Author Topic: I'm Gonna Pay More Taxes--Thanks, Trump!  (Read 26648 times)

tomsang

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #50 on: December 11, 2016, 01:21:28 PM »
We should be talking about how to tax more to balance the budget and provide services to our citizens, which would reduce the income and wealth inequalities. 

This is the part where you lose the vast red portion of the electorate.  If you substitute "uneducated" with "disinterested in having the government involved in every facet of their lives" you may be able to alter your perspective a bit and figure out the values of much of our nation.  You may, instead, see the "services" you're referring to above as waste that that people are unwilling to fund.  These people think they're much better at investing their money in the services that are best for their family than bureaucrats in Washington are.  For any services that demand bargaining power these voters would much prefer to deal with state and local government than having it filtered through the wasteful GIGO federal government. 

The 2nd part of your statement is dubious at best.  It is rather hard to tax your way to prosperity or equality.  Instead of whining about one's circumstances those with less should focus on working their way up and gathering the skills needed to increase their earning power.  There is plenty of opportunity in our country to make the ascent to the higher levels of the economic ladder.  The trouble is that people are unwilling to put forth the effort to do so and wish for someone else to solve their problems.

Many on this board have a hard time dealing with figuring out investments, budgets, retirement planning, and many other complicated areas.  I don't want to create a third world country where the elite own it all and the others have nothing.  We are heading down that direction very quickly.  Technology, robots, AI will make most uneducated jobs obsolete in the next five to twenty years.  How the spoils of this windfall are shared with society will be the role of government in the future.  Most people today don't have the IQ to compete with the technology development.  You can't expect a person with a 100 IQ to be a software developer or invest for the future.  So the question is what do we do with those that are not capable to handle their own finances?  I currently put 85% of the US population in that bucket as most are living paycheck to paycheck and not capable of making the right calls regarding health insurance, retirement planning, financing, etc.  If we don't have these safety nets in place we need to have a manner of putting people out of their misery as it is not pretty to see.

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #51 on: December 11, 2016, 02:30:30 PM »
IQs are loosely correlated with financial success.  People that apply themselves and have a 100 IQ have ample opportunity to ascend the economic ladder.  The government doesn't have a great track record of fixing their problems and I don't really have a lot of faith that future bureaucrats will do a whole lot better. 

Metric Mouse

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #52 on: December 11, 2016, 02:53:13 PM »
We should be talking about how to tax more to balance the budget and provide services to our citizens, which would reduce the income and wealth inequalities. 

This is the part where you lose the vast red portion of the electorate.  If you substitute "uneducated" with "disinterested in having the government involved in every facet of their lives" you may be able to alter your perspective a bit and figure out the values of much of our nation.  You may, instead, see the "services" you're referring to above as waste that that people are unwilling to fund.  These people think they're much better at investing their money in the services that are best for their family than bureaucrats in Washington are.  For any services that demand bargaining power these voters would much prefer to deal with state and local government than having it filtered through the wasteful GIGO federal government. 

The 2nd part of your statement is dubious at best.  It is rather hard to tax your way to prosperity or equality.

We should be focusing on ways to spend less, and spend smarter, so that we don't have to tax more.

MrsPete

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #53 on: December 11, 2016, 07:52:03 PM »
According to this infographic, I will be paying more taxes as a "middle income earner" under the Trump tax plan.  I will be going from a 28% tax bracket to a 33% tax bracket.  At the same time, those making twice as much as me, will see a decrease.  Unfortunately, I can't earn more so I can pay less....
Remember, you're talking about percentages.  In terms of dollars, the person earning twice as much as you will pay more dollars. 

Let's look at the math: You say you're currently paying 28% now ... but you'll be paying 33% ... let's assume you're at the top of this category and are earning $231,450 ... if you begin paying 33%, you'll be paying $76,378.xx

Then let's jump up two brackets to the guy whose taxes are going down by 2% ... the person at the top of that category is earning $466,950 ... and he's also going to pay 33% ... so he'll be paying $154,093.xx ... yes, his percentage is decreasing, but he's paying more than twice as many dollars as you. 
 
Personally, I think you're both paying WAY too much in taxes, especially considering that this is just federal tax.  You're still paying state tax, sales tax, property tax and more -- but that isn't really the question. 

Never understood why Social Security tax was capped at certain income levels.  If we had a flat Social Security tax, regardless of income level, we could go a long way to shore up Social Security and reduce the tax on the majority of people.
There's an upper limit on how much SS you can draw, so there's an upper limit on how much SS you're forced to pay in one year.  It's fair.

MrsPete

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #54 on: December 11, 2016, 07:53:34 PM »
We should be focusing on ways to spend less, and spend smarter, so that we don't have to tax more.
This is the most sensible statement on this thread.

MrsPete

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #55 on: December 11, 2016, 07:55:22 PM »
According to this infographic, I will be paying more taxes as a "middle income earner" under the Trump tax plan.  I will be going from a 28% tax bracket to a 33% tax bracket.  At the same time, those making twice as much as me, will see a decrease.  Unfortunately, I can't earn more so I can pay less....
Remember, you're talking about percentages.  In terms of dollars, the person earning twice as much as you will pay more dollars. 

Let's look at the math: You say you're currently paying 28% now ... but you'll be paying 33% ... let's assume you're at the top of this category and are earning $231,450 ... if you begin paying 33%, you'll be paying $76,378.xx ... Of course, I just over-simplified this by doing just one math step /multiplying the whole number by 33%, but as long as I do the same thing for both salaries, it'll come out a fair comparison.

Then let's jump up two brackets to the guy whose taxes are going down by 2% ... the person at the top of that category is earning $466,950 ... and he's also going to pay 33% ... so he'll be paying $154,093.xx ... yes, his percentage is decreasing, but he's paying more than twice as many dollars as you. 
 
Personally, I think you're both paying WAY too much in taxes, especially considering that this is just federal tax.  You're still paying state tax, sales tax, property tax and more -- but that isn't really the question. 

