You've just been appointed IRS Commissioner. Make some changes

[jmowreader]

Here's today's Fun Exercise:

The Commissioner of the Internal Revenue Service has just fled the country. Shrub has to fill the office quickly, and he chose...YOU!

You're the Commissioner of Internal Revenue! You flew through confirmation with flying colors. You got a nice office, one of those shitty government-issue chairs, a cute secretary who knows the IRS inside and out. AND...you got permission to make any changes you want, just so long as you explain why.

My first three:

I would eliminate the cap on payroll tax withholding. Right now only the first $84,900 you make is subject to payroll tax. By running it out into the brazillions, while keeping the rate exactly as it is now, Social Security will be funded into perpetuity.

I would allow taxpayers to file Schedules A and B--and ONLY these two schedules--with Forms 1040A and 1040EZ. I have a house. I pay interest on the mortgage. To deduct this interest, I've got to file Form 1040 and leave two-thirds of it blank. There is absolutely no reason whatsoever that you couldn't use Schedule A (itemized deductions) and Schedule B (earned interest) with Forms 1040A and 1040EZ.

And I would hire someone besides an accountant to write the instruction books. I have nothing against accountants, but their writing style isn't "user-friendly" to anyone who isn't an accountant.

[Goblinmonger]

1. Flat tax

for businesses and individuals.

If that can't be a reality, I would get rid of the marriage penalty. Stop taxing the first dollars I make at my wife's highest rate (or vice versa).

[Speck Tater]

5. I would agree IF

Flat tax can only be fair if ALL necessities, food, medical costs, utilities, personal transportation, a reasonable amount of clothing (which might depend on profession, to include uniforms, etc.), are all 100% tax exempt.

[Donnachaidh]

6. flat tax isn't going to work - and it will screw the poor and the Middle Class

All the flat taxes are consumption taxes. Do you really want the poor to pay out MORE for necessities?

[Goblinmonger]

12. Wouldn't it be easy

to not tax the first X thousand dollars much like we do now? I think that would be necessary in a flat tax as the person above describes to allow the purchase of necessities without tax.

And it ISN'T the same as a consumption tax. A consumption tax would benefit those that can afford to take a great deal of their income and invest it. A flat tax doesn't allow that and taxes all income. The use, then, of that income is up to you.

[Selatius]

16. Might as well do a 50% flat tax, with the first 85,000 being exempt from taxation

If you want to do it like that.

[jmowreader]

20. When you say "flat tax"

are you referring to:

a single-rate tax on income (the "flat tax" advocated by Steve Forbes, Jack Kemp et al)

or

a national sales tax (the "FairTax" advocated by Neil Boortz, Mike Gravel et al)

?

I don't like either one of them, but the single-rate income tax stands less of a chance of killing the economy than does a national sales tax.

Read Boortz' FAQ on his website--the line about used items not being taxable is enough to kill the idea dead. That would kill the auto business (hard to sell a new car when a used one is tax-free), the construction business (ditto), just about any business you want to name that makes or sells new products. Those of us who sell things you HAVE to buy new, like food, would see massive shrink as people stole to fill the tax-free stores they were running in their basements. As I put it last week, the way the FairTax is structured means the taxes on a new 12-foot jon boat are higher than the taxes on a five-year-old 60-foot yacht.

The problem with a flat tax on income, although it could be set high enough to be revenue-neutral, is that it doesn't treat income fairly. Let's throw out a number and say the tax is 20 percent. Twenty percent of a $20,000 income means you eat meat once a week instead of twice. Twenty percent of a $20 million income is only being able to afford two colors on your new Gulfstream instead of the three you really wanted. Taxes should bother everyone equally--and someone who makes $50,000 a year is going to be far more bothered by having to send $10,000 of it to the IRS than someone who makes $50 million having to send $10 million in.

[Goblinmonger]

27. A single-rate tax on income

I don't like the concept of a national sales tax for the reasons you mentioned. Though the impact it would have on encouraging people to save rather than spend is somewhat attractive.

