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Message |
    
dougw
Citizen
Username: Dougw
Post Number: 757
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 2:49 pm: | 
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The Alternative Minimum Tax was designed to tax the super rich. But now if will be effecting the middle class, especially in high RE tax areas like NJ. Personally it costs me quite a bit and I would love to see it eliminated. I read there may be bipartisan support for this in congress. Does anyone support this tax?
(How many posts before this thread becomes about Iraq) |
cjc
Citizen
Username: Cjc
Post Number: 5361
Registered: 8-2003
| | Posted on Thursday, March 16, 2006 - 2:52 pm: |
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I do. It's about time that everyone sacrificed to pay for the programs and services they want 'other people' to pay for. Welcome to the Taxpayer Bulls-Eye Club. |
MBJ
Citizen
Username: Mbj
Post Number: 189
Registered: 10-2005
| | Posted on Thursday, March 16, 2006 - 3:00 pm: |
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Seems like a good idea in theory, the problem is is that the limits have not been adjusted for inflation, the way the regular tax brackets have been. I believe this was put in place in the early 70s, and other than an tweaking of the Allowance, it hasn't been changed since. |
dougw
Citizen
Username: Dougw
Post Number: 758
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:01 pm: |
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CJC why not just raise the marginal rates for everyone in the country. Why target people with high deductions? Why not index the AMT to inflation retroactivly? |
cjc
Citizen
Username: Cjc
Post Number: 5363
Registered: 8-2003
| | Posted on Thursday, March 16, 2006 - 3:04 pm: |
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Doug -- I'm a low-tax guy as I think you know. I was selfishly reveling in schadenfreud.
I like that Democrats would love to do something about it, but it would hurt the take to the Treasury which is more important than the taxpayer. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 13000
Registered: 1-2003
| | Posted on Thursday, March 16, 2006 - 3:08 pm: |
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I agree with you, dougw and MBJ. And cjc, there's a way to adjust the problems without losing revenue.
What kind of an income do I need to have in order for the AMT to hit me? I have no idea how close I am to danger.
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Oldstone
Citizen
Username: Rogers4317
Post Number: 636
Registered: 6-2004
| | Posted on Thursday, March 16, 2006 - 3:10 pm: |
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isn't it around $180k? |
MBJ
Citizen
Username: Mbj
Post Number: 190
Registered: 10-2005
| | Posted on Thursday, March 16, 2006 - 3:12 pm: |
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It's a combination of income and high deductions for state, local and property taxes that trigger the AMT. Someone in NJ who makes $100,000 and has property taxes of $18,000 plus state tax deductions needs to worry about it. Someone living elsewhere making $100,000 with $5,000 of tax deductions is probably ok. (The $100,000 number is purely arbitrary. You could have a salary as low as $80,000 with high tax deductions and you might be swept up by the AMT). |
Bob K
Supporter
Username: Bobk
Post Number: 10963
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 3:17 pm: |
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Doesn't the AMT fade away with incomes over around $500,000? I thought I read that somewhere, although the concept doesn't make sense. Where is Sportsnut when you really need him?  |
dougw
Citizen
Username: Dougw
Post Number: 759
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:17 pm: |
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No no no no - much lower -
"about 30 percent of taxpayers with AGI over $500,000 will pay the AMT in 2010, the peak year. In comparison, about two-thirds of taxpayers with AGI between $50,000 and $100,000 will have AMT liability in 2010." CBO
http://www.cbo.gov/showdoc.cfm?index=5386&sequence=0
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dougw
Citizen
Username: Dougw
Post Number: 760
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:19 pm: |
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Bobk - you are right. As you pay more at the highest bracket the AMT fades away. So a tax that was meant to keep the uber rich paying is now hitting the upper middle class. And soon will hit the middle hard.
Flat tax anyone? |
cjc
Citizen
Username: Cjc
Post Number: 5365
Registered: 8-2003
| | Posted on Thursday, March 16, 2006 - 3:25 pm: |
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dougw -- is the reason those above $500K don't get tapped by the AMT have anything to do with they're getting investment income, particularly dividends at the 15% rate and tax-free municipal bonds?
