Prove me wrong about tax cuts for the rich.

[Anarchist420]

If there is no better alternative to the income tax, then I favor something like 1/4 after the first 70k or maybe 3/8 after the first 280k, and no payroll tax.

 

[IndyColtsFan]

That person making millions per year in capital gains could also just as likely lose millions in capital losses.

How are capital losses treated in the tax code?

 

[Anarchist420]

Address and dispute my points when you post, don't just post.

I lean towards the right of the political spectrum, but I think tax cuts for the wealthy are ridiculous.

It has nothing to do with morality or hatred for the rich. My opinion is that is better to give tax cuts to lower and middle class people to boast the economy than it is to give it to the rich.

My points.

About the wealthy.

1. Most wealthy people who own businesses, who make over $250k, are not filing their taxes as sole proprietorships, they're incorporated and they are paying corporate income tax rates, not personal income tax rates. So saying lowering the personal income tax rates creates jobs is ridiculous. It does not effect their businesses.

2. Giving the wealthy more money will not increase their personal spending. Most wealthy people already live below their means and already own all the things they want or need. If you gave a millionaire $1,000 , do you think they'll spend it? I think not.

About the middle class and poor.

3. Most middle class and lower income people always need something. Frig is broke. Car is broke. Washer and dryer old and running slow. Give $1,000 someone who makes $30,000 and do you think they'll spend it? I think so.

4. Jobs are not created by businesses have too much money laying around. A company will not hire because they were given a tax cut. A company hires because there is an increase in demand for their products. You cannot create that increase in demand UNTIL you put more money into the hands of people who need things, like the lower and middle class.

Giving the wealthy, who supposedly own businesses, breaks on their personal tax rates is like going through the economic cycle backwards. You're giving money to people, who you think will hire more employees WITHOUT seeing any increase in demand for their products, hoping they will all collectively hire more workers, which will in turn increase consumer goods spending, which sustain the newly created jobs. Make sense? No it doesn't.

My idea: Make the first $50,000 in income tax free for everyone, get rid of the Bush tax cuts to pay for it.

Prove me wrong and address my points specifically.

I'd say your post is quite reasonable. The corporate tax has got to go.

 

[piasabird]

Income tax, benefits, and deductables, and special tax rates and abatements are all a form of class warfare. It is time to end the madness.

Go flat tax now.

 

[Phokus]

That person making millions per year in capital gains could also just as likely lose millions in capital losses. Capital gain is what someone gets for putting their money at risk. It's a potential reward for risk taken, not just some magical manna from the skies for someone. There is also an opportunity cost for someone who chooses to invest into something that produces capital gains/losses. The reason it's taxed at a lower rate is that it benefits society to have that capital invested.

Hahahahaha, "Risk". Yeah, maybe if you invest for one year only, you could lose money, but take a long term view of the S&P 500 and you most likely have double digit percentage gains.

Also, if i decide to sell some IBM stock and you, as a billionaire, decide to buy it and then later sold it at a lower capital gains tax rate, how did that help the economy? Was IBM able to use that money to invest in new capital expenditures to grow the business? No.

 

[GuitarDaddy]

This is just the usual "sock it to the rich!" tripe. Nobody has presented ANY logical reason why someone who earns more than some arbitrary figure (250 thousand, 1 million, 5 million) is less deserving of a tax cut than someone making less than that figure. Just because someone earns more doesn't mean we need to steal more of their money and give it to people who do nothing to earn it.

God I get tired of hearing this POS worthless argument! The guboment stolz my money and gave it to them worthless lazy welfare bums The lazy bums taking your money are the corporatists and politicians you vote for you poor misquided sap, welfare is a tiny fraction of the federal budget these days.

