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dxing
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Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:47 am

The article says it all. Come January 1st there won't be a single indivdual or family unaffected by a tax hike in this country. Some will be hit worse than others. As for me, the student loans I took out to help cover my oldests college will no longer be deductible. I get hit with the marriage penalty again, my tax bracket goes up, although not as much as the lowest earners, and I guess I'll be holding my stocks a little longer now as well. Seperately and not included in the story, if you own gold and sell, anything above the 600 dollar mark will now have to be reported. Since an ounce is going for right around $1200 that's just about everything. Sucks to be a gold bullion dealer. Anyway, where will it hit you?

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=541131

[Edited 2010-07-21 22:02:39]
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fr8mech
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:53 am

Looks like I get hit with the marriage penalty and get hit with an income tax increase. I will also get slammed on dividends. Part of my compensation package is company stock and it pays a dividend every quarter.

I thought we weren't going to get a tax increase? Must be the new math.

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LAXintl
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 7:10 am

I would not worry about it too much, as even the democrats know action is required to stave off a major snap back.
Even if in a post election lame duck session I expect action. Madame Pelosi even mentioned this in one of her recent California interviews.

So relax, no need to panic yet.
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dxing
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:15 am

Quoting fr8mech (Reply 1):
and it pays a dividend every quarter.

Yep, I had forgotten that, I'll take a whallop there as well.
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Yellowstone
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:26 am

Wow, taxes are going way up! All the way back to where they were under... Clinton. Who governed over the most prosperous time in recent American history. You'll pardon me if I don't worry too much.
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MingToo
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:30 am

Quoting dxing (Thread starter):
The article says it all. Come January 1st there won't be a single indivdual or family unaffected by a tax hike in this country.

Far better to take the pain of tax rises than to keep trying to borrow $1000B every year from the Chinese and Saudi's who at some point will baulk at lending more. Tax increases and / or government spending cuts (and consequent personal spending cuts) are the only way of dealing with the problem.

You can blame a lot of this on big government. That's responsible for a lot of the problems in the UK. But it is also personal spending that is key. The west just isn't as rich as we like to think. We've tried to paper over that fact temporarily with debt bubbles on the part of both consumers and governments. It was bound to fail eventually.

Europe has it's problems, but all of the countries involved are dealing with their problems through austerity and tax increases including the UK. The Euro has its problems, but it has at least forced them to deal with it.

I'd suggest that the US doesn't want to be in the position of being the only target for speculators. The dollar may have more weight and the ability to weather things a little better, but pushing it too far would be an error. Housing is struggling with mortgages under 5%. How would it be doing if they were 8%, 10% or more ?
 
dxing
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:11 am

Quoting Yellowstone (Reply 4):
Clinton. Who governed over the most prosperous time in recent American history.

So in other words, if we just raise taxes the economy will recover and all will be well. If that is so, what happened in 2000-2001? The first of the Bush tax cuts didn't take effect until later in the year. When will people get it throught their heads that a high level of taxation has absolutely no corelation to how well the economy is doing? If that were the case then no boom would have occured in the 1980's or 1960's after tax cuts were passed. Do you think the President will cut the deficit with this new found cash or spend it?
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MingToo
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:17 am

Quoting dxing (Reply 6):
Do you think the President will cut the deficit with this new found cash or spend it?

The UK has gone for cutting its deficit with 80% coming from spending cuts and 20% coming from tax rises. This seems a pretty good ratio considering the bloated government sector here.
 
dxing
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:21 am

Quoting MingToo (Reply 7):
The UK has gone for cutting its deficit with 80% coming from spending cuts and 20% coming from tax rises. This seems a pretty good ratio considering the bloated government sector here.

Yes but just a few weeks ago our President was upset with Europes leaders for not going along with his "spend more now" policy.
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MingToo
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:32 am

Quoting dxing (Reply 8):
Yes but just a few weeks ago our President was upset with Europes leaders for not going along with his "spend more now" policy.

Yes, we don't want your socialist ideas over here thanks !  

Seriously though, I think one point that is often missed is a different between government spending in Europe (or at least parts of it) and in the US. European governments are more effective at spending the tax money which is why people there don't mind it so much. While the top graduates from the US (or the UK) go into Wall Street, in France they do into the government.

That's why they have the best healthcare system, because the money is spent effectively. And worth noting that it is far more like the US system than Canada's or the UK's, it just doesn't have the out of control costs like the US. And it's the only one I know of with no 'death panels' either government or insurance company. If the doc says you need it, you get it.

That's why the republicans focussed on slating the Canadian and UK systems and didn't try to compare with France.

But the bigger picture is that in the end whether it is tax rises or spending cuts we are going to have to take a hit on our standard of living. We can't just keep pretending that it will all be ok just so long as we sell each other our houses at a higher and higher price.
 
