[Rhodes22-list] Flat Tax Anyone? What is fair Dave(political rant)

[budconnor at earthlink.net]

Brad,
  is it easy to set up a not-for-profit company, and what are some of those hidden benefits?
Also, why don't all companies go not-for-profit?

Thanks,
Bud

-----Original Message-----
>From: Brad Haslett <flybrad at gmail.com>
>Sent: Jan 15, 2007 6:26 AM
>To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>Subject: Re: [Rhodes22-list] Flat Tax Anyone? What is fair Dave(political rant)
>
>Bill,
>
>Lucky you!  My company is a not-for-profit entity as well.  That wasn't our
>goal when we started but we've discovered some hidden benefits.
>
>The WSJ article referred to mid-career, two wage earner couples - that's Fan
>and myself.  We live modestly (small mortgage), save aggressively, and don't
>get involved in exotic tax schemes.  As a result, our effective federal tax
>rate has always been around 25%, much higher than the average truly
>rich person like Teresa Heinz.  The garden variety small craftsman, say a
>plumber or an electrician, who owns his own business is in the same boat.
>
>"Fairness" is in the eye of the beholder.
>
>Brad
>
>
>On 1/14/07, Bill Effros <bill at effros.com> wrote:
>>
>> Brad,
>>
>> I'm not a wage earner, and my company is a non-profit--just like Stan.
>> We pay no taxes under this "flat-tax" system?
>>
>> Bill Effros
>>
>> Brad Haslett wrote:
>> > Bill,
>> >
>> > How is "income" defined here?
>> >
>> >
>> >
>> > If you are a wage earner, income would be the amount on your W-2 less
>> > what
>> > you put in savings, (assuming the savings aspect survived Congress).
>> > If you
>> > are self-employed, nothing would change; your net profit for the
>> > year-end is
>> > your income.
>> >
>> > Does the "flat tax" replace all other taxes.
>> >
>> >
>> >
>> > No.
>> >
>> > Is the gasoline tax gone?
>> >
>> >
>> >
>> > No.  My personal opinion is that we should be paying about $4 per
>> > gallon for
>> > fuel, with a floating tax implemented over time to bridge the gap
>> between
>> > the market price of gasoline and the $4 target.  I know this sounds
>> > strange
>> > coming from a free market disciple but this is a matter of national
>> > security.
>> >
>> > Are tobacco and liquor taxes gone?
>> >
>> >
>> >
>> > No.  Those are local taxes and here in the Bible Belt a big fund raiser.
>> >
>> > Can cities and states tack on other taxes over and above the "flat tax"?
>> >
>> >
>> >
>> > Yes.  Each state is still responsible for their own spending and revenue
>> > raising schemes.
>> >
>> > Are property taxes gone?
>> >
>> >
>> >
>> > No.  Property taxes will still be used locally to fund schools and local
>> > government, as they should be.
>> >
>> > What about taxes on the sale of securities and real estate?
>> >
>> >
>> >
>> > Some flat tax advocates suggest eliminating capital gains.  I personally
>> > think we shouldn't tax the gain on assets held over two years.  This
>> > encourages long term investment and throttles real estate speculation.
>> >
>> > What about fees charged by the government?  Why should the government
>> > charge for entry to parks?  Or postage?  Or fees for passports?  Aren't
>> > these all just hidden taxes?
>> >
>> >
>> >
>> > These are user fees and they wouldn't change.  Airlines will still pay
>> > landing fees to support the airspace infrastructure, etc.
>> >
>> > Please fill in some more blanks on how the "flat tax" actually
>> > works--how everything becomes so simple and fair.
>> >
>> >
>> >
>> > The fair and simple is that the lowest income earners ($40K or less)
>> > don't
>> > have to fool with federal income taxes at all.  The top 1% (read Bill
>> > Gates)
>> > actually pays the same marginal rate as everyone else.  The 2% to 5%,
>> > that's
>> > you and me kid, probably won't see much difference except that our
>> > friends
>> > who borrowed a million dollars for a house may rethink their
>> > decision.  For
>> > the 6% to 50%, life gets a lot simpler, and for the bottom 50% the tax
>> > burden decreases.
