A question about the "rich paying their fair share" charge...

[spidey07]

36% of federal revenue is payroll taxes, which are primarily paid by ____ ?

I think this whole topic is fucking useless without including payroll taxes. The payroll funds are raided for general use anyways, so why are we not including it? Because it makes it look like ~50% of people pay no income tax, when in reality it's like ~<18%?

It's primarily paid by business/employers. Work for yourself and you pay the whole thing instead of just half split between employer/employee.

I haven't paid social security tax since about June, so it's not me paying it anymore this year. la-la-la wahoo!

 

[novasatori]

It's primarily paid by business/employers. Work for yourself and you pay the whole thing instead of just half split between employer/employee.

I haven't paid social security tax since about June, so it's not me paying it anymore this year. la-la-la wahoo!

 

[bfdd]

Yeah those poor people got a lot of money, we got to take some of what they make. It is something that will help solve the problem.🙄

This train of thought is so fucking stupid. Stop feeling so fucking bad for the poor and stop assuming others love the rich. Fuck them both. This country is a welfare state for two groups of people, as defined by the government, those who are poor and those who are rich. You get free money if you're either. If you're in between, we're stuck here wondering WTF IS GOING ON!? WHERE'S MY FREE MONEY!? So then idiots in our "group" start gaming the system. Things need to be FAIR and EQUAL. This means, I know it sucks for the poor, a FLAT TAX. PS this only sucks for the poor up front, it does not suck for them long term. Like I said, when people feel like they are being treated fairly and equally(which a flat tax would do), they would be more inclined to help those who are less fortunate. Especially someone who is contributing to society in some way.

Welfare is a fantastic thing, stop bastardizing it and using it to hold people down. That's why those programs were originally created, by fucking racists who wanted to keep blacks and browns down in the ghettos away from all the nice to do white people. You idiots keep pushing more of this "feel good" bullshit and it is doing nothing but keeping the down trodden down and cost us more and more money to placate the masses. IT IS TIME FOR SOME FUCKING CHANGE SO CUT OUT THE INSIDE THE BOX BULLSHIT THAT HAS BEEN FUCKING US FOR DAMN NEAR 50 YEARS!

 

[novasatori]

I am also going to put these numbers here just for humor over the outrage:

Okay, here are some facts, courtesy of the Tax Policy Center. They may not allay Mr. Perry’s dismay, but they should assuage the concerns of anyone with a soul.

• Of the 46% of households who don’t pay income tax, nearly 2/3 pay payroll taxes.
• Of the 18% who pay neither income nor payroll taxes, more than half are elderly.
• More than 1/3 have incomes below $20,000. (Note: Ronald Reagan made the decision in 1986 to exempt people with incomes below the poverty line from federal income tax. Twenty-five years later, that still seems like a good call.)
• Only 1% of nontaxpaying households are nonelderly with incomes over $20,000. I’m dismayed about them too governor. Maybe we should close some of the loopholes that allowed almost 1,500 millionaires to escape income tax in 2009.

From Forbes

 

[highland145]

.65&#37; of them? Humor over outrage, yes.

 

[spidey07]

I am also going to put these numbers here just for humor over the outrage:



From Forbes

Yep. Almost half pay NO INCOME TAX!!!!!!!!

Time for them to pay their fair share. Every worker and employer pays payroll taxes, now is the time for the half that pay NO INCOME TAXES to pay their fair share.

Also look at your graph, the lowest two quintiles have NEGATIVE TAX, meaning they pay no income tax and actually get money back via credits.

 

[novasatori]

Yep. Almost half pay NO INCOME TAX!!!!!!!!

Time for them to pay their fair share. Every worker and employer pays payroll taxes, now is the time for the half that pay NO INCOME TAXES to pay their fair share.

Hopeless

 

[bfdd]

Yep. Almost half pay NO INCOME TAX!!!!!!!!

Time for them to pay their fair share. Every worker and employer pays payroll taxes, now is the time for the half that pay NO INCOME TAXES to pay their fair share.

