Got whacked by AMT

[Singuy]

Texas, Trump's biggest agenda is to get rid of the AMT because AMT is what is causing him to pay millions of dollars since he can't just deduct everything including the moon on his current tax return.

So you and I will be saving 2k..while billionaires will be saving millions.

Honestly taxes suck but whatever..like what people say..it's a first class problem. Call it a donation if you will.

Plus you have more to lose vs the average American...so that military and law enforcement your tax dollars pay for serves you more than someone who is poor.

[Joan.of.the.Arch]

Plus you have more to lose vs the average American...so that military and law enforcement your tax dollars pay for serves you more than someone who is poor.

Hmm, that's an interesting thought. I never quite looked at it that way, but surely, I'd have to agree.

[TexasHusker]

Hmm, that's an interesting thought. I never quite looked at it that way, but surely, I'd have to agree.

Suppose I worked at the Chevy Dealer and you came in to buy a new Chevy car that is worth $20,000.

You asked for the final price, but before I could give it to you, I needed to see your tax return. Since you only make $15,000 a year, the car is yours for free. But if you make $30,000 per year, it's $10,000. If you make $50,000 a year, you pay $20,000. But if you make $100,000, the price is $40,000. Why? "Because you can afford it". (And we need you to pay for your car plus all those free ones we gave away).

The maximum price of the car is supposed to be $40,000 (if you really make a lot of money), but if you make more than a lot, we are going to tack on another $5,000 to the price.

That's our tax code in a nut shell. Most are quite content with it because they are a beneficiary of it.

"Soak the rich." But...that has significant downside consequences that few take the time to think through.

Like everyone else, rich people like to spend money. Sometimes on new businesses, sometimes on fancy cars, eating out, taking trips, and buying fine clothes. But just like everyone else, when things get tight, they pull back. The folks at the Cessna factory get their jobs cut. People get laid off so that the company can downsize. New people aren't hired because expansion is put on hold. Etc.

Most rich people own businesses. Most businesses employee people. When you soak the rich, the end result is that working folks get hurt.

Take a look at what happened to the yacht industry when Bill Clinton slapped a hefty luxury tax on yachts. The industry went into the toilet and lots of people lost career jobs in the factories.

[Singuy]

Would you rather have everyone make the same and pays the same tax/year communism style?

Also effectively you pay the same amount of tax(or actually less because you have more deductions) for the first 20k, 50k, or 100k you made vs someone who makes 50k for the whole year.

It's just the extra money you make are subjected to a slightly higher percentage(most people are in the 25% tax bracket, your bracket is 33%....but then after 118k, your payroll taxes drop dramatically).

Taxes are paid by percentages. Even if lets just that there's a tax rate of 25% ONLY for everyone. Those who made 1 mil still ended up paying 250k in taxes vs the person who only paid 25k and made 100k.

Do you want everyone to pay that "final price"...which lets say it's 25k, in your analogy? So people who makes 25k/year gets 0 to their name? Or do you prefer everyone making the same money?

[greenskeeper]

Flat tax rate, no deductions. Post card return. Income x rate = taxes owed.

Too simple to work.

everyone has skin in the game when it comes to government expenses.

[Singuy]

Flat tax rate, no deductions. Post card return. Income x rate = taxes owed.

Too simple to work.

everyone has skin in the game when it comes to government expenses.

Sure...but at the end of the day, it's still going to be the same.

Poor people who can't afford to pay the tax will now require even MORE government subsides to make their ends meet. The government will essentially take that money from them and then give it all back and then some.

[disneysteve]

Flat tax rate, no deductions. Post card return. Income x rate = taxes owed.

Too simple to work.

The problem with a flat tax with no deductions is it is regressive. It is far easier to pay 17% (or whatever number you pick) of income when you earn 100K or 250K than when you earn 50K or 30K.

So if we do ever go to a flat tax, they'll need to do something to address that piece of it.

I certainly agree that the current system is far too complex and unfair and the AMT, as noted earlier, turned into something entirely different than what it was intended for because they failed to index it to inflation (like various other things) so over time it sucked in more and more and more people.

[TexasHusker]

Make no mistake, there is no appetite in government for any sort of "fair" tax policy.

Tax policy is, at its core, a means to control the citizenry. Funding the treasury is purely secondary.

[disneysteve]

Make no mistake, there is no appetite in government for any sort of "fair" tax policy.

For sure.

[Singuy]

The only "fair tax" is no tax. Any tax beyond 0 can be scrutinized.

[greenskeeper]

The problem with a flat tax with no deductions is it is regressive. It is far easier to pay 17% (or whatever number you pick) of income when you earn 100K or 250K than when you earn 50K or 30K.

So if we do ever go to a flat tax, they'll need to do something to address that piece of it.

I certainly agree that the current system is far too complex and unfair and the AMT, as noted earlier, turned into something entirely different than what it was intended for because they failed to index it to inflation (like various other things) so over time it sucked in more and more and more people.

There would have to be an income "floor" before the tax kicks in for the very poor I suppose.

When ALL citizens of this country get hit with the cost of how huge and out o control the government really is, then maybe the citizens will realize this and vote for smaller government.

[greenskeeper]

The only "fair tax" is no tax. Any tax beyond 0 can be scrutinized.

What? I enjoy driving on roads, bridges, schools for our kids, etc.

You need taxation to run the country.

If everyone pays into the "system" and realizes how much money the government wastes it would probably change their view on how large the government should be and what it should control.

[corn18]

I was listening to NPR the other day and they were doing an analysis on this very topic. It seems the rest of the world has gone to a VAT tax to generate additional revenue. That allowed them to keep the income tax lower. The other issue they covered was deductions. Seems the preferred approach was a simple progressive tax with zero deductions for anything. They were interviewing people from those countries and it takes about 20 minutes to fill out your tax form.

I like both of these approaches.

Tom

[Singuy]

What? I enjoy driving on roads, bridges, schools for our kids, etc.

You need taxation to run the country.

If everyone pays into the "system" and realizes how much money the government wastes it would probably change their view on how large the government should be and what it should control.

Not saying taxes are a bad idea. Just saying that debating fairness when it comes to taxes is pointless. Your version of "fair" is different than everyone else's.

[txex86]

Flat tax rate, no deductions. Post card return. Income x rate = taxes owed.

Too simple to work.

everyone has skin in the game when it comes to government expenses.

Actually, there are too many tax related lobbies that court Congress for the flat tax to ever be enacted by Congress.