tax rates vs. loop holes

BrntOrngStmpeDe

BrntOrngStmpeDe

1,000+ Posts
Let me start by saying that I'm for this sequestor. While I would like for smarter cuts, my definition of smarter is not going to be the same as most so I'm just happy the cuts in spending are coming.

question though...

Since the GOP seems to be holding more firm on non-closure of loop holes does that indicate that the loop holes are actually more valuable to the wealthy than the tax rates were? If so, doesn't that tell us a lot more about the state of our tax code and how prevalent loop holes really are.

Then again, it could just be a case of 'fool me once, ....' So now the GOP is going to insist that the cuts come first.

I'm certainly in favor of that tack.
 
During the original fiscal cliff discussions, the GoP proposed closing those same loopholes, rather than raise rates. Closing loopholes would have been the smarter way to go, because lower tax rates help the small businesses more than closing loopholes do.

The reason the GoP doesn't want to close those loopholes now is that they already raised rates. They're not going to let democrats get both rate increases AND closed loopholes, at least not without SERIOUS budget cuts.

As a conservative, I'd at least be willing to close some loopholes at this point, if we could get a balanced budget amendment introduced and fix entitlements once and for all.
 
I think it wil take a massive crisis to fix this because everybody is entrenched in their mythology.

Right now we are doing the equivalent of telling a family that takes in $230,000 a year and expends $380,000 that they can't spend $40 every friday for a meal at Fudruckers and everybody is screaming like lilttle pigs being castrated. Hell yeah we're going to have to cut defense, cut entitlements, raise taxes on everybody, even those that get tax credits without paying taxes. Anybody think starving the welfare queens is going to put this back in order? Somebody must or we wouldn't have this crescendo of whining over every tiny effort to solve a massive problem.

Sure I know your pet government issue that blocks revenue or maintains spending levels is just a drop in the bucket, but it's going to take a lot of drops and a lot of hardship all around.
 
Found this chart off a New York Times report.... For anyone wondering how Bush's second term compares to going into Obama's second term. I don't see where these dollars are indexed, or if that even makes sense in an 8-year period. But figures there is some inflation to factor into the numbers.

Also, I'm not sure these defense figures are correct. I keep hearing that defense spending has been reduced by Obama, but that due to gag orders at the Pentagon no one is allowed to talk about it.

These charts could be bogus in a lot of ways. Just now have seen this comparison.

I'm guessing that fiscal 2011 is not the same as a 2011 proposed budget that would be for 2012?

Overall, something has got to give in the tax & spend (and borrow) formula. The country cannot sustain this, and some President or Party has got to man up and deal with it and quit pipe-dreaming.

Interactive Chart (AP) on NY times website

The orange is Bush's second term in 2003. The blue is BO's proposed 2011 budget. I'll show the comparisons first, then the 2011 budget proposal. If you click on the link, you get that one then toggle the tabs for the other material.

2003-2011-budgets_zps5e2df173.jpg


BO-2011Budget_zps6011b40a.jpg
 
I think I saw where Boehner is only offering to close loop holes if they lower tax rates. Of course they don't want to close loop holes since the Dems already got a tax increase. Some of the loopholes that they speak of would be more costly to wealthy taxpayers and miss the middle class, but they would only give those away if they lower the tax rates. I think I read where Krauthammer said that even if he got all the income for the last 100 years on those with corporate jets and the taxes they bring in it. would only run the government for about 6 weeks, could be wrong on that, but I think that was it. That's a pretty interesting chart Hu. My question is always how much more money are we spending on national security since 9/11? Homeland Security and the war on terror that followed ballooned our budget and debt. That seemed to hurt Bush and his legacy.
 
I may have to figure out what that low 20% income level is and decide it I'd be better off destroying my lifestyle and joining that 20%.
In reply to:
Click to expand...
 
Get rid of all tax loopholes and tax exempt organizations.

I can only imagine how much tax revenue we could generate from Tax Exempt organization, some of the most corrupt organizations in our country.
 
Major, you say get rid of all the tax loopholes, so what you want is to get rid of all the deductions on a tax return? if the answer is yes I don't have a problem with that stance as most deductions are governments way of pushing certain behaviors.

