US Flat Tax Rate

[columbus]

also notice that you didn't answer the question. As an independent contractor: can I deduct my expenses from my revenue to determine taxable income?

Yes.
Cost of doing business isn't the same as the sorts of deductions I am talking about.
The problems you are referring to we have now anyway. The kind of deductions I am mainly talking about are other things. Nobody needs a golf club membership or the philharmonic or, frankly, a church.
I'm not big on deductions for other taxes like state income either.
There is a ton of deductions I would give the axe to if it were up to me.
Tom

 

[JerryL]

Yes.
Cost of doing business isn't the same as the sorts of deductions I am talking about.
The problems you are referring to we have now anyway. The kind of deductions I am mainly talking about are other things. Nobody needs a golf club membership or the philharmonic or, frankly, a church.
I'm not big on deductions for other taxes like state income either.
There is a ton of deductions I would give the axe to if it were up to me.

You seem to be moving the goal posts.

Regardless of which exact ones: you support the availability of itemized deductions in your "flat tax". Is that correct?

If so: other than raising the rate on the poor and lowering the rate on the rich, how does a "flat tax" change the tax system?

I'm not big on deductions for other taxes like state income either.

I want to repeat this one because it's odd.

So like: you are totally cool with compounding taxes (which would allow, for example, the tax amount to exceed actual income)?

That's really odd. That's usually the one deduction everyone agrees on... no double taxation.

 

[Revoltingest]

It claims that they pay zero taxes on trillions in income that would otherwise be taxable.

It talks about taxes which could've been paid.
But your claim is different.
Here, I'll quote you.....

No companies would make their profit in the US. Already, very few do.

Here is more: 27 giant profitable companies paid no taxes
[/QUOTE]
Looking at one example, it had to do with carry forward losses.
I favor this deduction because it lowers risk.
Companies still pay tax on all net income earned over time.
So merely citing a link without presenting the analysis paints a distorted picture.
In that example, I didn't see anyone getting away with anything improper.

What income are you referring to?

I was referring to dividends.

Like: do I get to deduct the loss of capital in one stock from the gains in another? Because that would be another deduction in this simple, flat system. If not: I could lose money and owe taxes on the loss.

If an investor has capital gains, they can be offset by capital losses.
Currently, except for a small yearly amount, capital losses are not deductable from ordinary income, only
against other capital gains. So the unused deduction is carried forward to capital gains in future years.

I propose removing all these distinctions, ie, income is income....a loss is a loss.

What about retirement accounts? Are you abolishing those? When do I pay taxes on that? Before I put in? When I take out? Both? Do I pay taxes on gains while that's sitting waiting for me to retire?

I've made no proposals about those because I haven't given them adequate consideration.

What I'm telling you is the proposed tax isn't just simple, it's simplistic. It doesn't actually work. That's why we don't do it.

"Simplistic" is what people say when they don't like something simple.
You say it doesn't work.
I say it's better than what we have, ie, a system which drives business overseas, disincentivices
productivity, encourages unproductive complex tax avoidance schemes, & distorts markets in
a unproductive way.

Let me guess...you're not personally facing capital gains v capital loss v investment strategies?

 

[Revoltingest]

Nope. That changes nothing.

Changes nothing?
It's very different from the current system, which is a mix of regressive & progressive tax schemes,
& is particularly hard on the poor. A flat tax made progressive with a 0% tax threshold is better.

You have some good ideas, but one only has some good ideas if one also has many bad ideas.

Accusing me of being a broken clock, eh?

A flat tax rate is one of your bad ideas.

It's neither good nor bad.
Just my preference.
I have different goals from you, eg, incentivize investment & work, avoid double taxation, reduce dependence upon the dole.
And yours is nicht einmal falsch too, bub.

 

[JerryL]

It talks about taxes which could've been paid.

I think we may have lost one another.

My concern about your proposal is that it is so incredibly simple to bypass paying taxes (as a company), that any large company will.

