Twilight Hue
Twilight, not bright nor dark, good nor bad.
It certainly isn't as easy as filling out a postcard.
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A single worker for minimum wage paid more tax in 2018 than 60 Fortune 500 companies put together.
- Thread starter Twilight Hue
- Start date
I agree.
That could happen. I recall in history the oligarchs were successfully driven out of power by the trust busting presidents starting the Teddy Roosevelt. Maybe if the same thing were to happen and the presidents would start suing monopolies we could break up the oligarchies again?
That reminds me of the French Revolution which began surprisingly with a lottery. I am told that the poor people in France thought themselves inferior to wealthy classes, but then some of the poorest starting getting rich by lottery. It destroyed the myth that wealthy people were superior. The lower classes got very angry about it. I can imagine being very upset if I were them.
Are our expectations much different from what they ought to be? If so how can we wake up to our true situation, and can we do the same for others like what happened with France's lottery? We'd have our citizen's lobby, then.
My simple solution is a gross receipts tax. Everyone and every corporation pay a percentage of every dollar they take in with no deductions or gimmicks. This ignores use of the tax code for "good" purposes to encourage some things while discouraging others. It let's people and businesses make decisions on their own without having to factor in a complex system of goodies and penalties.
Of course many will argue against it for what seems like good reasons to them and those who think like them. And special interest groups like tax preparers will hate the idea.
But the basic virtue is that it takes government out of our financial lives outside of a simple payment.
I'm not in favor of an utterly flat tax and so would make it progressive with those on the bottom paying nothing. It takes the now gone (thanks, Republicans) 1040EZ and simplifies it a bit and applies it to everyone.
Why do you think so?
I ask because revenue continues to increase.
Ref....
Who Really Pays Uncle Sam's Bills?
U.S. - income tax revenues and forecast 2000-2029 | Statistic
Of course, it's a big problem that spending continues to
outpace revenue, hence a rapidly growing national debt.
This is what I was referring to, I wasn't as clear as I should have been.
It was a short article.
I saw no analysis of why they paid no income tax.
That would shed light on how the tax code functions.
But instead, it appears to only convey a general impression
that corporations don't pay income tax. Note thought that
income accrues to the shareholders, who do pay income
tax on that income in the form of dividends.
I agree that Trump's tax increase wasn't large enuf.
That might sound like a joke, but there were increases,
eg, limiting the SALT deduction to $10K, which is really
angering the red states. The net effect is to increase
federal income tax revenue.
To address the deficit & debt, I'd eliminate the SALT &
all personal deductions entirely.
I am not knowledgeable about the tax code to make an informed statement, really. It just bothers me when Amazon, one of the largest companies in the world, pays zero.
It would be useful to know why.
Instead, the media trumpet the horror of no tax.
Perhaps it doesn't serve their purpose to offer
an explanation.
What kinds of deductions are they taking?
How long will these deductions last?
What dividends are issued, & how are they taxed?
Such an incomplete picture does nothing but inspire resentment.
If we knew more of the picture, we could advocate for or against
changing specific portions of the tax code.
I think it is because they can write off their deductions all at once instead of over several years? Again, not very up and up on this one. But I found this video helpful:
The "R&D credit":
The video confused me.
It's been called both a "credit" & a "deduction", but those things are very different.
(A credit is generally worth more.)
Depreciation:
I ran into this change too, ie, my CPA is deducting some of my capital
expenditures which I'd expected to be depreciating. This doesn't do
anything to avoid paying taxes....it just time shifts the tax burden to future
years (relative to depreciation, which time shifts taxable income to earlier
years). Tax gets paid either way...it's all a matter of scheduling.
Stock compensation:
This is giving something of value, even though it's not actual cash.
And because it has value, we see this reflected in loss of value to
the stockholders by dilution of shares. It's like government deficit
spending using fiat currency, which also has the same kind of cost.
While it's a tax deduction for the company, it's taxable income to
the employee. The video explains well why Amazon does this.
Ref.....
Rewarding Employees with Company Stock | The U.S. Small Business Administration | SBA.gov
What do you think of this idea? It seems to heavily reward already successful companies that can take this risk.
Is it a reward?
1) If they pay in stock, they get a deduction for the value of the stock
And the employee pays tax on this value.
2) If they pay in cash, they get a deduction for the value of the cash.
And the employee pays tax on this value.
What's the significant difference?
When they pay in stock it doesn't cost them money, right?
If I have $1000 in my business account and I pay you $500, I get to deduct the $500 and my new balance is $500.
If I have $1000 in my business account and I pay you $500 in stock, I get to deduct the $500 and my new balance is still $1000.
I get to save $500 and deduct the value.
But it does cost in equity because of the reduction in value of other shares.
But your company just lost $500 in value....because you gave it as compensation.
That is where my "reward" comment came from and this was addressed in the video as well. Amazon stock is so strong that it is resilient to that reduction in value. Allowing Amazon, as a company, to print its own money.
It's not like government printing fiat currency.
But I do spot an aspect of tax avoidance which would be reasonable to ditch.
The deduction is based upon current stock price. But the company's basis,
ie, actual investment, in that stock might be more or less. For Amazon, I'd
expect that it's basis would be less, in which case the deduction exceeds
the basis. They could either get a deduction equal to the basis, or pay
capital gains tax on the difference.
The above assumes that I understand the complexities.
I'm not sure of that.
I'm not sure either and I would support either of those two adjustments and see what happens. I do not expect the tax situation to be fixed in a single presidential term given how slow it moves. But a step in that direction would be something I support.