As for your second point of doing away with tax exempt organizations and you calling them corrupt, I'd like to know why you think that? There definitely are some that are corrupt but there are also a lot of these organizations that do a lot of good around the country and world that wouldn't get done otherwise. Oh and btw, many of these will lose out on a lot of funding if people don't get a tax deduction for giving them money, so you want to basically hit them twice. These organizations do more for the truly needy then the government could ever hope to do.
 
The problem is the term "loop hole". We need to get rid of it.

Is it a tax deduction? Is it an accounting principle applied to every business in that industry? Is it a subsidy? Is it a credit? Loop hole implies an unintended "out" that people are using to their advantage. Everything I just listed was put there specifically so people WOULD use it - the questions need to involve whether those are still advantageous, if we can still afford them and what adverse outcomes will result if they go away. The point about charitable giving and non-profits is a good example of that.
 
prodigal, that was the point I was trying to make in the 2nd post. There are very few if any true loopholes now. What they are talking about when the politicians say loop hole are deductions such as the deduction you get for your mortgage interest. This is not a loophole as people think of loopholes but instead a specific deduction that Washington used to push people towards home ownership.
 
I personally think tax exempt organizations for the most part exist strictly to make money off of people. Think of all the money that has been donated through the years to so many different so called charities. How much money is wasted, how about scams like the United Way, not even a charity but a broker of charities. Susan Komen and funneling money to other charities. Draw a line and my line is no tax exempt organizations. People need to learn to take care of their own, there is a charity for everything and they use that guise to steal more and more money. It is just too good of a feel good for anybody to say anything or do anything about it.

I don't think people only donate for the taxe exemption, I am sure it encourages, but I don't think that would hurt the organization in the long run, it would definately weed out the corrupt organizations.

I just think the charity industry is a huge scam and under the guise of helping people.
 
not to fan your flames on the charity front but here is an article about athletes and their foundations losing their exempt status and ARod's foundation specifically.

I would say there are lots of good charities that do a lot of good work that would hang around. I'm just not sure if they would continue to get donations at least not at the same levels.
 
The problem is that the actions of the bad outweigh the actions of the few. If the good ones are truly good and have good causes they would be able to adjust and probably in the long run get a bigger piece of the pie as it would eliminate the scammer organizations.

If we need revenue, this is an tapped source, then again the government would just waste it anyway.

How about a bill that all tax revenue from charity organizations go directly to the debt and can't be tapped for anything else. Once the debt is gone, we can look at re-instating their tax exempt organization.
 
So this thread caught my attention as I started completing my tax returns to determine what I would likely owe to good old Uncle Obama and various states across the country which punish me for creating jobs in their state.

As I understand the definition, are you seriously interested in eliminating all loop holes as defined?

"A tax loophole is an exploitation of a tax law that can reduce or eliminate the tax liabilities of the filer."

I for one use every possible "loop hole" I can. I itemize everything I legally and possibly can including mortgage interest, charitable contributions, HSA, 401K funding, sales taxes, business expenses, etc. I follow the law and unfortunately our politicians have also figured out a way to further demonize those of us who pay the majority of taxes. I take the time to manually key in every receipt I have to capture much more than the standard deduction for sales taxes in the state of Texas. Demonize me if you want.

My total tax bill will once again exceed 6 figures. I do not mind paying taxes, but I do not like the fact I pay so much versus a large percentage that pay nothing.
mad.gif
 
I can understand why you would object to the term loophole. It is not an adequate description.

I am speaking about legitimate tax policy that is used to promote certain things. The tax policies that are so heavily lobbied for by major corporations and major party donors.

IMO, tax abatements, tax credits and such should almost all be done away with. They are subversive to a true capitalistic economy. They disguise competitiveness and raise the barrier to entry to new players. They create false economic priorities and demand.

If I were king for a day, tax policy would have a 5 yr shelf life. In order to be re-approved the tax policy in question would have to have a stand alone vote and would have to get a 60% approval vote to remain and then a 70% thereafter.

Inertia of tax policy is what kills us. once it is in there, it gets a prefunctory review when it comes around again.

While I don't fault people or corporations for taking advantage of what is available, I do fault those that actively lobby for the taxpayer gift and I do fault those that continue to give away taxpayer money to corporations and wealthy indivuals in the form of tax credits and such.
 
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