A Tax Theorem -or- "Why People are stupid when it comes to taxes."

[Darwins Friend]

Simply do away with the entire silly tax code - including all deductions. Let a federal sales tax do the job and be done with deception. A penny on a candy bar and $50,000 on a Ferrari.

That way you don’t hurt the poor and the rich don’t really give a shit.

 

[Bonnie]

I'm glad to see that this thread is still kicking around. I hope that everyone can agree that the current tax code is broken.

Although many of us find the government to be irresponsible with our money, this has nothing to do with gubberment spending. It's how the money is being collected that is unfair and wasteful.

A consumption tax would fairly tax everyone, criminals and black marketeers included. No taxes on income, private or corporate, would make America the ultimate financial haven of the world. Such a tax structure would insure that the Liberals have enough money for their social reforms and the Conservatives would find that their savings always increasing.

Sounds good in theory, however Im always dubious of how a consumption tax or sales would affect the middle class, and also how it would affect smaller businesses, for instance would it curtail cunsumer buying? The rich don't care because their income will always cover their needs and the poor are usually subsidized through food programs and govt assistance so their essential need will be met. It's always those in the middle being the largest tax paying group that gets hit the hardest.

 

[theHawk]

I got fucked this year in taxes

 

[Bonnie]

I got fucked this year in taxes

:baby4: Maybe next year will be a better one for you?

 

[theHawk]

Yea if I get a second job, which I am seriously thinking about.

 

[Bonnie]

Yea if I get a second job, which I am seriously thinking about.

Ouch.. won't that put you in a higher tax bracket?

 

[Mr. P]

I got fucked this year in taxes

We all did. Some (MANY) just don't know it.

 

[theHawk]

Ouch.. won't that put you in a higher tax bracket?

Well yea I'd have to pay slightly higher rate, but I'd still make some money to pay for taxes from job#1 and help pay off mortgage, and maybe spend some on a project car I want to build

 

[MtnBiker]

Income tax, consumption tax all are still collected from a third party. Let's have the tax collect be direct to the government and have people send tax checks in monthly to the government.

 

[Mr. P]

Income tax, consumption tax all are still collected from a third party. Let's have the tax collect be direct to the government and have people send tax checks in monthly to the government.

But then they WOULD know what they PAY!
What are ya trying to do, get people pissed-off ?

 

[MtnBiker]

But then they WOULD know what they PAY!
What are ya trying to do, get people pissed-off ?

Pay??? what ever do you mean?? I get money back from the government.

 

[Mr. P]

Pay??? what ever do you mean?? I get money back from the government.

That's what they say. :teeth:

 

[pegwinn]

To the guy who got screwed: You've always been screwed, it's just that this year they did you dry.......


Of all the tax schemes on the market today, I am in favor of the FairTax. This year I had to pay, which mean I got the interest free loan of my own money

I live in a state that does a sales tax and a property tax. I work for a small business and get to see just how the .gov screws the small business guy as well. Of course that screwing is transferred right down to the customer unfortunately. So the guy who complained about getting screwed, got a two-fer.

Hope y'alls Easter went well.

 

[PsuedoGhost]

Most people do not realize that when you include local and state taxes, the actual tax rate (including income taxes) is anywhere between 30 -50% depending largely on how much you purchase. The real deception in taxes is not the tax code (hell for most people all you have to do is fill out a 1040EZ), but just how much people are really taxed.

A sales tax would seem to be more fair, but sense it is based on consumerism those with larger families, and consequently more consumption would be ridiculously overtaxed compared to those with no children. If anything a sales tax of this sort could possibly lead to a drastic reduction in the number of large families in many years, since those who have large families tend to be middle and lower class demographically speaking.

 

[insein]

Yea if I get a second job, which I am seriously thinking about.

Being as i stare at tax forms forms for 8 to 10 hours a day for 4 months, it amazes me how many people F' themselves by not doing them right. Now the IRS usually fixes the errors but we're human. So the corrections might not always be caught.

Most common errors that i see.

Handwritten forms.

People don't write in their exemptions. Everyone inherently receives $5000 deducted from their total income. If you are not a dependent of someone else (meaning no one can claim you) then you receive another $3200 off. A single independent person (that isn't over 65 or blind) receives up to $8200 in non taxable income STANDARD. It basically means that $8200 is the poverty level. Anyone that makes less then that, pays zero taxes. People doing their own forms forget to write in the exemption and remove that $8200 from their income. So they end up paying taxes on their full amount of income that they received.

For people that are dependents (ie kids living at home for the most part), they tend to put in the wrong amount for an exemption. Every dependent person receives up to $5000 standard in non taxable income. What i see alot is people putting in $250 instead thus making the little refund check they would get disappear.

The tax code is complicated but these simple things are all caused by people not reading the lines on the form. You can't save people from their own stupidity i guess.

 

[insein]

Here's the standard deduction rates over recent years.

2005 $5000 + $3200 = $8200
2004 $4850 + $3100 = $7950
2003 $4750 + $3050 = $7800
2002 $4700 + $3000 = $7700
2001 $4550 + $2900 = $7450
2000 $4400 + $2800 = $7200
1999 $4300 + $2750 = $7050
1998 $4250 + $2700 = $6950
1997 $4150 + $2650 = $6800

Plus heres the tax rates.

http://www.irs.gov/formspubs/article/0,,id=133517,00.html