Corporations Pay NO TAXES!!! [Archive]

Mark G

08-14-2008, 10:45 AM

To clarify- the report is speaking of FCDC's And USCC's. THat is to say Foreign controlled domestic corporations ( companies operating within the US - but owned - thus controlled by foreign based corporations.) In other words they do pay taxes to the US- providing they make INCOME.

A USCC is a U.S. owned/controlled corporation.

Report means SQUAT- you can infer all you want, if your goal is to stir the pot.

Example- I can infer that many foreign countires trying to set up operations in the US are having a hard time competing- thus less income means less tax liability.

I could infer that these companies are more willing to use "creative" accounting practices (ie- Enron)- Thus they are adept at "hiding income" thus reducing tax liability.

Lots of inferences could be drawn, none of which may have any accuracy whatsoever.

No where in the report does it suggest that they pay less taxes per $income, relative to what USCC's pay, which would suggest they receive more favorable tax treament than USCC's. If that were the case then, yes it would be fodder for political debate.

Other wise, as I said, it means squat.

Mark G

08-14-2008, 11:09 AM

One problem- the report tries to estimate tax liability based on Gross receipts and/or assets. This is a poor substitute for claculating taxable income- I can sell a lot of product at a loss and have high gross receipts- but no taxable income if my costs exceeds my revenue.

Judging tax liability on asset valuation is ludicrous- I can own dozens of manufacturing plants- that tells me nothing about whether such plants are operating at a loss or a gain for the year.

Mark G

08-14-2008, 11:22 AM

Also keep in mind- the the years being studied (98-2005). In the wake of a recession and the debacle over the Enron and Worldcom mess- many companies-both foreign and domestic owned, were hit hard during those years. It's not surprising to see a lot of firms taking losses on the books during that time frame.

I'm not suggesting that it doesn't warrant further investigation, perhaps it does, but nothing concrete can be deduced from the information given.

saltandsand

08-14-2008, 12:13 PM

Oh, okay... it means squat... zippo... nodda...

Whatever... cynics abound and critics are often wrong.

The report is but a beginning of inquiry into the issue. IMO it's well past time for this matter to be reviewed, unless of course you happen to be one of "them" who are benefiting from the boondoggle.

SurfCat has made several points concerning the study which are somewhat on point. But let's take a view that this was not intended to be a be-all and end-all study. And appropriate caveats are made within the report so it is not misleading as is being inferred.

BTW: I'd hardly call the period of 1998 to 2000 a recession... but, if that what it was, then there's no doubt that we're in a solid DEPRESSION now.

Mark G

08-14-2008, 01:56 PM

1.as figure 1 shows, the number of large fcdcs and large usccs that reported no tax liability peaked around 2001 and 2002. These years correspond roughly with a period of economic recession in the united states. However, we did not do any analysis to determine the effect of the recession on the patterns shown in figure 1.

2. from 1998 through 2001, a higher percentage of all fcdcs reported no tax liability than all usccs, but differences after 2001 were not statistically significant.

and (repeating myself)

I'm not suggesting that it doesn't warrant further investigation, perhaps it does, but nothing concrete can be deduced from the information given.

Hmm, the report itself indicates a recession, and also admits to not attmepting to correlate the data.

One doesn't need to be an economics professor to understand- many firms took a hit subsequent to the aftermath of 911, which also coincided with the market shake out from Enron, etc., and yes the recession.

Proclaiming in huge writing

Corporations Pay NO TAXES !!!

warrants as much attention as a supermarket tabloid headline.

If I am somehow missing your point, I await your rebuttal, keep it civil and we can discuss.

Malakas07

08-14-2008, 03:37 PM

inaccurate, misleading, and deceptive thread title.

no taxes if you don't turn a profit.

sprtsracer

08-14-2008, 04:14 PM

Heck...I just can't wait for Obama to take office so the "BIG OIL" companies can get taxed more. That way, that'll make up the difference and we can pay more for gas!!!:rolleyes:

jcreamer

08-14-2008, 04:33 PM

heck...i just can't wait for obama to take office so the "big oil" companies can get taxed more. That way, that'll make up the difference and we can pay more for gas!!!:rolleyes:

he he heh heh

saltandsand

08-14-2008, 08:11 PM

The scope of the work appears in Appendix I. Transfer pricing was outside the scope, although may be one of the several explanable reasons for the low tax rates.

Continuing upon scope, the report, at page 5, says "Low tax burdens can be measured in various ways. Zero tax liability is one way. However, corporations paying only small, but not zero, amounts of tax also face low tax burdens. Furthermore, corporations that pay no or little tax over a number of years have a lower cumulative tax burden. Therefore, measures based on a range of tax amounts and tax years may give a fuller description of which types of corporations pay relatively less. Finally, the amount of taxes paid generally corresponds with the size of the corporation, with large corporations on average paying more than
small ones. Tax liability can be measured as the amount of tax paid as a percentage of gross receipts or total assets in order to account for
differences in the size of corporations."

Then it says, "As figure 3 shows, the overwhelming majority, about 79 to 80 percent of
both large FCDCs and USCCs that reported zero tax liability in 2005, established it on line 28 where they reported zero taxable income before
net operating losses. This means that their reported current-year deductions more than offset the positive current-year total income
reported on line 11. The two most commonly used deductions, as a percentage of the value of all deductions claimed, were “other
deductions” and the deduction for salaries and wages. See table 3 and figure 8 in appendix II for detailed comparisons of tax return line items
and deductions." This means that they reported no income before prior period losses.