Never understood why Social Security tax was capped at certain income levels.  If we had a flat Social Security tax, regardless of income level, we could go a long way to shore up Social Security and reduce the tax on the majority of people.
There's an upper limit on how much SS you can draw, so there's an upper limit on how much SS you're forced to pay in one year.  It's fair.

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #56 on: December 11, 2016, 10:03:49 PM »
I could agree with the flat tax arguments or even the no tax arguments when 100% of the population is absolutely altruistic and charitable beyond the slightest shred of greed for personal gain in all areas of their lives.

Since we don't live in that world, I support progressive tax rates and trimming the fat from the federal budget.  Simplicity in tax laws and regulations would also be convenient and reduce the chance for fraud (or failing to realize that there were "tricks" you missed out on).

There is no edict that says that the system needs to be taxed progressively.  Having vast portions of the population pay very close to zero doesn't really seem like a fair system either.  Everyone benefits from a robust national defense and many other basic services that our government provides.  It seems quite fair that they should pay for these services just like those with higher incomes. 

I really find it hard to figure out why much of this board is so left-leaning when it comes to taxation.  Taxes are THE LARGEST expense that most people pay in their lifetimes.  When was the last time we had deep, meaningful cuts in federal government spending?  The economy is prospering right now so a decrease in this spending seems well-timed right now.  Hopefully with the right having a super majority we'll get some real cuts and some policy that puts us on a course for financial solvency long term. 

hogfanboy

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #57 on: December 12, 2016, 12:27:57 AM »

[/quote]

 When was the last time we had deep, meaningful cuts in federal government spending?  The economy is prospering right now so a decrease in this spending seems well-timed right now.
[/quote]

So even though most of your points you have brought up are on  taxes.  You switch to spending.  (2 different beasts)
Most of the politicians that want to cut spending  say our economy sucks right now.

I did a little research back in 2012  looking at some congressional budget office reports. If Added the following spending  we are already in a deficit
Military
Interest on the debit.
Social security ( not  supplemental  and not disability,  just the retirement section)
Medicare
Military pensions  and retirement medical care
Government pensions  and retirement medical care.

That's it!  we were already spending more with these items than the government brought in.
Yes I think  we can all agree there could be some savings in the military ( but that doesn't win politicians elections)
Bottom line with the Bush tax cuts  the government wasn't even bringing in enough money to cover the military, debit,  and  retirement programs that were  currently funding themselves (SS and Medicare)

Most fiscal conservative people see the government's budget as a family's kitchen table budget.  But it is so much more, it is what drives the economy.
Most of the dollars spent in the budget end up paying someone's wage. They in turn spend it and that is how the economy grows.  (taking money out of the economy  will not make it grow). 

I understand how it may not make sense from a kitchen table budget point of view to have  the government run a program with 1000 people make $50k  each vs having the private sector do a similar program with  500 people make $25K each and 10 people make $3 million each.   
The government program spends  $50 million  but the private sector only spends $42 million. Which is better? 
When you really break it down, the main reason private sector is more efficient is they use fewer people at less pay (that doesn't help the economy).

I know it is really hard to grasp, for a family or individual being fiscally conservative with ones budget  is the smart and wise thing to do.
But for a society  and it's economy the best thing that can happen is to keep the money turning and the rising tide will raise all boats.
 
 

EscapeVelocity2020

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #58 on: December 12, 2016, 12:44:37 AM »
I really find it hard to figure out why much of this board is so left-leaning when it comes to taxation.  Taxes are THE LARGEST expense that most people pay in their lifetimes.  When was the last time we had deep, meaningful cuts in federal government spending?  The economy is prospering right now so a decrease in this spending seems well-timed right now.  Hopefully with the right having a super majority we'll get some real cuts and some policy that puts us on a course for financial solvency long term.

I don't disagree with this sentiment.  Trump is draining the swamp, but that doesn't mean that the middle class will be better off.  Government used to have to give in order to take.  By 'draining the swamp', I would imagine that the top echelon capitalists feel that there is a national mandate to return to the laissez faire world of 'The Octopus'.  Certainly not a place where the middle class thrived, but the middle class are also the least aware of their own place in history.  Like the pawn on a chessboard; limited in their predictable but effective range.

EnjoyIt

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #59 on: December 12, 2016, 02:07:26 AM »
The problem in this country isn't a racing problem. It is a spending problem. We need to stop crony capitalism, corruption and waste. We are taxed plenty to cover the real costs of running our society.

Metric Mouse

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #60 on: December 12, 2016, 03:17:14 AM »
The problem in this country isn't a racing problem. It is a spending problem. We need to stop crony capitalism, corruption and waste. We are taxed plenty to cover the real costs of running our society.

While I mostly agree with this sentiment, I would be absolutely willing to pay more for the same level of services I receive.

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #61 on: December 12, 2016, 06:59:19 AM »
When private companies cut jobs people lose their income too.  I'm not sure why this is materially different than the government cutting jobs to save money. 

Any discussion like this will naturally center on the role of government.  Many don't think it is the job of the government to "spread things around" and figure out how to supply jobs to those that can't obtain them in private industry. 

crentist

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #62 on: December 12, 2016, 08:13:19 AM »
It is surprising the liberal financial tendencies of the MMM threads.  The one thing the scares me about the early retirement movement is that SOME early retirees seem to be relying on or plan on taking advantage of social programs meant for the underprivileged/disadvantaged. Is it smart? yeah is it honorable? probably not
The discussion about govt jobs paying better and being more fair than private jobs makes no sense to me.  In a robust economy, new companies are created and wages go up due to demand for workforce.
And people that believe the general population cannot take care of themselves so we need all these services are the same type that has created much of the entitled in society. I see it everyday in my practice. I am all for a safety net but what we have in a comfy bed with a butler.
People making jobs and high incomes=paying all the taxes. They start to change their behaviors like moving to less taxed areas or working less.

adamb

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #63 on: December 12, 2016, 09:08:48 AM »
Everything I've read, and from a quick google search this calculator (http://www.clark.com/tax-calculator-clinton-trump) indicate a savings across the board for everyone if Trump can get his plan passed.

