Looks Like the Taxpayers got Fooled Again

Chris_V wrote: Top earners always pay more both in actual dollars and in percentages than anyone else, and pay the bulk of income taxes in this country. But the scary thing is that it doesn't take all that much to be considered "rich" in this country, and end up being the ones that are being asked to foot the bill due to class warfare. If I were to sell my house this year, then I'd be in the top 2% of incomes in the US, and you'd say "you're rich you SHOULD pay a lot in taxes 'cause you can afford it!" And I say BS. It's class warfare to be whining about the "rich" not paying enough when they already pay more, and when that particular "class" could be made up of any of us at any given time.

If they earn their momey via wages and whatnot, that is indeed true.

However.

Since long term capitol gains taxes are 15%, people with means have figured out a way around this fact. According to http://www.urban.org/UploadedPDF/1001201_Capital_gains_tax.pdf, people who earn an adjusted gross income of over $1M a year, 60.6% of their income is capitol gains. Lets be generous and let them only have half of that be long term gains (over a year).

SO if you made AGI of $1M, $303 is short term gains (36%), $303 is long term gains (15%), and the rest is normal income- 36%.

$45.45k in long term gains taxes and $251k for taxes in the rest. Total- $296K in taxes, or a net rate of just under 30%.

Just barely above a person earning up to $160k.

Vs. a person who EARNS $1M, who does pay $60k more.

There's your fainess argument.

Then there's the far more important argument- ballance. If the TOP rate was 15%, then there wouldn't be a big issue.

But when the discount rate is less than half the normal rate, don't you think investors would try to use this system to pay less taxes, and make more money? Which would drive both the stock market and the real estate market to a bubble??? Shocking that it actually happened.

WAAAAY to much emphasis on the stock market, and to few on real corporate investments. If you want corporate investment, fine- keep that, and ONLY that rate down. But for trades, and second home sales? No, that will drive people to force that market to be a bubble, as it just has been.

That's my main issue with capitol gains taxes. Personal earning ballance.

Eric

oops double post

Xceler8x wrote: You guys are great. I was just in here busting up your "yeah! I love Republicans because they help the rich! Wait a min..I'm not rich." Party you were having. On to the ball bustin!

Jensenman wrote: If you knew anything at all about the capital gains tax, you'd know that it hits the middle class disporportionately. Let's say you buy a house to fix up and sell, after you pay for the house, repairs, renovations etc and get it sold you make $10,000.00.

Are you talking about "McCain Middle Class" or everyone else's middle class? Most middle class folks I know are working two jobs and can only afford one (1) house. Where I grew up owning two homes put you solidly in the "well to do" category. Bush ain't helping out the middle class with a capital gains tax cut.

Duke wrote: Go learn yourself about the difference between profit and profit margin. Then go learn yourself about how much profit margin the Big Greedy Oil Companies made in the last few years.

You're right. I need to learn a thing or two. I then checked out this article in Us News and World Reports: Exxon's Profits: Measuring a Record Windfall It had this to say:

The oil industry urges people to look beyond its profits to its profit margin: about 7.6 percent of revenues late last year. That's not much higher than the 5.8 percent profit margin for all U.S. manufacturing, and if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales.

Well Dang. Looks like ol'Duke is right! I don't know squat! The nxt paragraph says:

However, profit margins across industries vary greatly based not on how well each business is doing but how capital- or labor-intensive it is. Oil is among the most capital-intensive. But look at the oil industry's profits compared with shareholder equity it has available for investment. The U.S. Energy Information Administration's most recent analysis of the oil industry's performance, released just last month, showed oil industry return on equity of 27 percent—about 10 points higher than that of other manufacturers. And it has been higher throughout this recent era of high world oil prices, just as it was back during the oil shock that hit in 1980.

So hey! I ain't so far off! Oil profits are high and higher due to high prices. Not something it would take Einstein or Warren Buffet to realize. High prices = high profits! Well howdy! I am a smert fella!

poopshovel wrote: Please explain to me how increasing taxes on oil companies decreases the price of oil. Then, please give me the maximum percentage of income you think any individual should pay in tax. I'm listening.

Actually, I'm with Ron Paul on this one. I think we should all pay lower taxes. ALL. Not just the wealthy. Course, that would mean we'd have to stop paying for all these wars that have historically given us such a great return on investment (/sarcasm). We'd also have to stop socializing the banking industry by subsidizing Wall St. failures. Legalizing drugs and taxing them would also help our national solvency. Hell, if we taxed legal drugs that might even pay for a national healthcare plan instead of just letting our lawmakers have state subsidized healthcare. Imagine that. We could all have "Cheney-care" style health plans!! But then that would mean that the R's would have to start talking about helping all people instead of just the rich, christian, and white. Why in hell would they do that? Short of the moral imperative to help fellow man and all that. Stupid morals.

