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

[Sonny Tufts]

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?

Yes, and it has repeatedly held that compensation for work is income, period.

But in one sense it's really not important whether pay-for-work is"gain", because its receipt can still be taxed. More important, the IRC clearly includes pay-for-work in gross income (IRC Section 61(a)(1)), so it's part of the tax base in any event.

Let me give you an example of something that's not income in any way, shape, or form but that is treated as income under the IRC and is therefore taxable. Suppose you want to help out a family member who wants to start a business or buy a house. You agree to loan him $100,000 and because he's family you agree that you won't charge him any interest. In other words, you are intentionally declining to receive interest.

This scenario used to involve no adverse tax consequences. But then two things happened: first, the Supreme Court held that the failure to charge interest constituted a gift from the lender to the borrower, resulting in the lender's having made a taxable gift. This makes sense because the lender is clearly bestowing an economic benefit on the borrower. This was followed later on by the enactment of IRC Section 7872, which treats the making of a loan with below-market interest as if the borrower really paid the foregone interest to the lender, who then turned around and transferred the interest to the borrower as a gift. In other words, the lender has to recognize the foregone interest as income, even though he never received anything and had no "gain".

But how can this be? How can the lender be taxed on phantom income he never received? Because in reality the tax is an excise on the making of a below market loan, and the measure of the tax is the foregone interest.

So even if you're right that pay-for-work isn't "gain" because it must be reduced by deductions for certain expenses (some of which, btw, would have been incurred in any event), a tax on the income can be viewed as an excise on the receipt of the pay, and the gross amount of the pay can be treated as if it were income.

 

[Origanalist]

Yes, and it repeatedly held that compensation for work is income, period.

 

[timosman]

Yes, and it has repeatedly held that compensation for work is income, period.

But in one sense it's really not important whether pay-for-work is"gain", because its receipt can still be taxed. More important, the IRC clearly includes pay-for-work in gross income (IRC Section 61(a)(1)), so it's part of the tax base in any event.

Let me give you an example of something that's not income in any way, shape, or form but that is treated as income under the IRC and is therefore taxable. Suppose you want to help out a family member who wants to start a business or buy a house. You agree to loan him $100,000 and because he's family you agree that you won't charge him any interest. In other words, you are intentionally declining to receive interest.

This scenario used to involve no adverse tax consequences. But then two things happened: first, the Supreme Court held that the failure to charge interest constituted a gift from the lender to the borrower, resulting in the lender's having made a taxable gift. This makes sense because the lender is clearly bestowing an economic benefit on the borrower. This was followed later on by the enactment of IRC Section 7872, which treats the making of a loan with below-market interest as if the borrower really paid the foregone interest to the lender, who then turned around and transferred the interest to the borrower as a gift. In other words, the lender has to recognize the foregone interest as income, even though he never received anything and had no "gain".

But how can this be? How can the lender be taxed on phantom income he never received? Because in reality the tax is an excise on the making of a below market loan, and the measure of the tax is the foregone interest.

So even if you're right that pay-for-work isn't "gain" because it must be reduced by deductions for certain expenses (some of which, btw, would have been incurred in any event), a tax on the income can be viewed as an excise on the receipt of the pay, and the gross amount of the pay can be treated as if it were income.

IRC?

 

[heavenlyboy34]

IRC?

Internal Revenue Code

 

[johnwk]

Yes, and it has repeatedly held that compensation for work is income, period.

I don't give two twits about that. My question is to explore how a working person is to calculate a taxable profit or gain from gross receipts derived from their labor, which are the characteristics defining "income".

I gave my thinking on this question in POST NO. 189 If your not interested in exploring this question ___ how one calculates a profit or gain from gross receipts derived from labor ___ and explore it in substantive mathematical manner and not as a tax question, then your answers are irrelevant to the discussion.


JWK

 

[Sonny Tufts]

If your not interested in exploring this question ___ how one calculates a profit or gain from gross receipts derived from labor ___ and explore it in substantive mathematical manner and not as a tax question, then your answers are irrelevant to the discussion.

Like it or not, it is a tax question. In your own words, "My question is to explore how a working person is to calculate a taxable profit or gain from gross receipts derived from their labor".

In order to calculate "taxable profit", you need to know what should be deducted. The Code is quite clear -- wages are includable in gross income in full, and no deductions for personal living expenses are permitted.

But let's look at your post 189:

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?

The attempt to offset wage income by a cost of goods sold deduction is addressed in the Reading case I cited. But you have an additional misunderstanding of the economics of the situation. Capital outlays aren't currently deductible but must be capitalized and written off through depreciation or amortization deductions over time.

