Guess what time it is!!!

[97stscaddy]

Tax time! That's right, time to get happy! Time for some money from the government. Money they shouldn't have had their grimey little paws on in the first place.

Now for those of us who are able to file a simple 1040, this process is relatively simple. But one of these days it won't be. Filing your taxes will eventually become a time consuming mess, and if you don't want to deal with it then you'll wind up paying someone else to do it for you.
Small business owners know full well what I'm talking about.

Anyway, here's a thought. When you get your W2 forms, if you haven't already, look at that box that says Federal Income Tax Withheld. Think about that number for a while. Then add the two numbers in the boxes underneath that one to it. Divide that total by twelve. Should come out to a couple hundred bucks for most people. That's how much money the U.S. Government took from your paycheck every month during the last year.

Think about what that money has funded over the last year. A war, A failing medical system, a failing social security fund. There may have been some good causes... somewhere...
What did that money do for you? When you think about it, probably not a damn thing.

Now think about if you had been able to keep that couple hundred bucks every month to put towards, Oh I dunno, how about a savings account? Maybe pay some bills with it? Rent? A big new TV? Or maybe you're a giving person and you'd like to have given some of that to a charity of some kind, like a Children's Hospital?

So back to that W2. You have to file this thing with the Infernal Revenue Service before April 15th. Like I said earlier, for some lucky (or not so lucky depending on how you want to look at it) people it's easy. But for others it could take hours of itemizing deductions so that maybe you can get a little extra back in that check. Or maybe you take the easy route and tote that shoe box full of receipts down to a tax preparer and just pay them to make it all go away... until next year at least. Either way its a waste of time, but not time well wasted.

Imagine if it would all go away for good. Imagine you had gotten that long lost money in your paycheck every month like you were supposed to, instead of seeing it disappear without even missing it. Imagine you didn't have to tell the government how much money you made last year, since it should be none of their business anyway. Sound good?

Just let it sink in. Then go to this website because you know you want to. http://www.fairtax.org
Now imagine that.

 

[04SCTLS]

It all sounds good but it will never happen.
He who pays the piper calls the tune and there's too many
lobbyists paying off politicians from both parties who prostitute themselves for contributions.
In the last 40 years corporations with their clever lawyers and accountants and lobbying efforts have lowered their contribution to the Treasury from 35% to 16% and will fight tooth and nail to preserve their gains.
Historically the rich have always made money off the poor
from slavery onto 30% credit card rates for people who can least afford to pay the charges.
Even the whole subprime meltdown is the shortsighted rich exploiting the poor which has now come back to bite
the lenders and threatens the future wellbeing and solvency of the Greenback.
With their lobbyists I'm sure the banks will get a bailout from the government which will use poor people's money
to save the rich.
Sales taxes cost poor people more of their percentage of income than millionaires.
Smaller corporations like mine still pay 35-40% taxes even as "S" corps and have to prepay taxes based on last years profits before even before filing a return.

"They live in the US and use government funded services. But under the current system, illegal immigrants do not pay federal income taxes"

The above statement is not true or disingenuine at best.
Anyone with a fake or stolen SS# has all the taxes deducted but never files a return or gets any real credit for their contributions.
The treasury profits by ten's of billions of dollars but it's almost never mentioned.
Kinda like listing the expenses to society of smoking without including the taxes the government gets from the sales of cigarettes.
I'll bet the government actually makes money from smoking as it kills off most of the pensioners and saves Social Security billions.
It seems only crackpots like Huckabee put forth and try and champion these flat tax plans but in a delicious irony
we can thank God (he he) that he won't get the nomination.
Any entity thought by many to have created the universe would surely pick a smarter candidate than Huck to talk to.

 

[shagdrum]

In the last 40 years corporations with their clever lawyers and accountants and lobbying efforts have lowered their contribution to the Treasury from 35% to 16% and will fight tooth and nail to preserve their gains.

I would like to know where you got that "35% to 16%" figure. Does that include the double taxation on all corporations?

