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Taxing Families Like Companies

americancompass.org

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Re: Taxing Families Like Companies

#61

Post by EdwinLarkin »

mnd999 wrote: post #32
EdwinLarkin wrote: post #5

Earlier quoted context omitted.

This would not work.UBI would raise inflation to sky high level making basic utilities and products super expensive. UBI needs to be combined with taxes and tax exemptions on things that are essential to life like housing and healthy food,healthcare and some other things I cant think of right now.Everything else can be treated as a luxury and can be achieved through conventional capitalist methods.

It sounds like you’re suggesting preemptively increasing sales taxes on luxuries to prevent richer people buying them with their UBI and thus pushing the prices up. The net is the same, prices including sales tax (which everyone pays anyway) go up. If this is an attempt to fund UBI with sales taxes on luxuries (and I’m speculating here) then this could be achieved with progressive taxation - cut income tax for the po…

My idea is not to tax luxuries to finance UBI.The point is to make UBI a sustainable thing not just a flat income that still plays according to the the market rules (inflation).

UBI needs to be coupled with progressive thinking.Simply build more houses and tax NIMBY or find a way to build more houses quickly. The same applies to food.

Re: Taxing Families Like Companies

#62

Post by bradleyjg »

klipt wrote: post #60
encoderer wrote: post #15

Earlier quoted context omitted.

You’re talking about why we can’t treat corporations like families with higher tax rates. To me the more interesting question is more about treating families like corporations. We had a nanny for a year. She made about $50k, but I had to pay her with after-tax income so the actual cost of the nanny was closer to $70k of my pretax income. This is the precise double taxation you’re talking about. Yes, higher income peo…

> She made about $50k, but I had to pay her with after-tax income so the actual cost of the nanny was closer to $70k of my pretax income. This is the precise double taxation you’re talking about. That's just payroll taxes, which fund things like your nanny's social security and Medicare, and corporations have to pay them too. If the nanny was on a corporation's payroll it would cost them 70k too, so if you paid the c…

No, payroll tax is a separate issue. What the grandparent post is talking about is that a company can deduct its expenses and only pay tax on net income but a family can’t. I’m not sure there’s a way to fix that—the concept of profit doesn’t really apply to a family—but it isn’t a reasonable thing to point out.

Re: Taxing Families Like Companies

#63

Post by hshshs2 »

prepend wrote: post #2

> As a result, families pay a disproportionate share of federal tax receipts This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. Trying to tax this money before it gets to employees would result in double taxation as the company would pay and the individu…

>Trying to tax this money before it gets to employees would result in double taxation as the company would pay and the individual would then pay again.

The author specifically said that they don’t think that’s the answer

Re: Taxing Families Like Companies

#64

Post by encoderer »

bradleyjg wrote: post #62
klipt wrote: post #60

Earlier quoted context omitted.

> She made about $50k, but I had to pay her with after-tax income so the actual cost of the nanny was closer to $70k of my pretax income. This is the precise double taxation you’re talking about. That's just payroll taxes, which fund things like your nanny's social security and Medicare, and corporations have to pay them too. If the nanny was on a corporation's payroll it would cost them 70k too, so if you paid the c…

No, payroll tax is a separate issue. What the grandparent post is talking about is that a company can deduct its expenses and only pay tax on net income but a family can’t. I’m not sure there’s a way to fix that—the concept of profit doesn’t really apply to a family—but it isn’t a reasonable thing to point out.

Yes exactly. Thank you. Generally people should just assume that others with lived experience are not total idiots about it.

One way to fix it is simply to let families use their SSN as the EIN for the employee, and remove that from your adjusted gross income.

Re: Taxing Families Like Companies

#65

Post by klipt »

bradleyjg wrote: post #62
klipt wrote: post #60

Earlier quoted context omitted.

