The 2017 tax reform from an economic point of view

[Foxfyre]

I would ask those participating in this thread to review the OP and the poll questions one more time.

Just considering the first three items on the list:

The tax reform bill just passed as I see it:
1. Was sold as one means to help promote thriving commerce and industry. Would that benefit the American people?

2. Was careful not to interfere in any way with the free market concept. Does that benefit the American people?

3. Was designed to make American commerce and industry at all levels more competitive with each other and in a global market. Will that benefit the American people?

Yes, yes, and yes. But one wonders how much benefit relative to the cost. From what I hear, this bill will probably be amended at some point sooner or later so what will we end up with? But I think it was a good first step.

I certainly hope it will be amended or additional economic legislation will pass. We still need for beneficial healthcare legislation which will mean the federal government will stay mostly out of it except for Medicare and the VA plus sensible federal regulation that will encourage competition across state lines and enforcing anti trust and RICO laws.

As for Medicare and the VA, these should be managed by healthcare professionals instead of faceless bureaucrats and it probably won't happen in our lifetime, but it would be wonderful if healthcare should become so accessible and affordable for all that both programs would become unnecessary except for the country being sure our veterans are properly cared for.

If the current tax bill gets favorable marks from most of the people, and I believe it will, maybe our timid status quo legislators will see fit to streamline the tax code as the President wanted--additional simplification and maybe a flat rate or at most three brackets while graduallly and carefully whittling away at giveaways that inspire more government control.

I am pretty sure that the less the federal government is involved in the delivery of healthcare and education, the more affordable it will become.

 

[Aldo Raine]

Tax expenditures are a strange animal. But if you end them:

If you live in your own apartment that you own, you will pay tax on the amount of rent that you are not paying to yourself plus you lose your deductions on your mortgage insurance and real estate taxes which would greatly lower the little guys ability to buy and own real property. That would shift a whole bunch of wealth to that top 1% in a hurry.

Employers who can now deduct their costs of helping to finance 401Ks, healthcare plans, and other employee benefits will be taxed on that money which would greatly reduce their ability and incentive to provide them.

Depreciation would be gone as well as deductions for charitable contributions. That would almost certainly result in less acquisition and further strain social services.

The topic of this thread is benefit to the people. How does eliminating means of the people to keep more of their own money that they work for and earn benefit them?

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Only business expense I am good with keeping is payroll.

 

[Foxfyre]

Tax expenditures are a strange animal. But if you end them:

If you live in your own apartment that you own, you will pay tax on the amount of rent that you are not paying to yourself plus you lose your deductions on your mortgage insurance and real estate taxes which would greatly lower the little guys ability to buy and own real property. That would shift a whole bunch of wealth to that top 1% in a hurry.

Employers who can now deduct their costs of helping to finance 401Ks, healthcare plans, and other employee benefits will be taxed on that money which would greatly reduce their ability and incentive to provide them.

Depreciation would be gone as well as deductions for charitable contributions. That would almost certainly result in less acquisition and further strain social services.

The topic of this thread is benefit to the people. How does eliminating means of the people to keep more of their own money that they work for and earn benefit them?

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

I am not task0778 to whom you addressed the question, but re your first question, of course business expenses should be deducted by those who are self employed or by corporations.

Your average super market, for example, has a profit margin of around 1%. The industry standard for the gross sales at an average supermarket is approaching $10 per square foot per week. If you do the math, in a 10,000 sq. ft store, that translations to $36,500,000 in gross income/sales per year but only $365,000 in net profit. It would be ridiculous to tax that super market on the $36,500,000 when it only earned $365,000 in profits.

I am 100% opposed to the federal government having any power to dictate how much any person can earn or how much wealth a person can accumulate. However, I would have no problem with capping the salary that a company can deduct as a business expense. For instance an executive should not be able to pay himself mega millions in salary to eliminate the profit his company makes and thereby escape the tax man entirely. So maybe a salary up to say $1 million could be deductible as a business expense but anything over that would not be deductible. (It is noted, however, that the executive would be paying taxes on his income regardless, but a cap on business expenses might be an incentive to take less to keep the money taxed at a more affordable corporate rate.)

