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To: federal__reserve

I believe it eliminates the “double taxation of dividends”, by allowing business to deduct dividends it pays out. So the individual would still pay tax on dividends, which would look like ordinary income.

That’s what the analysis I read says. I haven’t seen the actual plan language, just the summaries like you posted.

BTW, with zero tax on capital gains, and a single tax on dividends, I would expect companies to stop paying dividends, and instead to invest the money to make their business market value rise. If they pay out a million bucks, someone pays 9% tax on it. If they put the million in a savings acount, the business value grows by a million dollars, the total stock price can go up a million, then they can sell their stock, take the capital gain, and pay no tax.

There are a few good things about 9-9-9, but most of the “benefits” are just hype. The plan is revenue-neutral, which means it doesn’t cut taxes; for everybody who gets lower taxes out of it, someone else gets higher taxes out of it. In fact, it is a slight tax increase under it’s latest form, raising taxes to 18% of GDP. But it doesn’t help that it cuts the marginal rates, because with all the deductions gone you pay the same tax.

Well actually, I would expect that you, like me, would pay more tax. Because rich people definitely pay a lot less under the plan, and even when you bring all the poor people into the program, they don’t have enough money to make a difference. Since it is revenue neutral, we the middle class will make it up. I have lots of deductions, and will lose most of them.

I’m not against simplification, I just think it is absurd to argue that a plan that keeps the income tax and adds a sales tax would eliminate the IRS, like someone said, or remove the chance for audits. You say you have dozens of 1099 forms. Well, you still will be tax on interest income, so you will still have dozens of 1099 forms.

I use a tax program, and I just have to enter the numbers. It remembers my investments from last year, so I only need to type in new stuff. The hardest part is itemizing my charitable contributions, which we will still get to deduct, so I’ll still have to do that.


68 posted on 11/22/2011 9:40:59 AM PST by CharlesWayneCT
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To: CharlesWayneCT

Since I am now retired, I expect to pay more under 9-9-9.
And that does not bother me, if it will help boost the economy for the younger generations. Besides, my kids will not have to pay any death tax, so I may not blow it all on stuff I really do not need, haha.


70 posted on 11/22/2011 10:01:39 AM PST by federal__reserve (What matters in 2012 is jobs, jobs, jobs! Jobs kill unemployment, foreclosures & deficits)
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