I still think if there's going to a federal tax it should just be the entire federal budget for the year divided by either working age adults or the entire population, everyone pays their fair share.

You want to tax everyone ~$25k a year (3.7 trillion/150 million), even those who make less than that?

Absolutely not, there should be no federal income tax at all. I am opposed to all forms of slavery. Compulsory income tax in slavery at a certain percen, but slavery nonetheless.

What about those who could never hope to pay that much? Debt slavery?

There are any number of ways to account for that, perhaps a running tab. Either way, it would be a truly fair tax if you accept the premise that income tax is just and like many here believe that it is a good and virtuous thing. Regardless, the current federal government spending plan is debt slavery for the unborn via high debt, borrowed money, and inflationary monetary policy. The masses seem to want lots of free stuff now and to let the unborn pay for it. Won't somebody think of the children?

Flat taxes (what you propose) are simply not workable.

Put another way, how is it "fair share" to make some people pay nearly all (or more than) their income while others pay only pocket change?

That's teh cost of living in the "land of opporunity" as some here say, there is opportunity so if some can't pay their fair share they need to take advantage of some of that opportunity. It would resolve itself within 1-4 years as the masses would not vote for people that give them "free stuff" paid for with money stolen from others, debt, or printing money. A balanced federal budget would come very quickly.

So on a scale of 1 to the 13th amendment, where do taxes fall?

Always thought highly of Lincoln for ending all the free corporate food and housing slaves received.

honeybbq

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #64 on: December 12, 2016, 09:30:04 AM »
So, I take it that you are making 112,500 or more and complaining? or your spouse and you together are making over $225k?


So, who *is* allowed to complain about their taxes? Just curious.

Metric Mouse

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #65 on: December 12, 2016, 09:38:33 AM »
So, I take it that you are making 112,500 or more and complaining? or your spouse and you together are making over $225k?


So, who *is* allowed to complain about their taxes? Just curious.

In America, basically no one should be complaining about the rate of tax. Almost everyone receives far, far more in benefits than they pay in.

Not to say that the tax code couldn't use some updates or changes, but overall very few people have much to complain about.

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #66 on: December 12, 2016, 09:41:42 AM »
anyone sit down and figured out how this will impact a post FIRE plan where you are earning ~$30k per year?
30K income.  No state tax.  No dependents.  No itemized deductions

MFJ - Current - 30K less 20700 standard deduction + 2 exemptions = $9,300 taxable income * 10% = $930 federal income tax
MFJ - Trump - 30K less 30000 standard deduction = 0 taxable income = $0 tax

Single - current - 30K less 10350 standard deduction + 1 exemption = $19650 taxable income (9275 @10%, 10375 @15%)  = $2,483.75 tax
Single - trump - 30K less 15000 standard deduction = $15000 taxable income * 12% = $1800 tax

I know this isn't exactly a federal income tax question, but it seems like the biggest wildcard for a lot of people is what their healthcare expenses will be under Trump. 

pbkmaine

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I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #67 on: December 12, 2016, 09:44:33 AM »
What astonishes me is how the Republican party has changed over time. My father, who I adored, was a rock-solid Republican, a veteran of WWII, and a lifelong member of the NRA. He also believed that your private life was your own business and the government should stay the hell out of it, Planned Parenthood was a boon to humanity, and guns needed to be kept out of the hands of irresponsible people.

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #68 on: December 12, 2016, 09:46:58 AM »
What astonishes me is how the Republican party has changed over time. My father, who I adored, was a rock-solid Republican, a veteran of WWII, and a lifelong member of the NRA. He also believed that your private life was your own business and the government should stay the hell out of it, Planned Parenthood was a boon to humanity, and guns needed to be kept out of the hands of irresponsible people.

It is fascinating.  The Democrats leave me wanting for a whole lot, but I am certainly not seeing any better proposals from Republicans on a federal level. There doesn't seem to be a fiscally responsible small government party at all.  I've met more of those folks in the moderate wing of the Democrats than in the Republicans, and those I've known in the GOP are clearly not the dominant influence in their party.

honeybbq

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #69 on: December 12, 2016, 09:48:17 AM »
One of two issues I have with the tax code... is actually a further standard deviation out from the middle class. Why do the 0.1 % pay less than the 1%? I actually dislike the loopholes and schemes that get the 'uber rich' to pay zero taxes (think Trump) as opposed to a "reasonable share" like the 1%ers.

(I also dislike the bottom of the tax bracket as well).

Laserjet3051

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #70 on: December 12, 2016, 09:53:10 AM »
I'm middle class, MFJ, and according to that infographic link, my taxes will decrease under Trump. I plan to invest that savings difference in index funds.

Cwadda

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #71 on: December 12, 2016, 09:56:28 AM »
Quote
I don't want to create a third world country where the elite own it all and the others have nothing.  We are heading down that direction very quickly. there.

Fixed for you. The top 1% do own it all. It happens now, and it's not going to change. Hillary Clinton, Donald Trump, the whole lot of them. Plenty of corporate lobbying and funneling millions into campaigns.

Just look at how DNC was pitted against Bernie Sanders from the beginning.

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #72 on: December 12, 2016, 09:59:08 AM »
One of two issues I have with the tax code... is actually a further standard deviation out from the middle class. Why do the 0.1 % pay less than the 1%? I actually dislike the loopholes and schemes that get the 'uber rich' to pay zero taxes (think Trump) as opposed to a "reasonable share" like the 1%ers.

(I also dislike the bottom of the tax bracket as well).

I don't think it's an accident that the Trump tax plan (and the Romney proposals from the last election) hit the upper middle class professional the hardest.  College- (and grad school-)educated coastal elites earning their income from salaries (plus the very poor) seem to be hit the hardest by most Republican proposals, while the truly wealthy pay lower taxes.  That lines up with my experience of who is the biggest thorn in the side for the GOP.

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #73 on: December 12, 2016, 10:04:51 AM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative. 

tomsang

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #74 on: December 12, 2016, 10:12:11 AM »
Quote
I don't want to create a third world country where the elite own it all and the others have nothing.  We are heading down that direction very quickly. there.