We have something comparable tro that in the new tax bill with mortgage insurance and taxes deductions. Deductible mortgage insurance and property taxes have encouraged and enabled home ownership for millions of Americans. Home ownership has in return resulted in more stable neighborhoods that better hold their property values, encouraged economic development to serve those neighborhoods, higher education standards, lower crime rates, more socially responsive dynamics, and other quality of life dynamics that reduce strain on social services. Owning your own home has always been part of the American dream. However. . .

The new tax reform bill puts a sensible cap on how much mortgage interest and property tax can be deducted. 99% of us will see no difference between the way that was and the way it still is. But the top 1% who can afford million dollar homes and/or multiple high value homes will take a hit on that because of the new caps imposed. Speaking of the tax bill only benefiting the rich? Not.

 

[Foxfyre]

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Only business expense I am good with keeping is payroll.

Please see my Post #123

 

[task0778]

Tax expenditures are a strange animal. But if you end them:

If you live in your own apartment that you own, you will pay tax on the amount of rent that you are not paying to yourself plus you lose your deductions on your mortgage insurance and real estate taxes which would greatly lower the little guys ability to buy and own real property. That would shift a whole bunch of wealth to that top 1% in a hurry.

Employers who can now deduct their costs of helping to finance 401Ks, healthcare plans, and other employee benefits will be taxed on that money which would greatly reduce their ability and incentive to provide them.

Depreciation would be gone as well as deductions for charitable contributions. That would almost certainly result in less acquisition and further strain social services.

The topic of this thread is benefit to the people. How does eliminating means of the people to keep more of their own money that they work for and earn benefit them?

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Business expenses have to be deducted, so if the SE person's net income is 40k then that's what they'd pay their 15% on. But those business expenses have to be legit expenses needed to run the business; generally a self-employed person shouldn't get to deduct anything that you can't as somebody else's employee.

 

[task0778]

I would ask those participating in this thread to review the OP and the poll questions one more time.

Just considering the first three items on the list:

The tax reform bill just passed as I see it:
1. Was sold as one means to help promote thriving commerce and industry. Would that benefit the American people?

2. Was careful not to interfere in any way with the free market concept. Does that benefit the American people?

3. Was designed to make American commerce and industry at all levels more competitive with each other and in a global market. Will that benefit the American people?

Yes, yes, and yes. But one wonders how much benefit relative to the cost. From what I hear, this bill will probably be amended at some point sooner or later so what will we end up with? But I think it was a good first step.

I certainly hope it will be amended or additional economic legislation will pass. We still need for beneficial healthcare legislation which will mean the federal government will stay mostly out of it except for Medicare and the VA plus sensible federal regulation that will encourage competition across state lines and enforcing anti trust and RICO laws.

As for Medicare and the VA, these should be managed by healthcare professionals instead of faceless bureaucrats and it probably won't happen in our lifetime, but it would be wonderful if healthcare should become so accessible and affordable for all that both programs would become unnecessary except for the country being sure our veterans are properly cared for.

If the current tax bill gets favorable marks from most of the people, and I believe it will, maybe our timid status quo legislators will see fit to streamline the tax code as the President wanted--additional simplification and maybe a flat rate or at most three brackets while graduallly and carefully whittling away at giveaways that inspire more government control.

I am pretty sure that the less the federal government is involved in the delivery of healthcare and education, the more affordable it will become.

I am pretty sure that the less the federal gov't is involved in ANYTHING the more affordable it will become. I was listening to the news (Fox Business) while eating breakfast this morning,and they were saying that something like 85% of the donations to orgs like Good Will gets to the people that need the help but only something like 30% of the money for that purpose from the gov't actually gets to the needy. The bureacracy eats up a lot of that money.

 

[Toddsterpatriot]

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Only business expense I am good with keeping is payroll.

Only business expense I am good with keeping is payroll.

What about Cost of Goods Sold?

