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Income Tax Quashed, Ballmer To Cash In Billions
theodp writes "Washington's proposed state income tax not only prompted Microsoft CEO Steve Ballmer to spend $425,000 of his own money to help crush the measure at the polls, it also inspired Microsoft to launch a FUD campaign aimed at torpedoing the initiative. 'As an employer, we're concerned that I-1098 will make it harder to attract talent and create additional jobs in Washington state,' explained Microsoft general counsel Brad Smith. 'We strongly support public education, but we're concerned by key details in I-1098. This initiative would give Washington one of the top five highest state income tax rates in the country. I-1098 would apply this tax rate to all income, including capital gains and dividends, and would not permit any deductions for charitable contributions.' Nice to see a company take a principled stand, backed by a CEO who's not afraid to put his money where his company's mouth is, right? Well, maybe not. Just three days after the measure went down in flames, Ballmer said in a statement that he plans to sell up to 75 million of his Microsoft shares by the end of the year to 'gain financial diversification and to assist in tax planning.' Based on Friday's closing price of $26.85, the 75M shares would be valued at approximately $2 billion. All of which might make a cynic question what was really important to Microsoft — public education, or a $2B state income tax-free payday for its CEO?"
A corporation is required to maximize the profits for its share holders. Ballmer is a major share holder. Of course Ballmer's profits matter more than public education.
Palm trees and 8
...something is to be said for unenlightened self-interest. I am just not sure as to what.
Income tax is on income, not capital gains. He wouldn't have been paying income tax on his share sale anyway.
And his argument was that it would hurt his ability to attract talent. Unless by talent he meant himself I fail to see how what he does with his assets has to do with this issue.
Can you be Even More Awesome?!
Why should he pay the bill for the rest of the low lifes in the state who will never pay in as much as he has. State welfare has to end, not fair to punish those who DO PAY.
Just because the CEO then uses the tax free environment he helped create the article questions his intentions? Of course it was going to benefit him greatly, and just because it does, doesn't make any of the prior points against the tax less valid. Its his money, he worked for it. Get over it.
"Cowardice in a race, as in an individual, is the unpardonable sin." --Teddy Roosevelt
It's not as if Gates's philanthropy is a mantra of MS as a whole. It answers directly to the shareholders most of which could care less what impact things like this have on the state...as long as it doesnt effect their net worth.
Income tax or sales tax. One or the other. Not BOTH.
Personally, I'd support an income tax IF AND ONLY IF the sales tax was ended.
The biggest reason why I-1098 didn't pass has little to do with Ballmer. I believe the biggest reason was that in only two years the law makers could modify the tax to include all Washington tax payers, not just the rich. There is quite a large distrust of the spending habits of the progressive law makers here so 60% plus of voters decided not to risk it.
"There are four boxes to be used in defense of liberty: soap, ballot, jury, and ammo. Please use in that order." -Ed H
It wasn't just Steve Ballmer or Microsoft fighting I-1098 ... this measure was very unpopular all across Washington State and failed at the polls by a 65% - 35% margin. Washington State is one of the few states in the US without a personal income tax (the sales taxes here are very high to make up for the revenue deficiency). I-1098 would have introduced a personal income tax on the "richest" residents (those making over $200K individually or $400K as a family), but the reason it failed by such a wide margin is that most Washington residents (including me) believed that once they introduced a personal state income tax here, the politicians would plead "necessity" and keep lowering the threshhold over time to the point where most residents would be paying it, and without any decrease of the sales tax to compensate. The majority of the population here is all in favor of education and healthcare, we just don't believe that a state income tax is the way to fund them.
FWIW, Microsoft and other large businesses in Seattle do have a legitimate interest in avoiding a personal state income tax, as for recruiting and keeping high-priced talent there is an advantage for them to come to Redmond and live in a state with no income tax vs. going to some other company - say, in California - and paying the tax rates there. An equivalent pay job offer in the Seattle area vs. many other states actually means more take-home pay here.
"95% of all Slashdot
It is staggering to look back at the decade Ballmer has been in charge:
* Stock price has been effectively flat for an entire decade
* Lost hundreds of billions in market cap since Gates left
* The cellphone market failure
* The Xbox fiasco
* The search market failure
* The online services failure
* The portable music market failure
* IE's stagnation and market-share shrinkage
* The resurgence of OS X market-share
If Ballmer is soon to get dumped from the top spot at Microsoft it is bad news for Linux and Apple whoever replaces him can't possibly do any worse than Ballmer's disastrous decade at the helm.
Because giving government unlimited access money will solve their budget shortfalls. State government is not had a income problem, they have a spending problem, when everyone else is cutting back, they have been ramping up their spending.
So pointing out that areas that have higher taxation may not be able to get the best talents available to come to said area is now FUD? Wow. Just wow.
The timing of this sale is interesting not because of the defeat of the recent measure but the departure of the Ozzie, Allard, and Bach this year. Incidentally 75 million is the full amount of his sale. He's sold 49 million of the shares already. My opinion is that he's run out of people to blame or they were smart enough not to stick around to be blamed. It was disclosed that his bonus was cut in half this year because of the decline of Windows Mobile in the market place and the failure that was the Kin. After the dot com crash of 2000, MS stock has never passed $40 a share for his entire tenure, staying mostly in the mid 20s. Even though MS is highly profitable, the board may feel that MS cannot grow with him at the helm.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Exactly as designed. Yay democracy!
For justice, we must go to Don Corleone
As a Nigerian, I am deeply jelous of your corruption!
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Is that the biggest rat is deserting the sinking ship.
> ...a $2B state income tax-free payday for its CEO...
He is selling the stock this year. The new income tax wouldn't be retroactively applied to this year. Whether it passes or not, it has no effect on the sale. Why lie and try to make it appear that they do? Your agenda is showing.
I'm really tired of blog postings being accepted as summaries of news, complete with sarcastic comments embedded. This is just one example. If I want to read blogs, I know where to find them. I come here to read summaries of news items, and discussion about them. If someone submitting a story wants to share his opinion (everyone's got one), he can do so in the discussion. If he thinks his opinion is so noteworthy that it deserves special attention, he can start a blog and mix his opinion with everything. There's value in having a neutral summary of the news event.
The summary should have mentioned that the tax proposal was authored by Bill Gates Sr., and was supported by Bill Gates Jr., which is some pretty good evidence that Gates Jr. really has managed to separate himself from Microsoft.
As to why Ballmer is selling now, there's a pretty good chance it was for tax planning purposes. Many think there's a high chance the capital gains rate is going up soon, and so taking long term capital gains this year is indicated.
Right now in washington, the income tax is political suicide. In order to take more money, they're trying to get the voters to pass it. Sure, they can't adjust it for 2 years, but after that.. well, we'll just lower the threshold by 10%. It'll only affect a small number of people. The rich people will already be taxed (so why do they care), and people below $180,000 still won't be taxed, so why do they care?
Next year.. wash, rinse, repeat.