Fixed for you. The top 1% do own it all. It happens now, and it's not going to change. Hillary Clinton, Donald Trump, the whole lot of them. Plenty of corporate lobbying and funneling millions into campaigns.

Just look at how DNC was pitted against Bernie Sanders from the beginning.

You obviously have never left the country!  We are light years ahead of most countries in the world.  We tend to be top ten in most categories.  The tax policies proposed by the democrats were going to tax the wealthy in higher amounts.  Trump is giving a huge tax cut to the wealthy.  They are good at labeling taxes as bad and making it sound terrible to tax someone's estate.  The estate tax is one of the best ways to mitigate family empire building and they are convincing those that have zero chance of paying a cent to vote against it.  If your family estate is under $10 million there is no tax.  So those poor farmers and shop owners will not have to pay a cent, but they are used to eliminate the Billionaires from passing their entire empire to the next generation. In many case, Trump's, they have not paid a cent of tax as  they built the empire, then you pass it along without paying a cent of taxes.  Crazy stuff.

My family is in the 1% and we will see up to a six figure decrease in my taxes under the Trump plan.  I am pretty sure that Trump plan will not go into affect as stated as it would bankrupt the country in short order, but my taxes will drop significantly under the plans presented by the GOP and Trump.  I will save it all and retire with a bigger Stache, so trickle down will not be a pleasant experience for the poor and middle class families.

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #75 on: December 12, 2016, 10:17:34 AM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

I like pretty much everything taxprofblog summarizes for me, and use him to find more technical explanations.   I also like most things the taxpolicycenter publishes.  I'm a lawyer with 4-5 courses in tax law, math courses through linear algebra, basic macro and microecon and basic stats, so I can follow vaguely technical explanations, but not the highest level stuff, for sure.  Tax Policy Center had this study a couple months ago that does a good job of breaking it down (but not within the upper 1%, although there's some differentiation of the upper .1% who earned 3.6 million per househould versus upper 600s for the upper 1% per their data): http://www.taxpolicycenter.org/taxvox/who-benefits-tax-expenditures?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+taxpolicycenter%2Fblogfeed+%28TaxVox%3A+the+Tax+Policy+Center+blog%29 You can click through to the long-form version, that's their summary/chart version. 

Cwadda

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #76 on: December 12, 2016, 10:19:04 AM »
Quote
I don't want to create a third world country where the elite own it all and the others have nothing.  We are heading down that direction very quickly. there.

Fixed for you. The top 1% do own it all. It happens now, and it's not going to change. Hillary Clinton, Donald Trump, the whole lot of them. Plenty of corporate lobbying and funneling millions into campaigns.

Just look at how DNC was pitted against Bernie Sanders from the beginning.

You obviously have never left the country!  We are light years ahead of most countries in the world.  We tend to be top ten in most categories.  The tax policies proposed by the democrats were going to tax the wealthy in higher amounts.  Trump is giving a huge tax cut to the wealthy.  They are good at labeling taxes as bad and making it sound terrible to tax someone's estate.  The estate tax is one of the best ways to mitigate family empire building and they are convincing those that have zero chance of paying a cent to vote against it.  If your family estate is under $10 million there is no tax.  So those poor farmers and shop owners will not have to pay a cent, but they are used to eliminate the Billionaires from passing their entire empire to the next generation. In many case, Trump's, they have not paid a cent of tax as  they built the empire, then you pass it along without paying a cent of taxes.  Crazy stuff.

My family is in the 1% and we will see up to a six figure decrease in my taxes under the Trump plan.  I am pretty sure that Trump plan will not go into affect as stated as it would bankrupt the country in short order, but my taxes will drop significantly under the plans presented by the GOP and Trump.  I will save it all and retire with a bigger Stache, so trickle down will not be a pleasant experience for the poor and middle class families.

Oh no, I'm not talking about millionaires. I'm talking about the banks and huge corporations. They're the ones in control.

This isn't a question of who pays taxes. It doesn't mean America is a bad place, it's actually a wonderful place. It's just the reality, the fundamental system of how the country is controlled.
« Last Edit: December 12, 2016, 10:20:46 AM by Cwadda »

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #77 on: December 12, 2016, 10:22:15 AM »
For those complaining about estate taxes....How would you fix them?  People would simply dump their money on extravagant items or waste the money near the end of their life if the wealth couldn't be passed on.  This clearly is undesirable behavior. 

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #78 on: December 12, 2016, 10:27:49 AM »
For those complaining about estate taxes....How would you fix them?  People would simply dump their money on extravagant items or waste the money near the end of their life if the wealth couldn't be passed on.  This clearly is undesirable behavior.

That's probably a claim that can be empirically tested.  I bet there is data on how behavior has changed in response to different ways of administering the estate tax.  The Joint Committee on Taxation has a great report on the history of the estate tax: https://www.jct.gov/publications.html?func=startdown&id=4744 As of 2014, fewer than 0.2% of estates owed ANY estate tax at all, it's worth remembering.

Having gone to an ivy league school with a bunch of kids whose wealth was inherited, I can assure you that lots of the money (when left untaxed) is also wasted.  There are always the Warren Buffetts and Bill Gates who will find productive ways to use huge amounts of money, but very few people will do anything but waste $20 million.

http://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #79 on: December 12, 2016, 10:29:39 AM »
Why wouldn't we want elderly rich people blowing all their money before they die? Sounds like a great way to stimulate the economy.

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #80 on: December 12, 2016, 10:29:47 AM »
I like pretty much everything taxprofblog summarizes for me, and use him to find more technical explanations.   I also like most things the taxpolicycenter publishes.  I'm a lawyer with 4-5 courses in tax law, math courses through linear algebra, basic macro and microecon and basic stats, so I can follow vaguely technical explanations, but not the highest level stuff, for sure.  Tax Policy Center had this study a couple months ago that does a good job of breaking it down (but not within the upper 1%, although there's some differentiation of the upper .1% who earned 3.6 million per househould versus upper 600s for the upper 1% per their data): http://www.taxpolicycenter.org/taxvox/who-benefits-tax-expenditures?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+taxpolicycenter%2Fblogfeed+%28TaxVox%3A+the+Tax+Policy+Center+blog%29 You can click through to the long-form version, that's their summary/chart version.

