The biggest problem in my opinion is money in politics and the people with the money making the laws. It feeds the wealth gap.
abolishing income tax
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The biggest problem in my opinion is money in politics and the people with the money making the laws. It feeds the wealth gap.
It’s what keeps drawing me back here.
Well that and the weeping and wailing. 🥳
They already tax investment income. What are you talking about?
Seminole, it is more than 0, which 60% of my tax clients think it should be.
Income tax is probably easiest and fairest way to do it. However open to other methods.
So you’re saying that our 401 contribution is post tax? No.
Or that instead we’re taxed on whatever we are required to take out when we reach a certain age? Yes.
Interest on a savings account is taxed and I know that as we all do (except maybe the foreign trolls and bots).
If we own stocks outside of a 401/IRA and sell those yes we do pay capital gains on that.
Some other investment gains are also taxed as they should be.
Any other kind of taxation is regressive, which makes them very inefficient. When all taxes are considered, the lower and middle classes pay a larger portion of their income to taxes than do the wealthy. If you remove income tax you not only have to completely reimagine our country (think, no more standing military, for one) but you would exacerbate the unfairness of the tax burden to an absurd extent.
I think you’re conflating a few different types of investment income. Investments in 401k/IRA accounts are in “qualified retirement plans” and are subject to an entirely different taxing mechanism. These types of investments are not taxed “currently” nor is anyone that I know of suggesting they be taxed now (other than upon distribution from the retirement account as is currently the case; ROTHs being an exception since they are nontaxable accounts.
The argument about increasing rates on investment income is focused on capital gains, dividends and “carried interests” (the secret sauce of the investment banking world), which primarily (and only meaningfully) effect people with significant wealth beyond their retirement accounts. Not many middle class folks are going to fall into this category.
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Yes. And without income tax the overall tax burden in this country would disproportionately hit the middle and lower class. They already pay a higher proportion of their earnings to taxes. Income tax is the only thing leveling it out a bit.
All I said is that investment income is already taxed in response to your statement of "If they tax investment income the middle class would be in deeper doo doo than we already are." 401k deductions are not "investment income". They are deductions from income.
Now if you're asking for details, all investment income is taxed at some point, when earned or when received, unless you are investing it into an FSA or HSA, so I still have no idea what you were talking about.
Oh… I thought the goal was to be the leader of the people and a steward of our American democracy and way of life.
Do you consider 401k,403B, IRA, Pensions and Roth all investment vehicles or retirement vehicles? In my mind they are retirement. Otherwise there should be no deduction from income initially, penalties if receive early. Investments are the next step up using personal cash or assets to continue to growth wealth that is taxed as well. In the current format if you never sell, there is no difference that the retirement vehicles, merely deferring the tax until the investments are sold.
If you have a 401 at work your contribution into it is done before anything else is taxed. That’s what I meant -sorry if I didn’t make that clearer.
I think we’re talking past each other a bit, probably.
hawkeyetraveler
HB Heisman
There is an obvious solution to the federal revenue issue, but no one wants to do it…a modified inheritance tax.
Americans are estimated to inherit $105 trillion over the next 25 years for an average of 4.2 trillion in inheritance per year over that time period. If we taxed that at say 50% that would amount to $2.1 trillion in federal revenue annually. Our deficit in 2023 was ~1.8 trillion so we solve most of that issue and maybe have extra to pay down some of the national debt.
Now, I know people inherit farms, businesses etc. there is a simple solution this too. Only tax those assets when they are sold. The person who inherited them had a cost basis of zero, so just apply the full tax at sale. That way you get to work daddy’s farm without having to cough up the inheritance tax while you are still mourning your loved one. If you sell stock it gets taxed at a zero cost basis. If you inherit cash it is taxed at the point of inheritance.
Doing the above does not foreclose spending cuts which would further help the situation.
If we didn’t have a massive revenue gap that cannot be solved by spending cuts alone I would welcome other ideas. But somehow we have to pay for the services we all use. And yet no one wants to actually solve the problem because it is politically untenable. One side says reduce spending (which they never do because you would have to touch popular programs to make a real dent). The other side says tax the wealthy which won’t happen because the wealthy control Washington. So why not tax the dead. They sure as shit aren’t going to use it and their descendants are free to make a living in this country the same as everyone else while still getting some inheritance.
As to those who say all taxes are theft: given current infrastructure and current deficit obligations how exactly would you pay for all the stuff we use from the military to the bridges to farm subsidies to social security?
Americans are estimated to inherit $105 trillion over the next 25 years for an average of 4.2 trillion in inheritance per year over that time period. If we taxed that at say 50% that would amount to $2.1 trillion in federal revenue annually. Our deficit in 2023 was ~1.8 trillion so we solve most of that issue and maybe have extra to pay down some of the national debt.
Now, I know people inherit farms, businesses etc. there is a simple solution this too. Only tax those assets when they are sold. The person who inherited them had a cost basis of zero, so just apply the full tax at sale. That way you get to work daddy’s farm without having to cough up the inheritance tax while you are still mourning your loved one. If you sell stock it gets taxed at a zero cost basis. If you inherit cash it is taxed at the point of inheritance.
