Study shows what we all kind of suspected

[Nim Chimpsky]

http://www.washingtonpost.com/business/economy/big-corporations-use-loopholes-dodge-taxes-study/2011/11/02/gIQAIalngM_story.html

"The authors examined the finances of 280 corporations from 2008 through 2010 and found that 30 paid zero taxes or used loopholes to wind up with negative tax rates. Local utility Pepco Holdings paid the lowest rate of all the firms investigated, clocking in at nearly minus 58 percent.

Under the federal tax code, corporations are supposed to pay 35 percent of their profits in taxes. But the study found many of the companies used legal tax breaks that allowed them to pay lower rates than ordinary Americans.

...

The report said that 71 of the companies paid an effective rate of more than 30 percent over the three years. But roughly an equal number paid less than 10 percent."

 

[JAYDEEJOHN]

No, we should trash the system, allow rabble into our ranks, and never blame the ones responsible, because they give us free bread

 

[jsc]

Why do you think there's so much resistance to any of the flat tax schemes. There's no room to game the system.

 

[Nim Chimpsky]

Sorry, what's a "loophole" again? You mean tax law? Written by Congress and signed into "Law" by Presidents? Notice the plural.

Maybe we should change that.

I agree, we should definitely change that. That was my point in posting.

 

[Nim Chimpsky]

Why do you think there's so much resistance to any of the flat tax schemes. There's no room to game the system.

I suspect that a lot of opposition to flat tax ideas are because of their fundamental unfairness. That's why I oppose them anyway.

http://www.theatlantic.com/business/archive/2011/10/rick-perrys-tax-cut-for-the-rich-in-a-very-very-tall-graph/247635/

 

[Nim Chimpsky]

How is everyone paying the same rate unfair? That seems the epitome of fairness to me.

Progressive taxation is considered fair (flat tax unfair) by every modern country. The link in my last post gives you a nice illustration of why.

 

[dogman_1234]

Flat tax is good. It would shut up everyone to whom is paying more/less.

If I make 20,000 a year, but a CEO makes 20,000,000 a year @ 20% tax

Me: 4,000
CEO: 4,000,000

Seems fair to me.

 

[JAYDEEJOHN]

But some want to see that CEO pay 8,000,000

 

[dogman_1234]

Why? He already paied what I paied.

corrected.

 

[dogman_1234]

I am more worried about the % than the amount. Granted, amount should be considered, but we all need to understand that 5 is what defines the equality when it comes to taxes. I would think a flat tax would be a liberal idea. Guess not.

 

[JAYDEEJOHN]

Liberal ideas require money, and this is where they get it

 

[chunkymonster]

Of the 20+ countries world wide that have implemented a flat tax all have experience growth and increased tax revenues. Can we say "Russia"?

Regardless of where you stand on a flat tax, we can at least all agree on the fact that the American tax code is totally FUBAR and needs to be overhauled.

 

[dogman_1234]

and with change...comes an election. vote the bast@rds out!

 

[Nim Chimpsky]

I was hoping you guys would come along.

Besides the graph I posted, and the basic fact of progressive taxation in modern society, here is why I think progressive taxation is fair.

The 2010 United States Federal Budget broke down into 23% Medicare/Medicaid, 20% Social Security, 20% Defense Department, 19% Discretionary Spending, 12% Other Mandatory, 6% Net Interest.

Medicare/Medicaid helps the recipients of those programs, obviously, but the money goes to the health care industry.

Social Security is funded by a form of regressive taxation.

The Department of Defense awards lucrative contracts to the defense industry and provides free research to technology companies.

That covers 63% of federal spending from 2010. The rest (aside from the 6% interest) goes in various directions, but generally the government chooses large corporations, thanks to their lobbyists, to carry out whatever projects that spending goes to.

So it's clear who's benefitting the most from government spending. Of course, programs like Medicare and Social Security help the 99% (as jaydeejohn wrote, "Liberal ideas require money, and this is where they get it"), but it makes sense for the cost to be shared proportionally (the ones who benefit more should pay more, as a percent of their income).

 

[l0ckd0wn]

Oh, so that settles it then since every "modern" country considers it to be fair.

Do understand the reasons behind why it is the fairest in the modern scheme of things? Throwing your hands up in the air in contempt no better educates you or the rest of your kind - Just because facts don't favor your opinion doesn't mean they fail to exist.

Which brings us to this:

Flat tax is good. It would shut up everyone to whom is paying more/less.

If I make 20,000 a year, but a CEO makes 20,000,000 a year @ 20% tax

Me: 4,000
CEO: 4,000,000

Seems fair to me.

Of course factoring in the cost of living throws a huge wrench in your machine, mostly because the % of liquid/disposable income is hugely lopsided, but I guess that's ok if you want to eat bread and mayonnaise sandwiches while your CEO eats filet mingon everyday. It's a great idea, until you ACTUALLY look at it on paper - I can only assume these are the reasons Nim Chimpsky feels the way he does.

Using your numbers:

Regular Person: $20,000
CEO Salary: $20,000,000

Tax obligation @ 20%;
Regular Person:4,000
CEO Salary: 4,000,000

Disposable income:
Regular Person $20,000 - 4000 = 16,000 / 12 = 1333.33/mo
CEO Salary $20,000,000 - 4,000,000 = $16,000,000 / 12 = 1,333,333.33/mo

These numbers don't consider anything other than a tax obligation and leave those that already make very little to make even less.

