Not perfect but a good start. I personally am not in favor of a flat corporate rate unless you are going to provide small businesses with some kind of reduction mechanism. Also, I would imagine that with this flat corporate rate comes a VAT.

Or national sales tax.

24% corporate on top of 15%-35% personal. Sounds like a killer of small business. Scrap all corporate taxes and a 15% flat tax on all income, no deductions. That would cause the economy to explode.

Or national sales tax.

That won't fly. However, I love all of the "fair tax" people who think the US could get by with a sales tax alone.

Regarding this bill, I would like to see further detail on the brackets for those rates.

I also understand that the bill would eliminate various specialized tax breaks giving businesses and interest groups an edge over competitors and would repeal the deferral of taxes on foreign income by U.S. companies in an effort to improve the fiscal responsibility of the tax code, according to the summary.

Specifically, repeals include the exclusion of premiums on group term life insurance, accident and disability insurance, and the deferral of interest on savings bonds.

The corporate repeals include the expensing of energy exploration and development costs, the tax credit for enhanced oil recovery costs, the Section 199 production activity deduction, and advance refunding of the 503(c)(3) and governmental bonds.

I have been pro-repeal of the 199 and the energy legislation. It's time to stop subsidizing the oil industry. It will hurt us in the short term but will be beneficial in the long run.

Considering most small business are not C-Corps I am thinking that you would see a lot of conversions from flow-throughs (i.e., partnerships, LLCs, and S-Corps) to take advantage of the lower flat rate than the higher individual rate.

I do question the rationale of imposing higher rates on individuals than corporations, but that can be debated for eternity.

Taxman, the way I read this, a small S-corp or LLc that pays app 33% state and fed filed on personal income tax forms would get a 15% bare minimum. Is that your take?

I am not sure what you are asking. If you operate a business through an LLC, for example, the LLC will issue a Form K-1 which list various types of income/deduction, among other information. You include the information on your return and thus your tax rate will be applied rather than a corprate rate.

So what would be the advantage of switching from an S-corp to a C-corp?

I love all of the "fair tax" people who think the US could get by with a sales tax alone.

Yeah, those loons belong in a seperate category by themselves.

Considering most small business are not C-Corps I am thinking that you would see a lot of conversions from flow-throughs (i.e., partnerships, LLCs, and S-Corps) to take advantage of the lower flat rate than the higher individual rate.

I would agree with that. However, plenty of tax benefits exist within a parthnership or LLC besides just the tax rate.

I think we need to simplify the tax code and this is a good start but it is also a sneaky way to extend the Bush tax cuts. NOtice the top tax bracket remains at 35%. With the size of our debt a return to at least the 39% we had under Clinton is more than necessary. Any reform should be at least "revenue neutral".

plenty of tax benefits exist within a parthnership or LLC besides just the tax rate.

True, but when you are looking at possibly lowering your rate from 35% to 24% you have an added incentive, assuming of course this bill would eliminate the taxation of dividends paid to shareholders or other corporate distributions.

If it does not eliminate the tax on dividends or does not give the corporation a deduction for paying dividends then I cannot see many people switching. Too many downsides with getting the money out to the shareholders.

Also if the LLC or p/ship was holding property I would not switch to C corp.

#11, you can always opt to pay in more if you desire to cover the shortfall taken in from the rick people who also earner their money similar to yourself.

Just saying.

A little further info on the bill:

The tripling of the standard deduction would set the stage for "many taxpayers who currently itemize [to[ find it more advantageous to switch to the standard deduction which will both reduce their tax bills and eliminate the burden of maintaining records and receipts needed to document itemized deductions," the summary said.

Wyden and Gregg also released a proposed shortened one-page Form 1040. Under their legislation, taxpayers would be able to request that the Internal Revenue Service prepare and return the form for their modification and signature.
The overhaul would retain a number of tax deductions and credits, including the mortgage interest and charitable contributions deductions and others that target the armed forces, veterans, the elderly, the disabled, health care, higher education, and retirement savings, the summary said. The enhanced child tax and earned income tax credits also would remain and, along with the enhanced dependent care credit, would be extended on a permanent basis under the legislation.

The legislation also would cut the current phaseout of itemized deductions and personal exemptions.
A new Retirement Savings Account and a new Lifetime Savings Account would replace the three current types of individual retirement accounts, the summary said, allowing maximum annual contributions of $14,000 by married couples to the tax-favored accounts.

BNA Daily Tax Report

Link to a pdf version of the proposed 1040:

"Just saying."

Tell your grandchildren how snarky you were when suggestions were made as to how we could alleviate the debt and the interest on that debt ws discussed. I'm sure they'll think you're just so clever....as if you were the first to come up with that same tired talking point.

Top tier should be closer to 40% The rest looks ok. If a corporation would agree to hire American workers I would be in favor of lowering their tax rates to below 20%

"If a corporation would agree to hire American workers I would be in favor of lowering their tax rates to below 20%"

I think most Americans would agree with you on that one. I doubt though that contrary to the whining we've all heard about corporate tax rates in the US that it would really bring very many jobs back. Unfortunately the only thing which will bring jobs back is slave wages. When we are willing to work for Chinese wages then we will have jobs in manufacturing again. My guess is that the corporate execs think it will take about ten more years or so until we are so desperate that we will accept such low wages.

sounds like a bid to tax the internet to me.

