8579.9

[barfo]

That's a spurious justification for a cascading taxation system.

I could counter that by stating that rich people tend to hire more people, therfore providing more employment and jobs in this country. You can make up thousands of scenarios.

Hire them to do what? How many servants does a wealthy person need?

Face it, its an unfair system. A system of redistribution of wealth. Tax everyone at the same rate. Its the American way. Punishing one's success and upward mobility isn't.

Unfair is in the eye of the beholder. Taxation is not punishment.

barfo

 

[Minstrel]

could counter that by stating that rich people tend to hire more people, therfore providing more employment and jobs in this country. .

How is that a counter? Sure, they hire more people. Whether they pay an extra million in taxes really doesn't affect that. They hire those people because it's in their best interests in making money. Unless the taxes are so crushing that they can't afford to invest in their money-making ventures, your point isn't relevant to the effects of a cascading tax system on the overall economy. And I've seen nothing to suggest taxes are that crushing.

 

[AgentDrazenPetrovic]

Hire them to do what? How many servants does a wealthy person need? Unfair is in the eye of the beholder. Taxation is not punishment.

of course not, its just being patriotic.

With more available funds, a richer person is more likely to invest in more businesses and the stock market to provide funding for companies, start a business, hire workers...while a poor person buys playstations and plasma screens. While consumerism is important, so is equality in taxation. I don't look at this in terms of what is "in the interest of the people", I look at it in the terms of what is fair.

 

[AgentDrazenPetrovic]

How is that a counter? Sure, they hire more people. Whether they pay an extra million in taxes really doesn't affect that. They hire those people because it's in their best interests in making money. Unless the taxes are so crushing that they can't afford to invest in their money-making ventures, your point isn't relevant to the effects of a cascading tax system on the overall economy. And I've seen nothing to suggest taxes are that crushing.

So your argument is: "they can afford it, lets milk them more"? As for it being relevant, barfo brought up that its in the best interest of the economy for the middle class to have tax cuts because they spend it on consumer goods. His argument is as weak as mine.

Tax cuts for the middle class is really penalizing people for success.

 

[Nikolokolus]

They are penalized for being more successful because they get not only taxed more, they are taxed at a higher percentage. To me, it doesn't seem fair. I'm ok with them paying more money if they make more, but to be taxed at a higher percentage than everyone else is stupid.

Why should they be forced to pay a higher percentage of their income than everyone else. I believe in fairness across the board.

If the current tax code actually didn't have so many loopholes and if the wealthy made the bulk of their money from paid salary then I'd agree that they shouldn't pay a higher % tax, but fact of the matter is that people in the top 1% income brackets make their money off of investments, dividends, and capital gains, futhermore these people are also able to bring to bear massive reserves hiring lawyers, accountants etc. who help make sure they don't pay their "fair share" in taxes.

Hell, they even crow about how to people can get out of paying their fair share:

The good news is, you made money in 2007. Hopefully, a lot of it.
But do you understand that not all the dollars you earned are the same in the eyes of the IRS? Until you define the kind of income each of those dollars represents to the tax collector, you stand little chance of minimizing the money you give to Uncle Sam in taxes.
Let’s take closer look at how the IRS classifies your income - and explore some unique tax-minimizing opportunities you might be missing.

Earned Income - Okay, we’ll start with the most basic. Earned income is income that you earn for your personal services. It is subject to both income tax and self-employment tax (Social Security and Medicare). The most common type of earned income is W-2 wages (salary, etc.). However, net income from a self-employed business (filed on Schedule C) is also considered earned income. This is the type of income you want to minimize - or even avoid, if possible - because it is taxed most heavily.

Passive Income - Passive income generated from something other than personal services. It is subject to income tax, but is not subject to self-employment tax. The most common type of passive income is the income you generate from rental properties that you own. You see, the income you generate from rental property is not based on your personal services, but rather on the value of your property and the rental income that it generates. Passive income can also be generated by your personal involvement, or lack thereof, in your business. Certain business entities, such as limited partnerships, can create passive income.

Portfolio Income - Portfolio income is income you earn on your investments. This type of income includes interest, dividends, and capital gains. It is subject to income tax, but not self-employment tax. In this way, portfolio income is very similar to passive income. One major difference between the two is the ability to pay even less tax by generating capital gains. Currently, capital gains are taxed at a maximum rate of 15 percent. That’s right, a maximum of 15 percent! It is highly unlikely that this historically low rate will be around forever. Therefore, it would be a very wise move to analyze your investments to see if there is a way to maximize your overall return by taking advantage of this tremendous tax break while it exists.