Moreover, only the cost of something can be deducted (or capitalized), not its value. For example, if you cut a sweet deal with your landlord and lease business space for $500 a week when the going market rate is $750, you can only take a rent deduction for what you pay, not what it's really worth. What did you pay for your time? Nothing. What did you pay for your skill? Maybe you incurred educational expenses, but the knowledge you acquired will last your entire lifetime, so at best you would have to amortize some portion of the cost over your working lifetime. But how are you going to do that if you don't know how long you're going to continue to work using the same knowledge you initially acquired? And how are you going to determine what portion of what you spent on your education is relevant to your income-producing activities? Say you work as a computer programmer -- do you really think you should be able to offset your pay by the cost of that sociology course you took or the one on Fifth Century Athens?

As far as your skill is concerned, most probably came through experience. If you have any talent at all to begin with, it obviously improves through experience, but do you pay anything for your experience?

What did you pay for your labor? Nothing. Yes, you incurred expenses for food, shelter, clothing, etc. but wouldn't you have incurred these expenses anyway? Sure, you could argue that if you didn't have a paying job you wouldn't have incurred the same level of expenses that you did, but how are you going to allocate your expenses between your work and your personal life? As just one example, why should you be able to deduct any portion of your housing costs if you work away from home? You don't use your home on the job, do you?

See, it isn't as easy as you think.

 

[devil21]

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

Good thinking. If one were to incorporate the name as a C corp (and file a DBA of the full name to make it fully legal compliant), after deducting all expenses and arriving at a proper "profit/gain" figure, one could then trigger the corp tax rate instead of the personal tax rate and essentially pay no tax at all and even get back much of the living expenses. This is even if working for another business instead of actually being self employed. Thoughts?

 

[johnwk]

The rule of perverted tax law

I don't give two twits about that. My question is to explore how a working person is to calculate a taxable profit or gain from gross receipts derived from their labor, which are the characteristics defining "income".

I gave my thinking on this question in POST NO. 189 If your not interested in exploring this question ___ how one calculates a profit or gain from gross receipts derived from labor ___ and explore it in substantive mathematical manner and not as a tax question, then your answers are irrelevant to the discussion.


JWK

Like it or not, it is a tax question. In your own words, "My question is to explore how a working person is to calculate a taxable profit or gain from gross receipts derived from their labor".

In order to calculate "taxable profit", you need to know what should be deducted.

What should be deducted from gross receipts to arrive at one's profit or gain is in fact all necessary expenses and outlays. This is simple math for those whose singular object is to calculate one's profit or gain. But for those whose object is to use the force of government to create an advantage for one identifiable group over another identifiable group, such calculations are nothing more than an opportunity to create perverted rules under which an arbitrary advantage is created for the well connected by our Washington Sewer Rats, at the expense of those who are disadvantaged by "the rule of perverted law".

I see you side with "the rule of perverted tax law". Are you paid to take that position, Sonny?


JWK

 

[johnwk]

Good thinking. If one were to incorporate the name as a C corp (and file a DBA of the full name to make it fully legal compliant), after deducting all expenses and arriving at a proper "profit/gain" figure, one could then trigger the corp tax rate instead of the personal tax rate and essentially pay no tax at all and even get back much of the living expenses. This is even if working for another business instead of actually being self employed. Thoughts?

Your point is well made. But why should Joe Sixpack have to figure out such intricacies? Should we not have a system of taxation that is straightforward and easy to understand, even by those who are the least educated? There must be a reason, if not a few, why our federal tax system has been made so complicated that even those charged with enforcing it, more often than not, disagree when questions are presented to them.

My bottom line is, income taxation is a patently arbitrary and notoriously evil system to raise a federal revenue, and it opens the door to countless types of mischief and abuse, not to mention how discriminatory it is. And that is why I firmly support the Fair Share Balanced Budget Amendment which begins with the following 32 words:


“SECTION 1. The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay ``any`` tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.


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]

What should be deducted from gross receipts to arrive at one's profit or gain is in fact all necessary expenses and outlays.

OK, what are the "necessary expenses and outlays"? Be very specific and keep in mind that what I said earlier about capitalization vs. deduction and allocating expenses between earning pay-for-work and other activities (e.g., leisure).

This is simple math for those whose singular object is to calculate one's profit or gain.

It's not simple at all. See above.

But for those whose object is to use the force of government to create an advantage for one identifiable group over another identifiable group, such calculations are nothing more than an opportunity to create perverted rules under which an arbitrary advantage is created for the well connected by our Washington Sewer Rats, at the expense of those who are disadvantaged by "the rule of perverted law".

