Perhaps tahts how it works in your versionj of libertopia but a “buyer beware” attitude on everything is probably more harmful to economic activity than a slight increase in taxes on the rich.
Then someone else steps in and makes that million dollars.
No, I’m a tax lawyer.
I’m not really an expert on every aspect of the tax code (noone really is) but in over a decade of practicing tax law and promoting tax policy, I don’t think I have heard of anyone paying more than 100% tax rate. That is what you would need to actually increase your after tax income after reducing your pre-tax income. IOW, the only way your take home increases after quitting your job due to taxation is if you are paying a tax rate over 100%.
You tied it to taxes. I have some familiarity with taxes but frankly anyone who has finished 7th grade math could figure out that your statement couldn’t possibly be true unless your tax rate is over 100%.
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When did we bail out the individuals?
100% is not a random arbitrary number. It is the threshhold you MUST beat is you want your after tax income to increase after you have a reduction in pre-tax income. The fact that you don’t understand this simple math concept after numberous attempt by different people to explain this to you makes it look like you are really stupid or simply don’t give a shit about the facts.
Its not just that, its that most of those folks making a million/year can only make that kind of money by subjecting themselves to that tax. Sure you have some folks who could make that kind of money wherever they lived but most would not. You think that Goldman Sachs trader Fabrice Tourre would have made anywhere near as much money as he did if he had decided he preferred the tax system in Estonia and move to Estonia? You think that there are more than a handful of Hollywood actors who would do just as well if they moved to the Cayman Islands and only filmed outside of the USA? Do you think that Goldman would have had ANY trouble whatsoever replacing someone like Fabrice Tourre (or just about anyone on wall street other than a small handful of high end quants) or that Hollywood would have any trouble replacing any of the stars in its galaxy? Do you think there is any shortage of driven well qualified people who could perform as well as they do?
I could be convinced into supporting a tax on assets if you’d like.
You implied that your income rose when you quit because of taxes, otherwise your original post would have been fucking pointless. If you want to clarify thigns and state outright that you have no idea what happened to your income when you quit your job other than the fact that your take home decreased by less than 20K/year because you saved the taxes you would have paid on the 20K, then fine but it means your original post amounts to saying “I paid less in taxes when earned less income” which hardly seems worth saying at all.
We do not have a 50% tax bracket. My guess is that you are not in the 33 or 35% tax bracket either (and if you are then the reason you don’t feel the difference from a 20K reduction in income is because your husband is making over $190K(together with any other income you guys may have)). This means your marginal tax rate for that 20K was 28% or less (and even that requires an income of over $137K).
2010 income tax brackets
There are certainly states that tax relatively modest amounts of incoem at close to 10%.
http://www.taxfoundation.org/taxdata/show/228.html
This is not true unless you are self employed and paying self employment tax.
Your marginal federal tax rate is likely 28% or below and socials security/medicare are 6.2% and 1.45% unless youn are slef employed.
No you weren’t talking about perception. You were implying that taxes made your income stay the same or increase despite you quitting your job.
Just a sample of what you have said:
http://boards.straightdope.com/sdmb/showpost.php?p=14069322&postcount=253
“That’s fine, don’t care. You are not really expected to believe everything you read you know. I merely made a post to show a different viewpoint which is - the loss of my ability to work has meant zero to us.”
Here is what your wrote:http://boards.straightdope.com/sdmb/showpost.php?p=14064990&postcount=185
“No matter how much my husband makes I’m sure I’d miss $10K (where did you get that number) since by no standard are we rich. As for defying all logic and facts, sorry but the facts I listed are the facts in play. There has been a slight drop in our discretionary income, but not 10 or 20K worth.”
"I don’t do the taxes so I don’t know how it works, tho I highly doubt we are getting any credits of any kind - do we still get the one for having a mortgage? Other than that, all we would get would be for simply existing. All I do know is I am paying (somewhat higher) bills with the same ease I did when I was working. If we were missing $10,000 - about $833 a month - I’d think I’d notice it…
My husband may be a spendthrift but he’s not that bad! "
“For example - I had to quit working in 2007 so our annual income dropped by $20K+. Due to the difference in the amount of income tax we pay (which does include state income tax), we have noticed almost no difference. I’ve made some adjustments, but really our lifestyle hasn’t changed that much, and $20K is (to me anyway) a lot of money.”
