Taxes how would you change them?

[Fauxia]

Flat taxes. Progressive taxes don’t work from an administrative standpoint. For example, you’d rather make, say 39,000 than 41,000 do to taxes. That’s the type of things progressive taxes do. They lower wages and hurt the economy.

You don't understand how modern progressive tax systems work. Progressive tax brackets only affect income made above that level.

Let's say there are two brackets - 10% up to $10,000, and 50% above that, just to make the math easy.

A person who makes $15,000 will not pay $7,500, but $2,600 under this system.

Shoot, I tried to simplify it. I forgot about how obfusticated it was. It still might work out the same way though, hold on, let me maths

Quick correction: 3500, not 2600. So anyway, let’s try 9000 and 11000

9000- 900 (8100)
11000- 1050 (9500)

So even in this extreme case, it doesn’t work out. So I’m wrong here.

Still, this lowers incentive to do well.

As for the argument I hear for progressive taxes (a completely rational one, mind you), I think that’s the point of a welfare system. You will find I am much more tolerant of taxes than most proponents of a flat. Standard “flatters” say 10%. While I prefer lower taxes, I’ll be okay with 20%-25%. Above 30% is where it gets too high. So yes, I support a welfare system to get people back on their feet. But I still think there should be an incentive to do well, and with every tax bracket the incentive is decreased.

[Australian rePublic]

American tax system or my country's tax system?
USA- Sales tax would included as part of the price tag. America would come inline with the rest of the civilised world. None of this (the price tag says $1, but it's really $1.20 because you have to add tax bullshit )

Australia- I would reduce fuel tax significantly. E10 Fuel (10% ethanol) typically costs $AU 1.209 per litre (or US$3.512 per gallon for my American readers). Anything more than 90 cents per litre for the cheap ethanol mix is ridiculous. Secondly, since you pretty much can't smoke cigarettes anywhere, I would significantly reduce the Tobacco tax. $25+ for a pack of 25 is ridiculous. The maximum income tax I would charge is 49%. Anything else more than that is total and bullshit. I would also do a lot of cleaning to ensure tax dollars aren't wasted on bullshit

The question being asked is if you could rewrite the tax code what would you change if any at all? Would you lower taxes, raise taxes, make more brackets, make less, or remove it all together?

If I had the change to rewrite the tax code I would change the tax brackets and remove the loopholes in taxes.

My tax plan. Yearly

Personal


51M-250M 70%
251M-999M 80%
1B- or more 90%

Business
51M-999M 70%
1B- or more 90%

Tax deductables

Business expences non wages

Oh wait, you were serious? You do realise that for most businesses, the biggest expense is employees. In many cases, employees are a bigger expense nearly everything else (including taxation) combined

It would ban companies run by American citizens that travelled abroad from selling in the US. (Companies that left the US to avoid taxes)

What? So if a single share holder of a major corporation decides to move overseas, you're gonna shut the entire company down and leave hundreds of thousands of people unemployed overnight. And then what happens? What if Rupert Murdoch decides to move back to Australia? Will that mean Fox shuts down?

Tax credit
Any business that pays all their employees more than $50 an hour would get to pay taxes 1 bracket lower. If they are in the lowest tax bracket they would go from 15% to 10% (executives don't count.) 20 or more required for bracket 1, 100 ore more for bracket 2, 1000 or more for bracket 3, 10,000 or more for bracket 4 and 100,000 for more for bracket 5 (to get tax credit)

And why would the employees want to receive that much anyway? They're gonna lose at least 30% of it to tax

[Republic of Keshiland]

American tax system or my country's tax system?
USA- Sales tax would included as part of the price tag. America would come inline with the rest of the civilised world. None of this (the price tag says $1, but it's really $1.20 because you have to add tax bullshit )

Australia- I would reduce fuel tax significantly. E10 Fuel (10% ethanol) typically costs $AU 1.209 per litre (or US$3.512 per gallon for my American readers). Anything more than 90 cents per litre for the cheap ethanol mix is ridiculous. Secondly, since you pretty much can't smoke cigarettes anywhere, I would significantly reduce the Tobacco tax. $25+ for a pack of 25 is ridiculous. The maximum income tax I would charge is 49%. Anything else more than that is total and bullshit. I would also do a lot of cleaning to ensure tax dollars aren't wasted on bullshit

Tax deductables


Oh wait, you were serious? You do realise that for most businesses, the biggest expense is employees. In many cases, employees are a bigger expense nearly everything else (including taxation) combined


What? So if a single share holder of a major corporation decides to move overseas, you're gonna shut the entire company down and leave hundreds of thousands of people unemployed overnight. And then what happens? What if Rupert Murdoch decides to move back to Australia? Will that mean Fox shuts down?

