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(Talking Points Memo)   Last year, the Obamas paid a 25% higher tax rate than Mitt Romney - on only 3.5% of his last reported income   ( livewire.talkingpointsmemo.com) divider line
    More: Obvious, First Lady Michelle Obama, Dr. Jill Biden, tax rates, adjusted gross income  
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4342 clicks; posted to Politics » on 12 Apr 2013 at 3:10 PM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-04-12 05:30:12 PM  
So....BamBam is a hypocrite merely for paying his income taxes.
 
2013-04-12 05:31:30 PM  

skullkrusher: the reason you pay regular income taxes when you draw down a 401k or a traditional IRA is because you don't pay any taxes on the money you put it (up to a point). You don't accrue LT or ST cap gains while you trade, you don't pay cap gains taxes on investments in the account,  while getting the benefit of using pre-tax money. It's an awesome deal, not the consolation prize.


The system could easily be set to percentage-out the principle from the gains and pay different rates for each. My 401k is already about 3/4 gains. And I do agree that a 401k is a great deal. But the mother of all great deals is the LTCG tax rate - a flat 15% and no exposure to payroll taxes. To get a better deal than that requires offshore action or loopholes put their by your bought & paid for Congress-critter.

To put it simply, rich people can afford to get paid in stock. By holding it over a year they get to pay only 15% in addition to the benefit of not having to pay anything to Social Security or Medicare.

Hence my argument about treating all money received the same. Keep the same marginal rates, maybe add one more at 40% at 500k or 750k, but otherwise treat every method of receiving money / gains the same,
 
2013-04-12 05:33:27 PM  
my fellow tax livestock citizens

Oh, I geddit now.

Lawyers, whose head I am still contemplatively gnawing on like a hunk of jerky, is one of those WHITE PEOPLE R TEH JUUZ 4 0BAMMA's OVENS types.
My, this jerky is chewy.
 
2013-04-12 05:34:05 PM  

Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100


I have to remember to close the door to my office before reading your posts. I don't need everyone wondering why I'm laughing so hard at work.

I thought the fair tax guy in this thread was the stupidest possible fair tax supporter. And here you are to prove me wrong.

But hey, this should be fun, so why not go ahead and explain how a "23% inclusive" tax (which translates to a 30% sales tax) will make an item whose pre-tax price is $100, remain at $100. Remember, we are only talking about how much the tax adds to a purchase price, this has nothing to do with the "but companies will magically lower their prices when income taxes disappear" part of the fair tax "plan". I asked you only what the exact amount of tax on a $100 item is. If it helps  consider that $100 after the magical cost reduction benefits take place. What is the amount of tax on that $100? Are you still going to go with $100?
 
2013-04-12 05:34:16 PM  

Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100


Cute.

If the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.
 
2013-04-12 05:38:22 PM  

Lawyers With Nukes: Lord_Baull: Lawyers With Nukes: $608,611 in income....18.4% in taxes. Let that sink in for a while you guys.

Let that sink in? We've been biatching that people in the upper tax brackets haven't been paying their fair share for YEARS! Where have you been, in a Fox hole?

Last I checked, there were no atheists in Fox holes. ;)

Me and my ilk have been watching from the sidelines, endlessly amused at the electorate unquestioningly supporting the Wrestlemania that is American politics. Even when presented with absolute proof, IN BLACK AND WHITE, that the politicos are merely actors playing their assigned roles, my fellow tax livestock citizens simply refuse to see, so complete is their indoctrination.



The important thing is that you've managed to feel superior to everyone else.
 
2013-04-12 05:38:34 PM  

madgonad: Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100

Cute.

If the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.


Someone correct me if I am wrong but I though the price point was supposed to be close to the same because the cost of the items has taxes built into it already?
 
2013-04-12 05:38:47 PM  

Thrag: Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100

I have to remember to close the door to my office before reading your posts. I don't need everyone wondering why I'm laughing so hard at work.

I thought the fair tax guy in this thread was the stupidest possible fair tax supporter. And here you are to prove me wrong.

