[Rhodes22-list] Taxes - Timely Article

[Brad Haslett]

Bill,

You keep reminding me of my old workmate, Vernie Kuglin.

Google her.

Maybe I'm just not as smart or as clever as you, or Vernie.

Brad


On 1/18/07, Bill Effros <bill at effros.com> wrote:
>
> Brad,
>
> I keep telling you the secret.  To avoid income tax, don't earn income.
> There are plenty of other ways to earn money that are not classified as
> "income".  Mr. Bush has lowered the capital gains tax to 0% for some
> people.
>
> When you hear that some executive earned $100,000,000 last year, you
> don't think he paid $30,000,000 in income taxes, do you?
>
> Warren Buffet just gave away $30 Billion dollars--yet he never had an
> income of more than $100,000 a year.  He probably has paid less income
> tax over the course of his life than you have paid over the course of
> your life.  How did he do that?
>
> No taxes were ever paid on the $30 Billion dollars he earned, and now,
> because he is giving it to a non-profit foundation, none will ever be
> paid on it.
>
> A "flat-tax" doesn't change that--it's still just a tax on income, and
> those who earn incomes can't avoid paying it.
>
> You and Rik can't avoid earning incomes in your chosen professions, but
> don't think that by jiggering around the rates on which you pay you can
> substantially alter the percentage of your income that will go to the
> government to pay for things the majority of your countrymen have
> decided to spend your money on.
>
> The Wall Street Journal is happy to distract you with tax plans that
> benefit the majority of their readers whose principal income does not
> come from "income" as defined in "flat-tax" schemes.
>
> Bill Effros
>
> Brad Haslett wrote:
> > Rik,
> >
> > I've kept my eye one the ball as close as anyone.  The IRS has you by
> the
> > nads, except for BillE. I wish he would share his secrets.  I doubt he
> > has
> > any secrets,  just smoke and mirrors.  We'll see.
> >
> > Brad
> >
> >
> > On 1/18/07, Rik Sandberg <sanderico at earthlink.net> wrote:
> >>
> >> Brad,
> >>
> >> Well, I finished reading her article ...... She's still scary ....
> Wrong
> >> headed thinking....
> >>
> >> But, you are right. A clean slate is in order and IMO the only
> >> worthwhile way to go.
> >>
> >> Rik
> >>
> >>
> >> Rik Sandberg wrote:
> >>
> >> > Brad,
> >> >
> >> > I have to admit, I came unglued right away and didn't read the whole
> >> > article. Maybe I should go back now that I've settled down and finish
> >> > it :)
> >> >
> >> > Yes, I AM in favor of a new sheet of paper. I still like the sales
> tax
> >> > idea
> >> >
> >> > www.fairtax.org
> >> >
> >> > With this program, one could literally choose whether he'd like to
> pay
> >> > taxes like a rich guy or pay very little. 'Course one's standard of
> >> > living is going to have to reflect that choice. But for the
> >> > conservative spender, saving for retirement might actually be a
> >> > possibility.
> >> >
> >> > And Philip ..... there is a provision in this to repeal ..... uh,
> >> > whatever the hell amendment it is, that allows income taxes.
> >> >
> >> > Rik
> >> >
> >> >
> >> > Brad Haslett wrote:
> >> >
> >> >> Rik,
> >> >>
> >> >> I understand your point.  However, comma, the bottom 50% pay very
> >> >> little,
> >> >> and a huge hunk of that percentage don't participate anyway.  Let's
> >> >> make it
> >> >> official.  The top 20% pay most of the taxes, in fact, the top 5%
> pay
> >> >> most
> >> >> of them, but everyone get's one vote.  I say we start with a new
> >> >> sheet of
> >> >> paper.
> >> >>
> >> >> Brad
> >> >>
> >> >>
> >> >> On 1/18/07, Rik Sandberg <sanderico at earthlink.net> wrote:
> >> >>
> >> >>>
> >> >>> Brad,
> >> >>>
