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A GOP Plan For Tax Reform

A GOP tax plan would lower rates, repeal big breaks. We’ll look at Republican Dave Camp’s plan for tax reform.

House Ways and Means Committee Chairman Rep. Dave Camp, R-Mich., the House tax writer, leaves the podium after a news conference on Capitol Hill in Washington, Wednesday, Feb. 26, 2014, where he outlined a major plan to rewrite the nation’s tax code. The plan has almost no chance of becoming law this year. (AP)

House Ways and Means Committee Chairman Rep. Dave Camp, R-Mich., the House tax writer, leaves the podium after a news conference on Capitol Hill in Washington, Wednesday, Feb. 26, 2014, where he outlined a major plan to rewrite the nation’s tax code. The plan has almost no chance of becoming law this year. (AP)

Six weeks to April 15 and tax payment deadline now.  Many people up to their elbows in preparing tax returns, or having them prepared.  It’s the time of year when we experience firsthand that our tax system is unwieldy and complicated and needs reform.  Last week, Republican David Camp, chairman of the House Ways and Means Committee, proposed a big overhaul.  It would knock down a lot of tax rates.  Radically simplify.  And blow a lot of tax deductions out of the water.  Everyone says it will never pass.  But let’s think about it.  This hour On Point:  a Republican stab at tax reform.

– Tom Ashbrook

Guests

David Cay Johnston, investigative journalist and author. Columnist for Tax Analysts and Al Jazeera America. Professor in the law and graduate business schools at Syracuse University.  Editor, “Divided: The Perils of Our Growing Inequality.” Winner of the 2001 Pulitzer Prize. (@DavidCayJ)

Jason Fichtner, senior research fellow at the Mercatus Center at George Mason University. (@JJFichtner)

From Tom’s Reading List

Washington Post: Republicans joining populists in ending corporate welfare for banks — “No one likes the idea of filthy rich banks getting a leg up from the government, not even Republicans. And a small but growing contingent within the party is aligning with populists to strip big banks of the benefits they receive from the implicit guarantee that the government will always come to their rescue.”

Politico: Why Republicans abandoned tax revamp pledge –  “Camp also made a less-noticed pledge: that any overhaul would parcel out the fruit of reform roughly equally among those at different income levels — the poor, the rich, the in-between would all benefit about the same. One promise had to give, and last week Camp abandoned plans for a deep cut in the top marginal tax rate. He settled for 35 percent, which is just 4 percentage points lower than the current one.”

Forbes: Dave Camp’s Tax Plan: A Brave Start But Lots of Gimmicks — “In all, Camp deserves a ton of credit. He’s spent years working on a reform plan. He toured the country promoting the idea and spent countless hours teaching fellow House Republicans what rewriting the code really means. Camp soldiered on despite a serious illness and severe constraints imposed by his own party leadership. In the end, House GOP bosses won’t even try to pass his bill. ”

 

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  • Fiscally_Responsible

    Even though I am a conservative, I don’t think that either party is capable of real simplification of the tax code and elimination of specific tax breaks that benefit their constituency.

    • John Cedar

      In 1986 Republican Ronald Reagan proved that there is one party that is willing and able to reform the tax code.

      • Fiscally_Responsible

        Even though I am a conservative, I cannot support certain income like Mitt Romney’s passive income, dividens, capital gains, etc. being taxed at a rate other than the ordinary income tax rates that working stiffs like you and me who make a lot less money are taxed at. When that favoritism is removed from the current tax code, I will then agree that some serious tax reform is taking place.

        • WorriedfortheCountry

          “passive”? He is paid a return for taking risk.
          If you want robust economic growth in the US then you need to encourage investment. You can’t analyze things like capital gains and dividends without also analyzing items like the corporate tax double taxation and taxation of inflated assets. Carried interest is another matter. I’ve never heard a good economic defense for that policy.

          • BHA_in_Vermont

            The capital gains tax an individual pays has nothing to do with investing in a business unless that person bought the stock when it was first issued. All subsequent sales between individuals provide nothing to the business. There is no double taxation.

          • StilllHere

            Businesses raise capital by issuing additional stock all the time. Higher stock prices benefit the issuer. Companies use their stock to buy other businesses. Stock prices reflect share of after-tax profits.

