Wouldnt this make more sence than a Tax break for the wealthy?

[Smazz]

I try to get my head around why the powers in charge dont just give a basic personal exemption for say the first $8,000 - $10,000 similar to Canadas tax system? Sure this will only be 10% of the earning but surely it will all be spent.

The reason I say this is that this is the highest probability of money going back into the system - especially with GDP being so highly weighted in the services sector.  

Do away with the crazy tax breaks on mortgages.

 

I havent done the number crunching on what this would look like in terms of total dollars but we all know the higher earners are a smaller proportion of society.

 

Reports out now 1 in 7 live below the poverty line. Lets help these people.

http://finance.yahoo.com/news/Census-Bureau-reports-new-cnnm-2077327017.html?x=0&sec=topStories&pos=main&asset=&ccode=

 

What do yall think?

[Guest Bronco]

I think the U.S. already has this in place.  It is called personal exemptions, and goes up for your spouse and each family member.

 

The tax breaks for the rich line should make everyone sick.  Here's why:

 

1) $250,000 isn't rich.  After taxes and spending, you might save $50,000.  Is somone with a net worth of $50,000 rich?  GTF outa here.

 

2) If they really wanted to tax the rich, come up with a tax rate for people earning over $1,000,000 per year.  You treat someone differently making $10,000 vs. $50,000 vs. 100,000 vs. $250,000, yet you treat someone making $250,000 the same as someone making $2.5million.  GTF outa here.

 

3) The politicians act like your personal property is theirs, and you are lucky to keep anything.  This is not the thought process of our founding fathers.  There was no income tax back then.  The 1776ers would roll over in their graves with today's logic.  I don't have the tax revenue of the U.S. in front of me, but damn it sure is enough to run a country.  If anyone thinks otherwise, GTF outa here.

 

The problem with a democracy (or a democratic republic, if you will), is that a majority of people can vote to take property from people who work hard and have it distributed amongst themselves.  That was never the intent of government, and I am sure our forefathers never saw this debacle. 

 

But then again, one can't complain too much.  I could have been born in France.

 

 

[Smazz]

 

The tax breaks for the rich line should make everyone sick.  Here's why:

 

1) $250,000 isn't rich.  After taxes and spending, you might save $50,000.  Is somone with a net worth of $50,000 rich?  GTF outa here.

 

I will have to disagree with you on that part. If someone is earning $250,000 and all they can "save" is $50,000, something is wrong.

Ive saved $50,000 a few years without making close to that- there are alot of opportunities for deductions and deferrals.

 

This is not directed at you but its funny, it kind of reminds me of the basketball player who turned down a multi-million dollar contract and the rationale he communicated to the media was "how am I supposed to feed my family on that?".

 

Haha, funny guys those bb players! ;D

[zarley]

1) $250,000 isn't rich.  After taxes and spending, you might save $50,000.  Is somone with a net worth of $50,000 rich?  GTF outa here.

 

You seem to have little understanding of how taxes work, or what net worth represents. 

 

Not to mention that your fictional person's $50,000 savings alone is well above the median household income in the US. 

 

IMO, $250,000 per year in taxable income is a reasonable starting point for "rich."  It's more than 5 times the median household income and puts one in the top 2% of all incomes. 

[Smazz]

btw,

I apologize if I had the US personal exemption incorrect. I am a Canadian resident so I really dont spend much time on US taxation for individuals- I extrapolated my info from global tax tables and Canada has the exemption - showed up on the tables however it did not show up on the US side I was looking at.

[Guest Bronco]

You guys are pulling my leg right?  You are Canadian?  If so, I can understand how you aren't getting it, b/c maybe things in the US are different.

 

Again, $250,000 is squat if you live in an area where most homes start at $300,000 (and nice homes are $700,000).  Where I live in NJ, your real estate taxes average $10,000.

 

You didn't even mention Social Security tax - which is 12% if you are self employed up to $100,000.

 

Medicare tax isn't part of the tax rates - yet another 3% if you are self employed.

 

Forget about state tax?  Sales tax?  

 

I won't get into a pissing match, where you said I know very little about taxes.  But "rich" to me is a measurement of wealth and assets, not gross income.  Obviously, our definitions are different.

 

However, I am always suspicious when someone suggests that it is fair to take more of my money.  Especially when government tax collection (FY09) is $2.3 trillion dollars.  And that is just at the federal level.

 

Why is it that you don't suggest we should spend less money (as a government), and enjoy more personal freedoms, liberties, and the right to keep our personal property.  Then you would earn my respect.

[Smazz]

You guys are pulling my leg right?  You are Canadian?  If so, I can understand how you aren't getting it, b/c maybe things in the US are different.

