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Self Employment Taxes – How The Taxation System Works!

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March 3rd, 2010 at 6:37 pm

23 Responses to 'Self Employment Taxes – How The Taxation System Works!'

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  1. Does the left in this country really want Fairness?
    I’m a registered independent and a conservative. During these last primaries a couple of the democrats brought up a point that frankly I couldn’t defend. A couple of times it was brought up that the C.E.O. of most all companies paid less taxes [by percentage] than his or her secretary. Let’s assume that the secretary’s income puts her in a bracket where she pays a good amount of income taxes and that the ceo has some slick accountants working for him so that this whole argument holds water. Now this being the case I think it would be fair to say that they should both be paying the same percentage.
    So my question [especially to those on the left] is why in the world would you not support the Fair Tax Plan that has been promoted by Neil Boortz the libertarian radio host from Atl. Ga. among others?

    What is the FairTax plan?
    The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

    The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.

    The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

    The FairTax:

    Enables workers to keep their entire paychecks
    Enables retirees to keep their entire pensions
    Refunds in advance the tax on purchases of basic necessities
    Allows American products to compete fairly
    Brings transparency and accountability to tax policy
    Ensures Social Security and Medicare funding
    Closes all loopholes and brings fairness to taxation
    Abolishes the IRS
    (Fair Tax.org)
    Hey, even the drug dealers and the politicians would have to belly up! Everyone pays the SAME.
    Liberal Fifth: Maybe once people get a taste of a tax policy that makes sense then they’ll be more willing to take a look at the problems with the FED.
    Bash: Looks like you’ve done some homework on this. You have to give him credit for including those facts [that you use in your argument] in his book. I think this plan is light years ahead of what we now have and puts much more of the decision making power where it belongs..in the hands of the people.
    Skammuni: Read the details again..[up to poverty level]
    Bash: I need a source so I can study up on that, thanks.
    Pepper: Looks like you described our present system real well. If the FT stinks then do you have a better idea?
    usa: Thanks for nothing.
    So what..everyone is happy with the present system? Why all the complaining about the rich then? I don’t hear any solutions. All I’ve heard so far is lots of complaining!
    Definition…
    A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. …
    Explain exactly how the Fair Tax meets this definition.
    Kat: I think you got this figured out but please stop bringing up the constitution..it’s out dated don’t you know?
    Ol’ Foolosifer: One main advantage to the FT is that we’re not taxed until we actually purchase something. Wouldn’t this promote saving which would strengthen our economy in the long run?
    Doc: I changed my mind. I ate a forty pound beaver instead. Nix on the mint Jelly.

    L.T.M.

    3 Mar 10 at 6:37 pm

  2. You forgot one.

    - Abolish the Federal Reserve
    References :

    Liberal Filth

    3 Mar 10 at 11:39 pm

  3. fairness for some
    References :

    Saerlaith

    3 Mar 10 at 11:41 pm

  4. Yes
    References :

    ?make love, not war?

    3 Mar 10 at 11:43 pm

  5. I don’t know all of the pros and cons to be for or against it. Initially, it doesn’t look bad but what are some of the repercussions?
    References :

    logan

    3 Mar 10 at 11:45 pm

  6. They are politicians so the answer is no. Just PLEASE don’t act as if republicans are any better. Politicians are dirty no matter their skin color or party affiliation.
    References :

    Hang on to your hats

    3 Mar 10 at 11:47 pm

  7. So how was supper? I prefer your idea of what to do with a sheep or lamb over that of Ol Fool’s….

    I’ll be back to follow up on this question in a bit.

    Let me venture a guess here and say…they don’t like it and consider it to be "regressive"?

    So isn’t in theory, simply put
    People who have more money usually spend more money therefore they pay more taxes.
    People who have less money buy less stuff and pay less tax. Most of us are somewhere in between…yada yada yada.

    Tighten the loopholes and it averages out.

    So, did you have chops, a roast or what? Stuffing with mint jelly? Garlic butter and yeast rolls?