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LTU932
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:39 am

You're complaining about taxes? Have a look at Germany, where in times of crisis, the government refuses to raise taxes for people with higher incomes, even though many rich people have said that they were willing to pay more taxes in order to help our country out of the crisis. No raise in taxes for people with high incomes and high fortunes, but they're cutting down on parent benefits for low income parents and people under welfare (although those benefits remain in place for high income people), raise the premiums of the public health insurance (and disguise that as a health reform), prices for medication remain high (and those prices aren't controlled, they're set by the big pharma companies while in other EU countries, those prices are controlled), people with high income can only have private health insurance anyway), and increase the social unfairness, and they lowered the VAT for hotel stays (which we call the Mövenpick-Steuer).

The government has clearly forgotten that this is a social market economy, where apart from the fact that this is a market economy, the social aspects have to be taken into consideration. I still believe in the social market economy because it gave Germany prosperity in the 50's. And the worst part right now: The reduced VAT for hotel stays is suspected to have been lobbied for by Mr Michael Mronz, who happens to be the boyfriend of Foreign Minister and Vice Chancellor Guido Westerwelle. So basically, Mr Mronz has (possibly) taken advantage of his boyfriend's position in the government to press through that tax break.

So, while you Americans complain about tax hikes across the board, many of us Germans, including many high income people and people with fortunes over 1 Mio Euros, actually demand a tax hike for that group, to ease the pressure on regular workers and lower income people, who are indirectly getting milked by the liberal-conservative coalition of Union and FDP.
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FlyPNS1
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 1:08 pm

Quoting dxing (Reply 6):
So in other words, if we just raise taxes the economy will recover and all will be well.

No, but your doom and gloom about tax increases destroying the economy is also not right. We can't rely on perpetual tax cuts to boost our economy as taxes can only go so low.

Quoting dxing (Reply 6):
When will people get it throught their heads that a high level of taxation has absolutely no corelation to how well the economy is doing?

And a low level of taxation doesn't either. Right now, we have some of the lowest tax rates in the past 50 years....yet our economy is in the some of the worst shape it's ever been.

Quoting dxing (Reply 6):
Do you think the President will cut the deficit with this new found cash or spend it?

As you have reminded us before, the President doesn't make the budget.
 
Ken777
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 1:45 pm

Quoting FlyPNS1 (Reply 11):
And a low level of taxation doesn't either. Right now, we have some of the lowest tax rates in the past 50 years....yet our economy is in the some of the worst shape it's ever been.

Ain't that the truth! I keep thinking back to the days of Ike & JFK. But in those days I believe that people understood the importance of taxes and they were more willing to have taxes spent by their government.

Today it seems that all too often individuals could care less about the government or this country. They just go along with the Tea Party rants because they figure they might save a few bucks a month in taxes.

I can see Obama and the Democrats working to extend parts of the Bush Tax Cuts - but only at the bottom of the scale. THe top tier rate is a joke when you consider that they also get to skip out on SS taxes.

The real taxes I will be hit with will probably be property taxes, increases in fuel taxes, etc. Sin taxes will also have a good chance of increase, but I'm passed those days of sinning.

As a first step on government spending - lets cut politicians' budgets. Cut staff funding 25% and their travel budgets in half. That won't clear out the deficit, but will at least demonstrate some leadership on their part.
 
Arrow
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 3:30 pm

Quoting MingToo (Reply 9):
That's why the republicans focussed on slating the Canadian and UK systems and didn't try to compare with France.

Yeah, and they still had to grossly misrepresent the UK and Canada to make us look bad. But that's your only option if the facts don't back up your ideology.

When a country gets in way over its head with unsupportable debt -- like the US -- it has very few choices as to how to deal with it. The myth persists that if you cut taxes, you can grow your way out of trouble. That has had an element of truth to it in the past, but not now. The US has to raise taxes AND cut spending. The great irony in all this is that Canada, that festering cesspool of socialism, has lower effective corporate taxes than the US.
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MingToo
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:00 pm

Quoting Arrow (Reply 13):
Yeah, and they still had to grossly misrepresent the UK and Canada to make us look bad. But that's your only option if the facts don't back up your ideology.

I ripped up my knee skiing in France a couple of years ago. Went to the doctor in the resort the next day. He took 3 or 4 x-rays, examined it, drained the blood and muck out and prescribed me a lot of happy pills. Total cost $140 (converted). And that is with no government money involved as I'm from the UK not France. I doubt it would be under $1000 in the US.

Got back to the UK, saw my doctor the next day, he referred me, saw a consultant within a week, had an MRI within another week, lots of pre-op physio and an ligament reconstruction 3 months later (the minimum from a medical point of view). Can ski fine now although it gets a little tired. No health service could have done this better, that was as good as it gets for this problem. All on the NHS. Zero cost to me. And its non-essential, you can live without an ACL (you just can't ski).

Anecdotes are not always representative of course, but I've had no issues here.

