Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan

[sciwizam]

Originally posted by: blahblah99

Originally posted by: winnar111
http://abcnews.go.com/Business...tory?id=6975547&page=1

President Barack Obama's tax proposal ? which promises to increase taxes for those families with incomes of $250,000 or more -- has some Americans brainstorming ways to decrease their pay, even if it's just by a dollar.

A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.

So far, Obama's tax plan is being looked at skeptically by both Democrats and Republicans and therefore may not pass at all.

"We are going to try to figure out how to make our income $249,999.00," she said.

"We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama's tax plan," she added. "Why kill yourself working if you're going to give it all away to people who aren't working as hard?"

The attorney says that in order to decrease her income she'll have to let go of clients, some of whom she's been counseling for more than a decade.

"This means I'll have to tell some of my clients we can't help them and being more selective in general about who we help," she said. "I hate to do it."

Obama's budget proposal calls for $989 billion in new taxes over the next 10 years, most of which will be earned from increased taxes on individuals who make more than $200,000 and from families who make more than $250,000.
The expiration of the Bush administration's tax cuts at the end of 2010 would garner an estimated $338 billion, $179 billion would come from the elimination of some itemized deductions for higher-income taxpayers and $118 billion would be brought in from a hike in the capital gains tax. The remaining $353 billion would come from taxes on businesses.

Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.

"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."

"Generally it means being less productive," she said.

"The motivation for a lot of people like me ? dentists, entrepreneurs, lawyers ? is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."

Gary Schatsky, a financial adviser and the president of N.Y.-based Objectiveadvice.com, said that it is possible to successfully remove yourself from the bracket Obama plans to target in his new plan.

"It's very possible that there are plenty of things you can do with general tax planning techniques ? attempting to recognizes loses, pushing gains to years when your income is lower and increasing retirement plan contributions ? to come below $250,000," said Schatsky.

"If the value of all your itemized deductions goes from a 33 percent level to a 28 percent level than there would be a reason for people to do dramatic things to reduce their incomes," said Schatsky.

But Colorado dentist Poczatek says those who support the increase in taxes misunderstand what it means for those who will end up paying more.

"I'd like these people to know that we pay a lot of taxes, and have been paying a lot of taxes through the past administration," said Pcozatek.

"We make a lot of money, it's true, but we also already pay a lot of taxes," she said.

"So maybe we got a little bit successful but we worked very hard," she said. "It's taken us over 30 years and it didn't happen overnight. Every day is a lot of work.

"We're working for it and we're still overtaxed."



Welcome to the new USA: Where hard work only matters to a limit and it makes more sense to work less and/or have a spouse quit work than it does to be a 'maker of things'. Instead you can be a maker of less things.

I know numerous 2 income families in this ballpark. They're certainly preparing for the class war Zero has declared.

Good for these people; they are preserving the American dream.

Please, tell them to ask the 50,000 UBS clients how to sidestep taxes.

Why ask 50000 people, when you can ask the Treasury Secretary?


common, it was too good of a setup.

 

[spidey07]

Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

 

[Brainonska511]

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

Yes.... stealing :roll:. When I think of fabulous places in the world to live, I think of Ecuador, where I too can have my own armed escort to protect me from the local thugs and live on a compound.

 

[alchemize]

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

I have a 55 yo friend who is doing the same - going to Aruba to become a permanent citizen. VP, pretty good bag of coins going with him.

Anecdotes roll up to statistics....

 

[BigDH01]

Originally posted by: alchemize

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

I have a 55 yo friend who is doing the same - going to Aruba to become a permanent citizen. VP, pretty good bag of coins going with him.

Anecdotes roll up to statistics....

Let me know when they actually go.

 

[mugs]

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

Sweet. :thumbsup: More work available for the people who recognize that this country has given them as much as they're expected to give back. Maybe his time in Ecuador will lead him to the realization that if he lived in Ecuador, he would not have been as prosperous as he was. Either way, thank your friend for making room in the workforce for other qualified people.

 

[blahblah99]

Originally posted by: miketheidiot

Originally posted by: ProfJohn

Someone who makes $250,000 at 35% pays $87,500 in taxes

Someone who makes $260,000 at 39% pays $101,400 in taxes.