 

[Foxfyre]

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Business expenses have to be deducted, so if the SE person's net income is 40k then that's what they'd pay their 15% on. But those business expenses have to be legit expenses needed to run the business; generally a self-employed person shouldn't get to deduct anything that you can't as somebody else's employee.

Having been a self employed person for a number of years, the self employed have expenses that the salaried person receiving a W-2 at the end of the year does not have. The W-2 employee may or may not be furnished with or be reimbursed for uniforms, personal car expense, and other out-of-pocket expenses, but that should be something worked out between the employer and employee. The federal government should stay out of it.

The self employed person who risks capital by going into business has expenses for infrastructure, maintenance, property and on site liability and sometimes E&O insurance, any salaries plus FICA, SUTA, FUTA, work comp and employee liability insurance, utilities, business supplies, equipment, inputs, transportation, legal costs, and many other business costs that he would not otherwise have. He also pays all his social security costs instead of him paying half and his employer paying half and that is not deductible.

There are very very VERY few businesses who could afford to do business at all if they are required to pay income tax on their gross revenues instead of their profit after all expenses are deducted.

What the new tax code does is significantly lower the rate on which those profits are taxed so that the business owner will have more disposable income left over after expenses and taxes. And a fair number of businesses will use that money to raise salaries and/or offer more benefits to keep valued employees, will be able to expand, grow, and start up new ventures. I am pretty sure we will see more full time jobs returning and less under employment. Add in fewer oppressive regulations and I am pretty sure we will see more commerce and industry staying here in America instead of moving out of the country to get more business friendly environments.

 

[Foxfyre]

I would ask those participating in this thread to review the OP and the poll questions one more time.

Just considering the first three items on the list:

The tax reform bill just passed as I see it:
1. Was sold as one means to help promote thriving commerce and industry. Would that benefit the American people?

2. Was careful not to interfere in any way with the free market concept. Does that benefit the American people?

3. Was designed to make American commerce and industry at all levels more competitive with each other and in a global market. Will that benefit the American people?

Yes, yes, and yes. But one wonders how much benefit relative to the cost. From what I hear, this bill will probably be amended at some point sooner or later so what will we end up with? But I think it was a good first step.

I certainly hope it will be amended or additional economic legislation will pass. We still need for beneficial healthcare legislation which will mean the federal government will stay mostly out of it except for Medicare and the VA plus sensible federal regulation that will encourage competition across state lines and enforcing anti trust and RICO laws.

As for Medicare and the VA, these should be managed by healthcare professionals instead of faceless bureaucrats and it probably won't happen in our lifetime, but it would be wonderful if healthcare should become so accessible and affordable for all that both programs would become unnecessary except for the country being sure our veterans are properly cared for.

If the current tax bill gets favorable marks from most of the people, and I believe it will, maybe our timid status quo legislators will see fit to streamline the tax code as the President wanted--additional simplification and maybe a flat rate or at most three brackets while graduallly and carefully whittling away at giveaways that inspire more government control.

I am pretty sure that the less the federal government is involved in the delivery of healthcare and education, the more affordable it will become.

I am pretty sure that the less the federal gov't is involved in ANYTHING the more affordable it will become. I was listening to the news (Fox Business) while eating breakfast this morning,and they were saying that something like 85% of the donations to orgs like Good Will gets to the people that need the help but only something like 30% of the money for that purpose from the gov't actually gets to the needy. The bureacracy eats up a lot of that money.

I'm glad you brought up the size and expense and power of the bureaucracy.

DISCLAIMER: I am working from personal notes here and do not have links to the following data so I will offer it as my informed opinion only though I am pretty sure it can all be substantiated:

There are more than 169,000 pages in the Code of Federal Regulations. The Obama administration added something like 11,300 pages in his first two years of office and probably quadrupled that by the time his eight years were done. Some of that was via executive order from the President himself or via legislation passed by Congress. But most of the rules and regs in the code are written by unelected, faceless, nameless bureaucrats even as they are treated as the law of the land. Violations of most result in various penalties including loss of privileges, fines, and/or jail time.

