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"Hillary and Obama propose changes to the tax code that would add to its complexity."

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View Poll Results: How long do you think the federal income tax code should be?
100 pages or less
11
29.73%
101 to 500 pages
0
0%
501 to 2,500 pages
4
10.81%
2,501 to 25,000 pages
0
0%
25,001 to 100,000 pages (the current tax code falls in this category)
0
0%
100,001 to 1,000,000 pages
1
2.70%
1,000,001 to 10,000,000 pages
0
0%
10,000,001 to 1,000,000,000 pages
1
2.70%
1,000,000,001 to 1,000,000,000,000 pages
1
2.70%
1,000,000,000,001 pages or more
19
51.35%
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"Hillary and Obama propose changes to the tax code that would add to its complexity."

Old 03-13-08, 09:08 PM
  #1  
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"Hillary and Obama propose changes to the tax code that would add to its complexity."

The tax code is already way too long and way too complex.

It should be made shorter and simpler, not longer and more complex.


http://news.yahoo.com/s/bloomberg/20...g/are4y0wpjqxu

Obama Tax Plan Stresses Inequality, Clinton Focuses on Behavior

Alison Fitzgerald and Matthew Benjamin Thu Mar 13, 2008

March 13 (Bloomberg) -- Hillary Clinton and Barack Obama both propose significant changes to the tax code that would add to its complexity. His plan emphasizes income inequality, while hers seeks to change Americans' behavior.

Obama's proposal would shift the tax burden toward the rich from low- and middle-income workers. Clinton proposes targeted tax breaks designed to change the way Americans use energy, save money and care for elders.

Obama, 46, ``seems to have focused on redistribution,'' said Michael Graetz, a professor at Yale Law School in New Haven, Connecticut, and a former Treasury official.

Clinton, 60, ``is proposing tax credits for everything short of flossing your teeth,'' said Lee Sheppard, a tax lawyer and columnist at Tax Analysts in Falls Church, Virginia.

The two candidates' plans -- especially Clinton's -- would further complicate a tax system that experts say is already Byzantine. Obama would tweak and augment current laws, while Clinton would introduce even more rules by adding at least nine new credits with complex qualification requirements, phase-outs and sliding scales.

`Complicate the Process'

``The inevitable consequence,'' said Joel Slemrod, an economist at the University of Michigan in Ann Arbor, ``is to complicate the process.''

Both candidates would allow President George W. Bush's tax cuts to expire for workers in the top two tax brackets and set the estate-tax rate at 45 percent with a $7 million exemption. Obama wants tax rates on capital gains and dividends to rise from the current 15 percent rate to perhaps as high as 28 percent, the rate under former President Ronald Reagan.

Clinton spokesman Brian Deese said the New York senator would also raise the rate on investment income, though she hasn't provided details.

The centerpiece of Obama's tax plan is a $1,000 tax cut for workers that would cost more than $80 billion annually and effectively eliminate all taxes for about 10 million low-income Americans.

`Signature Difference'

That tax cut is ``the signature difference,'' said Jared Bernstein, an economist at the Economic Policy Institute, a Washington research center funded partly by labor groups. ``That costs some serious money.''

The Illinois senator would also offset the cost of his cuts by eliminating ``corporate loopholes,'' including one that allows executives of hedge funds and private-equity firms to pay a 15 percent capital-gains rate on most of their income rather than the 35 percent regular income-tax rate, and by cracking down on overseas tax havens.

Obama also offers a 10 percent mortgage credit that can be claimed by people who don't itemize deductions and eliminates taxes for senior citizens who earn less than $50,000.

His approach is aimed in part at giving a boost to workers whose incomes have been stagnant in recent years by allowing his $1,000 credit to offset payroll taxes as well as income taxes, which means it will reach lower on the income scale.

``That's a problem that faces a pretty wide swath of the population,'' said Austan Goolsbee, the candidate's chief economic adviser and an economics professor at the University of Chicago. ``Targeted credits do not properly deal with that problem.''

Clinton's Credits

Clinton, by contrast, proposes credits and deductions targeting specific groups or activities. She offers a $3,000 ``caregivers credit'' to offset the cost of caring for an elderly or disabled relative, a refundable credit ``to make health care affordable,'' and a $1,000 credit for people who save in a retirement account.

``For tens of millions of families, Senator Clinton's plan would provide more tax relief,'' Deese said.

Clinton also proposes credits for those who make homes and offices more energy efficient and for small businesses that provide health insurance to employees.

``These provisions certainly seek to use the tax system as a principal vehicle to deliver social policy,'' Slemrod said.

Obama's plan includes targeted tax provisions, too, including a $4,000 college credit and an extension of the renewable energy credit, though not as many as Clinton's.