Bonds, I might add, that go for wonderful things like the debt issued to cover things like the building of schools that the School Construction Corporation didn't build after blowing most of $8B. Thank God for the rich. |
MBJ
Citizen
Username: Mbj
Post Number: 191
Registered: 10-2005
| | Posted on Thursday, March 16, 2006 - 3:26 pm: |
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Does it "fade away" because the tax based on the normal brackets at those levels exceeds the AMT? |
dougw
Citizen
Username: Dougw
Post Number: 762
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:31 pm: |
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I recommend that CJC and MBJ read the link I provided above. It provides a clear analysis. |
Hoops
Citizen
Username: Hoops
Post Number: 933
Registered: 10-2004
| | Posted on Thursday, March 16, 2006 - 3:35 pm: |
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no doug I dont. I support everyone paying a fair share. Take away all deductions from all people and corporations. Tax the wealthy at a higher percentage and the poorer at a far lower percentage. Tax the corporations based on gross income just like people with a scale just like people.
Allow no exclusions. I am betting if that was the case everyones tax rates would actually go down. |
dougw
Citizen
Username: Dougw
Post Number: 763
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:40 pm: |
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Hoops how about a flat tax of 15% with a $20,000 dedcution per person? This effectivly makes the rates progressive and allows a significant amount of famililes to pay no tax at all. Forbes had a proposal like this and it had no immediate effect on tax revenue. In the long run it would promote growth and thus higher revs. Several countries in eastern euorpe have flat taxes and strong growth. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 13003
Registered: 1-2003
| | Posted on Thursday, March 16, 2006 - 3:42 pm: |
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It's intriguing, especially if there would be no deductions. It would kill a large industry of accountants, who are in a position to argue against such a change!
Where do you get 15%? It sounds too low, because it's below what most people pay currently.
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Hoops
Citizen
Username: Hoops
Post Number: 935
Registered: 10-2004
| | Posted on Thursday, March 16, 2006 - 3:45 pm: |
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I am not automatically against it. I am pro paying a fair share. If the projections show there would be enough revenue to the treasury with that structure then its fine with me. Of course they would have to put the exclusionary 20K adjusted to inflation.
The system we have now sucks. Only an accountant could love it. |
dougw
Citizen
Username: Dougw
Post Number: 764
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:45 pm: |
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I am trying to remember the Forbes proposal. 15% worked because there were no deductions. But it was simple and provided a clear incentive to increase your income. You make an additional dollar you keep 85 cents. Now I make an addititional dollar I really don't know how much I keep (with the AMT black box) |
dougw
Citizen
Username: Dougw
Post Number: 765
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 3:50 pm: |
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One Simple Rate
A flat tax would unleash a stupendous economic boom. WSJ OpEd
BY STEVE FORBES
Sunday, August 21, 2005 12:01 a.m. EDT
A major domestic battle looms this fall, when tax reform--a centerpiece of the president's bold domestic agenda--will finally be on the table. The President's Advisory Panel on Federal Tax Reform is expected to release its findings by the end of September. After the political shellacking the White House took on Social Security, the administration will be strongly tempted to take a conciliatory path that supports only superficial reforms, essentially preserving the status quo of our hideous income tax code.
Such a course would have perilous consequences, economically and politically. In fact, the administration has an opportunity here to boldly retake the initiative, to recover lost political support and thrust an already decent economy into high gear and, at the same time, make America better able to meet intensifying competition from China, India and others. How? By junking the entire federal income tax code and starting over with a flat tax. A growing number of countries are doing this--and so should we.
The current system is beyond redemption, a beast whose complexity, confusion and outright unfairness have corrupted our economy and society. Americans waste more than $200 billion and over six billion hours each year filling out tax forms. They engage in all kinds of useless economic activity intended to take advantage of the code's maze of deductions and to reduce taxes--from deducting donations of old socks to making unwanted investments. The waste of brainpower--at a time of increasing global competition--is incalculable.
The code corrupts our system of government by encouraging the crassest political conduct and by creating a massive, intrusive federal bureaucracy. One-sixth of the private-sector employees in Washington are employed by the lobbying industry. Half their efforts are directed at wangling changes in the tax code. Few people realize that our health-care system, with its runaway costs, is, in fact, the ultimate product of the tax-code distortion in our economy. And last, but most definitely not least, we simply pay too much in tax. When you take into account all the taxes, fees and tolls paid to the government, the typical American pays somewhere around half or more of his income in taxes. Why do we the people accept this?