The Flat Tax and Fair Tax scenarios act the same way and both leave the poor end of the spectrum even poorer - This is why progressive or graduated tax systems more appropriately apply taxation across all social classes. The problem is that a large handful of folks who watch talking point programs and pundit TV fall for the charade. I see it and hear it a lot and classify it as the "I'll make that much one day" which is highly delusional in the grand scheme. People seem to think they are going to be the next millionare/billionare with a bright idea or just entering a high paying field like medicine or information technology is going to put them in the "winners circle" when all it really does is create ideology wars amongst classes, between people who would highly benefit from legislation that affects 95% of the population.

But you all have the right to think what you like and listen to as many highly wealthy individuals (like that of Congress) that comprise less than 5% of our total population that decide upon just about all of who pays for what. I'm certain they will make you continue to pay for their tax breaks, they will continue to make you try to feel guilty for raising their taxes, and you will never be the next millionare/billionare with a brilliant idea believing them.

 

[l0ckd0wn]

Every flat tax idea i've ever heard would exempt anyone making $30,000/year or less.

@lockdown

my "kind"? WTF does that mean?

Openly conservative.

And as soon as you draw a line at any dollar number, people above that line will feel cheated by the people who happen to fall below that line. Especially as incomes APPROACH that line.

 

[l0ckd0wn]

eh, they would still be paying the sales tax, just not their income directly. Besides, we have that line now under the current system.

And as soon as you draw a line at any dollar number, people above that line will feel cheated by the people who happen to fall below that line. Especially as incomes APPROACH that line.

 

[fazers_on_stun]

Progressive taxation is considered fair (flat tax unfair) by every modern country. The link in my last post gives you a nice illustration of why.

I wonder how accurate that "graph" is. Does it account for all the loopholes the rich can find for their investments? After all, we also hear about how many rich people pay a pittance in taxes due to the loopholes - maybe not as egregious as the corporations in the link, but still..

I would gladly pay a small amount more in a flat tax rather than spend a whole weekend or two doing my taxes in TurboTax, then getting an irate letter from the IRS because I missed some stupid $12 interest statement.

Also, aren't most of these flat-tax schemes modified so that those below the poverty line actually receive $$ instead of paying taxes? If the same scheme is applied to corporations too, even better.

 

[Nim Chimpsky]

I wonder how accurate that "graph" is. Does it account for all the loopholes the rich can find for their investments? After all, we also hear about how many rich people pay a pittance in taxes due to the loopholes - maybe not as egregious as the corporations in the link, but still..

I would gladly pay a small amount more in a flat tax rather than spend a whole weekend or two doing my taxes in TurboTax, then getting an irate letter from the IRS because I missed some stupid $12 interest statement.

Also, aren't most of these flat-tax schemes modified so that those below the poverty line actually receive $$ instead of paying taxes? If the same scheme is applied to corporations too, even better.

The reason the rich can avoid taxes in those cases is because moving their money around in investments is not considered "income." A flat tax wouldn't change that, it would just decrease the taxes they pay on traditional income.

 

[dogman_1234]

Actually, the 1% starts at 433,000 USD.

 

[Nim Chimpsky]

You are wrong. The "rich" don't have earned income. Only a return on investments.

The 1% starts at $337,000 per year in the US. Those at the bottom of the 1% do have earned income. If you are talking billionaires, that is a different matter, as they do not have earned income that is taxed.

Maybe I misunderstand, but I think you can still earn an income if you're a billionaire.

But anyway, how would a flat tax change this if it only taxes income?

 

[Nim Chimpsky]

Nope.

http://www.hollywoodreporter.com/news/jay-z-occupy-wall-street-shirt-rocawear-260334

$379,150. make that per year and you are part of the 1%.

@ Nim

No, billionaire's are not taxed on their "earned income" because they do not have any. That is US tax law. If you disagree with the US tax law I agree with you.

Here's what it sounds like you're saying: "If you have a billion dollars, you do not earn an income."

Here's what you must be saying: "The highest tax bracket is $379,151+ at 35%."

That helps clear up your disagreement with dogman as well: you're talking about the highest income tax bracket, and he's talking about what "the top 1% of American households" earn (a minimum of $516,633 in 2010, an average of $1,530,773).

 

[l0ckd0wn]

No, i'm saying the bottom of the 1% do have what the federal government defines as "earned income". The top of the 1%, as defined by the tax code, do not have earned income.

I agree with you on changing the tax code. But, that will never happen as the US tax code is the single most powerful mechanism available to the ruling elite to engineer their "social change" they desire so much. The tax code allows the choosing of winners and losers. Who would want to give up that power?

Then how are you so vocally against the OWS? You can see the problem in the system, yet your a cynical and insulting to people who stand up for what they believe in, what gives?

 

[dogman_1234]

No, i'm saying the bottom of the 1% do have what the federal government defines as "earned income". The top of the 1%, as defined by the tax code, do not have earned income.

I agree with you on changing the tax code. But, that will never happen as the US tax code is the single most powerful mechanism available to the ruling elite to engineer their "social change" they desire so much. The tax code allows the choosing of winners and losers. Who would want to give up that power?

I'm not trying to be a di*k here but:

Who are the ruling elite?

 

[mjmjpfaff]

Then how are you so vocally against the OWS? You can see the problem in the system, yet your a cynical and insulting to people who stand up for what they believe in, what gives?

im guessing that it is because they believe in more taxation on the rich and more wealth distribution. also because of the way they are protesting. There is violence everywhere. they are deficating on cop cars, having sex in public, and there are lots of anti semitics there that blame everything on the Jews. The only thing to love is that they are exercising their freedom of speech and how they want some sort of change