Paul Won Iowa
#101
You can't just add 7.65% across the board, because a significant portion of the lower tax brackets are being refunded tax credits not only in excess of the employee's half of FICA, but in excess of the full FICA total (employee + employer).
http://www.taxfoundation.org/blog/show/26433.html
http://www.taxfoundation.org/blog/show/26433.html
#102
Elite Member
iTrader: (2)
Join Date: Sep 2008
Location: Central Florida
Posts: 2,799
Total Cats: 179
From this link in that article:
As we have discussed previously regarding the "top 40 tax filers," most of those in the very top of the income ladder on any given year were not likely to have been there consistently. Those people do typically earn most of their income from LTCG via the sale of a business, property, inherited assets, etc.
However, other than investment managers who get paid via carried interest (most financial types do not get paid that way)... I am scratching my head coming up with a plausible scenario in which a retired CEO or business magnate earns most of their annual income via LTCG. Via dividends? Sure. [Edit: Taxable dividends for those above the 15% marginal bracket are taxed at ordinary income rates.]
But to get taxed at the 15% LTCG rate, you would have to be selling something with a profit after having held it for at least 12 months. That seems like a less plausible way for the "mega rich" to receive their income.
Can someone think of an example where someone at the top of the income list would consistently receive their annual income via long-term capital gains (not carried interest)?
Last edited by Scrappy Jack; 01-19-2012 at 03:13 PM. Reason: Added info on taxation of dividends
#103
This has me scratching my head now...
As we have discussed previously regarding the "top 40 tax filers," most of those in the very top of the income ladder on any given year were not likely to have been there consistently. Those people do typically earn most of their income from LTCG via the sale of a business, property, inherited assets, etc.
However, other than investment managers who get paid via carried interest (most financial types do not get paid that way)... I am scratching my head coming up with a plausible scenario in which a retired CEO or business magnate earns most of their annual income via LTCG. Via dividends? Sure. [Edit: Taxable dividends for those above the 15% marginal bracket are taxed at ordinary income rates.]
But to get taxed at the 15% LTCG rate, you would have to be selling something with a profit after having held it for at least 12 months. That seems like a less plausible way for the "mega rich" to receive their income.
Can someone think of an example where someone at the top of the income list would consistently receive their annual income via long-term capital gains (not carried interest)?
As we have discussed previously regarding the "top 40 tax filers," most of those in the very top of the income ladder on any given year were not likely to have been there consistently. Those people do typically earn most of their income from LTCG via the sale of a business, property, inherited assets, etc.
However, other than investment managers who get paid via carried interest (most financial types do not get paid that way)... I am scratching my head coming up with a plausible scenario in which a retired CEO or business magnate earns most of their annual income via LTCG. Via dividends? Sure. [Edit: Taxable dividends for those above the 15% marginal bracket are taxed at ordinary income rates.]
But to get taxed at the 15% LTCG rate, you would have to be selling something with a profit after having held it for at least 12 months. That seems like a less plausible way for the "mega rich" to receive their income.
Can someone think of an example where someone at the top of the income list would consistently receive their annual income via long-term capital gains (not carried interest)?
http://news.yahoo.com/warren-buffets...205931812.html
I think I calculated my tax burden at 28% in 2008. 28 to 30% Seems to be about what it runs. Dual income no kids around the FICA cutoff. My Capital gains income doesn’t qualify for the special rate because it is from company stock pre tax investments in 401k.
It will be interesting to see Romney’s tax return. He said he paid 15%. His economic recovery plan I think calls for making his personal tax rate much closer to 0%. Same with Newt same with Paul. Most everybody else’s taxes would not change much but most would go up.
Bob
#105
Elite Member
Thread Starter
iTrader: (6)
Join Date: Sep 2010
Location: Seattle, WA
Posts: 3,611
Total Cats: 25
I don't think anyone on here doubts that I'm a huge fan of Ron Paul, so...take this with a dose of salt.
The more I research, the more I think Bbundy is right about this. I strongly believe in Ron Paul's ideals and what he says, but I do not think what he wants to implement will be implemented. I think that it is going to be corrupted, and as Bbundy says, only what benefits the corporations most will get passed....
At significant detriment to Paul's overall plan. I don't think that Paul's plan will survive the corporatists in our government, and will instead be gutted, twisted, and manipulated to be something entirely different then what Paul wants. Remember, bills -have- to go through the House and the Senate before they can be passed, and there are just not enough people who aren't corporate -----s to allow Paul's ideas to be implemented while remaining true to Paul's ideals.
Which means I don't know where I am anymore with political candidates. Except for Paul, Obama is substantially better than all of the Republican candidates. Paul blows everyone's socks off - but can he successfully win against the corporatists?
