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A Trillion of revenue is on the plate
We’re coming down to the wire on the debt limit. “Hard”
deals are now being put on the table. The Republicans have said all
along they don’t want any new taxes. But only a fool could think this
can be done without a significant amount of revenue increase. So if we’re to get a deal what has to give? Easy. Rather than increase taxes the government can phase out deductions.
This data looks at individual deductions. This come to a whopping $950
billion. You tell me, are you on this list? Have a mortgage? Pay state
or property taxes? School debt? Health care costs? Charity? Kids?
Veterans? At one point or another every American is on this hit list.
Consider the deductions at the corporate level in America. It’s only $65b. Peanuts compared to the tax breaks of individuals.
Now think of yourself in a room trying to negotiate this big deal. It’s
all well and good to say that the end result will be more taxes for
corporations. But at a ratio of 15 to 1 you have to hit individuals pretty hard in order to raise any serious money. At this point everyone understands that. Cutting personal deductions in a very big way is the only possible outcome where all sides can save some face.
The way that these cuts in deductions will be phased out will hit high incomes the hardest. But don’t kid yourself; this will end up in three to four years as a very middle class tax increase.
Should something like this come about you have to look askance at
owning real estate. You’ll get hit with a tax from employer 401
contributions. You might think twice about having a child. Those
charitable deductions are just that, charity.
I guess this is what has to happen when you need to raise a trillion in revenue to sell a deal. We’re going to hate it a few years from now when all this kicks in.
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Sounds to me like you DO have a problem with corporations not paying taxes, because you're proposing a way to get more taxes from them.
want more tax income - remove the cap on social security taxes
+1, also those that make their ordinary income from capital gains should have to pay SS like everybody else (day traders)
H- They do. Assests held less than 1 year are taxed at regular rates.
So, why am I not surprised?
Me either. But, be looking for loopholes to disappear at a tax form near you soon!
Nice analysis. I hadn't seen these deductions contrasted like this before.
Austerity = higher taxes for me & you = eating more peas than we ever imagined.
The tea partiers are pursuing a religious dogma that says no taxes can be increased. But a fair apportionment of the sacrifices needed to bring the deficit under control requires that those who can pay more should be required to do so, especially those upper one percenters who pocketed Bush's shameful tax decreases. So what are these fanatics now proposing: tax reductions! They want to reduce the number and level of the tax brackets. Apparently they have no shame to drag up the demagogy of the Reagan era by saying that revenue is increased by lowering tax
The Tea party is pursuing Faith Based Economics...
What this means, if it passes as is, is that if you bought a house in the last 10 years you will push yourself into a much higher effective tax rate and loose more purchasing power. The loss of the mortgage interest and real estate property tax deducts will cause people to have less income to support the debt service. Get ready for another drop in property values.
the law of unintended consequences.
not only property values, but more bailout money to banks to deal with more foreclosures.
And charity--watch charitable contributions drop by 1/3.
The old saying" you can't squeeze blood out of a turnip" or better, "there is no such thing as a free lunch".
And I just wish they would say they are reducing social security benefits rather than hiding it inside of new cpi calculations.
Classify elected officials:
A) corrupt
B) stupid
C) Idealistic
D) Lazy
E) A & B only
F) A&C only
G) all of the above.
the real dumb ones are the taxpayers (exclude voters or overall population-just the taxpayers) for putting up with this crap.
G
We are paid for.
Now Debt Service is a different story entirely. If PM's reach a certain number and I sold it at a price the Debt will be serviced pernamently (Student Loans) and we will owe no money to no one other than utitlies, food, gas and taxes each year on what little we own.
Read little. That 6000 square foot mansion is a fly trap to the greedy ones. Many a household has been eaten alive by taxes on that house over the years.
Pure genius! Let's face it, we've gone far beyond taxation w/o representation. We're in the realm of taxation with extreme prejudice.
It's comparing apples and oranges. Different code, different assumptions about income and expenses, different everything. It is incorrect to compare the two, but since the average Joe doesn't understand this they will fall for it.
I'm not saying individuals should or shouldn't pay more in taxes or enjoy less deductions and Bruce really isn't saying so either. It sounds like he's just saying that it's on the table. I'm saying let's look at actual taxes paid over a long period of time, the effective tax rate, and see which 'citizen' has the better deal, the 'real' citizen or the 'artifical' corporate one.
on Tue, 07/19/2011 - 20:18
#1472422
"I'm saying let's look at actual taxes paid over a long period of time, the effective tax rate, and see which 'citizen' has the better deal, the 'real' citizen or the 'artifical' corporate one."
cd: we have a basic disconnect here; how can corporations be treated as "natural persons" with the same right to contract as "legal persons" (Dartmouth College v. Woodward, decided in 1819. In the 1886 case Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394,) yet retain their status as distant legal entities with regard to personal liability while simulataneously being treated as sovereign individuals in terms of free speech rights.
something doesn't compute here. if corporations are going be viewed legally as individuals with an unlimited right to enter into contracts as "legal persons", while at the same time enjoying unlimited 1st amendment rights to fund electoral campaigns, shouldn't they also be expected to pay individual income tax rates??.