And I pay less taxes for it than people in the US. This figure doesn't seem to be quoted often, but government spend on health care per capita is $2800 in the UK and $3000 in the USA (slightly old figures probably). We are taxed LESS than people in the US for our healthcare. They could have the NHS for everyone, still pay their private health AND have a $200 tax cut. Costs must be way out of control.
 
slider
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:20 pm

Income tax rates are climbing for starters, this is already going to happen.

The current six personal income tax brackets will change as follows: from 10% to 15%, from 15 to ...28, 25 to 31, 28 to 36 and 35 to 39.6% respectively.

The marriage penalty returns, child tax credit halved, capital gains and dividend taxes go up, massive cuts in itemized deductions and exemptions.

Health savings accounts change dramatically. Prepare to see MAJOR tax increases and added costs of private insurance in advance of the Obamacare debacle…it’s already happening with many doctors opting out of Medicaire and refusing coverage.

The Alternative Min Tax (AMT) will capture 28 million families next year, up from a mere 4 million this year (remember Obama talking about giving working class people a tax break? LIE.)

Student loan interest deductions go bye-bye.

Teachers can no longer deduct classroom expenses.

Charitable IRA contributions—toast.

Small business get raped bigtime with changes in expense vs depreciation rules. There is a huge body of discussion on this one if you want to search for it, but considering the majority of jobs in this country are in small business, this adminstration’s refusal to give a shit about the economy or the citizenry will only punish small business owners more. Any surprise then why there’s no job growth in the private sector?

Also, there is a proposed internet sales tax AND Democrats are discussing a 1% transaction tax that would hit all consumers across the board for EVERY SINGLE item purchased and every retail or monetary transaction in the nation.

And the next massive scam will be the carbon trading scheme—cap and tax. Waxman is pushing hard on it.

Our own American Revolution was fought for less.

http://news.cnet.com/8301-13578_3-20009603-38.html
http://www.washingtontimes.com/news/...3rd-largest-single-day-debt-boost/
 
Arrow
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:41 pm

Quoting MingToo (Reply 14):
Can ski fine now although it gets a little tired. No health service could have done this better, that was as good as it gets for this problem. All on the NHS. Zero cost to me. And its non-essential, you can live without an ACL (you just can't ski).

My wife had a similar experience at Whistler (there's a top-notch clinic at the bottom of the hill). Her knee didn't need any major intervention fortunately, but she got all the diagnostics done on the spot. No cost. And me -- well, I've got more medical issues than you can imagine and have likely cost the medical system nearly $100K just in the last six months, 100% covered by insurance.

You're right -- costs everywhere are escalating rapidly -- but nowhere is it worse than in the US. And I don't see it getting better down there.

Quoting Slider (Reply 15):
lso, there is a proposed internet sales tax AND Democrats are discussing a 1% transaction tax that would hit all consumers across the board for EVERY SINGLE item purchased and every retail or monetary transaction in the nation.

Welcome to the real world where ya gotta pay for your excesses. We went through this more than a decade ago, and fixed most of it (there are some lingering time bombs like health care, but they are manageable if the politicians could just grow a pair). I think your three biggest issues are unfunded entitlements (e.g. SS), exploding health care costs (unfixable without a major rework), and military expenditures. Unless you get those under control, you're in deficit doo doo for a very long time (or until the world stops buying your debt).

And if you think you can accomplish all that without across the board tax increases, you're delusional. It will be painful.
Never let the facts get in the way of a good story.
 
slider
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:49 pm

Quoting Arrow (Reply 16):
Welcome to the real world where ya gotta pay for your excesses.
Quoting Arrow (Reply 16):
And if you think you can accomplish all that without across the board tax increases, you're delusional. It will be painful.

We CAN fix it all without tax increases. It's quite simple really. It's called REDUCING THE SIZE OF GOVERNMENT and cutting spending.

There is NO control right now. None. Time to recycle DC entirely and put them all out of jobs for their unconstitutional wickedness.
 
MingToo
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:53 pm

Quoting Arrow (Reply 16):
My wife had a similar experience at Whistler (there's a top-notch clinic at the bottom of the hill). Her knee didn't need any major intervention fortunately, but she got all the diagnostics done on the spot.

Glad she didn't rip it up like I did. In my experience of Whistler, the biggest danger was slipping over in the rain .. but then I was a cheapskate and went in the last 2 weeks of November.

I think there is a level of 'over-medication' in the US system because of its profit hungry nature. Comparing with a friend who lives in the US and also tore his ACL this was quite obvious. Post-op he had to lie on his sofa for a couple of weeks with an expensive looking machine that gradually bent his knee for him more and more each day. I was just told to get it mobile as soon as possible and bend it forcefully. I was off crutches on day 5 and driving (carefully) by day 10. He now skis with a full sports brace, I don't need one, I just use an elastic bandage to help with the proprioception (the brain can use the receptors on the skin to replace the missing ones from the ligament .... very cool).

The often quoted figures of 3 times as many MRI machines in America for me raises the question of whether 2/3 of MRI's are done unnecessarily (profits and lawsuits).