Even the whole subprime meltdown is the shortsighted rich exploiting the poor which has now come back to bite

The poor have responsibility here too. They were foolish enough to get a apply for and accept a loan they had no business with. "Let the buyer beware". If you don't research your purchase and budget properly, you are responsible when you go belly up financially. There was irresponsibility on both the part of the lender and the person accepting the loan.

It should also be noted that congress was pushing the lenders to mke these loans, to "give the poor, and underprivilaged a chance at the american dream."

With their lobbyists I'm sure the banks will get a bailout from the government which will use poor people's money to save the rich.

Where do you get that? If the government is using tax dollars to bailout the banks, they are using the money of the rich, not the poor. People below the poverty line don't pay any taxes, and the middle class hardly pay any taxes. 86% of all federal income taxes are payed by the upper 25%. The top 50% pay 97%, and the top 1% pay 39% of federal income tax. Not exactly a "fair" tax code.

Sales taxes cost poor people more of their percentage of income than millionaires.

This is irrelevant on its own. The rich will still pay more as an actual monetary figure, and as a percentage of all taxes paid. Also, the poor will have less then, or equal to a percentage of their income going to taxes as they do in the current system.

to claim "Sales taxes cost poor people more of their percentage of income than millionaires", suggests that the tax system is ment to "punish" the rich, which is ultimately what many liberals view the purpose of the tax system as.

 

[04SCTLS]

Billionaire Buffett still complaining his taxes are too lowDavid Edwards and Muriel Kane
Published: Tuesday October 30, 2007

http://rawstory.com/news/2007/NBC_Warren_Buffett_wants_more_taxes_1030.html



Multi-billionaire Warren Buffett has been complaining for years that his taxes are too low. Last June, he said at a fundraiser for Hillary Clinton that he was taxed at only 17.7% last year on his $46 million in income, while his secretary paid 30% of her $60,000.

NBC's Tom Brokaw recently interviewed Buffett, "whose approach doesn't make him very popular with his fellow billionaires."

"The taxation system has tilted toward the rich and away from the middle class in the last 10 years," Buffett, the nation's third richest man, told Brokaw. Buffett said he did an informal survey of federal taxes paid by his own office staff, and the average was 32.9%, compared to his 17.7%.

"There wasn't anybody in the office, from the receptionists on, that paid as low a tax rate," Buffett stated, noting that "I have no tax planning, I don't have an accountant, I don't have tax shelters."

"It's not right," one of Buffett's receptionist's told Brokaw.

"In theory, a progressive consumption tax makes the most sense," Buffett suggested to Brokaw -- referring to a form of sales tax that exempts basic necessities entirely and has higher rates on luxuries. However, that method has been criticized as likely to lead to distortions in the economy and corruption in setting rates.

Buffett has now challenged his fellow members of the "Forbes 400" to do the same survey he did, saying he'll bet a million dollars their average rate will be less than that of their receptionists.

"How much are you hearing from your fellow richfellows?" Brokaw asked.

"I don't hear from them. They're happy," chuckled Buffett.

The tax code has not been a major issue among the presidential candidates, but Rep. Charlie Rangel (D-NY) has recently offered a plan to increase taxes on super-wealthy hedge fund managers, who currently pay at the 15% capital gains rate, while lowering them for most families that earn under $500,000.

 

[04SCTLS]

I suppose shagrum I've moved up from the middle class
to the rich top 2% since I've already prepaid $800,000.00
for 2007 based on my 1.9 million in income for 2006.
Even when I was only paying myself 100,000.00 a year
my tax rate was close to 40%.

What do you mean by corporate double taxation.
I've been an "S" corporation for the last 3 years.
In case you don't know what that means an S corp owner's corporation profit is considered his/her personal income and only taxed once.
A "C" corp which is the standard pays income tax on it's profits and then the owner(s) pay income tax on their earnings.
An S corp vs C corp tax rate is about 5% lower which is substantial for someone at my level of income.

