Buyer's remorse

[knary]

Just dropped off the thick envelopes to be mailed to the Feds, the state and the county. :cry

[tessler]

Dude, I feel your pain. But why'd you wait so long? ;)

[Ridealot]

Hummm,
Sounds more like Payers remorse than Buyers remorse. :dunno

At least you know that it will all be spent wisely by the people your sending it to. :thumb

[SNC1923]

Spent my refund a month ago. No write offs? Maybe you need a new tax preparer?

[knary]

Spent my refund a month ago. No write offs? Maybe you need a new tax preparer?

Self employed artist/designer = always have to pay.

[boomyr]

Spent my refund a month ago. No write offs? Maybe you need a new tax preparer?

I expect if you looked at your return, you paid also, even with the write-offs. Many folks feel like a refund is some gift from Uncle Sam, but it is a refund of an overpayment throughout the year. If it weren't for income withholding, and EVERYBODY had to write a check at tax time, there would be much more interest concerning Govt. spending.

[YB in IN]

Self employed artist/designer = always have to pay.

Ding Ding Ding!!! Same boat here.

[Roc-Roc]

GARTH

Hey What's up ? Are you still riding around campus? I know you going to Nat. Let me know what's going down.


Roc

[basketcase]

I'm married to a CPA.

Our annual contributions are figured to within pennies of what the final will be, and we draw the interest on our monies -- what few of them there is...

:huh If she passed on or otherwise left me, I would have to marry another one to stay out of the slammer!

:deal

[knary]

Ding Ding Ding!!! Same boat here.

I remember the first year I made any money doing freelance work. After I realized that I'd owe 15.3% off the top before paying any income tax, I learned very quickly what a "deduction" was.

[kreinke]

I expect if you looked at your return, you paid also, even with the write-offs. Many folks feel like a refund is some gift from Uncle Sam, but it is a refund of an overpayment throughout the year.


And the whole time Uncle Sam was making interest off your money which he was holding for safe keeping.

Gotta pay for all those JDAM bombs, ya know.

[Visian]

Self employed artist/designer = always have to pay.

You definitely need a new tax preparer. :p

Ian

[Visian]

If it weren't for income withholding, and EVERYBODY had to write a check at tax time, there would be much more interest concerning Govt. spending.

I think this should be mandatory.

And so should this, (http://www.fairtax.org/) a consumption-based tax plan.

Ian

[Visian]

I remember the first year I made any money doing freelance work. After I realized that I'd owe 15.3% off the top before paying any income tax, I learned very quickly what a "deduction" was.

I should hook you up for a ride with my oldest son, who worked for the Social Security Administration for three years, prior to returning to graduate school.

You would love to hear how your 15.3% is being spent....

Ian

ps => basically, you can take ~45% off the top of your gross as a self-employed person. :mad

[jdiaz]

I think this should be mandatory.

And so should this, (http://www.fairtax.org/) a consumption-based tax plan.

Hey, let's not pick on people just because they buy a lot of stuff, okay? :D

[Visian]

Hey, let's not pick on people just because they buy a lot of stuff, okay? :D

well, who can resist now that knary is a member of the evil rich? ;)

[SNC1923]

I expect if you looked at your return, you paid also, even with the write-offs. Many folks feel like a refund is some gift from Uncle Sam, but it is a refund of an overpayment throughout the year. If it weren't for income withholding, and EVERYBODY had to write a check at tax time, there would be much more interest concerning Govt. spending.

WHAT!? Well, this is an outrage! Wait until my congressman hears about this. . . .

:stick

[knary]

well, who can resist now that knary is a member of the evil rich? ;)


:ha
Evil? I'd never call them evil. I just won't get suckered into the lie, all too popular with the current regime in D.C. and too much of this country, that greed and ambition and consumption are reflective of good moral character. To hear some of our more conservative citizens speak, you'd think trickle down economics is charity.

Uglier still, our pop culture confuses being a "good" person with having "talent", and "talent" with "success". We're subjected to an endless stream of images of wealthy people living fantasy lives. Lost is perspective on how rare that wealth is, how good someone as "poor" as me is living (I'm not poor, but compared to most buying a BMW motorcycle I'm scraping by), on what average and normal are. We've got anyone with a few pennies striving to live in a McMansion far bigger than their needs, costing more than they can afford, with all the beauty of a styrofoam cup. We've got shows like "Extreme Make Over: Home Edition" telling us that it's just wrong for more than one child to sleep in a room. The notion that anyone that isn't driving a new car, buying a new house, owning a 37" flat screen TV and getting 250 channels is less "good" than a wealthier person is going to destroy this nation. We have real problems in this world and in this country. Mr. Relatively-Wealthy isn't evil, but making it easier for him to upgrade to a 7-series will do little to address those problems.

