Why do we need a progressive tax system?

[mneilmont]

Perhaps. All I know is we still are Free, and we still can vote. Information is power. Powerfully informed people can make changes. It's up to us, they're not forcing us to vote for their "party".

You primarily have the two party system. You could support a third party, but that turns into a statement rather than support of the winning team. Simple facts born out by history.

After that, there is a chance a third party could survive. You have to have a saleable product and source of new money to get your message out. The fight is with the two parties who have the system, press, and money. If your message is so powerful that you can stimulate those who do not normally vote to come out for your message. Even all who do not vote are not necessarily independent. Most of them are registered as a member of one of the leading parties. Ross Perot had a shot at a challenging run, but it petered out in the end. There are not many among us who can generate that kind of following and more probable the press is more biased than at that period of time.

Good luck, and i would probably vote with you. I did with Ross.

 

[atlkvb]

That is interesting and I am sure every business would like to be in a world that all they had to do to get more money for their product is to increase their price to recapture all of those taxes, including income tax. My coal operations did not operate in your world.

There is a thing called the market price or contract price. That is how my price was established. I damned sure did not have the luxury of passing along tax increases. I accepted the market price or try my damnedest to eat the coal - not tasty. If I couldn't make a profit from the sale I would close production. Of course all the taxes were included in my operating cost - except Corp Income tax. That strictly came out of my(company) profit. The other several taxes by state and federal were line item operating cost.

If demand is greater than supply, you could possibly negotiate into the world you described. I was always in a world that supply potential was greater than demand. In that world, the consumer could refuse your coal and go to the mine in the next hollow and get his supply.

Gotta be careful when you repeat something that is written by someone who did not research his facts.

As I said corporations don't pay taxes my friend. Corporations pay none of their costs. Customers pay for everything and hopefully the corporations sell at enough profit to cover their costs and make additional money.

 

[mneilmont]

As I said corporations don't pay taxes my friend. Corporations pay none of their costs. Customers pay for everything and hopefully the corporations sell at enough profit to cover their costs and make additional money.

You have read too much and not been exposed to what really happens. I lived it. I was never able to recapture my income tax while operating as a Corporation. That was absolutely a reduction in my income. The other various state and Federal taxes were line items on my income statement. If I didn't have to pay a penny of those taxes and matching PR tax, I would still have sold coal at contract or/and market price. If I cannot sell at a price that the operating costs are covered, I close production. Net income, I keep and share with my partner the IRS.

Of course I have to look at fixed cost before closing.

Been there and done that. The market does not give a damn about your costs. Demand sets the price along with supply in the end.

 

[atlkvb]

You have read too much and not been exposed to what really happens. I lived it. I was never able to recapture my income tax while operating as a Corporation. That was absolutely a reduction in my income. The other various state and Federal taxes were line items on my income statement. If I didn't have to pay a penny of those taxes and matching PR tax, I would still have sold coal at contract or/and market price. If I cannot sell at a price that the operating costs are covered, I close production.

Of course I have to look at fixed cost before closing.

Been there and done that. The market does not give a damn about your costs. Demand sets the price along with supply in the end.

I don't know your particular business my friend but I do know business. So let me ask you, where do the revenues your business generates come from to pay whatever your expenses are, taxes, labor, material, equipment or otherwise?

If your business doesn't generate enough revenue to cover your expenses you are either in trouble or in the wrong business. If your business doesn't generate enough revenue for you to make profits after covering your expenses, you are not going to stay in that business very much longer.

 

[mneilmont]

I don't know your particular business my friend but I do know business. So let me ask you, where do the revenues your business generates come from to pay whatever your expenses are, taxes, labor, material, equipment or otherwise?

If your business doesn't generate enough revenue to cover your expenses you are either in trouble or in the wrong business. If your business doesn't generate enough revenue for you to make profits after covering your expenses, you are not going to stay in that business very much longer.

In past, I have been in coal business and I have personal experience how the system works. I can say without qualifying, your example is wrong as it pertains to that industry. Corp Income Taxes are paid on net income taxable, my friend. Income was generated from the tons of clean coal mined. The price received was from a contract or market depending on where coal went. I assure you those customers could give a rats *** as to my income tax.

Surprisingly, I did a break-even analysis prior to signing a contract to sell. Those things you list as expenses are listed under 'Operating Cost" as line items - all except Income Tax. Income tax is not consideration as an operating cost in any business. It is a cost of doing business, but not considered in the calculation of operating cost in any financials I have ever used.

Anyone who has actually been in business, you can understand why FORBES predict 90% of new start-ups to fail. A large number of small businesses do not use accrual method of accounting. Those companies never realize they have failed until they run out of money. In preparation for going into business some people only look at the revenue that can be produced and never consider the cost of doing business. The prudent person would calculate the cost of doing business as the initial step. Then, can you produce enough revenue to cover that cost? You have to be honest with yourself when putting your figures together. Operations are not perfect and an allowance has to be made for emergencies. Now, do you want to venture with that margin? If you are still game, that net margin has to be split with IRS.

