You're the new Tax-Man.

[RadioFreeSeaLab]

Step 1) Kill the income tax.
Step 2) 10% tax on all sales.
Step 3) Have a beer.

[cordex]

First of all, individual income taxes come about as close to $3.1 trillion as you can get to the moon by jumping.  If you cut out corporate and tariffs, that's 60% of tax revenues gone.

Corporations do not pay taxes.  Ever.  Employees, customers and shareholders pay all taxes assessed to corporations.

[Ned Hamford]

Anyone else just plan on looting Abu Daby?

[ilbob]

Iraq: gone. 
Afghanistan: gone.

Part of the military budget anyway.

DHS: gone.
Dept. of Education: gone.
FDA: gone. 
Farm Bill: gone.
HUD: gone.
NASA: gone.

No loss.

EPA: gone.

 
almost no loss. useful part is about 10%. keep that part.

BATF: gone. 
DEA: gone. 
FBI: gone. 
CIA: gone.
NSA: gone.

most of the domestic policing functions are more properly handled at the state level as the founder intended.

Not real sure how to handle intelligence expenses. Its clearly an absolute necessity, but it seems like the useful lifespan of an intelligence agency seldom exceeds 30 years. Maybe they should sunset after 30 years, and be recreated as something new.

Personally, I think paramilitary operations should be put under DoD control. The CIA has never done real well there, and DoD personnel end up doing most of the work anyway.

[beatnik]

Corporations do not pay taxes.  Ever.  Employees, customers and shareholders pay all taxes assessed to corporations.

http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States
So, how are corporate taxes paid by employees, and wouldn't that be a disincentive to work for that corporation?
How are corporate taxes paid by customers, and wouldn't that be a disincentive to buy from that corporation?
If shareholders pay corporate taxes, wouldn't that be a disincentive to buy stock?  Also, how is it that they are paid dividends?

most of the domestic policing functions are more properly handled at the state level as the founder intended.

Close, but why not go all the way - if we're judging agencies by their founder-intended constitutionality, then the 10% useful part of the EPA needs to get kicked as well.

I'm glad we mostly agree, but my point was you can talk about flat tax and fair tax and citizen tax and all the other taxes until you're blue in the face, but none of it is going to make a bit of difference as long as deficit spending is an available option or as long as we keep getting more unconstitutional alphabet soup.

[AZRedhawk44]

I would also point out that firearms, ammo,  rope, tar, and feathers are tax free for the next year.

+1.   

A flat, capped tax based on a percentage of income (10% sounds about right) but maxes out at about $25K for household incomes of $250K or more.  I don't care if you only make $5000 a year, you owe the gubmint just like anyone else... pay up your $500 contribution.  No more New Orleans piggy-backing off of other parts of the country.  No deductions.

Don't pay your 10%?  You don't get to vote.  You can't vote with an outstanding tax balance.  Welfare leeches can be squeezed off the system this way, and won't self-perpetuate like they do now.

[DustinD]

Among other things I would make most taxes payable as a monthly bill, or find ways of making them highly visible.

Remove the class warfare taxes (such as the death tax) as well.

[Paddy]

None of you are following the rules.  You need to raise $3.1 trillion, and you're all talking about cutting spending.  Also, this idea of 'pay all at once at the end of the year' won't work.  The rubes will have spent it on beer and cable tv.  You gotta get it at the source-when they spend it.  That way nobody escapes.

[Scout26]

How are corporate taxes paid by customers, and wouldn't that be a disincentive to buy from that corporation?

Taxes are built into the price of a corporation's product or service.   As an example Chicago just passed a $.10 a bottle tax on bottled water.  Which do you think happened:  a) the bottled water companies, distributors and retailer just ate the cost or b) the price of every bottle of water went up $.10 at the local Kwik-e-mart ??

