Well... the Jury is back....

Non-fashion, non-skirt, non-gender discussions. If your post is related to fashion, skirts or gender, please choose one of the forums above for it.

Well... the Jury is back....

Postby moonshadow » Sat Feb 02, 2019 7:50 pm

Okay,

Realizing we have a number of accountants on here, I decided to post this....

For all of 2018 I have refrained from forming a judgement or otherwise, opinion on Trumps tax plan, as I never take any exemptions on my W4 anyway.... I wanted to wait until I filed my taxes and compare them to 2017.

I had noticed that though my hourly income remained about the same, my take home pay also seemed to remain unchanged. Granted, as my hours generally fluctuate week by week, no two checks are ever exactly the same.

Well 2017 was a little tricky as I had almost $6k of 1099-MISC income with no withholding. This year (2018) was more standard stuff....

The refund is up about $400 from last year, of course on the other hand, I made about $15500 less this year than in 2017, with that kind of drop, and considering the "$24k standard deduction" my Republican friends were bragging about all year, and considering my week to week withholding seemed about the same, I rather expected to make up for it at the years end. Yet, my refund seemed to only reflect about what one would expect if you made about $15,000 less.

Likewise, in terms of raw percentages, my tax rate was effectively about 12% in 2017, and 10% in 2018. I didn't bother to look at the actual tax tables. For all I know, the 15k difference just put me in a different tax bracket.

So, bottom line, I didn't see much of a difference. And yet.. there is still this mystery... if the standard deduction is $12,700 for someone filing joint in 2017, and now it's $24,000... what gives....?

Turns out, I believe I found it... looks like the "Exemptions" part of the 1040 is GONE! Those exemptions gave you $4050 per exemption, in my case, myself, my wife, and Amber qualified for a total of $12150, add in the standard deduction and we come to: $24850 knocked off my taxable income.

To be fair, I'd certainly benefit from the Trump plan if Amber didn't live with us. As she does (and is working, non student, and almost 20 years old) I can not claim her. I'm not sure if she would count as an "exemption" if the tax plan for 2018 was similar to the 2017.

But as it is, I lost $850 in deductions under the new tax plan.

Would have been cool to be able to retain the exemptions in addition to the standard deduction of $24k... but it looks like it's "gotcha politics" as usual in D.C.

You fooled em' in the trailer park Mr. T... but you ain't foolin' me... Numbers never lie... politicians almost always do sir!

I'll grant there may be some perks here and there for certain middle class people, but I'd hardly call this the great "Middle Class Tax Break" it was hailed to be...

Seems like more of the same to me...
User avatar
moonshadow
Member Extraordinaire
 
Posts: 4198
Joined: Sun Aug 09, 2015 1:58 am
Location: Appalachian Mountains (VA)

Re: Well... the Jury is back....

Postby MoonsWifeJenn » Sat Feb 02, 2019 7:59 pm

Maybe it’s just our luck Moon :(
❤️Being deeply loved by someone gives you strength, while loving someone deeply gives you courage❤️
MoonsWifeJenn
Member
 
Posts: 25
Joined: Fri Jan 25, 2019 1:56 am
Location: Lebanon, Virginia

Re: Well... the Jury is back....

Postby moonshadow » Sat Feb 02, 2019 8:16 pm

MoonsWifeJenn wrote:Maybe it’s just our luck Moon :(


No worries... I just like calling out political B.S.... that's all.

There was no significant change, and I'm simply pointing out that in our situation, the hype seems unwarranted.

At least we didn't have to pay. [0]

I'm a little perturbed about making $9 grand less than the year prior (I'm not counting that 1099 income as it basically fell out of the sky)

But I guess such is the cost being eccentric (in my case, wearing skirts) [1]

[0] Technically not true. We do actually pay, we just paid too much in paychecks, and thus received a refund of the difference. Unlike Americans who have been socially engineered by the Internal Revenue Service to have lots of slaves, er uh... "kids", [2] we do not actually profit from taxes, and over the years have paid anywhere from 3%-12% net.

Gotta love the penalty for working. (aka, the "Income Tax")

Ahh... I feel my inner Libertarian coming on..... :twisted:

[1] I'm not getting into that on this public forum. Jenn knows what I'm talking about.

[2] I refuse to breed additional commodities for the one percent elite to profit off of. It ends with me, and when I die, I hope to do so with my middle finger fully extended... :mrgreen:
User avatar
moonshadow
Member Extraordinaire
 
Posts: 4198
Joined: Sun Aug 09, 2015 1:58 am
Location: Appalachian Mountains (VA)

Re: Well... the Jury is back....

Postby crfriend » Sat Feb 02, 2019 11:30 pm

moonshadow wrote:There was no significant change, and I'm simply pointing out that in our situation, the hype seems unwarranted.

