The internal revenue tax code

[Dave2512]

Are no mods around tonight?

[jamo]

Are no mods around tonight?

Thanks for the heads up. In the future, please either flag offensive posts or send one or more of us a PM.

[Dave2512]

Sorry on my phone, can barely see the text and mobile is uh sucky.

[14ledo81]

I haven't read everything in here, but I believe @jcjim brings up some valid points. I'm just amazed that the people who are getting screwed are so quick to defend the rights of the people doing the screwing! Seriously @saevel25 and @14ledo81 , the OP may come off a little strong and be a little light in the specifics but do you REALLY think all is just in Camelot??? Because I'm pretty sure, at least in Canada, that the elite are playing with a stacked deck simply because they have the political buying power. To think otherwise is pretty naive IMHO.

I was more or less commenting on the debate tactics.

[jcjim]

Well, that solves that!

Given that, who could've possibly doubted the veracity of anything you say?

Ask if I care...Looks like your just trying to get to 10,000 posts no matter what you post

[newtogolf]

I haven't read everything in here, but I believe @jcjim brings up some valid points. I'm just amazed that the people who are getting screwed are so quick to defend the rights of the people doing the screwing!

Seriously @saevel25 and @14ledo81, the OP may come off a little strong and be a little light in the specifics but do you REALLY think all is just in Camelot??? Because I'm pretty sure, at least in Canada, that the elite are playing with a stacked deck simply because they have the political buying power. To think otherwise is pretty naive IMHO.

Corporations have some wiggle room to play with when it comes to taxes but at a personal level the wealthy don't get any breaks with regards to income taxes.  The Federal Government is very good at finding income and tracking it.  Any money movements greater than $10,000 are reported to the fed by banks so even offshore accounts are subject to scrutiny and taxes.  Swiss banks are no longer safe tax free havens for the wealthy.

The wealthy get taxed at a much higher level than middle class on income and the table that was posted earlier is a true reflection of monies paid by income level.  I wouldn't say I'm "wealthy" but I've done well and despite consulting with numerous accountants and tax attorneys there isn't much one can do "legally" that won't trigger an audit.  If you're paying $100,000+ in taxes you're not going to risk an audit to save $5,000 on something shady.

The biggest leverage the wealthy have is that they have money that they can use to make more money and have those profits taxed at a lower level than their income tax level since it's considered Capital gains.  The purpose of lowering the capital gains tax was to encourage investment in business.  Is it a perk the wealthy mostly benefit from, yes, but even if you're not wealthy it's an incentive to invest money if you have spare income.

You can still circumvent capital gains by investing as Buffet does and just keep your money in stocks.  Until you sell the stock you won't take a tax hit, but you risk losing money if the market crashes.

[Mr. Desmond]

Okay,

Corporations get special tax breaks to encourage certain activity, like oil companies and intangible drilling costs - typically one would capitalize those costs, but they are deducted. Some costs are still capitalized for a successful oil well; when the well is dry, you write off the rest off the capitalized costs -- sort of like a building that collapses -- it is no longer there so write it off.

The investment tax credit is a nice benefit -  a credit for investing in certain equipment - some industries are favored over others.

Then there is the investment hedgefund manager, who instead of his income being classed as ordinary, it is CAPITAL GAIN - WOW!  That's abusive.

Corps tend to plan to escape tax by investing in equipment the last 6 months of the year -- we once waited until December to get all the benefits, but Congress cut that out.

There are a whole bunch of freebies when it comes to hiding and setting up outside of the USA -- so corps do it.

Individuals -- at a certain income range, the Gov't starts taking away their itemized deductions.

If you own 2 homes, you still get a tax break - why? Because of the real estate lobby and it encourages employment - construction.

Individuals and alternative minimum tax - gov't starts adding back deductions and not so favored deductions, to make one pay a minimum -- people hate this one.

Just a couple of examples.

I think the answer is:

After a phase in period, let companies deduct everything - nothing is capitalized. Lower the rates.

For individuals -- a low rate national sales tax (consumption) and a low rate income tax that is simple to capture income of those who do not spend.