I am afraid of Paul because I think only the most damaging of his Ideas will ever get implemented, Only those Ideas with immediate benefit to large corporations. In other words he won’t ever go far enough for it to work. The libertarian Ideal society is a pipe dream fantasy based on some theory’s that have serious issues. His initial plans don’t actually call for getting rid of Income tax. Just corporate and capital gains for those that make their income off the backs of working people.
At significant detriment to Paul's overall plan. I don't think that Paul's plan will survive the corporatists in our government, and will instead be gutted, twisted, and manipulated to be something entirely different then what Paul wants. Remember, bills -have- to go through the House and the Senate before they can be passed, and there are just not enough people who aren't corporate -----s to allow Paul's ideas to be implemented while remaining true to Paul's ideals.
Which means I don't know where I am anymore with political candidates. Except for Paul, Obama is substantially better than all of the Republican candidates. Paul blows everyone's socks off - but can he successfully win against the corporatists?
Last edited by blaen99; 01-19-2012 at 04:58 PM.
#106
That's why trying to compare nominal tax rates instead of comparing effective tax rates makes a mess of the numbers.
For what it's worth, I agree with you that the payroll tax is regressive. I just don't think that the payroll tax is [i]so[i/] regressive that it cancels out the otherwise generally progressive structure of our tax code.
#107
You do understand that that's 15% on top of a, what, 35% corporate tax rate? That money was already taxed before it ever showed up on his tax return.
That's why trying to compare nominal tax rates instead of comparing effective tax rates makes a mess of the numbers.
For what it's worth, I agree with you that the payroll tax is regressive. I just don't think that the payroll tax is [i]so[i/] regressive that it cancels out the otherwise generally progressive structure of our tax code.
That's why trying to compare nominal tax rates instead of comparing effective tax rates makes a mess of the numbers.
For what it's worth, I agree with you that the payroll tax is regressive. I just don't think that the payroll tax is [i]so[i/] regressive that it cancels out the otherwise generally progressive structure of our tax code.
Bob
#108
Elite Member
iTrader: (21)
Join Date: Jun 2007
Location: Rochester, NY
Posts: 6,593
Total Cats: 1,259
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. Naturally, we had to sell our stocks to do so. They gave us a helluva deal. So, here I am, sitting on a bunch of shares that I was banking as retirement, and they have to be sold. Stocks given to us as safe harbor had to be rolled into a 401k plan. No biggie, I was planning on doing that anyway.
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.
Am I to be penalized for making a sound financial decision? It isn't like I'll ever get this deal again, and having been a contractor (temp) for many years, this kinda makes up for my lack of any retirement/pension plan. I plan on cheating my *** off on my taxes every chance I get from now on if they stick it to me this year.
Last September, the company was sold to a private firm. Naturally, we had to sell our stocks to do so. They gave us a helluva deal. So, here I am, sitting on a bunch of shares that I was banking as retirement, and they have to be sold. Stocks given to us as safe harbor had to be rolled into a 401k plan. No biggie, I was planning on doing that anyway.
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.
Am I to be penalized for making a sound financial decision? It isn't like I'll ever get this deal again, and having been a contractor (temp) for many years, this kinda makes up for my lack of any retirement/pension plan. I plan on cheating my *** off on my taxes every chance I get from now on if they stick it to me this year.
#110
Elite Member
Thread Starter
iTrader: (6)
Join Date: Sep 2010
Location: Seattle, WA
Posts: 3,611
Total Cats: 25
After a bit of research, I have found that just a few decades ago, Corporate taxes made up as much as 80% of federal revenue.
It, and I hope Scrappy will correct me, appears that the tax burden has shifted from corporations to citizens.
#111
The tax burden was never actually on corporations...they might write the checks, but they're not the ones paying the cost.
bbundy himself noted this when he pointed out that it doesn't matter if we say that an employer has to pay their "half" of FICA, that cost is still coming out of your paycheck.
bbundy himself noted this when he pointed out that it doesn't matter if we say that an employer has to pay their "half" of FICA, that cost is still coming out of your paycheck.
#112
Elite Member
Thread Starter
iTrader: (6)
Join Date: Sep 2010
Location: Seattle, WA
Posts: 3,611
Total Cats: 25
The tax burden was never actually on corporations...they might write the checks, but they're not the ones paying the cost.
bbundy himself noted this when he pointed out that it doesn't matter if we say that an employer has to pay their "half" of FICA, that cost is still coming out of your paycheck.
bbundy himself noted this when he pointed out that it doesn't matter if we say that an employer has to pay their "half" of FICA, that cost is still coming out of your paycheck.
Then why does the argument that "corporations just move to other countries for better taxes" hold water? In theory, the taxes paid would be the same, and the cost of doing business would be the same if this is true.
