Pay zero taxes thanks to 2003 Tax Cuts

[shira]

Originally posted by: spidey07

Originally posted by: shira
You're conveniently ignoring my last post, which tore your arguments to shreds. And you keep harping on this useless point that middle class taxpayers have small amounts of capital gains subject to taxation, which costs them on average less than $150 a year in taxes, a tax that will remain the same under both McCain and Obama.

Well then he must have recently flip flopped on that issue then because all he's been preaching is raising capital gains tax across the board. He's never come right out and said he won't increase capital gains for the bottom brackets.

This is the disconnect between obama and understanding tax policy. He wants to punish the rich with capital gains tax raises but doesn't understand it isn't just the rich that benefit from lower capital gains, not to mention the economic impact.

Nonsense. To quote the Tax Policy Center's report, '

The current revision (8/15/08) reflects modifications to Senator Obama?s tax proposals announced on August 14, 2008

(The 9/12 revision was based on factors not related to the Candidates' proposals.)

So if you'd been paying any attention, you'd have understood Obama's position.

Your statement, "[Obama] doesn't understand it isn't just the rich that benefit from lower capital gains" is completely irrelevant, as capital gains taxation would remain exactly as it currently is for the non-rich. Thus, there's no "benefit" being lost by the non-rich under Obama.

As to "punishing" the rich, why is it that the very richest Americans pay a lower tax rate (15%) on a major component of their income (capital gains and qualified dividends, which account for 40+% of the income of the rich) than all but those making $63,700 or less taxable income? If lower-income taxpayers also got 40% of their income from capital gains and dividends, you might have an argument, but for the bottom three income quintiles, the actual percentage is 1.8% of income.

And remember, the rich can play all kinds of tax games to "recharacterize" income into different categories. With sufficient creativity, a person who might otherwise have to declare, say, $1 million in salary (with the top dollars taxed at 35%) might be able to re-characterize a major portion of that income into "dividends" (taxed at 15%).

There does need to be some recognition - in the form of lower capital gains and dividends rates - of the risks inherent in investing. But keeping the tax rates paid on capital gains and dividends earned by the rich below the rates paid by even middle-class Americans on most of their income seems obscene.

 

[newmachineoverlord]

Now just explain how to convert all my income into capital gains to decrease my tax rate when I already had to spend it on rent, food, car insurance, and car maintenance? Perhaps a link to a FAQ on this subject?

 

[CADsortaGUY]

Originally posted by: fleshconsumed

Originally posted by: CADsortaGUY

Originally posted by: fleshconsumed

Originally posted by: CADsortaGUY

Originally posted by: fleshconsumed
CsG
I wouldn't say 100K would let you have all the luxuries you want, but it would certainly allow for a comfortable living in SD. 100K filing jointly should be 25% tax bracket, so even before deductions you're left with 75K (and this is probably a conservative estimate). Say property taxes and state taxes are 10K, that leaves you with 65K in your pocket. Say your modest mortgage is 2K a month, which is not that unreasonable, that's 24K a year, take another 1K on insurance and you're still left with 40K in your pocket. Let's assume a generous $1500 for utility bills, phone, cable, gas, food, misc clothing items. With all of that you're still left with 20K a year to save for retirement, car loan, vacation, etc... Yes, you will have to budget even with 100K, but it is by no means a poor lifestyle.

No one said it was a "poor lifestyle" but people were suggesting that it wasn't middle class.

Sure, in SD you could do a lot better on 100K than you can in the area I live in, but you also don't have the opportunities that I do. I came from a small town in the middle of nowhere, where you could buy a nice house for 75-80K(probably nicer than the one I have now) but your employment opportunities weren't near as good as they are here. There were very very few families in that area that pulled in 100K gross because there just weren't that many jobs that paid that kind of money.

Anyway - this has gone way off track, but the point remains - 100K gross is middle class despite the protests of a few.

With the living costs you cited CsG you will have a really hard time arguing 100K is middle class where you live. It is a lower upper class, ...

