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I'd love for the people who want to lower taxes as a way to strangle the beast to push for something simple: remove all deductions from personal income tax. Nob

I'd love for the people who want to lower taxes as a way to strangle the beast to push for something simple: remove all deductions from personal income tax. Nobody gets ANY deduction for anything. All income is taxed the same regardless of the source. If we want less government spending, we should directly reduce government spending. This roundabout way of reducing income to reduce spending does not work. This is why I cannot trust anyone who says they think Ronald Reagan was a good POTUS. They are clearly either stupid or they have a huge ax to grind. As far as the current situation goes, the only reason we have this situation is because of our overreach. If we limit our taxation to transactions here in the US, we'd not have this problem. Who gave us the right to tax worldwide income anyway? Does any other country tax worldwide income?

sokoloff 11y ago
"All income is taxed the same regardless of the source." That statement seems simple but isn't. For example, are you using the US definition of income (which specifically allows the deduction of certain expenses related to income-seeking activities)? Or are you using the plain English sense of "money coming in" (in accounting, the revenue number)? If it's the former, you've already allowed lots of deductions in (raw materials, rent, utilities, salaries, sub-contracted labor, travel, etc), and for a sole proprietor or sub-S corporation, those are taken on the personal income tax return, schedule C. Concretely, as an individual landlord, can I deduct the mortgage interest on my rental property, or the labor I paid to repaint and replace the carpets from normal wear and tear? Can I deduct the depreciation on the building, reflecting the fact that it "wears out over some characteristic useful life"? If not, why can the C-corp landlord right next to me do that and I can't? If it's the latter (taxing all receipts), how do you treat businesses with low profit margins if you intend to tax them on revenue and disallow deductions for expenses? Imagine an airline with massive fixed costs, large variable costs, and slim profit margins. If I pay $1500 to fly round-trip to/from Europe and they make a $50 real-world profit on that, at what rate should they be taxed on the $1500 of revenue? How much more expensive will groceries become when grocers are taxed at double figure percentages against current gross profits in low single-digit percentages? (And not only the end grocer is taxed thusly, but every step along the chain that isn't vertically integrated will also be taxed that way.) How much will we help the poor and middle class if grocery prices double or triple? Will we now see a bunch of complaints of how Walmart is cheating because they bought up a bunch of farms and other elements in the grocery supply chain or if Coke or General Mills open up supermarket chains (thus minimizing the number of times the revenue is taxed)?
tn13 11y ago
Most people who support lower taxes also support lower government spending. These are not republicans or democrats but people who mostly do simple math. 40% tax essentially means people are working for government from January to May and get to keep only what they earn from June to December. I think that is not the way a free society should look like. I am all for paying taxes to build roads and police and courts. But heck I am not sure why I should pay for other people's food stamps, medicare and wars in Iraq.

sokoloff 11y ago

"All income is taxed the same regardless of the source." That statement seems simple but isn't. For example, are you using the US definition of income (which specifically allows the deduction of certain expenses related to income-seeking activities)? Or are you using the plain English sense of "money coming in" (in accounting, the revenue number)? If it's the former, you've already allowed lots of deductions in (raw materials, rent, utilities, salaries, sub-contracted labor, travel, etc), and for a sole proprietor or sub-S corporation, those are taken on the personal income tax return, schedule C. Concretely, as an individual landlord, can I deduct the mortgage interest on my rental property, or the labor I paid to repaint and replace the carpets from normal wear and tear? Can I deduct the depreciation on the building, reflecting the fact that it "wears out over some characteristic useful life"? If not, why can the C-corp landlord right next to me do that and I can't? If it's the latter (taxing all receipts), how do you treat businesses with low profit margins if you intend to tax them on revenue and disallow deductions for expenses? Imagine an airline with massive fixed costs, large variable costs, and slim profit margins. If I pay $1500 to fly round-trip to/from Europe and they make a $50 real-world profit on that, at what rate should they be taxed on the $1500 of revenue? How much more expensive will groceries become when grocers are taxed at double figure percentages against current gross profits in low single-digit percentages? (And not only the end grocer is taxed thusly, but every step along the chain that isn't vertically integrated will also be taxed that way.) How much will we help the poor and middle class if grocery prices double or triple? Will we now see a bunch of complaints of how Walmart is cheating because they bought up a bunch of farms and other elements in the grocery supply chain or if Coke or General Mills open up supermarket chains (thus minimizing the number of times the revenue is taxed)?

tn13 11y ago

Most people who support lower taxes also support lower government spending. These are not republicans or democrats but people who mostly do simple math. 40% tax essentially means people are working for government from January to May and get to keep only what they earn from June to December. I think that is not the way a free society should look like. I am all for paying taxes to build roads and police and courts. But heck I am not sure why I should pay for other people's food stamps, medicare and wars in Iraq.