How would You re-write the tax code?

[Skyth]

Please elaborate on your phrase full use of the money.

A person that earns $20,000 can typically fully use that money for personal consumption.
A person that has to spend $5,000 to earn that $20,000 can only use $15,000 of that money for personal consumption, thus they do not really have full use of that $20,000.

This is similar to a business that has $500,000 in sales. If they have $400,000 in expenses, they don't really have full use of that $500,000. Instead they only have full use of that $100,000.

Your proposal would be akin to putting a limitation of expenses for businesses. Businesses have (for example) a standard deduction of $100,000, so in the example of having $500,000 in sales, they would be taxed on the $400,000.

And also, you are ignoring my suggestion of making personal business expenses an adjustment to income as opposed to an itemized deduction.

[Owl]

A person that earns $20,000 can typically fully use that money for personal consumption.
A person that has to spend $5,000 to earn that $20,000 can only use $15,000 of that money for personal consumption, thus they do not really have full use of that $20,000.

This is similar to a business that has $500,000 in sales. If they have $400,000 in expenses, they don't really have full use of that $500,000. Instead they only have full use of that $100,000.

Your proposal would be akin to putting a limitation of expenses for businesses. Businesses have (for example) a standard deduction of $100,000, so in the example of having $500,000 in sales, they would be taxed on the $400,000.

And also, you are ignoring my suggestion of making personal business expenses an adjustment to income as opposed to an itemized deduction.

Business expenses are different from personal itemized deductions. You are taxed on the PROFIT you make in a business - that wouldn't change. Itemized deductions refers to schedule A of the 1040 individual income tax form. It is actually a very specific term. The truckers, though, are taking job related expenses because they are not self-employed. That's the problem with their expenses. They aren't on a schedule C if they are an employee.

[sailor]

A person that earns $20,000 can typically fully use that money for personal consumption.
A person that has to spend $5,000 to earn that $20,000 can only use $15,000 of that money for personal consumption, thus they do not really have full use of that $20,000.

This is similar to a business that has $500,000 in sales. If they have $400,000 in expenses, they don't really have full use of that $500,000. Instead they only have full use of that $100,000.

Your proposal would be akin to putting a limitation of expenses for businesses. Businesses have (for example) a standard deduction of $100,000, so in the example of having $500,000 in sales, they would be taxed on the $400,000.

And also, you are ignoring my suggestion of making personal business expenses an adjustment to income as opposed to an itemized deduction.

As Owl pointed out, it would not effect the expenses of businesses, ie Sch C or corporations of various types. There is no limit on total business expenses so long as they are reasonable and appropriate. If there was a limitation, companies like Govt Motors or Govt Electric would have huge tax bills.

So a person has to spend money to hold their job. How is a mechanic different than somebody who has to have a car to commute to work? Both are costs to work. Yes, it's partially rhetorical, one is a common expense the other is directly related to their job.

Changing employee business expenses from an itemized deduction to a straight deduction from income on top of a standard deduction regardless of other deductions or no deductions is worse than being an itemized one. it will encourage more tax cheating, and be another even bigger special interest tax break. Why not make all the deductions be from income on top of the standard deduction? Sounds like you are either save the few deductions that you personally can take or want a accountant full employment tax code.

[Skyth]

As Owl pointed out, it would not effect the expenses of businesses, ie Sch C or corporations of various types. There is no limit on total business expenses so long as they are reasonable and appropriate. If there was a limitation, companies like Govt Motors or Govt Electric would have huge tax bills.

I know what the tax code is, but your suggestion of getting rid of itemized deductions (including work expense reduction) is the same as just having a standard deduction for businesses and getting rid of being able to deduct expenses. Both are a bad idea for the same reasons.

So a person has to spend money to hold their job. How is a mechanic different than somebody who has to have a car to commute to work? Both are costs to work. Yes, it's partially rhetorical, one is a common expense the other is directly related to their job.

Exactly, you are dealing with common expenses (IE something covered by the standard deduction) compared to extraordinary expenses related to income. That is the difference.

Changing employee business expenses from an itemized deduction to a straight deduction from income on top of a standard deduction regardless of other deductions or no deductions is worse than being an itemized one. it will encourage more tax cheating, and be another even bigger special interest tax break. Why not make all the deductions be from income on top of the standard deduction?

This was based on your idea of getting rid of itemized deductions. A couple things (Health care expenses, employee business expenses, and charity) should stay regardless of whether there are itemized deduction or not. It would be patently unfair and unethical not to allow those.