Back a few years ago [0] when the prior "Huuuge tax cut" was unveiled I took a look at the tax code, did a few "back-of-the-envelope" calculations and casually mentioned to those around me that the Middle Class in the United States would be effectively be dead in 2020. Here we are in 2019, and faced with another "Huuuge tax cut". Most of my numbers aren't in yet for this year, but as was the case when the last "cut" went in I'm assuming at least four additional figures to the left of the decimal point as my personal "hit". And, in spite of the initial withering, but since diminishing, fire, hold to my initial assertion of 2020 as the recorded date of death for the US Middle Class. Certainly the working class.

I've already gotten a look at the US "Form 1040" (the standard form that everybody gets to fill out as a form of self-flagellation to Washington DC each year in spite of the government knowing more about what we make than we ourselves do), and it's getting hilariously close to a joke 1040 that was circulating in the 1970s which pretty much boiled down to two lines: (1) How much did you make, (2) Send it in.

It's going to be interesting to see how much of my lifestyle and legacy I'll have to abandon in a few weeks' time.
Gotta love the penalty for working. (aka, the "Income Tax")

Viz my comment on the Reagan "tax cuts" -- that's when the government started actively penalising work due to the inversion of the earned vs. unearned income tax rates.


[0] 1981, to be precise.
Retrocomputing -- It's not just a job, it's an adventure!
User avatar
crfriend
Master Barista
 
Posts: 10503
Joined: Fri Nov 19, 2004 9:52 pm
Location: New England (U.S.)

Re: Well... the Jury is back....

Postby dillon » Sun Feb 03, 2019 3:10 am

The mushrooming deficit was a predictable - and predicted by all but GOP politicians - consequence of the tax plan that, like climate change, threatens the subsequent generations more than our own.

IMO, the concept of tax fairness should never be employed. Even at exactly the same incomes and rates, no two individuals will be affected the same in terms of their lives. Taxation has always been a game of “take it where you can get it.”

A tax system has three obligations. First, to be productive in terms of funding the essential functions of government. Second, it must avoid being a substantial drag on the national economy. Third, it must be merciful to the taxed.

The GOP plan meets only one of the three obligations. It will stimulate the economy but at a point in the cycle where we could afford to move ahead with debt reduction and not debt explosion. The argument that tax curs lead to growth that then increases revenue is only true if the tax system can pursue that revenue, and ours has been hamstrung from doing so. Further, tax cuts have been generally reserved as stimulus for economic downturns. We have now hampered our ability to provide that stimulus. At least the Fed understands that even if the ruling party doesn’t care. Hence the rise in interest rates. Rate cuts are now the only response left for the next, and looming, recession.
As a matter of fact, the sun DOES shine out of my ...
dillon
Member Extraordinaire
 
Posts: 2584
Joined: Mon Nov 18, 2013 8:12 pm
Location: southeast NC coast

Re: Well... the Jury is back....

Postby moonshadow » Sun Feb 03, 2019 4:19 am

My issue isn't with paying taxes. I live in this country, I enjoy the benefits that come with that, paved roads, law enforcement, fire protection, councils, court systems, clean running water, a dependable electric grid, libraries, parks, public forest, a reasonably stable economy with a basic safety net for the occasional downturns, the list goes on and on...

In all my life, I've never been filthy rich, but I've never went without either.

My basic tax rate, when combining all income taxes (federal, state, social security, medicare) is a little over 16% of my total adjusted gross income. When I work some simple calculations to figure my total tax bill for ALL taxes (sales tax, real estate, car (personal property) tax, etc) I come up to about 18% (figuring an average grocery budget of $100 per week @ 2.5% sales tax, and general merchandise purchases of around $100 per week at 5.3% sales tax. These are ROUGH estimates. Also included is the car tax and registration fees which run around $300 per year, and real estate taxes run around $300 per year.

Finally, if you want to include the cost of my health insurance, that brings the total percentage up to around 25%.

That sounds like a lot, but I'd say I've accounted for at least 90-95% of my total tax burden right down to the little insignificant things... leaving 75 cents of every dollar earned to be used for other things.

With that in mind, I live comfortably. I don't have hoards of money to throw around, but I keep the bills paid and manage to put a little back once in a while. I'd say that by American standards, I make a lot less money than most, but on the other hand, I live in a very low cost of living area, and I also tend to opt for the bargain basement deals of life over the finer things. I don't live in a split level brick house in an upscale subdivision, our newest car is Jenn's and it's a 2012 model (one year to go and it's paid for!) My car is 16 years old, and the old truck is a legal "antique" by Virginia standards (26 years old). Our pantry is filled with private label groceries and our freezer has meats that were purchased on discount for being close dated. None of the dishes and cups in our cupboard match, nor does our flatware. My big goal this year is to acquire a riding mower (used)

"Date night" for Jenn and I is usually a visit to the local Pizza shop, where we get one medium pizza and two salads and soda (late, after 8PM when we have the restaurant to ourselves). Afterwards, a small ride around the local mountain roads if the mood strikes, or perhaps a little window shopping at Walmart, or maybe a drive to the Sheetz gas station in Bristol for some soft serve ice cream.

Anyway... I kinda chased a rabbit here....