Do you disagree? I've told you at least one way how and you seem to agree that it would work just fine.

I was referring to dividends.

Many companies don't even pay them. I would say that they represent a pretty small revenue stream compared to the companies themselves.

If an investor has capital gains, they can be offset by capital losses.
Currently, except for a small yearly amount, capital losses are not deductable from ordinary income, only
against other capital gains. So the unused deduction is carried forward to capital gains in future years.

I propose removing all these distinctions, ie, income is income....a loss is a loss.

So you are keeping quite a few itemized deductions it seems.

When are you going to apply these taxes? Am I going to be forced to sell my stocks to pay the taxes on holding on to them? Or will gains/losses only be computed at time-of-sale?

I've made no proposals about those because I haven't given them adequate consideration.

I don't see how you can advocate something without having considered the implications of it.

"Simplistic" is what people say when they don't like something simple.

Probably. It's also what people say when something is simplistic.

You say it doesn't work.

I think I've done more than that. I've described how it doesn't work. I've pointed out issues that, when you have addressed them, have moved it right back towards the system we have now.

How is this proposal different from the current system, other than to lower the top marginal tax rate and raise the bottom marginal tax rate?

I say it's better than what we have, which drives business overseas,

How does this tax plan do less to drive business overseas? You are going to need to explain that.

disincentivices productivity,

How, exactly?

encourages unproductive complex tax avoidance schemes, & distorts markets in dysfunctional way.

You've replaced them with unproductive simple tax avoidance schemes. I've illustrated one for you.

Let me guess...you're not personally facing capital gains v capital loss v investment strategies?

I do have to deal with capital gains and losses (and depreciation, and a score of other things); but not through stocks and bonds... those are tucked away in a shelter that protects me from capital gains costs. My issues are more about hard assets.

 

[Revoltingest]

I think we may have lost one another.

You made a claim (underlined) which you don't support.....

No companies would make their profit in the US. Already, very few do.

My concern about your proposal is that it is so incredibly simple to bypass paying taxes (as a company), that any large company will.
Do you disagree? I've told you at least one way how and you seem to agree that it would work just fine.

You claim they're already massively evading taxes.
I say this is because of an unfavorable climate here.
My proposal improves things by making Americastan more attractive.

Many companies don't even pay them. I would say that they represent a pretty small revenue stream compared to the companies themselves.

A company which doesn't ever pay dividends will be punished in the stock market, ie, they cannot raise capital because no one would invest. Even Amazon, which made no profit for many years was only able to sell stock because investors expected eventual profitability.
Once profitable, they're not allowed to retain earnings except under certain conditions, so if they make a profit, it must be distributed in the form of dividends.

So you are keeping quite a few itemized deductions it seems.

What does the underlined portion mean?

When are you going to apply these taxes?

Again, what does the underlined portion mean?

Am I going to be forced to sell my stocks to pay the taxes on holding on to them?

There are no taxes for holding stock.
I wouldn't change that.

Or will gains/losses only be computed at time-of-sale?

That's how it works.
I wouldn't change it.

I don't see how you can advocate something without having considered the implications of it.

I don't know it all.
Neither do you.
But we may explore the issues.

Probably. It's also what people say when something is simplistic.

That's just your way of objecting to something new & different, as you cling to the dysfunctional status quo.

I think I've done more than that. I've described how it doesn't work. I've pointed out issues that, when you have addressed them, have moved it right back towards the system we have now.

You're justifying the current system, which has the very consequences you oppose.
That's not addressing it very well.

How is this proposal different from the current system, other than to lower the top marginal tax rate and raise the bottom marginal tax rate?

To raise the lower marginal rate in the current system would be a heinous injustice, eg, confiscatory taxation, disincentivizing work, encouraging the dole.
The OP's proposal lowers marginal rates for all, & eliminates income tax for the poor.
As a certified "ulta-progressive", I like this.

How does this tax plan do less to drive business overseas? You are going to need to explain that.

