2018 Taxes

[CascadeClone]

My preferred method is the Fair Tax, which would replace the income tax, social security/FICA entirely. It's a consumption tax (like a sales tax). Everyone would get their entire check, and it would be up to them as to how much of it they spend/pay. Taxes rebated (in advance) up to the poverty line.

https://fairtax.org/index

I could support this as reasonable, it would be tricky to get "right" but it could be done. But Congress will never do it, because it takes away like 80% of their power -- to hand out money in the tax code and get campaign donations and favors from special interests. Not trying to be partisan, just human nature.

 

[BCClone]

My biggest tax issue was when they stopped letting us deduct 50% of our entertainment expenses. Hookers and blow are expensive enough but at least I got some back from Uncle Sam before.

 

[isufbcurt]

My biggest tax issue was when they stopped letting us deduct 50% of our entertainment expenses. Hookers and blow are expensive enough but at least I got some back from Uncle Sam before.

Just put it into "materials & supplies" lol


For what it's worth I don't care if you do taxes yourself, have me do them, have someone else do them just please do me one favor and do NOT go to an H&R Block!!!!!!!!!

 

[Cyclonepride]

I could support this as reasonable, it would be tricky to get "right" but it could be done. But Congress will never do it, because it takes away like 80% of their power -- to hand out money in the tax code and get campaign donations and favors from special interests. Not trying to be partisan, just human nature.

It takes away a good amount of their power, but much of that is their power to pay back donors under the table. It also makes taxpayers abundantly aware of how much burden the government is placing upon them through profligate spending, and also abundantly aware when their leaders increase that burden.

 

[SEIOWA CLONE]

My preferred method is the Fair Tax, which would replace the income tax, social security/FICA entirely. It's a consumption tax (like a sales tax). Everyone would get their entire check, and it would be up to them as to how much of it they spend/pay. Taxes rebated (in advance) up to the poverty line.

https://fairtax.org/index

The so called fair tax discriminates against lower income earners. They are spending most of their money just to get by. When you have little to no Discretionary income it really screws them over.
Now by the same thought, those on the upper part of the scale make out like bandits because while they have larger bills, they also have a ton more discretionary income left afterward.

We really need a flat tax that increases on income levels.
$0 to $25,000 7%
$25,001 to $75,000 12%
$75,001 to $150,000 18%
$151,0000 to $1,000,000 25%
$1,000,001 to $10,000,000 35%
over 10 million 50%

Under this plan a person that made $50,000 a year would pay $4,750 in taxes. $1,750 on the first 25 grand and then $3,000 on the second 25 grand they made. Their total tax bill would be 9% of their earnings for the year.

No deductions, money is taken right off the top, all income is taxed equally.

 

[BCClone]

The so called fair tax discriminates against lower income earners. They are spending most of their money just to get by. When you have little to no Discretionary income it really screws them over.
Now by the same thought, those on the upper part of the scale make out like bandits because while they have larger bills, they also have a ton more discretionary income left afterward.

We really need a flat tax that increases on income levels.
$0 to $25,000 7%
$25,001 to $75,000 12%
$75,001 to $150,000 18%
$151,0000 to $1,000,000 25%
$1,000,001 to $10,000,000 35%
over 10 million 50%

Under this plan a person that made $50,000 a year would pay $4,750 in taxes. $1,750 on the first 25 grand and then $3,000 on the second 25 grand they made. Their total tax bill would be 9% of their earnings for the year.

No deductions, money is taken right off the top, all income is taxed equally.

2 things. He mentioned rebated, upfront, to poverty level so that would handle a good portion of necessities.

Second, I don’t think you understand the concept of a flat tax at all with your proposal.

 

[khardbored]

I disagree. You'd need to run your information this year with last year's tax laws to compare numbers. Comparing effective rate doesn't account for changes in income, standard deduction, exemptions, tax tables, etc.

I get that. I didn't want to muddy things up more by saying "assuming your income and expenses stay roughly the same."

 

[Clonehomer]

2 things. He mentioned rebated, upfront, to poverty level so that would handle a good portion of necessities.

Second, I don’t think you understand the concept of a flat tax at all with your proposal.

Whatever you want to call it, progressive tax with no deductions, it seems like this is a better compromise than a flat tax. All income treated equally. You could even fit this on a postcard, which is what the Republicans promised in 2016 anyway.

 

[Cyclone06]

Early in 2018 both my wife and I changed our W4s to married, 0 fed and 0 state. We had to pay for 2017. With our pay withholdings being the max amounts, how can we owe again in 2018?

 

[CascadeClone]

2 things. He mentioned rebated, upfront, to poverty level so that would handle a good portion of necessities.

Second, I don’t think you understand the concept of a flat tax at all with your proposal.

You are right on both points, BC.