Not too off-topic I hope ... but healthcare one way or the other is a big part of the tax / spend / deficit problem. Fix those costs and that's a big part of the problem solved.
 
FlyPNS1
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 4:55 pm

Quoting Slider (Reply 17):
It's called REDUCING THE SIZE OF GOVERNMENT and cutting spending.

You are correct, but you have to be prepared for the consequences. Massive cuts to government spending will mean millions more in layoffs. Plus, cuts to Medicare/SS will mean people have to save more money and spend even less. Reduced spending will mean even more layoffs.

Why do you think conservatives have never tried major spending cuts to go along with their tax cut plans? They know what the consequences will be.
 
Arrow
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 5:00 pm

Quoting Slider (Reply 17):
We CAN fix it all without tax increases. It's quite simple really. It's called REDUCING THE SIZE OF GOVERNMENT and cutting spending.

Sorry, but you need both. If you try it by just cutting spending, you'll have a very small government, no military, and no social safety net for that vast chunk of your society that is getting old and sick. As I said earlier, the idea that you can grow your way out of this is a myth; the US is still #1 for the time being, but not the economic superpower it was. And the US ability to fund its debt on an ongoing basis depends on global confidence that you will make prudent financial decisions -- and that includes growing tax revenues aimed at debt reduction. The US is still, by far, the richest nation on earth and skimming a few more dollars off the top won't change that much.
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Tugger
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 5:11 pm

Quoting dxing (Reply 6):
So in other words, if we just raise taxes the economy will recover and all will be well. If that is so, what happened in 2000-2001? The first of the Bush tax cuts didn't take effect until later in the year. When will people get it throught their heads that a high level of taxation has absolutely no corelation to how well the economy is doing? If that were the case then no boom would have occured in the 1980's or 1960's after tax cuts were passed. Do you think the President will cut the deficit with this new found cash or spend it?

You do realize that your statement is saying that it doesn't matter if the taxes are high? That it does not have an effect, a correlation, to the economy? So if there is not connection then why are you concerned? PS I know what you are trying to say, but you are not saying it correctly. Also remember that every bit of spending ultimately ends up in someones pocket. It doesn't just vaporize into thin air. And when the government spends it, it tends to go into the pockets of US citizens not out of the country (of course what people spend the money on is a different story).

I believe that Reagan had the best tax structure in place when he left office. He understood that you needed to cut taxes so people kept most of their earnings but that you needed tax income as a nation to support your defense, welfare, infrastructure and other budgetary needs. I believe the taxes were mostly the same through the Clinton era and it was only under Bush II that they changed radically.

We need to go back to Reagan era taxes, he had it right.

Tugg
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D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 5:27 pm

Quoting tugger (Reply 21):
We need to go back to Reagan era taxes, he had it right.

He might have had it right for the situation we were in at that moment, but we are not in that situation now. Forgetting about who to blame and focussing on what to do, we can't simply say "things were good under XXX" and revert to whatever policy was in place back then. It might be putting a square peg in a round hole.

To do the right thing vis-a-vis tax policy requires a lot of thought, and thought is something that Americans, especially conservatives on this issue, simply do not want to do. It's just to easy and too popular to say "lower taxes."
 
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Tugger
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 5:43 pm

Quoting D L X (Reply 22):
He might have had it right for the situation we were in at that moment, but we are not in that situation now. Forgetting about who to blame and focussing on what to do, we can't simply say "things were good under XXX" and revert to whatever policy was in place back then. It might be putting a square peg in a round hole.

To do the right thing vis-a-vis tax policy requires a lot of thought, and thought is something that Americans, especially conservatives on this issue, simply do not want to do. It's just to easy and too popular to say "lower taxes."

You do realize that the Reagan era taxes were higher than what the taxes are about to revert too don't you? Also there is never a "right selection" of taxes, the market just adjusts to what is in the rule book. The biggest problem the market has is when things change, they want stability and the ability to plan over the long term what is going to happen and changes frustrate that.

Basically with planning I net out to paying just 7% of my income in taxes, and I am supposedly a high earner in a high tax bracket but I plan very thoroughly to minimize the impact. Based on projections I may end up paying another 2% or so in taxes next year if taxes revert to where they were. Do I want to pay that "extra"? Not if I don't have to, and I will re-plan based on what happens to minimize any impact. We all know that Warren Buffett claims to pay a lower percentage of taxes than his assistant, and I have yet to see wealthy people taxed into oblivion.

It's all about managing your money to maximize your return.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:01 pm

Quoting tugger (Reply 23):
You do realize that the Reagan era taxes were higher than what the taxes are about to revert too don't you?

Am I incorrect that he lowered them from Carter's confiscatory levels though? I'm assuming you were referring to his lower levels. Clinton raised them.

Quoting tugger (Reply 23):
Also there is never a "right selection" of taxes, the market just adjusts to what is in the rule book.

