Tax problems for Obama choices show problems with taxes

from JoeUser Forums

News over the last few days about President Obama's nominee for health and human services Secretary Tom Daschle compound the problems that were noted for Treasury Secretary Geithner but both go to prove one thing that I agree with several other frequent JoeUser's, as well a few close personal friends, about:

WE PAY TOO DARNED MANY TAXES

Note that I am not necessarily saying we pay too much in taxes (though in many cases I think we do), I am -- again, to be absolutely clear here -- saying that WE PAY TOO DARNED MANY TAXES.

The number of taxes, and types of taxes, that citizens of the U.S. of A., and the member states there-in, pay are so numerous that virtually no one can ever be certain that all of the required taxes have been paid. 

For most common folks it's fairly simple, though incredibly burdensome, and I suppose most people in the middle class and lower may not see paying taxes as being allthat difficult.  "Our" taxes are already factored into our salaries or wages in most cases.  They're (taxes) also already included in the services we pay for (such as cable TV service, telephone service, and other similar services we depend upon).  They're (again, referring to taxes) also typically already included in service work we have done such as repair work around our homes and such.

The problems come up for people that don't have taxes withheld by their employers.  Contract employees, or temporary type employees that are paid by someone else but then are expected to pay their own self employment taxes and such.  Without someone else doing the withholding for them they're left to do that very important work themselves and many people find the task overwhelming.  There doesn't seem to be enough guidance and/or enough people that understand the intricacies of it all to make it easy enough to keep out of the types of problems that Geithner and Daschle are now facing.

Is the answer a flat tax type system?  Possibly, though you get a lot of howling from many that flat taxes would harm lower income families because the burden is tougher on them than on those at the upper end of the scale.  The argument is that using regressive tax systems allow the burden to be shared more fairly (in the eyes of those doing the taxing) than with flat taxes.  Using a flat tax system would certainly simplify things for everyone though, or for most everyone, in that taxes could simply be withheld or paid in for all employees with no need to worry about getting tax refunds or making tax payments.  Taxes would already be paid on every dollar of income.  Some lower income families might need to file to get tax credits or refunds so they don't bear the burden more than others, but that could be worked out.

A best of both worlds type answer may lie not in flat taxes but simply in elimination of a lot of smaller taxes while increasing others that are easier to pay and deal with.  It might make things harder on some individuals over others but it could also make it much easier to properly pay the taxes that we have to pay.

Either way, in my book, it's time to look at the number of taxes, and types of taxes that we have to pay and do something to simplify the tax structure so it's easier to live up to our obligations.

politics
4,387 views 9 replies
Reply #1 from JoeUser Forums Top

Numerous taxes are typically introduced (from my own experience) as a way of governments increasing taxes without generating a lot of negative attention - you don't often notice them (until you end up having to pay them). While there is justification for having several taxes to make sure you target the right areas (e.g. you may wish to have an inheritance tax to increase opportunity/prevent all the money just accumulating to a small group, or you may wish to tax particular goods which produce harmful effects like cigarettes), but that doesn't justify the whole range of taxes that there typically are. For example you can be taxed on the money you make from employment. Then your employer can also be taxed on that. Then you can be taxed when you save that money (on the interest), and then when you spend that money you can be taxed again. If you spent it on an item which you then sell later on for more than you paid, you can be taxed even more.

If all the taxes were condensed into just one or two, I expect the figure would be so high that it would cause an uproar, even though simplifying them into such a small amount would remove various loopholes, decrease compliance costs, and allow for a lower effective overall rate of tax. So ironically people's opposition to a high (visible) level of tax means they get taxed even more.

 

A flat rate tax could be given a high annual exemption to avoid the most severe effects of it on the poor people - it'd mean the poor would benefit, the rich would benefit, but the middle class would be the losers (since it'd be unlikely the gains from simplicity would be enough to offset the decreased income from a lower tax rate applied to the rich).

WindowBlinds - Free yourself of the default settings, customize your desktop.
Reply #3 from PolMach Forums Top

Quoting Draginol, reply 2
Here's a priceless article on Daschel:



http://www.msnbc.msn.com/id/28958689

 

End of Draginol's quote

man we got some real winners getting great powerful positions in politics hey?! I guess it pays to be a slime

Reply #4 from Stardock Forums Top

Here's a priceless article on Daschel
End of quote

It must have been the anthrax.

Reply #5 from PolMach Forums Top

I definitely agree that some serious reform needs to happen to our current tax system, it is just too complicated, which tends to lead to loop holes being exploited by those who can afford to find them.  That said we don't need abrupt reform which is likely to shock and bother the average tax payer, you can't throw out the current tax system and switch to a flat tax overnight without a lot of uproar, however if you make slow subtle switches over a long period of time then you can move towards a more efficient system.

For example one quick and easy change is to get rid of one tax like tax on earned interest to encourage people saving money (also helps to fill banks balance sheets to enable them to lend more) and establish a very small federal sales tax on certain good and services.  Over time you slowly eliminate other taxes and moderatly increase that federal sales tax to ease people into the idea of paying a federal sales tax (or whatever you want to use as the flat tax).  One way to avoid impacting the extremely poor is issue some sort of card that can be used to exempt people from the federal sales tax which can be used like a credit card and effectivly amounts to your tax return.  Obviously this isn't a very well thought out system yet, but it's something to work from.

Reply #6 from Stardock Forums Top

Want to solve the economic crisis? Have Obama appoint every Democrat ( hell why not all politicians) to some position, the resulting pay back in taxes should ease things considerably. Why do we give those "unpatriotic" (based on Biden's dentition of patriotism) bastards any slack at all? They should be "locked up" (Dashels solution for corporate tax cheats) in prison. Is anyone feeling the "change" yet?

Reply #7 from JoeUser Forums Top

one quick and easy change is to get rid of one tax like tax on earned interest to encourage people saving money (also helps to fill banks balance sheets to enable them to lend more) and establish a very small federal sales tax on certain good and services
End of quote

It'd create an uproar - you'd be taxing the poor to give to the rich, and encouraging people to cut back on spending and save instead (the last thing you want to do in a recession).

 

One way to avoid impacting the extremely poor is issue some sort of card that can be used to exempt people from the federal sales tax which can be used like a credit card
End of quote

Wouldn't it be more straightforward to look at income tax rather than using a sales tax, and then complicating it to try and avoid such effects? Introducing such complications is why governments so rarely manage to actually simplify the tax system, even when they may want to, and instead make things worse than they were before.

Reply #8 from PolMach Forums Top

Wouldn't it be more straightforward to look at income tax rather than using a sales tax, and then complicating it to try and avoid such effects? Introducing such complications is why governments so rarely manage to actually simplify the tax system, even when they may want to, and instead make things worse than they were before.
End of quote

I suggested a federal sales tax because the eventual goal would be to eliminate the income tax.  I used the whole "fair tax" plan as a model and just figured that if you start the fed sales tax off small it wouldn't cause as much of an uproar as you start to eliminate other taxes and increase the fed sales tax.  The card is then a way to lessen the impact on the poor in lieu of filing income tax returns every year.

Reply #9 from Stardock Forums Top

Wouldn't it be more straightforward to look at income tax rather than using a sales tax, and then complicating it to try and avoid such effects?
End of quote

That would be great, but apparently many rich folks don't pay taxes unless they get caught, example: recent cabinet appointees,