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View Diary: Want to Reduce the Deficit? Start by Funding the IRS (81 comments)

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  •  And of course... (0+ / 0-)

    They are understaffed, hated for their very purpose and purposely sabotaged by the very people (congress) who are supposed to be ensuring their success.

    I am in favor of a flat tax of 35% for everyone on all earnings with no deductions except three...  

    1.) The poverty level for your specific region. (full single poverty level deduction for each spouse and half poverty level for each dependent child)
    2.) Taxes directly paid to state and local government.
    3.) Business expenses such as: Wages and investments in research, required business equipment/propert/raw materials and advertising.

     This will include social security and medicare within the 35%.

    Tax code could be narrowed down to a three page handout written in eigth grade reading level with large print.  GE could fill out their taxes on turbo tax (and a turbo scanner for the half a billion receipts).

    When Republicans want to broaden the tax base, the only way to do it would be to raise the minimum wage to a livable wage. Then they would be tax payers as well.

    "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

    by Buckeye Nut Schell on Thu Jan 31, 2013 at 07:18:58 AM PST

    [ Parent ]

    •  That'd be like the Wild Wild West. (6+ / 0-)

      Huge sections of the code define income and attempt to force current recognition of assets over which there's some sort of constructive receipt or effective control).  Get rid of those swaths of the code and people would game the hell out of the system.

      Which is to say: a simple tax is an easy one to avoid.

      •  The more people understand the vagaries (4+ / 0-)

        of the tax code, the more they realize the necessity of such a long code. We already have the 1040EZ for individuals or families with simple line items. But GE? An int'l business that is both a manufacturer and a financial services firm? How could someone even think that a simple few pieces of paper could clear up any and all ambiguities?

        •  For example, depreciation deductions. (1+ / 0-)
          Recommended by:
          Lujane

          Link.  They're a real plus for businesses that want to expand.

          Any jackass can kick down a barn, but it takes a good carpenter to build one.--Sam Rayburn

          by Ice Blue on Thu Jan 31, 2013 at 08:49:11 AM PST

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          •  I understand the intent of this but... (0+ / 0-)

            Again, we are using tax payer dollers to subsidize business growth.  The entire purchase cost is deducted from their initial purchase in the cost of doing business and then we allow them to deduct the wear on the asset as well.

            If a company wants a machine, there must be a financial incentive to have it already.  The are going to increase capacity, reduce labor, improve quality, provide a new feature or something.  If it makes economic sense, they will do it.  The depreciation of the asset is an added bonus.  

            It does create an incentive to buy something new as opposed to refurbishing something old but that is like robbing Peter to pay Paul.  Anymore, service contracts are typically local with American workers and new equipment purchases are more likely supporting foreign employment.

            "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

            by Buckeye Nut Schell on Thu Jan 31, 2013 at 09:03:26 AM PST

            [ Parent ]

            •  If an item can be fully expensed for tax (0+ / 0-)

              purposes there no longer is any basis with which one can take further depreciation. Not sure what you are saying about deducting both the upfront cost o the capital item in addition to ongoing deductions.

      •  I completely disagree... (0+ / 0-)

        The more complex you make something, the easier it is to cheat.

        You say:

        "Huge sections of the code define income and attempt to force current recognition of assets over which there's some sort of constructive receipt or effective control). "

        I simply state that all income is subject to taxes, period.  If you get it from work, interest, the lottery, dividends, inheritence, etc...

        Which is easier to game?

        In twenty years of writing ISO standards and standard operating procedures for companies, the secret is to understand what is critical and what is not and say it as clearly as possible with as few words as absolutely needed. (unlike my typical post).

        It is hard to find a loophole in a straight piece of string.

        "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

        by Buckeye Nut Schell on Thu Jan 31, 2013 at 08:33:11 AM PST

        [ Parent ]

        •  Sounds great. (2+ / 0-)
          Recommended by:
          RFK Lives, Roger Fox

          So I'll have a client set up an offshore corporation or mutual fund that invests and makes no distributions, and since he won't receive any income from that entity, he won't have income.  

          And that makes it easy for guys like Mitt to cut down their tax bills: the management fee would just be paid to some intermediary entity, and all their fees grow tax-deferred.  

          •  Touche... (1+ / 0-)
            Recommended by:
            TexDem

            You make a good point, I did not account for it and it would have to be considered.

            However, simplifying the code to extremely basic rather than complicated rules does make it more difficult to get around.

            There are 4,563 words in the US constitution and 5.6 million in the US tax code and associated regulations.  

            One of these has regulated one of the largest and most power governments in the history of the world for over two centuries with very few revisions.  

            The other is changed yearly, is completely riddled with loopholes and injustices and has lead to frequent inequalities in the distribution of wealth.

            Imagine how simple and easy to follow the bible would have been if it simply stated two rules; "Treat others as you would like to be treated" and "Love one another as I have loved you."  

            Simple is always better (as long as all contingencies are accounted for).

            "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

            by Buckeye Nut Schell on Thu Jan 31, 2013 at 11:04:42 AM PST

            [ Parent ]

    •  regressive (4+ / 0-)

      How big is your personal carbon footprint?

      by ban nock on Thu Jan 31, 2013 at 07:58:38 AM PST

      [ Parent ]

      •  How is it regressive? (0+ / 0-)

        If you make less than poverty level, you pay nothing.  

        If you make two times the poverty level, you pay 50% of 35% (17.5%) which includes your social security and your medicare which is about 10% so you total amount paid is 7.5%.

        If you make four times poverty level, you pay 75% of 35% which is 26.25% minus the 10% for payroll taxes and you pay 16.25% in taxes.

        $23,000 Income = $0.00 Taxes
        $46,000 Income = $3,450 Taxes / $4,600 social security/medicare
        $92,000 Income = $14,950 Taxes / $9,200 social security/medicare

        That sounds progressive to me.

        "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

        by Buckeye Nut Schell on Thu Jan 31, 2013 at 08:49:37 AM PST

        [ Parent ]

        •  start from existing brackets (0+ / 0-)

          and add these

          40% @2mil
          41% @ 4 mil
          42% @ 6mil
          43% @ 12mil
          44% @ 24 mil
          45% @ 48 mil

          That almost would resemble a geometric progression, no?

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Thu Jan 31, 2013 at 01:12:20 PM PST

          [ Parent ]

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