 

[atlkvb]

In past, I have been in coal business and I have personal experience how the system works. I can say without qualifying, your example is wrong as it pertains to that industry. Corp Income Taxes are paid on net income taxable, my friend. Income was generated from the tons of clean coal mined. The price received was from a contract or market depending on where coal went. I assure you those customers could give a rats *** as to my income tax.

Surprisingly, I did a break-even analysis prior to signing a contract to sell. Those things you list as expenses are listed under 'Operating Cost" as line items - all except Income Tax. Income tax is not consideration as an operating cost in any business. It is a cost of doing business, but not considered in the calculation of operating cost in any financials I have ever used.

Anyone who has actually been in business, you can understand why FORBES predict 90% of new start-ups to fail. A large number of small businesses do not use accrual method of accounting. Those companies never realize they have failed until they run out of money. In preparation for going into business some people only look at the revenue that can be produced and never consider the cost of doing business. The prudent person would calculate the cost of doing business as the initial step. Then, can you produce enough revenue to cover that cost? You have to be honest with yourself when putting your figures together. Operations are not perfect and an allowance has to be made for emergencies. Now, do you want to venture with that margin? If you are still game, that net margin has to be split with IRS.

I appreciate everything you outlined here mneilmont trust me I do. However your particular business expenses are no different than ours is in the auto business.

That is, despite our struggles with credit availability, unemployment, regulations, recalls, and pure fierce competition, we still have to generate enough revnue to cover both our expenses and make profits. We don't generate our own revenues our customers do. They pay our bills...ALL of them!

I sympathise with your struggles in the coal business. It was heavily regulated and you were operating under a promise in the last administration to shut you down! They damn near did too!

But if you look at many coal companies now, and examine how many other companies today are also passing along lower costs for their tax expenses in the form of bonuses to employees as a direct result of the Trump tax cuts....imagine if they didn't have to pay any corporate income taxes at all?

They won't have to under a national retail sales tax, and their tax liability while paid by their customers will still be a cost, everyone will benefit from the savings.

It's a good plan if you can break the current mode of thinking about Government taxing and spending.

 

[mneilmont]

I appreciate everything you outlined here mneilmont trust me I do. However your particular business expenses are no different than ours is in the auto business.

That is, despite our struggles with credit availability, unemployment, regulations, recalls, and pure fierce competition, we still have to generate enough revnue to cover both our expenses and make profits. We don't generate our own revenues our customers do. They pay our bills...ALL of them!

I sympathise with your struggles in the coal business. It was heavily regulated and you were operating under a promise in the last administration to shut you down! They damn near did too!

But if you look at many coal companies now, and examine how many other companies today are also passing along lower costs for their tax expenses in the form of bonuses to employees as a direct result of the Trump tax cuts....imagine if they didn't have to pay any corporate income taxes at all?

They won't have to under a national retail sales tax, and their tax liability while paid by their customers will still be a cost, everyone will benefit from the savings.

It's a good plan if you can break the current mode of thinking about Government taxing and spending.

I don't truly see it the way you do. Sales tax or income tax, the govt still has to receive enough taxes to function. Don't disagree that some of the Depts and Agencies could close shop and would not be missed. But those functions of Government that are essential, and we cannot provide individually, have to and will be funded. Take choice of source of government revenue via income tax or sales tax, they will still get theirs. Can stop income tax and pay higher sales tax.

To some extent you can control sales tax by not buying. Zero affect on me. At my age I buy essentials. Don't have interest in non-essentials. Don't need to impress. That is true if Government is receiving sales tax or income tax from me.

As stated before, the thing I dislike about sales tax method, the really big earners can defer taxation until later years or into some type of legal dodge and never pay tax. Obviously those heavy hitters will not spend a hundred million in the year it was earned. Government will spend and they will have to get the difference via increase in sales tax rate or borrow. Effectively, the super rich will pass their obligation to fund the government to the average Joe. Also, I do not like the current system where the super rich can have a Trust or other dodge and pass their obligation to average Joe.

I get frequent solicitation from WVU to donate my deferred income retirement accounts and assets and they can receive it tax free. I could get my name printed in the list of donors. Actually may do it to keep my survivors from that pending fight.

 

[atlkvb]

I don't truly see it the way you do. Sales tax or income tax, the govt still has to receive enough taxes to function. Don't disagree that some of the Depts and Agencies could close shop and would not be missed. But those functions of Government that are essential, and we cannot provide individually, have to and will be funded. Take choice of source of government revenue via income tax or sales tax, they will still get theirs. Can stop income tax and pay higher sales tax.

To some extent you can control sales tax by not buying. Zero affect on me. At my age I buy essentials. Don't have interest in non-essentials. Don't need to impress. That is true if Government is receiving sales tax or income tax from me.

As stated before, the thing I dislike about sales tax method, the really big earners can defer taxation until later years or into some type of legal dodge and never pay tax. Obviously those heavy hitters will not spend a hundred million in the year it was earned. Government will spend and they will have to get the difference via increase in sales tax rate or borrow. Effectively, the super rich will pass their obligation to fund the government to the average Joe. Also, I do not like the current system where the super rich can have a Trust or other dodge and pass their obligation to average Joe.

