Pipe dream? Obamacare

mac · Posted: Wed Oct 23, 2013 10:46 am Post subject:

RR--literally for free is absolutely nonsense. In the 1960's, when the marginal rate was 90%, I would agree that the progressive nature of the taxes was absurd. The current rate is 39%--which means you net over 60% of marginal income. If people are turning down raises for that they failed arithmetic, much less any higher math. This of course assumes that they will not take advantage of tax shelters, or make donations to non-profits of their choice, to direct their funds to causes that they agree with. That is an absurd assumption--unless you believe that accountants are the spawn of the devil.

To be sure, truth is not an essential component--or frequent visitor--to right wing talking points.

KGB-NP · Joined: 25 Jul 2001 Posts: 2856

Mac,
I'm standing in my accountants office right now, showed him your message. He is still laughing. He says he knows how to do math too. It was a prerequisite for university. He also noted your system is not ours.

I'm taking his word over yours in this case.

DanWeiss · Joined: 24 Jun 2008 Posts: 2296 Location: Connecticut, USA

As we sat in tax law class taught by a sitting Tax Court judge, one student bemoaned the idea of graduated, progressive tax. He posited higher rates upon higher income reduced or eliminated the incentive to work hard. "Why should I work more only to have the government take more?"

The judge looked at him, then looked to the class for any volunteers to comment. When none did but many rolled their eyes, the judge said, "Mr. Jones. Did you lie on your law school admission application?"

"No. Of course not."

"Of course you didn't. You did graduate from elementary school. But can you then explain why you seem unable to apply percentages to your thinking about tax rates?"

"I don't understand."

"Fine. It's not my intention to belittle you nor any of your classmates who might hold the same view, but allow me to say it makes no sense. Except at the most upper range of a tax bracket, where earning the next few dollars bumps you to the next bracket, more adjusted income always means the earner takes home more money."

Does anyone here think that a greater adjusted gross leaves you will less money after taxes (excepting the marginal adjusted gross at the top of all but one of the brackets)?

KGB-NP · Joined: 25 Jul 2001 Posts: 2856

Marginally adjusted gross / thresholds same thing? Everyone's tax situation is different too. In the case of my employeee I had him go to my accountant to work with HIS situation so that we could reach a win / win scenario that would still allow me to honour his hard work.

Pueno,
Are you assuming I do not do so in other ways? If you wish to do so through a system that can not net the same yeild as the ones I have chosen to then that is your right. I choose to do otherwise.

Enough of my personal situations which are open for assumptions about my nature or actions. You can all step in any time to share some of your first hand experiences. I am always willing to learn here. I don't profess to have all the answers I am sharing my personal experiences which I draw some of my own conclusions. If I am incorrect then thank you for clarify.

Dan,
My accountant confirms that the system can be viewed as a diminishing rate of return for efforts or on income earned and can in fact in certain instances create scenarios where one might actually work for free given certain circumstances. He cited my employee's scenario as one of those.

coboardhead · Joined: 26 Oct 2009 Posts: 4303

Actually....

In the US social security payroll taxes are capped at incomes of about $113 k. So, the first dollar I make over that amount is subject to a 12.4% tax savings. So, it is less of a rate for the extra income.

pueno · Joined: 03 Mar 2007 Posts: 2807

boggsman1 · Joined: 24 Jun 2002 Posts: 9120 Location: at a computer

jp5 · Joined: 19 May 1998 Posts: 3394 Location: OnUr6

KGB-NP · Joined: 25 Jul 2001 Posts: 2856

Pueno,

To give a little more insight into how greedy I am. My accountant recently presented me with some scenarios considering this year has been exceptionally good. One scenario involved me taking more "me time" next year and deferring income to next year. I opted to pay my taxes in the current year (read more taxes), not take the more "me time" so that "everyone" could keep working and making more money to pay for their houses, children, cars, etc and maybe even give them a raise. I actually feel responsible not only for mine and my family's well being but for those who work for me, and society in general. I know this doesn't fit the nutty right wing conservative lunatic stereotype.

You know what else I don't do is rape the tax system by working for cash with my general contracting company (very very rare in this industry). You want to know how often I used to get asked? It used to be about 50% of the time before I started telling people when prequalifying them that I will not work for cash.

Is that self centered greed? Do you think you cold run and honest business in such a dishonest industry? Try it, it's fun. One year I kept track of the work I lost to a "cash" contractor. It came to $265,000 and that was just the ones I knew about. That was almost 1/3 of my gross revenue. So you think you could resist the urge when it's cutting into "your" bottom line? Greed huh?

boggsman1 · Joined: 24 Jun 2002 Posts: 9120 Location: at a computer

rr...the effective federal tax rate in the US for earners north of $1,000,000 is 20.1%, certainly not a deterrent to making money...I cannot speak for Canada.