And why would the employees want to receive that much anyway? They're gonna lose at least 30% of it to tax

The overseas rule only applies to products made by non-American workers at American companies overseas. As long as they are still hiring Americans its fine. If they, however, don't hire Americans then they cant sell in America. You have to punish opportunists who would flee high taxes

[Kazarogkai]

Actually just a bit ago I came up with a means by which to structure the income tax. A few things were going in my mind when making it:

1. Laffer curve is a lot higher than generally projected, somewhere within the 50-90% range rather than the 00-50% range. Kennedy and the tax rates under him(in which he lowered the top tax bracket from 90% to 70%) are more or less my general justification for this since it doesn't really appear that tax avoidance rates didn't really decrease that much from that point onward. And hence in my eyes the to tax bracket should be about give 70% though should only apply to the top earners within society.

2. I really got into the idea of a GMI and it's feasibility in terms of being able to replace large portions of the current welfare system. Though of course a few supplements would be needed for particular needy cases(disabled, elderly) for the vast bulk of the population this would be more than enough. Not only that it could also serve as a means by which to subsidize labor and hopefully discourage outsourcing and address automation. part of this has to do with the fact that it gets rid of the need for a minimum wage which drives up costs to hire low skilled laborers and thereby reduces the number of jobs available to some degree.

3. That the income tax rather than being based on relatively arbitrary numbers should instead be semi-fixed. For example the top bracket of 70% should incorporate the top say 0.1% of income earners rather than a random number like say 250,000 and so on and so on. Adjustments can and should be made under certain circumstances but for general times the income tax should be a system that is able to update itself technically speaking via adjusting for increases in wages and the like. Say the current average income for the top 25% of the population is $100,000 this year but changes to $110,000 next year it should be an automatic process rather than something needing to be changed by politicians constantly.

4. In my eyes more needs to be done in order to encourage both the stability of families, which are at the heart of a proper civilized society, and the maintenance of a more neutral population growth(a fertility rate of 2.1 is ideal) in order to maintain the current order things which due to it's structure actually requires us to maintain a certain ratio of productive workers to pensioners/recipients. Immigration is not a long term solution considering the lowering fertility rates in foreign nations, consequently we need to encourage local growth here. One way this can be done is via the tax system which can help favor and encourage people to build families.

So on from that this more or less the structure of the income tax that I personally went for. It is divided into two types, The Family and the Individual Tax which allows for people to file either as a collective or as one depending on preference. Going on:

Individual Tax
00 00-07(B10)
10 07(B10)-20(B25)
20 20(B25)-38(B50)
30 38(B50)-65(T25)
40 65(T25)-108(T10)
50 108(T10)-310(T01)
60 310(T01)-1,000(T0.1)
70 1,000(T0.1)-

Family Tax
00 00-07(B10)(xa) + 1000(xb) + 2000(xc)
10 07(B10)-20,000(B25)
20 20(B25)-38(B50)
30 38(B50)-65(T25)
40 65(T25)-108,000(T10)
50 108(T10)-310(T01)
60 310(T01)-1,000(T0.1)
70 1,000(T0.1)-

To better explain it all. The far left highlighted number is the percentage, the numbers to the right are the income bracket, while the numbers and letters that are in this () attached to it represent the income percantile that said number corresponds to rounded to the nearest thousand. Example: B10 = Bottom 10% of income earners and so on. (xa) + 1000(xb) + 2000(xc) is a bit complicated but I will explain the best I can. xa represents the fact that you are supposed to multiply the income brackets by number of income earners within the family. 1000(xb) represents the fact that after the first you add 1000 for every adult regardless of whether they are income earners. 2000(xc) on the otherhand represents the fact that after the later you add 2000 to the final number for every child(person ages 0-17) regardless of whether they are income earners. It looks something like this:

You have a family of 6 known as the Saints.