I get frequent solicitation from WVU to donate my deferred income retirement accounts and assets and they can receive it tax free. I could get my name printed in the list of donors. Actually may do it to keep my survivors from that pending fight.

A lot of what you say is true but as I said we would not be doing business the same or funding Government the same way. Essential services would of course be funded as you say, but in radically different ways at radically different levels.

Ask yourself mneilmont, if State and local municipalities can successfully function on sales taxes, why couldn't the Federal Government? Not all local jurisdictions levy income taxes. How do their budgets function with no income taxes?

Most of them function quite efficiently and do not carry massive deficits. Many can't by law, their budgets MUST be balanced. We need the same fiscal discipline for Uncle Sam and the national retail sales tax helps us get there limiting by design what Government gets to spend.

Smaller is better. More for consumers, businesses, and workers instead of Government is best.

 

[mneilmont]

A lot of what you say is true but as I said we would not be doing business the same or funding Government the same way. Essential services would of course be funded as you say, but in radically different ways at radically different levels.

Ask yourself mneilmont, if State and local municipalities can successfully function on sales taxes, why couldn't the Federal Government? Not all local jurisdictions levy income taxes. How do their budgets function with no income taxes?

Most of them function quite efficiently and do not carry massive deficits. Many can't by law, their budgets MUST be balanced. We need the same fiscal discipline for Uncle Sam and the national retail sales tax helps us get there limiting by design what Government gets to spend.

Smaller is better. More for consumers, businesses, and workers instead of Government is best.

South Carolina collects an awful lot of operating funds via the Sales Tax. Tremendous advantage when you can have non residents give a substantial boost to services via the jacked up sales tax at the beach. My government retirement income would probably be taxed then. Keep that sales tax on foreigners - HeHe.

SC also has state income tax. Our legislators at fed level would like to have two sources of funds, If they could add a sales tax as well, they could buy a hell of a lot of votes with all the new "investments" they could make/pass. Sales tax is a bad idea for the government we now have and it is not going to be changed, imo.

 

[atlkvb]

South Carolina collects an awful lot of operating funds via the Sales Tax. Tremendous advantage when you can have non residents give a substantial boost to services via the jacked up sales tax at the beach. My government retirement income would probably be taxed then. Keep that sales tax on foreigners - HeHe.

SC also has state income tax. Our legislators at fed level would like to have two sources of funds, If they could add a sales tax as well, they could buy a hell of a lot of votes with all the new "investments" they could make/pass. Sales tax is a bad idea for the government we now have and it is not going to be changed, imo.

Change is always hard. Radical change is always hardest. Vested political interests want to keep the current tax code exactly as it is. It's the source of their power to do exactly as you mentioned "buy votes".

However it's our money. We ultimately have the final say over how much in fact if any we fund Government. Tax reform won't be easy. Nothing worthwile ever is. I disagree with you that it's not inevitable. We cannot go on as we are with these massive deficits and a tax code no one likes or understands.

 

[mneilmont]

Change is always hard. Radical change is always hardest. Vested political interests want to keep the current tax code exactly as it is. It's the source of their power to do exactly as you mentioned "buy votes".

However it's our money. We ultimately have the final say over how much in fact if any we fund Government. Tax reform won't be easy. Nothing worthwile ever is. I disagree with you that it's not inevitable. We cannot go on as we are with these massive deficits and a tax code no one likes or understands.

Would have to review the Constitution, but I do believe our obligations are to be paid, and I think all spending originates in the House. We have not lowered a debt balance at the end of a fiscal year since 1957. Pretty fair suggestion that it ain't a gonna happen. Neither of our two parties have done anything beyond lip service. During bad times they will not take money out of the economy. During good times, they still will not take money out of the economy in fear it will cause an end to the good time.

I find it difficult to explain because I feel positive they handle their household funds differently. But when they get to DC they try to hustle funds for their district and willing to trade any amount to other hustlers to get funds for own constituents,

 

[atlkvb]

Would have to review the Constitution, but I do believe our obligations are to be paid, and I think all spending originates in the House. We have not lowered a debt balance at the end of a fiscal year since 1957. Pretty fair suggestion that it ain't a gonna happen. Neither of our two parties have done anything beyond lip service. During bad times they will not take money out of the economy. During good times, they still will not take money out of the economy in fear it will cause an end to the good time.

I find it difficult to explain because I feel positive they handle their household funds differently. But when they get to DC they try to hustle funds for their district and willing to trade any amount to other hustlers to get funds for own constituents,

All true. It's the system they have set up to keep themselves in power. But as I said mneilmont it is our money and ultimately we allow them to rig the system for their benefit not ours. If we wanted to put a stop to it we could. Some of us do but not enough.

Yet.

We fight on. Either the swamp dwellers will drown us or we will eventually drain their swamp.

BTW...all the swamp does is take money out of the economy.