There is a lot of misinformation being spewed about taxes and the rich paying more than their fair share of taxes. It seems that Obama wants to tax the rich to pay for Medicare. Paul Ryan wants to lower the top tax rate from 35% to 25% to unleash the power of entrepenuership. Both sides are full of shit. Here are some facts as laid out below:
- The top tax rate of 35% only applies to taxable income above $379,000 per year.
- Only 470,000 Americans out of 310 million have gross income above $400,000.
- There are only 78,000 Americans that have gross income above $1 million per year.
- There are 108 million Americans who have gross income below $45,000 per year.
- The average income tax rate for all Americans is 9.3%, down from 9.9% in 1992.
- The average income tax for the 400 richest people with average income of $345 million was 17%, down from 26% in 1992.
- 45% of all households in the U.S. pay no income tax.
- There are $1.1 trillion of deductions, exemptions and credits annually.
Those are the facts. Now what does it mean to you and me? There is one thing you need to keep in mind when you watch the politicians and talking head pundits on CNBC, FOX, and the other MSM. Every person who is interviewing or being interviewed is in the 400,000 Americans making more than $400,000 per year. Do you think this might skew their point of view?
My take on the data is that the super rich hire super lawyers and super lobbyists to change the tax code in their favor. How else could you explain the drop in their average income tax rate from 26% to 17%? They have used their power and wealth to reap more power and more wealth. Their average tax rate dropped by 35% in 18 years. Meanwhile, the average middle class worker is still paying about the same tax rate. I guess our high powered tax attorneys didn’t do as good a job.
The truth is that with 45% of households paying no income taxes and the super rich using their power to manipulate the tax code in their favor, it is the 41 million hard working middle class workers ($45,000 – $200,000) who are bearing the heaviest relative burden. Why does the Paul Ryan proposal need to drop rates from 35% to 25%, when these people are already only paying 17%?
The chart below showing top marginal rates across time, tells an interesting story. The best years for the middle class were the 1950s and 1960s. The US economy was sound, we produced goods, and all boats were lifted. The top marginal tax rates during the 1950s was 90% and during the 1960s it was 70%. Since 1980, we’ve slashed tax rates on the super rich (most of their income is capital gains), gutted our manufacturing base, sent our good manufacturing jobs to China, and told the middle class to replace actual wages with easy debt.
Until the wealthy oligarchs are thrown to the wolves, the middle class will continue to be screwed. Remember that the next time you watch some multi-millionaire on CNBC interview another mult-millionaire about the unfairness on the tax code.
Super rich see federal taxes drop dramatically
WASHINGTON – As millions of procrastinators scramble to meet Monday’s tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.
There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.
“It’s the fact that we are using the tax code both to collect revenue, which is its primary purpose, and to deliver these spending benefits that we run into the situation where so many people are paying no taxes,” said Roberton Williams, a senior fellow at the center, which generated the estimate of people who pay no income taxes.
The sheer volume of credits, deductions and exemptions has both Democrats and Republicans calling for tax laws to be overhauled. House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent. Republicans oppose raising taxes, but they argue that a more efficient tax code would increase economic activity, generating additional tax revenue.
President Barack Obama said last week he wants to do away with tax breaks to lower the rates and to reduce government borrowing. Obama’s proposal would result in $1 trillion in tax increases over the next 12 years. Neither proposal included many details, putting off hard choices about which tax breaks to eliminate.
In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer, according to an analysis by the National Taxpayer Advocate, an independent watchdog within the IRS.
More than half of the nation’s tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes.
Obama wants the wealthy to pay so “the amount of taxes you pay isn’t determined by what kind of accountant you can afford.”
Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called United for a Fair Economy. Their goal: Raise taxes on rich people like themselves.
Shoenberg, who now teaches a business class at Columbia University, said his income is usually “north of half a million a year.” But 2009 was a bad year for investments, so his income dropped to a little over $200,000. His federal income tax bill was a little more than $2,000.
“I simply point out to people, `Do you think this is reasonable, that somebody in my circumstances should only be paying 1 percent of their income in tax?’” Schoenberg said.
Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said he has a solution for rich people who want to pay more in taxes: Write a check to the IRS. There’s nothing stopping you.
“There’s still time before the filing deadline for them to give Uncle Sam some more money,” Hatch said.
Schoenberg said Hatch’s suggestion misses the point.
“This voluntary idea clearly represents a mindset that basically pretends there’s no such things as collective goods that we produce,” Schoenberg said. “Are you going to let people volunteer to build the road system? Are you going to let them volunteer to pay for education?”
The law is packed with tax breaks that help narrow special interests. But many of the biggest tax breaks benefit millions of American families at just about every income level, making them difficult for politicians to touch.
The vast majority of those who escape federal income taxes have low and medium incomes, and most of them pay other taxes, including Social Security and Medicare taxes, property taxes and retail sales taxes.
The share of people paying no federal income tax has dropped slightly the past two years. It was 47 percent for 2009. The main difference for 2010 was the expiration of a tax break that exempted the first $2,400 of unemployment benefits from taxation, Williams said.
In 2009, nearly 35 million taxpayers got a tax break for paying interest on their home mortgages, and nearly 36 million taxpayers took the $1,000-per-child tax credit. About 41 million households reduced their federal income taxes by deducting state and local income and sales taxes from their taxable income.
About 36 million families cut their taxes by nearly $35 billion by deducting charitable donations, and 28 million taxpayers saved a total of $24 billion because their income from Social Security and railroad pensions was untaxed.
“As a matter of policy, there would be a lot of ways to save money and actually make these things work better,” said Leonard Burman, a public affairs professor at Syracuse University. “As a matter of politics, it’s really, really difficult.”
mikeinaz says:
Meanwhile, I and all of the dwindling remaining middle class enjoyed a pretty significant tax increase last year thanks to some creative adjustments by Obamao to the 25% tax rate.
Hot debate. What do you think?
6 
4
18th April 2011 at 4:59 pm
Pirate Jo says:
In other words, if your idea of how to pay for all this is “tax the rich,” there aren’t enough rich people to make a dent, even if you doubled or tripled their taxes. Meanwhile, how in blazes did we get to the point where 45% of households pay no income taxes? And how many not only pay no taxes, but are on the dole? Seems to me that we have vast numbers of people who don’t make much money, but still want full entitlement benefits without regard to the fact that they themselves have not done much to fund the programs.
