myiW Current Conditions and Forecasts Community Forums Buy and Sell Services
 
Hi guest · myAccount · Log in
 SearchSearch   ProfileProfile   Log in to check your private messagesLog in to check your private messages   RegisterRegister 
The pope on income re-distribution
Goto page Previous  1, 2, 3 ... 11, 12, 13 ... 29, 30, 31  Next
 
Post new topic   Reply to topic    iWindsurf Community Forum Index -> Politics, Off-Topic, Opinions
View previous topic :: View next topic  
Author Message
techno900



Joined: 28 Mar 2001
Posts: 4161

PostPosted: Wed Jan 22, 2014 4:48 pm    Post subject: Reply with quote

swchandler said:
Quote:
Really, you're talking about a couple things that aren't necessarily related. Financially managing income property over time is one thing, but the financial appreciation of property over time is another thing entirely. Seemingly, you sold at a profit.

Regarding taxation of capital gains, wouldn't that be limited to just the appreciation in value?

I don't think they are unrelated. I invested in property (at the peak of the market in 1984 at 9% interest) actually lived there for one year, got married and bought another house. I kept the condo as an investment, but competitive rentals kept me from charging more than what I owed on the mortgage, so I was taking a loss every month. However, when filing taxes, I was able to depreciate the property over a 15 year period which saved me some $ on my taxes (a tax loophole?), so when I sold it, the government said it had no value. I sold it for 5K less than I paid for it and then paid 15% capital gains on the total sales price.

Condos were hot in the mid 80's, then became a burden in the 90's. It took me 10 yrs to build enough equity to re-finance to 6% without having to put more money down. Rental property can bite you on the ass if you aren't careful.


The point is that for some time, the government (I don't know when) decided that 15% is a fair tax on capital gains for the below reason.
Investopedia explains 'Capital Gain':
Quote:
1. Long-term capital gains are usually taxed at a lower rate than regular income. This is done to encourage entrepreneurship and investment in the economy.
Back to top
View user's profile Send private message
techno900



Joined: 28 Mar 2001
Posts: 4161

PostPosted: Wed Jan 22, 2014 5:07 pm    Post subject: Reply with quote

pueno said:
Quote:
So, do you think that taxes should be assessed as a flat rate per person rather than a percentage of income? Sorta like membership dues to join Club America and use the benefits?

Don't put words in my mouth. I believe there should be a progressive tax, something like we now have, but I also think EVERYONE earning a pay check should pay some income tax. Maybe only .5 or 1% at the lowest level, because I think everyone should have a hand in the game.

Part of every dollar in my pocket was paid to the government in income taxes. Now I have 75 cents left to invest in a rental condo. If I had been lucky or smart enough to make a profit, then the government takes 15% of that profit. I can see way many think 15% is too little for a capital gains tax. I don't because it may discourage investments. It takes people with money to create jobs. Middle and lower income people are not creating jobs.

If you were to start a business and it makes a profit and you choose to sell it, would you be happy paying 39.5% on the profit after risking your money to start the business?
Quote:
The tax legislation passed at the start of 2013 permanently extended the George W. Bush-era tax cuts for most people but also added a top marginal tax rate of 39.6 percent for those at higher incomes - $400,000 for single filers, $450,000 for married couples filing jointly and $425,000 for heads of household.

Read more: http://www.washingtontimes.com/news/2014/jan/22/new-396-percent-tax-bracket-for-wealthiest-people/#ixzz2rAQyCUD1
Follow us: @washtimes on Twitter
Back to top
View user's profile Send private message
boggsman1



Joined: 24 Jun 2002
Posts: 9118
Location: at a computer

PostPosted: Wed Jan 22, 2014 5:19 pm    Post subject: Reply with quote

Technoo...if the earner is above the $450,000 threshold, he pays 23.8% on long term cap gains in 2013.
Back to top
View user's profile Send private message
swchandler



Joined: 08 Nov 1993
Posts: 10588

PostPosted: Wed Jan 22, 2014 6:41 pm    Post subject: Reply with quote

" Middle and lower income people are not creating jobs."


When you really think about, you're wrong on that point. Middle and lower income folks are an important part of the economy. The whole point of having vibrant middle class is growing demand beyond the bare minimum. Also, you got to remember that it wasn't rich folks that grew WalMart into what it is today.

