible for a felony conviction at the arbitrary whim of unaccountable government officials. If Mr Stack had run into such persecution his response may well have been the only rational one. What other avenues were open to him to escape from the situation? Good riot police know that they should never cut off an angry crowd's escape routes, as they will have no choice but to fight, and most of us have heard of the dangers of a cornered animal, but what opportunities did Mr Stack have to avoid what he (probably accurately) described as a kind of slavery?
In short, if Mr Stack had no viable alternatives, or if he was feeling especially patriotic, this response may not have been irrational. If all his friends and colleagues never suspected that he was insane, it may be because he wasn't. The fact that his suicide note was angry and used profanity does not necessarily mean that Mr Stack was mentally unbalanced - it may simply mean that he had good cause to be angry. If someone tried to enslave you, would you be angry? Would you say some naughty words? If so, does that mean that you are wrong or mentally ill to object to being enslaved, or does it mean that the bastard who is trying to enslave you is wrong?
The fact is, all Americans have become or are becoming the slaves of the United States government, which in turn has become the instrument by which those who take more than they give (at present 60% of Americans) have harnessed the productive classes for their own benefit. This is the tyranny of the majority, and it looks like it will only increase in the future. Talking to people overseas, I have met many who envy American wealth but none who envy American "freedom".
The fact that the lying heads on the News never addressed this question concerns me. The American media is no longer interested in discovering the truth, they merely do the bidding of their employers - and with the U.S. government being the largest advertiser, guess who their employers are? It may well be that Mr Stack really WAS crazy, but we will never learn the truth from the media.
Gross receipts tax. It's like a VAT, but on everything you receive. No deductions, no exemptions, no exclusions. Applies to everyone with a tax ID (i.e. persons and corporations). Double taxation for small businesses? Yup - you get the protection of the government via corporate veil, you pay the extra. (disclaimer - I own an S corp - I would be double taxed)
Then it doesn't matter what is deductable. It doesn't matter how you make it or where it comes from - gifts, cap gains, interest, wages, inheritance. It favors local production (fewer middlemen). It's easy to administer. Everybody pays something.
It does not, however, allow for social tinkering via the tax code, so it will never be adopted.
Is it just my observation, or are there way too many stupid people in the world?
Awesome, we can basically make sure rich people pay practically no taxes at all.
Are you super rich or dumb?
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Because the organization that makes sure _every_ _single_ _retail_ _item_ has had its tax paid, necessitating intrusive monitoring ... won't have the name "IRS"?
Information theory is life. The rest is just the KL divergence.
Every electrician or plumber uses resources provided by a company under supervision from a company employee. They usually claim to be a corporation doing contract work for the company. Do you expect them to bring their own wires or pipes every time they work on a client's building?
This "work for hire" class has existed longer than the "employee" in the US. In the 1770's people usually hired the carpenter or tailor to make them a chair or coat. People paid taxed directly on owner-run businesses.
When they want to, congress can sneak in small changes of law and pork projects into a bill, then claim not to notice it happening. All it takes is one person on a committee to get this inserted into a bill that's likely to pass, and it's done. At the same time, they claim their hands are tied to fix even simple problems. The tax code is over 15,000 pages long. There are hundreds of changes each year. Also, the Feds don't have to prosecute these cases. There's thousands of laws on the books that are violated openly and never prosecuted. In this particular case this "crime" lacks any criminal intent and represents no financial loss to the IRS, as they still get taxes paid to them. There's no victim, no damage, no loss of money. There has to be more important cases to prosecute that these. If they haven't changed it already, it's because they don't want to. They could have tacked this onto a hundred different bills and no one in Washington DC other than programmers and accountants would have noticed or cared. This is an easy fix, not something that needs it's own legislative event.
This sentence no verb.
Right. There's no problem if you have a real business. It's employment masquerading as consulting that's prohibited by US tax law. If you write and sell a software product to multiple buyers, no problem. That's a business. If you take ten jobs a year on Rent-A-Coder, no problem. (Not much money, though.) If you develop and patent technology, then license the technology, no problem.
If you work for one company for a year, are paid for time, not results, have a "boss", and do what they tell you, you're an employee. Deal with it.
He blamed 'politicians, the Catholic Church, the "unthinkable atrocities" committed by big business and the government bailouts' for his own failures to reach his goals. This is classic schizophrenic behavior, it is delusions of grandeur. With delusions of grandeur, you are convinced you are the most amazing person in the world and you should be able to succeed at anything. When you don't succeed, you start finding reasons as to why. And since you're convinced you are the best, you start at the top, because clearly it takes powerful forces to keep a great man like you down.
So you blame any powerful group. The government, big religion and big business.
My uncle had the same symptoms. He had all his genius ideas written down and the government was trying to steal them (physically!). He wrote to Kofi Annan (the head of the UN) to tell him that George Tenet (the head of the CIA) was in the building across the street spying on him. This is how these delusions work. Not only is the government out to get you, but the important people in the government are involved!
So what makes these guys? Well, primarily their own mental illness. The media has a role (previously lore did) in helping them choose the bad guys who they are going to list as out to get them. But the media doesn't create them, they'd just select other enemies if the media changed their tune.
http://lkml.org/lkml/2005/8/20/95
"we can basically make sure rich people pay practically no taxes at all."
Umm, what? If there is a sales tax on everything but food and medicine, those mega-rich people are just as likely to pay more in taxes - mainly because they are able to purchase more because they're rich.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
For as smart as we programmers are, why has no independent contractor sued and taken this law up to the supreme court. It's blatantly unconstitutional. It restricts the rights of an individual to participate in commerce for his profit in his profession. It's completely discriminatory based on profession as well.
Independent contractors are no different from contracted doctors working for a hospital. This should be challenged.
This is what some in congress have proposed (actually they proposed a VAT, which is essentially the same thing, only harder to cheat), and it may happen as a way to close the massive deficit.
Biggest problem is sales taxes are highly regressive, which means the poor pay a higher percentage of their income as tax than the rich. You can try what California does, and exempt certain things like food, which gives the poor a break but ends up with the middle class getting screwed and paying a higher percentage than everyone else.