 

[04SCTLS]

Perhaps I misspoke as to 16% corporate tax rate.
This article makes it out to be closer to 27%

High Corporate Tax Rate Is Misleading
By Igor Greenwald |Igor Greenwald Archive |Published: January 25, 2008

http://www.smartmoney.com/invisiblehand/index.cfm?story=20080125-corporate-tax-rate&nav=RSS20


IF YOU SAY SOMETHING long enough and loud enough, there's every chance people will come to believe it's true, especially if your opponents tire of rebuttals.

This time-honored political strategy has been working overtime of late, as Republican presidential hopefuls romance the richer Florida retirees with appeals for cuts in corporate taxes.

You may have heard: U.S. corporations face one of the highest income tax rates in the world, though the mention of "rate" is often enough excised, so that what comes through is the assertion that corporations pay too much in taxes. This is simply untrue if your basis for comparison is the developed world. The truth is that while the 35% corporate income tax rate is high indeed, the creativity and global reach of U.S. corporations make them among the most lightly levied.

Between 2000 and 2005, U.S. corporate taxes amounted to 2.2% of the GDP. The average for the 30 mostly rich member countries of the Organization for Economic Cooperation and Development was 3.4%.

Why the disparity given the high federal rate, which rises to 39% counting state taxes? Part of the answer is that big U.S. companies have become expert at hiding profits in tax havens overseas. And many of the smaller ones simply pass through their income to owners who then report it on their personal returns.

According to one analysis, if so much corporate income hadn't moved to the personal tax rolls over the last 20 years, U.S. corporate taxes would account for 3.2% of the GDP, still a bit below the OECD average. "Usage of pass-through forms of business organization can be viewed as a form of 'self-help' corporate tax integration," writes Peter R. Merrill, a partner at PricewaterhouseCoopers.

The income not squired away overseas or channeled to the personal returns still enjoys protection in the form of various tax breaks that depress the effective rate to 27%, according to the Treasury Department. Such breaks are expected to cost the Treasury $1.2 trillion over the next 10 years, reducing the corporate tax revenue by 25%.

Meanwhile, there's growing evidence that, despite the occasional crackdowns on especially creative tax accounting, routine corporate tax dodges are way up by historical standards, as multinationals play an increasingly profitable shell game.
According to one study, corporate taxable income has increasingly diverged from the (much higher) financial profits reported to shareholders. Another more recent analysis estimates that the effective corporate rate in the U.S. peaked at nearly 32% in 2000 but has declined to 25% by 2005.

There are so many ways to play the game: One can park valuable royalty-bearing intellectual property with foreign subsidiaries (hello, Microsoft (MSFT: 32.94, -0.31, -0.93%)) or merely make sure that U.S. operations incur tax-deductible interest payments by borrowing money from cash-rich subsidiaries overseas. This is what's known in industry parlance as "income-shifting." It passes the time while one waits for the next U.S. tax holiday on repatriated overseas profits.

It doesn't take a rocket scientist to figure out the solution here: Drop the corporate income tax rate to, say, the Swedish socialist level of 28% to reduce the attraction of tax havens, while eliminating the broad exemptions and industry-specific perks that have turned our tax code into Swiss cheese feeding a regiment of millionaire tax lawyers. Make sure the total share of the tax bill sent to corporations either stays the same or goes up. In recent decades, corporate receipts have declined dramatically in relation to the highly regressive payroll taxes. It's long past time to reverse that trend, restoring work incentives to what they once were.

 

[shagdrum]

I suppose shagrum I've moved up from the middle class
to the rich top 2% since I've already prepaid $800,000.00
for 2007 based on my 1.9 million in income for 2006.
Even when I was only paying myself 100,000.00 a year
my tax rate was close to 40%

.

Congrats on the success, an thanks for the student loan/scholarship money.

What do you mean by corporate double taxation.

Was reminded about it in my accounting class, the other day. Tax on money from corporate profits, then that money is taxed again when it given to the owners in the form of dividends.

I've been an "S" corporation for the last 3 years.
In case you don't know what that means an S corp owner's corporation profit is considered his/her personal income and only taxed once.
A "C" corp which is the standard pays income tax on it's profits and then the owner(s) pay income tax on their earnings.
An S corp vs C corp tax rate is about 5% lower which is substantial for someone at my level of income.

