What Happened To Tax Reform?
April 15th is less than a month away, and millions of Americans are breaking out their calculators and 1040s to slog through another year’s tax return (or hiring someone else to do it for them). H&R Block revenues from US tax operations in 2004 were $2 billion, and over 60 percent of returns were completed by a paid preparer.
Despite promises to tackle the issue, the administration has done nothing to improve the code, but has instead opted to bull forward with the same old policies that have done little to help the economy. The President’s tax reform panel released reform recommendations last year, but the panel’s co-chair, ex-Senator John Breaux, speculated that the recommendations “got put in a closet and they closed the door and they don’t know where it is.”
And despite years of being in control, congressional leaders have not pursued real reform – opting instead to cut rates primarily for the richest Americans. (Those with incomes over $1 million got an average tax cut of over $100,000 last year alone. How much did you get?).
To fill the tax reform void, the Center for American Progress is hosting a public conference to discuss tax reform — both comprehensive reform options as well as smaller changes to the tax code that would improve the system. Full details can be found here.
– John Irons
UPDATE: The IRS is quietly moving to let accountants “sell information from individual returns - or even entire returns - to marketers and data brokers.” Register your complaints with the IRS soon.
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52 Responses to “What Happened To Tax Reform?”
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The majority of individuals have extremely simple tax returns. The main reason they go to places like H&R Block is for the “rapid refund.” They are charge what I consider exhorbitant fees for these. If you are owed a refund and you file early you will receive your money very quickly. Especially if you have it direct deposited in a checking or savings account or e-file, which you can also do on your own.
If people would stop being lazy and read the forms, they are not difficult for the average American to complete themselves.
March 22nd, 2006 at 11:58 amOne approach is the “Fair Tax” which would impose a 30% (or 23% depending on how you look at it) sales tax on all “new” goods. The bill in the House (H.R. 25) has about 50 Republican sponsors.
It has the advantages of being simple, just about eliminating the IRS, and appearing progressive. It isn’t really progressive since it relies on millionaires & billionairs maintaining their current level of consumption, even in the face of a 30% federal sales tax. While the middle class probably can’t alter their purchase patterns much, the very rich have the option of not buying 500K yachts that will now cost 650K.
Democrats had better watch out or the Fair Tax might be the club which they get beaten with in 2008. I’d suggest one-upping the Fair Tax with the “Really Fair Tax”. The Really Fair Tax would be just like the Fair Tax but with the rate at 15% and the difference made up by an inescapable income tax levyed on individuals making 100K or more. 95% of Americans would avoid paying any income tax. The 15% rate would reduce the tax-avoidance problems that will plague the 30% rate and would be much more progressive.
I still don’t like the “prebate” checks that are part of the plan.
TDP
March 22nd, 2006 at 12:08 pmI’m interested in knowing if the commenters here feel like they’re better off today than they were 6 years ago.
I struggle harder than ever before, even though I make more money and no longer commute 2 hours per day.
March 22nd, 2006 at 12:08 pmthe top 1% got their tax “reform”.
Like bushco cares about anyone else….riiight.
March 22nd, 2006 at 12:12 pmWow, I’d love to get a 10% tax cut. I don’t make much, but 10% of my salary would be almost 3-times what my wife and I got back after filing our taxes jointly!
March 22nd, 2006 at 12:14 pmI’m interested in knowing if the commenters here feel like they’re better off today than they were 6 years ago.
Two words…….
HELL NO!!!
March 22nd, 2006 at 12:15 pmnote to tompainedickwad - cut out the we’re gonna club you shit.
go to redstate and say that. You are suggesting that a National Sales Tax is fair. Name 1 study that backs up that load of crap with actual numbers. It’s a regressive tax that makes the poorer segments (and middle segments) pay proportionately more of their income in taxes than the rich. it does that because the poor & middle have to SPEND more of their income, proportionately, on goods and services just to eek out a living.
Go soak your head tommyboy.
Now you want to crak out a flat tax w/ NO deductions? That would be fairer but political suicide.
March 22nd, 2006 at 12:15 pmKindness,
Wow, your name is way far off.
