The Tax Thread

CharminTide

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I agree with you 100% about the waste. I am an accountant for a responsible manufacturer that sells to the government. I hear more about how the buyers are pressuring to spend their budget than how to reduce their spending. They view the amounts that they spend for the government as a sign of their personal worth to the government. Until this ship is turned around I would rather decide what to do with my money than let these power drunken feds have it.
The main problem I see in my sector is the program managers of educational grants inflating the funds needed to run a grant without being questioned why they need that much money to run the grant. So a grant that should really require $10,000,000 gets approved for double, triple and sometimes quadruple that amount. The result is $30,000 worth of iPad's being ordered and never being used or taken out of their boxes. Or $20,000 worth of toner for office printers being ordered when the yearly lease agreement with the copier company includes toner. I could literally go on for days and pile up millions of dollars of examples just out of one educational grant. It's unreal. It truly is.
Seems like we'd save a lot of money if there were an agency that reviewed itemized expenses from previous years, accounted for use and excess, and then audited the itemized budget proposal for the following year. Enact some form of punishment for over- or under-budgeting beyond a certain threshold and allow these auditors to request justification for unusual purchases, especially in Q4. A lot of work, but this kind of thing seems like a necessary step. Bet it would more than pay for itself.
 

92tide

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Seems like we'd save a lot of money if there were an agency that reviewed itemized expenses from previous years, accounted for use and excess, and then audited the itemized budget proposal for the following year. Enact some form of punishment for over- or under-budgeting beyond a certain threshold and allow these auditors to request justification for unusual purchases, especially in Q4. A lot of work, but this kind of thing seems like a necessary step. Bet it would more than pay for itself.
there was a push in the obama administration to do some stuff like this

link

Cutting Waste
Instead of accepting the status quo, President Obama has worked from day one to change how business is done in Washington. Under his direction, the Administration has moved to eliminate wasteful spending, streamline what works, and modernize how government operates to save money and improve performance.

From scaling back on no-bid contracts and stopping improper payments to getting rid of unneeded Federal real estate and ending out-of-control information technology (IT) projects, the Administration has worked to reform how Washington spends taxpayer dollars. We’ve focused on cutting spending that is wasteful, duplicative, and outdated and improving the way services are delivered to the American people.

The President has asked the Vice President to lead the “Campaign to Cut Waste,” an initiative to hunt down misspent tax dollars throughout the government, and to build on the accomplishments detailed below:
 

Bazza

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Seems like we'd save a lot of money if there were an agency that reviewed itemized expenses from previous years, accounted for use and excess, and then audited the itemized budget proposal for the following year. Enact some form of punishment for over- or under-budgeting beyond a certain threshold and allow these auditors to request justification for unusual purchases, especially in Q4. A lot of work, but this kind of thing seems like a necessary step. Bet it would more than pay for itself.
I agree...would be fantastic.

What are the chances of something like that ever happening though?

Getting back to the tax discussion - I can see both sides. :)

My biggest gripe is how complicated our tax code is.

Seems like if you need an accountant to do your taxes for you - something is wrong.
 

92tide

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I agree...would be fantastic.

What are the chances of something like that ever happening though?

Getting back to the tax discussion - I can see both sides. :)

My biggest gripe is how complicated our tax code is.

Seems like if you need an accountant to do your taxes for you - something is wrong.
correct, there are a lot of folks who can't follow relatively simple instructions and do basic math. ;)
 
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Bazza

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correct, there are a lot of folks who can't follow relatively simple instructions and do basic math.
Absolutely.

It's still too complicated though, in my opinion.

And, if nothing else, I'm pretty good at math. In fact, I got 9 math credit hours when I enrolled in college from my entrance exams.
 

DzynKingRTR

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I agree...would be fantastic.

What are the chances of something like that ever happening though?

Getting back to the tax discussion - I can see both sides. :)

My biggest gripe is how complicated our tax code is.