My flat tax plan has one simple rate, on the federal level: 17% on personal income and 17% on corporate profits. There would be generous exemptions for individuals: $13,200 for each adult; $4,000 for each child or dependent, and a refundable tax credit of $1,000 per child 16 or younger. A family of four would pay no federal income tax on its first $46,165 of income. Exemptions for a family of six--mom, dad, four kids--would be $65,930. No anti-risk-taking capital gains levy; the capital gains tax would go to zero. The abusive Alternative Minimum (really maximum) Tax would be abolished. No more death tax: You'd leave the world unmolested by the IRS. No taxation without respiration!
Corporate profits would be taxed at a rate of 17%. Companies could expense all investments at once: no more depreciation schedules. If these instant write-offs produce a loss, that could be carried forward to use against future profits for as many years as necessary to use it up. And businesses would be taxed only on income made in the U.S.
The economic boom the flat tax would unleash would be stupendous, ushering in a long-term, noninflationary expansion of historic proportions. The current expansion would pale in comparison. Once again, we would be the clear global leader in high-tech and medical innovations--unlike today, when our lead, thanks in no small part to the tax code, is now under increasing assault.
How would a flat tax do this? What so many "experts" can't grasp is that taxes are not only a means of raising revenue for governments but also a price and a burden. The tax you pay on income is the price you pay for working; the tax on profits is the price you pay for being successful, and the levy on capital gains is the price you pay for taking risks that work out. When you lower the price of good things, such as productive work, success and risk taking, you get more of them. The flat tax does that dramatically.
Experience demonstrates time and time again--the Harding-Coolidge tax cuts of the 1920s, the Kennedy cuts of the '60s, the Reagan cuts of the '80s and the Bush reductions of 2003--that lower tax rates lead to more economic activity, which leads to more government revenue. Fiscal Associates of Alexandria, Va., an economic consulting firm, did an analysis of the flat tax. Its findings: Between 2005 and 2015, the Forbes Flat Tax Plan would generate $56 billion more in new government revenue than the current income tax. More important, an estimated $6 trillion in additional assets would be created, an immense boost to our nation's balance sheet. This study also predicts that that flat tax would lead to nearly 3.5 million new jobs by 2011--jobs that otherwise would not exist.
To avoid puerile and divisive debate about who would gain and who would lose, my flat tax is designed to be a tax cut for all. Because some people will only focus on what they lose in the way of deductions under the flat tax--ignoring the fact that their income tax payments would go down--my plan gives you a choice: When the flat tax is implemented, you can file your postcard return under this new, simple system, or continue to file your tax returns, with all of their mind-numbing complexity, under the old system. See for yourself which is better. I think most would conclude that the flat tax is best.
Other countries are getting the message, even if we have yet to. Hong Kong has successfully had a variation of the flat tax for 60 years. Lithuania, Latvia and Estonia enacted flat taxes in the 1990s that have been hugely successful. Russia put in a flat tax four years ago, and revenues have more than doubled in real terms. Ukraine, Slovakia, Romania, Georgia and Serbia have also successfully enacted flat taxes. How ironic that onetime Communist nations have been reaping the benefits of a flat tax before that bastion of free enterprise, the U.S.
President Bush should understand that trying to tinker with the tax beast won't work. In 1986, Ronald Reagan simplified the tax code somewhat: A number of tax shelters were eliminated and the number of tax brackets were cut to two: 28% and 15%. But the code remained intact. No sooner was the ink of Reagan's signature dry than Washington politicians slid back into their bad, old habits. Since his day, the federal income tax code has been amended 14,000 times. The tax system today is 60% larger than it was after the Reagan reforms. The flat tax's very simplicity makes such backsliding difficult: Any change would trigger a national debate. For insurance, the Forbes Flat Tax also contains a supermajority provision--taxes can't be raised unless approved by a 60% vote in both the House and Senate. Few tax boosts in recent decades have surmounted such a barrier. The usual objections to the flat tax don't hold up. The flat tax will help housing--personal incomes would go up and interest rates would go down--and boost charitable giving. Experience demonstrates that when people earn more they give more.