But hey, this should be fun, so why not go ahead and explain how a "23% inclusive" tax (which translates to a 30% sales tax) will make an item whose pre-tax price is $100, remain at $100. Remember, we are only talking about how much the tax adds to a purchase price, this has nothing to do with the "but companies will magically lower their prices when income taxes disappear" part of the fair tax "plan". I asked you only what the exact amount of tax on a $100 item is. If it helps  consider that $100 after the magical cost reduction benefits take place. What is the amount of tax on that $100? Are you still going to go with $100?


It is pretty simple if you just think about it:


Benghazi!
 
2013-04-12 05:39:19 PM  

madgonad: skullkrusher: the reason you pay regular income taxes when you draw down a 401k or a traditional IRA is because you don't pay any taxes on the money you put it (up to a point). You don't accrue LT or ST cap gains while you trade, you don't pay cap gains taxes on investments in the account,  while getting the benefit of using pre-tax money. It's an awesome deal, not the consolation prize.

The system could easily be set to percentage-out the principle from the gains and pay different rates for each. My 401k is already about 3/4 gains. And I do agree that a 401k is a great deal. But the mother of all great deals is the LTCG tax rate - a flat 15% and no exposure to payroll taxes. To get a better deal than that requires offshore action or loopholes put their by your bought & paid for Congress-critter.

To put it simply, rich people can afford to get paid in stock. By holding it over a year they get to pay only 15% in addition to the benefit of not having to pay anything to Social Security or Medicare.

Hence my argument about treating all money received the same. Keep the same marginal rates, maybe add one more at 40% at 500k or 750k, but otherwise treat every method of receiving money / gains the same,


your point is taken about the disparate tax rates for different types of income but 401k is pretty awesome and you're better off with that than you would be paying taxes on income now, investing it and then paying LTCGs down the road on the profits.

I wish 401ks had more flexibility in terms of investment choices and the ability to invest in individual stocks but Imma still load mine up as much as I can
 
2013-04-12 05:39:30 PM  

skullkrusher: theknuckler_33: skullkrusher: madgonad: theknuckler_33: short term cap gains are not taxed higher. they are taxed the same as regular income. LTCG are the income that is being specially treated here. I accept the premise, but if STCG promote risky or speculative investing, then tax those gains HIGHER than regular income. Taxing STCG the same as regular income is not a penalty, taxing LTCG is a benefit... one that by and large is realized only by the wealthy.

Taxing LTCG is categorically unfair because only the wealthy can take advantage of it. Your 401K or traditional IRA - now THAT is long term. Builds up over your entire life. How is it taxed? As regular income - the same as short term capital gains.

All income, of all types (including inheritance) should be taxed the exact same way.

oh FFS

I agree with him (her?)... although I'm ok with an exemption on inheritances up to a certain amount ($5 mil?).

the reason you pay regular income taxes when you draw down a 401k or a traditional IRA is because you don't pay any taxes on the money you put it (up to a point). You don't accrue LT or ST cap gains while you trade, you don't pay cap gains taxes on investments in the account,  while getting the benefit of using pre-tax money. It's an awesome deal, not the consolation prize.


It is an awesome deal. Not sure it's better than saving 20+% on the vast majority of my income every year for decades... but yea, it's a great deal.
 
2013-04-12 05:41:22 PM  

Kittypie070: So....BamBam is a hypocrite merely for paying his income taxes.


He wouldn't be if he did like Romney and never posted his income taxes, according to a FARKer above.
 
2013-04-12 05:41:39 PM  

madgonad: Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100

Cute.

If the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.


apparently the only time taxes aren't legal theft is when they are disproportionately collected from the poors
 
2013-04-12 05:42:58 PM  

skullkrusher: I wish 401ks had more flexibility in terms of investment choices and the ability to invest in individual stocks but Imma still load mine up as much as I can


I just wish the cap was a little higher.
 
2013-04-12 05:44:02 PM  

I alone am best: madgonad: Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100

Cute.

If the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.

Someone correct me if I am wrong but I though the price point was supposed to be close to the same because the cost of the items has taxes built into it already?


For that to be true, you would have to believe that all taxes get reflected in the costs of goods. However there are taxes, such as capital gains and inheritance taxes which would not be reflected in the cost of goods. You would also have to believe that corporations would pass along 100% of their tax savings onto consumers.
 
2013-04-12 05:44:22 PM  

Lord_Baull: Kittypie070: So....BamBam is a hypocrite merely for paying his income taxes.