    Folks are gonna b*tch no matter what.
    I don’t like mint jelly…so hell with it. Throw out the lamb chops too.
    How about no taxes for anyone?

    ******************************************************************
    EDIT:
    A forty pound beaver? hmmm after what ya’ll did with that nasty llama, I think I’ll pass on the giant beavers…maybe O/F can he’p ya out. haha

    Fair tax? There’s an oxymoron if I ever heard one.

    You don’t really think that a large percentage of the liberal left will be in favor of a tax that subjects them to actually having to START paying taxes. Right now many pay only sales taxes just like many of the extremely wealthy. Too poor….you’re exempt. Too rich…use the loopholes, pay a lawyer, you’re exempt too. This is too fair…not gonna happen.

    ha ha…how many times have I heard the word regressive now…. it’s regressive, it’s regressive…..baaaa-baaaa
    References :

    Dr Awkward

    3 Mar 10 at 11:49 pm

  8. Problem #1:The FairTax hides the amount of sales tax being paid. Boortz explains how "the FairTax was designed as what’s called an ‘inclusive’ tax—that is, the tax is included in the list price of the product." He reasons that "since our current income taxes are figured on an inclusive basis—that is, they are taken out of our paychecks, not added to them—it was decided to handle the sales tax in exactly the same manner." How could someone write a whole chapter on the evils of the withholding tax and then turn around and recommend a hidden tax like the FairTax? Boortz even has the audacity to claim that with the FairTax the "consumer is completely aware of what he is paying." Really? Suppose the FairTax is implemented next year. Go stand in front of a store and ask the typical American how much federal sales tax he paid on the item he just bought for $139? Give him a calculator and ask him again. Unless he is familiar with figuring percentages, the average American will not be able to tell you how much sales tax he just paid.
    Problem #2:The FairTax is progressive. Boortz correctly identifies a progressive income tax with Karl Marx. Yet, because of the prebate, the FairTax sets up a progressive tax system like we have now. Millions of Americans will pay no taxes at all. Others will have some of their taxes offset by the prebate. "The rich" will still be paying the majority of the taxes—something Boortz says he considers "class warfare."
    Problem #3: The FairTax is an income redistribution scheme. Boortz calls the Earned Income Tax Credit "a prime conduit for income redistribution from high-income earners to the poor and middle class." Why, then, would he promote a FairTax Plan with a prebate that in essence allows the majority of citizens to not only pay no taxes, but in many cases gives them money over and above that which they paid in sales tax? What’s fair about making "the rich" subsidize the poor and the middle class? Boortz calls Social Security an "income redistribution and welfare program." But under the FairTax Plan, Social Security is even worse. At least now it is funded by payroll tax contributions that are independent of deductions for federal income tax. Thanks to the prebate, many people will receive a free retirement program via Social Security who never contributed a dime towards their retirement, or as Boortz says: "All benefit and no burden."
    Problem #4:The FairTax creates new tax collectors. From doctors and lawyers to garbage collectors and tree trimmers—multitudes of individuals and businesses that never collected taxes before will be turned into tax collectors for the federal government. Will a teenage babysitter be required to collect the FairTax from her neighbors?
    Problem #5:The FairTax creates new taxes. All Internet purchases will be subject to the national sales tax. So will heart surgeries, kidney transplants, and appendectomies—plus the drugs prescribed by the doctors doing the procedures. Want to attend a baseball, football, or basketball game? Better save up a little extra to take care of the FairTax that will be imposed on your tickets.
    Problem #6: The FairTax creates new taxpayers. If there are no exceptions and no exemptions then churches and other non-profits will be forced to pay a national sales tax on every purchase. The FairTax will basically do away with not-for-profit entities. The FairTax would also count as taxable the purchases made by federal, state, and local governments. This means the government will be using taxpayer money to pay taxes to itself.
    Problem #7: The FairTax makes it easier for the federal government to raise taxes. All Congress has to do is slightly increase the initial 23 percent rate. A penny here, a penny there; a quarter of a cent now, a half of a cent later. Just a little at a time, of course. It might be to compensate for inflation, to give seniors a cost of living raise, or to pay for some manufactured crisis like bird flu . Since the federal budget goes up every year, and the FairTax is supposed to be "revenue neutral," the FairTax rate will have to go up right along with the federal budget. You can count on an increase every year, for if government budgets are not under control now, why should we expect Congress to magically become fiscally responsible just because the FairTax is adopted?