Let's take your example. I would say that the first $50K of income would be untaxable (I'm pretty much pulling that amount out of my ass and there might be a better number). So if we have a family that makes $48K, they pay no taxes. If we have a family that makes 100K, they pay only on the second 50K so their tax is $10,000. That is pretty much what it is now (at least based on my last return). A family that makes $100M would pay $190K. That's still a pretty big hurt. And under what I would put in as a plan, there are NO loopholes, NO deductions other than the first 50K untaxed. So Mr. Gulfstream in your example would not be able to hide shit and pay less than Mr. 100K like they do now. Additionally, businesses would pay the same tax with most likely a higher threshhold when taxes start to help out small businesses.

[Speck Tater]

2. Simplify, simplify, simplify.

Make the tax laws so simple that all the tax lawyers are instantly put out of business. No more loopholes, just a fair and equitable system that takes into account the fact that we all benefit from public projects like roads and schools, but that the reality is that rich folks get more benefit from the system and should pay correspondingly more taxes to cover their share of that extra benefit. Beyond a certain level, accumulating excess personal wealth is just being a parasite on the rest of the planet.

[Straight Shooter]

3. Tax corporations with offshore corporate offices whose business is mainly in the U.S.

Those snake-run companies with a post office box in the Cayman Islands or wherever, and they skip out on paying taxes.

[proud patriot]

10. good one

I agree with you .

[Captain Angry]

4. Compensation in stock to be taxed as if it were compensation in cash.

Why let somebody get a 15% tax rate instead of the 35% just because the paycheck comes in a different form?

[Donnachaidh]

8. It IS cash in a very real sense

It's applied to your personal worth. Tax them like they NEED to be taxed.

[TahitiNut]

23. What you're talking about isn't stock, per se, it's CAPITAL GAINS

Currently, capital gains income is taxed at 15% while salary income is taxed at a top marginal rate of 35%. In other words, income received due one's own labor is taxed at more than double the rate of income received due to the labor of others. This is particularly true due to the payroll tax for FICA.

The favorite compensation 'trick' isn't grants of stock, however. It's incentive stock options. While technically valueless when granted (an 'option' to buy stock at its current market value isn't worth much), it becomes VERY valuable when the market price goes up. This is one of the reasons that stock prices have become more volatile in the last 50-60 years. Incentive stock options are typically given a striking price equal to the lowest market price for the stock over a certain time frame. If the executives can 'manage perceptions' in such a way that the market price is suppressed at one point and boosted at other times, they can play the options game and cash in. And they do. You bet they do.

[sam sarrha]

7. FIRE ALL THE CONTRACTORS THAT F*CK WITH THE POOR

[Wiley50]

9. Below $100,000/yr Free ride Above SLAMMED!

Those in top one half of one percent
PRISON

[hack89]

24. Is this per wage owner or per family?

I can't imagine you wanting to punish a husband and wife who both work and earn more than 50K each. Exactly who are the bad guys here - after working 25 years and educating myself why should I be punished as I enter the prime of my earning years?

[TX-RAT]

30. Don't tax him, don't tax me, tax that man behind the tree.

[Warpy]

11. Your first won't do any good at all

unless you get OASDI payments out of the general fund, first.

My second would be to reinstitute the progressive income tax, tying it to the median wage rather than to a fixed dollar amount, which is what sank it during the inflationary 70s.

My third would be to keep the AMT but start it at an income floor of $500K. I'd include stock options and other corporate perks as income.

I couldn't be the head of the IRS to do all this stuff. I'd have to be supreme dictataor since Congress would never approve any of it.

[jmowreader]

15. Index the AMT to inflation

IIRC the Repuke public argument against the AMT is that it keeps snaring more and more taxpayers. (Their real argument against it is that it exists at all.) That could be avoided by indexing it to inflation.