Exactly right, CD. I wish I could expense everything, depreciate fixed assets, and just get taxed on the "earned income", or for the individual...my disposable income, that I had left over. I wouldn't mind paying 35% tax on my "profits" in that case.
If it's on the table, then it probably means more peas are going to be on your table and mine. :-)
The artificial, corporate citizen has a much better deal and the deal for them just keeps getting sweeter over time.
In that case Cognitive Dissonance is floating an IPO and going public. Who wants a round lot slice of my fat white ass for $99.95 per slice, 100 slices minimum? :)
(Extra thin see through slices if I can help it.)
Corporations don't pay tax, people pay tax.
I keep seeing this trope of big corporations not paying 'their' tax - well, why should they? The profits get distributed as dividends, capital gains, and wages/salaries. Tax THOSE.
So what if some 'big' corp makes $1 billion a year? It may have 1,000,000 shareholders, meaning they're getting $1000 each. Whereas the 'small' company, making 'only' $10 million, may only have 5 shareholders... meaning they're getting $2,000,000 each.
Tax the recipients on what they receive, not the companies.
You mean like say a "Capital Gains" or "Dividends" tax?
Corporations are hard at work creating jobs and stuff ...why should they also have to pay taxes. Look at Immelt, how many thousands of jobs he has created:
http://theconservativetreehouse.wordpress.com/2011/07/12/after-shipping-...
Better yet, look at Murdoch. Wasn't the story NewsCorp's effective tax rate was -46%?
IMO the fight is between small and big corporations.
Small corps create jobs, pay taxes and suffer under regulations.
Big corps destroy jobs (rationalise & streamline business), don't pay taxes (thanks to accounting and tax lawyers) and thrive under regulations.
"Corporations don't pay tax, people pay tax."
I have no idea why you got junked on this...wait, yes I do.
We are sooo fucking screwed.
Agreed, but to the extent that corporations retain earnings without distributing them, then they should be more appropriately taxed... in other words, they're not tax avoidance vehicles... there are too many corporations with gigantic cash balances that are not paying taxes on these balances... If a corporation wants to retain cash, so be it... I think it's a prudent move in this day and age, but it should be taxed the same as partnerships/flow through entities that retain earnings. The real legal and tax distinction between LLCs, S-corps, et al, and a C corp is largely beyond me... I'm really not sure why we bother differentiating them (other than the obvious lobby reasons, etc.).
"The real legal and tax distinction between LLCs, S-corps, et al, and a C corp is largely beyond me... I'm really not sure why we bother differentiating them (other than the obvious lobby reasons, etc.)."
Maybe I can help somewhat on the S-corp question...I'm not a tax expert by a long shot but...
My wife is a partner in a small business...that is an S-corp.
Her portion of the business income gets shown on her tax return so looking at the total, the untrained eye would think she is well to do, which is not the case at all.
The business has expenses, telephone, office lease space, office equipment, power bills, office staff etc. that is not a part of her take home pay, so these are properly taken off the total of the business income shown on the tax return.
The total says one thing, the actual take home pay is quite different.
Pols know this or should know this, so when one hears "people who make 250k a year" you should look at them with a jaundiced eye and ask them what exactly are they talking about when they say it.
As far as my thoughts on general taxation...see above, there shouldn't be an income tax at all.
Heh, maybe I drafted my comment poorly... I'm familiar with the distinctions between the various entities... it's what I do for a living... but, what amazes me is why there are so many types of entities that perform the same function... we're making distinctions without difference between all these entities... if an s-corp can elect to be taxed as a partnership, it makes little sense as to why a c-corp couldn't as well... if I can be a limited partner in a limited liability limited partnership and still materially participate in the business decisions of the entity, then why allow the entity to be created?
None of these laws are consistent from a macro view... they're internally consistent only through incredibly complex and voluminous rules... each one being slightly different under state law and tax regulation... e.g. s corps being limited in # of shareholders... llcs being able to give members payouts separate and apart from their % ownership... you name it... c-corps get better ability to absorb/carry forward startup and other costs at the beginning...
My point is that there is literally no reason to make a distinction between these types of organizations... the largest purpose for any of them is limited liability for the owner/shareholder... if this is met by all, then I fail to see why we need a different set of books/rules for all varying types... I also don't see why c-corps are taxed at the entity level, but similar businesses that provide limited liability, among other things, are not taxed at the entity level... someone missed the forest for the trees.