    Furthermore, since Social Security and Medicare would be funded out of general revenues the FairTax rate would also have to go up to fund the ever-increasing cost of these programs. Then there are the escalating costs of the new prescription drug plan. And if the amount of the prebate "is updated every year to keep up with inflation," the FairTax rate will have to be raised in like manner. How can Boortz recognize that "there is absolutely no limit to the government’s desire for your money" and then express hope that the FairTax rate "will go down in the future" if "Congress can keep government spending down"?
    References :

    bash

    3 Mar 10 at 11:51 pm

  9. The problem with a national sales tax is that there are minimum purchases required to survive, while most others are optional. For this reason, it would be a regressive tax. If basic needs were excluded (food, clothing, shelter, maybe transportation), some reasonable plan could be reached.

    I don’t see it happening anytime soon, though.
    References :

    The Skammunist

    3 Mar 10 at 11:53 pm

  10. We do not support the "fair tax" because it is inherently regressive.
    The propensity to spend falls as income increases and the propensity to spend overseas rises as income increases.
    As such despite the tokenestic prebate – the rich wind up paying less of their income in taxation than the middle class.
    It is merely a way to push the tax burden away from the rich toward the middle class.
    References :

    Sageandscholar

    3 Mar 10 at 11:55 pm

  11. Because this is a regressive tax and the system would be worse than it is now on many.What is hard to understand? The more you make the more loopholes you have to not pay your fair share.If you only have salary you pay and there are no loopholes for you to take.So in the end the rich never pay all they owe while the average worker pays the full amount.This is not fair either but its still better than the so called fair-tax plan which isn’t.Some of us actually did pass reading comphension.
    References :

    peppersham

    3 Mar 10 at 11:57 pm

  12. and you had some guy from texas and some croney from what kansas as his side kick in the white house for 8 years and they were far from fair with the democrats. I think the side kick started a war in Iraq on very bad intelligence and now the entire nation of Iraq is in such a bad state that Iran might gain influence over there. Yes 9-11 appeared to be a terrorist attack but why did the previous administration do all it could to stop any investigation into it? why did Bush wait until the second tower was hit before he stopped reading to the school children? You would think he would do something right away? We have a multi trillion dollar air- force and Navy air wing but they did not do a thing to intervene on 9-11 after the planes were hi jacked. But if you google/yahoo search a stand down order with 9-11 you find a bunch of sites. and you ask why would this order be given? I would say with the lack of action on both 9-11 and Katrina I would question Bush’s loyalty to our nation. and his poor performance as commander in chief. Invading Iraq and sending in our troops not properly armed. His horrid job at managing the deficit. There is no reason at all the debt should be above ten trillion dollars. A very bad mismanagement of our nations economy by the Bush administration.
    References :

    conservatism has failed the usa

    3 Mar 10 at 11:59 pm

  13. This was proposed in 2000 by Steve Forbes, which he called the flat tax. Huckabee proposed the same this last campaign. We need a serious debate on this idea, pros and cons..especially the negatives.
    References :

    Jerry O

    4 Mar 10 at 12:01 am

  14. I like the sentiment and agree with closing loopholes but any sales tax is by nature regressive.
    References :

    sbcalif

    4 Mar 10 at 12:03 am

  15. I think so, yeah… in their own way. Except they redefined the term fair. With this new meaning and a few slogans…. who could resist it??
    References :

