ICYMI, the NY Times had yet another expose on how the ultra rich, the top 0.1% keep their taxes lower than the rest of the working people.

http://www.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html

When I started this thread nearly 5 years ago, I had some hope that justice might prevail and that our nation would act for justice once we all understood the massive injustice that happens under our noses. But I now doubt even the election of Bernie Sanders would do anything to change the status quo.

geojanes wrote:ICYMI, the NY Times had yet another expose on how the ultra rich, the top 0.1% keep their taxes lower than the rest of the working people.

http://www.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html

When I started this thread nearly 5 years ago, I had some hope that justice might prevail and that our nation would act for justice once we all understood the massive injustice that happens under our noses. But I now doubt even the election of Bernie Sanders would do anything to change the status quo.

The article is about the special provisions that that the wealthy find in the tax code to lower their rates and avoid classification as income. However, the cornerstone of Sander's tax plan is to raise rates. He has ruled out the 90% during the Eisenhower years, but has suggested over 50%. For corporate tax, he has suggested taxing U.S. companies on their worldwide income without enabling them to defer taxes that are kept overseas. This will continue the trend of U.S. Corporations spending billions to locate in Ireland and other reasonable tax places.

So, Sanders would not solve the issues presented in the NYT article. He would make them worse by further incentivizing tax avoidance. The only solution is to lower rates and get rid of loopholes. That hasn't been done in the last 8 years, and won't be done under either Clinton or Sanders based on what they've said.

We lose some good jobs when Pfizer decided to reorganize its affairs to be an Irish company.

Ray

He would make them worse by further incentivizing tax avoidance. The only solution is to lower rates and get rid of loopholes

If you get rid of loopholes and provide effective enforcement.... why do you need to lower rates?
I agree that lowering rates may cause fewer to break laws....but if there is effective enforcement and genuine penalty for those caught ... you get the same thing.

rickyp wrote:Ray

He would make them worse by further incentivizing tax avoidance. The only solution is to lower rates and get rid of loopholes

If you get rid of loopholes and provide effective enforcement.... why do you need to lower rates?
I agree that lowering rates may cause fewer to break laws....but if there is effective enforcement and genuine penalty for those caught ... you get the same thing.

Tax avoidance is legal. I don't think that Pfizer broke the law. Do you?

rayjay

Tax avoidance is legal. I don't think that Pfizer broke the law. Do you?

They haven't. (If you are talking about their change in corporate headquarter) But should there be laws that restrict these form of tax avoidance?

You said, "get rid of loopholes". Surely artificially moving a corporate headquarter is a very big loophole.
If the economic activity of the corporation is taxed where it occurs ... then you can eliminate this kind of loophole.
It can be done. Its political will . A will that is weak because funding is required for the endless campaigns and much of that funding comes from corporations that enjoy the loopholes.

Yeah, if we agree to lower rates in return for closing loopholes...we'll get lower rates but we'll still have loopholes...no thanks.

freeman3 wrote:Yeah, if we agree to lower rates in return for closing loopholes...we'll get lower rates but we'll still have loopholes...no thanks.

Freeman, so cynical that you're defending our broken, unjust system? You can't be, are you?

All I am saying George is that I always hear talk from Republicans about we need a more efficient tax system where we have lower tax rates in return for closing loopholes. If we can close these loopholes with better tax laws and a more aggressive IRS--great. But I would only consider cutting tax rates after it has been convincingly shown that the top tier is paying a fairer share of taxes as a result of loopholes being closed and others not popping up. I am skeptical that loopholes would be really closed and we would simply getting even less taxes from those who can most afford them. I find it appalling that the top income bracket is paying only 17% percent in taxes but at this point I doubt things are going to change unless there is some type of massive protest movement. When have the rich in any society voluntarily allowed wealth to be spread around when they can manipulate things so that they get the lion's share of it? This is not something fixable by elections. How did the New Deal get passed or really any of the programs that benefited workers in the early part of the 20th Century? Because unless there was compromise with workers there was the potential for social unrest and Communism. Now, there is no counter-ideology to be concerned about. And you see what happens.

freeman3 wrote:All I am saying George is that I always hear talk from Republicans about we need a more efficient tax system where we have lower tax rates in return for closing loopholes. If we can close these loopholes with better tax laws and a more aggressive IRS--great. But I would only consider cutting tax rates after it has been convincingly shown that the top tier is paying a fairer share of taxes as a result of loopholes being closed and others not popping up. I am skeptical that loopholes would be really closed and we would simply getting even less taxes from those who can most afford them. I find it appalling that the top income bracket is paying only 17% percent in taxes but at this point I doubt things are going to change unless there is some type of massive protest movement. When have the rich in any society voluntarily allowed wealth to be spread around when they can manipulate things so that they get the lion's share of it? This is not something fixable by elections. How did the New Deal get passed or really any of the programs that benefited workers in the early part of the 20th Century? Because unless there was compromise with workers there was the potential for social unrest and Communism. Now, there is no counter-ideology to be concerned about. And you see what happens.

