Taxation....How To Do It?

[Revoltingest]

The argument over Trumps big loss a couple decades ago
involves some assumptions which aren't being addressed.
This thread isn't about Pubs v Dems or Trump v Hillary or the election.
Those topics may come up, but should remain incidental.
It's about Americastanian taxation in general.

Some questions......
Should taxpayers be able to deduct losses from their income?
Should capital losses be deductable from not just capital gains, but also ordinary income?
Should losses exceeding income in the year incurred be allowed to be carried forward to future years?
Should taxpayers have to pay income tax on loans they've defaulted on? (Currently, they must.)

 

[Quetzal]

Should taxpayers be able to deduct losses from their income?

I am assuming we are framing this with regards to business loses? I believe they should. Heck, you can claim gambling loses, don't see how this would not apply here, too.

Should capital losses be deductable from not just capital gains, but also ordinary income?

I don't know much about this, but in my simple mind, it would make sense only if the capital loses are greater than capital gains.

Should losses exceeding income in the year incurred be allowed to be carried forward to future years?

I don't think so because gains are not carried over from year to year, at least in regards to individual tax payers.

Should taxpayers have to pay income tax on loans they've defaulted on? (Currently, they must.)

This doesn't make sense, right? You have already documented that you cannot pay the loan, what makes Uncle Sam think you are capable of paying tax on said loan?

 

[Revoltingest]

I am assuming we are framing this with regards to business loses? I believe they should. Heck, you can claim gambling loses, don't see how this would not apply here, too.

It would apply to any financial loss, eg, business operating loss, investment loss, uncompensated loss of a home due to fire.

This doesn't make sense, right? You have already documented that you cannot pay the loan, what makes Uncle Sam think you are capable of paying tax on said loan?

They squeeze what they can from those in distress.

 

[Quetzal]

It would apply to any financial loss, eg, business operating loss, investment loss, uncompensated loss of a home due to fire.

In that case, I still hold that they should be able to be deducted/claimed.

 

[Revoltingest]

In that case, I still hold that they should be able to be deducted/claimed.

I agree.
My reason.....
If we were taxed upon income, but not allowed to deduct losses, this
would impose an asymmetry which discourages productive risk taking.

 

[tytlyf]

Taxes need to be increased on the wealthy and corporations. (mostly because they don't pay any)
Loopholes need to be closed.

That's a good starting point, the middle class shouldn't have to pay the 1%'r taxes. Let's not even get into corporate welfare.

 

[Revoltingest]

Taxes need to be increased on the wealthy and corporations. (mostly because they don't pay any)
Loopholes need to be closed.

That's a good starting point, the middle class shouldn't have to pay the 1%'r taxes. Let's not even get into corporate welfare.

Could you name the "loopholes"?

I oppose taxing corporations.
All income is passed to the shareholder, who pay income tax upon dividends.
To have corporations pay an income tax is double taxation.

 

[Quetzal]

I am curious about loopholes, too, and how they are exploited. I hear about it a lot in the media but I honestly have no clue how that works.

 

[Revoltingest]

I am curious about loopholes, too, and how they are exploited. I hear about it a lot in the media but I honestly have no clue how that works.

Aye, it's a problem that politicians & others will decry "loopholes",
but they don't offer any specifics. It's an undefinable boogeyman.
Years ago, a little old lady would stand to ask, "Where's the beef?".

 

[tytlyf]

Loopholes are ways people with tax knowledge know how to reduce their tax burden. The laws are typically written by republicans in congress. The majority of Americans aren't familiar with this, which is why tax attorneys exist. But most people can't afford those either. Corporations and the wealthy hire people to do their taxes with this knowledge.
My family does the same thing.

 

[Quetzal]

I have questions! (You don't have to answer.)

Loopholes are ways people with tax knowledge know how to reduce their tax burden.

Mhm, but how? And can I do this myself?

The laws are typically written by republicans in congress.

Any specific laws come to mind? Again, rookie here.

The majority of Americans aren't familiar with this

Guilty!

My family does the same thing.

So... you are the problem?! GET HIM!!!!

 

[beenherebeforeagain]

Could you name the "loopholes"?

I oppose taxing corporations.
All income is passed to the shareholder, who pay income tax upon dividends.
To have corporations pay an income tax is double taxation.

And yet, according to the USSC, corporations are persons, with the rights of persons...and as corporate persons, there are a number of companies that are known to hide funds in overseas accounts, to avoid having to pay taxes on them...this, many wealthy stockholders do as well...and dividends are also rarely paid any more

 

[Revoltingest]

And yet, according to the USSC, corporations are persons, with the rights of persons...and as corporate persons, there are a number of companies that are known to hide funds in overseas accounts, to avoid having to pay taxes on them...this, many wealthy stockholders do as well...and dividends are also rarely paid any more

The USSC never ruled that corporations are persons in the same sense as individual people.
It ruled that they have some of the rights of persons, eg, speech, suing in court.
This is merely to recognize what the law is....& has been for centuries.
Note that corporations cannot vote, marry or adopt children.

Shareholders in for profit corporations invest there because of dividends.
Even if they're not paid every year, they're ultimately expected.
(It is this expectation of dividends which drives stock value.)

 

[jonathan180iq]

Taxes spread the cost of our way of life among the whole of the population, decreasing individual burden for all. Those who make the most, or use the most services, should naturally pay the most for those services.

The fact that open corporate and personal greed is being defended is absurd to me. Just absolutely absurd.

 

[Revoltingest]

Taxes spread the cost of our way of life among the whole of the population, decreasing individual burden for all. Those who make the most, or use the most services, should naturally pay the most for those services.