Here’s my response.
1. You are crude.
2. I don’t post, nor hang around at redstate.
3. I don’t think the Fairtax is a fair tax. Adding a high-end income tax makes it more progressive.
4. I said that the Fairtax might be used against Democrats in 2008. Everyone hates the IRS and the Fairtax scheme would pretty much get rid of the IRS. Democrats ignore this at their peril.
5. There is now way in hell I’d vote for a Republican. Maybe it was the use of the third-person term “Democrats” that got you going.
Did you even read what I wrote or just freak out when you saw the words “Fair Tax”?
Open your mind just a tiny a bit.
TDP
March 22nd, 2006 at 12:31 pmZookeeper, I would assume you don’t own a home. This is a great topic, I think it is important in principle to have in mind just what exactly one is getting for a third of one’s annual paycheck. What about the AMT? This is where Progressives could out domesticate conservatives by applying principles of fairness to the tax code. Conservatives are against taxes so why not repeal the AMT? It’s original intent is exahusted so why not abolish it? I still think lower the invest income rate and make all of the revenue go to the Dept. of Education. Remember who the last sales guys were for the flat tax?
March 22nd, 2006 at 12:32 pmI thought liberals didn’t whine. According to a recently released study, conservatives whined more as children. Well, at least we got it out of system because liberals have done nothing but whine for the past six years. Every post at ThinkProgress is eihter a whine or a hateful slam against the military and the President.
Tax reform was killed because it would have raised taxes on homeowners.
March 22nd, 2006 at 12:39 pmThe IRS is not the problem, they just enforce the laws that congress enacts.
When you have complex transactions as occur in today’s world, the solutions end up being complex. When you have mergers, acquisitions, and the myraid of tax shelters that abound the has to be a way to stop individuals and companies from avoiding paying.
In addition, 90% of the code does not apply to the average American. This “simplification” congress and this administration is crying about is just a ruse. The only problem I currently see besides the AMT issue is that this administration is allowing individuals with high net worth not to pay their fair share!
March 22nd, 2006 at 12:42 pmI would think that after the IRS sells, my info to a third party, I should receive compensation. If the state of Maryland comes after me for sales tax issues based on information garnered from Federal files I should be compensated. I know a lot of people love Joe Biden but to me he is the ultimate boot licker for the Credit card institution. The recent bankruptcy bill was a total appeasement of the banking industry. Why should I as a taxpayer have to subsidize poor lending decisions by major cooperations? I didn’t have a chance to review any one’s file before giving them credit so why should I have to pay for the lenders loss?
March 22nd, 2006 at 12:45 pmI’m sure that each and every $100,000 cut got recirculated into the US economy.
*COUGH*investedinforeigncurrency*COUGH*
March 22nd, 2006 at 12:50 pmLiberals don’t whine, they ’speak up’. I DO dislike the millitary LEADERSHIP, not the poor suffering soldiers. The president needs to be questioned. Those who make the most should pay the most, but corp. america doesn’t want pay tax on their millions they have gotten from america. This system of corp. write offs, lets them zero out there taxes. Why does boeing advertise, just how many people buy 747’s? a handfull at most?…it was for the advertising WRITE OFFS.
March 22nd, 2006 at 12:50 pmKatrina from NOLA I don’t whine, I bitch. Jonah Goldberg whines when Battle Star gallactica is not on.
March 22nd, 2006 at 12:50 pmChris Wackjob Matthews whines, incesantly. Mary Matlin whines for losers and lots of money. Say something that can help, if you can, if not then stop whining about this blog.
corporations are the only ones that have representation on the federal level, so they should pay the taxes….the only way citizens should have to pay is if we are represented!
This is a founding principle of our country, yet we have completely turned 180 degrees
Too long and too much burden has been placed on the backs of the tax payers without anything contructive in return
March 22nd, 2006 at 12:52 pmThe Treasury Dept paid out $21.4 billion in Feb. to early filers where the EIC exceeded tax due and the total this fiscal year is $24.6 billion.
