Oh great, the Republicans want a FLAT TAX

[OzzyKP]

What's the difference between Iraq and Vietnam?
- Bush had a plan to get out of Vietnam.

I'm like RATM in a can.

For the first time ever I have been quoted in someone's sig and he didn't even attribute me...

[Imran Siddiqui]

Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

edit: I was a bit hasty and didn't look into the Bush plan in detail.

http://www.heritage.org/Research/Taxes/CDA03-02.cfm

Corporations pay dividends to investors out of after-tax profits, yet these dollars are then subject to another tax: the personal income tax paid by the individuals who receive them. This multiple taxation of dividends discourages investors from finding equity investments that pay a steady stream of income and encourages corporations to retain profits and seek debt financing solely for tax purposes rather than financing their operations with equity

[David Floyd]

That's all well and good except... How do we cut everyone's taxes in half and not destroy the budget?

Hmmm....cut the budget!

[Geronimo]

Originally posted by Imran Siddiqui

Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

Incorrect.

http://www.heritage.org/Research/Taxes/CDA03-02.cfm

Corporations pay dividends to investors out of after-tax profits, yet these dollars are then subject to another tax: the personal income tax paid by the individuals who receive them. This multiple taxation of dividends discourages investors from finding equity investments that pay a steady stream of income and encourages corporations to retain profits and seek debt financing solely for tax purposes rather than financing their operations with equity

Thanks Imran! I was starting to get pretty worked up over the notion of reverse progressive taxation being implemented. I wasn't quite ready to accept that was the case.

[Imran Siddiqui]

Ah, I think I may have been a bit too hasty:

http://economics.about.com/cs/interestrates/l/aa012303a.htm

Currently, any money an investor receives when a stock she owns pays a dividend to its investors is added to her total income at tax time. So dividend income is treated the same way, and is taxed at the same rate, as income from working. If the Bush plan becomes law, dividend income will no longer be added to an investor’s total income. As a result the dividends become exempt from taxation.

[Lawrence of Arabia]

bush plan to end double taxation
bush play to end the estate tax

end tax on money gained from selling property and not used to reinvest in property

[AnnC]

Nope, the 100k from sitting on his ass person now pays much less in tax than the 100k salary person.

Imran, that is correct.

If an individual collects 100k in stock dividends, he'll pay less federal income tax than an individual who earns 100k in salary. It's true that dividends come out of a corporation's after-tax income, but doesn't affect the tax situation of the individual who receives the dividends.

The way to solve the so-called double-taxation problem is to let corporations deduct dividends paid to shareholders just as they presently deduct interest paid to bondholders - that'll remove the debt-financing bias from the corporate tax code.

[Imran Siddiqui]

If an individual collects 100k in stock dividends, he'll pay less federal income tax than an individual who earns a 100k in salary.

Only after the Bush plan... before that they paid the same.

[Geronimo]

Originally posted by Lawrence of Arabia
bush plan to end double taxation
bush play to end the estate tax

end tax on money gained from selling property and not used to reinvest in property

I guess if you like Bush's plan to end double taxation (a plan in which someone who earns 100k from dividends will pay a far smaller tax percentage than someone who earns 100k in salary) we have to conclude that you don't like flat taxes where everybody pays the same tax on their income. You want some people to be taxed differently than others and as a result you support government enforced transfers of wealth.

That seems quite out of character. So if your principles aren't rooted in any sense of fairness what are they rooted in? Crude self interest perhaps?

[Geronimo]

Originally posted by Imran Siddiqui

If an individual collects 100k in stock dividends, he'll pay less federal income tax than an individual who earns a 100k in salary.

Only after the Bush plan... before that they paid the same.

Imran the article was too old to say if the plan was implemented. Do you know what the current situation is? Also is there a reason that dividends would no longer be counted towards income while interest would continue to be counted towards income?

[Imran Siddiqui]

Apparently, Geronimo, they became law in 2003... reducing the top tax rate for dividends to 15% from a potential 35% (the highest tax bracket today).

And the reason dividends and interest are treated differently is because Bush wanted them to.

[AnnC]

posted by AnnC: If an individual collects 100k in stock dividends, he'll pay less federal income tax than an individual who earns a 100k in salary.

posted by Imran: Only after the Bush plan... before that they paid the same.

Uhmm, Bush's tax policy is what we've been discussing. The new dividends tax rate was passed with Bush's 2003 tax cut.

Edit: we cross-posted.

[Imran Siddiqui]

I thought we were discussing a flat tax (and you can't have a lower % for dividends if you are truely going for a flat tax proposal).

[Lawrence of Arabia]

I guess if you like Bush's plan to end double taxation (a plan in which someone who earns 100k from dividends will pay a far smaller tax percentage than someone who earns 100k in salary) we have to conclude that you don't like flat taxes where everybody pays the same tax on their income. You want some people to be taxed differently than others and as a result you support government enforced transfers of wealth.

That seems quite out of character. So if your principles aren't rooted in any sense of fairness what are they rooted in? Crude self interest perhaps?

in fact, we have to conclude that I dont care if someone who makes 100K in salary or 100 K in investment, we need the least taxes possible and by getting rid of double taxation, we get one step closer. we can also conclude that I also support getting rid of 100% of the sales taxes, as well as most of the income taxes (if all is not practical)

can any other conclusions be drawn? did i miss any?

[Zevico]

Ahem...

Muslims for Greater Israel?

http://www.islam.italy.too.it/

And I thought I'd seen everything...