[Selatius]

17. Yeah, I second that. Index the AMT to inflation. That'll shut up the Repubs for a while. n/t

[hack89]

13. So when you remove the payroll cap

will you also remove the benefits cap? I wouldn't mind a bigger social security check.

[jmowreader]

22. I'd go for that

Contribute 7.5 percent of a brazillion dollars and you deserve a nice fat SS check every month when you retire.

[MiniMe]

14. Can the IRS Commissioner actually "do" any of those things?

I think they could make some of those recommendations, but they couldn't implement the changes unless a law was passed by congress. Seems like the only thing they could would be internal policy and hirings and firings.

Sorry, I guess I'm just not playing this game very well.

[jmowreader]

21. For the purposes of this discussion...

you wouldn't accept the job unless Congress and the President would rubber-stamp your tax reform ideas.

Strangely enough, Bush accepted even though he knows you're a Democrat.

[camero]

18. The president and congress make tax policy

It would be my job to enforce those laws. Of which the first thing I would do would be to order an audit of every corp with income over $1 mill and on individuals with incomes over $500k to uncover any fraudulant filings or underreporting of income in order to go after lost tax revenue.

[meldroc]

19. Eat the rich.

Modify the tax rates to give the lower and middle classes more of a break, while increasing taxes by quite a bit for people who make more than $150,000. People who make more than $500,000 will pay through the nose. Most of the tax breaks will go away.

[Kansas Wyatt]

25. Labor wages no longer considered income.

[TahitiNut]

26. Adjusting the income brackets for inflation, reinstate the tax rates of the Eisenhower years.

If it was good enough for Eisenhower Republicans then it should be good enough for us today. Capital gains on assets held for less than one year ("short-term" capital gains) would be taxed as ordinary income. Long-term capital gains would be adjusted for inflation and capital gains treatment for a primary residence would be tax-free under $250,000 (adjusted for inflation) aggregate in an individual's lifetime.





I'd enact a federal sales tax of 2% on the sale or exchange of corporate stock. It's PROPERTY. (Bonds would remain sales tax free.)


I'd enact a surtax on corporate profits equal to the percentage corporate profits exceeds 10% of total labor compensation minus executive compensation.




The "wage cap" on OASDI payroll taxes would remain as is.

[TheMightyFavog]

28. Fully prosceute and obtain back taxes from fundie churches who got involved in politics!

Megachurches, I'm looking at you! You wanna get invilved in politics? Then throw some money in the kitty like everybody else!

[Thothmes]

29. Agree

Accept I would not limit to the Fundy mega churches. Any church large or small in this country that involves itself with politics should have their tax exempt status revoked and their leadership prosecuted to the fullest extent of the law.

[TX-RAT]

31. Would you apply the same rule to unions?

[Freddie Stubbs]

34. Would you also prosecute African-American chruches which did the same?

:shrug:

[mmonk]

32. Tax churches that feel the need

to put out voter guides, receive taxpayer's money through "faith based iniatives", or give church membership rolls to political parties.

[Jeff In Milwaukee]

33. None of This Will Happen

Let's be clear about something. The Internal Revenue Service is the "collection agency" of the United States government. Tax laws are written by Congress and not the IRS. You don't need a better IRS to eliminate tax inequality. You need a better Congress.

[jmowreader]

35. Two of three of mine are totally doable

One would require a minor technical change to tax law (being able to itemize without having to file the long form), the other (a tax book you can read without an accounting degree) is purely an IRS function.

Removing the cap on FICA withholding would DEFINITELY cause a stink, but it needs to be done.

[Jeff In Milwaukee]

37. Doable, but not by the IRS...

It takes Congress to mandate it. And as far as Number 1 goes, it doesnt' take that much longer to file the long form if you don't have any other complicating factors. Just leave the "not applicable" spaces blank.

[truebrit71]

36. If you make under 100k a year. No taxes. If you make over 100k a year. 90% taxes.

Abolish ALL deductions.

Zero. None. There is no reason on God's green earth that Cheney should get a $52k refund when I have to fucking pay every year.