Maybe we should just officially revert to feudalism and be done with it.

ack...I'll shut up. :ha
(not likely)

p.s. I am rich. Just not monetarily.

[username]

p.s. I am rich. Just not monetarily.

that's how the poor console themselves, you big loser. next you'll be spewing some garbage about how you're going to have a better afterlife than all the people who are succesful, because *your* god likes failures and weaklings more than he likes all-american, patriotic success stories who have car payments that exceed 30% of their monthly take home pay. ;)

seriously though, you sound like the genius behind things like trainspotting and fight club! go paint with that emotion, don't waste it on the interweb!

Choose a job. Choose a career. Choose a family. Choose a *$&%ing big television. Choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of *$&%ing fabrics. Choose DIY and wondering who the *$&% you are on a Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing *$&%ing junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, *$&%ed up brats you spawned to replace yourselves.

[bullit7801]

that's how the poor console themselves, you big loser....snip...

Choose a job. Choose a career. Choose a family. Choose a *$&%ing big television. Choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance....snip...
WOW!!

:lurk

tb

[Grey_Matter]

:ha
Evil? I'd never call them evil. I just won't get suckered into the lie, all too popular with the current regime in D.C. and too much of this country, that greed and ambition and consumption are reflective of good moral character. To hear some of our more conservative citizens speak, you'd think trickle down economics is charity.

Uglier still, our pop culture confuses being a "good" person with having "talent", and "talent" with "success". We're subjected to an endless stream of images of wealthy people living fantasy lives. Lost is perspective on how rare that wealth is, how good someone as "poor" as me is living (I'm not poor, but compared to most buying a BMW motorcycle I'm scraping by), on what average and normal are. We've got anyone with a few pennies striving to live in a McMansion far bigger than their needs, costing more than they can afford, with all the beauty of a styrofoam cup. We've got shows like "Extreme Make Over: Home Edition" telling us that it's just wrong for more than one child to sleep in a room. The notion that anyone that isn't driving a new car, buying a new house, owning a 37" flat screen TV and getting 250 channels is less "good" than a wealthier person is going to destroy this nation. We have real problems in this world and in this country. Mr. Relatively-Wealthy isn't evil, but making it easier for him to upgrade to a 7-series will do little to address those problems.

Maybe we should just officially revert to feudalism and be done with it.

ack...I'll shut up. :ha
(not likely)

p.s. I am rich. Just not monetarily.
Well said. But as far a taxes go I pay too much for what I get in return!

I try to write a check every year. The thought of "The Man" having any more of my money all year long than is legally his to take pisses me off.

[BubbaZanetti]

hahha, i remember writing off cable tv when i was doing freelance sports tv audio, so i could "review" my performances, hahaha.........right

[Visian]

:ha
Evil? I'd never call them evil.

Yeah, I know. Rush Limbaugh did!

I just won't get suckered into the lie, all too popular with the current regime in D.C. and too much of this country, that greed and ambition and consumption are reflective of good moral character. To hear some of our more conservative citizens speak, you'd think trickle down economics is charity.

Ahhh.... you're just jealous! ;)

Uglier still, our pop culture confuses being a "good" person with having "talent", and "talent" with "success". We're subjected to an endless stream of images of wealthy people living fantasy lives.

All the more reason to go to a consumption-based tax system and close all the loopholes for the evil right, er... rich.

Maybe we should just officially revert to feudalism and be done with it.

Serf's up, dude!

Seriously, as some may know, I just got back from a trip to South Africa, where I stayed in hotels way better than I ever have before, and rode expensive german motorcycles past some of the most destitute people I've ever seen in a "modern" nation.

We gotta be doing something right here. Or, is it left?

