Former Starbucks Prez Says: Don't Gut Estate Tax

[dalegg 143]

I go with the Steve Forbes way. Straight flat tax. Nothing deductible, no tax shelters. If you earn X amount from any source then devide it by the percent they come up with. That way the ones that make less pay less. The ones that make more pay more.

I'd go with that. But it ain't ever going to happen. Those profiting ridiculously from the various loopholes and shelters that they have purchased from the legislator won't let that happen.

I think forbes was proposing a 15% flat tax. Compared to their current rates, I think the wealthier Americans would jump on that. It's the lower income earners that have rates around 5% that would suffer by this. As a matter of fact, my effective tax rate was less than 15% after my deductions, so I would want nothing to do with this either.

[Mr. Big Dog 10,747]

I go with the Steve Forbes way. Straight flat tax. Nothing deductible, no tax shelters. If you earn X amount from any source then devide it by the percent they come up with. That way the ones that make less pay less. The ones that make more pay more.

I'd go with that. But it ain't ever going to happen. Those profiting ridiculously from the various loopholes and shelters that they have purchased from the legislator won't let that happen.

I think forbes was proposing a 15% flat tax. Compared to their current rates, I think the wealthier Americans would jump on that. It's the lower income earners that have rates around 5% that would suffer by this. As a matter of fact, my effective tax rate was less than 15% after my deductions, so I would want nothing to do with this either.

I think it's a myth that wealthier Americans pay top tier rates on EVERY dollar they make. They may pay that on a portion of the money they make leaving their effective tax rate far below the 35% or whatever the top tier happens to be these days if calculated against each and every dollar they made.

The lower income folks, however, usually get the shaft as they get their standard exemptions to claim and then they pay income tax, sales tax, gas tax, property taxes, etc. They ain't far away from the 15% mark if you add it all up.

But the myth that the rich really pay 35% of what they earn seems to be quite alive...

[dalegg 143]

But the myth that the rich really pay 35% of what they earn seems to be quite alive...

as does the myth that they are hardly paying any taxes..

[Mr. Big Dog 10,747]

But the myth that the rich really pay 35% of what they earn seems to be quite alive...

as does the myth that they are hardly paying any taxes..

I did not say that they don't pay any taxes. But considering that money buys just about anything in this country - certainly tons of legislation - it stands to reason that it ain't the have-nots that keep this "no more loopholes flat tax on every dollar" idea from being adopted.

[GaryC 7]

I'd vote for someone that was proposing it.

[Laura_and_IanM 0]

I may not be a savvy financier, or up to date on the tax codes and what have you, but something doesn't add up to me. Why is it fair to even tax an inheritance?? An inheritance that was earned by the deceased and it was their wish to leave it to lets say their child(ren). It's just another way for the government to be in control and stick their greedy lil paws out saying "gimme gimme gimme!!". They are lining their pockets while leaving us high and dry. I don't know what the percentage is that you have to pay but I am sure that whatever it is, it is too much. NOTHING would be more like it!!!

As for what you said Steven about farmers not losing their land, that is funny because my great uncle sure lost his..well he decendants did when he passed away...why I wonder??? hmmmm well I will tell ya....they couldn't afford the TAX THAT THEY HAD TO PAY....SO yes, you are wrong. So please don't call desert fox a liar. Don't believe everything you read Steven. I like to see where you got your information from as far as no farmers ever losing their farms on account of not being able to pay the tax. It does happen.

LJ

[GaryC 7]

I come from a farming family and I can tell you that with the price of land and equipment even a modest farm can go over the limit for the death tax. I have been to a lot of farm sales because of that nasty bit of social engineering. It is ruining the family farm. It also can nail just about any other family business that isn't prepaired for it. The death tax is draconian. Don't believe the hype that the libs put down. It isn't only the top wealthiest that get nailed. They can get around it with shelters and creative bookkeeping. It's the backbone of America that takes it in the a$$ with that law.

[Ban Hammer 14,655]

What they should do is get rid of the provision (in California at least) that allows the IRS to ask people filing their income tax returns to include their last year's refund as income.

here in kansas the state refund from last year is counted as income too. i think it is stupidity beyond belief to count overpayment of taxes the previous year as income.