To accomplish all that, some 4 million to 4.4 million federal employees scattered all over the land and all over the world have created a massive, bloated, unknowable, unmanageable, bureaucracy that has been incrementally by fits and starts growing and becoming ever more bloated, more unknowable, more incomprehensible, more unmanageable and that absorbs up to 2/3rds or more of all revenues taken in or created via more debt. That's 1 federal employee for every 83 or so of us and is in addition to all the state, county, and city employees out there. And it requires more and more revenues. If unchecked and the situation isn't reversed, it will eventually claim more of all national resources than what is left for the other 330 million people who are not federal employees.

And then we no longer have a democratic republic. We have a dictatorship/totalitarian government.

I hope everybody participating or reading in on this thread will be able to set aside their personal partisanship and ideology and really think about that. Is it likely to benefit the people more for the government to have the power to take whatever it wants and decide what it wants the people to have? Or is it more beneficial for the people if the federal government does only what is absolutely essential and necessary and otherwise allow the states and the people determine how they will live their lives and use the money they earn?

 

[edthecynic]

Hey Foxy! Check this out:

The Free Market Beats Government Planning Every Time

Excerpt:

The average well-stocked supermarket carries 60,000 to 65,000 different items. Walmart carries about 120,000 different items.

Let’s suppose Congress puts you in total control of getting just one item to a supermarket—say apples. Let’s not make it easy by having the help of apple wholesalers. Thus, you would have to figure out all of the inputs necessary to get apples to your local supermarket.

Let’s look at just a few. You need crates to ship the apples. Count all the inputs necessary to produce crates. There’s wood, but you need saws to cut down trees. The saws are made of steel, so iron ore must be mined, and mining equipment is needed. The workers must have shoes.

The complete list of inputs to get apples to the market comes to a very large, possibly an unknowable, number. Forgetting any one of them, such as spark plugs, would probably mean no apples at your supermarket.

The beauty of market allocation of goods and services, compared with government fiat, is no one person needs to know all that’s necessary to get apples to your supermarket. Free markets, accompanied by free trade, including international free trade, make us richer by economizing on the amount of knowledge or information needed to produce things.

AND, this is without the politics getting involved with the corruption that goes with that.

I also note that the article I linked was back in 2009, the first year of the Obama administration. This one you linked is 2017, the first year of the Trump administration.

I suspect we have a President now who better understands the concept that Dr. Williams is teaching than did President Obama and the people surrounding him.

It's the same crap from the same idiot who obviously has learned nothing from 2009 to 2017.

Oh I think he learned quite a bit. And the same crap? Idiot? Perhaps you could make a good argument for why a free market doesn't benefit the people at the supermarket or in producing apples and why he is wrong that no government has the capability of accomplishing the same thing?

How is stocking the shelves of a supermarket different than stocking the armaments of the military???
If the government can do one, then they can do the other. If a supermarket is better, then why are they not running the military.
To put it in Right-wing terms, Williams is an affirmative action idiot who knows nothing about supermarkets and less about government.

 

[Foxfyre]

Hey Foxy! Check this out:

The Free Market Beats Government Planning Every Time

Excerpt:

The average well-stocked supermarket carries 60,000 to 65,000 different items. Walmart carries about 120,000 different items.

Let’s suppose Congress puts you in total control of getting just one item to a supermarket—say apples. Let’s not make it easy by having the help of apple wholesalers. Thus, you would have to figure out all of the inputs necessary to get apples to your local supermarket.

Let’s look at just a few. You need crates to ship the apples. Count all the inputs necessary to produce crates. There’s wood, but you need saws to cut down trees. The saws are made of steel, so iron ore must be mined, and mining equipment is needed. The workers must have shoes.

The complete list of inputs to get apples to the market comes to a very large, possibly an unknowable, number. Forgetting any one of them, such as spark plugs, would probably mean no apples at your supermarket.

The beauty of market allocation of goods and services, compared with government fiat, is no one person needs to know all that’s necessary to get apples to your supermarket. Free markets, accompanied by free trade, including international free trade, make us richer by economizing on the amount of knowledge or information needed to produce things.

AND, this is without the politics getting involved with the corruption that goes with that.