I think you honestly don’t notice a difference in your lifestyle despite a $20K reduction in pre-tax income but it is NOT because your post tax incoem has not taken a hit. Your post tax income has taken at least $9K hit (or $750/month). Perhaps you are living well within your means, perhaps your husband is just spending less money and you don’t realize it but you gave the impression that your income didn’t go down by a noticable amount when you quit your job.
True the cineom tax system is very bumpy at lower income levels. At 35K or so, your marginal tax rate increases by 10% from 15% to 25%; then at 83K it goes up by 3% to 28%; then at 174K it goes up to 33; then at 380K it goes up to 35. So the guy who makes 35K has a marginal rate that is 7% less than the guy who makes over $380K. If people don’t think our tax rates are flat enough i don’t really know how much flatter you can get without actually implementing a flat tax.
You know that most of your mortgage is tax deductible right? And hiding your income is not as easy as you make it sound, oh yeah, and its illegal.
Our middle class is withering along with unions and the bargaining power of labor generally. You basically need a college degree for a real shot at the middle class these days and you probably need a technical or professional degree at that.
Actually hiding income is pretty much impossible. Suppose you were really hard-core and only got paid in cash, and kept all your cash in a shoe box in the closet. Guess what, you got that cash from someone. At some point it’s recorded somewhere.
Money always leaves a trail. Always.
When I was in high school, a family friend was running a small restaurant. He under-reported revenue from the restaurant and tried to get by with paying almost no tax. The tax authorities came in and spent about three days in the restaurant. After three days, they sat him down and told him, 'we think you’ve been under-reporting by about 35%" (which was a percentage or two of being spot-on). How did they know? They looked at expenses - suppliers he was paying every week (obviously) but apparently water and electricity usage was a major giveaway…
If you make $250,000 a year and you’re not rich, then you are a fucking retard.
That’s not what I said. I asked what happens to your budget if some of the millionaires go broke, such as during the dot com bust, or following the financial crash, or simply through “bad luck.” Or they might simply retire and get on a spaceship to Mars.
But I thought of a better question: what happens if a bunch of those millionaires are making their money at a chemical factory that is found to be poisoning the children down stream. Putting in environmental regulations might shut down the chemical plant, and/or it might cause the plant to be significantly less profitable.
The government is going to have to decide between protecting the population, or keeping its tax revenue. The government is in effect profiting from the chemical plant and has vested interest in its success. Shutting it down, and thus bankrupting a bunch of your millionaires could also bankrupt the government.
The government in your scenario will lose $100,000 per millionaire, so it might decide it’s cheaper to treat the poisonings rather than have to make cutbacks to their UHC system.
www.dailycapitalist.com/2010/12/10/newsofnothinginparticular
This is a great chart from the year 2008.
My link is not working … sorry. The chart showed how the top 10% of wealthiest taxpayers already pay 70% of the taxes.
I don’t give a fuck who came up with the idea. Banks come up with financial products, that’s what they do. They were the ones that came up with the idea of mortgages in the first place.
Holy fuck you are amazingly stupid, yet you participate in all of these threads spouting the same stupid nonsense.
The banks offered these mortgages and gave people a choice
30-Year Fixed 4.375%
30-Year Fixed FHA 4.250%
15-Year Fixed 3.500%
5-Year ARM 2.875%
5-Year ARM FHA 3.250%
The customer was then able to choose which product he/she wanted. And in the run up to the bubble people loved the thought of having half the interest rate, because it meant they could buy more home. That was a stupid fucking decision that caused a lot of people to end up in poverty. The banks didn’t do it to them, they did it to themselves.
A lot of people looked at house prices, and concluded that they’d keep going up. So instead of putting money down, they believed their house value would increase and create equity for them. That was a stupid fucking decision that caused a lot of people to end up in poverty. The banks didn’t do it to them, they did it to themselves.
Lots of people bought mortgages assuming their salary would go up, that they’d continue to get the same bonus they got the previous years, that they could never be laid off, that the economy could never go to shit. That was a stupid fucking decision that caused a lot of people to end up in poverty. The banks didn’t do it to them, they did it to themselves.
Some day you’re going to realize this.
No one was forced to put zero money down. They were offered, and they accepted. At any time they could have paid into their mortgage, or made extra payments. They could have waited until they saved enough money for a down payment. Instead, they thought they could get something for free. That was a stupid fucking decision that caused a lot of people to end up in poverty. The banks didn’t do it to them, they did it to themselves.