If taxes here are driving them overseas (as you say), then reducing taxes would reduce that incentive.

How, exactly?

High marginal rates lower the after tax rate of return, which makes many ventures not profitable enuf to be worth doing. This harms us in many ways, eg, I want to make energy conservation improvements to properties, but the capital costs are not immediately deductable, but the increased net income is immediately taxable. So the economics of this situation limits me to making improvements I can roll into maintenance expense (which is limited to a particular small fraction of gross income). This would be problematic if I were audited.

You've replaced them with unproductive simple tax avoidance schemes. I've illustrated one for you.

There are many other tax avoidance tactics out there.
A low marginal tax rate would make all of them unnecessary.

I do have to deal with capital gains and losses (and depreciation, and a score of other things); but not through stocks and bonds... those are tucked away in a shelter that protects me from capital gains costs. My issues are more about hard assets.

It sounds like you're a passive investor (in IRS parlance), while I'm an active investor.
My situation is different in that I don't own stocks which only involve decisions about what to buy or not buy....I make decisions about what the businesses do, so I'm very familiar with the consequences of incentives.

Do you have any carried forward capital losses?
If so, do you oppose your being able to deduct them from future capital gains?

 

[JerryL]

You made a claim (underlined) which you don't support.....

Which you don't disagree with and isn't germane to the thrust of the argument so why are you belaboring it?

OK. Fine! No companies in the world (or any other number you would like to imagine) presently declare their income in offshore holdings to withhold paying taxes in the US.

Under you system: it would be simple to do. Only an idiot CEO (or one with some very unusual circumstances) wouldn't do it.

So now your system is way worse than the current system rather than "just as bad", which was a fig leaf I offered you and you seem obsessed with arguing.

My proposal improves things by making Americastan more attractive.

How is American more attractive under your proposal?

Because you think you lower the effective corporate tax rate? I'd assert you don't (but it's not important, so if you disagree with that statement: ignore it).

Your tax rate is still higher than others. There is therefore zero incentive to report profits in the US rather than offshore in a tax haven.

A company which doesn't ever pay dividends will be punished in the stock market, ie, they cannot raise capital because no one would invest.

77 of the S&P 500 companies pay no dividends (S&P 500 Companies without Dividends)

It's a 2-year-old list; but unless you think basic market forces have changed since then: the point holds.

Also: Index funds don't pay dividends; but people buy into them all the time.

Once profitable, they're not allowed to retain earnings except under certain conditions, so if they make a profit, it must be distributed in the form of dividends.

"Companies are not required to pay anydividends at all" - Google

"Dividend payments are optional, and not every public company pays them" - Do Corporate Stockholders Have a Right to Dividends?

What does the underlined portion mean?

That your tax code will allow me to put itemized deductions in, just like now.
For example: I can list the capital loss as a deduction from the overall capital gain to determine taxable income.

I seem to recall you were going to let me deduct the cost of gas for my car for the work I do for Uber too.

Again, what does the underlined portion mean?

There are no taxes for holding stock.
I wouldn't change that.

That's how it works.
I wouldn't change it

Those are all to the same question. You will tax on realized gains.

I don't know it all.
Neither do you.
But we may explore the issues.

Yes. But exploring isn't advocating.

That's just your way of objecting to something new & different, as you cling to the dysfunctional status quo.

And that's an ad homenim.

You're justifying the current system, which has the very consequences you oppose.
That's not addressing it very well.

That sentence is so vague as to be nonrefundable.

Of course there are changes that I advocate. There are also problems that need change that I don't know what will actually solve (and so cannot advocate a specific change).

What I'm doing is opposing a clearly bad system that will most hurt those who are most vulnerable.

To raise the lower marginal rate in the current system would be a heinous injustice, eg, confiscatory taxation, disincentivizing work, encouraging the dole.
The OP's proposal lowers marginal rates for all, & eliminates income tax for the poor.
As a certified "ulta-progressive", I like this.

