What are YOUR ideas on Tax Reform?
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  What are YOUR ideas on Tax Reform?
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Blue3
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« on: March 25, 2017, 03:32:07 PM »

What are YOUR ideas on Tax Reform?


























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Blue3
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« Reply #1 on: March 25, 2017, 03:45:17 PM »
« Edited: March 25, 2017, 03:53:33 PM by Blue3 »

For me, the most regressive tax appears to be Payroll Taxes. I'd rather eliminate payroll taxes, and fund SS/Medicare from the general revenue, by increasing rates and eliminating some deductions and credits. (Barring that, eliminate the cap.)

I believe the mortgage interest deduction is the most expensive deduction, and one that primarily benefits people who own more than one home. If I'm remembering that correctly, then it should be eliminated or limited to only one home.

I'd be open to eliminating the corporate income tax and estate tax in exchange for creating a minimum effective tax rate for millionaires, and treating dividends as part of normal income and taxed the same way.

Impose risk fees on banks, the higher the fee depending on how high the risk.

Create a carbon tax (but not too high at first).

Make pre-filled tax papers, that save individuals the most money, which they can either choose to accept... or they can still spend the extra time/effort and possibly money having it double-checked.
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mencken
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« Reply #2 on: March 25, 2017, 04:27:51 PM »
« Edited: March 25, 2017, 04:29:52 PM by mencken »

One-time* wealth tax of 60% on wealth over $10 million. Any adverse economic effects from the resulting fire sales will be offset by economic stimulus for the lower and middle classes.

*Or until the next time we face a twelve-digit deficit.
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The_Doctor
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« Reply #3 on: March 25, 2017, 04:39:34 PM »
« Edited: March 25, 2017, 04:43:54 PM by TD »

1. Three tax brackets of 35% and 20% and 10%. Those making adjusted over $500,000 pay 35%, married couples making over $800,000 pay the top rate. 2nd rate is for the middle class starting at $50,000 single and $100,000 joint. The last would be for those making $25,000 single and $50,000 joint. Nobody pays taxes below these rates.

2. Eliminate all deductions & keep a single standard deduction if you're in the middle and lower classes.

3. Set the estate and gift tax at 65% at all things given at over $30,000 inflation adjusted per year. You may bequeath up to $500,000 in one time gifts tax free per lifetime.

4. The Corporate tax rate halved to 15%. End all corporate deductions. (Corporations defined as businesses with over 15 workers).

5. Eliminate paying two halves of the self employed taxes. Just pay 1/2.

6. Those making below $50,000 single or $75,000 joint pay a reduced FICA and Medicare tax. The FICA tax cap is lifted to 90% of income.

7. Expansion of the Earned Income Tax Credit.
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Bojack Horseman
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« Reply #4 on: March 25, 2017, 04:56:33 PM »

Raise taxes on the rich and lower taxes on the poor/middle class. Eliminate SS/MC payroll tax cap and use that money to increase benefit amounts.
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Skill and Chance
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« Reply #5 on: March 25, 2017, 05:01:36 PM »

Raise taxes on the rich and lower taxes on the poor/middle class. Eliminate SS/MC payroll tax cap and use that money to increase benefit amounts.

This is a far better way to handle payroll taxes than eliminating them and raising income/estate taxes to fund SS/Medicare.  SS and Medicare will inevitably go the way of Medicaid within 12 years if you do the latter.
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Pericles
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« Reply #6 on: March 25, 2017, 05:04:43 PM »

Add a consumption tax, not very economically harmful but raises a lot of revenue, and cut income taxes for the middle class while raising it for top earners. A consumption tax can pay for an increased welfare state and larger government, or be used to pay for cuts to the rest of the tax revenue and government.
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Lief 🗽
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« Reply #7 on: March 25, 2017, 05:18:33 PM »
« Edited: March 25, 2017, 05:24:48 PM by Lief 🐋 »

Dramatically cut payroll taxes.

95% tax on income about $5 million.

100% estate tax on anything above $1 million.