        • StilllHere

          Dividends have already been taxed, why tax them again?
          Why discourage savings and investment? By discouraging it, you’re creating a moral hazard. Those with insufficient savings are expecting government aid to bail them out.

        • hellokitty0580

          Woohoo! I agree with you and I’m bleeding heart liberal progressive. It’s great when we can discover common ground.

          • jefe68

            Interesting that. One thing though, a lot of people go on about dividends being taxed already, this is not true.

            What tax does a company pay when its book value increases? It does not pay tax on the appreciation of its book value.
            Only the investors pay that and they only pay it once. And they pay it only when they sell the stock.

            You are not taxed on the purchase price of your stock only the new money you make when you sell it.

        • John Cedar

          It is interesting that you choose to specifically name Romney by name.
          The bigger concern should be the intentionally defective trust that he set up for his children. I’m sure no different for the Kennedy cartel as far as trusts and tax rates on income go. But Romney doesn’t drink and drive and drowned secretaries or pretend he accidentally took took a sleeping pill and get off Scot free.

          Or how about Kerry? He married a multimillionaire and enjoys those millions without having to pay tax on his new found wealth. He even keeps his yacht in another state to avoid the state tax on it.
          How about Billy Gates? Do you think he ever paid tax on that 40 billion or whatever he is worth? Nope, but he still gets to write it off as a donation to charity to offset any gains he does recognize, when he sells off a few million to build his mansions and such.

          Regardless of what you perceive as “fair”, unless you are prepared to put protectionism into place to stop capital from going to other countries, then our capital gains rates and such need to be competitive with the rest of the world.

          It is no coincidence that today’s mortgage and auto loan rates are much lower today in correlation with the lower income tax charged to those lending money.

      • nj_v2

        Reagonomics was the beginning of many of our current, socio-economic issues.

      • Don_B1

        Without Democrats, Reps. Dan Rostenkowski (D, IL) and Richard Gephardt (D, MO) and Sen. Bill Bradley (D, NJ), among many others, there would have been NO Tax Reform Act of 1986!

        The Tax Reform Act of 1986, for better and worse, was a bipartisan work.

        • John Cedar

          Ah…the good old days…
          When guys like me could vote democrat…because they were not dominated by left wing radical extremist divisive derisive illiberals.
          Back when the great Pat Moynihan could hold an office. If he ran today he would be booted out and labeled a tea bagger.

  • Informed American

    There won’t be any serious tax reform until the for-profit, privately-owned, ‘Federal’ Reserve is abolished. Since its infliction on the American people in 1913, the ‘Fed’ has destroyed more than 90% of the value of the dollar through inflation, which is a tax.

    • John Cedar

      Most of the profits of the federal reserve are remitted back to the government. Which means your definition of “ownership” must have a giant asterisk next to it.

      In 1986, Reagan proved that serious tax reform can happen without abolishing the Fed.

      • Informed American

        What percentage is “most” The privately-owned, for-profit ‘Federal’ Reserve has been a disaster for the American people. The Fed made the depression of the 1930′s worse by contracting the money supply, the Fed is largely responsible for the housing bubble through its policy of easy credit, and the Fed has ruined the lives of millions of Americans with artificially low interest rates which have been a death knell for people on FIXED INCOMES who supplemented their income with the interest they earned from savings and C.D.’s.

        • Don_B1

          The “artificially low interest rates” have kept the economy growing when other policies, particularly fiscal policy, have not done their part.

          During the housing bubble of the 200Xs, Democrats in the House strongly urged Fed Chairman Alan Greenspan to use the power that Democrats had given the Fed in the 1990s to regulate the “shadow banking system” which was using CDOs and CDSs, etc., to overleverage the debt associated with deficient mortgages, resulting in the financial crisis of fall, 2008.

          At least the Fed did not follow Treasury Secretary Andrew Mellon’s advice to “liquidate the banks, liquidate the farms, …” as it did in the late 1920s and early 1930s. But that was before Keynes; in the Great Recession/Lesser Depression, the Fed did NOT contract the money supply but did almost everything within its power to stimulate the economy, while the Tea/Republican controlled House prevented adequate fiscal stimulus to provide the strong recovery that was needed.

