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I am genuinely curious, what is the best tax solution for the US?

We clearly need tax reform. I hear this and read this all the time. But what is the best answer? I am looking for the objectively best answer, not some party line talking points.

Sounds like the UK has almost identical tax issues that the US does.

I have heard a flat tax idea rolled around.


What if the effective tax rate and the actual tax rate were both 15% for federal taxes? Then states would be 8.5% and local taxes 6.5%?

It should be capped like that.

And it should be a flat rate meaning no one gets out of it regardless of their situation.

Another proposed method is the excise tax option: taxes are paid when ever goods or services are exchanged. No income taxes. It is basically a Super-Sales Tax.

Then there are the graduated tax plans, the ones we have now, that the UK and the US have. These are massive holes of corruption.



I think that any place that takes in revenue, which includes churches, should pay taxes.



I like the 9-9-9 plan that Herman Cain talked about. It needs some work. Perhaps it should be 12-12-12 or 10-10-10?

More to come as I have lots of talk about and I need to learn a lot more.

Easy get rid of 3/4 of the government and entitlements and the rest will work itself out.

Originally posted by dadudemon
Sounds like the UK has almost identical tax issues that the US does.

I have heard a flat tax idea rolled around.


What if the effective tax rate and the actual tax rate were both 15% for federal taxes? Then states would be 8.5% and local taxes 6.5%?

It should be capped like that.

And it should be a flat rate meaning no one gets out of it regardless of their situation.

Another proposed method is the excise tax option: taxes are paid when ever goods or services are exchanged. No income taxes. It is basically a Super-Sales Tax.

Then there are the graduated tax plans, the ones we have now, that the UK and the US have. These are massive holes of corruption.



I think that any place that takes in revenue, which includes churches, should pay taxes.



I like the 9-9-9 plan that Herman Cain talked about. It needs some work. Perhaps it should be 12-12-12 or 10-10-10?

More to come as I have lots of talk about and I need to learn a lot more.

Flat rate income tax is something an emerging party in the UK (UKIP) proposed in their last election manifesto. Frankly seems like a bad idea to me as it simply means those on lower incomes and in the lower tax bracket pay a higher % of their earnings and those on higher incomes in the higher bracket pay less of a % of their earnings in tax.

V.A.T in the UK is currently at 20% as a sales tax yet it's very oddly applied. Crisps (potato chips) are subject to VAT yet similar products that aren't classed as crisps such as Doritos and Pringles aren't subject to VAT. As a principle I suppose a graduated super sales tax is feasible in that you apply a higher tax % on higher priced goods meaning that people with the means to buy extremely expensive luxury goods wouldn't really think of paying a higher % of sales tax on top of the item price. That way if rich people who can avoid income tax by various means will still pay a higher % of tax when they spend their income on supercars, yachts etc anyway. Although I'm sure they'd get around it by importing many of those purchases but then you could simply enforce an excise duty on it anyway.

I certainly think that Churches should pay taxes as well. It's ridiculous that an institution as rich as the Catholic church doesn't have to pay taxes. It's one of the richest organisations on the planet in terms of fixed assets such as land and property as well as items of high value such as art works and precious metals.

I'm not from the US, but I have this to say about taxes: don't tax me, bro.

how would you go about objectively determining the best answer?

Originally posted by red g jacks
how would you go about objectively determining the best answer?

We probably should start here:

http://www.diffen.com/difference/Objective_vs_Subjective

Objectively good tax solutions would need to meet several criteria. My question for you would be, "what are those criteria?" Your solution would need to be objectively met, at least in theory.

I think some important things we could and should try are.

Count capital gains as income. Have a simplified tier system, something like first $15,000 free, $15,000 to $250,000 at 25%, $250,000 to $1,000,000 at 35% and over $1,000,000 at 45%

Perhaps have a sales tax on everything at like 10%

Estate tax could also need an overhaul. An exemption of $5.5 million seems mind bogglingly high.

Close other loopholes, and invest in IRS agents, they pay for themselves manyfold.

Perhaps do a 5% bring back oversea capital deal, with requirements of how it has to be invested in the US.

