80% of new IRS revenue will come from small businesses earning under $200K: tax experts

Honestly, did you expect anything less once we got full Democrat control? Did you expect small business to be allowed to prosper?

Have you already forgotten Dodd/Frank and the ACA which shuttered many small businesses

Democrat votes have consequences; always harmful

 

Why not address the article instead of attacking the poster? I'm sorry if the truth of the fallout from yours and other Democrat voters is unpalatable.

Democrat votes have consequences; always harmful

 

Because the article is pure gas lighting, a lot like your fear mongering posts on Democrats. Almost like Russian active measures and propaganda.

 

Hahaha! Having to resort to "teh Rushunz" is desperate.

 

More gas lighting, my post nails the conspiracy nonsense fear mongering.

 

Everyone I know believes they should pay their legal obiligations that is not the issue. The issue is what IS their legal obligation. What is the purpose of the tax system, to raise the necessary revenues for the government to pay it's debts and obligations and proper functions as efficently as possible in the least intrustive manner on the people and the economy or to make things "fair" and "equitable" in our society by transferring the lawfully earned incomes of some to others who did not earn it.

 

It was just last year that they were going to go after billionaires by pulling data on every bank account that had $600 in it.

This is going to be a total cluster. It will take YEARS to get 87,000 new agents trained and while all that training is happening the current 90k agents will be doing the training instead of doing their jobs. Furthermore, if the majority of these new agents will be doing audits then buckle up because things will get crazy. New auditors, especially those with little to no practical business experience, generally have no idea what they're looking at and if their marching orders are "find revenue" then things will get ugly. Most small business owners don't really try to hide much and/or aren't sophisticated enough to do so if they wanted to. Common stuff you see on self-prepared returns actually incorrectly INFLATES income rather than reduces it. I mean, the number of times I've seen transfers between bank accounts treated as "income" FAR surpasses times I've seen business owners trying to hide income.

If you are a business owner that likes to use "sub-contractors" instead of "employees" then watch out because I suspect THAT will be among the top items on the list to target.

 

The National Taxpayer's Union does not want an income tax period.

Second, there is no way to determine how much revenue or taxes came from a broad group like "small business." A small business can be a 1040 filer with a Schedule C, Schedule F, or Schedule E. Schedule E can range from rental income to pass-through entity income from a partnership or S corporation. S Corporation income is taxes generally at the ordinary income level and partnerhip income is self-employed income under a pro-rata distribution of the total partnership ordinary business income or loss.

From the Tax Foundation, we do know the overall source from different broad categories: individual, corporate, social insurance, property, and consuption taxes.




We also know from Federal Tax Revunes what those percentage of what those categories are for the overall federal budget:



As you can see, income taxes, the 1040 series, account for about 50% of all revenue collected. Since the IRS budget is discretionary, it is reasonable to assume that all federal department budgets and agencies will obtain their funds in similar fashion as to how the Federal Government collects its revenue. So, he is talking a bunch of mathematical bull.

 

A flat tax will simply make the above-the-line calculations more complex. That's all.

 

The "Fair Tax" is a national sales tax on all goods and services. Services will include remuneration, aka salary and benefits, with no exemptions whatsoever. So, if you have a salary, married, with four kids, the sales tax would be the same as if you were single and had no kids.

In addition, it would be all final goods and services. In the states that have a sales tax, only about a third of final goods are taxed with a sales tax. Prescription drugs, sale of new homes/condos, new cars, etc would now be subject to such a tax. And that would be the biggest tax increase ever, and that is why no national sales tax, or fair tax, would come around.

 

https://www.finance.senate.gov/rank...sals-increase-taxes-on-millions-of-americans-

JULY 30,2022
JCT: Democrats’ Proposals Increase Taxes on Millions of Americans
Millions of Americans making less than $400,000 per year would see tax hike

Washington, D.C.--The nonpartisan Joint Committee on Taxation (JCT) estimates the Democrats’ latest reckless tax-and-spend proposal will increase taxes on millions of Americans across every income bracket, with more than half of the tax increases on Americans making less than $400,000 per year.

“While Republicans’ pro-growth tax reform in 2017 reduced tax rates for all Americans in a way that increased the progressivity of the tax code and produced historic gains in job and wage growth, the Democrats’ approach to tax reform means increasing taxes on low- and middle-income Americans to fund their partisan Green New Deal,” said U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), who requested the analysis. “Americans are already experiencing the consequences of Democrats’ reckless economic policies. The mislabeled ‘Inflation Reduction Act’ will do nothing to bring the economy out of stagnation and recession, but it will raise billions of dollars in taxes on Americans making less than $400,000.”

According to JCT:

• In 2023, taxes will increase by $16.7 billion on American taxpayers earning less than $200,000—a nearly $17 billion tax targeted solidly at low- and middle-income earners next year, amidst stagflation.
  • The $17 billion hit alone is confirmation that the Biden pledge to not raise taxes on anyone earning less than $400,000 is shattered by the latest tax-and-spend bill.
  • The proposal would raise another $14.1 billion from taxpayers earning between $200,000 and $500,000.
  • According to JCT data, 98 percent of all tax returns filed by those in the $200,000 to $500,000 category are filed by those earning between $200,000 and $400,000, with at least three-fourths of the income in the $200,000 to $500,000 category also coming from those below $400,000, meaning it is likely that at least half of all new tax revenue raised next year would come from those earning under $400,000.
• Throughout the ten-year window, the average tax rate for nearly every single income category would increase.
• By 2031, when the new green energy credits and subsidies provide an even greater benefit to those at higher incomes, those earning below $400,000 are projected to bear as much as two-thirds of the burden of the additional tax revenue collected that year.

