Comments on: Congress’ potential faulty tax logic http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/ Sat, 23 Mar 2013 13:49:31 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: ebanker1999 http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1238 Mon, 02 Apr 2012 07:03:27 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1238 Re: Report: Just $31B from Buffett rule tax on rich
“In an analysis provided to The AP on Tuesday, Congress’ Joint Committee on Taxation estimated that a bill introduced last month by Sen. Sheldon Whitehouse, D-R.I., attempting to enshrine Obama’s proposal into law would collect $31 billion through 2022. The measure has little chance of advancing soon, especially before the November elections.”

Using simple Math this calculation of the increased revenue from a proposed Buffett Rule says something very scary.

Since the wealthiest pay mostly 15% tax on their income, because the vast majority of their income is from capital gains and dividends, a Buffett Rule-based minimum tax rate of 30% should approximately double the tax revenue from the wealthiest.

Now consider that the projection in the article is an increased $31 Billion over 11 years. This implies only $31 Billion of expected revenue over the next ten years before the Buffett Rule. $2.8 Billion per year. How is that possible?

]]>
By: ebanker1999 http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1237 Mon, 02 Apr 2012 06:57:01 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1237 RE: Report: Just $31B from Buffett rule tax on rich
http://tinyurl.com/79s97kq

Using simple Math this calculation of the increased revenue from a proposed Buffett Rule says something very scary.

Since the wealthiest pay mostly 15% tax on their income, because the vast majority of their income is from capital gains and dividends, a Buffett Rule-based minimum tax rate of 30% should approximately double the tax revenue from the wealthiest.

Now consider that the projection in the article is an increased $31 Billion over 11 years. This implies only $31 Billion of expected revenue over the next ten years before the Buffett Rule. $2.8 Billion per year. How is that possible?

]]>
By: jtfane http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1150 Wed, 07 Mar 2012 22:02:14 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1150 @jaham said “DCJ is a smart man and does thorough research but he presents evey argument with a heavy liberal slant.” and then, get this, no kidding “Free markets, capitalism, and supply side theorems will work if only we’d get out of the way and remove impediments to their success.”

Oh how I do love irony, thank you for that.

But, as you said “Those are his beliefs and he is entitled to them.” I Couldn’t agree more.

I would also agree with most of the remainder of your post, though I would truly be interested to see you “Reverse this argument and logic could be used to support the counterargument.” Mostly because I’m not really sure what that means. I do think those rates would have to go quite a bit higher than 25% unless you’re planning on significant revenue reductions. And as I mentioned above, why not just plain eliminate the corporate tax?

If you’re looking for “Monied interests” I think you’d be better advised to look to the clients of the members of the AICPA rather than the organization itself. These are the people who lobby for the creation of the loopholes and deductions, the tax accountants just pick up the scraps.

]]>
By: Xnerd http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1149 Wed, 07 Mar 2012 16:22:49 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1149 Wow…. really??? Now it is uncertainty that is stiffening Job creation. Rush Limbaugh has such a hold on the simple minded masses…. its sad really.

Here is a clue for you. Supply side economics does not work, has never worked, and will never work.

Every time this country has been in trouble nothing short of liberal public works projects have been the only thing to save it. Putting money in the hands that actually supply the economy with cash flow…

How any times do we have to attempt voodoo economics to finally put it to bed.

]]>
By: jaham http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1148 Tue, 06 Mar 2012 19:37:23 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1148 DCJ is a smart man and does thorough research but he presents evey argument with a heavy liberal slant. Those are his beliefs and he is entitled to them, but his bias is apparent – this article is an exemplification of that. Reverse this argument and logic could be used to support the counterargument. The problem with political spin is that the average American voter is too ignorant to understand the truth and WHY it’s the truth; instead they jump on one side and chant the partisan mantra du jour, excerbating the problem.

Billyblog…you forgot to mention a terrible regulatory environment in which to deploy capital, uncertainty is very high and businesses won’t invest in the face of uncertainty. We need tax, regulatory, and fiscal reform; let alone issues like infrastructure and education.

All those businesses are sitting on capital that they will deploy when the time is right – given the current rate environment, they certainly aren’t getting paid to sit on cash right now. Further, it is not the governments job to dictate when and where capital is deployed.

Free markets, capitalism, and supply side theorems will work if only we’d get out of the way and remove impediments to their success.

@JLWR has the right idea. Completely Wipe the whole thing clean. Progressive rates, say: 5%, 10%, 15%, 20%, and 25%. Remove ALL loopholes and deductions. You made $xx,xxx income, multiply times your rate and that’s it.

