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The Flat Tax
Posted on 4/7/15 at 8:26 pm
Posted on 4/7/15 at 8:26 pm
How many of the CPA's on this board have been paying attention to the potential republican candidates for 2016? Both of the two big names are in favor of a flat tax. I've made a major attempt recently to not pay attention to anything political but this radical change could impact CPA's and attorneys. I know its been a political platform multiple times before but who really thinks this could ever pass in congress? I just don't see how it meets the revenue needs without a major tax increase on the middle class.
Posted on 4/7/15 at 8:35 pm to Jabstep
Even if it were to happen, it would be all of two weeks before Congress introduced some exemption to favor some group or another.
Posted on 4/7/15 at 8:43 pm to foshizzle
I just don't see how in the work. It would basically put a tremendous amount of white collar professionals out of business and devalue one of the more valuable degree programs most colleges have. I'm all in favor of tax reform, repealing AMT, repealing the repairs and maintenance regs etc. The full blown change that is currently being proposed is alarming.
Posted on 4/7/15 at 9:21 pm to Jabstep
I'm a CPA and using the argument that CPAs, lawyers, IRS agents, tax preparers, would lose jobs is a terrible argument against a flat tax.
The economic boon from every American not having money siphoned off by the income tax and the industry based on it would be enormous, creating new PRODUCTIVE jobs in every other industry.
The economic boon from every American not having money siphoned off by the income tax and the industry based on it would be enormous, creating new PRODUCTIVE jobs in every other industry.
Posted on 4/7/15 at 9:50 pm to Beerinthepocket
I'm potentially looking to move out of public accounting anyway but you honestly don't think that it would have a major impact on our profession?
I'm not saying it wouldn't work but I don't see how you find that perfect percentage. I guess we would have to see the structure but a like I said in a previous post, it would likely be a tax increase on the middle class in order to work.
I'm not saying it wouldn't work but I don't see how you find that perfect percentage. I guess we would have to see the structure but a like I said in a previous post, it would likely be a tax increase on the middle class in order to work.
Posted on 4/7/15 at 9:59 pm to Jabstep
It would most definitely have a major impact on the profession, but a selfish desire to protect CPA provided income tax services at the expense of the economy as a whole is not a good argument against a flat tax.
Posted on 4/7/15 at 10:38 pm to Jabstep
I have not yet seen a flat tax proposal that would realistically produce the same revenue that our current structure provides.
I'm a CPA, lean slightly to republican and I won't lose any sleep over the flat tax becoming a reality.
I'm a CPA, lean slightly to republican and I won't lose any sleep over the flat tax becoming a reality.
This post was edited on 4/7/15 at 10:39 pm
Posted on 4/7/15 at 10:54 pm to SippyCup
They should do a progressive tax, but no extra steps. No deductions, no difference in capital gains. Just a one step plug your total yearly income into a IRS website calculator and presto you're done. Would not necessary increase burden on certain income class, at least much.
All those bright future CPA's need to focus their talents to do something that actually produces something.
All those bright future CPA's need to focus their talents to do something that actually produces something.
This post was edited on 4/7/15 at 10:55 pm
Posted on 4/7/15 at 11:21 pm to Jabstep
The government's job gets much easier with sales tax because it eliminates 99.9% of the people. The focus would be solely on businesses required to collect tax.
This post was edited on 4/7/15 at 11:23 pm
Posted on 4/8/15 at 6:22 am to SippyCup
quote:
I have not yet seen a flat tax proposal that would realistically produce the same revenue that our current structure provides.
This is the major sticking point IMO. It's near impossible to do without raising taxes on the middle class.
Posted on 4/8/15 at 7:58 am to Jabstep
I'm a CPA. I don't think it would effect those in Public very much at all anyway. Most of the clients for the tax department were not individual returns anyway
Posted on 4/8/15 at 8:00 am to Stingray
quote:It is amazing how people have no clue what we do. I have never done anything with taxes in my life, which is common for more than half of CPAs
All those bright future CPA's need to focus their talents to do something that actually produces something.
Posted on 4/8/15 at 8:19 am to lsupride87
If anything, we would have to hire more CPAs than what we have to help adjust for the flat tax.
Just about every CPA employed by my fortune 500 employer would be fine since their job isn't to get people out of taxes
Just about every CPA employed by my fortune 500 employer would be fine since their job isn't to get people out of taxes
Posted on 4/8/15 at 8:49 am to Jabstep
Just finished my returns. The INSANITY of the current tax code is truly mind boggling. How anyone without a vested interest in the current system cannot demand change to a flat tax?