Spidey07, I completely agree lets get a flat tax installed in our system. Then we could more easily pay for things like universal healthcare and various other social services to help promote our society.

ps i believe dividing payroll tax and income tax into separate things is just to create more animosity among people. spur up that class hate. just ignore it. we wouldn't even be arguing over that stupid shit if we had A FLAT FUCKING TAX. All money earned = income, all income = taxed 30&#37;. Problem solved, nao no bitching about who pays what share, everyone pays the same share.

 

[rchiu]

Except you're delusional. That's not what the issue is. THAT which you describe is just fine - it's good for society, with appropriate amounts.

The extreme concentration of wealth at issue here PREVENTS what you describe - it denies opportunity to people who 'deserve' rewards to reward people who 'have money' instead. That great guy you talk about CAN'T get the reward he deserves, because he's limited in his reward because the big rewards are locked up by the few who have money. You falsely equate having money with the things you list.

Extreme concentration of wealth does nothing but create a corrupt society in which a few people have far more than they 'deserve' and cripples opportunity - and growth - for the rest of society, everyone has to serve those few. It's a plutocracy. You are too ignorant to know why that's a bad thing, it's clear.

You are also clueless about things like good public policy in which TAXES are used to help the public have access to education and such. You don't just leave people as wage slaves without education and say 'that's how we're going to leave it', you invest to have more educated people which is win-win - in part simply because it's good for the people the government serves. That's not how it works in plutocracy, in which you want to keep people weak and serving.

Massive concentration of wealth is finally incompatible with democracy. The interests of the people and the very rich conflict - and the very rich win.

You can't be more un-American than to want to take the power away from the people and to give it to a few people who are absurdly wealthy and powerful.

You are just clueless about the harm of the crap you spew. I said it's a waste of time with you and it continues to be.

And yes, it is a "massive transfer of wealth to the top."

Since you missed the pictures to give you an idea of the distribution already in place, I'll put the link again:

http://www.lcurve.org/LCurveVideo.htm

Why should the US apologize for being one of the richest country with extremely high income/wealth individuals? Yes if you look at Forbes billionaires list every year US is always at the top with the most members in the billionaires club and if you go through the list, big percent of those are self made billionaires. That's what makes the US the land of opportunities. That's a sign of country with no limit to what you can achieve financially, and that is a good sign.

Now let's look at the bottom 10% of the income earners in the US. I don't have a recent figure, but in 1998 bottom 10P already makes close to $10k per year. Plus all the government assistance, the food stamp, education assistance, that amount is certainly not starving income. And with hard work, dedication and all the social/education assistance available, it is certainly feasible for anyone in that class to climb up if the will is there.

And if you look at the historical median income for bottom 10P, it is quite stable. It is certainly not falling substantially. So you look at some real financial data (Gini Index, P90/P10, P80/P20 ratio) you 'd see that while the US wealth distribution is on the high side, it is certainly not "extreme". The rapid increase in the gap is due to the increase at the top. There is certainly no "transfer" to the top, it's simply top making that much more. Your theory of this "extreme wealth concentration" which doesn't exist in the first place is wrong. And the fact that so many billionaires in the Forbe list are self made, prove you wrong again that nothing is preventing American to succeed in this country.

And stop freaking waging class warfare with this rich people is anti democracy BS. Bill Gate and Warren Buffett are some of the most charitable people. And through out human history, it is your socialist and communist pal with the record of anti-democracy because of the need to force the wealth transfer to the bottom.

 

[HumblePie]

What loopholes can I take advantage of? Imagine a two income family in the top 5&#37; of wage earners. Most deductions are gone and AMT starts taking a chunk.

Please tell me about the loopholes and tax breaks! I would like to take advantage of said loopholes and tax breaks!

Not sure why I am bothering to reply to a spider post but....

I know you recently bought a house and have been proud in stating so. But you were stupid in how you went about it.

Why?

Here is how a really wealthy friend of mine bought his house.

a) went to a local church and got permission to buy property FOR the church as a donation.

b) found a 2 million dollar mansion he wanted.

c) using his own money he bought the mansion as an agent for the church. Which means TAX FREE BABY!. No closing costs or other bits. He also paid cash.

d) Donated said property to church but remains the sole "adminstrator" of the property while he is alive. When he dies, the church gets to name another person to be the administrator. Which means this property doesn't technically get to "pass" in the family but there are ways around that by getting your kids to be named the next administrator and such.

e) entire purchase is now allowed to be written off as a tax donation. No taxes for him that year.

f) also made it as a corporate purchase some how which allows him to put part of the tax write off on the following years so any "overage" would be used the following years.



