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'When Taxes Penalize People Making Money, Money-Making People Cut Back"
(snip)"Obama Taxes Affect Roughly 7% of Residents Making Money
The Wall Street Journal reveals that about 7% of American taxpayers - 3.8 million - fall into the bracket of making money in excess of $200,000. Their tax burden translates into 62% of all federal taxes received. Under the Obama tax plan, a good number of deductions are slated for phase out, while other sources of making money, such as capital gains and also dividend rates, would be taxed at a higher rate.
When Making Money is Penalized, Money-Makers Engage Tax Planners
While the DOW is plunging below 6800, those few who are still making money are not taking the threat of Obama taxes hunkering down. Instead, tax planning for the rich - or those purported to be - is a new cottage industry that has clever CPAs give their clients some startling advice.
ABC News quotes one successful attorney who unabashedly states that at this point the biggest goal is to get the reportable income below $249,999.00. The lawyer's rationale - why bother working hard to subsidize those who are hardly working - resonates with many who are making money and have not jumped on the Obama Administration bandwagon.
Another well to do business owner, a dentist, has determined that putting in less hours, seeing less patients, and taking off more time will get the reportable income just under the $250,000 mark. Sure, it also means laying off staff, but this is the nature of business. When making money is penalized, a decrease in productivity is tacitly rewarded."(snip)
(snip)"While Oprah and George Clooney might not mind paying extra, the upper middle class and those raking in just barely more than $250,000 - at the expense of long nights, working on weekends, and not seeing the family as much as they want to - may not appreciate having their making money penalized.
Perhaps it is the law of unintended consequences that will find many of these folks cutting back, which in turn not only reduces the hoped for tax revenues, but also contributes to the pool of unemployed, as small business owners are letting employees go."(snip)
I would also comment that if 'high gear' earners decide to trade their late nights and weekends at the 'office' for lower reportable incomes and more time spent with the family, there will be a DIRECT impact on the exotic dancing industry in cities where a significant number of club customer dollars come from these 'high gear' earners !!! Lowering their taxable incomes will leave former 'high gear' earners with fewer discretionary dollars to spend. Cutting out the late nights at the 'office' in favor of the 5pm commuter train to the suburbs will put them out of range of downtown strip clubs.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
I'm definitely seeing a lot of this.
I have a friend who makes 250k. He went in and asked his boss for a 2 grand pay cut, because it would save him cash in taxes.
I also know several small business owners who have decided "if you can't beat 'em, join 'em!"
Some of them are making sure their business is secure with their subordinates, and are laying themselves off (in order to make themselves able to collect benefits, Obama's health insurance, blah blah blah), or cutting their own pay.
I can't say I blame them. They've worked their butts off to get where they are, and now they're getting punished for it.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
I'd happily pay those kinds of taxes if I was making $250K a year! Hell, I'd happily pay the 39% if I was making $100K a year.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
Hmm, picture this: My income is $249.999.99. :D Lo & behold, my lottery ticket matches most of numbers, which yields a $100K prize. Am I going to feel :'( & >:( because I'm "only" ::) going to clear $60500 instead of $65000 ??
Also, wouldn't more motivated investing in tax exempt bonds make more money available for municipalities, and thus help keep those taxes down??
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
^^^ re lower interest rates on muni bonds, yes these might keep state and local tax rates down in the short term as those states and localities are able to cover their shortfalls with borrowed money. However, in the longer term, bond money must eventually be paid back with interest ... meaning even higher future tax rates due to an ever increasing cost to taxpayers of making bond interest payments in addition to covering current year operating budget requirements. California is currently in deep budget doodoo primarily because a very large slice of the state budget must now be diverted to make principal and interest payments on bonds issued in previous years. California's bond debt burden has also been responsible for threatening the state's credit rating and thus increasing the interest rate that California taxpayers must pay to service future bond debt.