That's why I voted against it even though I wouldn't have been taxed.
All of which might make a cynic question what was really important to Microsoft — public education, or a $2B state income tax-free payday for its CEO?
If the measure had passed, the tax would not have started until 2012, so that was a pretty stupid question. Ballmer's stock sale was income tax free regardless of what happened with 1098.
The most amusing take I saw on 1098 was that of the Boycott Novell folks. They blasted Ballmer for opposing the initiative. Rich guy not wanting to pay his fair share as his state flounders, yadda yadda. They also blasted Gates (both of them) for supporting it. Rich guys who have all their money hidden in tax free charities trying to avoid paying their fair share by making their fellow rich people pay.
One of the flaws in this 'story' is that it characterizes itself as trying to shoot down the idea that Microsoft acted on principle: Nice to see a company take a principled stand, ... right? Well, maybe not. Yet it fails to offer evidence that anyone, including Microsoft, has even hinted that Microsoft was "taking a principled stand". Maybe this stems from the author's misreading of Microsoft's statement that begins "We strongly support public education, but ...", as a claim that the company is opposing the bill as a way of supporting public education. He makes this misunderstanding clear in his final sentence: All of which might make a cynic question what was really important to Microsoft — public education, or a $2B state income tax-free payday for its CEO?
All the 'story' really even attempts to argue is that the self-interest of Ballmer in the defeat of the income tax brings into question whether Microsoft's leadership acted in the company's interest, or in Ballmer's. But it fails even at that. It offers evidence only that Ballmer's and Microsoft's interests were aligned.
Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.
quote, "public education, or a $2B state income tax-free payday for its CEO?""
In most states public education is funded by property tax.
Further, I'm happy to be in one of the few states that doesn't tax income.
Anyone at Microsoft involvement in the dissemination of FUD? Nah, it would never happen.
Fight Spammers!
Many of these big companies are tax dodgers anyway.
For example, Bill Gates probably wouldn't have needed to set up a charity if Microsoft had paid its taxes. There would have been lots of money to be spend on medical research and international aid.
http://microsofttaxdodge.com/tax-evasion/
I'm not really sure what you guys are concerned about. I get taxed out the ass but I don't really see much of a problem with it.
Amusingly enough....Maryland has also been a leader in the nation for job growth for a large duration of the "recession". We were far less hit with it than anyone else around us.
The income tax initiative was pushed by Bill Gates Senior, the father of Slashdot's favorite person. His son also (eventually) came out in favor of it. But Ballmer and Allen were both against it, IIRC.
Washington state has a very regressive tax structure, with a stupidly high sales tax rate that IMO puts way too much of a burden on lower income people. But the stupid thing was that the income tax measure didn't really address the sales tax inequity - instead, it was going to lower parts of our property taxes and also cut the B&O tax - neither of which would directly benefit low-income people. I voted for it anyway because I thought it was a small amount fairer than the current system - but it didn't really get at what I see as the underlying problem here.
That's the thing about the income tax initiatives that've come through our state. There've been a few in the last 30+ years, and they never make a significant dent in the sales tax rate.
#DeleteChrome
As if anyone cares. I support taxing latin.
In other words, you actually paid the plumber $65, and of course, that's as much, or more, than the service you got, and you paid the government $35;
You just desribed a tax on INCOME rather than a tax on PROFIT.
That's not how it works. Nice try though.
Divide a cake by zero. Is it still a cake?
Is that there is no one "right" tax. All taxes have advantages and disadvantages. Ultimately the source of tax money doesn't matter, since it is all coming from the people, what matters is that the government gets the funds it needs to provide the services people require of it. The choice in how to collect the taxes largely comes down to what you want to encourage or discourage, and so on. Income tax is good in that it is pretty stable, so long as their are jobs in your state. It is bad in that it requires higher salaries to make up for the money being taken off the top. Sales tax is good in that is maps nicely to spending, however it is bad in that it can be regressive if necessities aren't exempted, and people can evade it by buying from other states. I could go on with more reasons for those taxes, or for other taxes, but you get the idea. There is no "right" tax.
That Washington doesn't have an income tax is neither good nor bad. It just means that either other taxes must be higher to provide the necessary services, or the amount of services provided will need to be less. The tax money doesn't need to come directly from a paycheck anymore than it would need to come directly from sales. Other states don't have sales tax, that works too. Still other states have both, also works fine.
The Washington income tax looked to be very poorly implemented because it was so high. Not that a high income tax is a problem, but a high income tax that is brand new is a problem. If the idea is that revenue has fallen and you need to increase it, a small tax increase would be what is in order. That is what happened here (sales tax was the chosen tax in this case).
This very much looks like you say: Something they could creep on to all people in short order and hit them with a heavy tax.
The problem is that government is good at forgetting that tax is a thing to be collected in the amount needed to pay for what you do. Instead they start thinking that tax is something to be collected in as large a quantity as possible. That is not a good way to do things. Taxes exert a negative effect on the economy. Ideally from an economic standpoint, you'd have no taxes. That isn't workable, of course, we need taxes to pay for services. However that does mean that the taxes collected should be enough to pay for what is needed/wanted, and not just as much as possible.
You only say that because you're a racist!
"china (or insert random country) will pass usa in brain power in 2010something" and panic ...
if you be selfish assholes that only think about your own pocket over your entire society, you not only deserve being surpassed, but bring it upon yourself.
Read radical news here
This legislation would not have gone into effect until 2012, so it is unlikely to be the incentive for Balmer's stock sale.
The real incentive for this timing is that the Bush tax cap gains tax cuts, especially for high income people are very much in jeopardy of expiration at the end of this year, and there is a surcharge to these rates on the books for high income folks.
I voted for the income tax, though I didn't expect it to pass legal challenge. Rich people can buy a lot of lawyers. And in the end, we are back where we started: An antiquated, recession-prone sales tax that hits poor people a lot harder than rich. Washington's the sort of state I thought would be daring enough to perhaps someday implement a negative income tax, but if we can't even pass a traditional income on less than 2 percent of the state, then I really don't know about that. I'm just appalled people are willing to accept the status quo. But the most interesting point here is that this also say something about certain (but not all) macroeconomic theories. Some theories rest on the idea that individuals will always make decisions based on their own personal interests. Passing that income tax would have been in the interest of any person that made less that 200k a year, that is to say, about 98% of the state. The prop lowered taxes on these people. They would have received a direct financial benefit. And yet they voted it down by something like 60%. That either means that people are incredibly concerned about the welfare of rich people, or that people are more than willing to make decisions that harm themselves if they are convinced to do so by advertising.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Don't you worry about income taxes.
I am against income and payroll taxes (that's my bias) I am also pretty much against all government.
---
Realize that taxes are going up. Not only taxes on your income, don't you worry about your income, taxes are going up on your entire net worth.
Gov't is printing money.
Fed is printing hundreds of billions of dollars.
This automatically takes away your purchasing power.
Inflation is rampant.
Fed is causing rampant inflation by printing money. By printing money they are taking away your savings in form of dilution of your purchasing power.
