Author Topic: Targeting the Wealthy: MMM Meets Politics  (Read 57425 times)

astvilla

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #50 on: January 18, 2015, 11:12:36 AM »
I'm young and I favor this proposal, I don't see any impact on me since I will never make that much because wages are down so much. 478K/year is what percent of America? Less than 0.5? My chances then will be very low of reaching that level so I'll hedge my bets and support the proposal. Of course I know it will never pass, the middle class has been destroyed over the last 20-30 years and I've pretty much given up all hope on seeing any change that will strengthen the middle class and offer a fair chance to everybody. Obama probably knows it won't pass but it's probably his way of saying, "I am on your side but you dumb Americans don't have the patience for things to work out and see things only in 2 year cycles and that lack of patience cost you the best chance you'll have of ever restoring the middle class." The proposal just seems a way to help draw party lines so people know which party to vote for the next elections.

I'm pretty sure no one wants to have to rely on food stamps, welfare, etc. The problem is wages are suppressed by "job creators" because they know that the government will give handouts to cover the rest of their costs. Lower taxes on the rich don't necessarily create jobs either and their wealth is no longer dependent on the American economy with globalization an entrenched reality.

To be honest though I don't think those making 500k/year are the problem. It's the ultra high net worth individuals, the ones worth billions that are the problem. To me every person every individual in the US is a cog in the whole economic machine, money/wealth being the lubricant/oil. The UHNW people are well oiled but hardly spending while the rest of us are struggling and not able to move the economy. What stimulates the economy more, one billionaire or a thousand millionaires? And why else was MMM created and you guys are on these forums? Because the middle class life is now more precarious and we have to be more careful with money no?

I'm okay with taxes as long as taxes are spent wisely and on important issues. Right now it's important to avoid any war/conflicts and spend money on things important for long-term growth (cause humans are so great at seeing things long-term right?!) Not sure why people hate taxes so much, taxes pay for a civilized society, I believe is a famous quote. Don't like taxes? Go to Somalia or any other country with no infrastructure. 

FWIW it's worth I've dealt with rich and poor people and there are jerks on all sides of social strata. What amazed me was that rich people demand a lot of things for free actually, even more than those in middle-lower classes. A colleague told me this is because wealthier people got their wealth by screwing other people over and expect everyone else to be the same. Their attitudes and outlook on life just seem to be based on so much anger and leave little room for happiness, it doesn't surprise me they try to make life harder for those with less. 
« Last Edit: January 18, 2015, 11:17:19 AM by fewaopi »

Tetsuya Hondo

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #51 on: January 18, 2015, 11:16:18 AM »
I'll just leave this here...



Emilyngh

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #52 on: January 18, 2015, 11:25:22 AM »
the increased tax on dividends and capital gains only affects those earning more than 500K per couple.

did you actually read the article?

This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting.

To answer the OP's question, as a somewhat younger person, no, I don't feel at all demotivated by the fact that taxes are progressive.

Emilyngh

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #53 on: January 18, 2015, 11:26:41 AM »
It's all about class envy & soak the rich while promising a handout to those who have not worked for it. What it actually does is further kill the economy.

The rich are already paying far more than their so-called fair share.

Waaah!

Davin

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #54 on: January 18, 2015, 11:37:12 AM »
...Even more disappointing is those on this board agreeing with the idea of tax increases on "the wealthy" while they themselves find ways to game the system and abuse programs meant for truly poor people.  Amazing millionaires trying to get free college, subsidized food assistance, EITC...it's the height of deceptiveness, hypocrisy,  selfishness, and immorality.  Truly disappointing.

 "The wealthy" have been benefiting from rules that benefit them such as historically low capital gains taxes for years. Do you consider it "the height of deceptiveness, hypocrisy,  selfishness, and immorality" that they are in favor of policies like this? Conversely if someone legitimately qualifies for free college, subsidized food assistance, or EITC you think they should not take advantage of it?  I seriously doubt that most millionaires would qualify for the programs aimed at helping the low income and middle class, but how would that be any different from them taking advantage of the other tax codes that favor them?  We are talking about the rules of the game here, and what we think they should be. It seems odd to me that you would criticize some for playing by the rules but not others.

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #55 on: January 18, 2015, 12:03:49 PM »
Even more disappointing is those on this board agreeing with the idea of tax increases on "the wealthy" while they themselves find ways to game the system and abuse programs meant for truly poor people.  Amazing millionaires trying to get free college, subsidized food assistance, EITC...it's the height of deceptiveness, hypocrisy,  selfishness, and immorality.  Truly disappointing.


Whoaaaa, who is trying to get social assistance programs?  That's a huge leap there bud.  Food stamps are asset-tested IIRC.  EITC and "free college" could only possibly be legally attained when disclosing a huge amount of financial information, so I highly doubt anyone who is truly wealthy is benefiting from those programs. 

Also, don't oil and gas companies get ridiculous subsidies?  Why is that not immoral, but the same thing on a personal scale is?

I don't really like calling people out by name, but those threads definitely exist.  Here is one recent thread that comes to mind, that covers everything but food stamps. 

http://forum.mrmoneymustache.com/ask-a-mustachian/should-i-pay-off-my-mortgage-early/.

Yes oil and gas companies do get ridiculous subsidies, but clearly I was writing about increasing personal income taxes.  Personal and corporate taxes are two different beasts altogether.