Oh I'm sorry, yes for 2005 approximately 33 percent of the corporations paid something more than zero in taxes, see table I. Of this 33 percent, approximately 24 percent of FCDCs paid an average tax liability of $20,000 and approximately 31 percent of USCCs paid an average tax liability of $10,000. (See Table 4) SO ONLY ABOUT 11 PERCENT OF THE FCDCs PAID AN AVERAGE TAX LIABILITY OVER $20,000 AND A MERE 1.9 PERCENT OF THE USCCs PAID AN AVERAGE TAX LIABILITY EXCEEDING $10,000. Yeah sure, I suppose that's not ZERO for all of them but it's tantamount to zero for practically ALL of them.

saltandsand

08-14-2008, 08:14 PM

Now add up your tax bill, figure out what you pay and tell me that a total tax bill of $10,000 or $20,000 is alot. Chit... I pay almost that in just real property taxes.

saltandsand

08-14-2008, 08:16 PM

Heck...I just can't wait for Obama to take office so the "BIG OIL" companies can get taxed more. That way, that'll make up the difference and we can pay more for gas!!!:rolleyes:

I believe there's another thread on that topic...where I suggested raising gas taxes to force attention to consumption. In that thread I stated that businesses that depend on gas could be exempted from the tax so that the cost of the tax did not CREEP into the cost of all other products. Even though that last point was completely ignored by most that commented upon the thread.

BTW: This is not about Obama or McCain, it is a conversation about rational tax policy.

saltandsand

08-14-2008, 08:22 PM

inaccurate, misleading, and deceptive thread title.

no taxes if you don't turn a profit.

They pay no taxes because, in large part, they pay the income out in huge executive salaries and perks. Those executives, in turn, pay less in nominal taxes than an average worker.

So I suppose you're all for corporations paying next to ZERO in taxes, top execs paying far less taxes on a nominal basis that you do, and YOU PAY THE TAXES!!! That's called socialism by way of white collar welfare.

Sure would be nice to see some of those corporate profits going toward a return to investors so that retirement plans could come close to what the future inflationary costs require. But I assume you'd rather let your contributions toward Corporate America go toward someone else's consumption and retirement.

BubbaHoTep

08-14-2008, 08:24 PM

. . . .This surely will be an issue in the coming election. . . .

Uhm, not meaning to be persnickety here, but sns, you did bring up the election business in the first place, didn't you? :)

BubbaHoTep

08-14-2008, 08:48 PM

So I suppose you're all for corporations paying next to ZERO in taxes, top execs paying far less taxes on a nominal basis that you do, and YOU PAY THE TAXES!!! That's called socialism by way of white collar welfare.

Sure would be nice to see some of those corporate profits going toward a return to investors so that retirement plans could come close to what the future inflationary costs require. But I assume you'd rather let your contributions toward Corporate America go toward someone else's consumption and retirement.

I haven't heard anyone suggest that top execs should pay fewer tax dollars than the rest of us. I understand the theories behind Keynesian economics, and I understand that many people believe that to be an important stimulant to economic growth. I have no problems with giving tax breaks to larger corporations, providing they reinvest the money and create jobs. I do not believe, however, that a higher share of everyone else's tax dollars should get tossed into the trough in the meantime. (I don't know of anyone who believes that, btw.) I would like to see a mechanism in place to ensure that tax break dollars be reinvested, but I don't know how in the world that would be accomplished. "Down the line swallow the hook or don't even bite it" folks on both sides would bog down the debate. Those on one side would squawl about another "surrender" to "socialism" (or as Hillary called herself a "Progressive" - yeah, gotta love those condscending "I know what's best for you" Do-Gooders from a century ago), while those on the other side would try to use it as a springboard to take control of my life and, in the process, tell me where I had to pee next.

:)

saltandsand

08-14-2008, 09:20 PM

I haven't heard anyone suggest that top execs should pay fewer tax dollars than the rest of us. I understand the theories behind Keynesian economics, and I understand that many people believe that to be an important stimulant to economic growth. I have no problems with giving tax breaks to larger corporations, providing they reinvest the money and create jobs. I do not believe, however, that a higher share of everyone else's tax dollars should get tossed into the trough in the meantime. (I don't know of anyone who believes that, btw.) I would like to see a mechanism in place to ensure that tax break dollars be reinvested, but I don't know how in the world that would be accomplished. "Down the line swallow the hook or don't even bite it" folks on both sides would bog down the debate. Those on one side would squawl about another "surrender" to "socialism" (or as Hillary called herself a "Progressive" - yeah, gotta love those condscending "I know what's best for you" Do-Gooders from a century ago), while those on the other side would try to use it as a springboard to take control of my life and, in the process, tell me where I had to pee next.

:)

Good stuff. And likewise, not being persnickity, but how do you put mechanisms in place to ensure that tax break dollars are reinvested without taking control of people's lives? (Assuming of course that there could be such a thing as agreement as to where and what the reinvestment should be for... this being an almost impossibility these days.)

BTW: Yes I said it's sure to be an election issue, I didn't say that it's about Obama or McCain or what either party has said about it, or where anyone stands, or anything like that. This is a GAO report. I'm sure there'll be banter about tax policies of the candidates, but I'd rather stick to the idealogical issues rather than politics.

Also, Keynesian economics has been debated and criticized. Despite this, the theories are very good bases for discussions like this. Keynes pointed out that spending policies (fiscal) would be better oriented toward the lower class as they spend it (instead of save it) thus introducing more of the multiplier effect which requires demand. Fiscal policy and tax policy go hand in hand, IMO opinion Keynes's approach is but one way to approach this inter-relationship. Money policies caused revision of Keynesian theories. Business cycles, integration of micro-macro economics, optimal output and employment models, and a host of other approaches exist for discussion.

Good stuff... :)

wolfva

08-15-2008, 01:38 AM

Kindly read the GAO summary and, if you're questions aren't answered, then look to the full report (also shown on the link.) I'm not bantering with you on non-sense but am more than willing to discuss relevant issues. The report contains factual analysis, it's not hype.

I wasn't aware I was asking you to banter, nor did I claim this was nonsense. Your topic claims they are paying no taxes. The article speaks about differences in tax liabilities. So I would say you DID hype the article from the beginning. You don't need to oversensationalise a topic just to get people to read it; when you do, don't be surprised if you're not taken seriousely.