The point is, I'm happy with my lot in life, and don't mind paying my share to help protect it, but there are a few things that irk me about taxation in America:

1) I'd like to see the ultra-wealthy pay their share
2) I'd like to see the elimination of the wage earners (income) tax. Replace it with a sales tax, and I'd like to see that tax structured in the manner I hear it is overseas, where as it's factored into the price of the product. I'd gladly pay that 16% on goods and services rather than the four part deduction on my paystub. We can learn something from Tennessee here... They fund their entire state on a 9.5% sales tax. The only "income" tax they have is on capital gains.

A federal sales tax as opposed to an income tax doesn't penalize you for earning a paycheck, and it rewards you for SAVING (if you're not spending money, you're not paying a tax), it also doesn't discriminate based on income. Since the ultra rich would buy more, they'd pay more.

As someone who's been in business, I can say that sales taxes are reasonably easy to remit to the taxing authority. You simply reconcile your total gross receipts, and remit the required payment thusly. When I ran Lunar Curiosities, sending my monthly sales tax payment to Virginia literally took about 5 minutes, the cash register tracks it for you, you simply fill in the blanks... no complicated tax forms....

But let me say... Donald Trump would wear a hot pink dress on his 2020 campaign and Nancy Pelosi would kiss him square on the lips before we EVER came within a light years distance of passing a "fair tax".

Ain't gonna happen...
User avatar
moonshadow
Member Extraordinaire
 
Posts: 4198
Joined: Sun Aug 09, 2015 1:58 am
Location: Appalachian Mountains (VA)

Re: Well... the Jury is back....

Postby partlyscot » Sun Feb 03, 2019 5:39 am

I'm hopeless at tax stuff, but I just took a stab at estimating my 2018 tax rate, and came out around 18% which was roughly what I expected. I am but a humble retail serf, not Rockefeller, but for that segment, I'm in the top quarter I guess. Of course the only heath insurance is the supplemental one through work, for things like dental, vision, and prescription discounts. The major part is provided through the Province, and if necessary, would pay another 10% tax for that, rather than the system south of the border.
partlyscot
Member Extraordinaire
 
Posts: 686
Joined: Sun Dec 09, 2012 7:05 pm

Re: Well... the Jury is back....

Postby partlyscot » Sun Feb 03, 2019 5:45 am

"1) I'd like to see the ultra-wealthy pay their share
2) I'd like to see the elimination of the wage earners (income) tax. Replace it with a sales tax, and I'd like to see that tax structured in the manner I hear it is overseas, where as it's factored into the price of the product. "

These two statements are contradictory. The lowest earners spend a much higher proportion of their pay on necessities. They would end up paying a *higher* tax rate. How much can a billionaire spend on houses? Food? Clothing? Vacations can be spent anywhere, the taxes on those don't have to stay in the country of residence.
partlyscot
Member Extraordinaire
 
Posts: 686
Joined: Sun Dec 09, 2012 7:05 pm

Re: Well... the Jury is back....

Postby moonshadow » Sun Feb 03, 2019 6:16 am

partlyscot wrote:
moonshadow wrote:1) I'd like to see the ultra-wealthy pay their share
2) I'd like to see the elimination of the wage earners (income) tax. Replace it with a sales tax, and I'd like to see that tax structured in the manner I hear it is overseas, where as it's factored into the price of the product. "


These two statements are contradictory. The lowest earners spend a much higher proportion of their pay on necessities. They would end up paying a *higher* tax rate. How much can a billionaire spend on houses? Food? Clothing? Vacations can be spent anywhere, the taxes on those don't have to stay in the country of residence.


Not necessarily,

I don't know the ins and outs of the "fair tax" that was proposed in the mid 2000's. I was hot on that back in the day, but backed off when I was presented with the scary "what if" scenarios of those who oppose it...

Then I moved within a stones throw of Tennessee and observed how well managed the state is fiscally. They put Virginia and most other states I am aware of to shame.

Tennessee makes it work. So can the rest of the 49 and their fed.

I often wondered how this works, how can Tennessee pull all of this off with a sales tax that's just a few percentage points higher than Virginia's?

I learned the answer when I went to work for a contractor in Tennessee....

As it turns out that 9.5% applies to EEEEEVVEERRRYTHING! (except for income) Tennessee assesses a tax on services along with goods. A $3,000 repair bill from the company I work for, rendered in Tennessee will levy a $285 tax. The ultra rich going to put a new copper roof on their mansion? Install an indoor swimming pool? Gonna cost 'em....

Sure, the U.S. would have a hard time collecting on the occasional vacation in Europe, but then again, the common Joe won't be paying sales tax on yard sale items and other unregulated "off the books" transactions. The percentages would be similar across the board.

Also, lest we forget the tax on capital gains that Tennessee assesses. That tends to hit the wealthy in the groin.

Also, you can literally see the state line between Virginia and Tennessee. The Virginia side is riddled with poverty, small struggling towns, little jobs, little economic opportunity. Compared the the Tennessee side of the border where the cities are more developed, houses tend to be larger, ironically, rents are cheaper, and the general economic picture is brighter.