FAFSA qualifies students mainly for federal student loans, which is clearly stated in that post.  If your family income is less than 20k per year you may qualify for grants up to $5500, on a sliding scale.  College is unaffordable out of pocket for the vast majority of people, and FAFSA is not only meant for the truly poor.  In fact, college admissions officers emphasize to everyone how important it is to fill out the FAFSA, even if you think you make too much money to qualify for any aid. 

Tax optimization happens at every level.  It's not illegal or immoral.

In that post it's written

Quote
2.  FAFSA applications for your kids.  Federal need-based financial aid (mostly low interest loans) is available to families that can show low enough income, and your total assets are ignored if your family income is below $50k per year.  We have three kids to put through college, and a large nest egg that colleges would love to raid.

To my mind, these low interest loans are intended for people who have income below a threshold, not people who *engineer* their financial situation to fit a guideline to take advantage of a system.  All the while patting themselves on the back for how financially "independent" they are and how much free time they have.  Just seems to be a selfish reality disconnect to me.

Quote
3. The Earned Income Tax Credit.  Federal tax law subsidizes low-income families with a refundable tax credit if they can show earned income like from a side gig, but you are disqualified if you have too much investment income like dividends from your taxable investment account.  Paying off our mortgage with our taxable account would both reduce our expenses (and thus the income we would show) and it would reduce our taxable investment income, making us EIC eligible.

Again, the EITC is for the working poor, not those who engineer their situation to look like the working poor. 

Ill give you that it would be a hell of a lot easier to just change the rules to not allow those shenanigans to begin with.  Ill also give you that the wealthy play their own shell games to their advantage.  Im not happy with any of it.

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #56 on: January 18, 2015, 12:07:03 PM »
the increased tax on dividends and capital gains only affects those earning more than 500K per couple.

did you actually read the article?

This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting.

To answer the OP's question, as a somewhat younger person, no, I don't feel at all demotivated by the fact that taxes are progressive.

Ah the old "they can afford it" argument.  Yep they can afford to be robbed too, that doesn't make it right. 

waltworks

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #57 on: January 18, 2015, 12:13:26 PM »
I'd say the benefit they receive (ie public infrastructure, a healthy society to purchase the goods their companies create, smart/creative workers from all walks of life, etc) makes it more than worthwhile.

I mean, really, this all eventually comes down to a utilitarian argument. The lower-taxes argument is that tax rates are too high, and this discourages investment and work, and this makes us all poorer. The higher taxes argument says we're underfunding things like education, infrastructure, healthcare that would pay back more than they would cost to fund, so we should tax and spend more.

You'll either believe one or the other, but I've never met *anyone* who stopped working because their taxes were too high in the US. They just bitched about it a lot. We're also at much lower rates for marginal taxes and cap gains than we have been for most of the last 100 years of US history. Which tells me we're nowhere near the level at which taxes would be a drag on the economy.

-W

the increased tax on dividends and capital gains only affects those earning more than 500K per couple.

did you actually read the article?

This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting.

To answer the OP's question, as a somewhat younger person, no, I don't feel at all demotivated by the fact that taxes are progressive.

Ah the old "they can afford it" argument.  Yep they can afford to be robbed too, that doesn't make it right.

caliq

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #58 on: January 18, 2015, 12:16:03 PM »
I have federal student loans ranging from like 5% interest to 6.8% interest.  I think current rates are 4.6%.  They're not so low interest that they're free money.

Do you not take any tax deductions or credits besides the standard deduction?  Do you not choose a house based partially on property taxes?  Do you not contribute to your 401k and other tax advantaged accounts, in favor of putting everything in taxable investments?

I highly doubt you apply your principles to yourself.  We all benefit from various government programs and you are no exception. 

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #59 on: January 18, 2015, 12:19:01 PM »
...Even more disappointing is those on this board agreeing with the idea of tax increases on "the wealthy" while they themselves find ways to game the system and abuse programs meant for truly poor people.  Amazing millionaires trying to get free college, subsidized food assistance, EITC...it's the height of deceptiveness, hypocrisy,  selfishness, and immorality.  Truly disappointing.

 "The wealthy" have been benefiting from rules that benefit them such as historically low capital gains taxes for years. Do you consider it "the height of deceptiveness, hypocrisy,  selfishness, and immorality" that they are in favor of policies like this? Conversely if someone legitimately qualifies for free college, subsidized food assistance, or EITC you think they should not take advantage of it?  I seriously doubt that most millionaires would qualify for the programs aimed at helping the low income and middle class, but how would that be any different from them taking advantage of the other tax codes that favor them?  We are talking about the rules of the game here, and what we think they should be. It seems odd to me that you would criticize some for playing by the rules but not others.

Regardless of what the tax rates are, and were historically, the "wealthy" pay taxes at a rate higher than their proportion of the wealth, as already pointed out by another member.   So these proposals look to increase their tax burden even more.  That said, someone taking advantage of something like the mortgage interest deduction is not acting unethically since the purpose of that deduction is to promote home ownership, as opposed to helping a certain class of people afford homes.  The purpose of the EITC is to help the working poor, not someone who engineers their books to look like the working poor.

My problem with this new proposal is that it is on top of 2 other tax increases implemented by this administration.   By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.  All for programs that by and large are inefficient and would not be necessary if people could get along without their cable, lattes, F150s, and practice responsible family planning.  Again enough is enough.

And as I've said before, I'd be happier if these games didn't exist to play for anyone.  If I could wave a magic wand I would get rid of all deductions and exemptions (except a personal exemption), treat all income as income (i.e. not have earned vs unearned), rebalance the tax rates to reflect the lack of deductions and game playing, and require people to save a certain percentage of their income.  I would eliminate all corporate taxes on profit and implement a system of taxes based on socially responsible behavior.  e.g. tax for pollution, more tax for paying their employees poverty wages, etc.

