Join In On The Action "Register Here" To View The Forums

Already a Member Login Here

Board index Forum Index
User avatar
Adjutant
 
Posts: 3646
Joined: 17 May 2013, 3:32 pm

Post 06 Nov 2017, 11:23 am

Nope. A progressive tax system is necessary for a just society. Think of societal wealth as being a big pie we all contribute to. Everybody is entitled to a little piece of pie. The bigger the piece of pie you take out...the more you have to do to justify that.

Money is just something we used as a means to entitle a person to take part of the pie. A dollar for someone making $30,000, $50,000, or even $100,000 has more value to that person in getting essential things than that dollar does for someone making ten million. The dollar may be equal but the importance of that dollar is not equal. That is why incomes should be taxed more heavily as incomes go up.

There is also the fundamental idea that we're not playing a Monopoly game where a person's contribution to society is completely unrelated to their income. In general, value is based on what a person does. How much does a person work? How valuable--with the exception of something like a major invention--is the maximum contribution to society based on their work on a hourly basis? If you work 2,000 hours would it be $2,000 an hour or $5,000 an hour? I think at some point we should be taxing people at a high rate because there is just too much of a windfall for what they are doing, while other people are working extremely hard for peanuts. I think marginal tax rates should start to rise significantly after you hit a million in a year and after ten million should be very high. 39.5 percent marginal rate on a person's income after they make a billion? Come on. What kind of an idiot would organize a society on that basis. It's ridiculous. Even more ridiculous is hedge fund managers making a billion and paying what 20% due to carried interest because their income is counted as capital gains. That is so ridiculous and cannot be changed, just showing how (legally) corrupt our government is right now.
User avatar
Dignitary
 
Posts: 3486
Joined: 02 Oct 2000, 9:01 am

Post 06 Nov 2017, 11:30 am

Freeman, on the previous page you were talking about corporate tax rates, which are, essentially flat. You and Brad have now conflated it with personal tax rates, which are progressive. Different problems, different solutions.
User avatar
Adjutant
 
Posts: 3646
Joined: 17 May 2013, 3:32 pm

Post 06 Nov 2017, 11:43 am

Not progressive enough. But yeah Brad got me to go off on a tangent.
User avatar
Ambassador
 
Posts: 4961
Joined: 08 Jun 2000, 10:26 am

Post 06 Nov 2017, 1:02 pm

Freeman:
Why pay 20% when you can pay $0?

The companies that cheat will still want to cheat. There are plenty of companies that pay the top rate. They still feel a civic obligation to pay taxes. Starbucks does so. Obama wanted to reduce it to 28%. I could live with that. 20% is ridiculous.And these companies moving overseas to avoid taxes are not really moving much economic activity to do so. It's illusory. It's a tax fiction. And again the companies that do that will keep doing that even if the tax is 20%.


It's a complicated decision depending on other inputs. Starbucks is worried about their reputation. Other companies don't like the hoops they have to jump through to incorporate in Ireland or Bermuda. (get European directors, move employees to Europe, legal requirements, etc.) It may be worth jumping through those hoops if you save 20% of your income, but may not be worth it for a 5% savings.
User avatar
Adjutant
 
Posts: 3646
Joined: 17 May 2013, 3:32 pm

Post 06 Nov 2017, 2:05 pm

Reasonable point.
User avatar
Administrator
 
Posts: 7374
Joined: 26 Jun 2000, 1:13 pm

Post 06 Nov 2017, 5:27 pm

I did not mean to conflate personal taxes. I was talking everybody's businesses.

Starbucks and Granny's Tamales both.

(BTW, Granny's is a great provider of Tamales!)
User avatar
Ambassador
 
Posts: 4961
Joined: 08 Jun 2000, 10:26 am

Post 07 Nov 2017, 6:50 am

freeman3 wrote:Reasonable point.


Thanks ... I've also learned and refined my views from Geo's and your comments.
User avatar
Ambassador
 
Posts: 21062
Joined: 15 Jun 2002, 6:53 am

Post 07 Nov 2017, 8:44 am

Ray Jay wrote:
freeman3 wrote:Reasonable point.


Thanks ... I've also learned and refined my views from Geo's and your comments.


The right-wing hates this plan fwiw. It actually raises taxes on many with that 46% bubble bracket. Even lower income folks may pay more in taxes because rates aren't going down all that much and deductions are. It seems mostly a corporate tax cut.
User avatar
Ambassador
 
Posts: 4961
Joined: 08 Jun 2000, 10:26 am

Post 07 Nov 2017, 9:07 am

Doctor Fate wrote:
Ray Jay wrote:
freeman3 wrote:Reasonable point.


Thanks ... I've also learned and refined my views from Geo's and your comments.


The right-wing hates this plan fwiw. It actually raises taxes on many with that 46% bubble bracket. Even lower income folks may pay more in taxes because rates aren't going down all that much and deductions are. It seems mostly a corporate tax cut.