And that 'you' cheated on your taxes isn't a good reason to prevent 'me' from being able to take a tax deduction. It is not right to punish someone for someone else's wrongdoing.

[sugarmagnolia]

So trucking companies are keeping the trucks running just for the cost of the fuel?

Don't even try and complain about regulations on the trucking industry to me. You only have DoT and state to deal with. Try IMO, USCG, DoT, ABS, EPA, MSC, MarAd, and foreign govts.

Paying up front is not going to be solved by keeping the itemized deduction.

A flat tax, as generally presented, eliminates the deductions you are trying to keep. So what do you want? Complicated deductions or simplicity? Same with a national sales tax, no deductions for employee business expenses.

You get the same special per diem rate calculation I do (or rather your man does) for being subject to Hours of Service limits.

What I said was that fuel was one of the biggest expenses for a company. There's equiptment, maintenance, insurance, etc. as well.

A national sales tax that is proportional distributed among the state and local governments would eliminate the double taxation that residents of some states get hit with. When I was living in OK, it was assumed that no matter if you didn't buy anything from out of state, that you did. You had to pay an additional tax those goods using the states charts to calculate how much extra you owed. I call that double taxation.

Is there more than one per diem rate? Last I saw there was only one. If you can have a healthy diet on $52/day without skipping meals or living off the dollar menu, outstanding. Don't forget that all you have for refrigeration is an electric coleman cooler.

The last year that I drove, I was out 312 days. When I went to get my taxes done, I wasn't allowed most of what I had for deductions. An example would be entertainment expenses. Because I had reciepts for books and not dvds, I wasn't allowed that deduction. My cell phone bill was disallowed, because I used it to stay in contact with my kids in addition to using it for work. Cleaning supplies for the truck were mostly disallowed, they were considered to be "excessive". Never mind that having to go to one mud hole of a parking lot to another is going to take a lot of cleaning.

My point is that if most of my expenses are going to be disallowed anyway, I'd much rather have a flat tax or a national sales tax to deal with.

As far as just dealing with the state and DOT, if they would get some actual drivers, shippers and truck mechanics and not congress critters and company suits in there when they want to rewrite the regs, there would likely be a lot less bitching. I'm sure that goes for other regulatory agencies as well.

[Owl]

Is there more than one per diem rate? Last I saw there was only one. If you can have a healthy diet on $52/day without skipping meals or living off the dollar menu, outstanding. Don't forget that all you have for refrigeration is an electric coleman cooler.

The IRS publishes per diem rates for many cities in the US annually. This is an amount that (for that city) can be given to the employee without requiring any receipts back, the company can take off their taxes, and the employee does not have to show in their income. I am not aware of a single nation wide rate, but there may be one. This listing can be found at irs.gov (under publications) if you are interested.

The lowest per diem (from the irs listing) I ever disbursed was 48 per day, the highest was 96 I think.

[sailor]

The IRS publishes per diem rates for many cities in the US annually. This is an amount that (for that city) can be given to the employee without requiring any receipts back, the company can take off their taxes, and the employee does not have to show in their income. I am not aware of a single nation wide rate, but there may be one. This listing can be found at irs.gov (under publications) if you are interested.

The lowest per diem (from the irs listing) I ever disbursed was 48 per day, the highest was 96 I think.

There is a "special" rate for truckers, and I think for airline pilots / attendents. That's the $52/day she was talking about. Instead of having to track the per diem rate for each city on each day, they are given a single rate for the US.

The special per diem calculation I was talking about is how much is deductiable. If somebody who is subject to hours of service limitations (truckers, airline crew, ship's crews) can deduct 80% of the per diem instead of 50%.

I think the highest per diem I've seen is $196 a day; lowest was $2 per day.

[sailor]

As far as just dealing with the state and DOT, if they would get some actual drivers, shippers and truck mechanics and not congress critters and company suits in there when they want to rewrite the regs, there would likely be a lot less bitching. I'm sure that goes for other regulatory agencies as well.

Been there, done that. Let's say we had GS-15s serving coffee at the meeting. Things did change.

[sailor]

What I said was that fuel was one of the biggest expenses for a company. There's equiptment, maintenance, insurance, etc. as well.

The shipping industry has been moving cargo for just the cost of fuel. The companies have been eathing the costs of crew, M&R and such to maintain market share.