So much for the 10 percenters not carrying the water

[cereb]

Dec 10, 2013 20:36:07 GMT -5 zibazinski said:

Sure the bottom feeders pay taxes but with whose money? Not their own but money they stole from taxpayers to begin with.

To whom are you referring to? Exactly what constitutes being labeled a "bottom feeder"?

[Deleted]

Dec 10, 2013 19:56:50 GMT -5 laterbloomer said:

@investorbob this is the part that makes me antsy about how they are presenting this stuff

The CBO’s calculation of before-tax income included both the money a household earned and the money it got from the government.

“Before-tax income is the sum of market income and government transfers,” said CBO. “Market income is composed of labor income, business income, capital gains, capital income (excluding capital gains), income received in retirement for past services, and other sources of income. Government transfers are cash payments and in-kind benefits from social insurance and other government assistance programs."

The households in the bottom 40 percent of income—which on average paid negative federal income taxes—were on average receiving many thousands of dollars in what the report calls “government transfers.” These transfers included, among other things, benefits from unemployment insurance, Medicare and Social Security, as well as from means-tested programs such as the Supplemental Nutrition Assistance Program (food stamps), and Medicaid.
- See more at: cnsnews.com/news/article/terence-p-jeffrey/cbotop-40-paid-1062-income-taxes-bottom-40-paid-91-got-average-18950#sthash.a8kLb95y.dpuf

Got it. And I agree they are mixing things up. Now how did you tag me? I tried using @username once and it didn't work. I tried the insert user link button and it didn't work.

[Deleted]

@investorbob The third icon from the right, the little guy attached to the @, click on that and it will ask for the user name. Type in the proper user name and it will search it. When it gives you an option select it.

[skweet]

It wasn't that long ago when the discussions revolved around the scary prospect of almost as many takers as makers. In the blink of an eye, we have 150% takers to makers. 60% of people are now incentivized to vote for politicians that promise them more of the 40%'s wealth. Marx doesn't go into great detail as to how the working class comes to consciousness, but it seems we are now in between the 4th and 5th steps of history. Turn on the lights Socialism, we have arrived. This should end well.

[billisonboard]

Dec 10, 2013 21:20:32 GMT -5 skweet said:

... This should end well.

Certainly hasn't ended well for the rich in the past, but maybe they will wise up in time this go round. Not counting on it, but there is always hope.

[djAdvocate]

Dec 10, 2013 20:36:07 GMT -5 zibazinski said:

Sure the bottom feeders pay taxes but with whose money?

theirs.

Not their own but money they stole from taxpayers to begin with.

bullshit.

[Value Buy]

From the article, and remember this is from the CBO:

SNews.com) - The top 40 percent of households by before-tax income actually paid 106.2 percent of the nation’s net income taxes in 2010, according to a new study by the Congressional Budget Office. At the same time, households in the bottom 40 percent took in an average of $18,950 in what the CBO called “government transfers” in 2010. Taxpayers in the top 40 percent of households were able to pay more than 100 percent of net federal income taxes in 2010 because Americans in the bottom 40 percent actually paid negative income taxes, according to the CBO study entitled, “The Distribution of Household Income and Federal Taxes, 2010.” “When refundable tax credits, such as the earned income tax credit and the child tax credit, exceed the other federal tax liabilities of the households in an income group, those households are said to have a negative average tax rate,” said the CBO study. “In its analysis, CBO measured individual income taxes net of refundable credits,” it said. In 2010, the CBO determined, American households in the bottom 40 percent paid negative amounts in income-tax dollars and a negative average income-tax rate. “Much of the progressivity of the federal tax system derives from the individual income tax,” said the report. “In 2010, the lowest quintile’s average rate for the individual income tax was -9.2 percent and the second income quintile’s rate was -2.3 percent.”

[EVT1]

Willie Sutton:  Why do you rob banks?-  Because that's where the money is.



 

[Deleted]

Dec 10, 2013 21:05:28 GMT -5 laterbloomer said:

@investorbob The third icon from the right, the little guy attached to the @, click on that and it will ask for the user name. Type in the proper user name and it will search it. When it gives you an option select it.

Thanks.  I gave it a shot this morning and it worked.  I had tried that before--even copied and pasted someones name.  Maybe the boards were just finicky because the search function would not find any names.