I think that's right too. But try explaining that to people. It's very hard for people to rationalize that higher taxes can "grow the pot" and make us all richer. (If managed correctly.) The only thing people think about when they vote is what percentage of their paycheck goes into their hands, and unfortunately, little effort is spent on thinking about how much you can buy with that paycheck. In other words, if Americans were told that raising their taxes from say 25% to 30% would make the price of bread fall from $3/loaf to $1/loaf, we'd rather have the $3/loaf bread instead of paying another 5% in taxes.

Quoting tugger (Reply 23):
The biggest problem the market has is when things change, they want stability and the ability to plan over the long term what is going to happen and changes frustrate that.

I think that's also right. I would support a constitutional amendment setting the tax rates so that it would take a lot more effort to change them. That would give the market a very clear crystal ball into the future, regardless of which party might win the next elections.

Quoting tugger (Reply 23):
Basically with planning I net out to paying just 7% of my income in taxes

Careful. There is a lot of concern against people not paying their fair share in taxes. It is often quoted that certain people pay nothing in taxes at all.
 
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Tugger
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:13 pm

Quoting D L X (Reply 24):
Careful. There is a lot of concern against people not paying their fair share in taxes. It is often quoted that certain people pay nothing in taxes at all.

Oh I pay my fair share, and I do pay in the top bracket, the key thing is that I take all the proper deductions and manage my money such that the taxable portion is minimized. Remember it not your income that you pay taxes on, its your "adjusted gross income". Just gotta adjust properly. And that is what everyone should do.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:26 pm

Quoting tugger (Reply 25):
Oh I pay my fair share, and I do pay in the top bracket, the key thing is that I take all the proper deductions and manage my money such that the taxable portion is minimized. Remember it not your income that you pay taxes on, its your "adjusted gross income". Just gotta adjust properly. And that is what everyone should do.

Completely agree.

I think if Americans understood tax policy better, there'd be less complaining. But in general, people are uninformed about how the decisions they make will affect their taxes. And of course, politicians have little interest in explaining it to people - political football is a game best played in the dark.


BTW, am I correct to assume that you are not in favor of the flat tax?  
 
dxing
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:37 pm

Quoting FlyPNS1 (Reply 11):
No, but your doom and gloom about tax increases destroying the economy is also not right.

They won't destroy the economy, but they certainly don't help it either.

Quoting FlyPNS1 (Reply 11):
And a low level of taxation doesn't either.

Yet every time taxes were lowered, the government ended up making more money.....go figure.

Quoting FlyPNS1 (Reply 11):
And a low level of taxation doesn't either. Right now, we have some of the lowest tax rates in the past 50 years....yet our economy is in the some of the worst shape it's ever been.

Which ought to give you some idea of which is the horse and which is the wagon.

Quoting FlyPNS1 (Reply 11):
As you have reminded us before, the President doesn't make the budget.

OK, even more ridiculous, do you think Speaker Pelosi and Senator Reid will use any extra money collected to reduce the deficit?........You know, putting those two names in the same sentence with the word "reducing" just looks stupid.

Quoting FlyPNS1 (Reply 19):
Why do you think conservatives have never tried major spending cuts to go along with their tax cut plans? They know what the consequences will be.

Who says they haven't? During the Clinton years they managed to reduce spending even though they couldn't get a tax cut through. That's been the problem, it's always been one or the other. Several months from now the governments punting squad, otherwise known as the deficit reduction committee isgoing to come back with their report. Since virtually 3/4 of government spending is in entitlements and can't be touched without changing the law that supports them, what do you bet there will be a call for some sort of giant tax hike to cover those entitlements? Just like in Indonesia, that will be the second wave of the Tax Tsunami. That's usually the one that kills a bunch of people that thought it was safe to go back near the water.
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D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:42 pm

Quoting dxing (Reply 27):
Yet every time taxes were lowered, the government ended up making more money

I can think of a very recent time where lowering taxes took us from a surplus to a deficit.

I'm just sayin'.
 
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fr8mech
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:43 pm

Quoting Yellowstone (Reply 4):
Wow, taxes are going way up! All the way back to where they were under... Clinton. Who governed over the most prosperous time in recent American history. You'll pardon me if I don't worry too much.

Really not the point...I thought the boss said he wouldn't raise taxes.

The prosperity in the Clinton years wasn't hobbled by the largest deficit (as a percentage of GDP and raw number, I believe) in US history. There wasn't a 'spend what-ever the hell you want' congress and administration. Oh, and does anyone remember the Peace Dividend? That was where we didn't have to spend near the money we were spending on defense because the Soviet Union was...gone.


Oh yeah, where was unemployment under Clinton? Taxes are job killers. I wonder if we'll hit 12%? 15%? I guess it doesn't matter, The Triumvirate will just keep handing out money after they print it.

Sorry, this administration and congress are lying to us again.

(103,892)

[Edited 2010-07-22 11:46:08]
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Ken777
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 6:43 pm

Quoting Slider (Reply 15):
The current six personal income tax brackets will change as follows: from 10% to 15%, from 15 to ...28, 25 to 31, 28 to 36 and 35 to 39.6% respectively.