Tennessee also has NO toll roads.. period... and a free basic college system for residents.

Tired and true... it works. You've been listening to that elitist fear mongering... make no mistake a Tennessee system across the nation would cost the 1%.

While Virginia's governor moon walks, talks of hiking minimum wage, placing toll roads along I81 and increasing the sales tax AGAIN, Tennessee just keeps chugging along...

Bristol Tennessee: Recently boasted a massive shopping center, is in the process of a multimillion dollar investment to build a new four lane road from said shopping center to the race track. Most of the action in the Bristol area is on the Tennessee side, more businesses, more mom and pops, more restaurants.

Bristol Virginia: Is going bankrupt. (literally) They sunk their ship on the Falls project, the city has literally used up all of it's bond capability and is on the brink of going under due to struggling tax revenues, loss of industry, blightened residential areas, etc... [0]

But hey.. they've got a walmart...

[0] To be fair, this probably has less to do with any sales tax/income tax issues across state lines, and more to do with Virginia's moratorium on city expansion. Virginia cities, unlike elsewhere in the U.S. are independent from any county, and thus, have their own school systems and other constitutional offices. That in combination with the fact that Virginia is a dillon rule state has really hampered Bristol Virginia's ability to keep up with their Tennessee neighbor.

I haven't followed it lately, but if this Falls development project doesn't work out, I wouldn't be surprised if Bristol VA loses it's city charter, and possibly has to charter as a "town". Which would be interesting to follow as the story goes that Bristol and Washington County VA don't exactly see eye to eye.
User avatar
moonshadow
Member Extraordinaire
 
Posts: 4198
Joined: Sun Aug 09, 2015 1:58 am
Location: Appalachian Mountains (VA)

Re: Well... the Jury is back....

Postby alexthebird » Sun Feb 03, 2019 12:32 pm

We're in danger of getting way off topic but I agree with Partlyscot on sales taxes. Even if sales taxes were applied to services, the amount the ultra-wealthy spend on stuff and services is a much lower percentage than us ordinary folk. Even if you include their mansions and financial advisors and attorneys.

A way to even the playing field would be to figure out a way to shift the tax burden from income to wealth. It is tempting to focus on the folks with multi-million dollar incomes but some of those people are spending their income and helping to stimulate the economy. Others (and this is where I see the problem) are keeping their incomes and building huge piles of wealth for the purposes of who-knows-what. The tax structure on corporations and wealthy individuals ought to focus on how much is stockpiled, not how much goes in and out
User avatar
alexthebird
Active Member
 
Posts: 96
Joined: Mon Aug 08, 2005 12:37 pm
Location: Philadelphia USA

Re: Well... the Jury is back....

Postby crfriend » Sun Feb 03, 2019 1:58 pm

moonshadow wrote:My issue isn't with paying taxes. I live in this country, I enjoy the benefits that come with that, paved roads, law enforcement, fire protection, councils, court systems, clean running water, a dependable electric grid, libraries, parks, public forest, a reasonably stable economy with a basic safety net for the occasional downturns, the list goes on and on...

I have no problem with the concept of paying tax -- if I receive something tangible in exchange for it. The problem is that here I don't. The infrastructure is in danger of collapsing, roads and in dismal shape, the electric grid is in deep trouble, and let's not even start in on the thousands of miles of pipeline that carry toxic and flammable materials. Then there's the elephant in the room that nobody wants to talk about -- health care [0]. If the economy is in such great shape, why is the above true? Because there's no money available to actually get anything done with -- it's all tied up with gambling on Wall Street, primarily for the billionaire class. I am not above using taxation to release some of that money from hoarders so that society can get things done that need doing.

I earn a professional's salary, commensurate with the systems I work on and the fact that it's taken me a lifetime to acquire the knowledge I have that allows me to properly function in my job. I've actually got it pretty good -- and I'm a wage earner. However, the last time I added up my entire cross-section when it comes to taxation the percentage came to slightly north of 50%. That's right, I never even see slightly more than one half of what I earn. And what do I receive for that sum that's actually valuable to me? The National Weather Service, the GPS constellation, NASA, a badly-deteriorated Interstate Highway system, and a gummint in DC that's actively hostile to folks in my class whilst handing out freebies to billionaires and corporate conglomerates. The official tax rate for unearned income is 15% -- that's 35 points down from what I'm paying, so the billionaire class gets a vastly better deal than I do, and that's before they take advantage of assorted coded-in loopholes that allow them to reduce that by even more, in some instances to zero. There's a reason that the current inhabitant of 1600 Pennsylvania Avenue, Washington, DC refuses to release his tax returns -- he likely pays no tax at all thanks to a loophole that his daddy's accountants used for him decades ago after he gambled away most of his billion-dollar trust fund.
1) I'd like to see the ultra-wealthy pay their share
2) I'd like to see the elimination of the wage earners (income) tax. Replace it with a sales tax [..]

