President Trump’s tax plan keeps the socialist communist progressive income tax alive

[johnwk]

I've never really thought about a good working definition for income. If you're employed it would be your paycheck. If you own a business it'd be your profit.

Now why would a working person's paycheck be taxable income, but a business owners be "profit"?


JWK

 

[Zippyjuan]

Now why would a working person's paycheck be taxable income, but a business owners be "profit"?


JWK

Profits are also taxed.

 

[johnwk]

Profits are also taxed.

 

[euphemia]

The reaction of rich liberals and liberal states is really hilarious. Their filthy secret has finally been revealed. Their federal deductions have been forcing the rest of us to subsidize their lavish living. They really don’t think the wealthy should pay their share. Go figure.

 

[Swordsmyth]

Now why would a working person's paycheck be taxable income, but a business owners be "profit"?


JWK

He said both were taxable income.

 

[johnwk]

He said both were taxable income.

What he said was "If you're employed it would be your paycheck. If you own a business it'd be your profit."

JWK

 

[johnwk]

The reaction of rich liberals and liberal states is really hilarious. Their filthy secret has finally been revealed. Their federal deductions have been forcing the rest of us to subsidize their lavish living. They really don’t think the wealthy should pay their share. Go figure.

And that is why they hate with a passion our founders' original tax plan, part of which would tax articles of luxury!


JWK

 

[dude58677]

This is all the more reason why it was so good that Hillary lost the election as a career politician and why she should go to jail. Once she goes to prison it will deter future canidates for office from intending to be corrupt career politicians. You can't think of getting rid of the income tax till you get rid of corrupt politicians. Do so is putting the wheel before the horse.

 

[johnwk]

The rich deduct and the poor get

The reaction of rich liberals and liberal states is really hilarious. Their filthy secret has finally been revealed. Their federal deductions have been forcing the rest of us to subsidize their lavish living. .

I don’t think you even know how right you are, especially when it comes to our pinko Hollywood crowd, which is now furious over Trump and the “Tax Cuts and Jobs Act”.

See: Deductions for Actors:

”Prior to the enactment of the TCJA, any ordinary and necessary expenses that actors paid for out of their own pockets that were directly related to their acting activity were deductible. If you were an employee-actor, you deducted the expense as an unreimbursed employee expense. Independent contractors deducted the costs as a business expense.

Typical deductible expenses for actors include, but are not limited to, the following:

Business Travel: Airfare or other transportation costs and hotel or other lodging expenses, and 50% of the cost of meals.

Local Travel Expenses: Deductible local travel may include trips to performances (both as player and observer), rehearsals, acting classes, auditions, and to pick up supplies.

Agent Fees: All fees an actor pays to an agent.

Manager Fees: Talent manger fees.

Office Expenses: An outside office or office in the home used exclusively for an acting business.

Property and Supplies Used for Acting: The cost of video cameras, sound equipment, digital cameras, sound equipment, theater and film books, musical scores, computers, and cell phones.

Union Dues: Dues to belong to Actors Equity or other unions or organizations.

Education: Acting classes and coaching lessons.

Promotional expenses: Photos, videos, websites (including Internet connection costs), listings in professional registries, advertisements in trade publications, business cards, and other promotional expenses

Make-up and Hair Care: Deductible only when incurred directly in connection with a specific job.

Wardrobe: The cost of any clothing not suitable for street wear--for example, the cost of a modern business suit is not deductible, but an ape costume is deductible.

Subscriptions: The cost of magazine, journal, newsletter, and other subscriptions useful for your acting business--for example, trade newspapers like Daily Variety.

Legal and Professional Services: Fees paid to attorneys, accountants, consultants, and other professionals.

Tickets for Viewing Films and Plays: Actors need to attend plays and films to keep up with what's going on in their industry. They may also subscribe to services like Netflix and HBO. These costs are deductible as "research."

All of these expenses can really add up for professional actors, easily equaling 20% to 35% of acting income.”



And let us not forget how rich pinko corporate executives deduct everything imaginable as a business expense in order to arrive at their taxable income. . . even meals at the most expensive restaurants in town and countless forms of entertainment.


Now, why confine the tax on businesses to profits, and not do the same for wage earners? Under the notoriously evil income tax system the constitutional meaning of what is and what is not taxable income is a vital question which must be addressed. Seems to me the meaning of taxable “income” boils down to profits and or gains, collectively called “income”. And to arrive at one’s “income” all necessary outlays and expenses must be deducted from gross receipts to arrive at one’s “income”. at least this rule applies to some.