Tetsuya Hondo

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #60 on: January 18, 2015, 12:27:45 PM »
By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.

I would like to see your math on this.

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #61 on: January 18, 2015, 12:28:05 PM »
I have federal student loans ranging from like 5% interest to 6.8% interest.  I think current rates are 4.6%.  They're not so low interest that they're free money.

Do you not take any tax deductions or credits besides the standard deduction?  Do you not choose a house based partially on property taxes?  Do you not contribute to your 401k and other tax advantaged accounts, in favor of putting everything in taxable investments?

I highly doubt you apply your principles to yourself.  We all benefit from various government programs and you are no exception.

Again, you have to consider the *purpose* of a program, not the technicalities of how you take advantage of a program.  The purpose of tax advantaged accounts like 401ks is to promote saving by everyone.  The purpose of SS is to basically provide pension payments to those who payed into the system (not those who need more because they didn't save for whatever reason.  It's not immoral for anyone to use those systems.  Compare with the purpose of EITC, which is to help the working poor -- those that put in the effort but despite doing their best cannot get a break.  Not those who are retired, decided they don't want to work anymore, and trying to get a buck from the system.  Or the purpose of programs that subsidize school lunches.  Again, that 's for poor people, people who cannot afford to spend the $2/day on school lunch, not the retired early crowd that see a way to reduce expenses. 

Capsu78

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #62 on: January 18, 2015, 12:29:29 PM »
How about a flat tax and about 100,000 fewer IRS employees as well a reduced need for tax lawyers, revolving door lobbyists and CPA's for what should be a pretty straight forward transaction... all done without "envy".

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #63 on: January 18, 2015, 12:29:32 PM »
By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.

I would like to see your math on this.

Seriously? Between a mid to high 30s federal income tax, medicare tax, ss tax, state tax, property tax, personal property tax, gas tax, sales tax, etc you can't see how its possible?

Tetsuya Hondo

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #64 on: January 18, 2015, 12:33:21 PM »
By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.

I would like to see your math on this.

Seriously? Between a mid to high 30s federal income tax, medicare tax, ss tax, state tax, property tax, personal property tax, gas tax, sales tax, etc you can't see how its possible?

I would like to see your math on this.

caliq

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #65 on: January 18, 2015, 12:36:07 PM »
I have federal student loans ranging from like 5% interest to 6.8% interest.  I think current rates are 4.6%.  They're not so low interest that they're free money.

Do you not take any tax deductions or credits besides the standard deduction?  Do you not choose a house based partially on property taxes?  Do you not contribute to your 401k and other tax advantaged accounts, in favor of putting everything in taxable investments?

I highly doubt you apply your principles to yourself.  We all benefit from various government programs and you are no exception.

Again, you have to consider the *purpose* of a program, not the technicalities of how you take advantage of a program.  The purpose of tax advantaged accounts like 401ks is to promote saving by everyone.  The purpose of SS is to basically provide pension payments to those who payed into the system (not those who need more because they didn't save for whatever reason.  It's not immoral for anyone to use those systems.  Compare with the purpose of EITC, which is to help the working poor -- those that put in the effort but despite doing their best cannot get a break.  Not those who are retired, decided they don't want to work anymore, and trying to get a buck from the system.  Or the purpose of programs that subsidize school lunches.  Again, that 's for poor people, people who cannot afford to spend the $2/day on school lunch, not the retired early crowd that see a way to reduce expenses.

Interesting that you've switched to arguing specifically about EITC when I've been talking only about FAFSA.  I didn't really touch EITC because I have no experience with it; I do however have experience with FAFSA and made it very clear to you that you mistook it's purpose.  You responded by ignoring the subject and moving on to something that supports your narrow worldview. 

And EITC is really not for super low income people as you seem to think it is.  If you have children, the income limits are fairly high and not far below median household income:

Quote
2014 Tax Year

Earned Income and adjusted gross income (AGI) must each be less than:

$46,997 ($52,427 married filing jointly) with three or more qualifying children
$43,756 ($49,186 married filing jointly) with two qualifying children
$38,511 ($43,941 married filing jointly) with one qualifying child
$14,590 ($20,020 married filing jointly) with no qualifying children
 

It's only people with no children who have to meet very low income limits to qualify for EITC.  If you have kids, you get all the other child tax benefits and EITC on top -- maybe we should be mad at people who have kids when they take advantage of all the extra benefits they qualify? 

Capsu78

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #66 on: January 18, 2015, 12:40:45 PM »
By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.

I would like to see your math on this.

Seriously? Between a mid to high 30s federal income tax, medicare tax, ss tax, state tax, property tax, personal property tax, gas tax, sales tax, etc you can't see how its possible?

Star- plus double SS payments for the self employed.

Emilyngh

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #67 on: January 18, 2015, 12:43:26 PM »
I have federal student loans ranging from like 5% interest to 6.8% interest.  I think current rates are 4.6%.  They're not so low interest that they're free money.

Do you not take any tax deductions or credits besides the standard deduction?  Do you not choose a house based partially on property taxes?  Do you not contribute to your 401k and other tax advantaged accounts, in favor of putting everything in taxable investments?

I highly doubt you apply your principles to yourself.  We all benefit from various government programs and you are no exception.