I agree on one, but strongly disagree on two. Point two is what the rich have been pushing for for years, and the reason that's the case is that it benefits them at the expense of the lower-earning classes. Recall that the lower-earning folks spend vastly more of their income as a percentage on basic necessities than the super-rich do, so that dramatically increases their tax liability as a percentage of their income. The super-rich won't even notice it as overall compared to income it's below the rounding error.

I'd like to see the Reagan-era inversion on rates between earned (wage) and unearned (you simply rake in the bucks and don't do anything active) income repealed. Then I'd like to see a return to a progressive rate scheme in which the lowest-earning folks pay what they can (and that's not much) while the billionaires pay what they can (which is a whole lot). In a fair system, I don't mind paying more in tax than someone who earns less than I do. Furthermore, the progression in rates on unearned income should be much steeper than that on earned income. The message here is that work should be rewarded and parasitic behaviour discouraged.

I'd also like to see inheritance taxes reinstated, with an exemption on the first million dollars. That sounds like a big pile of cash -- and it is -- but it would exempt better than 98% of the population of the country and still net billions in much-needed revenue.

If all this sounds quaint and nostalgic, perhaps it is. 70 years ago the system was vastly fairer than it is now, the super-rich carried their proper weight, the country was prosperous as a whole, and the rest of the world looked up to the US as a decent example of how to do things. Today, we see what the inversion in the tax-code has done: the country is bankrupt (and has been since the late '80s), the billionaires pay close to nothing in tax whilst the dwindling middle class loses 40+% right off the top, upward class mobility -- which was always poor here -- is now impossible, and downward class-mobility is the norm with hundreds of thousands falling from middle-class to underclass yearly, a one-way move.
But let me say... Donald Trump would wear a hot pink dress on his 2020 campaign and Nancy Pelosi would kiss him square on the lips [...]

Oh dear god, where's the bleach for my brain?!


[0] Even with my income, I have very little meaningful access to health care. If I get sick enough to require a doctor or, heaven forbid, get injured and have to go to hospital the financial hit will bankrupt me. Essentially, I've got nothing. So, for all the advanced technology and capability, effective access is zero. Oh, I've got "insurance" all right, but the deductibles, exclusions, and limitation make it essentially worthless -- out of pocket tax with no benefit.
Retrocomputing -- It's not just a job, it's an adventure!
User avatar
crfriend
Master Barista
 
Posts: 10503
Joined: Fri Nov 19, 2004 9:52 pm
Location: New England (U.S.)

Re: Well... the Jury is back....

Postby oldsalt1 » Sun Feb 03, 2019 3:12 pm

Just a couple of points. The theory of running countries on say a sales tax, In Europe this is in the form of a value added tax it doesn't work and most of the major European countries who use this method are an the verge of going bankrupt.

It seems to be the general consensus to blame the republicans for the taxes which favor the rich.. There is a lot of talk of reintroducing inheritance taxes.

some say as high as 40% . Now Nancy Pelosi 's estimated net worth is 100 million and Fienstein is worth in excess of 68 million These are some of the most influential Democrats. do you honestly believe that they would support tax laws that would cost their estates 40 and 30 million respectively
User avatar
oldsalt1
Member Extraordinaire
 
Posts: 2019
Joined: Sat Jul 09, 2016 8:25 pm
Location: Long Island, New York

Re: Well... the Jury is back....

Postby crfriend » Sun Feb 03, 2019 5:01 pm

oldsalt1 wrote:Just a couple of points. The theory of running countries on say a sales tax, In Europe this is in the form of a value added tax it doesn't work and most of the major European countries who use this method are an the verge of going bankrupt.

Virtually all developed countries use a blend of sales/VAT and income taxes, so the notion that they're trying to run on the VAT alone is specious; it'd be impossible. Also, taxpayers in those countries expect something in return for those tax payments -- and, unlike the US, receive something. Of note, is that alone amongst "developed nations" only the United States lacks a meaningful health care system -- and those cost money. Real money. It's also money well spent because it increases competitive advantage.

Tax evasion in Europe, of course, is a problem, but it's pretty much confined confined to the very top of the economic elite, just as it is here in the US.
It seems to be the general consensus to blame the republicans for the taxes which favor the rich.

This has been the case for decades, and it not by any means a new phenomenon. That said, in the new order, "both sides" are equally guilty of that because "both sides", when it comes to operational performance, function as one team on matters pertaining to the super-rich (aka "oligarchs").
There is a lot of talk of reintroducing inheritance taxes. some say as high as 40% .

I could support that. After an initial exemption that would allow, say, the transfer of a modest some to one's heirs (e.g. $10e6) the tax rate might be progressive starting at 25% and reaching into the 70s by the time $1e9 is reached. Using tax code to shape the way a society thinks and works is an acceptable tactic.
Now Nancy Pelosi 's estimated net worth is 100 million and Fienstein is worth in excess of 68 million These are some of the most influential Democrats. do you honestly believe that they would support tax laws that would cost their estates 40 and 30 million respectively

Absolutely not. Whilst they're both at least an order of magnitude "down" from the oligarch class, they'll not willingly give up one penny on it. "Greed is good. Greed works." They're also beholden to their masters who also refuse to part with a single penny in spite of having hundreds of billions of them (100e9 at a minimum).