Ian

[Visian]

Choose a job. Choose a career. Choose a family. Choose a *$&%ing big television. Choose washing machines, cars, compact disc players and electrical tin openers. Choose good health, low cholesterol, and dental insurance. Choose fixed interest mortgage repayments. Choose a starter home. Choose your friends. Choose leisurewear and matching luggage. Choose a three-piece suit on hire purchase in a range of *$&%ing fabrics. Choose DIY and wondering who the *$&% you are on a Sunday morning. Choose sitting on that couch watching mind-numbing, spirit-crushing game shows, stuffing *$&%ing junk food into your mouth. Choose rotting away at the end of it all, pissing your last in a miserable home, nothing more than an embarrassment to the selfish, *$&%ed up brats you spawned to replace yourselves.

hahaha... you've been hanging out at advrider again, eh? :p

man, we suck.

ian

[knary]

Yeah, I know. Rush Limbaugh did!

If Rush ever utters a truth, it is the product of pure chance. I've known stray dogs with a better moral compass.

Ahhh.... you're just jealous! ;)
Hah! Yes. I am. I am jealous of Nye and his new R12GS adventure. I am jealous of your stable of bikes. But what of it? I'd still rather be me. :deal :ha

All the more reason to go to a consumption-based tax system and close all the loopholes for the evil right, er... rich.

Loopholes should be closed. What qualifies as such should also be defined. Some would call any deduction a loophole.

A solely consumption based tax system has profound issues. Not the least of which are implimentation and making it progressive. IF it can work and work fairly, I'm all for it. BUT when its strongest proponents are the same people that worship at the altar of Ayn Rand (-gag-) and "greed is good", I question their motives and their math.

Serf's up, dude!

Hey, whatever we can do to keep the little guy down while worshipping the myth of boot straps. "If 1 out of 10,000 can manage to rise out of the quagmire of poverty, human stupidity, and inequity, anyone can!"

Seriously, as some may know, I just got back from a trip to South Africa, where I stayed in hotels way better than I ever have before, and rode expensive german motorcycles past some of the most destitute people I've ever seen in a "modern" nation.

We gotta be doing something right here. Or, is it left?

Ian

We have done some stuff right. This is a great nation that, I at least, am proud to be a citizen of. But don't confuse good fortune (resources, place in history, immigration) with destiny.

Either way, we wrote some big checks to the U.S. Treasury and state of Oregon. Will they use my money wisely? Some of it. I hope my money goes towards making my local community and our nation better and stronger. The tricky bit is figuring out what that means. To me, that would mean better schools before just about anything else. Think of it as trickle up education.

I must have work to do. :ha

So did you put a deposit down on an R12S yet?

[username]

scott,

what tax rate are you suggesting for the consumption tax and how do you propose to make it progressive?

(i was kidding about calling you a poor loser. from what i can see, you have a really sweet life.)

EDIT: crap, i'm all confused. i can't tell if scott or ian likes the consumption tax. whichever of you it is, please answer the above. i'm mostly interested in the rate.

[YB in IN]

A good buddy of mine (who is a hard-core Republican, but I won't hold it against him) turned me on to this (http://fairtax.org/) organization. They have some DATA to back up their idea.

[Visian]

EDIT: crap, i'm all confused. i can't tell if scott or ian likes the consumption tax. whichever of you it is, please answer the above. i'm mostly interested in the rate.

I'm not 100% sure, either... on both questions.

So, there's this thing branded The Fair Tax (http://en.wikipedia.org/wiki/FairTax) that was written in part by controversial people. ;)

From what I can see, the progressiveness is pretty straightforward, the more you spend, the more you pay.

Or is the idea of progressiveness that people who earn more must pay more?

Or is that considered "fairness"...?

Ian

[knary]

scott,

what tax rate are you suggesting for the consumption tax and how do you propose to make it progressive?

(i was kidding about calling you a poor loser. from what i can see, you have a really sweet life.)

EDIT: crap, i'm all confused. i can't tell if scott or ian likes the consumption tax. whichever of you it is, please answer the above. i'm mostly interested in the rate.

There are many different numbers out there. The organization Ian posted a link to is suggesting a 23% rate (or 30% depending on what you're reading) on personal purchase sales/service transactions (from the doctor's visit to the guy mowing your lawn to the motorcycle you just bought) with a flat yearly rebate of $10k (if I understand their proposal).

A consumption tax has a certain romance about it. The cliche of the consumption tax is that it suggests that it is a voluntary tax. That you will suddenly be in charge of how much you pay the government. This is something of a pipe dream, especially since the tax rate won't be set in stone.