I also note that the article I linked was back in 2009, the first year of the Obama administration. This one you linked is 2017, the first year of the Trump administration.

I suspect we have a President now who better understands the concept that Dr. Williams is teaching than did President Obama and the people surrounding him.

It's the same crap from the same idiot who obviously has learned nothing from 2009 to 2017.

Oh I think he learned quite a bit. And the same crap? Idiot? Perhaps you could make a good argument for why a free market doesn't benefit the people at the supermarket or in producing apples and why he is wrong that no government has the capability of accomplishing the same thing?

How is stocking the shelves of a supermarket different than stocking the armaments of the military???
If the government can do one, then they can do the other. If a supermarket is better, then why are they not running the military.
To put it in Right-wing terms, Williams is an affirmative action idiot who knows nothing about supermarkets and less about government.

The military is not a free speech or free market kind of entity. Of necessity it is government created, stocked, and managed. The military is funded with taxes rather than paying taxes.

It would help if you actually read the argument that is being made as your question is rather silly and non sequitur.

Admittedly, the military is one thing the government does that contributes to a free market economy as it frees up the people from having to purchase and maintain all that equipment themselves to protect against or deter foreign aggressors. However the free market principle does apply when it comes to equipping the military as it would be much much more difficult if not impossible to do without that free market operating. And no, the government would not be able to do it without free market principles at play.

And one more time, where did Dr. Williams get it wrong?

 

[Slade3200]

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

I am not task0778 to whom you addressed the question, but re your first question, of course business expenses should be deducted by those who are self employed or by corporations.

Your average super market, for example, has a profit margin of around 1%. The industry standard for the gross sales at an average supermarket is approaching $10 per square foot per week. If you do the math, in a 10,000 sq. ft store, that translations to $36,500,000 in gross income/sales per year but only $365,000 in net profit. It would be ridiculous to tax that super market on the $36,500,000 when it only earned $365,000 in profits.

I am 100% opposed to the federal government having any power to dictate how much any person can earn or how much wealth a person can accumulate. However, I would have no problem with capping the salary that a company can deduct as a business expense. For instance an executive should not be able to pay himself mega millions in salary to eliminate the profit his company makes and thereby escape the tax man entirely. So maybe a salary up to say $1 million could be deductible as a business expense but anything over that would not be deductible. (It is noted, however, that the executive would be paying taxes on his income regardless, but a cap on business expenses might be an incentive to take less to keep the money taxed at a more affordable corporate rate.)

We have something comparable tro that in the new tax bill with mortgage insurance and taxes deductions. Deductible mortgage insurance and property taxes have encouraged and enabled home ownership for millions of Americans. Home ownership has in return resulted in more stable neighborhoods that better hold their property values, encouraged economic development to serve those neighborhoods, higher education standards, lower crime rates, more socially responsive dynamics, and other quality of life dynamics that reduce strain on social services. Owning your own home has always been part of the American dream. However. . .

The new tax reform bill puts a sensible cap on how much mortgage interest and property tax can be deducted. 99% of us will see no difference between the way that was and the way it still is. But the top 1% who can afford million dollar homes and/or multiple high value homes will take a hit on that because of the new caps imposed. Speaking of the tax bill only benefiting the rich? Not.

You make some very good points. To go back to the last post that you were responding to. Profit margins are based on expenses and which expenses get applied determines the taxable income. That is what this discussion is about. Are you talking just about the cost of goods sold, or are we also talking about equipment, travel, marketing, labor, community involvement (charitable contributions, sponsorships, etc.)

If we did it Aldos way and only allowed payroll to be deducted then businesses like your supermarket example would have to pay more in taxes then they actually make in profits and they would shut down. I don't think he has really thought this thing through.

If we take away deductions for charitable contributions and community involvement (like sponsoring the local little league team) then businesses just wouldn't do it and those organizations would likely have to shut their doors.

I think it is easy to say there should be a flat tax, but when you get into the weeds, it is is very hard to justify. We definitely need to reduce areas that are being abused but if we need to be honest and thoughtful about how these ideas will effect small businesses and our economy as a whole.

