The 4-4 plan

[angrypeppers 1]

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You've clearly not done any large chain pizza sales marketing before.

That there is funny, I don't care who you are...

Burn the land and boil the sea,
You can't take the sky from me.

[jgoose71 0]

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>So you aren't allowing any business deductions?

Nope. No complexities.

> If I buy raw materials for .50, pay someone .30 in labor to manufacture something,
>and sell the finished good for $1.00 I pay the tax on the entire dollar?

Yes.

Farmer grows the wheat, sells it to the miller: 40%
Miller mills the wheat, sells it to the baker: 40%
Baker bakes the bread, sells it to the grocer: 40%
Grocer sells it to the sandwich shop: 40%
Sandwich shop sells it to you: 40%
This is why most advanced economies have opted for a value added tax. Yes it is complex but it is as close as you are going to get to a flat tax.
You would think someone in the US would be advocating that. Oh wait Ron Paul is.

I hate the Idea of a VAT tax. Here is the problem:

It adds to the cost of the item before it hits the shelves of the market. Plain and simple.

To the economy going again we need to bring down the cost of our goods that are sold abroad. A sales tax would do that. It would also bring up the cost of items imported from china. Right now china's goods only face a 1.2% tariff. When we are able to start manufacturing textiles and other such goods back in the states again, you will see our economy take off.

The other pro of a sales tax is that it is a consumption tax. If you decide to save your money, you don't pay taxes on it. This will give the average American a chance to invest. You pay yourself first and only pay taxes on what you consume.

The only down side I have seen so far is that a sales tax would most likely create a black market in the US. Flea Market "cash only" transactions to avoid the sales tax so to speak, just like Greece.

While I understand billvon's attempt to suggest a "progressive flat tax", it doesn't address the high cost of our goods being shipped over seas or the low cost of cheap shit imported from china.

You figure that out and I would vote for you....

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[DiverMike 5]

I'm still confused how this would be implemented. What about all the people who are renting property? Speaking as a landlord, most of my properties are revenue neutral because the rents I receive cover the outstanding loan on the properties. I benefit by deducting the loan costs (and depreciation) on my tax return.

If I can't deduct those expenses, I would have to immediately sell all the rental property and nobody would buy it because they can't deduct rental expenses. The whole housing economy would collapse, as well as the banking economy since nobody would be borrowing money to purchase rental property.

For the same reason I jump off a perfectly good diving board.

[Southern_Man 0]

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I'm still confused how this would be implemented. What about all the people who are renting property? Speaking as a landlord, most of my properties are revenue neutral because the rents I receive cover the outstanding loan on the properties. I benefit by deducting the loan costs (and depreciation) on my tax return.

If I can't deduct those expenses, I would have to immediately sell all the rental property and nobody would buy it because they can't deduct rental expenses. The whole housing economy would collapse, as well as the banking economy since nobody would be borrowing money to purchase rental property.

The prices for purchasing rental properties and for renting those properties would readjust to reflect the removal of the government subsidy. It would be a pretty big short term adjustment. In the long run it would make little impact as prices and values would just come into equilibrium again (or more accurately would pendulum around the equilibrium).

"What if there were no hypothetical questions?"

[Southern_Man 0]

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The only down side I have seen so far is that a sales tax would most likely create a black market in the US. Flea Market "cash only" transactions to avoid the sales tax so to speak, just like Greece.

All taxes cause tax avoidance strategies. I remember when I was a chld my parents would purchase quite a few cartons of cigarettes for my grandfather prior to going to visit him, since we lived in a state with low tobacco taxes and he lived in a state with higher ones.

Of course we even see this on the forums, where Europeans subject to VAT tax will arrange a trip to the states to pick up a rig or have a friend bring it into the country as personal property. Supossedly one of the benefits of deal w/ Karnage Krew (before that whole situation blew up) was that he would list a much lower value on the invoice, leading to lower tax liability for his customers.

"What if there were no hypothetical questions?"

[billvon 2,400]

>I'm still confused how this would be implemented. What about all the people who are
>renting property?

In the plan I describe? Incorporate as a business, pay taxes on the profit you make. Or if you prefer just pay taxes on the rental income. In the original plan, as long as your salary + rental income is less than $40K, you pay no income taxes.

>The whole housing economy would collapse

Yep, it might. The government has been propping up the housing economy for decades. A lot of other industries may collapse as well as new industries form and the costs and benefits for each one changes.

>since nobody would be borrowing money to purchase rental property.

Yep. People would only borrow money for ventures they could afford and/or make money on. Is that really a bad thing?

[Andrewwhyte 1]

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I hate the Idea of a VAT tax. Here is the problem:

It adds to the cost of the item before it hits the shelves of the market. Plain and simple.

To the economy going again we need to bring down the cost of our goods that are sold abroad. A sales tax would do that. It would also bring up the cost of items imported from china. Right now china's goods only face a 1.2% tariff. When we are able to start manufacturing textiles and other such goods back in the states again, you will see our economy take off.

The other pro of a sales tax is that it is a consumption tax. If you decide to save your money, you don't pay taxes on it. This will give the average American a chance to invest. You pay yourself first and only pay taxes on what you consume.

The only down side I have seen so far is that a sales tax would most likely create a black market in the US. Flea Market "cash only" transactions to avoid the sales tax so to speak, just like Greece.

While I understand billvon's attempt to suggest a "progressive flat tax", it doesn't address the high cost of our goods being shipped over seas or the low cost of cheap shit imported from china.

You figure that out and I would vote for you....