[happyhoix]

Dec 10, 2013 19:52:31 GMT -5 @patiencetried said:

 What Tax advantages do the 10percenters have?
 let's figure...
Joe Sixpack doesn't get to deduct the costs of his Lamborghini or his $5,000 suits... as a "business expense".
 Joe Sixpack doesn't have a "Blind Trust" or  a"Limited Liability Corporation". Joe Sixpack rarely invests in Municipal bonds for the tax break.
 Joe Sixpack doesn't even have an accountant to juggle the books and cook the numbers. 

I seem to recall a certain wealthy person who was able to write off some 70K in expenses spent on room and board for his olympic dressage horse.

Certainly not a deduction I'm ever going to be able to take.

[The Captain]

Dec 10, 2013 19:52:31 GMT -5 @patiencetried said:

 What Tax advantages do the 10percenters have?
 let's figure...
Joe Sixpack doesn't get to deduct the costs of his Lamborghini or his $5,000 suits... as a "business expense".
 Joe Sixpack doesn't have a "Blind Trust" or  a"Limited Liability Corporation". Joe Sixpack rarely invests in Municipal bonds for the tax break.
 Joe Sixpack doesn't even have an accountant to juggle the books and cook the numbers. 

Either you are trying to be funny or are woefully ignorant of the tax code and are just throwing out terms you don't understand.

I'll give you the benefit of the doubt and ask you to explain to me exactly how the above assertions would work.

In case you haven't caught on, I'm one of those nasty tax accountants whom you seem to think only lives to juggle books and cook numbers...but don't let facts get in the way of your rants.

[The Captain]

Dec 11, 2013 7:53:01 GMT -5 happyhoix said:

Dec 10, 2013 19:52:31 GMT -5 @patiencetried said:

 What Tax advantages do the 10percenters have?
 let's figure...
Joe Sixpack doesn't get to deduct the costs of his Lamborghini or his $5,000 suits... as a "business expense".
 Joe Sixpack doesn't have a "Blind Trust" or  a"Limited Liability Corporation". Joe Sixpack rarely invests in Municipal bonds for the tax break.
 Joe Sixpack doesn't even have an accountant to juggle the books and cook the numbers. 

I seem to recall a certain wealthy person who was able to write off some 70K in expenses spent on room and board for his olympic dressage horse.

Certainly not a deduction I'm ever going to be able to take.

Look up hobby loss rules sometimes.  That wealthy person also had to report the income.

[happyhoix]

Very interesting chart showing the percentage of household income over the last ten years has steadily increased for the upper income tier, steadily decreased for the middle income tier, and stayed pretty much the same for the 'bottom feeders.'

Americans with incomes from $39,000 - 118,000 went from 61 percent in 1971 to 51% in 2011.

thinkprogress.org/economy/2012/08/23/734781/middle-class-worst-decade/

The middle class is our consumer engine. The wealthy tend to save a larger chunk of what they earn. The poor don't have much money to spend. But the middle class spends a bigger percentage of their income on 'stuff' which is what keeps the economy cranking. 

If this trend continues and we end up with no middle class, just a bunch of poor people and a handful of very wealthy ones, our economic system will fail. We'll return to middle evil times, with a tiny bunch of ultra rich nobility, an ocean of unwashed serfs, and a handful of middle class craftsmen. I don't think that's where we want to be. 

[happyhoix]

Dec 11, 2013 8:06:29 GMT -5 The Captain said:

Dec 11, 2013 7:53:01 GMT -5 happyhoix said:

I seem to recall a certain wealthy person who was able to write off some 70K in expenses spent on room and board for his olympic dressage horse.

Certainly not a deduction I'm ever going to be able to take.

Look up hobby loss rules sometimes.  That wealthy person also had to report the income.

I did look it up. There are a lot of hoops you have to jump through to show your side job is a 'hobby.' If you have a good accountant(s) who knows all the rules and can guide you through the steps to demonstrate you had losses from a hobby, you can claim the deduction. 

So - once again - if you're wealthy enough to hire an accountant that knows all the hoops, you can demonstrate that you have deductions for a hobby, along with all the other deductions that are out there, if you just have the knowledge (or the money to hire someone with that knowledge). 

Most of us don't have that knowledge, or the money to hire someone with the knowledge.  

[zibazinski]

It's already happening with health care. Want to keep your doctor? Your doctor goes into concierge practice and you pay a fee each year to keep your doctor. Only the rich will be able to afford good care. Nothing has changed much. Easy peasy for DF to go to Cleveland Clinic to find out what's wrong with him in a timely manner with everyone knowing what the other is dong and a coordinator to make sure it's all right. Not everyone can afford that. I went to a PA who screwed up my blood work and then I had to redo it and then the lab was scrambling to try to get the correct orders from her.    I'm still hoping they did the right tests this time.