 

Again, $250,000 is squat if you live in an area where most homes start at $300,000 (and nice homes are $700,000).  Where I live in NJ, your real estate taxes average $10,000.

Dont you get tax deduction for mortgage interest expense? Damn, thats huge, and if you dont have a mortgage (paid off) thats doubly huge!

BTW, homes where I live start at $300,000 and thats if you are ok with an attached condo with no yard etc.

 

I think everyone would like to spend less $ as a government.

The Military is an extention of the government, that is one of the biggest spenders in the US.

 

FTR, I said I dont spend much time on US Taxation for Individuals. Its a non issue for me unless im going to do someones taxes over there. 

Generally consumption taxes are not too different in both countries.

[Myth465]

This whole debate is ridiculous no one but Buffett thinks they are rich. $250,000 aint enough to retire off of but its more than like 95% of all other Americans.

 

Couldnt we all agree that's pretty well off.

 

Hell $100k is pretty well off. I say open your eyes - the vast majority (something like 90%) of your country man make less than that. Taxation is another conversation but if you make more then 90% of everyone else then I think you could be considered well off.

 

 

 

[Guest Bronco]

I'll leave my comments off here, since no one really addressed my points (i.e. why brackets go up and up and stop at 250,000k)?  So if you were to start a tax system from scratch, this is the methodolgy you would derive?

 

I will agree this debate is silly.  But again, I am suspicious of anyone that says the government should take more of my assets.  I guess its easy for you to say...

[investor99]

How about this.  Give us a basic low flat tax or national sales tax or something and do away with the IRS, etc.  With the money the "rich" or small and large businesses save from these high tax rates they can hire millions of workers and our unemployment rate would decrease.  I for one would hire several additional workers if I was not so heavily taxed.  That makes a lot more sense then to tax the employers have the gov't keep 90% of it as administration cost then turn around and give the last 10% to the people in the form of some entitlement program so that the person doesn't have to work.  This is not brain surgery, that is very very inefficient.  Our country has become a nation of beggars who think they are entitled to some type of gov't funds.  The truth is not one able bodied person should be getting money from the gov't in ANY form including medicare, social security, etc.  Our country is one of the few countries in the world where all people have real opportunity and the very fact that someone lives here should be enough.  

 

Put all of that aside and the real truth is I respect your opinion but I disagree with it 100%.  It is my right to disagree with it and it is also my right to not be forced to live by your opinion.  This country was founded by people who also were tired of having someone elses opinions and ideas of how they should live be forced upon them.  That is why this country was founded as a republic, not a democracy.  If there was a "New World" today I would be the first to migrate there to get away from the tyrany that this large government has become.

[nodnub]

 

The tax breaks for the rich line should make everyone sick.  Here's why:

 

1) $250,000 isn't rich.  After taxes and spending, you might save $50,000.  Is somone with a net worth of $50,000 rich?  GTF outa here.

 

I will have to disagree with you on that part. If someone is earning $250,000 and all they can "save" is $50,000, something is wrong.

Ive saved $50,000 a few years without making close to that- there are alot of opportunities for deductions and deferrals.

 

This is not directed at you but its funny, it kind of reminds me of the basketball player who turned down a multi-million dollar contract and the rationale he communicated to the media was "how am I supposed to feed my family on that?".

Haha, funny guys those bb players! ;D

 

 

Smazz, don't forget that basketball players are different from the rest of us. He might be paying child support to 5 different women.  ;D

 

[Smazz]

I'll leave my comments off here, since no one really addressed my points (i.e. why brackets go up and up and stop at 250,000k)?  So if you were to start a tax system from scratch, this is the methodolgy you would derive?

 

I will agree this debate is silly.  But again, I am suspicious of anyone that says the government should take more of my assets.  I guess its easy for you to say...

Something similar to property tax you mean? ok, sure Im in - i mean I dont think I'll be earning a $1,000,000/year any time soon and If I do, it will prob kill me anyway so :)  Count me in.

 

Governments should not take more assets, they should use what they have more efficiently and cut back from there - start with cutting back redundant military spending.

[Smazz]

Smazz, don't forget that basketball players are different from the rest of us. He might be paying child support to 5 different women.  ;D

 

yea,

I remember there was a basketball player, or football who had something like 10 kids from 10 different states!

WOW!!!!!!!

 

 

[Zorrofan]

A national sales tax might be a good idea. Eliminate ALL corporate and personal taxes and put in a national consumption tax instead. The more you spend the more tax you pay. Thus the "rich" spend more and pay more tax. Give a rebate of the tax on the first $20,000 (or whatever) so that the poor are not hit as hard. You can reduce a massive amount of state and federal red tape, reduce the size of the tax department (i.e. IRS)  and even exports would be more competative because the tax wouldn't apply on sales outside the country.