The point being raised here is its not fair that working familys get taxed at a 25-30% rate plus FICA, FUTA, and local taxes that push their combined tax rate to near 50%, when the wealthiest americans pay a total of 15% with zero contribution to SS or medicare. So post to the point of the thread or GTFO

 

[PokerGuy]

1. Because an extra dollar to the rich has very little marginal utility compared to the poor and middle class

That is not a logical reason to arbitrarily take money away from someone based on some magical amount of income.

http://www.cbpp.org/cms/index.cfm?fa=view&id=3090

Again, you're just saying that the top earners are keeping more. That's not a logical reason to steal the money they've earned. It's just typical class warfare.

 

[GuitarDaddy]

Income tax, benefits, and deductables, and special tax rates and abatements are all a form of class warfare. It is time to end the madness.

Go flat tax now.

A flat tax only works if it replaces everything! Income tax, payroll tax, property tax, sales tax, everything!

A flat tax for income tax only is just another fancy ponzy scheme designed by the rich for the rich.

 

[Phokus]

That is not a logical reason to arbitrarily take money away from someone based on some magical amount of income.

When you want to prevent the country from going into the toilet and the lower classes from starting a revolution and overthrowing the oligarchs, it makes perfect logical sense.

Again, you're just saying that the top earners are keeping more. That's not a logical reason to steal the money they've earned. It's just typical class warfare.

LMAO, those guys are paying a lower tax rate than many people who make LESS Than they do. Are you retarded? It's class warfare alright, but the rich are winning.

 

[Phokus]

Also, Pokerguy, for your absurd argument about the 'rich' and risk taking, here's the S&P 500 calculator:

http://www.moneychimp.com/features/market_cagr.htm

Unless you're investing over a very short time frame, you don't lose money. You have average double digit gains over a long period. You're absurd.

 

[PokerGuy]

When you want to prevent the country from going into the toilet and the lower classes from starting a revolution and overthrowing the oligarchs, it makes perfect logical sense.

In short "hey, they are smarter than me and make more. no fair! we must take their money away!"

LMAO, those guys are paying a lower tax rate than many people who make LESS Than they do.

The effective tax rate depends on a lot of factors. They are paying a lower effective tax rates than someone else. So what?

 

[PokerGuy]

Also, Pokerguy, for your absurd argument about the 'rich' and risk taking, here's the S&P 500 calculator:

http://www.moneychimp.com/features/market_cagr.htm

Unless you're investing over a very short time frame, you don't lose money. You have average double digit gains over a long period. You're absurd.

WRONG. You are clearly too stupid to understand investing. You earn a return for risk you take. There is the risk of losing money, and there is the opportunity cost of what you could make if you employ that capital elsewhere. You have to factor everything in, but pea brains can't handle those complexities, they just need to think in terms of "hey, durrrr, those guys make more than me. No fair!"

 

[Phokus]

In short "hey, they are smarter than me and make more. no fair! we must take their money away!"

Clearly everyone who's rich is smart and everyone who's poor is not. Those laid off software engineers whose jobs got shipped oversees must have iq's of 10 compared to warren buffet.

I imagine the number of rich dumbasses is going to increase exponentially when dumb as shit republicans are going to do away with the estate tax.

The effective tax rate depends on a lot of factors. They are paying a lower effective tax rates than someone else. So what?

Yeah read the report, it depends on shithead conservatives voting for lower capital gains taxes.

I just want to point out that Pokerguy is shrugging his shoulders over a regressive effective tax rate.

 

[Phokus]

WRONG. You are clearly too stupid to understand investing. You earn a return for risk you take. There is the risk of losing money, and there is the opportunity cost of what you could make if you employ that capital elsewhere. You have to factor everything in, but pea brains can't handle those complexities, they just need to think in terms of "hey, durrrr, those guys make more than me. No fair!"

LOL, why don't you play with the S&P calculator, you troglodyte. There is a risk of losing money in ANY GIVEN YEAR, but when you have millions/billions of dollars, you can ride out the losses for the long term and see a gain and the risk is diversified. And over the long term, you will see double digit gains in the broad market averaged out. Do you not know anything about investing at all?

 

[Thump553]

Address and dispute my points when you post, don't just post.

I lean towards the right of the political spectrum, but I think tax cuts for the wealthy are ridiculous.

