just for fun simple Tax law idea

[Telstra]

assuming the Tax law is 15% tax for personal income, and for any types of businesses (big or small) Therefore, the government should be able to take out money from all bank accounts.


Example:
if you have $100, government will take out $15 from your bank account.
If you have $100,000,000, government will take $15 million from your account.

Is this fair and why ??

 

[rareboy]

It isn't fair because rich people will just move ALL their bank accounts off shore.

The other thing is that tax is not on a gross amount of money, it is on the net taxable income. A lot of your money in your bank account will already have been taxed.

Sorry. Not workable.

 

[Nealm1]

It isn't fair because rich people will just move ALL their bank accounts off shore.

The other thing is that tax is not on a gross amount of money, it is on the net taxable income. A lot of your money in your bank account will already have been taxed.

Sorry. Not workable.

I suspect rich people have already moved money off shore!

 

[Telstra]

It isn't fair because rich people will just move ALL their bank accounts off shore.

The other thing is that tax is not on a gross amount of money, it is on the net taxable income. A lot of your money in your bank account will already have been taxed.

Sorry. Not workable.

What if the off shore accounts are made illegal ?
Also i don't know what net taxable mean but each year, no matter how much money in the bank account it will be taken out 15% each year from ALL types of bank accounts including fancy names such as "Trust accounts, non profit accounts .. etc "

 

[gsdx]

Also i don't know what net taxable mean but each year

'Net' is the total amount earned each year. That is the amount that is taxed. The amount in the bank around would be considerably less.

For instance, a person might earn $100,000. The tax would be $15,000. However, they might have only $10,000 in the bank. The tax would be $1,500. The government would lose $13,500 in taxes on that one person alone.

That's why your idea wouldn't work.

 

[Telstra]

'Net' is the total amount earned each year. That is the amount that is taxed. The amount in the bank around would be considerably less.

For instance, a person might earn $100,000. The tax would be $15,000. However, they might have only $10,000 in the bank. The tax would be $1,500. The government would lose $13,500 in taxes on that one person alone.

That's why your idea wouldn't work.

But why is it not fair if you take money out of bank accounts in equal % ?

Example:
year 1, person1 has $1000, take out 15% = $750
year 2, person1 has $750, take out 15% = $562.50
.... etc


year 1, person2 has $1,000,000,000 take out 15% = $75,000,000
year 2, person2 has $75,000,000 take out 15% = $56,250,000
... etc

Why is this not fair ?

 

[gsdx]

It has all been explained. You asked a question. I answered it. I'll not waste any more time on this.

 

[Rickrock]

If you put $10,000 in the first year and the government takes 15% they would take $1,500 the first year leaving $8,500. If you add another $10,000 the second year, you now have $18,500 in the bank. If the government takes 15% of that they take $2,775 instead of the $1500 like the first year, so they have taken 15% of your second year, but 30% of your first year's savings. That isn't fair. They should take only 15% of the additional and leave the earlier balance alone. !!!

 

[rareboy]

Obviously, as well, the trick would be to have no money in your bank account, but to deal in cash or spend as much as you could.

 

[Rickrock]

Also, what about people who spend all of their money and don't save anything. They might buy a new car and go on vacation and live high off the hog and not save but might make more than someone who makes less but doesn't spurge and tries to save for the future. They would be penalized for saving where the one who spends everything might not pay any taxes at all. That isn't fair. Taxes should be on your income and not your savings.

 

[Dominus]

But why is it not fair if you take money out of bank accounts in equal % ?

Example:
year 1, person1 has $1000, take out 15% = $750
year 2, person1 has $750, take out 15% = $562.50
.... etc


year 1, person2 has $1,000,000,000 take out 15% = $75,000,000
year 2, person2 has $75,000,000 take out 15% = $56,250,000
... etc

Why is this not fair ?

Everybody here knows I have a lot of conservative leanings. And even I think this is completely unfair.

Please allow me to go on a tangent to make a point. I have a point to this I promise.

Back when I first met my now husband, I had a business that was starting to not do so well. By the time I asked him to move in with me, quit his job, and go to college, my business had failed spectacularly. We were literally in the poor house. I had many sleepless nights worrying about how we were going to survive. I was up to my eyeballs with debt. Then his car broke down. We needed $1400 to get it fixed.

Here's the thing. He was in school studying hard and I did not want to burden him with worries. He told me he needed $1400 for his car. I did not say this out loud, but in my mind I was screaming where the hell was I going to dig up that kind of money? It was a huge mountain for me to climb.

Fast forward to now. Pretty much a gift for his new and first professional job after college, I paid cash for a new car for him. A little on the luxury side.

The point is 15% of $1000 may be just $150, but to the poor person who only has $1000, $150 is a lot of money for him. Most of us may have no problem shelling out $150 for pleasure, but for the person who only has $1000, $150 might as well mean the difference between being able to pay the towing company to get his car back or lose the car completely.

And yes, I know someone that could not afford to pay the towing company for the tow and storage and lost his car completely.

For someone that has $1,000,000. 15% of it may be $150k, which is still a lot of money. But I'm sure the guy will have no problem surviving.