Make student loan repayments tax deductible.
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Skill and Chance
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« Reply #8 on: March 25, 2017, 05:24:30 PM »

1. Drop the estate tax exemption from $10M to $500K.  Allow an additional $1M for equity in a bona fide, actively managed farm/ranch or small business with fewer than 50 W-2 or 1099 employees.  Assets left to surviving spouses are entirely exempt.  This would apply to gifts given to children, etc. over a lifetime.  The only exemptions are paying another's medical or educational expenses.

2. Abolish federal income taxes on W-2 earned income, at all income levels.

3.  Create a federal sales tax or VAT set at 25-30% and raise the federal income tax on dividends, capital gains, rents, and all other forms of passive income to match the level of the VAT.

4.  Everyone receives a basic income equal to the average VAT burden in the previous year on the spending of a family at 2X the poverty line for a household of their size

5.  Keep payroll taxes, but remove the cap and lower the total rate to about 5% per employee for the employee's half.  The self-employed only have to pay their half and the rest is covered by the government.  SS/Medicare will be much more likely to remain funded and solvent if everyone in the country who is employed is always contributing something to them.

Thoughts?  The idea is to be neutral between saving and spending (the current system heavily favors spending in the current year), promote entrepreneurship, and encourage everyone who can to pursue W-2 work.
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Skill and Chance
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« Reply #9 on: March 25, 2017, 05:26:09 PM »

Dramatically cut payroll taxes.

95% tax on income about $5 million.

100% estate tax on anything above $1 million.


Make student loan repayments tax deductible.

You realize that is going to utterly destroy a bunch of rural landowning families that only actually make like $30-50K/yr, right?
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Lief 🗽
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« Reply #10 on: March 25, 2017, 05:31:12 PM »

Dramatically cut payroll taxes.

95% tax on income about $5 million.

100% estate tax on anything above $1 million.


Make student loan repayments tax deductible.

You realize that is going to utterly destroy a bunch of rural landowning families that only actually make like $30-50K/yr, right?

Yeah I think your farm exception is a good idea.
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courts
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« Reply #11 on: March 25, 2017, 05:57:20 PM »

For me, the most regressive tax appears to be Payroll Taxes. I'd rather eliminate payroll taxes, and fund SS/Medicare from the general revenue, by increasing rates and eliminating some deductions and credits. (Barring that, eliminate the cap.)

I believe the mortgage interest deduction is the most expensive deduction, and one that primarily benefits people who own more than one home. If I'm remembering that correctly, then it should be eliminated or limited to only one home.

I'd be open to eliminating the corporate income tax and estate tax in exchange for creating a minimum effective tax rate for millionaires, and treating dividends as part of normal income and taxed the same way.

Impose risk fees on banks, the higher the fee depending on how high the risk.

Create a carbon tax (but not too high at first).

Make pre-filled tax papers, that save individuals the most money, which they can either choose to accept... or they can still spend the extra time/effort and possibly money having it double-checked.

i agree with pretty much all this... in general personal income tax and certain taxes on consumption should be a bit higher. while corporate taxation should be lowered to be more in line with other countries. although i'd prefer just raising gas taxes to a carbon tax.
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Mr.Phips
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« Reply #12 on: March 25, 2017, 06:30:14 PM »

Lower the corporate rate significantly, while taxing dividends and capital gains at ordinary rates on the individual side. 
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« Reply #13 on: March 25, 2017, 06:36:15 PM »

Eliminate corporate, capital gains, and estate taxes. Remove wage income cap on Social Security tax.
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Skill and Chance
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« Reply #14 on: March 25, 2017, 07:31:16 PM »
« Edited: March 25, 2017, 07:33:38 PM by Skill and Chance »

Eliminate corporate, capital gains, and estate taxes. Remove wage income cap on Social Security tax.

Are you really OK with an 18 year old who inherits a $100M investment portfolio outside of retirement accounts and never needs to do any W-2 work never paying any federal taxes at all in their lifetime?  IMO, the reverse scenario where W-2 work is untaxed other than for social insurance and passive income is taxed heavily at 25% or even 50% from the 1st dollar is far more just and efficient at promoting work.

