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openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to wentlanc

Re: If the facts dont fit...

Corporate tax rates are higher than individual tax rates


knightmb
Everybody Lies

join:2003-12-01
Franklin, TN
said by openbox9:

Corporate tax rates are higher than individual tax rates
They are except that's only the surface. Underneath the higher tax rate is tons of loops holes that basically eliminate tax.

As a business owner myself, I've yet to ever pay any tax since start my own business. As an individual, I was paying tax every year due to my low deductible.

The only reason I know is because I've always done my own taxes. When you are an individual (or married), about the only thing that helps is donations and investment accounts.

As a business, suddenly an entire world of *loopholes* opens. Now, everything I do is a *business expense* to some degree and while 50% off here and there isn't much, it all adds up in the end.

Every year, I don't pay a dime to the IRS and still get money back. Before, I payed out a portion of every pay check only to get some of it back next year (but my net gain was still really a loss). As a small business, I know what I could do if I churned more employees and money.

The tax system in this country is way, way, way over-biased to business. So much so that I tell my friends to start their own business and run it at a loss because you'll come up ahead in taxes every year for only a $15 a year fee for the business license.

Yes, I just gave away some expense tax advice, consider it a gift.
--
Fight Insight Ready (Was NebuAD) and the like:
Click Here to pollute their data


huntml

join:2002-01-23
Mullica Hill, NJ

2 edits
reply to openbox9
said by openbox9:

Corporate tax rates are higher than individual tax rates
True as far as it goes, but I've talked about this with several self-employed or incorporated people I know, who all agreed that if they were paying anything close to the marginal rate, they'd have fired their accountants for incompetence years ago.

openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to knightmb
said by knightmb:

As a business owner myself, I've yet to ever pay any tax since start my own business.
I have an LLC. I understand how taxes work. I also understand that if you continuously run your business at a loss, then you eventually raise the red flag inviting the IRS to pay you a visit.
said by knightmb:

about the only thing that helps is donations and investment accounts.
And personal deductions for dependents, mortgage interest, school interest, childcare expenses, etc... There are several credits and deductions that many taxpayers qualify for.

openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to huntml
I could say the same for a lot of individual taxpayers as well. It may not be as easy to find the deductions, but it can be done.


huntml

join:2002-01-23
Mullica Hill, NJ
said by openbox9:

I could say the same for a lot of individual taxpayers as well. It may not be as easy to find the deductions, but it can be done.
Not to the same degree. If you are a wage-earner in the legal economy, the provisions for sheltering your income from taxes simply are not there to anywhere near the extent they are if you are an entrepreneur or investor.

I personally think that the only way to fix things is to go to a consumption-based tax scheme, but that's not going to happen either.

openbox9
Premium
join:2004-01-26
Germany
kudos:2
said by huntml:

Not to the same degree. If you are a wage-earner in the legal economy, the provisions for sheltering your income from taxes simply are not there to anywhere near the extent they are if you are an entrepreneur or investor.
Of course the tax benefits for individuals aren't as great as for businesses, entrepreneurs, or investors, but neither are the risks.

said by huntml:

I personally think that the only way to fix things is to go to a consumption-based tax scheme, but that's not going to happen either.
I don't believe solely using consumption-based tax revenue is a viable option. As soon as you increase taxes on the things people buy, consumer-based discretionary spending will decrease. Now if you want to cut federal spending across the board, remove unnecessary and wasteful govt programs, and move to a fair and equitable flat tax to greatly simplify the tax code, I'd interest.


huntml

join:2002-01-23
Mullica Hill, NJ

3 edits
said by openbox9:

Of course the tax benefits for individuals aren't as great as for businesses, entrepreneurs, or investors, but neither are the risks.
That's a separate issue, but in offering this response you seem to be conceding that your previous statement

quote:
I could say the same for a lot of individual taxpayers as well. It may not be as easy to find the deductions, but it can be done.
isn't exactly defensible.

quote:
I don't believe solely using consumption-based tax revenue is a viable option. As soon as you increase taxes on the things people buy, consumer-based discretionary spending will decrease.
True, but there is an argument to be made that modern economies are too driven by consumer spending, and that shifting tax structures to incentivize saving (lowering the cost of capital) and moderate consumer spending would serve to make them more stable and productive in the long term.

quote:
Now if you want to cut federal spending across the board, remove unnecessary and wasteful govt programs, and move to a fair and equitable flat tax to greatly simplify the tax code, I'd interest.