A few years back, I loaned a guy $1k. Last time I saw him, he was living in his truck. To me nowadays, I'm sure I can survive without that $1k. To that guy, $1k might as well be a million. This is why I have mentally forgiven him for the debt.

Again, those who know me here know I'm pretty conservative economically. And I disagree with the Republican platform on this, which is essentially shifting the tax burden away from people who can afford it towards people who can't.

 

[Telstra]

Obviously, as well, the trick would be to have no money in your bank account, but to deal in cash or spend as much as you could.

In electronic banking age,
No one with millions of dollars going to hide money outside the bank.
And isn't it a good thing for the rich to invest ?

 

[Telstra]

Everybody here knows I have a lot of conservative leanings. And even I think this is completely unfair.

Please allow me to go on a tangent to make a point. I have a point to this I promise.

Back when I first met my now husband, I had a business that was starting to not do so well. By the time I asked him to move in with me, quit his job, and go to college, my business had failed spectacularly. We were literally in the poor house. I had many sleepless nights worrying about how we were going to survive. I was up to my eyeballs with debt. Then his car broke down. We needed $1400 to get it fixed.

Here's the thing. He was in school studying hard and I did not want to burden him with worries. He told me he needed $1400 for his car. I did not say this out loud, but in my mind I was screaming where the hell was I going to dig up that kind of money? It was a huge mountain for me to climb.

Fast forward to now. Pretty much a gift for his new and first professional job after college, I paid cash for a new car for him. A little on the luxury side.

The point is 15% of $1000 may be just $150, but to the poor person who only has $1000, $150 is a lot of money for him. Most of us may have no problem shelling out $150 for pleasure, but for the person who only has $1000, $150 might as well mean the difference between being able to pay the towing company to get his car back or lose the car completely.

And yes, I know someone that could not afford to pay the towing company for the tow and storage and lost his car completely.

For someone that has $1,000,000. 15% of it may be $150k, which is still a lot of money. But I'm sure the guy will have no problem surviving.

A few years back, I loaned a guy $1k. Last time I saw him, he was living in his truck. To me nowadays, I'm sure I can survive without that $1k. To that guy, $1k might as well be a million. This is why I have mentally forgiven him for the debt.

Again, those who know me here know I'm pretty conservative economically. And I disagree with the Republican platform on this, which is essentially shifting the tax burden away from people who can afford it towards people who can't.

If you have $1,
they take out 15 cent is not a big deal.

 

[Telstra]

Also, what about people who spend all of their money and don't save anything. They might buy a new car and go on vacation and live high off the hog and not save but might make more than someone who makes less but doesn't spurge and tries to save for the future. They would be penalized for saving where the one who spends everything might not pay any taxes at all. That isn't fair[. Taxes should be on your income and not your savings.

But, everyone get the same treatment, so its fair.

 

[fabulouslyghetto]

I'll take this idea to lawmakers right away, can you draft another proposal? but don't use crayons this time.

 

[rareboy]

In electronic banking age,
No one with millions of dollars going to hide money outside the bank.
And isn't it a good thing for the rich to invest ?

I think you may have missed the point and perhaps really don't understand how wealth works. Rich people actually keep a very small percentage of their wealth in banks because it makes no money at all. Most people, even the far less wealthy, will shift savings into investments like gold, stocks, bonds, derivatives, real estate, etc. It isn't even about hiding money outside the bank. It is making it work harder.

But the really wealthy will put any cash assets into off-shore banks to avoid paying taxes at all. As you note, electronic banking makes all of this much easier.

 

[unloadonme]

Either you tax income or you tax wealth. Taxing bank accounts in isolation is neither and there would be many ways to avoid paying. As has been said, the seriously wealthy hold the majority of their wealth outside bank accounts.

 

[Telstra]

I think you may have missed the point and perhaps really don't understand how wealth works. Rich people actually keep a very small percentage of their wealth in banks because it makes no money at all. Most people, even the far less wealthy, will shift savings into investments like gold, stocks, bonds, derivatives, real estate, etc. It isn't even about hiding money outside the bank. It is making it work harder.

But the really wealthy will put any cash assets into off-shore banks to avoid paying taxes at all. As you note, electronic banking makes all of this much easier.

Are you sure say Bill gate or Jim cook don't have millions of dollars in the bank ?
I would like 2nd or 3rd opinions on that one.

 

[rareboy]

Are you sure say Bill gate or Jim cook don't have millions of dollars in the bank ?
I would like 2nd or 3rd opinions on that one.

Telly, I can absolutely guarantee it. Over a certain minimum limit to cover incidentals, almost all available cash would be in term deposits or other investments. The rule of thumb would be to not hold anything more your bank account than you would need for a few weeks or that is covered by Federal Deposit Insurance limits. Which isn't much.

And once again, any 'cash' excess of this is likely to be held by offshore banks to shelter it from taxation.

 

[Telstra]

"assets or investment or property or gold or ... etc
sooner or later they have to convert to bank money .... when those were converted to money .. bam 15% taken out right away.