Obama Lays-Out $1.5T in New Taxes

[mrplunkey]

Effective tax rate. Technically although their tax rate is 35%, via loopholes, deductions, making $ off of carried interest, etc the average million dollar + earner paid an effective tax rate of 16.5% (thereabouts) in 2009.

All that The Buffet Rule is saying is that if your tax rate is 35% and youre going to take advantage of all the deductions and loopholes that are out there (which one is free to do), you should at least pay 25% instead of 16.5%.

I dont see how anybody could argue against that. Logically, at least.

It's yet another AMT-style tax, which becomes its own political tool for issuing handouts and political favors. Congress has been screwing with devices like these since the 60's and they are a categorically terrible idea unless you are a tax attorney or a tax lawyer.

And no, it's very easy to argue against this ridiculous new rule.

Let's look at someone who owns a 50% of a C-corporation in California. They don't work for or pay themselves out of the business.

The company earns $1M in pretax profit. So they'll pay $350,000 in federal income taxes and 88,400 in California income taxes for a total of $438,400 -- that's 43.8%. Note this ignores property taxes, payroll taxes, sales taxes, use taxes, licenses, etc. etc. This a pure income tax calculation.

Then, the 50% owner takes their 50% of the earnings ($219,200) as their sole source of income. Even now, that money is ridiculously re-taxed at 15% ($32,880). So under Barry's new rule, that double-taxed money now gets hit at 25% (54,800).

So let's get this straight:

$1M earned
$438k income taxes paid at the corporate level
$109.6k paid by the stockholders in "Barry Taxes"
--------
547,600 in income taxes alone

So under the old system, the income was taxed effectively at 50% -- which is ridiculous in the first place. Now, under Barry's system, the income is taxed effectively at 55%.

Double taxation of dividends has already been a problem and Barry is using class warfare to make a bad thing worse. This sounds familiar.

 

[75th]

Those are Obama's numbers. Unfortunately, the treasury department does not calculate it the same.

I hate it when facts get in the way of a good story.

lol @ Obama's numbers. Those numbers came from a small organization called the IRS.

Yes, facts getting in the way does indeed suck.

 

[mrplunkey]

So it's more than a concept really. What about inheritance taxes? Taxing stuff that's already been taxed?

They tax it when you make it, they tax it when you save it, they tax it when you spend it, and they tax it when you die.

That's another ridiculous element of our tax code. There should be absolutely zero inheritance tax on assets that have already been singly or doubly-taxed already.

 

[75th]

Bottom line, if someone is smart enough, and courageous enough to stick his/her neck out, potentially losing everything with one mistake, they deserve to keep the rewards, and not be punished for doing that.

Been listening to Rick Perry a lot recently? And lol @ taxes being a "punishment." Death and taxes - the only thing we need to discuss is what's appropriate.

Personally, I've been advocating on here for the Bowles-Simpson tax plan since it was proposed (25%, 17%, and 12% rates I believe with no deductions + lowering corporate tax rates to 15-20%(?) with no loopholes).

The wealthiest paying a higher percentage than the middle class doesnt bother me.

 

[miplank]

Been listening to Rick Perry a lot recently? And lol @ taxes being a "punishment." Death and taxes - the only thing we need to discuss is what's appropriate.

Personally, I've been advocating on here for the Bowles-Simpson tax plan since it was proposed (25%, 17%, and 12% rates I believe with no deductions + lowering corporate tax rates to 15-20%(?) with no loopholes).

The wealthiest paying a higher percentage than the middle class doesnt bother me.

Fact check: The wealthy already pay more taxes ? USATODAY.com

 

[mrplunkey]

Fact check: The wealthy already pay more taxes ? USATODAY.com

Good article.

 

[cindylou]

lol

 

[75th]

Fact check: The wealthy already pay more taxes ? USATODAY.com

lol

Nobody is saying the wealthy dont pay more.

Hence the use of the term "effective" in my argument.

With tax rates that high, why do so many people pay at lower rates? Because the tax code is riddled with more than $1 trillion in deductions, exemptions and credits, and they benefit people at every income level, according to data from the nonpartisan Joint Committee on Taxation, Congress' official scorekeeper on revenue issues.

Loopholes can and do benefit taxpayers at every level (hence the meme of 50% of the country paying no federal income taxes). Nobody is arguing that. What's being argued (at least on my end) is the effective rate the top 1% are paying.

Hence the support for the Bowles-Simpson tax plan - or any tax plan that lowers rates, simplifies the code, and eliminates deductions and loopholes.

Douche.

 

[SpyWizard]

that's why a flat tax is the only real way to spread around the taxation needs of the country..

 

[ceo]

Effective tax rate. Technically although their tax rate is 35%, via loopholes, deductions, making $ off of carried interest, etc the average million dollar + earner paid an effective tax rate of 16.5% (thereabouts) in 2009.

All that The Buffet Rule is saying is that if your tax rate is 35% and youre going to take advantage of all the deductions and loopholes that are out there (which one is free to do), you should at least pay 25% instead of 16.5%.

I dont see how anybody could argue against that. Logically, at least.

Good points brought up in here. Are we talking about 25% of gross? What if your net was less than that?

How could you argue for that, in a case like that? Logically, at least.



Maybe we should look at a federal sales tax instead of an income tax?