What about a national retail sales tax? The most prominent plan encompassing this idea proposes a sales tax of 30% to replace the income tax and payroll tax. This 30% tax poses many challenges, among them repealing the 16th Amendment, which allows Washington to impose the income tax--a lengthy, onerous process. Otherwise, we would likely end up with both an income tax and a sales tax.
The national sales tax would dramatically raise prices of many goods and services. Imagine a couple buying a new house costing, say, $200,000, coughing up an extra $60,000 in sales taxes. A new dedicated bureaucracy would be necessary to collect the tax and to disburse rebates (which the plan's advocates propose) from Uncle Sam to tens of millions of Americans every month to repay them for a portion of the sales tax they pay on food and clothing. Under the circumstances, the flat tax seems the best alternative to the current abomination.
That's why President Bush should pull a Ronald Reagan--he should demand that Congress destroy this hideous tax system, the way Reagan demanded that Mikhail Gorbachev tear down the Berlin Wall. Should the president make such a plea, the American people would surprise the Washington cynics and give him a grateful, full-throated cry of support.
Mr. Forbes, editor in chief of Forbes Magazine and president & CEO of Forbes Inc., is the author of "Flat Tax Revolution: Using a Postcard to Abolish the IRS" (Regnery, 2005).
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sportsnut
Citizen
Username: Sportsnut
Post Number: 2336
Registered: 10-2001
| | Posted on Thursday, March 16, 2006 - 4:08 pm: |
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Hoops - please define fair.
The AMT, as it stands now, is unfair. It flat out sucks.
Remember that the amount of AMT that you pay is the excess of AMT over regular tax and the regular tax for most folks has been dropping over the past few years. So its not that you are paying more tax, you are just paying a lower regular tax plus AMT. It would be interesting to see if your overall tax liability is higher than what it was before the tax cuts.
I took this little blurb from a recent CNN article:
"Using data from the IRS and estimates from the Congressional Budget Office, the Tax Foundation estimates that nearly 42.5 million filers (about 32 percent of all filers) paid a net of $0 to the IRS in 2004. That's up about 50 percent from the number of non-payers in 2000."
So much for the tax cuts only benefitting the "rich" people.
A flat tax would be a good idea but it would never pass. Too many special interest groups out there (including my profession) to ever get full support.
I think a better idea than "Tax the wealthy at a higher percentage and the poorer at a far lower percentage" would be to audit all of the entitlement programs and find out where the money is going then set the rates to cover those programs that work and those that are necessary. If it winds up that I pay a couple thousand more so be it but until we get to that point I would oppose any tax increase to anyone.
For those of you who have used the equity in your home to purchase other big ticket items (i.e. not reinvest it in your home) be aware that the interest that you incur on that second mortgage may not be deductible for AMT purposes. Consult your tax advisor for more details.
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tom
Citizen
Username: Tom
Post Number: 4550
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 4:20 pm: |
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Forbes makes some valid points, but he also spouts a lot of B.S. But generally I'm more than a little suspicious hearing about this from someone one stands to gain hundreds of thousands of dollars a year under a flat-tax system. It's unsurprising that he would strongly favor it.
No tax on capital gains and inheritance is indicative.
More than how this benefits Steve Forbes and his heirs personally, I suggest we all being referring to this as the Paris Hilton Plan.
