[Rhodes22-list] Taxes - Timely Article

Thu Jan 18 16:07:51 EST 2007

Brad,

I keep telling you the secret.  To avoid income tax, don't earn income.  
There are plenty of other ways to earn money that are not classified as 
"income".  Mr. Bush has lowered the capital gains tax to 0% for some people.

When you hear that some executive earned $100,000,000 last year, you 
don't think he paid $30,000,000 in income taxes, do you?

Warren Buffet just gave away $30 Billion dollars--yet he never had an 
income of more than $100,000 a year.  He probably has paid less income 
tax over the course of his life than you have paid over the course of 
your life.  How did he do that?

No taxes were ever paid on the $30 Billion dollars he earned, and now, 
because he is giving it to a non-profit foundation, none will ever be 
paid on it.

A "flat-tax" doesn't change that--it's still just a tax on income, and 
those who earn incomes can't avoid paying it.

You and Rik can't avoid earning incomes in your chosen professions, but 
don't think that by jiggering around the rates on which you pay you can 
substantially alter the percentage of your income that will go to the 
government to pay for things the majority of your countrymen have 
decided to spend your money on.

The Wall Street Journal is happy to distract you with tax plans that 
benefit the majority of their readers whose principal income does not 
come from "income" as defined in "flat-tax" schemes.