---
Your purchasing power is going down with every new dollar the Fed is printing.
Note, that the Fed came out (helicopter Ben) with a promise to print 600 Billion dollars more over the next 7 months.
That's just by June and it's about equal to the amount that the Federal gov't will borrow over the same amount of time. This means they are the lender of last resort to themselves. This also means that they know the US bond is on its last legs - nobody wants to buy more.
US gov't is broke. It's monetizing its debt and it's trying to cover that they are doing it, but it's not working as a cover, it's too "in your face".
Abandon ship, get rid of your US holdings, they are becoming worthless fast.
You can't handle the truth.
Income tax is precisely how it works, son. Welcome to the real world.
If you genuinely think that's how it works, I suggest you ask an accountant what "tax-deductible" means... briefly, you're paying a plumber $100, and as part of the same transaction he has to pay an electrician $65, then he does not get taxed on that $65.
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Why be so cynical? Can't it be both? I know that so many here are incapable of anything other than binary reasoning, and want their moral conundrums to be perfectly black or white, right or wrong, good or evil, and that is pretty much what drives the "wannabe nerd" moral outrage 'round about these parts, these days... but the real world isn't binary, you know.
Hell, the real world isn't even digital - it's analog. And let's face it: Analog is messy, at best.
And, I think I just created my new sig *grin*
"Life isn't binary... Hell, it's not even digital. Life is analog, and analog is messy, at best".
Regards,
dj
That is how it works for individuals. Corporate "income" tax is approximately based on profit, although such a statement is excessively simplistic, considering how complicated corporate tax law is.
Stylish sheet to fix many problems in Slashdot's D3: https://gist.github.com/801524
If you make below the poverty limit, you get a 100% refund of the taxes
This just subsidizes McDonald and Wallmart's bottom line. Ideally, there should be no refund on taxes, and a higher minimum wage to compensate. Much simpler and fairer, and it isn't corporate welfare in disguise.
Like all pain, suffering is a signal that something isn't right
I didn't say it was part of the same transaction. You did.
I was simply suggesting a similar expense in the plumber's life, which he pays for out of his income. Presumably anything he isn't paying taxes on, he made no profit from, so it isn't part of his income - it's irrelevant. Call it what he paid the doctor, or the grocery store, or the gardener. Doesn't matter.
The point is, he pays X% on his income, and for whatever part of his income you give him, you're *also* giving him the tax money he'll pay as income tax. He has to pay that out, and only gets to spend what remains. Not only does it work exactly that way, it is absolutely unavoidable.
Because what he gets from you as income will be taxed, he can only afford to give you enough service to account for what he actually gets. Otherwise, he'll be losing money per transaction -- doing work for you that he doesn't get the income for.
I've fallen off your lawn, and I can't get up.
I live in Washington. Here's the deal. The State has increased its spending 80% in the last ten years when inflation and population growth has been 40%. No one can see a 40% increase in services. They just spent more money. Now that the recession has reduced the state coffers the State is whining that it has a deficit. If the State went back to a 40% growth rate over the last ten years there would BE no deficit.
Now, this is like the umpteenth time the voters have said NO to s state income tax. Why? Because we know it's just the camel's nose in the tent. They're trying to get a class war going so all the people will want to tax the "rich," then when that is implemented, in two years the state legislature will reduce the threshhold so that we all pay or inflation will be so bad we'll all be in the 'rich' bracket. No one trusts the legislature.
One of the ploys was to say "it's for the children." Right. Just like the lottery was supposed to be for education, the legislature has shown its stripes so many times by raiding earmarked funds that it makes a travesty of the claim.
Voters also passed, for the third time, an initiative calling for a 2/3 vote of the legislature to raise taxes and fees. The legislature has managed to override the last two. One of the complaints was, why should 51% vote for a 2/3rds majority? OK. This time we approved the intitiative by 67%. Capiche? We don't have a revenue problem in Washington. We have a spending problem.
I don't care one whit what Ballmer & Co do with their money. I just know my money is more precious than his because I don't have anywhere near what he does. And I'm tired of having it confiscated by a state that doesn't understand it has to live within its means.
How about a moderation of -1 pedantic.
What amuses me is how America's system of 'trickle down economics', whereby they keep average wages down whilst all the proceeds of growth are sucked up by a largely non-producing elite, has left it in such dire economic straits that only reckless borrowing (both private and government) keeps the whole house of cards propped up
I find it endlessly more amusing that all of Europe's own house of cards is propped up by Germany.
I mean, annoying Germans - historically that always ends well.
Europeans are the last people who should be proclaiming the wonders of higher taxes with the state of spending and the economy there.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I should have added, Ballmer cashed in his chips THIS year AFTER the income tax measure failed. Had it passed it wouldn't have started until next year anyway (maybe even the year after). There really is no relationship between the income tax measure and Ballmer selling stock.
How about a moderation of -1 pedantic.
I believe the biggest reason was that in only two years the law makers could modify the tax to include all Washington tax payers, not just the rich.
Bullshit, bullshit, bullshit. That's one of the talking points the anti-1098 campaign was using before the election. It was FUD then and it's FUD now.
Here's why: if the legislature wanted to pass an income tax, they would've done it already.
"Only two years" is how long it takes after an initiative passes before the legislature can change it. The anti-1098 campaign baselessly speculated that the legislature would extend the tax to cover everyone, even though they've been free to do that all along and have never taken the opportunity. But it's just as likely that the legislature would repeal the tax after "only two years": after all, the tax would only have impacted high income earners, and that's who the legislature listens to.
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It amounts to the same thing. The workers who make the product pay income tax, the corporation pays taxes on any profits it can't hide, all this income comes from the corporation, but all of the corporation's income comes from the sale of the product or service.
When the poor person, supposedly at the 0 tax level, buys that product, all those taxes are built right into it because in the end, that's the only place the money can come from. This would be fine if the poor could be exempt from it up to a survival level, but that's almost impossible to do without a known flat rate to recompense them at because as you say, tax structures vary enormously. Which is one of the huge flaws in the current system. Look at Google paying a few percent as compared to the rate I pay, which is well over ten times that. And I assure you, I don't make as much as Google does.
So again, a retail flat tax with survival level support for everyone built in cuts right through all the problems. Tax collection, the IRS itself, all the corporate nonsense about figuring out and collecting employee taxes, accountants... it all goes away. You pay x% on retail purchases, you deposit your monthly government tax refund (or they electronically stuff it in your bank) and you're done.
Not that I believe it'll ever get implemented, of course, because it removes the special advantages for the rich and outright levels the playing field -- and they'll never stand for that -- but it's actually a fair solution.
I've fallen off your lawn, and I can't get up.
The ideal path is the one with the least complexity and cost that is still fair. That's why figuring out an allowance for survival level on a per-person basis is better. You figure it out once, thereafter you pay out that tax liability every month, preferably electronically so there isn't even an added postage or printing cost.