I think that the Democrats will work to save the cuts at the lower end. There is no reason to NOT return the top rates to the pre-Bush years. The Bush Tax Breaks for The Rich certainly didn't help protect us from the deficit, or the Great Recession.

Quoting Slider (Reply 15):
The marriage penalty returns, child tax credit halved, capital gains and dividend taxes go up, massive cuts in itemized deductions and exemptions.

While I would like to see the marriage penalty abolished (on the income tax side) I don't believe we ha e the money to pay out the Chid Endowment. Oooops, that term is used by liberals/socialists in other countries for the child tax credit. It's basically the same thing, but was brought in by conservatives so it can't have the liberal or socialist name.

Capital gains should, I believe, be reviewed closely. Maybe allowing a special rate on gains up to a percentage of earned income, but taxed at the full earned income rate after that. Otherwise tax it as regular income. Too many people bring in big money while only paying the capital gains rate.

And, while I believe we should not have such obvious double taxation on dividends I prefer the tax break to be at the corporate end, with the dividend a simple expense off of gross margins. That shifts focus on allocation of gross margin funds to dividends, R&D, etc on an equal basis. It also "allows" those who bring in big money to pay taxes like the rest of us.
 
slider
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 7:01 pm

Quoting FlyPNS1 (Reply 19):
Why do you think conservatives have never tried major spending cuts to go along with their tax cut plans? They know what the consequences will be.

Actually, they lack the resolve. it's called politics. No one wants to cut things because, well, that's the HARD thing to do. It's the right thing to do though. The problem is that we've got so many now feeding from the government trough that we may have a hard time turning off the spigot because the level and magnitude of government patronage is so immense. Even cabinet level functions such as the Departments of Agriculture and Education have run amok with little to show for it.


Quoting Arrow (Reply 20):
Sorry, but you need both. If you try it by just cutting spending, you'll have a very small government, no military, and no social safety net for that vast chunk of your society that is getting old and sick

Disagree. We are over-regulated by a host of government agencies that are unelected. Bureaucrats with no accountability, no cost controls, no private sector management to be lean, efficient much less effectiev. We have grown government into a host of grossly unconstitutional arenas that would make the founders spin in their graves. Foreign aid is out of control. Social Security is a ponzi scheme that needs to be addressed and is still not done.

Protecting our borders, providing for a military are the very few delineated tasks that the federal government actually has an obligation to provide. The rest has been "mission creep" over many decades. From Wilson to FDR, through LBJ's Great Society and on through the growth in government, few haev stemmed the tide of runaway governmental spending, none have reversed it.

If anyone would like to read an actual plan, an honest to goodness defined case for and plan to reduce the level of government spending, as well as the size and scope of it, Congressman Paul Ryan is the man. His Roadmap is brilliant and I'd encourage everyone to take some time to read it.
 
D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 7:24 pm

Quoting Slider (Reply 31):
We are over-regulated by a host of government agencies that are unelected.

Man.

We are far from overregulated. Laissez faire regulation in the years of Reagan and W had a direct result - financial disaster requiring TARP. The free market does its best work and is most fair when it is appropriately regulated.
 
Ken777
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 7:57 pm

Quoting MingToo (Reply 18):
Post-op he had to lie on his sofa for a couple of weeks with an expensive looking machine that gradually bent his knee for him more and more each day.

That's where technology overtakes traditional medical judgement. My wife finished her physical therapy training in '66 when there were no machines like this one. It was the therapist's judgement that took care of you. Today a machine replaces that judgement. Not always the best interests of the patient, but then look at the cost of training a good physical therapist who actually wants to work with patients?

Quoting D L X (Reply 24):
Am I incorrect that he lowered them from Carter's confiscatory levels though? I'm assuming you were referring to his lower levels. Clinton raised them.

So what were "Carter's confiscatory levels" and how do they compare to the days of Ike or JFK?
 
D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:08 pm

Quoting Ken777 (Reply 33):
So what were "Carter's confiscatory levels" and how do they compare to the days of Ike or JFK?

Don't know off the top of my head. I know during Carter's time, the top bracket was in the 70% range. Ike and JFKs were not much lower, if I recall correctly, but they were lower.
 
sv7887
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:49 pm

Quoting MingToo (Reply 9):
That's why they have the best healthcare system, because the money is spent effectively. And worth noting that it is far more like the US system than Canada's or the UK's, it just doesn't have the out of control costs like the US. And it's the only one I know of with no 'death panels' either government or insurance company. If the doc says you need it, you get it.

Have you seen the cost problems in France? They had a 15 Billion dollar deficit for that plan alone in 2009. and a 15 Billion EURO deficit was projected for 2010 That doesn't sound like "controlling" the cost to me.