March 22nd, 2006 at 1:01 pmTax receipts from individual taxes witheld so far this fiscal year were $391 billion vs.$355 billion last year. ” …individual income tax receipts were up by about $36 billion (or 10%);corporate income tax receipts were about $22 billion (or 30%) higher;and social insurance receipts increased by about $18 billion (or 6%)….Those gains reflect continued strength in wages and salaries…” “Refunds of individual jncome taxes grew by almost $3 billion…”
Somebody is doing better,too bad if it’s not you.
Oh,and the “Fair Tax” is another talk radio sham. To balance the budget,the tax rate would quickly balloon to 60% or higher. There are ways to fix the tax code but all the fixes won’t matter unless Congress can restrain spending. And the chances of that are zero until the voters stop sending incumbents back every year.
Katrina from NOLA here, let me explain it to you. The crux of the dispute with the White House and The GOP held Congress is the details. The president, as made apparent in yesterday’s press conference and the day before that’s Ohio speech, doesn’t care about details. Tax laws are all about details, complicated details. If you think by legitimately addressing major INVOLUNTARY taxation issues are being whininy you must have faith. Faith doen’t pay my electric bill. I prefer accountability. I’m sorry, the direct confrontation with details frustrates you and your party’s apparatus. The GOP wants the American dream for everyone but doesn’t want to tell the little guy he’s the one that has to pay for it. Fcking Walmart cannot support everything.
March 22nd, 2006 at 1:02 pmHow about a lobbying tax, simple you pay to the federal government double the amount you pay to lobbiests, NO DEDUCTIONS EVER and all payments go to the programs for the children and elderly first. If any program you lobbyed for is enacted then you pay a second payment to match the first. At least the average americans would finally get something out of the lobbying game.
March 22nd, 2006 at 1:25 pmGod I hate it when folks do this. But here goes.
Tompaine - in response to your #2 post, I posted #7. #2 seems to me to extoll the virtues of a National Sales Tax. My response on #7 was to express my sincere beliefs about you, a National Sales Tax and fairness. I think I will choose to stand by my earlier analysis, because in re-reading your #2, I see I was correct. Now, I will give you the caveat of trying to make a National Sales Tax less regressive by lowering the tax rate and instituting an income tax rate on anyone making over $100,000 and calling this a Really Fair Tax.
You don’t live in California, do you? I do. Out here, incomes are higher because costs are higher. It isn’t all that uncommon for a 2 income family to make more than $100,000. So, your plan would lump many of my fellow citizens up there with bill Gates. Gee Thanks.
Now you don’t like my writing style. Boo fucking Hoo. i don’t really care.
I don’t usually find your statements objectionable. Typically, I find you offer a good and valid point of view. Not this time. Sorry.
Please don’t take offense at any percieved vulgarity that I may on occasion display. it isn’t personal. it just means you got my attention.
March 22nd, 2006 at 1:27 pm“Every post at ThinkProgress is eihter a whine or a hateful slam against the military and the President.
Comment by Katrina in NOLA — March 22, 2006 @ 12:39 pm
Oh, we bash our share of gap-toothed, urine-stained hicks like you as well.
March 22nd, 2006 at 1:59 pmAnd it ain’t pleasant, lemme’ tell ya’ll.
March 22nd, 2006 at 2:02 pmkindness, you are correct, as Mr. DePaine showed in the #2 comment,he is utterly wrong about the % of taxpayers who would be affected by a tax on incomes over $100k. The CBO show data shows that the top 20% of taxpayers has an average income (pre-tax) of $183,000 using 2003 tax data combined with 2000 census data. You were quite restrained actually in observing the defects in that comment.
March 22nd, 2006 at 2:11 pm#20. No, I don’t live in CA, I live in New England Decent houses aren’t a million bucks but are a 500K+. My point is that I’m probably not on the complete opposite end of the socio-economic scale as you are.
You don’t like a flat tax, but don’t want to pay a top-end income tax because you have to earn significant $ to pay for your house in California. By the way, I never said that the top-end income tax shouldn’t be graduated.
So what is your solution or do you not have an opinion on how to solve the tax issue? Maybe you think that everything is fine and dandy with the way things are now with the IRS. If so let us know as that might help to put things into perspective for us. Show us how a do-nothing strategy is going to pay off at the polls.