Bill Effros

Brad Haslett wrote:
> Rik,
>
> I've kept my eye one the ball as close as anyone.  The IRS has you by the
> nads, except for BillE. I wish he would share his secrets.  I doubt he 
> has
> any secrets,  just smoke and mirrors.  We'll see.
>
> Brad
>
>
> On 1/18/07, Rik Sandberg <sanderico at earthlink.net> wrote:
>>
>> Brad,
>>
>> Well, I finished reading her article ...... She's still scary .... Wrong
>> headed thinking....
>>
>> But, you are right. A clean slate is in order and IMO the only
>> worthwhile way to go.
>>
>> Rik
>>
>>
>> Rik Sandberg wrote:
>>
>> > Brad,
>> >
>> > I have to admit, I came unglued right away and didn't read the whole
>> > article. Maybe I should go back now that I've settled down and finish
>> > it :)
>> >
>> > Yes, I AM in favor of a new sheet of paper. I still like the sales tax
>> > idea
>> >
>> > www.fairtax.org
>> >
>> > With this program, one could literally choose whether he'd like to pay
>> > taxes like a rich guy or pay very little. 'Course one's standard of
>> > living is going to have to reflect that choice. But for the
>> > conservative spender, saving for retirement might actually be a
>> > possibility.
>> >
>> > And Philip ..... there is a provision in this to repeal ..... uh,
>> > whatever the hell amendment it is, that allows income taxes.
>> >
>> > Rik
>> >
>> >
>> > Brad Haslett wrote:
>> >
>> >> Rik,
>> >>
>> >> I understand your point.  However, comma, the bottom 50% pay very
>> >> little,
>> >> and a huge hunk of that percentage don't participate anyway.  Let's
>> >> make it
>> >> official.  The top 20% pay most of the taxes, in fact, the top 5% pay
>> >> most
>> >> of them, but everyone get's one vote.  I say we start with a new
>> >> sheet of
>> >> paper.
>> >>
>> >> Brad
>> >>
>> >>
>> >> On 1/18/07, Rik Sandberg <sanderico at earthlink.net> wrote:
>> >>
>> >>>
>> >>> Brad,
>> >>>
>> >>> Yikes!!! this woman is scary. I wonder if she isn't into the
>> >>> Guinness......
>> >>>
>> >>> Subsidy, does she understand what that word means? How is taking
>> >>> less of
>> >>> a persons money a subsidy? By her way of thinking ALL of our money
>> >>> belongs to the government and nice guys that they are, sometimes 
>> they
>> >>> let us keep a little of it.
>> >>>
>> >>> This little blurb is really precious
>> >>>
>> >>> "They are also extremely regressive. A particular
>> >>> tax exemption might be worth 35 cents on the dollar to a wealthy
>> >>> individual
>> >>> and only 10 cents to someone on the other end of the income scale 
>> who
>> >>> faces
>> >>> a lower tax rate."
>> >>>
>> >>> Excuse me ....... how can you give a tax break to people who 
>> don't pay
>> >>> any???
>> >>>
>> >>> I think I'm going to read Ayn Rand again and see if I can figure out
>> >>> where all those guys went. It's starting to seem like a helluva good
>> >>> idea. This next thing has been around before, but maybe some need
>> >>> reminding. here's a link
>> >>>
>> >>> http://www.julianpistorius.com/journal/?postid=45
>> >>>
>> >>> Rik
>> >>>
>> >>>
>> >>>
>> >>>
>> >>>
>> >>>
>> >>> Brad Haslett wrote:
>> >>>
>> >>> > Here's an article from today's WaPo that dovetails neatly with our
>> >>> recent
>> >>> > discussion.  Care to make a bet about the home interest
>> >>> deduction?  No
>> >>> > one
>> >>> > in the Congress has the guts to take on that sacred cow!
>> >>> >
>> >>> > Brad
>> >>> >
>> >>> > -----------
>> >>> >
>> >>> > *The $800 Billion Tax Loophole
>> >>> > *
>> >>> >
>> >>> > By Maya MacGuineas
>> >>> > Special to washingtonpost.com's Think Tank Town
>> >>> > Thursday, January 18, 2007; 12:00 AM
>> >>> >
>> >>> > Democrats are in a bind when it comes to their domestic economic
>> >>> agenda.
>> >>> > They have promised a number of new and costly initiatives such as
>> >>> > fixing the
>> >>> > Alternative Minimum Tax, providing middle-class tax relief, and
>> >>> > increasing
>> >>> > spending on homeland security and education. But they have also
>> >>> made a
>> >>> > commitment to fiscal responsibility. So how can they deliver on
>> their
>> >>> > promises without opening themselves up to the old "tax and spend"
>> >>> label?
>> >>> > Reforming tax entitlements -- a large, mostly under-the-radar part
>> of
>> >>> the
>> >>> > federal budget -- might just give them a way out of their
>> >>> predicament.
>> >>> >
>> >>> > As a result of the 1986 bipartisan tax reforms, the tax base was
>> >>> > broadened
>> >>> > and the tax code was greatly simplified. But these reforms have 
>> been
>> >>> > gradually undone as Congress has created scores of new tax breaks
>> and
>> >>> > loopholes. Want to preserve historic buildings, encourage
>> alternative
>> >>> > energy
>> >>> > sources, help working families, or give certain industries a boost
>> >>> > without
>> >>> > appearing to increase spending? Voil? -- a new targeted tax 
>> break is
>> >>> > born.
>> >>> >
>> >>> > Most tax expenditures are really spending programs designed to 
>> look
>> >>> > like tax
>> >>> > cuts. Picture them as vouchers for healthcare, mortgage payments,
>> >>> > daycare,
>> >>> > transportation -- name the tax break. Dressing these programs 
>> up as
>> >>> > tax cuts
>> >>> > makes them a much easier sell for politicians who fear the "big
>> >>> spender"
>> >>> > label. But call them what you will, they drain the money from the
>> >>> > Treasury
>> >>> > and extend the scope of government. All told, this portion of the
>> >>> budget
>> >>> > represents $800 billion in lost government revenues annually.
>> >>> >
>> >>> > Not only do these tax breaks mask the true size of the government,
>> >>> > they are
>> >>> > a terrible way to make policy. They regularly pay people and
>> >>> > businesses to
>> >>> > do what they would do anyway, making them both poorly targeted and
>> >>> > unnecessarily expensive. They are also extremely regressive. A
>> >>> particular
>> >>> > tax exemption might be worth 35 cents on the dollar to a wealthy
>> >>> > individual
>> >>> > and only 10 cents to someone on the other end of the income scale
>> who
>> >>> > faces
>> >>> > a lower tax rate. It would be hard to justify a housing policy
>> >>> that does
>> >>> > more to subsidize the rich than the poor, yet that is exactly what
>> >>> the
>> >>> > $80
>> >>> > billion a year home mortgage interest deduction does.
>> >>> >
>> >>> > Moreover, tax expenditures do not get nearly the level of scrutiny
>> >>> they
>> >>> > should. (If they did, would we really have a government program 
>> that
>> >>> > subsidizes millionaires who buy vacation homes?) New government
>> >>> programs
>> >>> > should only be created following vigorous debate over whether a
>> >>> proposed
>> >>> > policy is important enough to warrant government intervention, and
>> if
>> >>> > it is,
>> >>> > whether it will be effective. Discussions about new tax programs
>> >>> however,
>> >>> > tend to focus almost exclusively on the cost. Billions of 
>> dollars of
>> >>> > targeted tax cuts have been passed in the past few years with 
>> little
>> >>> > or no
>> >>> > discussion about the worthiness of their goals. And unlike 
>> spending
>> >>> > programs, which are subject to congressional review, tax 
>> expenditure
>> >>> > programs are pretty much on automatic pilot.
>> >>> >
>> >>> > Reforming this area of the budget would not only be a critical
>> >>> step in
>> >>> > improving the tax code (and probably the closest thing we will see
>> to
>> >>> > fundamental tax reform in the next two years) it could also 
>> generate
>> >>> > tens --
>> >>> > if not hundreds -- of billions of dollars in savings.
>> >>> >
>> >>> > The first step should be capping a number of existing tax breaks.
>> >>> Capping
>> >>> > two of the largest breaks -- the home mortgage interest deduction
>> and
>> >>> the
>> >>> > exclusion for employer-provided healthcare, would easily provide
>> over
>> >>> $50
>> >>> > billion a year in savings. Both of these changes would reduce the
>> >>> large
>> >>> > subsidies that go to the highest earners while freeing up 
>> resources.
>> >>> > Getting
>> >>> > rid of a host of other tax breaks that subsidize certain
>> >>> businesses or
>> >>> > industries could easily generate another $25 billion. A thorough
>> >>> > review of
>> >>> > the over 150 existing tax expenditures to determine which ones 
>> have
>> >>> > outlived
>> >>> > their usefulness would yield still more in savings. As Democrats
>> >>> > search for
>> >>> > ways to offset the costs of their new agenda, reducing the $800
>> >>> > billion tax
>> >>> > loophole would be an excellent place to start.
>> >>> >
>> >>> > *Maya MacGuineas is the Director of the Fiscal Policy Program at
>> >>> the New
>> >>> > America Foundation.*
>> >>> > __________________________________________________
>> >>> > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
>> >>> >
>> >>>
>> >>> __________________________________________________
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