So that extra $10k in income costs them $13,900 in taxes.

You would be a fool to not cut your income if you are close to that magical $250,000 mark. Notice that most of these people are self employed and will just take some time off in order to cut a little bit of their income. No where does it say someone is going to quit a job making $70,000.

self ownage of the week

Now we all know ProfJohn doesn't make 260k a year, let alone does his taxes.

 

[ponyo]

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

lol. I'll offer you the opposite. My older cousin and his wife both own their own business. He owns contracting company and she is pediatric dentist with 3 offices. Both had record year last year and doing even better this year. Both are looking to expand, grow their business, and open more offices. Now is a great time. Labor is cheap and plentiful. Vacant retail space is overflowing and you have your pick on prime real estate. Landlords are offering all kinds of discounts and incentives for potential tenants. They're too busy making money to worry about petty politics. They could easily retire and never have to work another day but both are happily working. Obama plan is not even on their "need to worry" list. Not everyone is suffering in this economy and not everyone will "work less" because of the Obama plan. I haven't met one successful person who's planning business decision based on the proposed Obama plan.

 

[alien42]

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

sounds like he is as big of a douchebag as you. i also guarantee that he has lost far more in recent investment value under GWB then a few decades worth of a slightly higher taxes.

 

[quest55720]

Originally posted by: alien42

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

sounds like he is as big of a douchebag as you. i also guarantee that he has lost far more in recent investment value under GWB then a few decades worth of a slightly higher taxes.

If you think a slightly higher taxes will pay for 4 trillion dollar budgets I have a nice bridge to sell you real cheap. The whole country is going to be on the hook for Obama and his reckless spending.

 

[miketheidiot]

the premise of this thread is retarded. everyone already does everything they can to sidestep taxes.

 

[alien42]

Originally posted by: quest55720

Originally posted by: alien42

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

sounds like he is as big of a douchebag as you. i also guarantee that he has lost far more in recent investment value under GWB then a few decades worth of a slightly higher taxes.

If you think a slightly higher taxes will pay for 4 trillion dollar budgets I have a nice bridge to sell you real cheap. The whole country is going to be on the hook for Obama and his reckless spending.

clearly you already bought the bridge that GWB sold you, talk about reckless spending.

 

[quest55720]

Originally posted by: alien42

Originally posted by: quest55720

Originally posted by: alien42

Originally posted by: spidey07
Just to give anecdotal evidence...

My neighbor owns a successful consulting business. He's calling it quits. He's done with how much he is getting raped and is moving to Ecuador to enjoy the fruits of his labor. He's 48.

His exact words - "I'm done with this shit, it isn't worth it anymore when they keep stealing from me." I don't lie.

sounds like he is as big of a douchebag as you. i also guarantee that he has lost far more in recent investment value under GWB then a few decades worth of a slightly higher taxes.

If you think a slightly higher taxes will pay for 4 trillion dollar budgets I have a nice bridge to sell you real cheap. The whole country is going to be on the hook for Obama and his reckless spending.

clearly you already bought the bridge that GWB sold you, talk about reckless spending.

I was against the spending when GWB did it. I am against it now that Obama is doing it. This government has been spending to much for a long time. It is time for the government to do what the rest of us have to do and reduce spending. If Obama is starting at 4 god damn trillion dollars I hate to see his budgets in 2 years with UHC what 6-8 trillion dollar budgets? Bush started this country on the road to bankruptcy Obama is going to finish the job in record time.

 

[nobodyknows]

Originally posted by: CPA
My wife is quitting at the end of March. The expected tax hikes is one of the reasons why. I can do just as well, given the tax credits, removal from AMT and recouping deductions from making less overall household income.

Then you must like Obama's plan??

 

[miketheidiot]

Originally posted by: nobodyknows

Originally posted by: CPA
My wife is quitting at the end of March. The expected tax hikes is one of the reasons why. I can do just as well, given the tax credits, removal from AMT and recouping deductions from making less overall household income.