He wouldn't be if he did like Romney and never posted his income taxes, according to a FARKer above.


Does he have to? We get these annual "what the president paid" stories. Is it required or just some tradition?
 
2013-04-12 05:45:17 PM  

I alone am best: skullkrusher: I wish 401ks had more flexibility in terms of investment choices and the ability to invest in individual stocks but Imma still load mine up as much as I can

I just wish the cap was a little higher.


player
 
2013-04-12 05:46:18 PM  

Thrag: But hey, this should be fun, so why not go ahead and explain how a "23% inclusive" tax (which translates to a 30% sales tax) will make an item whose pre-tax price is $100, remain at $100. Remember, we are only talking about how much the tax adds to a purchase price, this has nothing to do with the "but companies will magically lower their prices when income taxes disappear" part of the fair tax "plan". I asked you only what the exact amount of tax on a $100 item is. If it helps  consider that $100 after the magical cost reduction benefits take place. What is the amount of tax on that $100? Are you still going to go with $100?


There are a lot of impacts from shifting to a consumption tax.

First off, retail would wither anywhere within 100 miles of the Mexico / Canada border. That would hammer San Diego, Los Angeles, Seatle, Detroit, Buffalo, Pittsburgh, and various parts of New England.

Second off, those hundreds of thousands of foreign tourists that come from Europe and Asia to drop serious money in New York and LA - that goes away too. Part of the reason they come here is to avoid their local sales and Value Added Taxes. A high consumption tax here would do just the opposite.

Third, the new car industry would kerplode. That $30k sedan just got an effective price boost up to almost $40k.

Fourth, property crime would have a renaissance. Stolen goods would become even more lucrative.

Fifth, the complexity of changing the point of enforcement from tens of thousands of HRs and annual filing to millions of POS's and trillions of transactions.

Sixth, the wealthy in this country would leave the country whenever possible to spend. An expensive trip to New York would relocate to London or Paris.

Seventh, RV and boat purchases would plummet at well.

I could go on.
 
2013-04-12 05:46:40 PM  

skullkrusher: theknuckler_33: skullkrusher: theknuckler_33: I don't know too many low income folks that can a) afford the kind of outlays that you need to buy stocks and hold onto them for over a year and b) tolerate the risk associated with such activity.  The only way to mitigate the risks is to have a diversified portfolio which requires even more investments in a variety of stocks across different sectors of the economy and I'd bet that there are even fewer lower income folks who can do that.  That doesn't even mention that the how much cap gains income you might even have if you are a low income investor. I mean... how many shares of IBM can a guy making 50k conceivably buy on an annual basis?

Most investments by low income folks, I think, are generally in IRAs or 401Ks where they invest in mutual funds, but withdrawals from IRAs and 401ks are taxed as regular income (unless its a Roth IRA)... so you don't get any benefit from cap gains rates there.

That's why lower income people who do invest directly (outside of a pension or 401k) tend to do so via mutual funds or in some cases, buying little bits of individual stocks at a time. To me that sounds more likely than lower income people flipping stocks for a quick profit.

Sharebuilder.com is a decent way to do that since it allows you to purchase fractional shares so even if you only have $100 a month to invest or whatever, you can buy .2326 shares of AAPL or 7.39 shares of F. That's usually impossible with most "traditional" brokers unless you already own stock and are set up for automatic dividend reinvestment.

I was making a point about how LTCG income disproportionately goes to the ~1% (or 5%... whatever). Sure a person with a modest income can accumulate small amounts of shares over time and eventually take advantage of the LTCG rates after years of investing... compared to someone who can buy thousands and thousands of shares (or more commonly gets them as part of their executive compensation package) every single ye ...


By default it is a bias though. If one class of people are essentially limited to labor income,and the other make the bulk of their income through investment income, then you are treating those two groups differently.

Not to open up a whole other can of worms, but this is also exacerbating the increasingly large division between the upper 1% or .1% and the rest of us.  Then of course you have the excellent arguments that the capital gains tax preference is not supposed to apply to people like Romney as their income really is labor income when you look at what they are doing.

