What is your opinion on taxes?

I’m currently outraged that our tax code allows a corporation with a $14.2 billion dollar profit to pay no taxes.

There’s nothing wrong with paying taxes, of course, but it also seems the money isn’t being handled very well (although I do not know much about misappropriation, this is just my opinion).

I don’t mind paying my share, but taxes are ridiculously high. I’m left with just enough to buy a wallet but would be left with nothing to put in it for it to be of any use. Talk about a real life Gift of the Magi. OK, slight exaggeration but the point is made. SLIGHT exaggeration.

I believe it makes more sense to tax consumption rather than productivity. I believe that moving to a national at the register sales tax would solve much of what is broken in our current system.

Alas, work calls so I don’t have time to ramble on about it at the moment.

I definitely think taxes are neccessary, but they are entirely too high.

The larger the country the more necessary bigger government and higher taxes becomes. I am not happy with all of the loopholes that allow the rich in America to pay much lower taxes than the middle class.

I prefer a combination of sales and income taxes, with no sales tax on food. I am not sure how I feel about property taxes.

I want federal taxes to pay for public schools, medical coverage, interstate roads, social security, research, and more.

State and local taxes for police, fire, local roads, and there is more I ammnot listing.

I’m with YoBob, consumption taxes are better than income taxes. It evens out the treatment of things like giving to charity etc. If you earn and want to give away, then few taxes are payable but if you give it to charities that consume too much resources to get their message across then society recovers the costs in the end anyway. Sometimes charities get away with too much in order to subject their message to the rest of us that don’t give a hoot. Make them pay!

Simply just a revenue generating device for a country to uphold its operations. The sad thing about it is that it temps the people in power to tap into the funds and steal it away from the people who deserves it.

@YoBob Having only a consumption tax will result in the rich paying much less tax as a percentage of their wealth then the middle class, and negatively impacts the economy. Ridiculously lower. I don’t know how much money you make, but let’s say it is $100k. Asssuming a sales tax of 20%, are you really ok with paying say $20k in taxes and the guy making $500k paying $60k? You have spent $100k, no savings, and you pay 20% taxes in this example if we look at income; and the other guy spends $300k, he pays 12% on his total income, and has $200k left in the bank. Why not let evryone pay 15% income tax? You have $5k to put in the bank, and Mr. $500k pays $75k in taxes. The government gets $10k more, and it barely affected the richer guy, and the less rich guy has some money for the future, or can do more spending, which helps the economy. The lower tax rate does not cause the richer individual to spend more. Having savings at the end of the year of $200k or $185k is inconsequential, and he already bought everything he wants.

@YoBob @Tocon_Tactus In theory a consumption (sales) tax is a great and fair idea.

In practice it wouldn’t produce enough funds to pave the roads or give our troops guns unfortunately.

The tax code could use some work, but when in our history has that not been the case? Its an ever-evolving beast and frankly it needs to be.

In the USA I think it’s crap that the IRS puts statutes of limitations on returns but makes none for dues. I also think it’s crap that 1099 money is taxed so much higher than W-2 wages- the part that is determined to be income after the percentage has been figured for the social pot. Ergh.

@Neizvestnaya What do you mean none for dues? I thought the IRS can only go back 5 years?

@Neizvestnaya Also, 1099 wages are taxed higher because you pay the full social security. W2 wages the employer pays half of SS.

@tedd – not having money to give the troops guns sounds appealing, actually. The thing is to tier consumption taxes based on the items being consumed. I’d expect a yacht to have a high tax levy and a loaf of bread to have none. So, I’m not advocating a flat-rate consumption tax, I’m just saying that taxes should be focussed towards the spender, not the receiver, of the money.

@Tocon_Tactus I wonder if you would comment on my question and example I wrote to @YoBob? Your way the superwealthy can wind up easily only paying a few percentage points on income, while the lower and middle class pays very high percentages. The top 400 income earners in the US pay an average of 17% tax on income, while the middle class pays much higher.

@Tocon_Tactus This would be great if yachts were selling by the hundreds or thousands. One yacht sale at a couple million dollars, even with a huge tax rate, probably doesn’t make up the income tax difference.

I don’t mind taxes as it is necessary for governments to run. What bothers the hell out of me is how that spend these dollars I give them. It pisses me off to no end too.