Cool link....thanks for posting it. 

This really is addressing a different topic than the one I asked about though.  Those that pay the most in taxes will clearly disproportionately benefit from methods to reduce the tax.  This doesn't mean they pay less in taxes as others in this thread have claimed. 

tomsang

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #81 on: December 12, 2016, 10:36:21 AM »
For those complaining about estate taxes....How would you fix them?  People would simply dump their money on extravagant items or waste the money near the end of their life if the wealth couldn't be passed on.  This clearly is undesirable behavior.

Churning wealth is great for the economy.  What is not great for the economy is passing along and creating dynasties.   They and we understand once you have billions the return on equity is so great that your kids, grandkids, and their kids are set for life.  If they were going to give up 60%+ then maybe they would do like Carnegie and other titans did. Set up institutions that help mankind or give it to the government as their wealth was probably the direct result of living in a country that allowed the growth.  And in many cases, they have not paid their fair share of taxes throughout the years.  IE Trump and other real estate guys, Wall Street tycoons with the carried interest, etc.

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #82 on: December 12, 2016, 10:38:00 AM »
It is surprising the liberal financial tendencies of the MMM threads.  The one thing the scares me about the early retirement movement is that SOME early retirees seem to be relying on or plan on taking advantage of social programs meant for the underprivileged/disadvantaged. Is it smart? yeah is it honorable? probably not
The discussion about govt jobs paying better and being more fair than private jobs makes no sense to me.  In a robust economy, new companies are created and wages go up due to demand for workforce.
And people that believe the general population cannot take care of themselves so we need all these services are the same type that has created much of the entitled in society. I see it everyday in my practice. I am all for a safety net but what we have in a comfy bed with a butler.
People making jobs and high incomes=paying all the taxes. They start to change their behaviors like moving to less taxed areas or working less.
from someone else's quote:
Quote
Having vast portions of the population pay very close to zero doesn't really seem like a fair system either.  Everyone benefits from a robust national defense and many other basic services that our government provides.  It seems quite fair that they should pay for these services just like those with higher incomes.

I guess you just can't put people in a box?

When it comes to people paying zero tax, well...I personally don't want people cold, hungry, desperate, and dead.  I've known too many people who work hard and have jobs and cannot afford enough food, or heat, or health care.  My college roommate's brother died in his 30's because he couldn't afford insurance and couldn't get health care.

So...are you working hard? Are you doing your best?  Still can't afford to eat?  Fine with me, here's some money for food stamps.  As someone who grew up poor, and made $8 a month too much for food stamps, I've got sympathy.

Now, a businessman who is very savvy in their avoidance of tax? I have very little sympathy.  Yeah, you are smart to use the loopholes but it still completely sucks.

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #83 on: December 12, 2016, 10:43:36 AM »
For those complaining about estate taxes....How would you fix them?  People would simply dump their money on extravagant items or waste the money near the end of their life if the wealth couldn't be passed on.  This clearly is undesirable behavior.

Churning wealth is great for the economy.  What is not great for the economy is passing along and creating dynasties.   They and we understand once you have billions the return on equity is so great that your kids, grandkids, and their kids are set for life.  If they were going to give up 60%+ then maybe they would do like Carnegie and other titans did. Set up institutions that help mankind or give it to the government as their wealth was probably the direct result of living in a country that allowed the growth.  And in many cases, they have not paid their fair share of taxes throughout the years.  IE Trump and other real estate guys, Wall Street tycoons with the carried interest, etc.

Yeah, estate taxes seem like a good idea to me intuitively (as someone more familiar with most than the federal tax system, but definitely not an expert).  I'm now curious to see what has happened historically when we've changed them. I'm sure more energy is spent on avoidance, but I would imagine more is donated, as well. 

The estate tax is SO EASY to avoid (accept that your kid can only inherit [at least, assuming there are ZERO exemptions for them]) 5.4 million, and start making gifts to your kids or a charity each year before you die, or donate everything beyond that amount to a charity)... I don't really see any reason but weird beyond-the-grave greed to be bothered by it.  I'm sure there is some sob story about a billionaire with a family farm who adopted 30 special needs kids who can each inherit an amount too small to provide for their medical care, or something, but we are already talking about such a tiny sector of the population.

tomsang

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #84 on: December 12, 2016, 11:50:32 AM »
The $5.4 million is also husband and wife.  So over $10 million before any yearly distribution. When even a decade to transfer wealth a couple probably could transfer $15+ million depending on how many benefactors.  Zero chance a small farmer would have issues.  That is also $15 million of net worth.

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #85 on: December 12, 2016, 11:54:08 AM »
Why wouldn't we want elderly rich people blowing all their money before they die? Sounds like a great way to stimulate the economy.

Capital Destruction.

honeybbq

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #86 on: December 12, 2016, 11:56:30 AM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

Data point #1: Donald Trump

Pooplips

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #87 on: December 12, 2016, 12:01:28 PM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

Data point #1: Donald Trump

I thought Trump didn't pay taxes because he was able to carry forward huge losses. Losses aren't somthing I wish for to avoid future taxes.

onlykelsey

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #88 on: December 12, 2016, 12:05:03 PM »
The $5.4 million is also husband and wife.  So over $10 million before any yearly distribution. When even a decade to transfer wealth a couple probably could transfer $15+ million depending on how many benefactors.  Zero chance a small farmer would have issues.  That is also $15 million of net worth.

Yeah, the small farm family thing is definitely a myth.  The Joint Committee on Taxation link I posted above has data on how many people have ever fallen in to that bucket: https://www.jct.gov/publications.html?func=startdown&id=4744 starting around page 39.  It's a very moving myth, but it is really a myth.  There are also easy ways to help those family farms, if we want to as a matter of policy, like upping the exemption in Section 2056 from 750K to whatever we think is equitable, without messing with the whole estate tax system.