So, an "S" corp is kinda like partnership (at least in regards to taxes), while a "C" corp is closer to a traditional corporation with shareholders, etc..
Correct?

 

[shagdrum]

Perhaps I misspoke as to 16% corporate tax rate.
This article makes it out to be closer to 27%

High Corporate Tax Rate Is Misleading
By Igor Greenwald |Igor Greenwald Archive |Published: January 25, 2008

http://www.smartmoney.com/invisiblehand/index.cfm?story=20080125-corporate-tax-rate&nav=RSS20


IF YOU SAY SOMETHING long enough and loud enough, there's every chance people will come to believe it's true, especially if your opponents tire of rebuttals.

This time-honored political strategy has been working overtime of late, as Republican presidential hopefuls romance the richer Florida retirees with appeals for cuts in corporate taxes.

You may have heard: U.S. corporations face one of the highest income tax rates in the world, though the mention of "rate" is often enough excised, so that what comes through is the assertion that corporations pay too much in taxes. This is simply untrue if your basis for comparison is the developed world. The truth is that while the 35% corporate income tax rate is high indeed, the creativity and global reach of U.S. corporations make them among the most lightly levied.

Between 2000 and 2005, U.S. corporate taxes amounted to 2.2% of the GDP. The average for the 30 mostly rich member countries of the Organization for Economic Cooperation and Development was 3.4%.

Why the disparity given the high federal rate, which rises to 39% counting state taxes? Part of the answer is that big U.S. companies have become expert at hiding profits in tax havens overseas. And many of the smaller ones simply pass through their income to owners who then report it on their personal returns.

According to one analysis, if so much corporate income hadn't moved to the personal tax rolls over the last 20 years, U.S. corporate taxes would account for 3.2% of the GDP, still a bit below the OECD average. "Usage of pass-through forms of business organization can be viewed as a form of 'self-help' corporate tax integration," writes Peter R. Merrill, a partner at PricewaterhouseCoopers.

The income not squired away overseas or channeled to the personal returns still enjoys protection in the form of various tax breaks that depress the effective rate to 27%, according to the Treasury Department. Such breaks are expected to cost the Treasury $1.2 trillion over the next 10 years, reducing the corporate tax revenue by 25%.

Meanwhile, there's growing evidence that, despite the occasional crackdowns on especially creative tax accounting, routine corporate tax dodges are way up by historical standards, as multinationals play an increasingly profitable shell game.
According to one study, corporate taxable income has increasingly diverged from the (much higher) financial profits reported to shareholders. Another more recent analysis estimates that the effective corporate rate in the U.S. peaked at nearly 32% in 2000 but has declined to 25% by 2005.

There are so many ways to play the game: One can park valuable royalty-bearing intellectual property with foreign subsidiaries (hello, Microsoft (MSFT: 32.94, -0.31, -0.93%)) or merely make sure that U.S. operations incur tax-deductible interest payments by borrowing money from cash-rich subsidiaries overseas. This is what's known in industry parlance as "income-shifting." It passes the time while one waits for the next U.S. tax holiday on repatriated overseas profits.

It doesn't take a rocket scientist to figure out the solution here: Drop the corporate income tax rate to, say, the Swedish socialist level of 28% to reduce the attraction of tax havens, while eliminating the broad exemptions and industry-specific perks that have turned our tax code into Swiss cheese feeding a regiment of millionaire tax lawyers. Make sure the total share of the tax bill sent to corporations either stays the same or goes up. In recent decades, corporate receipts have declined dramatically in relation to the highly regressive payroll taxes. It's long past time to reverse that trend, restoring work incentives to what they once were.

I think, what it comes down to is, what defines a "fair share" or "fair tax rate". It seems the author is defining it by comparison to the rest of the world. I wouldn't go with that definition. The fact that our country has been the standard for the world, and even still what drives the world economy is in large part because of the corporations and businesses driving the economy. I know that we are currently having economic trouble, dollar declining, housing market bubble bursting, all that, but is that due to our corporate taxes and the corporations finding clever ways around paying those taxes?