So, no, I see nothing changing until the whole thing implodes -- likely in under 20 years or sooner if the US "acts up" (or out) on the world stage.
Retrocomputing -- It's not just a job, it's an adventure!
User avatar
crfriend
Master Barista
 
Posts: 10503
Joined: Fri Nov 19, 2004 9:52 pm
Location: New England (U.S.)

Re: Well... the Jury is back....

Postby moonshadow » Sun Feb 03, 2019 5:54 pm

Good discussion guys.

You all make some thought provoking points.

NOTE: I'm coming back to the top of this comment after realizing I have just wrote a freaking "book" below... :oops: One thing I want to point out guys, is I'm not "preaching". I'm NOT an economist, and if I were so good then I'd certainly be doing a little better for myself financially for sure.... and I certainly wouldn't rely on turbo tax to do my taxes... I could do them myself.. for free.

... I'm just kicking around ideas and "shooting the bull" is all. Just passing the day whilst I'm on call with nothing better to do... Feel free to let your thoughts be known even if you differ in opinion! Just be polite and don't call me an idiot (why tell me things I already know after all! :wink: )

Carl, your comments are very thoughtful and I'll admit had me doubling back and doing a little research on my phone, Dan, I'm very glad you've chosen to participate too, I was eager to hear the thought of someone who I assume is a politically conservative accountant on this. I'm also curious as to what Dave's thoughts would be, as he too is an accountant on the other side of the political aisle.

As for me, I'm a mathematical flunkie who turns wrenches for a living, and survives off of whatever crumbs fall from the table. I am.. basically THE Trump demographic. But I pride myself in that I don't allow myself to be spoonfed anything... so by all means, let the (my) thoughts be provoked!

crfriend wrote:I'd like to see the Reagan-era inversion on rates between earned (wage) and unearned (you simply rake in the bucks and don't do anything active) income repealed. Then I'd like to see a return to a progressive rate scheme in which the lowest-earning folks pay what they can (and that's not much) while the billionaires pay what they can (which is a whole lot). In a fair system, I don't mind paying more in tax than someone who earns less than I do. Furthermore, the progression in rates on unearned income should be much steeper than that on earned income. The message here is that work should be rewarded and parasitic behaviour discouraged.

I'd also like to see inheritance taxes reinstated, with an exemption on the first million dollars. That sounds like a big pile of cash -- and it is -- but it would exempt better than 98% of the population of the country and still net billions in much-needed revenue.


This too, seems reasonable. My question though would be, what do you say to those who would argue that such a tax plan would hinder investment?

I think part of the reason we're in the mess we're in is the current tax system was pitched to "the people" under the notion that freeing up the tax burden on the ultra wealthy would in turn increase investment, which in turns trickles down to the common Joe. The going joke these days is that that isn't money tricking down from up top... it's sh.... So I can't argue that the current system is flawed. Perhaps a return to a time you describe would be better for people around my income bracket. I wouldn't know, as I wasn't alive during the "economic zenith" of our nation to attest to any actual standard of living. I know from stories from my parents, times seemed just as hard (if not harder) as they are now.

The national sales tax is an interesting idea, though I certainly see you all's point. There are also some other issues that would need to be worked out. Some say the national sales tax rate would have to be as high as 30% assuming we did away with the income tax. Couple that with the various state sales taxes and we some people could be paying as high as 40-45% on sales transactions. To combat this, some have suggested giving everyone "a check" each month to offset the tax amount up to the poverty point.

Frankly, such a notion to me seems shaky and just a tad bit silly, but hey, we're just kicking around ideas. Another idea might be to not tax, or reduce the tax rates on essentials such as grocery items. No tax on medicine and reduced rates on other necessities such as tampons, toilet paper, toothpaste, etc.

The other issue with the national retail sales tax that I wasn't aware of years ago, is that I'm not convinced it would be constitutional without an amendment. Though even without an amendment, my understanding is the fed can tax at the wholesale level between states. With the level of interstate commerce that takes place in the U.S. today, even it might be a workable option. Before a Chevy leaves Michigan, a 30% tariff is levied. Those outside of Michigan just see it as part of the cost of owning a car built in Detroit. But it goes deeper than that. How many of the parts to build that car came from other states... even from other countries?

We're seeing this play out to an extent with Trumps trade standoff with China. I've heard criticism from both sides of the aisle on this one. The more liberal minded look at Trumps tariffs with China as a tax on the poor (as virtually everything the average American consumer buys comes from China), then the Republican minded object as basically for the last thirty years they have built mass fortunes on cheap imports that are now in jeopardy. One of Sam Walton's pitches was to improve the life of the middle class by outsourcing the lowest cost goods. It seemed to work well until the "bill came due", and we had to contend with thousands of shuttered manufacturing facilities across the nation.

