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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsIf YOU were in charge, how would you structure the taxing systems to be fair to everyone?
Straight up question: What is the fairest tax system the US could enact?
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WSHazel
(567 posts)We balanced the budget, unleashed a wave of innovation, and had an incredible economy.
Jack Valentino
(3,163 posts)that now obscure Republican president whom today's Republicans
would probably say was "too woke"
Under Eisenhower, the obscenely rich paid rates up to 90%,
but none of them starved...
mr715
(1,883 posts)Less glibly, I think we need a tax policy that is also an energy policy. And a monetary policy that is also a carbon policy.
applegrove
(127,934 posts)and climate change mitigation laws because that will blow up the budget. Canada's rich pay 2% more in income taxes then in the US but we have vat taxes to pay for a lot of reasonable programs on top of income tax. It is not charged on food and poor people get a check 4 times a year. Send your kid to the mall with $100? That haircut will cost $107. Done!!!!!
JustAnotherGen
(36,877 posts)Circa 1956.
MichMan
(15,829 posts)
carpetbagger
(5,353 posts)So yes.
Volaris
(11,016 posts)Doesn't matter how you got it. Above that it starts at 10% on a progressive curve that goes all the way up to God. That's PERSONAL. BUSINESE profits I would start at 20%, same progressive curve. Pay yourself 150k a year for owning or running your business, fine, it counts as personal and no tax, and as payroll for your business.
ALSO, I would set a national sales tax at 2% for everything. Half goes to the state the sale is in, and the other half goes to pay down the principal on the national debt for a period of not less than 10 years, and I would use those things as the basis for a 10-year balanced budget that's run off census data for things like healthcare and federal to state payments.
Thats the short answer, and dems had better have a good one, because if the gop is gonna wreck the economy, we should kick them and take the ball (same way Obama did with NatSec after they screwed up Iraq so badly).
No reason to leave them ANYTHING to run on, imho..even if it means landing regressive taxes on things like Elon buying Twitter and me buying weed gummies and dinner out once a week. I can afford 2%, and so can elon.
DUU
(61 posts)biocube
(132 posts)think the 1950s was the peak of the middle class. What do they think the top marginal tax rates were back then?
JustAnotherGen
(36,877 posts)Paid the top tax rates.
Jerry2144
(2,965 posts)That the rich use. They use their wealth as collateral to take out huge loans, then live off those loans tax free. When the loan comes due, they refinance or flip their assets. A mortgage for a primary residence or car loans for daily drivers should be exempt. And loans using that collectible Ferrari or Picasso or South Florida Golf Course as collateral should be taxed at 20-30%.
This, combined with a graduated income tax system with no deductions or separate married/single tables would be more equitable than what we have now. It certainly would be less regressive than sales taxes and income taxes that don’t touch wealth.
Torchlight
(5,496 posts)(generally)
Freddie
(9,948 posts)Keep benefits the same. Any $$ collected beyond the cap goes to the general fund. This would be a very gradual tax increase to the wealthy. I’m a payroll admin and while I’m immune to what people earn, it still pisses me off to watch them get more take-home pay mid year.
LR3
(54 posts)"Let's restore the corporate tax rate to the levels the Great Ronald Reagan put in place".
That increases the top corporate from 21% to 34%. Then, massively close the loopholes that companies use to avoid those taxes.
Get rid of the carried interest loophole. Donut hole the SS tax.
chowder66
(11,216 posts)
leftstreet
(37,076 posts)haele
(14,544 posts)Other than the lucky Athletes, Artisans/Crafters, and Artists, most Hundred Millionaires and Billionaires stopped working. Hard work might have got them their first Ten Million or so, but other than that, it's basically a "you won the lottery" situation.
Their money works for them. Or their parents/mentor just gives them the money to make more money for them.
Pretty much any individual (other than those athletes, Crafters, or Artists) who can have over $50,000,000 that moves between various personal accounts every couple years doesn't work. All they do is use the money multiplication properties of investing to maintain or make more liquid money than they can spend. It's pretty simple math any emotionally mature 12 year old can figure out if given a multi-million dollar inheritance and told "that's all you're going to get for the rest of your life - make it last until you're 80"...
Disaffected
(5,856 posts)with a progressive sales tax.
Hey, Robert Reich proposed it so what's not to like?
Chemical Bill
(2,896 posts)The ultra rich don't buy anything with most of their money. That means they will only pay taxes on a small part of their income.
Meanwhile, the poor and middle class spend all or most of our money, so we will pay taxes on all or most of our income.
Disaffected
(5,856 posts)They usually "buy" investments of some sort. It could also be supplemented with a wealth tax I suppose to get at the mattress stuffers.
As well, a "progressive" sales, or consumption tax, would make allowance for low income earners (such as a low or zero rate on basic food items). That's why it's called "progressive".
MichMan
(15,829 posts)Do you have to bring in your tax forms for every purchase?
Disaffected
(5,856 posts)but on the good or service purchased. Buy a luxury yacht for example and you pay a high tax, buy a jug of milk and you pay little tax or perhaps nothing. Buy a house or car for instance and pay a tax rate based on the sales price or on a sales price in excess of a certain amount. Buy T-bills, stocks or bonds and pay a small percentage of the transaction amount.