Then drop corporate rates to 10% or so and watch how quickly the economy picks up and investment + FDI flocks to the US.

Why won’t this happen? Monied interests…for example: What will the AICPA have to say about this degree of structural tax code simplification?

]]>
By: CalDamage http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1147 Tue, 06 Mar 2012 02:19:51 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1147 Pardon me, but what’s the point? Oooooh, lower rate, flat rate, no loopholes…until they want to start handing out ‘tax incentives’ to friends and contributors, and then we’re back down this f’ing rabbit hole, but from a starting point much closer to zero.
Unless you can come up with a method that prevents Congress from handing out lollipops to the un-needy, I say raise the damned corporate rate, and make GE’s tax accountants really sweat to get its net tax burden back to zero.

Instead, how about parking tickets? Holding some multiple of your tax bill’s bottom line in liquid assets for more than, oh, 180 days earns a 1% fine against those assets. Larger tax bill means you can hold more cash and short-term bonds out of the economy, smaller bill means you have more liquidity exposed to the parking meter. Tune it a bit, so can’t just keep rolling over at 179 days, or carouseling various assets from cash to bonds and back. Specify those as tax evasion. Maybe more money will fall into the hands of those non-participants in the economy, the 99.5% who work for a living.

]]>
By: JLWR http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1146 Mon, 05 Mar 2012 16:40:16 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1146 Once again the only fair solution is to have a progressive tax rate with no deductions, no exemptions, no loopholes, no tax credits or incentives and this for corporations and the individual. Make the poor pay at a lower rate (they no logner get away with paying nothing) , the middle at a middle rate, the rich at their rate, and the mega rich at their rate. Let the rates range from 7% to 25% and keep it between those levels. That should be it in a nutshell. No one payes less than 7% and no one pays more than 25%. Forget all the other games as that is just a new scheme for the rich to pay less. There is no other fair way in my opinion!

]]>
By: CapitalismSays http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1145 Mon, 05 Mar 2012 16:24:21 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1145 We should be reforming taxes even if there’s no change in revenue or burden whatsoever. Those are added bonuses.

The stated US corporate tax is 35%. Almost no one actually pays that. The rate that companies pay is almost always lower, occasionally negative, and extremely variable. I for one, just want some transparency and simplicity. If the public knows and understand the problems, solutions will become very apparent. We will have to pay unemployment for all those pesky tax lawyers though.

]]>
By: jtfane http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1144 Mon, 05 Mar 2012 16:14:33 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1144 I think one of the main issues with corporate taxes is that they transfer , to some degreee, taxing authority to corporate management. While I agree that management is certainly constrained as to how it can pass taxes on, it is inevitable that those taxes will eventually be paid by some combination of employees, shareholders and customers. It would certainly seem to make sense that management would transfer the bulk of the tax burden to those who are least able to resist it, most likely unskilled labor. This would mean that not only are corporate taxes paid primarily by workers but that they are highly regressive as well. I can’t imagine that management would decide to transfer the tax burden to itself (and their income growth over the past few decades would certainly support that view) and market conditions for professionals and skilled labor, though certainly not ideal at the moment, would probably limit their ability to restrict wage growth in those areas. However, unskilled labor, particularly in the current situation of high unemployment and high resistance to collective bargaining efforts, really has no option other than to accept lower wages.

The fairest solution would seem to be for the government to take full control and resposibility for assessing taxes by completely eliminating corporate taxes and transferring that burden to higher capital gains and dividend taxes as well as a more progressive income tax. Unfortunately, I can’t imagine that this would have a tremendous net effect on income disparity.

The argument of double taxation has always been somewhat of a non starter for me since, once you tax income, essentially every other form of taxation (sales, property, excise, etc.) can be viewed as double taxation for the vast majority of those who do not or cannot itemize deductions.

]]>
By: SamuelReich http://blogs.reuters.com/david-cay-johnston/2012/03/02/congress-potential-faulty-tax-logic/#comment-1143 Mon, 05 Mar 2012 02:39:13 +0000 http://blogs.reuters.com/david-cay-johnston/?p=313#comment-1143 Both workers and share holders pay corporate taxes. Most goods and services cannot be imported fast at low cost. Therefore, the workers producing goods or services that can be made offshore pay or when trust busting is lax (price fixing allowed). Share holders of companies that cannot off shore and under the trust buster lens (cannot fix prices). When porice fixing is the rule consumers pay.

]]>