Tax reform

[James Boston]

That's what I said in my first post. Sorry if I didn't communicate it well enough.

[James Boston]

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if you only tax a CEOs income, you encourage them paying themselves with even more outlandish perks than they already enjoy. Its a catch-22 and I don't see a simple way to rectify it

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Tax perks....seriously.

[Dead]

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They provide all the goods and services to people on welfare.

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I have no idea what that means.

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It means that CEOs are the greatest people in the world, and that everyone else is scum. Duh. [img]/images/graemlins/tongue.gif[/img]

[gasgod]

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There are no "corporate tax dollars". Corporate taxation is a tax on employees and consumers, period. This is basically fundamental economics. You gain no ground taxing corporations.

natedogg

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If only it were true that you gain no ground -- that is, that it makes no difference. In actuality you lose ground in many ways. (As I'm sure you know, natedogg)

1. It costs money to calculate and avoid corporate Income Tax. Lots of it.

2. The people who bear the burden of the CIT have no practical way to exert control on those who levy the tax.

3. The CIT offers Corporations an incentive to locate outside the USA.

4. It leads to lobbying efforts that border on -- and sometimes cross over into -- bribery. We can't eliminate this, but the CIT adds to the problem.

I could go on with 5, 6, and 7, but you get the idea. The CIT is among the very worst taxes in the country.


GG

[lehighguy]

Yes, corporate taxes should be eliminated.

No, it won't happen because people think corp. tax money is free, justified, etc.

[The Dude]

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sales tax is, precentage wise, a regressive tax, so i don't support it.

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The FairTax bill the OP referenced has a solution to this. They give a rebate to all taxpayers based on the consumption tax that would be paid at poverty level spending. Using 2000's poverty numbers (I don't have updated ones in front of me), a Married couple with 2 children would get a monthly rebate check based on $22,500 annual spending - the poverty level for a family of 4.

More information can be learned at www.fairtax.org. When I first heard of this, I was opposed to it. The more I've learned about it, the more I like it.

[The Dude]

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And every company with more than a few million in gross would have CEOs and VPs on small compensation packages, purchasing swimming pools on the company dime.

This would shift the tax burden even further downward.

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No, it wouldn't. Businesses already do this, and they get a tax break for the expense.

[The Dude]

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the tax code is a powerful tool that may be used to create incentives for progressive/ benifical development and spending, and to give that up in the name of mere simplicity is a mistake, IMO. this is what the rhetoric about 'flat taxes' etc overlooks.

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The consumption tax has an even better ability to encourage/ discourage behavior than an income tax. Under the FairTax proposal, all education expenses, for example, are tax free. The consumption tax rate for a gas-guzzling SUV, cigarettes, liquor, or anything else teh government would like to discourage for economic/ social purposes would be higher than other products/ services.

[The Dude]

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our tax code probably costs the nation several hundred billion dollars a year.

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Much, much more. It is estimated that $225 billion is spent every year in tax planning, consultation, preparation, and collection. FairTax.org thinks the consumption tax system would cut that by 90%.

[The Dude]

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Let me give you an example of the sort of evasion FairTax would encourage. Suppose I want to buy a $20,000 automobile. The dealer and I make a deal: I get a substantial discount, but only if I sign a contract that obligates me to pay a much higher interest rate. (FairTax would not tax this.) Or perhaps I get a substantial discount with the understanding that I give the car dealer a substantial discount on what I might sell to him.

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Your first example is valid. Your second example is absurd.

Do you have any idea how much income tax evasion occurs right now? Do you have any idea how easy it is to get away with it, because the IRS simply can't monitor (audit) very many people, and because income is relatively easy to hide? I've talked to two economists (both with PhD's in economics) about a consumption tax, and they both agree that (legal and illegal) tax evasion would be reduced under this system.