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I owned my own business for 20+ years, used the "rules" to my advantage as much as I could. It ended up each year my business just broke even, after expenses and my salary. I never paid for a dinner out, drink, vehicle, gas, insurance ect out if my pocket. The rules are there, dont blame us, we did not make the rules, or blame us for the risk of having a business, you still need a "business" with a positive cash flow.
Dont blame me for an attitude of working for someone for a "golden watch", having them pay one half of your SS, IRA matching, med insurance, worrying on how to make and keep the business profitable, enough work to keep employees working and pay them a livable wage, no overtime pay for my 6 day work week at 10 hours a day, keeping customers satisfied with a product and at a competitive price.
I had people tell me, my favorite one, "you have it so good, you own your own business, you can take off when ever you want to"!!! I worked for WE Energies, our local utility for 20 years prior to my own business, I had 5 weeks paid vacation. With my own business, I never could take off 5 weeks, and not at one of my favorite times, Oct or Nov, busiest time for mine.

I can't fault him, Ed. He found a way to use the system to his advantage. The laws are there for all to read/study.
It may seem unfair to some, but it really isn't. We all have an opportunity to do the same.

Ed in Tampa wrote:Another example. I have a friend that went into hock and built a strip shopping center. I watched the center and was amazed how often a tenant would come in, build out and then close a couple of month later. This was a center with about 15 stores.

I remarked to him that the high number of turn overs had to be painful for him. NOT AT ALL! he replied. The more the better! Apparently with the tax breaks afforded him by these turn overs enabled him to pay the initial loan off in less than 5 years and to build two more centers. He told me he wants at least a 50 percent turn over rate a year and 100% would be better.

I haven't seen his 1040 but he claims he pays nearly zero taxes and own presently owns outright a 1+ million dollar house, a Bentley, Humvee, Porsche, high dollar diesel pickup, and a custom built Prevost Motor home.

That again is the problem with the tax system we now have.

rbursek wrote:I owned my own business for 20+ years, used the "rules" to my advantage as much as I could. It ended up each year my business just broke even, after expenses and my salary. I never paid for a dinner out, drink, vehicle, gas, insurance ect out if my pocket. The rules are there, dont blame us, we did not make the rules, or blame us for the risk of having a business, you still need a "business" with a positive cash flow.
Dont blame me for an attitude of working for someone for a "golden watch", having them pay one half of your SS, IRA matching, med insurance, worrying on how to make and keep the business profitable, enough work to keep employees working and pay them a livable wage, no overtime pay for my 6 day work week at 10 hours a day, keeping customers satisfied with a product and at a competitive price.
I had people tell me, my favorite one, "you have it so good, you own your own business, you can take off when ever you want to"!!! I worked for WE Energies, our local utility for 20 years prior to my own business, I had 5 weeks paid vacation. With my own business, I never could take off 5 weeks, and not at one of my favorite times, Oct or Nov, busiest time for mine.

I understand perfectly what you are saying I to have have and had businesses in the past and present.

I understand the rules. The problem is people shouldn't work the rules. The fact is someone is going to pay, is it right to shift it off to someone else?

Gene Howe wrote:I can't fault him, Ed. He found a way to use the system to his advantage. The laws are there for all to read/study.
It may seem unfair to some, but it really isn't. We all have an opportunity to do the same.

I do fault him. He was not paying his fair share. He was making money on the backs of others that make up the difference for what he didn't pay.

If everyone worked the system so no one paid what then? Who would pay for the military? The food inspectors? The Coast Guard that risks life and limb to pull idiots out of water that should have never been allowed near water? Who pays for disease control? The parks?

In my opinion there has been too much working the system. Where is the idea of shouldering the load and bearing one's fair share?

If companies and corporations paid their fair share without "working' the system maybe we all could have lower taxes.

There is one other problem the idiots we allow to decide how to spend the money. Again if people voted not by what is in it for me, but rather what is best for this nation and held our electorate to that concept we would be far better off.

The problem is everyone is out for number one and how to "work' the system.

If a VAT or sales tax instead of an income tax in a much lower revenue for the government, then that's just one more argument in favor of it, in my opinion. The government needs to be doing at least 75% less than they do now.

