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People reference the last third of Goodfellas in regards to this regime, He fits perfectly, I can picture him looking for the black helicopters when he is driving.
Geezer, you asked about tax reform. Here's what I would do:
1. Cut out a ton of loopholes, yes. Mostly for corporations. Cut out plenty for people as well, because I do see the pitfalls of using tax policy for social objectives. But the real problem with the complexity of the system is that it diverts brainpower away from productive uses and towards gaming the system.
2. Move to a territorial system, and stop incentivizing corporations to keep profits overseas.
3. Automatic fee of a certain amount for any subsidiary held in a tax haven or secrecy jurisdiction. You'd have to publish a formal list of these countries first, which would mean naming and shaming Delaware and Nevada, the UK, Ireland, Netherlands, Luxembourg, Switzerland, Singapore, and other important allies. But, fuggit. If the liberalism/neoliberalism mix is going to work then it has to take its seriously its own rules.
4. Raise the corporate tax rate. The IRS has the talent to do the cost/benefit analysis of multinationals leaving the country. The US is not a high-tax jurisdiction -- the opposite. There are only 3 OECD countries that collect less tax as a percentage of GDP than the US. One of them is Mexico, which has a major corruption issue. The other is a tax haven (Ireland), and in Korea the big firms are almost quasi-governmental. This is still the best jurisdiction in the world in which to raise funds, hire/fire people, capture regulators, lobby legislators, and, as well, "innovate". Infrastructure is lacking compared to SE Asia and Europe, but not by a huge amount. So multinationals aren't going anywhere and nobody's opportunities are being stifled until that rate is higher than legitimate alternative destinations, and by a margin significant enough to offset all the other advantages of being in the US. Even then, CEOs would have to think seriously about upping stakes and I bet few would. Moving elements of a multinational is a massive undertaking. My sense of justice says they should be squeezed for every penny, and that's right and fair. Probably more sustainable to figure out what that amount is, expressed in an increased tax rate, and settle for 75% of it.
If you take it and spend it on infrastructure and education/training, those corporations with an increased tax burden will do just fine.
I agree with everything above except raising the corporate tax rate. Removal or modification of deductions should be sufficient. Or impose a minimum rate, like 10%. Multi billion dollar companies game the system, like General Electric. Several times in the last 10 years, GE has paid ZERO in corporate tax. Frickin' zero! And I'd impose an "Apple" clause - overseas earnings are taxed, regardless of where its earned or kept. The US can recover corporate tax without raising the rate, imo. I find it absolutely hysterical when politicos wring their hands and whine about a top corporate rate of 35% when the average (large) biz pays less than 8%. My wife has been a sole proprietor business for more than 25 years and she gets absolutely hammered at tax time. I wish she paid the GE rate. But hey, she doesn't have lobbyists that can provide senators and reps with hookers and blow, so her biz is highly taxed.
“Outside of a dog, a book is a man's best friend. Inside of a dog, it's too dark to read.” - Groucho Marx
They need to get rid of the mortgage interest and local/state tax deductions as part of a tax cut package. There's roughly zero chance in hell they get rid of the mortgage interest deduction for political reasons. The local/state tax deduction, though, could get nixed easily.
FWIW, the folks who create jobs are paying 7.65% of their gross payroll in taxes (probably slightly lower given the cap to payment requirements).
I agree with everything above except raising the corporate tax rate. Removal or modification of deductions should be sufficient. Or impose a minimum rate, like 10%.
Spot on.
Raising the corporate tax rate is a disincentive to home basing essentially American Corporations, the global nature of such corporations not withstanding.
I've been a sole proprietor for most of my medical working career (about 20y). I've never incorporated but the same tax advantages, with some minor differences, apply to my tiny business as apply to GE.
I've often wondered why more people don't sell their talents and services on a contract basis rather than letting employers (and the Federal tax system) soak you.
If a new tax code were to eliminate all the deductions I have available to me as a sole proprietor and make extensive use of to reduce taxable income, I'd fairly, and rightly so, pay more taxes. My little business is a microcosm of the billions of dollars in taxes that are rightfully owed by corporations but legally gamed to avoid.
Mission to CFB's National Championship accomplished. But the shine on the NC Trophy is embarrassingly wearing off. It's M B-Ball ..... or hockey or volley ball or name your college sport favorite time ...... until next year.
I'd fairly, and rightly so, pay more taxes. My little business is a microcosm of the billions of dollars in taxes that are rightfully owed by corporations but legally gamed to avoid
I'd love for someone to definitively lay out what is "fair" or "right" so that we can all just follow along. Seems like an easy answer. LOL.
Congress set the tax rate that applies to you as a sole proprietor and provided you with the opportunity to lower those taxes. Taken as a whole, you pay what you're "supposed" to pay or what is "right" to pay. Or whatever.
If you want a simpler tax code, I think the argument ought to be made in those terms.
TBH, I wouldn't be against a system so neat and easy that it required no tax filings if you are an employee. The employer withholds at the correct rate and that's it. No deductions. Not even children or childcare.
And, yes, I've taken advantage of all of those deductions for years and will continue to do so without an ounce of remorse, guilt, or feeling I'm being unfair. I'm following the law. I'm perfectly fine with changing the law to something simpler.
Dan Patrick: What was your reaction to [Urban Meyer being hired]? Brady Hoke: You know.....not....good.
I'd love for someone to definitively lay out what is "fair" or "right" so that we can all just follow along. Seems like an easy answer. LOL.
heh ..... OK. Obviously "fair" is in the eye of the guy being taxed.
Through the years of my medical practice, I've found it easy to squeeze myself down into the 25% bracket based on taxable income. If I simply filed based on that taxable income I'd get soaked.
Here's where I think corporations (and I include similar tax advantages for Sole Proprietorship) game the system. It is perfectly legal for me to depreciate my Corvette, deduct a percentage of the cost of operating it, deduct what deferred income I am allowed to put in my company 401K (and this is beyond the legal contribution to it as IRA/401K contributions), deduct the cost of most of my dry cleaning and clothes I purchase (medical people wear "uniforms."), deduct the cost of my life insurance, my medical insurance, the list goes on.
In the end, my real tax rate is significantly lower than 25% becasue I can legally shelter a hefty portion of my income that the average Joe who is filing as an employee can't. Do I think this is fair? Well, hell yes ..... to me and it's legal. So, like you, I'm fine with it.
Do I think this sort of advantage that accrues to me because I am earning money as a business is fair relative to someone else who is a medical practitioner, doing the same things I do on the job, and is an employee? Relatively speaking and in other than absolute terms, no.
It's the same thing with GE but in taxes millions, even billions, more than I might be avoiding. Because of the huge number of advantages in the form of deductions and deferrals the corporate tax code gives to businesses the Fed looses revenue that I think they should otherwise be able to obtain. JMO, your mileage may vary.
Mission to CFB's National Championship accomplished. But the shine on the NC Trophy is embarrassingly wearing off. It's M B-Ball ..... or hockey or volley ball or name your college sport favorite time ...... until next year.
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