>> >
>> >
>> >
>> > Brad
>> >
>> >
>> >
>> >
>> > On 1/14/07, Bill Effros <bill at effros.com> wrote:
>> >>
>> >> Brad,
>> >>
>> >> How is "income" defined here?
>> >>
>> >> Does the "flat tax" replace all other taxes?
>> >>
>> >> Is the gasoline tax gone?
>> >>
>> >> Are tobacco and liquor taxes gone?
>> >>
>> >> Can cities and states tack on other taxes over and above the "flat
>> tax"?
>> >>
>> >> Are property taxes gone?
>> >>
>> >> What about taxes on the sale of securities and real estate?
>> >>
>> >> What about fees charged by the government?  Why should the government
>> >> charge for entry to parks?  Or postage?  Or fees for passports?  Aren't
>> >> these all just hidden taxes?
>> >>
>> >> Please fill in some more blanks on how the "flat tax" actually
>> >> works--how everything becomes so simple and fair.
>> >>
>> >> Bill Effros
>> >>
>> >> Brad Haslett wrote:
>> >> > Bill,
>> >> >
>> >> > There are a gazillion different versions out there, including the
>> ones
>> >> > currently being used in Eastern Bloc countries.  The one I like best
>> >> > is the
>> >> > one proposed by Steve Forbes.  Basically, the first $40,000 or so of
>> >> > household income would be tax free with adjustments for family size
>> >> > and type
>> >> > (single v married).  After the threshold, consumption, meaning income
>> >> > minus
>> >> > savings, would be taxed at a flat rate, 17% in Forbes proposal.
>> >> Corporate
>> >> > income would be taxed at the same 17%.  Going back to the old 80/20
>> >> rule,
>> >> > the 20% of taxpayers who pay 80% of the taxes still would.  Much of
>> >> > the 80%
>> >> > who pay little taxes anyway would be exempt, and what they did owe
>> >> > could be
>> >> > calculated on a postcard. Gone would be the deduction for home
>> >> > mortgage interest and other itemized deduction.  The idea is that a
>> >> > flat tax
>> >> > encourages savings while discouraging subsidized spending on
>> oversized
>> >> > houses, etc. The original income tax in the US was a flat tax of 1%.
>> >> > We had
>> >> > a lot fewer accountants and tax attorneys back then.
>> >> >
>> >> > Brad
>> >> >
>> >> >
>> >> > On 1/14/07, Bill Effros <bill at effros.com> wrote:
>> >> >>
>> >> >> Same question, Brad:  How does the flat tax work?
>> >> >>
>> >> >> Bill Effros
>> >> >>
>> >> >> Brad Haslett wrote:
>> >> >> > Chris wrote:
>> >> >> >
>> >> >> > "If the system steals all their wealth then I guess those guys
>> >> won't
>> >> >> > bother
>> >> >> > to earn their
>> >> >> > vast sums of money."
>> >> >> >
>> >> >> > Precisely!  That is exactly what happened when marginal tax rates
>> >> were
>> >> >> in
>> >> >> > the 70 to 90 per cent range.  That, and people got involved in
>> >> >> > sophisticated
>> >> >> > tax dodging schemes.  Our current code is far more complicated
>> than
>> >> >> > necessary because of all the tinkering done over the years to
>> >> achieve
>> >> >> > various social aims.  Under a flat tax, the top 20% of earners
>> will
>> >> >> still
>> >> >> > pay over 80% of the total tax collected. Those 10,000 square foot
>> >> >> > McMansions
>> >> >> > won't be subsidized and driving a leased Hummer to work won't make
>> >> >> much
>> >> >> > sense either.  JFK said it best when he explained why he was
>> >> cutting
>> >> >> > marginal rates, "a rising tide raises all boats."
>> >> >> >
>> >> >> > If the ultimate goal of a nations tax system is to achieve equal
>> >> >> > incomes for
>> >> >> > all,  you get Cuba, North Korea, and a few other third world
>> >> >> countries.
>> >> >> > Every other industrialized nation interested in growing their
>> >> economy
>> >> >> has
>> >> >> > given-up on such foolishness.