It's for this reason, I don't blame the companies that outsourced (the capitalist), nor do I blame the government for letting it happen. Most of THAT blame falls squarely on US. I recall a time growing up when you could purchase an American made hammer for say $10, but the one made in China was only $9.25. We had a choice, we chose the Chinese products. We made our choice to maximize our personal "profit", just as the company who built it made a choice to maximize their profits. The government simply allowed both sides to do what they wanted and the result is what we have now, a "service economy".

That's why I've generally favored Trump's tariff plans. Something had to be done, obviously we're not going to fix this ourselves.

So perhaps instead of a federal "retail sales tax", the fed can simply invoke their constitutional authority to levy "tariffs" (aka "value added taxes") on interstate commerce. I understand such a tax structure was very much lacking 150 years ago, but this isn't the same America now as it was then. Our economy is much more integrated and diverse than it was. The federal government could derive it's money from interstate commerce, and the individual states from intrastate. Also, the last time the federal government had to grapple with the limited taxation authority of tariffs and interstate commerce, much of the productivity of the U.S. was produced via slave (actual slave) labor. Slaves generally don't make "living wages", many hardly any money at all, thus there wasn't really anything of value to tax. These days, everyone receives some kind of money, thus more transactions are taking place. More transactions = more opportunities to tax. The life of the African slaves, in addition to the common (non wealthy) white people was downright dismal during those times. Generally speaking, everybody is doing better 150 years later, so why not take another stab at the VAT interstate tax and see how it flies?

Of course, no tax plan will work until we do something about the gluttonous spending that is taking place. Now I'm not talking about cutting welfare, shutting down national parks, shutting down schools, slashing government worker pay, cutting benefits, and all the other nasties that dominate the air waves when we start talking about cutting spending.

There is a lot of "fat" in government budgets that could be trimmed with a little common sense. I've spoken to countless government directors, managers, and even ordinary rank and file government employees who almost universally admit that their employer (the government) waste money hand over fist. On more than one occasion, I hear remarks like "we had X amount left over in the budget, so we were instructed to basically blow it all". This is when you see government agencies come up with all kinds of exotic extras that leaves the American tax payer thinking... 'WTF".... The reason for this is simple, if they don't spend it, they won't get it the following year.

I've seen this play out in mild winters where the local governments literally throw salt on rainy roads (above freezing) in April because if they don't use it, they lose it in the budget for next year. I have literally heard the town manager of Pulaski Virginia (years ago) state "we have to find some use for this money or we run the risk of losing future funding".

A councilman asked: "can't we put this in the reserve fund for a rainy day?"

He responds: "No sir, under the terms of said funding, that is not allowed, it was allocated for this purpose, and must be used as such".

These things happen, and they happen a lot. A private business would use any budget surpluses for expansion, hiring, innovation, research, etc etc... but government just blows it on fluff so they don't run the risk of losing their funding.

Shifting to a pre-16th amendment government would also mean placing most of the burden of what the fed provides directly to the states. It would likely be up to the states to completely fund their own social programs, unemployment, schools, SNAP (food stamps), land use, roads, and constitutional offices. Some would argue that the states already do this. This is true, to an extent, but they do not fund 100% of the services. Most of the funding comes in the form of federal assistance (e.g. grants and other various means) to the states.

This is how the fed can enforce certain civil and social agendas that on the surface would seem to constitutionally fall to the states to decide. I witnessed this play out with the "bathroom bills" that were being kicked around under the Obama administration. A state doesn't bend to the fed's will? Then they lose their federal funding. So, if we move towards a more pre-16th amendment form of government in the U.S. we also have to figure a way to ensure that each and every individual has the same equal basic right, and protect everyone's civil liberties.

I earn a professional's salary, commensurate with the systems I work on and the fact that it's taken me a lifetime to acquire the knowledge I have that allows me to properly function in my job. I've actually got it pretty good -- and I'm a wage earner. However, the last time I added up my entire cross-section when it comes to taxation the percentage came to slightly north of 50%. That's right, I never even see slightly more than one half of what I earn. And what do I receive for that sum that's actually valuable to me? The National Weather Service, the GPS constellation, NASA, a badly-deteriorated Interstate Highway system,...


There is a complicated dynamic that's taking place in "high end" and otherwise "fiscally liberal minded" states, such as those found in New England and the west coast particularly. I thought that Virginia may be on a runaway train down that path for a moment there, but it seems our governor bit off more than he could chew with the abortion comment, and showing up as a "blackface" certainly didn't help matters, I believe these things may have put a bit of a leash on our "runaway liberalism" for now. But I believe were were within just a couple senate (21/19) votes. If we had had just two more Democrats serving, in three years time I would be effectively making minimum wage all over again... Talk about everything you worked for being flushed away with the stroke of a pen!

