Definition of 'rich' changing... already

[HowardRoark]

Re: Definition of 'rich' changing... already

I guess we will find out where the Obama tax rate brackets will be if he becomes President. I haven't heard one specific from McCain on his tax policy. I suupose I could be more active and go to John McCain's website to see what he says but I haven't. Yes I know the Bush tax law expires in 2010 and taxes would go back to the pre-enacted rates. Can you tell what the capital gains rate will go back to? Will there be more than one capital gains rate? How about the treatment of qualified dividends from corporations?

McCain has said that he would make the Bush tax cuts permanent. He also wants to lower capital gains taxes. I ams ure he would leave taxation of qualified dividends alone.

Now, I need to get a Grain Belt and sit back and watch the "Battle of the CPAs".

[Tyrone Bigguns]

RG,

You just got taken to school. Not only did ThunderDan answer your post, he did so eloquently and without derision.

You might learn a thing or two from him.

[LL2]

RG,

You just got taken to school. Not only did ThunderDan answer your post, he did so eloquently and without derision.

You might learn a thing or two from him.

So, we have a CPA and a guy owning a successful tax business in a debate. That should be some good reading.

[ThunderDan]

RG,

You just got taken to school. Not only did ThunderDan answer your post, he did so eloquently and without derision.

You might learn a thing or two from him.

So, we have a CPA and a guy owning a successful tax business in a debate. That should be some good reading.

Maybe this CPA is an owner/partner in his CPA firm.

[Tyrone Bigguns]

RG,

You just got taken to school. Not only did ThunderDan answer your post, he did so eloquently and without derision.

You might learn a thing or two from him.

So, we have a CPA and a guy owning a successful tax business in a debate. That should be some good reading.

Better than most of your posts.

[Fosco33]

RG,

You just got taken to school. Not only did ThunderDan answer your post, he did so eloquently and without derision.

You might learn a thing or two from him.

So, we have a CPA and a guy owning a successful tax business in a debate. That should be some good reading.

Maybe this CPA is an owner/partner in his CPA firm.

I need a new CPA

I work in multiple states and was 'compensatory' because I travelled to one city for more than a year (meaning all my travel expenses are 'income')... And I got married and had a baby plus I'm transferring my 401(k)...

Gonna be an ugly year.

[Freak Out]

http://www.nytimes.com/2008/10/31/us/politics/31taxes.html?adxnnl=1&ref=politics&adxnnlx=1225493287-Eb2GTJYpl7iONxQpFGhoIA

I'm sure info like this is in the RR somewhere but figured I would throw it out anyway. There are loads of "non-partisan" looks at both tax plans and this is as good as any. Of course any plan would have to be approved by congress.

For Incomes Below $100,000, a Better Tax Break in Obama’s Plan
By STEVEN GREENHOUSE

Independent analyses of the presidential candidates’ tax proposals show that those who make less than $250,000 a year would not see their taxes raised under Senator Barack Obama’s plans. Further, Mr. Obama would generally cut taxes more than Senator John McCain would for households with incomes less than $100,000 a year.

Mr. McCain would cut taxes generally on par with Mr. Obama for those making $100,000 to $250,000 a year, the analyses found, but those making $250,000 a year and above would typically pay less in taxes under Mr. McCain.

The analyses were conducted independently by the nonpartisan Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, and Deloitte, the accounting giant, at the request of The New York Times.

Mr. McCain has been sounding the traditional Republican tax-cutting theme, trying to convince voters that Mr. Obama, the Democratic nominee, wants to increase taxes and spread the wealth like a socialist.

Helped by the emergence of Joe the Plumber and using Mr. Obama’s own words, Mr. McCain has insisted that Mr. Obama’s tax policies would hurt small businesses and upwardly mobile individuals, while providing welfare for low-income Americans.

Mr. Obama has been fighting those accusations in stump speeches and commercials, in recent days asking members of his audience to raise their hands if they made less than $250,000 a year. Fewer than 3 percent of households make more than $250,000.

But the tax proposals are complicated, and tax bills are affected by personal variables. Analysts at the Tax Policy Center and Deloitte tried to explain the ramifications of the candidates’ plans by applying their tax policies to various situations.