          If the Congress had not baulked on adequate stimulus, the period of low interest rates would have been much shorter, with much less harm to those on fixed incomes. There are a lot of analyses showing that unemployment would be anywhere from 1% to 2% lower today with adequate stimulus.

  • John Cedar

    “No one likes the idea of filthy rich banks getting a leg up from the government, not even Republicans.”
    With humorless cracks like this quote, I have to wonder, why is the WoPo cited so often here rather than the Onion or Jon stalwart?

    • nkandersen

      It’s a good point, John. Thanks for your thoughts.

      nick andersen
      web producer | on point radio

    • OrangeGina

      I thought it was pretty dang funny. Maybe you are the one that is humorless?

      • John Cedar

        How funny was it on a rating of SNL’s “well isn’t that special” to Blue collar’s “git r done”???
        Or are we up into realm of “the jerk store called and they’re running out of you”?

        Never mind. The important thing is, since you thought it was funny, we can assume it was a joke.

  • Jasoturner

    The plutocrats have already won, they’re just to polite to rub our faces in it. For the people who matter, taxes don’t matter. And tax reform will occur only if they net out ahead.

  • WorriedfortheCountry

    Instant knee jerk reaction from Senator ‘goldman sachs’ Schumer — ‘any plan that doesn’t preserve the state income tax deduction is DOA’.

    • hennorama

      WftC — that position is likely the position of virtually all members of Congress representing states with high income taxes.

  • http://hlb-engineering.us/ HLB

    Dear America. I’m the man with the plan. I’m here to help.
    –Dave Camp, R-Wall Street

    Please leave your litter in the public trash cans: placed there for your convenience.

  • http://hlb-engineering.us/ HLB

    Dear America. I’m the man with the plan. I’m here to help.
    –Barack Obama, D-DC + surrounding 7 richest counties on earth

    Please leave your litter in the public trash cans: placed there for your convenience.

  • http://hlb-engineering.us/ HLB

    Figure it out, folks. If I was going to do anything for the disappearing American middle class, I’d have done it long ago. Wake up. And smell the posies the deserving-rich people plant in our “public” spaces.
    –Barack H. Obama, President of some of U.S.

    • anamaria23

      We (Republican leaders Inauguration night 2009) vow “unyielding opposition” to any Obama adm. economic policies. Done.

      • StilllHere

        No just the dumb policies, it’s more nuanced than you seem to understand.

  • hennorama

    This is an interesting piece on WaPo’s WonkBlog:

    ‘Understand the House GOP tax-reform proposal in four simple charts’

    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/26/understand-the-house-gop-tax-reform-proposal-in-four-simple-charts/

    It excludes the changes to corporate taxation, but the graphics are helpful.

  • http://hlb-engineering.us/ HLB

    If you don’t ante up {pay taxes}, you’ve no investment in the deal. And no right to participate in any way at the shareholders’ meetings.

    • hennorama

      HLB — what nonsense.

    • StilllHere

      Exactly right! It’s too simple for most to comprehend.

      • hennorama

        StilllHere — more nonsense.

        The idea of only those who “{pay taxes},” (presumably limited to Federal Income Tax), being allowed to vote (“no right to participate in any way at the shareholders’ meetings”), is simple to understand, and is simple to reject as nonsense.

  • WorriedfortheCountry

    Trash the code!!!

    Lobbyists won’t like it but who cares.

    • http://hlb-engineering.us/ HLB

      Bring back the whip, the pillory, and the gibbet before you do so. Settling scores: always good accounting practice.

  • nealio

    The truth is simple. For individuals, have a total FLAT tax, no deductions at all, $40 to $45K standard deduction single tax rate of 12% to 18% let OMB determine what would be needed. Free all the intellectual capital being wasted on gaming the system.

    It will never happen, legislators need campaign money from lobbyists, corporate lobbyists need to create unfair advantage for their clients. GAME OVER.

  • Ed

    If there were some way to mandate that all members of congress fill out their own income-tax returns themselves (by hand, without a computer program–just a hand calculator), then we’d really get some tax simplification!

    • WorriedfortheCountry

      Great idea.

      Let’s move tax day to the first week in November to coincide with elections.