Surfcat made FAR better points then I can; frankly I'm economoisticly challenged. I'll note though that you start with Corporations paying NO taxes, and eventually move on to 33% of corporations paying taxes for ammounts over 0. Which makes sense, how do you tax under 0? And, as usual, you complain about those vile 'critics' who take an opposing viewpoint. Ummm, if you don't want to debate then why even bother posting?

saltandsand

08-15-2008, 03:14 AM

I wasn't aware I was asking you to banter, nor did I claim this was nonsense. Your topic claims they are paying no taxes. The article speaks about differences in tax liabilities. So I would say you DID hype the article from the beginning. You don't need to oversensationalise a topic just to get people to read it; when you do, don't be surprised if you're not taken seriousely.

Surfcat made FAR better points then I can; frankly I'm economoisticly challenged. I'll note though that you start with Corporations paying NO taxes, and eventually move on to 33% of corporations paying taxes for ammounts over 0. Which makes sense, how do you tax under 0? And, as usual, you complain about those vile 'critics' who take an opposing viewpoint. Ummm, if you don't want to debate then why even bother posting?

Here you go again. Accusations and denial of the same. You did say "Might as well point out that citizens of, say, the Ukraine, don't pay taxes to the US either." And you said that I oversensationalize and make nonsensical commentary... (The citizens of Ukraine have no relationship to the discussion, and have no obligation whatsoever to pay US income taxes... unless of course your referring to "tribute".)

Seriously, the point is that corporations are paying NOTHING near their share in taxes due to prefential tax treatment, lack of enforcement of standardized accounting, and other reasons referred to within the subject GAO report. My comment about their paying "No taxes" isn't oversensationalizing when you consider that the GAO report clearly shows:

ONLY ABOUT 11 PERCENT OF THE FCDCs PAID AN AVERAGE TAX LIABILITY OVER $20,000 AND A MERE 1.9 PERCENT OF THE USCCs PAID AN AVERAGE TAX LIABILITY EXCEEDING $10,000. ...tantamount to zero for practically ALL of them.

Kindly focus on the topics and let's have a civil debate. If you had noticed my response to Surfcat, I do believe that he and I are in the process of debating the issue. Namely, I am responding to his assertions and likewise he is doing the same.

BTW: Sensationlizing would have been my saying "ALL CORPORATIONS PAY ZERO TAXES" which is not what I said. I do humbly appologize for not editing my work to the high reporting and exacting literary standards that you so graciously seem to apply upon only a select number of those who seem to have ideas that disagree with your ideas. My editor in chief has notified me of the need for a clarification... the title should have read "PRACTICALLY ALL CORPORATIONS PAY ZERO TAXES."

wolfva

08-15-2008, 03:45 AM

saltandsand

08-15-2008, 04:01 AM

Posting a facetious topic title in capital letters with bold type face IS being overly sensationalistic. As you keep pointing out, corperations DO pay taxes. Just not as much as you would like them to. So you are proving your innitial statement wrong. Besides, aren't you complaining about FOREIGN corperations? Not all corperations? At least, that's what the GAO report seems to be about.

My Ukraine example wasn't apropo for the discussion; I was thinking your complaint was about foreign companies not paying US taxes. They shouldn't...IF they do not deal with the US. However, foreign companies which do business in the US SHOULD pay taxes. So I goofed on that one.

So, what is your thesis here? We should remember this because there is an election coming up why? It seems to me that NAFTA as well as giving China preferred trading status has alot to do with these discrepencies in taxation. So, we should vote Republican since Clinton brought in NAFTA? Or Democrat since Bush gave preferred trade status to China? Or Ron Paul? Would voting any of those people change matters? Wouldn't it be better to just write our congressmen since I doubt any new administration would do anything to change the current situation; however Congress could write better laws equalising the taxes (not holding my breath...). Then again, isn't one of the reasons foreign countries get a better tax rate is to stimulate imports? Lords know not much manufacturing goes on in the States anymore, and dang near everything comes from China.

My editor notified me and I issued a clarification... geez... what else do you want?
Okay... I put it in bold PRACTICALLY ALL CORPORATIONS PAY no taxes Hope that's satisfactory as I can't go back and edit the title to the intial post to the thread.

Without all the political stuff, I'd be interested in hearing more about how NAFTA and China's status as most valued trading partner come into this issue. There may be something here, I'm not seeing it. The report uses the classification of foreign-controlled domestic corporations (FCDC). An FCDC may involve imports to the USA but I'm not seeing what you are referring to unless you're speaking about transfer pricing. The FCDC classification is a domestic entity that is subject to domestic taxation and is simply owned by citizens, or another corporation, that is of foreign origin. Tell me more about the relationship you are making.

J_Lannon

08-15-2008, 04:58 AM

All the more reason for the US to go with the FAIR TAX plan. Then we would not have people whining about what taxes other people pay in.

wolfva

08-15-2008, 05:42 AM

That was low even for you SnS. After I responded to you you edited your post, adding 2 new paragraphs (the bottom two). You then take me to task for 'harping' on you after you corrected yourself, even though at the time I wrote my post you hadn't.

I can't discuss NAFTA or the China most favored trading partner in any more depth then I have because I'm not an expert. However, I believe both involve tax breaks for foreign corperations. A tax break would cause them to not pay as much in taxes.

Btw, what is the difference between a tax and a tax liability?

Hannibal

08-15-2008, 07:04 AM

This is not a new thing.

saltandsand

08-15-2008, 09:22 AM

That was low even for you SnS. After I responded to you you edited your post, adding 2 new paragraphs (the bottom two). You then take me to task for 'harping' on you after you corrected yourself, even though at the time I wrote my post you hadn't. Getting really old here Wolfva... my post #20 was 3:14 am, my edit of post #20 was at 3:35 a.m. and your comment to post #20 via post #21 was at 3:45 a.m. Not to mention that my comment in #20 is virtually the same as had appeared in post #12 which I made yesterday. It's this type of bantering that's really over the top. This personal attack is made for no other apparent reason except as an attempt to somehow disqualify me as a person, to undermine my approach, to whittle away at the substance of what I'm saying. I'm just putting this out here, it does not require your response. Our attention is better focused on reasoned debate and less on these trivalities.

I can't discuss NAFTA or the China most favored trading partner in any more depth then I have because I'm not an expert. However, I believe both involve tax breaks for foreign corperations. A tax break would cause them to not pay as much in taxes. Let me ponder this and determine a brief way to address it, this is somewhat complex.