Of curious note is that this tax system will only apply to personal purchases. What makes this curious is that many transactions never see the public marketplace. This places the entire burden of the government directly on the shoulders of the average citizen. This a boon for those who wield the greatest of corporate and political power.

The fundamental problem with a consumption tax is that it taxes just that - consumption. The lower your income, the more of that income goes towards consumption. The higher, the more to savings. There are ways around this such as a rebate as mentioned above. But in the end, you're back to a regressive system. Both the rich man and the poor man can drive a junker. Only the rich man can choose not to. Unless, of course, you want to build a sliding scale of varying rebates, different taxes on different products, omitting some purchases, etc. This builds a new complicated system - exactly what we were supposedly trying to avoid.

In the end, I have serious doubts. In many ways, it reads like the wet dreams of those that think that 98% of the country is fortunate to be employed by the other 2%. I'd prefer that we gut/revise our existing tax structure and then consider a brand new system. Consider a national sales tax. Revise the tax brackets. Reconsider each and every tax break we offer. Clearly our current tax system is a mess. But those pushing a consumption tax haven't shown that it won't prove equally cumbersome in the long run.

The biggest hurdle would be transition. How do you handle, for example, the IRA contributions that a soon to retire couple has made? Or, heaven forbid, the mortgage interest deduction?

Lastly, while it always hurts to pay (and so I started this thread), those who pay the most in absolute dollars haven't shown that they are paying too much. :deal :ha :ha :ha :ha

[BradfordBenn]

I just don't feel like I am getting my money's worth from the government.

[BouncinBob]

:ha
To hear some of our more conservative citizens speak, you'd think trickle down economics is charity.


Thanks Scott, I'm gonna ammend my return. This just gave me a great idea for some more deductions <creative ideas, too bad I'm not in public accounting anymore>...

[BouncinBob]

I'm married to a CPA.




So Rick, what she buy? I met up with a guy who's accounting practice I was looking to buy at the time. Up in Nye-land, RI. We went for a drive, he was buying a new 30 something foot Catalina. There were three other guys there buying new boats, all were CPAs.

[Visian]

Lastly, while it always hurts to pay (and so I started this thread), those who pay the most in absolute dollars haven't shown that they are paying too much. :deal :ha :ha :ha :ha

:rofl

I think it goes something like this:

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

* The first four men (the poorest) would pay
nothing.

* The fifth would pay $1.

* The sixth would pay $3.

* The seventh $7.

* The eighth $12.

* The ninth $18.

* The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men ate dinner in the restaurant
every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20."

So, now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes.

So, the first four men were unaffected. They would still eat for free.

But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share'?

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being 'PAID' to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

* The fifth man, like the first four, now paid
nothing (100% savings).

* The sixth now paid $2 instead of $3 (33% savings).

* The seventh now paid $5 instead of $7 (28% savings).

* The eighth now paid $9 instead of $12 (25% savings).

* The ninth now paid $14 instead of $18 (22% savings).

* The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man "but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!"


"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Europe and the Caribbean.

Methinks Ayn Rand may have written this!

Ian

[Visian]

... that's talking about tax *cuts*.....

Never mind!

Ian

[Visian]

So did you put a deposit down on an R12S yet?

Good lord... I forgot to answer the most important question.

Nah... the bike was impressive and all, but really not for me.

Even the R12 GS Adventure left me thinking that my 1150GS is rideable for at *least* another 50K miles.

I dunno Scott. To tell you the truth, I feel the richest when I ride the R69S.

Really.

Ian

[username]

ian,

your story seems to illustrate why it is bad when people of different socioeconomic status dine together.

;)

[Visian]

ian,

your story seems to illustrate why it is bad when people of different socioeconomic status dine together.

;)

ha! i knew there was a reason they make you wear a jacket when you eat at the country club! :p

[DarrylRi]

Of course, the rich don't leave the system here, because it's cheaper than anywhere else they might want to live and work. And metaphorically speaking, the rich don't get beat up, they do the beating up.

If you're a working stiff, but doing well enough on your income to buy a new beemer, then I'd wager you're paying about a third of your income in taxes. But the rich, who are often compensated largely in stock and options, are only paying 10% on their dividends and long term gains from stock sales. And if they die in 2010 (so far, that's the only year, because this is temporary), then they can pass ALL of their wealth along to their family (who can then pay only 10% in the future) tax free.

