Apple Paid $6 Billion in Federal Income Tax in 2012, 1/40 of All U.S. Corporate Income Tax Collected

[Bregalad]

Originally Posted by darkplanets

To be clear, I support:
-Closing tax loopholes
-A flat tax (which means a flat percentage)
I don't think we're very much in disagreement -- everyone should be even before the tax code, so the 100k person and the 10 million person BOTH pay 25%.

OK a flat tax, but also a flat deduction for living expenses.

Every citizen of a wealthy nation should be entitled to earn their basic living expenses tax free. Tax should be levied only on earnings beyond that needed to keep them at an acceptable minimum standard of living.

To make the math simple I'll say an American family should be allowed to earn their first 25k tax free and then be taxed on everything after that.

So the 100k family pays 25% tax on 75k
The 10m family pays 25% tax on 9.975m

As you can see the effective tax rate is lower for the 100k family than it is for the 10m family, but both are still equal before the tax code.

But I suspect my grandchildren will be 6 feet under before anyone takes that kind of proposal seriously.

[Eraserhead]

Originally Posted by KPOM

The railroads were originally built by the free market.

Not in the US they weren't - at least not really. The railway companies in the US were heavily subsidised with land grants to build the railways. They got about 10% of all US land to build the railways.

Its true that the railways in Britain were generally built by the private sector, but they were they then taken over by the state. It is also true that there are still genuinely private railways in Japan.

Additionally currently most modern rail infrastructure is built by the state - see all the high speed lines in Europe and especially China - although one new Shinkansen line in Japan is being built with private money.



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Originally Posted by Bregalad

But I suspect my grandchildren will be 6 feet under before anyone takes that kind of proposal seriously.

So what do you do about all the state and local taxes which are regressive?

[DrDomVonDoom]

Originally Posted by Bregalad

OK a flat tax, but also a flat deduction for living expenses.

Every citizen of a wealthy nation should be entitled to earn their basic living expenses tax free. Tax should be levied only on earnings beyond that needed to keep them at an acceptable minimum standard of living.

To make the math simple I'll say an American family should be allowed to earn their first 25k tax free and then be taxed on everything after that.

So the 100k family pays 25% tax on 75k
The 10m family pays 25% tax on 9.975m

As you can see the effective tax rate is lower for the 100k family than it is for the 10m family, but both are still equal before the tax code.

But I suspect my grandchildren will be 6 feet under before anyone takes that kind of proposal seriously.

Actually, I like the sound of this. I just got my w-2 and I was lucky enough to make 35,000 this year, at 26 I don't think I am doing horribly.

I wouldn't mind paying 25% on 15,000. Why isn't this put on that petition site on Whitehouse.gov?

[rdowns]

Originally Posted by DrDomVonDoom

Actually, I like the sound of this. I just got my w-2 and I was lucky enough to make 35,000 this year, at 26 I don't think I am doing horribly.

I wouldn't mind paying 25% on 15,000. Why isn't this put on that petition site on Whitehouse.gov?

You realize you currently pay a far lower rate than 25% on your income?

If you're single and head of household, 2013 income tax rates are 10% on your first $8925 in income and 15% on $8,926 – $36,250. That equates to paying about $2,759 (15% marginal rate) in taxes after standard deductions. If you're married filing jointly, your marginal rate drops to 10%. Under your plan, you'd pay $3,750 in taxes. Do you really believe the lower income earners could afford to have their taxes go up 35%?

[swagi]

Originally Posted by KPOM

Heathrow Airport is privately owned. It's not perfect by any stretch, but it is miles ahead of LaGuardia and JFK.

A lot of times, failures of the "free market" are the result of an overzealous government or regulators who become advocates. I think that left to their own devices lenders wouldn't have gone as crazy as they did underwiring "liar loans." But with two government-backed entities (Fannie Mae and Freddie Mac) buying up junk loans, it was almost irrational for lenders not to do it.

There is definitely a role for government, but I don't see it as a panacea either.

You could do me a favor and do some research on how well the free market works in changing the electricity grid in Germany. I'll give you a hint: It doesn't work.

Those private institutions rather let the grids deteriorate to push their agenda (i.e. forcing nuclear power upon us) than making the change.