Btw, what is the difference between a tax and a tax liability?

A tax liability is what you owe, and this is offset against payments made throughout the year. Taxpayers are required to make periodic payments throughout the year since the government can't function on year end payments (i.e., they need cash flow during the year just like workers need to be paid more than once a year.) The term tax and tax liability are often used interchangably. The term tax also refers to a category of taxation, for instance the gasoline tax.

Mark G

08-15-2008, 01:40 PM

SnS,

Ok, at least I'm straight with what your issues are- I thought you had some grievence with foreigners doing business in the U.S. Instead it's pretty much disdain for corporate tax regulations, irregardless of who owns the corporation.

Can't help you much there, bottom line is all corporations go to great lengths to minimize their tax liabilities-and it's their responsibilty to their stake holders to do so. The purpose of the report was an attempt to look into whether market manipulation games are being played, i.e. are the corporations playing within the rules, stretching the rules, or outright breaking the law (rules).

Tax avoidance involves minimizing the tax liability legally, tax EVASION, well we all know about Capone.

One thing from the study appears interesting, the decline in corporations claiming zero tax liability fell sharply after 2001. Make me wonder how much impact Sarbanes Oxley and the Enron fall out had on the issue. In other words, I believe there were a lot more corporations playing at least some of the same games as Enron, and no doubt a good many got a wake up call to "fly straight" after the fall out.

Personally I don't have an issue with corporations minimizing their tax liabilities leagally, but those who step out of bounds should be dealt with harshly.

Of course in that regards, my feelings would be the same whether talking individual taxpayers or corporations. No one should ever pay more taxes than leagally required, again good tax planning is based on tax avoidance, rather than tax evasion.

Admittedly, tax regulations are open to interpretation, the line between avoidance and evasion can be a very fine line indeed. ;)

redneckranger

08-15-2008, 01:44 PM

what corporations not paying taxes or wolftrap and sns?

redneckranger

08-15-2008, 01:46 PM

Corporations are all evil and Corporationy and sitting in there tall bulidings making money

saltandsand

08-15-2008, 01:49 PM

SnS,

One thing from the study appears interesting, the decline in corporations claiming zero tax liability fell sharply after 2001. Make me wonder how much impact Sarbanes Oxley and the Enron fall out had on the issue. In other words, I believe there were a lot more corporations playing at least some of the same games as Enron, and no doubt a good many got a wake up call to "fly straight" after the fall out.

Personally I don't have an issue with corporations minimizing their tax liabilities leagally, but those who step out of bounds should be dealt with harshly.

;)

I agree. And it is those laws that I'd like to discuss.

saltandsand

08-15-2008, 01:50 PM

what corporations not paying taxes or wolftrap and sns?

Claiming that I do not pay my legally required taxes is a very lowly comment, arguably defamation. You really should think about what you say.

redneckranger

08-15-2008, 01:51 PM

SnS you do realize you can't change everything right?

saltandsand

08-15-2008, 01:52 PM

Corporations are all evil and Corporationy and sitting in there tall bulidings making money

ALL evil? Really... so that includes those that do good things? And are you saying that an entity that is a creature of law is evil or do you mean that the people who run certain corporations are evil? Kinda like those who cast about defamatory comments???

redneckranger

08-15-2008, 01:52 PM

Claiming that I do not pay my legally required taxes is a very lowly comment, arguably defamation. You really should think about what you say.

I never said you didn't pay taxes

I was implying that you and wolftrap arguing tis the status quo LOL Lighten up yeesh :D

redneckranger

08-15-2008, 01:53 PM

ALL evil? Really... so that includes those that do good things? And are you saying that an entity that is a creature of law is evil or do you mean that the people who run certain corporations are evil? Kinda like those who cast about defamatory comments???

Nope actually quoting Team America World Police

that was the spoof on Tim Robins LOL

saltandsand

08-15-2008, 01:54 PM

SnS you do realize you can't change everything right?

Yep... but I ain't just sitting on my hands, whistling Dixie and acting helpless like I can't change a danged thing...

J_Lannon

08-15-2008, 06:58 PM

Read the FAIR TAX book and start getting on your congressman get the FAIR TAX BILL passed.

But I'm betting you wont. Your all content to sit here and pretend to be a bunch of Aristotles.

saltandsand

08-15-2008, 07:18 PM

I never said you didn't pay taxes

I was implying that you and wolftrap arguing tis the status quo LOL Lighten up yeesh :D

BTW: He refers to himself as Wolfva not "wolftrap" so stop the slam. I personally respect his opinion and he is entertaining this debate despite his self admitted lack of knowledge on the topic. You, on the other hand, are spewing sewage. I will not respond to personal attacks or self initiated sewage spills as there is alot of real crap that needs to be cleaned up.

saltandsand

08-15-2008, 07:21 PM

Read the FAIR TAX book and start getting on your congressman get the FAIR TAX BILL passed.

But I'm betting you wont. Your all content to sit here and pretend to be a bunch of Aristotles.

Seems you are the one who is content to do nothing. You couldn't even take a moment of time, beyond your attack, to make a cogent point about the Fair Tax policy. I'd be more than happy to hear your points as such would be consistent with the thread.

J_Lannon

08-15-2008, 07:45 PM

Seems you are the one who is content to do nothing. You couldn't even take a moment of time, beyond your attack, to make a cogent point about the Fair Tax policy. I'd be more than happy to hear your points as such would be consistent with the thread.

Like I have said in a previous post. Read the the book. You were part of that thread and know fully what I was talking about.

But anyways, Ill bite.;)

1. No tax filings at the end of the year. You only pay taxes on what you buy.

2. IRS not determining what you actually keep out of your paycheck......you keep 100%

3. No death taxes.

4. A prebate to ensure no American pays federal taxes on spending up to the poverty level.

5. Enables retirees to keep their entire pensions.

6. Ensures Social Security and Medicare funding.

7. Abolishes the IRS

8. Houses and land do not get confiscated over IRS disputes. Many lives have been ruined with this.

wolfva

08-15-2008, 07:50 PM

BTW: He refers to himself as Wolfva not "wolftrap" so stop the slam. I personally respect his opinion and he is entertaining this debate despite his self admitted lack of knowledge on the topic. You, on the other hand, are spewing sewage. I will not respond to personal attacks or self initiated sewage spills as there is alot of real crap that needs to be cleaned up.