I wouldn't be opposed to limiting organizational types other than sole proprietorships, general partnerships, and limited partnerships... if you want limited liability, then either find a good insurance carrier or do not materially participate in the business. (these businesses already carry liability insurance, etc... why give them two shots at the kitty?). This should have the added bonus of solving quite a bit of our problems with lobbying/campaign reform... as well as the wealth gap...
I think what you're after (in the end) is a way to extract cash (like from an Apple) out of the company and back into the overall economy.
Currently the only way I know is through company expansion/improvements or "wages"...both of these are voluntary measures. It may be that a rule could be devised by market cap for publicly traded companies but I wouldn't want to see it broadly applied to private companies.
Its always possible that the officers of the company don't see a viable opportunity for expansion and the tax implications of dumping company assets on individuals, while a nice position or windfall to be in, does have ramifications for the individual.
As you know with a tiered tax code it may be that some individuals (I've done it) prefer to get all their wages/profit due to them, that is, taxed at a lower rate. In my case, I had billable items that I "sat on" because billing for them triggers a higher tax bracket for the same labor/product. Just because I'm more productive in a lesser time frame should not be an invitation to tax me more on a percentage basis. That quashes the will to excel.
They were eventually billed and taxed as per tax rule.
I can't speak to the differences in tax code you cite which is why the Fair Tax appeals to me. Taxing at point of sale makes a lot more sense than an income tax. But it can't be combined with the income tax, the income tax would have to be removed...in other words no euro style VAT in addition to the income tax.
And I think we both know any corporate taxes paid to the Treasury are offset by higher prices paid for the product or service the company is engaged in selling. The consumer always takes the hit, not the company.
I realize this is a little broader than your original, but it all ties together I think.
So, as per my example, you think the shareholder receiving a $1000 dividend from a large corporation should be charged higher taxes on that dividend than a shareholder receiving $2,000,000 from a 'small' company?
Because that's what happens if you apply 'progressive' taxes to companies.
Sorry for the late response...I had left this thread...
"So, as per my example, you think the shareholder receiving a $1000 dividend from a large corporation should be charged higher taxes on that dividend than a shareholder receiving $2,000,000 from a 'small' company?"
No.
I think all federal taxation should be at the point of sale, I don't like income taxes, at all. Taxing savers destroys the capital base. Taxing income keeps the middle & lower classes down.
Taxing income also gives way to much power to elected officials to tinker with the tax code every year, to confer lobbyist favor, until it becomes the monstrocity it is now.
Fair Tax.
http://www.fairtax.org/site/PageServer?pagename=about_faq
OK
But are you gonna buy shares of CD? And indication of interest? I don't have the tombstone ad placed yet so just give me the signal down low when the SEC is busy with their tranny porn.
Haven't yet seen the business case of how you monetise your genius.
I would consider buying shares in CD, except his only product is hot air. Even on of Al Gores carbon trading companies would be a better investment.
Your on fire tonight!! hehe
Corporations don't need no damn deductions because they have the loophole market sewed up. I'm ready to compare my net tax rate to GE, IBM, Exxon, Apple and so on. Let's line them up and compare underwear.
Come on corporate America, boxers or briefs?
Why not cut through all this marxist-Democrat bullshit and just do a flat tax? Oh, I know, its not "progressive", a word I am sure Bruce firmly believes in.
And what about this statement:
Only a fool doesn't realize that the problem is that the progressives have been bribing the public and stealing elections for over a century by offering the sheeple free lunches. As Bruce has so often pointed out, the free lunch counter is out of food. So now he says that only a fool thinks that "this can be done" without stealing even more money from the people producing wealth to continue the free lunches. Bullshit, it is time to force the progressives to start telling the truth, and that is through the Republicans simply walking away from the entire negotiations.
- When the Republicans are in charge, they make sure big corporations and uber rich people do not pay taxes, so the deficit increases (=> money for the banksters).
- When the Democrats are in charge, they distribute more money to the people, so the deficit increases (=> money for the banksters).
Who is right ? Nobody. Most Republicans are as guilty as Democrats for this mess, and vice versa. Can people think further than ideology ?
You're counting Reagan, W. and their Republican majorities firmly in your century long progressive camp I hope.
I agree. Even Larry Summers could tell us that neither the repug plan to cut spending by a few cents nor Bruce's plan to raise taxes by another trillion will fix the current pickle!
Either the 535 muthafukkers partying with coke and hookers on the Hill collectively arrive at a light bulb moment and cut Obomber's spending plan by at least $2 trillion for the coming year---and keep the budget in surplus for the next 9 years (to pay off at least some of the accumulated debt), or they should just call Timmay and tell him to print as much as Tovarisch Obomber fukking likes (which is actually the objective of this laughable stand-off ... to hand over future budget control from Congress to the Politburo, errrr White House)!
Anything else will neither save America's productive jobs/economy nor stop me from laughing uncontrollably!
It's time to stop fucking around with the deck chairs!!!