Paul Won Iowa
#122
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I think you already know where I'm going with this, but in that case, I would advocate for corporations paying taxes instead of citizens. I would speculate that not a lot of people have the power or resources to fight the IRS - but corporations should have it in spades.
If we have to be taxed somewhere, tax what is most able to defend itself, not least able to defend itself.
Anyways, here's the other issue I have with corporate taxes. According to figures here, GE took in almost 5 billion in refunds - refunds! - on 10 billion reported income here. They "hid" their income in other countries to enable them to do this.
Even using your argument, when a company like GE games the system like that, would you agree that there are severe flaws in how we tax corporations?
#123
Even using your argument, when a company like GE games the system like that, would you agree that there are severe flaws in how we tax corporations?
The issue I have with it is not, however, that it's not progressive enough in its structure (on the aggregate, it appears by most measures to be comparably progressive to the tax structures of most Western nations), nor that "corporations" don't pay enough taxes (when it's abundantly clear that corporations can't pay taxes without individuals bearing the burden).
#124
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If you think I'm defending the idiocy that is our current tax system, you're barking up the wrong tree. Nothing would make me happier than ditching the entire thing. It's a mess of loopholes, personal favors, incentives, disincentives to counter the incentives, unintended consequences, and whatever ad hoc nonsense is piled on year after year.
The issue I have with it is not, however, that it's not progressive enough in its structure (on the aggregate, it appears by most measures to be comparably progressive to the tax structures of most Western nations), nor that "corporations" don't pay enough taxes (when it's abundantly clear that corporations can't pay taxes without individuals bearing the burden).
The issue I have with it is not, however, that it's not progressive enough in its structure (on the aggregate, it appears by most measures to be comparably progressive to the tax structures of most Western nations), nor that "corporations" don't pay enough taxes (when it's abundantly clear that corporations can't pay taxes without individuals bearing the burden).
However, there are two points in which we disagree. First off, I never said that "Corporations don't pay enough taxes". My comments specifically have been focused as to how corporations evade paying taxes.
Secondly, my argument is that corporations should be taxed based on your arguments, not citizens. Not because of "OMG, CORPORATIONS DON'T PAY ENOUGH TAXES!", but because there is no difference (according to you) in taxing corporations or citizens.
If you tax corporations, however, you are going to tax entities that are well able to defend themselves. You are taxing entities who are able to effectively lobby for tax cuts, and taxing entities that have more than enough power and resources to fight stupid actions taken by the IRS.
The average citizen does not have this. Or, to be more specific, my argument is not "MAKE CORPORATIONS PAY MORE ASDFLKASDFKLASDASLDKFASLDFKSADFLKASDFLKASFDLK!", but rather, "If we must be taxed, tax those most able to fight the taxes."
I would speculate there is a reason that the tax burden has shifted in the fashion it has. That is because it is easier for politicians to tax individuals than corporations, and individuals are less able to fight it than corporations.
#125
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I would need to see a proper tax return to decipher those numbers. The linked story was missing pieces and muddling various terms (
[Edit1: Technically qualified dividends of domestic corporations could be taxed at 15%. I'll have to double check whether enough can bump your marginal bracket or not. Edit2: Note that neither A nor B shares of Berkshire Hathaway pay a dividend.]
In fact, the money you put in to the 401k reduces your taxable income. The trade-off is that you will pay taxes when you make withdrawals, but quite possibly at a lower marginal rate than you are paying today.
If you are close to the FICA cutoff, you are probably in the top quartile of income earners. Therefore, you should stop taking advantage of tax loopholes (like Romney) and save exclusively in taxable retail investment accounts. While you are at it, sell anything with a profit in less than 365 days, do not invest in municipal bonds and make sure not to claim any tax deductions (like charitable deductions). Oh, and only own domestic equities via mutual funds/UITs/ETFs/etc so any dividends are taxed at your marginal rate.
That's only fair.
But, here's the kicker. Stocks bought outside the plan had to be sold, and the money was then capital gains. So, I have a one time only windfall, that was actually more than a single year's gross salary. Now those pols are talking about changing the rules, because all those evil capitalists are making big bucks and not paying their fair share.
Last edited by Scrappy Jack; 01-19-2012 at 07:12 PM. Reason: Remembered about qualified domestic corp dividends
#127
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You say that Ron Paul isn't going to back out on his word or compromise. I don't doubt it.
But what is the alternative if the House or the Senate aren't willing to compromise?
Remember, the Republicans were willing to shut down the entire government if they didn't get their way on the budget.
#130
What’s odd is I feel poor as hell. I drive cheap cars over 20 years old and I find it hard to find money to do the things I want to do and keep expenses below what I can pay off on the credit card every month and I certainly don’t appear wealthy.