And most proposals I've seen have some type of mechanism to help the poor. Necessities like groceries would either not be taxed, or there would be a rebate or even a prebate to cover the taxes. There would also be no sales taxes on used used items, only new. So a poor family buying a used minivan would not pay a sales tax while the millionaire buying a new sports car or flashy SUV would.

fredsheldon wrote:Let me see if I understand how this works. A guy making $30,000 a year pays $20,000 for a new car. He pays $3,000 in taxes at 15% VAT. That's 10% of his income for the year. Now comes a fat cat who makes $50 million a year. He buys the same car and pays the same tax which is .00006 % of his income for the year. Assuming they make no more purchases for the year, the government receives $6,000 in taxes. Using the current system, the little guy may pay $2,000 in taxes and the big guy would have paid lets say $7,500,000 in taxes at 15%. The government would have received $7,502,000 in taxes using the current system. Have I missed anything here How do we pay for those wars. Let me say right up front I'm not too smart when it comes to these types of issues so I could be way off base here.

I think your off Fred. If each had the opportunity to buy the same car for the same price and paid the same sales tax. That's fair. How much % of individual income they wish to sacrifice is not part of the purchase equation at that time. I hope like hell to be able to purchase an expensive new car one day, after making $1,000,000.00 for the year, and hope like hell they are not taxing me for the car purchase based on my income level. The VAT to production and sales is a foolish approach. Eventually the consumer is going to pay the full amount anyway and most of it is a "Hidden" tax, as at sale, only the last attachment is visible. You think sales taxes are rigged by the powers now, let them get their paws on the ability to attach a rate at every level of changing hands in the process.

moggymatt wrote: The VAT to production and sales is a foolish approach. Eventually the consumer is going to pay the full amount anyway and most of it is a "Hidden" tax, as at sale, only the last attachment is visible. You think sales taxes are rigged by the powers now, let them get their paws on the ability to attach a rate at every level of changing hands in the process.

We have a VAT in Canada (ours is called GST, Goods and Services Tax) and it dosn't work that way. Although the tax is billed at each level when the product is sold again the seller is credited back the tax already paid, and the government only actually collects on the final transaction.

When it was brought in it replaced a Manufacturers Sales Tax which was a hidden tax. As it was collected at manufacturers level it was built into the base price and as the product moved through the distribution chain it increased the markup at each level.

Since the tax was only charged on products made in Canada it put our products at a disadvantage vs imported goods.

When the GST came in the retail price on most manufactured goods actually went down.

Ed,
"he was not paying his fair share." What is his "fair share"? What the tax law sez or what your conscience sez, or what someone who is paying taxes at the rate the law sez and resents you for paying what the law sez, because it is less? Then we should resent the person who makes the same income but is frugal and has more $ in the bank, or the bigger house, ect. We all have choices, if someone chooses to work harder instead of smarter, well that is there choice. If someone chooses, not to clip coupons, send in rebate forms, ect, save/invest, be financially lazy, think that getting rich is a one thing deal, exp, win the lotto, inheritance ect. It is not that way for most affluent people, they accumulated it over a period of time, by saving/investing, putting that amount away each month, then with what is left buy the luxuries. The mentality today is buy the luxuries first, then if I have anything left, put it in the bank.
It is beyond me why someone would want to buy a new car? Knowing it just depreciated driving it off the lot, instead of buying a 3 year old car. Buying a bigger house, more expense in taxes, utilities, mortgage interest, maintenance, ect. If you look historically at owning a house, and calculate in all the cost it is, it is not a great investment. The majority of the home owners hitting 55-60 years old still have some type of loan on there house. The banks want to have you take out a second and a third, so you can buy that Harley, that boat, RV, there business is collecting dept interest.

rpd wrote:We have a VAT in Canada (ours is called GST, Goods and Services Tax) and it dosn't work that way. Although the tax is billed at each level when the product is sold again the seller is credited back the tax already paid, and the government only actually collects on the final transaction.

When it was brought in it replaced a Manufacturers Sales Tax which was a hidden tax. As it was collected at manufacturers level it was built into the base price and as the product moved through the distribution chain it increased the markup at each level.

Since the tax was only charged on products made in Canada it put our products at a disadvantage vs imported goods.

When the GST came in the retail price on most manufactured goods actually went down.

Rpd, you have just exposed the major issue with the US's system. Corporate tax.

Guys, do you REALLY think that when GM sells you a car, (or when General Mills sells you a box of cereal) that THEY, out of the goodness of their hearts pay the corporate taxes? Really? (Are you some SPECIAL kind of stupid?) Or, are they just putting that tax into the price of that Corvette, or box of Cheerios?

Businesses do NOT directly PAY taxes. They just add the tax to the price of what you're buying.

Which is why "corporate tax rate" is just a boondoggle. YOU are still paying THEIR taxes!