I would couple the new tax code with a complete reorganization of government and the budgeting process -- instead of encouraging government units to spend, encourage efficiency.

[jcjim]

Corporations have some wiggle room to play with when it comes to taxes but at a personal level the wealthy don't get any breaks with regards to income taxes.  The Federal Government is very good at finding income and tracking it.  Any money movements greater than $10,000 are reported to the fed by banks so even offshore accounts are subject to scrutiny and taxes.  Swiss banks are no longer safe tax free havens for the wealthy.

The wealthy get taxed at a much higher level than middle class on income and the table that was posted earlier is a true reflection of monies paid by income level.  I wouldn't say I'm "wealthy" but I've done well and despite consulting with numerous accountants and tax attorneys there isn't much one can do "legally" that won't trigger an audit.  If you're paying $100,000+ in taxes you're not going to risk an audit to save $5,000 on something shady.

The biggest leverage the wealthy have is that they have money that they can use to make more money and have those profits taxed at a lower level than their income tax level since it's considered Capital gains.  The purpose of lowering the capital gains tax was to encourage investment in business.  Is it a perk the wealthy mostly benefit from, yes, but even if you're not wealthy it's an incentive to invest money if you have spare income.

You can still circumvent capital gains by investing as Buffet does and just keep your money in stocks.  Until you sell the stock you won't take a tax hit, but you risk losing money if the market crashes.

Here we have a self professed rich guy trying to justify that the rich pay

more than their fair share....Warren Buffett doesn't even believe that.

GE paid no federal taxes and made billions and the IRS SENT THEM A CHECK

FOR 5 BILLION DOLLARS is that the "WIGGLE ROOM YOU'RE TALKING ABOUT?

There's probably many here that will believe your story based on the threads I've read

in the world of 100 watt light bulbs lots of 10 watters

But you just keep tellin you're story even if it's science fiction.

[David in FL]

For individuals -- a low rate national sales tax (consumption) and a low rate income tax that is simple to capture income of those who do not spend.

Agree, except I don't really even see the need for the second piece. Who "doesn't spend"....and why not encourage, rather than penalize those that choose to defer spending to save for the future?

[GolfLug]

Good post. The code is written to encourage Capital investing at all levels. What's classified as Capital and what is not always clear. Loop holes in classification are exploited, but it is not as easy as people seem to think unless you are blatantly dishonest.

Corporations have some wiggle room to play with when it comes to taxes but at a personal level the wealthy don't get any breaks with regards to income taxes.  The Federal Government is very good at finding income and tracking it.  Any money movements greater than $10,000 are reported to the fed by banks so even offshore accounts are subject to scrutiny and taxes.  Swiss banks are no longer safe tax free havens for the wealthy.

The wealthy get taxed at a much higher level than middle class on income and the table that was posted earlier is a true reflection of monies paid by income level.  I wouldn't say I'm "wealthy" but I've done well and despite consulting with numerous accountants and tax attorneys there isn't much one can do "legally" that won't trigger an audit.  If you're paying $100,000+ in taxes you're not going to risk an audit to save $5,000 on something shady.

The biggest leverage the wealthy have is that they have money that they can use to make more money and have those profits taxed at a lower level than their income tax level since it's considered Capital gains.  The purpose of lowering the capital gains tax was to encourage investment in business.  Is it a perk the wealthy mostly benefit from, yes, but even if you're not wealthy it's an incentive to invest money if you have spare income.

You can still circumvent capital gains by investing as Buffet does and just keep your money in stocks.  Until you sell the stock you won't take a tax hit, but you risk losing money if the market crashes.

Always made sense. If you keep the cash in the system, hence keeping it stimulated and hedging on it's growth instead of cashing out, then yes. Nothing wrong that I can see.

Corporations get special tax breaks to encourage certain activity, like oil companies and intangible drilling costs - typically one would capitalize those costs, but they are deducted. Some costs are still capitalized for a successful oil well; when the well is dry, you write off the rest off the capitalized costs -- sort of like a building that collapses -- it is no longer there so write it off.

The investment tax credit is a nice benefit -  a credit for investing in certain equipment - some industries are favored over others.