My preference is a single graded income tax scale with no exemptions, no hidden payroll taxes, no sneaky deductions (those mostly favor the rich). We can set it up so poor people pay a lower percentage, and rich people pay a higher percentage. Corporations will pay the same rate (on profits after they pay their employees: we shouldn't double-tax them). If we do that and close the loopholes, we should be able to make the top tax rate fairly low, even if we continue to pay earned income credit. The US government only spends around 20% of GDP every year, so it shouldn't need to take in much more than that to balance the budget.
Qxe4
This country has a long and glorious tradition of rich, middle-and-merchant class citizens fighting the powers that attempt to dip into their productivity. The American Revolution was started in part by outrage over taxes which by today's standards are absolutely minuscule. Tiny! The American revolution wasn't a revolution of the lower classes or working peasants. It was fought by people who were rich enough to organize, supply and arm them. People who owned shipping companies and were rich enough to have private battleships. So this middle-class programmer guy with a house and airplane protesting The State's encroachments on his attempts at the American Dream is actually very typical of american strife. Your "to each according to his need" class-jealousy is a reinterpretation of it using the modern justifications of "when the government gives out money, it's ok as long is it's to me, an when it takes money, it's ok as long as it's not from me".
Bankrupt people own planes? how do I get in on this action?
I for one was happy about the lack of "NEWS" on this nutty programmer suicide. Its NOT that big of a deal; people who are nuts and want to off themselves shouldn't have their big issues made into huge media storms highlighting their causes - it only encourages the next nut to do the same thing!
We've seen an increase over the years since the media has gone down in quality and focused upon this and anything else to drive ratings - most often FEAR related because that primitive emotion is easily exploited for profit. The result has been more nuts going down in glory - sure, legal drugs have contributed to this, especially teens - however, becoming a reality star that people try to understand upon death has also contributed to this. A LOT of these people want to be understood / noticed and their grievances heard. Its a two-for-one.
This is no more "news" than a local shooting - the weapon was just a tiny plane. It could have been a van full of explosives.... We didn't start doing stupid security checks to DRIVE as a result of that one either. I don't think the number of deaths should impact the treatment much either unless there are some worthy underlying issues involved.
You can't secure against everything; no matter how controlled the environment (which in some cases encourages even more trouble.) Flipping out and doing EXACTLY what Bin Ladden wanted means terrorism works extremely well on Americans - a proven example for half-rational nuts and very rational fanatics to look at.
Shit happens. Live with it.
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But they don't. See the thing is once you have so much money you basically can't spend it all. Add to that they will be paying less tax as a percentage of income and it gets really unfair. Heck, they also tend to spend lots of money on things that are not property so more money they spend without paying taxes on.
The only real fair tax would be, no tax on first X dollars made and Y% on every dollar made after. With no difference between money made via honest labor or capital gains, or dividends.
If you think taxing the poor more then the rich is the right way to go
The "FAIR TAX" does not tax the poor more than the rich. It's a tax on first retail purchase of "new" items. It actually includes a basic welfare element in the form of a subsidy per citizen to offset tax paid up to a certain amount defined as the "poverty level", based on a citizen would pay in tax for "new" items if the citizen were poor and just subsisting (on "new" items). Any citizen may collect the subsidy on a monthly basis if they want - they just have to show up and register for it.
IIRC "new" probably covers food. Used cars and 2nd-hand clothing are not new. Old houses are not "new". Apartment buildings may be "new", we haven't worked this out yet.
The "FAIR TAX" is desirable because it puts a tremendous drag on the effective power of the federal government, power coveted by many in government. It makes it easier to see the difference between high-tax and low-tax jurisdictions. I see the fact of so many people actively and offhandedly spreading disinformation about the "FAIR TAX" as prima facie evidence of a sinister opposition.
Glen Beck is a clown; an entertainer for a gullible audience and himself privately likely is way different than his act on TV.
Beck isn't anything; either its an act or he is nuts. Having seen some of his early stuff, I would have to say its most likely an act. He doesn't even have to put in a whole lot of effort either.
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More accurately, it is likely he had a house and a plane because he did not pay his taxes.
After paying for his legally required share of the two utterly ridiculous wars we are prosecuting, US bases all over the world, the cost of keeping an unprecedented number our citizens in jail, subsidies for businesses that otherwise would naturally fail... he might very well have been unable to purchase a house, much less an aircraft. 20% to 40% of one's income in your hands over the years (more, if you actually do the math*) makes for quite a difference in how you can approach purchasing big ticket items like homes and boats and so forth; and if in doing so, whether you ride the wheel of debt that has been arranged for us, or if you are able to actually make such purchases without incurring additional costs in interest.
It is well to keep in mind that like any enterprise that involves the legal system, trying to stand up for a position that the government finds itself in disagreement with - legitimately or otherwise - is also a hugely expensive undertaking, easily capable of bankrupting any person of average income. The presumption that you can fight city hall is false for most people. It's just another way to shipwreck your life.
Perhaps taxes are too high, and government too large, after all. I seem to recall that there are Americans who are looked upon as heroes because they fought against unreasonable tax policies. Is it fair to assume that each and every one of those we hold in such high regard perfectly managed their lives? This guy clearly could have made different decisions (no doubt most of them to his detriment), but would they have been "right", or merely compliant?
I could point out many historical examples of "law abiding citizens" that most certainly were not doing "right." To call this fellow an "idiot", as you do, is to attempt to wrap the whole event in a nutshell of disrespect that does not serve the interests of the dead IRS employees, the family Stack left behind, or, frankly, the rest of the nation.
It does, however, serve the needs of the government. An entity that is more in need of careful pruning than encouragement, in my opinion. I can't support Stack's action, because in the end, these people were neither his enemy nor the source of his problems. However, from where we stand today, it is history, and all I can do is hope that more people think about the problem, instead of assuming it is inevitable that we pay such huge amounts for "services" that primarily benefit other than the general population. Perhaps while they're at it, they'll think about how the government has stepped outside the boundaries defined for it by its formal authorizing mechanism.