Democrats and Republicans have legislated a very complicated tax code. The Executive Branch has then layered upon hundreds of detailed regulations. Then any disagreement finds its way to the courts where there is further complexity including jurisdiction. Meanwhile the whole thing is complex when you enter an international environment that it's no wonder that the IRS cannot keep up. Meanwhile innocent individuals and small corporations get caught up in the legal maze with a sometimes over-zealous IRS. Meanwhile the bigs whom you despise hire the necessary talent to avoid what you consider to be their fair share. How stupid would they be not to?

I appreciate your frustration at unfairness in the tax code, but part of the reason for the mess is trying to legislate fairness thru the tax code. It cannot be done when it has to go through the sausage machine. However, if you do lower rates there will generally be more compliance, not less. The US corporate rate at 35% vs. rates sometimes less than 1/2 of that in Europe. The U.S. is one of the few countries that taxes worldwide income further complicating the problem.

The only hope is lowering the tax rate and cleaning up the complexity of the code. If you lowered the corporate tax rate of tax, you would retain the same tax revenue or even increase it increase because companies would be less motivated to move operations overseas.

Keep in mind that the goal isn't to sock it to the rich. The goal is to maximize revenue collected and minimize economic dislocation.

By the way, here's an interesting blog comparing Canada's corporate tax policy to the U.S. Even though Canada has lower tax rates, they collect more corporate tax revenue as a % of GDP then the US.

http://taxfoundation.org/blog/canadas-l ... ax-revenue

rickyp wrote:rayjay

Tax avoidance is legal. I don't think that Pfizer broke the law. Do you?

They haven't. (If you are talking about their change in corporate headquarter) But should there be laws that restrict these form of tax avoidance?

You said, "get rid of loopholes". Surely artificially moving a corporate headquarter is a very big loophole.
If the economic activity of the corporation is taxed where it occurs ... then you can eliminate this kind of loophole.
It can be done. Its political will . A will that is weak because funding is required for the endless campaigns and much of that funding comes from corporations that enjoy the loopholes.

Wouldn't it just have been easier to lower the corporate tax rate to match that of Ireland? Instead of treating corporations like they are the enemy, how about working with them so they are not motivated to leave your country? That's what your government does.

ray

Wouldn't it just have been easier to lower the corporate tax rate to match that of Ireland? Instead of treating corporations like they are the enemy, how about working with them so they are not motivated to leave your country? That's what your government does

I'm discussing the issue, not what my countries government has done. (And we have a brand new government that is busy unraveling much that is currently in place..)
Corporations and the very wealthy avoid taxation because they have an army of lawyers, and lobbyists and control the tax code development.
The loop hole of moving corporate headquarters, although in effect often not actual management but only enough presence for a legal figleaf, allows corporations to black mail countries into lowering taxes. Lower the taxes or we;ll move. Why give in?

If the taxation system taxed revenues where earned or where the economic activity occurred you can remove the loop hole.

Corporations don't want a simplified tax code. Billionaires don't want a simplified tax code. Within the complexity are al the loop holes. When politicians campaign on simplifying the tax code, but never really attempt to do so ... its another case of the system working to the advantage of the elite.
https://newrepublic.com/article/117843/ ... op-refuses

rickyp wrote:Corporations don't want a simplified tax code. Billionaires don't want a simplified tax code. Within the complexity are al the loop holes. When politicians campaign on simplifying the tax code, but never really attempt to do so ... its another case of the system working to the advantage of the elite.
https://newrepublic.com/article/117843/ ... op-refuses

I do. No loopholes, no exemptions, no hassle.

10% Personal, 15% Corporate. If you don't want loopholes and you want equality here you go.

The problem is the left wants more cost on the rich and corporate (supposedly), and the right wants equality (supposedly) for all regardless of strata. The two don't want to compromise and we arrive at our current situation.

freeman3

This is not something fixable by elections.

It is. OI the elections are not dependent on corporations and billionaires.

Imagine a system where funding for elections all comes from a revenue pool made from taxes. And where the allocation of the revenue pool is based upon individuals file their personal allocation .
Kind of like shareholders assigning revenue...

Or just a system where past votes earned future shares of the revenue.

Without the need to pander to corporations or billionaires politicians would need to respond to actual people equally. (To a certain extent that is part of Trumps charm. His perceived freedom from any requirement for big donors.Sanders too.)

As long as the tax code is controlled by lobbyists.... there will be inequality built in)
http://www.theatlantic.com/internationa ... rs/280081/

I don't think people would bother looking for loopholes if tax rates were that low, Brad. But I don't think that would be adequate to fund a modern state/civilization. Assuming that a flat rate would have to be considerably higher, there would be fights on what is considered to be income (e.g, fights over whether income was made here or elsewhere) and what are legitimate business expenses. It's never that easy.

freeman3 wrote:I don't think people would bother looking for loopholes if tax rates were that low, Brad. But I don't think that would be adequate to fund a modern state/civilization. Assuming that a flat rate would have to be considerably higher, there would be fights on what is considered to be income (e.g, fights over whether income was made here or elsewhere) and what are legitimate business expenses. It's never that easy.

As long as it is equal among all strata of economic class, I would love to see that. Then people could vote with their pocketbooks.