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kallend

How to encourage tax cheating by the very wealthy

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9 hours ago, RobertMBlevins said:

Very few people are actually super-rich. If you want to be fair and raise more money, the answer is a sliding scale flat tax without a deduction list and a tax code longer than three typical Bibles. The more they make changes to the tax code, the more the lawyers figure out ways to get around it. A straight-up flat tax on everyone with very limited deductions, has always been the best way. 

But it's been proposed a boatload of times...and just as many times it has been rejected. 

Deduction will always have to be a part of the equation. Otherwise some business could not exist. For some corporations profits are not realized for years. Others operate on very seasonal basis. But simplification is necessary.

9 hours ago, billvon said:

Why not keep the current progressive scale and just simplify the tax code?  The complexity of the tax code has nothing to do with how basic tax is calculated.  (And a "sliding scale flat tax" is still progressive; it just uses a different formula.)

(Needless to say there will ALWAYS be ways to get around paying taxes - but a simplified tax code would help reduce the number of people who avoid taxation.)

YES, as per my suggestion above. Tax codes typically arise because some genius politician has an idea on how to "incentivize" a corporations, or individuals actions.

8 hours ago, JoeWeber said:

This is nothing short of arrogant assholeishness but I have always welcomed confusion in the tax code. Some years ago I sorted out a way to distribute fully tax deferred assets into LLC's and then break them into separate parts and then bundle some bits into assets, under separate contracts, to be distributed into other LLC's so they could be used to purchase, tax deferred. other assets that, go figure, passed the IRS smell test. So yes, just like any other game if your opponent leaves an opening you are a moron if you don't take it. But I'm a small potatoes douchebag. At 50 million things should be different.

Human behavior as its always worked. In sports, taxation, life, etc. writing on the wall is interpreted in different ways.

The statutes around taxation need to be more agile. So unintended consequences can be quickly addressed. The code simplified. To raise more money the slope of the marginal rate increased. More enforcement is needed.

The US is 1/2 way between Greece and the Nordic countries. Concerning outright cheating and the citizens who think the tax systems are fair and just.

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As a part of this equation is the entire idea that government supplies needed services. That government is efficient. When government is painted as "evil" and "enemy", a swamp of waste, corruption, etc. Its citizens are more likely to cheat and go to extreme lengths to avoid paying taxes.

Edited by Phil1111
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14 hours ago, billvon said:

Why not keep the current progressive scale and just simplify the tax code?  The complexity of the tax code has nothing to do with how basic tax is calculated.  (And a "sliding scale flat tax" is still progressive; it just uses a different formula.)

(Needless to say there will ALWAYS be ways to get around paying taxes - but a simplified tax code would help reduce the number of people who avoid taxation.)

Hi Bill,

Re:  Why not keep the current progressive scale and just simplify the tax code? 

I agree with this with one exception.  The current system of progressive scale is a plateau system.  This what I do not like.  If you make just one dollar more in income, it can change your taxes from 18% to 26% ( I think those are correct numbers - if they are not, I am sure you know what I am talking about ).  IMO it should be an increasing slope system where that one dollar of income does not impact you so much.

Jerry Baumchen

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51 minutes ago, JerryBaumchen said:

Hi Bill,

Re:  Why not keep the current progressive scale and just simplify the tax code? 

I agree with this with one exception.  The current system of progressive scale is a plateau system.  This what I do not like.  If you make just one dollar more in income, it can change your taxes from 18% to 26% ( I think those are correct numbers - if they are not, I am sure you know what I am talking about ).  IMO it should be an increasing slope system where that one dollar of income does not impact you so much.

Jerry Baumchen

In a truly progressive taxation system, you would only pay 26% on that portion of your income earned above the threshold. For example, if the threshold was $10,000 and you earned $10,100 you'd pay $1,600 for the income up to and including $10,000 and an additional $26 on the $100 over and above the threshold, in total $1,626.