I would pay more for a viable national health care system. I wish more went toward road maintenance and infrastructure (like bridges).

@JLeslie – “Having only a consumption tax will result in the rich paying much less tax as a percentage of their wealth then the middle class”

That is completely ridiculous for the simple reason that “rich” people spend more because they have more disposable income to do so. Folks with less income are not going to purchase BMWs, Jet Skis, and fancy jewelry. Additionally, it doesn’t matter if you make your money teaching school or selling crack cocaine, when you make any purchase you pay your taxes just like everyone else. In other words, it also has the side effect of eliminating the underground tax free economy.

There should, of course, be a generous tax free allowance on consumption (I suggest something in the form of a debit like card that gives a fixed amount to purchase tax free) any spending below that amount pay ZERO in taxes, and if you spend above that amount you are officially above the poverty line and pay taxes just like everyone else.

I really wish I had more time to elaborate today. However, I must tend to that job thing…

I always wonder what salary, and how much wealth people are thinking about when they talk about the rich, and taxing or not taxing the rich? $300k? $1million? $30million? $200million?

@tedd and @JLeslie – You’re not thinking sufficiently out of the box on this one. Determine the tax required, and construct a consumption tax regime appropriate to that tax take. Don’t see what the problem is. Maybe the yacht/bread example is tricky for you. How about an orange juice/wine/tobacco ratio then? I’m not suggested a tinkering around the edges here, I’m suggesting wholesale reform.

Think about moving to a cashless society for example. All liquidity is then held in legitimate and accountable bank accounts. Apply a negative interest rate and you immediately hit high earners according to their assets. Hold on to the liquidity and it is slowly eroded, spend it and you will be hit on the things that you might want to hold as assets (houses, land, precious metals etc). If you spent $1B on bread then no tax would be payable, but how much bread can you eat before it is worthless?

@YoBob No, you are ridiculous if you think someone who makes $25 million a year is spending all of their money. But, the average guy is spending almost everything just to get by. My household income is double what it was 15 years ago, and we only spend about 20% more probably. And, I am not close to what I would consider rich.

@tocon_Tactus I have three Porsches in my garage, travel, no mortgage, no debt blah, blah. Sure, making more money in the last 10 or 15 years meant I increased my spending, but it mega increased my savings also. Do you know rich people? Why do you think they spend all of their money? One yacht at $1 million (I actually have no idea how much a small yacht costs) is the same as 50 middle class people having an extra $20k to spend, and the middle class is more likely to actually spend it, AND anyone who pays a $1million on a yacht is not spending their last dime when they buy it. There is a threshold where more money does not get put back into he economy.

@JLeslie As you pointed out, those few folks making $25 million a year are already paying less in percentage because they are able to position themselves to use the laws to their advantage. With a flat tax, there is not room for positioning, either you consume goods and services or you don’t, and what’s the point of going to the trouble of making $25 million if you don’t eventually spend a good chunk of it.

I too could stand some extra real income in my pocket. However, when I filed my taxes recently I noticed that a hell of a lot of what I make is garnished from my wages. I would welcome the opportunity to control my taxes by governing my spending rather than running the risk of them going up should I (gasp) be motivated enough to generate a bit of additional income.

@YoBob This is why I prefer a combination income and sales tax. I also prefer the income tax to be flat, with an exception for the very poor to pay very little if not nothing in income tax. How about everyone pay 17% and some sales tax? Without needing a fancy accountant to work the system. I’m telling you most people who make less than $100k whose parents made less, who also might not have higher educations, and who are not in the circles of people who are able to take advantage of tax write offs and loopholes, not able to overhear the converstions, have no real clue how much tax money is “dodged” by the people who do have more money.

@YoBob By the way that IRS 17% stat was for the top 400 earners, they make over $200 million a year. I can find the article if you are interested.

The people making the most money in our country are dependent on the government to pave the roads their materials ship on. The schools to educate their workers, right down to the lowly janitor. The workers who are living paycheck to paycheck need fall backs and social security.

The wealthiest 0.05% of the people in this country own over half of the total wealth. Frankly I think paying a larger chunk of their fortune and yet still being incredibly god damned rich is a fair price to pay.

It is one of the reasons I chose to live in NH.
No State Income or Sales Tax.

Live Free or Die

Actually, I rather like the way they do it in Texas. Sales tax, no income tax. Seems to have worked remarkably well for a rather long time.