Seems like if you need an accountant to do your taxes for you - something is wrong.
I have always done my own taxes. My grandmother was an accountant and taught me. Granted nowadays I end up having to pay in April rather than get a refund. Refunds are dumb anyway. The government is not giving you money, they are giving you your money that they have kept all year and you don't even get interest charged. My taxes have gotten increasingly harder to do as well with IRA, stocks, money market accounts, and I make a whole lot more than I did.

Oh and tax is theft.
 

Bamabuzzard

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Seems like we'd save a lot of money if there were an agency that reviewed itemized expenses from previous years, accounted for use and excess, and then audited the itemized budget proposal for the following year. Enact some form of punishment for over- or under-budgeting beyond a certain threshold and allow these auditors to request justification for unusual purchases, especially in Q4. A lot of work, but this kind of thing seems like a necessary step. Bet it would more than pay for itself.
There are already mechanisms in place to do this. The problem is getting those in positions of authority to actually put them into action. The problem isn't lack of business processes or internal controls/oversight. The problem is the culture and mindset that exist within government employment. There was a time I (and others within my department) would bring to the attention of those in position of authority to do something about the waste I saw running through the grants I deal with. Scanned copies of invoices emailed to them showing them the waste and irresponsible spending. One time I even went above people's heads in an effort to get somebody to do something, only to realize I was wasting my time.
 
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rolltide_21

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Oh, I agree - we've been using a progressive system basically since the beginning of income tax here in the US. I've no problem with that, but I think some who oppose this feel as if that high of a percentage is unfair, regardless of the astronomical income level that's required to reach it or the fact that they will never be affected by it.

I'm more in the second camp - unless / until we make changes to how congress spends money, I'd rather starve the beast than find ways to feed it more money to waste.
Amen. Well said. Probably not a good analogy, but I don't give money to people who constantly find themselves in need/broke when their plight is due to their financial recklessness/misbehavior. Im not helping them. I'm enabling them and exacerbating the problem. That's how I feel about raising tax revenue on anyone right now. And even new blood politicians like Ocasio-Cortez don't make me feel better about the situation either. My perspective is subject to change but I doubt that it does any time soon in the current climate of politics.

ETA- I understand there is good spending. Im not suggesting starving the government of revenue, but that I proceed with extreme caution increasing revenue without also addressing spending extremes in some sectors of the government (i.e., defense).
 
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rolltide_21

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I could get behind something similar to this - at least be willing to listen - if and only if the middle class get substantial tax relief. That would be more in line with the original income tax.

ETA: It would also help in moving the wealth back to the middle class.
Good point. I agree.
 

CharminTide

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I think there are two conversations going on, and one is far more abstract/difficult than the other. I think we'd do better to uncouple the question, "how much money does the government need/deserve?" from the question of tax bracket structure.

So, assuming that the net tax revenue doesn't change, do people think that the current tax bracket architecture is fair/acceptable, or would folks advocate a return to a more progressive system, where each tier in someone's overall income is taxed at progressively higher rates. All things being equal, this should result in a tax reduction for most current tax brackets, although the degree of tax relief at each level would depend on whether your tax curve is linear, logarithmic, whatever.

Here's a cool interactive calculator that shows the historic inflation-adjusted tax rates throughout the 1900s and early 2000s.

https://qz.com/74271/income-tax-rates-since-1913/
 

Bamaro

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I think there are two conversations going on, and one is far more abstract/difficult than the other. I think we'd do better to uncouple the question, "how much money does the government need/deserve?" from the question of tax bracket structure.

So, assuming that the net tax revenue doesn't change, do people think that the current tax bracket architecture is fair/acceptable, or would folks advocate a return to a more progressive system, where each tier in someone's overall income is taxed at progressively higher rates. All things being equal, this should result in a tax reduction for most current tax brackets, although the degree of tax relief at each level would depend on whether your tax curve is linear, logarithmic, whatever.

Here's a cool interactive calculator that shows the historic inflation-adjusted tax rates throughout the 1900s and early 2000s.

https://qz.com/74271/income-tax-rates-since-1913/
There is really only one answer, a more progressive structure. We just saw the effect of enacting a less progressive structure.
 

