Posted on 06/18/2015 6:13:49 AM PDT by GIdget2004
I would not necessarily be against eliminating all personal deductions from the tax code. I see the wisdom in it, and I also see some problems with it, and I don’t think the dependent and home deductions will ever go away politically.
But business deductions are nothing more than business expenses. Since you fail to admit you stepped in do do on that one, and won’t answer my question on business deductions, then it’s you who need one more chance.
I’ll make it EEEEEE ZZZZZZZZ for you: In a system where all personal deductions are done away with, how would you handle BUSINESS DEDUCTIONS - especially for LLCs and DBAs.
I tell them that the surest way to really get money out of politics is to go to some version of a flat tax.
The money in politics, like money everywhere, is there to make purchases. What the politicians are primarily selling is favorable treatment in the tax code.
Without the ability to tinker with the tax code, politicians will be just like regular people, with nothing to sell. That's why we'll never get politicians in either party to go to a flat tax. It's like asking a supervillian to voluntarily give up his superpowers.
A business should be a self standing "thing". It is not taxed and it can not reduce taxes if it has a loss. It is what it is. When my real estate business pays me money, that money should be taxable to me, on my personal income tax.
It is not that way not, but it should be. To many people (EVERYONE) mixes business and personal taxes and we have a gazillion pages of tax law to make it work.
Personal taxes should be flat at 10%. There should be no business tax.
Pass a national sales tax, eliminate all income taxes, and restore the 4th Amendment by removing the government's rights to stick their noses and claws into the financial lives of the citizens.
FWIW, the elitists in DC are way past caring what the "little folk" want. If the DC crowd really wanted to clean up the tax mess, they'd just do it. Like with everything else.
The nice things about a flat tax are everyone’s got some skin in the gameTaxpayers would get to keep the deductions for home mortgage interest and charitable deductions under Paul’s plan, and would also not have to pay any payroll taxes. Plus, the gift and estate taxes would be scrapped, and the first $50,000 of a family of four’s income would be exempt from taxes.
I saw that. Rand Paul’s proposal is not a true flat tax. It’s a true flat tax that I’d favor.
Its only flat in that there are no progressive rates.... It would be no more manageable than what we have now. It just lowers rates for higher incomes. That’s all it does.
How true, how true.
I’ve always advocated for a flat very low tax on business. After all, a successful business grows and employs many people, who would all pay taxes. Our real problem is the gov. spends too much. No one really wants to address that problem. It’s a political minefield.
My solution: A constitutional amendment that does the following:
Why 10%? God only asks for 10%. The government does not deserve more than the Lord.
You must set the rate itself in the amendment, or else you'll see rate creep, the same way we've seen with income tax rates.
People have no idea how bad the income tax has become.
Check out my page on the 1913 income tax.
From that page:
Back in 1913, there were 6 tax brackets.Those making under $20,000 per year paid no tax. According to this inflation calculator, $20,000 in 1913 was equivalent to $435,543.79 in 2010. This first $20k was subtracted from your income so even if you made $30,000, you were only taxed on the last $10,000 of it. The rate was a whopping 1%. So, let's take that hypothetical person who made $30,000 in 1913. He would have paid $100 in taxes on it. If you run that through the above inflation calculator, you'll see that it would be equivalent to $2177.72 today. Well, that sounds like a lot of money until you consider that what that really means is that in today's dollars, someone would have to make $653,315.69 per year to pay that $2177.72 in income tax.
I have Images of the original 4-page form. Wish I could find a copy as a PDF.
Then again taxing income in and of itself is problematical. A consumption tax would be preferable but that has problems as well.
THe only reason we have business deductions is because we have business tax.
Here's another example. Guy has business to do in London. So he buys a plane ticket to London. Wife says she wants to go too. So they buy her a ticket as well. His business takes two days. She kills time while he's in meetings.... Then they spend another 10 days there sightseeing. He fills out his taxes and starts determining which parts are pertaining to business and which are personal. That's where our tax code is screwed up. It should all be personal. You want it to be business.... you get on the plane, fly there, do your business, fly back. You want to take your wife to London, you buy your own tickets with your own money, and spend your own money while you're there.
I don’t have an answer for that. The tax code is so complex and far reaching that to ‘tweak’ it in one area would almost certainly cause problems elsewhere - both financial and political.
Which is why there should be no deductions at all in my opinion. To eliminate most but keep others will end up being self-defeating it seems to me. The political infighting and favoritism over time would sink it, and we’d be right back where we started.
Although one could argue to retain all business deductions and just keep a flat personal income tax with no personal deductions. That might be doable.
To summarize, the tax code is so complicated and conflicting and wrongly used for favoritism (or punishment) that it best to scrap it and just pay a fixed percentage of income, regardless of income. And to have businesses pay their own expenses without the ability to take it off the top line, even for depreciation.
It will cause much turmoil in the short-term, but long term it would be a net benefit, imo.
Do you agree with any of this from a practical standpoint or based on principle? Or do you see things from a different perspective?
14.5% ? Why not 14.875%? And what was wrong with the 15% flat tax. Just askin. ;|
If I ever mix that money with my personal money for any reason, and get caught, I'll lose my license and potentially be prosecuted. There is no excuse or exception.
We should draw the same line between a person's business and their personal business. It is not that complicated and it can be done. Then the business is something that makes profit or loses money. It has not taxes and no deductions. The personal money that owners take out of it and use for personal us should be taxable at a flat rate. I prefer 10%. You get caught mixing the two (buying personal things with the business account) the whole business account becomes a personal account with no deductions in it.
Yeah. Right.
Never happen.
So again, here's my page on the 1913 income tax.
Direct link to the original form is here.
You’re right. We make it too complicated.
If I understand you right, you’re suggesting personal income tax for everyone only at a set percentage, and businesses pay no tax and enjoy no deductions.
You pay the flat tax as you take the money out.
In effect your biz becomes like a 401k. You invest the money in it in stocks, bonds, whatever. You pay tax as you take it out.
BUT, if you ever take it out for personal use without paying tax on it (try to game the system) you just really, really screwed up.
That's the kjam22 tax plan.
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