Another example is: Whenever the free market decides it opts for the solution with the lowest cost. There is no balancing of long-term-benefit. Bayer Chemicals has a testing facility for washing out carbon-dioxide in Coal Power Plants. They then transform that carbon-dioxide into fuel. Alas this currently is more expensive than drilling up holes in the earth and shipping this stuff around the world.

If the free market really would work that great, then why is it that every technological breakthrough in emission control in cars is only there because of California (this was admittedly said by several CEOs in the automotive industry).

So in short: The free market will NEVER be the choice for quality - because the free market only cares about short-term profit and shareholder value. Nobody even considers long-term profit - and that's why outsourcing has become so ridiculously popular (with acceptance of the long-term effect that your quality goes down -> just take a pre-2000 Mac and stack it up against your current Mac. Yes, your current Mac is cheaper in every thinkable way!)

[skunk]

Originally Posted by hipnetic

I'm not interested in their services. But they won't let me opt out, and take my money by force. Hence, it is theft.

You use their services every single day.

Those things can all be provided by the free market. And they'd be better quality, and less expensive.

Absolute nonsense.

Oh well...I see that I'm wasting my time in this thread.

This would appear to be true.

[ugahairydawgs]

Originally Posted by dernhelm

It all makes Machiavelli appear absolutely pedestrian. We need simpler tax laws, Congress. Fewer loopholes; collect your $6B and let them keep the rest of their money invested here in the US.

We don't need fewer loopholes...we need NO loopholes. Knock out every single credit and deduction and then dramatically cut rates across the board, setting the top end around 15% and treating all sources of income the same.

It'll never happen in a billion years because the vast majority of our leaders are spineless when it comes to disrupting the status quo. People would also raise ten kinds of hell if we tried to do away with the mortgage deduction and child tax credit...as if we need to somehow subsidize every decision a person makes.

[rdowns]

Originally Posted by hipnetic

I'm not interested in their services. But they won't let me opt out, and take my money by force. Hence, it is theft.

Do you really expect anyone to take a comment like that seriously? What are you interested in opting out of?

Your "freedom" protected by the Dept. of Defense?
Relatively clean air and water regulated by the EPA?
Paved roads paid, in part, by the Dept. of Transportation?
Food that won't kill you regulated by the Dept. of Agriculture?
Public power monopolies regulated by the Dept. of Energy?

[KPOM]

Originally Posted by swagi

You could do me a favor and do some research on how well the free market works in changing the electricity grid in Germany. I'll give you a hint: It doesn't work.

Those private institutions rather let the grids deteriorate to push their agenda (i.e. forcing nuclear power upon us) than making the change.

Another example is: Whenever the free market decides it opts for the solution with the lowest cost. There is no balancing of long-term-benefit. Bayer Chemicals has a testing facility for washing out carbon-dioxide in Coal Power Plants. They then transform that carbon-dioxide into fuel. Alas this currently is more expensive than drilling up holes in the earth and shipping this stuff around the world.

If the free market really would work that great, then why is it that every technological breakthrough in emission control in cars is only there because of California (this was admittedly said by several CEOs in the automotive industry).

So in short: The free market will NEVER be the choice for quality - because the free market only cares about short-term profit and shareholder value. Nobody even considers long-term profit - and that's why outsourcing has become so ridiculously popular (with acceptance of the long-term effect that your quality goes down -> just take a pre-2000 Mac and stack it up against your current Mac. Yes, your current Mac is cheaper in every thinkable way!)

OK, so tell me how well central planning worked in the USSR, or China, or anywhere else it was tried? In short, it didn't. The USSR collapsed and China largely abandoned central planning (note that authoritarian social policy is not the same as central economic planning).

The biggest breakthrough in reducing carbon emissions in recent years has been hydraulic fracking, which governments have actually impeded. The US, which refused to sign onto Kyoto, has actually reduced carbon emissions at a faster rate than the EU, and is no longer the largest producer of CO2 in the world even though we remain the largest economy.