 

Radical but maybe thinking outside the box is whats needed?

 

cheers

Zorro

 

How about this.  Give us a basic low flat tax or national sales tax or something and do away with the IRS, etc.  With the money the "rich" or small and large businesses save from these high tax rates they can hire millions of workers and our unemployment rate would decrease.  I for one would hire several additional workers if I was not so heavily taxed.  That makes a lot more sense then to tax the employers have the gov't keep 90% of it as administration cost then turn around and give the last 10% to the people in the form of some entitlement program so that the person doesn't have to work.  This is not brain surgery, that is very very inefficient.  Our country has become a nation of beggars who think they are entitled to some type of gov't funds.  The truth is not one able bodied person should be getting money from the gov't in ANY form including medicare, social security, etc.  Our country is one of the few countries in the world where all people have real opportunity and the very fact that someone lives here should be enough.  

 

Put all of that aside and the real truth is I respect your opinion but I disagree with it 100%.  It is my right to disagree with it and it is also my right to not be forced to live by your opinion.  This country was founded by people who also were tired of having someone elses opinions and ideas of how they should live be forced upon them.  That is why this country was founded as a republic, not a democracy.  If there was a "New World" today I would be the first to migrate there to get away from the tyrany that this large government has become.

[Smazz]

A national sales tax might be a good idea. Eliminate ALL corporate and personal taxes and put in a national consumption tax instead. The more you spend the more tax you pay. Thus the "rich" spend more and pay more tax. Give a rebate of the tax on the first $20,000 (or whatever) so that the poor are not hit as hard. You can reduce a massive amount of state and federal red tape, reduce the size of the tax department (i.e. IRS)  and even exports would be more competative because the tax wouldn't apply on sales outside the country.

 

Radical but maybe thinking outside the box is whats needed?

 

cheers

Zorro

Not too crazy, especially considering there would prob be something similar to the GST rebate for low earners - similar to what is currently in Canada.

[RRJ]

I'm with Bronco.  $250k a year is not "rich".  Rich to me means you don't have to go to work if you don't want to to live at a very nice lifestyle.  Most people with families in America that make $250k have to go to work every day because to (1) pay a total tax rate of around 40% or more (state, federal, local, property, sales, hidden "fee" and "license" taxes), (2) live in a nice, not ostentatious house, (3) pay for private school (because the government schools in many areas are not up to par), (4) pay for college at ever increasing rates, (5) take a decent family vacation, (6) save for retirement (enough that you don't have to rely on social security, which may or may not be there), takes far more than $250k.

If you say they can do without those things -- okay fine, but those are the basics of the good old American Dream, so if you want them to do away with one or more of those, then you're proposing changing the standard of living of most Americans.  There are arguments to be made for changing Americans' standard of living, but I don't buy them when you're doing it to redistribute wealth and spend it on wasteful government programs.  I can make far better decisions on spending my money than politicians, who just want to buy votes with it.

 

For the record, I make $250 a year or so, live in a 2 bedroom condo, drive an 8 year old Toyota, save a lot of money rather than spending it, and have no kids.  I can assure you, I do not feel rich, and I would far prefer fewer or no services from government other than the basic ones they are not providing currently, like protecting our borders and good infrastructure. 

 

 

[Myth465]

I am sure if you made $500k you wouldn't consider yourself rich either, dispute the fact that you made more then probably 94% of Americans and probably 99% of those on the planet.

 

People have a funny way of looking at things. Its not light your cigar with $100 bills rich, but its doing pretty damn well.

[RRJ]

    Fair enough point, Myth.  And I always remember that, and I feel blessed.  But I also earn that money, every day.  And I worked a long time, making much less, or even nothing (in school, in junior positions for many years building skills, intellectual capital, and reputation in the community, etc.), to get in a position to do so.  It is easy to say that someone makes more than 94% of Americans.  That sounds like they're in a high place. They're not. 

    I'm not trying to make it personal or about me -- , but I'm saying $250k is really $140-150k after taxes, and after all the expenses, you're lucky to be able to save $50k a year.  That's saving at a high rate too.  No one gets "rich" saving $50k a year, when it takes $1 million saved to equal a basic level government pension in actual retirement income.  If they know how to invest, they might have a decent retirement off that $50k a year, after saving for 30 years.  But it's not "rich".  No way in hell.   

    And remember that what made America great is the ability to seek one's fortune -- to get really rich, by one's own devices.  Stop that engine, and you are hacking away at one of the major pillars of American entrepreneurialism.  This class divide stuff to raise taxes just to fund government programs that do little good is a recipe for disaster.  Just read The Road to Serfdom.  Good intentions (and I absolutely know you have them) do not make good policy.  In Europe, class mobility is much dampened.  That's not good.  That's consigning people to a life they were born into.  Meritocracy, even a very imperfect one, is better than redistribution and levelling of results as an organizing principle.  Equality of opportunity, not equality of results. 