After all, a government that is doing what it was actually authorized by its citizens to do is a lot less likely to incur the wrath of its citizens, thinking rationally and "acting rightly", or not.
---
*note: The amount of your money that goes to taxes is the amount you actually pay directly, plus the amount paid by any first-party you do business with. For instance, if you pay a plumber $100 to fix your pipes, and the plumber is paying a 25% tax rate, then $25 of the $100 you gave the plumber goes directly to the same tax well that your direct taxes do. Here's the math. Let's say you and the plumber are both paying 25%. Then, you initially earned $133; the government taxed you 25%, which is $33.33, and now you have $100 left. Now you give that $100 to the plumber, who in turn has to give $25 of that income (25%) to the government. $75 of your $133 has arrived in the plumber's hands, actually paying for the plumbing work. Your actual tax rate here is 75/133 which is about 56% - not the 25% that it initially appears to be.
And the income of the plumber, w
I've fallen off your lawn, and I can't get up.
It sounds like regardless of the moral issues involved, he chose the wrong building. The chambers of the house and senate would have been more in line with his goals.
God I hope you're in high school. Or a troll.
If neither of these things are true, then that's damn sad.
In case the former is true, let me explain:
Rich people spend a way, way smaller percentage of their income on retail goods than the poor. They also have the means at their disposal to easily avoid such a tax, assuming the government doesn't try to tax goods purchased overseas and never brought in to the 'States.
Further, this has the effect of dampening consumer spending, which, despite what the trickle-down dumbasses say, drives the economy. This recession has given proof enough of that, for anyone who couldn't figure it out on their own. You don't have to look too hard to find stories about business owners complaining that loans and tax cuts won't help them much, since they can't hire more people unless they've got the orders to justify it. I know, seems obvious, but believe it or not there's a school of economic thought (I use the term loosely) in the US that holds that companies will hire more people if you just give them more money, rather than giving them more business.
One thing everyone is forgetting about health insurance. They cheat. Insurance doesn't pay what they should, and they'll always have some excuse. They can outright deny your claims. More common is burying you in technicalities that somehow amount to them paying a good bit less than they ought while trying to convince you and the doctors that they've paid their share. Watch Sicko sometime, and try not to let any bias you may harbor about the director interfere with the message.
First thing you know is the hospital is hitting you with one of their fantasy bills for something you thought was covered. You think you're only on the hook for 10% of the 30% of the completely scandalous list price the insurance negotiated when they entered into an agreement with the doctors. But then they won't pay it. They give you and the hospital a load of crap about how some of the drugs and procedures aren't approved, the visit is classified in a certain way, the particular deductible hasn't been met yet. They've got a mile long list of excuses. Denied by insurance, the hospital has the gall to turn around and demand from you not just the 30% the insurance was supposed to pay, no, but the full 100%, because of course you don't have any such agreement with the hospital. Pretty big jump when your share of the bill changes from 3% to 100%. I've had the hospital harassing me with weekly calls and finally siccing a credit collection agency on me for a bill that the insurance bastards should have and finally did pay after much determined calling and calling and calling and waiting on hold and waiting while they "investigate" and waiting for supervisors and listening to them blame the hospital for entering incorrect codes (to which I replied that it was the insurance's fault if they'd made the system too complicated for the doctors to get right), and angrily refusing when they try to tell me I should just pay up and stop making trouble. Cost me a lot of time to straighten out just one-- so much time that maybe I could have earned as much or more money than what the insurance tried to cheat me out of. I have several others that look like they're never going to be paid. And they didn't surface until more than a year after the medical work was all done-- that's how long the hospital tried to get fully paid through the insurance. To be fair, the hospital shares a good bit of the blame for their outrageous billing practices, in particular, the miserable fee for service system with the completely insane rates that somehow can't be figured out in a timely fashion because they've got to pack it with every service they can. Decided I was through arguing about it all and am just letting the rest rot. Statute of limitations FTW!
You may even have to find a lawyer to threaten to sue the damned insurance company.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
I would point you to Three Felonies a Day by Harvey Silverglate.
Silverglate should have a great deal of appeal here. He was deeply involved in the ACLU, was a founding member of FIRE, and was the first litigation counsel for the EFF.
LedgerSMB: Open source Accounting/ERP
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My preference is a single graded income tax scale with no exemptions, no hidden payroll taxes, no sneaky deductions (those mostly favor the rich). We can set it up so poor people pay a lower percentage, and rich people pay a higher percentage.
I suggest everyone who has income gets a 40 x minimum wage deductible from income. Tax over that is flat rate. I saw a 12+ percent rate the other day as the flat rate equivalent to current taxation. With minimum wage deduction I expect it would be 14 percent or so for everyone.
One of the main hurdles would be loss of mortgage and child exemptions, that sort of thing, but if it was clear there were no exemptions for anyone and none that Congress could pass without invalidating the system and requiring Congress to be lined up in front of a firing squad, then I believe most people would agree with this and support it enthusiastically.
But it will take a strong bit of persuasion to take Congress' ability to extort kickbacks with tax loopholes and bribe voters with tax cut gimmicks away. Like voting in new members who endorse this as part of a reset of the ongoing mess.
rd
Its going to get worse unless we can curb the corporate takeover. Its hardly our government anymore - and resembles more of a trade group.
What big government? The corporations almost run the government; soon they will become the government--- well not completely because that would be too obvious and people would revolt-- its a charade to fool the gullible as is the left/right false dichotomy -- they really need to make a few more viable political parties because its just too obvious for many of us. Anyhow- if they get full WORKING control over it-- is it really our government? is it actually government or some enforcer cartel? Its not a legitimate democracy at that point but just another means of control. A Corporate Theocracy? A Corporate Plutocracy?
Much of the bailout was payed back. just saying. the fact they got fractional lending (10x or higher) on that money which means they could have given it back immediately is a bigger mess...
