<p>Is the mortgage deduction an incentive to purchase a house or an enticement to purchase a home at the top of our budget?</p>
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I was referring more to the situation with businesses. I rent you an apartment, you pay me $600/month. I have an assortment of expenses associated with providing you an apartment. What is my “income”? </p>
<p>dietz199 asks:
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<p>^ You are referring to a tax on gross receipts. There is at least one state that does this (Texas?) but the rate is very low.</p>
<p>This kind of tax has to have a very low rate because most businesses have profit margins that are pretty low to begin with. If a business only makes 5% and you have a 10% receipts tax, you’ve just put that business out of business, unless they can somehow raise prices by 10%.</p>
<p>
I never claimed a 12% rate would balance the budget. Our buddy dstark would tell you
it’s not even necessary to balance the budget.</p>
<p>My point was just that we could chuck our current system (how many billions would that save?), push collections onto businesses just like we do now for FICA, and huge numbers of people would not need to file returns. 80%? I don’t know how to calculate it, but it would be huge.</p>
<p>Although for at least a couple of years you would see a huge increase in capital gains as people cash in their gains at a low tax rate.</p>
<p>As far as the regressivity of it - I’ve always felt that everyone should pay something. Everyone should be contributing and have some skin in the game. At a low enough rate I don’t think this would be an outrageous burden, especially if you exempt up to $25K or so.</p>
<p>Nobody is making me king any time soon though. So my ideas will remain untested,.</p>
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<p>So does Dr. Ben Carlson, who said this in his speech during national prayer breakfast (and probably landed on Obama’s “never invite him again” list):</p>
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<p>Dr Ben Carlson shows you can be brilliant in some areas and dumb as @@@@ in others.</p>
<p>I guess we have to agree to disagree. I found his speech brilliant. Are you calling me dumb for thinking this? :).</p>
<p>P.S. I was so impressed with his speech, I kind of memorized it and recited it to my husband. He said he has never seen me so excited about politics.</p>
<p>Well…I am glad you are excited.</p>
<p>Me…not so much. ;)</p>
<p>If you stop and think, you will see why he is wrong…</p>
<p>Why should we punish the billionaire?</p>
<p>This has nothing to do with punishing the billionaire…</p>
<p>This seems to be a hard concept for people…</p>
<p>Depending on circumstances, you can “hurt” somebody a lot more by taking 10 bucks from someone than hurting a billionaire by taking away a billion. </p>
<p>I knew this when I was a little kid and I was in the hospital and I looked at another patient in my room…</p>
<p>This DR…who is brilliant in many ways…hasn’t figured this out…</p>
<p>People are imperfect…</p>
<p>We can go on and on about this and never agree. </p>
<p>However, it was Joe Bidden who said about 5 years ago that it is patriotic to pay taxes. Is it me, or did he call those who pay no income taxes unpatriotic? Why don’t we give everyone an opportunity to contribute? It is not about hurting, it is about contributing.</p>
<p>You are right. I am done for now. This isn’t politics.</p>
<p>As I’ve said before, many people like Dr. Carlson seem to count the beans differently for different people. For instance, that golfer complained he was paying 63% of his income in taxes. Sean Hannity says the same thing - 63% right out the door in taxes. </p>
<p>Yet when the discussion turns to other people suddenly a huge percentage didn’t pay any taxes. They argue that it would only be fair if everyone paid “something”. </p>
<p>When they talk about what they pay they count all taxes and when they talk about what the other guy pays they only see federal taxes. Either approach is valid in its way, but the approach should be consistently applied.</p>
<p>Income inequality in the United states has increased dramatically in the last couple of decades. In Germany they actually have laws stating what percentage higher than the wage workers that the CEO can receive. We have no such laws. The CEO can earn exponentially more pay than his/her laborers.</p>
<p>So, with such a vast increase in wage inequality, it only makes sense that there would be a vast increase in tax inequality. If you are taking that much out of the system, and it is a “system,” whether you like it or not, then you are benfitting that much more from the system that is in place.</p>
<p>Nobody who earns over a certain amount of money from this system should have any exemptions. They are simply benefitting too much more from the military protection and the infrastructure and the freedoms we have here to export jobs overseas.</p>
<p>It’s true.</p>
<p>When the income tax was first introduced, the level at which they began to even pay taxes was the equivalent of 100K today. The income tax was not designed to be a middle class tax anyway, though that is what it has become.</p>
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<p>Wasn’t the rate just 1% at the time?</p>
<p>Also, everyone benefits from “military protection” in the same way.</p>
<p>It was 7% at the time, not far off from what is already being paid by people like me, right now, those of us who benefit most from the tax loopholes and exemptions.</p>
<p>I can get up to 50% of income tax exempt (or my accountant can.) Just start there. The tax code is ridiculously regressive.</p>
<p>Poetgrl,</p>
<p>I want your accountant’s number.</p>
<p>I agree that the tax code is ridiculous, but whether it is regressive or progressive varies with each personal situation. From where I sit, it is progressive to the point where I feel it is unfair.</p>
<p>You are probably upper middle class. You guys get it worst in this little game.</p>
<p>And, no, everyone does not benefit the same way from our military involvement in other places. Not even close.</p>
<p>There are financial reasons we are never involved in Africa, ever. There are financial reasons we remain in south korea. It’s not because we think south koreans are more important to us as people than those in Darfur.</p>
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<p>Yes, rich enough “to afford to pay a little more”, but not rich to enough to write my own tax proposal that benefits me. </p>
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<p>I guess I understand your point, but I don’t necessarily agree with it. Besides, I can list benefits that people who pay little or no taxes get or tax credits and deductions that middle class is eligible for. I don’t get any of those benefits. What I am trying to say is that there is unfairness on all sides of the issue and unless we address it from all the sides, we will never come up with the solution. </p>
<p>And believe it or not, even my high paying job is not immune to outsourcing. In the last couple of years, when I see the org chart at work, I see the writing on the wall: our US group consists of about 10% of all our non-US operation in that area. We all have Phds, but so do our non-US counterparts. While we are shrinking, they are growing. </p>
<p>I actually had to change my specialty a bit, so that I could do work that foreigners cannot. But this specialty experiences highs and lows, today it’s in demand, tomorrow - not so much. For me it is like I have a bullet behind me and my job is to outrun it, by constantly reinventing myself.</p>
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<p>Your numbers are a bit off according to this:</p>
<p>[Revenue</a> Act of 1913 - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/Revenue_Act_of_1913]Revenue”>Revenue Act of 1913 - Wikipedia)</p>
<p>The rate was 1% up to an inflation-adjusted $440,000 in income. The exemption in inflation-adjusted terms was $66K for singles and $88K for married couples.</p>
<p>The top rate of 7% started at $11 million in today’s dollars.</p>
<p>thank you for that correction. It only reinforces what I think</p>
<p>lerkin, who outside of those living in Alaska, Delaware, Montana, New Hampshire, and Oregon of not paying taxes? And, even if they as a low income individual can deduct their entire yearly earnings, won’t their employer still be paying some taxes on their behalf?</p>