Basically he gets to buy a brand spanking new house. Not pay taxes. Technically he doesn't "own" it as it belongs to the church, but since the head of the church is his brother. Yah, you get the picture. He also doesn't have to pay a dime in income taxes that year or for like the following 4 years (he did this a while back) because of the whole purchase being a donation write off. He also did some delayed credits with it and other crap.

That's just the tip of the iceberg of the loopholes he's used. He does things to "give" money away but really doesn't. It's all smoke and mirrors. He follows the letter of the tax laws, but not the intent. Can't blame him though.

Just because the wealthy are "on the books" as suppose to pay X% amount of income tax doesn't mean they do. There are ways of hiding and burying income amounts that the rich make use of and the poor can not. It takes money to make money and keep money.

 

[rchiu]

Not sure why I am bothering to reply to a spider post but....

I know you recently bought a house and have been proud in stating so. But you were stupid in how you went about it.

Why?

Here is how a really wealthy friend of mine bought his house.

a) went to a local church and got permission to buy property FOR the church as a donation.

b) found a 2 million dollar mansion he wanted.

c) using his own money he bought the mansion as an agent for the church. Which means TAX FREE BABY!. No closing costs or other bits. He also paid cash.

d) Donated said property to church but remains the sole "adminstrator" of the property while he is alive. When he dies, the church gets to name another person to be the administrator. Which means this property doesn't technically get to "pass" in the family but there are ways around that by getting your kids to be named the next administrator and such.

e) entire purchase is now allowed to be written off as a tax donation. No taxes for him that year.

f) also made it as a corporate purchase some how which allows him to put part of the tax write off on the following years so any "overage" would be used the following years.



Basically he gets to buy a brand spanking new house. Not pay taxes. Technically he doesn't "own" it as it belongs to the church, but since the head of the church is his brother. Yah, you get the picture. He also doesn't have to pay a dime in income taxes that year or for like the following 4 years (he did this a while back) because of the whole purchase being a donation write off. He also did some delayed credits with it and other crap.

That's just the tip of the iceberg of the loopholes he's used. He does things to "give" money away but really doesn't. It's all smoke and mirrors. He follows the letter of the tax laws, but not the intent. Can't blame him though.

Just because the wealthy are "on the books" as suppose to pay X% amount of income tax doesn't mean they do. There are ways of hiding and burying income amounts that the rich make use of and the poor can not. It takes money to make money and keep money.

First of all, your friend is a crook, not every millionaire is one. Second, good luck to your friend when he has a falloff with his brother. 2 Million dollar gone baby.

 

[highland145]

Humble, sounds like a good citizen should report your friend, his bro and church, and have his 503c revoked.

Edit: Wasn't there a "report a tax dodger" thread where you can make some $$.

Just do it.

 

[bfdd]

lols @ anyone thinking that church shit doesn't go on ALL THE TIME. THIS IS WHY YOU CANNOT GIVE GROUPS SPECIAL TREATMENT.

 

[Fern]

Do you want to look like an idiot? It's a real question.

Yes, it would, but let's get past that. You argued that the status quo causes a "massive transfer from the top to the bottom".
-snip-

No, I didn't.

Fern

 

[highland145]

lols @ anyone thinking that church shit doesn't go on ALL THE TIME. THIS IS WHY YOU CANNOT GIVE GROUPS SPECIAL TREATMENT.

May be but I want to know if Humble is going to turn in his tax cheat millionaire friend.

 

[bfdd]

May be but I want to know if Humble is going to turn in his tax cheat millionaire friend.

why? what he did was probably completely legal. people do this shit ALL THE TIME and it's a big issue. it stems from us granting special groups special rights. we treat people differently and for some reason THAT'S OK. lols where's the equality? MLK might have succeeded in breaking up the racial divide, but there are still divides among us creating inequalities. To many keep looking in the wrong directions. To much in the box thinking. lols @ land of innovators.

