Reply #26: You make some good points, but... [View All]

when you start allowing exemptions or deductions, you then have to start defining things like "charitable organization" (would that be like the Anti-Clinton Library, for example... It is a tax-free organization after all). I understand what you mean about likelihood of reducing charitable contributions, and can feel sympathy for the organizations. I give regularly, without regard to if it is deductable or not, based on if I feel the organizatino is a good and worthy cause. I wish more folks did/could.

As for tooling and incentives, I don't know if I understand what you mean by incentives, but tooling (as in revamping a factory line) could be allowed for in the definition of income (as in "profits - some forms of business expenditures such as retooling a line or retraining employees"). I know it isn't a panacea, but it has benefits in the simplicity areas that could more than compensate for the losses. The big thing is that the tax code is far too complex (I have to spend about 4 x 8 hour days filing out my forms, and I do it electronically), and allows for far too many "pork exemptions" and a flat tax would help that dramatically.

And yes, I did mean for a family of four (I have such a one, so tend to notice facts for IT, not for larger/smaller ones). My bad.


Of course, there are some other things we could do, like take back the shelters that allow corporations to transfer profits to over-seas divisions and exclude them as taxable income, etc., but the big thing is that as people get wealtier, they ease of finding shelters to protect their income and their ability to take advantage of those shelters increases dramatically. Add to that the give-aways (like being able to claim stock-value losses) and it gets even worse. The fact is that someone making $30K can afford $3K in taxes (no, it isn't CONVENIENT, but it can be done), while someone making $100K can easily tolerate $10K with no significant damage to their lifestyle, and so on, but that isn't what happens.