      • Steve__T

        That would also place it during fiscal year end (FYE) of the Federal Government. That would cause a mess so large, the results would not be known until the next FYE. That’s including the election.

        • StilllHere

          Their fiscal year ends September so no problem.

          • Steve__T

            Too close together.

  • Yar

    A majority of congress supports our current tax system, it is their public financing of campaigns. We have the best tax system money can buy. No tax reform is possible without campaign finance reform. 40 percent of our taxes are inflationary. Nothing in our tax code is sustainable. We can’t even define sustainability.
    We live in very troubled times, one third of baby boomers are reaching 65 with negative net equity, meaning they owe more than they own. One third of seniors will “need” some type of long term care.
    Talk about the big picture.

  • Jeff

    Great proposal, give us a single large deduction (earn that much money tax-free every year) and then remove as many special interest deductions and credits as we can. On top of that we can lower the tax rates and increase revenue all while making doing taxes as simple as taking your income…subtracting a single number and multiplying by a single percentage rate…about as simple as calculating a tip. What’s not to like?

    • Salty

      Sounds good to me. Simple is always better.

  • http://hlb-engineering.us/ HLB

    We will plan for the discussion. Then we will prepare for the discussion. We’ll then discuss the discussion. And finally we will discuss what was discussed. It’s the American way. It’s why our system works.
    –John Boehner, Speaker of the House

    With actions like this: everybody wins!

    • Yar

      As long as nothing changes!

  • WorriedfortheCountry

    Obama is a horrible leader.

    It should be clear to everyone after listening to the clip just played (or just observing the last 5 years).

    • Informed American

      Excellent post WFTC, the part of your post I would take issue with is “It should be clear to everyone”
      You are assuming that Obama’s rabid supporters, who believe every blatant lie that comes out of this regime, can de-program themselves to view this President in an un-biased and critical light, and from what I’ve seen of them, they don’t have the courage nor the intelligence to do so.

      • WorriedfortheCountry

        Yes. And I also understand that my post comes across as terribly partisan and many will tune it out. However, I don’t feel it is a partisan comment. It is an analysis of actions.

        If I could get Colin Powell one on one I would pin him down on Obama. Powell wrote a great book on leadership and Obama violates every tenet espoused by Powell. Yet Powell still supported Obama in 2012. And it isn’t even that Powell dislikes Romney. He considers Romney a friend.

  • Yar

    Try giving up oppression for lent. It is far harder than you think if you really think about it. In fact I suspect it is impossible.
    Thank God for grace.

  • hellokitty0580

    “Anit-privilege, populist, competition-inducing tax code”? Sounds good to me.

    Also, aren’t corporations legally considered people? Shouldn’t they be taxed as such? Why the double-standard?

    • Jeff

      It’s not a “double-standard” it’s double taxation…the reason that individual capital gains are taxed so low is because that money is already taxed as profit in a business first. If we eliminate the profits tax we could logically increase capital gains at or above normal income tax rate and we would eliminate the double taxation.

      • Salty

        I agree. I would personally drop business taxes completely. Businesses don’t pay taxes anyway, consumers do.

    • Salty

      Either they are people or they aren’t. Free speech and taxed or no free speech and not taxed. take your pick but let’s be consistent.

      • Jeff

        Honestly, if businesses weren’t taxed then they would have zero incentive to get involved in the tax/political discussion…you could easily make it illegal for them to donate to any sort of political group since they don’t pay taxes…seems like a fair trade-off doesn’t it?

        • Salty

          Yep – one way or the other. Tax and free speech or no tax and no free speech. Simple.

  • http://hlb-engineering.us/ HLB

    Don’t tax you. Don’t tax me. Tax that feller behind the tree.
    –Huey Long, Governor

  • John_Hamilton

    This is a good opportunity to repeat my stock answer to questions about taxes: I am old enough to remember when Nelson Rockefeller was governor of New York, and because of his family income he was in the 90% tax bracket. He paid without complaint, and was still filthy rich afterward.

    What is different now? One obvious answer is that we no longer have a 90% tax bracket. That is peripheral. The main difference now is a cheapened level of discourse. The conversation about taxes has been dumbed-down by demagoguery, more about deceitful propaganda than the best interests of a functioning civilization.