Again, you have to consider the *purpose* of a program, not the technicalities of how you take advantage of a program.  The purpose of tax advantaged accounts like 401ks is to promote saving by everyone.  The purpose of SS is to basically provide pension payments to those who payed into the system (not those who need more because they didn't save for whatever reason.  It's not immoral for anyone to use those systems.  Compare with the purpose of EITC, which is to help the working poor -- those that put in the effort but despite doing their best cannot get a break.  Not those who are retired, decided they don't want to work anymore, and trying to get a buck from the system.  Or the purpose of programs that subsidize school lunches.  Again, that 's for poor people, people who cannot afford to spend the $2/day on school lunch, not the retired early crowd that see a way to reduce expenses.

The EITC income limits are around $40-50k for a married couple with kids, and this is the limit *after* deducting employer sponsored health insurance and 401k contributions (so a couple who happen to max these, without any other fancy "engineering" of taxes, could qualify with $75k+ gross).   Considering the median household income is right around $50k and the poverty level is less than $20k for a family of 3, it's pretty obvious that this credit is for more people than the "working poor"     Nice strawman argument though.


RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #68 on: January 18, 2015, 12:48:29 PM »
I don't like it, but it only targets the actually rich, not the "comfortably poor" (i.e. Mustachians).

Your definition of mustachians is narrower than mine. I didn't realize there was a limiter/crabpot theory associated with MMM, particularly since Pete himself now probably has a liquid net worth well over $1 million.

DIFFERENT TOPIC: With a 39.6% top rate, wait until you see more people in NY, BOS, LA, SF, CHI, etc. say "Enough is enough"....and John Galt themselves to Longmont, CO. Because in these expensive municipalities there are a disproportionate share of two income households who make an ADJUSTED GROSS INCOME above 500K/year. They are not hedge fund managers, partners in law firms, etc. They are middle managers who work at financial services firms, tech companies, biotech companies, marketing firms, etc.

Wait until you see what happens to our revenues then as more of these folks say FUCK THIS. When an increasing amount of revenues comes from stock dividends, wait until you see what happens with our revenues during the next recession when a huge number of companies cut or halt dividends -- lesson from California, anyone?

This IS everyone's 'problem.' You could tax the 1% by garnishing ALL their wages. This would be a great temporary solution, and then.....

Tetsuya Hondo

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #69 on: January 18, 2015, 12:56:57 PM »
By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.

I would like to see your math on this.

Seriously? Between a mid to high 30s federal income tax, medicare tax, ss tax, state tax, property tax, personal property tax, gas tax, sales tax, etc you can't see how its possible?

Star- plus double SS payments for the self employed.

If you're paying anywhere near 50% at any income level, then you need to fire your accountant immediately, because they are a fucking idiot.

If you have the money, there's really no end to the creative, yet legal ways that you can avoid paying taxes. As a decent earning self-employed person with an S Corp, I know. It's just silly, and I don't even take advantage of it all either.

And as a reminder, even if you're in the top income tax bracket, that doesn't mean that you pay 39.6% or whatever it is now on everything you earn. You only pay that on the part that exceeds the top bracket, which, off the top of my head, is whatever exceeds around $400k-ish now. But, that's just salary. Chances are, a good chunk of your income comes from dividends, which are pretty sweet as they completely bypass FICA taxes altogether, even at the higher rate.

If you're self employed (or at least have an S-Corp) you can also stuff a substantial amount of cash into retirement accounts through a profit sharing 401k, cramming over $50k tax free into that. Note that's a lot more than your lower earning working stiffs can put away. Poor bastards.

Then there are business deductions out the ass. You can also do fun things with trusts. And if you have a "farm" (that nice 200 year old colonial you summer in that has a few acres of [cough] "farm land" attached to it, then sweet Jeezus it can get good, not to mention that you can qualify for farm subsidies then. Then there's all the itemized deductions and charitable giving deductions and other bullshit you can cram in as well.

And this is just the small potatoes, 1%-er but not even .001%-er stuff off the top of my head that I know about. A good accountant and tax lawyer can probably work some really sick magic.
« Last Edit: January 18, 2015, 01:00:07 PM by Tetsuya Hondo »

waltworks

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #70 on: January 18, 2015, 12:59:46 PM »
Yeah, but I don't know a SINGLE PERSON who has EVER DONE THAT (John Galted, that is). And I live with a bunch of really rich people at a ski resort. And they weren't doing it when tax rates were much higher either. Hell, rich people from all over the world have been jumping all over themselves to move here/buy US real estate.

So I say the "taxes are so high everyone's going to quit working" thing is BS. I bet you could double marginal rates and that wouldn't happen.

-W

I don't like it, but it only targets the actually rich, not the "comfortably poor" (i.e. Mustachians).

Your definition of mustachians is narrower than mine. I didn't realize there was a limiter/crabpot theory associated with MMM, particularly since Pete himself now probably has a liquid net worth well over $1 million.

DIFFERENT TOPIC: With a 39.6% top rate, wait until you see more people in NY, BOS, LA, SF, CHI, etc. say "Enough is enough"....and John Galt themselves to Longmont, CO. Because in these expensive municipalities there are a disproportionate share of two income households who make an ADJUSTED GROSS INCOME above 500K/year. They are not hedge fund managers, partners in law firms, etc. They are middle managers who work at financial services firms, tech companies, biotech companies, marketing firms, etc.

Wait until you see what happens to our revenues then as more of these folks say FUCK THIS. When an increasing amount of revenues comes from stock dividends, wait until you see what happens with our revenues during the next recession when a huge number of companies cut or halt dividends -- lesson from California, anyone?

