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» The Ornery American Forum » General Comments » Are you paying your fair share? (Page 8)

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Author Topic: Are you paying your fair share?
TomDavidson
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quote:
I shouldn't have to do that as a US citizen.
It seems to me that living "off the grid" makes your citizenship moot.
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RedVW on a Laptop
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What gets me is the utter lack of recognition to the increasing proto fascist expansions by our government by people.
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TomDavidson
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Dude, you're a fascist. Doesn't it make you happy?
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Greg Davidson
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quote:
This has nothing to do with the free market, this has to do with unnatural crony capitalism and corruption from the government itself.
That sounds like an almost religious belief in the nirvana of a "free market", and to protect that purity, anything that you don't like in the economy done by private sector entities you just label as "crony capitalism".

Can you name any country in any period in human history where there was private economic activity but no "crony capitalism"?

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Seneca
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Why is it the job of citizens to provide charity as a buffer to government corruption? Is government corruption an inevitable force of nature that we must make ritual sacrifices for?
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Seriati
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Why is it when people do "tax analysis" online they ignore that people are most likely paying the AMT, which eliminates (among other things) State tax deductions? They often ignore self employment's impact on the tax situation as well. I don't find Red's claim of 50% shocking, it's easily attainable, now that said, there are probably things that could be done to reduce it (but I couldn't guarantee it). I'm over 40%, but I could see things like renting (no mortgage deduction) or a higher property tax pushing it over 50% (depeding on income level overall).

KidTokyo, on the prior conversation, I don't see at all your point after your last clarification. I truly don't see how you can say you're not against big business, not against passive investment, yet still have so many issues with the corporate form.

And I think you completely missed the point on owner-operated businesses. It was only relevant in a context without limited liability, your list of successful set-ups in companies with limited liability has no bearing. It's a just a novelty in that environment, as their personal liability ends with their employment, and that's not materially different than anyone else's position.

If you're not arguing against limited liability (notwithstanding repeatedly making a big issue about it) and you're not against big business (notwithstanding that you keep complaining about mega-corps controlling government), I really don't understand your point. And you intimate that your concern is with manager power, if that's the sole concern I don't have any issue with constraining that.

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TomDavidson
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I'm not sure why the AMT would bring you close to 50%, as the maximum bracket of the AMT is 28%. Most of us here would already be paying 28% in federal tax, unless we've got a whole boatload of exemptions or deductions.
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Seriati
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TomDavidson,

The AMT adds percentage points to you're overall effective tax rate. All it takes is a single deduction in some states - state taxes - to move someone from the standard rates to the AMT. So literally because you pay an extra percentage in state tax over what others do, you will pay an extra percentage in federal taxes over what other similarly situated persons will do.

I just don't get why people feel like their experts on taxes other people pay, when they obviously haven't dealt with any of the common issues.

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RedVW on a Laptop
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Tom
And as I have said repeatedly fascist government is one of the best, if not the outright best peacetime governments. It also has the tendency to turn to militarism once the great domestic crusades are solved. Spain being the only exception, all other fascist states have ended badly. Which is why the creep towards corporativisim is a very very bad thing.

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TomDavidson
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quote:
The AMT adds percentage points to you're overall effective tax rate.
Up to 28%. The maximum tax bracket of the AMT is 28%. If you paid less federal tax than 28% and have a high enough (i.e. not particularly high) income, you wind up paying 28%. If you paid more, you don't get hit with the AMT. And, heck, if you've got an income primarily from capital gains, the AMT isn't your major concern anyway (since capital gains are taxed at 15% under the AMT.)

Now, of course it's the case that the AMT at 28% may still represent more total tax than a "regular" tax bracket at 34% or so; this is because the AMT is calculated off a different figure for income and ignores many exemptions and deductions. But it will still never be -- in fact, can never be -- more than 28% of your actual gross income.

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NobleHunter
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quote:
Spain being the only exception, all other fascist states have ended badly.
And Spain started worse than the others. So not exactly something to shoot for either.
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Seriati
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Tom, are you trying to make a point? Is it that you think you can't get from 28 to 50 (or that 28 is an absolute cap on all federal taxes)? If you live in NYC you can add almost 11% at that income level for state and local. That brings you up to about 40% (not effective 40 though) before you consider any of the other taxes that are mandatory - social security and medicare being the biggest - or possible like property tax, or likely - like 8.5% sales tax. It doesn't take all that much to get to 50% in that environment, though like I said, there'd almost have to be ways to reduce it from that level.
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AI Wessex
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"Why is it the job of citizens to provide charity as a buffer to government corruption? Is government corruption an inevitable force of nature that we must make ritual sacrifices for?"

How corrupt is the government? How much money is it stealing from us?

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AI Wessex
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quote:
Originally posted by Seriati:
Tom, are you trying to make a point? Is it that you think you can't get from 28 to 50 (or that 28 is an absolute cap on all federal taxes)? If you live in NYC you can add almost 11% at that income level for state and local. That brings you up to about 40% (not effective 40 though) before you consider any of the other taxes that are mandatory - social security and medicare being the biggest - or possible like property tax, or likely - like 8.5% sales tax. It doesn't take all that much to get to 50% in that environment, though like I said, there'd almost have to be ways to reduce it from that level.

