5 ms·

Another strong reason to implement the concept of a simple flat tax, without the pages and pages of magic accounting trickery. It really shouldn’t be that comp

by whb07 9y ago

Another strong reason to implement the concept of a simple flat tax, without the pages and pages of magic accounting trickery. It really shouldn’t be that complicated: Salary wages * tax rate Investment delta * tax rate Why does that take thousands of lines on a tax return ?

vonmoltke 9y ago
"[T]housands of lines"? Really? How many private citizens have ever had a return that long? The base form is two pages. Schedule A for itemized deductions is one page. Schedule B for dividends and interest is one page. Schedule D for capital gains is two pages. So, six pages total for your situation. Barely qualifies as hundreds, particularly since many don't even need to be filled out. US tax code is definitely more complicated than it needs to be, but the repeated assertions here that this complication extends to the simple case are bullshit.
- jandrese 9y ago
  Stocks can get hairy in a hurry, especially when you have a partial sale of a tech stock (happens commonly in mergers when they liquidate partial shares) that was a former baby bell you inherited from your grandmother's AT&T options. What's the strike price? Who knows? The tax code is hairy but for the most part all of that complexity has a good reason for being there. A lot of it is closing loopholes that fat cats used to dodge taxes. The flat tax people want to open them all back up again and start from scratch. I mean right off the bat the grandparent's post falls victim to a scheme where you are paid a $0.01 salary, but simply get an enormous cash "holiday" gift every year. Tax Dodge 101. But the gp will say "oh, then you just need to declare gifts as income as well", and he's starting down the road to the big bloated tax code we have now.
- whb07 9y ago
  Have you ever done a 990? I don’t mean “paid for one” but I mean truly sat down and did it? It’s ridiculous and each ridiculous line has more baggage attached to each. So to you, I tell you that the tax code for the US is significantly bigger than the tax return a private individual like yourself files yearly [0]. Tax liabilities should be a simple event and should not require a tax professional and other accounting tricks to lessen the burden. In the current environment, those who pay top dollar for tax lawyers and accountants are able to maximize their taxes. The small business and individual is left a higher regulatory burden and are forced to eat the costs. A regular person should be able to properly pay taxes in a quick, clear and efficient manner. It shouldn’t require a professional who’s job it is to deal with the gross mismanagement of government. [0]:https://taxfoundation.org/how-many-words-are-tax-code/ https://taxfoundation.org/how-many-words-are-tax-code/
  - vonmoltke 9y ago
    > Have you ever done a 990? I don’t mean “paid for one” but I mean truly sat down and did it? It’s ridiculous and each ridiculous line has more baggage attached to each. No, but your post was about individual taxes. Form 990 is only filed by non-profit organizations, which certainly do not fit the formulas for individuals you posted above. > So to you, I tell you that the tax code for the US is significantly bigger than the tax return a private individual like yourself files yearly. Your initial post was referring to individuals, so that is what I was replying to. You are being disingenuous by talking about corporate tax code complexity next to burdens on individuals. > A regular person should be able to properly pay taxes in a quick, clear and efficient manner. It shouldn’t require a professional who’s job it is to deal with the gross mismanagement of government. Like I said, it can be better. However, I have never used a tax professional. The burden is not nearly as great on individuals and small businesses as you are claiming, as evidenced by you talking about 990s (which do not apply to individuals and small businesses) and the overall tax code(the vast majority of which does not apply to individuals and small businesses).
telchar 9y ago
You have that backward, underfunding the IRS to cause dysfunction is the strategy that is used to gin up support for simple easily-gameable tax schemes like "flat tax".
reaperducer 9y ago
>Why does that take thousands of lines on a tax return ? In part because of incentives. The government wants to encourage people to live in houses, so mortgage deductions are available. The government has an interest in population growth, so there's a child tax credit. The government wants to encourage certain kinds of saving, so Roth IRA's are taxed differently. The government wants to encourage charitable giving so it doesn't have to shoulder all of the nation's burdens, so there are deductions for that. etc... When you're a kid and all you know is your paycheck, a flat tax makes sense. But when you get older and your life becomes more interesting/complicated, you start to understand there are reasons for everything.

