Just the Tax

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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 17:16

I know ☹️

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Jennifer
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 17:19

JasonL wrote:
08 Nov 2017, 17:10
So, straight talk, let’s take average wages for a minute and say a $45k earner pays lifetime $300,000 in federal income taxes in current system. If my plan reduces that by $75k $80k or even $100k for the same worker, increased savings by 10-15% but you had the possibility of one year bigger bills say 3-4 times in a life, you are saying no way I don’t want it?
I'm saying that whatever tax system is in place, people will compare how they're doing to others within that system, not how they'd do compared to someone in a completely different system. And your system would penalize people who face certain unavoidable sympathy-inducing expenses, compared to others in the same system who pay less taxes solely because they didn't suffer the catastrophe of uninsured medical costs or uninsured home damage, or people who had to withdraw from savings rather than add to it because of job loss, or other already-unpleasant scenarios.
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thoreau
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Re: Just the Tax

Post by thoreau » 08 Nov 2017, 17:47

We're going to have a tax code. It's going to be a drag. It's going to have gray areas and hence loopholes.

What I want is to tax the things that can be defined with the least bullshit. I didn't say no bullshit (there are always gray areas), I said least bullshit. Defining "income" for individuals who mostly earn their living via wages or salaries seems to be mostly easier than defining "consumption." There will be gray areas either way, and those gray areas will keep many lawyers and accountants quite busy. And politicians can carve out exceptions in either type of tax code, if they wish, and that's a problem either way. But I think that defining "income" for most people is less fraught than defining "consumption" for most people. This is my take-away from Jason's arguments over the past few months. I'm not talking about the current back-and-forth specifically, but about my general gist from the past few months.

Also, you could further reduce the games people play by providing enough of a standard deduction that it just isn't worth it for most people to play certain games, let alone hide the money from their little side hustle. A self-employment side hustle that somebody is using to write off their car and whatever other personal items as expenses is only worth playing games with if it generates enough money to exceed the standard deduction.

Also, in the end, you're taxing economic activity. Every time somebody consumes they're buying from somebody who earns a living providing what they consume. Either you tax one participant or the other, but you're taxing a lot of the same activity (not to be confused with "all of the same activity") either way.
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JD
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Re: Just the Tax

Post by JD » 08 Nov 2017, 18:15

I've read a bit about the consumption tax, and while I have little opinion on its "fairness" one way or the other, I don't quite get the proponents' argument that it would encourage investment. Investment doesn't just mean "something sits around in a bank vault", for money to be actually usefully invested it has to get spent...and now that activity is getting taxed.

Personally my feeling on matters of fairness is that the vast majority of Americans should never have to think about filing taxes at all; any system that forces the average working man or woman to play accountant for the government under pain of fines or imprisonment is an unfair one. Let companies file taxes; they already have accountants.

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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 18:31

Adam Ruins Everything had an episode about taxes a few weeks ago; I forget the title, but most countries do a system where the government basically does your taxes for you, then you look it over and say if you agree or not. And, of course, with most people they already have the bulk of the information anyway -- they know how much you make because your employer tells them. They know how much you have in the bank (in America) and how much interest you got. But they don't because the tax-filing companies lobbied specifically to keep themselves in business.
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JasonL
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Just the Tax

Post by JasonL » 08 Nov 2017, 19:17

Jennifer wrote:
JasonL wrote:
08 Nov 2017, 17:10
So, straight talk, let’s take average wages for a minute and say a $45k earner pays lifetime $300,000 in federal income taxes in current system. If my plan reduces that by $75k $80k or even $100k for the same worker, increased savings by 10-15% but you had the possibility of one year bigger bills say 3-4 times in a life, you are saying no way I don’t want it?
I'm saying that whatever tax system is in place, people will compare how they're doing to others within that system, not how they'd do compared to someone in a completely different system. And your system would penalize people who face certain unavoidable sympathy-inducing expenses, compared to others in the same system who pay less taxes solely because they didn't suffer the catastrophe of uninsured medical costs or uninsured home damage, or people who had to withdraw from savings rather than add to it because of job loss, or other already-unpleasant scenarios.
Is that a yes you’ll take that deal or no you won’t?

Edited for clarity
Last edited by JasonL on 08 Nov 2017, 19:17, edited 1 time in total.