Roberton Williams, principal research associate at the Tax Policy Center, said the analysis found that: “On the average, people with income below $100,000 would get more from Obama than from McCain. From $100,000 to $250,000, they’d be fairly even under Obama and McCain. For those over $250,000, Obama increases taxes.”

Mr. McCain’s plan includes extending President Bush’s income-tax cuts and doubling exemptions for dependent children to $7,000 by 2016. He would also give a refundable tax credit to households that buy health insurance and would impose taxes on employer-provided coverage.

Mr. Obama opposes extending President Bush’s tax cuts. Instead, he proposes various tax breaks, including a $500 tax credit for each person in a household who works, a larger child care tax credit, a $4,000 tax credit each year for the first two years of college, and eliminating all income taxes for those over 65 with income less than $50,000 a year.

To reduce the deficit and inequality, he would raise the tax rate for single households with incomes of $200,000 or more and for families with incomes over $250,000. He would also raise taxes on capital gains and dividends.

The median household income nationwide is $50,233, according to the Census Bureau. The Tax Policy Center found that, for married couples with incomes of $50,000, two children and both parents working, income taxes would be cut by $284 more under Mr. Obama’s plan — by $1,005, compared with $721 under Mr. McCain’s plan.

Deloitte also examined such a couple and found similar benefits; a $700 cut under Mr. McCain’s plan and $1,000 under Mr. Obama’s.

For married couples with incomes of $500,000 with two children and both parents working, the Tax Policy Center found that Mr. Obama would raise income taxes by $3,363, from $110,955 now, while Mr. McCain’s plans would leave taxes unchanged. Deloitte found that a $500,000-a-year couple would pay $3,100 more under Mr. Obama, with no change under Mr. McCain.

Clint Stretch, Deloitte’s managing principal of tax policy, said most families would benefit under Mr. McCain’s plan because of an increased exemption for each child. That, he said, would reduce taxes for low-income families by about $230 per child and for high-income families by about $800.

To help low-income families in particular, Mr. Obama would give a “Making Work Pay Credit” equal to 6.2 percent of a worker’s first $8,100 in wages. That would yield a tax credit of $500 for a single person, and $1,000 for a couple in which both adults work. As a result, a low-income couple now paying no income taxes might receive a $1,000 refund.

But Mr. McCain has told audiences that Mr. Obama’s “plan gives away your tax dollars to those who don’t pay taxes. That’s not a tax cut, that’s welfare.”

Mr. Obama responded last week in Kansas City, Mo.: “McCain is so out of touch with the struggles you are facing that he must be the first politician in history to call a tax cut for working people welfare.”

Mr. Obama wants to eliminate income taxes for people over age 65 who earn less than $50,000 a year. So under his plan, a single person that age with income of $50,000 would experience a $2,339 tax cut, according to the Tax Policy Center. Under Mr. McCain’s plans, that person’s taxes would remain unchanged.

“What Obama’s doing,” said Mr. Stretch of Deloitte, “is he’s taking more money from people like me, and spending it on exemptions for the elderly and on tax credits for education.”

But Mr. Stretch added, “When Obama says he cuts taxes for every working family under $150,000, I’d say that’s true.”

A single head of household with one child and $15,000 in income now receives a tax refund of $3,859, largely because of the earned income tax credit, according to the Tax Policy Center. That refund would increase by $500 under Mr. Obama’s plan. Under Mr. McCain’s plan there would be no change for that taxpayer.

According to Deloitte’s calculations, a single taxpayer who earns $35,000 a year and has no children would get a $500 tax cut under Mr. Obama’s plan — to $3,000 a year from the current $3,500. Mr. McCain would leave that person’s taxes unchanged.

Mr. McCain also proposes giving many households a $5,000 tax credit when they buy family health insurance, which costs $12,000 nationwide on average. But households would for the first time have to pay taxes on employer-provided insurance.

[retailguy]

Re: Definition of 'rich' changing... already

Let me explain this to you. I am a CPA. I think I know a little bit more than you about tax law.