 

[Slade3200]

Well, it appears that the nee tax reform dors indeed eliminate many of the little guys perdonal exemptions. I am saying do the same for businesses and the uber wealthy. If the tax rate were say 15% for all would that not be fair. Businesses and the wealthy are paying the same as the working stiff, not a lower effective tax rate as yhey often do now.
Besides it is the same rate across the board, not robbing the wealthy for others free stuff that righty loves to throw out there.

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Business expenses have to be deducted, so if the SE person's net income is 40k then that's what they'd pay their 15% on. But those business expenses have to be legit expenses needed to run the business; generally a self-employed person shouldn't get to deduct anything that you can't as somebody else's employee.

Yes, well this is what the discussion is about. What should and what shouldn't be deducted to determine taxable income. Saying that you want a flat 15% tax rate may sound fair on the surface but you have to look at the big picture of how w2 employees are taxed vs small business owners vs self employed individuals, vs corporations. It is a much more complicated beast then it seems on the surface.

 

[Foxfyre]

Righty loves to rob the wealthy for others free stuff? Really? And for God's sake check your spelling before you post,

Fine by me to go to a flat tax with no deductions. From the 1st dollar to the last.

If im a W2 employee and I make 100k salary then I’d pay 15k in taxes with your 15% flat tax plan. If you are self employed and you do 100k in sales but to earn that money You had 60k In expenses giving yourself a take home net of 40k then do you think I should be paying the same amount of taxes as me?

To save you some math, that plan would give me an after tax income of 85k and you 25k

There is a difference between 100k in sales and 100k in income.

So you are ok deducting business expenses then? What is it you want to eliminate? Charitable contribution write offs. Child tax credits? Stuff like that?

Business expenses have to be deducted, so if the SE person's net income is 40k then that's what they'd pay their 15% on. But those business expenses have to be legit expenses needed to run the business; generally a self-employed person shouldn't get to deduct anything that you can't as somebody else's employee.

Yes, well this is what the discussion is about. What should and what shouldn't be deducted to determine taxable income. Saying that you want a flat 15% tax rate may sound fair on the surface but you have to look at the big picture of how w2 employees are taxed vs small business owners vs self employed individuals, vs corporations. It is a much more complicated beast then it seems on the surface.

Not really. As an employee, how much money did you earn from all sources over a specified standard threshhold plus the amount you paid in mortgage interest, real property taxes, contributions to your 401K, medical savings plan, and charitable contributions? Send the government 15% of whatever that amount is.

As a business owner, what was your net profit i.e. your gross income less charitable contributions and what it cost you to earn that gross income? Send the government 15% of whatever that amount is.

Most people really could do it on a postcard which is what the President was shooting for. The permanent political class in Washington, however, was not ready to give up all that lovely power yet so the President didn't get anywhere near what he wanted.

But it is a start.

 

[Foxfyre]

And let's analyze the practical side of a truly simplified tax code.

First you have an efficient computer system so that businesses, banks, etc. could input the 1099's and other income related information directly into the federal government computers making that a paperless process. Everybody reports to one central clearing house department that automatically distributes the information to the various departments who need it. (As it is now, the business owner is required to furnish essentially the same information separately to different various departments.)

Let's say a data entry clerk could handle 250 postcard sized returns a day or 1200 a week. That would be roughly 30 or so returns per hour punched into the computer that should be a piece of cake for anybody competent in that kind of work. And assume the clerk works 48 out of 52 weeks. Allowing for sick time, holidays etc., 3500 data entry clerks could handle 150 million postcard size returns.

Add another 3500 people as managers and supervisors and professional checking out returns that don't match up with 1099's, W-2s or other financial statements--there would be far fewer of these with a truly streamlined simplified system.

And another 1000 people with investigative powers to ferret out the few who will still try to beat the system and cheat. Most of those will be flagged by the computers.

And voila! you have an IRS of roughly 8,000 people managing the taxes for a country of 330+ million. (Honestly, I don't think it would take anywhere near that many.)

The IRS is now an organization of roughly 93,000 employees. By one estimate, the IRS alone costs the taxpayer roughly 40 cents for every dollar it collects and processes in taxes.
How many people work for the IRS?

