How would this be for a tax plan?

<alt>doxygen said:

I actually think that the more knowledgeable and reasonable L and R people on DP could probably come up with a decent skeleton of a better tax system. The problem is the lobbyists and politicians wouldn't benefit from it.

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This is one of the biggest problems in government to me. We have too many politicians indebted to these lobbyists rather than the people who voted them in.

upsideguy said:

While, as a rule, larger businesses tend to be publicly traded and smaller businesses tend not to be, the public/private status will let you down on this front frequently...

The Cargill Corporation
Koch Industries
Mars Candies
ToysRUs

are each examples of large private companies. Here are some additional ones:

https://www.forbes.com/pictures/eim...-private-companies-in-america-2/#3f29b0c356c7

There are also some very small public companies with revenues of less than $5M.

So, while its fine, for discussion purposes to think of private companies as smaller and public companies as larger, you can not legislate around that distinction.

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What other distinctions would you add to determine what is a small or large business?

upsideguy said:

Yes, but look how many factors you said were "identical" to get it down to the tax burden being the issue. You actually have illustrated it well..... when OTHER things are not a factor taxes are, but taxes are usually down at the bottom of the list in the decision making. Along the same line of reasoning....all things being equal, I will take green over blue.

I have done a lot of corporate financial analysis in my years.... taxes were pretty far down on the list of considerations. We did have some issues around taxes when we considered sell-offs of parts of the business, but that really, at the end of the day, was about corporate structure, which ours was very complex.

First and foremost of any financial analysis is the underlying economics of the opportunity. In the A,B,C's of business analysis, taxes were a C consideration.

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I agree that there other factors and that they are of more concern then taxes. I was simply pointing out that they are indeed a factor which the other poster doesn't seem to agree with.

Nap said:

1.Corporate Tax rate - 8.5% no deductions, no subsidies, no corporate welfare (Current effective rate is roughly 18.6%, Canada is 8.5%, China is 10%, Mexico is 11.9%)

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Dumb idea. America has a better business climate and greater stability than all those countries, as a result, we can afford to charge more. We currently have basically full employment, and we have more job openings today than at any point in recorded U.S. History. No reason to cave for big business.

Nap said:

2.Small business - 0%
Reason - Aid smaller businesses in combating burdensome regulations that larger corporations have a much easier time getting around through lawyers and spreading costs. This would encourage more competition and lead to lower cost of living.

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I'm fine with it being lower than the typical corporate tax, but not this low. 12% maybe.

Nap said:

3. Increase standard deduction to 15k for single, 30k for family.

Reason - tax break for poor and middle class.

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Fine.

Nap said:

4. End SALT

Reason -SALT Encourages states to raise taxes because their constituents can simply claim on federal taxes. It mostly affects those making 200k or more and with the increase to the standard deduction it would have little to no impact on the poor and middle class. This would account for 1.3 Trillion dollars over the next 10 years for the government.

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Stupid idea. This prevents states from getting into a bidding war with businesses and citizens over taxes to the point where states could barely charge any income tax at all. If states want to raise their income taxes to better fund infrastructure and education they should be able to do that without worrying about potentially losing part of their wealthier tax base to their neighboring states.

Nap said:

5. Cap tax returns so that you can not receive more than what you paid in, and for those making more than 200k, deductions can not take you below 20%.

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Fine.

Nap said:

increases tax on the wealthy slightly

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Where exactly did you accomplish that? You gave a massive tax break to corporations which most of the wealthy would take advantage of.

Nap said:

while cutting some from the poor and middle class.

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No, you realistically didn't cut **** for the poor or middle class. The standard deducation increase would barely have an effect. The poor and lower middle class already pay next to nothing. Your cut might help upper middle class, but not that significantly, and they don't really need help much in terms of tax releif.

MrWonka said:

Dumb idea. America has a better business climate and greater stability than all those countries, as a result, we can afford to charge more. We currently have basically full employment, and we have more job openings today than at any point in recorded U.S. History. No reason to cave for big business.


I'm fine with it being lower than the typical corporate tax, but not this low. 12% maybe.



