Tax proposals

[Addie]

8 hours ago, Jerry Pasewicz said:

Oh for Pete’s sake, what the hell are you talking about?

Politics unrelated to taxes and violin businesses, which will put Uncle Jeffrey in a bad mood when he reads this topic... 

[JacksonMaberry]

Yes we really should be better about avoiding the political. Too many of our most prominent users can't avoid becoming defensive.

[Carl Stross]

8 hours ago, Violadamore said:

I used to joke, decades ago, that we should eliminate taxes altogether, and simply give the Feds a monopoly on vice, gambling, and intoxicants, but that was before I saw them take over some properties in Nevada for back taxes, and prove that they could run casinos and brothels at a loss.

Well one should've seen it coming : who'd gamble or screw with the Inland Revenue ?  

[Carl Stross]

7 hours ago, JacksonMaberry said:

Yes we really should be better about avoiding the political. Too many of our most prominent users can't avoid becoming defensive.

Don'y you worry - they'll survive.

[AtlVcl]

10 hours ago, Violadamore said:

Making the government spend responsibly is a whole other question.

A dirty little political secret is after all Reagan's tax cuts, revenue to the Feds actually increased!  The natural tendency is for government to grow, and it happens because we let politicians buy our votes with our own tax dollars.  I mean, "go figure!"

 

 

[Frank Nichols]

My solution to the endless spending of government is to end elections and institute a draft. Random citizens are drafted for 4 to 8 year of service. Most of the people that are elected get into it for the power and control of the money/spending. By drafting we eliminate that motivation. Not a complete cure but I think would help.

[David Burgess]

9 minutes ago, Frank Nichols said:

My solution to the endless spending of government is to end elections and institute a draft. Random citizens are drafted for 4 to 8 year of service. Most of the people that are elected get into it for the power and control of the money/spending. By drafting we eliminate that motivation. Not a complete cure but I think would help.

We'll have draft dodgers fleeing to Canada again.

Can I get out of it by joining the Peace Corps?

[David Burgess]

33 minutes ago, AtlVcl said:

 The natural tendency is for government to grow, ...

Of course! How can a poorly qualified person be promoted to supervisor, unless less qualified people are hired in for them to supervise?

[Frank Nichols]

10 minutes ago, David Burgess said:

We'll have draft dodgers fleeing to Canada again.

Can I get out of it by joining the Peace Corps?

I can't seem to get anything right. I volunteered for the Marines during VN, and now I am fleeing to Ecuador... sigh, it's so confusing.

 

[MeyerFittings]

OK so here is the reason for my OP. Screw the politics. If you are a violin maker and make over $100, 000 a year 25% may be your current rate and you are not affected. If you are making at a lesser level as, I suspect most are, or using your craft to augment retirement income as many certainly are, under the proposed tax "reduction" your business income may be taxed at 25%, if I am reading this rightly. There doesn't seem to be a lower bracket for those making under $50,000 . Monsanto will be paying 20% and you will be paying 25%.  Perhaps I don't get this rightly?  I figure somebody out there knows more about this than I do.

[David Burgess]

34 minutes ago, MeyerFittings said:

 Monsanto will be paying 20% and you will be paying 25%.  Perhaps I don't get this rightly?  I figure somebody out there knows more about this than I do.

If those numbers are correct, here's the way I look at it:

Monsanto would be paying 20%, and everyone who works there would be paying 25%+, so total revenue Monsanto generates for the government would be considerably higher than the corporate 20% tax.

As I understand it, my sole proprietorship, with myself as the only employee, is only taxed once, at my personal income tax rate. It may not work out as well for sole proprietorships with multiple employees, and maybe they would be better off being corporations. Not that I claim to fully understand everything my accountant tells me.

[MeyerFittings]

No David, as I understand it, people who declare their income as business income as your sole proprietorship is, would now pay 25% as a bracket regardless of what that income is. It's the "pass through", as you are passing your income through a business regardless of having no employees. Monsanto's employees are not passing their income through their own business and will pay in brackets according to their salaries.

[David Burgess]

2 hours ago, MeyerFittings said:

No David, as I understand it, people who declare their income as business income as your sole proprietorship is, would now pay 25% as a bracket regardless of what that income is. It's the "pass through", as you are passing your income through a business regardless of having no employees. Monsanto's employees are not passing their income through their own business and will pay in brackets according to their salaries.

I got that part. But I don't need to pay a 20% business tax, and then my personal income tax on top of that. (Although my salary would probably be deductible from the taxable business profits, if I chose the corporate tax model.)

To know which works out best for me, I'd probably need to pay my accountant a bunch of money to prepare an annual tax return each way. And then I still wouldn't know the bottom line, because each type of tax return might depend heavily on the sorts of deductions rolled in from past tax returns under each method. So I might need to pay him to re-figure more like ten years of tax returns, with things like depreciation schedules, and how they can be carried forward under each strategy.

So I'd be in favor of a simper method, providing that it is actually simpler and easier to understand, rather than just another form of deception.

[Frank Nichols]

2 hours ago, David Burgess said:

So I'd be in favor of a simper method, providing that it is actually simpler and easier to understand, rather than just another form of deception.

I would favor a simpler method also, I just don't see how they can get it much simpler, it is already down to only about 30,000 pages.

[Violadamore]

1 hour ago, Frank Nichols said:

I would favor a simpler method also, I just don't see how they can get it much simpler, it is already down to only about 30,000 pages.

They call it the Tax Code, because you have to decrypt it to use it.

[PASEWICZ]

It would be refreshing for our lawmakers and citizens to get to a point that doing what is right is more important than looking out for themselves.

[Jeffrey Holmes]

Back to what pertains directly to our business please. Discuss politics and farming elsewhere.

[Mike_Danielson]

It is way premature to try and outguess our congressional leaders on the new tax laws.  So, do not panic yet; there is plenty of time for that later, if they really do something.

My surmise is that nothing will get done this calendar year, and maybe for the entire presidency.  

I do like the idea of a Schedule F.

I edited this to add a Mark Twain quotation:  "There is no distinctly American criminal class--except Congress."

Mike D

[Violadamore]

21 minutes ago, Mike_Danielson said:

It is way premature to try and outguess our congressional leaders on the new tax laws.  So, do not panic yet; there is plenty of time for that later, if they really do something.

My surmise is that nothing will get done this calendar year, and maybe for the entire presidency.  

I do like the idea of a Schedule F.

Mike D

It's the "Profit and Loss From Farming" attachment to a Form 1040.

[mbose]

For anyone who wants to try to read this, or at least to scan it and confirm it's not worth reading! Here's the site:

https://www.congress.gov/bill/115th-congress/house-bill/1/text

and a PDF: https://waysandmeansforms.house.gov/uploadedfiles/tax_cuts_and_jobs_act_section_by_section_hr1.pdf
 

Michael

 

[Dimitri Musafia]

Hi everyone,

Where I live has one of the highest total tax rates in the world, and at the same time also the third highest sovreign debt to GDP ratio (well over 130%). Just our sales tax alone (VAT actually) is 22%! That doesn't stop the guvment from continually raising taxes even higher to try to increase revenue, without resolving anything.

So I humbly bring forth to you a little-known gem, the Laffer Curve:

https://en.wikipedia.org/wiki/Laffer_curve

I wish our legislators would attend at least Economics 101.

[Stephen Fine]

It might also hurt the luthiers that any instrument or bow purchases I make can no longer be deducted.