They consist of Father, Mother, Fathers Grandma, and their 2 children.

Father every year earns 50,000 as a construction worker
Mother earns 35,0000 as a primary teacher
Grandma Works part time and earns 12,000
Their eldest child works part time and earns 15,000
Their total family income is 112,000

First since they are filing as a family their brackets will be multiplied by the number of income earners(4).
After that they will add 1,000 for every adult(3) for a total of 3,000
When that is done they will finally add 2,000 for every child(2) for a total of 4,000 and which that they will get their actual tax brackets

From this
00 00-07
10 07-20
20 20-38
30 38-65
40 65-108
50 108-310
60 310-1,000
70 1,000-

To this
00 00-35
10 35-87
20 87-159
30 159-267
40 267-439
50 439-1,247
60 1247-4,007
70 4,007-

Under this tax code their total collective tax burden will be $10,200 assuming no other deductions are added unto that and the like. Another thing to keep in mind is the GMI or Guaranteed Minimum Income which will apply to both individuals and families under either system. GMI under my system is dependent on the top rate on the bottom 0% tax rate whatever it is will be your GMI. For an individual filer it will be 7000, for the aforementioned Saint family theirs will be 35,000. Regardless if one makes below that amount this will be called a defiicit which will be rectified every time one files their taxes in the form of a subsidy which will be equal to 50% of the ones GMI. For a singular filer making nothing at all they will receive a subsidy of 3500, in the case of the saints assuming a similar situation they will receive a subsidy of 17,500.

I have others of this vain but this is just what I would do to the income tax personally within the united states.

[Trumptonium]

A flat rate of 10% so that you are not punished for increasing your wages. Someone who, for example, pays 20% at 39,000, and then 40% at 40,000, is out of luck otherwise. That's not a fair system.

If you pay 20% up to $39 000 and then 40% from 39 001 onwards, my assumption from your post, then it would look something like this:

Total income: 41 000
Taxable income at 20%: 39 001 (Hence 7800.2)
Taxable income at 40%: 1 999 (Hence 799.6)

Total tax paid: 8599.8
Total disposable income: 32400.2
Actual tax rate: 20.9%

Flat taxes. Progressive taxes don’t work from an administrative standpoint. For example, you’d rather make, say 39,000 than 41,000 do to taxes. That’s the type of things progressive taxes do. They lower wages and hurt the economy.

Nonsensical

Total income: 39 000
Taxable income at 20%: 39 000 (Hence 7800)

Total tax paid: 7800
Total disposable income: 31200
Actual tax rate: 20%

You are hence $1200 worse off by having $39000 in gross wages rather than a wage rise to $41000.

I second the previous comment, do they not teach you this in schools?

[Trumptonium]

1. Laffer curve is a lot higher than generally projected, somewhere within the 50-90% range rather than the 00-50% range. Kennedy and the tax rates under him(in which he lowered the top tax bracket from 90% to 70%) are more or less my general justification for this since it doesn't really appear that tax avoidance rates didn't really decrease that much from that point onward. And hence in my eyes the to tax bracket should be about give 70% though should only apply to the top earners within society.

This type of thinking regarding the limitations of the Laffer curve is outdated - external environments (aka foreign nations) affect the Laffer curve 'optimum' far more than opportunity cost of tax avoidance does. Administratively speaking it is far easier to move and gain citizenship elsewhere than it ever was in history, including back in the 70s when Laffer curve thinking was introduced. Worse yet, there's zero opportunity cost in the actual decision to move away.

A 90% income tax rate would virtually kill off the HNWI cohort as only those who find it legally impossible to move and keep the income would choose to stay. The vast majority of people's incomes do not fluctuate that wildly based on their country of residence.

[Lady Scylla]

Create a layered tax scheme for certain brackets based on a period of x years that alternates, raise taxes on higher incomes to match lower income payments. Bout it, really.

[New Chalcedon]

How would I change it?