No deductions for ANYTHING
No credits
No exemptions
No Nothing Never
No deductions for ANYTHING
No credits
No exemptions
No Nothing Never
Posted on 4/8/15 at 8:55 am to Jabstep
The strongest argument against the flat tax I have heard is it hurts the poor the most. Since they spend the majority of their income on extraneous items, they would be taxed at a higher rate than others since middle- and upper-class do not spend as much of their income percentage wise.
This argument to me is weak, though. I believe the elimination of the IRS would be simple and more fair. Also, people would feel safer knowing that April 15th is not some fricked up surprise.
This argument to me is weak, though. I believe the elimination of the IRS would be simple and more fair. Also, people would feel safer knowing that April 15th is not some fricked up surprise.
Posted on 4/8/15 at 9:07 am to lsupride87
The proposal I saw will drastically impact entity returns as well. It would be along the same lines as the individual returns (few expense categories then multiply by a flat percentage)
Posted on 4/8/15 at 9:17 am to lsupride87
quote:
I'm a CPA. I don't think it would effect those in Public very much at all anyway. Most of the clients for the tax department were not individual returns anyway
Exactly - the percentage of time CPA's spend on individual taxes is not highly significant.
Flat tax doesn't change the corporate arena where the vast majority of CPA tax work is done.
H&R block get affected significantly? Yes. The CPA profession, not quite so much.
Posted on 4/8/15 at 9:21 am to Jabstep
quote:
This is the major sticking point IMO. It's near impossible to do without raising taxes on the middle class.
Because income tax wise, the middle class currently pays jack shite.
No one likes to say that or hear that, but the statistics are clear.
If you ask the average educated person how much income tax you think a family of five making $55K pays - I can promise you 99% would not answer "why nothing, and he actually has a negative rate".
People like to live in a world where they imagine an income tax burden on the middle class - that does not exist.
Thus any tax that takes our hyper progressive current structure will not fly politically.
Posted on 4/8/15 at 9:28 am to Jabstep
Responding while waiting for 968 pages of tax return to print...
Here is what you have to think about.
1) The tax code as currently written curries favor. It favors some industries and penalizes others. This provides congress with a large base of power. To go to a flat tax would require congress giving up that power. When is the last time you have seen a politician willingly give up power? This is why I think the flat tax will go nowhere.
But even if we got some new congressmen in who voted to pass it...
2) It doesn't do anything for entity returns. A flat tax would mean the end of passthrough taxation, so all businesses would have to be taxed as a C corporation (or something new created that is similar). If there is hardly any chance of a flat tax for individuals, there is no chance at all for a flat tax for businesses.
3) You still have a large majority of states who tax income. Just because the feds go to a flat tax doesn't mean the states will.
4) You still have international taxation.
Most CPAs who work in taxation would not be affected much at all. H&R Block and the like would go out of business, but they are not really employing CPAs.
Most tax CPAs provide value by helping businesses decide what is and what is not taxable income, and what is and what is not a deductible expense. If individual taxation went away, I would not miss it one bit.
Here is what you have to think about.
1) The tax code as currently written curries favor. It favors some industries and penalizes others. This provides congress with a large base of power. To go to a flat tax would require congress giving up that power. When is the last time you have seen a politician willingly give up power? This is why I think the flat tax will go nowhere.
But even if we got some new congressmen in who voted to pass it...
2) It doesn't do anything for entity returns. A flat tax would mean the end of passthrough taxation, so all businesses would have to be taxed as a C corporation (or something new created that is similar). If there is hardly any chance of a flat tax for individuals, there is no chance at all for a flat tax for businesses.
3) You still have a large majority of states who tax income. Just because the feds go to a flat tax doesn't mean the states will.
4) You still have international taxation.
Most CPAs who work in taxation would not be affected much at all. H&R Block and the like would go out of business, but they are not really employing CPAs.
Most tax CPAs provide value by helping businesses decide what is and what is not taxable income, and what is and what is not a deductible expense. If individual taxation went away, I would not miss it one bit.
Posted on 4/8/15 at 9:32 am to igoringa
Rand Paul's Plan
That's completely inaccurate for the proposal above. All entity returns are simplified dramatically.
That's completely inaccurate for the proposal above. All entity returns are simplified dramatically.
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