Depends on how you define 'fair and equitable.' A *straight* flat tax is hardly fair to my thinking, as it is income-regressive, and I happen to feel that income progressivity is a necessary requisite for fairness.

But I would certainly support a modified flat tax that was structured so as to exempt some basic level of income from taxation before kicking in.

If some of the Cato or AEI types put forward such a plan, I think they'd get a lot of lefty types to jump on board.

Flat tax advocates seem to oppose progressivity on principle, though.

With regard to cutting federal spending across the board, I don't think this is either a good idea (I think that we should be spending MORE on some areas, and A LOT LESS on others), OR that it is tenable politically. I agree that a lot could and should be done to remove wasteful spending from the budget and make the government more efficient and effective, but there are political problems there too, which we've already touched on elsewhere.

wentlanc
You Can't Fix Dumb..

join:2003-07-30
Maineville, OH
reply to openbox9
You support metered billing for internet access, which means paying for what you use. Why is that not ok here? Sure, some may spend less, but others would pay more. I think the real answer is that everyone would end up paying their fair share, and certain people really don't want that.

cw

openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to huntml
said by huntml:

you seem to be conceding that your previous statement
No concession here. Several deductions and credits exist for many individuals taxpayers and they're aren't as easy find and exploit.
said by huntml:

True, but there is an argument to be made that modern economies are too driven by consumer spending, and that shifting tax structures to incentivize saving (lowering the cost of capital) and moderate consumer spending would serve to make them more stable and productive in the long term.
Valid argument with economic potential. Shifting to a consumption-based tax system, while potentially taming consumer gluttonous spending, would still require slashing the federal budget otherwise we'll be in the same situation, only worse. There would also be a long painful transition for both consumers and the government if the switch is made. Just one more unfortunate reason why the status quo will most likely remain in place.
said by huntml:

Depends on how you define 'fair and equitable.' A *straight* flat tax is hardly fair to my thinking, as it is income-regressive, and I happen to feel that income progressivity is a necessary requisite for fairness.
We'll diverge on beliefs here. If you make $1 and I make $2 and we both receive the same benefits and protections that the fed govt provides, why should I pay more to the fed govt to provide those benefits and protections?
said by huntml:

With regard to cutting federal spending across the board, I don't think this is either a good idea (I think that we should be spending MORE on some areas, and A LOT LESS on others)
I should have qualified my statement a little more. I agree that balancing spending in the fed budget is necessary as well as cutting the govt's bottom line.

openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to wentlanc
Because this tangential discussion is about the fed budget, reducing our debt, and stabilizing our economy not your connection to the Internet. You'll also notice that I stated "I don't believe solely using consumption-based tax revenue is a viable option." I believe paying for consumption has it's role both in the tax code as well as the billing structure of your connection to the Internet, just not as the sole means of revenue. Most states have a sales tax which is a consumption tax. If the fed wants to add a national sales tax, I'm not opposed, if done smartly. If ISPs want to add metered billing, I'm not opposed, if done smartly.


huntml

join:2002-01-23
Mullica Hill, NJ

4 edits
reply to openbox9
said by openbox9:

No concession here. Several deductions and credits exist for many individuals taxpayers and they're aren't as easy find and exploit.
Nor are they as expansive taken as a whole. Though there are deductions and credits available to the wage-earner, they simply do not add up to those that are available to the entrepreneur/investor.

Valid argument with economic potential. Shifting to a consumption-based tax system, while potentially taming consumer gluttonous spending, would still require slashing the federal budget otherwise we'll be in the same situation, only worse.
It all depends on how the tax system is structured. One could certainly devise a consumption-based tax scheme that was revenue-neutral compared to the current scheme if he wanted.

There would also be a long painful transition for both consumers and the government if the switch is made. Just one more unfortunate reason why the status quo will most likely remain in place.
I agree. Even if the change was revenue-neutral, there would be a lot of economic dislocation, there would be winners and losers, etc. Not gonna happen.