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I seem to remember this way back then. There was a big brouhaha about Silicon Valley companies hiring programmers as contractors in order to get around various employment rules (overtime pay, etc), and programmers essentially being employees because their so-called contracting work was basically full-time with a single employer for an extended period.
But it seems Congress went overboard in their zeal to reign-in the practice.
-Matt
The best tax plan I saw was proposed decades ago, for a flat income tax. One rate (17% I think was the rate at the time) and 1 deduction for everyone of $25,000. The rate would be applied to the difference between what you make and the deduction. So, if you make $26,000 one year, you pay $170. You make $1,026,000, you pay $170,000. Index the deduction base on inflation, and require unanimous approval from both House and Senate to raise the percentage. No other deductions, no loopholes, no exceptions. Poor people pay no taxes, rich people pay big taxes, and everyone is treated equally. Withholding can be handled by multiplying your paycheck by .17 after you reach the $25,000 deduction and sending that in to the IRS.
Obviously this doesn't cover Social Security or Medicare, which are a separate problem. It would also mean thousands of tax lawyers and accountants would be out of work, and it would reduce the power of the Federal Government, so it has zero chance of becoming anything more than a dream.
By the taping of my glasses, something geeky this way passes
And if you're not spending it, what are you doing? Investing it -- either directly or putting it in a bank, and they're investing it for you. ...and what are your investments doing? Buying goods and services (on which sales taxes are paid) while funding ventures intended to make a return.
Also, think of it this way: What's better social policy, encouraging people to spend, or encouraging people to save? Taxing only money that's spent (the former approach) encourages saving, something which has long since been forgotten.
Also, the official FairTax proposal (which the grandparent was not promoting, as their post implied that some items would be "tax free") provides for absolutely no tax-free goods, but includes a refund based on poverty-line cost-of-living for one's family size in one's area; thus, if you're living below the poverty line, you're getting more money back from taxes than you put in -- and people spending far more than the basic cost of necessities on food don't freeload with cheap fillet mignon purchased with tax breaks intended to protect the poor.
The rough equivalent in the UK is known as "IR35" and essentially starts from the premise that if you are running a small business in this area then you may not be allowed many of the expenses/deductions that a larger employer of yours would be.
I actually wrote to and visited the ministers concerned, but due to the feuding between the Treasury as then run by Gordon Brown and the Prime Minister of the day Tony Blair, reason wasn't allowed in.
The effect on me has been to have to reduce the hours I work, fire almost all my staff as I could have become liable to over 100% tax on the money I paid them, earn less revenue from foreign companies, pay less tax, etc, etc, even though I do not evade tax and indeed understand its utility.
I was annoyed enough again by this to write this evening to both Gordon Brown and the Leader of the Opposition urging them to actually prevent evasion rather than tormenting real consultants/freelancers and indeed fairly smart people bringing in good (tax) revenue.
The official view from the US and the UK does not seem to be that these measures have increased revenue at all.
I know that I was some measurable fraction of 1% of the entire target for IR35, and I know that it drove me away from paying work entirely for a while, made all the more ironic by the fact that I survived by borrowing money from someone very publicly associated with the Inland Revenue. That made my tax inspector choke, I think!
The fact still remains that any time up to about 7 years after you've filed returns that the Revenue has agreed with, it can change its mind, disallow entirely reasonable expenses, and bankrupt you, even if you've acted entirely in good faith and in accordance with the law.
I think an entire class of politicians and Treasury/Revenue civil servants fail to understand that there is an entirely legitimate world other than 9-5 with guaranteed pension.
Rgds
Damon
http://m.earth.org.uk/
I know you think you are a god whose word should be blindly taken by the bowing and scraping masses, but I it's not true.
Some evidence is required to back up your otherwise-specious claim.
Infuriate left and right
I might be wrong, because it's a complex system, but the government each year is spending around 20% of the GDP (although really it doesn't collect anywhere near that amount in taxes). So I'm going to say that the 12% tax rate is not going to be enough.
One thing I do think should be incorporated is that everyone should be required to pay a little bit in taxes, even if it is as low as 1 or 2%, so they get involved in the political system (although for very poor people it could all be refunded). It is easy to not care what the government does when it is not your money: tax breaks are an easy way for the powerful to keep the populace in the dark about what is going on. I feel everyone should be encouraged to join the political system.
Qxe4
Obviously this doesn't cover Social Security or Medicare, which are a separate problem. It would also mean thousands of tax lawyers and accountants would be out of work, and it would reduce the power of the Federal Government, so it has zero chance of becoming anything more than a dream.
I think it actually does have a chance, for a few reasons:
1) We are heading to a huge crisis, so something is going to have to change (or technically, nothing might change, we can always end up like Argentina in a perpetual state of crisis)
2) It is inefficient for the federal government to have too much power. Eventually efficiency wins over inefficiency.
3) People are mad at special deals rich people and corporations get. This is true both on the left and on the right. A flat tax would fix a lot of this problem (because exemptions are loopholes largely exploited by the rich).
4) the tax code is a mess. It costs billions of dollars each year to prepare taxes, billions that could be spent elsewhere. As soon as people realize that fixing this would be a better and cheaper stimulus than fixing roads (roads that should be fixed anyway), they may favor it.
If the populace educates themselves, it will probably happen. If we don't, then it will continue to be the ones who do manage to educate themselves that control things (lobbyists, businesses).
Qxe4
I might be wrong, because it's a complex system, but the government each year is spending around 20% of the GDP (although really it doesn't collect anywhere near that amount in taxes). So I'm going to say that the 12% tax rate is not going to be enough.
The 12% or so equivalent figure came from a Flat Tax organization. I don't have the details of the calculation but they've obviously put a lot of thought into it. I don't believe the GDP spending comparison is valid because of the deficit spending as you mention.
rd
No, it's a wabbit law!
I am not super rich but would like to be some day and perhaps
if I work hard enough it may happen.
I don't understand the mentality behind why someone that
has more money should pay more to taxes. I guess if I was just
the average brainless joe with no drive to succeed then I may have
that attitude.