My refined thinking is that the corporate rate reduction, simplification, and one-time repatriation is very good, and the rest is just throwing mud in the swamp. Without a real marginal tax rate reduction on the individual side it doesn't change behavior. There is some simplification, but it could be done much better. Perhaps it will be as it changes.
User avatar
Dignitary
 
Posts: 3486
Joined: 02 Oct 2000, 9:01 am

Post 09 Nov 2017, 12:23 pm

Ray Jay wrote:My refined thinking is that the corporate rate reduction, simplification, and one-time repatriation is very good, and the rest is just throwing mud in the swamp. Without a real marginal tax rate reduction on the individual side it doesn't change behavior. There is some simplification, but it could be done much better. Perhaps it will be as it changes.


I've been refining my thinking as well. The more time I spend with it the more I don't like it on the personal side. The repeal of the estate tax is absurd. The loophole for carried interest, you've got to be kidding me. The reduction of pass through rates for S corps could be a huge deal. If you're a rich guy and own an S corp and take your money out at 25%, why would you ever take earned income? You wouldn't.

On the corporate side, we need to see changes there, it needs to be a reduction of the rate and a removal of the loopholes, so that every corp, be it GE or your corner gas station are paying the same rate, and it should be, roughly, revenue neutral. The market is expecting everyone to benefit from the changes, instead there should be winners and losers on the corporate side. And that's because the proposal is not revenue neutral.

If I were in Congress, I think I'd be a no.
User avatar
Ambassador
 
Posts: 21062
Joined: 15 Jun 2002, 6:53 am

Post 09 Nov 2017, 12:30 pm

geojanes wrote:The repeal of the estate tax is absurd.


Question: Should the Federal government get a second shot at wealth via the estate tax, no matter what?

In other words, if it's going to force a family to sell a farm, too bad? If the same to a small business, too bad?

Are there any limitations?

Thanks.

As for me, I'd vote "no" too. I think it's a bad bill as now constructed. It could have been written by pro-business Democrats, if there were any in power.
User avatar
Dignitary
 
Posts: 3486
Joined: 02 Oct 2000, 9:01 am

Post 09 Nov 2017, 2:48 pm

Doctor Fate wrote:
geojanes wrote:The repeal of the estate tax is absurd.


Question: Should the Federal government get a second shot at wealth via the estate tax, no matter what?

In other words, if it's going to force a family to sell a farm, too bad? If the same to a small business, too bad?

Are there any limitations?

Thanks.

As for me, I'd vote "no" too. I think it's a bad bill as now constructed. It could have been written by pro-business Democrats, if there were any in power.


First, and most importantly, we don't have royalty in the USA. People really should earn their own way. It's better for them, it's better for the country.

Second, for businesses like farms, there are hosts of ways to to protect the asset from the estate tax. The few farms that fall victims generally didn't do their homework. This is, in the vast majority of cases, a red herring.

Third, if you're not willing to make your heirs part of the business when you're alive and operating it and doing the necessary work to share your ownership interest to blunt or eliminate the estate tax, then maybe the business should be sold to pay the tax. I mean if it's not important to the people involved, why should you or I care?

Fourth, it's fair and consistent. Right now there is a tax due on gifts of $14,000 or more when it involves individuals. But if it's an inheritance, the first 5.5 mil is tax free? That's crazy. The exemption should actually be much lower, in my opinion.

Finally, like many households, my wife and I share finances, but we don't share them with our parents, or our siblings. Spouses being exempt make sense. But parents and siblings? It doesn't, unless you've made the effort to plan your estate so that you avoid (or blunt) the estate tax because you have actual financial or business ties that are real. Otherwise, why do you get special treatment?
User avatar
Dignitary
 
Posts: 3486
Joined: 02 Oct 2000, 9:01 am

Post 09 Nov 2017, 2:53 pm

The biggest problem with our personal taxes is that earned income is taxed at the highest rate and passive income is taxed at a lower rate and this does nothing about that, as I understand it, and may even make it worse because of the pass through income rate reduction.

Earned income should be taxed at the lowest rate and passive income should be taxed at the highest rate: reward those with jobs, don't penalize them. Duh.

If you want to exempt or have very low rates on the first X dollars because a lot of retired people rely upon passive income, that's fine, but above that amount should be taxed at the highest rate not the lowest.
User avatar
Adjutant
 
Posts: 3646
Joined: 17 May 2013, 3:32 pm

Post 09 Nov 2017, 3:05 pm

Totally agree with everything said here, George. It just seems intuitively fair and obvious to me.
User avatar
Ambassador
 
Posts: 4961
Joined: 08 Jun 2000, 10:26 am

Post 09 Nov 2017, 3:46 pm

geojanes wrote:The biggest problem with our personal taxes is that earned income is taxed at the highest rate and passive income is taxed at a lower rate and this does nothing about that, as I understand it, and may even make it worse because of the pass through income rate reduction.

Earned income should be taxed at the lowest rate and passive income should be taxed at the highest rate: reward those with jobs, don't penalize them. Duh.

If you want to exempt or have very low rates on the first X dollars because a lot of retired people rely upon passive income, that's fine, but above that amount should be taxed at the highest rate not the lowest.


Much passive income (interest, certain dividends, short term capital gains) is taxed at the highest rate. It's taxed at the top marginal rate plus the 2.9% ACA tax. I do agree with other aspects of your comments.