If you hate rich people, go ahead and lobby to raise their taxes. I’ll be sitting in the corner, sipping my drink, waiting for you to move on to something that actually makes a difference.
Well-loved. Like or Dislike:
29 
13
18th April 2011 at 5:30 pm
Pirate Jo says:
Just saw this:
IRS data showed that in 2008, the top 5 percent of earners — households earning more than $160,000 — accounted for about 59 percent of all federal income tax paid. The next 45 percent — solidly middle-class taxpayers earning between $33,000 and $160,000 — accounted for about 39 percent of all personal income tax paid.
The bottom 50 percent accounted for the remaining sliver of tax revenue. In fact, a Tax Policy Center study showed that 45 percent of households in the United States will pay no federal income tax for 2010.
http://www.foxnews.com/politics/2011/04/18/taxes-pay-debt-unless-rates-150-percent/
Hot debate. What do you think?
6 
3
18th April 2011 at 5:34 pm
Reverse Engineer says:
“If you hate rich people, go ahead and lobby to raise their taxes. I’ll be sitting in the corner, sipping my drink, waiting for you to move on to something that actually makes a difference.”-PJ
By your own arguments PJ, taxing the 45% or households who currently pay no taxes would not make a difference. You argue that taxing the Rich won’t make a difference, but the top 20% of the population holds 80% of the wealth, or thereabouts. Therefore, if it makes no difference to tax them, HTF would it make a difference to tax the people who only have only 1/4 of what the Rich have? Your argument is self defeating.
RE
Hot debate. What do you think?
16 
17
18th April 2011 at 5:38 pm
bigargon says:
the only real way to sort this out is a Flat tax (say about 15% to 20%) with no deductions. simple easy everybody contributes.
Well-loved. Like or Dislike:
32 
3
18th April 2011 at 5:42 pm
Pirate Jo says:
“By your own arguments PJ, taxing the 45% or households who currently pay no taxes would not make a difference.”
Yep, because my argument wouldn’t be for raising taxes on anyone, but cutting the damn spending.
Well-loved. Like or Dislike:
23 
4
18th April 2011 at 6:57 pm
KaD says:
I’m so glad this topic is being covered. I don’t know HOW the citizenry in this county got so damn brainwashed that any time the topic of making the super rich pay their fair share comes up people argue FOR the rich and against their own best interests.
http://www.businessinsider.com/the-battle-is-about-giving-more-money-to-rich-people-not-about-the-size-and-role-of-government-2011-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+businessinsider+%28Business+Insider%29
The one unifying theme to Representative Ryan’s proposal is that it redistributes a vast amount of income upward. It does not always lead to smaller government rather than bigger government.
It is understandable that proponents of redistributing income upward would try to conceal their motives by feigning an interest in small government.
Hot debate. What do you think?
9 
7
18th April 2011 at 7:35 pm
llpoh says:
First, based on the above. the “super rich” are paying 175 of $345 million. That is $58.65 million each. Hmmmm. Sounds like a lot of tax to me.
Second, it seems to me that the ONLY way for their rate to be this low would be for the BULK of it to be capital gains tax of 15% – which the Admin acknowledges absolutely. I can think of nothing that would create the sort of deductions to get them down to a rate of 17% otherwise (it would mean deductions of over $60 million per year for “breaks for having children, paying a mortgage, going to college, and even for paying other taxes”. If they are getting a $60 million break from these items, i’d be well and truly surprised. Other taxes could be substantial – but who knows?).
I have no problem raising capital gains taxes – but it would/could have severe unintended consequences. Severe. Let me repeat that – SEVERE! Low capital gains tax encourages capital investment – do we want to fuck that up? That “capital gains” are included in income figures is extremely misleading. We want to encourage capital investment, but what happens – people scream the super rich aren’t paying their fair share when they finally get around to collecting their gains.
As I keep harping on, the top 1% pay 38 times more than the average tax. How the fuck s this unfair? When you go out to dinner with friends, do you divvy up the bill by income? Fuck no. Why do we want to force the “super rich” to pay more than $60 million each per year? It makes no sense to me. They will simply fucking hide their income, or not realize the capital gains, etc.
The admin says: “My take on the data is that the super rich hire super lawyers and super lobbyists to change the tax code in their favor. How else could you explain the drop in their average income tax rate from 26% to 17%?” There is undoubtably some truth to this. The difference, as I have pointed out, is in the capital gains rate – down from 28% to 15%. But the fact remains, lower capital gains tax rates drive investment. Period. Perhaps there should be multi-tiered rates similar to the current income tax rates. But the fact remains, in order to get a lot more dollars, changing personal income tax rates will only hit the middle class. To really get more money out of the super rich you have to target capita gains. And they will simply sit on their gains if that is done. Studies have shown that no matter what the tax rates, the super rich pay the same amount of net tax – they restructure their holdings/defray capital gains/ change dividend payment patterns/redistribute income/etc. in order to minimize their taxes.
Politicians know this. They fucking know this in spades. When they say tax the rich, they are REALLY TARGETING THE MIDDLE CLASS. They are relying on inflation and bracket creep to force up taxes on the middle class. And they intend to do nothing about the 50% who pay nothing (except they will catch some via bracket creep each year). And that is the problem. The problem isn’t the super rich.
If you want to help the middle class, you have to get the 50% that are paying nothing – 150 million of them – to pay something. The top 1% are carrying this 150 million, and the middle classes are carrying themselves. More would flow to the middle class if this bottom layer paid even a few percentage points of tax.
But that is too hard to address. Those fuckers vote, don’t they?
Well-loved. Like or Dislike:
20 
11
18th April 2011 at 7:37 pm
llpoh says:
KaD – you are an idiot. What is a “fair share”? Sixty million a year isn’t enough? 400 people paying $24 billion isn’t enough? The top 1% (3 million people) paying taxes for 120 million people isn’t enough? What the fuck is a fair share then? What, you want all of it?
Bigargon/Pirate Jo – thanks for being sensible. Bigargon, the flat tax is my preferred plan, with NO deductions. It doesn’t address what the level of tax on capital gains should be. 15% is too low, but you have to be extremely careful with capital gains tax or risk killing off investment.
