Ideas for Improving America
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David F Mayer
Tue Nov 20, 2012 1:28pm

The point is that, by transferring income producing assets to some minor, a new taxpayer and corresponding new personal exemption is created. Hence tax liability is reduced.

The ONLY way that tax can be independent of who owns what is when it is computed by the formula:

Tax = Rate * (Income - Persons * ExemptionAmount) [Here we omit negatives]

That is because that is the only way in which ExemptionCount remains constant regardless. Just as soon as a person switches from "non-taxpayer" to "taxpayer" due to income transference, the number of exemptions changes in your system. It does NOT in mine.

I offer a formal proof if you want it, but it is rather obvious if you think about it carefully.

David F Mayer

  • False..... completely false....Sprout, Tue Nov 20 10:46am
    It is really very simple. If Bob makes income Bob pays income tax, and can claim one exemption... If Susan makes income, Susan pays income tax and can claim one exemption. If Billy makes income,... more
    • Wrong. — David F Mayer, Tue Nov 20 1:28pm
      • If one indivdual "transfers" wealth to another indivdiual that is INCOME for the other indivdual, who must pay taxes on it... AFTER the first indiviual payed taxes on it in the FIRST PLACE... Dad... more
        • Not so. Transfers occur all the timeDavid F Mayer, Tue Nov 20 5:29pm
          in the same family, to a trust fund, etc, etc. I have never heard of them being called income, although that would be in the spirit of my flat rate tax. This is an interesting matter that requires... more
          • Every transaction is a "transfer"....Sprout, Sun Dec 9 9:23am
            Folks just USE that word to AVOID it sounding like they are paying... If I "transfer" twenty dollars to you, you have been paid twenty dollars. It doen'st matter WHY. Now, it is possible that you... more
            • True, but this is constantly used to evade taxes.David F Mayer, Sun Dec 9 1:40pm
              The new tax code must consider ALL transfers as income, which is certainly NOT true at present. David F Mayer
              • scratch with none of the existing loopholes... If someone gives you money it is income... I think some extremely limited exceptions might be in order such as a person under the age of 16 can recieve... more
                • What happens is that Mr X signs a contract with Y.David F Mayer, Wed Dec 12 1:44pm
                  Y is required to pay, NOT Mr X, but Mr X's wife, son, daughter, dog, etc. Sure, it is taxable income, but such subterfuges permit the income and consequent tax to be spread to several individuals. Mr ... more
                  • And when the audit comes in....Sprout, Thu Dec 13 11:33am
                    And because it WILL when an 8 yr old claims 20K in income without being legally able to work, it will be amply clear that that money is actually compensation for Mr. X's job, and Mr X will then be... more
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