Death & Taxes

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    Posted: 21 February 2012 08:28 PM #31

    Uh, since when are cap gains taxed at 40% in the United States? 

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

    If you kick ass at short-term trading and you make so many millions that most of your income is in the top-tax-tier bucket as of 2013 and it isn’t changed, that’s close to true, yes.

    [ Edited: 21 February 2012 08:31 PM by Mav ]

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  • Posted: 21 February 2012 08:36 PM #32

    JDSoCal - 21 February 2012 05:03 AM

    maybe if Obama would get serious about deficit reduction instead of Keynesian spending gimmicks, we wouldn’t be running record deficits. Funny how it’s never a spending problem with you lefties.

    Whatever validity there might have been in Keynesian economic theory, was eliminated with LBJ’s very first budget.  The “War on Poverty” started a culture of deficit spending that has yet to abate.  Since then any attempt to control the economy, using Keynesian theory has failed.

    Under Keynesian theory it is impossible to have a recession, and inflation, at the same time.  Ptooie.  Just ask Carter: double digit inflation, and double digit unemployment with negative growth.

    Yet, the clingers to Keynes deride Laffer and trickle down.  ALL economic theory is based on ‘trickle down’.  It sure doesn’t trickle up.

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    Posted: 21 February 2012 08:52 PM #33

    Mav - 22 February 2012 12:28 AM

    Uh, since when are cap gains taxed at 40% in the United States? 

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

    If you kick ass at short-term trading and you make so many millions that most of your income is in the top-tax-tier bucket as of 2013 and it isn’t changed, that’s close to true, yes.

    I rounded Fed and state taxes.

    That said anybody who has ever heard me knows that my definition of what is and is not a good trade is to ask the diagnostic question, “Did you make money?” So yes, if you made money, then good trade.

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    Posted: 21 February 2012 08:55 PM #34

    Eric Landstrom - 22 February 2012 12:52 AM
    Mav - 22 February 2012 12:28 AM

    Uh, since when are cap gains taxed at 40% in the United States? 

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

    If you kick ass at short-term trading and you make so many millions that most of your income is in the top-tax-tier bucket as of 2013 and it isn’t changed, that’s close to true, yes.

    I rounded Fed and state taxes.

    That said anybody who has ever heard me knows that my definition of what is and is not a good trade is to ask the diagnostic question, “Did you make money?” So yes, if you made money, then good trade.

    Oh, THAT.

    Well, when you lump everything together, as you must, the number’s always quite high.  Cost of doing business.

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    Posted: 21 February 2012 08:58 PM #35

    Gregg Thurman - 22 February 2012 12:36 AM
    JDSoCal - 21 February 2012 05:03 AM

    maybe if Obama would get serious about deficit reduction instead of Keynesian spending gimmicks, we wouldn’t be running record deficits. Funny how it’s never a spending problem with you lefties.

    Whatever validity there might have been in Keynesian economic theory, was eliminated with LBJ’s very first budget.  The “War on Poverty” started a culture of deficit spending that has yet to abate.  Since then any attempt to control the economy, using Keynesian theory has failed.

    Under Keynesian theory it is impossible to have a recession, and inflation, at the same time.  Ptooie.  Just ask Carter: double digit inflation, and double digit unemployment with negative growth.

    Yet, the clingers to Keynes deride Laffer and trickle down.  ALL economic theory is based on ‘trickle down’.  It sure doesn’t trickle up.

    Which is to say that we cannot tax ourselves into prosperity?

    As I see it, the issue is deficit spending during the fat years so that when forced to steer markets in lean years, govcos can draw out of surpluses rather than further deficit spending. Speaking of, with last weeks’ $35B auction, US debt to GNP is 101%.

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  • Posted: 21 February 2012 09:02 PM #36

    ChasMac77 - 20 February 2012 11:12 PM

    If the rich are getting richer (they are) and the poor are getting poorer (they are), then if that current trend continues, wouldn’t the % that those at the top contribute be proportionally larger even though the income gap is getting wider?  Didn’t massive unemployment make the statistics look even worse? (How do you pay a fair share when you can’t?).?

    I’m sorry, but that is the dumbest thing I’ve ever heard.  The “poor” aren’t poor because of Sales Taxes.  The “rich” aren’t rich because of Sales Taxes.

    If everyone paid the same tax RATE, everybody would be clamoring against deficit spending.  When the bottom 50% of tax payers contribute less than 3% of tax income THEY aren’t paying their share.

    $30,000/yr
    2.25% Effective Income Tax Rate = $675.
    $7,500 taxable expenditures (25% of total income) at 7% = $525.
    Total tax bill = $1,200.

    $250,000/yr
    35% Effective Income Tax Rate = $87.500
    $37,500 taxable expenditures (15% of total income) at 7% = $2,625.
    Total tax bill = $90,125

    $5,000,000/yr
    15% Effective Income Tax Rate = $750,000
    $100,000 taxable expenditures (2% of total income) at 7% = $7,000.
    Total tax bill = $757,000

    This is a simplified example, but even if calculated more accurately, the pittance paid by HALF of the US is not onerous by any definition of the word.