Deferred Income - Deferred income is income that you do not pay tax on currently, but that you expect to pay tax on at some point in the future. That tax could be paid next year, 10 years from now, at retirement, or possibly never. Retirement plans are an easy way to set up deferred income; you take a current deduction today for the amount you contribute to your retirement plan. You will most likely pay tax when that money is removed from your retirement plan. However, that time will hopefully be many years from now, when you may be in a lower tax bracket than currently. Section 1031, or like-kind, exchanges are another way to generate tax-deferred income for real estate properties. In this scenario, you can sell a piece of property at a gain and defer the tax on that gain by acquiring another investment property. There are certain parameters you have to meet, but tax-savvy investors would be wise to know all the ins and outs of Section 1031 exchanges.

Tax-Free Income - Tax-free income is exactly that, wonderfully tax free. The primary tax-free income bonanza for most working Americans is experienced on the sale of their personal residence. If you use a home as your main, or principal, residence for any two out of the preceding five years, any gain on the sale of that home would be tax-free up to the first $250,000 of gain for a single filer - or $500,000 for married filers.
Often, investments that yield tax-free income, even though the returns may be lower, will have an effective rate of return higher than many after-tax investments. For example, let’s say you are doing well and are in a 35 percent federal tax bracket and a 5 percent state tax bracket, for a total income tax rate of 40 percent. You shop long and hard for a good money market rate at your local bank and find one willing to pay you 6 percent on your money. However, 40 percent of that income will be lost due to income taxes. Therefore, your 6 percent investment has an effective rate of 3.6 percent. That’s not exactly what you signed up for. You’ll do much better if you can find a tax-free investment that will return 5 percent. Adding a few thousand or more tax-free dollars to your portfolio can generate wealth at an amazing clip.

My purpose in giving this quick overview is to get you to begin to understand that your situation can change - if you allow it to! When you work for a company, it issues you a W-2. That is a classic example of earned income. You have no control over the type of tax you pay or the amount of tax you pay--unless you put some of the income into your company’s retirement plan.
But when you are self-employed, you have the ability to dictate what type of income you receive. That is only one of the reasons why I constantly push my clients to look for ways to generate types of income that yield preferential tax treatment. Armed with the right information, you can structure your income and emerge a winner at tax time.
The advice in this article is adapted from the new book Trump University Asset Protection 101: Tax and Legal Strategies of the Rich by J.J. Childers, with a foreword by Donald J. Trump. Published by John Wiley & Sons.

Look, I hate taxes as much as the next guy, but until there is a radical overhaul in the way our tax code is structured, I won't be crying for the wealthiest 1% in this country and the "burden" they bear.

 

[AgentDrazenPetrovic]

If the current tax code actually didn't have so many loopholes and if the wealthy made the bulk of their money from paid salary then I'd agree that they shouldn't pay a higher % tax, but fact of the matter is that people in the top 1% income brackets make their money off of investments, dividends, and capital gains, futhermore these people are also able to bring to bear massive reserves hiring lawyers, accountants etc. who help make sure they don't pay their "fair share" in taxes.

Eliminate the loopholes. Simple.

 

[AgentDrazenPetrovic]

Look, I hate taxes as much as the next guy, but until there is a radical overhaul in the way our tax code is structured, I won't be crying for the wealthiest 1% in this country and the "burden" they bear.

I support a radical overhaul.

http://www.fairtax.org

 

[Nikolokolus]

I support a radical overhaul.

http://www.fairtax.org

Hey we finally agree on something politically!!

 

[AgentDrazenPetrovic]

Hey we finally agree on something politically!!

had to happen eventually.



invisible hand at work!

 

[Minstrel]

So your argument is: "they can afford it, lets milk them more"?

No, my argument is that your point isn't relevant to effect on economy. The money they pay isn't money they'd invest back into the economy.

I'm not arguing the "fairness" of it, here.

As for it being relevant, barfo brought up that its in the best interest of the economy for the middle class to have tax cuts because they spend it on consumer goods. His argument is as weak as mine.

It's not. He tied middle class tax cuts to an actual benefit to the economy: purchasing power, which is the engine that makes the economy go. Your argument didn't relate to any benefit to the economy, as I pointed out.

 

[AgentDrazenPetrovic]

No, my argument is that your point isn't relevant to effect on economy. The money they pay isn't money they'd invest back into the economy.

I'm not arguing the "fairness" of it, here.



It's not. He tied middle class tax cuts to an actual benefit to the economy: purchasing power, which is the engine that makes the economy go. Your argument didn't relate to any benefit to the economy, as I pointed out.