It was clear as day. The crash began when some guys in France finally spoke up about the mess. Obviously when the person issuing the loan doesn’t have to hold it there is no reasonable expectation that it would be secure. Lots of people were so used to investing in mortgage backed securities that they never gave it a second thought. That was a stupid fucking decision that caused a lot of people to end up in poverty. The banks didn’t do it to them, they did it to themselves.
God damn you are stupid. Just really fucking ignorantly stupid. No one forced anyone to do anything. The banks offered a product, and people choose to buy it. Contracts were written and signed. What’s really pathetic here is that there were actual cases of fraud, but you belittle that by suggesting everyone that got a shitty mortgage was a victim of fraud. Bullshit, people had just enough rope to hang themselves. They saw what they thought was a great scam, getting a house, with half the interest rate, with no money down. The American Dream. And the best part was that prices were going up so in a couple years they could flip it!
Stupid fucking decisions.
I don’t give a fuck what the minimum requirements were then or now. The point is that they were the minimums. I bought my house in Aug 09, even then the mortgage brokers we went to tried to sell us more house than we wanted. They told us prices would recover. They told us that even though it looks bad now you’ll still be able to refinance in a few years. Even then, just like now, we could have gotten an FHA loan with 5% down. What you consider “more stringent” I still think are laughably criminal. If you can’t afford 20% you can’t afford a house, it’s that simple. People that get shitty mortgages do it to themselves.
Are you fucking kidding me?
Why does this poor guy have to get a mortgage?
Why can’t this poor guy do even the smallest amount of homework before going into the negotiation? (Like looking up what ARM stands for)
This idiot in your scenario willingly chose to walk into a bank, ask for the mortgage consultant, then sit through the sales pitch. Unless they put a gun to his head it’s no one else’s fault by his if he picks up the pen and signs the contract.
I don’t give a fuck if he’s not proficient in English, or math, or history, or what ever the hell is his problem. If he isn’t capable of handling a sales pitch he shouldn’t have been in the room.
Name one other industry where this is some how different? That guy is an idiot if he puts himself into that situation, which was the original point. He made the really fucking stupid decision to even consider buying a house, when he should have kept renting. Frankly, it seems he’s too stupid to even be on his own, where is his state appointed guardian?
There is no justifiable excuse for buying a house without doing your homework. It’s a huge fucking decision, how do people not get that? Same goes for retirement planning. You should know what’s in your 401k, there is zero excuse for “losing it all” in the crash. Crashes aren’t uncommon, or unexpected.
And in the end, a shit load of people made the WRONG decision. But we’re supposed to feel sorry for these drop outs because the banks train their staff to negotiate.
It is no more legitimate to take advantage of someone else’s ignorance or stupidity than it is to shortchange a blind man, simply because you can.
In the world of business, there shouldn’t be any justifiable excuse for giving out idiotically high-risk loans, either. The wannabe homeowner should have done his homework before attempting to enter a deal; the bank should have laughed in his face. Giving out those bad loans was a highly irresponsible use of money.
And yes, I do feel worse for the wannabe homeowner. To use the previous administration’s parlance, there are known knowns, known unknowns, and unknown unknowns. When you’re a layman without much grounding in financial matters, that last category is fucking huge and is difficult to overcome. And insisting that he should become an expert on par with a bank, who does this shit for a living, before trying to buy a home is just one of the myriad ways the poor stay poor.
emack, when did you go all libertarian on us? The whole ‘personal responsibility’ hook, line and sinker, too.
When I need engineering drawings for the new septic system on my house I seek a professional who designs septic systems. And when I need a web site design for my business I seek out a graphic designer who is competent with electronic media. If my car needs repair I take it to a certified auto mechanic. And when people need to work with an eagle or a rattlesnake they come to me, because I have some expertise in that area.
We aren’t just talking about slack jawed morons looking to leapfrog themselves out of the trailer park into a McMansion via some government “program”. Nor are we interested in the folks engaged in the “flip it and run to the next” craze. These were always in the minority. We are talking primarily about regular middle class folks who worked hard, accumulated some assets although not vast piles of spare cash, but felt comfortable enough to make the step from the cramped 2 bedroom into the 4/2 that would give their kids their own rooms and let Dad have a den. They had pretty stable jobs, the economy seemed to be doing pretty well, and they couldn’t know what surprises were over the horizon.