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #89 on: December 12, 2016, 01:25:18 PM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

Data point #1: Donald Trump

I thought Trump didn't pay taxes because he was able to carry forward huge losses. Losses aren't somthing I wish for to avoid future taxes.

Yup....I knew the thread would head in this direction and that is why I explicitly requested to avoid useless anecdotes.  Losing boatloads of money and then recouping the losses over a period of years doesn't seem like sound tax avoidance advice to me. 

I'm all for things being a meritocracy.  The problem is that this is awfully tough to implement in practice without encouraging other silly behavior.  I've made ever penny in my current stash and have inherited zero.  There has been a lot of sacrifice to get where I am at, but others having more really has had zero impact on my ability to move up the ladder. 

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #90 on: December 12, 2016, 02:46:25 PM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

With respect to 1% vs. 0.1% - I'm not finding anything specific to that as people seem to focus on the 1% as a group, though the IRS raw data is surely out there for someone to parse. This article is a bit old, but does show average effective tax rate for very high income households (2009 data): http://taxfoundation.org/blog/romneys-tax-returns-and-effective-tax-rates-rich Spoiler alert: It goes up for a while, then dips well into the 1% range (~$2 mil +).

This article seems to cover a lot of the thinking behind "rich paying less in taxes" rhetoric: https://www.americanprogress.org/issues/economy/reports/2014/06/25/92656/how-the-government-subsidizes-wealth-inequality/

They call out two main things (1) Capital gains and dividends taxed at lower rates (2) "Step-up in basis" for inherited wealth (quotes from both sections below)

Quote
Capital gains and dividends are taxed at lower rates than other sources of income. Labor income, such as wages and salaries, is taxed at rates of up to 39.6 percent and also subject to payroll taxes. Capital gains and dividends, which are investment income, are taxed at a top rate of 23.8 percent, which includes the 3.8 percent surtax on investment income imposed by the Affordable Care Act, or ACA.
Quote
Piketty warns of “patrimonial capitalism,” in which inheritances drive economic outcomes more than talent or hard work. A provision of the tax code known as “step-up in basis” is a direct subsidy for inherited wealth.

When an asset is sold, the capital gain is the sales price minus the seller’s basis in the asset, with the basis usually equaling the price that the seller originally paid. For inherited property, however, the basis is generally the fair market value of the asset on the date the previous owner of the asset died. Calculating an heir’s basis in an asset using its more recent value when the previous owner died, instead of its original cost, is called a step-up in basis.

Beyond these two points, there are quite a few messy loopholes and tax shelters people will use to pay lower rates. These loopholes and such are trickier to talk about as a group (and I am by no means a tax expert), so I won't/can't go into that.

If we look at capital gains & dividends taxation by itself, you could easily see how the more investments/wealth you have as a high earner, the lower tax rate you would expect to have, to the point where your tax rate hovers around the capital gains tax rate, as your actual earned income might be measly in comparison.

e.g. (assuming taxable deductions are the same for both and already taken out of income):
Family 1: $400k income + $1M capital gains
Family 1 Taxes: $107,413 on income + $150,000 on capital gains = $257,413 (~18.39%)
Family 2: $400K income
Family 2 Taxes: $107,413 on income (~26.85%)

Family 1 has a much lower effective tax rate than Family 2, as they're in the 35% bracket, but the $1M in capital gains is taxed at 15% (not even at the highest possible 20%, as the income is not high enough).

Very related: Buffet Rule https://en.wikipedia.org/wiki/Buffett_Rule

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #91 on: December 12, 2016, 04:15:38 PM »
Unless you can capture the carryforward losses on your taxes and then have the losses cleared off the books in a bankruptcy.  Gives a nice and tidy way of wrapping up that tax and shuffling the losses over to the creditors - a net win for the filer.

I'm not a tax expert, but there are at loss rules presently in place that wouldn't allow this to help.  This may have not been the case when Trump pulled the maneuver.  To the extent this is still possible this is an even stronger case for a simpler tax code that doesn't encourage risky behavior. 

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #92 on: December 12, 2016, 04:27:07 PM »
Spoiler alert: It goes up for a while, then dips well into the 1% range (~$2 mil +).

I can't see part of the article linked because the UI sucks, but what I can see shows that the average tax rate dips a bit at the higher levels.  Even if this is the case these taxpayers are still paying more in taxes.  25% of a very large number is still larger in absolute value than 28% of a smaller number.  How does this show that they're paying less in taxes?

This article seems to cover a lot of the thinking behind "rich paying less in taxes" rhetoric: https://www.americanprogress.org/issues/economy/reports/2014/06/25/92656/how-the-government-subsidizes-wealth-inequality/

They call out two main things (1) Capital gains and dividends taxed at lower rates (2) "Step-up in basis" for inherited wealth (quotes from both sections below)

The step-up basis issue is akin to the estate tax issue.  Taxing things at the old basis will encourage silly behavior late in life. 

I'm all for doing away with the distinction between capital gains and ordinary income.  All sorts of games get played in my industry with transforming ordinary income to carried interest which is subject to capital gains treatment.  Again, a simpler tax code with lower taxes and smaller government is fine with me. 

Beyond these two points, there are quite a few messy loopholes and tax shelters people will use to pay lower rates. These loopholes and such are trickier to talk about as a group (and I am by no means a tax expert), so I won't/can't go into that.

If we look at capital gains & dividends taxation by itself, you could easily see how the more investments/wealth you have as a high earner, the lower tax rate you would expect to have, to the point where your tax rate hovers around the capital gains tax rate, as your actual earned income might be measly in comparison.

e.g. (assuming taxable deductions are the same for both and already taken out of income):
Family 1: $400k income + $1M capital gains
Family 1 Taxes: $107,413 on income + $150,000 on capital gains = $257,413 (~18.39%)
Family 2: $400K income
Family 2 Taxes: $107,413 on income (~26.85%)

Family 1 has a much lower effective tax rate than Family 2, as they're in the 35% bracket, but the $1M in capital gains is taxed at 15% (not even at the highest possible 20%, as the income is not high enough).