Hot debate. What do you think?
6 
12
18th April 2011 at 7:43 pm
Administrator says:
LLPOH
Please describe to me your definition of capital investment. I understand you are a business owner and you invest in your business. That is a capital investment in my book and a worthy one.
The super rich aren’t investing in businesses. They are buying and selling pieces of paper. They buying and selling fraudulent derivatives betting against this country. These scum bags are moving our industry off-shore and then reaping their capital gains.
Your interpretation of capital gains is wrong. You sound like a shill on CNBC.
Well-loved. Like or Dislike:
24 
5
18th April 2011 at 7:47 pm
Reverse Engineer says:
“Yep, because my argument wouldn’t be for raising taxes on anyone, but cutting the damn spending.”-PJ
Cutting spending will help deficits from accruing in the future, but it won’t pay off debts already accrued. You still have to tax to pay those off. The reality is that no taxation or spending reductions can pay off the Trillions thrown at the Pigmen. We simply have to go BK as a Nation and start over from Zero.
RE
Like or Dislike:
5 
2
18th April 2011 at 7:50 pm
Administrator says:
LLPOH
Please address the fact that America had its best years in the 1950s under a Republican president when the top marginal rate was 90%. How could this be? According to you, this would ruin the world. Those Republican socialists in the 1950s were evil.
Well-loved. Like or Dislike:
15 
5
18th April 2011 at 7:50 pm
Administrator says:
LLPOH
As you should be able to see from the chart, there are 151 million Americans earning income. 108 million of them make less than $45,000 per year. There tax rate according to the IRS tax tables is 10%.
I would gladly like to see those 108 million pay 10% if the super rich actually paid the 35% they are supposed to.
Would that be acceptable to you?
Well-loved. Like or Dislike:
18 
4
18th April 2011 at 8:02 pm
llpoh says:
Admin – The middle class are paying their share, but the bottom 50% are paying nothing. It seems to me that that is the big issue – the FSA. I am absolutely sick of carrying 150 million of these people.
I didn’t try to define capital gains. I am happy to define capital gains as investments in business/property/stocks (not derivatives), etc.. Financial transactions should not count as capital gains but as income. I would be very happy with that. I understand to be a capital gain that the item needs to be held for over a year – I thought that derivatives would be short-term transactions but I know little about them. I am happy to tightly define capital gains to real business investment. Also, I have seen no stats on where these 400 got their money. I did a quick look but found no break-down. Are you assuming they are capital gains from derivatives and financial instruments or do you have facts? I personally am assuming it is from the sale of businesses/stocks, but I may be way off.
How are they moving their industries off-shore then reaping capital gains? I do not understand your point (I am not being an ass here). To reap capital gains you have to crystallize the investment – i.e. you have to sell. And if they have business capital gains to realize, as long as it is a real business, I do not have any problem with the gains being realized. Moving business off shore is a whole different issue, and needs to be addressed by stopping transfer of profits, etc. It is different to taxing of personal income.
By the way, you sound a bit like a MSM shill yourself with the let’s soak the rich stuff – that is simply the politics of envy unless you can back it up with facts re where the money came from. I will happily side with you if you can show these 400 are largely making their money via derivatives. I believe that that is not correct, but will gladly and happily be proven wrong.
Hot debate. What do you think?
7 
9
18th April 2011 at 8:16 pm
Dave says:
“My take on the data is that the super rich hire super lawyers and super lobbyists to change the tax code in their favor. ”
“The truth is that with 45% of households paying no income taxes and the super rich using their power to manipulate the tax code in their favor, it is the 41 million hard working middle class workers ($45,000 – $200,000) who are bearing the heaviest relative burden.”
Holy bat Shitman….You’d think that the the milliions of citizens who aren’t among the super rich could round up enough fucking votes to eject congresscritters who sell their souls to the rich by legislating the changes that favor the rich. OR DO THE RICH GET ONE VOTE FOR EVERY FUCKING DOLLAR THEY EARN?
Hot debate. What do you think?
5 
4
18th April 2011 at 8:18 pm
Persnickety says:
Even this is misleading. FICA taxes whack you if you have earned income, and literally twice as hard if you are self-employed. In general* FICA is a total of 7.65%, with 6.2% of your first $100k or so in income (your employer pays the same) for SS, and another 1.45% with no cap (and your employer again pays the same) for Medicare. If you’re self-employed like me, you pay a 12.4% flat tax on your first $100k and another 2.9% flat tax on everything you earn, IN ADDITION to the ordinary income tax rates. Basically, a self-employed person making in the $100-150k range is 300% well and truly fucked by the tax rates and scheme.
*The individual side of FICA was lowered 2% for 2011. Anyone’s guess if that stays.
So, yeah, the relatively modest 15% income tax rate (and then 28%) is more like 30.3% then 43.3% if you’re self employed making what is now a decent middle class income. By the time you hit the SS-FICA cutoff you are into the higher federal “income” rates. Your overall tax burden can really work out to 30-35% plus state and local income taxes on a total basis, not just a marginal basis. Yippee fucking skippee.
I wish I was a multibillionaire and only faced a 15% rate on most of my income, if I couldn’t find a way around it by paying some big 4 firm .0001% of my potential tax bill in “tax advising” fees.
Like or Dislike:
4 
2
18th April 2011 at 8:21 pm
llpoh says:
Admin – during the period you show, the capital gains rate was 25%. As you well know, the super rich make their money there, not on wage income. My fucking point is that it is the capital gains tax rate that matters viv a vis investment. Raising the top marginal rates only will really affect the middle class in the long run. If you raise the capital gains rate to 35% think you will do serious damage to investment. And that is the only way you will ever get the super rich paying 35% of their reported income – by seriously increasing capital gains tax.
As I pointed out, the rich have a lot of ways to change the make-up of their income. A 90% top rate would force them to be very creative, but who would it hurt most? The aspirational of course. Also, higher rates would serve to drive these super rich overseas. You could get away with these rates back then (50+% corporate and 90+ percent personal) – overseas competition was not such a factor. Try it today and see what happens – turn out the fucking lights, ’cause the party’s over. You cannot compare business in the 50′s to today. You well know that.