Thanks for your candor about your rental property. I guess I showed how little I know about the write-offs and depreciation of investment property. Frankly, I've never owned any investment property. Actually, I bought my first home when I retired at 55 1/2, so I never had the mortgage write-off during my working years. No doubt, I was always taxed to the max on my income.
Back to top
View user's profile Send private message
keycocker



Joined: 10 Jul 2005
Posts: 3598

PostPosted: Wed Jan 22, 2014 7:31 pm    Post subject: Reply with quote

Techno info is exactly right.
It is worth noticing that we get to avoid income tax each year through depreciation, then have to make it up on sale day at cap gains rates which in this case is lower.

This lowers the tax that rich landlords owe yearly, compared to those on salaries, and allows them to defer paying for a lifetime.
It is good idea to take those tax savings and invest in more property

We have been landlords for thirty years, never sold any rental properties so our income taxes are very low and there has been no cap gains to pay at any time.

We don't pay FICA on rental income either. At the time SS was set up , it was for those who have no rentals to support them in their old age. In that era, rich folks owned real estate. The rich people who run Congress made the income tax and SS structure very favorable to property owners and landlords.o
Back to top
View user's profile Send private message
pueno



Joined: 03 Mar 2007
Posts: 2807

PostPosted: Wed Jan 22, 2014 8:05 pm    Post subject: Reply with quote

techno900 wrote:
pueno said:
Quote:
So, do you think that taxes should be assessed as a flat rate per person rather than a percentage of income? Sorta like membership dues to join Club America and use the benefits?

Don't put words in my mouth.

How is asking a clarifying question putting words in your mouth?


techno900 wrote:
I believe there should be a progressive tax, something like we now have, but I also think EVERYONE earning a pay check should pay some income tax. Maybe only .5 or 1% at the lowest level, because I think everyone should have a hand in the game.

Agreed, at least in concept but perhaps not in scale.

But why would you allow those who are most able to pay taxes (the Mitts, Bills, Steves, and Warrens of the world) to pay a lower percentage than you or I pay? Taxes are more of a burden for ordinary breadwinners than they are for the super rich. How does your progressive tax fit the super wealthy?


techno900 wrote:
Part of every dollar in my pocket was paid to the government in income taxes. Now I have 75 cents left to invest in a rental condo.

What most people seem to forget in all this is that our taxes -- federal, state, and local -- pay for necessary infrastructure that allows us to live and conduct business the way we do, and it pays for the local and national security that we enjoy.


techno900 wrote:
If you were to start a business and it makes a profit and you choose to sell it, would you be happy paying 39.5% on the profit after risking your money to start the business?

I'd be thrilled to receive that 60.5% as profit above and beyond my initial investment. (Hell, I get only a few percent at the bank...)

But I *do* recognize that many people are greedy and truly want 99.9% of the "their" profit -- profit from a business entity that could prosper, grow, and increase in value and was protected by police and fire departments, an entity that allowed transportation over public roads, an entity that benefited from regulations that provide clean air, clean water, etc.
.
Back to top
View user's profile Send private message
keycocker



Joined: 10 Jul 2005
Posts: 3598

PostPosted: Thu Jan 23, 2014 3:19 am    Post subject: Reply with quote

I have several small businesses in different places and pay taxes in a lot of different ways.
I don't ever work out my net tax rate to see of a venture is worth it. I look at net profits. If they pay the taxes and net me a real return that I like, I am good to go.
If taxes go up the profit better be going up too to make me feel OK about "high taxes".

This is why folks who complain about high taxes usually don't quit doing profitable businesses as long as they are profitable enough to pay those taxes and still make folks money.
Back to top
View user's profile Send private message
techno900



Joined: 28 Mar 2001
Posts: 4161

PostPosted: Thu Jan 23, 2014 8:54 am    Post subject: Reply with quote

swchandler said:
Quote:
When you really think about, you're wrong on that point. Middle and lower income folks are an important part of the economy. The whole point of having vibrant middle class is growing demand beyond the bare minimum. Also, you got to remember that it wasn't rich folks that grew WalMart into what it is today.


I don't question the fact that middle and lower income folks are an important part of the economy, but they are typically workers, not investors.