That's not quite true.
The individual burden is greater for those who pay more taxes.
Note that I'm not arguing against their paying more, but it's an
error to say that their burden is lessened by income redistribution.

The fact that open corporate and personal greed is being defended is absurd to me. Just absolutely absurd.

"Greed" is a value laden word.
It's as fair as saying welfare recipients are "lazy".
Discussion is best served by not attacking either group.

 

[beenherebeforeagain]

The USSC never ruled that corporations are persons in the same sense as individual people.
It ruled that they have some of the rights of persons, eg, speech, suing in court.
This is merely to recognize what the law is....& has been for centuries.
Note that corporations cannot vote, marry or adopt children.

Shareholders in for profit corporations invest there because of dividends.
Even if they're not paid every year, they're ultimately expected.
(It is this expectation of dividends which drives stock value.)

In the US, the owners of corporations were jointly and severally responsible for EVERYTHING (debts, assets, profits, etc) of the investors up until the latter half of the 1860s. They were also of limited purpose and duration (typically five to 10 years, when they HAD to be liquidated). Then the USSC ruled that corporations could be fictive persons, so they could own property, sue and be sued, etc., and most importantly, protect the investors from personal responsibility for "corporate" actions and liabilities, and extend the life of the corporation indefinitely--while also giving it the power to change its own purpose. The corporate right to free speech (ie, campaign contributions) was made up out of whole cloth by the SC recently.

The question of who, whether, and how to go about raising funds for governmental/societal purposes is complex, and every proposed system has pluses and minuses associated with them. But if corporations are persons, they should be treated just the same as individuals--if a corporation can write off "research" expenses, then the individual should have some sort of equivalent available to them. If a corporation can write off the failure of an investment, then the individual should get the same. If a corporation qualifies for an incentive, then individuals should also qualify.

 

[Revoltingest]

In the US, the owners of corporations were jointly and severally responsible for EVERYTHING (debts, assets, profits, etc) of the investors up until the latter half of the 1860s.

Actually, limited liability in the USA starts in 1855.
https://en.wikipedia.org/wiki/Limited_Liability_Act_1855
But historically, the concept is much older, Americastan having lagged behind Europe.

Do you object to limited liability?

They were also of limited purpose and duration (typically five to 10 years, when they HAD to be liquidated). Then the USSC ruled that corporations could be fictive persons, so they could own property, sue and be sued, etc., and most importantly, protect the investors from personal responsibility for "corporate" actions and liabilities, and extend the life of the corporation indefinitely--while also giving it the power to change its own purpose. The corporate right to free speech (ie, campaign contributions) was made up out of whole cloth by the SC recently.

You believe that their right to free speech was created out of thin air, but there is a long legal tradition of such free speech.
Consider that unions, non-profits, & even the DNC itself are corporations.
Would you argue that government has the right to silence them?

The question of who, whether, and how to go about raising funds for governmental/societal purposes is complex, and every proposed system has pluses and minuses associated with them. But if corporations are persons, they should be treated just the same as individuals--if a corporation can write off "research" expenses, then the individual should have some sort of equivalent available to them. If a corporation can write off the failure of an investment, then the individual should get the same. If a corporation qualifies for an incentive, then individuals should also qualify.

Are you arguing that these changes justify double taxation of corporations?

 

[bobhikes]

The argument over Trumps big loss a couple decades ago
involves some assumptions which aren't being addressed.
This thread isn't about Pubs v Dems or Trump v Hillary or the election.
Those topics may come up, but should remain incidental.
It's about Americastanian taxation in general.

The problem as I see it is not the TAX but Tax manipulation and improper spending.

A flat tax based on gross income is fair and resolves all issue's. The problem is the flat tax will be to high and keep increasing because of Government funds manipulation.
The government will also lose the ability to manipulate the economy by manipulating tax brackets.

What I purpose is a Federal amendment for a Flat Tax and sales tax with no other taxes authorized. The flat tax would be fixed in the amendment and the sales tax would have a fixed range for economic reason's. The amendment forces congress to comply.


I don't have any numbers but say a 10% flat tax with a sales tax range from 0 - 3% on specific product groups Like food, clothing, entertainment, luxury items. The sales tax is for economic manipulation. I'm sure they'll use it for political as well.

 

[Revoltingest]

The problem as I see it is not the TAX but Tax manipulation and improper spending.

A flat tax based on gross income is fair and resolves all issue's. The problem is the flat tax will be to high and keep increasing because of Government funds manipulation.
The government will also lose the ability to manipulate the economy by manipulating tax brackets.

What I purpose is a Federal amendment for a Flat Tax and sales tax with no other taxes authorized. The flat tax would be fixed in the amendment and the sales tax would have a fixed range for economic reason's. The amendment forces congress to comply.


I don't have any numbers but say a 10% flat tax with a sales tax range from 0 - 3% on specific product groups Like food, clothing, entertainment, luxury items. The sales tax is for economic manipulation. I'm sure they'll use it for political as well.

Sounds like a vast improvement to me!

 

[Kuzcotopia]

If we were taxed upon income, but not allowed to deduct losses, this
would impose an asymmetry which discourages productive risk taking.

Sure. But the key word is "productive."

I'm a liberal, so for me, the word "productive" does not mean any venture that makes money for you and your investors.

"Productive" means that your venture follows the rule of law in spirit and in letter, it has no reasonably negative impact on human rights or the environment, pays reasonably living wages to any employee used in the venture, does not capitalize on the poor's effort or lack of education, and though not required . . . it would be nice if the venture actually contributed something valuable to the human experience.

If the "productive"venture does none of those things, I have no trouble whatsoever with disincentives.

That's probably one way our perspectives are quite different.