The reality was that this tax rate was changed as a giveaway to the wealthy. All arguments as to why it was fair to do are just attempts to obscure that fact. Prior to 97 these guys paid 28%, which is what my marginal rate is.  Funny how it was fair before 97, but now it's a crime against humanity.

http://www.fark.com/comments/7696957/83583753#c83583753" target="_blank" data-cke-saved-href="http://www.fark.com/comments/7696957/83583753#c8 3583753">theknuckler_33: nocturnal001: theknuckler_33:

Why is it ok to treat SOME capital gains preferentially? In particular, the kind of capital gains that again are mostly realized by a certain segment of society?

That's the problem with using morality arguments when people bring up taxation. They fall apart quickly. Short term capital gains are taxed higher as a way to encourage more stable behavior from investors.

short term cap gains are not taxed higher. they are taxed the same as regular income. LTCG are the income that is being specially treated here. I accept the premise, but if STCG promote risky or speculative investing, then tax those gains HIGHER than regular income. Taxing STCG the same as regular income is not a penalty, taxing LTCG is a benefit... one that by and large is realized only by the wealthy.


Mmm, yeah that's what I meant. STG are taxed higher than LTCG, not higher than normal income.
 
2013-04-12 05:47:17 PM  
i wonder if we'll ever see mitt's '09 return - the one that likely shows that he took the swiss amnesty.
 
2013-04-12 05:47:50 PM  

Philip Francis Queeg: Oh sweet mother of God....


Yes?

madgonad: f the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.


Perhaps you should read it.

Jackson Herring: apparently the only time taxes aren't legal theft is when they are disproportionately collected from the poors


You too.

Until you have you are attempting to discuss something that you know nothing about. And y'all keep trying to tell me that you're the learned....Well, go do some learnin' and get back to me.
 
2013-04-12 05:48:15 PM  

skullkrusher: I alone am best: skullkrusher: I wish 401ks had more flexibility in terms of investment choices and the ability to invest in individual stocks but Imma still load mine up as much as I can

I just wish the cap was a little higher.

player


If I want to eat Raman now so I can eat lobster when i'm senile I should be able to.
 
2013-04-12 05:48:53 PM  

I alone am best: madgonad: Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100

Cute.

If the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.

Someone correct me if I am wrong but I though the price point was supposed to be close to the same because the cost of the items has taxes built into it already?


Yeah, that is BS. Corporations pay taxes on profits - not gross. Prices are based upon material cost and labor. Anything extra they get to keep. Lowering income taxes doesn't provide ANY incentive to lowering prices. Just think about it. If your tax rate dropped, would you work for a lower salary?
 
2013-04-12 05:48:54 PM  
Historical capital gains rates, since we all seem to forget that 15% is a relatively new thing.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161"> http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161

Hmm, I bet if you graph that and overlay it with a graph depicting middle class wealth those two will be about opposite on average.
 
2013-04-12 05:50:39 PM  

Cletus C.: Lord_Baull: Kittypie070: So....BamBam is a hypocrite merely for paying his income taxes.

He wouldn't be if he did like Romney and never posted his income taxes, according to a FARKer above.

Does he have to? We get these annual "what the president paid" stories. Is it required or just some tradition?



A tradition started by his father. Does he HAVE to? No. Does it bode well when every candidate since the 60's has done it, but he doesn't? Yes.
 
2013-04-12 05:52:54 PM  

I alone am best: skullkrusher: I alone am best: skullkrusher: I wish 401ks had more flexibility in terms of investment choices and the ability to invest in individual stocks but Imma still load mine up as much as I can

I just wish the cap was a little higher.

player

If I want to eat Raman now so I can eat lobster when i'm senile I should be able to.


just don't eat lobster flavored Ramen because that's just gross
 
2013-04-12 05:53:24 PM  

madgonad: I alone am best: madgonad: Dancin_In_Anson: Thrag: If an item costs $100 before taxes, what will be the price of that item after the "fair tax" is applied?

$100

Cute.

If the Federal Fair tax was 30%, at my local Target it would be:

$100 for product, $30 for Federal Fair Tax, $7.85 for local, state, and city. So you would pay $137.85 at the register.

Someone correct me if I am wrong but I though the price point was supposed to be close to the same because the cost of the items has taxes built into it already?