:roll: You don't have a clue do you. Just because the raw 100K number looks like alot - there are many expenses that go along with it. First and foremost - daycare. Do you happen to know what daycare for 3 kids costs? Yeah, so while we pull in 100K as a household - it has costs associated with it. Without my wife working - we wouldn't have daycare costs and other expenses but we wouldn't be pulling in 100K gross either. So while you and a few others try to suggest 100K gross isn't middle class - I and other rational people understand that 100K gross combined household income most certainly is middle class.

I don't think 100K looks a lot and I know about expenses. However, your house costs about half the national median (should be about 210K I think right now, your house only cost you 130), and you make about twice the national median income, 100K vs 50K. I truly believe you when you say you're not rich, but you are far better off than vast majority of population, which does make you upper middle/lower upper class. And believe me, I'm not saying it in any negative sense, I'm glad you're that well off, no bad feelings, but you should realize that you're not middle class. Maybe you would be middle class if you lived on one of the coasts, but not when your gross income is almost as much as your house.

No, "I" don't make - "we" make. There are 2 incomes.
Yes, I am now better off than most of the rest of the population but it's taken me over 10 years to get here and I've made the tough decisions to be able to get here.

Originally posted by: JD50

Originally posted by: Robor

Originally posted by: bozack

Originally posted by: Robor

A $100,000 salary is 'smack dab middle class'? Talk about out of touch.

What household is able to live off of one income? talk about out of touch.

Uh, I'm talking about a household income.

You said "salary", that implies one income. A single person making $100,000 is definitely not "smack dab middle class" (in most parts of the country), I'll agree with you there. But a family household income of $100,000 is "smack dab middle class", at least where I live.

Exactly

 

[Suspicious-Teach8788]

Originally posted by: Brainonska511

Originally posted by: spidey07

Originally posted by: shira
You're conveniently ignoring my last post, which tore your arguments to shreds. And you keep harping on this useless point that middle class taxpayers have small amounts of capital gains subject to taxation, which costs them on average less than $150 a year in taxes, a tax that will remain the same under both McCain and Obama.

Well then he must have recently flip flopped on that issue then because all he's been preaching is raising capital gains tax across the board. He's never come right out and said he won't increase capital gains for the bottom brackets.

This is the disconnect between obama and understanding tax policy. He wants to punish the rich with capital gains tax raises but doesn't understand it isn't just the rich that benefit from lower capital gains, not to mention the economic impact.

But capital gains taxes hit the rich much more so than increasing earned income taxes, which hit the middle to upper middle class (and even the lower-upper class if you want to refer to the people earning their money by going to work every day and being successful).

Yes Obama has somewhat flipflopped on his taxes and he's already come down from 30% to 25% and now to 20% on capital gains taxes. It's not a complete reversal, but you can tell that he's buying into the fact that you need capital in capitalism. This brings the two candidates' economic policies even closer together although the corporate tax will remain higher under Obama.

These tax changes should not be about punishing the rich or redistributing wealth, but rather to balance revenue and economic growth. I still don't like higher taxes especially for an economy like this, and clearly Obama's seeing this.

 

[Suspicious-Teach8788]

Originally posted by: fleshconsumed

Originally posted by: CADsortaGUY

Originally posted by: fleshconsumed

Originally posted by: CADsortaGUY

Originally posted by: fleshconsumed
CsG
I wouldn't say 100K would let you have all the luxuries you want, but it would certainly allow for a comfortable living in SD. 100K filing jointly should be 25% tax bracket, so even before deductions you're left with 75K (and this is probably a conservative estimate). Say property taxes and state taxes are 10K, that leaves you with 65K in your pocket. Say your modest mortgage is 2K a month, which is not that unreasonable, that's 24K a year, take another 1K on insurance and you're still left with 40K in your pocket. Let's assume a generous $1500 for utility bills, phone, cable, gas, food, misc clothing items. With all of that you're still left with 20K a year to save for retirement, car loan, vacation, etc... Yes, you will have to budget even with 100K, but it is by no means a poor lifestyle.

No one said it was a "poor lifestyle" but people were suggesting that it wasn't middle class.

Sure, in SD you could do a lot better on 100K than you can in the area I live in, but you also don't have the opportunities that I do. I came from a small town in the middle of nowhere, where you could buy a nice house for 75-80K(probably nicer than the one I have now) but your employment opportunities weren't near as good as they are here. There were very very few families in that area that pulled in 100K gross because there just weren't that many jobs that paid that kind of money.

