Ron Paul & Mike Huckabee on IRS

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Both candidates want to repeal the income tax and abolish the IRS. My question is if either one of them comes to power, is getting rid of the IRS a plausible idea? Can this actually be done?

7 ounce wonders, music and dogs that are not into beer

[mnealtx 0]

I've seen arguments for and against... it would definitely require a huge adjustment in the way things are done, but I think it *could* be done.

With that said...realistically? Never happen.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

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With that said...realistically? Never happen.

I am all for fair tax. Paying 23% tax on purchases is cheaper then paying 20% per paycheck, and then another 8% on purchases. But at the same time getting rid of IRS would be one of the biggest changes to hit the States, and people dont deal with change to easily. A lot of people would be put out of their jobs should the IRS be abolished, so from that perspective there would be tons of unhappy people,. Having said that, we live in corporate America where downsizing happens everyday.

I'd love to see the IRS go, but I dont see it happening either unfortunatly.

7 ounce wonders, music and dogs that are not into beer

[AWL71 0]

It would never happen because it would lay off thousands of IRS workers, lobbyists, and tax attorneys. That being said I wish it would happen because it would benefit the country.

The most terrifying words in the English language are: I'm from the government and I'm here to help.

[TheAnvil 0]

The fair tax rocks.

Vinny the Anvil
Post Traumatic Didn't Make The Lakers Syndrome is REAL
JACKASS POWER!!!!!!

[kallend 2,117]

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The fair tax rocks.

What assets or income do rocks have? You can't get blood from a stone.

...

The only sure way to survive a canopy collision is not to have one.

[mnealtx 0]

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The fair tax rocks.

What assets or income do rocks have? You can't get blood from a stone.

No, but you can get money with an inheritance tax...

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[quade 4]

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It would never happen because it would lay off thousands of IRS workers, lobbyists, and tax attorneys.

I don't think the average vote give a flying F if people in the IRS, lobbyists or lawyers lose their jobs.

It would also be a HUGE change to the way people deal with HOUSING . . . THE American Dream.

I think the average voter would be FAR more concerned about the usefulness of that tax deduction vs the horrible cost increase it would mean in home sales.

quade -
The World's Most Boring Skydiver

[livendive 8]

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It would never happen because it would lay off thousands of IRS workers, lobbyists, and tax attorneys.

I don't think the average vote give a flying F if people in the IRS, lobbyists or lawyers lose their jobs.

It would also be a HUGE change to the way people deal with HOUSING . . . THE American Dream.

I think the average voter would be FAR more concerned about the usefulness of that tax deduction vs the horrible cost increase it would mean in home sales.

That doesn't make any sense. In very simple terms, using some phantom numbers, if Joe Smith makes $100,000 per year and pays 33% income tax, he'll owe $33,000 in taxes. If he buys a $200,000 house and pays $15,000 in interest on his mortgage this year, his adjusted gross income will be $85,000, on which he'll pay $28,050 as income tax. That means he gets to keep 5% more of his money to apply toward his mortgage. Are you telling me he's going to throw a fit over the government offering him a 100% income tax deduction in favor of a 5% income tax reduction?

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[lawrocket 3]

Practical considerations aside, this is how you do it.

You could try to get the 16th Amendment repealed - it is what authorizes an "income tax." So long as there is the 16th Amendment, the government will not go to a national sales tax on goods and services, though I wouldn't put it past the govt. to impose one of those, too.

If the income tax is to remain, then the structure of the tax must be changed. A flat tax is what many argue, but I can actually see additional problems with it. How will capital be taxed? Etc. If only income is taxed, it WILL mean that the poor, who have no "capital" to make a return, will be paying a higher rate based upon their wealth.


Still, there are PRACTICAL considerations that make abolishing the income tax structure a pipe dream.

The first is that it actually takes effort from Congress, and Congress lacks the balls to do it. As presently constituted, Congress lacks the willingness to do anything that may affect their income gravy train.
The second issue is that there is no way in hell that hundreds of thousands of accountants and lawyers will be put out of work. It ain't gonna happen. Period. Much less put tens of thousands of government employees out of business. It will not happen.

