BF2S Forums How much are taxes going to go up now that the Democrats are in power?

I was listening to a discussion last night on the radio about the Tax scams being exploited by private equity groups where individuals are amassing fortunes, and, paying less tax on it than someone in the lowest tax bracket in the UK!  This scam has being running un challenged for 20 years! even Tony Blair has admitted that there are  “real issues” over the level of tax paid by these groups.  It's the mega rich who scam and cheat and award themselves "tax" breaks, while others, less able pay their dues for the rich's dishonesty..

Bertster7 wrote:

It's not a theory, it's well documented. The Kinks even wrote a song about it (Sunny Afternoon - well, not specifically about the exodus). It's a huge factor. A good example would be the UK in the 60s. Rich people left the country en masse. Lowering taxes and bringing rich people (who stimulate the economy as well as providing tax revenue) was one of the greatest successes of Thatcher's government.

You can't raise taxes for the rich, because they get round them. For example most very rich people resident in the UK makes sure that they are not classed as being domiciled here, therefore they don't pay any tax (well next to nothing). Only with either loopholes for the rich or low tax rates for the rich can you make any money at all off them - you must also remember that rich people are an asset to countries, not only because of their wealth, but because of the income generated because of their presence.

Since WWII the top tax brackets in the UK have fallen dramatically and with the reductions in very high rate taxation, enormous boosts to the economy and tax revenue have been recorded. Rates of 95% income tax (which is what the UK was on in '48 - even as recently as '79 the top rate was around 75%) are silly and don't work.

Well, I'll put it this way...  Back in the late 40s in America, corporate income taxation and personal income taxation were equal in their total makeup of the government's revenue.  Somehow over the last 60 or so years, it's become something like 90% personal, 10% corporate.  If we could move things back to equal parts corporate taxation and personal taxation, we'd have a far more viable tax system, and our working class and small business owners would have far more disposable income.

We'd also have a better funded system, with better programs.

Of course, corporations won't allow such things to occur....

Harmor wrote:

Let say you put a tax on Oil Companies...say $21 billion tax that the Democrats are currently purposing.  Do you think Oil companies will absorb this new cost in doing business?  Won't they raise the price of their product a couple of cents per gallon to compensate for this new cost of doing business?

Exactly.  Therefore this tax will just be a cost to the business that will pass the cost to us. 

Corporations don't pay taxes, we pay their taxes though the products and services we buy from them.

Your example only works for goods with perfectly inelastic demand. However, whenever demand for a good is not perfectly inelastic, not all of the tax can be passed on. The more elastic the demand, the more the producer pays. For example, demand for ice cream is much more elastic than demand for gasoline. If the price of gasoline rises, people will likely purchase near as much gasoline as they would have had the price remained the same. However, if DairyQueen raises their prices it is more likely that they will sell less ice cream, and thus, they can only pass a percentage of the tax onto the consumer, determined by the price elasticity of the demand for DQ ice cream.

Last edited by jonsimon (2007-06-20 21:10:12)

Turquoise wrote:

Bertster7 wrote:

It's not a theory, it's well documented. The Kinks even wrote a song about it (Sunny Afternoon - well, not specifically about the exodus). It's a huge factor. A good example would be the UK in the 60s. Rich people left the country en masse. Lowering taxes and bringing rich people (who stimulate the economy as well as providing tax revenue) was one of the greatest successes of Thatcher's government.

You can't raise taxes for the rich, because they get round them. For example most very rich people resident in the UK makes sure that they are not classed as being domiciled here, therefore they don't pay any tax (well next to nothing). Only with either loopholes for the rich or low tax rates for the rich can you make any money at all off them - you must also remember that rich people are an asset to countries, not only because of their wealth, but because of the income generated because of their presence.

Since WWII the top tax brackets in the UK have fallen dramatically and with the reductions in very high rate taxation, enormous boosts to the economy and tax revenue have been recorded. Rates of 95% income tax (which is what the UK was on in '48 - even as recently as '79 the top rate was around 75%) are silly and don't work.

Well, I'll put it this way...  Back in the late 40s in America, corporate income taxation and personal income taxation were equal in their total makeup of the government's revenue.  Somehow over the last 60 or so years, it's become something like 90% personal, 10% corporate.  If we could move things back to equal parts corporate taxation and personal taxation, we'd have a far more viable tax system, and our working class and small business owners would have far more disposable income.

We'd also have a better funded system, with better programs.

Of course, corporations won't allow such things to occur....