Seriously; I'd be really interested to hear your answer to the questions:

1. How does increasing taxes on oil companies decrease the price of oil.

2. What's the maximum percentage of their income you think any individual should pay in tax.

poopshovel wrote: Seriously; I'd be really interested to hear your answer to the questions: 1. How does increasing taxes on oil companies decrease the price of oil. 2. What's the maximum percentage of their income you think any individual should pay in tax.

a-HEM. I said

Xceler8x wrote: Actually, I'm with Ron Paul on this one. I think we should all pay lower taxes. ALL. Not just the wealthy.

Bottoms up!

Datsun1500 wrote: Suppose that every day, ten men go out for beer and 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 would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar 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 beer by $20. Drinks for the ten now cost just $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 drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 drink his beer. So, the bar 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 drink 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 I!' 'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? 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 drinks, so the nine sat down and had beers 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

That analogy has been around the block for a long time. Not exactly accurate, either. SInce Rich people still get a lot of benefit from paying taxes- since their great weath is protected by our government.

BTW, where will they go? Even if capitol gains taxes were 50%, where would people then go to have an economy even close to the US where one can make so much money. Yea, some third world country you can make 5% and pay 10% tax, or the potential here in the US to make 15% and pay even up to 50% tax- you make more money here. No, people won't leave. There's nowhere else in the world that they can take their money and come close to the income as you do here....

My biggest problem is unballanced sources of income, which can (and I think did) lead to unballanced emphasis on certain parts of our economy. We've gone from a manufacturing country to a financial country. So we used to give the world useful products, and now we just launder money....

Eric

Eric

Xceler8x wrote: Newsflash there cochise. You ain't gonna be rich anytime soon. We're on a board about racing cheap cars. This isn't the Motley Fool Rich Guys' Corner. Guys, come on. You're being snowed here. Just admit it and let's move on.

Newsflash asshat:

http://www.visualizingeconomics.com/wp-content/uploads/2005_income_distribution.gif

I'm above 90% of the nation. I AM "the rich," and my household is only at <$150k annually. I'm tired of your BS class warfare just because of you picking out the top 1%. The tax breaks covered vastly more than the top berkeleying 1%. Any thought that it didn't and doesn't affect the rest of us is being absolutely disingenuous. The top 20% pay the bulk of the taxes, and that top 20% goes down to the people making well under $100k annually. And the top 20% are the people being called "rich" by the lefties.

My household income damn sure ain't enough to make me rich, yet the AMT (alternative minimum tax) is looking worse by the moment because it's getting a lot closer to my tax bracket.

http://en.wikipedia.org/wiki/Alternative_Minimum_Tax

The AMT was devised to cover just 155 households which paid no tax due to loopholes in the late '60's tax code (loopholes in place due to lobbying of Congress by different special interest groups! ) and the bottom threshold of AMT has gotten closer to the middle class' upper limits due to inflation.

It is long past time to disassemble this amalgamation of bullE36 M3 called a tax code and replace it with a national sales tax. Yeah yeah, I know: unfair. Hell no it ain't unfair. It's only unfair if you are currently flying under the tax radar because you are hiding income.

I too like the idea of a national sales tax, and I am in one of the states that would SUFFER from one initially.

On the topic of oil, The only reason that they raised the price to $4/gal was cause they could.

As the price rose the sale of gas bottomed out. If noone noticed the price started to fall prior to the collapse of the economy. The quarterly sale of gas hit a near all time LOW! At that point, the day after this came out, prices dropped. They continued to lower slowly. Then F&F came out, wall street freaked, lots of stock was called back in, blah blah blah.

This, so far, is still a capitalist society. If you have a demand driver that is way high, why not push towards that monetarily? If you sold a product, everyone wanted, for $5, but could get $25 for it why wouldnt you raise the price? Now Im sure that you would not go all the way to the $25, but heck why not lose a couple of customers and sell them for $15. This is what happened. Do I agree with all this? To a point, but it will hit everyone till they decide that they do not want to spend that much and quit buying.

Back to the original topic, I never thought that they should have bailed out the system. Of course, I never thought that they would need to make it so people who had no source of income or anything could get a house to begin with. Its great to try to help people, but why do we need to support there every whim? This is why a lot of people do not work in areas. I know in the Seatle area that their is a large population of homeless. Main reason is that they get more money by not working than working. How they come up with this, I do not know. It does happen, and this is why there should be more checks on the system to keep this from going on and on and on.

Berkeley the AMT. A few years ago, I paid more in income tax than my farking salary. My AMT penalty was in the tens of thousands. Berkeley.

Check this: http://despair.com/government.html

Proof that a picture and a few words can make for an essay.