Same thing, when you get a job. Social Security says, "you pay half, and your employer pays the other half." Your employer is thinking, "if it costs me X+5 to hire him, I'm out X+5." Do we need him at X+5? What your boss has to pay, is what your wages are. So, even though you don't see it, you're paying the whole thing. If you weren't there, your boss wouldn't have to pay it.

steve

I laughed when I read about the boycott. Political office has become the home of lairs, thieves and despots. A politician cries "FOUL" for various reasons however in this case it covers a multitude of actions. First, the politician knows that nothing will be done about it so he/she can safely spout about the injustice without fear of ever having to act upon their words. Second, by pointing at a falling sky he/she is attempting to distract voters, critical in an election year. The HMFICs of both parties and their associated PACs are raising huge amounts of money to sling mud and hate at the opposition and Americans are sick of it. Personally I believe that those who buy in to the rhetoric are the same that think "Reality TV" is quality wholesome family entertainment. Decades ago there was a movie titled something like “what if they threw a War and Nobody Came?”. The political parties are trying to start a war, but middle class America doesn’t want to go. They are beginning to understand that just like the Vets who fight who once they get home, the government that promised them a better life/world/future, that government is not going to honor its commitment. So they stay home and let those with money spend it on TV, newspaper and mailer ads. The boycott is a great way to use money in ads and sling mud in all directions. Lastly, if by some strange circumstance, Congress does try to step in, The Supreme Court will over rule anything that interferes with business.

Regarding the VAT and fair share idea of taxation (and yes I can tie the two).
First, who's idea of fair share? I seriously doubt we could get consensus on this forum. Then shift the audience to career politicians and you have no chance of coming up with who pays what. Nearly everyone wants most everyone else to pay. Even if we could replace every single elected official, the replacements would get lost in a sea of influence. There are too many people who don't want to pay and those who want to get paid by those who are paying. Add to that a modicum of Capitalism and any thought of a simple solution is doomed.

Which leads me to fair share taxation. A couple decades back, an idea was floated around about a "Fair Tax". Newt Gingrich was one of those at the forefront. The idea was simple. A flat tax applied to ALL new sales. This would replace ALL Federal taxes (but not state, city, county). Currently the organization still promoting this is sure that 23% is THE number. With all deference to them, that amount was feasible a couple decades back when we as a country were more solvent. In it's simplest structure, it takes the dollar amount the nation sells and figures what percentage of that amount would equal the budget. That amount is the tax that pays for the country. However, since the treasury can print money based upon whim, we currently float upon a deficit budget. To get the fair tax system to work, not only would an amount equal to the budget be needed, but also an established loan repayment system to both the Treasury for the money it "borrowed" from other accounts and foreign governments. With the world economy, I would guess the percentage is closer to 39 and that presupposes that Greece and Spain don't fail within the next five years. Economic failure of countries might push that number north of 55%. The kicker is interest rates. In 1978 the Supreme Court ruled that a national bank could charge the highest interest rate of ANY branch in ANY state, which basically eliminated any and all State Usury laws. North Dakota saw the opportunity and nearly eliminated any cap. That is why many high interest credit cards are issued out of North Dakota. Interest fuels company and job growth. Most companies need to borrow to continue. The Fair Tax system would need an index based upon both Federal interest rates and consumer rates. Since a bank change your interest rate on a whim (kind of like Treasury printing money), planning a cost for a product could vary drastically.

Is there any chance of a middle ground? I don't think so, but I've become jaded. Members have expressed that they are happy with their investments beating the markets, using loopholes, etc Hedge fund managers are one of the wealthiest groups in this nation. Other members want more money poured into a system, but those in Congress will just take it and spend it how their influence peddlers tell them. As stated immediately above, business owners are not in business to pay taxes, they are trying to take a certain amount of investment and turn it into more money. Unless they are foolish, they are not going to absorb extra taxes, wags, employee benefits, Instead they will charge more which generally results in consumers buying less less.

Who do we make happy? Who gets the shaft?

So back to the boycott and fingers pointing in all directions.... Until (or maybe IF) this experiment called the United States of America figures out a way to lasso, brand and castrate those we have ceded control to (the politicians and big business), we don't stand a chance.

Dusty's mantra of voting in November has good merit, but I would urge a more proactive approach. Find a person you trust to represent most of the people you know and convince them to throw their had in to the ring. Starting a county of state level is fine. Provide them grassroots and monetary support until they are elected. THEN as soon as they are elected, look for their replacement!! It won't take long for them to become part of the problem. It's just the nature of politics.

Been there. Smelled the stink. Felt the knives. No current plans for going back!

Be well,
Ben

PS It's nearly 3:30 in the morning so I hope I've found the typos and made some coherent statements, but not making any promises. After all I'm NOT a politician!!:p