STOP TALKING ABOUT MASSIVE TRANSFERS OF WEALTH TO THE TOP FROM THE BOTTOM OR VICE VERSA. It's massive transfers of wealth from THE MIDDLE to the top AND bottom which is the issue we're having. The top refuses to pay their "fair share" as in an equal percentage(yes they have a higher rate, but only "poor" people pay taxes) and the bottom doesn't pay anything at all. EVERYONE needs to contribute.

 

[highland145]

Highly doubt it but I'm not an accountant.

As to why, if it's illegal, because here is a rich bastard that's sticking it to the rest of us by not paying his fair share. Isn't that where this thread started?

 

[bfdd]

Highly doubt it but I'm not an accountant.

As to why, if it's illegal, because here is a rich bastard that's sticking it to the rest of us by not paying his fair share. Isn't that where this thread started?

most of the things rich people do to "stick it to us" is legal. we made it that way.

 

[highland145]

most of the things rich people do to "stick it to us" is legal. we made it that way.

Congress did that. But wouldn't you want this guy popped, assuming it is illegal?

 

[Fern]

Not sure why I am bothering to reply to a spider post but....

I know you recently bought a house and have been proud in stating so. But you were stupid in how you went about it.

Why?

Here is how a really wealthy friend of mine bought his house.

a) went to a local church and got permission to buy property FOR the church as a donation.

b) found a 2 million dollar mansion he wanted.

c) using his own money he bought the mansion as an agent for the church. Which means TAX FREE BABY!. No closing costs or other bits. He also paid cash.

d) Donated said property to church but remains the sole "adminstrator" of the property while he is alive. When he dies, the church gets to name another person to be the administrator. Which means this property doesn't technically get to "pass" in the family but there are ways around that by getting your kids to be named the next administrator and such.

e) entire purchase is now allowed to be written off as a tax donation. No taxes for him that year.

f) also made it as a corporate purchase some how which allows him to put part of the tax write off on the following years so any "overage" would be used the following years.



Basically he gets to buy a brand spanking new house. Not pay taxes. Technically he doesn't "own" it as it belongs to the church, but since the head of the church is his brother. Yah, you get the picture. He also doesn't have to pay a dime in income taxes that year or for like the following 4 years (he did this a while back) because of the whole purchase being a donation write off. He also did some delayed credits with it and other crap.

That's just the tip of the iceberg of the loopholes he's used. He does things to "give" money away but really doesn't. It's all smoke and mirrors. He follows the letter of the tax laws, but not the intent. Can't blame him though.

Just because the wealthy are "on the books" as suppose to pay X% amount of income tax doesn't mean they do. There are ways of hiding and burying income amounts that the rich make use of and the poor can not. It takes money to make money and keep money.

This is a gift of a "remainder interest". See here:
http://www.vlt.org/support/planned-giving/remainder-interest-in-land

Nothing illegal and not a loophole. Congress purposefully created this law.

But some of your story is incorrect.

* Charitable contributions have a limit and cannot fully reduce your taxable income down to zero.

* He would NOT be able to deduct 100% of the cost of residence.

* Putting it into a corporation provides no tax benefits, and unless careful may actually reduce the tax benefits (corporations are subject to stricter limits etc). Individuals can already carry over any contribution not deductable due to the deduction limitation (I think can only deduct an amount not in excess of 30% or 50% of AGI, depending on the year he donated it).

* "Technically" he IS the owner of the house. It won't transfer until his death.

* There is no "smoke and mirrors" here, he is actually giving something of value away to the church. Upon his death the church would be able to sell the house, likely for more than the $2M you cite.

Fern

 

[Craig234]

I'd call it smoke and mirrors to use the church tax exemption for family members to get huge tax benefits to live in $2 million mansions.

I'd like to support the idealistic version of the church tax exemption - protection from a government attempting to use taxation to harm a religion - but that's so far from what's happening and the exemption so ripe for abuse that I at least want reform looked at and it's worth considering a total repeal.

