Just the Tax

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dhex
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Re: Just the Tax

Post by dhex » 09 Nov 2017, 11:06

Or they hire a lawyer and cpa because of that.
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the innominate one
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Re: Just the Tax

Post by the innominate one » 09 Nov 2017, 11:20

Isn't a consumption tax simpler for small business owners, since there's no itemization? You set up a separate account for the business, deposit and withdraw from that account for revenues and expenses, and the bank tallies it for you.
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Re: Just the Tax

Post by Warren » 09 Nov 2017, 11:33

dhex wrote:
09 Nov 2017, 11:06
Or they hire a lawyer and cpa because of that.
Right, which is an expense individuals getting by week to week simply can't afford.
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nicole
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Re: Just the Tax

Post by nicole » 09 Nov 2017, 11:35

But...don't the individuals you're talking about, Warren, benefit by being able to hide their income?
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Re: Just the Tax

Post by dead_elvis » 09 Nov 2017, 11:37

the innominate one wrote:
09 Nov 2017, 11:20
Isn't a consumption tax simpler for small business owners, since there's no itemization? You set up a separate account for the business, deposit and withdraw from that account for revenues and expenses, and the bank tallies it for you.
And for large expenses that you need/want to amortize? Still need to itemize.
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Re: Just the Tax

Post by Warren » 09 Nov 2017, 11:44

nicole wrote:
09 Nov 2017, 11:35
But...don't the individuals you're talking about, Warren, benefit by being able to hide their income?
Oh sure. But if you're working gig jobs like Uber, there's still a 1099 to deal with. And part of what I'm saying is that it is a very bad thing to drive people to the underground economy. People should be free to do their business in the open. Part of that is a tax burden that's low enough for honest people that want to be in compliance with the law to honestly pay. What's stuck in my craw is that honest people can't even afford to figure out what they owe in taxes.
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Warren
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Re: Just the Tax

Post by Warren » 09 Nov 2017, 11:45

dead_elvis wrote:
09 Nov 2017, 11:37
the innominate one wrote:
09 Nov 2017, 11:20
Isn't a consumption tax simpler for small business owners, since there's no itemization? You set up a separate account for the business, deposit and withdraw from that account for revenues and expenses, and the bank tallies it for you.
And for large expenses that you need/want to amortize? Still need to itemize.
And that doesn't sound like a consumption tax. More like a simplified income tax, no?
At any rate a separate account for business isn't possible if you're working gig jobs.
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Re: Just the Tax

Post by nicole » 09 Nov 2017, 11:56

Warren wrote:
09 Nov 2017, 11:44
nicole wrote:
09 Nov 2017, 11:35
But...don't the individuals you're talking about, Warren, benefit by being able to hide their income?
Oh sure. But if you're working gig jobs like Uber, there's still a 1099 to deal with. And part of what I'm saying is that it is a very bad thing to drive people to the underground economy. People should be free to do their business in the open. Part of that is a tax burden that's low enough for honest people that want to be in compliance with the law to honestly pay. What's stuck in my craw is that honest people can't even afford to figure out what they owe in taxes.
Ah, okay. Yeah, I know many are still stuck with 1099s. I'm in favor of more of the economy going underground.
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Re: Just the Tax

Post by dead_elvis » 09 Nov 2017, 11:57

Warren wrote:
09 Nov 2017, 11:44
What's stuck in my craw is that honest people can't even afford to figure out what they owe in taxes.
We have an ungodly combination of W2 and 1099 stuff that every year has me wanting to scream to my countrymen "if it's so damn important to you to know how much I make, *YOU* come and waste *YOUR* life figuring it out". The People should be ashamed of the free labor I give them.
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Re: Just the Tax

Post by Warren » 09 Nov 2017, 12:01

dead_elvis wrote:
09 Nov 2017, 11:57
Warren wrote:
09 Nov 2017, 11:44
What's stuck in my craw is that honest people can't even afford to figure out what they owe in taxes.
We have an ungodly combination of W2 and 1099 stuff that every year has me wanting to scream to my countrymen "if it's so damn important to you to know how much I make, *YOU* come and waste *YOUR* life figuring it out". The People should be ashamed of the free labor I give them.
Well the rest of The People are spending 1.35 billion hours in returns (pi) according to Google.
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Re: Just the Tax

Post by dead_elvis » 09 Nov 2017, 12:03

nicole wrote:
09 Nov 2017, 11:56

Ah, okay. Yeah, I know many are still stuck with 1099s. I'm in favor of more of the economy going underground.
One nice way of giving 1099 giggers a better tax deal would be to raise the $600 limit for triggering a 1099 to something quite a bit higher, and formalize that it doesn't actually need to be reported either, creating something of a legal underground. I recall at some point it was raised to 600 from 400, but that has to have been at least 15-20 years ago. Way overdue for raising again.
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Re: Just the Tax

Post by the innominate one » 09 Nov 2017, 12:05

dead_elvis wrote:
09 Nov 2017, 11:37
the innominate one wrote:
09 Nov 2017, 11:20
Isn't a consumption tax simpler for small business owners, since there's no itemization? You set up a separate account for the business, deposit and withdraw from that account for revenues and expenses, and the bank tallies it for you.
And for large expenses that you need/want to amortize? Still need to itemize.
dead_elvis: I don't follow. Can you elaborate?
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Re: Just the Tax

Post by JD » 09 Nov 2017, 15:59

Mo wrote: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.
Yeah, what you and Jennifer mention kind of jibes with what I've heard from some foreigners. I'm sort of surprised that it works out as well as it does in other countries (assuming that it does work out well...) because it seems to me like here in the US there are plenty of situations that would make it not so easy. How do those systems handle self-employed people, or other non-W2-type earnings? How do they handle stuff like mortgage interest deductions? As far as the weird deductions, I fear that "just get rid of those" is the hard part, because that's how our system manipulates people's behavior by rewarding certain behaviors and punishing others.

