Bush wins

[KaskadskyjKozak]

Again. Apparently, the American people loved him so much, they've reelected him to a 4th term.

[jon]

Does anyone (JayB) have a diagram showing which part of the Bush tax cuts actually contributed to the deficit. The problem is what most people know about the Bush tax cuts and the deficit come from the media, ignoring the issue of what parts have been so detrimental to most of us. Here is my take.

 

Estate tax is totally overblown. I don't know much about the estate tax, I know there is someone here who does, but my understanding is this is largely a non-issue because most people can shelter the money in trusts.

 

The big problem is the dividend tax. The dividend tax was set at 15% because Bush argued it was double taxation under the guise that corporate taxes are 38%, which they are not. Most large corporations like Microsoft pay 18%. The lower dividend tax was advertised as helping people invest in companies, but there is a difference in providing actual capital to a small business and buying stock on market. When you buy 100 shares of CocaCola you aren't helping them be successful, they are doing just fine. Yet you only pay 15% on that "investment" income. I think for most people paying 15% if fine but the problem is the upper tier earners are the one taking advantage of this to the fullest.

 

With the introduction of the lower dividend tax people converted businesses to S Corps, take a small reasonable salary, and pay themselves in dividends. I think for most small and medium sized business, that is pretty fair. You worked hard to get there, the tax code doesn't take into consideration time and sacrifice, so that is fair, but there has to be a limit. Should you really only be paying 15% taxes on a $10 million a year income? Obama at least got them to raise it for income over 500k to 20%, but I think that is too little.

 

In my mind the dividend tax needs to be completely reworked, make publicly traded and privately held different, put limits on privately held dividend income to make it fair for small and medium sized business owner but so it can't be abused by private equity firms.

 

So you can say that things haven't changed, but I guarantee you 1-3% of people who just had their tax rate raised 5% will disagree with this conclusion.

[KaskadskyjKozak]

So you can say that things haven't changed, but I guarantee you 1-3% of people who just had their tax rate raised 5% will disagree with this conclusion.

 

But did they? How many people making 400K a year make that all in salary, now taxable at 39.6 %? I'd bet you it is more likely they make $150K salary and 250K elsewhere, so that 4.6% increase applies to about a third of this salary, and is an increase of a whopping 1.5+%.

 

 

[jon]

So you can say that things haven't changed, but I guarantee you 1-3% of people who just had their tax rate raised 5% will disagree with this conclusion.

 

But did they? How many people making 400K a year make that all in salary, now taxable at 39.6 %? I'd bet you it is more likely they make $150K salary and 250K elsewhere, so that 4.6% increase applies to about a third of this salary, and is an increase of a whopping 1.5+%.

 

 

Actually there is no increase because dividend income under $500k is still taxed at 15%. It's a good question though, I have both a lawyer and a dentist you pay themselves through an S Corp at the moment to lower their taxes. But most lawyers and dentists don't make over $500k.

 

But you have highlighted one of my points; Most people don't understand one of the biggest problems with the Bush tax cut. People wonder why Romney didn't release his taxes? It's because he didn't pay any because he offset his dividend income of 15% somehow.

 

Also, why should a company like Microsoft pay 18% corporate tax when a little startup trying to make a competing product pays much more? The reality is that the Republican plans is anti-small business no matter how much sunshine they blow up people's asses. I have often wondered why there are so many rich small and medium business owners up in BC, and it's due to the fact their corporate taxes for under $500k are incredibly low, along with a tiered dividend tax.

[KaskadskyjKozak]

 

Actually there is no increase because dividend income under $500k is still taxed at 15%.

 

Ha, right! So who exactly makes >$400K in salary anyways? I bet it's a very small chunk of folks indeed (compared to other comp)

 

Also, why should a company like Microsoft pay 18% corporate tax when a little startup trying to make a competing product pays much more?

 

Loopholes and tax breaks. Just like the rich have -and use. And the bigger you are, the more you can (and will) afford to pay for clever people to minimize your taxes by leveraging said loopholes.

 

The reality is that the Republican plans is anti-small business no matter how much sunshine they blow up people's asses.

 

It's a BIPARTISAN plan, buddy, and the Dems and Barry just signed off on it.