There are many ways of structuring it, all vastly simpler and more fair than the current income tax system (I have read that the income tax code in the US has become so voluminous and convoluted (and full of inconsistencies and loop-holes) that no-one fully understands it). And it's not dissimilar in many other countries.
WarGamer
(17,778 posts)Each and every day there are 10-12 BILLION shares of stocks bought and sold DAILY.
Even with a TEN CENT tax per share on trades... that's like a billion dollars a trading day or 250 billion a year.
haele
(14,544 posts)Capital Gains also needs to be kicked up on the higher levels once it becomes profit.
Buyback of shares need to be regulated more tightly -and taxed more rigorously if it doesn't get turned into a tangible cost (capital improvements (technology or facility upgrades, product investments, increase of workforce)
The C-Suite doesn't need to parley revenue into greater deferred stock options or bonus payouts if the business isn't being improved and the labor that made the profit isn't also being awarded. Especially if all they do is go to press events and private clubs to make marketing statements that may or may not be accurate just to gin up investor enthusiasm for the product they're pushing. (Looking at you, Tech Bros and other Tulip Bulb salesmen)
Just my Keynesian opinion...
thatdemguy
(612 posts)I mean would someone really have to pay 10 cents when they bought a penny stock that costs 5 cents? I mean I have a few thousand shares of some sub penny stocks, they cost me like 50 Bucks for 10000 shares on a few things. If the price goes from .005 cents per share to .01 cents I get to make 50 bucks but would have to pay 2000 bucks in taxes. 1000 to buy and another 1000 to sell em.
I play with penny stocks just for fun, I have a few hundred bucks in them. I have made maybe a few hundred bucks from them over the last 5 years.
WarGamer
(17,778 posts)A sliding scale... I'd charge more than .10 to trade a share of SPY $645 or NFLX $1228
EdmondDantes_
(858 posts)Is home mortgage interest fair given it's a benefit to those of us who own homes, but not to renters?
We use the tax code to promote various things. Student loan interest, medical expenses, etc.
I can only give a broad outline of what I would want to fix.
Raise the top tax brackets, take off the social security cap. Address the ability of ceos and such to get paid via stock options that encourage them to avoid taxes and the taking a loan on stuff to avoid having income. Perhaps a minimum tax or taxing on the "unrealized" gains but that would have to be done carefully to not hit everyone, maybe a minimum amount say 5 million in stock holdings. Changes to the estate tax. Take away the stock buyback option. Include pet medical expenses as a tax deductible option. Some sort of trade or other non-college school tax break to go with the student loan break because all jobs have value and we need more people in the trades and other jobs that don't require college so that it becomes more fair than student loans which primarily benefit those already likely to make more money.
Increase tax incentives for starting small businesses especially around health insurance because that's an impediment as long as we tie insurance to employment.
I'm sure I could come up with more. But I think it's a really complicated area and like so many other things the impact of lobbying favors the wealthy or business who can afford to stay interested year after year in advocating, so I think you'd also need to address that aspect.
No deductions, no exceptions.
karynnj
(60,512 posts)Disaffected
(5,856 posts)
On every incoming dollar personal or business, no exceptions that includes churches many of which are businesses and or con games.
Jack Valentino
(3,163 posts)
Scrivener7
(57,019 posts)for a billionaire who gives up a few million. Also, the billionaire uses a lot more of the public resources. For example we all pay for the airport and staff where he has his private plane. Then there's his single house at the end of a publicly maintained road that costs as much to keep up as the road that runs past a block of apartment buildings that hold 800 families. Think of Bezos. Amazon trucks are part of what has made him rich, but they create a huge portion of the wear and tear on our highway system. My little hybrid has almost no impact on them. But the highway system is something we all pay for.
Much better to have a graduated tax, with no tax on the poorest and anything over a given amount - say a billion - taxed at nearly 100%. No one needs that second billion, and we have all paid to help that oligarch make that second billion.
karynnj
(60,512 posts)Many Democrats have pointed out that our values are in our budget. The same thing can be said of our tax laws.
Some provisions were designed to favor certain decisions. One major one was that decades ago, people argued that home ownership was good both for people who did so and for the overall community. In the tax law, this resulted in being able to lower taxes by itemizing both mortgage interest and property taxes. For some, that savings made ownership more affordable than renting. A less difficult to eliminate change would be the various provisions for things like buying green products.
But, as Democratic legislators pointed out some corporations have entire pages in the tax code that benefit just them.
O
So, in designing a fair system, you might have to start from where we are on somethings, phasing out things that large numbers of people would be negatively affected by.
A fair system might streamline income based payments to and from the government. There is some of that now with the Earned Income Credit and other provisions. ( Back in the1960s, there was discussion of replacing welfare with a negative income tax. )
In addition to busting the budget and giving hugh cuts to the wealthy, the 2017 tax law led to more people taking the standard deduction. You could say that that simplified preparing taxes, but it also cynically hurt people in blue states by capping SALT.
