Flat Tax (National Sales Tax) Debate

[Douglas]

wait...how is social security unearned?? please explain.

Social security is 100% unearned income.

In a contributory pension, your contribution is not taxed upon the reciept of the pension. However, it's all unearned income. The same goes for a noncontributory plan.

 

Earned income is strictly wages/tips etc.

[Douglas]

Bush is using the excuse of trying to reform a complex system to try and cloak his true agenda, which is to lower the taxes for all of the rich corporations and rich friends that got him into office.

It seems to me, that giving corporations a tax break encourages the corp to stay in the country, in addition, if a "state" offers lower corp taxes, it's an incentive to move to that state. Case in point, in the 50's most of the woolen mills, shoe factories, furniture manufacturers etc. moved from New England to the south.

Further, corporations don't pay taxes, people do......corp taxes are simply passed on the people.

[Douglas]

Bush is using the excuse of trying to reform a complex system to try and cloak his true agenda, which is to lower the taxes for all of the rich corporations and rich friends that got him into office.

It seems to me, that giving corporations a tax break encourages the corp to stay in the country, in addition, if a "state" offers lower corp taxes, it's an incentive to move to that state. Case in point, in the 50's most of the woolen mills, shoe factories, furniture manufacturers etc. moved from New England to the south.

Further, corporations don't pay taxes, people do......corp taxes are simply passed on the people.

[Aardvark]

Earned income is strictly wages/tips etc.

 

Etc? Your definition is too vague. If a person works hard to renovate a property then the capital gains are considered 'unearned' but that person has worked for his money.

 

And why should investment income be considered 'unearned'. A person has to use his brain and risk his money to make an investment, any gains can be seen as being earnt fairly.

 

The distinction between earned and unearned income is far too vague and porous to be useful in considering taxation.

[Aardvark]

Earned income is strictly wages/tips etc.

 

Etc? Your definition is too vague. If a person works hard to renovate a property then the capital gains are considered 'unearned' but that person has worked for his money.

 

And why should investment income be considered 'unearned'. A person has to use his brain and risk his money to make an investment, any gains can be seen as being earnt fairly.

 

The distinction between earned and unearned income is far too vague and porous to be useful in considering taxation.

[mattd]

Etc? Your definition is too vague. If a person works hard to renovate a property then the capital gains are considered 'unearned' but that person has worked for his money.

 

And why should investment income be considered 'unearned'. A person has to use his brain and risk his money to make an investment' date=' any gains can be seen as being earnt fairly.

 

The distinction between earned and unearned income is far too vague and porous to be useful in considering taxation.[/quote']

 

If a person works hard renovating a property, then he becomes actively involved in the reconditioning of that asset. Any rental income is considered ordinary and earned. The renovation of the property is costed to the asset, increasing it's basis and therefore brings the capital gain from the sale down.

 

This is how it's approached with our current income tax code.

 

Taking risks is the same as gambling. If you buy stock, you are trying to make a nice capital gain off of it. If we were to tax capital gains and not ordinary or "earned" income, we would be encouraging corporations to pay their shareholders dividends which wouldn't be taxable to avoid retaining earnings and driving the stock prices up.

 

Keeping companies focused on paying shareholders earnings instead of trying to drive their stock price up would eliminate future Enrons and worldcoms, who used creative accounting to drive their stock prices up.

[mattd]

Etc? Your definition is too vague. If a person works hard to renovate a property then the capital gains are considered 'unearned' but that person has worked for his money.

 

And why should investment income be considered 'unearned'. A person has to use his brain and risk his money to make an investment' date=' any gains can be seen as being earnt fairly.

 

The distinction between earned and unearned income is far too vague and porous to be useful in considering taxation.[/quote']

 

If a person works hard renovating a property, then he becomes actively involved in the reconditioning of that asset. Any rental income is considered ordinary and earned. The renovation of the property is costed to the asset, increasing it's basis and therefore brings the capital gain from the sale down.

 

This is how it's approached with our current income tax code.

 

Taking risks is the same as gambling. If you buy stock, you are trying to make a nice capital gain off of it. If we were to tax capital gains and not ordinary or "earned" income, we would be encouraging corporations to pay their shareholders dividends which wouldn't be taxable to avoid retaining earnings and driving the stock prices up.