We can do better.

 

[edthecynic]

Hey Foxy! Check this out:

The Free Market Beats Government Planning Every Time

Excerpt:

The average well-stocked supermarket carries 60,000 to 65,000 different items. Walmart carries about 120,000 different items.

Let’s suppose Congress puts you in total control of getting just one item to a supermarket—say apples. Let’s not make it easy by having the help of apple wholesalers. Thus, you would have to figure out all of the inputs necessary to get apples to your local supermarket.

Let’s look at just a few. You need crates to ship the apples. Count all the inputs necessary to produce crates. There’s wood, but you need saws to cut down trees. The saws are made of steel, so iron ore must be mined, and mining equipment is needed. The workers must have shoes.

The complete list of inputs to get apples to the market comes to a very large, possibly an unknowable, number. Forgetting any one of them, such as spark plugs, would probably mean no apples at your supermarket.

The beauty of market allocation of goods and services, compared with government fiat, is no one person needs to know all that’s necessary to get apples to your supermarket. Free markets, accompanied by free trade, including international free trade, make us richer by economizing on the amount of knowledge or information needed to produce things.

AND, this is without the politics getting involved with the corruption that goes with that.

I also note that the article I linked was back in 2009, the first year of the Obama administration. This one you linked is 2017, the first year of the Trump administration.

I suspect we have a President now who better understands the concept that Dr. Williams is teaching than did President Obama and the people surrounding him.

It's the same crap from the same idiot who obviously has learned nothing from 2009 to 2017.

Oh I think he learned quite a bit. And the same crap? Idiot? Perhaps you could make a good argument for why a free market doesn't benefit the people at the supermarket or in producing apples and why he is wrong that no government has the capability of accomplishing the same thing?

How is stocking the shelves of a supermarket different than stocking the armaments of the military???
If the government can do one, then they can do the other. If a supermarket is better, then why are they not running the military.
To put it in Right-wing terms, Williams is an affirmative action idiot who knows nothing about supermarkets and less about government.

The military is not a free speech or free market kind of entity. Of necessity it is government created, stocked, and managed. The military is funded with taxes rather than paying taxes.

It would help if you actually read the argument that is being made as your question is rather silly and non sequitur.

Admittedly, the military is one thing the government does that contributes to a free market economy as it frees up the people from having to purchase and maintain all that equipment themselves to protect against or deter foreign aggressors. However the free market principle does apply when it comes to equipping the military as it would be much much more difficult if not impossible to do without that free market operating. And no, the government would not be able to do it without free market principles at play.

And one more time, where did Dr. Williams get it wrong?

I already told you where idiot Williams got it wrong, there is no difference between stocking shelves in a supermarket than stocking armaments. Everything idiot Williams rationalized about the supermarket supply chain is mimicked exactly in the armament supply chain. And the fact that idiot Williams is an affirmative action "economist" who knows nothing about economics and less about government becomes obvious when you know that one of the most basic equations in economics is the "guns and butter" comparison. Look it up if you have never taken even the simplest course in economics.

 

[Foxfyre]

I also note that the article I linked was back in 2009, the first year of the Obama administration. This one you linked is 2017, the first year of the Trump administration.

I suspect we have a President now who better understands the concept that Dr. Williams is teaching than did President Obama and the people surrounding him.

It's the same crap from the same idiot who obviously has learned nothing from 2009 to 2017.

Oh I think he learned quite a bit. And the same crap? Idiot? Perhaps you could make a good argument for why a free market doesn't benefit the people at the supermarket or in producing apples and why he is wrong that no government has the capability of accomplishing the same thing?

How is stocking the shelves of a supermarket different than stocking the armaments of the military???
If the government can do one, then they can do the other. If a supermarket is better, then why are they not running the military.
To put it in Right-wing terms, Williams is an affirmative action idiot who knows nothing about supermarkets and less about government.

The military is not a free speech or free market kind of entity. Of necessity it is government created, stocked, and managed. The military is funded with taxes rather than paying taxes.