Bob
That's because you are "taking advantage of tax loopholes!" You don't pay ANY capital gains tax on the company stock (or other investments) inside the 401k. Nor do you pay ANY taxes on dividends or interest paid by those investments.
In fact, the money you put in to the 401k reduces your taxable income. The trade-off is that you will pay taxes when you make withdrawals, but quite possibly at a lower marginal rate than you are paying today.
If you are close to the FICA cutoff, you are probably in the top quartile of income earners. Therefore, you should stop taking advantage of tax loopholes (like Romney) and save exclusively in taxable retail investment accounts. While you are at it, sell anything with a profit in less than 365 days, do not invest in municipal bonds and make sure not to claim any tax deductions (like charitable deductions). Oh, and only own domestic equities via mutual funds/UITs/ETFs/etc so any dividends are taxed at your marginal rate.
That's only fair.
Max out my 401k contribution pre tax. Get the company stock dividends out as periodic payments when dividends are paid, pay regular income tax on that income but avoid paying payroll tax on that income.
Bob
#132
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You might loos that wager. Household income in the 95 to 98th percentile. By mgeffriau numbers average is ~25% but his numbers are low by employer paid potion of payroll plus I don’t have much in deductions. No kid, paid down mortgage a bit refinanced at low intrest, etc compared to the average.
Pull up your 2010 tax return. On the 1040, look at line 60. This is your total tax obligation for the year. Take that number and divide it by line 37 (your adjusted gross income or AGI). That number is what would be comparable to the ~11 - 15% that Buffet discusses in the quote you listed above.
I would be really surprised if that number is greater than 20%.
#133
Bob
#134
I think there is some confusion here.
Pull up your 2010 tax return. On the 1040, look at line 60. This is your total tax obligation for the year. Take that number and divide it by line 37 (your adjusted gross income or AGI). That number is what would be comparable to the ~11 - 15% that Buffet discusses in the quote you listed above.
I would be really surprised if that number is greater than 20%.
Pull up your 2010 tax return. On the 1040, look at line 60. This is your total tax obligation for the year. Take that number and divide it by line 37 (your adjusted gross income or AGI). That number is what would be comparable to the ~11 - 15% that Buffet discusses in the quote you listed above.
I would be really surprised if that number is greater than 20%.
Bob
Last edited by bbundy; 01-20-2012 at 12:56 PM.
#135
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I can go back and look but that wouldn't be comparing apples to apples. have to take the FICA number and double it first in my case to show total amount of my income that went to the federal government. 2010-2011 wasnt a good year for me wife was under employed. 2008 was pretty good however and now she is back again with a good job.
Bob
Bob
Originally Posted by Forbes article
According to a letter Buffett sent to Rep. Tim Huelskamp (R-Kansas) that the Congressman posted here, the billionaire had adjusted gross income in 2010 of $62,855,038, taxable income of $39,814,784, and a federal income tax bill of $6,923,494. That makes his effective tax rate, as a percentage of AGI, just 11.06%, compared to an average effective rate in 2008 (the most recent year available) of 18.1% of AGI for the 400 taxpayers with the largest incomes, according to figures reported by the Internal Revenue Service.
$6,923,494 / $62,855,038 = 11.02%
This is an example of a few things:
- The complexity of our tax code makes it difficult for lay people to discuss accurately
- I think some level of intentional misdirection on Buffett's part (using effective tax as a percentage of AGI when most people think and speak in terms of marginal brackets)
- Ignorance or duplicity (I think more of the former) with reporters who also do not understand the tax structure that they are reporting on
I don't care what year you use; I would be surprised if your effective tax rate as a percentage of AGI was over 25%. In fact, I would be surprised (but not shocked) if it was over 20%.
[Edit: I have a stack of 1040s for people in a wide variety of situations for reference [I am not a tax preparation professional and nothing I say should be taken as professional advice] and none of them have effective tax rates over 25%. Whatever theoretical wager we placed on bbundy's effective rate being less than 25% - I would be willing to double it when I say at least one of those returns is for someone who makes a LOT more than he does. Their rate is between 20.01 and 24.99%.]
#136
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You seem otherwise too intelligent to talk like this.
There are a lot of lower and middle income senior citizens and retirees that benefit more on a percentage basis from the "Bush tax cuts for billionaires" than any of the .01%.
Guess what the tax rate for long term capital gains and qualified dividends is for a married couple with taxable income (different from adjusted gross income or AGI) less than $69k in 2011 was? 15% less than it was for Warren Buffett. 15% - 15% = 0%
In addition, the Bush tax cuts introduced the 10% marginal bracket which likely reduced the total tax expenditure for EVERYONE.