None of what you just said is true.

1) The current second marginal rate is 10%. So you've not lowered it.
2) The proposed rate is nowhere near the current level of income (and therefore the budget).
2a) You are welcome to say "cut spending", but you can do that without changing the tax rate, then lower the present second bracket marginal tax below 10% or raise the threshold).
3) I really don't know where you guys are on deductions at this point. I'd thought the point was you didn't want them; but now it seems you do. So other than making fewer brackets, I don't see how you've simplified anything.

And let's go back to #2 for a moment. If you lower taxes on one group (in this case: the wealthy), then you *must* raise them on the other group (the poor) to generate the same income.

This really is a zero sum game. We will need to collect $X. The only question is how that burden will be spread.

If taxes here are driving them overseas (as you say), then reducing taxes would reduce that incentive.

If you come below the tax havens, yes.

But if you do that, then you will have (functionally) $0, because your rate will have to be below 0.05%.

High marginal rates lower the after tax rate of return, which makes many ventures not profitable enuf to be worth doing.

Huh? The rate of return isn't taxed so isn't effected by taxation.

This harms us in many ways, eg, I want to make energy conservation improvements to properties, but the capital costs are not immediately deductable, but the increased net income is immediately taxable.

Where did you get this idea from?

I've done improvements to both my commercial and residential properties. That doesn't accurately describe either... and what "net income" are you referring to.

Now: businesses don't generally *want* to do a one-time write-off. We'd rather spread the write offs over several years to best control profit/loss.

There are many other tax avoidance tactics out there.
A low marginal tax rate would make all of them unnecessary.

You mean "a low tax rate".

And yea. But not at 10%.

It sounds like you're a passive investor (in IRS parlance), while I'm an active investor.
My situation is different in that I don't own stocks which only involve decisions about what to buy or not buy....I make decisions about what the businesses do, so I'm very familiar with the consequences of incentives.

I own a business.

Do you have any carried forward capital losses?
If so, do you oppose your being able to deduct them from future capital gains?

Not this year... and no: I support being able to carry losses forward. Without that: I'm stuck to an arbitrary calendar and my taxes don't align with my long-term performance.

But that's exactly the sort of complexity you appear to be railing against.

 

[columbus]

You seem to be moving the goal posts.

No, really what I am talking about is replacing the current byzantine code, with ridiculous top marginal rates and equally ridiculous deductions, with something simpler and more fair.
I am more concerned with effective rates than marginal rates. The effective rate on billionaires is less than on blue collar families. Frankly, I wouldn't be surprised if part of the reason GE paid no tax for years is because the expenses involved with moving their plants to Mexico were so enormous.
Tom

 

[Revoltingest]

Which you don't disagree with and isn't germane to the thrust of the argument so why are you belaboring it?

I was curious about the ratio of taxes paid to taxes you wanted paid (but weren't).
It would indicate the size of the issue.
But your link didn't address your claim.
If you don't have the info, then I won't ask for it.

OK. Fine! No companies in the world (or any other number you would like to imagine) presently declare their income in offshore holdings to withhold paying taxes in the US.
Under you system: it would be simple to do. Only an idiot CEO (or one with some very unusual circumstances) wouldn't do it.
So now your system is way worse than the current system rather than "just as bad", which was a fig leaf I offered you and you seem obsessed with arguing.

Since it takes 2 to tango, the underlined part is an odd thing to say.
Let's just agree to disagree which system is better.

How is American more attractive under your proposal?

American [sic] is made more attractive by lower a lower income tax rate.

Because you think you lower the effective corporate tax rate? I'd assert you don't (but it's not important, so if you disagree with that statement: ignore it).
Your tax rate is still higher than others. There is therefore zero incentive to report profits in the US rather than offshore in a tax haven.

I don't plan on preventing every company from moving overseas.
That would be impossible.
I only propose making the situation better than it is.

I don't believe in utopias or perfect solutions.