[Myth465]

I agree with Buffett mainly because I hope to enter the wealthy class. I think you have worked hard and earned your money. I think you deserve it and should keep it also. I am open to a variety of tax skims, as long as they are progressive in nature, but not overly punitive.

 

I have listened to interviews this week with Peter Ozarq, and Paul Ryan and find myself agreeing with both. I could go with a Paul Ryan type tax situation.

 

I agree with you, with $250,000 you cant save your way to wealth, but I dont think one can be truly wealthy off hourly / salary pay. Real wealth comes from investing or royalties, or options. Im squarely in the middle class at less then 75k but more than 50k, but with no kids. I would actually agree with Ozarq though, even though it would raise my taxes. We should repeal all the tax cuts. America cant afford them and has no political will to cut spending or raise taxes.

 

One must pay for the government or lifestyle they have and can afford, not the one they want. If you want lower taxes work to change the Government (cut spending) then lower taxes. The other way around never seems to work and will create a crisis for your Children (and Me when im old).

 

I would love to cut taxes, but lets cut spending first. I cant support a tax cut until I see fiscal sanity from Washington (and the right is worse then the left INMO). With that said I want more, I am not rich. But I know for someone living in the South I am doing damn well. I know there are a hell of alot of people with families of 4 making 30k. I cant imagine how they survive, and would have a damn hard time looking them in the eye and telling them im not rich (and thats at 60k). As Buffett said being born in the US, makes you rich relatively speaking.

 

Compared to Buffett, Gates, and Slim we are all poor - but look behind you before you decide. This is coming from a guy who wouldn't feel rich with $2 million in the bank.

[Smazz]

 

 

Compared to Buffett, Gates, and Slim we are all poor - but look behind you before you decide. This is coming from a guy who wouldn't feel rich with $2 million in the bank.

In addition if you were to ask WEB how rich he is, Im pretty confident he doesnt quantify it in dollars.

I loved his definition of success- I always use that as an example when Im talking to friends who are getting all wacky in this dog eat dog rat race world.

[Sea Island]

However, I am always suspicious when someone suggests that it is fair to take more of my money.  Especially when government tax collection (FY09) is $2.3 trillion dollars.  And that is just at the federal level.

 

Bronco, well put. This discussions strikes me as very insipid class warfare and it needs to come to an end. Government is not the solution and we do not want Canadian style socialism in the U.S. The truth is that you cannot raise the lower class by lowering the upper class, redistributing wealth does not work and for all the talk of what the U.S. spends on its military(a legitimate function of our government) look at all the money that has been wasted fighting the war on poverty, social engineering etc. for what? 1/7 living below the poverty line and some bureaucrats telling me how much of my money I get to keep and how much I have to give to someone else?

[ubuy2wron]

To all the tea partiers ranting about govt. tax policies being confisacatory. The wealthiest person I have ever known said to me he did not mind paying taxes and he was in favour of most welfare programs because he did not want hungry men holding him up at gun point to feed their family. Democracy is a dictatorship of the majority and yes the majority will always try to ensure the minority pays. Politics is the art and science of making some one else pay for something, the alternatives however are much less palatable. The western worlds system of capitalism, rule of law and democracy has worked pretty damn well for EVERYONE so do not be in such a hurry to replace it with some form of anarchy based economic Darwinism.

[Guest Bronco]

UBUY2PACSHAKUR,

 

I think you are confusing the concept of anarchy versus a 1) low regulatory 2) low tax 3) limited government democratic republic.  Two vastly different concepts.

 

And only a fool would suggest that the social programs in America are efficient and effective.  Debating the role of social programs is one thing - but the current programs in their current form are a disaster, as well as a huge swinging hammer against personal freedoms and liberties. 

 

 

[Sea Island]

The wealthiest person I have ever known said to me he did not mind paying taxes and he was in favour of most welfare programs because he did not want hungry men holding him up at gun point to feed their family.

 

This quaint anecdotal evidence actually serves a purpose to highlight my point: if your Bill Gates and Warren Buffett want to give their wealth away that is their right to do so but it is not their right to tell me what to do with my wealth. Nor is it the right of any man in our country to expect that he has a claim on what I produce. I am not insulted by the moniker "Tea Partier" but I prefer Original  Constitutionalist. Has a nice ring to it,

[ubuy2wron]

Great debate and very worth while having ,however I am one who has to toil to reach Obamas arbitrary level of "richness" so I will let others continue the arguement.