“The more this bill is analyzed by impartial experts, the more we can see Democrats are trying to sell the American people a bill of goods,” Crapo continued. “Non-partisan analysts are confirming this bill raises taxes on the middle class and produces no meaningful deficit reduction when gimmicks are removed and the full cost is accounted for. It’s no wonder this bill, which was drafted behind closed doors, is being rushed through the Senate at record pace.”

To view JCT’s distributional analysis, click here. To view JCT’s revenue table, click here.

 

The 87000 "new agents" is over a 10-year period. But the IRS is more than just agents. It has job positions from mail clerk to the Commissioner and everywhere in between. Some of the new 87000 will be Revenue Agents, some will be Revenue Officers, some will be customer service representatives, and so forth.

However, the current employment level at the IRS is about 75000 right now. About 50% will retire in the next 5 years based on FERS eligibility retirement age. This investment will replace those workers retiring and hire a net additional 20000 new persons. So, by the end of 2032, the IRS total force will be slightly over 100k.

 

That is why I am an advocate for the FairTax, instead. We will never see either one, because politicians are addicted to the power the IRS gives them, and none of them will voluntarily give that up.

 

And none of the JCT distribution analysis meets with the Taxpayer's Union analysis of what it will do.

 

So, you want a tax increase? Do you even know what the "Fair Tax" is and how it will affect everything final good and service out there?

 

I have known about the FairTax for going on a decade now. It would not amount to a tax increase for me or most people, but it damn sure would for criminals, drug dealers, and illegal aliens.

 

What is your current effective tax rate? Is it more than 23%?

The effective Tax rate is your total income tax, excluding Social Security taxes based on your total taxable income. This would include any nonrefundable credits and itemized deductions/standard deductions, you claimed on your return. This is not the marginal tax rate based on your last $1.

Fair Tax has been around since the 1980s and I have known about it since the 90s. There are studies that support it and studies that don't. Tax Foundation Analysis is one of those that does not support it. And most reputable tax experts say that a consumption-based tax, a Fair Tax, would be detrimental to a lot of people. It is regressive, it has no or very few exemptions. and it will create an information return nighnmare for you and others. You will have to submit information returns on tax collected at the source just like everyone else. No matter what system is used, the government wants its money.

 

False, The Fair Tax has a pre-bate which eliminates the sales tax that would be paid by the lowest earners. And you would not pay a "sales tax" on your salary. The tax increases you speak of would be offset by the elimination of income taxes and FICA.

For example concerning new home sale


https://fairtax-structure-psyclone....irTax does impose a,homes and repeals the MID.

 

Strawman, the 23% tax only applies to what part of your income you spend on retail products and services and after the pre-bate. You also get your money FIRST and can save it tax free until you spend it.

It is not regressive as the pre-bate is the same for EVERYONE. Those at the poverty level pay virtual no sales tax while those at the top pay the most expontionally.

 

I’m sure hoping that this will allow the service to staff the practitioner line, preferably with people that understand stuff and things. Also wouldn’t break my heart to get someone else into AUR reconsideration where I’ve had paperwork sitting for more than a year while collections is still doing their thing.

 

It seems that some folks do not like "fair".

 

It's easy to just characterize it as just a 23% effective tax, but that's not a very fair characterization. No one is taxed, at all, for their spending up to the poverty level, so it is entirely possible to pay no tax, if you're frugal. To my knowledge there is no reporting requirement for consumers, only for retailers. My mind is open, though. Convince me!

People who make their living from the ever increasing complexity of the current system have good reason to trash the FairTax, so it's not surprising that "most reputable tax experts" don't like it. It effectively puts 99% of them out of work! I have to take what they say with a grain of salt.

I'm no expert, but I can't imagine a worse situation than we currently have with the IRS. I recognize that the IRS isn't going anywhere, for reasons aforementioned, but that's no reason to to not explore the alternatives.

 

I will say this: there are people who depend on the complexity of the tax code for their continued livelihood, and they are the recognized authorities on tax matters. They, along with power hungry politicians, will, and have, work(ed) in concert to do everything in their power to discredit the FairTax as a viable alternative to the IRS.

 

That does not go to my argument Blues.

This is how it works. All final goods and services, except "necessities," in the United States and its territories would be subject to the consumption tax. So, if you are buying a brand new home costing $300k, the Fair Tax would be 23% of that price, regardless of mortgage, down payment, credit scores, etc. This would include new cars, new clothes, new everything other than "necessities." Necessities would be meat, chaese, milk, eggs, and bread.

Those who are working who receive compensation, a W2 or Nonemployee compensation, would also be subject. This would include any benefits that you may provide in said compensation, all subject to 23% withholding at source. If you pay someone compensation, you will be required to hold at source for those taxes as well as issue the required information return to verify their income to the government.

A person who meets certain thresholds as prescribed would file and attempt to obtain a refund, but the tax would still be collected at the source throughout the year and returned the following year when they filed, much like we do today with our current tax system. In other words, there is no "W-4" to show that Tax should not be withheld because that would be "complicated" in their minds. The site also tries to say that a rebate would be sent, but that would be on the prior year's return, and that could become taxable if a person's situation changed where the rebate would be less the following year than the current year. I know what they are trying to sell and that is why 99% of all CPAs think this is a bill of goods and not very affordable or realistic.

 

This does put it in a better perspective. But the question remains, how does this help inflation as the title of the bill claims??