by whb07 9y ago

vonmoltke 9y ago

"[T]housands of lines"? Really? How many private citizens have ever had a return that long? The base form is two pages. Schedule A for itemized deductions is one page. Schedule B for dividends and interest is one page. Schedule D for capital gains is two pages. So, six pages total for your situation. Barely qualifies as hundreds, particularly since many don't even need to be filled out. US tax code is definitely more complicated than it needs to be, but the repeated assertions here that this complication extends to the simple case are bullshit.

jandrese 9y ago
Stocks can get hairy in a hurry, especially when you have a partial sale of a tech stock (happens commonly in mergers when they liquidate partial shares) that was a former baby bell you inherited from your grandmother's AT&T options. What's the strike price? Who knows? The tax code is hairy but for the most part all of that complexity has a good reason for being there. A lot of it is closing loopholes that fat cats used to dodge taxes. The flat tax people want to open them all back up again and start from scratch. I mean right off the bat the grandparent's post falls victim to a scheme where you are paid a $0.01 salary, but simply get an enormous cash "holiday" gift every year. Tax Dodge 101. But the gp will say "oh, then you just need to declare gifts as income as well", and he's starting down the road to the big bloated tax code we have now.
whb07 9y ago
Have you ever done a 990? I don’t mean “paid for one” but I mean truly sat down and did it? It’s ridiculous and each ridiculous line has more baggage attached to each. So to you, I tell you that the tax code for the US is significantly bigger than the tax return a private individual like yourself files yearly [0]. Tax liabilities should be a simple event and should not require a tax professional and other accounting tricks to lessen the burden. In the current environment, those who pay top dollar for tax lawyers and accountants are able to maximize their taxes. The small business and individual is left a higher regulatory burden and are forced to eat the costs. A regular person should be able to properly pay taxes in a quick, clear and efficient manner. It shouldn’t require a professional who’s job it is to deal with the gross mismanagement of government. [0]:https://taxfoundation.org/how-many-words-are-tax-code/ https://taxfoundation.org/how-many-words-are-tax-code/
- vonmoltke 9y ago
  > Have you ever done a 990? I don’t mean “paid for one” but I mean truly sat down and did it? It’s ridiculous and each ridiculous line has more baggage attached to each. No, but your post was about individual taxes. Form 990 is only filed by non-profit organizations, which certainly do not fit the formulas for individuals you posted above. > So to you, I tell you that the tax code for the US is significantly bigger than the tax return a private individual like yourself files yearly. Your initial post was referring to individuals, so that is what I was replying to. You are being disingenuous by talking about corporate tax code complexity next to burdens on individuals. > A regular person should be able to properly pay taxes in a quick, clear and efficient manner. It shouldn’t require a professional who’s job it is to deal with the gross mismanagement of government. Like I said, it can be better. However, I have never used a tax professional. The burden is not nearly as great on individuals and small businesses as you are claiming, as evidenced by you talking about 990s (which do not apply to individuals and small businesses) and the overall tax code(the vast majority of which does not apply to individuals and small businesses).

telchar 9y ago

You have that backward, underfunding the IRS to cause dysfunction is the strategy that is used to gin up support for simple easily-gameable tax schemes like "flat tax".

reaperducer 9y ago

>Why does that take thousands of lines on a tax return ? In part because of incentives. The government wants to encourage people to live in houses, so mortgage deductions are available. The government has an interest in population growth, so there's a child tax credit. The government wants to encourage certain kinds of saving, so Roth IRA's are taxed differently. The government wants to encourage charitable giving so it doesn't have to shoulder all of the nation's burdens, so there are deductions for that. etc... When you're a kid and all you know is your paycheck, a flat tax makes sense. But when you get older and your life becomes more interesting/complicated, you start to understand there are reasons for everything.