Ideas man! The world needs new ideas. Global warming, bird flu, clash of civilizations, national debt and petrocollapse are breathing down our neck. Think or die hungry…that’s my larger point.
As for your crude style…Ok, I’ll accept it’s your way. My way is to propose new ideas that stretch the democratic brain a bit. I can see that it got your attention.
TDP
P.S. If the blogs aren’t for this kind of back-and-forth, then what are they for?
March 22nd, 2006 at 2:20 pm#23. First off, my numbers are not exact. They are round approximations meant to get the following idea across:
Flat Tax + Prebate + Graduated High End Income Tax = Solution???
Your 183K number isn’t correct either by the way. It probably breaks down something like this (AN ESTIMATE):
Top 1-2% — $1M
Top 2-3% — 400K
Top 3-4% — 150K
…
Top 10% — 90K
…
Top 20% — 80K
Top 20% average = 183K
I’m being lazy and not looking up the real numbers. I could be totally wrong, but the top 20% of incomes are not linear.
TDP
March 22nd, 2006 at 2:34 pmActually Tom, as the progressive income tax has become increasingly less progressive, and by that I mean with all the “legal” tax dodges available to the upper 2% bracket, I am less thrilled with the tax structure as it now stands.
I do think that a flat tax with no deductions and a starting level that is significantly above the poverty line would be fairer. I said fairer, not better. I also repeat that it’ll never happen as it is political suicide to eliminate deductions that even the middle class has come to love.
Now, if congress would keep it’s nose out of tax cuts for their constituents and allow the 5 stage progressive tax to work, it would be fine. But I also relaize that that is their job, to bring home the bacon for their constituents.
My solution…dump all the bells and wistles (deductions) that’ve been added to the tax plan by our representatives who are trying their best to help their constituents. Now, just imagine if we had a ledgislative body that only concentrated on civil laws for a generation….That would be kind of nice. They could actually pull off that 2 day a week work schedule and it wouldn’t matter.
Also, they have to address the AMT. It is hitting many of my co-workers because they are 2 income families. The level it kicks in at has NEVER been adjusted so the inflation of the last 10-20 years means folks pulling in $120,000 now have to pay it. Honestly, when you consider a house payment in the Bay Area (go N. Cali) is going to be a minimum of about $2,500 a month and really $3,500 isn’t all that uncommon for a middle class home, that’s about $30,000 to $40,000 a year just for your mortgadge. Take 45% off the top of $120,000 for taxes (state, local, US, SSI) that leaves $66,000. Subtract that $30,000 (mortgage) and you have $36,000 and you haven’t even paid your property taxes, medical insurance, or car payments yet.
Yea, we may make alot, but ther isn’t much of anything left over.
Ronnie Raygun used to rail about the “welfare queens” showing up to collect their checks in Cadillacs. We progressives, we rail about Bill Gates paying $0 in Federal taxes. We rail about Microsoft and many other large corporations paying $0 in Federal taxes.
It isn’t just the right wing that doesn’t like the current tax structure. But you will get a different answer out of us here.
March 22nd, 2006 at 2:43 pm#26. Cool. Thanks for giving me someone to respectfully spar with.
You say that a flat tax with no deductions and a high starting level would be fairer but not better. Please elaborate. Do you mean a flat-income tax or a flat-consumption tax?
As for political suicide, what could be better than saying “OK Republicans you want a sales tax? Fine. As long as we have a high-end income tax to keep rich folks from buying yachts in the Carribean to avoid paying US taxes.” Funny thing, the Democrats would be the ones proposing the 15% rate not the Republicans (estimate people!)
I too would freak out about the lack of mortgage deduction. Maybe this is a killer on the idea. I’m not willing to give up yet though. The Republicans face this with their Fair Tax proposal too. Find a way for them to take the heat.
As for the wealthy getting all sorts of breaks, I think a simpler system would make it harder for lobbyists to push through their tax-breaks. I too think the loophole problem is a huge issue.