We'll diverge on beliefs here. If you make $1 and I make $2 and we both receive the same benefits and protections that the fed govt provides, why should I pay more to the fed govt to provide those benefits and protections?

Yes, we'll just have to disagree here, because as I see it, if you have/make twice as much as I, over time you are likely to amass wealth at more than twice the rate I am, because a much larger proportion of my income will go to simple living expenses, leaving me much less than half as much disposable income with which to build wealth.

So overall, the value of the things the government provides (things like law enforcement to protect our incomes and property and roads to get to our jobs) is worth more to you, proportionally, than it is to me.

So you can and should pay proportionally more for those services.

It was once argued by at least some of the upper classes that an orderly and well-functioning society was something in which the more prosperous classes had an enlightened self-interest in maintaining, even to the extent of disproportionately supporting it, given their advantaged position. They simply have more to lose if there is lawlessness and general disorder and things do not work at least reasonably well.

It is too bad we no longer have that spirit in this country.

(As an aside, my proposed modified flat tax program that exempts basic income from taxation and then applies a flat rate to income over this threshold, would in part address my objection to your view.)

openbox9
Premium
join:2004-01-26
Germany
kudos:2
said by huntml:

Though there are deductions and credits available to the wage-earner, they simply do not add up to those that are available to the entrepreneur/investor.
That I will agree with, caveatted once again that the increased tax incentives help overcome the barriers and increased risk of being an entrepreneur/investor.
said by huntml:

It all depends on how the tax system is structured. One could certainly devise a consumption-based tax scheme that was revenue-neutral compared to the current scheme if he wanted.
Structuring a revenue-neutral tax scheme isn't difficult, making it viable without totally killing consumption and/or increasing the fed debt is the challenging part.
said by huntml:

Yes, we'll just have to disagree here, because as I see it, if you have/make twice as much as I and we are both supporting things like law enforcement to protect our incomes and property (which you have twice as much of as I) and roads to get to our jobs (which pay you twice as much as mine pays me), the value of that protection is worth twice as much to you as it is to me, so you should pay more.
So do I get my own dedicated security guard and traffic lane for my extra dollar? A concern I have with a progressive tax is the potential to stymie initiative and creativity. Money is a powerful motivator for many (myself included). Beyond personal satisfaction, taxing me more based on my success reduces my inspiration. You can argue that if done correctly, the relatively impact of a progressive tax is negligible, but still I believe it is viewed as a deterrent for many.
said by huntml:

It was once argued by at least some of the upper classes that an orderly and well-functioning society was something in which the more prosperous classes had an enlightened self-interest in maintaining, even to the extent of disproportionately supporting it, given their advantaged position.
I can respect that point. Kind of like placating the masses and providing them with relative comfort and happiness while the affluent go on living their lives in the security of an accepted economic class system.

Thank you for the thoughtful and educated debate, something that sadly doesn't happen too often around this forum.


huntml

join:2002-01-23
Mullica Hill, NJ

4 edits
said by openbox9:

That I will agree with, caveatted once again that the increased tax incentives help overcome the barriers and increased risk of being an entrepreneur/investor.
There is an certainly an argument to be made that policies that encourage entrepreneurship are good for the economy at large, as it is entrepreneurship that drives economic growth, job creation, etc.

Structuring a revenue-neutral tax scheme isn't difficult, making it viable without totally killing consumption and/or increasing the fed debt is the challenging part.
Agree. Changing to consumption-based taxation would certainly reduce consumption overnight, and there would thus lead to a very difficult transition phase in which the govt would have to step in and do something with fiscal and/or monetary policy to keep things moving, at least for awhile. But I don't think this is necessarily a bad thing provided that the market interpreted the changes as putting the economy on a more stable and sustainable footing, long-term.

So do I get my own dedicated security guard and traffic lane for my extra dollar?
Funny. No, that extra dollar gets you to your job just like it does me, but when you get there, you get more money than I do. And though local law enforcement is generally funded locally, it is probably the case that federal law enforcement benefits the more affluent more than it does the less affluent, given the facts that national/international crime organizations prey on poorer communities more than they do affluent ones (e.g., one doesn't see drug runners or Russian prostitutes on the streets of tony suburbs and bedroom communities) and the more affluent are disproportionally the victims of large-scale white collar crime that is largely the purview of federal law enforcement.

