Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (329736)	12/16/2002 9:37:16 PM
From: DuckTapeSunroof	Read Replies (2) \| Respond to of 769670

Nominal tax rates... that's one part. Effect of the thousands of tax loopholes... that's the other part. The combination: loopholes + rates = percent of income paid in taxes (setting aside all the OTHER kind of taxes for now... which we REALLY SHOULDN'T if we are looking at the whole system, and trying to build the best, fairest, society. Things like WEALTH taxes - like the estate tax - and CONSUMPTION taxes - such as sales taxes. It is the combination of all these, and many OTHER taxes which determine how much a person pays to the government.) But, if you just want to talk about one part of the tax system - the federal income tax (which was NEVER supposed to go above 1.5%... if you believe Congressmen, and then was supposed to sunset after the WW I debt was paid off :), then OK, we'll talk about that. My point was that the 400 richest Americans paid an average income tax rate of 22% in 1999... so obviously they are not paying at the full top marginal rate. They are - naturally enough - taking advantage of LOOPHOLES in the tax code. Things like special depletion allowances for investments in oil partnerships, total shelters from federal taxation for income generated from ownership of Intellectual Property (copyrights, title to motion pictures, software, etc.) harbored in overseas tax shelters, etc., etc., etc., etc... there are THOUSANDS upon THOUSANDS of 'special loopholes'. To NOT take advantage of them, one would have to be crazy. All I'm saying is that the POSTED tax rates are meaningless without considering the loopholes too. .... Unless, that is, we can come up with a tax system WITH NO LOOPHOLES - which I am WAY for - or at least a system with just a very few... count 'em on one hand only, loopholes. Maybe keep a single family home deduction, a charitable contribution deduction... and R & D deductions for business, and otherwise treat all sources of capital the same. Right now our tax system favors DEBT (business gets a deduction for interest on loans) over retained earnings, or equity issuance... and this encouragement of going into debt is becoming a BIG problem for our country.