Tell me again who's getting beaten up?

[jdiaz]

Of course, the rich don't leave the system here, because it's cheaper than anywhere else they might want to live and work. And metaphorically speaking, the rich don't get beat up, they do the beating up.

Darryl, why are you referring to the rich in the third person? Can't you still see Hawaii from your plush, well-lit oceanfront home? :laugh

[Visian]

But the rich, who are often compensated largely in stock and options, are only paying 10% on their dividends and long term gains from stock sales.

And of course, there is no way they could have possibly earned this compensation, right? ;)

Tell me again who's getting beaten up?

The small businessperson who hires the working stiff, pays half the stiff's Social Security tax, most of the stiff's healthcare insurance costs, and all of the stiff's unemployment costs.

All for the priviledge of paying nearly 45% of the remaining income to support the "entitled" ?

Ian

[naddy100]

And of course, there is no way they could have possibly earned this compensation, right? ;)


{snip}

Ian

They weren't Robinson Crusoe.
Noel

[wuli959]

:rofl

I think it goes something like this:

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

SNIP
Ian

thanks, read this story a long time ago and I've been looking for a version of it for a long time. great timing :groovy

[username]

Tell me again who's getting beaten up?

it's an invalid argument to say that because the rich are not getting beat up, then the poor must be. sometimes no one gets beat up.

it's also false to argue that the solution to the ills of the poor is to mess with the rich.

i'm not agreeing to any particular form of taxation or any of that, just pointing out the illogic. :D

[knary]

it's an invalid argument to say that because the rich are not getting beat up, then the poor must be. sometimes no one gets beat up.

it's also false to argue that the solution to the ills of the poor is to mess with the rich.

i'm not agreeing to any particular form of taxation or any of that, just pointing out the illogic. :D

But it's equally illogical to say that taxes are "too high" because paying them is unpleasant.

Ian,
Ayn Rand is a lunatic who espoused a belief that humans are at their best when babboons occupy a higher moral ground.

That example you posted is cute but you forgot some details. You forgot to add that the guy at the top owns the chain of diners, that the guy at the bottom is unemployable (paralyzed in a motorcycle accident), and that the rest somewhere in between. You forgot that the owner of the diners is where he is because that is where his market is.

[Visian]

Ayn Rand is a lunatic who espoused a belief that humans are at their best when babboons occupy a higher moral ground.


LOL!

Dunno about that, but I can tell you for sure that when you're riding a GS in the midst of nowhere and a big-ass baboon jumps out of the woods and talks to you, you seek higher ground really friggin' fast!

:laugh

Ian

[DarrylRi]

There's nothing I enjoy more than watching my dividends come in.

And of course, there is no way they could have possibly earned this compensation, right? ;)I have no problem at all with them earning it. I have a problem with the fact that they pay a third of the tax on investment income than people who actually work 8 hours a day have to pay.

The small businessperson who hires the working stiff, pays half the stiff's Social Security tax, most of the stiff's healthcare insurance costs, and all of the stiff's unemployment costs.You misunderstand me. I'm not talking about the typical small business person, who also earns a regular salary and must pay regular income tax on it. I'm talking about top management at big corporations who are paid more in stock than in cash. That's who is benefitting from all of the recent "tax reforms". Sure, Jeff Skilling and Ken Lay paid a chunk in income tax, but most of their compensation was in Enron stock, which they sold at a considerable gain that was taxed at 10%.

All for the priviledge of paying nearly 45% of the remaining income to support the "entitled" ?

IanYou also confuse what are the costs of doing business from what the business owner takes home as a salary. It's the business, as a separate entity, that pays for all of the items you list. To say that the owner pays for these things is disengenuous at best. The business person has to make an informed decision when they take on staff as to whether the increased output will make the company more money than the cost of hiring.

[Visian]

I have no problem at all with them earning it. I have a problem with the fact that they pay a third of the tax on investment income than people who actually work 8 hours a day have to pay.


Or is this the benefit of taking the risk to run or own a share in a company that gives people something to do for 8 hours a day?


You also confuse what are the costs of doing business from what the business owner takes home as a salary. It's the business, as a separate entity, that pays for all of the items you list. To say that the owner pays for these things is disengenuous at best.