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3 hours ago, rifleman said:

In a truly progressive taxation system, you would only pay 26% on that portion of your income earned above the threshold. For example, if the threshold was $10,000 and you earned $10,100 you'd pay $1,600 for the income up to and including $10,000 and an additional $26 on the $100 over and above the threshold, in total $1,626.

I think that’s how it works. Software does my taxes now, but when i did them by hand it was that way. 
Wendy P. 

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18 hours ago, JoeWeber said:

Just like any other game if your opponent leaves an opening you are a moron if you don't take it. But I'm a small potatoes douchebag. At 50 million things should be different.

Well, right, everyone thinks things should be different at some level above what they are worth.  But I assure you that everyone thinks like you do - the DZO's think what they do is just "not being stupid" but the rich Chemical Bank VP's should pay their fair share.  The Chemical Bank VP's think that what they are doing is just not being a moron, but those hedge fund managers should pay their fair share.  They make MILLIONS!  The hedge fund managers think that what they are doing is just good business sense - no reason to pay an extra million in taxes, that's for sure! - but the Bill Gates of the world are just abusing the system.  Etc etc.

You have a level of wealth that 99.9% of the people on the planet will never, ever see.  (Not an attack on you; I am similar.)  But you think "hey, I am small potatoes; go after the rich people."  Everyone thinks that.  Well, everyone except Bezos and Gates perhaps; but even doubling their taxes would change the overall budget situation in the US government by approximately zero.

 

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4 hours ago, JerryBaumchen said:

I agree with this with one exception.  The current system of progressive scale is a plateau system.  This what I do not like.  If you make just one dollar more in income, it can change your taxes from 18% to 26%.

Nope.  It just changes your taxes from 18% to 26% (for example) on the amount you make over the threshold.

Let's use a real world example.

If you make $40,125 you are in the 12% tax bracket.  If you make $40,126 the next year you move into the 22% tax bracket.  But your taxes do not go up by 10% overall - they go up by 22% of $1, or $0.22.

 

 

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1 hour ago, billvon said:

Nope.  It just changes your taxes from 18% to 26% (for example) on the amount you make over the threshold.

Let's use a real world example.

If you make $40,125 you are in the 12% tax bracket.  If you make $40,126 the next year you move into the 22% tax bracket.  But your taxes do not go up by 10% overall - they go up by 22% of $1, or $0.22.

 

 

Hi Bill,

I know someone who had a somewhat 'huge' tax increase due to a 'small' increase in income.  However, it may have been an overall tax increase.  The result of both federal taxes & Oregon state income taxes.

Jerry Baumchen

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5 minutes ago, JerryBaumchen said:

I know someone who had a somewhat 'huge' tax increase due to a 'small' increase in income.  However, it may have been an overall tax increase.  The result of both federal taxes & Oregon state income taxes.

Yes, there are all sorts of cases where a slight increase in income can have a huge effect.  But for the most part that's due to other things kicking in, like triggering the AMT - not due to simple progressive taxation.

 

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6 hours ago, JerryBaumchen said:

The current system of progressive scale is a plateau system.  This what I do not like.  If you make just one dollar more in income, it can change your taxes from 18% to 26% ( I think those are correct numbers - if they are not, I am sure you know what I am talking about ). 

Jerry, Google the term "marginal tax rate". But by now you probably know.

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3 hours ago, JerryBaumchen said:

Hi Ken; and all of you,

Re:  But by now you probably know.

Let's just say I learned a lot - Now to merely leave with my tail between my legs.  :`o

Jerry Baumchen

Been there, know the feeling. Kinda scratchy there, isn’t it?

Wendy P. 

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On 5/9/2021 at 6:43 PM, billvon said:

Well, right, everyone thinks things should be different at some level above what they are worth.  But I assure you that everyone thinks like you do - the DZO's think what they do is just "not being stupid" but the rich Chemical Bank VP's should pay their fair share.  The Chemical Bank VP's think that what they are doing is just not being a moron, but those hedge fund managers should pay their fair share.  They make MILLIONS!  The hedge fund managers think that what they are doing is just good business sense - no reason to pay an extra million in taxes, that's for sure! - but the Bill Gates of the world are just abusing the system.  Etc etc.