Considering how often we DO argue, I'd say his stating it's the status quo is not an attack but a basic fact. In any case, he's using humor that most of us recognise; go rent 'Team America, World Police'.

When I responded to you, you had not written those 2 paragraphs. Obviousely you typed much faster then I did. SO, I'll retract my comment about it being low of you. But stop telling other people to stop attacking you as you attack them. For instance, J's last post. He suggests reading the Fair Tax book and talking to your congressman. You equate that with doing nothing. You also haven't said what YOU are doing about the issue, beyond chatting about it on a fishing board. A better answer would have been to responded with what your actions are.

Here is a suggestion. Stop being so defensive. If you think someone is attacking you, don't respond to the 'attack'. Instead just answer the questions. You're here for debate, right? Part of a debate is answering questions.

J_Lannon

08-15-2008, 07:51 PM

Seems you are the one who is content to do nothing. You couldn't even take a moment of time, beyond your attack, to make a cogent point about the Fair Tax policy. I'd be more than happy to hear your points as such would be consistent with the thread.

By the way........you need to loosen up. Pull the pine cone out of your arse and smile a little.

saltandsand

08-15-2008, 10:46 PM

By the way........you need to loosen up. Pull the pine cone out of your arse and smile a little.

You're here for debate, right? Part of a debate is answering questions.

:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

saltandsand

08-15-2008, 10:57 PM

Like I have said in a previous post. Read the the book. You were part of that thread and know fully what I was talking about.

But anyways, Ill bite.;)

1. No tax filings at the end of the year. You only pay taxes on what you buy.

2. IRS not determining what you actually keep out of your paycheck......you keep 100%

3. No death taxes.

4. A prebate to ensure no American pays federal taxes on spending up to the poverty level.

5. Enables retirees to keep their entire pensions.

6. Ensures Social Security and Medicare funding.

7. Abolishes the IRS

8. Houses and land do not get confiscated over IRS disputes. Many lives have been ruined with this.

I will admit, I have not read nor have studied this so called "fair tax." If your synopsis is adequate to then I call it BUNK. Here's why:

The proposal is merely a value added taxation system, plying upon Keynesian economics. It assumes that all value added to the purchaser will be reported, or otherwise controlled, by the government. This is ridiculous...let one man on this board profess that he has never purchased something of value without rendering taxes unto the government.

Keynesian economics is the basis. Not that I fault Keynes but a reasonable study will show that it is a theory. And, his theory is based upon consumption at the lowest wage level of society, which the "fair tax" provides an exemption.

Accumulation of excessive wealth also is a subject of review for taxation policy. This turns on its head with the "fair tax" agenda since it eliminates taxes on monies that should have otherwise been disenfranchised and set to more productive use.

Like I said, I haven't read or studied on the "fair tax" but it doesn't seem that fair to me based on what you have summarized. I appreciate the time you've taken to put this information forward and, at the risk of sounding defensive I'll say that I did not encounter this matter at this level of discussion in any other thread.

Taxes are a necessary evil of a civilized society, that does NOT mean that taxes, in and of themself, are evil. (But April 15th suxs.) :D

saltandsand

08-15-2008, 11:01 PM

BTW: Ensuring Social Security and Medicare funding is not necessarily a tax policy issue since these are supposed to be TRUST FUNDS. The tax policy issue comes into play because our elected officials seems to want to continuously raid those funds to cover other tax-based initiatives that were not properly funded through tax revenues.

WE CAN'T SPEND OUR WAY OUT OF THIS PUZZLE... lest we risk ridicule amoung the global community. (Although I am pleased to see the reduction in the US-petro-dollar equation and increase in dollar unitization rates.) :)

Mark G

08-15-2008, 11:24 PM

Like I have said in a previous post. Read the the book. You were part of that thread and know fully what I was talking about.

But anyways, Ill bite.;)

1. No tax filings at the end of the year. You only pay taxes on what you buy.

2. IRS not determining what you actually keep out of your paycheck......you keep 100%

3. No death taxes.

4. A prebate to ensure no American pays federal taxes on spending up to the poverty level.

5. Enables retirees to keep their entire pensions.

6. Ensures Social Security and Medicare funding.

7. Abolishes the IRS

8. Houses and land do not get confiscated over IRS disputes. Many lives have been ruined with this.

The first time this was presented I rejected it out of hand (somewhat). I may have to give it a read, if only to further my belief that there is no such thing as a completely "fair" tax, as "fair" is entirely dependent on perspective and thus subjective.

I suppose a grandfather clause could be put into effect, but how would it to be "fair" to keep people that don't have certain items from purchasing them, and allow those that already have said assets to go free. Seems like nothing more than an attempt to keep those in certain income levels where there at. (rich get richer) cause they are earning interest on their "unspent" earnings, while the less better off (not necessarily poverty level) are trying to keep up.

How does the book deal with our never ending need to progress- aka a recession hits and the gov't goes belly up because everyone decides to not "spend" to avoid taxes. I'll try to keep an open mind, but it doesn't seem the least bit feasible. Isn't our economy based on people spending money? Didn't most of us recently recieve a tax rebate to encourage spending?

Stifling spending may be good for those living beyond their means, but in no way can be construed as "good" for the economy. Take a poll among those who depend on people spending, (most every business), and I think you will have your answer.

saltandsand

08-16-2008, 02:56 AM

The first time this was presented I rejected it out of hand (somewhat). I may have to give it a read, if only to further my belief that there is no such thing as a completely "fair" tax, as "fair" is entirely dependent on perspective and thus subjective.