The free market does care about long term profit. Companies like IBM wouldn't be around for over 100 years if they weren't concerned about long term stability. On the other hand, politicians just care about getting re-elected in 2 or 4 years. Are you really going to tell me you trust politicians like the idiots we have in Washington to solve our problems? Even when they agree on 98% of the issue they wait until the last minute and ram a bunch of pork-laden provisions in the end. Government is a monopoly. It is a necessary one, but it is still a monopoly subject to all the downsides. In other words, it has no competition, and doesn't suffer the consequences of making mistakes. When regulators fail, they usually get more power because government blames their failure on insufficient regulation.

[robbie12345]

this is what i call limousine liberals. The jobs family went to all the democratic national conventions and supported obama along with higher tax rates, and wants everyone to be taxed higher except themselves. give me a break, i now dont respect apple as a company.

[KPOM]

Originally Posted by rdowns

Do you really expect anyone to take a comment like that seriously? What are you interested in opting out of?

Your "freedom" protected by the Dept. of Defense?
Relatively clean air and water regulated by the EPA?
Paved roads paid, in part, by the Dept. of Transportation?
Food that won't kill you regulated by the Dept. of Agriculture?
Public power monopolies regulated by the Dept. of Energy?

The Department of Agriculture and 80 years of farm subsidies have been one of the most destructive forces imaginable. The government acts as a cheerleader rather than a promoter of public safety. Note that obesity was never really an issue until the government started promoting a high carb, low fat diet with "substitutes" like hydrogenated oils. They've finally gotten wise to trans fats, but still promote garbage like whole grains (loaded with gluten).

Roads are mostly a state government issue, rather than the DOT. Granted, it is still government. It's a similar story with the DOE. However, there is a legitimate debate over how roads should be funded (general income and sales taxes vs. targeted taxes on users such as gas taxes, tolls, or mileage charges).

In general, most people will acknowledge that defense is a vital service that can only be provided by government. However, note that it is often the most ardent supporters of government who find themselves annoyed at that, since governments also start wars.

If we look solely at the federal level, the largest expenditures are defense, interest on the debt, Social Security, and Medicare (in roughly that order, though in the coming years the latter 3 will move up). All are sacred cows to enough of the population, making real reform difficult, but at the same time there is no realistic way we can pay our existing promises with taxes alone (and certainly not simply taxing the "rich" and corporations).

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Originally Posted by Eraserhead

Not in the US they weren't - at least not really. The railway companies in the US were heavily subsidised with land grants to build the railways. They got about 10% of all US land to build the railways.

So what do you do about all the state and local taxes which are regressive?

Read up on the Great Northern Railroad. Unlike the Union Pacific and Central Pacific, it was a transcontinental railroad built almost entirely without public subsidies of any kind, and was so successful that the "progressive" Theodore Roosevelt administration broke it up with bogus anti-trust legislation. The UP and CP were highly corrupt and relied heavily on subsidies.

It's up to states and local government to figure out how to fund themselves. The federal government isn't responsible for them. However, the feds ought to stop imposing unfunded mandates on states and attaching all kinds of strings to things like highway funding and FEMA benefits.

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Originally Posted by ugahairydawgs

We don't need fewer loopholes...we need NO loopholes. Knock out every single credit and deduction and then dramatically cut rates across the board, setting the top end around 15% and treating all sources of income the same.

It'll never happen in a billion years because the vast majority of our leaders are spineless when it comes to disrupting the status quo. People would also raise ten kinds of hell if we tried to do away with the mortgage deduction and child tax credit...as if we need to somehow subsidize every decision a person makes.

The really silly thing in all the fiscal cliff debate is that at one point Congress did offer the President $800 billion in new revenue by limiting loopholes, but he didn't take it since he insisted on higher headline rates. It was completely a case of symbolism over substance. The last time we had real tax reform was 1986 (in what was truly a bipartisan effort). Since then politicians have undone virtually all the progress made then, and we have a tax code that is just as complex and nonsensical as what we "fixed" back then. With this Congress and this President, I don't see a real chance for reform. The GOP spent most of the last 2 years trying to undermine the President, and judging by the past few weeks, it looks like the President will try to return the favor over the next 2 years by doing everything he can to undermine and divide them. This isn't Reagan and Tip O'Neill or even Clinton and Gingrich who we are dealing with. I don't think tax reform would be a priority if the Democrats take control of Congress in 2014 (though we'll probably see rates jacked up even higher and the threshold reduced to the $250,000 they originally wanted).