Said with all the genuineness of someone who pays all the costs of doing business and then figures out how much the business owner gets to take home as salary: I don't think I am confused about anything.

The business person has to make an informed decision when they take on staff as to whether the increased output will make the company more money than the cost of hiring.

The small business person also has to take the risk his/her own treasure for the benefit of paying 45% of the reward back to Uncle Sam, after variable & fixed expenses.

And, fwiw, as a subchapter S small business person, Uncle Sam makes no distinction between my personal and corporate income.

No one's (well at least I ain't) defending Jeff Skilling or the Exxon guy here. For me, it's a discussion about whether there will be any incentive to innovate, risk or compete in a completely "fair" (whatever that means) world.

Ian

[DarrylRi]

Or is this the benefit of taking the risk to run or own a share in a company that gives people something to do for 8 hours a day?If it's not worth the risk, then I guess someone should be working 8 hours a day for a big company. But saying that no one will invest in stocks if the tax on their sale is 33% is like saying no one will work if the tax on their income is 33%.

The small business person also has to take the risk his/her own treasure for the benefit of paying 45% of the reward back to Uncle Sam, after variable & fixed expenses.Again, those costs you cite are the variable costs of hiring. If you don't think it's worth it to hire someone because of those costs, obviously you shouldn't be hiring them. OTOH, if their productivity, after taxes, can make the company more profitable, it doesn't really matter what the tax rate is, does it? You're just complaining that you have to pay taxes. I commisurate with you.

No one's (well at least I ain't) defending Jeff Skilling or the Exxon guy here. For me, it's a discussion about whether there will be any incentive to innovate, risk or compete in a completely "fair" (whatever that means) world.

IanOf course, innovation is still made and risk is still taken in Old Europe, where the tax rates would make your head spin. Germany has a term for their small business community, Mittelstand, on which their economy is heavily dependent. You could be paying 100% in taxes and be obliged to take on an apprenticeship program too, all the while paying 16% VAT on purchases.

But again, that's not the point I'm interested in, which is that someone who makes most of their wealth by investing in the stock market pays 1/3 in income taxes from those who actually have to go out and work, as most of us understand it, every day.

[Visian]

But saying that no one will invest in stocks if the tax on their sale is 33% is like saying no one will work if the tax on their income is 33%.

No one is saying no one. I'm saying fewer. Less incentive = less willingness to take risk.

Again, those costs you cite are the variable costs of hiring. If you don't think it's worth it to hire someone because of those costs, obviously you shouldn't be hiring them.

And again, the point is that you don't get your money back if the business doesn't come through. Or costs aren't in line with your plans. Or the BoD if the company you bought stock in makes a wrong move So it's the risk of your own capital (that theoretically, you earned) that justifies the difference in taxation rate. Without that reward, there is far less incentive.

OTOH, if their productivity, after taxes, can make the company more profitable, it doesn't really matter what the tax rate is, does it? You're just complaining that you have to pay taxes. I commisurate with you.

Nope, taxes are a reality. And there's no complaint. I just don't like the perception that I should pay more because I earn more, and therefore "can afford it."

Dunno about you personally, but I have yet to win life's lottery. Way too busy working my butt off to play. ;)

Of course, innovation is still made and risk is still taken in Old Europe, where the tax rates would make your head spin.

Is this the reason their economies are thriving and growing at the same pace our is?

But again, that's not the point I'm interested in, which is that someone who makes most of their wealth by investing in the stock market pays 1/3 in income taxes from those who actually have to go out and work, as most of us understand it, every day.

Understood. So what happens when those people have a loss in the stock market?

Ian

[hlothery]

What about the age-old idea of a flat income tax rate of say 18% for every wage earner in the country with absolutely no deductions of any kind?


BTW, I'm really enjoying lurking this issue, so I'll now return to that! :lurk

[DarrylRi]

Nope, taxes are a reality. And there's no complaint. I just don't like the perception that I should pay more because I earn more, and therefore "can afford it."
You've really twisted around what I'm saying. I never once said "more". I have been saying "the same". If 33% is the tax rate, then why should it be different whether you earn it with a salary or you earn it by trading on Wall St.?

Let me ask you something. If you, hypothetically I take it ;-), had "won life's lottery" and suddenly received a check for, say, $100M, what would you do with it? I mean, after the bikes, cars, boats and planes, of course. ;-) And the trophy wife. ;-) ;-)

You'd invest it, probably conservatively, so you'd have a good piece of it around for when you're old and gray (and need some medical care).