It would help if you actually read the argument that is being made as your question is rather silly and non sequitur.

Admittedly, the military is one thing the government does that contributes to a free market economy as it frees up the people from having to purchase and maintain all that equipment themselves to protect against or deter foreign aggressors. However the free market principle does apply when it comes to equipping the military as it would be much much more difficult if not impossible to do without that free market operating. And no, the government would not be able to do it without free market principles at play.

And one more time, where did Dr. Williams get it wrong?

I already told you where idiot Williams got it wrong, there is no difference between stocking shelves in a supermarket than stocking armaments. Everything idiot Williams rationalized about the supermarket supply chain is mimicked exactly in the armament supply chain. And the fact that idiot Williams is an affirmative action "economist" who knows nothing about economics and less about government becomes obvious when you know that one of the most basic equations in economics is the "guns and butter" comparison. Look it up if you have never taken even the simplest course in economics.

I am pretty busy having a conversation with people who at least know what we are talking about so I'll wish you a pleasant evening and adieu.

 

[edthecynic]

It's the same crap from the same idiot who obviously has learned nothing from 2009 to 2017.

Oh I think he learned quite a bit. And the same crap? Idiot? Perhaps you could make a good argument for why a free market doesn't benefit the people at the supermarket or in producing apples and why he is wrong that no government has the capability of accomplishing the same thing?

How is stocking the shelves of a supermarket different than stocking the armaments of the military???
If the government can do one, then they can do the other. If a supermarket is better, then why are they not running the military.
To put it in Right-wing terms, Williams is an affirmative action idiot who knows nothing about supermarkets and less about government.

The military is not a free speech or free market kind of entity. Of necessity it is government created, stocked, and managed. The military is funded with taxes rather than paying taxes.

It would help if you actually read the argument that is being made as your question is rather silly and non sequitur.

Admittedly, the military is one thing the government does that contributes to a free market economy as it frees up the people from having to purchase and maintain all that equipment themselves to protect against or deter foreign aggressors. However the free market principle does apply when it comes to equipping the military as it would be much much more difficult if not impossible to do without that free market operating. And no, the government would not be able to do it without free market principles at play.

And one more time, where did Dr. Williams get it wrong?

I already told you where idiot Williams got it wrong, there is no difference between stocking shelves in a supermarket than stocking armaments. Everything idiot Williams rationalized about the supermarket supply chain is mimicked exactly in the armament supply chain. And the fact that idiot Williams is an affirmative action "economist" who knows nothing about economics and less about government becomes obvious when you know that one of the most basic equations in economics is the "guns and butter" comparison. Look it up if you have never taken even the simplest course in economics.

I am pretty busy having a conversation with people who at least know what we are talking about so I'll wish you a pleasant evening and adieu.

Thank you for admitting affirmative action idiot Williams knows nothing about supermarkets and government, which he proved with this moronic rationalization that government could not even get one item in a supermarket shelf, yet somehow is able to get a bullet to a soldier's gun.

Since you have forgotten the stupidity of Williams' claim, I will let him refresh your memory with his own words, but this time as you read then think about the government stocking an arsenal with each step he gives for stocking a supermarket and tell me what is so different between the two that a government could not get even one product on a supermarket shelf.

"Let’s suppose Congress puts you in total control of getting just one item to a supermarket—say apples. Let’s not make it easy by having the help of apple wholesalers. Thus, you would have to figure out all of the inputs necessary to get apples to your local supermarket.

Let’s look at just a few. You need crates to ship the apples. Count all the inputs necessary to produce crates. There’s wood, but you need saws to cut down trees. The saws are made of steel, so iron ore must be mined, and mining equipment is needed. The workers must have shoes.

The complete list of inputs to get apples to the market comes to a very large, possibly an unknowable, number. Forgetting any one of them, such as spark plugs, would probably mean no apples at your supermarket.

The beauty of market allocation of goods and services, compared with government fiat, is no one person needs to know all that’s necessary to get apples to your supermarket. Free markets, accompanied by free trade, including international free trade, make us richer by economizing on the amount of knowledge or information needed to produce things."