77 of the S&P 500 companies pay no dividends (S&P 500 Companies without Dividends)

Your linked article doesn't deal with company performance as a function of time & expectation.
Hint....
Why would investors buy stock in a company which hasn't issued a dividend for a number of years, eg, Amazon?

Also: Index funds don't pay dividends; but people buy into them all the time.

This is an interesting claim.
If a fund yields no returns, who would invest?
But index funds d offer yields, so I don't know what you're trying to do with your claim.

"Companies are not required to pay anydividends at all" - Google

That's not quite accurate.
If they have no profit, they needn't pay dividends.
But if they make a profit, it's impractical to avoid dividends because of Corporate Accumulation Penalty Taxes.

That your tax code will allow me to put itemized deductions in, just like now.

Not personal deductions.

Yes. But exploring isn't advocating.
And that's an ad homenim.

Rawrrrrr!
With irony too.

What I'm doing is opposing a clearly bad system that will most hurt those who are most vulnerable.

Hey, by coincidence, so am I !

None of what you just said is true.

That's all you got?
Essentially, "Nuh uh!".

1) The current second marginal rate is 10%. So you've not lowered it.

I haven't proposed changing the proposal of the OP.

2) The proposed rate is nowhere near the current level of income (and therefore the budget).
2a) You are welcome to say "cut spending", but you can do that without changing the tax rate, then lower the present second bracket marginal tax below 10% or raise the threshold).
3) I really don't know where you guys are on deductions at this point. I'd thought the point was you didn't want them; but now it seems you do. So other than making fewer brackets, I don't see how you've simplified anything.
And let's go back to #2 for a moment. If you lower taxes on one group (in this case: the wealthy), then you *must* raise them on the other group (the poor) to generate the same income.
This really is a zero sum game. We will need to collect $X. The only question is how that burden will be spread.
If you come below the tax havens, yes.
But if you do that, then you will have (functionally) $0, because your rate will have to be below 0.05%.

I can't make hide nor hair of the above.
It seems your conflating the OP's proposal with the current US system.
I'm not addressing that chimera.

Huh? The rate of return isn't taxed so isn't effected by taxation.

But I addressed the "after tax rate of return".

Where did you get this idea from?

Capital improvements to real estate must be depreciated over several decades.
Thus, the income & the deduction aren't simultaneous, ie, one pays tax on the gross (rather than net) increase on income.

I've done improvements to both my commercial and residential properties. That doesn't accurately describe either... and what "net income" are you referring to.

You do know you can't just 179 all your capital improvements to real estate?
To depreciate them means the deductions are taken in future years,
thereby increasing the tax burden associated with the fruits of the improvements.

Now: businesses don't generally *want* to do a one-time write-off. We'd rather spread the write offs over several years to best control profit/loss.

You might want to.
Considering the time value of money, I'll take my deductions ASAP.
And I figured out a really sneaky perfectly legal way to do it.
But there are difficulties.
And no, I'm not tell'n.

You mean "a low tax rate".

No, I'd never say something so imprecise.
There are different kinds of tax rates, & I meant exactly what I said.

And yea. But not at 10%.

You don't like 10%, but I do.

I own a business.


Not this year... and no: I support being able to carry losses forward. Without that: I'm stuck to an arbitrary calendar and my taxes don't align with my long-term performance.

You're doing exactly what you're criticizing in companies who carry forward losses result in no tax liability.

But that's exactly the sort of complexity you appear to be railing against.

To carry forward losses isn't complex at all.
Moreover, I propose simplifying things by making capital & ordinary income & losses the same class.
Adjusting for inflation where appropriate is also simple to do.

 

[Curious George]

Changes nothing?
It's very different from the current system, which is a mix of regressive & progressive tax schemes,
& is particularly hard on the poor. A flat tax made progressive with a 0% tax threshold is better.

No, it's not...at least not at the rate about which is suggested in this thread. But please elaborate. Exactly how is this better?

Accusing me of being a broken clock, eh?