The AMT should be gone. Bill Gates and Microsoft should be paying their share.
TDP
March 22nd, 2006 at 2:58 pmWell TDP,if you want to propose a solution to the IRS,being at least somewhat exact would be quite helpful. As I pointed out,the number I used for the average for the top 20% was from CBO data. So your casual statement is as inane as the rest of your comment while you admit to being too lazy to look it up. If you want to discuss the FAIR tax,tell me how you would lower the estimated $200 + billion in lost revenue due to fraud. The FAIR tax has so many loopholes to evade the tax because it relies on valuations for the transation to the consumer. How do you define the price at which an article is to be sold at retail?
March 22nd, 2006 at 3:21 pmTry to be as exact as you can,assuming as a predicate that you’re lazy.
TomPaine, since the IRS now no longer allows companies to write off the difference in what a stock option was valued at when issued, vs what the recipient actually paid for it, that deduction by corporations no longer works. That is how most of the Tech companies avoided income tax in the 90’s.
I’ve read (sorry, I don’t have the link handy) from one of the actuaries of the Tresuray that a flat tax would need to be 19% for just the federal with NO deductions in order to cover expenses. Now, that actually sounds good to me. But, when you consider a couple of things that would infuriate some groups, that is why I say it won’t ever happen.
1) No deductions. Even though most middle class households would come out OK with that, when you couple it with the lack of write-offs for dependents & charity & religious groups, it would mean many (a sizable portion of the population) would end up paying slightly more. Not much, but couple slightly more with the anger generated by not being able to write off dependents and interst & you have groundsell anger. Our elected representatives are basically cowards. They would never face that fire unless they could try to blame someone else.
2) the rich would pay more. No more non-taxed Municipal Bonds. No more investing in money losing oil ventures so as to be able to write off 3x the invested amount, no more transferring paychecks to a Caiman Islands/tax free account. The rich, sadly, bankroll our campaigns here in the US. They wouldn’t tolerate losing so badly. They aren’t gracious as it is. You think Congressional Representatives are afraid of an angry middle class? You ain’t seen nothing till you’ve seen a Representative with no Campaign money.
3) Corporations would throw the biggest fit of all. No more deducting all the crap they get to now? The NYSE would just shut down in protest. The Wall Street Journal would lead off every day with headlines about the Communists who’ve taken over the government.
I hate to say it, but self centered and self intersted parties and people run this country. They won’t allow the right thing to be done. Sorry.
March 22nd, 2006 at 3:42 pm#28. Do you understand how the average of the top 20% of taxpayers means that people in the 20th percentile don’t pay 183K?
Ok, so you got me off my lazy ass.
87% of filers (the number of filers) earned under 100K in 2003. By my understanding of the spreadsheet, those 87% of filers paid only 36% of income tax. 97% of filers earned between 0 and 200K in 2003 and paid 58% of the total income tax paid.
See http://www.irs.gov/ taxstats/ indtaxstats/ article/ 0,,id=96981,00.html
To be honest, this surprised me that the top-end pays so much. I suspect that the numbers don’t include Social Security and Medicare.
How fraud gets reduced is by making most transactions in the economy taxed. I don’t know about you but I pay sales tax on everything I purchase. There is no real way of getting around it. The Fair Tax proposal does have some problems with enforcement mainly due to the way it taxes “new” products but not “used” products. So, is this why we are dismissing the whole idea. How many people are working “under the table” in our economy? Those people still go out and buy TV sets (plasma even). A consumption tax probably would reduce fraud.
By my reading of the statistics, a consumption tax that replaced the income tax for 87% of filers would have to replace 36% of the total income tax that is derived from that subset of the population. To me this sounds much more doable then replacing 100% of the income tax.
Will you at least give me credit for a less-crazy idea than the fair tax? :)
You also didn’t address the possibility of this as a Republican wedge issue.
TDP
March 22nd, 2006 at 3:57 pmTo the extent talk radio can drive this as a wedge issue,anything is possible. I haven’t seen any analysis,except from the proponents that says it’s doable at the current rate of spending. Whether you can replace the IRS is a differnet issue since the fair tax makes the sellers of all products the collector and remitter of the tax collected. Good luck with enforcement and the replacement of the IRS since we will neeed an army of examiners of the collection and remittance. Companies in trouble today,especially small business,think nothing of failing to remit the FICA tax.