Take a look at the history of governments. Governments seek to get more and more power and control, not cede it. Assuming that Paul or Huckabee make it in, they'll have a helluva time getting Congress to do anything.

My wife is hotter than your wife.

[dan_iv 0]

I think what quade was getting at is that home prices would, (if taxes on the sale of a housing increased as a result of removing the federal income tax) go up, as the tax on the sale of the home would increase.

using your example they paid 33,000 before deductions on income at 33%

If a house was purchased for 200,000 at 28% (just a random tax percentage) you would pay 56,000 in taxes the year you purchased the home.

*of course you need to keep in mind that this is a x-time tax, where x=the number of times you buy a home. Where income tax is a never ending stream of revenue for the Gov't.


the problem with all of this is that we are all making assumptions that removing federal income taxes would have to immediately mean an increase in other taxes to make up for the lost revenue that the gov't takes in from it. There are other considerations that are hard to quantify, but removing the the federal income tax automatically reduces some of the tax burden by removing that governmental entity. Then if we could possibly cut spending in other areas, federal programs for education, (this should be handled by the states and not the feds IMO). some of the federal welfare programs, FEMA, etc.. The funds spent on 'pork', could have a huge impact on our economy.

Imagine the possibilities of having that extra cash on hand as a consumer if a well thought out plan was put in place to actually reduce the overal tax burden we as citizens already bare on our shoulders.

[lawrocket 3]

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don't think the average vote give a flying F if people in the IRS, lobbyists or lawyers lose their jobs.

The average voter also doesn't have any direct say in the issue...

My wife is hotter than your wife.

[kelpdiver 2]

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Both candidates want to repeal the income tax and abolish the IRS. My question is if either one of them comes to power, is getting rid of the IRS a plausible idea? Can this actually be done?

so far no one gets past the fantasy plan to make taxes simple. They never seem to explain how to accomplish it, and the discussion centers entirely on the 'fairness' of the fair tax. And then the demands for exceptions (children, mortage, etc) start flooding in. The tax code isn't complicated for random reasons. There were reasons behind most of the elements, it just has been accumulating for a long time.

In the most extreme scenario - you unemploy more than a million people, housing prices go crazy for a spell (probably in the negative direction, coupled with a surge in foreclosures), and people cheat just as much as before.

Reality says that the IRS still has to be checking W2s and 1099s, so quite a lot of it has to remain. And with the inevitable exceptions, now you have use for the tax accountants again, who also will still be handling the state taxes. So at the end of all this, you've made a huge mess for minimal gain.

[kelpdiver 2]

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I think what quade was getting at is that home prices would, (if taxes on the sale of a housing increased as a result of removing the federal income tax) go up, as the tax on the sale of the home would increase.

If the mortage interest deduction is removed, the price of houses will go down, and substantially. People would be able to afford ~30% less for their monthly carrying costs.

[dan_iv 0]

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The first is that it actually takes effort from Congress, and Congress lacks the balls to do it. As presently constituted, Congress lacks the willingness to do anything that may affect their income gravy train.

This in of itself kinda ends the thread...

[dan_iv 0]

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I think what quade was getting at is that home prices would, (if taxes on the sale of a housing increased as a result of removing the federal income tax) go up, as the tax on the sale of the home would increase.

If the mortage interest deduction is removed, the price of houses will go down, and substantially. People would be able to afford ~30% less for their monthly carrying costs.

That's assuming, (and I/we are making a ton of assumptions here), that one no new taxes were created after they repealed the income tax for the spending capital to be there.

The way that Quade worded his answer I made the assumption that he was getting at the fact that taxes would increase on home sales as a source of revenue to offset the loss of the income tax.

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don't think the average vote give a flying F if people in the IRS, lobbyists or lawyers lose their jobs.

The average voter also doesn't have any direct say in the issue...

The average voter doesnt have any direct say in voting for a president either, which has proven faulty before. Completely of topic, but we need to get rid of the electoral college.