Anyway - this has gone way off track, but the point remains - 100K gross is middle class despite the protests of a few.

With the living costs you cited CsG you will have a really hard time arguing 100K is middle class where you live. It is a lower upper class, ...

:roll: You don't have a clue do you. Just because the raw 100K number looks like alot - there are many expenses that go along with it. First and foremost - daycare. Do you happen to know what daycare for 3 kids costs? Yeah, so while we pull in 100K as a household - it has costs associated with it. Without my wife working - we wouldn't have daycare costs and other expenses but we wouldn't be pulling in 100K gross either. So while you and a few others try to suggest 100K gross isn't middle class - I and other rational people understand that 100K gross combined household income most certainly is middle class.

I don't think 100K looks a lot and I know about expenses. However, your house costs about half the national median (should be about 210K I think right now, your house only cost you 130), and you make about twice the national median income, 100K vs 50K. I truly believe you when you say you're not rich, but you are far better off than vast majority of population, which does make you upper middle/lower upper class. And believe me, I'm not saying it in any negative sense, I'm glad you're that well off, no bad feelings, but you should realize that you're not middle class. Maybe you would be middle class if you lived on one of the coasts, but not when your gross income is almost as much as your house.

WTF is this LOWER UPPER class crap? What's upper class status? Like top 1%? Top 5%'s lower limit is 157k according to Wiki. I don't see how that's upper class considering 157k is NOT A LOT OF MONEY. I don't even want to say it but 100k is not that much money either. I saw my mom's W4 before she took an early retirement package and it was smack dab at 120k. She then went to get a contract job which I imagine pays a lot better. Now I live in Silicon Valley and there's plenty of my friends who have both parents in the tech industry as well. I think it's not too hard for any of us to be having household incomes of above 200k. The household median in our town is above 100k.

My house isnt by any means a mansion, and while it is large we live on a normal plot of land. It takes big bucks just to survive here and while we make enough money, it's not putting us at lower upper. If anything we are upper middle. People with two engineers in the family are upper middle. What does this mean? It means we make enough to send kids off to college without breaking a sweat. We make too much that financial aid is out of the question, and our mortgage payments suck our paychecks dry because we pay top dollar to put our kids through the top high schools. I can drive 2 miles down the road into the hills and you will see 3 - 4 million dollar houses. Now this is what I call lower upper. I know a few friends who are there and a few have a parent as some executive in some company raking in like 300k/year in salary + bonuses. Yeah maybe then you have lower upper, but seriously for the rest of us who get by with 6 figures in our expensive worlds like CA or NY, we are no means lower upper. In fact we get shafted by taxes the most especially without the Bush tax cuts.

 

[JD50]

To those of you claiming that a 100k household income is upper class, you do realize that you are saying that someone that makes 50k a year is upper class right? That's insane. So now, Teachers, Police Officers, retail store managers, etc... are all considered upper class? You guys are getting way too wrapped up in looking at average and median incomes without putting any of it in perspective, that's basically the definition of being "out of touch".


Edit - Sorry for going so far off topic, that's just been gnawing at me for a while.

 

[miketheidiot]

Originally posted by: Robor

Originally posted by: spidey07

Originally posted by: Juddog
Thread = Fail.

How? Many middle class folks own stock and those pay dividends which are frequently used in a dividend reinvestment program. ZERO tax on that, I'd call that a pretty big deal especially long term as they're reinvestment programs are buying MORE stock. AGI of 66,700 is a pretty decent living...probably around 100K gross income. Smack dab middle class and here's a great break for them or possbily you if you want to take advantage of it.

Also keep in mind the 66,700 mark was for 2007. It will surely be higher for 08, 09, 10.

A $100,000 salary is 'smack dab middle class'? Talk about out of touch.

depends on your definition of middle class, by my definition i think 100k a year would be the bottom of the middle class, if that.

 

[miketheidiot]

Originally posted by: winnar111

Originally posted by: Engineer
Why the fuck should people get a preferred tax rate on their income via capital gains vs my income via labor? Investment? It's only investment during the initial stock purchase (where the company gets the money from the sale of the stock)...IMO, after that, it's trading stocks for profit (and loss).