Ultimately there are only two ways for state and local gov'ts to keep taxes down. One is to actually spend less money. The other is to expand the tax base i.e. encouraging more profitable businesses and high earning individuals to move to their jurisdiction and share the existing tax burden over a larger number of taxpayers. Arguably, current gov't economic plans are doing neither ! And if existing profitable businesses and high earning individuals do decide to voluntarily reduce their earnings in order to avoid a draconian new tax burden, gov'ts will lose a MAJOR amount of expected tax revenue. In the absence of cutting gov't spending (which seems the ultimate impossibility) this will mean that those gov'ts will eventually come looking to make up for those lost tax revenues from individuals earning far less than $250k !
But hey if some of you consider it your patriotic duty to pay ever higher tax rates, knock yourselves out. In fact this year you can also knock yourselfs out by 'making up for' the US income taxes that I will no longer be paying ( on the first $91k of income anyhow) !
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
Quote:
Originally Posted by
Melonie
But hey if some of you consider it your patriotic duty to pay ever higher tax rates, knock yourselves out. In fact this year you can also knock yourselfs out by 'making up for' the US income taxes that I will no longer be paying ( on the first $91k of income anyhow) !
Ahaha...now the deficit will be a bizillion + Mel's avoided taxes. Whatever.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
hockeybobby
Ahaha...now the deficit will be a bizillion + Mel's avoided taxes. Whatever.
Why does it have to be We decide what to spend and YOU pay for it?
Mel is not avoiding taxes. She has removed herself from an obviously failing system.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
^^^ yes I am still paying all of the US income and other taxes that I am legally required to pay. See The foreign income exclusion provides for the first $91k of 'foreign' income to be exempt from US taxes ... which in my case will provide about a $35k-$40k tax savings at existing US tax rates ( between US federal tax plus NY state tax plus NY city tax).
More to the point, in order for me to wind up with an 'equal' amount of $35-$40k in additional after tax income ( that I get to keep down here simply by living down here and taking the 'foreign' earnings exclusion on US taxes) while still living in New York, it would have been necessary for me to find an additional income source of somewhere around $55-$70k in gross income ... which is damn near impossible given the current investment / interest rate economic climate. The disparity is of course due to the fact that any additional earnings on my part would have been taxed at the higher marginal rate if I still resided in New York / USA.
As the original article points out, this same higher marginal tax rate applying to additional earnings is being addressed in a different fashion by many Americans who don't want to become ex-pats. They will simply avoid paying additional taxes by choosing to earn less gross income !!! However, the cumulative effect on US tax revenues will be the same ... less tax revenue dollars coming in from the highest earning 5% of Americans means more tax burden will eventually have to be shifted to Americans in the lower earnings percentiles to cover this tax revenue shortfall.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
Deogol
Why does it have to be We decide what to spend and YOU pay for it?
300 million people can't all decide where every penny should go. That's not the way it works, and politics is all about choices. When you get the chance, just vote for the people who you think will make the right choices, and trust your system.
Quote:
Mel is not avoiding taxes. She has removed herself from an obviously failing system.
Mel is living in another country in order to avoid paying taxes. Your system is not failing, you are just unhappy with the result of an election...just like Mel.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
person
39% for over $250k? Cry me a river! Maybe I should move to the US!
Well, since you think 39% is so fair (and don't forget the other FICA, Medicare, State and Local taxes that drive the burden to 50% or more) I would be glad to sponsor you.
FBR
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
Paris
I'd happily pay those kinds of taxes if I was making $250K a year! Hell, I'd happily pay the 39% if I was making $100K a year.
You will get your wish soon. $100K is rich compared to being on the government dole. It's unfair and unpatriotic that you earn so much. You should be ashamed.
FBR
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
FBR
Well, since you think 39% is so fair (and don't forget the other FICA, Medicare, State and Local taxes that drive the burden to 50% or more) I would be glad to sponsor you.