I suppose a grandfather clause could be put into effect, but how would it to be "fair" to keep people that don't have certain items from purchasing them, and allow those that already have said assets to go free. Seems like nothing more than an attempt to keep those in certain income levels where there at. (rich get richer) cause they are earning interest on their "unspent" earnings, while the less better off (not necessarily poverty level) are trying to keep up. Assuming that such a drastic change in taxation could occur, I agree that the value derived should somehow be assessed for a foundation to support the heritage of the American people before we transitioned to such a drastically different taxation system.

How does the book deal with our never ending need to progress- aka a recession hits and the gov't goes belly up Never happen, if this blessed Country goes belly up then World chaos should occur... a day that I hope my progeny shall never see.because everyone decides to not "spend" to avoid taxes. I'll try to keep an open mind, but it doesn't seem the least bit feasible. Isn't our economy based on people spending money? Didn't most of us recently recieve a tax rebate to encourage spending? Sure, consume, consume, consume... then there is the idea of QUESTIONING CONSUMPTION.

Stifling spending may be good for those living beyond their meansThose who live beyond their means and continue to expect bailouts from responsible citizens like myself are called criminals... look at their intent.... ME ME ME ME ME, but in no way can be construed as "good" for the economy. Take a poll among those who depend on people spending, (most every business), and I think you will have your answer.

Businesses that cater to unbridled consumption cause disfunction with economic efficiency. Keynesian economics seems to be prevalent amongst those on this board...not saying its a flawed theory, but it's limited in the current world economy.

We asked for globalization, we supported more than one enemy in producing it, we've now got to deal with the problems we created. Not saying we, as the GREATEST and BEST country in the world, should not take a leading role.

Just ask... is this a sustainable program?

J_Lannon

08-16-2008, 05:56 AM

The first time this was presented I rejected it out of hand (somewhat). I may have to give it a read, if only to further my belief that there is no such thing as a completely "fair" tax, as "fair" is entirely dependent on perspective and thus subjective.

I suppose a grandfather clause could be put into effect, but how would it to be "fair" to keep people that don't have certain items from purchasing them, and allow those that already have said assets to go free. Seems like nothing more than an attempt to keep those in certain income levels where there at. (rich get richer) cause they are earning interest on their "unspent" earnings, while the less better off (not necessarily poverty level) are trying to keep up.

How does the book deal with our never ending need to progress- aka a recession hits and the gov't goes belly up because everyone decides to not "spend" to avoid taxes. I'll try to keep an open mind, but it doesn't seem the least bit feasible. Isn't our economy based on people spending money? Didn't most of us recently recieve a tax rebate to encourage spending?

Stifling spending may be good for those living beyond their means, but in no way can be construed as "good" for the economy. Take a poll among those who depend on people spending, (most every business), and I think you will have your answer.

Good points. But the current system is dependent on the same " state of the economy".

The coffers go down during a recession now dont they? Im sure the coffers will react the same way under the Fair Tax plan.

The fair tax is not meant to stifle spending. It is meant to tax on what people spend.

Lets face it, there are companies leaving the USA every day for foreign shores because of our current tax system. Implementing the fair tax will not only bring back businesses, but will also turn the US into a tax haven for alot of overseas companies as well.

It is not a perfect plan. But it is definately 100 times better than what we suffer through today.

redneckranger

08-16-2008, 10:29 AM

saltandsand

08-16-2008, 07:57 PM

Please correct me if I'm wrong on this. If we did become a tax haven for foreign countries as SnS says. Wouldn't that create jobs for American Workers. If it does isn't that what we want?

I don't know I'm no self appointed expert but seems to be that both answers would be yes.

Depends on what type of jobs you want, at what level of pay, and how little or much you'd like workers to be able to keep from their pay after paying taxes.

jhmorgan

08-17-2008, 12:01 AM

Saltandsand arguing again? No way, real shocker. I mean, who would have thought that someone who posts over 7.5 times a day would be attempting to dominate every conversation they are a part of.

I think that you have major image issues. You feel the need to constantly try to prove your worldy knowledge on EVERY SINGLE topic that gets posted on this forum. I can personally guarantee that there are many, many people on this site who know far more than you do on many of the topics you post on, but they do not feel the need to always expouse their personal oppinion on others. Its rediculous how many things you try to argue about. And moderators, I am sorry if this post is out of line, but I have felt like this for about 6 months now regarding saltandsand and I am sure I am not alone in that regard...

saltandsand

08-17-2008, 02:22 AM

jhmorgan

08-17-2008, 01:14 PM

Because you start a thread means you have to argue with every single person that posts in it? And I am not surprised that its a thread you started, because every non related fishing thread I fully expect you to be the author. And I would not say that you know a lot about the subject, because, as previously stated, many of your arguments do not stand up to scrutiny. You are a jack arse in every sense of the word...

Mark G

08-17-2008, 04:13 PM

Good points. But the current system is dependent on the same " state of the economy".

The coffers go down during a recession now dont they? Im sure the coffers will react the same way under the Fair Tax plan.

The fair tax is not meant to stifle spending. It is meant to tax on what people spend.

Lets face it, there are companies leaving the USA every day for foreign shores because of our current tax system. Implementing the fair tax will not only bring back businesses, but will also turn the US into a tax haven for alot of overseas companies as well.

It is not a perfect plan. But it is definately 100 times better than what we suffer through today.

Not having read the book I don't want to appear to be attacking an idea I haven't given full consideration.

Nevertheless it seems fairlly obvious this would turn our current concept of business and economy on it's ear. Part of the proble is how do you define "spend".

Their is an old saying in business that it takes a buck to make a buck.

Let's throw out an example, a small business is having a hard time making a go of it.

During the year they have expenses "spent" money of $250,000 and sales (revenue) of $270,000. Under current accounting this equates to a net profit of $20,000 and a tax liability on that amount. To suggest they have to pay taxes on money spent is to now say they have a tax liability based on their expenses, or tax on $250,000.
Let's assume a flat tax rate of 10 %. The tax on the $20,000 net profit would equate to $2000, leaving the owners with $18,000 net profit. On the other hand using that flat rate on $250,000 (spent money)would equate to a $25,000 tax bill, and the company only has the $20,000 profit to pay the bill. I can see bankruptcy looming in the near future for this firm. Not likely that firm will "view" this as a "fair" tax system.