In Eisner vs Macomber 1920 the court stated:


”After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, 247 U.S. 183, 185 , 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054)."


As you can see, defining what is and what is not taxable income requires a taxpayer to deduct all necessary expenses and outlays from gross receipts in order to arrive at taxable income. Income from a business which was wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to a tax in that case.


And, in Sullenger vs. Commissioner, 11 T.C. 1076 ,1948, the Court allowed the business owner [who made illegal purchases of meat] to deduct the cost of meat purchased at a higher price then set by the Office of Price Administration, a World War II price control agency, which he then resold for profit. The “income” from those sales was being taxed which was at issue in the case. The Court went on to cite Sullivan and concluded: “No authority has been cited for denying to this taxpayer the cost of goods sold in computing his profit, which profit alone is gross income for income tax purposes.”


So, what is the cost of goods sold by a wage earner? Is it not his/her time, labor, skills, etc? Are these not capital outlays, the value of which must be deducted from gross receipts in order to arrive at an alleged profit or gain?



Shouldn't a working person be allowed to deduct transportation costs to and from work in calculating their profit or gain? How about the costs involved with providing one's labor ___ the necessities of life or medical expenses which a wage earner incurs and makes their labor possible? Shouldn't the wage earned be allowed to deduct these costs from gross receipts in calculating his/her profit or gain? How about the eight hour of life which a working person invests in earning a wage? Is this not to be considered as their property and a capital outlay, the value of which ought to be deducted from gross receipts in order to arrive at an alleged profit or gain? According to our pinkos in Hollywood, the answer is “No”! “Let them eat cake.”


Do you now see how right you really are?


JWK

 

[Madison320]

What he said was "If you're employed it would be your paycheck. If you own a business it'd be your profit."

JWK

"it" refers to income in both cases.

I'm assuming you want to go back to the founder's idea of taxation, and that's definitely an improvement over what we have now, but remember that it didn't last. Socialism was still able to slowly take over. That's why I wonder if there's a better way, that's more self sustaining. I'm confidant it has some thing to do with the pool of voters. Think about it, in almost every private group situation the members of the group that contribute the most, get the most input into how the group is run. The biggest shareholders of a corporation have the most votes. If you and your friends decide to buy a keg, the ones who chip in the most get to decide what kind of beer. Only with government does everyone get the same "say" even when one guy is contributing millions and another is receiving that stolen money. That's clearly a logical flaw. That's why I wonder if maybe an income tax is actually superior because if you are going to reward the contributors you need to keep track of how much they had stolen from them.

 

[Madison320]

Run the numbers. Trump instituted a hiring freeze when first elected. While lifted to some degree, he has not replaced those who retired or moved on. There are fewer federal employees now than when he first took office.

I think it is entirely reasonable to let the first step have full effect before reducing or eliminating departments. It's not how I would do it, but there you go. EPA and Ed would have gone my second day.

Those are rounding errors compared the ways Trump is expanding government. He wants to greatly expand the military, he wants to spend more on "infrastructure", and probably worst of all he appointed another dove to the federal reserve after he campaigned on the opposite.

Watch this video of Trump's reversals:

https://www.youtube.com/watch?v=tsvud_CTRuk

 

[johnwk]

"it" refers to income in both cases.

I know it refers to “income” in both cases. That is why I asked my next question which was: ”… why would a working person's paycheck be taxable income, but a business owners be "profit"?

In reference to your tax scheme, I asked you for a definition of taxable "income"? What are its defined characteristics? Your answer indicates with reference to a working person, taxable income would be their paycheck while a business owner’s would be profit.

So why, under your tax scheme, would a working person's paycheck be taxable income, but a business owners taxable income be limited to "profit"?

Before answering the question, perhaps you ought to see post number 189, and then get back to me.

JWK




The major inequity found in socialism, communism and a progressive government is, those in charge of redistributing wealth always live large, and at the expense of those who have actually worked to create wealth.

 

[Sonny Tufts]

And let us not forget how rich pinko corporate executives deduct everything imaginable as a business expense in order to arrive at their taxable income. . . even meals at the most expensive restaurants in town and countless forms of entertainment.

You really should read the law and educate yourself. Start with IRC Section 274, which includes various restrictions on the deductibility of entertainment expenses, including limiting the deduction for food and entertainment expenses to only one-half of the cost and completely disallowing any deduction for lavish food and beverage expenses.