I doesn't matter what you believe (that corporations; or big public corp.s; are evil or whatever), crap I am a corporation (a Bushism: actually my business is incorporated, with little or no veil of protection, through my corporate entity), and I am heavily taxed (or rather I am in the highest possible US tax bracket). Technically on a pie chart I fall in the lndividual Income Tax area (being that I own a small business).


Your "50% corp. tax responsibility in the 40's" comment does not stand up as a valid criticism of the tax-base. "Back in the 40's," all that means is that back then large corporations accounted for more personal wealth (and more Fed. revenue); and that, now more personal wealth is distributed (in small businesses; like mine).
______________

From: http://www.ustreas.gov/press/releases/js1287.htm (FROM THE OFFICE OF PUBLIC AFFAIRS - April 1, 2004)

Fact Sheet:
Who Pays The Most Individual Income Taxes?

The individual income tax is highly progressive – a small group of higher-income taxpayers pay most of the individual income taxes each year.

    * In 2001, the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.3 percent) of all individual income taxes, but reported roughly one-third (32.0 percent) of income.

    * The top 1 percent of taxpayers paid 33.9 percent of all individual income taxes in 2001.  This group of taxpayers has paid more than 30 percent of individual income taxes since 1995.  Moreover, since 1990 this group’s tax share has grown faster than their income share. 

    * Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes.  In all years since 1990, taxpayers in this group have paid over 90 percent of all individual income taxes.  In 2000 and 2001, this group paid over 96 percent of the total.   

    * The President’s tax cuts have shifted a larger share of the individual income taxes paid to higher income taxpayers.  In 2004, when most of the tax cut provisions are fully in effect (e.g., lower tax rates, the $1,000 child credit, marriage penalty relief), the projected tax share for lower-income taxpayers will fall, while the tax share for higher-income taxpayers will rise.   

    * The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent. 

    * The share of taxes paid by the top 1 percent of taxpayers will rise from 30.5 percent to 32.3 percent.

    * The average tax rate for the bottom 50 percent of taxpayers falls by 16 percent as compared to a 12 percent decline for taxpayers in the top 1 percent.
______________

50% of the public only accounts for between 3 to 4% of all taxes collected. The other 50% is responsible for 96 to 97% of all taxes.

Where that money goes, from: http://www.federalbudget.com/


So obviously - it makes little sense to go after the 50% that amounts to 3-4% of the collected tax base. They (the Federal Government) are either going to tax the upper 50% more (or less; as in a tax cut) and/or learn how to spend money in a more efficient way.

Last edited by topal63 (2007-06-21 16:14:42)

By law in America, paying income taxes is voluntary. Look that one up.

Mason4Assassin444 wrote:

By law in America, paying income taxes is voluntary. Look that one up.

Tell that to Wesley Snipes.

Mason4Assassin444 wrote:

Bertster7 wrote:

Mason4Assassin444 wrote:

By law in America, paying income taxes is voluntary. Look that one up.

Tell that to Wesley Snipes.

Id like to tell it to the officers outside this lady's house.

http://beta.cnn.com/2007/US/06/21/tax.e … index.html

lol

Nutters. If the fact that paying taxes is voluntary has been repeatedly rejected by courts, then it isn't voluntary.

Mason4Assassin444 wrote:

Bertster7 wrote:

Mason4Assassin444 wrote:

Id like to tell it to the officers outside this lady's house.

http://beta.cnn.com/2007/US/06/21/tax.e … index.html

lol

Nutters. If the fact that paying taxes is voluntary has been repeatedly rejected by courts, then it isn't voluntary.

Research it yourself. It is voluntary. It says so on the 1040 form you fill out at tax time.

It is mandatory.
http://docs.law.gwu.edu/facweb/jsiegel/ … omeTax.htm

The law (Show me the law!): http://docs.law.gwu.edu/facweb/jsiegel/ … tNoLaw.htm

Last edited by topal63 (2007-06-21 09:31:52)

topal63 wrote:

Mason4Assassin444 wrote:

Bertster7 wrote:

lol

Nutters. If the fact that paying taxes is voluntary has been repeatedly rejected by courts, then it isn't voluntary.

Research it yourself. It is voluntary. It says so on the 1040 form you fill out at tax time.

It is mandatory.
http://docs.law.gwu.edu/facweb/jsiegel/ … omeTax.htm

The law (Show me the law!): http://docs.law.gwu.edu/facweb/jsiegel/ … tNoLaw.htm

Cool, but what law makes it a felony, and where is the punishment outlined?

topal63 wrote:

jonsimon wrote:

topal63 wrote:

It is mandatory.
http://docs.law.gwu.edu/facweb/jsiegel/ … omeTax.htm

The law (Show me the law!): http://docs.law.gwu.edu/facweb/jsiegel/ … tNoLaw.htm

Cool, but what law makes it a felony, and where is the punishment outlined?