I have many friends that live at poverty levels and
in every single case the only reason they live like that
is because they choose to. They either do not care to try
to improve their conditions or simply do now want to
work.
Got Code?
The only people I know that live in poverty conditions do so
willingly. I have friends that live at the poverty level but
they have no desire or drive to change that condition. They
come home, plop on the couch, drink beer until they are blind
and go to sleep and repeat the cycle. The old lady will not get
a drivers license or job for that matter. Not because she cannot
but because she does not want to.
I have very little pitty for these people when it comes to financial
hardship as it is self induced.
Got Code?
Rich people spend a way, way smaller percentage of their income on retail goods than the poor.
So? They still spend more, meaning they will be taxed more. Can you show me where in The Constitution where it says that those who have more, must pay a higher percentage in taxes?
They also have the means at their disposal to easily avoid such a tax, assuming the government doesn't try to tax goods purchased overseas and never brought in to the 'States.
Huh? If you buy a house, you pay taxes. Rich people buy houses. If you buy furniture for that house, it is taxed. Rich people buy furniture. If you buy a boat, car, ceiling fan, computer, whatever... it is taxed. Rich people buy such things. Those items will be taxed. If a rich person bought a surfboard in Haiti... why do you care? When they bring it stateside, it will be taxed.
Now, think about how much money "rich" people make. If I gave you $20,000,000, you would pay pretty hefty taxes on it this year because it's all counted as income. Now, how much money would you make NEXT year? I assume you invest the money somehow, but let's say your investments don't do so well. Let's say you broke even. How much money would you pay in taxes? That's right! $0.00, no matter how well you lived or how much money you spent, you would owe $0.00 to the government because you made $0.00 for the year. Hell, you might even get money back!
Let me tell you "rich" people spend money. I have a cousin that owns his own custom home building business. His company built a house for demo purposes. My cousin lives there. It's a very nice home that they may show to potential customers about once or twice a year. My cousin, of course didn't have to pay taxes on the house. He didn't have to pay any income taxes on the money that bought the house. The business called it an investment and used it as a deduction, meaning that it LOWERED THE TAXES THE COMPANY OWED, and does so every year as the house "depreciates". Of course, the company also has to furnish the house and provide work vehicles for my cousin and his wife. Yard upkeep, home maintenance, vehicle maintenance and all living expenses that are not food or clothing, are paid by the company because the company owns all the stuff.
In years that the business does well, my cousin does well salary wise and pays good taxes on it. In years that the business does not do well, my cousin doesn't do as well and may not pay any taxes at all, even though he is still living like a king.
Now, if you look at various CEO's around the country, they are living well beyond their income levels because many of the things they'd normally have to purchase are provided by the company and counted as expenses when tax time comes. Private planes, nice cars, limo service, even homes are all company owned so that the person using them usually doesn't have to claim them on their taxes. Of course, the company writes it off and doesn't pay taxes on it either.
This is what a sales tax will prevent.
Further, this has the effect of dampening consumer spending, which, despite what the trickle-down dumbasses say, drives the economy. This recession has given proof enough of that, for anyone who couldn't figure it out on their own.
This recession didn't start until Democrats took over Congress. If you read the Constitution, you will find out that CONGRESS CONTROLS THE ECONOMY because CONGRESS WRITES THE BUDGET! It has nothing to do with "trickle-down" economics. But since you brought it up, who do you work for? Is he a wealthy or poor. If he were poor, would he be able to hire you?
You don't have to look too hard to find stories about business owners complaining that loans and tax cuts won't help them much, since they can't hire more people unless they've got the orders to justify it.
Maybe if people like me were not paying so much in taxes, I'd be able to buy more stuff meaning
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
Sounds very similar to the "IR35" rules we have in the UK (nickname comes from the Inland Revenue press release kicking of the debacle, now codified into statutes). Enforcement also very similar, they treat the "employer" company's payments to the "employee" as the amount net of tax and then gross it up to get the tax from the company.
The arguments in favour are basically to protect employees by preventing companies from avoiding all the protection/benefits employees (but not contractors) are given by law. They have a very valid point here, some industries were really abusing this, literally forcing staff to become self-employed so they didn't have to pay them sick time or redundancy. They'd also only get paid for hours worked, no guaranteed minimum pay, leaving a lot of (particularly construction) workers with no income for uncertain periods (particularly winter).
The other reason companies were doing it is to avoid employers' NIC, a "tax on jobs" that the employer pays based on the employee's wages, roughly 12.8%). Hence the tax man's interest - and let's not ignore that rather a lot of the self-employed people were not paying their taxes, and those that were have relatively generous expense rules if they are self-employed compared to those of an employee. And then there's the lower tax rate from taking dividends rather than salary or trade income. So IR35 is significantly an anti- tax-avoidance measure.
But, they also did over people who genuinely wanted to be and were better off as self-employed. For these guys it's just time to make an appointment with an accountant or lawyer, getting round it is often not very difficult provided you have room to negotiate in your contracts and that, well, the whole thing isn't a blatant sham. HMRC helpfully tells us things they look for in determining employee-status therefore you construct your business and contracts to show the reverse. Two key things are firstly to ensure that you only need to do what is required - when, how and who actually does it is totally up to you; even if in practice this is always you, the mere fact that you are allowed to delegate work is what matters. Secondly, have more than one customer/employer.
Here is my story submission on it (I think you have to be logged in to see it):
http://slashdot.org/submission/1176330/Programmer-plane-crash-targeted-feds
I suggested that vitamin D deficiency may be one factor, since inadequate vitamin D is slowly being recognized as an occupational hazard of indoor office work creating all sorts of health risks. Vitamin D deficiency can contribute to depression and schizophrenia, as well as cancer and heart disease, obesity, influenza, autism, and other things. Vitamin D deficiency is now common in the USA, since that many people as we all spend more time indoors at computer screens; here is how to treat it and prevent it:
http://www.vitamindcouncil.org/treatment.shtml
I listed other ways there that might help prevent additional such tragedies. There is a deep irony here that a person took a very advanced piece of technology -- a private airplane, and all that it represents as a technological marvel -- and used it to destroy a past instead of to create a future. Very sad situation for everyone all around. We need to build a 21st century society socially and economically to go with the 21st century society we now have technically -- otherwise the divide-by-zero errors (from automated production costs falling to zero) and social absurdities and ironies will drag our society down eventually. We were lucky that Joe Stack, an embedded software developer, chose such a limited means (relatively) to express his anger, when you consider how much of our civilization depends on embedded software (from airplanes to nuclear power plants to medical equipment to electronic voting).