1. Remove exemptions from Australia's GST, while simultaneously changing the tax-free threshold and increasing welfare amounts slightly to ensure that the poor are no worse-off on net. This will save on administrative costs of the GST, as well as slightly reducing the dodging of it. Any net proceeds to go toward reducing the structural fiscal deficit;

2. Add a Tobin Tax of 0.5% on the trading of bonds, securities and shares, with half falling on the seller and half on the buyer;

a) Use half of the proceeds to fund regional development programmes (RDPs), which will provide a combination of tax credits (paying State-level payroll taxes, for instance), low-interest loans and venture capital to encourage startups and company relocation to rural & regional Australia.
b) Use the other half to fund investment in productive rural & regional infrastructure, including alternative transportation hubs (secondary ports etc.), communications infrastructure (FTTP NBN, etc.) and other, similar investment. Some of this half may go toward hiring more teachers, EAs and other education support staff for rural/regional schools to assist them in developing and offering advanced programs for their students; alternatively, some could also go toward higher education, hospitals/healthcare, etc. etc.
c) Purpose of a) and b) is to assist rural & regional Australia in generating more economic activity and being more attractive places to live, work & invest. End goal is to reduce the crowding of Australia's major urban areas.

3. Revisit the offshore minerals royalties system, to ensure that whether onshore or offshore, Australia's people receive a fair share of the profits from exploitation of our vast mineral resources. Currently, Australia rivals Qatar as World #1 exporter of LNG; Qatar receives $26.6bn in royalties, Australia a mere $800m. Credit half of the total royalties toward the State whose waters the royalties are generated in, the other half to pay down deficits;

4. Harmonise - by Commonwealth fiat if needs be, but preferably with consultation and consensus with the States - the State-level royalties regimes onshore, to prevent "race to the bottom" minerals royalties regimes.

5. Close the more egregious loopholes being abused by multinationals to dodge Australian taxes, using half of the proceeds to cut the "book" corporate tax rate, and the other half to reduce the fiscal deficit;

a) Effectively, this would mean that current tax-dodging corporations (whether they are true MNCs, or Aus corps shifting profits offshore) will pay more, while corporations which already try to do the right thing will get a tax cut.
b) Possibly make corporate income tax rates slightly progressive, with a loading on companies generating high ROI and relief for those generating low ROI. Example: Current Aus book rate is a flat 30%; by closing loopholes, this could be cut to 28% overall - 26% for those making less than half the median ROI, 30% for those making more than twice the median ROI. Specific numbers would, of course, be dependent upon detailed analysis - this is a hypothetical.

6. Simplify personal income taxes by rolling-in the Medicare levy into the headline rate, thus reducing the cost of tax compliance. Also reduce the private health insurance rebate, although not to the extent of cutting it entirely;

7. Rebalance personal taxation rates, to ensure that the highest brackets are not paying more than a total of 49% of earnings (I consider 50% an important psychological threshold when it comes to taxation rates), but are otherwise paying a share corresponding to their share of the overall income.

8. Finally, legislate automatic indexation of both personal and corporate income tax rates to prevent bracket creep - personal to the median salary, corporate to median corporate ROI.

Just my $0.02 worth

[Fauxia]

A flat rate of 10% so that you are not punished for increasing your wages. Someone who, for example, pays 20% at 39,000, and then 40% at 40,000, is out of luck otherwise. That's not a fair system.

If you pay 20% up to $39 000 and then 40% from 39 001 onwards, my assumption from your post, then it would look something like this:

Total income: 41 000
Taxable income at 20%: 39 001 (Hence 7800.2)
Taxable income at 40%: 1 999 (Hence 799.6)

Total tax paid: 8599.8
Total disposable income: 32400.2
Actual tax rate: 20.9%

Flat taxes. Progressive taxes don’t work from an administrative standpoint. For example, you’d rather make, say 39,000 than 41,000 do to taxes. That’s the type of things progressive taxes do. They lower wages and hurt the economy.

Nonsensical

Total income: 39 000
Taxable income at 20%: 39 000 (Hence 7800)

Total tax paid: 7800
Total disposable income: 31200
Actual tax rate: 20%

You are hence $1200 worse off by having $39000 in gross wages rather than a wage rise to $41000.

I second the previous comment, do they not teach you this in schools?