Felony tax evasion - 7201. (The wiggle worm room is provided by "... willful attempt ...")
http://www.usdoj.gov/tax/readingroom/2001ctm/06ctax.htm

But... if you're not willful then what?
This is the one area of law in which ignorance is an actual defense! Weird!!!!!!!!!
http://docs.law.gwu.edu/facweb/jsiegel/ … belief.htm
Though you had better be certain of your acting abilities -

Thanks.

Bertster7 wrote:

topal63 wrote:

jonsimon wrote:

Cool, but what law makes it a felony, and where is the punishment outlined?

Felony tax evasion - 7201. (The wiggle worm room is provided by "... willful attempt ...")
http://www.usdoj.gov/tax/readingroom/2001ctm/06ctax.htm

But... if you're not willful then what?
This is the one area of law in which ignorance is an actual defense! Weird!!!!!!!!!
http://docs.law.gwu.edu/facweb/jsiegel/ … belief.htm
Though you had better be certain of your acting abilities -

So the Browns (the nutters refusing to pay tax) haven't broken the law, but are obligated to pay their taxes and probably owe the IRS interest and could be liable for the costs of staking out their house? Sounds expensive.

Nah... they broke the law. Then it goes to court, if convicted, they pay (money & jail time). The only real legal defense they could have is ignorance. But, they don't seem willfully ignorant (IMO). Their standoff appears to be a willful knowledgeable (yet wrong) claim/stand.

Bertster7 wrote:

Turquoise wrote:

Bertster7 wrote:

It's not a theory, it's well documented. The Kinks even wrote a song about it (Sunny Afternoon - well, not specifically about the exodus). It's a huge factor. A good example would be the UK in the 60s. Rich people left the country en masse. Lowering taxes and bringing rich people (who stimulate the economy as well as providing tax revenue) was one of the greatest successes of Thatcher's government.

You can't raise taxes for the rich, because they get round them. For example most very rich people resident in the UK makes sure that they are not classed as being domiciled here, therefore they don't pay any tax (well next to nothing). Only with either loopholes for the rich or low tax rates for the rich can you make any money at all off them - you must also remember that rich people are an asset to countries, not only because of their wealth, but because of the income generated because of their presence.

Since WWII the top tax brackets in the UK have fallen dramatically and with the reductions in very high rate taxation, enormous boosts to the economy and tax revenue have been recorded. Rates of 95% income tax (which is what the UK was on in '48 - even as recently as '79 the top rate was around 75%) are silly and don't work.

Well, I'll put it this way...  Back in the late 40s in America, corporate income taxation and personal income taxation were equal in their total makeup of the government's revenue.  Somehow over the last 60 or so years, it's become something like 90% personal, 10% corporate.  If we could move things back to equal parts corporate taxation and personal taxation, we'd have a far more viable tax system, and our working class and small business owners would have far more disposable income.

We'd also have a better funded system, with better programs.

Of course, corporations won't allow such things to occur....

Low taxes for businesses make good economic sense. If your countries businesses are heavily taxed, then competing in a global market becomes harder and the companies are less profitable, leading to less taxable revenue and a lower GDP. The economic effects of increasing taxation on businesses are bad, that's why they have fallen.

Low taxation on corporations = a better economy (typically - there are lots of other factors).

While that is mostly true, corporations are also some of the biggest tax dodgers.  I don't know about the UK's tax laws, but in the US a corporation that isn't headquartered in the states isn't required to pay federal income taxes.  Many corporations have used this loophole to avoid them all together.  They essentially set up a P.O. Box in another country without corporate taxation, but the company itself is actually being run out the same offices in the US.

In post #57, topal63 has a nice graph of how congress spends its money.

how come nobody is harping how much congress is spending in the Health and Human Services department?  Why is that so high?  People continually bash defense which is also high, but all i hear is crickets when HHS is brought up. 

Ditto for Social Security.

my best guess as to why these areas are high is due to cost of living increases, healthcare costs ballooning out of control (in part due to limited tort reforms), and the sheer number of people taking part in these programs (baby boomers, etc).

now, it sucks to say but once these baby boomers die off in next 20-30 years, we'll have some amount of relief in the numbers, no?

by the way, don't any new taxes imposed on corporations simply get reflected in the price of their goods and services so the money gets shifted around and i get shafted?