> She made about $50k, but I had to pay her with after-tax income so the actual cost of the nanny was closer to $70k of my pretax income. This is the precise double taxation you’re talking about. That's just payroll taxes, which fund things like your nanny's social security and Medicare, and corporations have to pay them too. If the nanny was on a corporation's payroll it would cost them 70k too, so if you paid the c…

No, payroll tax is a separate issue. What the grandparent post is talking about is that a company can deduct its expenses and only pay tax on net income but a family can’t. I’m not sure there’s a way to fix that—the concept of profit doesn’t really apply to a family—but it isn’t a reasonable thing to point out.

If you only tax money people don't spend, i.e. only tax savings, then you discourage saving.

Taxes aren't just about fairness, they're about setting the right incentives. Do you think discouraging saving is a good incentive?

Re: Taxing Families Like Companies

#66

Post by encoderer »

xapata wrote: post #56
slg wrote: post #44

Earlier quoted context omitted.

Money doesn't magically appear. The money was earned at some point and likely went through some type of income or estate tax.

Fair. However, because marginal rate differs by year, now we need to know what year's money that nanny's wage is being paid out of to make that 50 vs 70 calculation.

This is a solved problem called accrual accounting.

Re: Taxing Families Like Companies

#67

Post by bradleyjg »

klipt wrote: post #65
bradleyjg wrote: post #62

Earlier quoted context omitted.

No, payroll tax is a separate issue. What the grandparent post is talking about is that a company can deduct its expenses and only pay tax on net income but a family can’t. I’m not sure there’s a way to fix that—the concept of profit doesn’t really apply to a family—but it isn’t a reasonable thing to point out.

If you only tax money people don't spend, i.e. only tax savings, then you discourage saving. Taxes aren't just about fairness, they're about setting the right incentives. Do you think discouraging saving is a good incentive?

I agree it would be problematic to tax savings. However, if you have a two earner household a nanny is arguably a cost of revenue. I could imagine a system that allowed cost of revenue expenses to be deducted but not, say, a trip to bora bora.

Re: Taxing Families Like Companies

#68

Post by klipt »

encoderer wrote: post #64
bradleyjg wrote: post #62

Earlier quoted context omitted.

No, payroll tax is a separate issue. What the grandparent post is talking about is that a company can deduct its expenses and only pay tax on net income but a family can’t. I’m not sure there’s a way to fix that—the concept of profit doesn’t really apply to a family—but it isn’t a reasonable thing to point out.

Yes exactly. Thank you. Generally people should just assume that others with lived experience are not total idiots about it. One way to fix it is simply to let families use their SSN as the EIN for the employee, and remove that from your adjusted gross income.

So you think hiring a nanny should have special tax benefits vs e.g. paying a daycare? You realize daycares also pay the same payroll tax, should daycare patrons be able to deduct the daycare's taxes too?

Re: Taxing Families Like Companies

#69

Post by [deleted] »

klipt wrote: post #65
bradleyjg wrote: post #62

Earlier quoted context omitted.

No, payroll tax is a separate issue. What the grandparent post is talking about is that a company can deduct its expenses and only pay tax on net income but a family can’t. I’m not sure there’s a way to fix that—the concept of profit doesn’t really apply to a family—but it isn’t a reasonable thing to point out.

If you only tax money people don't spend, i.e. only tax savings, then you discourage saving. Taxes aren't just about fairness, they're about setting the right incentives. Do you think discouraging saving is a good incentive?

[deleted]

Re: Taxing Families Like Companies

#70

Post by [deleted] »

bradleyjg wrote: post #67
klipt wrote: post #65

Earlier quoted context omitted.

If you only tax money people don't spend, i.e. only tax savings, then you discourage saving. Taxes aren't just about fairness, they're about setting the right incentives. Do you think discouraging saving is a good incentive?

I agree it would be problematic to tax savings. However, if you have a two earner household a nanny is arguably a cost of revenue. I could imagine a system that allowed cost of revenue expenses to be deducted but not, say, a trip to bora bora.

[deleted]
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