The Possible end of heel and toe

steve remchak · **Posted:** Thu May 06, 2010 9:32 am

DickRasmussen wrote:

Read all the way to the end.

http://money.cnn.com/2010/05/05/smallbu ... /index.htm

Also to Mike's original question, note the reference to the need for the IRS to issue its regulations. Apparently another example of what I suggested in my previous post which was that the laws are supplemented by agency regulations.

note to self. don't buy fuel from the same station too many times. :roll:

clinehall · **Posted:** Thu May 06, 2010 9:45 am

DickRasmussen wrote:

Read all the way to the end.

http://money.cnn.com/2010/05/05/smallbu ... /index.htm

Also to Mike's original question, note the reference to the need for the IRS to issue its regulations. Apparently another example of what I suggested in my previous post which was that the laws are supplemented by agency regulations.

I'm golfing with the head of the Acct Dept at ECU today, I am interested in his thoughts on this.

My thoughts, at the least, a huge waste of time, labor, postage, etc basically huge dollars for nothing! All this stuff is available upon audit, It's not going to stop some one from say, buying christmas presents at Staples and expensing it to their business. (A shameful practice I have heard of some doing) At worst, another invasion of privacy by big brother.

Michael Czeiszperger · **Joined:** Thu Apr 09, 2009 9:35 am **Posts:** 861

clinehall wrote:

All this stuff is available upon audit, It's not going to stop some one from say, buying christmas presents at Staples and expensing it to their business. (A shameful practice I have heard of some doing)

A stapler for him and an extra big box of copier paper for her. :-)

BriceJohnson · **Joined:** Thu Apr 13, 2006 7:33 am **Posts:** 2230

steve remchak wrote:

Price is a former Dookie Prof too Brice.......

I'll choose the Duke Engineer, Doctor, and Entrepeneur over the former Duke Public Policy and Political Science professor.

WalterHouston · **Posted:** Thu May 06, 2010 11:21 am

Why don't we make income taxes unconstitutional and let taxes be raised through a VAT, Federal sales tax. consumption tax or whatever you want to name it. Even the pimps and drug dealers would pay taxes. Can you imagine how many IRS employees we could lose? Can you imagine how much paperwork would be eliminated. Individuals wouldn't have to file a 1040!

Then, balance the budget except in time of war, eliminate many deductions and reduce the size of government. Yes, I'm for smaller government and few entitlement programs.

Jason Mauldin · **Posted:** Thu May 06, 2010 11:25 am

WalterHouston wrote:

Why don't we make income taxes unconstitutional and let taxes be raised through a VAT, Federal sales tax. consumption tax or whatever you want to name it. Even the pimps and drug dealers would pay taxes. Can you imagine how many IRS employees we could lose? Can you imagine how much paperwork would be eliminated. Individuals wouldn't have to file a 1040!
.

But then people would realize exactly how much they are being taxed and would become unhappy.

MikeWhitney · **Joined:** Wed Aug 20, 2003 9:15 pm **Posts:** 4724

WalterHouston wrote:

Why don't we make income taxes unconstitutional and let taxes be raised through a VAT, Federal sales tax. consumption tax or whatever you want to name it. Even the pimps and drug dealers would pay taxes. Can you imagine how many IRS employees we could lose? Can you imagine how much paperwork would be eliminated. Individuals wouldn't have to file a 1040!

Then, balance the budget except in time of war, eliminate many deductions and reduce the size of government. Yes, I'm for smaller government and few entitlement programs.

Houston for Congress!!!!!

MikeWhitney · **Joined:** Wed Aug 20, 2003 9:15 pm **Posts:** 4724

Seriously everyone, please email your congressmen and ask them to sponsor this act. Tell them you've had enough and will vote for whomever does.

http://www.downsizedc.org/etp/campaigns/83

Kevin Allen · **Joined:** Thu Aug 28, 2003 6:42 pm **Posts:** 3479

MikeWhitney wrote:

WalterHouston wrote:

Why don't we make income taxes unconstitutional and let taxes be raised through a VAT, Federal sales tax. consumption tax or whatever you want to name it. Even the pimps and drug dealers would pay taxes. Can you imagine how many IRS employees we could lose? Can you imagine how much paperwork would be eliminated. Individuals wouldn't have to file a 1040!

Then, balance the budget except in time of war, eliminate many deductions and reduce the size of government. Yes, I'm for smaller government and few entitlement programs.

Houston for Congress!!!!!

Seconded.

JamesMilko · **Posted:** Thu May 06, 2010 12:07 pm

WalterHouston wrote:

Why don't we make income taxes unconstitutional and let taxes be raised through a VAT, Federal sales tax. consumption tax or whatever you want to name it.

The biggest problem with VAT is that it isn't regressive. It's bad for the same reason that having a flat tax percent is bad, people with lower incomes end up paying a proportionally higher taxes due to them spending a higher percent of their income vs people with higher income who can save money.