What are the purpose of taxes? When they are defined as "fair" or "unfair", this suggests a social purpose. What that social purpose is (especially in the current tax code), is to effectively punish wealthy people (and more successful corporations) for their success, in an attempt to make everyone equal. Making people equal is not the governments job (recognition of equality is different from making people equal). Taxes aren't to be a tool for social change. It isn't even the governments place to try and force social change (at least not in the USA). In this country, taxes are to fund a limited government. **Now I'll get off my soapbox**

I would think, if the government cut corporate taxes, that would boost the economy.

Something else that crossed my mind...
How were those rates calculated? You could argue that the extra financial burden that a corporation pays to the government due to government regulations and policies add to an "effective corporate tax rate". Corporations certianly have a lot more restrictions and costs due to those restrictions then an individual tax payer. How does this figure into what is a "fair" corporate tax rate? The article does mention an effective corporate tax rate; I would love to see what all goes into that calculation.


Also, that article cites multinational corporations being able to dodge some american taxes because they are in other countries too. What about the taxes they pay in those countries?

 

[04SCTLS]

Yes,
An S corp files a tax return but pays no taxes in it's name.
As the owner, the corporation's profit is considered my personal income and I'm personally taxed at the personal rate for it.
I pay myself a taxed salary throughout the year to live on but my accountant combines that with the company income.
After taxes have been paid I can take money out and invest it for retirement or lend it back to the company
at prime.
My accountant's bill last year was about $11,000.00
but I'm expecting it to be more this year as I purchased
a large building for just under a million with 1/2 down.

 

[04SCTLS]

What's "fair" becomes different when one has big income and pays big taxes.
We all think we pay too much and the government wastes our money but at 50, I'm not too greedy, pay my workers well, offer subsidized health insurance and a 401K plan, and am happy I get to keep about 65% of my income less sales taxes I pay on consumer purchases.
One of the things that attracted me to my 04 LS was what a bargain it was when I bought it almost a year ago for 18,900 with 22k on the clock.
I could easily buy a BMW or Mercedes but as a newly rich person my values haven't changed much from when I was only middle class and a car however nice is but only an appliance.
Sam Walton of Walmart fame drove around in a used pickup truck.
I'm at a point in my life that I have the security not to worry too much about whomever may get elected.
I'm in the owners club and ultimately politicians of both parties really cater to the owners in this country as we are the one's who generate the wealth. We are the horse and they are just the cart.

 

[04SCTLS]

You could argue that the extra financial burden that a corporation pays to the government due to government regulations and policies add to an "effective corporate tax rate". Corporations certianly have a lot more restrictions and costs due to those restrictions then an individual tax payer. How does this figure into what is a "fair" corporate tax rate?

Corporations do have more restrictions and government regulations to put up with which take effort and cost money however this is more than compensated for with tax breaks for research and development, empire zone designations, accelerated depreciation and other tax write offs such as travel and expense accounts to name a few.
I don't know if this is still in effect but a business owner could buy an SUV that weighs more than 6000 lbs and write off the total cost in 1 year as it was in the same category as a piece of farm equipment under the tax code.

A taxpayer whose taxes are deducted at source hardly has the same writeoffs available as a corporation does.
There really isn't much of a comparison.

 

[shagdrum]

What's "fair" becomes different when one has big income and pays big taxes.

Yeah, I just think "fair" is a term used in the current debate that isn't well defined. People substitute their own definition to meet their own ends and promote their own agenda.

We all think we pay too much and the government wastes our money but at 50, I'm not too greedy, pay my workers well, offer subsidized health insurance and a 401K plan, and am happy I get to keep about 65% of my income less sales taxes I pay on consumer purchases.

Wish I was sittin where you are. Maybe in another 10-20 years...

One of the things that attracted me to my 04 LS was what a bargain it was when I bought it almost a year ago for 18,900 with 22k on the clock.
I could easily buy a BMW or Mercedes but as a newly rich person my values haven't changed much from when I was only middle class and a car however nice is but only an appliance.