    The “disparity” in income is a political red herring, propagated by those seeking office, and who will foster class warfare to get it.

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  • Posted: 21 February 2012 09:11 PM #37

    Eric Landstrom - 22 February 2012 12:58 AM

    As I see it, the issue is deficit spending during the fat years so that when forced to steer markets in lean years, govcos can draw out of surpluses rather than further deficit spending.

    That’s classic Keynesian economics.  The problem is that Keynes never envisioned institutionalized deficit spending.  We feed the economy always, no matter the state of that economy, which is why we’ve had meteoric inflation since 1964.  Today, we think inflation under 2% is great.  Before LBJ inflation above 1% was considered catastrophic.  The only institutions that benefit from inflation are those in debt.  They are paying back loans, with dollars that aren’t worth as much as was originally borrowed.  Gee, guess who the biggest debtor in the US is.

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    Posted: 21 February 2012 09:25 PM #38

    Mav - 22 February 2012 12:28 AM

    Uh, since when are cap gains taxed at 40% in the United States? 

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

    If you kick ass at short-term trading and you make so many millions that most of your income is in the top-tax-tier bucket as of 2013 and it isn’t changed, that’s close to true, yes.

    Of course, cap gains and/or dividends taxes of C corps is double taxation because the corporation has already paid taxes, so the real rate for the Apple investor would be close to 40%. And don’t forget to add California’s 11% top rate for those unfortunate to live here.

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  • Posted: 21 February 2012 09:56 PM #39

    It is clear that there are disagreements here smile

         
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    Posted: 21 February 2012 10:03 PM #40

    Try an expat assignment in Canada.  Then see what you think about US taxes. :D

         
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    Posted: 21 February 2012 11:37 PM #41

    lovemyipad - 22 February 2012 02:03 AM

    Try an expat assignment in Canada.  Then see what you think about US taxes. :D

    I don’t see large numbers of Canadians sneaking across the border in order to make a better life in America, or even protesting in large numbers that they are Taxed Enough Already.  They enjoy longer lifespans, better average health care, a stronger economy, better roads and highways, better maintained national parks, and a lot more.  It is one of the best countries to live in in the world, and taxes help maintain that quality of life.

         
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    Posted: 21 February 2012 11:47 PM #42

    No argument from me.  Everyone in my neighborhood is taxed at 46%, and no one complains about it—that’s how Toto and I know we’re not in Kansas. smile

    [ Edited: 21 February 2012 11:51 PM by lovemyipad ]      
  • Posted: 22 February 2012 12:35 AM #43

    lovemyipad - 22 February 2012 03:47 AM

    No argument from me.  Everyone in my neighborhood is taxed at 46%, and no one complains about it—that’s how Toto and I know we’re not in Kansas. smile

    It’s worth noting that only 50% of capital gains are taxed (so under 25% total tax rate for gains in Canada). Unless you’re a professional trader, in which case it’s income and it’s back up to 46% or whatever you happen to be at.

         
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    Posted: 22 February 2012 09:22 AM #44

    Consumers still fretting the economy. Despite recent signs of improvement in the U.S. economy, more consumers feel financially insecure than they did a year ago, largely because of their lack of savings to cushion a job loss or other problems, according to a Bankrate.com poll. Just 54% of consumers have more emergency savings than credit card debt, the survey finds.

    I know, let’s tax them some more and give more tax breaks to the rich folks. That’ll do the trick! Talk about stupid (to quote Gregg).

    As income inequality grows, the louder the complaints from the top. Hmmm, maybe you should do something to make the gap smaller. It’s like having a dog that had a nice job digging holes. He had a lovely dog house, you let him in once in awhile and let him chase tennis balls for hours on end. Now, because of the bubble burst in the dog house market, he can’t pay the 2 bones a month anymore (you did ok because you bet that was gonna happen). He lost his job to a Shar Pei that will dig all day for chicken bones no less. He wants to go back to obedience school to learn some new tricks but you cut funding for those places. He can’t afford to go to the vet like he used to and his rib cage is starting to show. Now he’s a mean ‘ole snarly dog and you just can’t understand why his tail doesn’t wag when he sees you.

         
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    Posted: 22 February 2012 01:10 PM #45

    Government has two ways to collect taxes.

    a.  Income side e.g. income tax, corporate tax, dividends, interest and capital gains.
    b. Consumption side e.g. sale tax, property tax, licenses, ...

    Theoretically can just collect using one way but that would lose the flexibility of influencing behavior and consumption tax is more stable.  So government collects in two ways.  Income side can be made progressive easily while consumption side is usually regressive because it is a flat rate.

    From discussions, the wealthy paid a lot more income tax but their overall tax bill as a percentage of their income is lower than their poorer fellow citizens.  This is logical as there is a limit to personal consumption.  So in order to take more $ from the wealthy and redistribute to the poor, has to increase income tax.  The max income tax in California is = 35% (federal) + 9.3% (state) + 4.2%* (social security) + 1.45% (medicare) = 49.95%.  *Max taxable earnings is $110,100.  How far can we take wealth redistribution before it becomes like “communist style of welfare state”, discouraging hardwork and incentizing “spoon-feeding” attitude.

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