In reality we need a President who is a dealmaker, which Obama isn't. Perhaps if Christie, Hillary, or Biden, who all have reputations as dealmakers, get elected in 2016 we might have a chance.

[iphoneclassic]

Originally Posted by darkplanets

For the IRS a company is defined as an individual and thus is subject to taxation, which is what I meant before.

Problem is companies are above individuals in this country.

A company has several options during bankruptcy to stiff every one (customers,employees, share holders, creditors...) with impunity and get additional money while in bankruptcy. An individual cannot do that.

A CEO who takes a company thru successful Chapter 11 and fire thousands of employees is a hero here. There will be dozens of INCs ready to hire him. In other countries any CEO who files bankruptcy will never get another job.

A rich person with 10 homes have bankruptcy protection for 2-10 homes, while a person with 1 primary residence looses his/her roof.

Those who lobby law makers get the best deal in this country.

If I remember correctly Apple pays only 2% tax on its overseas profit here. I guess they want to spin the story in a positive way.

[Rocketman]

Originally Posted by rdowns

Do you really expect anyone to take a comment like that seriously? What are you interested in opting out of?

Your "freedom" protected by the Dept. of Defense?
Relatively clean air and water regulated by the EPA?
Paved roads paid, in part, by the Dept. of Transportation?
Food that won't kill you regulated by the Dept. of Agriculture?
Public power monopolies regulated by the Dept. of Energy?

When you say paid for by Dept of whatever, you are disregarding that the money they use is first taken from folks, then run through a government bureaucracy and pops out the other end at 30 to 50 cents on the dollar due to overhead. We got 80% of the benefits of those agencies and rules in the first year they were installed. It's time to make the rules subject to a public feedback and control loop, shut down most aspects of those departments, and assign funds in block grants so almost 100% of the net funds go to the end use. How about that. Keep your precious government agencies, but simply rationalize them. Read shrink them drastically.

The public feedback and control loop might for a relevant example cause massive broadband deployments nationwide in a very short time frame. One example. Partially by some funding, but mainly by making the permission process vastly streamlined.

In my business 90% of our problems are conflicting rules, permits that are too limited in scope to assure we don't break some other rule, and selective enforcement. Not to mention actual intentional entrapment enforcement.

Business just wants to accomplish a task and be safe and compliant in the process. I want a powerful committee I can go to to get permission to do something, have that permission be wide ranging in scope and have the committee align the many regulators to conform with it. This is an Executive Branch function.

Rocketman

[alfonsog]

What would stimulate the economy more? Raising the social security age to 75 or lowering it to 55...

Also Medicare is the reason we even are able to have profitable health insurance companies. Raise the age any and you either have uninsured elderly or all profit disappears very quickly.

In my opinion is there are only 2 solution to health insurance:
1. universal health care, single payer
2. elimination of all insurance including medicare and everyone pays cash

Originally Posted by jrswizzle

I think there are some pretty obvious things that should happen which haven't as far as spending cuts.....

$12B subsidy for wind energy - which has gotten as much over the last 5 years and only produces 3% of the US's energy.....

The albatross that is SS/Medicare - the age has to be raised....I don't see what's so difficult about this. Either we 1) raise the age to accommodate for longer life spans or 2) we go broke and no one gets anything.....

When FDR first brought SS into existence the average lifespan in America was 67.....and the normal retirement age was 65 (though 62 was as early as you could claim benefits). Now we've seen the average retirement age increase to 67 but the average lifespan increase by a decade to 78! A relatively simple fix that would undoubtedly cause some activist to go into a rage - but would nevertheless save this country a lot of money, and ultimately be a big help to saving the country financially.

----------

SS/Medicare are more or less self-sustaining with adjustments since they are (at least on your paychecks) separate from income tax. Sadly politicians have borrowed money from those "trust funds" to pay for bombs. Government is NOT supposed to make a profit or be run like a business...

Originally Posted by jrswizzle

We spend more on SS/Medicare (by more than double) what we do on defense. I'm not saying there aren't cuts to be made - the government is the most unorganized, inefficient manager of money there is, but we need to look at entitlements as well.