One of my friends drives an LS (he is a muscle car nut, but loved the look of the LS and got a good deal). I love the platform and the looks and overall quality of materials. My only issue was that I wanted to be able to modify my car, and the Mark VIII has a better aftermarket (at least where the engine is concerned). Those LS cars are nice!! The last great car Lincoln created, IMO.

Sam Walton of Walmart fame drove around in a used pickup truck.

Yeah, that is still ingrained in Walmart from what I understand. Part of the reason they can keep costs down. When they have corporate meetings, people don't fly 1st class. When the go out to eat, it's someplace relatively cheap.

I'm in the owners club and ultimately politicians of both parties really cater to the owners in this country as we are the one's who generate the wealth. We are the horse and they are just the cart.

I like that analogy.

 

[shagdrum]

I don't know if this is still in effect but a business owner could buy an SUV that weighs more than 6000 lbs and write off the total cost in 1 year as it was in the same category as a piece of farm equipment under the tax code.

Was that just for business owners? I thought that anyone could do that, assuming it was for "business" reasons.

 

[shagdrum]

Yes,
An S corp files a tax return but pays no taxes in it's name.
As the owner, the corporation's profit is considered my personal income and I'm personally taxed at the personal rate for it.
I pay myself a taxed salary throughout the year to live on but my accountant combines that with the company income.
After taxes have been paid I can take money out and invest it for retirement or lend it back to the company
at prime.
My accountant's bill last year was about $11,000.00
but I'm expecting it to be more this year as I purchased
a large building for just under a million with 1/2 down.

So, how does that effect legal liability? I know in a sole proprietorship, or a partnership, if you are sued, they can go after your personal assets as well as the company assets. Is that the same for a "S" corporation, or is it kinda the best of both worlds here?

 

[04SCTLS]

I think Walmart overdoes it with their stinginess but no one's forcing people to work there.
Yes an S corp is an LLC (Limited Liability Corporation) so it is the best of both worlds.
Not sure if a private owner can write off an over 6000 lb vehicle for business but I'm sure it helps if said vehicle is registered to a corporation.
I'll bet there's a lot of doctors, lawyers, farmers and other sole proprieters or parnerships that are registered as S corps due to the advantages.
I think the only caveat is that in a C corp if you pay yourself too much the tax department can re assess you argueing that you should be paying more taxes due to the higher corporate tax rate vs personal rates.
An S corp takes care of that but is only worth it if you have a high overall income.
As to the LS yes there's less power mod stuff but mine's pretty quick with my custom CAI, SCT tune and Mina mufflers.
And when I get the urge I just take my 400+ hp supercharged 97 LT-1 Camaro covertable out for a spin.
It's as fast as a bike, always chirps the tires with the full race auto and used to be my daily driver (even winters before I put the RS skirt kit on) till I got the LS.
And it's taken me 25 years to get where I am so with some hard work, a little luck and getting on a good horse
shagdrum you should be very succesful, maybe in a shorter time than I.

 

[97stscaddy]

Thank you both for the short lesson in corporate taxes. That's a nice looking Camaro as well.

It all sounds good but it will never happen.

Thats exactly the kind of attitude that would prevent the FairTax from becoming a reality and the law.

In the last 40 years corporations with their clever lawyers and accountants and lobbying efforts have lowered their contribution to the Treasury from 35% to 16% and will fight tooth and nail to preserve their gains.

You may know more than I on this, being in the business world, but would that have anything to do with so many corporations moving their operations out of the country or outsourcing to avoid the Corporate tax burden?

Sales taxes cost poor people more of their percentage of income than millionaires.

This is true. But millionaires do pay more actual tax when the amount is viewed as a monetary value. Also the FairTax is constructed in a way that it relieves everyone household in the U.S. of the sales tax burden up to a set level of spending.

Even the whole subprime meltdown is the shortsighted rich exploiting the poor which has now come back to bite
the lenders and threatens the future wellbeing and solvency of the Greenback.