*I presume you are including taxation of stock dividends and (non-municipal) bond coupon payments in "capital gains."  My apologies if you are not.
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angus
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« Reply #15 on: March 25, 2017, 07:47:07 PM »

What are YOUR ideas on Tax Reform?

Simplify!!!!!!!!!

That a cottage industry has evolved to serve no purpose other than to help people "do their taxes" should be evidence enough that we need simplification.  I have never used a service, or software, to "do" my taxes, but I am constantly reminded that many (most?) people do.  Just the other day I was in the club working out with a colleague who asked me about my taxes and I mentioned that I didn't quite finish because I was printing PA40 form UE and my printer quit.  (Oh, it was a fine printer.  It is three years older than my son and has been faithfully printing since 2001, but it started to make a noise a few months ago so I knew it was coming.)  Anyway, he immediately said, "printed out forms?  You mean, you do it on forms with a pencil?  old school, man.  I use TurboTax."   

?!  This particular individual has a PhD in political science and he has to use software to "do" his taxes?!

I've been chastized and hounded by the feds.  Sometimes it's good.  Once they wrote, "We owe you one thousand dollars.  Please call this number if you dispute this."  Who would dispute that?  Of course I didn't call the number.  I awaited my one-thousand dollar check and was glad to receive it.  More often it's like this, "We have determined that you owe us six thousand, seven hundred, thirty-three dollars and forty-seven cents.  If you pay in the next two weeks there will be no additional interest or penalties..."  Or something like that.  Once they pissed me off so bad that I called them and had to go through about 20 minutes of menus, only to get "Our call volume is unusually busy at the moment.  Please call back at another time."  WTF??!  I wrote them a harshly-worded letter and disputed the amount that they claimed, as well as the interest rate they charged, and offered them about a third of what they wanted (I was being generous).  About a month later I got a letter that stated that my amount would be acceptable.

Mostly I don't make mistakes, but I have to set aside at least an entire weekend to do it.  It's insane. 

DECIDE HOW MUCH YOU NEED AND TAKE IT!  JUST FUCKING TAKE IT.  DON'T MAKE IT SO COMPLICATED.

That's all I'd suggest. 
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ProgressiveCanadian
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« Reply #16 on: March 25, 2017, 07:53:32 PM »

Time to go back to FDR and Eisenhower tax rates.
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True Federalist (진정한 연방 주의자)
Ernest
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« Reply #17 on: March 25, 2017, 07:58:09 PM »

Time to go back to FDR and Eisenhower tax rates.

Only if we get into World War III.
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ProgressiveCanadian
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« Reply #18 on: March 25, 2017, 08:24:13 PM »

Time to go back to FDR and Eisenhower tax rates.

Only if we get into World War III.

Was Eisenhower in a world war while president? Hmmm didn't know that Roll Eyes
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Mopsus
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« Reply #19 on: March 25, 2017, 08:31:18 PM »

1. Confiscatory tax rates on nonmaterial assets
2. Sin taxes on major unhealthy products (tobacco, alcohol, junk food), enough to compensate for their negative externalities
3. Raise the gas tax and implement a carbon tax, enough to compensate for their negative externalities

That should close the deficit anyway.
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ExtremeRepublican
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« Reply #20 on: March 25, 2017, 08:32:21 PM »

Cut taxes to late 1800s levels (including no income tax).  Ideally, I would say that every person over 25 would have to pay a flat fee (probably something like $500) and then ban all forms of taxation other than excise taxes and fines.
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ProgressiveCanadian
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« Reply #21 on: March 25, 2017, 08:39:21 PM »

Cut taxes to late 1800s levels (including no income tax).  Ideally, I would say that every person over 25 would have to pay a flat fee (probably something like $500) and then ban all forms of taxation other than excise taxes and fines.

I bet you would love to live in the 1800s...
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DC Al Fine
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« Reply #22 on: March 25, 2017, 08:48:53 PM »

Time to go back to FDR and Eisenhower tax rates.

