RE Post Scripts Article “Tax Hell 2010 & 2011”
Quentin: It reminds me of the tar baby. the more they mess with it, the worse it gets! THIS tax for these people. THAT tax for those people. The best tax is a fair tax that everyone pays–voluntarily. If we taxed the purchase of stocks, commodities, derivatives, bonds, etc. at a mere 7.5%, we would raise more money than we do now, AND we could eliminate capital gains. This would spur investment, which would spur the economy, which would spur investment, which would raise revenues to the government. The revenues raised would be so great we could eliminate the National Debt in less than fifteen years. Don’t take my word for it, do the math yourself.
Jack: Quentin the problem as I see it with taxing the purchase of stocks, commodities, derivatives, bonds, etc. at 7.5% is that it would have a chilling effect on said purchases, people just wouldn’t buy them. For the last 3 1/2 years of recession your typical return on investment would have been far less than the taxes you paid to own it.
We try to grow our retirement portfolios at about 7-10% per annum (and thats being optimistic), now if you deduct for income tax and adjust for inflation, that brings us down to around 4.5 to 7.5% per annum; even without an income tax the yield would be so dismal compared to the investment risk that it would not make much such sense to invest in America. And what about the companies that depend on stock/bond sales for liquidity? Will they be forced to turn to the government for short term loans and what influence will that have because of all the strings that would be attached?
I think the better idea is to scrap the IRS and go to a VAT or value added tax (aka consumption tax). Then we do away with all the other little hidden taxes we now pay here and there. At the same time we must restrict government from spending us into the poor house. We must have a law preventing Congress to not exceed spending by the rate of inflation.
Government simply must stop growing every year because this is a train wreck in the making.
As of April 2009, 43% of Americans don’t pay any federal tax and we burden the remaining 57% to pick up the tab. The top 5 percent of wage earners pay well over half the income taxes. How far can this go before there is a revolt of some sort?
The reason we are here discussing any kind of tax plan is because of government. There’s the real problem, not how we can creatively shake money out of peoples pockets. Restraining government is where we should focus first. And for what it’s worth, sixty percent (60%) of voters nationwide believe tax cuts help the economy…what do you believe?