BlueHeronDruid wrote: 
Why dem IRS bastids rejected my filing! Now I OWE! Damn kids, claiming themdumbass selves.

 kurtster wrote:  Our current tax code is not subject to constant adjustments and tweaking? Come on, that argument holds no water.

Rampant consumption is one reason we're in the mess we're in right now. We have been consuming far beyond our means for many years now, and the piper is demanding his due.

Quite right, consumption patterns DO change. So do income patterns and deductions. Taxes on consumption are a much more direct way to CONTROL those patterns. Look at cigarettes, gas, and alcohol: we tax those at a higher rate than other items, because we are trying to CONTROL certain behaviors. We as a society accept that (well, most of us do anyway) as the price for such 'luxuries'.

A consumption tax CAN be progressive, IF the correct things are taxed. Staples such as bread, milk, produce (fresh, frozen, canned), meat, etc. etc. can easily be exempted from sales tax: in Texas your grocery receipt indicates which items are taxed and which are exempt. Poor folks, heck anyone for that matter, should not be buying chips and soft drinks when there's fresh produce, bread and bottled water (not taxed in Texas) on the next aisle.

Want to give children a break? Easy. Set all children's clothing, up to a certain age or size or price, tax-free or tax-reduced. Baby food, formula, diapers? Exempt. In Texas there are several days a year designated 'no sales tax', usually corresponding to the beginning of the school year, for just such instances. There are limits, like shoes up to $100 or something, clothing up to $50, I don't know what the numebrs are but the point is there are controls: if you buy a $100 pair of jeans, you're gonna pay the full tax rate, 'cause the Levi's on the next rack are only $30.

The thing about sales tax is, with only a couple exceptions, the states are already collecting it: there is already a system in place for collecting a national sales tax. Yes, all the store computers would need to constantly be tweaked to account for whatever changes Congress decides to make to the tax rate. But you know what? Retailers already do that EVERY DAY. Look at all the SKU codes that are constantly being tweaked to account for sales, discounts, closeouts, markdowns, every dang thing. Right now we have TWO complex taxing systems: we could easily consolidate that into one. That way the IRS only has to figure out how to deal with 50-plus checks every month, instead of 250 million-plus checks coming in all at once. The IRS will still be PLENTY busy though: consumption taxes create black markets (see alcohol and cigarettes), so they'll still have plenty of tax cheats to go after. But almost certainly a smaller number than the potential 250 million tax cheats we have now.

Of course it's not a perfect solution: there is no such thing as perfect taxation, right? It is simply a change in philosophy, a different way of looking at how we take money to pay for our government and the services it provides.

Again: I don't honestly expect it to ever happen. I'm just trying to get people thinking about how it could be POSSIBLE. As an engineer I spend most of my time trying to find solutions to problems. Rarely is there one perfect solution, and often we spend hours on the relative merits of several approaches. What we do NOT do is dismiss proposals without really trying to make them work first. Of course there is always a degree of conjecture, and some ideas are dead ends, and some are just so complex we have to try them out on a smaller scale before leaping in. The problem of our Tax Code (and make no mistake, there IS a problem) is incredibly complex, but I think there is a better way.

c.

 kurtster wrote: 
The only way I could go along with such a tax is if a standard deduction up to the poverty level was in place. 

 cc_rider wrote: 

This is only to address your points on a consumption tax. 

I find that any tax based on consumption is doomed to constant adjustments and tweeking, ending up with a bigger mess than we are trying to fix.  Taxing consumption is a sure fire way to slow down consumption thereby reducing the revenues sought in the first place. 

Examples are many.  This past summer, Californians were told to drive less, to conserve fuel and resorces.  They did and for the first time in memory, gas consumption fell.  What came next ?  A call for higher taxes due to falling revenues resulting from decreased consumption.  In Charlotte, NC, citizens were told to conserve water.  They did.  What was the reward ?  Higher water rates to make up for lost revenue due to decreased consumption.

As tastes and needs evolve, comsumption patterns evolve and change making the tax target elusive at best.  The best way to diminish consumption of a product is to raise costs.  Taxation is the fastest way to raise costs and affect the consumption of a given product.

The cunnard that consumption will never decrease is being proved false right before our eyes.

IMO the only fair tax, is the FLAT TAX, everyone pays the same rate, regardless of income.  It is not regressive as sales taxes are.  Comsumption taxes hit the ones that can least afford to pay, ie, the poor who must spend every penny they earn in order to survive.  A Flat Tax would elimate deductions, making sure that those at the top pay taxes, just as those at all the other levels do.  I don't have any studys to cite, but I believe it would result in a higher net tax payout by those at the top presently pay due to the myriad of deductions and loop holes available. 

 cc_rider wrote: 
I think that I have been using it (TTax) for ten years, Is that possible? My taxes are not that complicated so I think that it has served me well. I'm getting another big refund this year but this may be the last time, as it is the last year that I will have had (what's that case?) two children in college. So I will pay more tax next year, but one less tuition bill; I'll take that.