I want to say that I am all for Capitalism and people being aBle to make money, and I am not looking to stick the wealthy with a much higher tax percentage, what upsets me is an overall lower tax percentage for the wealthy. If I had my way the earnings would be a little more level and just also, because what created the incredible prosperity and wealth in America is how large our middle class is, was, and that is at least partly because during the latter part of the 20th century in America the average guy could afford to live, and have some discretionary income. Saying we want the rich to hold onto their money so they will invest, makes so the avwrage guy has a hard time having his own business, the rich begin to own everything, and it is ike a plague, once it takes hold in big enough numbers, it is hard to eradicate. The model of very rich, and the rest of the country at the bottom, is the third world, if that is what people want to go towards have at it. But, I guess that is a different topic.

@JLeslie: It annoys me the IRS will only go back 5 years to return overpayments or at least credit a person toward future taxes due. They have no problem going back more than 5 years with all the info if you owe.

@Neizvestnaya I thought it was 5 years period. Either way? I was under the impression its ok to throw out my tax returns from over 5 years ago.

Or, if we go to an at the register sales tax there would be no individual tax returns for you to worry about at all and individuals would no longer have to live in fear that the IRS might decide to hit you with their equivalent of a full body cavity search.

@YoBob It’s so regressive. Are you going to exclude food? Maybe you said above and I don’t remember.

@JLeslie – I contend that not only is it not regressive it also has many benificial side effects like the elimination of yearly tax returns for individuals, the underground economy is driven to the surface, it encourages saving, and it doesn’t penalize individuals for figuring out ways to bring in additional income.

Yes, food an housing should be exempt. Further, as mentioned above, each citizen should be given a generous yearly tax free allowance (in the form of a debit-like card). If they do not spend anything above that amount they pay ZERO in taxes. Anything above that amount, then they are officially above the poverty line and will pay the sales tax for additional purchases.

Why is this not regressive? Because if you are making $20K a year, unless you are selling crack on the side you are likely not going to have enough discretionary funds to purchase anything above the tax free limit. If you are making $80K a year you are likely to be spending most of it on a comfy, but not lavish, lifestyle and will pay the tax on anything above the poverty limit. If you are making $1Mil a year, you will be paying taxes on your yacht, sports car, the jewelry for your trophy wife, etc… Further even if you don’t blow through your million dollar income, eventually you will retire and will still wind up spending it all up before you die, and if you don’t your heirs are likely to do it for you, so in the end it turns out to be fully taxed.

I do find it really scary and a bit disturbing that there are some who believe that the government could determine that you have too much money and demand you hand some more over to them. And so many wonder why there are those like me who will take their side jobs, tips, gambling winnings, and other non-employer form of income and not tell Uncle Sam about it. Why should I? So they could say “Hey you!! Way too much, so hand some over, NOW!!!!” Seems some have a LOT of growing up to do and a lot of education to get —the real kind you get when you leave school, that is.

@YoBob Ok, that is reasonablish. But, I think in the end you are going to wind up with a lot less taxes collected, unless the sales tax rate is very very high. No matter how much people complain about fed income tax right now, it is rather low, I doubt that number can be squeezed lower. Even if we got better with the budget, the economy picked up, and we trimmed some of the waste in the government, we might get back to not having a deficit, and not owing China and others, but I don’t see us having a surplus of money any time soon. So, we have to get the money from somewhere is my point. I think we need some tricky stuff for Americans not to freak out, not they there is not a select group of Americans who are always freaking out about taxes no matter. Hell, I have right wing friends bitching Obama raised taxes on the, and there tax bracket was lower in 2010 then 2009. Most people have no idea how much federal income taxes they pay in my experience. Just the idea that people think it is a windfall when they get money back at the end of the year is annoying to me. Especially annoying back when interest rates were fairly high on our savings accounts.

So back to being tricky. I sometimes think the game has to be played. Tell people they will get a tax break for having a mortgage, and they are more likely to buy a house and employ mortgage brokers, and keep the money flowing. Take money from the average guys check, so he feels it less than a lump sum every quarter that he wold have to physically sit down and write a check (of course many self employed do just that). 23% tax braket, but we give you exemptions, it’s like a sale at a store, supposed to feel good about what you saved, rather than thinking about what you spent.