Paris Hilton's chauffeur pays 15% of his income to support national defense while she pays nothing. We really don't need the kind of parasitic hereditary aristocracy, enjoying all the benefits that the taxes paid by the rest of us provide, that the Paris Hilton PlanTM would generate. Past history shows that this is bad for society. |
dougw
Citizen
Username: Dougw
Post Number: 766
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 4:22 pm: |
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Tom thanks for bringing down the level of discussion. |
tom
Citizen
Username: Tom
Post Number: 4552
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 4:25 pm: |
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Pointing out the possibly selfish motivations of purportedly high-minded speakers is not lowering the level of discussion. And Paris Hilton is a very valid example of who those policies would help most. |
dougw
Citizen
Username: Dougw
Post Number: 768
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 4:40 pm: |
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Tom - the flat tax would not help Paris Hilton. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2337
Registered: 10-2001
| | Posted on Thursday, March 16, 2006 - 4:43 pm: |
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IMO, capital gains should not be exempted from tax but I am in favor of not taxing inheritance money's just because they pass from one generation to the next. Why should a person be taxed upon their death? Why should death be a triggering event? Paris' family has paid tax on that wealth (assuming that all of their wealth is not a result of holding significantly appreciated assets). What is "fair" about paying tax on items that I may not have earned but was earned by my parents? I can see how people who are not in that position might be offended by the notion that some people don't have to work for their wealth, but since when is that a valid standard for determining the taxability of an item? |
tom
Citizen
Username: Tom
Post Number: 4553
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 4:44 pm: |
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From the article you posted above, paragraph 5:
Quote:No anti-risk-taking capital gains levy; the capital gains tax would go to zero. The abusive Alternative Minimum (really maximum) Tax would be abolished. No more death tax: You'd leave the world unmolested by the IRS. No taxation without respiration!
If your wealth is inherited, and your income comes from capital gains, you come out pretty well. |
tjohn
Supporter
Username: Tjohn
Post Number: 4137
Registered: 12-2001
| | Posted on Thursday, March 16, 2006 - 4:47 pm: |
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A progressive tax was adopted, along with inheritance taxes, to prevent the formation of an oligarchy.
While the size of estates subject to taxation certainly should be adjusted for inflation, I support the concept.
As for Paris Hilton, I think she embodies the tradition of shirt sleeves to shirt sleeves in three generations. |
Rastro
Citizen
Username: Rastro
Post Number: 2617
Registered: 5-2004
| | Posted on Thursday, March 16, 2006 - 4:51 pm: |
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So if the exemption for capital gains was removed, Tom, would you be in favor of it? |
dougw
Citizen
Username: Dougw
Post Number: 769
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 4:54 pm: |
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Tom how do you know Paris' income comes from capital gains and not from operating income at the LLCs and LPs that her family is famous in the real estate community for investing in? |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2338
Registered: 10-2001
| | Posted on Thursday, March 16, 2006 - 4:59 pm: |
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tjohn - you mean to tell me that the only way to prevent an oligarchy is through the use of tax policy? |
tom
Citizen
Username: Tom
Post Number: 4554
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 5:01 pm: |
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well there's also bloody and violent revolution... |
dougw
Citizen
Username: Dougw
Post Number: 771
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 5:02 pm: |
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How did we prevent oligarchy before 1917? |
tom
Citizen
Username: Tom
Post Number: 4555
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 5:06 pm: |
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Doug, I don't. Do you know for a fact that aren't other people who fit that description in the U.S.?
Capital gains need to be taxed, as does inherited wealth. The percentage of tax on estates is not onerous, nor does it kick in until levels that most of us will never need to be concerned with. It's hardly going to leave any of the inheritees in the poorhouse. Maybe they have to sell off the second ski house, I don't know, but it isn't cutting anything essential from their lifestyle.
The tax code definitely needs to be simplified, but I can't imagine it can all be done in one shot so why bother even fantasizing about it? Whatever is done needs to be fair, because there are going to be winners and losers no matter what, and I'll take 100-1 that Steve Forbes comes out a winner under his plan, and people over in Ivy Hill come out losers. |
dougw
Citizen
Username: Dougw
Post Number: 772
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 5:11 pm: |
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Tom I am sure there are people that fit your description of living on capital gains.
You said something I find very interesting:
"Capital gains need to be taxed, as does inherited wealth."
Why? |
tjohn
Supporter
Username: Tjohn
Post Number: 4138
Registered: 12-2001
| | Posted on Thursday, March 16, 2006 - 5:22 pm: |
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"How did we prevent oligarchy before 1917?"
Teddy Roosevelt did a bit of heavy duty trust-busting. |
dougw
Citizen
Username: Dougw
Post Number: 774
Registered: 3-2005
| | Posted on Thursday, March 16, 2006 - 5:26 pm: |
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So we don't need the taxes to prevent oligarchy? |
Southerner
Citizen
Username: Southerner
Post Number: 832
Registered: 2-2004
| | Posted on Thursday, March 16, 2006 - 7:44 pm: |
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I am for any tax system that takes money from the rich blue staters and gives it to us poor, lonely, uneducated red staters. I guess I am a closet liberal. Will you rich folks please help me out down here. As RL points out, I only have four toilets in my yard. My neighbor has six and I have to keep with up them. Thank you for your hard work. One more day, and you'll get a few days off. I'm off to shoot something. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 13006
Registered: 1-2003
| | Posted on Thursday, March 16, 2006 - 9:03 pm: |
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Are those your true colors?