Here's another example (lowest prices taken from Gasbuddy.com):

Gasoline:
Hammond, IN - $2.80
Dupage County, IL - $2.87
Cook County, IL - $3.01
City of Chicago, IL  - $3.19

Hints:  1) Illinois has a higher gas tax then Indiana.  2) Cook County has an additional gas tax on top of the State tax, and 3) The City of Chicago has an additional gas tax on top of the State and County gas taxes.

Same thing for cigarettes. 
 
Corporations do "pay" taxes.  But, it's a cost, like everything else in the product (materials, labor, distribution, marketing, etc.) and that cost gets passed along to the end user.   

[HankB]

None of you are following the rules.  You need to raise $3.1 trillion, and you're all talking about cutting spending. 

None of us?

Well, I at least proposed quite a number of rate increases and taxes, as well as the elimination of certain deductions, credits, and allowances. Some might result in depopulating certain Federal agencies, but I only proposed changes to taxes. 

Here's a few more:

100% tax rate on any gambling winnings (including lottery prizes) won by anyone during a calendar year in which they received government assistance, other than normal Social Security retirement pay.

100% tax on all possessions of an illegal alien other than normal clothing being worn during deportation.

 

[beatnik]

I followed the rules, I simply stated that under the rules the solution does not exist.  You need to either:
1) More than triple the personal income tax rate, inciting armed rebellion
2) change the rules to include corporate tax and double all income tax rates, still inciting armed rebellion
3) change the rules to cut spending.

And please follow the wikipedia link to find this sentence:

Corporate tax in the United States is a tax on the taxable income of a C corporation or an entity taxed as a C corporation.

If that's true, then corporations pay taxes on income as well.  They probably red-tape themselves into a situation where it is minimal or zero, but you can't pretend like corporate income taxes don't exist.

[cordex]

So, how are corporate taxes paid by employees, and wouldn't that be a disincentive to work for that corporation?

I'll explain in a moment.  And yes.

How are corporate taxes paid by customers, and wouldn't that be a disincentive to buy from that corporation?

I'll explain in a moment.  And yes.

If shareholders pay corporate taxes, wouldn't that be a disincentive to buy stock?

Yes.

Also, how is it that they are paid dividends?

Dividends are a portion of profit not reinvested in the company that is paid to shareholders.  Profit that will diminish or disappear if it goes towards paying taxes.

Beatnik,
Let's make up a hypothetical situation.

You are in charge of HypothetiCorp.

Your yearly costs are:
Materials: $750,000.
Wages: $500,000.
All other expenses: $250,000.

Total costs: $1,500,000.

Your yearly sales total $2,000,000.

So, your total net profit is $500,000.  Not too shabby.

HypothetiCorp has run for several years in a hypothetical tax-free environment.  Everyone is currently happy.  The employees are receiving a decent wage, the customers are receiving a decent product at a decent price and the investors are receiving a decent profit. 

Now, the government steps in and tells HypothetiCorp that as a corporation they must pay a tax rate of 34% on their net profit (I'm not certain that I'm figuring this correctly, but this is just an example), so from $500,000 we subtract $170,000 leaving us with $330,000 in profit.

So, you, as the CEO of HypothetiCorp have to answer a question: Who really pays that $170,000? 
Do the investors lose 34% of their dividends?
Do the employees lose 34% of their salaries?
Does the company raise prices for the consumers on their products by 13%?
Does the company buy 23% cheaper materials, thus decreasing the quality of the product?

No matter how you cut it, one or more groups of individuals pay the tax - employees, shareholders or customers.  Never the mythical, faceless "corporation" that everyone seems to think produces milk for free.

And please follow the wikipedia link to find this sentence:

Corporate tax in the United States is a tax on the taxable income of a C corporation or an entity taxed as a C corporation.

If that's true, then corporations pay taxes on income as well.  They probably red-tape themselves into a situation where it is minimal or zero, but you can't pretend like corporate income taxes don't exist.

Those taxes exist, but as I showed above, whenever taxes are levied on a corporation, they are always paid by individuals ... employees, shareholders and/or customers.