Have a look here: Quoting D L X (Reply 32):
We are far from overregulated. Laissez faire regulation in the years of Reagan and W had a direct result - financial disaster requiring TARP. The free market does its best work and is most fair when it is appropriately regulated.
That financial disaster was due to the government subsidizing and pushing sub prime lending through Fannie Mae and Freddie Mac. Hence the term Mortgage Backed Securities.

You seem to have conveniently ignored this process was started under Clinton, who also declined to regulate derivatives after the collapse of LTCM and signed the repeal of the Glass Steagall Act into law in 1999.

If anyone wants to see the cause of the deficits, look at the federal budget expenditure from 2006 which was around 2.6 Trillion and look at 2010's number of 3.5 Trillion. That's a 35% increase in 4 yrs.

[Edited 2010-07-22 13:50:20]

[Edited 2010-07-22 13:51:00]
 
dxing
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:55 pm

Quoting D L X (Reply 28):
I can think of a very recent time where lowering taxes took us from a surplus to a deficit.

Two different things. After the tax cuts went into effect reciepts to the Treasury went up. The problem, just like after the tax hikes in the late 80's is that government continued to spend more than it was taking in even though it was taking in more.

Quoting D L X (Reply 32):
The free market does its best work and is most fair when it is appropriately regulated.

Unfortunately the pendulum has now swung the other way and the financial reform law contains many things that have absolutely nothing to do with anything that caused the financial meltdown.
Warm winds blowing, heating blue skies, a road that goes forever, I'm going to Texas!
 
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Tugger
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 8:55 pm

Quoting fr8mech (Reply 29):
Really not the point...I thought the boss said he wouldn't raise taxes.

The administration is not raising them, the tax reductions involved were temporary. That is what the Bush administration agreed to so the reduction could be passed and look like they would not fiscally damage the USA budget over the long term. It was a risk, and the hope was that tax receipts would increase to the point where extending them would be a slam dunk. That did not happen.

Quoting D L X (Reply 34):
Quoting Ken777 (Reply 33):So what were "Carter's confiscatory levels" and how do they compare to the days of Ike or JFK?

Don't know off the top of my head. I know during Carter's time, the top bracket was in the 70% range. Ike and JFKs were not much lower, if I recall correctly, but they were lower.

Here's a decent chart :

Source: http://www.mymoneyblog.com/historica...ral-tax-rates-by-income-group.html
(wikipedia also has a good simple one but I can't link it into here due to rights issues but you can see it here: http://en.wikipedia.org/wiki/File:MarginalIncomeTax.svg)

And here is one that shows the average effective rate over time which shows that I am pretty normal and paying my "fair share":



Tugg
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MingToo
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:36 pm

Quoting sv7887 (Reply 35):
Have you seen the cost problems in France? They had a 15 Billion dollar deficit for that plan alone in 2009. and a 15 Billion EURO deficit was projected for 2010 That doesn't sound like "controlling" the cost to me.

France spend 11.5% of GDP on healthcare, the US spends nearly 17%. Costs have been rising in France, but they are not nearly as out of control as the US.
 
D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:38 pm

Quoting tugger (Reply 37):
Here's a decent chart :

Thanks.
 
Sabena332
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:42 pm

The "Tax Tsunami" is hitting me every month when I get my salary statement and additionally every time I fill up my car (e.g. today).   

Patrick
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fr8mech
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:51 pm

Quoting tugger (Reply 37):
The administration is not raising them, the tax reductions involved were temporary.

Whatever helps you sleep at night. My tax burden, and just about everyone else's, will increase come January 1. That is a tax increase...rationalize all you want.
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D L X
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 9:58 pm

Quoting fr8mech (Reply 41):
My tax burden, and just about everyone else's, will increase come January 1.

And since everyone's tax burden will increase, the laws of economics will suggest that the price of things will come down ever so slightly to compensate.

The sun will still rise in the east, and set in the west. And the deficit will go down some as a result.
 
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fr8mech
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RE: Where Will The Tax Tsunami Hit You?

Thu Jul 22, 2010 11:16 pm

Quoting D L X (Reply 42):
And since everyone's tax burden will increase, the laws of economics will suggest that the price of things will come down ever so slightly to compensate.

All things being equal...maybe? But all things are not equal. We already have staggering unemployment. We have the monstrosity of a health care 'reform' act that will lay additional burdens on employers. We have the finance control act that will make it more difficult for businesses and individuals to secure financing. We have the looming specter of more 'stimulus' bills. MOre encroachment on the free market. At least cap and trade is dead...for now.

Trillion dollar deficit. A budget so out of whack, a five year old could do better. A White House that strictly plays politics and is doing everything it can to consolidate its power and that of the left.

No, all things are not equal. Any increase in the tax burden, whether across the board or targeted will increase the deficit because unemployment will go up. Confidence is gone and businesses are holding their capital because of the uncertainty this administration and congress have introduced in the economy.

Yes, The Sun will rise in the east and set in the west, but we will be worse off because of this administration. I guess the bonus will be that they can no longer blame Bush. I'm guessing the blame will go to the American people 'ala Carter.