Maybe the American public needs the psychological game?

The type of 1099 income I’m referring to is when you’re paid by a business to be on call and they keep you on 1099’s in order not to have to pay taxes, leaving you to pick up the whole tab even though you’re not really in business for yourself.

@Neizvestnaya That is self employed.

@JLeslie: I got audited because my last two years show more income with 1099’s than with W-2’s. The IRS told me this has been a tactic of employers in hard times to be able to lay off employees and then still call them back without the hassles of regular payroll.

For me there was no choice though. Laid off with over 200 others and for exactly 12mos, I couldn’t have made it by what unemployment would have paid me so I took as much “on-call” as possible until being rehired to official payroll again.

I don’t mind paying taxes. I figure I earned it so I should pay my fair share. However, like @syz I object to those with plenty of money to circumnavigate the system avoiding paying their share.

In the USA it’s time for one of them thar revolutions!!!!

TL;DR

As a concept, I have no issues with taxes. I like my roads. I like the fact that the richest nation on Earth will take care of those who are down on their luck and at least make sure they don’t starve to death like many do in Africa. I like kids getting an education.

However, the system we have now is completely fucked up. We have to jack corporate taxes high enough to scare many companies into moving abroad while many multi-billion-dollar companies pay zero taxes. Warren Buffet pays a far smaller percentage of his eight-figure income in taxes than those who earn only six-figures. A fact that he speaks about often, and why he is one of the biggest supporters of taxing the rich. We are willing to spend over a trillion dollars on a stalemate in Iraq and Afghanistan, but we won’t pay for preventative healthcare that would, in the long term cost far less than it saves.

So my opinion of taxes is highly dependent on the context.

@JLeslie, Last time I checked (which has been a few years ago) a sales tax of around 10%, excluding food and housing, would yield as much revenue as is currently collected by the IRS in income tax.

I don’t mind paying taxes, since I don’t expect something for nothing, but I work hard for my money, and I wish the government was as careful spending my money as I have to be.

@robdamel so I’m interested in your take on Brazil`s tax absurdities. ;)

@bkcunningham

Alright, lets get started with a bomber- 27.5% income tax for salaries above 3k a month. Did you get that? 27.5%. Yeah, i`m not joking, to me thats reason enough to sit outside the president`s house until his soldiers shoot me. Below 3k drops to 22%, and below 1.8k or something like that is between 8–15%.

• All non-residents are subject to a flat 27.5% tax on all income earned in Brazil

Consider minimum salary in Brazil is 564 reais for the next one.

Tax IPVA – vehicle tax. All cars that are under 20 years of age are taxed yearly. It doesn`t matter if it is fully paid, if you never drove it, or if it simply sits in your garage. Now the amount is DIRECTLY dependent on the car model, the car year, and the car market value.
Lets take a brand new, basic 2011 Volkswagen Fox, which costs 38k (in Europe it costs 7k, cars are insanely expensive here). Yearly IPVA tax on this car would exceed 3000. Thats 5 minimum salaries yearly to have one of the most common cars in the country. BMW? Mercedes? 8–20k yearly. Porsche? Ferrari? 40k+.

Want to open a business in Brazil? Employers pay 37.3% in tax of the gross salary of the employee—consisting of 28.8% for social security and 8.5% for a severance fund.

Resources for proof? -
http://www.brazil-help.com/taxes.htm

Gosh, and the worst of it all- a few months ago a politician was complaining that his salary of 23k a month was too small to have to attend so many cocktail parties. (Those were literally his words.) So what happens? He and a group of other politicians raise their own salary to 44k a month. Thats right, with public money. This was on the news, and the politician has the balls to say it during an interview with a face like ‘poor me’.

The problem with Brazil is that people just dont give a fudge. The higher class screws everyone else over, and people just shrug their shoulders and say, ‘thats life.’

As a matter of fact, this entire scenario of the higher class screwing over the lower? That is life.

Taxes charged to billionaires is chump change. Even at 90%.

Taxes are too high for the working poor, and the middle class.
They’re just about right for multi millionaires.
And they’re WAY too low for billionaires.