So when Chris the carpenter and his wife Doris the medical receptionist wanted to buy that new house, they sought out people who were supposed to be experts, or at least qualified, in the home mortgage field. And they were told that the market was going up, and their house would “probably, almost certainly increase in value (I’m not offering any guarantees you understand, but just look around you, have you ever seen so many people buying new homes, you don’t want to miss out, and if you don’t buy now the same house will cost you so much more next year) and you can just refinance the ARM whenever the rates look like they’re going to change” blah, blah, blah.
Which turned out to be incredibly bad advice provided by people who were gaming the system from their own positions in the finance industry. People who had everything to gain from using a bellows to fan the flames of the purchasing bubble, absolutely nothing to lose, and the perfect cover – their professional position – for the operation. But neither Chris nor Dora knew this. There was no way they could have guessed, or investigated, or otherwise divined the truth. The entire finance industry was engaged in a massive Ponzi scheme, but it was all legal and above board. Dora and Chris believed the representations that were made to them because they were used to trusting the advice of professionals, just as they themselves would expect to be trusted by someone engaging their own services. And they got screwed, royally and completely.
And now you come along and blame them because “they did it to themselves”. Bad form there, emack, bad form.
Oh for crissakes, what term do you wish to use then when someone’s income increase causes them to have to use a next higher tax bracket? As for the rest of what you say up there, since it doesn’t apply to anything I’ve said, I suggest you be careful about throwing around that “stupid” accusation.
Really? You don’t think that caution when making a large purchase is a good idea? It’s better to buy first and think about it later?
Apparently they don’t teach reading comprehension then - see below.
None of which I have said.
Which I haven’t said. If nothing else, we are middle class, so obviously our tax rate doesn’t even approach that.
Perhaps all of the ads I see regarding getting out of credit card debt and helping folks keep their homes are all scams? I don’t know, since I don’t know anyone dumb enough to get into that sort of trouble.
No, what the facts are is that someone has decided that I said something I didn’t, repeated it enough that others like you are believing it, then this 100% number got pulled out when it has to be obvious that there is no way that we are paying anything like that in taxes. There are days when I weep for the IQ of this country.
Let’s say there are two tax rates. From $1 to $10,000, you pay 10% on. Anything above $10,000 you pay 50% on.
I think you think that if you make $10,000, you take home $9000, but if you make $10,001, suddenly you take home $5000.50. You lost money by getting bumped into a higher bracket.
But that’s not how it works. You never make less money by having a higher income. What actually happens is that if you make $10,000, you get back $9000, and if you make $10,001, you get back $9000.50. Or if you make $20,000, you’d get back $9000+5000=$14,000.
So your story about how you didn’t lose much money because when you made less you got bumped into a lower tax bracket doesn’t make sense. Your entire point in this thread was “I make less money and yet I don’t see a difference due to the way taxes work” and that claim is factually wrong.
No, I didn’t. Did you even read the original post?? Give it a try sometime.
I’m snipping most of the rest because you are making statements on things you don’t have any facts to support - ie, you have little idea what our combined income is, nor how much tax we pay.
Wanna bet Mr Tax Lawyer? You can’t think of any way that SS tax would drop that far?
Well, seeing as how I’ve used that word perception, as well as terms like “seems like”, “appears”, etc, what you decide to believe based on how others have jumped to wrong conclusions is not a problem of mine.
Exactly! “Has meant zero to us” does not imply that our income stayed the same (or increased?! The hell??)
Again, where do you get “no loss of income or an increase” from this?
And on and on. I think you even quoted my original post, and somehow you think that says that we have had no drop in income, and are now adding on the even bigger leap of illogic that I feel our income has increased.
I pay the bills in this house, I know how much money is coming in and going out. I would definitely notice if we had $750 a month less since that is about 30% of our monthly bills. I imagine rich people can absorb that without noticing, but we can’t.
And, again, at this point teh stupid has gotten so bad that I say - I merely made a post to show a different viewpoint which is - the loss of my ability to work has meant zero to us (meaning, trying to be perfectly clear here, that we are simply motoring on the same way we always have). I imagine there is a decent number of people like us, who find that a relatively small drop in income can be had, and it makes for a much better life to get out of the rat race. Meaning that those that wish to keep jacking up the tax rates instead of getting a handle on spending may find that more and more people choose to opt out, or opt down rather, if the drop isn’t all that significant.