A concern I have with a progressive tax is the potential to stymie initiative and creativity. Money is a powerful motivator for many (myself included). Beyond personal satisfaction, taxing me more based on my success reduces my inspiration. You can argue that if done correctly, the relatively impact of a progressive tax is negligible, but still I believe it is viewed as a deterrent for many.
I would argue that this is to a significant degree due to the fact that for the last several decades conservatism has moved away from arguing for the enlightened self-interest of ensuring that the government is well-funded and works well, and asserted that government is unambiguously a problem, and that all taxation is theft.

We had extremely progressive tax rates throughout the 60s and 70s into the 80s, marginal rates as high as 80% or higher, I believe. There was no shortage of innovation and entrepreneurship during this time.

I can respect that point. Kind of like placating the masses and providing them with relative comfort and happiness while the affluent go on living their lives in the security of an accepted economic class system.

Thank you for the thoughtful and educated debate, something that sadly doesn't happen too often around this forum.
You too. I have enjoyed it greatly. We may not agree on many things, but your arguments are well-reasoned and worth consideration, and reading them has been a pleasure.

sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
His arguments are *not* well-reasoned and worth consideration. You've simply avoided conflict by ignoring the *obvious* conflicts of interest and faulty logic, refusing to point them out for fear of insulting him.

It's disgusting really. The intellectual back-slapping made me want to barf. You need to be more poignant with your arguments or no one will listen to you.

What it boils down to is openbox wants the government to cut all programs that aid the poor while burdening the rich, and institute a flat tax across the board so rich people end up paying less.

He wholly favors the rich at the expense of the poor, and were his ideas put into practice the already wide gap between rich and poor would increase to make the Grand Canyon seem like a crack in the floor.

Honestly he is so disagreeably biased I feel embarrassed to be living in the same country as him. It's people like him that screwed up our country over the last 8 years.

sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
reply to openbox9
Yes I'm sure you're not opposed to monopoly/duopoly ISPs adding metered billing to pad their profit margins.

Also your reasons for not using consumption-based tax revenue are so appallingly and unethically cruel to the poor I have to question your basic humanity.

openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to sonicmerlin
Wow, so why don't you tell us how you really feel. While you're at it, why don't you suggest a couple of viable options to actually fix some of the problems with our country's financial situation.
said by sonicmerlin:

His arguments are *not* well-reasoned and worth consideration. You've simply avoided conflict by ignoring the *obvious* conflicts of interest and faulty logic, refusing to point them out for fear of insulting him.
Says the person that's added nothing tangible to the discussion. Don't worry, you aren't going to insult me.
said by sonicmerlin:

What it boils down to is openbox wants the government to cut all programs that aid the poor while burdening the rich, and institute a flat tax across the board so rich people end up paying less.
And where did you pull that from. I've never once stated that, nor do I desire it.
said by sonicmerlin:

He wholly favors the rich at the expense of the poor
Actually, I favor myself at the expense of everyone, but that's beside the point
said by sonicmerlin:

were his ideas put into practice the already wide gap between rich and poor would increase to make the Grand Canyon seem like a crack in the floor.
How so?
said by sonicmerlin:

Honestly he is so disagreeably biased I feel embarrassed to be living in the same country as him.
At least you have an unbiased open mind, otherwise this discussion might have decayed into name calling and pointless rambling.
said by sonicmerlin:

It's people like him that screwed up our country over the last 8 years.
I beg your pardon. How exactly have I screwed up this country over the last eight years? Considering you don't know me, what I do, or what I've been doing for the last eight years, I find your comments a pointless rant.

openbox9
Premium
join:2004-01-26
Germany
kudos:2
reply to sonicmerlin
said by sonicmerlin:

Also your reasons for not using consumption-based tax revenue are so appallingly and unethically cruel to the poor I have to question your basic humanity.
Do purposely choose not to read posts before responding to them? I'll quote the actual words that I typed:
quote:
I believe paying for consumption has it's role both in the tax code
So how exactly am I so appallingly and unethically cruel?