goes to eleven Wrote: ------------------------------------------------------- > Flat tax sounds great, but flat tax on what? > Calculating the tax is the easiest part of the > return. The hard part is the taxable income. An > individual income tax return with wages is a > pretty simple return. But if you own a business, > that is where it gets interesting (i.e. > difficult), right? > > Surely you should allow deduction for cost of > sales, right? How about other ordinary and > necessary business expenses. What is ordianary? > Would you allow depreciation, or should you be > able to deduct the entire cost of equipment in > year 1. Should the character of the income > matter? That poses another set of issues. > > And how about partnership income. Should it be a > flow through like it is now? How do you > distribute the income? What about other forms of > business. Should they all be taxed the same? > > Too many time people use the words “simple” and > “fair” interchangably. Unforunately, for income > taxes, in order to make it “fair,” it has to be > quite complex. This is incorrect. The tax code has been MADE complex. When it was introduce 90 years ago, it was not nearly this complicated. You first start with wages–it’s easy to calculate gross wages. You phase out most deductions and implement a flat tax. It’s not that complicated. Then you can deal with business income. Just like health care, you don’t have to tackle 100 years of issues in a single bill.
Kkent: You state “start with wages.” Okay, I am a shareholder in an S corp and I can completely manipulate my wage. Same thing with C Corps. I agree that anybody with a W-2 should have a much less complicated return. The issue becomes what ends up on that W-2 for small corps and other business owners. We can certainly agree that the code does not have to be thousands of pages. However, arriving at “taxable income” is the difficult part of the income tax.
I don’t see why business wages would be treated any differently than now. Legitimate business expenses reduce income. Once again, you start with W-2 wage earners and can move to business income next. It’s not a legitimate excuse to do nothing or reject a flat tax.
goes to eleven Wrote: ------------------------------------------------------- > Kkent: > > You state “start with wages.” Okay, I am a > shareholder in an S corp and I can completely > manipulate my wage. Same thing with C Corps. I > agree that anybody with a W-2 should have a much > less complicated return. The issue becomes what > ends up on that W-2 for small corps and other > business owners. > > How exactly do you think that an S-Corp owner can “completely manipulate my wage”?
mwvt9 Wrote: ------------------------------------------------------- > goes to eleven Wrote: > -------------------------------------------------- > ----- > > Kkent: > > > > You state “start with wages.” Okay, I am a > > shareholder in an S corp and I can completely > > manipulate my wage. Same thing with C Corps. > I > > agree that anybody with a W-2 should have a > much > > less complicated return. The issue becomes > what > > ends up on that W-2 for small corps and other > > business owners. > > > > > > How exactly do you think that an S-Corp owner can > “completely manipulate my wage”? You are right. I probably shouldn’t have used the S-Corp as an example. But for W-2 purposes I can pay myself whatever wage I want. Sure the IRS wants a certain amount on your W-2 as opposed to the K-1 in order to get p/r taxes, but I have made the argument for a certain return on capital in order to minimize W-2 and maximize K-1. Auto fringe, retirement, meals in the office for convenience of the employer (me), travel which doubles as vacation, promotional clothing, etc. All of a sudden my K-1 doesn’t look so fat. I realize the S-corp is a flow-through so manipulation is tougher, but C corps pose a new set of issues.
Taxing fattening foods won’t help. Black markets will emerge overnight. I’ll raise and slaughter my own hogs and put a donut speakeasy in my basement. I intend to be the Al Capone of transfat if that plan goes thru.
joemontana Wrote: ------------------------------------------------------- > Taxing fattening foods won’t help. Black markets > will emerge overnight. I’ll raise and slaughter > my own hogs and put a donut speakeasy in my > basement. I intend to be the Al Capone of > transfat if that plan goes thru. mmm I’m in. Better yet combine the two and make donuts fried in lard.
A lard-fried hog portion imbedded in a crispy fried donut skin, now that is all American!
joemontana Wrote: ------------------------------------------------------- > Taxing fattening foods won’t help. Black markets > will emerge overnight. I’ll raise and slaughter > my own hogs and put a donut speakeasy in my > basement. I intend to be the Al Capone of > transfat if that plan goes thru. al capone’s hideaway in st. charles has awesome steaks - just in case you were wondering
I think there should be a 100% estate tax. Let’s get back to an America where you actually have to earn your money!
naturallight Wrote: ------------------------------------------------------- > I think there should be a 100% estate tax. Let’s > get back to an America where you actually have to > earn your money! No, let’s stick with freedom, where people who earn their money are free to give it to whomever or whoever they wish.