    “Democrats” are almost as blameful as “Republicans.” They could explain the need for taxation, that government is not “the beast” that needs to be starved. The problem is that they are as bought by corporate and Wall Street interests as are the “Republicans.”

    • WorriedfortheCountry

      The only one that paid the 90% rate is the poor schulb that won the lottery. As a result, he never quite made it to the 1%.

  • JP_Finn

    I’m all for removing the corporate income tax while assessing the equivalent taxes on owners’ incomes from company earnings–especially if it means putting the kaibash on this absurdity of considering corporations to be legal ‘citizens’ with free speech rights (and hence the right to make campaign contributions)… unfortunately, the net effect of endangering politicians’ fundraising gravy train makes that a tough thing to do.

  • nostoppingprogress

    This guy is disingenuous. $400K is the BOTTOM of that rung. Most of the 1% are making WAY more.

    Most of these people who own companies or run them have huge stock positions, whether private or public. So of course they would like to exempt corporate income tax–they’re taking it home with capital gains, not income.

  • http://hlb-engineering.us/ HLB

    Don’t tax anyone. Roads will pay for themselves.
    –Ronald Reagan, President

    And water will purify itself after flowing for 200 feet. What a wonderful world RR lived in. I wonder if I can get a visa to it.

    • Steve__T

      ” I wonder if I can get a visa to it”

      Yes, stand just off the middle of that paid for road, with your back to on-coming traffic.

      • Salty

        I don’t understand, Steve. Perhaps you are being too subtle? What does standing in the road have to do with “user pays” funding?

        • Steve__T

          Kinda dense huh, try re-reading what’s in quotes (” “).

          • Salty

            Try again Steve… You have a ways yo go still.

          • Steve__T

            No you try again. Re-read the post it wasn’t to you,yo.

          • Salty

            Good luck…

    • Salty

      RR realized that user fees could pay for roads. User fees could pay for water treatment. Simple really. (Obviously, you must have a way to deal with the poor and needy…)

  • hellokitty0580

    I don’t think you can blame Obama for that tax break for the wealthy. Republicans weren’t playing ball and tied Obama’s hands behind his back. Obama was trying to compromise. The Republicans are responsible for that.

  • Yar

    Do you think the top one percent could make their wealth without the labor of the bottom fifty percent? Now who really earns our country’s wealth?

  • http://hlb-engineering.us/ HLB

    We will close all of the tax loopholes. The money we save will completely pay for temple offerings. No more bribes to the Kohen. Everybody wins!
    –King Solomon, circa 970 BC

  • BHA_in_Vermont

    So the Republicans dump on any plan that raises taxes and then put out this plan that would raise taxes – mostly on the poor and middle class.

    TWO tax rates?

    Someone making $35,600 a year pays 10%.
    Someone making $35,601 pays 25%??

    AND they can’t deduct their state taxes so their taxable federal income goes up. AND they pay 7.65% in SSI and Medicare taxes

    Someone making $400,000 also pays 25%?
    And they pay SSI on only the first $117K.

    Get rid of AMT? They don’t need to get rid of it they need to make it work. How did Romney pay ~13% on $20M in 2010? The “alternative minimum” clearly didn’t work.

    Yes, get rid of the bullshit “carried interest” thing. It is INCOME, not interest. Tax it in the current year as income. This is just one of the thousands of loopholes the very rich put in for themselves.

    Yes, rip the mortgage interest deduction. It was created to help people buy a home. If you can afford a $1M house, or even a $500K house, you don’t need help buying a home, buy one that costs a few thousand less.

    The best tax reform would remove ALL deductions and loopholes.
    Still tiered starting at a low level and rising as income rises. The mortgage interest deduction would have to be phased out over perhaps 10 years.

    If you want to spur investment in business with lower tax rates on capital gains ONLY the person who buys stock when it is issued by a company can get a lower “investment” tax rate. All subsequent buyers of those shares provided ZERO money to the company and shouldn’t have preferential tax treatment.

    GWB brought down tax rates. The rich got MUCH richer, the rest sank . So let’s lower the rates again so the rich can eek out a living with even more money. Romney made $20M, paid ~13% and created NOT ONE JOB. How will this plan ensure that he would have paid 35%??

