Bar Stool Economics

[JCH]

I think they'd prefer to give it away through the Gates Foundation, rather than have it all taxed, which I think is even better. Surely, we can agree on that.

[sea-tax]

I think they'd prefer to give it away through the Gates Foundation, rather than have it all taxed, which I think is even better. Surely, we can agree on that.

You miss my point, if they want rich people to pay more taxes than why do they not stand up for what they think is right and lead by example. Again no one is stopping them from paying more if they so choose. My point is that they may say they are all for more taxes but when you get down to it, they really are not or they would have mailed the check yesterday.

[JohnH]

(Progressive taxation is also legalized theft, with a twist).

I believe Warren Buffet, Bill Gates, and anyone else who claims they make too much and should pay more taxes are pure hypocrites for advocating higher taxes. That is, unless they are willing to present evidence that they have put their money where their mouth is and have made regular contributions to the Public Debt, as is described in the Form 1040 instructions.

No need to tell me you make too much money and SHOULD pay more taxes when you already have a mechanism to voluntarily increase your own tax liability. If they REALLY believe they should pay more taxes, why don't they do the moral thing and actually do what is right, rather than just talk about it? Anyone who doesn't take advantage of that opportunity is just another bag of hot air, at least with respect to the subject at hand. It's nice to express these ideas if they want headlines & attention, but it means nothing beyond highlighting their hypocricy.

[JCH]

You miss my point, if they want rich people to pay more taxes than why do they not stand up for what they think is right and lead by example. Again no one is stopping them from paying more if they so choose. My point is that they may say they are all for more taxes but when you get down to it, they really are not or they would have mailed the check yesterday.

Sea-Tax, I got your point the first time. What a unique idea.

[DTS]

I think they'd prefer to give it away through the Gates Foundation, rather than have it all taxed, which I think is even better. Surely, we can agree on that.

Depending what the Gates Foundation's goal is and who benefits, yes, we can agree that money should be given freely to that first or in total and not to the gov't.

I've been thinking about taxation with all this stuff in the election and I keep coming back to the fact that if I'm to be taxed upon $250,001, what incentive do I have to be a success? Government does not give me the know-how or the personal drive with a plan like this. These are all done within me. How dare the gov't stifle this personal drive and it will.

I don't make anywhere near that amount, but this year, I was planning to expand my business a bit and hire someone to help me grow my business. If this plan is implemented, why bother? Why should me or anyone else bust their hump, for what?

Anyway, I guess this thread is bordering on "too political", so I'll stop (unless you drag more out of me! )

[Edsel]

Drain

Taxpayer paid $6500 installing an oil change drain on a facility that was not his.

Shortly thereafter, he abandoned the lease and the building. Can he deduct the cost of the drain?

[Bees Knees]

I agree

You miss my point, if they want rich people to pay more taxes than why do they not stand up for what they think is right and lead by example. Again no one is stopping them from paying more if they so choose. My point is that they may say they are all for more taxes but when you get down to it, they really are not or they would have mailed the check yesterday.

A donation to the US Treasury or any State or Local government in excess of tax liability is deductible as a charitable contribution.

TTB, page 4-15 under list of organizations where a contribution is deductible:

• Federal, state, and local governments if gifts are solely for public
purposes, including nonprofit volunteer fire companies, public
parks and recreation facilities, and civil defense organizations.

If a person truly believes they should have a greater share of supporting the public through taxation, why not make a charitable contribution to the government? Often times such individuals will give huge amounts to other charities and deduct the contribution on their tax return. What is the difference?

[Bees Knees]

Anyway, I guess this thread is bordering on "too political", so I'll stop (unless you drag more out of me! )

If we can keep the conversion civil and stick to taxes without getting into a political argument, the thread can continue.

A flat tax verses progressive taxation is a legitimate discussion that tax professionals should be able to discuss in a civilized manner.

I often find myself having to explain how progressive taxation works to clients who ask how a raise will affect their taxes. I've seen versions of WhiteOleander's story before. I think it is a good example of how progressive taxation works.

[DaveO]

I think Buffet protest too much

About the tax code and the fact he pays so little. No one forced him to organize as a holding company instead of as a mutual fund which is in fact what Berkshire Hathaway is. Organized as such, dividends and capital gains would be distributed at least annually and he would have the sublime pleasure of paying the taxes he says he should.