Yupp, our accountant chases down every penny and fights me toot and nail to capitalize everything he can that I spend (I oversee budget and spending of about $5 million annually in a manufacturing company, mostly consumption spend - 75% and rest, actual capital - 25% - machines) in favor of a linear depreciation. For example, last year he wanted me to put an asset tag on a new plumbing for a piece of equipment. "If you can touch it, you put a tag on it" , "we are still paying somebody and spending money as gov intended", we should get the benefit. Some times I agree and some times I just laugh.

[Mr. Desmond]

Agree, except I don't really even see the need for the second piece. Who "doesn't spend"....and why not encourage, rather than penalize those that choose to defer spending to save for the future?

Because the grubberment needs the money and a low single digit tax rate is not much of a penalty - it's a contribution.

I think you need to catch it both ways to ensure no abuse.

[Slowcelica]

GE paid no federal taxes and made billions and the IRS SENT THEM A CHECK

FOR 5 BILLION DOLLARS is that the "WIGGLE ROOM YOU'RE TALKING ABOUT?

Where are your sources for this? Stop posting blanket statements and no facts to back it up.

[Patch]

Here's a tid bit that might be interesting.

http://www.aol.com/article/2015/09/28/donald-trump-to-unveil-tax-plan-monday/21241676/

[Mr. Desmond]

Where are your sources for this? Stop posting blanket statements and no facts to back it up.

I read that GE paid no income tax, so if they paid estimated taxes of $5b -- they would have had a nice refund.

GE has a whole department (lots) of guys do what I once did -- tax lawyers with  multiple law degrees and experience whose only job is to think of ways not to pay taxes.

[saevel25]

I read that GE paid no income tax, so if they paid estimated taxes of $5b -- they would have had a nice refund.

Exactly. They paid estimated taxes. Meaning they paid taxes, but on a return they got a refund because they overestimated them.

I could right now give the Fed's $4000 dollars in taxes. Next year i would probably get $3500 of it back.

[David in FL]

Because the grubberment needs the money and a low single digit tax rate is not much of a penalty - it's a contribution. I think you need to catch it both ways to ensure no abuse.

But again, who doesn't consume at the retail level? No one. That's the wonderful thing about a consumption tax. You catch everyone, and you still get a progressive tax, with those who consume more, paying more, and those that consume less, whether by virtue of less income, or because they chose to defer spending in order to save, pay less. The gubbment also captures tax from all the heretofore untaxed. No more "working under the table", untaxed criminals, illegals, etc... Even your local drug dealers are now contributing, whether they're buying a pair of shoes, or a new Mercedes. Very cool.

[Slowcelica]

I read that GE paid no income tax, so if they paid estimated taxes of $5b -- they would have had a nice refund.

GE has a whole department (lots) of guys do what I once did -- tax lawyers with  multiple law degrees and experience whose only job is to think of ways not to pay taxes.

Here I'll even help him out with some actual facts from forturne, now this is from 2011.

http://fortune.com/2011/04/04/the-truth-about-ges-tax-bill/

Tax reform would be a good start, but how about passing laws to force congress to have a balanced budget every year, and cut some useless government spending.

[saevel25]

But again, who doesn't consume at the retail level? No one. That's the wonderful thing about a consumption tax. You catch everyone, and you still get a progressive tax, with those who consume more, paying more, and those that consume less, whether by virtue of less income, or because they chose to defer spending in order to save, pay less.

I would note that I think they should stay away from a Value Added Tax. I don't mind a consumption tax as long as it's on the final point of sale.

Just to look at some numbers.

In 2014 there was 127,006,000 households that averaged $53,495 spent each year in expenditures. That would be 6,794,185,970,000 trillion dollars in spending.

Right now US it taking in 3.176 trillion in revenues. 1.51 is in income tax, 1.06 is in Payroll taxes, 0.327 is in corporate taxes

Cool thing is, lets say you get rid of the income tax. You are injecting 1.51 trillion back into people's pockets. American's like to spend. I think the amount spent would jump a tad.

A 20% sales tax would produce 1.36 trillion dollars with out adjusting for the extra money people would have not having to pay an income tax.