[beatnik]

I see where you're going.  It's important for us all to realize that corporate taxes are a sham that just gets passed back to us, yes.  But I'm not arguing the source of the Nile, I'm saying there's a lot of money not getting accounted for if you get rid of corporate taxes.  AFAIK the VAT ideas are the only competing ideas which call for an end to corporate taxes and suggest an alternative.
Oh, and isn't any competing idea cutting spending since by definition they call for an end to the IRS?

[cordex]

I see where you're going.  It's important for us all to realize that corporate taxes are a sham that just gets passed back to us, yes.  But I'm not arguing the source of the Nile, I'm saying there's a lot of money not getting accounted for if you get rid of corporate taxes.  AFAIK the VAT ideas are the only competing ideas which call for an end to corporate taxes and suggest an alternative.

Beatnik,

I'm not sure where you are getting the idea that there is "a lot of money not getting accounted for if you get rid of corporate taxes."  The goal is to reproduce the existing budget through taxation.  If we are forced to ignore corporate taxes in this thread, abolishing the inefficient (but delightfully deceptive) corporate tax code is simply a part of the requirements as stated by the original post.

Again, individuals are responsible for absorbing the cost of all corporate taxes one way or another.  For the purposes of this thread, we'd have to replace all income from corporate taxes by taxing individuals.  We could even choose to do this in a manner that would cause the same individuals to pay approximately the same taxes.  The VAT and FairTax are examples of levying all "corporate taxes" on consumers.  Taxes on investments and capital gains levies the taxes on shareholders.  Income taxes levy them on employees.  Combine the three and we're right back to where we stand now, for the most part.

So, assuming we're willing to take the time to make the last connection as to the actual source of corporate taxes, it isn't all that hard to determine methods of raising the funds directly from the individuals who would pay anyway, is it?  It has the added benefit of people realizing just how much they actually pay for taxes (the major factor I particularly like about the FairTax).

[grampster]

The very first thing that would have to happen is that a constitutional amendment would have to be passed that sunsets EVERY money bill within 7 years.  You'd need a supermajority to re-enact any sunsetting money bill. That includes subsidies of every kind. 

If we are going to continue with SS, Medicare, Medicaid, ( and we should) then whatever funds are collected for those programs would be kept OUT of the general fund and invested separately.  Probably would need a constitutional amendment to secure that.

Since corporations and businesses only pass taxes through to consumers, rescind all corporate and business taxes and require that all corporations and businesses roll back their prices by an amount equal to the taxes they passed on to consumers (or other businesses) and if any were actually paid, reduce by that amount also.

Pass another constitutional amendment outlawing the income tax and all business taxes.

Impose a 20% sales tax on all retail sales.  10% to the general fund and 10% to SS.   Every adult over 18 gets a $15,000 exemption and everyone under 18, $10,000.  Everybody gets a check each month to pay for the exemption.  (Ex: 1/12 of 20% of $15,000 = $250.00)

That would be a good start.

[beatnik]

Okay....
I get it, but I would still rather that instead of getting rid of our "can't someone else pay it" mentality, we first adopt a "can't nobody pay it" mentality.
Tax reform is meaningless to me as long as my multi-millionaire boss gets paid $3000 a year not to grow corn on his historic farm.

[El Tejon]

Abolish the personal and corporate income tax, replace with 6% National Sales Tax, Balanced Budget Amendment, 75% supermajority in both chambers to raise taxes, abolition of the capital gains tax.

[cordex]

Okay....
I get it, but I would still rather that instead of getting rid of our "can't someone else pay it" mentality, we first adopt a "can't nobody pay it" mentality.

Totally with you.  Trim Fed.gov back by, oh, say, 90% and then there's less for all of us to worry about.

But the first post of the thread specifically stated that cutting spending wasn't an option.  So ... given those requirements ...