And some other, non tax-income ideas.

Reevaluate all subsidies publicly and cut superfluous ones.

Require insurance, have a public health option and regulate prices for medical expenses and medicine.

Create a free secondary education system.

I meant higher education should be free. Secondary, luckily, is already.

Originally posted by Bardock42
I meant higher education should be free. Secondary, luckily, is already.

Outside the US, it is referred to as post-secondary education or tertiary education. I think they mainly call it those names in the UK.


If you helps you feel any better, I knew exactly what you meant and I wasn't going to say anything.



Also, I like your solutions. I really really really like the flat tax, with no exceptions, solution. A single page of laws on taxes. Someone on the interwebz had something like that. I was utterly enthralled.

It will take more than one solution.

I think the most debilitating problem with taxes is the tendency for the government to use taxes for corruption.
Not to mention the big-name corporations with their tax-reducing/evading techniques.

Another thing to note is there are so many superfluous taxes being imposed on services and products in the US as well as in most European countries, which is still somewhat related to government corruption.

My aunt who resides in the UK told me that almost every product/service is taxed there.
Just to give an example, even public utilities and services are heavily taxed. Here in Asia (at least in Southeast Asia and the Middle East), almost all public utilities are used for free.

Certain utilities are taxed in the UK because they are provided by private companies- of course they are taxed. The alternative isn't cheaper utilities because fully public services are paid out of general taxation- it would just mean income tax etc. would go up.

I have no idea what you mean by 'heavily' taxed though. Fuel and power is very low taxed and water not at all.

Originally posted by Robtard
****ing amazing

I thought about that...


If the six billion pounds fee/tax issue with Vodafone would put Vodafone out of business, the loss in jobs and the tax revenue from those employees could be even more costly. There is also the information output from such a large corporation: it creates more money for the UK than just the direct taxes they pay. There are organizations that are related/tie-in to Vodafone that would also be very negatively impacted if Voda went belly-up overnight because they were forced to sell-off all of their infrastructure and close shop due to a bill that is too high.


Just like a person, large corporations, if they f*ck-up and end up with a huge tax bill, should get the option to make installments.


Edit - I do not think Vodaphone would go out of business if they had a firesale of 6 billion pounds. But their profits are very marginal (pun). They don't seem to have much to spare. As the world's second largest mobile carrier (and one of the world's largest telecommunication infrastructures), the UK Government has a strong interest (pun) in keeping them in the black.

I can understand the government working with them so they don't fold considering their size and who they employ. But 100mil out of 6bil walk-a-away, that is ridiculous.

As you said, an installment plan makes sense. Say 100mil every 6month or so sounds far more sensible than: "Meh, pay a pittance of what you owe, we'll make it up by ****ing over some other people."

http://www.dailymail.co.uk/news/article-2287216/Revealed-One-UKs-companies-pay-tax.html

This is why it's a problem.

Originally posted by Robtard
I can understand the government working with them so they don't fold considering their size and who they employ. But 100mil out of 6bil walk-a-away, that is ridiculous.


The'll be done in 60 years of payments...

100 million each year for 60 years = 6 billion.


In the US, I think the IRS gives you far less time to make your tax payments.


As one of my employees just said to me (about the Vodafone tax issue): "Why drain the lake to get the fish?"

Originally posted by jaden101
http://www.dailymail.co.uk/news/article-2287216/Revealed-One-UKs-companies-pay-tax.html

This is why it's a problem.

It says their profits were 9.4 billion pounds. It was actually 429 million pounds.


http://www.vodafone.com/content/annualreport/annual_report13/downloads/vodafone_annual_report_2013.pdf

This is why I don't think people should use the dailymail: other than having racist stuff every now and again, smut almost all the time, but they have factually incorrect articles like this one that say they had 9.4 billion pounds in profits.

Also, the title of the article is dishonest: it makes it seem like the government is subsidizing those companies by giving them money. That's not what is happening: they are tax breaks. They are not getting a tax return, which is how they are painting it. Tax deductions and credits affect the bottom-line just the same until you get into the black with your taxes. At that point, then, sure, credits and deductions are different (because you cannot keep throwing on deductions and get more and more money back on a tax return but you can do so with credits).