 

[dank69]

Spidey07, I completely agree lets get a flat tax installed in our system. Then we could more easily pay for things like universal healthcare and various other social services to help promote our society.

ps i believe dividing payroll tax and income tax into separate things is just to create more animosity among people. spur up that class hate. just ignore it. we wouldn't even be arguing over that stupid shit if we had A FLAT FUCKING TAX. All money earned = income, all income = taxed 30%. Problem solved, nao no bitching about who pays what share, everyone pays the same share.

You will still have rich people bitching that they pay 300k per year in taxes while poor people pay 3k per year in taxes for the exact same government services.

 

[Fern]

I'd call it smoke and mirrors to use the church tax exemption for family members to get huge tax benefits to live in $2 million mansions.

I'd like to support the idealistic version of the church tax exemption - protection from a government attempting to use taxation to harm a religion - but that's so far from what's happening and the exemption so ripe for abuse that I at least want reform looked at and it's worth considering a total repeal.

Craig,

Look, aside from the fact you may, or may not agree with people getting a deduction for contributions to a church, surely even you can see there's a real and substantial value to that transfer of the house.

How much does he get to deduct for giving the house away upon his death? We don't know (for a start we'd need to know his age to determine how many years he would living there), but I can assure it's NOT $2M. The value of the period of time he is living in the house (for the rest of his life) will be calculated and that part is NOT deductible. It will be subtracted from the $2M amount.

This is no different than people donating large tracts of (unspoiled) land to a conservatory group upon their death. They're getting the same kind of deduction.

I think the way the poster described this, with his (incorrect) use of terms like "loophole", pushes peoples' buttons etc.

A "remainder interest" type deal is nothing unusual. You can see commercials on TV where they offer to buy your house and let you live in it until you die etc. I've seen this done in other countries as well.

Is it conceptually complicated? yes, but it is not "smoke and mirrors", nor is it a loophole.

Fern

 

[werepossum]

This is a gift of a "remainder interest". See here:
http://www.vlt.org/support/planned-giving/remainder-interest-in-land

Nothing illegal and not a loophole. Congress purposefully created this law.

But some of your story is incorrect.

* Charitable contributions have a limit and cannot fully reduce your taxable income down to zero.

* He would NOT be able to deduct 100% of the cost of residence.

* Putting it into a corporation provides no tax benefits, and unless careful may actually reduce the tax benefits (corporations are subject to stricter limits etc). Individuals can already carry over any contribution not deductable due to the deduction limitation (I think can only deduct an amount not in excess of 30% or 50% of AGI, depending on the year he donated it).

* "Technically" he IS the owner of the house. It won't transfer until his death.

* There is no "smoke and mirrors" here, he is actually giving something of value away to the church. Upon his death the church would be able to sell the house, likely for more than the $2M you cite.

Fern

That's most likely and I have no problem with it, but I wouldn't completely discount the idea that it is exactly as Humblepie described it. I've seen instances, albeit with very much less money involved, of people doing much the same thing to avoid taxes. If this is indeed the case, then this man needs to go to jail; he is a tax cheat. At the very least, he should be paying fair market rent if the church now owns it, or paying taxes on an equivalent gift.

 

[Fern]

-snip-
At the very least, he should be paying fair market rent if the church now owns it, or paying taxes on an equivalent gift.

As you can see from the (informative) link I provided, the man owns the house. The FMV of the rent he should be paying for the period of his remaining lifetime is deducted from the value of the property. I.e., there is no deduction for that.

Tell you guys what, I'll structure the the transaction a completely different way but with the same consequences and hopefully you'll understand better what's happening here.

Man has $2M. The man would like to donate to his brother's church to help them out.

But the man needs to have a place to live. What can this man do?

The man finds a house he likes for rent. The man makes a deal to rent the house for the remainder of his life, 20 years. The owner agrees to accept an upfront rent payment for the 20 yrs of $500,000.

The man pays the rent of $500K and donates the rest ($1.5M) to his brother's church getting a charitable deduction as an itemized deduction on his tax return. The deduction is limited to 30&#37; (or 50%) and he pays income taxes on the other 70% (or 50%).

Hopefully that makes it more understandable. The only possible difference is that the church will forgo the $1.5M now and get something in excess of $2M later. Actually, the church in my example could sell the right to that remainder interest to another party and get their $1.5 immediately.

Fern