Blow Up the Tax Code and Start Over

Re:Blow Up the Tax Code and Start Over by rayiner on Thursday June 18, 2015 @02:55PM (#9740846)

I love the idea of a flat tax, but flat taxes don't get rid of the complexities of the tax code. The tax code is definitely full of random cruft, but the bread and butter that keeps the IRS and all those tax attorneys busy are a few principled features of the system: taxing net rather than gross income, deducting the value of depreciating capital assets over an amortization schedule, taxing income internationally, taxing capital gains differently than income, not taxing certain intra-familial transfers, etc.

Most of the complexity of tax accounting is complexity that's intrinsic to accounting itself.

NB: If you want to learn more about the theory of the U.S. tax code, I can't recommend this book enough: http://www.amazon.com/Federal-Income-Taxation-Concepts-Insig...

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Re:Blow Up the Tax Code and Start Over by driverdan on Thursday June 18, 2015 @03:26PM (#9741060)

> flat taxes don't get rid of the complexities of the tax code

Most flat tax proposals don't allow for exemptions. You pay your taxes off your gross salary, full stop. That would eliminate 99% of the tax code complexity for most individuals.

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Re:Blow Up the Tax Code and Start Over by rayiner on Thursday June 18, 2015 @03:45PM (#9741161)

The median individual return is under $50,000, and more than 80% of filers in that group just take the standard deduction. Not to mention, they get free use of most electronic preparation services.

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Re:Blow Up the Tax Code and Start Over by big_maybe on Thursday June 18, 2015 @05:16PM (#9741657)

Gross income isn't income for purposes of taxing. Consider that after expenses a person may actually have lost money. Tax her anyway?

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Re:Blow Up the Tax Code and Start Over by dragonwriter on Thursday June 18, 2015 @05:49PM (#9741816)

> Gross income isn't income for purposes of taxing.

It is for personal income (business income is different.)

Well, strictly, adjusted gross income is income for purposes of taxing, but AGI is gross income after deductions allowed in the tax code, and "flat" tax proposals -- including Paul's -- almost without exception call for eliminating most deductions or all deductions (Paul expressly states that he will eliminate all except for charity and mortgage-related deductions.)

(Keeping one of the complexities of the current tax code, Paul continues to allow more deductions for businesses than individuals.)

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Re:Blow Up the Tax Code and Start Over by jessaustin on Thursday June 18, 2015 @03:09PM (#9740953)

...inter-familial transfers...

Did you intend intra-familial? Like inheritance and 529 plans, right?

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Re:Blow Up the Tax Code and Start Over by rayiner on Thursday June 18, 2015 @03:18PM (#9741004)

Yup. :)

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