    • Jeff

      Obviously you don’t understand how the tax code currently works…
      “Someone making $35,600K a year pays 10%.Someone making $35,601 pays 25%??”

      No, the $1 over 35,600 would be taxed at 25% and the actual tax plan has that number at ~$72,000 not $35,600.

    • OnPointComments

      According to published reports, Camp’s plan replaces 7 tax brackets with 2 tax brackets. Under Camp’s plan, someone making $35,600 a year pays 10%; someone making $35,601 pays 10% on $35,600 and 25% on $1.

      • hennorama

        OPC — c’mon … you know better than that.

        It’s NOT what anyone “makes,” it’s what’s TAXABLE that matters.

        • OnPointComments

          I was answering using the same terms BHA used, not giving a lecture on the tax code.

          • hennorama

            OPC — TYFYR.

            In my view, if one has knowledge that “the same terms BHA used” are erroneous, one has a responsibility to correct the record and not perpetuate the error.

    • TFRX

      Only the marginal rate increase is in effect above that $35xxx amount.

      But yes for most all the rest.

    • hennorama

      BHA_in_Vermont (and Jeff, below) — the proposed rates are NOT on gross income (“Someone making $35,600 a year”) but are instead on TAXABLE income.

      At present the formula is ADJUSTED Gross Income (AGI) – Deductions – Exemptions = Taxable Income.

      The proposal doesn’t change this basic formula, but it changes various Adjustments to Income, as well as various deductions, including significantly increasing the Standard deductions.

  • http://hlb-engineering.us/ HLB

    You’ll wonder where the loophole went
    When you find your money has been spent.
    –President Pepsodent

  • http://hlb-engineering.us/ HLB

    We’ll all get rich taking each other’s tax loopholes.
    –Adam Smithovych, Russian tax authority

  • nj_v2

    We just heard one of the corporate, apologist, arguments from Mr. Fichtner on why taxes should be kept low: Corporations will spend large amounts of money to find loopholes and ways to avoid higher taxes. He says, that, at some unspecified level, corporations would find it unprofitable to spend this money to lower their taxes.

    Really?

    The only tax corporations would be happy with would be zero or less. Why wouldn’t they continue to fight any taxes?

    And, of course, there’s always the option of closing loopholes, and enforcement and punishment for avoidance. Not a tax issue, but how many Wall Street thugs have gone to jail for their crimes? How many corporate execs get prosecuted for tax avoidance?

    • OnPointComments

      Tax avoidance is legal.

  • http://hlb-engineering.us/ HLB

    Dave and the Lost Boys are preparing our tax proposals.
    –John Boehner, Speaker of the House

    We can fly! We can fly! Fill in the rest.

  • Shag_Wevera

    Taxes should be higher on everyone, and set progressively. I’m not in the least interested in a tax plan proposed by the GOP. It will be repugnant and insulting.

  • hellokitty0580

    You go, David Cay Johnston!! Calling it like you see it!

  • Salty

    How about a very simple system of two tax brackets, say 10 and 25 percent. No deductions. You can adjust the levels where the 10 turn to 25 to generate the income needed. Every one pays something and there is a cap on amount you pay. Everyone should an investment in the state and there comes a point where one has paid their fare share. This would take the MAN out of our lives and they would not be able to socially engineer by not having the tax code as a tool so probably would never happen.

    • hennorama

      Salty — please allow a few questions:

      If I have $1.00 of income, I should be required to pay $0.10 in Federal Income Tax (FIT)? (“No deductions…Every one [sic] pays something…”)

      If I own a business, I can’t deduct my expenses? (“No deductions.”)

      If my income exceeds the level where “there is a cap on amount you pay,” no matter how much my income exceeds this level, I pay ZERO additional FIT? (“…there is a cap on amount you pay…there comes a point where one has paid their fare [sic] share.”)

      • Salty

        Hennorama, You seem to understand my plan. Basically three points:
        1. Much lower rates with no deductions.
        2. Everyone pays something.
        3. A maximum amount required.

        • hennorama

          Salty — thank you for your response.

          As you did not indicate any errors in my questions, please allow a few more:

          1. Do you seriously think anyone in business will go for your idea if “no deductions” are allowed?
          2. Who is “everyone”? For example, if a newborn child has $1.00 of interest income, does the newborn owe $0.10 in FIT?
          3. If the first dollar of income is taxable [for "everyone"], why isn’t the last dollar of income also taxable [for "everyone"]?

