Taxes

[mglenn]

Maybe I could get your thoughts on these three links:

http://www.russiaeconomy.org/comments/021803.html

Choice Quote: "On January 1, 2001, a 13% flat-rate tax on personal income took effect in Russia...During its first year, the 13% flat tax exceeded all expectations. In 2001, personal income taxes increased...28% in real rubles after adjusting for ruble inflation..."

http://www.nationalreview.com/murdock/m ... 0102.shtml

Choice Quote: "While ex-Communist states confidently reject progressive taxation, America remains plagued by Marxian class-warfare rhetoric. A May 28, 2000 New York Times editorial praised the Russian flat tax's promise to reduce "political corruption, removing layers of subsidies in the code that officials like to shower on favored constituents." However, the previous October 30, Republicans for a U.S. flat tax were "disingenuous, when the basic result would ease the tax burden on the super-rich,"


http://www.rushlimbaugh.com/home/menu/t ... guest.html

(This whole article is a choice quote, but I had to choose...)

Choice Quote: "Think of it this way: less than four dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. Are the top half millionaires? Noooo, more like "thousandaires." The top 50% were those individuals or couples filing jointly who earned $26,000 and up in 1999. (The top 1% earned $293,000-plus.) Americans who want to are continuing to improve their lives - and those who don't want to, aren't. "

[andrewgd]

Maybe I'm not seeing it, but why DON'T we have a flat tax? Who's against this and why? I've not dug too deep into it, but it just makes sense to me. As long as loopholes are closed.

Another tax point that I've been mulling over. There is an argument (this may sound familiar) that states "Its our money, we should get to keep it".

That makes sense, but what I don't get is this: Wouldn't our total earnings go down? I've been led to beleive that taxes are 'built in' to wages. Everyone knows this money has to be paid out, and if it weren't wouldn't wages decrease? Things would be just like they are, only the government isn't getting a piece of the pie.

Is this too narrow a viewpoint? What am I missing?

[mglenn]

Wouldn't our total earnings go down?

Depends, but if you have a contract that states you will get paid such an amount a company would have a tough time changing that because your taxes were reduced. Also they are playing a dangerous game with company moral. As well minimum wage is set so those jobs would not be effected unless the government reduced what employers were forced to pay.

As long as loopholes are closed.

Can you fill me in on what some of these loopholes might be?

[andrewgd]

Can you fill me in on what some of these loopholes might be?

Well, I'm sure you're more up on all this than I am, but they'd have to address tax shelters, corporate taxes and things like this. I didn't have any specific loopholes in mind, I just know that people tend to not like giving up their money, and try to find any way around it, if possible.

[JPP13]

What loopholes? I'll give you an example. Currently, under existing law, a corporation which is a US corporation in all bvut name, can locate its headquarters in Bermuda. And thus pay NO TAXES!

3 weeks ago, while Bush kept the country distracted with his little wargames, the Republican Congress passed a law which made it easier for corporations to do this. The law was prompted by an independent investigation underway following Enron.

How to fix it? No longer will a corporation be allowed to set up a papaer office overseas. You want the protection of US law? The benefits of US stock exchange? The office downtown? You pay taxes.

Another loophole is what I like to call the Forbes loophole. Forbes, the wealthy right wing wacko who never worked a day in his life, has set up all the money from his daddy's magazine into trusts. These trusts are the easiest way to avoid taxes. mglenn, I bet you paid more in taxes than Malcolm.

I have no problem with a progressive flat tax. Say 10, 20, 30, 40% across the board. As well as a tax on holdings at a certain millage. otherwise the wealthy who own 100 million dollars of assets, with no discernible income contribute their fair share. Like Forbes.

[mglenn]

First off I was not discussing current laws, I wanted discussion on what peoples thoughts were on flat tax plans.

Second are you suggesting that we make it illeagal to do business outside the US? If not how do you suggest we stop these tax havens? (Consider a new thread for this...)

Yup trusts are a great thing, I highly suggest you check into them and consider incorporating them in to your retirement plan. Remember its your money!