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
I decided to post the whole thing as a reply here since it is not easily accessible, even though there are a couple of replies there and additional comments by me.
Embedded software developer Joseph Stack allegedly intentionally flew a small plane into government offices in Austin, TX, in an act that has been labeled as domestic terrorism. He cited, among other things, IRS regulations about independent contractor status as well as other issues related to government corruption.
Could his behavior have been partially due to vitamin D deficiency syndrome from indoor work? Could vitamin D deficiency also have contributed to the violent behavior alleged of Hans Reiser or Amy Bishop? And is part of the problem also that Joe Stack was not talking to anyone about any of this to think through real solutions and find positive things to do that, as Mr. Rogers sang, would not hurt himself or anyone else?
Here are some useful resources for preventing more copycat violence to show how there are plenty of alternatives to violence despite Joe Stack's claim otherwise in his manifesto:
Treating Disease With Vitamin D
Surviving America's Depression Epidemic: How to Find Morale, Energy, and Community in a World Gone Crazy
Dark Nights of the Soul: A Guide to Finding Your Way Through Life's Ordeals
Albert Einstein on: Religion and Science
A wombat talks about a global mindshift
TED | Peter Eigen on moving beyond corruption
The Optimism of Uncertainty
Social Movements and Strategic Nonviolence
As another software developer who has done embedded work, here are some non-programming things I've worked on related to helping people see positive alternatives to violence:
Possible cures for a jobless recovery
Post-Scarcity Princeton, or, Reading between the lines of PAW for prospective Princeton students, or, the Health Risks of Heart Disease
Rebutting Communiqué from an Absent Future
The amazing thing to me is not that stuff like this happens. What is amazing is that it does not happen more often, which is a tribute to most of humanity's basic social nature. In a way, even Joe Stack chose a relatively limited approach; an embedded software developer such as he was could have done far more damage if trying to create general mayhem (he could have tampered with nuclear power plants or medical devices or airplane software). There is also irony here that a person took a very advanced piece of technology — a private airplane, and all that it represents as a technological marvel — and used it to destroy a past instead of to create a future.
What do people think and feel about all this?
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Sorry, that was my post; I must've accidentally ticked 'post anonymously'.
The fact is, your real tax rate specifically determines what goods and services you get for your dollar. That means taxes applied to your purchases - no matter what they are called - reduce the ability of your dollar to function on your behalf.
You are implying that if that tax rate was lessened, I would somehow have had "more money" to spend on plumbing. But that is not necessarily true because prices are set by the market not by the tax rate. Even if the plumber had to pay $0 in taxes, he would still charge me the same $100 if the market would bear it. The taxes that businesses pay are simply a cost of doing business, which is only one input into price.
My hope for you is that someday you actually understand what is being done to you.
This seems really melodramatic. You said that maybe Stack could not have afforded his house if he had paid his taxes, but I pay my taxes every year and presumably so do most of the businesses where I spend my money. And yet, I have little problem affording my house and many businesses turn profits. Taxes are simply a cost to be managed. It's a very good idea to minimize them--yes--but IMO it's ridiculous the degree to which some people get emotionally involved in the concept of taxation.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
"International Terrorism: Image and Reality" by Noam Chomsky, notable linguist and self-declared Libertarian Socialist ... The answers are not difficult to find. We must simply abandon the literal approach and recognize that terrorist acts fall within the canon only when conducted by official enemies. When the US and its clients are the agents, they are acts of retaliation and self-defense in the service of democracy and human rights. Then all becomes clear. ...
http://www.chomsky.info/articles/199112--02.htm
"""
There are two ways to approach the study of terrorism. One may adopt a literal approach, taking the topic seriously, or a propagandistic approach, construing the concept of terrorism as a weapon to be exploited in the service of some system of power. In each case it is clear how to proceed. Pursuing the literal approach, we begin by determining what constitutes terrorism. We then seek instances of the phenomenon -- concentrating on the major examples, if we are serious -- and try to determine causes and remedies. The propagandistic approach dictates a different course. We begin with the thesis that terrorism is the responsibility of some officially designated enemy. We then designate terrorist acts as "terrorist" just in the cases where they can be attributed (whether plausibly or not) to the required source; otherwise they are to be ignored, suppressed, or termed "retaliation" or "self-defence."
"""
There are many related comments by Chomsky on this:
http://www.google.com/search?hl=en&source=hp&q=chomsky+terrorism
Even a book:
"excerpts from the book: The Culture of Terrorism by Noam Chomsky"
http://www.thirdworldtraveler.com/Chomsky/Culture%20of%20Terrorism.html
http://www.amazon.com/Culture-Terrorism-Noam-Chomsky/dp/0896083349
More here:
http://en.wikipedia.org/wiki/Noam_Chomsky's_political_views
And, not by him, but here is an essay by Prof. G. William Domhoff on why non-violence is the only moral and rational approach to social change in the USA:
http://sociology.ucsc.edu/whorulesamerica/change/science_nonviolence.html
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
TFA seems pretty clearly to be an attempt by the author, Mr. Shulman, to write off a pre-existing brief (probably billed at his own rate though actually written by a clerk) as an "expense incurred in the writing of an original work for publication."
Nice of the NYT to give him the opportunity to shaft the IRS and all other US taxpayers in this way.
no tax on first X dollars made and Y% on every dollar made after
As far as income tax goes this is the system we use in .au, the first 6000 is tax free then then next 15K @15%, and then increasing % until max rate of 39% for very high salaries. We do have a federal sales tax, (Known as the GST) of 10% too.