Very related: Buffet Rule https://en.wikipedia.org/wiki/Buffett_Rule

In your example Family 1 still pays more in taxes.  I'm not sure how this example shows how the top 0.1% pay less in taxes as has been stated elsewhere in this thread.  This is clearly not the case. 

RangerOne

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #93 on: December 12, 2016, 05:25:35 PM »
Everything I've read, and from a quick google search this calculator (http://www.clark.com/tax-calculator-clinton-trump) indicate a savings across the board for everyone if Trump can get his plan passed.

I still think if there's going to a federal tax it should just be the entire federal budget for the year divided by either working age adults or the entire population, everyone pays their fair share.

Something seems fishy about this tax calculator. As you keep adding children the effect of the child tax credit disappears for current and Clinton tax plan. Thus negating the situations where you would pay more under Trump...

You can very clearly see its stop subtracting the full amount of the deduction for all the plans except for Trumps... very odd.

Even still it properly shows that single parents get shafted for an extra few grand in taxes for no reason. Average families with 2-3 kids see next to no benefit. They save around $500(3 kids)-$1500(2 kids). Its something for sure but nothing to get excited about. An extra $125 a month is basically parity with the old plan. And this is all assuming a person pulling down $120k a month total family income.

If you drop down to $60k a very middle income wage. The price of having 2-3 kids gets way worse. At that level you save $150 with 2 kids, and owe an extra $500 if you have 3. Great tax break for the middle class...

There is also a small window between making $150k-$225k a year that I suspected would exist where a single person will pay more in taxes due to the loss of the 28% bracket.

Unless there is some cut off I am unaware of.

And pretty much no different for the rest of us dwelling in the under $225k a year households. Yet of course it is being pitched as some wonderful tax break for the middle class which it clearly isn't.

Will a lower corporate tax really result in a permanent job boost and maybe even increased salaries? I have no idea.

In general this calculator just shows what I had estimated. The "middle class" will either save or pay a trivially different amount extra in taxes. So essentially this is a massive tax cut for corporations and very high income people. Yet we have to listen to Trumps talk about how wonderful a break this will be for the average working person, which is just a bold faced lie. And people believe him and praise him based off that lie just like all the others.

Also aside from removing exemptions this isn't much of a simplification. Exemptions weren't that complicated. The overall proposed plan is still complicated and that is why most people still can't tell they might lose money in this deal.

I think we are like to get some kind of tax reform similar to this since we have 3 branches under the Repubs and it happened last time under Bush very quickly.

RangerOne

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #94 on: December 12, 2016, 05:33:47 PM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

Data point #1: Donald Trump

I thought Trump didn't pay taxes because he was able to carry forward huge losses. Losses aren't somthing I wish for to avoid future taxes.

Yes and that is legal. However those huge losses weren't entirely his money. They weren't even mostly his money. The majority of money lost was money lent to him. That is the loophole. You are currently allowed to claim losses on money that was loaned to you against your own income well beyond the year in which it was lost.

This is not a problem an average person would have as the only reason he even could get loans so large is because he was already so rich. Then you get to claim massive losses of bank loans in a failed business venture against your own income. Doesn't seem very fair, but I don't fault him for letting his lawyers utilize the tax code.

ender

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #95 on: December 12, 2016, 06:31:02 PM »
I think people don't realize that part of Trump's tax plan is to basically get rid of deductions. From his plan synopsis:

Quote
This plan also reduces or eliminates loopholes used by the very rich and special interests made unnecessary or redundant by the new lower tax rates on individuals and companies.

With this huge reduction in rates, many of the current exemptions and deductions will become unnecessary or redundant

Those within the 25% bracket will keep fewer deductions.

Whether or not that happens is yet to be seen, but it's clear that Trump wants to tax people earning in his highest bracket on the full extent of their money. And honestly I think

I am relatively surprised he as a Republican champions his tax plan as saying:

Quote
This plan simplifies the tax code by taking nearly 50% of current filers off the income tax rolls entirely

The fact that our tax system is so complicated is a travesty to me. I think nearly everyone benefits from more transparent, clear, and understandable taxes. While I might disagree with Trump's numbers it's also a heck of a lot easier to adjust those numbers if he wipes out the entire deduction/exemption system and makes it clear and concise that it ever will be to sweepingly cut out pages of tax code.

Any politician can tweak the numbers. Most politicians can't come close to clearing out the complex tax code.

Indexer

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #96 on: December 12, 2016, 07:23:31 PM »
Estate taxes:  Few people actually pay these. For starters the exclusion is huge, one would need to have an estate north of 5 million before they even need to worry about it. That number is adjusted for inflation. Done right it is over 10 million for a married couple.

If someone is near that number a good attorney along with a good CPA will help them shield tons of money. There are so many ways of shrinking an estate back under 5 million. Many of the ways involve setting up complex trusts that move from the original owner and have charities and family members for beneficiaries. Ever hear of someone leaving millions to a charity upon death? It is normally because they like that charity more the IRS.

Quote
They call out two main things (1) Capital gains and dividends taxed at lower rates (2) "Step-up in basis" for inherited wealth (quotes from both sections below)

Both 1 & 2 are taxes paid on taxes. That is why they get special treatment.

1. The corporation already paid taxes before they paid you dividends. That is why your tax rate is lower.

2. you get a step up in basis because the estate pays taxes on the total value. It would be REALLY messed up to charge dad's estate 40-50% in taxes, and then tell his kids they still have to pay taxes on the gains in those stocks they just paid 40-50% taxes on...  They are probably selling the stocks just to pay the estate tax. Now yes, I just explained how many people don't pay estate taxes, but that is the logic behind it.

tomsang

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #97 on: December 12, 2016, 11:36:53 PM »
For those claiming the top .1% pay lower taxes than the 1% can you please provide a link to any reliable study showing that this is the case?  Please table the anecdotes for threads where critical inspection will not be applied.  Remember to include ALL taxes and not the cherry-picked ones that favor your 1% taking over the world narrative.

Data point #1: Donald Trump

I thought Trump didn't pay taxes because he was able to carry forward huge losses. Losses aren't somthing I wish for to avoid future taxes.