Now, let's say that instead of paying 10% on your gains in the market, you then had to pay your bracket on that income, 33%. What would you do differently, because of this? Not invest? No, of course not. If anything, you'd probably adjust your investments to be a bit more aggressive, risk taking and speculative, to make up for it.

Understood. So what happens when those people have a loss in the stock market?Why, they get to deduct that loss against their gains. Just as a gambler gets to do.

But a gambler pays 33% (or whatever his bracket) on his winnings.

Oh, and also, the market investor can carry over those losses and deduct them against next year's winnings.

[DarrylRi]

Ok, let me try this one more time, then I'll shut up for a bit. (Really, that's all I can promise. ;-)

If you've just done your taxes with Turbo Tax, try this little experiment. Go in and start up a new return. Rather than putting your salary in as wages, tips, etc., instead enter it as the proceeds from a stock sale. (What the heck, Skilling walked away with tens of milliions of dollars from selling Enron stock.) Now have a look at what Turbo Tax says you owe. Bet it was less than you actually ended up paying, even without going through the rigamarole of house payments and so on.

Too bad you're not getting compensated by your company in stock, instead of those worthless greenbacks.

[Visian]

You've really twisted around what I'm saying. I never once said "more". I have been saying "the same".


33% > 10% ;)


Now, let's say that instead of paying 10% on your gains in the market, you then had to pay your bracket on that income, 33%. What would you do differently, because of this? Not invest? No, of course not. If anything, you'd probably adjust your investments to be a bit more aggressive, risk taking and speculative, to make up for it.


This is exactly the "because you can afford it" argument. If I had to pay more taxes, I personally would invest more conservatively to lower the risk of potential loss, since the investments wouldn't be earning as much.


So what happens when those people have a loss in the stock market?


they, they get to deduct that loss against their gains. Just as a gambler gets to do.

But a gambler pays 33% (or whatever his bracket) on his winnings.

Oh, and also, the market investor can carry over those losses and deduct them against next year's winnings.

Um... as I understand it, and I don't even play an accountant on TV, you only get to deduct $3,000 per year, and then only against future gains. Small comfort when you loose a few mill or go bankrupt.

And don't forget, you weren't given this money in a lottery. You earned it and are risking it... your own money, not some gov't handout.

So, if you've earned money through stock options in your life, and you feel like it's appropriate to pay more, you are more than welcome get out your checkbook and write the government a check for an additional 23% of your income.

Doubtful we'll ever agree on this, because it's a matter of perspective and theory. But I do know we can agree on one thing.... riding an R69S makes you feel really rich. :D

Ian

[DarrylRi]

33% > 10% ;)See, I would have phrased this exactly the opposite: 10% < 33%. You're getting a special break, not paying "more" by paying the same as everyone else. I guess I just don't understand why this class of income is so darned special.

Um... as I understand it, and I don't even play an accountant on TV, you only get to deduct $3,000 per year, and then only against future gains. Small comfort when you loose a few mill or go bankrupt.You get to deduct $3k if you don't have any gains the next year. But you can deduct long term losses against long term gains in future years (and short term vs. short term). Run the scenario in Turbo Tax.

Doubtful we'll ever agree on this, because it's a matter of perspective and theory. But I do know we can agree on one thing.... riding an R69S makes you feel really rich. :DLandsman!

[petepeterson]

Sorry Darryl but you win in the casino you pay taxes,, you loose in the casino you DO NOTclaim it!!! Jeezz :rolleyes Loses are your tough luck.........

[DarrylRi]

Sorry Darryl but you win in the casino you pay taxes,, you loose in the casino you DO NOTclaim it!!! Jeezz :rolleyes Loses are your tough luck.........'Zat right? You pay taxes on winnings, but you can't deduct your losses from whatever winnings you might have in the calendar year? I guess I haven't used that part of the tax return lately. ;-)

Tough to be a gambler in a casino, but soft to be a gambler on Wall St.

[bullit7801]

Actually, guys, IF you declare your profession to be a professional gambler, you may deduct PROVEN losses up to the amount of gains in any year.

Otherwise, the rules are as stated above. Winnings are taxable, losses are not deductable.

tb