"If a corporation would agree to hire American workers I would be in favor of lowering their tax rates to below 20%"

You still have to make up the revenue somewhere if you are going to continue funding entitlement programs, the military, different government agencies, etc. This is why I think behind all of these proposals, including Paul Ryan's, is a VAT to make up the revenues.

when democrats and republicans start working together it means that the corporations have paid them both off.

incidentally, wasn't there more money going into republican coffers lately?

i seem to remember a story here to that effect...

What we have now is unworkable, unweildy, and gets screwed with very few years. It takes a specialist to calculate what is due, and THEN it is subject to IRS interpretation - not a good deal for anyone!

Until it is in operation it will not be fully understood. Givw it a chance and see what happens! Almost anything is better than what we currently have!

That doesn't even scratch the surface of the jungle that they call the tax code. It is called code because even they don't understand it.

I think most Americans would agree with you on that one. I doubt though that contrary to the whining we've all heard about corporate tax rates in the US that it would really bring very many jobs back.

#19 | Posted by danni

Taxes are only one small component of the high cost of a company here in the US.

I have listed many of them in the past for you but I know you are a selective reader and only see what you want to see. The most hidden portion are the environmental laws that manufacturing companies have to abide by.

It also seems like everyone wants to earn over $30 per hour but end up flipping big macks and changing linnen in a hotel for min wage because the better paying manugacturing jobs are going over seas.

Listening to republicans discuss tax strategy is like listening to cow flatulence in a feedlot. It won't keep them out of the slaughter house and it still stinks.

Last time I checked not one of the fat cats actually pays the maximum rate because of the generous write offs, but anyone who takes a standard deduction pays his or her due.

What is even sadder is the real facts. If we don't increase revenue the interest we already owe will kill this country even if the loopholes were patched.

Taxes are only one small component of the high cost of a company here in the US.

I have listed many of them in the past for you but I know you are a selective reader and only see what you want to see. The most hidden portion are the environmental laws that manufacturing companies have to abide by.

It is a proven fact that the Clean Air Act was instrumental in increased profits by eliminating waste, lowering health costs and reducing maintenance and equipment cost.

As usual, you don't know what you are talking about sniper.

I personally am not in favor of a flat corporate rate unless you are going to provide small businesses with some kind of reduction mechanism.

#1 | Posted by taxman

This is the kind of stuff it is designed to stop.

Everybody hates paying taxes. Somehow, people don't seem to make a connection between paying taxes and receiving services.

I have said this numerous times before, but I will repeat it here.

Replace the tax on the creation of goods with a tax on the consumption of goods.

This would encourage production in the US, encourage saving, discourage consumption of foreign goods, and allow the collection of taxes from foreign sources.

So, how about 10% national sales tax? Maybe an additional 1% or 2% to pay off the existing debt?

24% corporate on top of 15%-35% personal. Sounds like a killer of small business. Scrap all corporate taxes and a 15% flat tax on all income, no deductions. That would cause the economy to explode.

#3 | POSTED BY STIRSUMUP

no it wouldn't..

incorporate as a subchapter S, LLC..

You guys are fucking clueless.

oh.. taxman stated it well..

Tax is pass through on a S corp.

Link to a pdf version of the proposed 1040:

wyden.senate.gov

#16 | Posted by taxman at 2010-02-25 09:31 AM

That's simple alright. I can hear them now while they break their arm patting themselves on the back. "Look how we came up with a simplified, 1-page tax return."

I want to see "Schedule B." I'd wager that it wouldn't look a whole lot different than the Income Section of today's 1040. I guess putting all of one's income on a schedule attached to Form 1040 instead of actually putting it on Form 1040 makes filing one's taxes more simple.

That article is real short on detail, so who knows what's really being proposed.

"Replace the tax on the creation of goods with a tax on the consumption of goods."

Since consumption is about 70% of the economy, you just slammed the brakes on the most active sector.

Heck of a job, Hoover.

Replace the tax on the creation of goods with a tax on the consumption of goods.

Danforth is right. It has been argued many times before that a flat tax hurts those who can least afford the taxes the most, the poor. 15% is a big chunk of a person's income if they are living paycheck to paycheck like so many are because of the low minimum wage laws. I know in Hawaii we already have hefty income taxes and a 4% sales tax on both creation of goods and consumption of goods. People making less then 15,000 a year would be hit the hardest.

But, of course that's what the right wants. Why should they care? They don't care about anything else.

I say leave the tax laws alone and go after the fat cats that are avoiding their tax obligations with offshore tax shelters, pricey lawyers, crooked accountants and fuzzy math.

We also need to get the SEC off their duffs and start doing their job regulating the banks, credit card companies and insurance agencies that are all picking our pockets with added fees and outright fraud.

Sure, leave the thousands of pages of tax codes, written with provisions that help tyson foods, because they make huge contributions, but not the guy 2 blooks away that raises and sells his own chickens.

Fuck him, he can't afford to buy a congressman.

And while we're at it... fuck anyone who wants to produce something in this country... cause your competition will go to someplace else, make the same product without the huge labor cost, without the federal taxes, without the environmental laws, and then import them with no restrictions. Make much more sense to tax the guy who wants to make something into bankruptcy than to tax the company that wants to import stuff to the US for free.

"Ted Nugent, rock star and avid bow hunter from Michigan , was being interviewed by a liberal journalist, an animal rights activist.

The discussion came around to deer hunting.

The journalist asked, 'What do you think is the last thought in the head of a deer before you shoot him? Is it, 'Are you my friend?' or is it 'Are you the one who killed my brother?

Nugent replied, 'Deer aren't capable of that kind of thinking. All they care about is, what am I going to eat next, who am I going to screw next, and can I run fast enough to get away. They are very much like the Democrats in Congress.'