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sbenois
Supporter
Username: Sbenois
Post Number: 14719
Registered: 10-2001
| | Posted on Thursday, March 16, 2006 - 9:05 pm: |
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Quote:I'm off to shoot something.
Let me guess: yourself, in the foot? |
Foj
Citizen
Username: Foger
Post Number: 1006
Registered: 9-2004
| | Posted on Thursday, March 16, 2006 - 9:43 pm: |
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AMT should have been fixed years ago. AMT has become regressive, like the rest of the fed. tax system.
tjohn-- great comment on Oligarchy. Thanks. |
cjc
Citizen
Username: Cjc
Post Number: 5367
Registered: 8-2003
| | Posted on Thursday, March 16, 2006 - 10:02 pm: |
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dougw -- thanks, but the article doesn't address what kind of income the over 500K crowd had or the deductions (for business?) they were allowed to take.
That being said, the flat tax is the fairest tax out there. You make 10 times more, you pay 10 times more in tax. What could be fairer.
People focus on how much a person makes, and if it's really up there that in and of itself is unfair and deserves to be taxed in their minds. It's class envy, pure and simple. Same with the estate tax. It's OK to many because most people won't be faced with it. There's a good reason to confiscate something that isn't theirs! |
tom
Citizen
Username: Tom
Post Number: 4556
Registered: 5-2001
| | Posted on Thursday, March 16, 2006 - 10:51 pm: |
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I don't see what's so bad about the estate tax. For once, you can tax money from someone who has absolutely no use for it!
One answer to "how did we prevent oligarchy before 1917" might be, "we didn't." That's why trustbusting, the progressive movement, labor unions, minimum wage laws, child labor laws and so on all came to be. |
Bob K
Supporter
Username: Bobk
Post Number: 10969
Registered: 5-2001
| | Posted on Friday, March 17, 2006 - 4:50 am: |
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Not all that long ago the highest marginal tax rate was over 70 percent. As this was reduced the concentration of wealth in this country in the hands of a few became more prevalent. I think a 70 percent rate is not fair. However, to ask working people to take a tax increase and still pay social security to reduce taxes on the very wealthy isn't fair either. Under most of these plans most families with an income of less than 200k, especially with two incomes, will see a large decrease in their disposable income, while those making more than 500k will make out like bandits. |
sbenois
Supporter
Username: Sbenois
Post Number: 14722
Registered: 10-2001
| | Posted on Friday, March 17, 2006 - 6:35 am: |
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Dougw,
If you search the archives, I've written about the AMT quite often. Maplewood's TC passed a resolution two years ago calling for the AMT to be changed (the first town in the state to do so).
But it's gone nowhere.
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Foj
Citizen
Username: Foger
Post Number: 1014
Registered: 9-2004
| | Posted on Friday, March 17, 2006 - 1:09 pm: |
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In the 1950's, wasnt the top rate 92%? Knocked down to 86% in the early 1960's? |
MBJ
Citizen
Username: Mbj
Post Number: 194
Registered: 10-2005
| | Posted on Friday, March 17, 2006 - 2:30 pm: |
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Again, is it a case of the folks making over $500,000 "making out like bandits", or is it that the tax calculated using the marginal rates at that level of income exceeds the tax required by the AMT? |
Rastro
Citizen
Username: Rastro
Post Number: 2626
Registered: 5-2004
| | Posted on Friday, March 17, 2006 - 3:21 pm: |
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I will never inherit a large sum of money. But I don't understand why we tax someone's already taxed savings when they die and leave it to their children.
People who have very large sums of money have various tax shelters and schemes (all legal) to pass their estates to their children tax free (or at least at significantly reduced tax rates). It's the people with moderately large estates that I would guess (I haven't looked into teh number) are hit the most with this.