Fine.


Stupid idea. This prevents states from getting into a bidding war with businesses and citizens over taxes to the point where states could barely charge any income tax at all. If states want to raise their income taxes to better fund infrastructure and education they should be able to do that without worrying about potentially losing part of their wealthier tax base to their neighboring states.


Fine.


Where exactly did you accomplish that? You gave a massive tax break to corporations which most of the wealthy would take advantage of.



No, you realistically didn't cut **** for the poor or middle class. The standard deducation increase would barely have an effect. The poor and lower middle class already pay next to nothing. Your cut might help upper middle class, but not that significantly, and they don't really need help much in terms of tax releif.

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You say SALT prevents economic migration of people and businesses but that doesn't seem to work as intended. We see states competing with each other across the country. Even New York has a program (a failed one) trying to lure in certain businesses with 0% tax rates for 10 years, and the Amazon bidding has become quite ridiculous with Georgia even proposing to name a town "amazon" in order to bring them in.

As stated in the OP, cutting SALT would add 1.3 Trillion in revenue over 10 years which would be an increase in taxes on the wealthy since they would largely be those most affected by it.

Nap said:

What other distinctions would you add to determine what is a small or large business?

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Excellent question. Usually the focus is on revenues or gross margin and/or number of employees or number of shareholders.

upsideguy said:

Excellent question. Usually the focus is on revenues or gross margin and/or number of employees or number of shareholders.

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I think the issue with judging revenues is the ability to hide such things. Employees could used to determine a size and much harder to obfuscate but I could see issues there as well in relation to types of businesses as well. I think the best way to handle it would be to have concrete distinctions rather than certain arbitrary barriers, for instance say it is 500 employees it could cause some businesses to not wanting to expand past that 499 barrier until they are sure they can expand far enough to ensure they make enough profit to surpass the amount of increase in taxes.

Nap said:

You say SALT prevents economic migration of people and businesses but that doesn't seem to work as intended. We see states competing with each other across the country. Even New York has a program (a failed one) trying to lure in certain businesses with 0% tax rates for 10 years, and the Amazon bidding has become quite ridiculous with Georgia even proposing to name a town "amazon" in order to bring them in.

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Sure, but without SALT this would become even worse. While Amazon itself may get tax breaks, the employees won't, and other businesses will be able to sustain themselves better as a result of Amazon's existence. Those other businesses will create a net gain for the states even if Amazon gets a deal.

Nap said:

As stated in the OP, cutting SALT would add 1.3 Trillion in revenue over 10 years which would be an increase in taxes on the wealthy since they would largely be those most affected by it.

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No, actually it won't. It might put more money in the federal coffers, but as stated the goal is to make it harder for states to raise their taxes. This will force states to cut taxes to make up for it, and force them to rely more heavily on the federal government for education and infrastructure spending. Any increase at the federal level will lead to a decrease at the state level to match it, and almost certainly require more spending or a severe degredation in educational and infrastructure spending. Overall it's at best a net zero effect on the wealthy. At worst it could require these states to make up for their lack of income tax by implementing more sales tax which ends up pushing the tax burden down on to the poor, and off of the wealthy.

Wealthy people are wealthy because they bring in way more income than they spend. Poor people and middle-class people live paycheck to paycheck. They spend pretty much exactly what they make every month so eliminating income taxes and replacing them with sales taxes radically hurts the poor, and radically benefits the wealthy.

Nap said:

What is particularly funny is NY's failure at it. They did a 50 million dollar campaign to advertise no taxes for 10 years for new and expanding businesses but then tied a crazy list of strings attached to it along with your typical level government BS hoops they want you to jump through causing a grand total of 400 jobs.

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You'll note course that rarely will the so-called journalists go in after the fact and find out what we bought, because all too often the news is something along the lines of "We spent $432,000 to grow one job for a few years".

I have seen times where it would have been cheaper and equally effective to take $60,000 taxpayer money each year and hand it to someone.

The truth is embarrassing to the Elite Class, so the truth is embargoed, far too often.