Now, why confine the tax on businesses to profits, and not do the same for wage earners? Under the notoriously evil income tax system the constitutional meaning of what is and what is not taxable income is a vital question which must be addressed. Seems to me the meaning of taxable “income” boils down to profits and or gains, collectively called “income”. And to arrive at one’s “income” all necessary outlays and expenses must be deducted from gross receipts to arrive at one’s “income”. at least this rule applies to some.

Deductions are matters of legislative grace. The only exception is that a producer or seller of goods may deduct its cost of goods sold before arriving at gross income. Some wage earners have argued that they should be allowed to deduct their living expenses as an analogue to cost of goods sold, but aside from a specific statutory disallowance of deducting personal living expenses (see IRC Section 262), the analogy is misplaced:

Respondent disallowed the miscellaneous deductions claimed by petitioners in the amount of $10,952.91 as being personal, living, or family expenses not expressly deductible under the 1954 Code, and hence expressly nondeductible under section 262. He also determined that petitioners owed self-employment tax on petitioner's self-employment income of $13,837.63, as reported on the Schedule C. Respondent does not dispute petitioners' entitlement to the business expense deductions claimed on the Schedule C.

Petitioners do not argue that the various expenditures at issue in this case are without the scope of section 262 or that respondent has improperly calculated the amount of self-employment tax in accordance with sections 1401 and 1402. Rather, their principal argument is that Congress, by denying deductions for personal, living, and family expenses in the computation of taxable income, has exceeded its authority under the Sixteenth Amendment to the Constitution to lay and collect taxes on "incomes." The cornerstone of petitioners' argument is the definition of income stated by the Supreme Court in Eisner v. Macomber, 252 U.S. 189, 207 (1920), as "the gain derived from capital, from labor, or from both combined." They argue that the "gain" from labor cannot be determined until the "cost of doing labor," i.e., their expenditures at issue, has been subtracted from the amount received from the sale of labor. Petitioners attempt to support their method of arriving at the figure reflecting "income" which may constitutionally be taxed by analogizing the "living expenses" of one who depends upon the sale of his services for his livelihood to the "cost of goods sold" concept in certain business contexts. See Sullenger v. Commissioner, 11 T.C. 1076 (1948); Anderson Oldsmobile, Inc. v. Hofferbert, 102 F. Supp. 902 (D.C. Md. 1952), affd. 197 F.2d 504 (4th Cir. 1952). Appeal is made to history and philosophy and to analysis of legal, social, and economic concepts, none of which leads, however, to the result they seek.

It is difficult, if not impossible, to respond to arguments such as petitioners have put forth without becoming embroiled in a game of semantics. The logical force requiring rejection of their arguments—apart from their assertions of personal political philosophy which do not provide a basis for us, a Court sitting to interpret the law, to decide the questions dispositive of this case—is essentially a matter of the definition of terms. Thus, should we hold that "gain" is an essential element of income, compare Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), affd., revd., and remanded 439 F.2d 934 (5th Cir. 1971), with McGuire v. United States, an unreported case (N.D. Cal. 1970, 25 AFTR2d 1127, 70-1 USTC par. 9384), we would still face the problem of defining what constitutes "gain." Compare Conner v. United States, supra, with McCabe v. Commissioner, 54 T.C. 1745, 1748 (1970). It is in situations like this that one can truly admire the wisdom of Mr. Justice Holmes, in particular, as he expressed in United States v. Kirby Lumber Co., 284 U.S. 1 (1931), "We see nothing to be gained by the discussion of judicial definitions."

Nevertheless, accepting the conclusion that some kind of "gain" must be realized for there to be income, the flaw in petitioners' analogy of what they call the "cost of doing labor" to the "cost of goods sold" concept—essentially its failure to acknowledge the difference between people and property—may be shown. The "cost of goods sold" concept embraces expenditures necessary to acquire, construct or extract a physical product which is to be sold; the seller can have no gain until he recovers the economic investment that he has made directly in the actual item sold. See Estate of Johnson v. Commissioner, 42 T.C. 441, 444-445 (1964), affd. per order 355 F.2d 931 (6th Cir. 1965), and cases cited thereat. Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property, and whether the distinction comports with petitioners' philosophical rationalization for their argument, it is recognized for Federal income tax purposes. See Hahn v. Commissioner, 30 T.C. 195 (1958), affd. per curiam 271 F.2d 739 (5th Cir. 1959). One's gain, ergo his "income," from the sale of his labor is the entire amount received therefor without any reduction for what he spends to satisfy his human needs.