#114
Elite Member
Thread Starter
iTrader: (6)
Join Date: Sep 2010
Location: Seattle, WA
Posts: 3,611
Total Cats: 25
So, you agree that companies place shell headquarters in other countries to help avoid the cost of doing business? (See: GE's 10billion US income, but 5 billion back in various tax refunds due to shifting a great deal of income over to their shell HQ. They would be paying taxes instead of leeching if this wasn't possible to shuffle profits around with like that.)
#115
At significant detriment to Paul's overall plan. I don't think that Paul's plan will survive the corporatists in our government, and will instead be gutted, twisted, and manipulated to be something entirely different then what Paul wants. Remember, bills -have- to go through the House and the Senate before they can be passed, and there are just not enough people who aren't corporate -----s to allow Paul's ideas to be implemented while remaining true to Paul's ideals.
then you SERIOUSLY know very little of Ron Paul
you really think that RP would be afraid to veto?
just skip to the 4:10 mark
#117
Actually, I was going somewhere with that and you unintentionally hit on it.
So, you agree that companies place shell headquarters in other countries to help avoid the cost of doing business? (See: GE's 10billion US income, but 5 billion back in various tax refunds due to shifting a great deal of income over to their shell HQ. They would be paying taxes instead of leeching if this wasn't possible to shuffle profits around with like that.)
So, you agree that companies place shell headquarters in other countries to help avoid the cost of doing business? (See: GE's 10billion US income, but 5 billion back in various tax refunds due to shifting a great deal of income over to their shell HQ. They would be paying taxes instead of leeching if this wasn't possible to shuffle profits around with like that.)
What is meant when it's said that corporations don't bear the tax burden is that the burden is simply bundled into other decisions: whether to hire, whether to invest, how to set prices, how to set wages, how much to pay in dividends, etc. Those decisions might put a company at a competitive disadvantage (for example, hiring fewer workers, or lowering wages, would lower a company's competitiveness), but that's exactly the point -- the cost is being passed onto someone else -- the workers, the customers, or the investors. Or some combination of all three.
#118
Elite Member
Thread Starter
iTrader: (6)
Join Date: Sep 2010
Location: Seattle, WA
Posts: 3,611
Total Cats: 25
Sure. If you can hire workers in a country where the business is not required to send in their 7.6% FICA checks, and compete for customers against businesses that are required to send in 7.6% FICA checks, that's a competitive advantage. No one is denying that.
What is meant when it's said that corporations don't bear the tax burden is that the burden is simply bundled into other decisions: whether to hire, whether to invest, how to set prices, how to set wages, how much to pay in dividends, etc. Those decisions might put a company at a competitive disadvantage (for example, hiring fewer workers, or lowering wages, would lower a company's competitiveness), but that's exactly the point -- the cost is being passed onto someone else -- the workers, the customers, or the investors. Or some combination of all three.
What is meant when it's said that corporations don't bear the tax burden is that the burden is simply bundled into other decisions: whether to hire, whether to invest, how to set prices, how to set wages, how much to pay in dividends, etc. Those decisions might put a company at a competitive disadvantage (for example, hiring fewer workers, or lowering wages, would lower a company's competitiveness), but that's exactly the point -- the cost is being passed onto someone else -- the workers, the customers, or the investors. Or some combination of all three.
It's theoretically possible to place your corporate HQ in a place with zero tax (Say, Somalia). Why don't they? I cannot recall a single major corporation that does not re-quarter their shell HQ in a non-first world country. They always place shell HQs in a first world country, which means I have trouble believing that argument to the extent that it is advocated.
#119
So, here's the issue I have with that.
It's theoretically possible to place your corporate HQ in a place with zero tax (Say, Somalia). Why don't they? I cannot recall a single major corporation that does not re-quarter their shell HQ in a non-first world country. They always place shell HQs in a first world country, which means I have trouble believing that argument to the extent that it is advocated.
It's theoretically possible to place your corporate HQ in a place with zero tax (Say, Somalia). Why don't they? I cannot recall a single major corporation that does not re-quarter their shell HQ in a non-first world country. They always place shell HQs in a first world country, which means I have trouble believing that argument to the extent that it is advocated.
Most nations attempt to tax corporations that do business with them, regardless of what the return address says on the invoice. Just because you buy a building in Somalia and stick a sign out front doesn't mean that other nations don't tax and tariff you to death when you do business with its citizens.
#120
Elite Member
Thread Starter
iTrader: (6)
Join Date: Sep 2010
Location: Seattle, WA
Posts: 3,611
Total Cats: 25
Seriously?
Most nations attempt to tax corporations that do business with them, regardless of what the return address says on the invoice. Just because you buy a building in Somalia and stick a sign out front doesn't mean that other nations don't tax and tariff you to death when you do business with its citizens.
Most nations attempt to tax corporations that do business with them, regardless of what the return address says on the invoice. Just because you buy a building in Somalia and stick a sign out front doesn't mean that other nations don't tax and tariff you to death when you do business with its citizens.