...

To be honest, the way they currently sit - SS/Medicare are the most ridiculous programs there are. To think - if you had a buddy who was...say, $16 T in debt and asked you for a loan of about 6.5% of every paycheck you get, telling you he would pay you back when you turned 65 what would you say?

[guzhogi]

Correct me if I'm wrong, I heard that some states don't have income taxes. All their revenue comes from sales taxes. If true, out of curiosity, how is that working out? I find it a little odd that people get charged for getting money and then again when they use it. I'm no economist, but it would be interesting to see how it would be if the US federal, state & local communities dropped income taxes totally & used only sales tax (probably a flat % across the board). This way, people aren't really punished for being successful.

And then with each kind of sale is marked towards certain things. Like sales tax from gas & cars as well as tolls will go to roads, bridges, etc. Sales tax on houses go to schools. Internet, TV, & phones go to communication infrastructure. Guns, weapons & ammo taxes go to police & military. That kind of thing. For some products/services that may not have a definite thing to go to, maybe pool the money & divert it to where it's needed.

As I said, I'm no economist so please let me know if any of what I say is unrealistic and explain why it won't work.

[darkplanets]

Originally Posted by Bregalad

OK a flat tax, but also a flat deduction for living expenses.

SNIP

I see nothing wrong with this. It's equal for everyone, and though there's the relative tax rate, that doesn't and shouldn't matter.

Originally Posted by iphoneclassic

Problem is companies are above individuals in this country.

SNIP

In one of my other responses I advocated for companies to not be persons, especially in criminal context, because I think the actual person(s) behind the actions should be held responsible (within reason -- we don't need witch hunts, of course). I hold the same views about bankruptcy protection.

Personally, if a company files for bankruptcy protection, all upper management (legal definition pending) should be fired, unless the creditors who are being shafted vote otherwise. They were a part of the system that failed, and differentiating between the good and bad cogs in this case is impossible. All bonuses and severance packages should also be nullified through filing for bankruptcy, as those that drove the company into the ground do not deserve bonuses for shorting investors. That money should instead be put towards the companies outstanding debt.

In a similar vein, if a company receives federal assistance to stave off bankruptcy, the upper management should be fired, and no bonuses or severance packages should be honored, especially in a period following assistance disbursement. Tax payers money should not be used to reward employees and managers for doing a **** job.

[afireintonto]

Originally Posted by guzhogi

Correct me if I'm wrong, I heard that some states don't have income taxes. All their revenue comes from sales taxes. If true, out of curiosity, how is that working out? I find it a little odd that people get charged for getting money and then again when they use it. I'm no economist, but it would be interesting to see how it would be if the US federal, state & local communities dropped income taxes totally & used only sales tax (probably a flat % across the board). This way, people aren't really punished for being successful.

And then with each kind of sale is marked towards certain things. Like sales tax from gas & cars as well as tolls will go to roads, bridges, etc. Sales tax on houses go to schools. Internet, TV, & phones go to communication infrastructure. Guns, weapons & ammo taxes go to police & military. That kind of thing. For some products/services that may not have a definite thing to go to, maybe pool the money & divert it to where it's needed.

As I said, I'm no economist so please let me know if any of what I say is unrealistic and explain why it won't work.

The tax your post proposes is extremely regressive, meaning that poorer people will have to pay a higher cost even though the percentage is the same across the board.

Think about it this way. Rich people and poor people probably use about the same amount of toilet paper ~ give or take, it should have about the same price.
So, poor people pay the whatever% sales tax and so do the rich folks, same price, but different cost.
The poor have a higher cost associated with the sales tax because the sales tax is a higher percentage of their income. The rich pay the same price, but the actual cost to them is less because they have a higher income.
Six bucks to poor folk is more than six bucks to people who are well off.
Im not saying that people should be punished for being successful, but i feel we should all pay the same cost regardless of income.

I feel that the best reform that could happen is capitol gains income reform. It should be taxed at a rate equal to a persons regular income.