    Nurse

    4 Mar 10 at 12:05 am

  16. I am willing to bet that none of the DC dummies ever pay income tax, We do we pay all kinds of tax, but I bet they do not pay any, I am sure we pick up the tab for all their tax’s, think about it, plenty of people in the usa, to cover it all!!!!! they are all like a secret society!
    References :

    guanete42

    4 Mar 10 at 12:07 am

  17. Given that the income tax was unconstitutional to begin with, I am definitely down with abolishing it, and if there was just one, single sales tax, that served both state and feds, I might be able to go with that. At least, if they set one level and quit dicking with it. And we didn’t have to deal with local sales taxes as well, at least without having a veto in the matter.
    Sure the Dems primary objection is to the possibility of losing all that great graft from the people their tax modifications have been favoring all these years. Fairness, by definition, for the libs is whatever best advances their agendas or their fortunes. So, yes, by their lights, they are all in favor–get it?–of fairness. Just not to the people who merely elect them.
    Pitch them all and hire new guys with character and integrity.
    Join the revolution at http://www.resistnet.com/
    References :

    kaththea s

    4 Mar 10 at 12:09 am

  18. The only thing the left wants is their own way, and they don’t care if it’s fair or not.
    References :

    Virginia B (SFECU-Pray4Revival)

    4 Mar 10 at 12:11 am

  19. It always amazes me when the filthy rich seem to pay absolutely no tax at all while the under dogs have to pay. So you go and run for the position and if you can break that circle well and good.
    References :

    Dropshortandduck

    4 Mar 10 at 12:13 am

  20. Ultimately I believe that the Fair Tax is the most equitable way for all to pay their share of taxes based on what we consume. Logically it would seem that the wealthiest would pay more in taxes because they would in fact have more disposable income to by goods and services.
    The only problem I can see with this approach is that the law makers would have a tendency to constantly raise the tax percentage unless there are checks and balances built into the system. The less wealthy could easily be convinced that the base rate should be increased because the wealthy proportionately would pay more.
    Anyway great conversation starter and one that merits further discussion and consideration.
    References :

    Ratherbridin

    4 Mar 10 at 12:15 am

  21. Well the demographic population targeted by obamas campaign in this last election would not go for this, as they are not worried about paying taxes anyhow. They want to know what’s in it for them period. Forced sharing, they care nothing of fairness. Fairness is a one sided facet to the left. Hypocritical if you will. Gay activists want to invoke freedom of speech but then burn churches down for same right? Fairness? More like a power grab.
    References :

    Liberal+Face+Bat

    4 Mar 10 at 12:17 am

  22. What you and Bash both say makes sense but to some they’d never understand it.
    Another solution is simply, a flat rate tax. A percentage of what you get, no deductions for anybody. Every body pays the same rate whether it be 10 % or 35%. Do away with sales tax and all other taxes. The one tax is paid to the state who in turn pays a percentage to the Federal government. The rest goes to the running of the state.

    Simple is usually better.
    References :

    the Ol' Foolosifer

    4 Mar 10 at 12:19 am

  23. I am for a consumer tax. Right now there are a lot of loop holes where some people do not pay their fair share and also a lot of people that pay no tax at all. For example the people that sell dope, prostitutes, house keepers, baby sitters etc. pay no tax at all because no one reports their income. Any private owned business that sometimes receives cash money may opt not to report the cash money and just pocket it. They only report the check and credit card payments for their income. Those that work for a company that keeps up with what they paid you pay 100% of the taxes they owe.

    The CEO’s and top personel in the different companies can write off business trips, entertainment, and a million other things. After they get through writing all of that suff off, there is little tax to pay. The company pay most of these bills so these type of things get written off twice once by the company and again by employee.

    Now everyone is going to spend money. The rich (people that sell dope) will now have to pay taxes for the first time. No taxes will be paid except for when you buy something. A consumer tax is the only fair way to make sure everyone is taxed fairly.
    References :

    Sarah

    4 Mar 10 at 12:21 am

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