Income Groups

The candidates' plans differ as to which income groups they help most, says Margaret Simms, director of the Low-Income Working Families Project at the Urban Institute, a nonpartisan economic and social-policy research center in Washington.

Clinton's plan ``seems to be more pitched toward middle- class families,'' Simms said. ``Obama's appears to be slightly more tilted to lower-income families.''

Neither plan will be approved by Congress in current form, even if Democrats increase majorities in both houses, Bernstein said.

There will be an opportunity to overhaul the tax code when many of Bush's 2001 and 2003 tax cuts expire in 2010. The next president will face pressure to renew some of the breaks to avoid a sudden across-the-board tax increase that could disrupt the economy.

Officials including Treasury Secretary Henry Paulson and Representative Charles Rangel, the New York Democrat who heads the House Ways and Means Committee, have put forth proposals to redesign the system.

Clinton and Obama, however, haven't focused on streamlining the federal tax code, which runs to more than 66,000 pages when regulations and rulings are counted, said Chris Edwards, director of Tax Policy Studies at the libertarian Cato Institute in Washington.

The Democrats' proposals ``would add thousands more pages,'' Edwards said.
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Old 03-13-08, 09:32 PM
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Should just be another 5 or 6 lines on the return though, right? I'd venture to guess that most people don't mind more lines if those lines are chances at getting money back. Not that I disagree with you.
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Old 03-13-08, 09:54 PM
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"Tax simplification" and "tax reform" are just code words for tax hikes. Like Thor said... I'd much rather see an extra 5 or 6 lines on my tax form than to pay an extra $2000 or so.
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Old 03-13-08, 10:00 PM
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A 66,000 page book. I wonder what size that would be if it was a text-only PDF file.
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Old 03-13-08, 10:16 PM
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Originally Posted by Thor Simpson
Should just be another 5 or 6 lines on the return though, right? I'd venture to guess that most people don't mind more lines if those lines are chances at getting money back. Not that I disagree with you.

Each extra line on the return could have many paragraphs or even pages of instructions.
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Old 03-13-08, 10:20 PM
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Originally Posted by NCMojo
"Tax simplification" and "tax reform" are just code words for tax hikes. Like Thor said... I'd much rather see an extra 5 or 6 lines on my tax form than to pay an extra $2000 or so.

I'd rather see lower marginal tax rates and a much shorter tax code. The only legitimate purpose of having a tax code is to collect money to pay for the operation of the government. Anything beyond that is social engineering.

There should be a standard deduction equal to twice the poverty level. Above that, there should be progressive tax rates of 3%, 6%, 9%, 12%, and 15%. And that's it. Nothing else. The tax code should be short, simple, and easy to understand.

However, for people who prefer the 66,000 word tax code, that should still remain an option.

Then, let each person choose which tax code they use.
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Old 03-13-08, 10:35 PM
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I think their tax talk are losing strategies in the general, so I don't mind them spouting all the ideas. I already knew that Obama sees the tax code as a punative instrument. Everyone knows that the "poor" don't pay any taxes as it is. It is even pretty easy to be middle class and not pay. What they really mean is that "the rich" (which is just a buzz word that will include plenty of people that aren't) did to pay a lot more than they do.

The one thing that this might do is help the real estate market as people try to sell and take capital gains now before either of them can double or triple them.
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Old 03-13-08, 10:49 PM
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Originally Posted by kvrdave
The one thing that this might do is help the real estate market as people try to sell and take capital gains now before either of them can double or triple them.
Which you will have to pay more taxes on. Those people are always trying to keep you down kvrdave.
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Old 03-14-08, 01:05 AM
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Not if people sell property this year, which may happen.

And there are a lot of people who are carrying contracts on property that could have their capital gains tax go up significantly. A good time to buy those at a discount. I'll probably wait until Oct. before I get serious about it, though.
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Old 03-14-08, 02:12 AM
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I don't care how long it is, just so long as it makes those damn richies pay their fair share!!!!!!!!111!!!1

Originally Posted by Karl Marx
From each according to his ability, to each according to his needs
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Old 03-14-08, 07:19 AM
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i think it should be eleventy billion pages
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Old 03-14-08, 07:50 AM
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Size DOES Matter. The more the better.
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Old 03-14-08, 07:55 AM
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Thanks for the update. I didn't realize that a new politician would want to tweak on the tax code. Wow, what a surprise!

Seriouly, what's new here? Why don't we post a news story: "New President will have different policies than the old one!"
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Old 03-14-08, 08:00 AM
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Originally Posted by grundle
Both candidates would allow President George W. Bush's tax cuts to expire for workers in the top two tax brackets
A majority of the Senate voted for this yesterday, essentially.
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Old 03-14-08, 08:11 AM
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Originally Posted by grundle
Each extra line on the return could have many paragraphs or even pages of instructions.
And WORKSHEETS. Don't forget the NUMEROUS worksheets you have to fill out to complete a line on the tax form, but don't send in the sheet (save for your records). You have 66000 pages of instructions, 6600 worksheets, and a 6 page tax form.
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Old 03-14-08, 08:21 AM
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What's McCain proposing, if anything?
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Old 03-14-08, 09:23 AM
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This is all so stooooopid.