Yes and that is legal. However those huge losses weren't entirely his money. They weren't even mostly his money. The majority of money lost was money lent to him. That is the loophole. You are currently allowed to claim losses on money that was loaned to you against your own income well beyond the year in which it was lost.

This is not a problem an average person would have as the only reason he even could get loans so large is because he was already so rich. Then you get to claim massive losses of bank loans in a failed business venture against your own income. Doesn't seem very fair, but I don't fault him for letting his lawyers utilize the tax code.
It is not unusual to see Real Estate owners pay little to no taxes over decades as they have the ability to depreciate their buildings.  In real life, the buildings and real estate are increasing in value, but the Real Estate owner is showing taxable losses.  Sometimes these losses are massive even though the property is cash flowing well and appreciating in value, year after year.

The fact that Trump has paid little or no taxes over decades is not that unusual.  The fact that he is trying to eliminate the Estate Tax will allow his family to never pay taxes throughout his life and pass the empire on to his children without paying taxes.

Those who are Billionaires, typically have paid minimal taxes as compared to their net worth as they have obtained them through stock appreciation, real estate gains, stock options and other means that have not been taxed.  They have managed their tax situation very well throughout their lives.  Currently, when they die the government would tax their estate up to 50%, which would limit their dynasty a bit.  Trump and the GOP are pushing to eliminate the Estate Tax which would accelerate the accumulation of wealth to the richest families in the US.

The GOP is proposing on gutting tax revenues which were being paid by the top 1% and mostly paid by the top .1% and taking away the benefits going to the poor and middle class.  They keep it so complicated that most people don't fully understand that they are being swindled.  The GOP may even throw then a few crumbs short term, for the long term screw.     

mr_orange

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #98 on: December 13, 2016, 07:08:19 AM »
It is not unusual to see Real Estate owners pay little to no taxes over decades as they have the ability to depreciate their buildings.  In real life, the buildings and real estate are increasing in value, but the Real Estate owner is showing taxable losses.  Sometimes these losses are massive even though the property is cash flowing well and appreciating in value, year after year.

Source?  Large, commercial buildings are depreciated over 39 years save whatever chattel can be accelerated.  One can exchange to avoid taxation at the point of "sale," but I don't know ANY real estate investors that aim to pay zero in taxes.  The fact that you're claiming this to be the case illustrates how little you know about the subject.  I have been an investor and developer for 14 years.  Pretty much all of my peer group consists of developers, securities attorneys, angel investors, fund managers, software engineers, etc.  NONE of them pay zero in taxes.  None. 

The goal of any good investor should be maximal after-tax gains, not minimal taxes.  Aiming to minimize one's taxes is biting off one's nose to spite their face.  Your statements above are not backed by any studies or facts.  If they are please produce them for inspection instead of supplying anecdotes that do not match reality. 

The fact that Trump has paid little or no taxes over decades is not that unusual.  The fact that he is trying to eliminate the Estate Tax will allow his family to never pay taxes throughout his life and pass the empire on to his children without paying taxes.

If the estate tax was not present Trump would be forced to find a way to move the money offshore or to flush it down the toilet on wasteful spending.  People won't sit idly and let the government confiscate their money if you somehow magically construct a tax system that repatriates the money when they die. 

Those who are Billionaires, typically have paid minimal taxes as compared to their net worth as they have obtained them through stock appreciation, real estate gains, stock options and other means that have not been taxed.  They have managed their tax situation very well throughout their lives.  Currently, when they die the government would tax their estate up to 50%, which would limit their dynasty a bit.  Trump and the GOP are pushing to eliminate the Estate Tax which would accelerate the accumulation of wealth to the richest families in the US.

No doubt those who make a lot of money find legal ways with the tax code to limit their taxes.  The estate tax isn't the answer though. 

tomsang

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Re: I'm Gonna Pay More Taxes--Thanks, Trump!
« Reply #99 on: December 13, 2016, 10:03:32 AM »
Source?  Large, commercial buildings are depreciated over 39 years save whatever chattel can be accelerated.  One can exchange to avoid taxation at the point of "sale," but I don't know ANY real estate investors that aim to pay zero in taxes.  The fact that you're claiming this to be the case illustrates how little you know about the subject.  I have been an investor and developer for 14 years.  Pretty much all of my peer group consists of developers, securities attorneys, angel investors, fund managers, software engineers, etc.  NONE of them pay zero in taxes.  None. 

Source:  I am a tax partner at a top CPA firm.  If you are paying any significant taxes on commercial real estate you are doing something wrong.  Look into Cost Segregation, 1031 exchanges, entity structure, and financing structure to limit or eliminate your taxes.

Real estate is the name of the game not because of the huge appreciation. It works because of the favorable tax, leveraging and financing structures available for this type of business. 

I also said little to no taxes over decades.  Your use of the word None, which is a finite amount.  As a percent of their appreciation how much do these folks pay in taxes?  Most likely significantly less than someone pulling down a paycheck.

I own a multi million dollar commercial building and rental houses that cash flow very well, but they kick off taxable losses after depreciation is applied.  The reason the tax code is complicated and we have an Alternative Minimum Tax is because we can and we did create tax shelters that would eliminate taxes for decades if not forever.

Trump legally takes advantage of these as many Real Estate investors.  It is all legit, but he is not paying any significant taxes.  IE the reason, why he is not releasing his tax returns.  The returns would show minimal to no taxable income.  All legitimate, but the population would get hung up on the fact that he does not "Make" a lot of taxable income and obviously is not very "Rich".  When he is obviously doing very well and it would be very hard to explain that is how the wealthy play.  It would also make it harder to push through his tax plan, which will most likely eliminate taxes for many people.  The tax code is only complicated for those doing complicated transaction.  If they make it simple, then we will be able to eliminate taxes for our clients.  They will then realize that they need to pay some taxes and will begin adding different laws to make it "fair", then it will get complicated again.  This will be a huge boon for tax attorneys and accountants.  It is easy to sell services to your clients when you can say, "For $100k, I can reduce your million dollar tax bill to zero".         

 

Wow, a phone plan for fifteen bucks!