          • Salty

            1. I never said businesses should pay tax. BT is just an expense that is passed on to the consumer.
            2. I didn’t think of children earning interest income. Actually, I would only tax earned income. All other income has been taxed somewhere else at some other time.
            3. There comes a point when one has paid there fair share.

            Hope that helps.

          • hennorama

            Salty — thank you for your response.

            1. Farmers and business owners are subject to individual income taxes. If they are not taxed, then few Americans would be employees — they’d become farmers and business owners, and avoid income taxation.

            2. See above as to earned income. What about the newborn who is a child actor, and earns $1.00? What if [the newborn] own[s] a business? What if [the newborn's] image is sold?

            What about U.S. residents who are immigrants, and have sizable assets accumulated abroad that have never been subject to U.S. taxation? Would their unearned income (interest income from U.S. banks, for example) be taxable?

            3. Again, you haven’t answered the question. If the first dollar is taxable for a select few (since you’ve now limited your idea to tax only “earned income,” many would not pay anything, which of course now eliminates your “everyone pays something” idea) why wouldn’t every dollar (again, of the select few) be taxable?

            Your ideas have now collapsed due to their lack of internal logic and consistency.

          • Salty

            One more try…. Income should be taxed once, when it is earned the first time. Money used to earn income has already been taxed. Newborns aren’t adults, they aren’t responsible. I would assume the income would be placed in a trust or something. When it comes out it should be taxed or tax it as it is earned. Individuals should be taxed, not businesses. If one earns their income through a business, the income should be taxed.

            If we have to dig around for babies selling their images then I think the jury is in. Thank you and good night.

          • hennorama

            Salty — how does your “very simple system” look now?

            Not so simple, is it?

          • Salty

            Nothing changed, still simple. Just took a while for some to see it…

          • hennorama

            Salty — thank you for your response. Your continued engagement is appreciated.

            My intent was to show that changing the tax code is not “simple” in any way.

            As to your ideas — they are more accurately described as “simplistic” rather than “simple.”

          • pete18

            Salty’s plan is simple and I like the the basic premise of it. I don’t see much merit in your challenges to it. However, it is true that enacting a simple plan wouldn’t be simple, but that has more to do with politics and people’s resistance to change
            than the structure of Salty’s suggestion.

          • hennorama

            pete18 -TYFYR.

            Within the span of four replies, “Salty’s plan” morphed from one in which “Everyone pays something,” into one that “would only tax earned income,” thereby exempting wide swaths of income, and large numbers of people who only have unearned income, and “businesses” (but not “If one earns their income through a business”) as well.

            It has no internal logic.

          • Salty

            You can define it how you like. Getting the MAN out of our lives doesn’t sit well with some. Some want to keep things complicated, with complication comes control…

        • dizzy7

          Salty, if your goal is to increase income inequality you’ve come up with
          the perfect plan. Taking a flat 10% of every penny earned from the
          working poor who need all they earn for basic living expenses and allowing the rich
          to keep all of their income above a certain level without
          paying an additional cent in taxes will certainly do the job.

          • Salty

            OK, let’s see… When is enough, enough? When has the MAN had enough of your money, of my money? Is $1 million in taxes enough? How about $10 million? What about $100 million?

            Should everyone not contribute, contribute something? If some don’t contribute that’s social engineering. Who is going to ever vote out someone out who is giving them something for nothing? Having a large group who contribute noting and ever increasing group that contributes a larger and larger share is scary and unsustainable. Someone once said: “…eventually you run out of other people’s money.”

  • http://www.CayerComputing.com/ Melissa A. Cayer

    Now I forgot what I wrote!

    Will you remind me?
    It was something about naturally decaying money.
    And where I got the idea from MotherJones or UtneReader magazines.
    It was about wealth distribution.

    • http://www.CayerComputing.com/ Melissa A. Cayer

      I will try the comment again.
      Years ago, I read a magazine article about money. I think the magazine was either Utne Reader or Mother Jones. It talked about naturally decaying money and wealth distribution. There are so many layers of taxing entities that it seems to me they are competing with each other to get to the tax first.