The rebated piece could go higher to some level, to reduce income inequality (yes then it's welfare, but bear with me). Most economists agree that a simple payment like this is better than all the different programs - more efficient in almost every way. We already have the EITC; this rebate is essentially the same thing. And you are topping off incomes of people who are working, not incentivizing them NOT to work.

Having a flat tax rate, but a progressive EITC rate, could theoretically get rid of the income tax disincentive to work more, maybe even increase the incentive to work more at the lower end too if done right.

It's not perfect, but it is hard to see how any change could be significantly worse than what we have. Sorry if this is considered "political", intended just as a (rather dry) problem solving discussion.

 

[isufbcurt]

Early in 2018 both my wife and I changed our W4s to married, 0 fed and 0 state. We had to pay for 2017. With our pay withholdings being the max amounts, how can we owe again in 2018?

Because the withholding tables were skewed to make people think they saving on taxes during the year only to have to pay it back at tax time.

The IRS even acknowledged this by waving penalties and interest due to the under withholding.

 

[CascadeClone]

You could even fit this on a postcard, which is what the Republicans promised in 2016 anyway.

The postcard thing, was originally Steve Forbes' idea when he ran for the nomination in 1996(!)

It'd be great, but you have to reform the system to make it feasible.

Just read there IS an effort to put a simple 1040 on a postcard form now (didn't know that was back as a thing). I don't think its possible with the current system, unless you literally have one job and nothing else. So, teenagers maybe.

 

[SEIOWA CLONE]

2 things. He mentioned rebated, upfront, to poverty level so that would handle a good portion of necessities.

Second, I don’t think you understand the concept of a flat tax at all with your proposal.

You are correct, the plan I described is a progressive tax, more than a true flat tax. I have never seen a study that shows that a true flat tax brings in anywhere close to the money that the government now currently does.

Its sounds good, everyone pays the same rate, but then how is it equitable that I pay 10% on $50,000 while another guy earns $5,000,000 and he also pays at the same rate?
You have to come up with a system that does not bury the low wage earner, but then does not also reward the high wage earner. Which a true flat tax does.

 

[keepngoal]

I see we are threading the needle on cave vs non-cave.

 

[Cyched]

I see we are threading the needle on cave vs non-cave.

There’s a lengthy thread in the cave.

PSA: Post in the other thread if you can’t help yourself.

 

[mapnerd]

Because the withholding tables were skewed to make people think they saving on taxes during the year only to have to pay it back at tax time.

The IRS even acknowledged this by waving penalties and interest due to the under withholding.

How would you recommend paying federal taxes? Just all at once? Installment plan? Maybe it doesn't matter?

 

[isufbcurt]

How would you recommend paying federal taxes? Just all at once? Installment plan? Maybe it doesn't matter?

Preferably all at once.

 

[mdk2isu]

You are correct, the plan I described is a progressive tax, more than a true flat tax. I have never seen a study that shows that a true flat tax brings in anywhere close to the money that the government now currently does.

Its sounds good, everyone pays the same rate, but then how is it equitable that I pay 10% on $50,000 while another guy earns $5,000,000 and he also pays at the same rate?
You have to come up with a system that does not bury the low wage earner, but then does not also reward the high wage earner. Which a true flat tax does.

Why should the person that produces/contributes more be punished? Because thats typically what it takes to become a high wage earner, high productivity and/or high contribution to society. Yes, there are exceptions, but those are the minority of high earners.

 

[SEIOWA CLONE]

Why should the person that produces/contributes more be punished? Because thats typically what it takes to become a high wage earner, high productivity and/or high contribution to society. Yes, there are exceptions, but those are the minority of high earners.

Because they can afford to pay more. For the past 40 years the wealthy and large multinational corporations have shifted the tax burden from themselves to the middle class and the poor.

Their wages and share of the economy has grown unbelievable upward, while the middle class and the poor have seen our wages stagnate.

There has been economic warfare going on for the past 40 years, and we the middle class are losing the battle, if not the entire war. What is up next for the poor wealthy, elimination of the estate tax. So they can then use that money to build new factories and hire more workers at higher wages. Keep believing in fairy tales or in other words, Republican economic plans.
https://www.brookings.edu/articles/the-great-tax-shift/

 

[mdk2isu]

Because they can afford to pay more. For the past 40 years the wealthy and large multinational corporations have shifted the tax burden from themselves to the middle class and the poor.

Their wages and share of the economy has grown unbelievable upward, while the middle class and the poor have seen our wages stagnate.
https://www.brookings.edu/articles/the-great-tax-shift/

But they receive the same services. Just because someone can afford more doesnt mean they should have to pay more than someone else to get the same services.

The second part of your post, thats due to poor financial education in this country in my opinion. But thats another topic.