In Canada the VAT (called the GST but it is the same thing) is not paid on exported items. It is paid on the final price of all imported items. If Vertical Suits in Vancouver imports material they pay GST at the border. If they ship the suit to the US they do not charge GST. At the end of the reporting period they deduct the GST they paid for materials from the GST that they charged on domestic sales and send the difference to the gov. This amount equals the value added by them on suits sold in Canada, and paid by the consumer.

[DiverMike 5]

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In the plan I describe? Incorporate as a business, pay taxes on the profit you make.

Which is it? Profit or Income? If it profit then which business expenses are you allowing as deductions to arrive at Net Profit? I thought you were in favor of getting rid of mortgage deductions, depreciation, etc?

The rental costs would skyrocket if we remove the 'subsidy' of depreciation and mortgage expense. Those two expenses would have to be passed onto the renters.

For the same reason I jump off a perfectly good diving board.

[billvon 2,400]

>Which is it? Profit or Income?

Business: profit
Individual: income

[kallend 1,623]

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In the plan I describe? Incorporate as a business, pay taxes on the profit you make.

Which is it? Profit or Income? If it profit then which business expenses are you allowing as deductions to arrive at Net Profit? I thought you were in favor of getting rid of mortgage deductions, depreciation, etc?

The rental costs would skyrocket if we remove the 'subsidy' of depreciation and mortgage expense. Those two expenses would have to be passed onto the renters.

Why should other taxpayers subsidize a landlord anyway?

...

The only sure way to survive a canopy collision is not to have one.

[DiverMike 5]

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>Which is it? Profit or Income?

Business: profit
Individual: income

That makes it easy for everyone to establish an S Corporation for about $99 and then pass through the deductions to their 1040 via a K1. That is a huge loophole.

For the same reason I jump off a perfectly good diving board.

[DiverMike 5]

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Why should other taxpayers subsidize a landlord anyway?

They aren't subsidizing the landlord - they are subsidizing the renters. The expense that is being subsidized would be passed on to the renters.

For the same reason I jump off a perfectly good diving board.

[kallend 1,623]

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Why should other taxpayers subsidize a landlord anyway?

They aren't subsidizing the landlord - they are subsidizing the renters. The expense that is being subsidized would be passed on to the renters.

Parse it anyhow you like, why should other taxpayers subsidize it?

...

The only sure way to survive a canopy collision is not to have one.

[kelpdiver 2]

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Why should other taxpayers subsidize a landlord anyway?

They aren't subsidizing the landlord - they are subsidizing the renters. The expense that is being subsidized would be passed on to the renters.

Parse it anyhow you like, why should other taxpayers subsidize it?

other taxpayers in this context = home owners. They probably wouldn't like the substantial decline in their property value if this scenario was played out that way.

Or more bluntly - renters are subsidizing homeowners much more than the other way around.

[kallend 1,623]

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Why should other taxpayers subsidize a landlord anyway?

They aren't subsidizing the landlord - they are subsidizing the renters. The expense that is being subsidized would be passed on to the renters.

Parse it anyhow you like, why should other taxpayers subsidize it?

other taxpayers in this context = home owners. They probably wouldn't like the substantial decline in their property value if this scenario was played out that way.

Or more bluntly - renters are subsidizing homeowners much more than the other way around.

So what? Why should other taxpayers subsidize homebuyers?

...

The only sure way to survive a canopy collision is not to have one.

[DiverMike 5]

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So what? Why should other taxpayers subsidize homebuyers?

Arguably, the best use of public funds is to make sure that the general population is provided with food, clothing, shelter, and basic healthcare. Subsidies to allow people to afford those basic necessities are more easily justifiable than bailing out bankers.

For the same reason I jump off a perfectly good diving board.

[billvon 2,400]

>That is a huge loophole.

For corporations - yes, it is. But you can't effectively tax all income on a corporation, since they vary very widely in expenses, and you'd end up promoting service industries and destroying, say, oil companies.

And here we see the problems inherent in ANY system of taxation. I proposed the simplest possible form of income tax. Immediately there were people saying "I need a deduction for X and Y, otherwise you will destroy the housing market, the banks and the economy!"

Now, keep in mind that they weren't saying this because they were evil communist government IRS supporters. They really thought they needed those very important deductions.

And now we have other people saying "loophole! unfair!"

This was in one thread with about 50 people reading it. Imagine all the "loopholes" you'd get if 500 people contributed to it. Now imagine 5000. Now 50,000. Now half a million.

If you can picture that, you can picture how we ended up with the tax code we have today.

[kallend 1,623]

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So what? Why should other taxpayers subsidize homebuyers?

Arguably, the best use of public funds is to make sure that the general population is provided with food, clothing, shelter, and basic healthcare. Subsidies to allow people to afford those basic necessities are more easily justifiable than bailing out bankers.

You just want others to subsidize your business.

...

The only sure way to survive a canopy collision is not to have one.

[DiverMike 5]

Ok, then in your opionion, what is a better use of government funds than providing the basic necessities of life? Keep in mind, private industry will almost always provide services cheaper than the government does, so it makes sense for the government to pay landlords rathing than becoming a landlord.

Also, from the government's point of view it is cheaper to subsidize landlords to get people in apartments than it is to put the in jail for being vagrants. It is also cheaper to subsidize farmers than to jail looters who can't afford food.

For the same reason I jump off a perfectly good diving board.

[JohnRich 4]

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If the attractiveness of Cain's proposal is simplicity then let me propose this plan:
40% tax on all income over $40,000. Period.

My zero-zero plan: If members of Congress don't balance the budget, every year, they are ineligible for reelection.