CharminTide

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There is really only one answer, a more progressive structure. We just saw the effect of enacting a less progressive structure.
I agree. The problem of wealth inequality was kicked into overdrive with Reagan and his "simplification" of the tax code. It's still something that the GOP likes to talk about (see Trump/Ryan's "do your taxes on a postcard" dance), but it's really only ever simplified taxes for the rich, and it's pure donorspeak. Reagan compressed the top and low end of the tax code so the impoverished paid more, and someone making 10 million suddenly found themselves in the same bracket as someone making 100k.
 

92tide

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I agree. The problem of wealth inequality was kicked into overdrive with Reagan and his "simplification" of the tax code. It's still something that the GOP likes to talk about (see Trump/Ryan's "do your taxes on a postcard" dance), but it's really only ever simplified taxes for the rich, and it's pure donorspeak. Reagan compressed the top and low end of the tax code so the impoverished paid more, and someone making 10 million suddenly found themselves in the same bracket as someone making 100k.
yeah simplification and a more progressive structure are not mutually exclusive. a more progressive rate structure does not lead to more complexity.
 

bama_wayne1

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I agree...would be fantastic.

What are the chances of something like that ever happening though?

Getting back to the tax discussion - I can see both sides. :)

My biggest gripe is how complicated our tax code is.

Seems like if you need an accountant to do your taxes for you - something is wrong.
There have been way too many tax laws written for special interests. I mean on both sides of the equation funding and loopholes. It's all about buying votes....
 

Bamabuzzard

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twofbyc

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Pretty decent read regarding the decades of stagnation of middle class wages. However, I will say if you google this topic you'll get all kinds of opinions and statistics to prove or disprove just about everything under the sun regarding middle class wages.



http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/
One thing that can be proven: they haven’t kept up with the real cost of living.
Another thing that can be proven: the gap between them and the upper class income is wider than its ever been.
The reasons for it are only debatable if they’re politicized; in reality it’s pretty simple.


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Bamabuzzard

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One thing that can be proven: they haven’t kept up with the real cost of living.
Another thing that can be proven: the gap between them and the upper class income is wider than its ever been.
The reasons for it are only debatable if they’re politicized; in reality it’s pretty simple.


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You got that right.
 

rolltide_21

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I think there are two conversations going on, and one is far more abstract/difficult than the other. I think we'd do better to uncouple the question, "how much money does the government need/deserve?" from the question of tax bracket structure.

So, assuming that the net tax revenue doesn't change, do people think that the current tax bracket architecture is fair/acceptable, or would folks advocate a return to a more progressive system, where each tier in someone's overall income is taxed at progressively higher rates. All things being equal, this should result in a tax reduction for most current tax brackets, although the degree of tax relief at each level would depend on whether your tax curve is linear, logarithmic, whatever.

Here's a cool interactive calculator that shows the historic inflation-adjusted tax rates throughout the 1900s and early 2000s.

https://qz.com/74271/income-tax-rates-since-1913/
After doing some thinking on this while driving today, I would be in favor of a more progressive tax plan. Like someone said earlier, it would get us back to what income tax started out to be. I would also add that I would like to see some breaks for the middle class if we raise the amount on the most wealthy. Regarding the percentage for the most wealthy, I'm not sure what the percentage should be. I would ask a few follow up questions, how large of a percentage do they actually pay on average right now? How much is adjusted for write offs, credits, etc? How much would raising the percentage change how much they pay? I would expect the adjusted percentage to be substantial, but Ive not researched it to find out so I could be wrong.
 

twofbyc

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After doing some thinking on this while driving today, I would be in favor of a more progressive tax plan. Like someone said earlier, it would get us back to what income tax started out to be. I would also add that I would like to see some breaks for the middle class if we raise the amount on the most wealthy. Regarding the percentage for the most wealthy, I'm not sure what the percentage should be. I would ask a few follow up questions, how large of a percentage do they actually pay on average right now? How much is adjusted for write offs, credits, etc? How much would raising the percentage change how much they pay? I would expect the adjusted percentage to be substantial, but Ive not researched it to find out so I could be wrong.
Well, Trump bragged he didn’t pay any in 2017; does that help?


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