Does anyone really think if Paris Hilton was left a billion bucks when her folks died, that she would pay estate taxes on that amount? |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2340
Registered: 10-2001
| | Posted on Friday, March 17, 2006 - 3:36 pm: |
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IMO, the oligarchy that we are currently developing is less a result of tax policy and more a result of the "old boy network" as is the disparity in income. Taxation is not the most effective to guard against what is happening. But how do you legislate against what corporate CEOs are doing.
Just to give you an example today we received a memo telling us that the new AT&T will no longer provide water for its employees. Its a small thing, but tough to justify as a cost savings measure when our executives have more corporate jets than Continental.
The estate tax is a bad idea, always has been. It is the most unfair form of taxation I can think of. |
Tommy O'Reingold
Supporter
Username: Noglider
Post Number: 13034
Registered: 1-2003
| | Posted on Friday, March 17, 2006 - 3:42 pm: |
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The way I see it, money is taxed when it moves. It's not the money, it's the motion that is taxed. Therefore, I don't buy the concept of "already taxed" money. A dollar is like an atom that is never created or destroyed. It gets taxed an infinite number of times, just as you might be breathing an oxygen atom that Einstein once breathed.
I don't have a problem with inheritance tax because it's not earned, and those which are taxed are usually huge windfalls. Those who receive them will do fine for themselves.
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sportsnut
Citizen
Username: Sportsnut
Post Number: 2341
Registered: 10-2001
| | Posted on Friday, March 17, 2006 - 3:52 pm: |
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Tommy - movement of money is absolutley the wrong standard. What if you handed your daughter $20? Under your standard that would be taxable. The theory of income taxation is just that - taxing income, not receipts. There are many instances in the tax code where income is deemed to be earned but the payment of tax is deferred until the item is converted to cash. The IRS usually doesn't force you to convert assets to cash just to pay the tax.
The estate has been earned, just not by the person who inherited it. |
Tommy O'Reingold
Supporter
Username: Noglider
Post Number: 13036
Registered: 1-2003
| | Posted on Friday, March 17, 2006 - 3:56 pm: |
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You're a tax accountant, and you know more about this stuff, including the principles behind tax code. Perhaps I should defer to you on that.
But I still don't mind taxing money when someone who doesn't earn it receives it.
I do think my daughter should pay tax on money I give her. I just think there should be a maximum untaxed amount. For instance, parents may give adult children up to $12,000/year without taxation, right? I don't know what the case is for minor children.
And I disagree with the current trend of cutting or eliminating taxation on unearned income. That's tremendously regressive.
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sportsnut
Citizen
Username: Sportsnut
Post Number: 2342
Registered: 10-2001
| | Posted on Friday, March 17, 2006 - 4:38 pm: |
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Why don't you mind taxing income when a person doesn't "earn" it? What is fair about it in your eyes?
Technically you don't pay tax on money given to your child if it exceeds 11K. Without getting into the details you have a lifetime credit of a million dollars. If you give your child more than 11K then you are supposed to file a gift tax return so that the IRS can track how much of that lifetime credit you have used up.
I disagree with the elimination of capital gains taxes but I fully support the elimination of taxes on the estate tax. |
Tommy O'Reingold
Supporter
Username: Noglider
Post Number: 13039
Registered: 1-2003
| | Posted on Friday, March 17, 2006 - 4:42 pm: |
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Why don't you mind taxing income when a person doesn't "earn" it? What is fair about it in your eyes?
I guess fair is in the eyes of the beholder. Maybe it's a matter of taste, as you might like vanilla whereas I like chocolate. Maybe I can't explain it better than that.
To me, being a lucky duck, to use a first grader's term, through no work of your own, you should pass the luck around a bit.
Hey, if you believe an individual can make his own way with the sweat of his own brow and should reap the rewards therefrom, then why not let everyone reap a slice of his luck when it's not from the sweat of his brow?
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tom
Citizen
Username: Tom
Post Number: 4565
Registered: 5-2001
| | Posted on Friday, March 17, 2006 - 5:24 pm: |
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Similarly, if you have to pay tax on money you receive for, say, cleaning toilets, why shouldn't you have to pay tax on money you receive by other means? That money is no better or worse than the other. |
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