Yeah, that is BS. Corporations pay taxes on profits - not gross. Prices are based upon material cost and labor. Anything extra they get to keep. Lowering income taxes doesn't provide ANY incentive to lowering prices. Just think about it. If your tax rate dropped, would you work for a lower salary?


Oh, I know they wont. Just like how everyone's credit card interest rates were going to go down when they tightened up the bakruptcy rules. That was supposed to be the concept.
 
2013-04-12 05:53:35 PM  

Dancin_In_Anson: Until you have you are attempting to discuss something that you know nothing about. And y'all keep trying to tell me that you're the learned....Well, go do some learnin' and get back to me.


From the FairTax website:

The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current four-million-word-plus word tax code. Under the FairTax, every person living in the United States pays a sales tax on purchases of new goods and services, excluding necessities due tothe prebate. The FairTax rate afternecessitiesis 23% and equal to the lowest current income tax bracket (15%) combined with employee payroll taxes (7.65%), both of which will be eliminated.

So it's a large sales tax. Unless, of course, you would like to actually make an argument instead of stamp your feet and say "nu-uh!" some more.
 
2013-04-12 05:54:41 PM  

skullkrusher: I alone am best: skullkrusher: I alone am best: skullkrusher: I wish 401ks had more flexibility in terms of investment choices and the ability to invest in individual stocks but Imma still load mine up as much as I can

I just wish the cap was a little higher.

player

If I want to eat Raman now so I can eat lobster when i'm senile I should be able to.

just don't eat lobster flavored Ramen because that's just gross


I wont care, I will be senile, but my underwear will be made out of 100 dollar bills.
 
2013-04-12 05:56:52 PM  

skullkrusher: that's just a matter of wealthier people having more money to invest and therefore earn greater amounts.


That is the entire point. A HUGE amount of personal income has been declared 'special' and taxed at a lower rate and the vast majority of that particular kind of income just happens to go to the wealthy. the difference here is that some folks say "hey, the rules are the same for everyone, that's fair" while others are saying "the rules are different  depending on where the income comes from, that's not fair".

Income is income.
 
2013-04-12 05:57:27 PM  

Lord_Baull: Cletus C.: Lord_Baull: Kittypie070: So....BamBam is a hypocrite merely for paying his income taxes.

He wouldn't be if he did like Romney and never posted his income taxes, according to a FARKer above.

Does he have to? We get these annual "what the president paid" stories. Is it required or just some tradition?


A tradition started by his father. Does he HAVE to? No. Does it bode well when every candidate since the 60's has done it, but he doesn't? Yes.


I was asking about the president. It turns out he does not need to release his returns and many have only released partial returns or a summary.
 
2013-04-12 05:57:50 PM  
A deduction indexed to a typical basket of goods in your area to cover necessities and some spending money. No credits, if you make less than the deduction, you just pay no income tax.
25% on all income above that, no exemptions.
Progressive, simply, revenue generating.

No charge, America.
 
2013-04-12 05:58:28 PM  

Dancin_In_Anson: And y'all keep trying to tell me that you're the learned...


Other than the voices in your head, who tells you that?  Oh, that's right.  Nobody.  Y'all.
 
2013-04-12 05:58:43 PM  

theknuckler_33: skullkrusher: that's just a matter of wealthier people having more money to invest and therefore earn greater amounts.

That is the entire point. A HUGE amount of personal income has been declared 'special' and taxed at a lower rate and the vast majority of that particular kind of income just happens to go to the wealthy. the difference here is that some folks say "hey, the rules are the same for everyone, that's fair" while others are saying "the rules are different  depending on where the income comes from, that's not fair".

Income is income.


I thought we were talking about whether the cap gains paid by lower income earners tended to the ST or LT categories?
 
2013-04-12 06:04:56 PM  

Kittypie070: my fellow tax livestock citizens

Oh, I geddit now.

Lawyers, whose head I am still contemplatively gnawing on like a hunk of jerky, is one of those WHITE PEOPLE R TEH JUUZ 4 0BAMMA's OVENS types.
My, this jerky is chewy.



Kittypie070, please please please, FOR THE LOVE OF GOD...


...be sure to clean your plate!
 