  • Informed American

    With the $7 trillion that Obama has added to the national debt since his regime came into power, we’ll all be paying higher taxes in the future.

    • StilllHere

      And from here, the cost of entitlements only becomes worse. My advice is to deplete your savings before the government does.

      • Informed American

        That’s a good point. A lot of Americans are getting into hard assets, things that the for-profit, privately-owned ‘Federal’ Reserve can’t print, like they can with their near worthless dollars. Even Warren Buffet, a big time Obamanoid, is warning people to get out of US dollars.

  • tbphkm33

    Ta da!!! Drum roll please!!! Wait for it, wait for it….

    VOODOO ECONOMICS PART DCCIXX – the “This time it really will work!” rollout. Trust us, we will stake our reputation on it! (if you can find our good reputation, GW lost it in one of his escapades).

  • Kay Huebscher Van Aacken

    http://www.people.com/people/mobile/article/0,,20793330,00.html
    This is all over the Internet and I found interesting. Should parents be beholding to a child that leaves home because they are having a tantrum???

  • Informed American

    The ugly truth is that the I.R.S. is basically a collection agency for the for-profit, privately-owned, ‘Federal’ Reserve. Most of the money collected by the I.R.S. goes back to the ‘Fed’ to pay the interest on their reserve notes (dollars), that they order the US Treasury to print up, an that the ‘Fed’ then loans to the American people at INTEREST.

    • John Cedar

      I don’t think you have as much understanding of how the Fed works as you imply you do.

      • hennorama

        John Cedar — well, well … there’s at least one thing on which we can agree.

        • John Cedar

          A mind is a terrible thing to waste.
          Come over to the right side.
          Walk toward the light!

  • A.J. Wilkes

    Content aside, this was a great hour of civil radio discourse with people that were knowledgeable and affable. Thanks!

  • Kevin Burber

    “Corporations don’t pay taxes – people do”. Wait…now I’m REALLY confused. I thought the Supreme Court said corporations are people. They get the privileges of “personhood”, I don’t think I’m ready to give this special type of “person” rights without the corresponding responsibility.

    • StilllHere

      Take away corporations ability to vote then. Oh wait…

    • John Cedar

      One of the largest Democrat voter blocks, (people without a H.S. diploma or GED) have unlimted free speech but pay no income taxes (In fact they pay negative income taxes.) So why insist on tying tax and free speech together for corporations only?

      • Government_Banking_Serf

        Not to mention, speech only equals money in a corrupt system anyway. Being productive should equal getting money, and taxes should be simple and mildly progressive, and spent on defense, basic infrastructure, and an elemental safety net.

  • Larry Talbot

    Super simple, you pay tax based on the benefit you provide to the American society.

    Teachers, trash men… a really low tax rate
    Pro athletes, film stars, Politicians…. a very high tax rate
    oh wait, that’ll never work…. it makes sense

    • pete18

      Who decides what activities are beneficial to society?

  • Government_Banking_Serf

    Lets just keep in mind in all this economic justice talk, that its no secret that the Washington/Wall St elite derive their profits and their power from Bubble economics based on Debt. Taxation is a sideshow, aside from any reforms that would close elite loopholes.

    We the people will continue to suffer the dislocations, growing tax burden, inflation and wars, to support that model. Peace and prosperity for the masses via free markets and anti-cronyism is just sadly not profitable enough for the status quo elite.

    The Permanent Recession

    http://www.zerohedge.com/news/2014-03-04/says-law-and-permanent-recession

    and of course lest we forget…

    Money as Debt

    http://www.youtube.com/watch?v=0K5_JE_gOys

  • John Cedar

    Out of the 10,000 bazillion pages of IRS regulations, the part that deals with tax rates only takes up a page or two. It is naive to bring “flat tax” into a discussion about tax simplification.

    Equally naive is the idea of eliminating deductions. It would be ridiculous to charge a corporation tax on every penny of its revenue, as if all that revenue is income.

    Any tax changes should take a hard look at the tax reform act of ’86 and the subsequent S&L crises it contributed to causing,

  • TheDailyBuzzherd

    How about stop messing around, consider the Simpson / Bowles Plan as a benchmark to start from, and stop giving these panderers their 15 Minutes?

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