 BlueHeronDruid wrote: 
see my edit. I'm going back in. Plus I've been paying the govment for years.

 katzendogs wrote: 
I really like Turbo Tax. I've been using it to do my taxes for about 8 years.

 katzendogs wrote: 

Turbo Tax did me justice!

They gave me Quicken, but it says I'm (what's the word?) overdraft!
Not true

Thanks you three that's all I needed to know.

 katzendogs wrote: 
I have used it for five years or so. I think it's great. There is now a (supposedly) free version too. It allows you to submit everything electronically, no mailing at all, and to have your refund deposited directly into your bank account. The version I've always used is about $30, it has some extra help with deductions and the like.

One nice thing about it is it carries over information from year to year. Name and address info, plus it shows you last year's W-2s and other paperwork as you go through it.

c.

 katzendogs wrote: 
Used it for the first time this year.  Did the whole thing online - worked great.

 katzendogs wrote: 
I've used it for years. I like it.

The only times I consulted a professional was when we were living in IL, hobbitt was working in GA, and owned a piece of the company that incorporated in MA. Too tricky for me.

Anyone have experience with Turbo Tax? Good,bad, ugly?

 uselessart wrote: 
At first.

Interest on mortgage loans will be deductible for those making under $200k, right?

 strawberryblonde wrote: 
That may happen due to the mortgage crisis. The tax break on interest was one (small) factor in the mess, because it allowed people to take out larger mortgages.

It's not so much that renters should get a tax break, just that mortgage interest would no longer be deductible. Same thing, different terms.

It also ties into my 'consumption tax' rant: it would not matter whether you rented or owned if you paid tax on what you SPENT. It could get a bit complicated due to the longer terms of mortgages: do you pay the 'sales tax' all at once up front, or spread it out over the length of the mortgage? What happens if the Gov't decides to change the nominal 'sales tax' rate on housing expenses during the term of your mortgage (a very likely scenario)? It is certainly possible to work it out, there are just those sorts of hitches that should be addressed.

c.

renters should get the same tax break as home owners

Okay, I'm gonna throw out the idea of consumption taxes instead of income taxes. Again.

Why?

Because philosophically, we are taxing the wrong thing. Income tax 'punishes' people for, what? Making money! Is that really the message we, as a capitalist society, want to send? Work hard, get ahead, so we can take a bigger chunk of your efforts. I don't think so.

Consumption taxes, that is, sales taxes, 'punish' people for the very thing that has gotten us into this mess: profligate SPENDING!  (Plus I just love typing 'profligate'. What a word.)

I have not read all about the 'Fair Tax' proposal, because I don't need convincing, but my guess is it's all spelled out in there. From what I understand of it, I still have some disagreement with it, such as sales tax on 'staple' items such as milk, bread, produce, et al. In Texas those items are not taxed, along with most food items that require preparation. Ready-to-eat foods and snack foods are taxed.

Another big fun item of consumption taxes is, politicians will still have plenty to argue about. Think about all the time spent on the current tax code. First the government wrangles over it, THEN the accountants and tax advisers and whatnot try to figure out what to do next. With consumption taxes, the first part stays the same, but the second part becomes much simpler, because there's very little to figure out: you buy something, you pay a certain percentage to the government.

Another nice thing about switching to consumption-based taxes is you can CHOOSE how much tax you want to pay. Huh? Birth, death, no taxes? Well, technically, yeah. If you lived off the grid, or purchased only necessities (non-taxed items), you wouldn't have to pay any taxes, no matter how much money you made. Sounds weird, and isn't very realistic, but it's certainly possible.

Consumption taxes are accused (rightly) of being regressive. But the fact is, people who make more money, spend more money. Automobiles, housing, TVs, shoes, clothes, dining out, you name it. If you exempt virtually all essential items from taxation, consumption taxes become far less painful. Big-screen TVs? No one has the RIGHT to own one, it's a CHOICE. Once people start correlating what they spend to the amount of tax they pay, well, you'll see some big changes in the American consumer mindset. In a good way, in my opinion.

Capital gains, interest income, blah blah blah, all that goes away. We don't CARE how you made the money anymore, we only care when you SPEND it.

I'm not idealistic enough to think it'll ever happen, but it's worth thinking about. Maybe it'll get the wheels turning.

c.

BasmntMadman wrote: 
And the CPUSA was the first American political party to call for full and equal civil rights for African-Americans, too. So, let's recap: turns out the Communists were on the right side of history after all, and nobody admits/knows this interesting fact.

This thread + Schlabby = gonna be interesting!