More importantly,the fair tax proposal understates the rate of tax needed to replace not the revenue collected by the gov’t but the expenditures. You failed to address the issue,so let’s do some quick math. The government currently spends 125% of the revenue collected. At a minimum, the tax,which is actually the 30% figure would be at least 37.5 % on every transaction. Since there is also a savings rate,well usually, the tax would also have to make up this figure.
So,to be fair,the retail tax would be 40%. Every $100 of purchases would require a tax of 40%.
You also leave out the fact that every state currently collects a sales tax. Here in Pa. the rate is 7%. We’re now up to 44.5% to 47%.
There is no mention in the legislation that the 14.9% base rate is forever frozen. The gov’t will have the ability to raise money (Medicare,Social Security come to mind) in whatever amount desired.
There is also no mention in the legislation of the taxes collected on gasoline or cigarettes. Gas taxes are 18.5 cents per gal. (Fed) plus between 26 and 36 cents in the states.
The Fair tax is another idea like the flat tax that sounds to good to be true. That’s because it is.
March 22nd, 2006 at 4:34 pmThe alternative view is here:
March 22nd, 2006 at 4:41 pmhttp://www.mises.org/story/1814
Thanks,
I’ll check out your link.
The 125% ratio of spending to revenue is a problem that every tax system has to solve.
At least by dramatically simplifying the tax code some visibility into the problem might be attained.
You say, “Companies in trouble today,especially small business,think nothing of failing to remit the FICA tax.” I can’t quite believe this is true. I run a small business and paying my taxes keeps me up at night. The nightmare is the 50,000 pages of rules and regulations. I know that 95 % doesn’t apply to me…but which 5% does.
The rate is a problem for the fair-tax proponents. They say it is 23% inclusive instead of the “easy to calculate” and more standard 30% exclusive rate. They should be honest and just call it a 30% rate. They don’t, instead calling it 23% so that it looks good realtive to the current rate people pay on their 1040, despite the fact it is comparing apples and oranges.
It’s been fun but I have to run off until Friday. Thanks for the debate.
TDP
P.S. I’m not TomPaine. I’m ThomasDePaine. If you like his posts then continue liking him.
March 22nd, 2006 at 5:02 pmGOD, DON’T REMIND HIM.
TAX REFORM TO BUSH MEANS TAKING THE CHILDREN OF THE POOR AND SELLING THEM TO SLAVE TRADERS, THEN USING THE REVENUE TO GIVE TAX BREAKS TO EXXONMOBIL.
March 22nd, 2006 at 6:17 pmThese are the kinds of issues the Dems need to stand up to and trumpet. Damn right! People are daft. They need to hear it on Fox. Make it an issue, if only for a day or 3.
March 22nd, 2006 at 6:24 pmThe public ignorance and/or apathy is somewhat like fiddling while the Empire burns down.
ThinkProgress has finally made the big time.
I saw earlier that this thread was linked by Wonkette.
March 22nd, 2006 at 6:53 pmI would like to insert an idea into this debate that may not be familiar to many. It is a sweeping tax reform that accomplishes all the positives of the (un)Fair Tax and the Flat Tax (rich man’s dream) yet none of the negatives. For this site you should be interesred in the fact that it represents the most progressive tax possible while providing substantial tax relief across the board individual TAX PAYERS and business.
The tax is called APT (automated payment transaction) Tax. As you can tell from the name it was thoroughly researched, developed and published in peer review literature (so the unbelieveable figure ARE correct) by a highly credentialed Professor of Economics and Rockefeller Scholar, Dr. Edgar Feige — no buzz words here just serious data and ideas.