 

Keeping companies focused on paying shareholders earnings instead of trying to drive their stock price up would eliminate future Enrons and worldcoms, who used creative accounting to drive their stock prices up.

[LucidDreamer]

It seems to me' date=' that giving corporations a tax break encourages the corp to stay in the country, in addition, if a "state" offers lower corp taxes, it's an incentive to move to that state. Case in point, in the 50's most of the woolen mills, shoe factories, furniture manufacturers etc. moved from New England to the south.

[/quote']

We can view the extra money that we have to pay in taxes or the other government projects that will have reduced budgets or get cut as an investment in these corporations that receive a tax cut. I doubt the rich men who are in control of these corporations were thinking about improving America when they hired lobbyist to influence the politicians. I believe they were operating on greed. Their objectives were purely about enriching themselves.

 

Since their motives were selfish I doubt that the laws that would be passed and the money that would be saved would be geared towards strengthening and building the US economy. I imagine that most of the money would end up as corporate perks and extra yachts for CEOs and rich stockowners. I think its about George Bush and the Republicans paying back their friends who got them into office.

 

I might, however, be interested in investing in small business as small businesses are leaner and hungrier and the money is more likely to go towards building the economy.

 

Further' date=' corporations don't pay taxes, people do......corp taxes are simply passed on the people.[/quote']

Yes but if a middle class worker was offered a choice between lowering his income tax or to lower the corporate tax rate of the company he had a few shares in he would choose the income tax relief because that would save him the most money. It's the rich who own large amounts of stocks and receive all kinds of corporate benefits who are most interested in lowering the corporate taxes.

[LucidDreamer]

It seems to me' date=' that giving corporations a tax break encourages the corp to stay in the country, in addition, if a "state" offers lower corp taxes, it's an incentive to move to that state. Case in point, in the 50's most of the woolen mills, shoe factories, furniture manufacturers etc. moved from New England to the south.

[/quote']

We can view the extra money that we have to pay in taxes or the other government projects that will have reduced budgets or get cut as an investment in these corporations that receive a tax cut. I doubt the rich men who are in control of these corporations were thinking about improving America when they hired lobbyist to influence the politicians. I believe they were operating on greed. Their objectives were purely about enriching themselves.

 

Since their motives were selfish I doubt that the laws that would be passed and the money that would be saved would be geared towards strengthening and building the US economy. I imagine that most of the money would end up as corporate perks and extra yachts for CEOs and rich stockowners. I think its about George Bush and the Republicans paying back their friends who got them into office.

 

I might, however, be interested in investing in small business as small businesses are leaner and hungrier and the money is more likely to go towards building the economy.

 

Further' date=' corporations don't pay taxes, people do......corp taxes are simply passed on the people.[/quote']

Yes but if a middle class worker was offered a choice between lowering his income tax or to lower the corporate tax rate of the company he had a few shares in he would choose the income tax relief because that would save him the most money. It's the rich who own large amounts of stocks and receive all kinds of corporate benefits who are most interested in lowering the corporate taxes.

[Douglas]

Etc? Your definition is too vague. If a person works hard to renovate a property then the capital gains are considered 'unearned' but that person has worked for his money.

 

And why should investment income be considered 'unearned'. A person has to use his brain and risk his money to make an investment' date=' any gains can be seen as being earnt fairly.

 

The distinction between earned and unearned income is far too vague and porous to be useful in considering taxation.[/quote']

Aardvark, in your 1st paragraph, if the person fixed his own house on his own time, then sold, that would be unearned income, he'd pay capital gains on the profit after he deducted the money he put in the house.... If he renovated a house, as a self employed worker, that would be earned income.

 

2nd paragraph.... All investment income is unearned income

 

3rd paragraph....It's not really that vague. I'm self employed, I receive a 1099MISC form from the people that employ me....that's earned income, I also receive a 1099DIV from stocks I own, that's unearned income, then I receive a 1099INT for interest on bank accounts etc, that's unearned income.

 

When you retire (assuming you don't have a part time job), all of your income is unearned.