The tax code is way to complicated. Now it's being used for "social engineering" which is wrong. I go with the Steve Forbes way. Straight flat tax. Nothing deductible, no tax shelters. If you earn X amount from any source then devide it by the percent they come up with. That way the ones that make less pay less. The ones that make more pay more.

amen to that. one gal i was dating years ago got back way more than she paid into it because of the way the tax laws were written. in effect, it was another paycheck for her.

if they went with a flat tax say 10% of a person's wages then everyone is paying their fair share, rich and poor alike.

[Mr. Big Dog 10,747]

What they should do is get rid of the provision (in California at least) that allows the IRS to ask people filing their income tax returns to include their last year's refund as income.

here in kansas the state refund from last year is counted as income too. i think it is stupidity beyond belief to count overpayment of taxes the previous year as income.

That's not what they do.

You took a deduction on the amount you originally paid to the state. Then you got money back from the state that you previously deducted from your income when doing your federal return. All the feds do is adjust your previous deduction to reflect what you actually paid vs. what you previously declared.

If that adjustment wasn't taking place, then I could technically pay all my income above the federal tax exempt amount to the state, file my federal tax return declaring the outrageous tax I paid to the state thereby avoiding any federal income tax (maybe even collect some EIC). Then I'd turn around and reclaim my overpayment from the state w/o ever paying any federal income tax on it. All it would take for this scheme is savings to carry me through the first year of doing this. And I would be done paying federal income taxes for the rest of my life...

Edited August 9, 2006 by ET-US2004

[Ban Hammer 14,655]

What they should do is get rid of the provision (in California at least) that allows the IRS to ask people filing their income tax returns to include their last year's refund as income.

here in kansas the state refund from last year is counted as income too. i think it is stupidity beyond belief to count overpayment of taxes the previous year as income.

That's not what they do.

You took a deduction on the amount you originally paid to the state. Then you got money back from the state that you previously deducted from your income when doing your federal return. All the feds do is adjust your previous deduction to reflect what you actually paid vs. what you previously declared.

If that adjustment wasn't taking place, then I could technically pay all my income above the federal tax exempt amount to the state, file my federal tax return declaring the outrageous tax I paid to the state thereby avoiding any federal income tax (maybe even collect some EIC). Then I'd turn around and reclaim my overpayment from the state w/o ever paying any federal income tax on it. All it would take for this scheme is savings to carry me through the first year of doing this. And I would be done paying federal income taxes for the rest of my life...

you're wrong. i claim 2 deductions right now in an effort to keep from paying more than i was, and i still overpay my taxes. kansas just likes to tax everything they can.

[clloyd 0]

I took a quick look at the Kansas tax forms, and could not find anywhere where the state tax refund is taxable.

The instructions are located here:

http://www.ksrevenue.org/pdf/forms/k-40inst05.pdf

Line by line instructions on the general form.

http://www.ksrevenue.org/pdf/forms/schsinst05.pdf

instructiosn on the modification form.

[Ban Hammer 14,655]

I took a quick look at the Kansas tax forms, and could not find anywhere where the state tax refund is taxable.

The instructions are located here:

http://www.ksrevenue.org/pdf/forms/k-40inst05.pdf

Line by line instructions on the general form.

http://www.ksrevenue.org/pdf/forms/schsinst05.pdf

instructiosn on the modification form.

it's right here on one of those links

http://www.ksrevenue.org/pdf/forms/schsinst05.pdf

right hand side, about halfway down under line a8

enter any state or local income tax refund included as income on your federal return.

[clloyd 0]

That is a subtraction from your federal AGI, not an addition.

[Ban Hammer 14,655]

That is a subtraction from your federal AGI, not an addition.

i get a form every year from them and on it, it states i must claim the amount of my previous year's state refund as income. that's what i'll go with. meanwhile, i'm gonna keep raising my deductions so less taxes gets paid out.

[clloyd 0]

The fact is that Kansas does not tax any refunds. What you pointed out was a subraction from the portion of federal AGI that the state taxes.

The only time the IRS taxes a state or local refund is when, in the previous year, the taxpayer claimed the amount of tax paid as a deduction on their schedule A and recieved a portion of it back in the form of a refund. It's really recapturing a deduction from the previous year. On the other hand, if you have to pay the state more taxes, that is deducted on the tax return.