Doing the above does not foreclose spending cuts which would further help the situation.
If we didn’t have a massive revenue gap that cannot be solved by spending cuts alone I would welcome other ideas. But somehow we have to pay for the services we all use. And yet no one wants to actually solve the problem because it is politically untenable. One side says reduce spending (which they never do because you would have to touch popular programs to make a real dent). The other side says tax the wealthy which won’t happen because the wealthy control Washington. So why not tax the dead. They sure as shit aren’t going to use it and their descendants are free to make a living in this country the same as everyone else while still getting some inheritance.
As to those who say all taxes are theft: given current infrastructure and current deficit obligations how exactly would you pay for all the stuff we use from the military to the bridges to farm subsidies to social security?
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Thanks Rick! But since people like you get a wee bit lost gloating over trolling, the actual goal is to serve and better our country and its constituents. Winning the election is the path to that goal.
So you get that revenue once and then everyone is off the tax hook?
If someone wanted to give all that money away to avoid having to give it to the government upon their death (WAIT A MINUTE - Warren Buffett calling on Line 1) they could avoid paying taxes?
come on...we know what the goal is
if "bettering our country" was the goal...trump wouldn't be releasing meme coins from which he stands to profit less than a week before taking office
when it comes to trump...there is only ever one real goal
The top 1% pays the lion’s share of taxes.
I know that’s been repeated several times and I also would repeat that the bottom half of wage earners don’t pay much of anything at all.
Any tax increase would impact the middle class because that’s where most of us “live” and that’s why we appreciate the tax cuts from 2017.
Trump's blue collar base would probably rejoice to have income tax and the IRS go away, and instead simply have a pay-as-you-go tax on goods and services purchased.
Gosh I’m gonna say I plan to never buy one. If someone has a few dollars extra and they just have to have one that’s their business. Who cares?
The tax cuts from 17 are one of the major issues for the national debt continuing to rise. There is no way to pay down the debt with the current tax rates. You also can't expect the 1% to take the burden (the math doesn't work). So say what you will the middle clan and lower class and upper class will all have to pay more just a matter of when. There is going to a major reckoning in the next 10 years is my guess.
You would need to record of paper currency to stop underground economy.
The rich would love it.
Only way it could work even in theory is a national property tax.
The rich would love it.
Only way it could work even in theory is a national property tax.
The issue with sales tax as a primary method, is high income earners won't pay fair share, and 2ndly easily avoided by purchasing in other countries or jurisdictions.
I once made a mistake on my taxes involving my kids college expenses.
IRS threw everything out and wanted copies of syllabuses to prove they needed the books I deducted. It was ridiculous.
My penalty was more than I ever paid in income taxes for an entire year. My mistake was a few hundred dollars.
The IRS can go to hell. They target the easy money, middle class people trying their best fill out the minefield of bs.
So glad I am done with childcare and college experience portion of taxes.
For the average person every piece of income and taxes is somewhere online, they should be able to tell me without any forms what I owe or what I should get back, with the option for me to file if I don’t care for what they presented to me.
I’m really sorry for saying this because I don’t think I’ve ever noticed you as a terribly bad poster, but in the bolded section you are either vastly misstating the tax and penalty situation or you are incredibly poor.
If the penalty for misreporting a few hundred dollars was more than the entire income taxes you’ve ever paid in a single year, then you should have been able to access Pell Grants for your kids’ education.
simpletons view. Who decides what weight commodities have? let's start: cigarettes $50/pack and a 12 pack of beer $75. Fruit, chicken, veggies, fish 0 tax.
0% tax on vehicles, but .25/mile to drive on them.
system becomes more complex than current pretty quick.
hawkeyetraveler
HB Heisman
In fairness I recognize my idea comes with plenty of downsides. But the downsides are smaller than our “head in the sand” approach to the federal deficit. Our grandkids will pay a massive economic price for our hubris. Those alive today are essentially borrowing money with the payments coming due in future generations.
I would also dramatically flatten the tax structure and eliminate most/all of the deductions. So Buffett is free to give it away, but he wouldn’t get tax benefits for it if we did that.
Most of the other solutions I see involve raising taxes and or cutting spending. I’m a fiscal conservative and want us to cut spending as much as anyone. But we would have to cut entitlements and the military to make that viable and no one wants that. DOGE ain’t going to find anywhere close to the money we need.
There are plenty of problems with my solution, taxes suck. But it’s the best solution I can think of. Honestly we are going to have to pay a painful price one way or the other and I think this is the least bad of all the bad options.
The military is one of the core responsibilities of the government and entitlements have been allowed to get out of hand. The cap on earnings for SSI is still too low even after a modest bump this year. The early eligibility at 62 doesn’t reflect a work force that is living longer and working longer and the lifetime lower payout means those folks will be a challenge to support as they get older.
A true fiscal conservative would agree and would also agree that the waste of our money on other things our representatives don’t seem to have the nerve to touch is an enormous problem.
Outdated post WWII foreign policies - a wide ranging out of control spectrum - are an area of opportunity.
The size of the government workforce is also going to be a challenge because AI will make several jobs obsolete. Thorny problems and difficult choices.
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