Like or Dislike:
1 
1
18th April 2011 at 8:27 pm
Pirate Jo says:
“It is understandable that proponents of redistributing income upward would try to conceal their motives by feigning an interest in small government.”
I don’t want anybody’s income to be redistributed at all – upwards or downwards. I want a small government that leaves people alone to keep their own money.
“Cutting spending will help deficits from accruing in the future, but it won’t pay off debts already accrued.”
Sure it would – here’s how I’d do it:
Federal tax revenues $2,200 (in billions)
Borrowing $1,500
Total spending $3,700
I’d cut total spending in half, to $1,850. That leaves ($2,200 – $1,850) = $350 billion to pay down existing debt. Granted, it would take three years just to pay off one trillion. But at least it would get us moving in the right direction.
Entitlements – cut in half. Military – end the wars and close most military bases around the world, so that gets cut in half, too. The rest would come from eliminating entire federal bureaucracies, such as the Dept of Education, HUD, Dept of Energy, and a whole slew of others.
llpoh is right about this class envy stuff, and I’m sick of hearing it. This is the same kind of crap the FSA says about us, just because we fall into the middle class.
Well-loved. Like or Dislike:
11 
3
18th April 2011 at 8:39 pm
dd says:
we are getting 15% of gdp in tax revenue, as opposed 21% in great times (late 90s for example), and an average since 1950 of around 18%. this average has been established under many different tax rate structures.
i’m for the bowles-simpson plan, 3 tiered flat tax. i’m not sure what they did with deductions, but i favor none. it may be too hard to remove the mortgage interest deduction as that would screw alot of very responsible people.
llpoh is right in alot of ways, but admin makes good points.
in the end, as the numbers go, taxation is the lesser problem when compared to spending: we are 3 pct points below what we know we can get on taxes, sustainably, and we are over 7 pct points above in spending above that. dual headed monster.
as for cap gains, that’s a tough one. do we reward business investment over PE firms or holders of stocks for holding for over a year? because capital is essential to investment … but then again financial engineers aren’t great at job creation.
Like or Dislike:
5 
1
18th April 2011 at 8:40 pm
llpoh says:
dd – I do not have all the answers for sure. The big issue is capital gains – too much is being classed capital gains that are not (i.e. financial instruments), and the 15% is too low, by historical standards, and by any decent measurement of fair. I own a business and have not crystallized my gains, but for sure I am happy at 15%, but I think that is too low. Twenty to twenty-five percent seems a better place for it, in my opinion.
I am with Pirate Jo – slash spending. You can pick up some money on the capital gains side and some restructuring of deductions/etc. But that is too damn hard – the politicians are trying to do it by stealth, and as I have said, they are really targetting the middle class, as no matter what, even if you take ALL the income of the wealthy it is not nearly enough to overcome the issues. And the wealthy will find a way around most of it in any event.
Like or Dislike:
2 
2
18th April 2011 at 8:54 pm
llpoh says:
This is the compilation of the tax data for the top 400 going back a decade from 2007. Makes for some very interesting reading. Hard to digest it all. It doesn’t specify exactly where the income is earned, but it shows how involved the process is. These folks would have to have teams of accountants working on the returns, as they are very complex.
http://www.irs.gov/pub/irs-soi/07intop400.pdf
Like or Dislike:
1 
2
18th April 2011 at 9:13 pm
ASIG says:
So you all want to play the envy game, “tax those rich bastards”, “lets go back to the tax rates of the 60s”. Well you might want to be carefull what you wish for. The 90% tax rate applied to taxable income over $300,000. You like that right? You don’t make that much so no problem. Alright how much do you make? Is it more than $20,000 because the 1960s tax on anything over $20K is 38%
Over:
$24K = 43%
$28K = 47%
$32K = 50%
$36K = 53%
$40K = 56%
$44K = 59%
$52K = 62%
OK so this is what you want? Because realize in 1960 if you made 20K a year you were rich. So yea tax all those rich bastards.
http://www.stanford.edu/class/polisci120a/immigration/Federal%20Tax%20Brackets.pdf
Hot debate. What do you think?
8 
8
18th April 2011 at 10:30 pm
Lark Williams says:
How about NO income taxes and all consumption taxes? That way the rich pay a lot more and the poor pay nothing. Exempt food and clothing from the VAT. This would encourage people to live more modestly and save money. We shift away from the whole consumerist-driven society which breeds jealousy. And we can end the lobbyists and class warfare that income tax systems drive. The country was like this for a long time. The income tax breeds war, big government, waste and polarization
Well-loved. Like or Dislike:
14 
2
18th April 2011 at 10:52 pm
dd says:
ASIG: if that is what you are reading into this chain of comments then maybe you should invest in some spectacles — we’ll grant you zero cap gains upon sale of your reading aid. no one who is credible wants those rates you nincompoop. no one has said that here at least. what we want is a more fair, more simple tax code that moves closer to a flat tax with limited deductions.
Lark: your idea is worthy of debate. the thing i worry about there is it becomes regressive, i.e., those who cannot afford to save much pay full freight as they consume almost all of their earnings, while the uber rich (who bank most of their earnings) pay a whole lot less as a percent of their earnings. i think i favor a flat tax over a consumer tax, but then again for most that are not super duper wealthy, the model may work, e.g., i have more money and buy a nicer car, i pay more tax. anyway, i like where you are going with the find a loophole, then pile that into a consumerist society, which is garbage. good stuff.
Like or Dislike:
2 
2
18th April 2011 at 11:31 pm
dd says:
oh and ASIG, maybe you should invest in a calculator, one that does compound math — when you do, go ahead and alert yourself of the current equivalent of $300k is in 1960s dollars. hint: it’s alot more dollars now.
i just re-read the chain — no one is asking for what you accuse.
Like or Dislike:
0 
2
18th April 2011 at 11:38 pm
FRED FLINTSTONE says:
What kind of Gorilla Math is llpoh using? You want the poor/negative net worth/public dole/unproductive citizens to pick up the slack? Did you get the memo about how the upper percentile controls almost all of the wealth. It is like a poker game with rigged rules and these people have a million to one chip stack advantage. Do people deserve the right to accrue vast sums of money…you bet your ass. Do people deserve to be able to buy corrupt politicians and special interest groups to form an incestuous nepotistic paradigm where the rich have so much overrepresentation that the poor can’t even play the game? To balance this equation you need to kill 75% of entitlements and institute a consumption tax that is absolute with no deductions. The poor will consume less and pay less, the rich more. Fair and Balanced like your favorite channel. It is not the governments job to keep the poor happy or to protect the wealth of the rich. That shit is on you.
