• Sonny Tufts's Avatar
    10-12-2019, 03:49 PM
    A flat tax is fine, but not all expenses are deductable; some have to be capitalized and depreciated or amortized over time. Others should arguably be nondeductable even if they're properly viewed as a current expense. For example, fines and penalties aren't deductable under current law; if they were they would be much less of a deterrent. As a practical matter a flat tax could never be enacted without some non-business deductions and without some nondeductible business expenses. Incidentally, the standard deduction was originally designed to shelter income that people needed to live on and raise a family. In 1913 the deduction was $3,000 for a single person and $4,000 for a married couple. These translate to $77,800 and 103,740 in today's dollars (the overgenerous 1913 levels may have been set that high in order to assure the tax woulod be enacted). Obviously, today's standard deduction is nowhere near these levels, but the idea is that if the flat tax rate were, say, 10%, we shouldn't be taxing someone who has to spend 95% of his income on food, clothing, and housing for a family of 4.
    56 replies | 1611 view(s)
  • Sonny Tufts's Avatar
    10-12-2019, 03:26 PM
    Legislatures wouldn't simply toss out all liability insulation for owners, because the courts would still be governed by the common law rule of respondiat superior under which principals are liable for the torts of their agents committed within the scope of their authority. Sure, one could argue that a court should differentiate between people who own very small interests in an entity and those who own a large or cotrolling interest, but where is a court to draw the line and how can you make sure that one court doesn't draw it at 51% while another draws it at 35%? This kind of line drawing is best left to the legislature, which can draw an arbitrary line based on the percentage of the entity; more inportant, this line will be known ahead of time instead of being sprung on an unsuspecting defendant after the fact in a civil trial. But does that really solve the problem? Forget large publicly-traded companies -- suppose someone has a brilliant idea for a product or service that carries with it a fair amount of risk. He forms a company and like all entrepreneurs who create a startup, he wants control. But if that control is going to subject him to personal liability he may be forced to sell his idea to a publicly-traded company or ditch the idea completely. It seems to me that eliminating liability protection for all controlling owners will have an adverse effect on the creation of new businesses.
    23 replies | 719 view(s)
  • Sonny Tufts's Avatar
    10-11-2019, 04:18 PM
    The word "politics" comes from Greek. "Poli" means many, and "tics" means blood-sucking parasites.
    580 replies | 14048 view(s)
  • Sonny Tufts's Avatar
    10-10-2019, 02:13 PM
    The person who commits the tort isn't protected from liability; the shareholders of the corporations are. It's a basic rule of the law of agency that the principal is liable for any tort committed by his agent if the agent was acting in the course of the principal's business and in the scope of the agent's responsibilities. For example, if you employ a driver to make deliveries to your customers and if the driver injures someone while out making deliveries, you and the driver are both liable. In the corporate context, the officers, employees, and other agents of the corporation are ultimately the agents of the shareholders, so that absent the insulation that current law gives the shareholders they would be liable for the torts committed by their agents. All I'm saying is that if the government didn't provide limited liability to the owners of corporations, LLC's, and limited partnerships, I think our economy would look vastly different that it does today and that entrepreneurs would be much more reluctant to engage in risky businesses and would find it much more difficult to attract investors.
    23 replies | 719 view(s)
  • Sonny Tufts's Avatar
    10-10-2019, 12:43 PM
    But they would have unlimited exposure to tort liability. It is this insulation from liability that distinguishes corporations, LLC's, and limited partnerships from other voluntary associations. Sure, they could theoretically insure themselves against tort liability, but how many insurance companies would there be? Do you think anyone would want to invest in an insurance company and have personal liability for the insurer's contractual obligations?
    23 replies | 719 view(s)
  • Sonny Tufts's Avatar
    10-09-2019, 07:57 AM
    While corporations are formed by filing papers with the government, their primary purpose is to protect their shareholders from personal liability for the torts and contracts of the corporation. The same reasoning applies to the other liability-insulating entities, limited liability companies and limited partnerships. Absent the liability protection afforded by the government, the owners of these entities would be personally liable for all of the entity's contractual obligations and for all torts committed by the entity's agents within the scope of their authority. Without such protection, people would be extremely reluctant to invest in risky endeavors. Is this insulation from personal liability consistent with the notion of a free market? It may be, at least with respect to the entity's contractual obligations because any person dealing with the entity will know that his sole recourse in the event of a breach of contract will be against the entity's assets and that he won't be able to go after the personal assets of the entity's owners. But this isn't the case with tort liability. Ambrose Bierce, in his The Devil's Dictionary, had a slightly more cynical view. His definition of a corporation was "An ingenious device for obtaining personal profit without personal responsibility."