So Vodafone pays taxes every single year (lol, no they don't...that's why we are in this mess...but they owe every single year), those credits are functionally deductions. Because people are dumb, generally, and do not understand credits vs. deductions, news sites usually say "tax breaks" instead of credits or deductions.


Anyway, to sum up, this is why I say to not use the Daily Mail to support a position. They are worse than Fox News...if such a thing is possible.

Yeah, even my 100mil every 6 months seems laughable, but going off what Jaden said, it seems the deal was a one time payment/settlement of 100mil and they're done.

eg if a person owes 15,000 here, they can make a settlement and pay something like 4,700.00 once and be done.

Originally posted by Robtard
Yeah, even my 100mil every 6 months seems laughable, but going off what Jaden said, it seems the deal was a one time payment/settlement of 100mil and they're done.

eg if a person owes 15,000 here, they can make a settlement and pay something like 4,700.00 once and be done.

Oh, that's worse than I thought. I thought it was an installment plan. I should read more on it. If that's it...no more...nada....that's just crazy.



I wish I only had to pay 1/60th of my taxes over 2 years. That would be amazing!

Not that I am saying that Vodaphone is some paragon of tax paying virtue, but in the interests of fariness:

- Vodaphone paid over a billion, not 100 million

- HMRC denies that 6 billion was ever a figure tht existed.

The facts of the case are confidential so no-one knows for sure.

Also companies pay corporation tax on profits, not revenues. You can claim the accounting is dodgy if you like, but you have to start from the position that companies like Vodaphone make bugger all profit in the UK- but they do invest billions in infrastructure.

My intent isn't to highlight a specific company but rather a general problem that many companies avoid paying full tax bills and then a weak tax enforcement means they can reach retrospective deals worth a small portion and it gets sanctioned at ministerial level. Even on a surface level its clearly dodgy so here's to what goes on behind closed doors.

Originally posted by Ushgarak
Also companies pay corporation tax on profits, not revenues. You can claim the accounting is dodgy if you like, but you have to start from the position that companies like Vodaphone make bugger all profit in the UK- but they do invest billions in infrastructure.




Originally posted by jaden101
My intent isn't to highlight a specific company but rather a general problem that many companies avoid paying full tax bills and then a weak tax enforcement means they can reach retrospective deals worth a small portion and it gets sanctioned at ministerial level. Even on a surface level its clearly dodgy so here's to what goes on behind closed doors.

Also, there are oversight agencies in the US and the UK that are supposed to check up on and prosecute the utter living shit out of people trying to doctor their books to avoid taxes or certain regulations. Here in the US, those agencies are the SEC and the IRS. There used to be the UK's Financial Services Authority but, iirc, they moved those duties over to the UK Central Bank. And, like you mentioned, the HMRC (Her Majesty's Revenue and Customs) is the other oversight group for these types of things.


Originally posted by jaden101
My intent isn't to highlight a specific company but rather a general problem that many companies avoid paying full tax bills and then a weak tax enforcement means they can reach retrospective deals worth a small portion and it gets sanctioned at ministerial level. Even on a surface level its clearly dodgy so here's to what goes on behind closed doors.

I think it was a good point and there is definitely some dodgy stuff going on with that tax situation and Vodafone. No doubt. It is a symptom of a shitty tax system.

It's a symptom of a lack of enforcement due to a number of factors as well. Increasingly complex tax laws as more and more laws are added and none are removed making them easier to exploit. The question is whether this is deliberate by legislatures who are in the pockets of businesses or simply a byproduct of badly written legislation. So a huge simplification of tax laws would help as would a government actually willing to fully enforce its basic tax % targets.

One thing I think all of us agree on is tax simplification is greatly needed.

Loopholes need to be closed, too. As far as the actual meat of what comprises that tax system, I still do not have confidence in a definitive answer.

Keep the tax system as is and any company that attempts any kind of manipulation of the system to avoid tax should have their board members and tax lawyers brutally and publicly executed.

Solved.

You're welcome.