[Douglas]

Etc? Your definition is too vague. If a person works hard to renovate a property then the capital gains are considered 'unearned' but that person has worked for his money.

 

And why should investment income be considered 'unearned'. A person has to use his brain and risk his money to make an investment' date=' any gains can be seen as being earnt fairly.

 

The distinction between earned and unearned income is far too vague and porous to be useful in considering taxation.[/quote']

Aardvark, in your 1st paragraph, if the person fixed his own house on his own time, then sold, that would be unearned income, he'd pay capital gains on the profit after he deducted the money he put in the house.... If he renovated a house, as a self employed worker, that would be earned income.

 

2nd paragraph.... All investment income is unearned income

 

3rd paragraph....It's not really that vague. I'm self employed, I receive a 1099MISC form from the people that employ me....that's earned income, I also receive a 1099DIV from stocks I own, that's unearned income, then I receive a 1099INT for interest on bank accounts etc, that's unearned income.

 

When you retire (assuming you don't have a part time job), all of your income is unearned.

[Douglas]

We can view the extra money that we have to pay in taxes or the other government projects that will have reduced budgets or get cut as an investment in these corporations that receive a tax cut. I doubt the rich men who are in control of these corporations were thinking about improving America when they hired lobbyist to influence the politicians. I believe they were operating on greed. Their objectives were purely about enriching themselves.

 

Since their motives were selfish I doubt that the laws that would be passed and the money that would be saved would be geared towards strengthening and building the US economy. I imagine that most of the money would end up as corporate perks and extra yachts for CEOs and rich stockowners. I think its about George Bush and the Republicans paying back their friends who got them into office.

 

I might' date=' however, be interested in investing in small business as small businesses are leaner and hungrier and the money is more likely to go towards building the economy.

 

 

Yes but if a middle class worker was offered a choice between lowering his income tax or to lower the corporate tax rate of the company he had a few shares in he would choose the income tax relief because that would save him the most money. It's the rich who own large amounts of stocks and receive all kinds of corporate benefits who are most interested in lowering the corporate taxes.[/quote']

You make some good points, I agree with some, but probably for different reasons.

I agree that some of the fatcat CEO's are ripping off the public...big time, and perhaps by raising corporate taxes would decrease the amount of moola in the trough. I don't know what you do about this.

 

There are some good "startup" and small business's that get hurt by these taxes, makes them less competative. These are the guys that can't afford to move to China. Then what do you do about guys like Bill Gates and Michael Dell, these guys and others revolutionized the world.....of course they're worth billions....................................................................

 

What it boils down to...... I dunno,me.

[Douglas]

We can view the extra money that we have to pay in taxes or the other government projects that will have reduced budgets or get cut as an investment in these corporations that receive a tax cut. I doubt the rich men who are in control of these corporations were thinking about improving America when they hired lobbyist to influence the politicians. I believe they were operating on greed. Their objectives were purely about enriching themselves.

 

Since their motives were selfish I doubt that the laws that would be passed and the money that would be saved would be geared towards strengthening and building the US economy. I imagine that most of the money would end up as corporate perks and extra yachts for CEOs and rich stockowners. I think its about George Bush and the Republicans paying back their friends who got them into office.

 

I might' date=' however, be interested in investing in small business as small businesses are leaner and hungrier and the money is more likely to go towards building the economy.

 

 

Yes but if a middle class worker was offered a choice between lowering his income tax or to lower the corporate tax rate of the company he had a few shares in he would choose the income tax relief because that would save him the most money. It's the rich who own large amounts of stocks and receive all kinds of corporate benefits who are most interested in lowering the corporate taxes.[/quote']

You make some good points, I agree with some, but probably for different reasons.

I agree that some of the fatcat CEO's are ripping off the public...big time, and perhaps by raising corporate taxes would decrease the amount of moola in the trough. I don't know what you do about this.

 

There are some good "startup" and small business's that get hurt by these taxes, makes them less competative. These are the guys that can't afford to move to China. Then what do you do about guys like Bill Gates and Michael Dell, these guys and others revolutionized the world.....of course they're worth billions....................................................................

 

What it boils down to...... I dunno,me.