If the rate is 35% and the level is $1000 per month (not saying that's reasonable, just using numbers so the math can be demonstrated in a concrete manner), everyone gets $350 and this covers the taxes for that minimum survival level - heat, water, rent/mortgage, food etc. -- that each person is expected to have to pay out.
Under such a scheme, there are no exceptions to paying retail tax, which makes checkout many times simpler and faster, no one has to be concerned about which items are exempt and which are not (because nothing is), there's no income tax infrastructure... it's just dead simple, as well as scrupulously fair and not regressive (it can actually land the poor an almost exact 0% tax rate, which nothing else I know of can get even close to), which is why I favor it over anything else I've heard (so far.)
I've fallen off your lawn, and I can't get up.
Well, there is an easy solution to that, and we have had that in Europe for ... hum, let's see, in some places 100 years now ... strange how much time these radical ideas about a more equal society take to arrive USA.
The solution is different sales taxes for different kinds of goods. A very high one for luxury goods (an iate or sports car), a normal one to non absolutely necessary goods (plasma TV for instance, cars, etc.), and a very low one, or complete exemption for indispensable goods (non processed food, water, heating, etc). Really, it's not rocket science people.
One small problem... when a company gets into financial problems, they raid their sales tax escrow for that quarter.
Residents of WA should thank him for saving their money.
If you think income tax is fair, you simply don't understand how it works. Even if your tax rate is zero - say you earn $5000 a year - your $5000 is still taxed at the average rate
No, it most certainly is not. Someone making that little is tax-exempt and need not even file.
Higher-earning taxpayers pay taxes on less of their actual income (not the accounting term, but the English one) because the money they earn from interest is not taxed, and because they have all kinds of tax dodges available to them. As long as they use their personal car for business they can write off a lease. As long as your business doesn't lose money for too many years in a row you can even get away with some pretty egregious abuse of this particular system.
The problem with a sales tax is that the poor spend a larger percentage of their income on taxable necessities than the rich. That means they're bearing more of the burden than their share by default.
One solution which I do not like but which I think could work would be to move entirely to electronic cash and to simply devalue any piece of currency that sits around too long. I don't like it because I like good old actual cash money. I think it would work because most of the problems which we don't already have laws to address have to do with sitting on cash. Stockpiling money is one thing that prevents trickle-down economics from working.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Most people I tell are shocked when I tell them that the income tax rates on individual income over $200000 was 92%, according to this Tax Foundation pdf file. This would be the equivalent of taxing millionaires at 92% today. The interesting thing is that the period from 1945 to 1963 was one of profound middle class economic security. When I read about Mr. Balmer's income tax shenanigans, I am reminded how much times have changed.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
So they go to jail. Same as now if they don't pay the income taxes. Or it's collected monthly. Or daily. Or collected often AND they go to jail if they screw up.
This is a design that will work -- be fair and not be regressive -- if the rules are followed. Right now, if the rules are followed for the current system, things don't work -- that is, it's not even remotely fair (the rich often pay low or no taxes, while the middle class effective rate is over 50%), and it's highly regressive, that is, the poor pay significant taxes no matter how poor they are.
One thing about it is since the rules are a lot simpler, it's a lot easier to tell if someone is in compliance. So in that sense, for rulebreakers, it's going to be easier to catch them.
I've fallen off your lawn, and I can't get up.
ok, in cartoon form:
I've fallen off your lawn, and I can't get up.
I wish you had read the thread instead of just replying to a sentence or two. You're entirely missing the point. Which is just what they want you to do. I've written this (again) just for you. So please do me the courtesy of reading the whole thing.
ok, right. Now here we go with what happens from there:
Now, the guy hasn't filed, and hasn't paid, right? And he's got the whole $100 he earned. He pays that to you so you'll do some work for him. YOU, however, are not poor, and if you have a 35% tax rate, you'll pay $35 of that $100 to the taxman.
Now, are you going to give the guy $100 worth of work, considering you only KEPT $65, or are you going to limit it to $65? And if he's only getting $65 worth of work out of his $100 because of that tax hit on the worker side of his transaction, what is his effective tax rate?
35%.
If that's still not clear, try this:
I've fallen off your lawn, and I can't get up.
It isn't. It would take a constitutional convention to legitimately gain such authority. I have no problem with that. In fact, I think it's something we've needed to do for quite a while, for any number of reasons. And it's a far better thing than what they do now, which is whatever they want, regardless of what the constitution says.
Any further questions? That was a pretty good one, by the way. Not that the mods are likely to pay any attention, sorry... :)
I've fallen off your lawn, and I can't get up.
Precisely, comrade!
has left it in such dire economic straits
Yes, such "dire economic straits" that it remains the largest economy in the world, continues to lead most global industries, has an HDI ranking of 4th, and has unemployment roughly on par with Europe (and slowly improving once again). Dire indeed. A true 'house of cards'.
Meanwhile Europe emerged totally unscathed, of course, from the financial crisis --- major European banks didn't collapse, Europe didn't also go into recession and experience major job losses, there was no Euro crisis earlier this year, and the massive 'austerity measures' (and other moves in a more American-style direction) currently being put in place to rescue many major Western-European states from the verge of bankruptcy don't exist. (cf. http://www.bbc.co.uk/news/10162176 - e.g. "The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had "run out of money". Experts predict a similar number of job losses in the private sector.")
Your post has all the right crowd-pleasing rhetoric and buzzphrases, but I'm afraid upon analysis it doesn't hold up against reality. But please do continue to be "amused" while you look down your nose at the US and speak, I'll be generous, basically fiction.
Or he's getting ready to bail from a company about to tank, didn't they just lose the CEO puppet?
- Dan.
~ People that think they are better than anyone else for any reason are the cause of all the strife in the world.
If it were possible for money to "crush it" in the polls, we'd be talking about governor Meg Whitman of California now.
Referring again to California, they could not get people to vote for a parks tax, even by saturating us with ads showing cute little fox pups poking their heads out of the den.
This election made me feel just a bit better about living here, knowing that fellow Californians can't be manipulated like that.
In the case of the parks proposition, my rationale for voting NO went like this: The parks were underfunded by a financial crisis. Crises pass. New taxation methods are virtually forever. Also, there would be uninteded consequences. As it stands now, many parks have entry fees. With the tax, any Californian with a car would have the right (or would feel justified in demaning the right) to enter without a fee. This would require more infrastructure to support the demand. Thus, the gain from the tax might be negated. Then, they'd want to raise it. Closing the parks was a bluff anyway. The parks provide a return to the state indirectly, by supporting tourist businesses near the parks, which pay other taxes. I can't speak for the rest of the state; but I bet they realized all of this too.
The cute little foxes didn't sway us, and neither did Meg's millions.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
the state of Washington did absolutely nothing to help him make it, they have no right to any of it! let them learn to budget properly and prioritize spending like everyone else. they need to stop looking for easy victims they can suck dry just because they have spending habits they don't want to kick.
So your better idea is to let rich folks pay tax only on stuff they buy, which is perhaps what they spend 10% of their income on.