> >> >>> Yikes!!! this woman is scary. I wonder if she isn't into the
> >> >>> Guinness......
> >> >>>
> >> >>> Subsidy, does she understand what that word means? How is taking
> >> >>> less of
> >> >>> a persons money a subsidy? By her way of thinking ALL of our money
> >> >>> belongs to the government and nice guys that they are, sometimes
> >> they
> >> >>> let us keep a little of it.
> >> >>>
> >> >>> This little blurb is really precious
> >> >>>
> >> >>> "They are also extremely regressive. A particular
> >> >>> tax exemption might be worth 35 cents on the dollar to a wealthy
> >> >>> individual
> >> >>> and only 10 cents to someone on the other end of the income scale
> >> who
> >> >>> faces
> >> >>> a lower tax rate."
> >> >>>
> >> >>> Excuse me ....... how can you give a tax break to people who
> >> don't pay
> >> >>> any???
> >> >>>
> >> >>> I think I'm going to read Ayn Rand again and see if I can figure
> out
> >> >>> where all those guys went. It's starting to seem like a helluva
> good
> >> >>> idea. This next thing has been around before, but maybe some need
> >> >>> reminding. here's a link
> >> >>>
> >> >>> http://www.julianpistorius.com/journal/?postid=45
> >> >>>
> >> >>> Rik
> >> >>>
> >> >>>
> >> >>>
> >> >>>
> >> >>>
> >> >>>
> >> >>> Brad Haslett wrote:
> >> >>>
> >> >>> > Here's an article from today's WaPo that dovetails neatly with
> our
> >> >>> recent
> >> >>> > discussion.  Care to make a bet about the home interest
> >> >>> deduction?  No
> >> >>> > one
> >> >>> > in the Congress has the guts to take on that sacred cow!
> >> >>> >
> >> >>> > Brad
> >> >>> >
> >> >>> > -----------
> >> >>> >
> >> >>> > *The $800 Billion Tax Loophole
> >> >>> > *
> >> >>> >
> >> >>> > By Maya MacGuineas
> >> >>> > Special to washingtonpost.com's Think Tank Town
> >> >>> > Thursday, January 18, 2007; 12:00 AM
> >> >>> >
> >> >>> > Democrats are in a bind when it comes to their domestic economic
> >> >>> agenda.
> >> >>> > They have promised a number of new and costly initiatives such as
> >> >>> > fixing the
> >> >>> > Alternative Minimum Tax, providing middle-class tax relief, and
> >> >>> > increasing
> >> >>> > spending on homeland security and education. But they have also
> >> >>> made a
> >> >>> > commitment to fiscal responsibility. So how can they deliver on
> >> their
> >> >>> > promises without opening themselves up to the old "tax and spend"
> >> >>> label?
> >> >>> > Reforming tax entitlements -- a large, mostly under-the-radar
> part
> >> of
> >> >>> the
> >> >>> > federal budget -- might just give them a way out of their
> >> >>> predicament.
> >> >>> >
> >> >>> > As a result of the 1986 bipartisan tax reforms, the tax base was
> >> >>> > broadened
> >> >>> > and the tax code was greatly simplified. But these reforms have
> >> been
> >> >>> > gradually undone as Congress has created scores of new tax breaks
> >> and
> >> >>> > loopholes. Want to preserve historic buildings, encourage
> >> alternative
> >> >>> > energy
> >> >>> > sources, help working families, or give certain industries a
> boost
> >> >>> > without
> >> >>> > appearing to increase spending? Voil? -- a new targeted tax
> >> break is
> >> >>> > born.
> >> >>> >
> >> >>> > Most tax expenditures are really spending programs designed to
> >> look
> >> >>> > like tax
> >> >>> > cuts. Picture them as vouchers for healthcare, mortgage payments,
> >> >>> > daycare,
> >> >>> > transportation -- name the tax break. Dressing these programs
> >> up as
> >> >>> > tax cuts
> >> >>> > makes them a much easier sell for politicians who fear the "big
> >> >>> spender"
> >> >>> > label. But call them what you will, they drain the money from the
> >> >>> > Treasury