Congress should just collect everyone's total wages, deduct whatever amount it deems necessary for earmarks in each district, divide whatever is left over by the adult population, and then send an equal distribution to each adult (whether working or nonworking).

Now, that would be a simple and fair system.

I'm hoping for a yacht.
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Old 03-14-08, 09:47 AM
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Simply because changes to the tax code are complex doesn''t necessarily mean they're bad.

btw: I hope Bush's tax cuts expire.

I also hope a Democratic controlled Congress & White House will enact new tax cuts. And some tax increases also.
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Old 03-14-08, 09:50 AM
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Originally Posted by classicman2
Simply because changes to the tax code are complex doesn''t necessarily mean they're bad.

btw: I hope Bush's tax cuts expire.

I also hope a Democratic controlled Congress & White House will enact new tax cuts. And some tax increases also.
Do you disagree with the 99-1 vote yesterday?:

http://senate.gov/legislative/LIS/ro...n=2&vote=00042
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Old 03-14-08, 09:57 AM
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Originally Posted by kvrdave
I think their tax talk are losing strategies in the general, so I don't mind them spouting all the ideas. I already knew that Obama sees the tax code as a punative instrument. Everyone knows that the "poor" don't pay any taxes as it is. It is even pretty easy to be middle class and not pay. What they really mean is that "the rich" (which is just a buzz word that will include plenty of people that aren't) did to pay a lot more than they do.
Whaaa? The poor and the middle class can easily not pay taxes? How exactly are you defining those terms?

Most poor people, and most middle class people, overpay their taxes, because they don't know enough to take advantage of all the tax breaks and deductions. Meanwhile, a heckuva lot of "rich people" -- including people who clearly should belong to that list -- pay absolutely no taxes at all, and get away scot-free. And many major corporations, who report billions in earnings, somehow also end up paying no taxes.
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Old 03-14-08, 10:44 AM
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Originally Posted by NCMojo
Whaaa? The poor and the middle class can easily not pay taxes? How exactly are you defining those terms?

Most poor people, and most middle class people, overpay their taxes, because they don't know enough to take advantage of all the tax breaks and deductions. Meanwhile, a heckuva lot of "rich people" -- including people who clearly should belong to that list -- pay absolutely no taxes at all, and get away scot-free. And many major corporations, who report billions in earnings, somehow also end up paying no taxes.
This is the liberal equivalent of welfare moms driving Cadillacs and homeless people walking around with cellphones. It's not true. Rich people pay an ever-increasingly disproportionate percentage of federal taxes.


Now, it's fine that with a progressive tax system they pay more, but let's not get carried away with crap about rich tax cheats working a rigged system.
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Old 03-14-08, 10:52 AM
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Originally Posted by NCMojo
Whaaa? The poor and the middle class can easily not pay taxes? How exactly are you defining those terms?

Most poor people, and most middle class people, overpay their taxes, because they don't know enough to take advantage of all the tax breaks and deductions. Meanwhile, a heckuva lot of "rich people" -- including people who clearly should belong to that list -- pay absolutely no taxes at all, and get away scot-free. And many major corporations, who report billions in earnings, somehow also end up paying no taxes.

Whaaaaaa?

*chock full of graphy goodness
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Old 03-14-08, 10:55 AM
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Originally Posted by wendersfan
Now, it's fine that with a progressive tax system they pay more, but let's not get carried away with crap about rich tax cheats working a rigged system.
The question is, how much is too much? Because you're right... it's ever higher and that group is always an easy target because:
1) They do make a lot of money... amounts hard to comprehend by many
2) 99% of people are not affected by the increase

I'd think that if you locked 100 people in a room with no knowledge of how much any tax group currently pays and had them put together a scale of what amounts each percentile should rightly pay, the amount they come up with for the top tier would be nowhere near what they are presently paying.
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Old 03-14-08, 11:04 AM
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Originally Posted by wendersfan
This is the liberal equivalent of welfare moms driving Cadillacs and homeless people walking around with cellphones. It's not true. Rich people pay an ever-increasingly disproportionate percentage of federal taxes.
Without also showing the percentage of the nation's income that those groups control, that graph is fairly worthless.

Last edited by Jeremy517; 03-14-08 at 11:20 AM.
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Old 03-14-08, 11:12 AM
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Originally Posted by Jeremy517
Without also showing the percentage of the nation's wealth that those groups control, that graph is fairly worthless.
Yes, because showing that the bottom quintile pays negative taxes is just mean.
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