    23 replies | 719 view(s)
  • Sonny Tufts's Avatar
    10-01-2019, 11:45 AM
    There's nothing in the Bill of Rights that says individuals have a right to an unlimited income tax deduction for state and local taxes. The requirement that the income tax (and all other indirect taxes) be geographically uniform is sufficient protection against regional favoritism.
    6 replies | 264 view(s)
  • Sonny Tufts's Avatar
    10-01-2019, 07:08 AM
    But the Tenth Amendment argument was so weak as to be almost nonexistent. The plaintiff-States were essentially claiming that Congress' explicitly delegated power to tax can't be exercised in a manner that adversely affects the States' own power to tax. This turns the Supremacy Clause on its head and makes the federal taxing power subservient to the desires of States that want to tax and spend on a high level.
    6 replies | 264 view(s)
  • Sonny Tufts's Avatar
    09-30-2019, 01:07 PM
    The court's opinion can be read here https://www.politico.com/f/?id=0000016d-82a6-d9fa-a36f-a6e6c35c0001. Unless you're interested in various procedural matters, start on page 23 to read the discussion of the merits of the case. Irony: Judge Oetken, who wrote the opinion, was nominated by Obama upon a recommendation by Senator Schumer of (you guessed it) New York, a seriously blue state with high local taxes.
    6 replies | 264 view(s)
  • Sonny Tufts's Avatar
    09-30-2019, 07:03 AM
    Won't happen anytime soon. Under current law an income tax would have to be approved by a statewide referendum authorized by a simple majority in the state House and Senate. But under a proposed amendment to the state Constitution that's on the November ballot, an income tax on individuals would be prohibited. This could be overturned only by a constitutional amendment, which would require a 2/3 votes in both the state House and Senate and approval by the voters.
    21 replies | 583 view(s)
  • Sonny Tufts's Avatar
    09-30-2019, 06:52 AM
    This is from Adam Smith's Wealth of Nations, and it was quoted in the concurring opinion of a single Justice in an antitrust case having nothing to do with taxation. The proper way to cite it is Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746, 757 (1884) (Field, concurring). Incidentally, Justice Field voted to uphold the constitutionality of the federal income tax (which taxed wages, among other things) just three years earlier.
    5 replies | 143 view(s)
  • Sonny Tufts's Avatar
    09-28-2019, 02:53 PM
    The 1943 tax was clearly constitutional, and taxing wages began in 1861 and was reintroduced in 1913. Unless federal spending were cut to the bone, imposts and duties wouldn't produce anywhere near the amount of revenue needed. And incidentally, the income tax is an excise. Your McCarthyesque screed failed to mention the obvious reason why a wealth tax is a bad idea: unless apportioned (a political impossibility), it would be unconstitutional. A tax on the mere ownership of property is a direct tax. This creates a problem with so-called luxury taxes unless they are imposed only once, as in a sales tax. Hamilton understood this when he argued in favor of the 1794 carriage tax in the Hylton case. In his brief, he put forth the following regarding the difference between indirect and direct taxes:
    5 replies | 143 view(s)
  • Sonny Tufts's Avatar
    09-28-2019, 09:20 AM
    Proof positive that bowlcuts are hate symbols.
    12 replies | 285 view(s)
  • Sonny Tufts's Avatar
    09-25-2019, 07:01 AM
    I don't think you can eliminate all deductions -- individuals and corporations that run businesses will need to be able to deduct certain expenses. Otherwise, you'll have a gross receipts tax, which would be payable even by someone who has a net operating loss. The estate tax is a different matter. It doesn't raise much revenue, and it currently affects only the wealthy (estates over $11.4 million).
    56 replies | 1611 view(s)
  • Sonny Tufts's Avatar
    09-24-2019, 06:46 AM
    I was considering only federal taxes, not state income taxes; only the addition of the latter can push someone close to 50%. Bottom earners always lose 15.3% to payroll taxes, even if they pay no federal income tax.
    56 replies | 1611 view(s)
  • Sonny Tufts's Avatar
    09-23-2019, 08:57 AM
    The current system isn't as progressive as some people think. Even ignoring the rate differential between capital gains and ordinary income (e.g., wages), one needs to take into account the effect of payroll taxes, which are regressive owing to the fact that the amount of wages subject to the Social Security payroll tax is capped. A single person whose income consists of $132,000 of wages (the current cap) will pay total payroll and income taxes of $43,476, or 32.7% of his income. A single person with income of $1 million in wages would pay total tax of $383,154, or 38.3%. If a flat tax is what's desired, the cap on wages subject to Social Security would need to be eliminated.