Congress did play a part in this as Shagdrum pointed out. And if you really want to find a place to put the blame you can trace it back to the poor and middle class who complained about banks being unfair when they couldn't get approved for a loan.

I'm really not sure how Buffett calculates his 17.7% tax liability. It would be interesting of someone could shed more light on that subject.
This is a quote straight form The Tax Foundations website:
"In 2005, the top 1 percent of tax returns paid 39.4 percent of all federal individual income taxes and earned 21.2 percent of adjusted gross income, both of which are significantly higher than 2004 when the top 1 percent earned 19 percent of AGI and paid 36.9 percent of federal individual income taxes."

I'm in the owners club and ultimately politicians of both parties really cater to the owners in this country as we are the one's who generate the wealth. We are the horse and they are just the cart.

There you have the key to one of the main purposes behind the FairTax, to create wealth.

When rich people have more money they tend to invest that money. Whether it be in the stock market, or in a new business, or in their own private ventures. When it comes right down to it, when the rich spend their money, everyone else profits from it.

 

[04SCTLS]

It is very hard to alter the status quo and a change as radical as a flat tax would meet an all out war from powerful interests who profit from the current situation.

US based corporations are required by law to declare their worldwide income. They get credit for taxes paid in other countries.
The main advantage to moving operations overseas and outsourcing comes down to simply cutting costs.
The principle of comparative advantage comes into play.
It is cheaper to produce in countries with emerging economies because workers can buy more value than an equivalent wage buys americans.
Essentially workers in emerging economies are improving their standards of living substantially on the lower wages
companies pay there. The money goes a lot further there.
Add to that less regulation by governments eager for foreign investment and expertise and you get an unbeatable combination.
Money knows no nationality,has no patriotic sentimentality,
and large multinational corporations are responsible only to their shareholders exhisting to make as much money as possible.
Corporate tax rates in the US are not the primary motivation for moving operations and production offshore.

People who can't afford to pay back loans should not be lent money and it was sheer folly on the part of government to encourage such shortsighted recklessness.

Rich people do create more wealth with their money.
With the profits my company has made I've put away a big chunk for retirement and the rest is being reinvested
in expanding our product lines with complimentary items that can be sold through exhisting distribution channels that are already set up for our current products.

Rich people have paid a higher percentage of the taxes recently because they have gotten richer while the average american worker's income has stayed the same or lost ground.

 

[04SCTLS]

Oh
and thanks for the compliments about my Camaro.

 

[shagdrum]

Here is an interesting article about the whole subprime thing...

http://www.townhall.com/columnists/WalterEWilliams/2008/01/23/subprime_bailout

A subprime lender is one who makes loans to borrowers who do not qualify for loans from mainstream lenders. It's a market that has evolved to permit borrowers with poor credit history and an unstable financial situation the opportunity to get home mortgages. The catch is they pay a higher and typically an adjustable rate mortgage (ARM). Encouraged by the housing bubble, easy credit, along with the expectation that housing prices would continue to appreciate, many subprime borrowers took out mortgages they could not afford in the long run, particularly if interest rates rose and housing prices depreciated.

As with most economic problems, we find the hand of government. The Community Reinvestment Act of 1977, whose provisions were strengthened during the Clinton administration, is a federal law that mandates lenders to offer credit throughout their entire market and discourages them from restricting their credit services to high-income markets, a practice known as redlining. In other words, the Community Reinvestment Act encourages banks and thrifts to make loans to riskier customers.

According to an article in The Atlanta Journal-Constitution (11/04/07) titled "Black Atlantans often snared by subprime loans," by Carrie Teegardin, a national study of credit scores, not just mortgage loan applicants, found that 52 percent of blacks have credit scores that would classify them as subprime borrowers compared with 16 percent of whites.

Many lenders did make loans to people who had no realistic ability to pay them back. But that doesn't qualify as fraud, although there might have been a bit of exuberance in the repackaging of the mortgages into securities and selling them to investors. Some argue that many borrowers defrauded the banks by misrepresenting their income, the so-called "no doc" loans or "liar's loans".