[Jesse]

I've been thinking about taxation with all this stuff in the election and I keep coming back to the fact that if I'm to be taxed upon $250,001, what incentive do I have to be a success? Government does not give me the know-how or the personal drive with a plan like this. These are all done within me. How dare the gov't stifle this personal drive and it will.

I don't make anywhere near that amount, but this year, I was planning to expand my business a bit and hire someone to help me grow my business. If this plan is implemented, why bother? Why should me or anyone else bust their hump, for what?

I bet if you do some tax planning you can expand and still keep your income at $249,999.

And if you work your butt off and you end up paying 35% on that extra $1.00 does that make everything you worked for so not worth it?

A couple of my clients complain about paying taxes on their interest or dividends, they're going to "pull it all out and put it under thier mattress". I suggest if you do that I would at least put it in a safe deposit box or a fireproof home safe! But if you look at it from another point of view, even though you must pay 15 cents for every dollar you earned you are still ahead by 85 cents per every dollar you earned.

[Bees Knees]

A couple of my clients complain about paying taxes on their interest or dividends, they're going to "pull it all out and put it under thier mattress". I suggest if you do that I would at least put it in a safe deposit box or a fireproof home safe! But if you look at it from another point of view, even though you must pay 15 cents for every dollar you earned you are still ahead by 85 cents per every dollar you earned.

I use a similar point when clients say why earn extra money when the government will just take more. I say, give me the extra money and I'll pay the extra tax for you.

Works every time.

[erchess]

Progressive Taxation and Incentive to work

Two points

1. The US has never to my knowledge suffered from a shortage of people willing to work jobs that pay for a significantly better lifestyle than was at the time available to people supported entirely by charity and/or welfare benefits. .

2. A worker who has retired below a certain age and begun to draw Social Security earns wages above a certain amount the individual suffers a loss of $1 in Social Security for every $2 in extra pay. I believe that a significant number of people elect to pay this 50% tax rather than work less or not at all or postpone drawing Social Security. .

[veritas]

Let's make our system more progressive

Two points

1. The US has never to my knowledge suffered from a shortage of people willing to work jobs that pay for a significantly better lifestyle than was at the time available to people supported entirely by charity and/or welfare benefits. .

2. A worker who has retired below a certain age and begun to draw Social Security earns wages above a certain amount the individual suffers a loss of $1 in Social Security for every $2 in extra pay. I believe that a significant number of people elect to pay this 50% tax rather than work less or not at all or postpone drawing Social Security. .

Why not a top rate of 90% for the uber rich?

[erchess]

Don't Laugh

Why not a top rate of 90% for the uber rich?

I don't know if these rates are still in force and I don't know if the rate was for all income or merely income above a certain amount but at one point according to media reports I saw some very rich people in the UK were paying a rate of 110%. When I saw that on the TV I was uneducated enough that I asked some adult if that really meant that the tax was greater than the taxed income. I could not yet conceive of such a tax.

On Saturday night on TV I saw someone propose a maximum annual salary for anyone of $10 Million with anything above that being instantly confiscated. I think that would be great. I would set a higher limit or maybe have none at all on people who own their own businesses alone or with some small number of other people. I would also allow funds greater than ten million to be set into a fund that pays for the eventual retirement of the CEO Pro Athlete or other highly compensated employee. In the case of a pro athlete I would want receipt of the retirement check conditioned upon behavior that would not result in sanctions if he or she were still playing. In the case of a business executive I would want the retirement checks to be paid if and only if the business remained current with its creditors and paid dividends to the owners. I would like to stop so called golden parachute payments except to people who joined the business within five years of its beginning.

I want to confess something that I don't often confess.. My views on economics are an odd and internally inconsistent mixture of traditional conservatism, libertarian conservatism, and socialism that never got sorted out in a college level economics course but did survive one college course in Politics.

[JohnH]

Why not identify everyone who has the skills or ability to perform their job at a very high level and take direct action? Since we know they will be earning so much that some people will be will be provoked to jealousy over the fortunes they can potentially earn, the government can handle the situation early in the process well before they get to the point that they are making more than is "fair".

Rather than fool with complicated tax schemes, let's just make them slaves of the state and assign a government employee to monitor what they earn, spend their earnings for the good of the masses, and give them a reasonable allowance for their efforts (determined, of course by that government employee). This would be an efficient process for "spreading it around", plus it would be a much more honest & straighforward process for using the power of the state to steal what's rightfully one person's property and give it to someone else. If the government is going to be a thief, at least it should be an honest thief - that's what democracy is all about.