Why not? By hiring employees, starting businesses and investing in companies, they are contributing, dare I say more, than some schlub buying a new plasma screen.

 

[Minstrel]

Why not? By hiring employees, starting businesses and investing in companies, they are contributing

Yes, that was your original point. I responded to that:

Sure, they hire more people. Whether they pay an extra million in taxes really doesn't affect that. They hire those people because it's in their best interests in making money. Unless the taxes are so crushing that they can't afford to invest in their money-making ventures, your point isn't relevant to the effects of a cascading tax system on the overall economy. And I've seen nothing to suggest taxes are that crushing.

So, yes, they contribute, but that contribution isn't affected by the cascading tax system. So that's a null point; you haven't countered barfo's point that it helps the economy to have richer people pay more taxes.

 

[AgentDrazenPetrovic]

Yes, that was your original point. I responded to that:

Sure, they hire more people. Whether they pay an extra million in taxes really doesn't affect that. They hire those people because it's in their best interests in making money. Unless the taxes are so crushing that they can't afford to invest in their money-making ventures, your point isn't relevant to the effects of a cascading tax system on the overall economy. And I've seen nothing to suggest taxes are that crushing.

So, yes, they contribute, but that contribution isn't affected by the cascading tax system. So that's a null point; you haven't countered barfo's point that it helps the economy to have richer people pay more taxes.

If they have that extra million dollars, they have more money to spend, invest, hire and start companies. Their interest is irrelevant. Just because the taxes aren't crushing doesn't make it fair.

I don't need to address the issue that barfo supposedly brought up that having rich people pay not only more, but a higher PERCENTAGE, of taxes is "good for the economy" because I don't look at this issue in terms of "the good of the people", but rather a system that is fair for all citizens. If we did everything in the name of being "good for the people", we might as well just push a socialist agenda.

 

[barfo]

If they have that extra million dollars, they have more money to spend, invest, hire and start companies. Their interest is irrelevant. Just because the taxes aren't crushing doesn't make it fair.

I don't need to address the issue that barfo supposedly brought up that having rich people pay not only more, but a higher PERCENTAGE, of taxes is "good for the economy" because I don't look at this issue in terms of "the good of the people", but rather a system that is fair for all citizens. If we did everything in the name of being "good for the people", we might as well just push a socialist agenda.

I don't have kids, why should I have to pay for schools? It's not fair!
I didn't want to go to war in Iraq, why should I have to pay for that?
I don't want to obey speed limits, so why should I have to fund highway cops?
I'm not that old, so why should I pay social security taxes?
Let the elderly fund Medicare if they want it.
Why should we pay for secret service protection for the president? Let him look out for himself.
Etc.

If you want to build a society based on selfishness, there are plenty of avenues to explore.

barfo

 

[AgentDrazenPetrovic]

I don't have kids, why should I have to pay for schools? It's not fair!
I didn't want to go to war in Iraq, why should I have to pay for that?
I don't want to obey speed limits, so why should I have to fund highway cops?
I'm not that old, so why should I pay social security taxes?
Let the elderly fund Medicare if they want it.
Why should we pay for secret service protection for the president? Let him look out for himself.
Etc.

If you want to build a society based on selfishness, there are plenty of avenues to explore.

barfo

How is wanting an equitable tax structure being selfish? I don't know how one can morally justify that the PERCENTAGE of tax burden cascades as you make more.

Even with a flat tax rate, the richer will pay more net versus the poor. Its just the same percentage of their income.

I really don't see the problem here.

 

[Minstrel]

If they have that extra million dollars, they have more money to spend, invest, hire and start companies.

If everyone invests 100% of their wealth into the economy, you are absolutely right. Since that's not what people do, this is wrong. The taxes they pay aren't dollars being taken away from their businesses. They aren't going to shut down their money-making ventures because they pay extra taxes. All the people they hire to help them make money they will continue to gire.

Just because the taxes aren't crushing doesn't make it fair.

I already said that I'm not debating the fairness. Just the issue of how it affects the economy.

If we did everything in the name of being "good for the people", we might as well just push a socialist agenda.

Incidentally, "the people" includes the rich. Strong economies are very much in their interest. So it's not like it is "for the good of the people" at the expense of the rich.

 

[barfo]

How is wanting an equitable tax structure being selfish? I don't know how one can morally justify that the PERCENTAGE of tax burden cascades as you make more.

I don't know how one can morally justify that I pay for schools when I have no children.

[Actually, I do, but for the purposes of this argument..] Why should I pay for schools? Wouldn't it be equitable for me to not pay anything?

barfo