This IS everyone's 'problem.' You could tax the 1% by garnishing ALL their wages. This would be a great temporary solution, and then.....
« Last Edit: January 18, 2015, 01:03:43 PM by waltworks »

TrulyStashin

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #71 on: January 18, 2015, 01:06:45 PM »
Another scheme for Government to PUNISH SUCCESS and REWARD FAILURE.

Just another day in America.

Lower income people are failures?  Really?

In 2004 and 2005, I was a teacher.  I earned about $35k and with two kids at home, I qualified for some help through the Earned Income Tax Credit.   

I was the kind of person who would be helped by this plan.  But to you, that person is a failure?  Then there is a long list of people who are failures:  fire fighters, ambulance/ EMT workers, teachers, social workers, police officers.......

How ugly to consider all these people "failures" because they make less money.  What a horrible thread this is.

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #72 on: January 18, 2015, 01:28:42 PM »
I have federal student loans ranging from like 5% interest to 6.8% interest.  I think current rates are 4.6%.  They're not so low interest that they're free money.

Do you not take any tax deductions or credits besides the standard deduction?  Do you not choose a house based partially on property taxes?  Do you not contribute to your 401k and other tax advantaged accounts, in favor of putting everything in taxable investments?

I highly doubt you apply your principles to yourself.  We all benefit from various government programs and you are no exception.


Again, you have to consider the *purpose* of a program, not the technicalities of how you take advantage of a program.  The purpose of tax advantaged accounts like 401ks is to promote saving by everyone.  The purpose of SS is to basically provide pension payments to those who payed into the system (not those who need more because they didn't save for whatever reason.  It's not immoral for anyone to use those systems.  Compare with the purpose of EITC, which is to help the working poor -- those that put in the effort but despite doing their best cannot get a break.  Not those who are retired, decided they don't want to work anymore, and trying to get a buck from the system.  Or the purpose of programs that subsidize school lunches.  Again, that 's for poor people, people who cannot afford to spend the $2/day on school lunch, not the retired early crowd that see a way to reduce expenses.

Interesting that you've switched to arguing specifically about EITC when I've been talking only about FAFSA.  I didn't really touch EITC because I have no experience with it; I do however have experience with FAFSA and made it very clear to you that you mistook it's purpose.  You responded by ignoring the subject and moving on to something that supports your narrow worldview. 

And EITC is really not for super low income people as you seem to think it is.  If you have children, the income limits are fairly high and not far below median household income:

Quote
2014 Tax Year

Earned Income and adjusted gross income (AGI) must each be less than:

$46,997 ($52,427 married filing jointly) with three or more qualifying children
$43,756 ($49,186 married filing jointly) with two qualifying children
$38,511 ($43,941 married filing jointly) with one qualifying child
$14,590 ($20,020 married filing jointly) with no qualifying children
 

It's only people with no children who have to meet very low income limits to qualify for EITC.  If you have kids, you get all the other child tax benefits and EITC on top -- maybe we should be mad at people who have kids when they take advantage of all the extra benefits they qualify?

Edit -- i screwed up the quote nesting...

You are making this more complicated is.  The only 2 things you need to consider are: 1) is it a need based system and, 2) is an individual purposefully structuring their numbers to (ab)use that system.  FAFSA is need based.  EITC is need based.  Anyone who considers themselves FI, is purposefully not working, and tries to ab(use) these systems is doing something that while legal is ethically questionable. 

There is a difference between 2 parents with 3 kids working as hard as they can receiving the EITC vs someone who stopped working to pursue their love of walking in the woods receiving the EITC.  There is a difference between truly underprivileged kids receiving federally subsidized loans vs school vs kids who parents decided they didn't want to work anymore receiving federally subsidized loans.

As opposed to normal SS, or home mortgage deduction which have no assumptions of purpose.
« Last Edit: January 18, 2015, 01:33:48 PM by starguru »

starguru

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #73 on: January 18, 2015, 02:06:35 PM »
I have federal student loans ranging from like 5% interest to 6.8% interest.  I think current rates are 4.6%.  They're not so low interest that they're free money.

Do you not take any tax deductions or credits besides the standard deduction?  Do you not choose a house based partially on property taxes?  Do you not contribute to your 401k and other tax advantaged accounts, in favor of putting everything in taxable investments?

I highly doubt you apply your principles to yourself.  We all benefit from various government programs and you are no exception.

Again, you have to consider the *purpose* of a program, not the technicalities of how you take advantage of a program.  The purpose of tax advantaged accounts like 401ks is to promote saving by everyone.  The purpose of SS is to basically provide pension payments to those who payed into the system (not those who need more because they didn't save for whatever reason.  It's not immoral for anyone to use those systems.  Compare with the purpose of EITC, which is to help the working poor -- those that put in the effort but despite doing their best cannot get a break.  Not those who are retired, decided they don't want to work anymore, and trying to get a buck from the system.  Or the purpose of programs that subsidize school lunches.  Again, that 's for poor people, people who cannot afford to spend the $2/day on school lunch, not the retired early crowd that see a way to reduce expenses.

The EITC income limits are around $40-50k for a married couple with kids, and this is the limit *after* deducting employer sponsored health insurance and 401k contributions (so a couple who happen to max these, without any other fancy "engineering" of taxes, could qualify with $75k+ gross).   Considering the median household income is right around $50k and the poverty level is less than $20k for a family of 3, it's pretty obvious that this credit is for more people than the "working poor"     Nice strawman argument though.