[swagi]

Originally Posted by KPOM

OK, so tell me how well central planning worked in the USSR, or China, or anywhere else it was tried? In short, it didn't. The USSR collapsed and China largely abandoned central planning (note that authoritarian social policy is not the same as central economic planning).

The biggest breakthrough in reducing carbon emissions in recent years has been hydraulic fracking, which governments have actually impeded. The US, which refused to sign onto Kyoto, has actually reduced carbon emissions at a faster rate than the EU, and is no longer the largest producer of CO2 in the world even though we remain the largest economy.

The free market does care about long term profit. Companies like IBM wouldn't be around for over 100 years if they weren't concerned about long term stability. On the other hand, politicians just care about getting re-elected in 2 or 4 years. Are you really going to tell me you trust politicians like the idiots we have in Washington to solve our problems? Even when they agree on 98% of the issue they wait until the last minute and ram a bunch of pork-laden provisions in the end. Government is a monopoly. It is a necessary one, but it is still a monopoly subject to all the downsides. In other words, it has no competition, and doesn't suffer the consequences of making mistakes. When regulators fail, they usually get more power because government blames their failure on insufficient regulation.

First of all I'm not advocating central planning for the whole economy like in USSR or China. But nevertheless there are some things that rather be left in public hands. Have you ever read about Tallinn's free public transport system?

Public Transport is the way of the future - especially if one would combine that with good public carsharing services. I know, private carsharing works in cities and there are several big players backing it up - but it would be a whole lot more effective, if state was behind that.

Switching to electricity on vehicles will be the next revolution (and if it wasn't for the private pioneer Elon Musk we wouldn't get any further in that direction - point given to you) - and I still don't understand why this is not backed with a public car pool (like police cars) to accelerate the transmission.

I also don't understand why it has taken to 2012 for Silicon Valley big players to use photovoltaic power. Come on. Silicon valley is the place to use solar cells - yet I never read anything about the installed solar capacity in California.

The biggest breakthrough in carbon emissions - in all honesty - would be if households would take insulation seriously. I don't know the US figures, but as a matter of fact more than 50% of Germany's carbon dioxide emission is due to private heating and another 25% belongs to cars. Therefore the whole screaming of heavy industries is just bollocks.

And trusting politicians? Well - I am a member of the German Pirate Party - This would be your equivalent. I think that clears this up

[GRuizMD]

Originally Posted by jrswizzle

I dreamt of a world where everyone made enough money to live comfortably and had everything they needed.

And then human nature took over, and no one had anything - except those with the biggest guns.

This is the biggest lie/folly of the modern democratic party. That those who make more should pay more (i.e. bring their net worth/income closer to the median) so those who either don't make much money/can't/won't work can pay less and see their net worth/income rise to the median.

I hate to break it to you.....but socialism has been tried and always leads to the same outcome - the top earners realize they could make just as much without working, ambition is sucked out of society, and a dictator moves in to take the country's riches - it's called communism.

Obviously this wouldn't happen tomorrow - but its a slippery slope. Today we're "Making the rich pay just a little bit more so the poor have a fair shot" (as if the person making this statement has any business saying what is fair). Next we see "Well we (the govt) still needs more money so those rich people need to pay a little more - they still make more than most"....

I think you see where I'm taking this.

Yeah, this is where the typical ultraconservative paranoid stocks automatic assault rifles and canned food in a basement and gets ready for the zombie apocalypse.

For the record, I am in the top 2% and advocate for my segment of the economy to pay higher taxes.

[MOFS]

Originally Posted by jrswizzle

I must live in alternate reality where 10% of $25,000 is NOT equivalent to 10% of $250,000 - regardless, technically those at $250,000 are taxed a much higher percentage than those at $25,000....it's the loopholes and deductions that muddy the waters.

Ah we seem to have a degree of confusion. You're talking about flat tax [everyone gets taxed the same percentage]. I was talking about a system where everyone got taxed the same sum of money. Either way, I still stand by my point that by following a flat tax rate remains unfair; the take home money (after tax and daily living expenses) of the lower earning would remain significantly lower. Plus which government takes only 10% flat? Even the USA takes 18%, which would leave only $20,500 for the lower earner there.

[ThunderSkunk]

People convinced they have all the answers, with half of the hypotheses, and none of the experience of making any of it work.