    56 replies | 1611 view(s)
  • Sonny Tufts's Avatar
    09-20-2019, 07:00 AM
    It's been legal in New York City since 1992. https://www.npr.org/sections/thetwo-way/2015/08/24/434315957/topless-in-new-york-the-legal-case-that-makes-going-top-free-legal-ish https://www.amny.com/news/topless-parade-nyc-1.35488865
    9 replies | 388 view(s)
  • Sonny Tufts's Avatar
    09-19-2019, 10:38 AM
    The Constitution prohibits a State from entering into any agreement or compact with another State without the consent of Congress (Art. I, Sec. 10, Clause 3). Ignoring U.S. Supreme Court decisions didn't work following the 1954 school desegregation case, and there's no reason to think it would work today.
    99 replies | 4902 view(s)
  • Sonny Tufts's Avatar
    09-18-2019, 04:39 PM
    Considering that the latest polls show that a majority of Americans are in favor of gay marriage, it certainly won't go as far as you want it to. https://news.gallup.com/poll/257705/support-gay-marriage-stable.aspx https://en.wikipedia.org/wiki/Public_opinion_of_same-sex_marriage_in_the_United_States
    134 replies | 2037 view(s)
  • Sonny Tufts's Avatar
    09-18-2019, 04:30 PM
    Aside from the District of Columbia (which Congress has exclusive authority over, per the Constitution), the federal government doesn't sanction relationships in the sense of legislating marriage rules; the States do. But the 14th Amendment is part of the Constitution, and when a State denies same-sex couples the same ability to have legal relationships that it provides to opposite-sex couples, it violates the Equal Protection Clause. Congress is also prohibited from that kind of discrimination. In a case that preceded its gay-marriage decision, the Supreme Court held that it was unconstitutional for the federal government to deny an estate tax marital deduction to the survivor of a same-sex marriage that was legal under the law of the state in which the couple lived. In other words, the federal government couldn't refuse to recognize the legal same-sex marriage.
    134 replies | 2037 view(s)
  • Sonny Tufts's Avatar
    09-18-2019, 04:11 PM
    Perhaps it's been defined that way in a religious context. But the definition in a legal context can always be changed so long as it's consistent with the Constitution. Really, what difference does it make if you call it a "marriage" or a "legal union"? Your "the sky is falling!" paranoia makes no sense. And you've provided absolutely no proof that allowing gays to marry will destroy civilization, only empty hand-wringing, wailing, and gnashing of teeth.
    134 replies | 2037 view(s)
  • Sonny Tufts's Avatar
    09-18-2019, 12:40 PM
    Neither you nor religion has a copyright on the definition of "marriage". In a legal sense (in this country) it refers to any union of two people that the government recognizes and that has certain legal consequences. Too bad if it gets your knickers in a wad. You were using the fact that the Old Testament condemns homosexual conduct as a reason for society to condemn it. Should society condemn all of the other things the Bible prohibits? Or will you cherry-pick?
    134 replies | 2037 view(s)
  • Sonny Tufts's Avatar
    09-18-2019, 07:27 AM
    You forget about polygamy, which was practiced in many cultures, including those in the Bible. In any event, "it's always been that way" is a very weak argument. It was probably used in 1860 to justify slavery: "There's always been slavery. Why should we get rid of it?" The plain fact is that some laws change, as they should when their rationale no longer applies (or, in the case of slavery, it never did). Idiotic paranoia. So are many other things -- eating shellfish or pork, working on the Sabbath, wearing clothing made of linen and wool, trimming beards, tattoos, etc. In any event, we don't yet live in a theocracy where self-appointed zealots such as yourself get to make religious decrees binding on everyone else.
    134 replies | 2037 view(s)
  • Sonny Tufts's Avatar
    09-17-2019, 09:28 AM
    OK. "While many Christians do not want to be forced to celebrate what they believe to be sin, they are not attacking or discriminating against members of that community." They are, in fact, discriminating against gays if they refuse to sell them goods and services. Although the reason for the refusal may be a deeply held religious belief, the fact remains that it's still discrimination, just as if a Muslim were to refuse to give driving lessons to a woman. This isn't to say that the law should prohibit such discrimination (unless it's done by government employees; see below). But to claim that it isn't discrimination is simply absurd. "This is why Christian businessmen, from bakers to florists to wedding planners, have been persecuted in recent years for refusing to service events — faux (same-sex) weddings. The irony is that these Christians weren’t trying to shut down these faux weddings" There's nothing faux about same-sex weddings. I'm not talking about religious ceremonies, but about civil marriages that are equally real whether the participants are same-sex or opposite-sex. Opponents of same-sex civil marriages have never been able to demonstrate how they are harmed by the government's extending the benefits of civil marriage to gays, other than that it offends their religious sensibilities.
    134 replies | 2037 view(s)
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We have long had death and taxes as the two standards of inevitability. But there are those who believe that death is the preferable of the two. "At least," as one man said, "there's one advantage about death; it doesn't get worse every time Congress meets."
Erwin N. Griswold

Taxes: Of life's two certainties, the only one for which you can get an automatic extension.
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