FBR
We've got loads of indirect taxes too. It would be pretty painful to try and compare the value of AU and US after-tax dollars, actually :(
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
Melonie
^^^ yes I am still paying all of the US income and other taxes that I am legally required to pay. See
http://www.irs.gov/businesses/small/...=96822,00.html The foreign income exclusion provides for the first $91k of 'foreign' income to be exempt from US taxes ... which in my case will provide about a $35k-$40k tax savings at existing US tax rates ( between US federal tax plus NY state tax plus NY city tax).
I doubt you would pay anywhere near $35k-$40k in taxes on $91k income, unless you are self-employed and paying 15% SECA taxes.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
Most of us are not "lucky enough" to have ANY much less 91 grand worth of "foreign income"
So I guess we will just stay here.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
Paris
I'd happily pay those kinds of taxes if I was making $250K a year! Hell, I'd happily pay the 39% if I was making $100K a year.
you say this until you actually have to fork it over. if you made $400 consistently working 5 days a week for the whole year you would clear 100k. you just busted your ass working 5 days a week, 52 weeks now you have to hand over $40,650 of that $104,000. this is just in terms of dancing. imagine busting your ass for a degree and building a business that allowed you to make just $250,000. For that $250,000 you are going to be forking over $97,500:O you can say these things when you arent making that kind of money but imagine how the people that fall into the 39% tax bracket feel.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
The problem here is how the AMT works. According to the Congressional Budget Office, "Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households." [CBO, April 15, 2004] An ironic date for the issuance of such a report. Indeed, the AMT actively discriminates against people who live in high tax states, like New York and California. It also has the perverse affect of encouraging higher wage people to emmigrate (leave) from the United States, or at least emmigrate from high tax states to lower tax states. Neither is a legitimate goal of any rational system of taxation.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
Melonie and FBR are right. As usual. It's NOT just 39 %. It's ALSO payroll taxes; excise taxes; phone taxes; gas taxes; other energy taxes; import duties and we still haven't even started talking about State and Local. I've posted this before: I make a very comfy six figures BUT more than half is paid out in taxes. Compared to what folks in Canada, Australia, Denmark and other European countries actually get for paying 50% and sometimes even slightly less , I'm getting SCREWED. Lousy roads, incompetent police, outdated airports and trains etc. etc.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
Eric,
I doubt very much that you, or anyone else, pays over half of their income in taxes. Even before Bush's tax cuts, the wealthiest Americans were paying less than 1/3 of their income in federal taxes. I doubt that there are enough state and local taxes to put that even near 50%.
http://www.washingtonpost.com/ac2/wp...nguage=printer
(snip)
On average, each of the 400 top taxpayers paid more than $21 million in federal income taxes last year on income of more than $64 million, according to estimates based on the IRS data.
(snip)
and this article was from Before Bush's tax cuts were passed.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
jessica0585
you say this until you actually have to fork it over. if you made $400 consistently working 5 days a week for the whole year you would clear 100k. you just busted your ass working 5 days a week, 52 weeks now you have to hand over $40,650 of that $104,000. this is just in terms of dancing. imagine busting your ass for a degree and building a business that allowed you to make just $250,000. For that $250,000 you are going to be forking over $97,500:O you can say these things when you arent making that kind of money but imagine how the people that fall into the 39% tax bracket feel.
Yes, I have done this. Actually, in the past if I am creeping up on the higher tax brackets, I take a vacation. Just like the dentist in the OP, I value my time and relaxation more than I value a huge bank account.
What happens if dancers stop going into work to avoid hitting a higher tax bracket? More money in the club for you!
I actually think that it is a fabulous idea that people become self regulating in regards to income caps. People will have more free time, and be under less stress. The work load will be spread around to a greater number of workers, meaning industry isn't so dependent on a vital few individuals. Less risk to industry, less stress on individuals, more opportunity to a greater variety of workers and all because a dentist decided to cut back his client list leaving an opening for new dentist to expand his/her business. Heck, this new business person can even benefit from the highly experienced staff the seasoned dentist has just cut back on!