Pff please.  In no world is the EITC anything other than social welfare.  Wikipedia calls it "the third largest social welfare program".  It is need based.  If one plays games to qualify they are abusing it, especially if claiming to be FI.  You can quibble all you want over my wording "working poor" but it doesn't dilute my argument nor is it a straw man. 

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #74 on: January 18, 2015, 02:23:54 PM »
Yeah, but I don't know a SINGLE PERSON who has EVER DONE THAT (John Galted, that is). And I live with a bunch of really rich people at a ski resort. And they weren't doing it when tax rates were much higher either. Hell, rich people from all over the world have been jumping all over themselves to move here/buy US real estate.

So I say the "taxes are so high everyone's going to quit working" thing is BS. I bet you could double marginal rates and that wouldn't happen.

-W

I don't like it, but it only targets the actually rich, not the "comfortably poor" (i.e. Mustachians).

Your definition of mustachians is narrower than mine. I didn't realize there was a limiter/crabpot theory associated with MMM, particularly since Pete himself now probably has a liquid net worth well over $1 million.

DIFFERENT TOPIC: With a 39.6% top rate, wait until you see more people in NY, BOS, LA, SF, CHI, etc. say "Enough is enough"....and John Galt themselves to Longmont, CO. Because in these expensive municipalities there are a disproportionate share of two income households who make an ADJUSTED GROSS INCOME above 500K/year. They are not hedge fund managers, partners in law firms, etc. They are middle managers who work at financial services firms, tech companies, biotech companies, marketing firms, etc.

Wait until you see what happens to our revenues then as more of these folks say FUCK THIS. When an increasing amount of revenues comes from stock dividends, wait until you see what happens with our revenues during the next recession when a huge number of companies cut or halt dividends -- lesson from California, anyone?

This IS everyone's 'problem.' You could tax the 1% by garnishing ALL their wages. This would be a great temporary solution, and then.....

1) Hi Walt, my name is RapmasterD. Pleased to meet you!

2) Bad news. Now you know someone who John Galted.

3) More bad news. It's not an all or none game. If a mere 10,000 people from the bottom of the top one percent bail out, then the Federal Government loses $1.1 billion. Now I know that's chump change. But what if 10% of the one percenters say FUCK IT. Like you said, highly unlikely this would ever happen. But now we're up to more than $10 billion -- still chump change, but starts to get more interesting.

coffeehound

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #75 on: January 18, 2015, 02:24:51 PM »
Cap Gains taxes are the close to the lowest in the history of this country.   After putting a war on credit and halting a 2nd Great Depression, you bet we need to raise them!   

Let's just go back to the tax levels when old fuck Regan was president.....that'll get em on board :)

Sorry but I have no issue with paying 30-40% Cap Gains on income generating $500k or more.   A lot folks today are  completely clueless about the financial history of the U.S.

+1.  Let's go back to the tax rates of the Reagan years!

coffeehound

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #76 on: January 18, 2015, 02:33:55 PM »
By the time the government gets done with high wage earners those people are paying >50% of their income to taxes and fees.

I would like to see your math on this.

+1.

waltworks

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #77 on: January 18, 2015, 02:43:41 PM »
I assume you Galted back when the Reagan tax rates (or Eisenhower) were killing you? Are you considering returning to work now?

-W

Yeah, but I don't know a SINGLE PERSON who has EVER DONE THAT (John Galted, that is). And I live with a bunch of really rich people at a ski resort. And they weren't doing it when tax rates were much higher either. Hell, rich people from all over the world have been jumping all over themselves to move here/buy US real estate.

So I say the "taxes are so high everyone's going to quit working" thing is BS. I bet you could double marginal rates and that wouldn't happen.

-W

I don't like it, but it only targets the actually rich, not the "comfortably poor" (i.e. Mustachians).

Your definition of mustachians is narrower than mine. I didn't realize there was a limiter/crabpot theory associated with MMM, particularly since Pete himself now probably has a liquid net worth well over $1 million.

DIFFERENT TOPIC: With a 39.6% top rate, wait until you see more people in NY, BOS, LA, SF, CHI, etc. say "Enough is enough"....and John Galt themselves to Longmont, CO. Because in these expensive municipalities there are a disproportionate share of two income households who make an ADJUSTED GROSS INCOME above 500K/year. They are not hedge fund managers, partners in law firms, etc. They are middle managers who work at financial services firms, tech companies, biotech companies, marketing firms, etc.

Wait until you see what happens to our revenues then as more of these folks say FUCK THIS. When an increasing amount of revenues comes from stock dividends, wait until you see what happens with our revenues during the next recession when a huge number of companies cut or halt dividends -- lesson from California, anyone?

This IS everyone's 'problem.' You could tax the 1% by garnishing ALL their wages. This would be a great temporary solution, and then.....

1) Hi Walt, my name is RapmasterD. Pleased to meet you!

2) Bad news. Now you know someone who John Galted.

3) More bad news. It's not an all or none game. If a mere 10,000 people from the bottom of the top one percent bail out, then the Federal Government loses $1.1 billion. Now I know that's chump change. But what if 10% of the one percenters say FUCK IT. Like you said, highly unlikely this would ever happen. But now we're up to more than $10 billion -- still chump change, but starts to get more interesting.

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #78 on: January 18, 2015, 02:49:59 PM »
I assume you Galted back when the Reagan tax rates (or Eisenhower) were killing you? Are you considering returning to work now?