If you think that a sales tax will replace income tax you are dreaming, it would just be nore tax on top!
Chapter 8 of How To Save Jobs contains a nice discussion of the U.S. health care system. Since David Gewirtz has kindly made this book free to download, I've taken the liberty of quoting more than I might otherwise, concerning bankruptcy and rescission (emphasis mine):
Three-quarters had health insurance. Put those two numbers together. 60% of all bankruptcies in America were driven by people who couldn't pay their medical bills, most of whom actually had health insurance.
...
Most insurers claim the rate of rescission is fairly small. In testimony before the U.S. House of Representatives Committee on Energy and Commerce, Don Hamm, CEO of Assurant Health stated "Rescission is rare. It affects less than one-half of one percent of people we cover."
And yet, according to a story by Karl Vick in the September 8, 2009 issue of the Washington Post:
In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.
Amazing statistical coincidence that the rescission rate mirrors the relatively low rate in modern society of personal health catastrophe.
Gewirtz is an odd duck, with significant background in both politics and technology. If your response to Gewirtz is to pigeon-hole him for easy target practice at one end or the other of the ideological spectrum, good luck with that. If he's as clever as I think he is, his misguiding jingoism on "buy American" could be cured by a close listen to Rustici on Smoot-Hawley and the Great Depression, another flawed discussion which nevertheless can not be resolved by means of a circular pigeon dance. In the end, I rejected about a quarter of what Rustici puts forward, but felt edified by the other three quarters.
I'm about halfway through The Baroque Cycle which has an an organizing theme tumult in the understanding of financial markets and the stability of credit and currency. If Neil's super-great (mostly paternal) granddaughter Nellie Stephenson were to write the Barack Cycle several hundred years from now, it would focus on the present tumult and disorder in our health insurance industry, with lobbyists in Washington taking center stage as the imposing yet perhaps doomed palace of Versailles.
America fails to reform it's health care system because it is now in the late phase of the French disease, terminal narcissism. Debate rarely turns on what needs to be done until coinage runs short. From what I've read, mission accomplished. Will the American empire make it to the next gas station running on fumes? America is not to be underestimated, but far enough back, hard to believe, neither was France.
These kinds of laws are a lot like Smoot-Hawley. The elite has a shallow hand-waving understanding of how this implicates tax revenue (shared by few of the wonks), while totally failing (with scant concern) to wrap their minds around the larger consequences.
Fortunately, there are economies gaining steam in other corners of the world less set in their sumptitude, that sucking glissando you hear as you circle around the velvet drain pipe.
In a vigorous nation, it might be prudent to fix this while time remains, starting with a cold hard look at some of these small fish nourishing larger ponds.
Health care should not be coupled with employment. It hides the costs and jumps the price in doing so. If people had to pay for their own health care and health insurance the price would drop remarkably and they would care about it more. We don't expect our auto vendor or employer to pay for our auto insurance. We don't expect our mortgage holder or building contractor to pay for our property insurance. Health insurance should not be paid for by the employer.
And what if the rich make a huge sum of money after they have paid for that house, boat, Ferrari, furniture etc.? Is that tax-free money? The rich use a lot of resources and govt, tax-payer infrastructure to earn their money. They should therefore be required to pay more than a common employee.
Most importantly, the remedy in the FairTax for those Americans who are currently classified as non-taxpayers" would be much more obvious than it is under our current system. Being more obvious, most Americans would avail themselves of the remedy and the present system of governmental franchise and license would collapse. I do not expect any change away from the present byzantine system until more Americans educate themselves about the massive disadvantages appertaining to the acceptance of government benefits and availing oneself to licenses and franchises offered.
http://sedm.org/Forms/MemLaw/Franchises.pdf
Screw them... Find a happy, lucrative, vertical market... claim you business is widget polishing (or whatever), and that your software engineering solution is just an adjunct to your primary business. Mayhaps sprinkle a little diversification in your project, just to keep the audit-drones guessing, add a couple part-time contractors from Mesopotamia at $3/hr. just to nail down any wiggly bits about you being the only employee, and VOILA', cakewalk all the way to the IRS auditor's office smiling, while you bill your clients with impunity!
Point is, do what other corporations do. Work the system. Before you incorporate, sit down with your business lawyer, figure out where the holes in the law are, place you business squarely in the hole (a good sized legal hole should leave you plenty of wiggle room), PUBLICLY MAKE THAT HOLE A PART OF YOUR BUSINESS PLAN, AND LET THE IRS KNOW IN ADVANCE... do all this above board in plain view (transparency is your friend), and let the guys in the government KNOW beyond a shadow of a doubt, you're operating in good faith, in fact, get to know your local IRS Office, Your Federal Small Business Office, and Your State Small Business resources. Get on a first name basis with all these guys, and make certain you have friend inside the system backing you rather than folks who you will need to plan on having all in one place 10 years from now, so you can crash your plane into them.
You don't have to love them (though that wouldn't hurt), and you don't have to think it's fair (especially when it ain't)... but only a fool sits around cursing the unfairness of gravity. Figure it out, and let the X-Games commence.
"Not hard *today*."
I said "legal regime."
Some solutions to make the rich pay more:
1.If you buy shares, bonds, or any other instrument, you pay the same tax on that as any other thing you buy, same with services. So if you buy a car, you pay tax. If you buy a computer you pay tax. If you buy a haircut, you pay tax. If you buy car repairs, you pay tax. If you buy internet access you pay tax. If you buy a sign-up to the local baseball team for your kid, you pay tax.
then 2.At the end of the financial year, if you hold any money in savings, you pay a tax (matching the tax on goods and services) to prevent the rich from just sticking money in the bank (or in a vault at their mansion ala Scrooge McDuck or Richie Rich)
Yeah, but when the GST was bought in (June 2000) the top tax rate was cut from the 48% as it stood at the time, and a bunch of Sales taxes (woo, Coke got cheaper overnight by a bunch as it had a "Luxury tax" of 22% IIRC). It was just a redistribution that they should have gone all the way for and killed all income taxes. In ten years time when all the baby boomers are on a fixed income, good luck trying to convince the voting public to scrap income taxes and increase consumption taxes!
