Tilted Forum Project Discussion Community - View Single Post - Tell me what's wrong with this income tax model

nofnway · 04-13-2005, 10:02 PM

To the point of this thread...the problem with this model is that "Fairness" has nothing to do with tax code. Who supposes it fair that the richest or the poorest should pay more than they already do? Taxes have become about social control and political favor than raising funds for necessary expenses...am I right? I'd love to see a flat tax, personally, but it will never happen. Why would we need the IRS? Whole industries would be wiped out...H&R et. al......

As an aside...some of the different tax policies have encouraged some really strange consequences...changing policies might just give us some new unexpected consequences.

What got me to thinking about this was Scout's idea for corporate taxes.

"Corporate taxes should be based upon the number of employees and the amount of profit. Example, up to 20 employees you are allowed to make 200 grand in profits or 40 employees 400 grand then you pay a flat tax after that. Again, no ifs and or buts you just pay the tax. You could tier the whole corporate tax structure and base it upon employees/profit and this would promote job growth. Again, this is merely theory and all the details would need to be worked out but it's a lot fairer tax system than we have."

You might get something like companies hiring hundreds of minimum wage workers or even "part time" workers to skate around the profit per number of employees thing...

A strange consequence that already exists is evident in taxation of stock dividends..Microsoft for example is sitting on piles of cash( billions I've heard) That money belongs to shareholders and has already been taxed at the corporate rate. If the money is paid out in the form of dividends it becomes taxable to shareholders at their personal rate. Many shareholders don't want to lose this money in the form of taxes and instead want the company to invest the cash in ways to increase the value of their stock. What is Microsoft to do? Invest in (BUY UP) other companies....everything from fledgling startups to the competition.

Certainly a consequence not intended

04-13-2005, 10:02 PM	#30 (permalink)
nofnway Insane Location: under the freeway bridge	To the point of this thread...the problem with this model is that "Fairness" has nothing to do with tax code. Who supposes it fair that the richest or the poorest should pay more than they already do? Taxes have become about social control and political favor than raising funds for necessary expenses...am I right? I'd love to see a flat tax, personally, but it will never happen. Why would we need the IRS? Whole industries would be wiped out...H&R et. al...... As an aside...some of the different tax policies have encouraged some really strange consequences...changing policies might just give us some new unexpected consequences. What got me to thinking about this was Scout's idea for corporate taxes. "Corporate taxes should be based upon the number of employees and the amount of profit. Example, up to 20 employees you are allowed to make 200 grand in profits or 40 employees 400 grand then you pay a flat tax after that. Again, no ifs and or buts you just pay the tax. You could tier the whole corporate tax structure and base it upon employees/profit and this would promote job growth. Again, this is merely theory and all the details would need to be worked out but it's a lot fairer tax system than we have." You might get something like companies hiring hundreds of minimum wage workers or even "part time" workers to skate around the profit per number of employees thing... A strange consequence that already exists is evident in taxation of stock dividends..Microsoft for example is sitting on piles of cash( billions I've heard) That money belongs to shareholders and has already been taxed at the corporate rate. If the money is paid out in the form of dividends it becomes taxable to shareholders at their personal rate. Many shareholders don't want to lose this money in the form of taxes and instead want the company to invest the cash in ways to increase the value of their stock. What is Microsoft to do? Invest in (BUY UP) other companies....everything from fledgling startups to the competition. Certainly a consequence not intended __________________ "Iron rusts with disuse, stagnant water loses its purity and in cold water freezes. Even so does inaction sap the vigor of the mind" Leonardo Da Vinci