>> >> >> >
>> >> >> > Brad
>> >> >> >
>> >> >> >
>> >> >> > On 1/14/07, Geankoplis <napoli68 at charter.net> wrote:
>> >> >> >>
>> >> >> >> Dave,
>> >> >> >>        There seems too much hand wringing about the unfair taxes,
>> >> the
>> >> >> >> crushing burden of those taxes on the wealthy.  I agree with you,
>> >> >> isn't
>> >> >> >> wealth the reward?  Didn't the system benefit those wealthy
>> >> >> people?  If
>> >> >> >> that
>> >> >> >> system exist to reward these people then why shouldn't they pay
>> >> >> more to
>> >> >> >> support it?  They have more to loose than the little guy.  If the
>> >> >> system
>> >> >> >> steals all their wealth then I guess those guys won't bother to
>> >> earn
>> >> >> >> their
>> >> >> >> vast sums of money.  People can complain all they want but their
>> >> >> actions
>> >> >> >> speak louder than words.  If the amount of taxes someone pays is
>> >> more
>> >> >> >> important than what they make, let them work minimum wage, an
>> >> obvious
>> >> >> >> luxurious level of existence that should be suppressed as it is
>> >> more
>> >> >> >> money
>> >> >> >> than someone really needs.
>> >> >> >>
>> >> >> >> Chris the tax payer
>> >> >> >>
>> >> >> >> -----Original Message-----
>> >> >> >> From: rhodes22-list-bounces at rhodes22.org
>> >> >> >> [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of
>> >> >> >> DCLewis1 at aol.com
>> >> >> >> Sent: Friday, January 12, 2007 8:29 PM
>> >> >> >> To: rhodes22-list at rhodes22.org
>> >> >> >> Subject: Re: [Rhodes22-list] Flat Tax Anyone? Tossing ball back
>> to
>> >> >> >> Slim(political rant)
>> >> >> >>
>> >> >> >>
>> >> >> >> Interesting that Ed thinks 36% tax is an oppressive tax rate (and
>> >> >> that's
>> >> >> >> the
>> >> >> >> max rate, not on your gross, its after deductions).  Look at the
>> >> >> >> roads  you
>> >> >> >> travel, the ATC, national security, public health, the commerce
>> >> >> >> infrastructure, etc - seems like a one time good deal to me.
>> >> >> >>
>> >> >> >> For those of you who worry that you're paying school taxes for
>> >> other
>> >> >> >> peoples
>> >> >> >> kids, ask yourself who is going to be paying into the Social
>> >> >> >> Security  fund
>> >> >> >> on your behalf 10 years from now - it's those kids.  You better
>> >> hope
>> >> >> >> they're
>> >> >> >> educated and have good jobs, their Soc Security deposits are
>> >> >> >> going  straight
>> >> >> >>
>> >> >> >> to you.
>> >> >> >>
>> >> >> >> Further, while Ed makes a good point regarding founders that
>> begin
>> >> >> and
>> >> >> >> develop companies, I suggest they are likely a small fraction of
>> >> >> the 1%
>> >> >> >> under
>> >> >> >> discussion.  I would encourage you to consider the real 1% -
>> >> consider
>> >> >> >> the
>> >> >> >> Grasso'
>> >> >> >> s, who didn't start, found, begin or develop anything he just got
>> >> >> >> the  NYSE
>> >> >> >> to
>> >> >> >> give him an egregious pay package.  Or Nardelli of Home Depot,
>> >> >> >> or  Skilling
>> >> >> >> of Enron, or Conrad Black accused of looting the Tribune, or the
>> >> >> >> guys  that
>> >> >> >> looted Tyco, or McKinnel of Pfizer, or Immelt of GE, or
>> >> Waggoner of
>> >> >> >> GM,
>> >> >> >> or
>> >> >> >> Ford
>> >> >> >> of Ford......  Lets cut out the mythology and deal with cases,
>> >> and
>> >> >> >> there
>> >> >> >> are
>> >> >> >> a ton of cases, and in all those cases the MBAs that won the
>> water
>> >> >> >> cooler
>> >> >> >> wars stepped up to run major corporations and made out like
>> >> bandits
>> >> -
>> >> >> >> that's
>> >> >> >> the real story and that's the real 1%.  I can't think of a single
>> >> >> >> S&P 500
>> >> >> >> corporation that's run by it founder.  And I
>> respectfully  suggest
>> >> >> that
>> >> >> >> the
>> >> >> >> MBAs
>> >> >> >> that win the water cooler wars are no more entitled to  special
>> >> tax
>> >> >> >> consideration by society than anyone else - they are not
>> >> >> founders,  they
>> >> >> >> are
>> >> >> >> watch
>> >> >> >> standers, and there is a difference.