President Bush's plan to deal with the subprime crisis is to freeze interest rates on adjustable rate mortgages. Freezing interest rates would stop people's mortgage payments from increasing. That is a gross violation of basic contract rights and would appear to be a Fifth Amendment violation. If a contractual agreement is willingly entered into and agreed upon by a borrower and lender, it is binding and if broken by one party or the other, harsh penalties should ensue. Now here comes government, under the Bush plan, to declare millions of contracts null and void. The long run effect of the Bush plan is to make lending institutions even more selective in choosing borrowers. Then there's the question: If government can invalidate the terms of one kind of contractual agreement where the borrowers can't pay, what's to say that it won't invalidate other contractual agreements where the borrowers encounter hardship and what will that do to financial markets?

The Bush bailout, as well as Federal Reserve Bank cuts in interest rates, is a wealth transfer from creditworthy people and taxpayers to those who made ill-advised credit decisions, and that includes banks as well as borrowers. According to Temple University professor of economics William Dunkelberg, 96 percent of all mortgages are being paid on time. Thirty percent of American homeowners have no mortgage. Delinquency rates were higher in the 1980s than they are today. Only 2 to 3 percent of all mortgages are in foreclosure. The government bailout helps a few people at a huge cost to the rest of the economy.

Government policy got us into the subprime mess and government's measure to fix the mess is going to create more mess. As such I'm reminded of Marcus Cook Connelly's spiritual play, "Green Pastures," where God laments to the Angel Gabriel, "Every time Ah passes a miracle, Ah has to pass fo' or five mo' to ketch up wid it," adding, "Even bein' God ain't no bed of roses." That's something the president and congressmen should think about and leave the miracle business up to God.



Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of More Liberty Means Less Government: Our Founders Knew This Well.

 

[fossten]

As much as I like the fairtax, I like Ron Paul's tax plan better - zero income tax replaced by no tax.

 

[04SCTLS]

And they say youth is wasted on the young.
After taxes we can abolish death...
Revolution Now !!

 

[fossten]

And they say youth is wasted on the young.
After taxes we can abolish death...
Revolution Now !!

There were no income taxes before 1913. Was there no death either?

 

[04SCTLS]

Yes of course,
Death came about as a direct result of the income tax.
Everyone knows that.
Before then life was worth living.
Not like now with electricity jetliners, american idol and petrochemicals to curse us.

But seriously fossten I suppose we import enough stuff that we could just raise taxes on that to fund the modern life most of us seem to be enjoying.
Isn't that what funded the government before the "temporary" income tax.
Of course a temporary tax is an oxymoron just like military intellegence, progressive conservative and good government.

 

[97stscaddy]

Only 2 to 3 percent of all mortgages are in foreclosure.

Exactly, but the reason this has been thrown into the spotlight lately is because the foreclosure rate has gone up so much in just the past 2 years.
from CnnMoney.com, Jan. 17, 2007: "The number of homeowners entering into some stage of the foreclosure process in December was 109,652, down 9 percent from November but up 35 percent from December 2005, according to RealtyTrac."

Anyway, back to taxes.

No taxes would be freakin awesome! But what would happen to our infrastructure if everyone stopped paying taxes? Who would fund our military if god forbid our country came under attack? There is a purpose for taxes, to fund a limited government. That was the original purpose of having taxes. Then little government grew up into big brother government that has to take care of all of us. And it'll continue to grow as long has power hungry politicians can get their hands on our hard earned money.

We need to limit the size of our government but the way things are right now that would be impossible. So the best way to start is to make sure that they can't just take more and more money out of our paychecks every two weeks. The FairTax does that by making it so government doesn't even come close to your paycheck or your earnings until you choose to spend it. As it is now they can take 100% of our paychecks if they choose to. They wont do that because people would get pissed, but there is no law that says they can't.

 

[Calabrio]

The problem I have with the Fair Tax is the 16th Amendment.
It is foolish to pass the Fair Tax before the income tax is repealed. Otherwise, it's just a matter of time before we're facing both - a national sales tax and a federal income tax.