Those tax rate charts paint an incomplete picture. Along with those higher tax rates were quite a few tax shelter mechanisms, meaning the effective tax rate was much lower.
Reagan traded eliminating the tax shelters for the lower tax rates.
>eliminating the tax shelters for the lower tax rates.
I think the something is better than nothing argument already shows a sign of defeat.
Cheating and evasion of taxes is the same as over taxing, because please note when X set of people don't pay taxes, you have to recover the loss from Y set of people by taxing them a little extra. If the X had payed at the first place, the original tax rate would have been lower, and every one would have to pay less.
"Evasion" has a fairly specific meaning in this context, so you're right on that. However, the processes that create and maintain many tax shelters, at least in USA, is hideous and corrupt, so I think it really ought to be considered "cheating".
Warren Buffet paid nearly nothing because of retained earnings. But his family apparently lives modestly, so it doesn't make sense to pay oneself more than necessary.
If Warren Buffet never sells his shares he will never pay capital gains on those earnings because of the "free stepup in basis" that occurs when you die. You will hear him say income taxes should be higher but I am waiting for him to say that the free stepup in basis is unfair and should be eliminated.
Of course if he ever needs money he can borrow as much as he wants and spend it tax-free! The salary he pays himself is completely irrelevant to his ability to spend.
The bigger problem is the US tax code is a byzantine mess, and duct tape fixes further obscure the greater larceny of the unaware.
A simple solution is fair* "flat" (graduated) tax every year on both balance sheet (assets and holdings) and income sheet. An inheritance tax would be unnecessary, because balance sheet reporting would handle it. One page form, no special amendment shit for megafarms, special credits and other edge-case crap. Also to make things fair across-the-board, tax companies and trusts in a similar manner. And yes, people would continue trying gambits. It would never happen of course unless people get organized and insist on it.
No more hideouts for the ultrawealthy while everyone else subsidizes services they use.
* Poor pay less down to 0% for 2X minimum wage, % levels out at some upper-middle class level and stays constant.
Comments
The US has had higher tax rates than that at times. It's more of a recent thing that the numbers have been well below 50%
Historical US upper bracket tax rate: http://s158.photobucket.com/user/OnlyObvious/media/Tax_Rates...
Those tax rate charts paint an incomplete picture. Along with those higher tax rates were quite a few tax shelter mechanisms, meaning the effective tax rate was much lower.
Reagan traded eliminating the tax shelters for the lower tax rates.
I think the something is better than nothing argument already shows a sign of defeat.
Cheating and evasion of taxes is the same as over taxing, because please note when X set of people don't pay taxes, you have to recover the loss from Y set of people by taxing them a little extra. If the X had payed at the first place, the original tax rate would have been lower, and every one would have to pay less.
Tax shelters are legal means of avoiding taxes. They are neither cheating nor evasion.
"Evasion" has a fairly specific meaning in this context, so you're right on that. However, the processes that create and maintain many tax shelters, at least in USA, is hideous and corrupt, so I think it really ought to be considered "cheating".
Warren Buffet paid nearly nothing because of retained earnings. But his family apparently lives modestly, so it doesn't make sense to pay oneself more than necessary.
If Warren Buffet never sells his shares he will never pay capital gains on those earnings because of the "free stepup in basis" that occurs when you die. You will hear him say income taxes should be higher but I am waiting for him to say that the free stepup in basis is unfair and should be eliminated.
Of course if he ever needs money he can borrow as much as he wants and spend it tax-free! The salary he pays himself is completely irrelevant to his ability to spend.
The bigger problem is the US tax code is a byzantine mess, and duct tape fixes further obscure the greater larceny of the unaware.
A simple solution is fair* "flat" (graduated) tax every year on both balance sheet (assets and holdings) and income sheet. An inheritance tax would be unnecessary, because balance sheet reporting would handle it. One page form, no special amendment shit for megafarms, special credits and other edge-case crap. Also to make things fair across-the-board, tax companies and trusts in a similar manner. And yes, people would continue trying gambits. It would never happen of course unless people get organized and insist on it.
No more hideouts for the ultrawealthy while everyone else subsidizes services they use.
* Poor pay less down to 0% for 2X minimum wage, % levels out at some upper-middle class level and stays constant.
There were also different tax brackets and different number of people in these brackets...