With the exception of a capitation tax with no exemptions, the selection of any tax base will favor some over others. Under your preferred system importers and producers of items subject to excises (e.g., luxuries) will be the losers and domestic producers of items that would be subject to tariffs if imported will be the winners. And you're incredibly naïve if you think the selection of the taxable items won't be influenced by those who are well connected to the Washington sewer rats.

I see you side with "the rule of perverted tax law". Are you paid to take that position, Sonny?

Your paranoia surfaces at last.

 

[johnwk]

OK, what are the "necessary expenses and outlays"? Be very specific....

I already was in post number 189. This is simple math for those whose singular object is to calculate one's profit or gain. But for those whose object is to use the force of government to create an advantage for one identifiable group over another identifiable group, such calculations are nothing more than an opportunity to create perverted rules under which an arbitrary advantage is created for the well connected by our Washington Sewer Rats, at the expense of those who are disadvantaged by "the rule of perverted law".


JWK

 

[Danke]

...

 

[Sonny Tufts]

I already was in post number 189.

No, you weren't specific at all. You simply listed a bunch of deductions specifically geared to actors that have little to do with the average wage earner. It's clear you don't have the necessary background in elementary economics and accounting to begin to address this issue.

 

[NorthCarolinaLiberty]

But let's look at your post 189:

"Let's." LOL. I notice you Soros employees like to use that word a lot. Nice template you have.

 

[devil21]

...

Any one that wants to know what's really going on should learn the true history of this American land mass, instead of the revised "for public consumption" version that's basically a load of bs. The catch is that TPTB and the courts and even police go by the true history while the average folk live by the fake history. Guess who has the upper hand in that situation? Look up 'The Great American Adventure' by Judge Dale in pdf online and read the entire thing. It will shed much light on how modern income taxation came to be (as well as most everything we see today...it explains a lot), without being a wonky read.

 

[johnwk]

OK, what are the "necessary expenses and outlays"? Be very specific....

I already was in post number 189. This is simple math for those whose singular object is to calculate one's profit or gain. But for those whose object is to use the force of government to create an advantage for one identifiable group over another identifiable group, such calculations are nothing more than an opportunity to create perverted rules under which an arbitrary advantage is created for the well connected by our Washington Sewer Rats, at the expense of those who are disadvantaged by "the rule of perverted law".


JWK

No, you weren't specific at all. You simply listed a bunch of deductions specifically geared to actors that have little to do with the average wage earner. It's clear you don't have the necessary background in elementary economics and accounting to begin to address this issue.

You apparently have a reading comprehension problem, or, you are obfuscating and being disingenuous. In post number 189 I posted the following:

_________

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.”


____


JWK

 

[Sonny Tufts]

In post number 189 I posted the following:

_________

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?

If you'd read my post #206, you'd see the answer to some of these questions. It's clear you don't know the proper accounting principles that are used to arrive at net profit -- e.g., you can't deduct all your outlays; you must capitalize some of them. You also don't get to deduct value -- you deduct cost. What did your time cost you? Nothing. The costs for the necessities of life aren't attributable solely to your earning pay-for-work, so you need some rule to allocate them between the time you are working and the time you aren't. In addition, many of these costs are capital outlays and as such can't be deducted currently but must be capitalized.

The Reading case addresses your cost-of-goods sold argument.

The only thing I agree with you is the bit about commuting expenses. I think they should be deductible. But the law has never allowed a deduction for such expenses unless they are incurred "away from home", meaning out of town. But even then they were deductible only to the extent that they exceeded 2% of your adjusted gross income. But under the new law none of such out-of-town commuting expenses are deductible.

 

[johnwk]

If you'd read my post #206, you'd see .

 

[dude58677]

If you'd read my post #206, you'd see the answer to some of these questions. It's clear you don't know the proper accounting principles that are used to arrive at net profit -- e.g., you can't deduct all your outlays; you must capitalize some of them. You also don't get to deduct value -- you deduct cost. What did your time cost you? Nothing. The costs for the necessities of life aren't attributable solely to your earning pay-for-work, so you need some rule to allocate them between the time you are working and the time you aren't. In addition, many of these costs are capital outlays and as such can't be deducted currently but must be capitalized.

The Reading case addresses your cost-of-goods sold argument.

The only thing I agree with you is the bit about commuting expenses. I think they should be deductible. But the law has never allowed a deduction for such expenses unless they are incurred "away from home", meaning out of town. But even then they were deductible only to the extent that they exceeded 2% of your adjusted gross income. But under the new law none of such out-of-town commuting expenses are deductible.

LMAO, you are a deep statist. You take everything that johnwk said out of context and then try to get the last word in. You cried on the night of November 9th, 2016 when Donald Trump won and cheered when Ron Paul dropped out in 2008 and 2012. You also cried when Cliven Bundy got his mistrial. You are so sad!!! LMAO!