That addresses expenses but not expenditures. To start a business generally requires the purchase of assets, production equipment, delivery vehices, etc.This class of "spending" money is currently called (expenditures).This would still qualify as "spent" money, during the year, not only would expenses typically used to run a business be subject to tax, but so would any attempt to purchase assets to help run or improve the business.

I simply cant see this as being attrative to any business- and would surmise it would tend to send them running, rather than encouraging them to set up business here.

To say that this new tax system won't "stifle" spending doesn't make any sense. That is exactly what it would do, and in terms of forcing "frugal" financial decisions might have some desirable effect on keeping people living within their means, but would be disasterous for busnesses.

The other downside I see is the implications on financing. Too many people already are carrying way too much debt, this "fair" tax would appear to exacerbate the situation. Why? If I pay for something out right with cash I have "spent" money. If on the other hand I charge it to my credit card, I haven't "spent" the money until I make payments to the credit card company. This would encourage the buy "charge" it and own it now mentality, but would be seen as a way to avoid paying taxes until the money is actually spent to pay the bill.

THe ultimate result is big business would soon find that major financing is the way to forestall tax payments until some time in the future. You can change the rules of the game, the ultimate objective of payng less taxes will still be the goal, instead of corporations looking for creative ways to show less profit, they will simply change to looking for creative ways to show less "Spent" money.

J_Lannon

08-17-2008, 06:49 PM

Not having read the book I don't want to appear to be attacking an idea I haven't given full consideration.

Nevertheless it seems fairlly obvious this would turn our current concept of business and economy on it's ear. Part of the proble is how do you define "spend".

Their is an old saying in business that it takes a buck to make a buck.

Let's throw out an example, a small business is having a hard time making a go of it.

During the year they have expenses "spent" money of $250,000 and sales (revenue) of $270,000. Under current accounting this equates to a net profit of $20,000 and a tax liability on that amount. To suggest they have to pay taxes on money spent is to now say they have a tax liability based on their expenses, or tax on $250,000.
Let's assume a flat tax rate of 10 %. The tax on the $20,000 net profit would equate to $2000, leaving the owners with $18,000 net profit. On the other hand using that flat rate on $250,000 (spent money)would equate to a $25,000 tax bill, and the company only has the $20,000 profit to pay the bill. I can see bankruptcy looming in the near future for this firm. Not likely that firm will "view" this as a "fair" tax system.

That addresses expenses but not expenditures. To start a business generally requires the purchase of assets, production equipment, delivery vehices, etc.This class of "spending" money is currently called (expenditures).This would still qualify as "spent" money, during the year, not only would expenses typically used to run a business be subject to tax, but so would any attempt to purchase assets to help run or improve the business.

I simply cant see this as being attrative to any business- and would surmise it would tend to send them running, rather than encouraging them to set up business here.

To say that this new tax system won't "stifle" spending doesn't make any sense. That is exactly what it would do, and in terms of forcing "frugal" financial decisions might have some desirable effect on keeping people living within their means, but would be disasterous for busnesses.

The other downside I see is the implications on financing. Too many people already are carrying way too much debt, this "fair" tax would appear to exacerbate the situation. Why? If I pay for something out right with cash I have "spent" money. If on the other hand I charge it to my credit card, I haven't "spent" the money until I make payments to the credit card company. This would encourage the buy "charge" it and own it now mentality, but would be seen as a way to avoid paying taxes until the money is actually spent to pay the bill.

THe ultimate result is big business would soon find that major financing is the way to forestall tax payments until some time in the future. You can change the rules of the game, the ultimate objective of payng less taxes will still be the goal, instead of corporations looking for creative ways to show less profit, they will simply change to looking for creative ways to show less "Spent" money.

Well, the company used in your scenario would be in trouble in any form of tax code. A 9% profit margin is way to skinny to run any business.

The Fair Tax is a end user....consumption tax. Business accounting would be simplified under the fair tax.

You gotta read the book.

Or!

Contact: Congressman John Linder Georgia 7th district.

email: john@JohnLinder.com

address: P.O. Box 4026 Duuth, GA. 30096

Ph. 770.495.3767

HellRhaY

08-17-2008, 06:56 PM

I think that you have major image issues. You feel the need to constantly try to prove your worldy knowledge on EVERY SINGLE topic that gets posted on this forum. I can personally guarantee that there are many, many people on this site who know far more than you do on many of the topics you post on
most of citations are from the internet, that makes google his friend, cntrl +c his better friend and cntrl +v his best friend.
GOOGLE makes you look smart.

Because you start a thread means you have to argue with every single person that posts in it?
oh jeeez, we have a jettypark the 2nd?

Shooter

08-17-2008, 07:07 PM

Folks, one last time,,, you can argue points but NO PERSONAL ATTACKS and yes that inculdes calling each other names.

*I have a name I would like to call a few* :eek:

saltandsand

08-17-2008, 11:34 PM

This is a complex topic.

Since I've heard a rumbling from the crew who aren't interested in looking at the CONTROL C, CNTL+V or whatever links they wanna call them... I'll defer with including links into my posts.

Sorry to JLannon and Surfcat and others who want to carry along a reasoned discussion. In no way do I diminuate what I parry that the minions carry over.

As I stated, a value-added tax system is not without merit. Others have pointed that a value-added tax code is difficult to measure and enforce. The current tax code has its challenges with enforcement, the GAO report elludes to these.

Fair and collectible taxes is the goal of any sustainable government, otherwise we'd be ruled by group of punks who can't spend a moment considering the ramifications of their non-supportable CNTL > X <BS non-sense or otherwise slammable commentary. Hey, if you don't like the topic, then don't contribute.

Other than value added, or an income/wage based withholding system, is there another workable idea? How about taxing equity or wealth acquisition? (Whoa... I know that one is tough to enforce from a collection point of view let alone measurement/accounting...just threw it out there for consideration...)

Or how about a taxation code that is based upon consumption of publicly funded resources? This is an idea that has been debated. It's along the line of taxes being based on scarcity. A complex idea in and of itself but worthy of consideration.

wolfva

08-18-2008, 01:17 AM

From what I'm hearing, the Fair Tax program would be basically like a retail tax, right? Or is that a different animal?