[Deleted]

Dec 11, 2013 8:24:59 GMT -5 happyhoix said:

Dec 11, 2013 8:06:29 GMT -5 The Captain said:

Look up hobby loss rules sometimes.  That wealthy person also had to report the income.

I did look it up. There are a lot of hoops you have to jump through to show your side job is a 'hobby.' If you have a good accountant(s) who knows all the rules and can guide you through the steps to demonstrate you had losses from a hobby, you can claim the deduction. 

So - once again - if you're wealthy enough to hire an accountant that knows all the hoops, you can demonstrate that you have deductions for a hobby, along with all the other deductions that are out there, if you just have the knowledge (or the money to hire someone with that knowledge). 

Most of us don't have that knowledge, or the money to hire someone with the knowledge.  

The goal is to raise a champion horse and then be able to make money breeding it.  They did not do well at the Olympics.  It would not be hard to show that they lost money, given how expensive it is to raise, keep, and train the horse.

Expenses (not "deductions") generally offset revenues, not losses.  I'm not up on hobby rules, but I remember looking into this back when people were making a big deal of it.  And as I expected, it was much ado about nothing.  Just a bunch of bitter people trying to vilify somebody because they are rich.

You don't get to deduct expenses for "hobbies".  You deduct expenses for businesses.  There are businesses that are called hobbies because they are done on the side and "for fun".  But they are still businesses.  Anyone who runs a business--hobby or not--gets to offset revenues with expenses.  And one does not have to be rich to have a hobby business or keep track of revenue and expense.

[AgeOfEnlightenmentSCP]

Dec 10, 2013 10:59:47 GMT -5 djAdvocate said:

Dec 10, 2013 9:44:43 GMT -5 AgeOfEnlightenmentSCP said:

WOW! I knew it was bad- and getting worse. But jeeze-- how long before the top 40% says, "Screw this!" and joins the bottom 40%?

how, pray would they do that?  by losing their income?  by moving to a place with higher taxes?

does your ridiculousness know even fewer boundaries than your physical self?

You really have NO understanding of how things actually work, do you?  People don't even have to lose their incomes- they can just arrange their affairs so as to report less.  And I'm not even addressing the illegal stuff- like collecting benefits while working for unreported cash.

[The Captain]

Dec 11, 2013 8:24:59 GMT -5 happyhoix said:

Dec 11, 2013 8:06:29 GMT -5 The Captain said:

Look up hobby loss rules sometimes.  That wealthy person also had to report the income.

I did look it up. There are a lot of hoops you have to jump through to show your side job is a 'hobby.' If you have a good accountant(s) who knows all the rules and can guide you through the steps to demonstrate you had losses from a hobby, you can claim the deduction. 

So - once again - if you're wealthy enough to hire an accountant that knows all the hoops, you can demonstrate that you have deductions for a hobby, along with all the other deductions that are out there, if you just have the knowledge (or the money to hire someone with that knowledge). 

Most of us don't have that knowledge, or the money to hire someone with the knowledge.  

Actually the trick is to be able to demonstrate your side job is NOT a hobby so I'm not sure how much time you actually spent looking it up or how good your reading comprehension is based on the above statements which are bolded.  I'm not trying to be snarky, but you have it backwards.

If you consider keeping good records and proving you can turn a profit jumping through "hoops" then I suppose you're right - it's too much work for most.  I suppose you think having to be able to keep records to support you income tax return is too much work also?

Most IRS publications are written at the 12-14th grade level which is too advanced for many I admit. However there are many, much more comprehensible how to guides available via Amazon.  If you are engaged in a for profit endeavor then it would make sense to invest a little time in learning the tax ropes.

If it's a hobby, then no you should not get the deduction and in fact this is a favorite hotbutton for the IRS - so good records and profit motive are key.

[AgeOfEnlightenmentSCP]

Dec 10, 2013 21:00:03 GMT -5 @investorbob said:

Dec 10, 2013 19:56:50 GMT -5 laterbloomer said:

@investorbob this is the part that makes me antsy about how they are presenting this stuff

Got it. And I agree they are mixing things up. Now how did you tag me? I tried using @username once and it didn't work. I tried the insert user link button and it didn't work.

laterbloomer & @investorbob -- First, thanks for that tip on tagging.  And second, what do you mean by mixing things up?  The way I read it, you may be saying that it is 'unfair' to include social security recipients with AFDC, WIC, SNAP, etc. recipients?