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the innominate one
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Re: Just the Tax

Post by the innominate one » 08 Nov 2017, 19:29

JasonL wrote:
08 Nov 2017, 15:00
Ahh I forgot about itemized medical deduction above 10% of agi for out of pocket medical costs. Fair enough. If we are looking to simplify I don’t think we can go down this road of itemized special consumption exemptions though. Food is special. Housing is special. Clothes are special. Education is special, hey look nothing is taxable. So, yeah I think I’d keep the consumption structure. A multi year payment plan almost completely solves that problem.
I think those other expenses are regular and predictable, where medical bills frequently are not. There's your justification for exempting that one thing and not the others.
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Re: Just the Tax

Post by Jennifer » 08 Nov 2017, 19:39

JasonL wrote:
08 Nov 2017, 19:17
Jennifer wrote:
JasonL wrote:
08 Nov 2017, 17:10
So, straight talk, let’s take average wages for a minute and say a $45k earner pays lifetime $300,000 in federal income taxes in current system. If my plan reduces that by $75k $80k or even $100k for the same worker, increased savings by 10-15% but you had the possibility of one year bigger bills say 3-4 times in a life, you are saying no way I don’t want it?
I'm saying that whatever tax system is in place, people will compare how they're doing to others within that system, not how they'd do compared to someone in a completely different system. And your system would penalize people who face certain unavoidable sympathy-inducing expenses, compared to others in the same system who pay less taxes solely because they didn't suffer the catastrophe of uninsured medical costs or uninsured home damage, or people who had to withdraw from savings rather than add to it because of job loss, or other already-unpleasant scenarios.
Is that a yes or a no?
Whether I personally want it for myself will ultimately depend on multiple factors: do I personally (or my husband) end up one of those unfortunates with huge uninsured medical or disaster-recovery costs, how bothered am I by those people who are, etc. But even if my answer is "yes," there's still those journalism stories I mentioned, which are only hypothetical now but I guarantee will be real if your proposed tax came into being. I can almost see the Slate headline now: "The Mandalay Bay victims don't just face huge medical bills. They owe Uncle Sam a bundle, too."
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JasonL
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Just the Tax

Post by JasonL » 08 Nov 2017, 19:44

JD - money doesn’t just sit in a bank vault when it is saved. Yes that money upon being lent will be subject to activity that is taxed but it will be subject to one fewer layers of taxation, namely on the person who deposited the money as savings. If you buy a stock, through a more convoluted process, that money doesn’t sit there either.
Last edited by JasonL on 08 Nov 2017, 19:44, edited 1 time in total.

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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 19:46

Jennifer wrote:
JasonL wrote:
08 Nov 2017, 19:17
Jennifer wrote:
JasonL wrote:
08 Nov 2017, 17:10
So, straight talk, let’s take average wages for a minute and say a $45k earner pays lifetime $300,000 in federal income taxes in current system. If my plan reduces that by $75k $80k or even $100k for the same worker, increased savings by 10-15% but you had the possibility of one year bigger bills say 3-4 times in a life, you are saying no way I don’t want it?
I'm saying that whatever tax system is in place, people will compare how they're doing to others within that system, not how they'd do compared to someone in a completely different system. And your system would penalize people who face certain unavoidable sympathy-inducing expenses, compared to others in the same system who pay less taxes solely because they didn't suffer the catastrophe of uninsured medical costs or uninsured home damage, or people who had to withdraw from savings rather than add to it because of job loss, or other already-unpleasant scenarios.
Is that a yes or a no?
Whether I personally want it for myself will ultimately depend on multiple factors: do I personally (or my husband) end up one of those unfortunates with huge uninsured medical or disaster-recovery costs, how bothered am I by those people who are, etc. But even if my answer is "yes," there's still those journalism stories I mentioned, which are only hypothetical now but I guarantee will be real if your proposed tax came into being. I can almost see the Slate headline now: "The Mandalay Bay victims don't just face huge medical bills. They owe Uncle Sam a bundle, too."
Should smart people in general take that deal or not?

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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 19:54

I could negotiate a catastrophic expenses cap if that would help. I’m not interested in low margin health expenses being deducted.

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the innominate one
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Re: Just the Tax

Post by the innominate one » 08 Nov 2017, 20:42

JasonL wrote:
08 Nov 2017, 19:54
I could negotiate a catastrophic expenses cap if that would help. I’m not interested in low margin health expenses being deducted.
Seems reasonable.

In response to JD, I don't think the consumption tax incentivizes investment so much as it doesn't disincentivize investment. That might be a fine distinction, but it probably only matters at the margins.

JasonL - are corporations also taxed under this plan? I seem to recall you're opposed to corporate taxation.
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Mo
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Re: Just the Tax

Post by Mo » 08 Nov 2017, 21:07

JD wrote:
08 Nov 2017, 18:15
I've read a bit about the consumption tax, and while I have little opinion on its "fairness" one way or the other, I don't quite get the proponents' argument that it would encourage investment. Investment doesn't just mean "something sits around in a bank vault", for money to be actually usefully invested it has to get spent...and now that activity is getting taxed.

