SENATE BILL: Income Tax Reform Act of 2014 (Failed)

[Cincinnatus]

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2. All income tax deductions are null and void except for the deduction on charitable donations. The taxpayer shall pay the prescribed rate for his or her income listed in clause A above.
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Sponsor: Yankee

[DC Al Fine]

Question for Yankee: Does this bill ban deductions for expenses incurred to earn income? The current wording seems like it screws self-employed people.

[Cincinnatus]

Question for Yankee: Does this bill ban deductions for expenses incurred to earn income? The current wording seems like it screws self-employed people.

Both this bill and the Intl Acct Standards Act have been introduced on behalf of the Administration, if you wish to pose questions to Duke, or myself.  As to your question, yes, considering the current text.

[DC Al Fine]

Question for Yankee: Does this bill ban deductions for expenses incurred to earn income? The current wording seems like it screws self-employed people.

Both this bill and the Intl Acct Standards Act have been introduced on behalf of the Administration, if you wish to pose questions to Duke, or myself.  As to your question, yes, considering the current text.

Ok thanks for the heads up.

While I understand the administration's desire for a simplified tax code, I believe that removing all deductions is violates the basic idea behind the income tax; taxing a fair share of one's income.

The current wording of the bill does not allow for accurate assessment of income. The current wording of the bill would assess the landlord or self-employed person based on the rents or revenue the collected, not their actual income.

[Adam Griffin]

Obviously, the GM's assessment of this tax code will be necessary, with particular focus on Section 2. Section 1 through some pretty rough math suggests we'd be reducing revenue by $110-130 billion annually.

[TNF]

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2. All income tax deductions are null and void except for the deduction on charitable donations. The taxpayer shall pay the prescribed rate for his or her income listed in clause A above.
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[TNF]

Even if my amendment goes down, I'd like to throw out there that it's totally insane to place an income tax upon people making $25K per year while giving a tax cut to the richest people in the country. No one making under $100K should be paying the income tax, as was originally intended by those who implemented it a century ago.

[H.E. VOLODYMYR ZELENKSYY]

I'd support TNF's amendment without the confiscation bit.

[Lumine]

Just curious, if Griffin's math is correct and we reduce revenue by about $100 billion, does the administration have plan to deal with that loss of revenue with another bill? I'm quite concerned about the next budget running in a deficit thanks to all the new programs, so losing that amount of revenue is certainly not something I'm looking forward to.

[TNF]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

[H.E. VOLODYMYR ZELENKSYY]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

[TNF]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

I don't see why they should be able to hoard that much money (which is what they'd be doing). That money can be better assigned to social priorities, such as the building of hospitals, expansion of wireless internet services, building mass transit lines, etc.

[H.E. VOLODYMYR ZELENKSYY]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

I don't see why they should be able to hoard that much money (which is what they'd be doing). That money can be better assigned to social priorities, such as the building of hospitals, expansion of wireless internet services, building mass transit lines, etc.

I just said I don't support letting them keep the money - I want to keep the 90% rate on them too. And we can still build hospitals, subways, and those internet things the young'uns are always going on about without resorting to confiscation.

[TNF]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

I don't see why they should be able to hoard that much money (which is what they'd be doing). That money can be better assigned to social priorities, such as the building of hospitals, expansion of wireless internet services, building mass transit lines, etc.

I just said I don't support letting them keep the money - I want to keep the 90% rate on them too. And we can still build hospitals, subways, and those internet things the young'uns are always going on about without resorting to confiscation.

It's not as if confiscation would be unfounded, though. The fact that they're making in excess of $8M per year (in almost every case) is evidence that they're skimming the profit out of others' labor. It's outright parasitic. That money should be forcibly confiscated of them and put to work for those who actually produced that wealth, i.e. the workers of this nation.

[H.E. VOLODYMYR ZELENKSYY]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

I don't see why they should be able to hoard that much money (which is what they'd be doing). That money can be better assigned to social priorities, such as the building of hospitals, expansion of wireless internet services, building mass transit lines, etc.

I just said I don't support letting them keep the money - I want to keep the 90% rate on them too. And we can still build hospitals, subways, and those internet things the young'uns are always going on about without resorting to confiscation.

It's not as if confiscation would be unfounded, though. The fact that they're making in excess of $8M per year (in almost every case) is evidence that they're skimming the profit out of others' labor. It's outright parasitic. That money should be forcibly confiscated of them and put to work for those who actually produced that wealth, i.e. the workers of this nation.

And that is why we tax them at 90%. I just don't think we should be taking away someone's entire income - what if someone makes an app or something by themselves that gains them ten million dollars in a year? Should they get nothing from that?

[Fmr. Pres. Duke]

If removing the charitable donation deduction is fine with everyone, I am willing to support that for the sake of economic efficiency. Obviously, I'd never support a 90% tax rate on any bracket, but you all already knew that.

[Goldwater]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

I don't see why they should be able to hoard that much money (which is what they'd be doing). That money can be better assigned to social priorities, such as the building of hospitals, expansion of wireless internet services, building mass transit lines, etc.

I just said I don't support letting them keep the money - I want to keep the 90% rate on them too. And we can still build hospitals, subways, and those internet things the young'uns are always going on about without resorting to confiscation.

It's not as if confiscation would be unfounded, though. The fact that they're making in excess of $8M per year (in almost every case) is evidence that they're skimming the profit out of others' labor. It's outright parasitic. That money should be forcibly confiscated of them and put to work for those who actually produced that wealth, i.e. the workers of this nation.

And that is why we tax them at 90%. I just don't think we should be taking away someone's entire income - what if someone makes an app or something by themselves that gains them ten million dollars in a year? Should they get nothing from that?