It has nothing to do with morality or hatred for the rich. My opinion is that is better to give tax cuts to lower and middle class people to boast the economy than it is to give it to the rich.

My points.

About the wealthy.

1. Most wealthy people who own businesses, who make over $250k, are not filing their taxes as sole proprietorships, they're incorporated and they are paying corporate income tax rates, not personal income tax rates. So saying lowering the personal income tax rates creates jobs is ridiculous. It does not effect their businesses.

2. Giving the wealthy more money will not increase their personal spending. Most wealthy people already live below their means and already own all the things they want or need. If you gave a millionaire $1,000 , do you think they'll spend it? I think not.

* * *

Point 1) A quick correction-most small businesses are run as Sub-S corporations (or the LLC equivalent). Roughly this means they have the legal status and protections of a corporation, but are taxed as individuals. All the profit (or loss) passes through the corporation untaxed at all and goes right on the owner's individual income tax return. This avoids double taxation-the money being first taxed within the corporation, then taxed again when distributed to the owner. Until the number of owners becomes unwieldy this is almost always the preferred method.

I've organized lots of businesses and only a very small fraction of them were traditional C corporations.

Point 2) Economists are pretty much in agreement that a tax cut for the wealthy is one of the least effective means of stimulating the economy, and that has been proven over and over. The best stimulus is one where the money is spent rapidly over and over, on domestic goods or services.

What worries me most about this bill is how it codfies and accelerates the trend in the US to stratify wealth. Most galling (and little noticed) under this bill the estate tax exemption will be raised to $5,000,000 (and with very simple estate planning this is effectively a $10,000,000 exemption). Under this bill less than one quarter of one percent of the estates will be taxed by the federal government. (And don't talk to me about the family farm/ranch-there are special protections to preserve those rare instances.) Philisophically I agree with the Bill Gates/Warren Buffett mindset on this issue.

I understand why Obama made the choices he did, but I think he was wrong in this instance. I'd rather see all the Bush tax cuts expire than drive the country deeper into the hole for a mostly ineffective stimulus package that will stratify wealth further.

Government is like any other commodity or service-it costs money. It's time for us to stop pretending it doesn't and start paying for it. Our military do it with their blood, youth and sometimes lives. The rest of us shouldn't whine about a couple of dollars.

 

[kranky]

Things are just more complex now, given the ease of doing things globally.

It's true that many very wealthy people count on tax-free bonds and capital gains and dividends to pay for their spending, and that type of income is taxed less than Joe Sixpack's W-2 wages. But if you raise their taxes, you have to expect people will change what they are doing to avoid the tax hike.

100 years ago, you could tax the super-rich at 50% because they had practically no choice but to pay it. Today, they will move out of the country. They can still live in luxury, visit the US whenever they want, bank anywhere they want, just as easily as if they were living in the country. An internet connection, worldwide air travel, being able to buy anything from anywhere and have it delivered to you wherever you happen to be... that makes living in another country pretty painless compared to it would have been in the era of the robber barons.

When NJ raised their income tax on the very wealthy, they saw people leaving and a large drop in wealthy people moving into the state. http://www.forbes.com/2010/02/04/st...n-personal-finance-rich-avoid-new-jersey.html . These people often move to Florida (no income tax). Now if the Federal taxes go up, isn't it likely that you'd see similar results, except they would leave the country altogether? You can live like a multi-millionaire in Costa Rica for $100,000 a year. You have people in Mexico buying $300 round-trip flights for a very short trip over the border to Texas just to avoid the hassle of a ground border crossing. The very wealthy could move out of the country and would not see it as a huge burden to buy first-class airline tickets to hop a flight back to the US anytime and as often as they feel like it.

The problem is that very wealthy people are able to hire experts to help them avoid taxes. Whatever is done will have to account for the fact a lot of people will find ways to avoid the increase, and the revenues from an increase will not be what the authorities expect.