Nothing of the sort. I can appreciate a good idea. Simply alluding to the 99 failures for each success of great inventors.

It's neither good nor bad.

Nope, it's bad.

Just my preference.
I have different goals from you, eg, incentivize investment & work, avoid double taxation, reduce dependence upon the dole.

You think what you have proposed does these things. Please explain.

And yours is nicht einmal falsch too, bub.

Which?

 

[9-10ths_Penguin]

How about the part where anyone making less than $25K/year pays no tax?
And anything the make over that is only taxed at 10%.
It takes very little from them, & encourages earning more.

Going from $24,999 to $25,000 would have a marginal tax rate of 25,000%.

Do you think that a marginal tax rate of 25,000% "encourages people to earn more"?

 

[JerryL]

No, really what I am talking about is replacing the current byzantine code, with ridiculous top marginal rates and equally ridiculous deductions, with something simpler and more fair.

It's not simpler.. it simply has a reduced number of brackets (2).

It's not more fair: I've a score posts describing why.

I am more concerned with effective rates than marginal rates. The effective rate on billionaires is less than on blue collar families.

Where that's true: your proposal does nothing at all to resolve that.

Frankly, I wouldn't be surprised if part of the reason GE paid no tax for years is because the expenses involved with moving their plants to Mexico were so enormous.

Which your plan doesn't change.

 

[JerryL]

Since it takes 2 to tango, the underlined part is an odd thing to say.
Let's just agree to disagree which system is better.

I was asserting that you were belaboring *that point*, which was not really salient to the issue at hand.

American [sic] is made more attractive by lower a lower income tax rate.

10% is not lower than 0.05%.

I don't plan on preventing every company from moving overseas.
That would be impossible.
I only propose making the situation better than it is.

Except that you are not.

Your linked article doesn't deal with company performance as a function of time & expectation.
Hint....
Why would investors buy stock in a company which hasn't issued a dividend for a number of years, eg, Amazon?

Because they expect the future value to be higher than the present value.

Hint... why do investors buy index funds?

This is an interesting claim.
If a fund yields no returns, who would invest?
But index funds d offer yields, so I don't know what you're trying to do with your claim.

"Yield" is a new goalpost. You asserted dividends.

That's not quite accurate.
If they have no profit, they needn't pay dividends.
But if they make a profit, it's impractical to avoid dividends because of Corporate Accumulation Penalty Taxes.

Why is the Corporate Accumulation Penalty Tax rate for Ireland? Particulartly after special negotiation?

Also: Isn't that something your "simpler tax" gets rid of"

Not personal deductions.

Then answer my question about my uber driver. Can he deduct the cost of working from his pay?
What about the police officer purchasing his own uniform?
Can I deduct a part of mortgage to cover the percentage of my house that is my home office?

I haven't proposed changing the proposal of the OP.

You are well beyond the scope of what the OP has said. You are the advocate. To quibble over attribution is nuance.

I can't make hide nor hair of the above.
It seems your conflating the OP's proposal with the current US system.
I'm not addressing that chimera.

It's a partial summary of the problems with what you've been advocating.

Capital improvements to real estate must be depreciated over several decades.
Thus, the income & the deduction aren't simultaneous, ie, one pays tax on the gross (rather than net) increase on income.

There is no such requirement.

You do know you can't just 179 all your capital improvements to real estate?
To depreciate them means the deductions are taken in future years,
thereby increasing the tax burden associated with the fruits of the improvements.

Yes. That is the definition of "depreciating". Doing so isn't a requirement.

I buy a property for $100k, add $50k of work, and flip it for $200k: my profits are at sale and I can deduct the cost of improvements in a lump sum.

Or I can take a rental property that I make $20k/yr from, put $100k of improvements into , and depreciate the expense over 5 years (making income for those years $0).

I don't see the problem you keep asserting.

You might want to.
Considering the time value of money, I'll take my deductions ASAP.
And I figured out a really sneaky perfectly legal way to do it.
But there are difficulties.
And no, I'm not tell'n.