Right now my situation is a real PITA, because we're married filing jointly, living in one state but one of us working in another state and the other owning a sole proprietorship which does NOT do business inthat other state, and having investments etc. etc. But then, never in my life have I been able to use the 1040-EZ, which makes me doubtful as to how common these supposedly "90% simple" situations really are.

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Re: Just the Tax

Post by Sandy » 09 Nov 2017, 16:06

IIRC, one of the reasons to go to flat taxes in the Baltics and Russia was the lack of tax compliance. Of course the Panama and Paradise papers show that Western Europe is no stranger to tax avoidance.
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Re: Just the Tax

Post by dead_elvis » 09 Nov 2017, 16:17

the innominate one wrote:
09 Nov 2017, 12:05
dead_elvis wrote:
09 Nov 2017, 11:37
the innominate one wrote:
09 Nov 2017, 11:20
Isn't a consumption tax simpler for small business owners, since there's no itemization? You set up a separate account for the business, deposit and withdraw from that account for revenues and expenses, and the bank tallies it for you.
And for large expenses that you need/want to amortize? Still need to itemize.
dead_elvis: I don't follow. Can you elaborate?
Say someone spends 20k on an asset. Though they do allow (with certain restrictions) you to deduct more the first year if you choose, the IRS wants you to amortize that over 5 years, and depending on circumstances some years it's a good idea from my POV as well. Simply subtracting expenses from revenue based on the bank account without breaking out items like that will result in it being impossible to spread large expenses over a period more than a year.
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Re: Just the Tax

Post by dead_elvis » 09 Nov 2017, 16:35

JD wrote:
09 Nov 2017, 15:59
As far as the weird deductions, I fear that "just get rid of those" is the hard part, because that's how our system manipulates people's behavior by rewarding certain behaviors and punishing others.
Something I find fascinating about significantly raising the standard deduction is that it reduces the ability to socially engineer with targeted deductions. Where it's going to bite us in the ass is business expenses on the W-2 side (as opposed to the 1099 side). Even though it might reach the same tax result, if deducting a $5k expense gets rendered moot by the standard deduction it *feels* like getting screwed, because now everybody gets that deduction even if they don't do The Thing Being Encouraged That Gets You A Deduction.
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Re: Just the Tax

Post by Mo » 10 Nov 2017, 21:09

The bill hasn't even been voted on and someone already figured out how states can get the SALT deduction back and eliminate the savings.
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Re: Just the Tax

Post by dbcooper » 11 Nov 2017, 01:48

Grad Students Are Freaking Out About the GOP Tax Plan. They Should Be.
Buried in that plan is a proposed repeal that would cause graduate students' tuition waivers to be counted as income—making them subject to taxes. The document analyzes how the repeal would affect graduate students in colleges across Carnegie Mellon.

It's pretty bleak.

The annual stipend for a PhD student in Carnegie Mellon's school of computer science is about $32,400. The university covers the student's $43,000 tuition, in exchange for the research she conducts and the courses she teaches. Under current law, the government taxes only a student’s stipend; the waived tuition is not taken into account. But under the GOP bill, her annual taxable income would rise from $32,400 to $76,234. Even factoring in new deductions also included in the proposal, the CMU document estimates her taxes would amount to $10,209 per year—nearly four times the amount under current law. That would slash her net annual stipend by 25 percent, from $29,566 to $22,191.
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the innominate one
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Re: Just the Tax

Post by the innominate one » 11 Nov 2017, 07:53

We were discussing this somewhere. I posted a tweet from a Princeton history doctoral candidate. Since then, I think I've read the Senate's proposal restores the exemption for tuition.
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Re: Just the Tax

Post by Mo » 13 Nov 2017, 23:17

The purpose of the tax bill is to encourage innovation and dynamism in the American economy, not be a big giveaway to rich Republican donors.
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the innominate one
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Re: Just the Tax

Post by the innominate one » 14 Nov 2017, 05:48

I think you're confusing the stated pretext with the actual purpose.
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Re: Just the Tax

Post by Jennifer » 14 Nov 2017, 15:31

I don't even know what the presumed benefit of the proposal "tax stock options when they mature, not when they're sold" is supposed to be.

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Re: Just the Tax

Post by Fin Fang Foom » 14 Nov 2017, 15:32

Jennifer wrote:
14 Nov 2017, 15:31
I don't even know what the presumed benefit of the proposal "tax stock options when they mature, not when they're sold" is supposed to be.

https://www.cnbc.com/2017/11/13/silicon ... D=ref_fark
It is about taxing them when they are fungible.
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Re: Just the Tax

Post by Highway » 14 Nov 2017, 15:33

Jennifer wrote:
14 Nov 2017, 15:31
I don't even know what the presumed benefit of the proposal "tax stock options when they mature, not when they're sold" is supposed to be.

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Re: Just the Tax

Post by Jennifer » 14 Nov 2017, 15:38

Definitely goes against the "encourage innovation and dynamism" bit Mo quoted earlier, though.

It actually makes me think of the "if your neighborhood gentrifies, your cheap home's property tax bill skyrockets" status quo--taxing someone on a "gain" which they only realize if they sell a major asset--even to the point where they're forced to sell the asset, just to pay the taxes.
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