I live and voted in Washington state. This isn't about Balmer, it's about us being a sales tax state, and not a sales tax and income tax state.
corps go to jail?
what country do you live in?
the design also decreases the effective tax rate on the rich and increases it on the poor and middle class for a net loss in revenue overall.... unless you want to include sale tax on stocks.
and it's budget is NOT a lack of income; it's the 35% increase in spending over the last 5 years. Spending increases that GREATLY outpace inflation and population growth combined. Olympia (WA State capitol) was looking for more money to recklessly drive spending even higher, rather than first looking at the reason for the budget crunch - the reckless high spending they've been doing for the last 5 years.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I think a whole lot of people who know nothing about my state just decided to make random political interjections about something they know nothing about
So the correct answer is for the government to give everyone that makes less than a certain amount money so that they are all at that amount. Better than a flat tax, no American who works will make less than $25k!
My provincial government has been implementing something like this, cutting income tax and broadening the sales tax.
The way it's working is businesses don't pay sales tax (actually reimbursed it at 100%) which is the selling point, attract more business. So it's only regular people who pay taxes.
And people don't get pay raises anymore because with the lower income tax they have more money. In practice wages are dropping as in the plumber example up the page. Before he charged a $100 and took home $65. Now he charges $80 + sales tax and takes home $65 which has depreciated by 12% due to having to pay sales tax when he spends his wage. The customer is still paying $80 + 12% tax but as his take home pay has actually dropped due to inflation that is a bigger chunk of his income.
Meanwhile big business, while saving money due to simpler accounting and dropping wages, keeps raising prices.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
Person advocates policy that is in his own best interest! News at 10!
That's the point. They save the rest in a bank, making it less expensive for the bank to loan money. Or they invest it in companies that purchase things and pay taxes on those things. Money unspent is not gone from the economy, it's put to work in other ways.
Hello little man. I will destroy you!
Wow, a constitutional scholar and and economist, you sure know a lot of stuff. Tell us what else do you know everything about. I would like to subscribe to your newsletter.
brandelf -t FreeBSD
And once income tax is eliminated you only pay the plumber $65 cash to avoid the service tax so he has the same take home cash. Of course when he spends that $65 at the grocery store he discovers that the bill is actually $75 due to the sales tax.
So you're ahead $35 due to only paying $65 cash instead of a $100. Which is lucky as your employer has cut your pay to keep your take home the same. The plumber is behind $10 due to sales tax. And the government is behind $25 due to the underground economy that springs up due to people avoiding the sales and service tax.
The only winner is your employer who now has an extra $35 to invest in China.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
No. Under the US system, the rich pay a smaller percentage than anyone but the poorest. Corporate example: Google pays in the single digit percentiles; that number is just a few weeks old. Rich individuals can arrange to pay even less. Under this design, the rich would pay the same percentage as everyone else, and in perfect proportion. Which is scrupulously fair. They don't get any more, or less, motive to earn than anyone else. They get that percentage, too. Everyone gets it. Persons, that is.
No. It becomes zero for the poor
No, it starts easier on the middle class as they pay zero tax for the same allowed sustenance value as the poor and the rich do. After that, it only increases in proportion to spending above that limit, so it can be controlled. And I should point out that the middle class currently is paying an aggregate rate of about 50% or so because of the way the income tax double-dips.
Certainly. Any retail purchase of a new product or service; any purchase of new material or service at the point it reaches its final owner. Stocks, bonds, buildings, boats, land, clothing, toilet paper, drugs, surgery, butler, maid and gardening services, fire trucks, jails, churches, fish food, fuel, statuary, art, etc. A flat tax on all retail.
However: If an item is used, that is, taxes have already been paid on it, it isn't taxable again, unless it can be shown that the new sale amount is greater than the previous taxed amount, and in that case, only the difference is taxable.
For instance, I buy a house and lot for $100k. I pay $35k in taxes. I turn around and sell it to you for $150k. You only owe $17.5k in taxes (taxes on the additional 50k of new value.) If I sell it to you for $100k or less, no tax is due. This is another mechanism to prevent double dipping by the government, which has demonstrated it is inherently greedy and will do so everywhere from auctions to garage sales to inherited property and so on.
If you buy something new for any purpose other than immediate resale as an integral component of something else specifically made for resale to someone else, not the current buyer's use (so a contractor could buy wood and screws, a computer manufacturer could buy ram and motherboards, a grocery store could buy groceries and TP, or a plumber could buy pipe and fittings), it would be considered retail and taxable.
I've fallen off your lawn, and I can't get up.
It's not rocket science, but its way too complicated, and it unfairly penalize the rich. Why should they pay a higher percentage than you or I? Just the fact that it's a percentage already levels the playing field in a most profound manner as long as you actually collect the tax.
That's one of the key problems we face here right now is that the tax system is utterly riddled with loopholes for the rich, and we don't collect the taxes from them as we should -- it's not even close to a level playing field, the rich have it rigged from first principles.
That's why a flat sales tax is fair. That's also why it won't fly: It would make the rich pay taxes, but since the rich control our tax system, guess what. :/
I've fallen off your lawn, and I can't get up.
People who break the law in corporations can, and should, go to jail. We don't see it nearly enough, but we do see it.
I've fallen off your lawn, and I can't get up.
Osama isn't behind the US problems. Failure to enforce existing laws, rules, and regulations, and attempting to promote social agendas over fiscal responsibility seems to be.
Listen to yourself:
Whatever they spend their income on, they pay the tax on. All spending on new goods and services. Everything. If they put the money in the bank and it does nothing, they pay nothing, and they do not benefit. If they buy something - like a 100k bond, in order to earn interest - they pay the tax. If that earned interest goes in the bank and sits, earning nothing, it isn't taxed. The minute that interest is spent on something new - it's taxed.
My idea is, you spend, you pay. You save, you don't. Everyone gets a basic tax allowance based on reasonable factors. Up to that point, you effectively pay no taxes, even if you're rich. (Of course, you can exceed that mark by simply buying a necklace if you're so inclined), after which, everything else you pay for that isn't used and of a lesser or equal value to the last time it was bought and sold, you pay taxes on.
I've fallen off your lawn, and I can't get up.
No, but keep trying. At least you're thinking about it.
I've fallen off your lawn, and I can't get up.
I'm not saying that the idea you are proposing is without merit, but your comprehension of how it currently works is incorrect and I would suggest you hire an accountant if you ever decide to go into business.
Divide a cake by zero. Is it still a cake?
The summary is FUD. Even if the measure had passed it certainly wouldn't have been in effect for 2010 income, so his selling this year would not have been subject to the tax anyway.
Why no? It's called redistribution of wealth and its a good thing. Tax the rich people at higher rates and give the money to the poor people. Honestly, it would be better if they just paid their workers more but since they aren't the government should step in.