Then you must like Obama's plan??

props to cpa and his wife for opening a job up for someone who needs it more. :thumbsup:

 

[JSt0rm]

Originally posted by: miketheidiot

Originally posted by: nobodyknows

Originally posted by: CPA
My wife is quitting at the end of March. The expected tax hikes is one of the reasons why. I can do just as well, given the tax credits, removal from AMT and recouping deductions from making less overall household income.

Then you must like Obama's plan??

props to cpa and his wife for opening a job up for someone who needs it more. :thumbsup:

Yeah I see that situation as a net positive.

 

[Zebo]

Originally posted by: blahblah99

Originally posted by: miketheidiot

Originally posted by: ProfJohn

Someone who makes $250,000 at 35% pays $87,500 in taxes

Someone who makes $260,000 at 39% pays $101,400 in taxes.

So that extra $10k in income costs them $13,900 in taxes.

You would be a fool to not cut your income if you are close to that magical $250,000 mark. Notice that most of these people are self employed and will just take some time off in order to cut a little bit of their income. No where does it say someone is going to quit a job making $70,000.

self ownage of the week

Now we all know ProfJohn doesn't make 260k a year, let alone does his taxes.

People ARE this stupid. It seems many in this thread and article too don't understand graduated tax tables.

 

[ebaycj]

Originally posted by: ProfJohn

Originally posted by: eskimospy

Originally posted by: ProfJohn
Ok... so my math was a little simplistic.

But it is still a fact that the extra $10k in income results in another $3900 in tax liabilities, not including state taxes.

Also, it would take a fool to not admit that there is a HUGE difference between 33% tax and 39% tax. If you are self employed and close to the $250,000 mark it would make sense to take an extra week off or work a few 4 day work weeks in order to not pay those extra taxes.

Why would it make sense to take time off to avoid the $250,000 mark? Your math wasn't simplistic, it showed us you don't understand how the tax code works because you thought going past the $250,000 mark would suddenly make the 39% rate apply to all your income instead of just the income over $250,000 and so you thought earning that extra $10k actually COST you money... which is completely and utterly wrong.

I know how the tax code works, but I didn't want to do all that fancy math

Interesting that your "laziness" also dishonestly skews the numbers in favor of your argument.


And if it makes sense for a self-employed person making 260k to take an extra week off (thereby reducing income by 10k to 250k) just to avoid paying an additional $600 in taxes is ridiculous.

He was just fine paying $3300 per $10,000 on the previous 50,000 or 60,000 he made.

To avoid making $10,000 just because your tax rate on that $10,000 would be increased from $3300 to $3900 is retarded. He voluntarily threw away $6000 of cash in his pocket to avoid paying an extra $600. Tell me how much sense that makes?

 

[winnar111]

Originally posted by: ebaycj

Originally posted by: ProfJohn

Originally posted by: eskimospy

Originally posted by: ProfJohn
Ok... so my math was a little simplistic.

But it is still a fact that the extra $10k in income results in another $3900 in tax liabilities, not including state taxes.

Also, it would take a fool to not admit that there is a HUGE difference between 33% tax and 39% tax. If you are self employed and close to the $250,000 mark it would make sense to take an extra week off or work a few 4 day work weeks in order to not pay those extra taxes.

Why would it make sense to take time off to avoid the $250,000 mark? Your math wasn't simplistic, it showed us you don't understand how the tax code works because you thought going past the $250,000 mark would suddenly make the 39% rate apply to all your income instead of just the income over $250,000 and so you thought earning that extra $10k actually COST you money... which is completely and utterly wrong.

I know how the tax code works, but I didn't want to do all that fancy math

Interesting that your "laziness" also dishonestly skews the numbers in favor of your argument.


And if it makes sense for a self-employed person making 260k to take an extra week off (thereby reducing income by 10k to 250k) just to avoid paying an additional $600 in taxes is ridiculous.

He was just fine paying $3300 per $10,000 on the previous 50,000 or 60,000 he made.

To avoid making $10,000 just because your tax rate on that $10,000 would be increased from $3300 to $3900 is retarded. He voluntarily threw away $6000 of cash in his pocket to avoid paying an extra $600. Tell me how much sense that makes?

Yeah, if you value your leisure time at nothing.