This comment was unnecessary. We were already corrected, and I already acknowledged that. Don’t they teach this in schools? No, nothing is taught that’s anymore political then “nazis are bad!” And “the Confederates are racists!” Nothing at all about economics or taxation. It’s why my friends are probably all socialists. (I am not saying that socialists don’t understand economics, I’m simply saying my friends wouldn’t be socialists if they understood anything about economics.)
I almost somewhat think it’s a plot to have the younger generation vote Democrat and there ideas of high spending and low taxes. More likely, though, it creates apathetic citizens, citizens who don’t understand what the politicians say.

[New Chalcedon]

This comment was unnecessary. We were already corrected, and I already acknowledged that.

Perhaps, but this is NSG. Snark, gracelessness and over-the-top didactic remarks are par for the course, I fear.

Don’t they teach this in schools? No, nothing is taught that’s anymore political then “nazis are bad!” And “the Confederates are racists!” Nothing at all about economics or taxation.

I'm....fairly sure that this is not the case in any Western nation. I'm not quite prepared to call "Bullshit!" because I haven't read all the curricula, but I know that every single curriculum I've read (all Australian curricula, the central UK curriculum, and a dozen or so US State-level curricula) has at least some time blocked in for (very) basic economics, typically in the final three years of education.

It’s why my friends are probably all socialists. (I am not saying that socialists don’t understand economics, I’m simply saying my friends wouldn’t be socialists if they understood anything about economics.)

Here's a hint: When you say "I'm not saying X", then immediately imply X, it tends not to do your credibility much good. Much like if you were to say "I'm not a racist, but... <racially-stereotypical statement>". You make a claim, then immediately put the lie to it - it makes it hard to believe anything you claim!

I almost somewhat think it’s a plot to have the younger generation vote Democrat

What the Hell?

No, seriously: What the everliving Hell?

How did you come up with that bullshit conspiracy theory?
<calms self down>
OK, it is pretty damn clear that you don't have the foggiest clue of how curricula, textbooks or teaching methods are chosen. So, in the hope that you're actually interested in learning what the fuck you're talking about, here's how school curricula work (as a rule) in the United States:

1. Either the State legislature's standing committee on education, or the State's elected Board of Educators/Education, will meet to determine what (if any) changes are needed to update the curricula. Such changes are usually agreed to by a simple majority vote of the Board.
2. These changes are made, and disseminated throughout the State.
3. Local school boards then meet, consider the curricula and changes from the previous year(s)'s curricula, and recommend teaching changes to individual schools in that district.

4. The schools' individual departments (Social Sciences, Science, Mathematics, etc.) will make the appropriate term/semester plans, then set the textbooks - typically the Texan version, as that is where most US textbooks are made and is also the single biggest market (CA has...interesting ways of setting textbooks). Incidentally, this fact has resulted in - to name just one example - Thomas Jefferson all but disappearing from US history textbooks. Why? The religious fundamentalists on the Texan SBE have decided that his message of religious toleration is not one they want spread. They instead prefer focusing on Calvin's teachings and ordering textbooks to criticise the notion of "separation of Church and State".

5. Once all of the above are settled, parents purchase textbooks and send their kids to school, where the kids are taught in a manner consistent with the State curriculum, as well as with any directives from the local school board(s).

Got all that? Good.

Now, as to why the notion that it's a Democratic (not "Democrat") plot is absurd: Since 2010, the Republican Party has held outright control of at least half of US State legislatures, with Democrats only holding 6-10 depending on election cycle. Not to mention that there is evidence of the notion that the hard Right are changing textbooks to suit their own agenda - see the links above for just one example of this. In short, any ignorance in the US State curricula is more likely than not to be the result of Republicans rewriting the curricula to gain future partisan advantage...simply because they (and not the Democrats) are in a position to do so.

and there ideas of high spending and low taxes.

Yeah....that's not what the Democratic Party stands for. Go get educated; read their main website, read the State Democratic Party's website, look up some Q & A from individual Democratic candidates/officeholders. Don't believe Fox News or Breitbart's opinion of the Democrats - they speak in lies.

More likely, though, it creates apathetic citizens, citizens who don’t understand what the politicians say.

Indeed, that is a preferred goal of Steven Bannon's agenda - you see, Bannon's the kind of hard-Rightist who doesn't want the Government to work, period. He wants to tear it all down and start again, this time without any of those silly notions of "liberty" or "equality" getting in the way. And he can't do that with an educated, politically-active populace voting against his preferred neo-Fascist rubber-stamps - sorry, I meant "candidates" - for high office.