If you think income tax is fair, you simply don't understand how it works. Even if your tax rate is zero - say you earn $5000 a year - your $5000 is still taxed at the average rate. For instance, if the plumber is paying 35%, and you pay some of your supposedly non-taxed $5000 to the plumber to fix your leak, 35% of what you gave him goes right to the government; this increases your cost of service by about 1.5 times. In other words, you actually paid the plumber $65, and of course, that's as much, or more, than the service you got, and you paid the government $35; every transaction you make with your $5000 will be hit with the "hidden" income tax applied to whomever you paid it to, and you will get that much less service, goods, etc. In the end, you pay about the average rate.
How is that different with the sales tax? What difference does it make if the plumber pays $35 in income tax on the earnings vs. paying $35 in sales tax on the things that he buys with the money? In each case he gets $65 worth of value by charging you $100 and paying $35 in tax.
I love bashing the rich, Microsoft, and especially Ballmer as much as anyone but it's kind of hard to overlook the glaring logic error in the cynicism: whether or not that measure passed would have no effect on Ballmer's stock sales before the end of the year anyway. I suppose it would've looked a little worse if the measure passed and he immediately dumped a bunch of stock, but somehow I don't think that PR problem is worth the effort and expense.
The problem with only taxing what you buy is that the rich only need to spend a fraction of their total income a year on goods and services. Which means only a fraction of their total earnings are getting taxed. The millions of middle to lower class citizens would in turn be paying a higher % of there earned income in taxes because they have to spend a much higher % to survive.
There are plenty of very smart liberals out there that strongly feel that government just doesn't take enough in taxes. Be it income, sales, or some other tax it's not enough in some way. For those folks, why not just calculate the increase you feel is better and personally pay the government the delta? There is no law against it and nothing to stop one from doing it. Don't feel 9.5% in sales tax? Think 11% is better? You have the tools to calculate the delta, pay a bit extra. Want the income tax to go through? Pay out the extra at the end of each year and feel better knowing you're making the government better. For the rest who don't feel that way, we'll keep it to the minimum. Everyone wins!
A flat tax is impossible even if it was a constitutional amendment - the amount of POWER lost is so great that it trumps the constitution and that would not be the first time the "quaint document" was ignored.
Tax policy is used to push many agendas some good and some bad as well as many loopholes that sneak in for various reasons-- unsurprisingly, some good things come at the cost of buying a politician with something bad. Many rich people give to charity simply for the write off and good image - take away their write off and they'd cut back if not stop and the newly rich may never do it (or as much.) Many non-profits would be upset. They are not even the powerful ones.... Ballmer would throw a chair! ..or...worse... or stomp on a kitten! He probably pays less than 10% in taxes while most people here are above 30%. He'd almost double his taxes with a flat-tax system.
--
Some taxes may be useful, such as taxing items with "external costs" that harm society; although, corporations (and their believers) prevent us from implementing market-oriented solutions. An example of this would be taxing non-biodegradable plastic bags so that they cost slightly more than paper bags - since they come at an external cost which is difficult to monetize as to how much harm it will cause future generations. Other things can be monetized and those costs need to come into play in the marketplace for it to be able to do anything about it. The market can't do a lot of stuff (sorry, there is no Santa) but the market can't act upon factors which are externalized - in fact, markets tend to trend towards externalizing as many costs as they can--- and its peoples around the world who end up paying those costs sooner or later. Naturally regulation has a place as well-- but in the USA neither regulation or "artificial overhead" are allowed to be intelligently debated.
-
Speaking of which, does anybody think Obama can plug that offshore corporate loophole now when he couldn't do it with the last congress? The lost corporate taxes just means smaller businesses, patriotic businesses, and tax payers have to pay the difference.
BTW, corps get a ton of government services and corporate welfare - if they leave the nation they should be billed for services rendered. Most corps who pay for an employee to get training make sure the employee must pay it back or stick around a while --- but for corporations dealing with the peoples' government... its a double standard.
Democracy Now! - uncensored, anti-establishment news
I pay higher income tax, higher sales tax, but my property tax is about HALF Wisconsin and I'm in a major city too. At least in MN, we don't pay sales tax on necessities.
They get you 1 way or another... Me, I want to remove homestead property taxes completely. I am a DIY bargain hunter and in my spare time I could easily make my house worth more than I can afford before my retirement - but say I was retired... it would be even easier to have such a problem. My state is full of small towns who can't afford to run themselves anyhow so they get a sizable chunk from the state...
Sometimes I think we waste 1-2% just playing all these games to fool the selfish voters.
Democracy Now! - uncensored, anti-establishment news
#2 is retarded. #1 just claimed the guys tax rate was 57%, now the poor guys tax rate is claimed to be 35%.
35% is less than 57% so that tax setup is not regressive, it is progressive.
You seriously didn't notice that? Or are you making false claims intentionally?
There are a bunch of arguments for why the rich should pay more (not just dollar wise but percentage wise).
Off the top of my head:
1. They can afford to. It costs $X to run the government and lowering the burden on the poor by increasing that on the rich is considered a reasonable thing to do by many people (not you obviously).
2. They use more government resources and hence it's fair they pay more. The military provides more benefit to the rich - they lose more if the Russians invade and confiscate all the property. The legal system provides greater protection (in terms of the value protected) for their property.
3. The marginal propensity to consume falls as income rises. If you think the economy is demand driven then taking more money from the rich and less from the poor will be better for the economy.
4. Income exhibits diminishing marginal returns in terms of utility (a person earning $100,000/year gets less utility from an extra $1000 than a person earning $25,000/year does). Hence taxing the rich at higher rates than the poor will result in higher total utility than a flat percentage system.
i live in washington state, know plenty about this ballot initiative, and most of these comments are ignorant. if they passed the state income tax law (I-1098) it could be potentially be applied to all tax brackets, not just the wealthy. i like the idea of taxing income on the wealthiest however this specific ballot initiative was too broad and left the door open to expand to even low income families.
btw the argument in the article writeup is not even valid. if it did pass, which it didn't, it wouldn't have gone into effect until next year. so balmers cashout of stock doesn't even come into play.
you can keep hating on microsoft, but just make sure you get your facts straight.
-mr silver
You don't need to tax them at higher rates. Percentages already do that. Just tax them at a flat rate.
Do the math. You get taxed 10% on $25,000.00, they take two thousand, five hundred bucks from you. They tax some rich person at 10% on twenty million dollars, and they take two million dollars from them.
Flat tax, two people contributing, one is you at about two thousand, five hundred bucks the other is the rich guy at two million dollars. Total is two million, two thousand five hundred dollars. Of which YOU paid about 1/800th of the total. Say they build a highway from this taxation. Now you and the rich guy can drive on it. Does that feel like you're not "redistributing the wealth"?
Isn't that enough, without the rich guy paying an even higher percentage?
You're certainly entitled to your opinion, but me, I'm not rich, yet a flat tax rate seems pretty severe already, and I'm perfectly satisfied with it. The problem as I see it is that the rich aren't paying that rate. Look at what Google just paid in taxes. And it's perfectly legal, by which I mean to say it's perfectly broken.
