What do Fannie and Freddie have to do with the housing bubble?
They did not originate any mortgages. They backed bad ones though. The banks originated the bad mortgages but have done quite well since. Odd, isn’t it?
some high maintenance items are worth it. When I was a teenager, I didn’t watch that show only for the pig.
Do you have that much in equity in your real estate, or is the value of your property that much? A guy with a $1 million house who owed $950K on it isn’t rich from real estate - a guy who owns it free and clear is. It isn’t liquid, so the guy may not feel rich, but that’s more psychology than economics.
This seems to me the most reasonable definition.
Then I’m dirt poor.
In my previous post I was referring to current market value, not equity.
I’m doing okay by most standards, but I’m not rich by any stretch of the imagination. However, if, because of my income and worth, I’m considered part of the nebulous entity called ‘the rich’ and my taxes are increased because of it, so be it. As I said, I wouldn’t love it, but I can afford to pay much more in taxes than I do now and not have my current lifestyle affected one iota.
I think those who are financially comfortable, but complain about being taxed at higher rates than those living paycheck to paycheck are pigs. In a similar vein, I feel those who barely have a pot to piss in, but advocate for the rich at the expense and well-being of themselves and their peers, because they plan to be rich some day (hah!), are not only delusional but dangerous to society as a whole.
We’re becoming a society of serfs and lords, only the serfs are too stupid to realize it; great for the lords I guess. Must be something in the water.
Okay, I don’t consider market value to be part of worth or wealth. Someone who runs out and buys a $1 million house with a 95% mortgage doesn’t get richer. Part of the problem during the crash was that people suddenly felt themselves to be much poorer when their property value plummeted, and for good reason.
Rest of your post I agree with pretty much.
There’s a lot more that has to go into the equation that just salary.
Consider an Alabama household where the husband makes $52,029 in a factory and the wife stays home with two kids, versus a Chicago doctor-and-lawyer family that makes $300,000.
[ul]
[li]The second couple has $250,000 in student loans[/li][li]The second couple has a 50% higher cost of living[/li][li]Since the second couple both work, they have to pay childcare[/li][li]Both because of higher income and higher-tax jurisdiction, the second couple gonna pay many thousands more in taxes of all kinds[/li][li]The second couple is going to have all sorts of work-related expenses that may not be reimbursable – travel for conferences for the doctor, suits for the lawyer, etc.[/li][li]And most of all, both the doctor and lawyer are likely working 50, 60, 70 hours a week, following years of school. The factory guy punches in, punches out, and goes home after 40 hours. [/li][/ul]
Put it all together, and that huge difference between $50K and $250K starts getting a lot smaller. Looking at base salary as if that was anything more than a fraction of the picture is simplistic.
http://money.msn.com/tax-planning/down-and-out-on-250000-dollars-a-year-fiscal-times.aspx
But even taking what you say into consideration, there are wide and wild variations. Responding to your bullets:
[ul]
[li]I finally finished school in my late 20’s. I thought my loans were so epic in depth that I’d never pay them off. It took almost 20 years, but they’re done.[/li][li]I have a relatively high standard of living, and comparable cost, but that’s my choice. I don’t have to live where I do.[/li][li]Most couples who work and have children, whether they are financially comfortable or not, will pay for childcare. The wealthy couple doesn’t necessarily pay more for it. Actually, as a percentage of income, childcare/daycare costs are much lower for the high income couple than for a lower middle class family.[/li][li]And the higher income couple gets tax breaks and financial offsets others do not. I can personally attest to this.[/li][li]I travel a lot for work, and attend many conferences, both domestically and internationally, and every dime of my expenses are paid by either my company or my client and, at times, depending on the events, I receive cash honoraria. Even if an attorney or doctor doesn’t receive direct remuneration for expenses, I’d be very surprised if they weren’t writing it all off.[/li][li]And the factory guy is probably just as bone tired after 40 hours of labor as the 70-hour junior executive or law clerk.[/li][/ul]
Someone with a $50k salary is probably looking at his entire compensation, with a couple of weeks vacation thrown in. Someone with a $250K salary more than likely has additional monetary and non-cash incentives as components of his overall compensation package, so, if anything, the disparity between the two is greater than you opine.
One thing you didn’t mention was health care costs, the brunt of which are borne by those in the lower income strata. My wife works for a medical institution, and costs we would normally incur for things like hospital stays, certain surgeries, and other procedures are waived by something called ‘professional courtesy’ and, trust me, these circumstances are not unique to us.
This is true, but not in the way you believe.
This is not rocket science. We KNOW how much people were paying in taxes under Clinton. We KNOW how much the tax burden diminished with the Bush tax cuts. So we have a pretty good idea of how much returning to Clinton era tax levels will raise.
Your opinion has very little to do with it.
Ah, it’s that easy is it? Feel free to show your work. Don’t forget to factor in the difference between an economy operating during a boom and one that’s operating after a bust…
-XT
Why would going back to the Clinton era tax system, why wouldn’t we collect as much as we did during the Clinton era?
The income tax system is not as porous as you seem to think.
All sane people (well economists at least) also agree that tax increases need to be passed as well.
I think a lot of it depends on where you live.
But we do that by the mere fact of having tax brackets.
I also think we should roll back all the Bush tax cuts and then throw a few extra brackets on top of the Clinton tax system. Our tax system has been too flat for too long.
Bill Gates’ tax planning is pretty simple. Donate enough money to cut your income in half and pay capital gains on the rest.
Very little of the stuff that is clearly legal requires a lot of expertise, its built into the code. The stuff that really cuts down on your tax bill are questionable tax transactions like Variable Prepaid Forwards or BOSS transactions. You end up paying taxes PLUS penalties on these transactions.
Compaared to average 25 year old maybe but you need at least $200K to retire and probably more like $2,000,000 to retire comfortably.
Things won’t be bust forever. All things being equal, higher tax rates result in higher revenue.
Noone is saying that raising rates during a recession is going to result in Clintonian era levels of revenue. Obama isn’t saying that, CBO isn’t saying that, JCT isn’t saying that, I’m not saying that. CBO, JCT and OMB have all projected the effect of repealing the bush tax cuts and the effect is significant.
Its that easy.
I’m not a tax expert by any stretch, which is why I have a smart guy manage that stuff for me. Based on my personal circumstances however, yes, I believe the system is somewhat porous, and more so the higher one’s income level, and amount and diversification of assets.
Of course closing loopholes and removing deductions won’t solve the deficit problem, but I believe it would be a step in the right direction. I am, however, fully in favor of repealing the Bush tax cuts, but only on the wealthy, however that’s defined.