2013-04-12 06:07:14 PM  

madgonad: skullkrusher: the reason you pay regular income taxes when you draw down a 401k or a traditional IRA is because you don't pay any taxes on the money you put it (up to a point). You don't accrue LT or ST cap gains while you trade, you don't pay cap gains taxes on investments in the account,  while getting the benefit of using pre-tax money. It's an awesome deal, not the consolation prize.

The system could easily be set to percentage-out the principle from the gains and pay different rates for each. My 401k is already about 3/4 gains. And I do agree that a 401k is a great deal. But the mother of all great deals is the LTCG tax rate - a flat 15% and no exposure to payroll taxes. To get a better deal than that requires offshore action or loopholes put their by your bought & paid for Congress-critter.

To put it simply, rich people can afford to get paid in stock. By holding it over a year they get to pay only 15% in addition to the benefit of not having to pay anything to Social Security or Medicare.

Hence my argument about treating all money received the same. Keep the same marginal rates, maybe add one more at 40% at 500k or 750k, but otherwise treat every method of receiving money / gains the same,


What do you mean"rich people can afford to get paid in stock". You realize that the only portion that gets taxed at cap gains rates is the gains after exercise, right?

If your company gives you a grant of $500k in stock, and you hold it for a year and sell for $600k, you pay ordinary taxes in the $500.
 
2013-04-12 06:14:11 PM  

Debeo Summa Credo: madgonad: theknuckler_33: short term cap gains are not taxed higher. they are taxed the same as regular income. LTCG are the income that is being specially treated here. I accept the premise, but if STCG promote risky or speculative investing, then tax those gains HIGHER than regular income. Taxing STCG the same as regular income is not a penalty, taxing LTCG is a benefit... one that by and large is realized only by the wealthy.

Taxing LTCG is categorically unfair because only the wealthy can take advantage of it. Your 401K or traditional IRA - now THAT is long term. Builds up over your entire life. How is it taxed? As regular income - the same as short term capital gains.

All income, of all types (including inheritance) should be taxed the exact same way.

So, like a "flat" tax?


Flat in the sense that income is income and certain types don't need to be elevated above the types normally associated with labor instead of capital.
 
2013-04-12 06:15:51 PM  
everystockphoto.s3.amazonaws.com
 
2013-04-12 06:17:02 PM  

skullkrusher: theknuckler_33: skullkrusher: that's just a matter of wealthier people having more money to invest and therefore earn greater amounts.

That is the entire point. A HUGE amount of personal income has been declared 'special' and taxed at a lower rate and the vast majority of that particular kind of income just happens to go to the wealthy. the difference here is that some folks say "hey, the rules are the same for everyone, that's fair" while others are saying "the rules are different  depending on where the income comes from, that's not fair".

Income is income.

I thought we were talking about whether the cap gains paid by lower income earners tended to the ST or LT categories?


You were. I was talking about the fact that the vast majority of LTCG income goes to the already wealthy. I suppose it is more likely that the cap gains income that IS realized by lower income earners tends to be LT rather than ST. But that's like discussing how much lower income earners fly first-class for recreation internationally vs. domestically. Either way, it's not much.
 
2013-04-12 06:18:27 PM  
I'm trying to figure out how the Fairtax is supposed to work.

According to the website, the wealthy spend more money on stuff, so of course they are going to pay more in taxes. However, used items are untaxed, and I see no mention of home sales, so I must assume that all used home sales are untaxed, along with whatever capital gain may come with the sale. The wealthy can also afford to invest more of their income in stocks, bonds, etc., the capital gains of which would be untaxed. They would be able to grow their money at a much higher rate than now, and I can't see how that would drive them to buy so much they'd pay an even higher tax rate. They could maintain an extraordinarily lavish lifestyle but still grow their money at an even more extraordinary tax free rate and end up even wealthier with a lower tax burden as a result. People can only consume so much.

Business transactions including goods and services are untaxed, so would it be possible for two "business owners" to do favors for each other that end up untaxed as a result, even if the underlying reason was for personal gain? How would you prove otherwise?

That's not even getting into the sales tax business, which claims to help the poor with a "prebate", a prebate based on spending on new goods and services. Poor people buy a lot of used stuff, so no prebate. A used house would be untaxed at sale, so no prebate on that mortgage. Is their a sales tax on rent? If not, no prebate. Poor people are going to be spending most of their money on their living expenses and used vehicles, they're not out buying a lot of nice new stuff. That seems to make the whole prebate thing kind of useless. Are people supposed to keep track of everything they spend money on so they can get their prebate? There's no IRS, so who do you report this to? Am I missing some fundamental component?