MichMan
(15,829 posts)Lowered taxes for the 88% of taxpayers that don't itemize, including mine
Jack Valentino
(3,163 posts)even though it was a 'sleeping pill' for those of us closer to the bottom,
so that we would complain less about the giveaway to billionaires...
Even so, the majority of Americans opposed that 2017 Trump tax bill...
SickOfTheOnePct
(8,400 posts)Even with losing a portion of our SALT deductions, the lower brackets with wider ranges saved us quite a bit in taxes.
karynnj
(60,512 posts)it would have been something hard to argue was not positive.
What it did was to a pretty large degree eliminated the tax
advantage of owning a house versus renting as for most people the standard deduction was higher than the amount they could get from itemizing. This was fairer to people who rented, often because they could not afford to buy.
GreenWave
(11,436 posts)Destroyers of Earth second.
And so on.
And the really good people pay nothing.
thatdemguy
(612 posts)To those saying go back to the 70's tax rates, it wont work. First every dime of interest of any type was a deduction. The effective tax rate back then was similar to what it is today. It was with in a few % for the rich. The tax rate went down for the rich but deductions that allowed them to avoid taxes also went away.
My tax plan is simple, flat tax on all income above say 50k a year ( single and married would be 100k ). I am not sure what the % would need to be but any and all income taxed at that. NO deductions, no credits, no write offs. Capital gains taxed at the same rate, for math lets say 20%.
make 51,000 pay 20% on the 1k or 200 bucks.
make 100k a year you pay 20% on 50k or 10K
make 1 million you pay 20% of 950k or 190k
This allows the lowest earners pay little to no taxes, the rich pay in effect 20% ( ok 19% ) but cant use loop holes like long term capital gains being a lower rate. The effective tax rate on the rich but would be lower on the poor, due to removing the lower rates on capital gains, and the loop holes. It removes the "income" tax avoidance of paying CEO's in shares, as soon as they sell em its full taxed income.
Response to thatdemguy (Reply #28)
DUU This message was self-deleted by its author.
Sneederbunk
(16,607 posts)
BlueSpot
(1,174 posts)What if your tax rate was based on the number of bathrooms you owned? Stay with me for a minute.
Might be tough for Paris Hilton, lol. Hotels would not like it. Neither would stadiums. Wonder how much more the beer would cost if they had to pay for the output that represents.
But even that aside, who owns the residential property? Who is snatching up houses and then using them as rentals? Would a tax like that reverse the trend and make it easier for young people to buy homes?
Also, to be fair, this idea is partially fueled be a recent report that Mark Zuckerberg is building a huge compound someplace. I wonder how many bathrooms are in there. Makes you grin a little at the thought, doesn't it? It kind of tastes like fairness.
And then, big companies have LOTS of bathrooms. I mean, I don't have to explain that to everyone. One way or another, those folks need to pay their fair share.
You got a mortgage? The tax is split between you and the mortgage company according to what percentage of the total share of ownership.
As I said, I haven't really thought about it but, this was the first thing that popped into my head when I saw the thread title. You can probably think of (and answer) more questions than I have here.
Oh dear, I believe I have officially thought outside the box. 
Chemical Bill
(2,896 posts)for a start.
Instead of just income taxes, a tax on income and wealth. Put a floor on that tax of the median home price, so that it wouldn't affect the owner of (one, modest) single family home. People with low incomes wouldn't pay taxes.
As one goes up in income and wealth, progressive brackets.
This would pay for all functions of federal, state, and local governments.
Tax all wealth in or out of the country, for anyone owning property or doing business in the country. No more Russian billionaires buying units in Trump Towers.
Put a ceiling on wealth.
No more Private Equity firms owning way too many houses.
Make it illegal to profit on healthcare (again).
I'd also want to see a checklist on tax forms, so we could choose where our money goes. Then see how much the military gets....
I'm not a extreme leftist, I don't want to kill all the ultra-rich.
Scrivener7
(57,019 posts)Everyone else falling between. No exemptions. No SS cap.
Johnny2X2X
(23,280 posts)First $75K of income is exempt for individuals, $150K for couples. All types of income treated the same. Perhaps 20% up to $1M. And then above $1M it changes from year to year based on whatever is needed for the last year's expenditures. Could be 80% some years.
Scrivener7
(57,019 posts)Johnny2X2X
(23,280 posts)I think it can be simplified some, but people struggling to feed their families and pay the bills should not pay federal taxes.
And graduated is a misunderstood word at times. Everyone has the same tax rate, period. Someone making $5M a year, pays the same tax rate as someone making $75K a year on their first $75K, and they then pay the same tax rate on their first $1M as someone who topped out at a $million. It's something that never gets talked about correctly in sound bytes, but someone making $750K a year right now isn't paying %35 on $750K, they're paying the same rates as everyone else on the lower portions of their income. They're only paying 35% on anything above $250K. The same tax rates are available to everyone.
Scrivener7
(57,019 posts)A flat tax would be the same percentage at each step. As in 10% for the 0 to 30K step, and 10% for the 1 billion to 2 billion step.