Without constitutional backing for their position concerning the definition of income, petitioners are left with a bald assertion that section 262 is unconstitutional. However, it has long been established that "Congress has power to condition, limit, or deny deductions from gross income in order to arrive at the net that it chooses to tax." Helvering v. Independent Life Ins. Co., 292 U.S. 371, 381 (1934). And, as the Supreme Court has also stated:

For income tax purposes Congress has seen fit to regard an individual as having two personalities: "one is [as] a seeker after profit who can deduct the expenses incurred in that search; the other is [as] a creature satisfying his needs as a human and those of his family but who cannot deduct such consumption and related expenditures." [Fn. ref. omitted.] United States v. Gilmore, 372 U.S. 39, 44 (1963). This Court has no power to enlarge the deductions for personal exemptions authorized by section 151 to comport with petitioners' actual living expenses. Crowe v. Commissioner, 396 F.2d 766 (8th Cir. 1968).

Reading v. Commissioner, 70 T.C. 730, (1978)

Income from a business which was wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to a tax in that case.

You might want to actually read the case. The Court never addressed that issue, although the cost of purchasing illegal liquor for resale would certainly be a part of the cost of goods sold. Sullivan wanted to deduct other expenses, however, but the Court declined to address the matter: "It is urged that if a return were made the defendant would be entitled to deduct illegal expenses such as bribery. This by no means follows but it will be time enough to consider the question when a taxpayer has the temerity to raise it." http://caselaw.findlaw.com/us-supreme-court/274/259.html

A current sore spot to marijuana retailers is IRC Section 280E, which disallows any deduction for expenses incurred in a business that consists in trafficking in controlled substances. This means that expenses such as rent, utilities, and employee salaries aren't deductible. It's a stupid law, but it's on the books.

 

[johnwk]

You really should read the law and educate yourself. Start with . . .Deductions are matters of legislative grace.

The meaning of income within the 16th Amendment is profit and or gain. In order to arrive at a profit or gain, all necessary expenses and outlays must be deducted from gross receipts to arrive at one's profit or gain.

 

[devil21]

The meaning of income within the 16th Amendment is profit and or gain. In order to arrive at a profit or gain, all necessary expenses and outlays must be deducted from gross receipts to arrive at one's profit or gain.

Hmm....does that mean that the ALL CAPS NAME (JOHN W. K., eg) we labor under is actually a business and we can deduct all expenses related to our work? Or maybe incorporating ourselves as C or S Corps (JOHN W.K., LLC, eg) and deduct expenses like any other corp does and even trigger the corp tax rates instead of personal rates? Your point brings up an interesting legal question worth exploring. Instead of paying for gas and groceries and other basic expenses without recourse, incorporate your own name into an LLC and deduct it all as expenses of maintaining the "business" (aka your life as a laborer)...

 

[johnwk]

Hmm....does that mean . . . we can deduct all expenses related to our work?

It seems abundantly clear to me that a working person who sells the property they have in their own labor, must deduct all necessary expenses incurred from gross receipts in order to arrive at a taxable profit or gain, collectively defined as incomes under the 16th Amendment. See post NUMBER 189 for my legal reasoning.

JWK

 

[Madison320]

I know it refers to “income” in both cases. That is why I asked my next question which was: ”… why would a working person's paycheck be taxable income, but a business owners be "profit"?

In reference to your tax scheme, I asked you for a definition of taxable "income"? What are its defined characteristics? Your answer indicates with reference to a working person, taxable income would be their paycheck while a business owner’s would be profit.

So why, under your tax scheme, would a working person's paycheck be taxable income, but a business owners taxable income be limited to "profit"?

Before answering the question, perhaps you ought to see post number 189, and then get back to me.

What difference does it make whether you can deduct gas from your paycheck? No tax system is perfect and there's always going to be grey areas. What about a car that gets assembled in the US but the half the parts come from China? How would you tax those under an import tax? How do you define retail under a retail sales tax?

You almost make it sound like the business owners and corporate executives are getting a great deal in comparison to the average worker, which is complete nonsense if you look at the facts. People at the lower end of the wage scale pay a MUCH lower tax rate, anyway you figure it. And workers can't get sued for discrimination, or safely hazards, or harassment. Workers know in advance whether what they do is illegal, business owners have to worry about unconstitutional post de facto laws (the government making up laws after the fact) as is the case with antitrust laws.

I just thought about something else. What about the standard deduction, which was 6K last year? Most people are averaging under 1K a year in gas to get to work.