I've fallen off your lawn, and I can't get up.
He is Microsoft oldtimer and got lots of stock options. Number of initial stocks multiplied by 288 (source: wikipedia). It is harder to sell stocks, when you work for same company and especially when you are *EO of that company. He is diversified. 2B USD is less than 20% of his wealth.
Its about equality of pain, not equality of money spent. Me spending 10% of my income on taxes is much more painful than a rich person spending 10%. An example, someone who makes 20k a year would pay 10% in your example, that $2000 means the difference between being able to afford to fix his car if it brakes down. But then again, 10% is laughable for a flat tax, it would probably be closer to 20% if not higher.
Where in the constitution is the federal government authorized to implement a national sales tax?
You talk as if the federal government is or should be somehow limited by the Constitution.
What, are you some kind of radical nutcase?
Strat
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
Really? Your superhero ideal does not often match reality. Ever seen what happens when a CEO of a large company REALLY needs to be contacted in a hurry? 24/7 indeed.
You have been watching far too many movies and confusing them with reality.
The 1st was slavery.
http://online.wsj.com/article/SB124260067214828295.html
It says:
" We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts."
For the full story of how beneficial eliminating the US Income Tax would be, see:
www.fairtax.org
Well, Washington won't have to increase their sales tax after eliminating income tax because they never had one in the first place. The sales tax is 6.5% in Washington, with counties adding from 1.5% to 3.5%.
For most states and municipalities, things were going swimmingly before the bust. With revenues up, they double-downed on spending: half-billion dollar schools, $1.5 million city manager salaries. The problem is they refused to cut the fat during lean times.
Even if you believe in Keynesian economics, spending money to promote economic activity is the prerogative of the one government (the Feds) that has a printing press.
I'm not a lawyer, but I play one on the Internet. Blog
1. Inflation means more people are automatically promoted to higher tax brackets.
2. Income tax discourages productive investment. I've never really understood why the government doesn't let you deduct the entire cost of capital investment (new factory, new pizza oven, etc.) from your income instead of deducting a small amount (depreciation) every year.
It's entirely possible for you to spend more money than you take in for a given year, and still be liable for income taxes! Obviously that means you'll do less capital investment, which means less jobs.
Or it means you'll be encouraged to borrow money from banks (and surprise ... that is deductible) instead of growing organically. Which, combined with other government messes, means a diversion of funds toward the non-productive sector (bankers, lawyers, accountants).
Anyway, sales tax eliminates this whole gordian knot. You get taxed on consumption. Production is free.
I'm not a lawyer, but I play one on the Internet. Blog
It sounds like you've given this a lot of thought.
Here's another tax that seems better than the monstrosity of income taxes:
The APT tax (no, it's not a tax on Debian installation methods).
I'm not a lawyer, but I play one on the Internet. Blog
Well, as long as you don't spend it, what use is it to you?
I mean, granted we talk about the rich getting richer, but usually that's in the context of them having all kinds of fabulous luxuries like gold faucets and Porches while the proles make do with leaky lead pipes and clunkers.
But if the rich don't actually spend their money, how are they benefiting from it? And if they don't spend it, it's lying in a bank, increasing the deposits, and therefore decreasing the cost of loaning money. Thereby allowing the poor and middle classes ease of borrowing (for mortgages or small businesses).
I'm not a lawyer, but I play one on the Internet. Blog
ok, well, as I said, you're certainly entitled. We'll agree to disagree.
As for a flat tax, I think you're looking at about 35% or so. If it were viable, which again, not likely.
I've fallen off your lawn, and I can't get up.
I looked at all 3 comics. Good job, whoever made them. Having the different coloured shirts and names really clarifies things for people who need a little visual stuff for learning.
That third comic stumped me, because I didn't do the math properly, but now I get it.
I'm glad that this tax concept is getting more attention on Slashdot, because, theoretically speaking, poor people can profit. I'm disappointed that people still argue against it.
testing out my trending skills
That is good news. If don't mind me asking, which province?
testing out my trending skills
Would you please elaborate on donations, specifically to churches? I agree that churches should pay taxes, but I think that a lot of their money is not really church income. So would I pay a sales tax when giving to the church, and then the church would pay a sales tax to spend it on things like plumbing, pencils, carpet, paper, etc.? I support the last tax payment, but not the first.
Would you elaborate on your last paragraph, please? If I buy a used couch, and then take apart all the parts, and then sell the good condition stuff [e.g. the frame], then would anybody need to pay taxes? If I did that to a new couch, then would anybody pay taxes? I figure that a new couch would require taxes, but not a used couch. Maybe the new materials on a refurbished couch, but at that point we're starting to get complex.
testing out my trending skills
I don't want to bombard you with a bazillion questions, but you're posting bazillion times, so I guess that you're fair game. ;^P
Regarding investments, when I buy and sell stocks, I think of it as putting money in the bank and withdrawing money from the bank, but you said earlier, that we are supposed to pay taxes on the buying and selling of bonds. If I sell $100 of stock to "Lenny", then who pays taxes, if any at all?
testing out my trending skills
Every state I've lived in and the Federal government will all let you pay extra if you want to. If you really think that you want to pay an extra $300, do it.
If you can convince all your friends, let them do it to.
If you say, "I meant everyone should pay an extra $300." Then don't try to make yourself sound noble by saying you'd gladly pay, because that's not what you meant.
There is no double-taxing. Everything is taxed one time, at retail.
How do you get that? When discussing income tax, you take one level of abstraction; you factor in the taxes the plumber pays as part of the cost of service. Under an income tax system, that plumber is still going to pay taxes, and that will still affect his cost of living. So, if he is paying 35% taxes then what does it matter if that is in the form of income tax or sales tax? Either way, it is going to be passed on to his customers.
BC. Note that the Premier has been forced to resign. The impossible to meet criteria for a referendum has actually been met and the recall mechanism has started.
Most of the hatred is due to the government in the last election promising they weren't considering it, campaigning on the platform that the other party (socialist) was going to tax funerals etc then right after winning introduced the new tax, which includes taxing funerals. Fucking liars.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
I didn't say it was part of the same transaction. You did.
Actually you said:
So the net tax rate on the plumber for that transaction is 57.75%.
...implying that there was a single tax rate of 57.75% on one transaction.
Poor choice of wording aside, the argument still falls down on a number of grounds:
Need to type accents and special characters in Windows? Use FrKeys
You're wrong. High tech companies are fleeing California for low tax states. In fact, high earners inevitably flee high tax states for low tax states:
Here's a comparison between California and Texas that explains, in great detail, how and why Texas is kicking California's ass.. This is also why more than half the new jobs created in the last twelve months were created in Texas. Another reason is strong vs. weak or no public sector unions. One thing that articles notes:
High tech employees are fleeing California for Texas, because they can keep more of what they make, the government isn't going bankrupt, and the roads and schools are now better in Texas. Despite all the money California spends on a a bloated public sector, the actual core services delivered are worse in California than they are in Texas:
Here's a slightly older analysis from 2007. Since then, of course, things have gotten better (relative to the rest of the nation) for Texas and worse for California.