 

 

[KaskadskyjKozak]

 

Larry Ellison, one of the richest men in America, and a card-carrying democrat has recently earned the following, according to Wikipedia:

 

In 2005, Oracle paid Ellison a $975,000 salary, a $6,500,000 bonus, and other compensation of $955,100.[19] In 2007, Ellison earned a total compensation of $61,180,524, which included a base salary of $1,000,000, a cash bonus of $8,369,000, and options granted of $50,087,100.[20] In 2008, he earned a total compensation of $84,598,700, which included a base salary of $1,000,000, a cash bonus of $10,779,000, no stocks granted, and options granted of $71,372,700.[21] In the year ending May 31, 2009 he made $56.8 million.[22]

 

So of 50, 60, or 70 million compensation, 1 million is in salary, and 600K of that million is now taxed at 39.6% instead of 35. LOL

[jon]

The guy just bought an island in Hawaii, I think he isn't too bent out of shape over his taxes. And most of his wealth is in Oracle stock which he sells as long term capital gains at 15%.

[KaskadskyjKozak]

The guy just bought an island in Hawaii, I think he isn't too bent out of shape over his taxes. And most of his wealth is in Oracle stock which he sells as long term capital gains at 15%.

 

Exactly. Which is why this whole business about 39.6% being somehow some huge victory for "fairness" is BS.

[ZimZam]

 

Exactly. Which is why this whole business about 39.6% being somehow some huge victory for "fairness" is BS.

You're absolutely spot on. Until the tax code is revamped and loopholes are eliminated, it's all just smoke and mirrors. The working class will continue to be sodomized by the affluent. Dems are just Repub-lite.

[Jim]

 

Exactly. Which is why this whole business about 39.6% being somehow some huge victory for "fairness" is BS.

You're absolutely spot on. Until the tax code is revamped and loopholes are eliminated, it's all just smoke and mirrors. The working class will continue to be sodomized by the affluent. Dems are just Repub-lite.

 

Isn't the simple solution to tax dividends/interest/appreciation over a modest amount (say $50k a year) as ordinary income?

[KaskadskyjKozak]

 

Exactly. Which is why this whole business about 39.6% being somehow some huge victory for "fairness" is BS.

You're absolutely spot on. Until the tax code is revamped and loopholes are eliminated, it's all just smoke and mirrors. The working class will continue to be sodomized by the affluent. Dems are just Repub-lite.

 

Isn't the simple solution to tax dividends/interest/appreciation over a modest amount (say $50k a year) as ordinary income?

 

The simple solution is to adjust AMT so anyone making any income above some amount, no matter the deductions and other loopholes they take, get assessed a flat (or progressive), minimum tax. Then you'd never have a guy making over a million paying, say 2% tax on total income.

[Jim]

The simple solution is to adjust AMT so anyone making any income above some amount, no matter the deductions and other loopholes they take, get assessed a flat (or progressive), minimum tax. Then you'd never have a guy making over a million paying, say 2% tax on total income.

 

If we can hammer it out, why can't congress?

[matt_warfield]

The simple solution is to adjust AMT so anyone making any income above some amount, no matter the deductions and other loopholes they take, get assessed a flat (or progressive), minimum tax. Then you'd never have a guy making over a million paying, say 2% tax on total income.

 

If we can hammer it out, why can't congress?

 

Because Congress, like the UN, costs a lot of money and neither does shit. Congress is trying to set a world record for least bills passed and the UN goes to Syria to "observe" the carnage and can't do a damn thing.

Edited January 4, 2013 by matt_warfield

[mattp]

Does anyone (JayB) have a diagram showing which part of the Bush tax cuts actually contributed to the deficit.

 

It is the part where they enacted huge tax cuts and started two wars. You don't need a diagram.

[yellowlab03]

well, one war was legit... the other maybe not so much.

[KaskadskyjKozak]

Does anyone (JayB) have a diagram showing which part of the Bush tax cuts actually contributed to the deficit.

 

It is the part where they enacted huge tax cuts and started two wars. You don't need a diagram.

 

And spending under Obama has been, how, exactly? Including military - I mean in comparison to Bush?