This is a transaction tax on every single transaction that occurs in the economy, automatically “sliced” from the proceeds as money moves through every qualified financial institution., in a protected and private manner. Sounds horribly intrusive until you get to the real numbers which, after all is what tax is all about. It’s the RATE of 0.3% per side that makes it a thing of beauty for ALL interests (except daytraders and H&R Block stock holders). This is a TOTAL replacement tax for ALL Federal taxation including SS/Medicare. Make it 0.35% per side and we could replace the cumulative sum of ALL state budgets — if we could agree on a distribution system froma national collection process. At 0.3%, if someone made $100K and moved the same to spending or savings then “churned” their investment accounts for another $100K they would have $300K in transactions and would have had $900 “sliced” from their transactions during the year and not required to file a tax return. The gov’t would have it’s money immediately and wouldn’t bother you one iota. Don’t worry the loopholes like cash (2% of all transactions) are covered and the theoretical tax base is cut in half just to accomodate behavioral changes induced by the tax (such as few account transfers) when the 0.3% rate was calculated.
This is truly a revolutionary idea with tremendous political power for the brve candidate who will think outside the box. I have been debating this for 2 years and honestly have not experienced a flaw that wasn’t easily answered. Before you sound off please go to http://www.apttax.com and reads the large amount of info there. Especially the FAQ section where I address many of the superficial arguments that have been raised.
If you want to adequately fund the gov’t — allow for new programs and achieve the ultimate in progressivity while eliminating the IRS — this 21st century idea is for you.
March 23rd, 2006 at 9:39 amBill, Do you have link for us?
March 23rd, 2006 at 10:53 amDuh-oh. sorry, I didn’t get to the bottom of your post.
Sorry about my Homer moment.
March 23rd, 2006 at 10:53 amHere’s a suggestion. When you get together to talk about tax reform, spend some discussing this: The Progressive Income Tax: Theoretical Foundations
It presents the best damned justification you’ve ever heard for promoting the progressive income tax as “the ideal method of taxation.”
March 23rd, 2006 at 2:07 pmJohn,read part of your link because Mr. Kroeger is pretty simplistic in his views and his explanation assumes he already knows the outcomes of the piees he puts in motion. Very tidy but very wrong.
March 24th, 2006 at 4:42 pmWith all due respect, TJM, you clearly have no idea of what you are talking about.
If you could bother yourself, consider reading the whole thing and then give me some specifics that you disagree with. I’d like to benefit from your superior understanding of the topic.
March 24th, 2006 at 7:07 pmWell,John,he assumes that the volume of transactions (and in order to raise sufficient revenue to meet the outlays of the government he must) could be cut by as much as 50% or might stay the same. The $ volume of transactions needed at 0,3% is $800 trillion. That amount can’t be raised by salary or other xactions,so he assumes that bond stock and most importantly forex x actions will remain the same. But forex in particular is based on the difference in interest rates between the countries or is arbitrage at very small increments. a 0.3% tax on each of these would result not in a diminishment by 50% but a cessation in activity here.
March 25th, 2006 at 8:32 amEach of the forex trades requires there to be a winner and a loser,it’s not a win-win. If I have a $1,000 to trade and I trade once/day, a 0.3% tax will wipe out any profits. At 0.3%,annualized on a trading basis of 1/day works out to 0.015%/week or 7.8%/year. Traders aren’t going to trade in the US at those kinds of rates. The volume of money movement for forex and other means of making money through risk arbitrage would basically cease.
Nice theory and the math works only because, like most economists, he assumes that what he nedds for it to work to be the case. I don’t believe his assumption as to the volume of transactions in a $12 trillion economy to be 70 times GDP. I just don’t.
We’ll get tax reform, the same time we go to the metric system. And we have been trying that since 1866. I don’t believe Congress, with the people there, the leadership we have, and lobbyist, that any meaningful legislation or changes can or will occur that will positively impact our country and the people. No one seems to have the combination of intellect, vision, skills or compassion to do what is good for the people, and too many of the people are lost. Also the many institutions needed in a Democracy that affect are lives are under great strain now.
April 18th, 2006 at 12:39 amRoyce
Learn from yesterday, live for today, hope for tomorrow.
March 16th, 2008 at 10:31 amAccounting Financial Financial Success
I can not agree with you in 100% regarding some thoughts, but you got good point of view
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