Ron Paul introduces "Tax Free Tip" Legislation

[DeadMoneyDad]

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There is actually sound economics in this proposal.

There would be a very modest hit on revenue, but a rather large multiplier effect on the economy.

Earned income in the hands of the "working class" is much better overall than money in the hands of the government.

Tuff graduate of econ 101

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Well when you get past the 101 level you learn that no economic activity happens in a class room.....

In the real world the vast majority of tips are now not taxed. The IRS has tried and likely collects more now than it used to collect on as a whole.

But look at the net effect on say the SS earnings for the tip earner. By not reporting on or taxing the tips they are willing to currently report, each individual now no longer gains the benifits of the earnings nor benifits the entire group who think they might get a dime out of SS.

Off the books economys cause many problems for governments and most directly impact the working class more than others. The rich are always going to be able to make some economic decisions with taxes in mind, where as a working man's economic decisions very rarely have positive tax consequences if many choices at all.

So yes in economics 101 money out of the hands of governement is indeed good, because the government is not as effecent as the private sector in it's utilization of the same dollars. But Paul's plan removes an important portion of lower class wage earners income from taxation now as well as removing it from over all SS earnings over their life time. If he was smart he'd suggest fully reporting it for SS earnings or even SS taxes but NOT income taxes.

Your average tip earner isn't pushing up against ever higher tax brackets as it is, many working part time or while in school. The actual tax bite out of their reported tip income is more than likely received as an annual tax refund now. I doubt there is one tip earner who is subject to AMT calculations.

IMPO he looks like a fool on a number of counts, not the least of which is courting a younger and less affluent demographic that is less likely to be registered to vote, and even less likely to vote on election day.


D$D

[Legislurker]

My god, tip earners get an awesome tax treatment. The assessment by the IRS is always way way under whats earned. They rarely make top tier high income tax paying brackets. I highly doubt the effect on G either way is going to change Y.
Even when Y goes down because G goes up it doesnt include the cost of not having enough G for whats needed. Its a vote ploy, not economics. Maybe GWB vodoo economics. If you don't think the poor should pay the modicum of taxes they do now, then vote that way. Its laffable to say ANYTHING RP proposes is good economics. He probably has a picture of Calvin Coolidge somewhere in his office.

[Uglyowl]

Depending on the business, lots of tip earners have a lot of tax free (unreported) income as it is [img]/images/graemlins/smirk.gif[/img]

[Sifmole]

You all understand that this just means the multi-million dollar CEO bonuses will just be re characterized as "tips" for the CEO's wonderful performance. right?

[kagame]

"Paul adheres to the economic philosophy of the Austrian School of economics and has authored several books on the subject. He has pictures of classical liberal economists Friedrich Hayek and Ludwig von Mises hanging on his office wall[30][31]."

http://en.wikipedia.org/wiki/Ron_paul

[DeadMoneyDad]

[ QUOTE ]
"Paul adheres to the economic philosophy of the Austrian School of economics and has authored several books on the subject. He has pictures of classical liberal economists Friedrich Hayek and Ludwig von Mises hanging on his office wall[30][31]."

http://en.wikipedia.org/wiki/Ron_paul

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Well he must have been asleep the many days the effects of his suggestion that the US go back to any semblance of a gold standard.

After we pay China for our worthless paper in GOLD there will be nothing left over....

D$D

[surftheiop]

well Ron Paul wants less income to be taxed so this would go right along with what he is trying to accomplish i believe

[kagame]

gold standard could be applied to our money at a much lower rate than it was in the past, making it worth exactly what its worth for gold on the open market, doing nothing but removing the ability for the fed to PRINT money and devalue the currency any further! why does no one understand this?

[Coy_Roy]

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gold standard could be applied to our money at a much lower rate than it was in the past, making it worth exactly what its worth for gold on the open market, doing nothing but removing the ability for the fed to PRINT money and devalue the currency any further! why does no one understand this?

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They don't understand, because they're not even aware that the fed is devaluing the the currency.

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
gold standard could be applied to our money at a much lower rate than it was in the past, making it worth exactly what its worth for gold on the open market, doing nothing but removing the ability for the fed to PRINT money and devalue the currency any further! why does no one understand this?

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They don't understand, because they're not even aware that the fed is devaluing the the currency.




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You seemed to have missed my understanding of economics.

I hope to hell Paul's suggestion that going any where near the gold standard gains wide acceptance, let alone any hearings, if it actually came to pass I'd be happier than anyone I know.

I'm so over loaded in gold related invenstments a small precentage move in gold and I could pay a buy-in to a couple of WSOP type events. A nice move and I could go on a private jet.

I have a good idea of how badly the Fed is devaluing the US currency. Hell I'll go you one further our school system has so devalued this country all I have to decide is which foriegn currency to cash into when I get out of my gold positions. The American people have gotten so lazy and litigious in general that they expect everyone or at least some one to pay for any stupid thing they do to themselves.

I don't think the US is comming fully back any time soon. Well my investments are set up so if it happens in my lifetime I had to make some minor changes.

My kids are on their own. Well they'll get whatever I don't manage to spend and the IRS doesn't get.

Personally my philisophy of proper financal management is based on the dream of the last check I write bouncing.


D$D