Dan, I am also a CPA and have been for many years. Until 2 years ago, I owned a small tax firm which I sold when my wife and I moved to the midwest so she could attend law school. I know a fair amount about taxes myself...

The self-employment tax is calculated on page 2 of the tax return and is added after regular taxes have been calulated. Half of this number is than moved to the front page of the tax return.

Self Employment taxes are calculated on Federal Schedule SE, not on page 2. They are listed on Page 2 of the 1040 on line 58, but are not figured there.

Assuming that the taxpayer in question files the short form of schedule SE, then the amount that transfers to the front page does so from Line 6 of the SE, which is calculated from line 5 of the SE. The amount transferred to line 27 of the front page of the 1040 is calculated at 50% of line 5.

Assuming that the taxpayer in question earns $97,500 or less, the amount is calculated as follows: Earnings * .9235 (line 3) * 15.3%. I would assume that this is the "maximum $7500" that you were referring to. Again, this is a very paltry deduction, that I didn't figure worth mentioning.

OK, then the 50% that is transferred to line 27. That amount reduces Adjusted Gross Income by 50% of the self employment taxes and is designed, as I said before, to prevent this taxpayer from paying Federal Withholding Taxes on monies they paid in self employment taxes.

Since a sole proprietor pays taxes on a 1040 he has no facility to deduct those taxes as "payroll" taxes, hence line 27. This is the method that "reduces" the income from the taxpayers business to allow for the standard business deduction for the employer portion of the payroll tax.

If I made $100,000 from my business and had to pay $15,000 in self-employment tax I only have to pay income tax on $100,000 minus $7,500 or $92,500. So I am not paying 15.3% as self eployment tax. You are probably going to get a $1,800 income tax break. So you are really only paying 13.2% which is lower than the 15.3% you would pay between employee and employer as a business owner paying W-2 wages. So saying the self-employeed employee is paying twice what a normal person pays isn't a fair or correct statement.

Dan, your point ignores that any corporation is allowed a "tax deduction" for the employer portion of payroll taxes, so that would reduce the "effective" percentage of taxes paid by the corporation.

The fact is, EVERY american worker pays 7.65% of the 1st 97,500 of income, and, that every business pays 7.65% of each employees wages. Schedule SE compensates for sole proprietor earnings to 'equalize' this (net of the 7500 you discussed).

So, truthfully, when you figure the nominal deduction that the corporation gets for payroll taxes off their effective rate, these amounts for all practical purposes equalize. I suppose if you want to argue .5% here and there depending on the profitability of the business, fine, but largely a self employed person pays nearly the same amount as the employee and their employer.

The issue isn't how much is collected but what's done with it. The employee and employer funds are supposed to be used to calculate your retirement beneift paid out over your life expectance. Unfortunately we are in a pay it ahead world with social security and with the baby boomers the system may go broke. This is a huge concern and worries me that neither canidate has really addressed this issue.

I actually find common ground with you here. Neither party has addressed this, and Fosco dealt with it as he should have. He probably won't see social security or medicare, and neither will I. I have no idea how old you are, but if you're under 45 you won't likely see it either.

This is a flaw in BOTH parties, if you vote on this issue alone, you'd have to vote NEITHER.

I am not sure what you mean by "You, Dan, pay federal income taxes on the taxes you pay to both your state government and the federal government" I deduct any and all taxes I pay to the state of Wisconsin on my tax return, income and real estate,

What I meant was, you pay taxes on a paycheck based on gross income, not net income. You are not allowed a deduction, other than Schedule A (not all taxpayers), or the equivalent Wisconsin deduction. It's been over 20 years since I left Wisconsin, so forgive me, but I don't know where that deduction resides any longer on the specific Wisconsin tax form.

Point was, and is, you are paying federal income tax on the earnings that you send in as social security tax.

I guess we will find out where the Obama tax rate brackets will be if he becomes President. I haven't heard one specific from McCain on his tax policy. I suupose I could be more active and go to John McCain's website to see what he says but I haven't. Yes I know the Bush tax law expires in 2010 and taxes would go back to the pre-enacted rates. Can you tell what the capital gains rate will go back to? Will there be more than one capital gains rate? How about the treatment of qualified dividends from corporations?