How the fark is this supposed to be "fair"? The whole thing screams "fark you poor people".
 
2013-04-12 06:19:37 PM  

skullkrusher: A deduction indexed to a typical basket of goods in your area to cover necessities and some spending money. No credits, if you make less than the deduction, you just pay no income tax.
25% on all income above that, no exemptions.
Progressive, simply, revenue generating.

No charge, America.


Poor people can't save for retirement, I see. What about health care? Yea, real progressive.
 
2013-04-12 06:22:21 PM  

mak3_7up_y0urs: I'm trying to figure out how the Fairtax is supposed to work.

According to the website, the wealthy spend more money on stuff, so of course they are going to pay more in taxes. However, used items are untaxed, and I see no mention of home sales, so I must assume that all used home sales are untaxed, along with whatever capital gain may come with the sale. The wealthy can also afford to invest more of their income in stocks, bonds, etc., the capital gains of which would be untaxed. They would be able to grow their money at a much higher rate than now, and I can't see how that would drive them to buy so much they'd pay an even higher tax rate. They could maintain an extraordinarily lavish lifestyle but still grow their money at an even more extraordinary tax free rate and end up even wealthier with a lower tax burden as a result. People can only consume so much.

Business transactions including goods and services are untaxed, so would it be possible for two "business owners" to do favors for each other that end up untaxed as a result, even if the underlying reason was for personal gain? How would you prove otherwise?

That's not even getting into the sales tax business, which claims to help the poor with a "prebate", a prebate based on spending on new goods and services. Poor people buy a lot of used stuff, so no prebate. A used house would be untaxed at sale, so no prebate on that mortgage. Is their a sales tax on rent? If not, no prebate. Poor people are going to be spending most of their money on their living expenses and used vehicles, they're not out buying a lot of nice new stuff. That seems to make the whole prebate thing kind of useless. Are people supposed to keep track of everything they spend money on so they can get their prebate? There's no IRS, so who do you report this to? Am I missing some fundamental component?

How the fark is this supposed to be "fair"? The whole thing screams "fark you poor people".


The part of the fairtax is that after the elimination of income and business taxes, companies will magically lower the prices as opposed to tacking on the new tax rate, shrugging their shoulders and pocketing the savings. It makes perfect sense because rich people got rich by working against their own financial interests.
 
2013-04-12 06:24:57 PM  

theknuckler_33: skullkrusher: A deduction indexed to a typical basket of goods in your area to cover necessities and some spending money. No credits, if you make less than the deduction, you just pay no income tax.
25% on all income above that, no exemptions.
Progressive, simply, revenue generating.

No charge, America.

Poor people can't save for retirement, I see. What about health care? Yea, real progressive.


Define "poor". If it is anything less than money to cover the necessities and some spending money, why don't you read what I said again.

In any case, I meant progressive in terms of an income tax structure. I would never suggest something "progressive" as you interpreted the word ;)
 
2013-04-12 06:27:26 PM  

Snarcoleptic_Hoosier: Debeo Summa Credo: madgonad: theknuckler_33: short term cap gains are not taxed higher. they are taxed the same as regular income. LTCG are the income that is being specially treated here. I accept the premise, but if STCG promote risky or speculative investing, then tax those gains HIGHER than regular income. Taxing STCG the same as regular income is not a penalty, taxing LTCG is a benefit... one that by and large is realized only by the wealthy.

Taxing LTCG is categorically unfair because only the wealthy can take advantage of it. Your 401K or traditional IRA - now THAT is long term. Builds up over your entire life. How is it taxed? As regular income - the same as short term capital gains.

All income, of all types (including inheritance) should be taxed the exact same way.

So, like a "flat" tax?

Flat in the sense that income is income and certain types don't need to be elevated above the types normally associated with labor instead of capital.


I realize that's what he meant but it's ironic to hear a liberal ask for all income to be taxed the same way when they are pretty adamant that they want some income to be taxed at much higher rates than other income.
 