There are a lot of lower and middle income senior citizens and retirees that benefit more on a percentage basis from the "Bush tax cuts for billionaires" than any of the .01%.
Guess what the tax rate for long term capital gains and qualified dividends is for a married couple with taxable income (different from adjusted gross income or AGI) less than $69k in 2011 was? 15% less than it was for Warren Buffett. 15% - 15% = 0%
In addition, the Bush tax cuts introduced the 10% marginal bracket which likely reduced the total tax expenditure for EVERYONE.
#137
That's the disconnect. From the Forbe's article:
They are saying Buffet's line 60 was $6,923,494, his line 43 was $39,814,784 and his line 37 was $62,855,038.
$6,923,494 / $62,855,038 = 11.02%
This is an example of a few things:
I don't care what year you use; I would be surprised if your effective tax rate as a percentage of AGI was over 25%. In fact, I would be surprised (but not shocked) if it was over 20%.
[Edit: I have a stack of 1040s for people in a wide variety of situations for reference [I am not a tax preparation professional and nothing I say should be taken as professional advice] and none of them have effective tax rates over 25%. Whatever theoretical wager we placed on bbundy's effective rate being less than 25% - I would be willing to double it when I say at least one of those returns is for someone who makes a LOT more than he does. Their rate is between 20.01 and 24.99%.]
They are saying Buffet's line 60 was $6,923,494, his line 43 was $39,814,784 and his line 37 was $62,855,038.
$6,923,494 / $62,855,038 = 11.02%
This is an example of a few things:
- The complexity of our tax code makes it difficult for lay people to discuss accurately
- I think some level of intentional misdirection on Buffett's part (using effective tax as a percentage of AGI when most people think and speak in terms of marginal brackets)
- Ignorance or duplicity (I think more of the former) with reporters who also do not understand the tax structure that they are reporting on
I don't care what year you use; I would be surprised if your effective tax rate as a percentage of AGI was over 25%. In fact, I would be surprised (but not shocked) if it was over 20%.
[Edit: I have a stack of 1040s for people in a wide variety of situations for reference [I am not a tax preparation professional and nothing I say should be taken as professional advice] and none of them have effective tax rates over 25%. Whatever theoretical wager we placed on bbundy's effective rate being less than 25% - I would be willing to double it when I say at least one of those returns is for someone who makes a LOT more than he does. Their rate is between 20.01 and 24.99%.]
#139
I work for a company that, up until a few months ago, was employee owned. We had a stock ownership plan, where they gave us anywhere from 2-6% of our base pay in stock every year, called "safe harbor". I was also allowed to buy shares, up to a maximum of 10% of base pay. Once I became eligible, I bought the max every year.
Last September, the company was sold to a private firm.
...
But, here's the kicker. ... So, I have a one time only windfall, that was actually more than a single year's gross salary. Now those pols are talking about changing the rules, because all those evil capitalists are making big bucks and not paying their fair share.
Am I to be penalized for making a sound financial decision?
Last September, the company was sold to a private firm.
...
But, here's the kicker. ... So, I have a one time only windfall, that was actually more than a single year's gross salary. Now those pols are talking about changing the rules, because all those evil capitalists are making big bucks and not paying their fair share.
Am I to be penalized for making a sound financial decision?
The aftermath of the Enron debacle and the new accounting standards that followed, included making it more expensive for companies to give out stock options. "Tax the rich executives that get stock options", remember? Well, the real result was that a lot of companies quit giving stock options to employees, and left it for the execs. The real effect was the oppposite of intended.
Here's a great video explaining how gov't intervention actually *resulted* in greater incomes for company execs over the last 30 years, from like 20x of rank and file workers, to 500x:
#140
You seem otherwise too intelligent to talk like this.
There are a lot of lower and middle income senior citizens and retirees that benefit more on a percentage basis from the "Bush tax cuts for billionaires" than any of the .01%.
Guess what the tax rate for long term capital gains and qualified dividends is for a married couple with taxable income (different from adjusted gross income or AGI) less than $69k in 2011 was? 15% less than it was for Warren Buffett. 15% - 15% = 0%
In addition, the Bush tax cuts introduced the 10% marginal bracket which likely reduced the total tax expenditure for EVERYONE.
There are a lot of lower and middle income senior citizens and retirees that benefit more on a percentage basis from the "Bush tax cuts for billionaires" than any of the .01%.
Guess what the tax rate for long term capital gains and qualified dividends is for a married couple with taxable income (different from adjusted gross income or AGI) less than $69k in 2011 was? 15% less than it was for Warren Buffett. 15% - 15% = 0%
In addition, the Bush tax cuts introduced the 10% marginal bracket which likely reduced the total tax expenditure for EVERYONE.
Bob