Jimmy Higgins

Do you get out Loren? How many people who are retired take all their money monthly from Dividends alone? The usual thing when you get older is to go from risky stocks to safe bonds. People live off the interest of bonds, not dividends of stocks. A person with $270k in stocks will certainly have as much or more probably more in bonds and CD's. That person would have atleast half a million.

I do admit error with the interest in a savings account parallel.

Jimmy Higgins

Not necessarily. The democrat model is to have a "holiday" where a few times you don't bill the FICA costs. For me, that would mean about $250+ extra in the pocket in just one month. The money from the "tax cut" would be immediately realized and just as easily put back into the economy. If you are able to boost the economy enough, you should be able to get back what you didn't collect in the FICA "holiday tax cut".

The biggest problem is that the people that would benefit the most for a tax cut aren't the poor with children. They already have virtually nothing withheld. Heck, some people have nothing withheld from the government. If you dropped their taxes, they won't see that until Tax time, that is if nothing or almost nothing is withheld on their check. You lower my first $6000 rate from 15% to 10%, I see a savings of $300 yearly, or about $25 a month. So I don't see much.

You give a holiday on FICA, and the money is there, in big bold numbers. You are right though, it will have a direct effect on social security. But if we are talking about a "tax cut" that would benefit all people, this would be the one.

John Hancock

Loren

Can't really think large corporations are fully taxed not Only do they get mailboxs in Bermuda but they game the system extensively ie.

Ruling Eases Restrictions on Tax Shelters for Companies Copyright 2002 The New York Times Company

January 3, 2002

Ruling Eases Restrictions on Tax Shelters for Companies
By DAVID CAY JOHNSTON
federal appeals court has issued a ruling in a case involving Compaq Computer (news/quote) that tax experts say will make it much more difficult for the Internal Revenue Service to demolish many corporate tax shelters.
Some experts predicted that tax shelter promoters would quickly take advantage of the ruling to fashion new shelters for corporations to shed billions of dollars in taxes. "This is disastrous" for the integrity of the tax system, said David A. Weisbach, a University of Chicago law professor who has argued in several articles that Congress must prevent corporations from using a patina of legitimacy to justify tax shelters.
Compaq itself agreed that the ruling narrows the definition of prohibited tax shelters. "That seems to be the gist of the decision," said Ben K. Wells, treasurer of the company, whose tax shelter was upheld in a ruling by the United States Court of Appeals for the Fifth Circuit in New Orleans.
The ruling greatly narrows the sort of deals that the Internal Revenue Service can disallow as having no purpose besides tax avoidance. Federal law allows Companies to cut taxes when they engage in legitimate
deals but not when tax savings are the sole purpose. The court, agreeing with Compaq, said its deals involved risks, however tiny, of profit or loss and, therefore were legitimate business transactions for tax
purposes. The I.R.S. says that abusive corporate tax shelters are its most serious enforcement problem. Corporations have acknowledged saving at least $14.7 billion in 2000 through the use of tax shelters, many of them illegal, the I.R.S. said last week. The agency has described this amount as just the tip of an iceberg and announced a program to waive penalties for companies that acknowledge using tax shelters and name the promoters. None of the transactions affected by the court's ruling involved individuals. The ruling, issued on Friday and published yesterday in the journal Tax Notes, overturned a 1999 United States Tax Court decision that Compaq had improperly reduced its 1992 income tax bill through a series of huge, rapid- fire stock trades.In 46 trades, Compaq bought, and then immediately sold back, more than $900 million of Royal Dutch/ Shell stock in one hour on Sept. 16, 1992. The trades were intended to let Compaq receive a tax credit for Dutch taxes on Shell dividends. Compaq, which did not have to pay these taxes, used the credit to reduce its American income taxes by $2.7 million, the court said.
Compaq says it was a minor customer of the tax shelter promoter, Twenty-First Securities,

:boohoo:

Anyway I Believe only the smallest companies dividends are now maybe going to be made tax free. That could be acceptable. As long as they don't use a Bermuda address.

Martin Buber

Derec

Problems with that:
1) How do you pay for the social security expenditures? You would have to tap the general taxes, i.e. people paying bulk of the income taxes to begin with would also finance your social security.

2) That model benefits people that pay very little federal income taxes to begin with.

UMoC

Kinross

Tax shelters protect companies against double taxation. If you have a presence in the US and anothother country and sell a product in the other country you first pay a tax on the profit in the other country and then pay a tax again on the same profit in the US.

By locating your business to a tax shelter you would only pay the tax on your profits once, the place where you made the profit.

It would be like working in DC but living in Virginia and having to pay income taxes twice once in Virginia and once in DC.

John Hancock

Horse pucky Adam

You apparently did not read the entire quote from New York Times which I posted. :banghead:

Martin Buber

John Hancock

That's great particularly because the tax breaks given to wealthy come out of SS Security Trust Fund.

Martin Buber

Kinross

I did read the article. Your comment about Burmuda and the issue addressed in the article are two completly different things. I was addressing your Burmuda address comment.

John Hancock

Your reply was Tax shelter Genric. Companys get foreign post office boxs that allow them duck US taxes and pay a low forgeign tax. Double taxation my ass, tax dodge the truth.

Martin Buber

Aerion

Social Security tax is capped because there is a cap on benefits. It doesn't matter how much you earned as a worker; you get the same benefit. That is why Social Security tax is capped.

Also, sales tax is very fair because it is levied as money is spent. Rich People(tm) have more money to spend so they pay more sales tax. If someone who earned $1,000,000 pays 5% sales tax then they pay $50,000 a year. If someone who makes $20,000 a year pays 5% then they pay $1,000. How can it get more fairer than that unless you believe it is fair for Rich People(tm) to pay MORE taxes than the poor.

Of course the above paragraph is a simple example, but it does illustrate that sales tax is one of the most fair taxes. That is unless your idea of fair is having Rich People(tm) grabbing their ankles.