Well-loved. Like or Dislike:
7 
2
18th April 2011 at 12:06 am
Reverse Engineer says:
@FF
LLPOH missed the Memo.
RE
Like or Dislike:
0 
0
18th April 2011 at 12:16 am
llpoh says:
Fred – very simply, I expect everyone to pull their own weight – or ar least some of their weight. Zero taxes by half the population is a joke. The upper percentiles have the wealth – and they pay a huge portion of the taxes. We do not need a free shit army. We need personal responsibility.
I would be happy with a consumption tax. I would be happy to change the capital gains tax upward – some. I would be happy to take financial instruments out of capital gains. I would be really happy to slash entitlement spending and total government spending by half per PJ’s thoughts. I would be really really happy to make payment of tax an obligation of ALL the people, not just 50% of the people.
But there is no way in hell I will say people that are paying $60 million per year aren’t paying enough. For fuck sake, that is outrageous. OUTRAGEOUS! Or that 3 million people (top 1%) are paying 120 million people’s worth. That is also outrageous. Since when is it right that half of the people have no obligation whatsoever? That defines unfair in my book.
Hot debate. What do you think?
8 
5
18th April 2011 at 12:32 am
Apollo says:
“Paul Ryan wants to lower the top tax rate from 35% to 25% to unleash the power of entrepreneurship.”
First a definition: Dogma – n. prescribed doctrine:as in political dogma, dogma of the Catholic Church.
Two dogma that guided the USA since Reagan are:
A) Trickle-down economics – the belief that when you empower and enrich the rich and powerful, all kinds of good stuff will trickle down to the rest of the miserable, less-talented folks.
B). Cut tax and entrepreneurship will flower with an unstoppable force.
If anything, the past few years exposed these dogma as con. (Conma?). These dogma were adopted in America as religion, untouchable by any political party. Yes no other country in the world have even considered them, less adopt them. Maybe they see a con the moment they see it. For Americans, it took more than 2 decades to see the con. Why? I have a theory:
C) Americans don’t believe they can ever screw themselves.
Ooops, That’s another dogma …
Like or Dislike:
2 
1
18th April 2011 at 12:44 am
casamurphy says:
http://www.myxyz.org/mjm/WhoRulesUSA.pdf
Go to the above link for some good visuals and good citations on this stuff.
For example, the top 1% who own 60% of the assets in the country and have an average income of 1.4 million which is 23 times higher than that of the average tax payer (62.3K) have a TOTAL (not marginal) rate of 22% compared to the average TOTAL rate of 13%. So they have 23 times higher income, but pay less than twice the tax rate.
When you talk taxes you have to include local taxes as well before you start claiming that the poor don’t pay taxes. Generally speaking our tax structure is regressive and indeed the relatively poor pay much higher total percentage of their meager incomes in tax than the wealthy.
Besides skewing tax collection towards the wealthy, we need to institute financial transaction taxes. Taxes on profits gained through financial speculation need to be hefty in order to place needed emphasis once again on the production of tangible goods and services.
Like or Dislike:
2 
1
18th April 2011 at 12:49 am
llpoh says:
Llpoh- casamurphy, so your point is that they make 23 times the average, but pay approx 2 times the rate so they pay 46 times the average total, but that isn’t enough. So please tell me, what is enough? 100 times the average? Please enlighten me as to how much of other people’s money you are entitled to?
By the way, if you take out the money the top earners pay, just what would the average rate be? Have of fuck all, that is how much.
All of you soak the rich types – please tell us just what you think their fair share is, anyway. I guess they should pay all of the taxes paid.
Like or Dislike:
3 
1
18th April 2011 at 2:24 am
Reverse Engineer says:
The fair share is whatever it costs to run the society. If you want a society with plenty of police and a military to protect your wealth and property, you should pay for that. So the rich should pay the entire military and police costs, since it is their wealth being protected. If the rich want nice roads to drove their jags on, they should pay for them also. If the rich want a way to get poor people to their factories, they should pay for the public transportation to get them there, siimve the poor do not have money to pay for these things, if the rich want them, they get to foot the bill, that is fair.
RE
Hot debate. What do you think?
5 
5
18th April 2011 at 2:48 am
llpoh says:
RE – if the “poor” didn’t have cable tv, big screen tv, ipads and iphones, etc etc maybe they could afford to chip in some. Maybe? Say the 150 million who pay nothing pay perhaps 20 percent of a full share – the equivalent to 30 million peoples full share – that would add several hundred billion to the tax take. Say the loopholes re capital gains for financial transactions are closed. Say the capital gains tax is raised a few perecentage point to around 20 percent or maybe 25 percent. Say a plan is put in place to rapidly begin reducing entitlement spend – and make people realize they will need to carry more of the load in retirement. Say defined benefit schemes are eliminated from public servants retirement funds. Say we reduce defense spending by half and eliminate 95 percent of overseas bases (which would make us much more competitve internationally and would force other countries to be accountable for their own defence). Say we reduce government funding for colleges for non-core programs. I can go on and on.
What I am after is to make everyone carry some of the burden. And to eliminate abuse everywhere – where the super rich are rorting the system with capital gains on financial instruments, tax it at personal tax rates; end the abuse of government pension schemes; kill off the ridiculous defense spending (hundreds of billions on carriers that will be obsolete before they are complete? What a hose job.). Etc etc.
The answers are simple and straightforward. The politicians are too shit scared to do straightforward and so they are trying to do it by stealth. The Dems are crying “soak the rich” when they really want to doak the middle class. The Republicans want to spare the rich, but the really want to soak the middle and lower class.
I don’t mind paying a bit more so long as everyone has an obligation to pay some. And as long as serious cost controls are put in place.
But it isn’t going to happen, is it?