>> >> >> >>
>> >> >> >> Regarding founders: If you do found and develop a public company,
>> >> you
>> >> >> >> make
>> >> >> >> out like a bandit even with the current tax code - and I don't
>> >> >> begrudge
>> >> >> >> that
>> >> >> >>
>> >> >> >> one  bit.  But you reasonably make out so incredibly well that
>> >> even
>> >> >> >> after
>> >> >> >> taxes
>> >> >> >> you are incredibly well off.  Consider Phil Knight, the guy who
>> >> >> founded
>> >> >> >> Nike
>> >> >> >> - I think he's the 48th richest guy in the US even after the
>> >> current
>> >> >> >> taxes,
>> >> >> >>
>> >> >> >> and that's fine but he doesn't need a change in the tax code to
>> >> help
>> >> >> him
>> >> >> >> out
>> >> >> >>
>> >> >> >> he's doing very well thank you.  Consider Bill Gates, I think the
>> >> >> >> richest
>> >> >> >> guy in the US, money up the gazoo - under the current tax
>> >> >> code.  Michael
>> >> >> >> Dell,
>> >> >> >> absolutely not suffering at all - under the present tax code.
>> >> >> None  of
>> >> >> >> the
>> >> >> >> founder types I've mentioned need special consideration from the
>> >> >> >> tax  code,
>> >> >> >> they
>> >> >> >> are all doing very very well by any standard - and I don't
>> >> begrudge
>> >> >> >> their
>> >> >> >> doing well, but neither do I feel sympathy for the tax they pay.
>> >> >> >> They've
>> >> >> >> got
>> >> >> >> it made and some of the reasons they have it made is the
>> >> >> larger  society
>> >> >> >> respects and enforces their intellectual property rights - at a
>> >> real
>> >> >> >> cost
>> >> >> >> to the
>> >> >> >> larger society - the larger society facilitates their production
>> >> >> >> efforts
>> >> >> >> with
>> >> >> >> roads, power, terminals and infrastructure and security of all
>> >> >> >> sorts, and
>> >> >> >> generally enables the commerce that they profit from so greatly -
>> >> >> >> so  maybe
>> >> >> >> they
>> >> >> >> should pay more for that increased support.  If that increased
>> >> >> support
>> >> >> >> weren't
>> >> >> >> there, they'd have nothing or very much less.  The
>> >> customs  inspector
>> >> >> >> standing on the dock looking for counterfeit Nikes is not paid by
>> >> >> Phil
>> >> >> >> Knight, but
>> >> >> >> Phil Knight benefits directly from that customs
>> >> >> inspector's  activities,
>> >> >> >> maybe
>> >> >> >> Phil Knight should pay more tax than the rest of us.   Maybe Bill
>> >> >> Gates
>> >> >> >> should
>> >> >> >> pay more taxes, the US Government is investing time and  manpower
>> >> >> trying
>> >> >> >> to
>> >> >> >> mitigate software pirating efforts in Asia and around the
>> >> world, a
>> >> >> >> direct
>> >> >> >> significant beneficiary is - Bill Gates.  I don't begrudge  any
>> of
>> >> >> these
>> >> >> >> guys
>> >> >> >> their wealth, but I also think they, more than some day
>> worker  in
>> >> >> South
>> >> >> >> Carolina,
>> >> >> >> are constructively exploiting, using, and benefiting from the
>> >> full
>> >> >> >> range
>> >> >> >> of
>> >> >> >>
>> >> >> >> government services and in consideration they should pay
>> >> more  taxes.
>> >> >> >>
>> >> >> >> Dave
>> >> >> >>
>> >> >> >> __________________________________________________
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>> >> >> >>
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