-W

Yeah, but I don't know a SINGLE PERSON who has EVER DONE THAT (John Galted, that is). And I live with a bunch of really rich people at a ski resort. And they weren't doing it when tax rates were much higher either. Hell, rich people from all over the world have been jumping all over themselves to move here/buy US real estate.

So I say the "taxes are so high everyone's going to quit working" thing is BS. I bet you could double marginal rates and that wouldn't happen.

-W

I don't like it, but it only targets the actually rich, not the "comfortably poor" (i.e. Mustachians).

Your definition of mustachians is narrower than mine. I didn't realize there was a limiter/crabpot theory associated with MMM, particularly since Pete himself now probably has a liquid net worth well over $1 million.

DIFFERENT TOPIC: With a 39.6% top rate, wait until you see more people in NY, BOS, LA, SF, CHI, etc. say "Enough is enough"....and John Galt themselves to Longmont, CO. Because in these expensive municipalities there are a disproportionate share of two income households who make an ADJUSTED GROSS INCOME above 500K/year. They are not hedge fund managers, partners in law firms, etc. They are middle managers who work at financial services firms, tech companies, biotech companies, marketing firms, etc.

Wait until you see what happens to our revenues then as more of these folks say FUCK THIS. When an increasing amount of revenues comes from stock dividends, wait until you see what happens with our revenues during the next recession when a huge number of companies cut or halt dividends -- lesson from California, anyone?

This IS everyone's 'problem.' You could tax the 1% by garnishing ALL their wages. This would be a great temporary solution, and then.....

1) Hi Walt, my name is RapmasterD. Pleased to meet you!

2) Bad news. Now you know someone who John Galted.

3) More bad news. It's not an all or none game. If a mere 10,000 people from the bottom of the top one percent bail out, then the Federal Government loses $1.1 billion. Now I know that's chump change. But what if 10% of the one percenters say FUCK IT. Like you said, highly unlikely this would ever happen. But now we're up to more than $10 billion -- still chump change, but starts to get more interesting.

End of last summer, after looking at my wife's and my prior three years of tax returns and seeing how much we paid out.

Doubtful but not impossible. Never say never.

forummm

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #79 on: January 18, 2015, 02:53:25 PM »
Obama's proposal sounds good to me. But it's not going to pass. I especially like the small tax on risky financial transactions. Many economists have said this is important to reduce the risk to taxpayers (and the financial system). Great ideas. But the banks will kill that one immediately.

And taxes are just a necessary fact of life. We enjoy the benefits of the government in so many ways. I'm happy to pay for that.

bacchi

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #80 on: January 18, 2015, 03:08:55 PM »
1) Hi Walt, my name is RapmasterD. Pleased to meet you!

2) Bad news. Now you know someone who John Galted.

You ain't Galted until you move to your own private valley away from all the moochers (and "failures" who aren't successful CEOs). Since you're still in California, which incidentally is doing better budget-wise than Texas, you obviously haven't John Galted.

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #81 on: January 18, 2015, 03:10:16 PM »
"This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting." - Emilyngh

According to whom? According to you? And who the F do you think you are? I mean....seriously. You're spreading your subjective pap like it's fact....really?

This thread is officially making me projectile vomit.

Note to self: stay away from politics on MMM.

highlow65

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #82 on: January 18, 2015, 03:11:03 PM »
Personal feelings aside, this has NO chance with the current congress.

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #83 on: January 18, 2015, 03:15:07 PM »
1) Hi Walt, my name is RapmasterD. Pleased to meet you!

2) Bad news. Now you know someone who John Galted.

You ain't Galted until you move to your own private valley away from all the moochers (and "failures" who aren't successful CEOs). Since you're still in California, which incidentally is doing better budget-wise than Texas, you obviously haven't John Galted.

bacci -- You could very well be correct on this one. However, the definition I take is excerpted from Wikipedia, "...describe(s) productive members of society cutting back on work in response to the projected increase in U.S. marginal tax rates, increased limits on tax deductions, and the use of tax revenues for causes they regard as immoral."

Incidentally, CA is doing great because we've had years of a crazy good stock market. And when the market tanks, CA does worse than just about every other state. And that's because we are so heavily dependent on capital gains, etc. I have to compliment Jerry Brown for his efforts to set up a rainy day fund.

P.S. Nobody is a 'failure' in my book. They may have sub-optimal thought processes and tactics. But that doesn't mean THEY are failures.

bacchi

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #84 on: January 18, 2015, 03:21:49 PM »
bacci -- You could very well be correct on this one. However, the definition I take is excerpted from Wikipedia, "...describe(s) productive members of society cutting back on work in response to the projected increase in U.S. marginal tax rates, increased limits on tax deductions, and the use of tax revenues for causes they regard as immoral."

Fair enough. I was going by the Rand definition.

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #85 on: January 18, 2015, 03:24:37 PM »
bacci -- I have the attention span of a retarded gerbil. I don't think I could ever get through the Rand books. So basically I'm an ass clown. Guilty as charged.

iris lily

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #86 on: January 18, 2015, 03:27:37 PM »
the increased tax on dividends and capital gains only affects those earning more than 500K per couple.

did you actually read the article?

This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting.

To answer the OP's question, as a somewhat younger person, no, I don't feel at all demotivated by the fact that taxes are progressive.

Ah the old "they can afford it" argument.  Yep they can afford to be robbed too, that doesn't make it right.

Oh yeah, other people deciding "what I can afford" is annoying. No thanks.