Low taxes and small government create jobs. High taxes and big government destroy jobs.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Yeah, I hear you about how much of a liar he his. I hate him for what he did to BC Rail. He makes the NDP look good.
I never thought of the taxes in the way that you describe. It's interesting.
testing out my trending skills
Because they can afford it. A minimum-wage employee who gets taxes 50% of his income will go without eating; a CEO who gets gets taxed 50% of his income will simply invest a bit less.
The more you earn, the smaller percentage of your income you spend on food, housing and other unavoidable costs. Progressive taxation is simply taking this into account.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
The new income tax wouldn't have come into being over night even if it did pass. By selling all the stock before January, even if the income tax measure passed, even if the capital gains were considered income, Ballmer would not have been taxed on the transaction because of the effective date on the law.
If the timing is politically motivated, it has to do with the expiration of the Bush tax cuts.
america never 'was' as such. there were only frontier conditions, allowing the new entrants to the market to be able to free of domination of established ones. and when frontiers expired, power hierarchy got established again. come late 19th century, almost entire america risked being owned by 4 people. now, it is owned by a group of people through innumerable proxies and conglomerates. nothing has been different. below post illustrates it fine. youre not the first one to use that argument. that 'free' market conditions, freedom of innovation whatnot, has always been an illusion.
http://slashdot.org/comments.pl?sid=1847700&cid=34083272
Read radical news here
You'll have to point out where I said I actually agreed with any of those arguments I raised.
You do realise people can actually understand motivations and reasons for things that they don't actually think themselves, right?
Guess not. Oh well, that's supposed to come at 5 years of age as your brain develops, you mustn't have got their yet.
...Which leads to another interesting question. What was the original exemption threshold when the US Income Tax was first implemented? How close is that figure to today's, in terms of what percentage of people fell below it? Was it originally a tax mostly on rich people, or was everyone affected?
Do not mock my vision of impractical footwear
If your argument for the flat tax rate is that it will help close loop holes for the rich, fine, at least that has some logic behind it. But please don't tell me you want someone below the poverty line to pay $2,500 in taxes.
Common Sense
No, not at all. I was just trying to show how percentages act across widely diverse income levels.
My flat tax concept is designed both to completely eliminate the highly regressive effects of the income tax on the poor, and to eliminate all tax loopholes, large and small, obsolete the vast bulk of the IRS, encourage investment and savings, and simplify tax collection enormously. It can be extended from the federal level to the state level easily, too, though it'd be a bear to do -- and as pointed out earlier, it'd take a constitutional convention to legitimately obtain the authority for any of this.
My method builds in a true zero tax liability structure up to a defined "poverty" level, which may be determined as locally as desired down to the individual, or as globally as the entire population. Individually is most accurate; globally is least expensive. Some level of compromise is called for.
Every new transaction (land, buildings, services, stocks, goods, diapers, TP, gardening, etc.) is taxed at the same rate; used items are taxed if they have gained in sales price and then, only for the amount gained. No double (or more) dipping.
Basically, each person is given a tax allowance at the beginning of each month. For instance, if the poverty level is determined to be $2000 in monthly spending, and the tax rate is 35%, then each person gets a check for $700.
This completely covers the tax liability for all spending up to that $2000 level. Over that, everyone has to come up with their own tax dollars. In this way, basic needs are wholly tax free for everyone -- no matter what your income -- and everything else, isn't. Totally level playing field at the bottom, totally proportional playing field elsewhere.
With the check arriving at the beginning of the month, and disbursed as tax fees by the end, there is no ongoing cost for the tax mechanism other than check distribution; electronic distribution would be preferable as it can be zero cost.
Of course, both the 35% tax rate and the $2000 poverty level are hand waving. Those would have to be carefully determined in order for the government to recoup the funds needed and for the poor to be served appropriately.
Here are three short cartoons that go over the basics:
I've fallen off your lawn, and I can't get up.
The bank pays tax on the interest it earns. The rich person pays tax on the interest *they* earn. Money that just sits, for instance in a checking account that doesn't earn interest and isn't collateralized in some manner, isn't taxable. But it isn't doing anything, either. If it is collateral, for instance on a credit line, that credit line is taxable the instant it is issued, and for the full amount of the line. When new value is transferred, the tax applies. No loopholes.
The investor pays taxes on stocks, bonds, etc. Same rate. And also on any income gained from those investments. No exceptions.
Any money put to work on new goods or services or instruments, is taxed. Any money put to work on used goods is taxed if the purchase price exceeds the previous value on which taxes were paid. For instance, I sell you a new house for $100k. You pay $35k in taxes. You resell the house for $150k. The new buyer pays $17.5k in taxes (on the 50k price increase.) Or, you sell the house for $75k; the buyer does not pay taxes on the purchase (because this value has already been taxed -- no double dipping.)
I've fallen off your lawn, and I can't get up.
This is like having to defend porn in order to stand for free speech. It's the right fight but you need a shower afterwards. Listen, I'd like to see Balmer lose copious amounts of money as much as anyone else, maybe more than some, but that bill would have created way too much collateral damage to regular people in Washington had it passed. It's like taking a hammer to a fly on your nose.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
imo the rich are more willing to spend the additional money on gaming the system than on taxes. So when you have a complicated system, then you have alot of loopholes to exploit.
Starbucks, Harbuckle of Breath.
>or a $2B state income tax-free payday for its CEO
Of course it is the tax free payday. Also, if you could put a full 20% across the line to all residents and companies, with no possible
deductions, so you would lessen the paper work for tax returns, you could also generate so much more revenue, but then they would start going off shore even more, as taxes in dubai are non existent, etc....
I think comparing the stated (but theoretical) marginal tax rates alone isn't necessarily all that useful without taking into consideration the loopholes, deductions, and other changing components of the complicated system.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
If you paid less than $100 for the stock, you pay capital gains tax on the difference between what you paid and what you sell for -- minus commission costs too.
That makes more sense than what I was thinking. I wish that we could have some kind of a tax shelter until we take our money out, or something like that.
testing out my trending skills
We do, it's called a 401(k). Most people even get extra "free money" from their employer.
Under the proposed tax system that we are discussing, there would be no tax shelters, if I understand correctly. Having a tax shelter would just create another law, which would make the system more complex.
Just for the record, I'm from Canada, and we do have tax shelters, but I'm pretty sure that we do not have 401(k).
testing out my trending skills
We were talking about a flat *sales* tax rate on new items and new value, with a built-in COL payment. Such a tax is inescapable, because everyone has to pay it for everything they buy. No more tax shelters. At all. For anyone. One of the concepts many merits. You should have read the thread.
The bit of yours about how power aggregates - absolutely right. Can't be fixed as long as the government is based upon centralized power, which I suspect is the same as "can't be fixed."
I've fallen off your lawn, and I can't get up.