Well-loved. Like or Dislike:
8 
1
18th April 2011 at 4:21 am
Reverse Engineer says:
@llpoh
All your suggestions might help in a better distribution curve. The problem is one of total ince v total expenses and how it gets paid for in a given economic model, more tomorrow
RE
Like or Dislike:
0 
2
18th April 2011 at 4:45 am
Administrator says:
I find it amusing that LLPOH loves the tax code when it benefits him, but scorns it when it benefits the working poor. You insist that you are carrying the load for the 150 million blood sucking leeches.
Can you read a chart? There are 151 million income earning Americans in the US. As you can see if you open your eyes, 108 million of them earn less than $45,000 per year. Even an Ivy League graduate can calculate a percentage. That means 71.5% of income earning Americans make less than $45,000 per year. This ties in nicely with the fact that median household income in the US is $48,000, meaning half of all households in the US make less than $48,000.
Can we agree on the facts as stated above? If not, then it is a worthless exercise.
In the case of a normal family with two kids and a home making $48,000 per year, the tax code would allow them personal exemptions and deductions for mortgage interest and property taxes. Just assuming the standard deduction of $11,400 and $14,600 of exemptions, their taxable income would be $22,000. The tax liability would be $2,500. The child tax credit and earned income credit wipe out the $2,500.
So, LLPOH there are your deadbeats who pay no taxes. The tax code is not OK for them, but is OK for you and your 15% capital gains tax rate. By the way, these people have no capital gains. They are busy putting food on the table, while the super rich shipped their jobs overseas.
Well-loved. Like or Dislike:
11 
2
18th April 2011 at 8:24 am
Administrator says:
I can’t believe I’m on the same side as RE. I have to rethink my position.
Well-loved. Like or Dislike:
9 
2
18th April 2011 at 8:28 am
Administrator says:
ASIG
Adjust your numbers for inflation. Don’t play the usual Republican bullshit games.
Like or Dislike:
5 
2
18th April 2011 at 8:34 am
eugend66 says:
“The fair share is whatever it costs to run the society.” – RE
Shared poverty sucks, been there, done that ! Everybody gots monies but there are nothing
to buy with them. And I do not count brown-outs, heating shortages in private owned houses.
Ppl. rather spend time at work, doing nothing, because they freeze in their houses.
If I were you, RE, I`ll try some more balanced view when comes about ‘society’ .
Like or Dislike:
0 
0
18th April 2011 at 8:41 am
Reverse Engineer says:
“I can’t believe I’m on the same side as RE.”-Admin
Actually, we are on the same side most of the time, just when we are not our disagreement tends to be intense. Mainly, I am just a much more extreme Doomer than you are, and as a result I hold more extreme viewpoints.
RE
Like or Dislike:
3 
0
18th April 2011 at 12:35 pm
Reverse Engineer says:
“If I were you, RE, I`ll try some more balanced view when comes about ‘society’ “-E66
If you were me, who would I be?
RE
Like or Dislike:
4 
2
18th April 2011 at 12:36 pm
Reverse Engineer says:
This whole problem of Taxation of Rich and Poor is best examined by simplifying the problem. Instead of a big society utilizing Money to distribute around the wealth and costs, just look at a Plantation in the Old South, with a Master and Slaves. The Master represents all the Rich People in this society, consolidated into one guy. The Slaves represent all the Poor people, who instead of having very little money, have Zero money.
In this society, what is the Rich Guy responsible for? He has to Feed his slaves, Cloth them, House them, and at least provide some Medical care for them if they get Sick, unless there are so many available Slaves out there he can replace them cheaply if they die on him. He also has to pay Overseers to keep his Slaves in line and not Revolting on him. The Overseers represent his Police force. In cooperation with other Plantation Owners, he has to pay a Military force to protect their entire Society from invasion from without, maybe from people North of the Mason-Dixon line. Can the Slaves pay ANY of these costs? Of course not, they have no MONEY. One thing Southern Plantation Owners in the Civil War period did NOT do was try to tax their Slaves to pay for having a Big Ass Military, although to an extent they did try to conscript them into the battle. Of course, most defected to the North, where they were promised “Freedom”. Right, they got that, sort of, for a while.
The Industrial Society is not that much different, but because of the Surplus provided by the thermodynamic energy of fossil fuels, through the economic system many of these costs were offloaded onto the slaves of the Industrial system. It generated much more Wealth than the Ag Plantation paradigm, and so that form of explicit Slavery went by the Wayside, for a while. Explicit Slavery did not expire because of any great Moral Leap of Homo Sapiens, it was simply out-competed by the Economic form of slavery of the Industrial model, because that form of slavery was subsidized by the thermodynamic energy of fossil fuels.
As fossil fuel energy becomes more expensive, all the costs that were offloaded onto the slaves for maintaining the society become too much for them to bear. They get progressively lower wages while their food and clothing costs increase. Soon they have no surplus at all with which to pay Taxes to run a Police force and a Big Ass Military that moves Oil from the M.E., but if the Rich folks who benefit most from that flow of Oil want it to continue, THEY have to pay for it. They also have to find some means to get the poor folks to work when they can no longer afford the Gas for their cars. They also have to find some means to pay for Health care for these people, because if they don’t they will not be very good workers, sick all the time. Of course also, since there is such a huge Surplus of these people now, they CAN just let most of them die. Health Care as a result is likely to be among the first things defunded here along with public education, resulting in the pay scale of Doctors, Nurses and other Health Care workers dropping precipitously, along with the Teachers. They have a somewhat better Lobby though, so I expect the teachers will take the hit before the health care workers. When the Medical Insurance Ponzi collapses, its going to be sight to behold for sure, its like Sub-Prime Mortgages, all built on a lot of nothing. Its not just Medicaire, it’s the whole private Insurance scheme in Medicine as well. The risk models are all WRONG. This is what I did in my Pigman years, I did actuarial analysis of risk, It cannot possibly ever pay off on the liabilities. It depends on new and MORE folks constantly buying into the system, a Ponzi by definition, and that won’t continue, even if Da Goobermint OBLIGATES it. Because the people they obligate simply will not have the money to pay the premiums. It will collapse, just like Medicaire, just like Social Security. Has to happen.