You have a level of wealth that 99.9% of the people on the planet will never, ever see.  (Not an attack on you; I am similar.)  But you think "hey, I am small potatoes; go after the rich people."  Everyone thinks that.  Well, everyone except Bezos and Gates perhaps; but even doubling their taxes would change the overall budget situation in the US government by approximately zero.

 

All true but this is Speakers Corner. I have, admittedly, achieved a certain degree of financial security through an odd combination conflicting of galling hypocrisies and inadvertent good works. From what I hear, you went to school. Happy though we each are with our respective outcomes I, as humbly as I can, respectfully submit that those among and above us who are somehow able to scrape together another $50 Billion or so while my favorite sushi chef is collecting dinner at the local food bank ought to be paying a crap load more. Especially if it is futile and punitive.

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https://www.washingtonpost.com/opinions/2021/10/21/gop-rebrands-itself-party-tax-cheats/

Tax cheating is not a victimless crime. When (disproportionately high-income) people don’t pay their bills, everyone else must pay more to fill the shortfall.

“Democrats want to track every penny you earn so they can then tax you and your family at the maximum possible amount,” fearmongered House Minority Leader Kevin McCarthy (R-Calif.). This is an interesting euphemism for “rich people are going to pay the minimum amount of taxes the law already requires.”

 

The GOP seeks to exploit the confusion of honest, rank-and-file taxpayers. Their income is already quite well reported to the IRS: Three billion 1099 forms alone will be issued this year, and Americans haven’t considered this a “dragnet” or “infringement on personal privacy.” But suddenly it is — when similar reporting is proposed to ensure high-income people’s tax compliance, too.

Republicans also presumably have another shameful aim: communicating to tax cheats that, now and in the future, the GOP has their backs.

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3 hours ago, kallend said:

https://www.washingtonpost.com/opinions/2021/10/21/gop-rebrands-itself-party-tax-cheats/

Tax cheating is not a victimless crime. When (disproportionately high-income) people don’t pay their bills, everyone else must pay more to fill the shortfall.

“Democrats want to track every penny you earn so they can then tax you and your family at the maximum possible amount,” fearmongered House Minority Leader Kevin McCarthy (R-Calif.). This is an interesting euphemism for “rich people are going to pay the minimum amount of taxes the law already requires.”

 

The GOP seeks to exploit the confusion of honest, rank-and-file taxpayers. Their income is already quite well reported to the IRS: Three billion 1099 forms alone will be issued this year, and Americans haven’t considered this a “dragnet” or “infringement on personal privacy.” But suddenly it is — when similar reporting is proposed to ensure high-income people’s tax compliance, too.

Republicans also presumably have another shameful aim: communicating to tax cheats that, now and in the future, the GOP has their backs.

Hi John,

IMO anyone that believes anything coming out of Kevin McCarthy's mouth is a fool.

Jerry Baumchen

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Cheating not even needed - sometimes Congress just gives it to the billionaires:

https://www.nytimes.com/2021/12/28/business/tax-break-qualified-small-business-stock.html

Once aimed at small businesses, a 1990s-era tax break has become a popular way for Silicon Valley founders and investors to avoid taxes on their investment profits.

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2 hours ago, kallend said:

Once aimed at small businesses, a 1990s-era tax break has become a popular way for Silicon Valley founders and investors to avoid taxes on their investment profits.

"I'm doing it for the moneeey" ~Kevin O'Leary 

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3 hours ago, kallend said:

Cheating not even needed - sometimes Congress just gives it to the billionaires:

https://www.nytimes.com/2021/12/28/business/tax-break-qualified-small-business-stock.html

Once aimed at small businesses, a 1990s-era tax break has become a popular way for Silicon Valley founders and investors to avoid taxes on their investment profits.

Gives??? Those billionaires and corporations paid millions in political contributions for those laws!

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