[RevDisk]

Very simple.  Flat tax on all income.  Corporate or individual.  Divide the budget by last year's total income, plus a percent.  Use the percent to cover any flux.  If not required to cover any budget shortfall, by law require it to be used to cut down the national debt.  I'd recommend elimating all exemptions for incomes over a certain amount (say $25k or whatever).   

It's workable, simple, something everyone can figure out themselves.  Income X * percent Y = tax owed.  That's it.   

There's a lot of drawbacks to the process.  Eliminating exemptions would cause some issues, less now because of the AMT.  A very large chunk of the tax industry would dry up.  Not all, as you still have very complex state laws.  IRS could really be scaled down.  Probably save billions there alone. 

The reason I'm opposed to a VAT or sales tax is two fold.  One, I simply do not believe the federales would elimate the income tax when the VAT was brought online.  Two, it'd significantly drive down purchases, which would either cause a recession or worsen a pre-existing one.  It'd spark a major black market shift, which would result on much greater and invasive government crackdowns.     

[MicroBalrog]

1.  Your plan must fund the US federal budget for 2009.  FY2009 budget is $3.1 trillion.   

I quit immediately. It is not possible to seriously reform the tax code of the US, or any other Western country known to me, without affecting the entire philosophy of government and cutting expenditures.

[roo_ster]

Given:
3.1 trillion budget
No Spending cuts

My Goals are:
Generate enough revenue to fund budget
Eliminate need for FedGov to know anything about its individual citizens


The Fair Tax is a good start, but needs some work.

Hokay, all taxes on individuals, businesses, corporations, estates, etc. are abolished by Constitutional Amendment.

Impose sales tax rate on all goods & services enough to:
Pay 3.1 trillion (as Riley Mc described)
Refund check to every household of the amount that someone who made exactly the poverty line would pay in sales taxes

One twist: allow anyone who wants to drop out of the refund check, social security, medicare, & other handouts. to do so.  This way, you owe fed.gov absolutely no information on your fine self, if you are willing to forego gooberment handouts.

For an individual, the 2006 poverty line was ~$10000.  Given a national sales tax rate of 30%, it would cost $3000 to be anonymous to fed.gov for an individual taxpayer.  For a family of four, the PL was ~$21, costing the family ~$6300 for anonymity.

[Zardozimo Oprah Bannedalas]

First off: Lie. "We are establishing a flat tax to replace the income tax."
This is true - flat sales tax of 10% or so will be implemented ASAP. Income tax will remain in place, but it will be reduced by 15% through all brackets (maybe not on the millionaires. Always sounds good to tell the people "We're soaking the rich"). This allows me to use the line "I've raised taxes 10% and cut them 15%. A 5% total reduction."
May be the fever talking, but I get the notion that the sales tax dollars would more than cover the income tax reduction - while allowing for a good sales pitch.
Official pronouncement would be that we will eliminate the income tax next year if all goes well.

[johnster999]

Given the restrictions of the stated scenario:

I'd start with the current system.

I would slap a 10% special tax on all forms of welfare, no exceptions.

I'd cut income taxes, by an equal percentage in all brackets, totalling an amount exactly equal to the welfare tax revenue collected above.

That's as far as I'd get before being knocked off, most likely.

[cordex]

1.  Your plan must fund the US federal budget for 2009.  FY2009 budget is $3.1 trillion.   

I quit immediately. It is not possible to seriously reform the tax code of the US, or any other Western country known to me, without affecting the entire philosophy of government and cutting expenditures.

I'm still having trouble adjusting the the new, non-Socialist MicroBalrog ...

[MicroBalrog]

1.  Your plan must fund the US federal budget for 2009.  FY2009 budget is $3.1 trillion.   

I quit immediately. It is not possible to seriously reform the tax code of the US, or any other Western country known to me, without affecting the entire philosophy of government and cutting expenditures.

I'm still having trouble adjusting the the new, non-Socialist MicroBalrog ...

You missed the last five years of my life, then.