[Aardvark]

Aardvark' date=' in your 1st paragraph, if the person fixed his own house on his own time, then sold, that would be unearned income, he'd pay capital gains on the profit after he deducted the money he put in the house.... If he renovated a house, as a self employed worker, that would be earned income.

 

2nd paragraph.... All investment income is unearned income

 

3rd paragraph....It's not really that vague. I'm self employed, I receive a 1099MISC form from the people that employ me....that's earned income, I also receive a 1099DIV from stocks I own, that's unearned income, then I receive a 1099INT for interest on bank accounts etc, that's unearned income.

 

When you retire (assuming you don't have a part time job), all of your income is unearned.[/quote']

 

 

I fail to see any distiction between my renovating my own house or renovating a house as a self employed worker. In both cases i have worked to improve the property, so any gain is earned

 

Why do you consider risking my money making investments to be not earning my return? I'm using my brain and taking risks with my money, putting it into productive uses. Simply dismissing that as unearned seems wrong.

 

As for my pension, i shall have earned that, it's my money i've worked for and put aside for my old age, most definitely earned.

 

To penalise savings, investments and pension schemes would be economically dumb and unjustifable.

[Aardvark]

Aardvark' date=' in your 1st paragraph, if the person fixed his own house on his own time, then sold, that would be unearned income, he'd pay capital gains on the profit after he deducted the money he put in the house.... If he renovated a house, as a self employed worker, that would be earned income.

 

2nd paragraph.... All investment income is unearned income

 

3rd paragraph....It's not really that vague. I'm self employed, I receive a 1099MISC form from the people that employ me....that's earned income, I also receive a 1099DIV from stocks I own, that's unearned income, then I receive a 1099INT for interest on bank accounts etc, that's unearned income.

 

When you retire (assuming you don't have a part time job), all of your income is unearned.[/quote']

 

 

I fail to see any distiction between my renovating my own house or renovating a house as a self employed worker. In both cases i have worked to improve the property, so any gain is earned

 

Why do you consider risking my money making investments to be not earning my return? I'm using my brain and taking risks with my money, putting it into productive uses. Simply dismissing that as unearned seems wrong.

 

As for my pension, i shall have earned that, it's my money i've worked for and put aside for my old age, most definitely earned.

 

To penalise savings, investments and pension schemes would be economically dumb and unjustifable.

[Douglas]

I fail to see any distiction between my renovating my own house or renovating a house as a self employed worker. In both cases i have worked to improve the property' date=' so any gain is earned

 

Why do you consider risking my money making investments to be not earning my return? I'm using my brain and taking risks with my money, putting it into productive uses. Simply dismissing that as unearned seems wrong.

 

As for my pension, i shall have earned that, it's my money i've worked for and put aside for my old age, most definitely earned.

 

To penalise savings, investments and pension schemes would be economically dumb and unjustifable.[/quote']

Well Aardvark, that's not the way it works. If you renovate your own house, you can't pay yourself a wage, thus the profit is unearned income. If you buy an old house, renovate it, then it's earned income.....just like a house contractor. Also, if you build your own home, you cannot pay yourself.

 

Keep in mind, I'm only trying to tell you what the rules are.....not necessarily agreeing with them.

 

I agree with the investments and pensions, you earned them, however, you didn't earn the 2000% interest or gains you made on these investments.

Put it this way, you earned the money, you invested it, now you're getting it back, sooo, it's unearned.

 

Anyway, there are advantages to unearned income, many states that have a state income tax, only tax earned income.

[Douglas]

I fail to see any distiction between my renovating my own house or renovating a house as a self employed worker. In both cases i have worked to improve the property' date=' so any gain is earned

 

Why do you consider risking my money making investments to be not earning my return? I'm using my brain and taking risks with my money, putting it into productive uses. Simply dismissing that as unearned seems wrong.

 

As for my pension, i shall have earned that, it's my money i've worked for and put aside for my old age, most definitely earned.

 

To penalise savings, investments and pension schemes would be economically dumb and unjustifable.[/quote']

Well Aardvark, that's not the way it works. If you renovate your own house, you can't pay yourself a wage, thus the profit is unearned income. If you buy an old house, renovate it, then it's earned income.....just like a house contractor. Also, if you build your own home, you cannot pay yourself.