Business that grow and provide jobs are typically started by people with enough discretionary money to invest in an idea. Sam Walton borrowed $25,000 in 1945 to get started, a VERY sizable amount in 1945. He was college educated, had retail experience and was an entrepreneur and access to 25K. Sure, some businesses get started by people that may not fall into the wealthy category, but it usually takes money. Those that have it are a thousand times more likely to create jobs than those without. Special people like Walton take risks to grow their empire, which some now find fault, but that's another story.


Quote:
Following college, Walton got his first real taste of the retail world when took a job in Des Moines with the J.C. Penney Company, which was still a relatively small retailer. After serving as an Army captain in an intelligence unit during World War II, Walton returned to private life in 1945 and used a $25,000 loan from his father-in-law to acquire his first store, a Ben Franklin franchise in Newport, Arkansas.

In less than two decades, Walton, working with his younger brother, James, came to own 15 Ben Franklin stores. But frustration over the management of the chain, in particular the decision to ignore Walton’s push to expand into rural communities, prompted him to strike out on his own.

Building an Empire

In 1962 Walton opened his first Wal-Mart store in Rogers, Arkansas. Success was swift. By 1976 Wal-Mart was a publicly traded company with share value north of $176 million. By the early 1990s, Wal-Mart’s stock worth had jumped to $45 billion. In 1991 Wal-Mart surpassed Sears, Roebuck & Company to become the country’s largest retailer.


Boggs, I didn't know that the LT capital gains went to 23.8 for the "rich". Just their "fair share" I guess.
Back to top
View user's profile Send private message
techno900



Joined: 28 Mar 2001
Posts: 4161

PostPosted: Thu Jan 23, 2014 9:14 am    Post subject: Reply with quote

pueno said:
Quote:
But I *do* recognize that many people are greedy and truly want 99.9% of the "their" profit -- profit from a business entity that could prosper, grow, and increase in value and was protected by police and fire departments, an entity that allowed transportation over public roads, an entity that benefited from regulations that provide clean air, clean water, etc.


I think city, county and state & federal gas taxes (NOT INCOME) that business pay cover police, fire and roads.

Let's say that I actually made a profit on my condo deal (discounting all the time and labor of managing the property for 15 yrs) and sold it for a 20K profit. You say you would be "thrilled to receive 60.5%" which would be $66,550 on a fully deprecated condo that sold for $110,000. Of course, you paid $90,000 when you bought it. What a great deal? Most of us wouldn't be very happy to lose that much money on an investment.
Back to top
View user's profile Send private message
pueno



Joined: 03 Mar 2007
Posts: 2807

PostPosted: Thu Jan 23, 2014 9:50 am    Post subject: Reply with quote

techno900 wrote:

I think city, county and state & federal gas taxes (NOT INCOME) that business pay cover police, fire and roads.

You think that federal, state, and local GAS TAXES pay for police and fire and their retirements? Really? And building, maintaining, plowing, and managing roads too? You really think that?


techno900 wrote:

Let's say that I actually made a profit on my condo deal (discounting all the time and labor of managing the property for 15 yrs) and sold it for a 20K profit. You say you would be "thrilled to receive 60.5%" which would be $66,550 on a fully deprecated condo that sold for $110,000. Of course, you paid $90,000 when you bought it. What a great deal? Most of us wouldn't be very happy to lose that much money on an investment.

You'd be taxed on the 20K (net), not the $110K (gross).

Were you living in that condo for 15 years?

But if it was a business deal and you depreciated the property to zero value, then you need to acknowledge what the depreciation allowance was over those years that you received it. Might it have some bearing here? (Or do you see it as value that you keep, untaxed?)
.
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic    iWindsurf Community Forum Index -> Politics, Off-Topic, Opinions All times are GMT - 5 Hours
Goto page Previous  1, 2, 3 ... 11, 12, 13 ... 29, 30, 31  Next
Page 12 of 31

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
You cannot attach files in this forum
You cannot download files in this forum

myiW | Weather | Community | Membership | Support | Log in
like us on facebook
© Copyright 1999-2007 WeatherFlow, Inc Contact Us Ad Marketplace

Powered by phpBB © 2001, 2005 phpBB Group