[Chestaan]

Higher income tax and capital gains tax and lower sales taxes. Add at least 1 more bracket at the upper end for income tax and possibly bring in some wealth taxes and financial transaction taxes. Close corporate tax loopholes. That's a start at least.

[Community Values]

Lower corporate tax, higher income tax on the rich, lower income tax on the poor and middle class. Replace the property tax with a Georgist tax.

[Trumptonium]

What? So if a single share holder of a major corporation decides to move overseas, you're gonna shut the entire company down and leave hundreds of thousands of people unemployed overnight. And then what happens? What if Rupert Murdoch decides to move back to Australia? Will that mean Fox shuts down?

Quite clearly the comment refers to 'companies leaving the US' i.e. moving their tax residency abroad, most likely to reduce their tax bill.

And I agree - revenue made in the US should be subject to American taxes, not those of Luxembourg or Cayman.

The punishments should be even more punitive for companies that were originally American but choose to outsource all of their operations and move their tax residency while hoping to continue making most of their sales in the United States. That is an insult and an open taunt.

[Ifreann]

1% reduction in tax owed per 1,000 posts on NSG.

[Finswedeway]

preferably, a nice and flat 20%

Men (and women) are entitled to the sweat on their brow

[Ifreann]

preferably, a nice and flat 20%

Men (and women) are entitled to the sweat on their brow

Or rather, to 80% of it.

[Dumb Ideologies]

If I was asked to rewrite the tax code I would immediately apply for funding to hire a support team. My next step would involve saying as little as possible in the meetings so that I can keep collecting my pay check as long as possible without them realising I'm completely unqualified.

[Kazarogkai]

1. Laffer curve is a lot higher than generally projected, somewhere within the 50-90% range rather than the 00-50% range. Kennedy and the tax rates under him(in which he lowered the top tax bracket from 90% to 70%) are more or less my general justification for this since it doesn't really appear that tax avoidance rates didn't really decrease that much from that point onward. And hence in my eyes the to tax bracket should be about give 70% though should only apply to the top earners within society.

This type of thinking regarding the limitations of the Laffer curve is outdated - external environments (aka foreign nations) affect the Laffer curve 'optimum' far more than opportunity cost of tax avoidance does. Administratively speaking it is far easier to move and gain citizenship elsewhere than it ever was in history, including back in the 70s when Laffer curve thinking was introduced. Worse yet, there's zero opportunity cost in the actual decision to move away.

A 90% income tax rate would virtually kill off the HNWI cohort as only those who find it legally impossible to move and keep the income would choose to stay. The vast majority of people's incomes do not fluctuate that wildly based on their country of residence.

Hence why I am against having it that high,The top bracket only reaches 70% and only applies to the top 0.1% of the population. Plus there is a thing and it is called tarifss, their quite nice and should deal with the issue. Death to Reagan and all his cosmopolitan shit eating friends, Nationalism for the win!

[Albynau]

Flat tax on income

The end

[Major-Tom]

Frankly, I have general ideas, but I'm not an expert on the subject. I'd probably consult some people smarter than myself.

That said, I was browsing through here, and some people gave some well thought out, well researched answers, even if I didn't agree with them fully. Respect.

[Trumptonium]

only reaches 70% and only applies to the top 0.1% of the population.

That 'only' is high enough to make them move away.

Plus there is a thing and it is called tarifss,

What have tariffs got to do with personal income of the rich?

[Neutraligon]

Keshi, there is a reason why tax laws are complicated and longer then just a list of tax brackets.

[Nickel Empire]

Increase the amount of money that can be made before it is taxed from 11,000 to 12,000. Increase GST from 5% to 7% and increase the amount that can be taxed at 15% from 46,000 to 50,000.

[Austrasien]

Where is the option to lower income taxes and raise tariffs? Imports, property and capital gains should be taxed much, much more. Especially imports. Income & sales much less.

[Taihei Tengoku]

Taxes on capital is a tax on not only present income but a reduction in future productivity and therefore future incomes

My neoliberal dream is LVT + VAT + One Big Equation

Where tax = a^income-(b^income+m), b<a and both are empirically determined. The area between the curves is your tax bill, when tax is negative its EITC