 

[trenchfoot]

The rich from the right will not be happy until they each get to incorporate themselves and ship their virtual corporate selves overseas in some obscure tax sheltered island in the middle of nowhere, while they sit in their mansions in terra firma USA living the good life net tax-free...wait a minute...oh shit....somebody just told me they're already doing that. My bad. (Kranky's post above).

 

[The-Noid]

Only about 5% of small incorporated businesses file as a c-corp (CPA society of Minnesota) which pays the corporate income tax.

They file as an s-corp which passes profit and loss through to the shareholders at their rate.

Your entire post is flawed. Try again.

 

[soulcougher73]

I'm here for my daily dose of GOP talking points. Feed me!!

 

[Patranus]

1. Most wealthy people who own businesses, who make over $250k, are not filing their taxes as sole proprietorships, they're incorporated and they are paying corporate income tax rates, not personal income tax rates. So saying lowering the personal income tax rates creates jobs is ridiculous. It does not effect their businesses.

Nope.

Only a C corp files corporate income taxes.
S coprs and LLCs pay on ones personal income tax.

Most companies file as a S corp or LLC to avoid the double taxation. Companies that from as a C corp usually are ones who will have an IPO as a S corps cannot become public.

The money is taxed at the owners rate. If the owner wants to reinvest, he is reinvesting after tax dollars which were taxed at their personal income rates. So you see how an increase in taxes directly impacts a S crops ability to run a company.

 

[Genx87]

People seem to forget the "rich" dont stuff their money into a matress. It is put into a bank. Which then dishes it out in the form of loans to people to build homes, business, cars, buy products. Or they invest into business. Taxing them is an opportunity cost on that money. Instead of going into a bank or business, it is put into the inefficient monster of big govt.

 

[IHateMyJob2004]

regarding:
2. Giving the wealthy more money will not increase their personal spending. Most wealthy people already live below their means and already own all the things they want or need. If you gave a millionaire $1,000 , do you think they'll spend it? I think not.

While the answer to this is that they might spend it, if you invert and say, if you give a poor person $1000, will they spend it, the answer IS yes.

 

[her209]

The money is taxed at the owners rate. If the owner wants to reinvest, he is reinvesting after tax dollars which were taxed at their personal income rates. So you see how an increase in taxes directly impacts a S crops ability to run a company.

I don't think that's right.

http://www.irs.gov/pub/irs-pdf/i1040se.pdf

Line 20

Depreciation is the annual deduction you must take to recover the cost or other basis of business or investment property having a useful life substantially beyond the tax year. Land is not depreciable.

Depreciation starts when you first use the property in your business or for the production of income. It ends when you deduct all your depreciable cost or other basis or no long use the property in your business or for the production of income.

 

[IHateMyJob2004]

If you increase the payouts to everyone who is poor or middle class, inflation will kick in raising prices of goods and services negating the benefits.

Increase the salaries of the working class, then the price tag of their products must go up.

Government gives the poor direct cash and you create an incentive to be poor and unproductive. The hosts on mainstream talk radio here were talking about this a few weeks ago, and I forget the exact numbers, but it basically went like - with all the government assistance going to "the poor", at the end of each year the person who works a minimum wage job has more money in his pocket than a person working for twice the minimum wage! That shouldn't be right, but it is. Someone who strives to be a Wal*Mart cashier for life should not be rewarded.

If I were King, I'd simultaneously raise taxes on "the rich" and reduce benefits to "the poor". It irritates so many who truly work hard and get to watch a second culture in this country sit on their fat asses waiting for their link card to be refilled each month.

I have a funny feeling that your quality of life is in fact better than a Wal-mart cashier.

I make much more money than my brother and it is obvious. I have a new car, big home. He has an old car and rents a crappy condo.

As for the poor being unproductive, someone has to chsh you out. That person, believe it or not, is an active member of society.

Anyways, I don't know what you see, but all I know is that where I live the people making $20K a year are not as well off as those making $80K a year.

 

[MooseNSquirrel]

Because there is not a single piece of evidence that the Bush tax cuts had any effect whatsoever on the economy.