Not that I really want to argue in favor of a 100% tax rate, but with the way tax brackets work I think that only the last 2 million would be confiscated.

[H.E. VOLODYMYR ZELENKSYY]

I'd support TNF's amendment without the confiscation bit.

Why should anyone make in excess of $8M? Surely that's too much for any one person.

I'm not supporting letting them keep all $8,000,000 dollars, but they should be allowed to have some, no?

I don't see why they should be able to hoard that much money (which is what they'd be doing). That money can be better assigned to social priorities, such as the building of hospitals, expansion of wireless internet services, building mass transit lines, etc.

I just said I don't support letting them keep the money - I want to keep the 90% rate on them too. And we can still build hospitals, subways, and those internet things the young'uns are always going on about without resorting to confiscation.

It's not as if confiscation would be unfounded, though. The fact that they're making in excess of $8M per year (in almost every case) is evidence that they're skimming the profit out of others' labor. It's outright parasitic. That money should be forcibly confiscated of them and put to work for those who actually produced that wealth, i.e. the workers of this nation.

And that is why we tax them at 90%. I just don't think we should be taking away someone's entire income - what if someone makes an app or something by themselves that gains them ten million dollars in a year? Should they get nothing from that?

Not that I really want to argue in favor of a 100% tax rate, but with the way tax brackets work I think that only the last 2 million would be confiscated.

Ah, right, my mistake - but the point still stands.

[🐒Gods of Prosperity🔱🐲💸]

What are we going to do with tax credits?  Are we going to get rid of those also?

While I could support some limitations on it, I don't support removing the charitable deduction.  Taxation limits the amount of money that a person has available to give to charity. So if we don't want to discourage giving, the deduction makes sense.

[🐒Gods of Prosperity🔱🐲💸]

What are we going to do with tax credits?  Are we going to get rid of those also?

While I could support some limitations on it, I don't support removing the charitable deduction.  Taxation limits the amount of money that a person has available to give to charity. So if we don't want to discourage giving, the deduction makes sense.

The trouble with that argument is that we could say this about anything. "Taxation limits the amount of money that a person has available to give to X. So if we don't want to discourage X, the deduction makes sense." It's the primary justification given for virtually every deduction on the books.

There are lots of things that policymakers want to encourage: Consumer spending, savings, home ownership, education, energy savings, etc. Yet we're dumping all of these - as long as they're deductions and not credits, at least - and in many cases, I support this. What makes charitable giving different?

One difference is that those other things you mentioned are that people spend money on for themselves and their family, that they can find some economic utility in quite aside from the deductions and credits. I don't mean that people won't give without this, but there's not the same economic incentive there on the other side to balance the cost of spending a significant portion of one's after-tax income.

Basically though, I think it comes down to what we are going to prioritize and value.  We tend to have a different reaction to hearing that a millionaire has given 40% of his income to charity than if he spent 40% of his income on a house.  Maybe given the jobs created by that spending we reacted differently too much, but it's not entirely wrong, because the societal benefit is more direct, assuming it is a worthwhile cause.  I value having voluntary, independent social institutions out there doing good in our communities, and so I don't believe we should be burdening the ability of people to contribute. 

[Southern Senator North Carolina Yankee]

Why except the charitable donation deduction? I know that it sounds horrible, but if the goal is to broaden the base and increase the efficiency of the economy, it doesn't make sense, especially when you consider where most charitable donations go (and I'm not just talking about churches). We should also be mindful of how any change in the tax code will interact with Nixcome in terms if effective marginal tax rates.

This needs to be considered, the last thing we want to do is damage that policy. Particularly when everyone and there cousin now wants to expand it in someway for some purpose (haven't checked all the campaign threads for President closely but I do recall it being mentioned by both once or twice).

[Southern Senator North Carolina Yankee]

Oh yea,  the TNF Amendment is hostile.

I made clear in a another thread why marginal tax rates that high are a bad idea. The last test case had mitigating factors propping up the economy and even then we paid heavy price afterwards.

The best rate is somewhere between 45% and 55% for the top tax bracket.

[Fmr. Pres. Duke]

The rates are certainly debatable. I did not do much high level analysis before I posted the bill. My bar preparations have really taken the front burner for me recently. However, I saw the debate in the senate slowing, the queue drying up, and I generally don't agree with any tax rate that takes over 50% of someone's income, because it is inefficient, so I introduced this. I'm happy it's at least generating some debate and discussion.

If this ends up being too regressive, I am more than willing to adjust some things. I am a big believer in a progressive tax system, but I also wanted to broaden the base while eliminating many loopholes the super wealthy sometimes take advantage of at the moment.

[Maxwell]

I consider myself someone who prefers a top rate of 50%. However, we have to balance the needs of the rich and the needs of the poor. A top rate of 50% is good by Atlasia standards, and therefore we need that to apply to more people. Therefore, I recommend extending it to all millionaires. Raise the $500-1 Million to 45%. This will raise more revenue from the top bracket than the bill currently does.

As for lower income residents, Instead of making only the bottom $25,000 exempt from taxation, raise that to at least $30,000. In addition, lower the rate for $30-50 tho to 13%. Keep the rest relatively the same, though raising the rates for some of the higher non-millionaires.

These rates aren't exact, I'll be doing more research to see how we exactly implement this, but this would be closer to smarter reform.

$0 - $30,000: 0%
$30,001 - $50,000: 13%
$50,001 - $100,000: 20%
$100,001 - $250,000: 30%
$250,001 - $500,000: 38%
$500,001 - $1,000,000: 45%
$1,000,000 and over: 50%

My hope is that this doesn't cut out too much revenue, so that we can afford to do a small business tax cut to stimulate that sector of the economy.

[bore]

I would advise all senators who haven't yet seen it to look at Averroes post on the repercussions of this here.