Reminds me of all of the people I've watched over the years who say they could not afford health insurance yet have items I consider luxurious.


Capsu78

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #87 on: January 18, 2015, 03:31:40 PM »
When did dying become a "loophole"?

Psychstache

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #88 on: January 18, 2015, 03:49:21 PM »
Let's see:

Automaton regurgitated talking points from the left and right? Check
Smug mockery and insulting of the opposing talking points? Check
Reasonable thoughts and math presented and subsequently ignored in favor of red v blue bickering? Check
Someone pointing out that the composition of Congress means this would never pass, also ignored to continue poetical sparring? Check

Looks like all we need is someone to compare someone else  to Hitler and then we will have the thread lock checklist complete.

iamlindoro

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #89 on: January 18, 2015, 03:50:23 PM »
Let's see:

Automaton regurgitated talking points from the left and right? Check
Smug mockery and insulting of the opposing talking points? Check
Reasonable thoughts and math presented and subsequently ignored in favor of red v blue bickering? Check
Someone pointing out that the composition of Congress means this would never pass, also ignored to continue poetical sparring? Check

Looks like all we need is someone to compare someone else  to Hitler and then we will have the thread lock checklist complete.

You know who else liked lists?  The Nazis.

Kris

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #90 on: January 18, 2015, 04:23:16 PM »
Let's see:

Automaton regurgitated talking points from the left and right? Check
Smug mockery and insulting of the opposing talking points? Check
Reasonable thoughts and math presented and subsequently ignored in favor of red v blue bickering? Check
Someone pointing out that the composition of Congress means this would never pass, also ignored to continue poetical sparring? Check

Looks like all we need is someone to compare someone else  to Hitler and then we will have the thread lock checklist complete.

You know who else liked lists?  The Nazis.

Lmao!!  Hats off to you.  Thanks for the laugh!

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #91 on: January 18, 2015, 04:24:51 PM »
Personal feelings aside, this has NO chance with the current congress.

I agree wholeheartedly, which is why I'm penalizing myself for allowing to get at all emotional on this topic -- simply not worth it.

And although I can't back this up with anything that resembles fact, my money would be on a President Hillary Clinton running very far away from this....

firewalker

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #92 on: January 18, 2015, 04:59:47 PM »
Everybody knows that every single political proclamation from every single politician is completely and absolutely transparent and without alternative motive. Anything stated can bn trusted at face value without concern. Therefore I do, or do not, accept and or reject, the trustability and or rejectability of the previously referred to proclamation.

Norioch

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #93 on: January 18, 2015, 05:52:43 PM »
"This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting." - Emilyngh

According to whom? According to you?

According to MMM, the guy whose forums we're posting on. $500,000 for a couple is an amount of money MMM might describe as "a never ending nuclear explosion of cash".

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #94 on: January 18, 2015, 06:08:40 PM »

"This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting." - Emilyngh

According to whom? According to you?

According to MMM, the guy whose forums we're posting on. $500,000 for a couple is an amount of money MMM might describe as "a never ending nuclear explosion of cash".

My point is - it's completely subjective, including MMM's perspective, which is slightly incongruent because he absolutely has amassed far more than his original 625K by now. And the 'nuclear explosion of cash' doesn't amount to nearly as much in our major coastal metros as it does in Longmont.

Emilyngh

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #95 on: January 18, 2015, 06:11:26 PM »
"This.   A couple making more than $500k is crazy super wealthy and if living anything close to a Mustachian life can more than spare the extra taxes without feeling even a sting." - Emilyngh

According to whom? According to you? And who the F do you think you are? I mean....seriously. You're spreading your subjective pap like it's fact....really?


Ummm, according to pretty basic MMM philosophy.  This is still the MMM forum, no?   
« Last Edit: January 18, 2015, 06:13:24 PM by Emilyngh »

Emilyngh

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #96 on: January 18, 2015, 06:14:05 PM »

 And the 'nuclear explosion of cash' doesn't amount to nearly as much in our major coastal metros as it does in Longmont.

Waaah?

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #97 on: January 18, 2015, 06:22:55 PM »

 And the 'nuclear explosion of cash' doesn't amount to nearly as much in our major coastal metros as it does in Longmont.

Waaah?

Difference in cost of living.

One source: http://money.cnn.com/calculator/pf/cost-of-living/

One example: 50% more expensive to live in San Francisco than in Denver.

Another example: More than 100% more expensive to live in Manhattan than in Denver.

Emilyngh

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #98 on: January 18, 2015, 06:24:43 PM »


Pff please.  In no world is the EITC anything other than social welfare.  Wikipedia calls it "the third largest social welfare program".  It is need based.  If one plays games to qualify they are abusing it, especially if claiming to be FI.  You can quibble all you want over my wording "working poor" but it doesn't dilute my argument nor is it a straw man.

Meh, since the office of social security website itself has an article that refers to social security as "social welfare" http://www.ssa.gov/history/aja964.html, the fact that EITC could be considered "social welfare" does not put it in a super special class separate from all of the other social benefits most Americans take advantage of when they qualify.   

What "games" are you referring to people on here playing to qualify?  If it's income-based, and one's income is low enough in FI, they qualify.   This is no more "playing a a game" than someone who is FI and SS age claiming SS.

RapmasterD

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Re: Targeting the Wealthy: MMM Meets Politics
« Reply #99 on: January 18, 2015, 06:41:04 PM »
Starguru - What does PFF stand for? BTW, I love your "save $10 per day" mantra.