Can I tell? No, I can't but it is more than reasonable to assume that capital gains rates will be increasing. I believe the only "specific" I have heard from Obama is 25%. That would be more than the stair stepped 8% to 15% as it stands right now. I have seen ZERO proposals that suggest that Obama will LOWER rates.

It is too soon to say what will happen with qualified dividends, but, realistically, those would be more likely to affect those in society that Obama considers "wealthy" so I would suspect this will in fact change, and not for the better.

Yes, I expect more than one capital gains rate. Too soon again, to talk specifics, but so much of his "tax plan" concentrates around income that I would expect rates to increase based on certain "ceilings". In short, the more you make the more you pay.

I believe about 95% of the federal budget goes to the military and social security. Obviously there is waste in government and money can be found. But it will be tiny compared to the overall picture of our deficit. If you can find a way to not spend us out of the deficit I am willing to listen to your plan.

I think (I have not researched) that other things are included in that 95% figure, but yes, I agree that much of the federal budget is defined as "non discretionary". Do that mean it's really "non-discretionary". Probably not.

It is seemingly pointless for you or I to create a plan. I've run a business for the better part of 20 years and I can balance ANY budget. That being said, I can assure you that you wouldn't like my budget any more than I'd like yours. I'd have more military spending than you would, and you'd have more social program spending than I would.

But your basic point - yep, it's going to be tough to cut spending and pay off the deficit. But, raising taxes wont' work. It sounds good, but it won't work. Revenues' will decline. the only way out is to tighten the belt and spend less.

To your last point, people are rarely paid what they are worth. Equal positions in corporations usually pay equal or close to equal amounts. Yet there is always an employee or two that outshines the rest. A majority of workers salaries are determined prior to the current year. Rarely does the great producers get paid for their actual work. It's usually the employee who is willing to turn the spotlight on themselves that gets promoted or bigger raises.

I disagree with this. For simple economic reasons. If someone can make more money, they leave and accept that job. Most can't and don't. Since they can't, because they already have the "best" job available in the marketplace, the only other option to your original point is to reduce spending, adopt a budget and pay off the credit card.

The "great producers" have the ability to leave and get better jobs. And they do. Average term of employment is now less than 3 years in our society. Those that can move for more money do. Those that can't stay until they get laid off.

None of this suggests that workers are underpaid.

Tax revenues increased with Bill Clinton's tax increase. As measured by constant dollar revenue growth tax collection has increase every year since 1992 except for the contraction in 2001, 2002 and 2003 due in part to 9/11.

Real dollar increase perhaps. But when viewed with economic growth, this analysis does not reflect the impact those taxes being removed from the economy have had. Again, we'll have to agree to disagree, but in these economic times, ANY tax increase is stupid. There is never a good time in my world to increase taxes, but today, is the worst of the worst.

As for your horrible comments regarding that I am stupid and uninformed this is exactly what the problem is in the USA today. Without ever meeting me or asking me what I do or believe in you were willing to make disparaging remarks based on my support of the Democtratic canidate. No matter who wins in November, they are going to have to lead the whole country and this dividiing and labeling as unworthy makes me sick.

My horrible comments? Have you watched the "politics of destruction" on the Democrat side? I'm so tired of being called a "greedy evil bastard" I can't begin to tell you.

You can interpret your above comments two ways, but what I hear is "How dare you criticize me". Yeah ok.

I couldn't disagree with your political choice more than I do. Obama is BAD for this country. But you've done a fair amount of criticizing here yourself. I haven't met you, and yes I'm disappointed in your support for the democratic side of the fence. Hopefully you're true to your beliefs and are ready to open your wallet, because Obama is coming for it.

You obviously do not agree with the economic theories that I believe. I assumed, apparently incorrectly, that you were not familiar with them, now, I know that you are but reject them.

I believe the future will prove me right and so do you. We shall see. And finally, I apologize for offending you.

[Tyrone Bigguns]

RG,

Now i realize that you aren't just dishonest, but tone deaf.

Dan, you really need an economics class at your local community college. If you tell me where you live, I will find a class for you to enroll in. Macro Economics 101 or Micro Economics 101 would be a great place to start.