If that is the case, I would offer that it really doesn't matter the type of subsidy- what is important for us as a nation, and what we need to be concerned about is an ever-increasing dependent class, and a shrinking productive class that keeps all the balls in the air.  And this, no matter how they calculated it, does not even address the VERY large, and GROWING federal debt.

The concern is obvious:  America is on an unsustainable fiscal path.  At some point, the spending must be curtailed.  If interest rates stay within about a point of where they are now, we will need to slash spending something like 30% to 40% just to tread water.  And interest rates are likely on their way up.  Further, we would need to tax everyone.  A minimum income tax on every American of roughly 9% to 12% coupled with a cut in benefits AND the aforementioned spending cuts could begin to make progress on the debt- but only IF interest rates stay low.  

More likely, though- we're going to see more people exit the workforce (a five year high number quit in October: www.kansascity.com/2013/12/10/4683042/us-job-openings-reach-5-year-high.html ) and my guess is that they're not leaving due to a 'healthy job market' - a good number are saying f- this, or retiring. 

[Deleted]

Dec 10, 2013 19:52:31 GMT -5 @patiencetried said:

 What Tax advantages do the 10percenters have?
 let's figure...
Joe Sixpack doesn't get to deduct the costs of his Lamborghini or his $5,000 suits... as a "business expense".
 Joe Sixpack doesn't have a "Blind Trust" or  a"Limited Liability Corporation". Joe Sixpack rarely invests in Municipal bonds for the tax break.
 Joe Sixpack doesn't even have an accountant to juggle the books and cook the numbers. 

I'm nowhere near rich....but I can easily go get an LLC. Not complicated and not only for the rich as you say. Try again.

I can also invest in Muni bonds for the tax breaks. Just because regular people don't take advantage of it doesn't mean it isn't available. Try again.

As a business owner I can also deduct business expenses such as miles driven, dinner, etc. Again...not only for the rich. Try again.

I can easily have an accountant that can "find" me deductions for a bigger return just like the big guys. Try again.

Still not going to hold my breath on an actual answer from you.

[Deleted]

Dec 10, 2013 20:35:43 GMT -5 @investorbob said:

Dec 10, 2013 16:54:15 GMT -5 @financialtexan said:

Trust me....I wasn't planning on it.

I should have been more specific.  Patiencetried has never responded to one wild statement with anything but more wild statements....

Yeah....I noticed. I've also responded to his wild statements....so I'll be waiting on a rebuttal....while breathing of course!

[Value Buy]

Speaking of the middle class, many are retiring boomer babies, exiting the workforce.

They also recently inherited most of their parents investments after they passed on.

The parents stopped spending money while in retirement, deciding to save more money in retirement. and leaving it to their children through inheritance.

The baby boomers are starting to slow their spending habits, just like their parents, getting all their ducks in a row, so to speak, for retirement.

Remember all pundits tell people you have to have 10 to 18 times your regular income, to survive retirement years. You cannot accumulate these numbers without slowing your spending

This is probably the number two reason why the economy can not gain traction, behind number one, loss of jobs in manufacturing.

Baby boomers are also the most educated group of American citizens in the history of the country.

We also know (or at least try) to limit our federal and state tax obligation to the bare minimum that can pass muster with the IRS.

I think President Obama should do some kind of public service announcement to the nation, explaining that, "we can pay our federal tax obligations at max rates and still have all our money left without consequences to our well being and living standard."

Just like he did with ACA.

[Deleted]

AgeOfEnlightenmentSCP

The concern is obvious: America is on an unsustainable fiscal path. At some point, the spending must be curtailed. If interest rates stay within about a point of where they are now, we will need to slash spending something like 30% to 40% just to tread water. And interest rates are likely on their way up.

I actually agree with that. But doing this kind of math to manipulate what gets cut and save corporate welfare isn't going to impress me.

[Value Buy]

Dec 10, 2013 23:57:55 GMT -5 EVT1 said:

Willie Sutton:  Why do you rob banks?-  Because that's where the money is.



 

Kind of like the Federal government and JPM right now.

JPM buys a bankrupt bank at the urging of the Feds during the financial crisis, then the Feds sue JPM for bad business practices of the bank they bought for transgressions that bank did before JPM bought it.

[AgeOfEnlightenmentSCP]

Dec 11, 2013 10:27:53 GMT -5 laterbloomer said:

AgeOfEnlightenmentSCP

The concern is obvious: America is on an unsustainable fiscal path. At some point, the spending must be curtailed. If interest rates stay within about a point of where they are now, we will need to slash spending something like 30% to 40% just to tread water. And interest rates are likely on their way up.