@Neizvestnaya Right. The employer does not have to worry about any laws regarding “firing” you if he decides he does not need your help any more. Or, complaints if he cannot give you 4 hours work a week. And, the employer does not have to give you any benefits, which he might be offering to regular employees. You are still self employed, no matter why the employer prefers that set up. I prefer that set up as an employee, because it generally gives me more flexibility, but I have health insurance through my husband, and I don’t have to work financially

@YoBob Lets’ say 10% is right, which sounds low to me, but I am willing to go with it as an example. That means in my state the sales tax would be 19.25% I think people would have more trouble with that than having money taken from their pay checks and paying 9.25% sales tax. Just my guess. What do you think? Oh, and here food is taxed, groceries, which I find disgusting, but that is here, I know if you were King you would get rid of that. Funny, when someone’s check is directed deposited, I think most people just see the amount in their bank account, but when you buy something for $100, but you have to hand over $119.25 at point of sale, I think people would bitch more. I think in England the VAT is included in the price, if I remember correctly, to get over this psychological hump I guess.

Taxes save lives.

Taxes increase our well-being.

Taxes treat our grandchildren fairly, while more debt doesn’t.

@JLeslie – True, your sales tax would be 19.25%. However, the money that comes in from your pay check would also be proportionally increased as well because you would not be forking over your <whatever bracket you are in>% to the IRS, plus, let’s not forget the tax free spending allowance.

As for wage garnishment, I think it the current system is a bit disingenuous. It has the effect of making people unaware of just how much they are paying in taxes because they never get to see that money. I would much rather everyone pay their taxes directly. Perhaps it would make everyone a bit more willing to ask our elected officials how they are spending our money.

@YoBob Yeah, but many people are dumb. Disingenuous, using your word, is done on purpose I’m thinking. The psychology matters I think for a large part of the population. Plus, America’s gig for many many years, especially from the republican side has been to encourage spending to move the economy. If the sales tax is higher, I think it might discourage spending. So the very people really behind putting more money in your pocket, might create an environment where people buy less things. Of course, there is no way to know for sure unless it is tried out I guess.

I personally think the UK has income tax about right at the moment with the exception of the (supposedly temporary) Additional Rate. I understand why it has been implemented but if it turns out it isn’t temporary then I think it will be a mistake. I’ll give everyone a summary in case they are not familiar, and I’ll go with the rates applicable from 6th April 2011 as that is the start of the new Tax Year.

Everyone gets a personal allowance of £7,475 (i.e. you can earn upto that amount in a year and not have to pay any income tax)

Next you pay the Basic Rate on anything earned upto £35,000 which is 20%

Then you pay the Higher rate on anything earned between £35,001—£150,000 which is 40%

Then you pay the Additional Rate on anything earned above £150,000 which is 50% (hopefully this will be temporary)

Value Added Tax went up from 17.5% to 20% on the 4th January 2011, I think it’s known as Sales Tax in the US. There are a lot of things that are VAT exempt though from most foods to children’s clothes. Basically it is not meant to be charged on necessities and only on luxuries (although women’s sanitary products, tampons etc are VAT chargeable and I’ve never understood that). At the height of the recession VAT was dropped to 15% to try and stimulate the economy and I would like to see it return to it’s traditional 17.5% in the next couple of years.

I won’t go into Capital Gains Tax, Inheritance Tax, Corporation Tax, National Insurance and Stamp Duty as the above is pretty much what effects your average Joe on a day to day basis so to speak.

I think with the exceptions I mentioned that the tax rates are pretty right, what’s the saying? “Those with the broadest shoulders should carry the heaviest weight”. It’s something I in general agree with. I’d like to hear others thought on the UK tax system, is it comparable to yours? Do you think it’s about right?

QUESTION people-

According to:
http://internationalliving.com/countries/panama/taxes/

“Personal income tax in Panama is based on a sliding scale, ranging from a minimum of 7% after the first $9,000 to a maximum rate of 27%. For temporary residents, the tax is only applied to Panamanian-sourced income.”

According to: http://www.can-offshore.com/panama-foundation/panama-tax-haven-2.htm

‘Panama does not assess any income tax income produced from sources outside the country, including the proceeds of sales made outside of Panama. ’

If I open a business in Panama that made money outside the country but deposited the money into the Panama account, would that be considered ‘Panamanian-sourced income’?
For example, I sold consulting information to an American, and this American deposits money into my account in Panama.

Okay, nevermind, i found the answer to my own question here:
http://www.panama-offshore-services.com/income_taxes.htm