1) Every fortune 500 company I've ever worked for (quite a few) appear to disagree with you as they budged in asset depreciation.

2) Doesn't really work out that way. Take my rental example above. If I declare an $80k loss by taking the $100k expense all at once, I pay $0 for one year, and taxes on $20k every other (assuming this represents to total of my business). Conversely: by depreciating over time, I pay less taxes.

Same is true for the individual since money from the top bracket is more valuable than from the bottom.

No, I'd never say something so imprecise.
There are different kinds of tax rates, & I meant exactly what I said.

Then you've stated an oxymoron.

You don't like 10%, but I do.

The rich do. It lowers their taxes.

And since the budget is the budget: the shortfall comes from the poor.

Or we just have massive deficits that eventually collapse the economy.

You're doing exactly what you're criticizing in companies who carry forward losses result in no tax liability.

I don't recall criticizing such a thing.

To carry forward losses isn't complex at all.
Moreover, I propose simplifying things by making capital & ordinary income & losses the same class.
Adjusting for inflation where appropriate is also simple to do.

But only for companies. Not for people.

Once you are done writing down all the rules you've supported it above and tacked it on to the "I propose a simple system were we just charge everyone and everything 10%"; it does indeed look *way* less simple.

 

[9-10ths_Penguin]

Yes.
Cost of doing business isn't the same as the sorts of deductions I am talking about.
The problems you are referring to we have now anyway. The kind of deductions I am mainly talking about are other things. Nobody needs a golf club membership or the philharmonic or, frankly, a church.
I'm not big on deductions for other taxes like state income either.
There is a ton of deductions I would give the axe to if it were up to me.
Tom

For some businesses, a golf club membership or a big prominent donation to a church are just as much about marketing as flyers and billboards are for other businesses.

A lot of deals get done on the golf course... and at church.

 

[Revoltingest]

Going from $24,999 to $25,000 would have a marginal tax rate of 25,000%.

I made an oopsie.
I forgot to point out my modification to the OP.
(I plead having been tired & multitasking last nite.)
The 10% rate should be on income over $25K.
Does this clear up some misunderstanding?

 

[Revoltingest]

No, it's not...at least not at the rate about which is suggested in this thread. But please elaborate. Exactly how is this better?



Nothing of the sort. I can appreciate a good idea. Simply alluding to the 99 failures for each success of great inventors.



Nope, it's bad.


You think what you have proposed does these things. Please explain.



Which?

Please see my post #95.
It might fix some misunderstandings.

 

[9-10ths_Penguin]

I made an oopsie.
I forgot to point out my modification to the OP.
(I plead having been tired & multitasking last nite.)
The 10% rate should be on income over $25K.
Does this clear up some misunderstanding?

Yeah - that solves the problem (though probably means you'd need a higher tax rate for the change to be revenue-neutral).

 

[Revoltingest]

Let's consider fewer points per post.

Because they expect the future value to be higher than the present value.

(Too much to keep track of.)
The reason they expect the future stock value to be higher is the expectation of dividends.

"Yield" is a new goalpost. You asserted dividends.

You're playing a game here....avoiding the issue that people buy investments to get a return on them.
One may get dividends, interest, rent, etc?
It strikes me that you're pretending that people buy index funds with no expectation of a return.
You won't call that return "dividends".
Why is that?

 

[Revoltingest]

Yeah - that solves the problem (though probably means you'd need a higher tax rate for the change to be revenue-neutral).

The Cato Institute once proposed something similar at 17% as I recall.
But the amount isn't really the issue, is it?
That would be in the "to be determined" category.
Whatever the result, it would beat the roughly 50% marginal rate I pay for Schedule C income.
(Fed income tax + Fed self employment tax + state tax)

 

[JerryL]

The reason they expect the future stock value to be higher is the expectation of dividends.

OK. That's your assertion.

Now: Show your proof please.