Mark G

08-18-2008, 08:49 AM

Well, the company used in your scenario would be in trouble in any form of tax code. A 9% profit margin is way to skinny to run any business.

The Fair Tax is a end user....consumption tax. Business accounting would be simplified under the fair tax.

You gotta read the book.

Or!

Contact: Congressman John Linder Georgia 7th district.

email: john@JohnLinder.com

address: P.O. Box 4026 Duuth, GA. 30096

Ph. 770.495.3767

Well, my point was most businesses especially small ones, have trouble getting started , and operate at a loss or only a small profit initially. In any regard, every business typically has more money spent than profit earned in a given year.

My own firm last year had roughly $817,000,000 in operating revenue, with operating expenses of 744,000,000, for a net operating margin (profit) of $73,000,000. Would we rather pay taxes on the $73M profit or the $744M in expenses. Obviously operating under a spent money philosphy would raise the tax base 10 fold.

From what I'm hearing, the Fair Tax program would be basically like a retail tax, right? Or is that a different animal?

J. Lannon might be better equipped to answer that, but yes as I percieve it, it would essentially be a sales tax under a new name, a "buy" tax, and would likely be collected in the same manner sales taxes are done, but still leaves the question open, have I "spent" money when I charge or finance an item?

I'll see if I can pick up a copy of the book at lunch time, and will refrain from "guessing" at it's intent until I have gave it a read.

BubbaHoTep

08-18-2008, 07:58 PM

Sorry to JLannon and Surfcat and others who want to carry along a reasoned discussion.

I just want to add that I am also grateful for these efforts at carrying on this discussion. In the area of taxation policy, I profess mammoth ignorance, except perhaps as it affects me and my family's budget directly. You folks are really making an effort to carry this forward and, in the process, giving me some good info, raising some good questions, and giving me things to think about. These are things I had "heard of," but never investigated.

Thanks for helping me understand. :)

Mark G

08-18-2008, 09:00 PM

Like I have said in a previous post. Read the the book. You were part of that thread and know fully what I was talking about.

But anyways, Ill bite.;)

1. No tax filings at the end of the year. You only pay taxes on what you buy.

2. IRS not determining what you actually keep out of your paycheck......you keep 100%

3. No death taxes.

4. A prebate to ensure no American pays federal taxes on spending up to the poverty level.

5. Enables retirees to keep their entire pensions.

6. Ensures Social Security and Medicare funding.

7. Abolishes the IRS

8. Houses and land do not get confiscated over IRS disputes. Many lives have been ruined with this.

Ok, gave the book a read so first question

Can I get a refund? :D

J/k it was an ok read unfortunately more of a sales pitch for the idea, than a true identification of the plan. Guess I'll have to go for a read on the actual proposal.

Pretty neat way to get the buy in of average joe, claiming it will abolish the IRS. Who doesn't hate the IRS?

Problem is as long as there is a federal tax system of any kind, there will need to be an enforcement body to ensure regulations are followed. (Remembering the I in IRS stands for Internal not Income.)
True, it would be good for average joe, and pretty much take him out of the picture of having to deal with filing tax paperwork, as long as average joe isn't trying to circumvent the system. I'm just saying don't expect to be rid of the dreaded IRS agents. As long as there is a need they wll be poking their noses into your affairs, investigating both illegitimate as well as legit transactions for foul play.

That not withstanding the idea seems to have some merit, but certainly has it's detractors as well (not just the IRS agents and accountants that the book claims will be out of a job.)
I did get a few questions answered, and to the book's credit it did list some of the opposing views, (but as expected only those it had a ready defense for)

Bottom line-
I'd have to see a few more prominent economists sign on before jumping on the bandwagon.

Until then I'll remain a bit skeptical, tho some questions were answered, a few more were uncovered in the learning process.

J_Lannon

08-19-2008, 05:22 AM

I just want to add that I am also grateful for these efforts at carrying on this discussion. In the area of taxation policy, I profess mammoth ignorance, except perhaps as it affects me and my family's budget directly. You folks are really making an effort to carry this forward and, in the process, giving me some good info, raising some good questions, and giving me things to think about. These are things I had "heard of," but never investigated.

Thanks for helping me understand. :)

I have a very basic working knowledge of the tax system. I had a crash course (a painful one).....when I first went into the trucking business. Luckily for me, I was contracted out to Schneider National who had some great people to help out owner operators like myself. Fuel taxes are a big PITA for trucker.

J_Lannon

08-19-2008, 05:29 AM

Ok, gave the book a read so first question

Can I get a refund? :D

J/k it was an ok read unfortunately more of a sales pitch for the idea, than a true identification of the plan. Guess I'll have to go for a read on the actual proposal.

Pretty neat way to get the buy in of average joe, claiming it will abolish the IRS. Who doesn't hate the IRS?

Problem is as long as there is a federal tax system of any kind, there will need to be an enforcement body to ensure regulations are followed. (Remembering the I in IRS stands for Internal not Income.)
True, it would be good for average joe, and pretty much take him out of the picture of having to deal with filing tax paperwork, as long as average joe isn't trying to circumvent the system. I'm just saying don't expect to be rid of the dreaded IRS agents. As long as there is a need they wll be poking their noses into your affairs, investigating both illegitimate as well as legit transactions for foul play.

That not withstanding the idea seems to have some merit, but certainly has it's detractors as well (not just the IRS agents and accountants that the book claims will be out of a job.)
I did get a few questions answered, and to the book's credit it did list some of the opposing views, (but as expected only those it had a ready defense for)

Bottom line-
I'd have to see a few more prominent economists sign on before jumping on the bandwagon.

Until then I'll remain a bit skeptical, tho some questions were answered, a few more were uncovered in the learning process.

John Linders people are pretty good about getting replies back when you contact them.

And yes, I still have questions myself how they will solve the underground economy problem, as well as what products will a business be tax free on and what not.

There are alot of economists and institutes that are pushing the bill.

http://www.fairtax.org/site/PageServer