If you can't follow where you insulted him...then, really, there is little hope for you.

[Partial]

Re: Definition of 'rich' changing... already

The USA is $10 trillion in debt. So we either have to cut sprending or increase revenues. Between social security and defense there isn't really a lot to cut out of the federal government that will make any dent in the debt. So we need to increase the revenue generated not decrease it.

I'm sorry, but this is retarded. Did Fos cause the debt? No. Did Fos do anything wrong? No.

Maybe the assholes that live 100% on the governments dime should get off their ass, contribute their fair share of tax dollars, instead of living off the working man. Then, Fos wouldn't have to give all his money away to support the bums.

That is the logical way of fixing the situation. Alas, nothing about being liberal or a democrat is logical.

[MJZiggy]

Re: Definition of 'rich' changing... already

The USA is $10 trillion in debt. So we either have to cut sprending or increase revenues. Between social security and defense there isn't really a lot to cut out of the federal government that will make any dent in the debt. So we need to increase the revenue generated not decrease it.

I'm sorry, but this is retarded. Did Fos cause the debt? No. Did Fos do anything wrong? No.

Maybe the assholes that live 100% on the governments dime should get off their ass, contribute their fair share of tax dollars, instead of living off the working man. Then, Fos wouldn't have to give all his money away to support the bums.

That is the logical way of fixing the situation. Alas, nothing about being liberal or a democrat is logical.

Fos didn't cause the debt. Who did? Who borrowed the money and who spent it? On what? Bums getting jobs and making 15K a year is not going to solve the tax burden. If we want to solve the tax burden, the first thing we have to do is stop borrowing money from China. You can't pay down debt while you're still borrowing.

[Partial]

RG,

Now i realize that you aren't just dishonest, but tone deaf.

Dan, you really need an economics class at your local community college. If you tell me where you live, I will find a class for you to enroll in. Macro Economics 101 or Micro Economics 101 would be a great place to start.

If you can't follow where you insulted him...then, really, there is little hope for you.

How is that insulting? He's trying to help the guy. You're an idiot. And RG just served for liberal dumbass homeboy Thunder Danny.

[Partial]

http://en.wikipedia.org/wiki/Image:U.S._Federal_Spending_-_FY_2007.png

Defense - 20%
SS - 21%
Care/Caid - 21%
Other/interest/mandatory - 38%

Served.

[Tyrone Bigguns]

RG,

Now i realize that you aren't just dishonest, but tone deaf.

Dan, you really need an economics class at your local community college. If you tell me where you live, I will find a class for you to enroll in. Macro Economics 101 or Micro Economics 101 would be a great place to start.

If you can't follow where you insulted him...then, really, there is little hope for you.

How is that insulting? He's trying to help the guy. You're an idiot. And RG just served for liberal dumbass homeboy Thunder Danny.

Trying to help a business owner and CPA? Insulting him before he even knows his background?

You are such a dumbass.

[Partial]

Re: Definition of 'rich' changing... already

The USA is $10 trillion in debt. So we either have to cut sprending or increase revenues. Between social security and defense there isn't really a lot to cut out of the federal government that will make any dent in the debt. So we need to increase the revenue generated not decrease it.

I'm sorry, but this is retarded. Did Fos cause the debt? No. Did Fos do anything wrong? No.

Maybe the assholes that live 100% on the governments dime should get off their ass, contribute their fair share of tax dollars, instead of living off the working man. Then, Fos wouldn't have to give all his money away to support the bums.

That is the logical way of fixing the situation. Alas, nothing about being liberal or a democrat is logical.

Fos didn't cause the debt. Who did? Who borrowed the money and who spent it? On what? Bums getting jobs and making 15K a year is not going to solve the tax burden. If we want to solve the tax burden, the first thing we have to do is stop borrowing money from China. You can't pay down debt while you're still borrowing.

Why don't they start their own business and make 100k? This is capitalism. Money is there to be made. It's not my fault lazy bums are unwilling to go out and make something of themselves. If somebody is content earning 15k, then they should be content living a shitty life. Not my problem, its theres, and I shouldn't be punished for their lazy, poor decision.