> >> >>> > and extend the scope of government. All told, this portion of the
> >> >>> budget
> >> >>> > represents $800 billion in lost government revenues annually.
> >> >>> >
> >> >>> > Not only do these tax breaks mask the true size of the
> government,
> >> >>> > they are
> >> >>> > a terrible way to make policy. They regularly pay people and
> >> >>> > businesses to
> >> >>> > do what they would do anyway, making them both poorly targeted
> and
> >> >>> > unnecessarily expensive. They are also extremely regressive. A
> >> >>> particular
> >> >>> > tax exemption might be worth 35 cents on the dollar to a wealthy
> >> >>> > individual
> >> >>> > and only 10 cents to someone on the other end of the income scale
> >> who
> >> >>> > faces
> >> >>> > a lower tax rate. It would be hard to justify a housing policy
> >> >>> that does
> >> >>> > more to subsidize the rich than the poor, yet that is exactly
> what
> >> >>> the
> >> >>> > $80
> >> >>> > billion a year home mortgage interest deduction does.
> >> >>> >
> >> >>> > Moreover, tax expenditures do not get nearly the level of
> scrutiny
> >> >>> they
> >> >>> > should. (If they did, would we really have a government program
> >> that
> >> >>> > subsidizes millionaires who buy vacation homes?) New government
> >> >>> programs
> >> >>> > should only be created following vigorous debate over whether a
> >> >>> proposed
> >> >>> > policy is important enough to warrant government intervention,
> and
> >> if
> >> >>> > it is,
> >> >>> > whether it will be effective. Discussions about new tax programs
> >> >>> however,
> >> >>> > tend to focus almost exclusively on the cost. Billions of
> >> dollars of
> >> >>> > targeted tax cuts have been passed in the past few years with
> >> little
> >> >>> > or no
> >> >>> > discussion about the worthiness of their goals. And unlike
> >> spending
> >> >>> > programs, which are subject to congressional review, tax
> >> expenditure
> >> >>> > programs are pretty much on automatic pilot.
> >> >>> >
> >> >>> > Reforming this area of the budget would not only be a critical
> >> >>> step in
> >> >>> > improving the tax code (and probably the closest thing we will
> see
> >> to
> >> >>> > fundamental tax reform in the next two years) it could also
> >> generate
> >> >>> > tens --
> >> >>> > if not hundreds -- of billions of dollars in savings.
> >> >>> >
> >> >>> > The first step should be capping a number of existing tax breaks.
> >> >>> Capping
> >> >>> > two of the largest breaks -- the home mortgage interest deduction
> >> and
> >> >>> the
> >> >>> > exclusion for employer-provided healthcare, would easily provide
> >> over
> >> >>> $50
> >> >>> > billion a year in savings. Both of these changes would reduce the
> >> >>> large
> >> >>> > subsidies that go to the highest earners while freeing up
> >> resources.
> >> >>> > Getting
> >> >>> > rid of a host of other tax breaks that subsidize certain
> >> >>> businesses or
> >> >>> > industries could easily generate another $25 billion. A thorough
> >> >>> > review of
> >> >>> > the over 150 existing tax expenditures to determine which ones
> >> have
> >> >>> > outlived
> >> >>> > their usefulness would yield still more in savings. As Democrats
> >> >>> > search for
> >> >>> > ways to offset the costs of their new agenda, reducing the $800
> >> >>> > billion tax
> >> >>> > loophole would be an excellent place to start.
> >> >>> >
> >> >>> > *Maya MacGuineas is the Director of the Fiscal Policy Program at
> >> >>> the New
> >> >>> > America Foundation.*
> >> >>> > __________________________________________________
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> >> >>> >
> >> >>>
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