Taxation is a downward influence on any economy.

Quoting tugger (Reply 23):
It's all about managing your money to maximize your return.

The wife and I were just talking about that. We will avoid as much of this additional burden as possible. That may mean locking some of the cash up for longer than we initially planned, selling some stock earlier than wanted, pulling dividends out in cash instead of re-investment, etc. but it will beat letting the government take a bigger chunk. Oh, and you know what that means? Lower tax receipts for the governement, even though the tax rates are going up...oh wait, sorry, back to where they were. If I can figure out how to lower my burden, while increases are in place, don't you think the truly rich can?
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DfwRevolution
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RE: Where Will The Tax Tsunami Hit You?

Fri Jul 23, 2010 2:49 am

Quoting D L X (Reply 28):
I can think of a very recent time where lowering taxes took us from a surplus to a deficit.

If you are referring to the "projected" surplus that the CBO claimed in 2000, it never would have materialized. Those budget projections were based on the unrealistic notion of continued growth at break-neck 1990s rates - among other rosey assumptions. At that time, the market was already cooling off.

We now know that the tax cuts were responsible for no more than 15% of the deficits run while Bush was in office, and that is assuming the tax cuts provided no economic stimulus whatsoever. So no, you don't know what you are saying.
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Pyrex
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RE: Where Will The Tax Tsunami Hit You?

Fri Jul 23, 2010 5:27 am

Quoting Ken777 (Reply 12):
THe top tier rate is a joke when you consider that they also get to skip out on SS taxes.

Yes a joke. How dare they pay only 80% marginal tax rate on their income? Do you mean that in that 80th hour a week a person has to work to be on those tax brackets only 48 minutes end up going to the government?
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D L X
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RE: Where Will The Tax Tsunami Hit You?

Fri Jul 23, 2010 1:16 pm

Quoting Pyrex (Reply 45):
How dare they pay only 80% marginal tax rate on their income?

No one has paid anywhere close to 80% marginal rate in 30 years.
 
Ken777
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RE: Where Will The Tax Tsunami Hit You?

Fri Jul 23, 2010 2:14 pm

Quoting D L X (Reply 34):
Don't know off the top of my head. I know during Carter's time, the top bracket was in the 70% range. Ike and JFKs were not much lower, if I recall correctly, but they were lower.

Ike was 90 - 95%. JFK was 75%.

Quoting sv7887 (Reply 35):
That financial disaster was due to the government subsidizing and pushing sub prime lending through Fannie Mae and Freddie Mac. Hence the term Mortgage Backed Securities.

Actually the core problem were those in the financial industry who used a decent program to make profits out of thin air. The government programs weren't established to be a folly for the rich. Like 235 homes in the 70s the programs were designed to allow people in lower income levels to start buying a home.

But when the high flyers in real estate, insurance and finance saw how the game could be played they had a field day. And the taxpayer picked up the tab for these high flyers selling a $600,000 home to some dude working on minimum wage.

Quoting dxing (Reply 36):
Unfortunately the pendulum has now swung the other way and the financial reform law contains many things that have absolutely nothing to do with anything that caused the financial meltdown

Sure. We're killing an ant with a nuclear weapon. But conservative Republicans will repeal this bill, just like they will repeal health care reform. I wouldn't be surprised if the Republicans voted to have people receiving unemployment benefits refund the latest extension.

Quoting tugger (Reply 37):
Here's a decent chart :

And it shows the groups that gained the most from tax reductions. If you add in the hidden taxes (like excise tax) as well as sales taxes the differences are even greater.

Quoting Pyrex (Reply 45):
How dare they pay only 80% marginal tax rate on their income?

That was a Conservative Republican President who had a higher rate - Ike. I liked Ike, but he didn't go in for the Voodoo Economics of the Bush Dynasties.
 
FlyPNS1
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RE: Where Will The Tax Tsunami Hit You?

Fri Jul 23, 2010 2:17 pm

Quoting fr8mech (Reply 43):
Taxation is a downward influence on any economy.

Maybe, but historically that hasn't always held true. Taxes were raised in the early 90's and the economy boomed in the subsequent years.

Of course, the funny thing is that the actual effective tax rates for the very wealthy are actually LOWER than most middle to upper middle class earners. And the reason the wealthy in this country pay the bulk of taxes (while most of the poor pay little) is because of the extreme income stratification that has occurred. The U.S. has a wealth distribution that is now approaching 3rd world levels.
 
Venus6971
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RE: Where Will The Tax Tsunami Hit You?

Fri Jul 23, 2010 2:19 pm

I am just waiting for the surge in CPA business when each business has to send a 1099 to each of their suppliers they spent over $600 with. The IRS will go to congress asking for more money to further expand to keep up with the avalanche of paper from tax payers and further more IRS agents to investigate all the busniesses who don't file all the required documentation. I imagine the economy will chug along with alot of stuff done off the books.
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