As the Wealth of the society sieves upward to a very small group of people leaving the rest of the people Impoverished, all the BURDEN of having the wealth of the society falls onto those who have the wealth. If Wealth is distributed evenly through the society, the COSTS of running the society also can be distributed evenly. The more skewed the wealth distribution, the more the burden of the costs falls on those who actually HAVE the wealth. So in a pure Slave Society, ALL the costs fall onto the Rich of the society.
We of course have not quite yet devolved to a society of explicit Slavery again, but we are getting ever closer to it. As it stands now, my estimation would be that it is about 95:5 overall, where the very wealthiest people need to shoulder 95% of the burden of costs of running the society, and where the large number of poor people shoulder around 5% of the costs. A more even distribution of wealth would obviously be better, but until that occurs its simply impossible for people who barely are making ends meet to shoulder the huge costs of running such a big society with a Big Ass Military. If the Rich people who are the major beneficiaries of such a society wish it to continue onward, they will have to bear the costs of it, because they are the only ones who have the money to pay for it.
The fact is of course that even the Rich in our society do not really have the necessary wealth to perpetuate this model. The real wealth to perpetuate the model for this last Century has come from the Thermodynamic Energy of Fossil Fuels, and they are becoming increasingly expensive with a lower EROEI, so they will run this model no more. However, with what appears to be about a 23:1 ratio in the wealth distribution right now in the FSofA, to run the society as constructed one would expect a similar distribution in Tax Burden. So a Fair Distribution in this type of society would also be 23:1, just as in a Pure Slave Society 100% of the Tax Burden falls on the Plantation Owners. Even that distribution is not enough to pay for the Big Ass Military we run, or the outrageously expensive Health Care system either, and both must be reduced in size to what the Rich actually can afford to pay at the 23:1 Ratio. At least for so long as that Ratio holds true, which probably will not be much longer. Because when this system Comes to Glory, there are only 2 outcomes possible from it. One is that an extremely small number of people will maintain control over ALL the Wealth, that is the Fascist Outcome. The other is that the Masses will Guillotine the Oligarchy, and redistribute out the Wealth remaining, that is the Communist Outcome. It will go one way or the other, and not the same in all places. Pick your Poison, those are the only two likely results in most places. A very few remote places may run Tribal models, but to do so their populations will have to be very small, 10,000 Human Souls or fewer. They will have to be remote enough to maintain independence from the Fascist and Communist societies surrounding them. Any large societies that survive this spin down will be explicitly Fascist or Communist. Fascism of the extreme variety can also be labeled Neo-Feudalism. That is the likely outcome for the next Century or so IMHO.
RE
Like or Dislike:
3 
1
18th April 2011 at 12:38 pm
Administrator says:
RE
I know we are on the same side most of the time. That is what scares me. I think you are a few years older than me. Will I become you in a few years?
Well-loved. Like or Dislike:
7 
1
18th April 2011 at 12:59 pm
Reverse Engineer says:
@Admin
Same question as for E66. If you become me, who will I become?
RE
Like or Dislike:
0 
0
18th April 2011 at 1:04 pm
Administrator says:
RE
Maybe you’ll become an Illuminati. Wouldn’t that be ironic?
Like or Dislike:
2 
0
18th April 2011 at 1:13 pm
Reverse Engineer says:
@Admin
More likely I will Become Death, the Destroyer of Worlds
Seriously though, when I was your age I wasn’t nearly the DoomerAnti-Capitalist I am now. That has only come about since I started researching the history right after Bear Stearns collapsed. In my younger years I found the whole “Rat Race” to be distasteful but I didn’t examine the outcomes of wealth disparities as closely as I have since Bear Stearns.
I don’t know what you will think a decade down the line, since I think I am around 10 years older than you. I do know that the world will be a much different place then, so the parameters for your thought process will be quite different then. Mine also, if I am still alive, which I doubt I will be.
See you on the other side though
RE
Well-loved. Like or Dislike:
6 
0
18th April 2011 at 1:26 pm
Dragline says:
Note, the oft-cited shiboleth that “45% of U.S. households pay no income taxes” is really a misnomer, because it only concerns part of your tax bill. It does not mean that these people do not pay federal taxes. The statistic does not include the social security tax and medicare tax (for starters).
See http://money.cnn.com/2011/04/14/pf/taxes/who_pays_income_taxes/index.htm
The social security tax is where the wealthiest have the biggest advantage, because you don’t have to pay it anymore for income above about $106K. So the more you make, the lower your marginal rate is on that.
The people who really make out like bandits are the big hedge fund managers, whose marginal is 15% max, but who can keep the assets in the fund, borrow against it, and not even pay that much.
Like or Dislike:
4 
0
18th April 2011 at 2:07 pm
Reverse Engineer says:
Also true is that the Poor pay Property Tax, since it is embedded in their Rent. They also pay Vehicle Usage taxes and Fuel Taxes, as well as any local Sales taxes. These all represent a much larger percentage of their personal budgets than the rich have to pay.
RE
Well-loved. Like or Dislike:
6 
0
18th April 2011 at 2:31 pm
Dave says:
RE says…”The fair share is whatever it costs to run the society. If you want a society with plenty of police and a military to protect your wealth and property, you should pay for that. So the rich should pay the entire military and police costs, since it is their wealth being protected. If the rich want nice roads to drove their jags on, they should pay for them also. If the rich want a way to get poor people to their factories, they should pay for the public transportation to get them there, siimve the poor do not have money to pay for these things, if the rich want them, they get to foot the bill, that is fair.”
And what the fuck would you be screaming if “the rich” just took all their fucking marbles and went home?
Like or Dislike:
1 
4
18th April 2011 at 4:09 pm
Reverse Engineer says:
“And what the fuck would you be screaming if “the rich” just took all their fucking marbles and went home?”-Dave
Went “home” precisely where?
RE
Like or Dislike:
4 
0
18th April 2011 at 4:13 pm
llpoh says:
Admin – my numbers have included all people for ease of calculation. As you say, all earners, on the whole, earning less than 45k pay no tax. That is half. Deadbeats is your word. It is reasonably accurate given there share is carried by the top approx 15 percent. The band from 85 to 50 percent carry themselves.
What is your point – that they should not pay taxes at all? As I pointed out I believe everyone has an obligation. Everyone. Or is that too libertarian for you? I do not care what they make. Why should the the FSA be 50 percent of the population? Give me a break.