I think you're the one who's trying too hard, given your last sentence. Also, remember that this started with Red's assertion that *he* might be subject to a 50% tax burden, but he lives in Georgia on a substantially smaller income than this hypothetical pretends to address.
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Greg Davidson
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Seriati, I have been open to the notion that there are features of the tax code that I don't understand (AMT is not one of them, neither is the phase out of deductions). But so far the math doesn't work out

quote:
If you live in NYC you can add almost 11% at that income level for state and local. That brings you up to about 40% (not effective 40 though) before you consider any of the other taxes that are mandatory - social security and medicare being the biggest - or possible like property tax, or likely - like 8.5% sales tax. It doesn't take all that much to get to 50% in that environment, though like I said, there'd almost have to be ways to reduce it from that level.
As I wrote above, by the time you are hitting the federal max tax rate, your social security and medicare are down to about 2% (since you only get charged those taxes for the first 114K). And you get a limitation on your deductions for state and local taxes, but it is only a partial limitation when you get to 450K and start paying the highest federal rate (you can have more deductions eliminated when you get to higher income, but then social security and medicare start shrinking as a % even further).

The fact that you don't "find Red's claim of 50% shocking" says more about you and your willingness to believe things that are either said in a moment of hyperbole or due to a very unusual set of circumstances not applicable to most US taxpayers. I would think that even your 40% would be hard to achieve, although the worst part is that I think that one of the easiest ways to get there is not with a high income, but rather with self-employment doubling social security and medicare and income under 114K - and that says something about the fairness of our tax code.

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RedVW on a Laptop
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Unfortunately Greg it isn't hyperbole. By the way should I also include my obamacare premium as a tax? And keep in mind that it isn't subsidized.
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Greg Davidson
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Red, I "showed you mine" on the other thread - 390K income, 36% net tax rates without any fancy deductions and living in a high tax state and locality. The only way I can imagine a 50%+ tax burden is if you have some very unusual circumstances that are not representative of the vast majority of Americans.

Even without sharing numbers, can you be specific about what drives your circumstances to be different from others?

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Greg Davidson
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Actually, let me also take a step back. I do appreciate everyone's willingness to participate here, we are just having a discussion about policy. I hope that no one feels personally threatened by the nature of describing somewhat personal information. For purpose of this discussion, I don't actually need to see your information, Red. Can you just describe the circumstances of any person who could be in a situation of paying more than 50% of their income in taxes? Doesn't have to be a real person, just a hypothetical person with specific income and assets that under our tax code would face such a high liability.
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Seriati
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quote:
Originally posted by Greg Davidson:
(AMT is not one of them, neither is the phase out of deductions)

***

And you get a limitation on your deductions for state and local taxes, but it is only a partial limitation when you get to 450K and start paying the highest federal rate

Greg, my point is that you get NO DEDUCTION for state and local tax when you pay the AMT. I don't think you understand the AMT as well as you think.

I don't disagree that the social security and medicare taxes become an ever smaller percentage of income as income increases, even if you pay both sides as a a self employed person. Phase out of deductions can hurt as well.
quote:
The fact that you don't "find Red's claim of 50% shocking" says more about you and your willingness to believe things that are either said in a moment of hyperbole or due to a very unusual set of circumstances not applicable to most US taxpayers.
What is says is that if you have any familiarity with high income people at the bottom end of the top range, who don't get things like substantial capital gains, there is nothing suprising about such a tax rate. I've said it many times, income tax IS NOT a tax on the rich, its a tax on people trying to become rich. And the rates, as should be expected, are a bigger burden on those towards the bottom end of the ranges than at the top.
quote:
I would think that even your 40% would be hard to achieve, although the worst part is that I think that one of the easiest ways to get there is not with a high income, but rather with self-employment doubling social security and medicare and income under 114K - and that says something about the fairness of our tax code.
I doubt many people with high income from salary come in below forty percent. And I'd be surprised if anyone who lives in a high tax jursidiction and doesn't own their own home does.

What the double tax policy most says, is that the government has sucessfully confused most people into not even realizing the extra-compensation they get but never see because it is immediately turned over to the government by their employer. Most people never hit the SS cap and that's what about 6.5% tax on their entire income, before you even get it.

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kmbboots
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quote:
Originally posted by Greg Davidson:
Seneca, what if you go off the grid in a ship in international waters?

I was hoping that Santa would bring Seneca his own island where he could live by himself. Either that or visits from three spirits.
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Seneca
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Instead I'd rather have a Constitutional government. What a tall order, huh?
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Pete at Home
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Do you know what that means?
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Seneca
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Constitutional? Yes.
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Pete at Home
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So you understand that you cannot have Constitutional government without a rigorous rule of law, right? That the same law applies to people we like and don't like?
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Seneca
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What does that have to do with unconstitutional laws and bad tax policy?
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Pete at Home
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Sigh. And here I was just explaining to Thing One that he should never tell people that he's a "nucular physicist ..."
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