Using numbers from http://www.nytimes.com/2008/02/10/opinion/10cox.html and assuming VAT will apply to the clothes,transportation, entertainment and misc buckets. (Leaving out food,housing,utilities and health care)

Income taxable spend % of income VAT taxable
149963 29034 19
44933 13268 29
9974 5957 59

Including everything makes it 46/76/"100", things break down a bit on the bottom fifth mostly because of retirees and their "$0" income but they draw from their retirement accounts allowing them to spend money.

Un mucked with numbers can be found at ftp://ftp.bls.gov/pub/special.requests/ ... intile.txt

[edit]
I'd prefer to see a revamp of the excise tax system. Buying a boat/6 figure car/etc? Enjoy your "VAT."

editx2, added some numbers

David Spratte · **Posted:** Thu May 06, 2010 12:50 pm

Michael Czeiszperger wrote:

MikeWhitney wrote:

A good example of "no one knew" is the $600 1099 requirement in the health care bill. Anyone with a small business who pays $600 or more to a supplier for any reason (parts, materials) is now required to file a 1099 for every transaction over that limit. Health care?

I run a small business and was just discussing this with my accountant yesterday. 1099s have always been required, the law just didn't spell out spending limits. 1099s aren't for every transaction, but rather a year-end tally of everything you paid to someone working for you who's not an employee. The point is to keep businesses from having employees without paying payroll taxes, and to make sure the independent contractors are reporting all of their income. My understanding is it's not for physical goods, but for services.

Yup. 1099's for service only. I had to request corrected 1099s when clients included goods sold in the total on 1099s. That's not income, that's goods sold and there's a substantial difference.

Not looking forward to the day when NC starts charging sales tax on services and it's likely on the horizon.

MikeWhitney · **Joined:** Wed Aug 20, 2003 9:15 pm **Posts:** 4724

David Spratte wrote:

Michael Czeiszperger wrote:

MikeWhitney wrote:

A good example of "no one knew" is the $600 1099 requirement in the health care bill. Anyone with a small business who pays $600 or more to a supplier for any reason (parts, materials) is now required to file a 1099 for every transaction over that limit. Health care?

I run a small business and was just discussing this with my accountant yesterday. 1099s have always been required, the law just didn't spell out spending limits. 1099s aren't for every transaction, but rather a year-end tally of everything you paid to someone working for you who's not an employee. The point is to keep businesses from having employees without paying payroll taxes, and to make sure the independent contractors are reporting all of their income. My understanding is it's not for physical goods, but for services.

Yup. 1099's for service only. I had to request corrected 1099s when clients included goods sold in the total on 1099s. That's not income, that's goods sold and there's a substantial difference.

Not looking forward to the day when NC starts charging sales tax on services and it's likely on the horizon.

According to the CNN article, the new law will be for goods as well. Is that not accurate then?

DickRasmussen · **Posted:** Thu May 06, 2010 2:21 pm

It looks like the actually law adds other stuff whenever it kicks in. Past practice is not relevant if the law changed for the reasons explained in the CNN article. Plus I found an article that claimed to actually include the text of the new law.

As the CNN article pointed out, the IRS regulations will tell the "real' story when they are issued.

One thing I know for sure, there will be a lot of "the sky is falling" claims to make political and talk radio/tv points that may or may not reflect reality.

DickRasmussen · **Posted:** Thu May 06, 2010 2:30 pm

JamesMilko wrote:

[
Including everything makes it 46/76/"100", things break down a bit on the bottom fifth mostly because of retirees and their "$0" income but they draw from their retirement accounts allowing them to spend money.

Unless retirees are poor, there is likely to be lots of income that is taxable under the current system even assuming full retirement age.

Social Security is taxable by the Fed if income exceeds a sliding scale above a certain number . . . which isn't very high is you want to autox, etc. 401K withdrawals are taxable income (except Roth) and get added to the SS income to determine how much of SS is taxed. FYI this was a Ginnrich/Clinton change as part of the changes to balance the budget). Obviously most interest income is taxable. Most traditional pensions are taxable income.

Only the poor, the very rich, and big corporations escape income taxes it appears. :cry:

In my case, it would be very nice it the income tax went away on my tax sheltered 401k withdrawals and SS. Especially if my medicare and medigap, etc. premiums will exempt from the various replacement taxes. Not going to happen in my lifetime . . . even if I live to my 90's like my parents have)

Dick (who is close, I hope, to retirement)

David Spratte · **Posted:** Thu May 06, 2010 2:36 pm

Sorry Mike, I skimmed. But. . .
I'd be stunned if it's around long enough to be implemented in 2012.

Of course, they decide corporations need 1099s the same year we incorporate.

If it holds at least we'll have a year or two before the onslaught of paper work.

Needless to say, I'll be talking to my accountant and writing letters to my reps and senators.

—Grumpy, small business owner.

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