I've always opted for more free time if the taxes were getting too expensive. I'm sure that the other dancers in the club didn't mind at all that my regulars were sitting there just waiting to spend their money on some hottie while I was taking a break.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
eagle2
Eric,
I doubt very much that you, or anyone else, pays over half of their income in taxes. Even before Bush's tax cuts, the wealthiest Americans were paying less than 1/3 of their income in federal taxes. I doubt that there are enough state and local taxes to put that even near 50%.
http://www.washingtonpost.com/ac2/wp...nguage=printer
(snip)
On average, each of the 400 top taxpayers paid more than $21 million in federal income taxes last year on income of more than $64 million, according to estimates based on the IRS data.
(snip)
and this article was from Before Bush's tax cuts were passed.
Well you're wrong. As usual. Not too long ago I actually added up everything I made ( well into six figures ) and how much I got to keep and spend. I included all the "hidden" taxes I pay. Look at your phone bills ( cell & land-line) and your utility bills and check out all the taxes. PLUS all the sales tax. PLUS all the corporate taxes that are passed down to consumers like me. (I didn't even include those.)
After Federal witholding including payroll taxes; State witholding; City witholding PLUS NYC Corporation tax PLUS property taxes and all the aforementioned "hidden" taxes (supra) I am left with about 47 cents of every dollar I earn.
Please don' t be fooled by folks who make millions and even billions that are NOT taxed as ordinary income but instead are treated as Capital Gains.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
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Originally Posted by
Eric Stoner
Compared to what folks in Canada, Australia, Denmark and other European countries actually get for paying 50% and sometimes even slightly less , I'm getting SCREWED.
http://mirror.nla.gov.au/budget/2007...p1_bst5-10.htm
According to chart G3 in the above, AU and US tax revenues have roughly the same % of indirect taxes. So we pay shitloads of tax _before_ getting our money, and _after_ as well :D
Eg. I want to buy an investment property
- Company gets taxed employing me
- I get taxed when they pay me (income tax)
- I put the money in the bank. The interest counts as income, so that gets taxed
- I use my savings to buy a property. Stamp duty. Pay 4% of $500k for a typical home = $20k
- I receive rent. Used to be able to get a tax deduction via investment properties' mortgages, but not nowadays due to lower interest rates. Damn.
- I sell the property. Capital gains tax
Much better to spend my money on beer and strippers. Oh wait, alcohol has special taxes passed on to consumers as well, and strippers have GST. Shit. :(
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
Quote:
Originally Posted by
Eric Stoner
Well you're wrong. As usual. Not too long ago I actually added up everything I made ( well into six figures ) and how much I got to keep and spend. I included all the "hidden" taxes I pay. Look at your phone bills ( cell & land-line) and your utility bills and check out all the taxes. PLUS all the sales tax. PLUS all the corporate taxes that are passed down to consumers like me. (I didn't even include those.)
After Federal witholding including payroll taxes; State witholding; City witholding PLUS NYC Corporation tax PLUS property taxes and all the aforementioned "hidden" taxes (supra) I am left with about 47 cents of every dollar I earn.
Please don' t be fooled by folks who make millions and even billions that are NOT taxed as ordinary income but instead are treated as Capital Gains.
Overall, Americans pay 28% of total GDP in income.
http://en.wikipedia.org/wiki/List_of...centage_of_GDP
You're paying almost twice as much as the overall average?
Conservatives often exaggerate how tough it is for the wealthy and how great the poor have it.
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Re: 'When Taxes Penalize People Making Money, Money-Making People Cut Back"
http://www.rushlimbaugh.com/home/men....ImageFile.gif
This is also corroborated at the state / local level - i.e. NYC mayor Bloomberg recently stating that just 40,000 ( i.e. 1/2 %) of New York City's 8 million residents wind up paying for more than 50% of the city's gov't budget via their local income taxes.