Should we abolish the capital gains tax?

[Jon]

Whose talking about a progressive tax? Certainly not I. For my money a flat tax is by definition a fair tax and a progressive tax is unfair by definition.

What is called the fair tax is a national retail sales tax which scares the hell out of me.

The fair tax is a joke and its implementation would be a disaster. Besides that, in order to make it "fair", the government has to send money back to everyone. How stupid is that?

The flat tax is what we desperately need. Everyone gets a certain standard deduction and deductions for personal exemptions. Then, everything else is treated as income, including capital gains. I would make one allowance, and that would be to make the capital gains portion based on inflation adjusted numbers. In other words, anyone with capital gains income could reduce it by the amount of inflation for the given timeframe in which it took them to earn that gain. It's not perfect, but it would make a big difference when comparing a short term to a long term capital gain, as long term capital gains are in great part just inflated dollars. No one should have to pay taxes on inflated dollars, only on real gains.

Getting back to the flat tax, it should include everything from wages to capital gains to inheritance. Businesses would also pay the same rate as individuals. As with individuals, businesses could be allowed a standard deduction.

The bottom line would be that the tax rates would be lower for the more wealthy, but there would be no loopholes, and many of them would actually pay more than they do now. At a lower rate however, there would be no reason to complain that they were paying too much.

Now you're talking about taxing capital gains at the same rate as taxing income, and that I don't agree with.

And you will never get businesses to allow a flat tax rate. So many businesses avoid tax expenses by clever tax planning, and allowing only the standard deduction would put a lot of businesses in trouble. One thing we should not allow is the NOL carryovers and carrybacks, because a business that doesn't earn a profit one year does not have to pay taxes that year, which in and of itself is a great idea to help out struggling businesses, but allowing them to carry those losses backwards and forwards to other years to lessen their tax burden in those years is completely insane.

As editec says, a flat tax rate only works in a system where the income brackets are flat. Ours aren't even close.

 

[Jon]

Rather simply...if you PAY YOUR BEST WORKERS MORE MONEY, then guess what?

Those are expenses and as such paying those salaries WILL REDUCE YOUR TAXES.

duh!

Exactly.

 

[Jon]

I will admit that the tax code is complicated, and overly so. There are a lot of pieces of the tax code that should be looked over, or hell, a whole new tax code could be rewritten using the current tax code as a reference to rewrite the deductions that should be allowed. But simplifying it to the point of one tax rate and one standard deduction will not create a fair or efficient tax.

 

[Shogun]

Because I work longer and harder to get the extra money and to drive my business you have no right to take a higher percentage in taxes from me than you do from anyone else. How the hell do I reward my best workers if you are taking half my damn money year in and year out to fund programs for people who don't want to work or can't work.

The same boogie man that TAKES "half" your damn money and then gives a relatively small percentage to people who don't work (most of your damn money goes to defense, infrastructure, public works, police, fire, eductation, etc.) is the same boogie man that makes it possible for you to make any money at all and expect to keep any of it without your own private army. So basically, pull your head out of your ass and quit being such a fucking delusional, self-important, self-absorbed prick.

Thats pretty much the bottom line. I'm sure there are plenty of Surinamese who believe in taxless commerce. Mexicans.. I bet his buisiness would THRIVE on a zero sum tax rate in India! Or AFRICA! Fuck it. Whose going to tax you like those crazy Americans would after setting up shop in Mugabe's Zimbabwe!

 

[manifold]

... But simplifying it to the point of one tax rate and one standard deduction will not create a fair or efficient tax.

What makes you say that?

Note: I agree with most of what Editec has to say most of the time, but I think he's completely wrong to throw in the towel so to speak and suggest that complexity of the tax code is somehow a necessity. In fact, I'd say it stands in direct contradiction to how he normally views things.

 

[Jon]

... But simplifying it to the point of one tax rate and one standard deduction will not create a fair or efficient tax.

What makes you say that?

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

Note: I agree with most of what Editec has to say most of the time, but I think he's completely wrong to throw in the towel so to speak and suggest that complexity of the tax code is somehow a necessity. In fact, I'd say it stands in direct contradiction to how he normally views things.

The complexity is NOT needed, I agree. There are a lot of things that could removed, consolidated, or rewritten. I'm in favor of a new tax code that uses the old tax code as its source.

 

[Ravi]

Damn, jsanders, did you wake up on the wrong side of the bed? You are pretty much right in this instance. The thing about the flat tax rate is that it will actually lower the rate for the rich while raising it for the middle class...therefore putting the bulk of the burden of funding the government on the middle class. Better to lose some of the loopholes the rich are able to take advantage of and tax all income by the same progressive rate.

 

[auditor0007]

... But simplifying it to the point of one tax rate and one standard deduction will not create a fair or efficient tax.

What makes you say that?

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

Note: I agree with most of what Editec has to say most of the time, but I think he's completely wrong to throw in the towel so to speak and suggest that complexity of the tax code is somehow a necessity. In fact, I'd say it stands in direct contradiction to how he normally views things.

The complexity is NOT needed, I agree. There are a lot of things that could removed, consolidated, or rewritten. I'm in favor of a new tax code that uses the old tax code as its source.

Minimum wage Joe wouldn't be paying any taxes as the standard deduction and exemptions would clear his earnings. When breaking down tax revenues, you need to remember that Social Security and Medicare revenues are around $1 trillion. Corporate taxes are around $400 billion. So, you are only talking about collecting $1.2 trillion in income taxes to make up the shortfall. I'm not sure what that rate would be because lower income earners would not pay any income tax, the same as now. Middle income earners would only pay on income above the standard deduction. Everyone would have the same rate, but those who earned less would still pay a lower percentage of their overall income due to the standard deduction. In other words, it would still be a progressive tax where the wealthiest pay the most. This would just get rid of all the loopholes and make certain nobody used creative accounting to avoid paying their fair share.