And what if the rich make a huge sum of money after they have paid for that house, boat, Ferrari, furniture etc.? Is that tax-free money? The rich use a lot of resources and govt, tax-payer infrastructure to earn their money. They should therefore be required to pay more than a common employee.
Yep! Tax free money. They can take all that cash and fill their mattresses with it. They can put glue on the back of it and use $100 bills to wall paper their dog house. Yep! All 100% tax free.
Now, how many wealthy people that have everything they ever wanted are going to stop buying stuff and bury the money in their back yard? So, even if they did stop spending money and start living frugally, you know, mowing their own yards, changing their own oil, cutting their own hair with the flowbee, patching up their own clothes and putting foil over their windows, because... well, because we all know how rich people do everything for themselves, they still would have invested their money somehow. Yep, even though they didn't spend their money, odds are that the bank loaned it to someone else. Even if they didn't put it in a bank and bought stock or bonds or something, whatever business they purchased or loaned the money to spent it.
So even if the hypothetical, frugal fat-cat you like to dream of won't spend their money, someone else gladly will. No money sits idle unless it is literally buried in someone's backyard or mattress.
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
And what if the rich make a huge sum of money after they have paid for that house, boat, Ferrari, furniture etc.? Is that tax-free money? The rich use a lot of resources and govt, tax-payer infrastructure to earn their money. They should therefore be required to pay more than a common employee.
Couple more points I forgot to bring up:
First, they WILL pay more in taxes than the "common employee" because they will spend more than the "common employee". And if they don't spend more than the common employee, then they are not really living that rich, then are they? If they are living like their employees, then shouldn't they pay taxes like their employees? If someone chooses to live like a pauper, shouldn't they pay taxes like one?
Next, tax payer infrastructure? Really? Um, no. If anything the company paid for all that stuff in its taxes. You know, that's why communities try like hell to bring business in. Oh, and businesses give people jobs and all those people also pay taxes. It's such a boon for a community that many will offer companies sweet deals, like tax free and interest free loans, because having an employed population buying stuff and paying taxes is worth it to these communities. Oh, and most local communities exist on property tax and... yep, you guess it, SALES TAX! And for some reason, I don't hear a whole lot about how communities where billionaires live having too many budget shortfalls. That includes communities that do NOT charge an income tax like Texas and Florida. Michigan charges an income tax. How are they doing? With all those rich people leaving and freeing up all those tax-payer funded infrastructure, Detroit should be booming, right? How about NY? They should have a huge budget surplus with all of the rich people leaving there. How's NY doing?
Finally, if a rich guy makes a shit load of cash and doesn't spend it, why do you care? What business is it of yours? Don't you worry, it will be spent eventually, but even if they want to burn it up in a bonfire, it's none of your damn business.
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
You are implying that if that tax rate was lessened, I would somehow have had "more money" to spend.
Fixed that for you.
Taxes reduce earning power by depriving of a percentage of your wages. Every dollar that the government withholds from your pay is a dollar that you no longer have available to spend on goods and services of your choice. The parent was arguing that if taxes were lessened, you would have money to pay the plumber and some left over.
Taxes reduce your spending power because they are a cost that is factored into everything you spend what remains of your wages on. The plumber may continue charging the same rate for services if his taxes were lower, but he could charge less and make the same profit because his overhead has been reduced. Understand?
I totally disagree that the GST should have replaced income tax. Only the well off would benefit from that as the tax free threshold would disappear.
The only serious problem here is nomenclature - dividends and distributions are not "capital gains". Capital gains occur when the value of an asset goes up, and in the United States are generally only taxed when the gain is realized, typically when the asset is sold. If a consultant never sells his company, he will never pay any capital gains tax on that investment.
The money he pays himself as a company owner he will pay ordinary income tax on. In fact, the only reason to pay himself that way at all is to avoid some of the social security (self employment) tax he would otherwise pay. In part, because there are rules about what is reasonable in that regard.
Ya see the thing is generally speaking capital gains tax is less than income and payroll tax. Consultants running their own companies generally pay capital gains on most of their income whereas employees pay income tax and their employers pay payroll tax, which generates more revenue for the government. The extra benefits for employees are nice too, but that isn't really the goal.
The only problem about that paragraph is that it is almost entirely wrong. Unless a consultant sells his company he will never pay any capital gains tax on that enterprise. All the income distributions that are not counted as salary (and hence subject to self employment tax) will be counted as ordinary taxable income and will be subject to ordinary income tax.
If a consultant with his own company abuses this distinction he can largely avoid paying any self employment tax (which is the equivalent of Social Security) so the IRS has rules to require such individuals to pay themselves some reasonable salary for the work they actually perform.
Good luck persuading a court of that - last I checked those "tax protestor" arguments had a batting average of zero.
The US government only spends around 20% of GDP every year, so it shouldn't need to take in much more than that to balance the budget.
That is what it used to spend, at the federal level only. As of late the Feds are spending more like 25% of GDP, while only collecting enough revenue to pay for 17%. Hence the trillion dollar deficits.
If you include all levels, the government spends about 45% of GDP these days. No doubt the real problem is that they are not spending enough.
How can we invest so much time and debate arguing tax laws that tax it citizens more then 10 fold the rate that we had when we overthrew a king due to taxes? Obviously our voting track record and solidly confirmed we are the government's bitches so why waste the energy you could better spend working harder for the King.. errr government.
-=[ Who Is John Galt? ]=-
Economics doesn't care about dads--from a strictly business perspective the GP's question is insightful. On the other hand, citizens obviously do care about each other. Thus we created Medicare.
But if everyone was forced to purchase health insurance, then private insurance companies could offset the costs of older people with the premiums of younger people, making the business model sustainable. This is why discussions of health reform today often include the concept of the individual mandate.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.