Increasing the minimum wage would increase income tax revenues. (when I made less than $10 per hour, my income tax was effectively zero percent), however you get close to the $15 mark, and you find that your refunds are lower. Amber and I have about $40k gap between our incomes, yet we both received about the same refund back on taxes. She got everything back, I got back about a third of what I paid in, and it would have been 20% less had I not had a 401k (you get a tax credit for that). Also $15 per hour means you make too much to qualify for assistance in many cases. Also, raising the minimum wage does nothing to stop the cost of good and services from increasing. The REAL winner of minimum wage hikes are the "one percent". They just increase their prices and the money coming in multiplies. Those who actually make the minimum wage find that their buying power remains unchanged, people in my situation, who make a little better than the old minimum find their cost of living skyrocketed without any cost of living adjustment on their behalf, and basically we (the low end of the middle class, $35k-$60k per year) struggle the most.

It's coming, and that's why I told Jenn we need to get locked into a fix rate housing situation ASAP. Right now, the average rent in the area is around $500-$700 per month. (I've seen it as low as $250 in some areas) With that kind of min wage hike, I expect rents to double alongside. Housing is a big chunk of most low middle class budgets. I locked mine in at $465 for 13 1/2 more years (it's paid off after that point). There is nothing I can do about doubling utility bills, groceries, and other essentials. But I can tell you I probably won't be making many impulse buys.

There is something out of control with states like the one you live in Carl. I can't put my finger on it because I don't live there and "breathe the air" you breathe, but there is no logical reason why any government that taxes to the amount yours and others like yours do should have a crumbling infrastructure. The streets outta be paved in gold for that price! Where is the money going? (I'm eager to hear your thoughts on this)

Something is fishy there, and it's not the ocean.... I figure I know about what a "seasoned professional" would bring up there, and I can say that with that kind of money, in a more fiscally conservative state, you'd not be living in an apartment. No sir! (unless you just wanted to). You'd likely have a nice house somewhere near one of the lakes, or within close proximity to one, a nice daily driver car (under a few years old), and a few "toys" in YOUR (not the landlords) garage(s) to tinker with. Granted you'd be at your liberty to live as frugally as you want, but you'd literally be making more money than you'd know what to do with...

You would probably have to wear pants to work though.. :blue: The conservatism that rules the state and local governments down here generally doesn't stop at fiscal responsibility, which is where I DRAW THE LINE, rather it creeps right down into the fabric of the type of person you're allowed to be. Why can't we have fiscal responsibility AND civil liberty? *shurgs*... ?

Also, I realize that my support of a federal sales tax, or even it's more constitutional interstate tariff(s) also hinges on my own personal lifestyle. I very seldom make a non-grocery impulse buy (such as a TV, stereo, car, grills, appliances, furniture, etc. Most of what I buy are day to day "little things". That's just my lifestyle. Every time I walk into a Sams Club to do work, someone is trying to sell me a cell phone, a TV, or a satellite plan. My 4 year old phone works fine, my one TV is sufficient for what I use it for, and I don't need to be brainwashed by subscription TV service. Hell, I don't even have a Sam's Club membership anyway. I would be that guy who takes his untaxed earnings and finds some means to invest it in something that might pay dividends down the road. But I'll be the first to admit, I'm not very typical in lifestyle. I loathe the idea of being called a "consumer" and personally find it insulting. Viruses "consume". The enlightened man leaves the world a little better when he leaves it behind.

oldsalt1 wrote:Just a couple of points. The theory of running countries on say a sales tax, In Europe this is in the form of a value added tax it doesn't work and most of the major European countries who use this method are an the verge of going bankrupt.


One could argue, the U.S. is also in the brink of financial bankruptcy. So what's the solution then? Are we just doomed to failure?

It seems to be the general consensus to blame the republicans for the taxes which favor the rich..


I generally blame lobbyist for the most part. Special interest groups funding by... the rich and powerful... that buy politicians off. Politicians from both sides have fallen to this. The health industry (I REFUSE to call it "healthcare") is a shining example of this. Truth be known, most Democrats who are actually in power do not favor any for of health care reform that would actually benefit the working class. They always talk the talk, but when the rubber meets the road, they know it will never happen, so the use it to score votes. It's similar to how those on the other side of the aisle play up the "Christian" card to score votes.

Back to you...

(this is fun, and quite enlightening I might add)
User avatar
moonshadow
Member Extraordinaire
 
Posts: 4198
Joined: Sun Aug 09, 2015 1:58 am
Location: Appalachian Mountains (VA)

Re: Well... the Jury is back....

Postby MoonsWifeJenn » Sun Feb 03, 2019 6:05 pm

I feel I’m back in high school and have to read a few pages before a test. You should be a book writer Moon :lol:
❤️Being deeply loved by someone gives you strength, while loving someone deeply gives you courage❤️
MoonsWifeJenn
Member
 
Posts: 25
Joined: Fri Jan 25, 2019 1:56 am
Location: Lebanon, Virginia

Next

Return to Off Topic

Who is online

Users browsing this forum: No registered users and 1 guest