Only if we get into World War III.

Was Eisenhower in a world war while president? Hmmm didn't know that Roll Eyes

You're missing the point.

If you blew up most of the world's economies, then sure you could get away with charging such high taxes. But alas, it's not 1952 anymore and capital is much more mobile than the past.
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Shadows
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« Reply #23 on: March 25, 2017, 09:00:13 PM »
« Edited: March 25, 2017, 09:05:03 PM by Shadows »

Time to go back to FDR and Eisenhower tax rates.

Only if we get into World War III.

Was Eisenhower in a world war while president? Hmmm didn't know that Roll Eyes

You're missing the point.

If you blew up most of the world's economies, then sure you could get away with charging such high taxes. But alas, it's not 1952 anymore and capital is much more mobile than the past.

That is now how it works - Most empirical studies have already proven that this is a failed concept because technically you will always have tax havens & if you destroy your economy & country if you go that low creating anarchy & otherwise you will always have tax rate differential & there will always be some flow.

Capital is more mobile but depends on a range of issues, not purely tax rates but how the economy does, size of market & dozens of factors. But the key is to not have huge tax differentials among Big/Developed economies but now you have a lot more international agreements including coming heavily/regulating these tax havens.

But in general what happens is a bandwagon effect - When FDR, Eisenhower & LBJ & Truman & others had a 70-90% top tax rate, the whole world followed it. When Reagan tried Trickle down, the whole world followed led by the Iron lady - The world transitioned into phases.

Given the complete breakup of the middle class & massive income inequality, we are in the cusp of a new realignment (if there is a FDR type candidate again. It will never go to 90%, but it is likely to get 10-15% higher if the left has a good messenger !

For me, the most regressive tax appears to be Payroll Taxes. I'd rather eliminate payroll taxes, and fund SS/Medicare from the general revenue, by increasing rates and eliminating some deductions and credits. (Barring that, eliminate the cap.)

I believe the mortgage interest deduction is the most expensive deduction, and one that primarily benefits people who own more than one home. If I'm remembering that correctly, then it should be eliminated or limited to only one home.

I'd be open to eliminating the corporate income tax and estate tax in exchange for creating a minimum effective tax rate for millionaires, and treating dividends as part of normal income and taxed the same way.

Impose risk fees on banks, the higher the fee depending on how high the risk.

Create a carbon tax (but not too high at first).

Make pre-filled tax papers, that save individuals the most money, which they can either choose to accept... or they can still spend the extra time/effort and possibly money having it double-checked.

Blue - The rational behind Estate tax is immovable assets are unproductive & are locked in & do not contribute to economic growth. That is why in pure macroeconomic terms to prevent large scale accumulation of assets & to channel capital in the economy you have estate taxes. If it's tax on income, you pay for it only once.

I fully agree with the Payroll tax but it is practically not possible, will have to increase taxes & spending so next time there is a budget deficit/have to go to war/tax cuts for uber rich, that program will be cut/reformed/eliminated because the revenue will be part of general & not a separate one.

Having a separate Payroll taxes (although very regressive) protects these schemes !
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Shadows
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« Reply #24 on: March 25, 2017, 09:13:49 PM »
« Edited: March 25, 2017, 09:16:13 PM by Shadows »

My suggestions -

Introduce new tax brackets & set the top individual tax rate at 50-55%

Estate Tax, Capital Gains at top marginal tax rate

Eliminate Cap on Social Security

Tax off shore money parked in tax havens

Cut the Corporate tax rate from 35% to 30%

Buffet Rule - Minimum 30% tax for all people making over 1M

Buffet Rule - Minimum 20% tax for all corporations making over X profits (say X = 10B etc)

Sin Taxes on unhealthy products

Carbon tax to account for externalities of fossil fuels

Introduce a Financial Transaction/Securities Tax/Derivatives trading tax at 0.001% which will raise 100's of Billions of $ in revenues (& are present in many countries)


(All these will raise enough revenues to fund a massive rebuilding of infra, Medicare for all, College affordability & range of other plans)
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