The real question is why we should have a dividend tax, and hinder capital from flowing from less profitable to more profitable institutions.

oh god i've agreed with you on something :Q

well sort of at least.

Personally i advocate raising capital gains taxes and lowering (within reason) dividend taxes to encourage investment in long run profitable ventures, instead of tossing around money at whatever the newest fad is in hope of a quick buck.

 

[miketheidiot]

Originally posted by: spidey07

Originally posted by: DLeRium
http://www.taxpolicycenter.org...ons/url.cfm?ID=1001201

Not that many people pay capital gains, especially the poor. I'd say capital gains taxes matter a lot more when you're in the 80k+ range.

Edit: Obama's new plan says to raise capital gains taxes to 20%. That's not a huge change.

Didn't you read your link?

"Many taxpayers with gains had modest incomes ? more than half (52 percent) of those with taxable net gains or capital gains distributions had incomes below $75,000."

Zero percent to 20% is a big change in my book. For the other brackets it's 15 to 20, that's a 33% increase.

I really don't like the concept of long term capital gains as it hinders capital investment of all kinds, not just stock/dividends.

Like the saying goes, there are lies, damn lies, and statistics, and this is clearly a case of the later. So 52% of capital gains recipients have incomes below 75k, what proportion of taxpayers have incomes above/below this mark? 20/80? Assuming everyone with incomes above 75k earns capital gains, that means that only 1 in 4 people in the bottom 80% receive capital gains at most, and likely much fewer.

 

[bozack]

Originally posted by: Robor

Uh, I'm talking about a household income.

And back to my first point, if you truly believe that a dual income household pulling in only 100K isn't middle class then you my friend are truly out of touch.

You would have been better off saying that you meant single income, not household.

 

[bozack]

Originally posted by: JD50
To those of you claiming that a 100k household income is upper class, you do realize that you are saying that someone that makes 50k a year is upper class right? That's insane. So now, Teachers, Police Officers, retail store managers, etc... are all considered upper class? You guys are getting way too wrapped up in looking at average and median incomes without putting any of it in perspective, that's basically the definition of being "out of touch".


Edit - Sorry for going so far off topic, that's just been gnawing at me for a while.

Amen brother...been preaching this for a while on here, people get too wrapped up in the absolute numbers, when in reality times have changed and while 100K household might be better than 80% of the rest of the population, the fact is that it still isn't anything to write home about unless you're making it in east bumfuck.

 

[fleshconsumed]

Originally posted by: DLeRium
WTF is this LOWER UPPER class crap? What's upper class status? Like top 1%? Top 5%'s lower limit is 157k according to Wiki. I don't see how that's upper class considering 157k is NOT A LOT OF MONEY. I don't even want to say it but 100k is not that much money either. I saw my mom's W4 before she took an early retirement package and it was smack dab at 120k. She then went to get a contract job which I imagine pays a lot better. Now I live in Silicon Valley and there's plenty of my friends who have both parents in the tech industry as well. I think it's not too hard for any of us to be having household incomes of above 200k. The household median in our town is above 100k.

My house isnt by any means a mansion, and while it is large we live on a normal plot of land. It takes big bucks just to survive here and while we make enough money, it's not putting us at lower upper. If anything we are upper middle. People with two engineers in the family are upper middle. What does this mean? It means we make enough to send kids off to college without breaking a sweat. We make too much that financial aid is out of the question, and our mortgage payments suck our paychecks dry because we pay top dollar to put our kids through the top high schools. I can drive 2 miles down the road into the hills and you will see 3 - 4 million dollar houses. Now this is what I call lower upper. I know a few friends who are there and a few have a parent as some executive in some company raking in like 300k/year in salary + bonuses. Yeah maybe then you have lower upper, but seriously for the rest of us who get by with 6 figures in our expensive worlds like CA or NY, we are no means lower upper. In fact we get shafted by taxes the most especially without the Bush tax cuts.

Go and reread my previous posts. I specifically said that cost of living matters and that 100K would be middle class on both coasts.