Personally my feeling on matters of fairness is that the vast majority of Americans should never have to think about filing taxes at all; any system that forces the average working man or woman to play accountant for the government under pain of fines or imprisonment is an unfair one. Let companies file taxes; they already have accountants.
The vast majority of countries don't have taxes the way they do, they get a summary at the end of the year that you sign off on. We could do it for the vast (>90%) majority of Americans as well if you got rid of most of the weird deductions. All of your investment filings and W-2s already go to the government. Only if you deal with cash would there be any question about your income. You could even keep SALT type deductions and have states file your info to the Feds, and it would be easy, breezy, beautiful. There are two big opponents of this, Intuit and the like and Grover Norquist.
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Re: Just the Tax

Post by Mo » 08 Nov 2017, 21:25

Meanwhile, here's live video of Paul Ryan and Kevin Brady ending the adoption tax credit.

Image
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JasonL
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 22:10

First pass yes I hate corp rates and feel you should just tax people. I’d set corp rates at 0% and the levels on the progressive tax sufficient to fund what we want to fund and make sure we tax rich people. I haven’t really thought or read howcorp purchases would work tho.

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Re: Just the Tax

Post by Warren » 08 Nov 2017, 22:34

I'm not interested in any reform that doesn't start with doing away with W-2's. The excess burden on the self employed needs to be eliminated.
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Re: Just the Tax

Post by JasonL » 08 Nov 2017, 22:56

I don’t think you can get there with the progressivity incidence and low deterrence of good things I’m looking for. I support a carbon tax but that can’t be your base tax by itself.

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Re: Just the Tax

Post by the innominate one » 08 Nov 2017, 23:02

I propose that the self employed be given the choice of dealing with W-2s or being summarily executed and parted out for organ replacement surgeries.
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Re: Just the Tax

Post by Aresen » 09 Nov 2017, 00:01

the innominate one wrote:
08 Nov 2017, 23:02
I propose that the self employed be given the choice of dealing with W-2s or being summarily executed and parted out for organ replacement surgeries.
Tough choice. :shock:
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Re: Just the Tax

Post by Warren » 09 Nov 2017, 00:14

JasonL wrote:
08 Nov 2017, 22:56
I don’t think you can get there with the progressivity incidence and low deterrence of good things I’m looking for.
Then what you're looking for is just more rearranging deck chairs that keeps the establishment in power and the boot heel on the necks of the disenfranchised.
Take your story walkin bub.
I support a carbon tax but that can’t be your base tax by itself.
I can support that too. It's a start. Can we build off it?
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Re: Just the Tax

Post by Aresen » 09 Nov 2017, 00:24

I am opposed to a strict carbon tax. Silicon based life forms should have to pay, too.
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JasonL
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Re: Just the Tax

Post by JasonL » 09 Nov 2017, 08:08

Warren transactions taxes are regressive. I don’t care about what you care about with establishment power blah blah. The W2 is very far down the list of reasons why people have power. Having a product people want to buy dominates large successes, occupational licensing is much more relevant for barriers to start up.

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Re: Just the Tax

Post by Warren » 09 Nov 2017, 09:56

JasonL wrote:
09 Nov 2017, 08:08
Having a product people want to buy dominates large successes, occupational licensing is much more relevant for barriers to start up.
You have no comprehension of the burden on individual filing of income earned from in small amounts throughout the year with thousands of small deductible expenses. Especially as many transactions are handshake deals with no documentation.

I'm not talking about start ups where you hope to make a viable business with employees. I'm talking about getting by taking in laundry, boarders, day care, etc. Or monetizing YouTube, selling crafts on etsy, etc.
I don’t care about what you care about with establishment power blah blah.
Yah no shit. You care about big getting bigger and keeping the small from pestering them.
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Re: Just the Tax

Post by Mo » 09 Nov 2017, 10:14

Isn't the burden the exact same as basic business bookkeeping?
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Re: Just the Tax

Post by Warren » 09 Nov 2017, 10:21

Mo wrote:
09 Nov 2017, 10:14
Isn't the burden the exact same as basic business bookkeeping?
It's not the same, but even a small business with a handful of employees would keep books that would make the burden of accounting for income much less. But individuals that aren't "running a business" don't keep books. They keep track of income and outgo without necessarily itemizing it. And they don't need to keep records of it. Doing so is a most burdensome demand on their time and attention.

ETA
Indeed this is really the point I'm driving at. If you're a large business, tax compliance is a relatively small expense because you are already doing the accounting to run your business. A large business needs to keep detailed records of its transactions, even internally. Which pot moneys come from to pay for what good/services is already being done.

But to an individual such minutia makes no sense. Is your car a business expense? Is your home? You know you have to pay for gas and rent, but how much the government allows you to deduct from your income requires expertise in tax law. Businesses have lawyers and accountants for reasons other than tax compliance. Individuals have only the hope that they are too small to eat.
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