2013-04-12 06:27:41 PM  

Debeo Summa Credo: madgonad: What do you mean"rich people can afford to get paid in stock". You realize that the only portion that gets taxed at cap gains rates is the gains after exercise, right?

If your company gives you a grant of $500k in stock, and you hold it for a year and sell for $600k, you pay ordinary taxes in the $500.


Wrong. Your company gives you a grant of X shares at Y dollars. They didn't give you any money at all. You can choose to exercise that grant... ie. buy the shares. If you buy the shares when the current price of the stock is Y+Z, you pay ordinary taxes on X(Z-Y).  I have done exactly this several times the in the past year. Nowhere near 500k of course, but the cost of my transaction was thus:

(number of shares being bought X option price) + ((current stock price - option price) X applicable regular income tax rates)

This assumes the current stock price is higher than the option price. I'm not sure what happens if you buy at a lower price than the option price.
 
2013-04-12 06:29:03 PM  

odinsposse: So it's a large sales tax


You're learning! Keep up the good work!

mak3_7up_y0urs: I'm trying to figure out how the Fairtax is supposed to work.


Read up.
 
2013-04-12 06:30:57 PM  

mak3_7up_y0urs: How the fark is this supposed to be "fair"? The whole thing screams "fark you poor people".


These are the same guys supposedly crying about everyone "paying their fair share".  Yet the first addendum is "well, let's carve out a bit at the bottom".
 
2013-04-12 06:31:48 PM  

Snarcoleptic_Hoosier: mak3_7up_y0urs: I'm trying to figure out how the Fairtax is supposed to work.

According to the website, the wealthy spend more money on stuff, so of course they are going to pay more in taxes. However, used items are untaxed, and I see no mention of home sales, so I must assume that all used home sales are untaxed, along with whatever capital gain may come with the sale. The wealthy can also afford to invest more of their income in stocks, bonds, etc., the capital gains of which would be untaxed. They would be able to grow their money at a much higher rate than now, and I can't see how that would drive them to buy so much they'd pay an even higher tax rate. They could maintain an extraordinarily lavish lifestyle but still grow their money at an even more extraordinary tax free rate and end up even wealthier with a lower tax burden as a result. People can only consume so much.

Business transactions including goods and services are untaxed, so would it be possible for two "business owners" to do favors for each other that end up untaxed as a result, even if the underlying reason was for personal gain? How would you prove otherwise?

That's not even getting into the sales tax business, which claims to help the poor with a "prebate", a prebate based on spending on new goods and services. Poor people buy a lot of used stuff, so no prebate. A used house would be untaxed at sale, so no prebate on that mortgage. Is their a sales tax on rent? If not, no prebate. Poor people are going to be spending most of their money on their living expenses and used vehicles, they're not out buying a lot of nice new stuff. That seems to make the whole prebate thing kind of useless. Are people supposed to keep track of everything they spend money on so they can get their prebate? There's no IRS, so who do you report this to? Am I missing some fundamental component?

How the fark is this supposed to be "fair"? The whole thing screams "fark you poor people".

The part of the fairtax is that ...


A ton of businesses buy stuff from other businesses that never even ends up at the consumer level, and none of those transactions would be taxed. So Company A makes a profit from selling their stuff to Company B, but no tax ever actually gets paid. I know businesses can write off purchases already, but now you've got the other company not paying anything on their profits on top of that. The whole Fairtax thing baffles me.
 
2013-04-12 06:31:51 PM  

Snarcoleptic_Hoosier: The part of the fairtax is that after the elimination of income and business taxes, companies will magically lower the prices as opposed to tacking on the new tax rate, shrugging their shoulders and pocketing the savings.


This is also addressed in the book. Perhaps you should read it too.
 
2013-04-12 06:32:13 PM  
UNC_Samurai:

There it is again. Thank you.

Count how many times the plumbing business' income is taxed before it gets to the owners pocket, how many times the shop's income is taxed before it gets to the owners pocket, and how many times the bank's income is taxed before it gets to the owners pocket. One of those is double the other two.
 
2013-04-12 06:32:27 PM  

Dancin_In_Anson: You're learning! Keep up the good work!


Yeah, let's have a 23% sales tax. I mean it's no where close to being revenue neutral. But Neil Bortz said it was a good idea so he must be onto something.

/rolls eyes
 
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