JPP13 don't get all in a huff... I agree with you on some of this. I just take a little different prospective. I think that with a simple flat tax between 12% to 17% we could greatly simplify the tax code and take alot of the loopholes out as most of them are a result of the overly complex tax code we have now.

[lance]

First off I was not discussing current laws, I wanted discussion on what peoples thoughts were on flat tax plans.

Second are you suggesting that we make it illeagal to do business outside the US? If not how do you suggest we stop these tax havens? (Consider a new thread for this...)

Yup trusts are a great thing, I highly suggest you check into them and consider incorporating them in to your retirement plan. Remember its your money!

JPP13 don't get all in a huff... I agree with you on some of this. I just take a little different prospective. I think that with a simple flat tax between 12% to 17% we could greatly simplify the tax code and take alot of the loopholes out as most of them are a result of the overly complex tax code we have now.

Yup,

The current tax code is quite the monster. As part of the my job I have to file paper updates to our copy of the code which currently stands at 26 volumes and counting.

Flat tax, don't know.

Best,

Lance Man

[JPP13]

Don't confuse confidence with getting in a huff.

It won't take any great creativity on my part to stop the use of fraudelent overseas offices for tax scams. The bills have already been proposed.

Here's a tidbit I found doing some research on the issue, from the Wall Street Journal.

""These expatriations aren't illegal,but they're sure immoral,"
declared Sen.Charles Grassley (R)of Iowa recently."During a war
on terrorism,coming out of a recession,everyone ought to be
pulling together.If companies don't have their hearts in America,
they ought to get out."
With millions of dollars at stake,many are getting out,following
their wallets if not their hearts.It's part of a dramatic rise in the use
of tax shelters by corporate America.
$155 billion in corporate income literally disappeared
without Uncle Sam's tax collectors laying a finger on it,according to
research by Harvard Business School Prof.Mihir Desai.That
amount is the gap between what corporations reported to
shareholders and what appeared on the tax returns they filed with
the Internal Revenue Service."

--------------------

Your right mglenn, it is our money. Its also my roads I drive on, my parks I visit, my police I call if I'm robbed. For every one of those 155 billion that was stolen from our treasury, you or I have to pay it.

What are the odds of such a loophole getting fixed? Well, consider this. Prior to Dick Cheney taking over at Haliburton, they had 11 offshore subsidiaries. When he left? Over 40, with the express purpose to avoid taxes.

[TomSpeed]

I don't think anyone has a problem with foreign investment by American companies. People have a problem with American companies having PO boxes in foreign countries as their headquarters so that they can avoid paying corporate taxes. There is a dodge built into the current tax laws. Congress was looking into closing this loophole during the last session. I don't really know what happened. I'm pretty sure nothing concerning this issue has made it to Bush's desk.

[mglenn]

Once again I'm not against what your saying JPP13, your just a bit single minded in your quest. I did some research into Cheney and Haliburton and what I discoverd was that they posted payments to their books before they actually had cash in hand. It would be like me posting to my books the money I received from rent checks on the first even though I might not get the check till the 4th or 5th. Its a prefectly legal accounting practice from what I understand.

The only issue that seems to be out standing is that Haliburton did not tell the stockholders of the change till a year later because it initially only amounted to $89 Million in additional net gain out of $17 Billion in Gross Gains. Should they have told their stockholders? Yes! Is it as big an evil as you make it to be? I don't think so.

As for the subsidiaries I can't comment without further research. Haliburton is a world wide contractor. So for them to have 40 subsidiaries throughout the world hardly seems questionable to me... but I'll do some digging and see what I find.

Now as for the Iraq - Haliburton Connection, first Cheney has nothing to do with Haliburton anymore and a far as my research shows he will see nothing if Haliburton is involved in the rebuilding of Iraq ( save for some campain contrabutions, which happens on both sides of the congressional isle). Second Haliburton is one of two international contractors that is big enough to handle the job that needs done in Iraq. The other is a company out of France whos name escapes me right now. I certainly have no problems with an American company getting the contracts over a french one. But hey thats me...