 

Keep in mind, I'm only trying to tell you what the rules are.....not necessarily agreeing with them.

 

I agree with the investments and pensions, you earned them, however, you didn't earn the 2000% interest or gains you made on these investments.

Put it this way, you earned the money, you invested it, now you're getting it back, sooo, it's unearned.

 

Anyway, there are advantages to unearned income, many states that have a state income tax, only tax earned income.

[Aardvark]

If you renovate your own house' date=' you can't pay yourself a wage, thus the profit is unearned income. If you buy an old house, renovate it, then it's earned income.....just like a house contractor. Also, if you build your own home, you cannot pay yourself.

[/quote']

 

I still don't understand this. Just because i'm not paying myself doesn't detract from the fact that i've worked hard to achieve that profit. Therefore that profit has been earned.

 

If that's the rule then it's arbitary and illogical.

 

Also, good luck if you get 2000% return on your investment, but remember when investing you are taking a risk. That risk means that you are taking a chance and having to use your brain to make the best possible investment, achieving efficent capital allocation. that is wor of a sort, therefore investment income can be considered to be earnt. No one is giving money away in the stock market.

[Aardvark]

If you renovate your own house' date=' you can't pay yourself a wage, thus the profit is unearned income. If you buy an old house, renovate it, then it's earned income.....just like a house contractor. Also, if you build your own home, you cannot pay yourself.

[/quote']

 

I still don't understand this. Just because i'm not paying myself doesn't detract from the fact that i've worked hard to achieve that profit. Therefore that profit has been earned.

 

If that's the rule then it's arbitary and illogical.

 

Also, good luck if you get 2000% return on your investment, but remember when investing you are taking a risk. That risk means that you are taking a chance and having to use your brain to make the best possible investment, achieving efficent capital allocation. that is wor of a sort, therefore investment income can be considered to be earnt. No one is giving money away in the stock market.

[LucidDreamer]

I still don't understand this. Just because i'm not paying myself doesn't detract from the fact that i've worked hard to achieve that profit. Therefore that profit has been earned.

 

If that's the rule then it's arbitary and illogical.

Earned and Unearned are just the American Internal Revenue Service’s (don't know what other countries use it) terms for classifying income. It’s their business to not make any sense.

[LucidDreamer]

I still don't understand this. Just because i'm not paying myself doesn't detract from the fact that i've worked hard to achieve that profit. Therefore that profit has been earned.

 

If that's the rule then it's arbitary and illogical.

Earned and Unearned are just the American Internal Revenue Service’s (don't know what other countries use it) terms for classifying income. It’s their business to not make any sense.

[Skye]

If we were to tax capital gains and not ordinary or "earned" income, we would be encouraging corporations to pay their shareholders dividends which wouldn't be taxable to avoid retaining earnings and driving the stock prices up.

Yes, but surely you see the downside of discouraging capital growth in a capitalist economy?

[Skye]

If we were to tax capital gains and not ordinary or "earned" income, we would be encouraging corporations to pay their shareholders dividends which wouldn't be taxable to avoid retaining earnings and driving the stock prices up.

Yes, but surely you see the downside of discouraging capital growth in a capitalist economy?

[r1dermon]

capital growth is encouraged, because the only people with a voice are the people with the big companies. did you know that the top 20% of americans (wealth wise) share between themselves 80% of all the money in america. thats amazing. and yet, they still push to save money, rip off their employees, and actually ENCOURAGE their employees to sign up for welfare...ehh ehhhm(wal mart) in fact, they actually cost tax payers in any given state, according to CNN, over 35 million dollars a year in welfare recipients. this is a company that is doing 1 billion dollars of business a day. thats insane.

[r1dermon]

capital growth is encouraged, because the only people with a voice are the people with the big companies. did you know that the top 20% of americans (wealth wise) share between themselves 80% of all the money in america. thats amazing. and yet, they still push to save money, rip off their employees, and actually ENCOURAGE their employees to sign up for welfare...ehh ehhhm(wal mart) in fact, they actually cost tax payers in any given state, according to CNN, over 35 million dollars a year in welfare recipients. this is a company that is doing 1 billion dollars of business a day. thats insane.