I actually agree with that. But doing this kind of math to manipulate what gets cut and save corporate welfare isn't going to impress me.

I am definitely not a fan of corporate welfare - I am not convinced that the same moral hazard doesn't exist for businesses as individuals- and if you provide a company with a guaranteed government check, they're going to be just as lazy and unproductive as an individual in the same situation.

[djAdvocate]

Dec 11, 2013 9:45:29 GMT -5 AgeOfEnlightenmentSCP said:

Dec 10, 2013 10:59:47 GMT -5 djAdvocate said:

how, pray would they do that?  by losing their income?  by moving to a place with higher taxes?

does your ridiculousness know even fewer boundaries than your physical self?

You really have NO understanding of how things actually work, do you? 

no.  please explain everything to me, Paul.  you can start with what rich people are going to do when they get tired of paying for a system that they own and operate.

People don't even have to lose their incomes- they can just arrange their affairs so as to report less. 

they already do that.  we are not talking about that.  what NEXT?

And I'm not even addressing the illegal stuff- like collecting benefits while working for unreported cash.

then what ARE you talking about?

i breathlessly await your reply.  my mind is starving for enlightenment.

[AgeOfEnlightenmentSCP]

Dec 11, 2013 10:25:01 GMT -5 @financialtexan said:

Dec 10, 2013 19:52:31 GMT -5 @patiencetried said:

 What Tax advantages do the 10percenters have?
 let's figure...
Joe Sixpack doesn't get to deduct the costs of his Lamborghini or his $5,000 suits... as a "business expense".
 Joe Sixpack doesn't have a "Blind Trust" or  a"Limited Liability Corporation". Joe Sixpack rarely invests in Municipal bonds for the tax break.
 Joe Sixpack doesn't even have an accountant to juggle the books and cook the numbers. 

I'm nowhere near rich....but I can easily go get an LLC. Not complicated and not only for the rich as you say. Try again.

I can also invest in Muni bonds for the tax breaks. Just because regular people don't take advantage of it doesn't mean it isn't available. Try again.

As a business owner I can also deduct business expenses such as miles driven, dinner, etc. Again...not only for the rich. Try again.

I can easily have an accountant that can "find" me deductions for a bigger return just like the big guys. Try again.

Still not going to hold my breath on an actual answer from you.

Went rounds on this in the olden days of YM.  Some people just do not get it.  I was told I was FOS, a criminal tax cheat- or both.

[Deleted]

Dec 11, 2013 11:06:53 GMT -5 AgeOfEnlightenmentSCP said:

Dec 11, 2013 10:27:53 GMT -5 laterbloomer said:

AgeOfEnlightenmentSCP
I actually agree with that. But doing this kind of math to manipulate what gets cut and save corporate welfare isn't going to impress me.

I am definitely not a fan of corporate welfare - I am not convinced that the same moral hazard doesn't exist for businesses as individuals- and if you provide a company with a guaranteed government check, they're going to be just as lazy and unproductive as an individual in the same situation.

Okay, while we are agreeing on this much, can we do something about the compound interest on the debt? Changing that would save a boatload of money as well. If you give me corporate welfare and compound interest and cutting defense spending I'll take a second look at the benefits and see where we can trim some fat.

[AgeOfEnlightenmentSCP]

Dec 11, 2013 11:08:55 GMT -5 djAdvocate said:

Dec 11, 2013 9:45:29 GMT -5 AgeOfEnlightenmentSCP said:

You really have NO understanding of how things actually work, do you? 

no.  please explain everything to me, Paul.  you can start with what rich people are going to do when they get tired of paying for a system that they own and operate.

People don't even have to lose their incomes- they can just arrange their affairs so as to report less. 

they already do that.  we are not talking about that.  what NEXT?

And I'm not even addressing the illegal stuff- like collecting benefits while working for unreported cash.

then what ARE you talking about?

i breathlessly await your reply.  my mind is starving for enlightenment.

What I'm talking about is fairly obvious- perverse incentives lead to perversity.  We are going to have more people arranging their affairs so as to "qualify for benefits" than we are going to have that willingly pay outrageous, confiscatory tax rates.  And the more skewed the numbers get- the more like Greece we become.

[Deleted]

AgeOfEnlightenmentSCP, I only meant that counting food stamps, unemployment insurance, etc as being effectively negative taxes doesn't make sense.