All this writing about all these big ideas, all amounting to nothing.

[nStyle]

Why is the Mint logo being used here when the article has nothing to do with Mint?

haha... isn't that some sort of copyright infringement.

[KPOM]

Originally Posted by afireintonto

The poor have a higher cost associated with the sales tax because the sales tax is a higher percentage of their income. The rich pay the same price, but the actual cost to them is less because they have a higher income.
Six bucks to poor folk is more than six bucks to people who are well off.
Im not saying that people should be punished for being successful, but i feel we should all pay the same cost regardless of income.

I feel that the best reform that could happen is capitol gains income reform. It should be taxed at a rate equal to a persons regular income.

The last time capital gains were taxed at the same rate as ordinary income was after the 1986 tax reform. However, that was coupled with a drop in the top ordinary income rate from 50% to 28% (with a small 33% rate to phase out the benefit of the 15% bracket for upper-income taxpayers).

Everyone from Bush I, Clinton, and now Obama who has raised the income limit has resisted raising the capital gains rate. Clinton, who raised the top income rate, lowered the capital gains rate. There is a good reason why. Capital gains are usually generated from investments, whose value generally ultimately is driven by corporate income (that's why the top capital gains rate for things like collectible art and precious metals is higher). Since corporate income is taxable, a high capital gains rate essentially taxes this twice. One of the better parts of the "Bush tax cuts" that Obama has retained was the decision to lower the tax rate on dividends to equal the capital gains rate. That gave companies an incentive to distribute their earnings in dividends rather than hold onto cash in an attempt to drive up their stock price.

There is one scenario (actually a pretty good one) where I agree it would make sense to eliminate the distinction between capital gains, dividends, and ordinary income. That would be if we eliminated the corporate income tax.

[guzhogi]

Originally Posted by afireintonto

The tax your post proposes is extremely regressive, meaning that poorer people will have to pay a higher cost even though the percentage is the same across the board.

Think about it this way. Rich people and poor people probably use about the same amount of toilet paper ~ give or take, it should have about the same price.
So, poor people pay the whatever% sales tax and so do the rich folks, same price, but different cost.
The poor have a higher cost associated with the sales tax because the sales tax is a higher percentage of their income. The rich pay the same price, but the actual cost to them is less because they have a higher income.
Six bucks to poor folk is more than six bucks to people who are well off.
Im not saying that people should be punished for being successful, but i feel we should all pay the same cost regardless of income.

I feel that the best reform that could happen is capitol gains income reform. It should be taxed at a rate equal to a persons regular income.

Very true. I thought of that right after I posted. There are many things, like toilet paper, where you'd use the same amount regardless of income. In that case, it's regressive.

One thing else is, however, there are many things that richer people buy more or higher quality of. Examples are more (and bigger) houses, more (and more expensive) cars, etc. So tax on one thing may be more regressive, but when you take into account how much more/better things richer people buy, it might level off.

AS for capitol gains, I could see the tax rate being equal to regular income tax. There are many people who make their careers out of buying/selling stocks and takes a certain skill set to master doing it profitably. So why shouldn't it be taxed like regular income?

[KPOM]

Originally Posted by GRuizMD

Yeah, this is where the typical ultraconservative paranoid stocks automatic assault rifles and canned food in a basement and gets ready for the zombie apocalypse.

For the record, I am in the top 2% and advocate for my segment of the economy to pay higher taxes.

Fine, but note that the expiration of the payroll tax cut is expected to bring in 1.5 times as much money as raising the top rate from 35% to 39.6%.

I don't own a gun, but don't begrudge someone else owning one. I'm guessing you live in an urban area (such as NYC) since you seem to not understand the difference between automatic weapons (which are illegal) and semi-automatics. Just about every gun (including hunting rifles) are semi-automatic now because of the recoil.

In general, my observation is that people at the highest end of the income scale are left-leaning, as are people at the lowest end. It is in the second tier (the people just below the top 1% to around the 40% mark) who are most likely to be right-leaning. There's a certain level of income where being taxed an extra 4.6% doesn't matter so much. But the people just below that level often find that they have lots of the disadvantages of being "rich" without so many of the advantages.