 

[Jon]

And now you're saying that low income earners pay

 

[Jon]

Damn, jsanders, did you wake up on the wrong side of the bed? You are pretty much right in this instance. The thing about the flat tax rate is that it will actually lower the rate for the rich while raising it for the middle class...therefore putting the bulk of the burden of funding the government on the middle class. Better to lose some of the loopholes the rich are able to take advantage of and tax all income by the same progressive rate.

We're talking taxes, my dear. You don't go to school for accounting and not understand the tax system.

 

[Ravi]

What makes you say that?

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

Note: I agree with most of what Editec has to say most of the time, but I think he's completely wrong to throw in the towel so to speak and suggest that complexity of the tax code is somehow a necessity. In fact, I'd say it stands in direct contradiction to how he normally views things.

The complexity is NOT needed, I agree. There are a lot of things that could removed, consolidated, or rewritten. I'm in favor of a new tax code that uses the old tax code as its source.

Minimum wage Joe wouldn't be paying any taxes as the standard deduction and exemptions would clear his earnings. When breaking down tax revenues, you need to remember that Social Security and Medicare revenues are around $1 trillion. Corporate taxes are around $400 billion. So, you are only talking about collecting $1.2 trillion in income taxes to make up the shortfall. I'm not sure what that rate would be because lower income earners would not pay any income tax, the same as now. Middle income earners would only pay on income above the standard deduction. Everyone would have the same rate, but those who earned less would still pay a lower percentage of their overall income due to the standard deduction. In other words, it would still be a progressive tax where the wealthiest pay the most. This would just get rid of all the loopholes and make certain nobody used creative accounting to avoid paying their fair share.

If the tax rate is 20% and the standard deduction is $30,000 then an earner at $60,000 would pay an effective rate of 10%, an earner at $120,000 would pay an effective rate of 15%, and an earner at 2 million would pay an effective rate of 19.7%. Sounds pretty unrealistic.

 

[Charles_Main]

... But simplifying it to the point of one tax rate and one standard deduction will not create a fair or efficient tax.

What makes you say that?

Note: I agree with most of what Editec has to say most of the time, but I think he's completely wrong to throw in the towel so to speak and suggest that complexity of the tax code is somehow a necessity. In fact, I'd say it stands in direct contradiction to how he normally views things.

I would have to agree.

 

[manifold]

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

How about a standard deduction of $25,000 and a flat rate of 30% on all income above that amount.

I know it would put a lot of tax accountants and lawyers out of work, but why should I care more about them than I do the out of work cobbler.

 

[del]

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

How about a standard deduction of $25,000 and a flat rate of 30% on all income above that amount.

I know it would put a lot of tax accountants and lawyers out of work, but why should I care more about them than I do the out of work cobbler.

cobblers are actually doing pretty well these days, but i take your point.

 

[manifold]

cobblers are actually doing pretty well these days, but i take your point.

Maybe I should've said stock broker.

 

[del]

cobblers are actually doing pretty well these days, but i take your point.

Maybe I should've said stock broker.

 

[Ravi]

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

How about a standard deduction of $25,000 and a flat rate of 30% on all income above that amount.

I know it would put a lot of tax accountants and lawyers out of work, but why should I care more about them than I do the out of work cobbler.

Most people don't pay anywhere near an effective rate of 30% now.

 

[xsited1]

Because of ability to pay. What tax rate would you suppose is fair to everyone? Our national income was $9.78 trillion in 2007; our tax revenue was $2.674 trillion (based on quick searches, I don't have time to find the exact information, so this may be off a bit). A flat tax rate would require us to tax EVERYONE at 27% to collect that kind of revenue. Do you want to be the person to tell Minimum Wage Joe that we're taking 1/3 of his income?

How about a standard deduction of $25,000 and a flat rate of 30% on all income above that amount.

I know it would put a lot of tax accountants and lawyers out of work, but why should I care more about them than I do the out of work cobbler.

Most people don't pay anywhere near an effective rate of 30% now.

I remember when John Kerry was campaigning for tax hikes, it was discovered that he and his wife paid less than 10% in taxes even though they were in the highest tax bracket.

 

[Jon]

How about a standard deduction of $25,000 and a flat rate of 30% on all income above that amount.

Do you realize how much this would take out of the income revenue? That means a person making $50,000 under that system would be paying the same in taxes as a person who makes $25,000 now, and that's a BIG hit to our income revenues. There would have to be a LOT of spending cuts, which this administration doesn't seem to favor.

Plus, not taxing anyone who makes less than $25,000 is a ridiculous, since they are the ones who benefit from most of the social programs the federal government is nice enough to fund with the rich's tax dollars.

 

[manifold]

How about a standard deduction of $25,000 and a flat rate of 30% on all income above that amount.

Do you realize how much this would take out of the income revenue? That means a person making $50,000 under that system would be paying the same in taxes as a person who makes $25,000 now, and that's a BIG hit to our income revenues. There would have to be a LOT of spending cuts, which this administration doesn't seem to favor.

Plus, not taxing anyone who makes less than $25,000 is a ridiculous, since they are the ones who benefit from most of the social programs the federal government is nice enough to fund with the rich's tax dollars.

No, I don't realize that at all. According to the figures you posted earlier, I'd expect it to add to tax revenue (30% > 27%).

And no offense, but your second point makes no sense at all. If they paid less in taxes, perhaps they would require less in government handouts.


Edit: But let's not get caught up haggling over the numbers. Maybe it's $20,000 and 35%. I want you to explain why you don't like the concept itself and say that "simplifying it to the point of one tax rate and one standard deduction will not create a fair or efficient tax."