7 ounce wonders, music and dogs that are not into beer

[rushmc 23]

[r Completely of topic, but we need to get rid of the electoral college.

[rehmwa 2]

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[r Completely of topic, but we need to get rid of the electoral college.

I hope not. It works exactly as designed as I hope it will for genreations to come

No, he's got a point there. I mean, it's not as if the country was established on the concept of state's rights or anything.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

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If the mortage interest deduction is removed, the price of houses will go down, and substantially. People would be able to afford ~30% less for their monthly carrying costs.

And that's a whopping huge freekin' difference depending on whether or not you; are buying, are selling or are keeping a house for investment value.

A first-time new buyer might like it, however, I personally, would find it a HORRIBLE loss. I would no longer be able to write off my home mortgage interest rate AND the value of my house would be substantially less than what it is today.

quade -
The World's Most Boring Skydiver

[dan_iv 0]

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If the mortage interest deduction is removed, the price of houses will go down, and substantially. People would be able to afford ~30% less for their monthly carrying costs.

And that's a whopping huge freekin' difference depending on whether or not you; are buying, are selling or are keeping a house for investment value.

A first-time new buyer might like it, however, I personally, would find it a HORRIBLE loss. I would no longer be able to write off my home mortgage interest rate AND the value of my house would be substantially less than what it is today.

I'm not so sure that if the income tax was removed it would have an impact on housing costs or the value of your house as it stands today.

The value of your home isn't based on the federal tax deduction you get to make on interest and taxes that you paid on your property during that year. The taxes your paying are property taxes that are at the state, city, county, school district, level.

The deduction is just a way to lessen the burden of the federal income tax that you pay as it is today, I.E. no federal income tax nothing to deduct...

Your homes value is based on the market rate, not fees assessed or taxes paid.

[quade 4]

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The deduction is just a way to lessen the burden of the federal income tax that you pay as it is today, I.E. no federal income tax nothing to deduct...

Then you've missed my point altogether.

The mortgage interest deduction is a way to offset the cost of the mortgage.

Assuming that "fair tax" repeals the federal income tax and it is offset by then levying a national sales tax, then current home owners get screwed since a part of their monthly mortgage payment would no longer get used to lower their tax burden. Since first-time new home buyers ALSO will have this apply to them, the prices of homes will go down as there is no longer a tax incentive to purchase a home. This hits the current home owners twice.

quade -
The World's Most Boring Skydiver

[livendive 8]

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I think what quade was getting at is that home prices would, (if taxes on the sale of a housing increased as a result of removing the federal income tax) go up, as the tax on the sale of the home would increase.

If the mortage interest deduction is removed, the price of houses will go down, and substantially. People would be able to afford ~30% less for their monthly carrying costs.

Removal of the deduction is only being discussed because you can't keep the deduction in the absence of the tax to which it applies. I don't think anybody has proposed remoding the deduction without also removing the tax it's deducted from.

If this year I charge you $1000 dollars per month rent on an office, minus whatever you pay for utilities, and next year I stop charging you rent, is the loss of the utility deduction going to break your bank?

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[quade 4]

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If this year I charge you $1000 dollars per month rent on an office, minus whatever you pay for utilities, and next year I stop charging you rent, is the loss of the utility deduction going to break your bank?

If I buy a product from a salesman and he gives me a monetary incentive in return (let's not call it a kickback, shall we? ) and he's replaced the next year by some guy that doesn't, am I going to be happy about it?

quade -
The World's Most Boring Skydiver

[billvon 3,090]

> is getting rid of the IRS a plausible idea?

Nope. The Fair Tax thing would have its own set of exemptions/rules/loopholes and require its own department with legions of auditors, lawyers, accountants etc - might as well call it the IRS.

The underlying desire of many people when they talk about getting rid of the IRS is paying less tax. The Fair Tax won't do that. The only way to pay less tax is to spend less money - have fewer highways, fewer wars, weaker military, less medicare, less border surveillance etc. Trying to figure out how to spend all that money and not pay for it, whether the scheme is called Fair Tax or the Ultimate Tax Relief Bill of 2007 is an exercise in futility.