 

[johnwk]

I know it refers to “income” in both cases. That is why I asked my next question which was: ”… why would a working person's paycheck be taxable income, but a business owners be "profit"?

In reference to your tax scheme, I asked you for a definition of taxable "income"? What are its defined characteristics? Your answer indicates with reference to a working person, taxable income would be their paycheck while a business owner’s would be profit.

So why, under your tax scheme, would a working person's paycheck be taxable income, but a business owners taxable income be limited to "profit"?

Before answering the question, perhaps you ought to see post number 189, and then get back to me.

What difference does it make whether you can deduct gas from your paycheck? No tax system is perfect and there's always going to be grey areas. What about a car that gets assembled in the US but the half the parts come from China? How would you tax those under an import tax? How do you define retail under a retail sales tax?

You almost make it sound like the business owners and corporate executives are getting a great deal in comparison to the average worker, which is complete nonsense if you look at the facts. People at the lower end of the wage scale pay a MUCH lower tax rate, anyway you figure it. And workers can't get sued for discrimination, or safely hazards, or harassment. Workers know in advance whether what they do is illegal, business owners have to worry about unconstitutional post de facto laws (the government making up laws after the fact) as is the case with antitrust laws.

So, instead of answering my questions concerning your proposal, you decide to deflect and obfuscate. That tells me you may not be able to defend your proposal, especially when asked legitimate questions. Did it ever dawn on you your proposal may have some very serious flaws? Perhaps you should work on dealing with those flaw instead of switching the subject when they are brought to your attention.


BTW, keep in mind I do not support any form of federal taxation which is calculated from profits, gains, or other lawfully realized incomes, not for individuals or corporations. And I don't support it because it is a communist, socialist, progressive system of taxation and opens the door to countless types of mischief and abuse in addition to allowing the iron fist of government to clench the necks of America's labor and businesses.


JWK


”If, by calling a tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property.”__ POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 [1895]

 

[Sonny Tufts]

The meaning of income within the 16th Amendment is profit and or gain. In order to arrive at a profit or gain, all necessary expenses and outlays must be deducted from gross receipts to arrive at one's profit or gain.

Wages, without any deductions, have always been included in income, even as far back as the 1861 income tax. The authority to impose an income tax comes from I.8.1 and not the 16th Amendment (which was enacted to authorize the imposition of an unapportioned income tax on investment income).

The Sixteenth Amendment declares that Congress shall have power to levy and collect taxes on income, ‘from whatever source derived’ without apportionment among the several states, and without regard to any census or enumeration. It was not the purpose or the effect of that amendment to bring any new subject within the taxing power. Congress already had the power to tax all incomes. But taxes on incomes from some sources had been held to be ‘direct taxes’ within the meaning of the constitutional requirement as to apportionment. [cites omitted] The Amendment relieved from that requirement and obliterated the distinction in that respect between taxes on income that are direct taxes and those that are not, and so put on the same basis all incomes ‘from whatever source derived.’
Bowers, Collector v. Kerbaugh-Empire Co., 271 U.S. 170, 173-174 (1926).

Indeed, Congress has the power to impose a tax on things that aren't income at all. Most excises tax events or transactions -- for example, the gift tax taxes the gratuitous transfer of property during lifetime, while the estate tax taxes the transfer of property at death. Congress could certainly impose an excise in the form of a gross receipts tax if it wanted to. A tax on wages can be viewed as an excise in the form of a gross receipts tax.

In other words, if the gratuitous transfer of property can be taxed, then so can a transfer of property for a consideration. A sales tax is a tax on the transfer of property for a consideration, and the only theoretical difference between it and a tax on wages is that in the latter case the liability falls on the recipient. But there's nothing that says the recipient can't be taxed -- inheritance taxes, for example, fall on the recipient, not on the estate. Moreover, if the donor of a gift fails to pay the gift tax, the donee is liable.

So there's no constitutional issue in taxing wages without permitting any offsetting deductions, just as there is no issue in denying certain deductions for business-related activities.

Incidentally, your tired rhetoric about the "communist, socialist, progressive system of taxation" is just that: tired rhetoric. The progressive income tax predates the Communist Manifesto by at least 50 years (it was introduced in Britain in 1798), and variations can be traced back to Ancient Greece.

 

[johnwk]

Wages, without any deductions, have always ....

We are talking about calculating one's profit or gains. Did our Supreme Court not confirm shortly after the adoption of the 16th Amendment, that the meaning of income, within the 16th Amendment refers to a profit or gain, collective called incomes?


JWK