Also, do you read what I post or do you just fling shit like an irate fucking gorilla when it has its bananas stolen?
I talked about increasing the capital gains tax to a more reasonable level. I talked about cutting spending. Etc. Etc.
I am amazed you are against this position. Truly. What happened to your positions re “personal responsibility”?
We are using democracy as a means of theft when we target the “super rich” because “they can afford it”.
I can afford to pay for everyone’s meal when we go out, but no one expects me to. Why do we expect to take from the rich who already are paying forty times their fair share when half the earners are paying nothing? Nothing is fair? Fix that first and control costs and I will back other taxes on the rich, too.
If they don’t, I, as a businessman, am sick of all the load I am forced to carry, and one day I will take my ball and go home. Who will carry the load then? And I am not alone. I see it every day. Too many members of the FSA screaming for my money that I worked my life for, when I already pay taxes you would not believe.
That is why I empathise with the rich and super rich. I do not see them as the all-evil beings that many do. Certain excesses need to be controlled and influence pefalling needs to be stopped. But it isn’t a crime to be rich. It isn’t a crime to be poor. But it isn’t right that so many are leeches.
Like or Dislike:
1 
2
18th April 2011 at 5:01 pm
llpoh says:
Admin – by the way, on the best fucking day of your life you are no match wiith me with numbers on my worst. I see numbers more clearly than anyone I ever met. Anyone.Ever. And I have been around some giants. It is my peculiar skill. So when you put up a chart I not only see the chart but all the underline assumptions and flaws and realities. So you can lay off trying to educate me on how to read them.
Like or Dislike:
1 
4
18th April 2011 at 5:06 pm
llpoh says:
Admin – based on your numbers above – can we then agree that 50 million people pay all the taxes for 300 million people? And of those the top 15 million or so pay the taxes for 265 million people? Because for me that is a more accurate picture. Rather than the way people try to spin it. And they want this 15 million to pay even more because they aren’t carrying their fair share? As I have said – that is a load of shit.
Like or Dislike:
2 
1
18th April 2011 at 5:14 pm
Reverse Engineer says:
“Admin – by the way, on the best fucking day of your life you are no match wiith me with numbers on my worst. I see numbers more clearly than anyone I ever met. Anyone.Ever. And I have been around some giants. “-LLPOH
ANOTHER Fucking Einstein on the board.
RE
Like or Dislike:
1 
0
18th April 2011 at 5:15 pm
llpoh says:
RE – not normally my style. But it is the second or third time recently the Admin has more or less implied I am too stupid to read charts. Not only do I read them and understand them, I see what they leave out and any slants they have. And believe me, a lot of charts are designed or selected to show a particular bias. Admin is good at selecting charts, to his credit.
Like or Dislike:
2 
1
18th April 2011 at 5:47 pm
The Me Generation « Jaded Haven says:
[...] Another link you may find interesting on the nation’s tax structure. It’s an outside the box take and the discussion following the post is worth a [...]
Like or Dislike:
0 
1
18th April 2011 at 5:53 pm
Reverse Engineer says:
@LLPOH
I will let you and Admin sort out your issues on reading charts. I look at it from a macro perspective. The distribution problems make an even taxation paradigm unworkable. Its no different than the idea of taxing Slaves, it can’t be done. To be able to generate anything worthwhile from taxation, the people you are taxing have to have sufficient surplus to tax. Some people are just too poor to tax, no amount of bemoaning will change this fact of life. The number of people in this country too poor to tax now is probably close to 50% no matter how you cut it. That is all she wrote.
RE
Like or Dislike:
4 
0
18th April 2011 at 6:02 pm
Punk in Drublic says:
You guys are boring. LLPOH and the Admin fighting.
I know Pirate Jo has said it before and I have seen it with people in my own life, one of the reasons that the bottom 50% pays no taxes is that the piddling amount they do contribute is wildly offset by the fact that the government pays people to breed. Eliminate that shit right off the bat. Even my uber liberal wife would be in favor of that. Deductions are one thing, credits that result in a refund simply because one has children has got to go.
Having just spent the past week or so deciphering my tax return, I will say this.
1. Our household income is a little lower than the median, with no kids. Our tax burden is not overwhelming. Putting skin in the game is not crushing our financial and economic spirit.
2. I would kick in another few percent to have a tax system designed to be used and followed by the common man. We are not all CPA’s or Ivy league number crunchers or IRS agents.
I was a tax the rich kind of guy once. Not so much any more. Now I’m lining up behind Pirate Jo in the “To hell with the scalpel or the hatchet, trim the goddamn budget with a wood chipper” crowd.
Well-loved. Like or Dislike:
8 
0
18th April 2011 at 6:14 pm
llpoh says:
RE – the number isn’t anywhere near 50 percent. As I said, they need to give up their toys/mobiles/ipads/cable/nice cars/big screen tvs/McMansions/etc. And then pay SOME. The sense of entitlement must be broken.
I also understand we haven’t discussed misc taxes (at least I haven’t). The issue also must address enormous spending cuts at all levels. Given the hole we are in the pain will be incredible and debilitating. It is what it is. I do not know when the idea came in that the everyone is supported no matter what or how little they do for themselves, but it is unsustainable and it will require a horrific correction in the end.
Like or Dislike:
3 
1
18th April 2011 at 6:15 pm
llpoh says:
Punk – so I gather you are on my side! Woohoo! I knew I was right! Haven’t seen you lately. Tax returns are a bittch.
Like or Dislike:
0 
0
18th April 2011 at 6:19 pm
Reverse Engineer says:
@LLPOH
They already do pay some. As I said, they pay Property Tax through their rentals, they pay road usage tax through the gas they use to get to their minimum wage jobs. The fact tthey buy what amounts to common consumer electronics in our culture is just part of this economy, and they do pay Sales tax on those items they buy. Your image of poor folks living in Luxury is propaganda. In real poor communities, anybody driving a Mercedes is doing it through Drug Dealing, not on freebies from the State. They are hard industrious workers in a dangerous field, and almost as good as Lloyd Blankfein at avoiding taxes, but they are not the typical working poor person. If you did live that life, you would know that anyone making much under $30K or so has no surplus whatsoever, and generally is behind on bills all the time with no savings. These folks do pay property and sales taxes, they just fall below the level it is worthwhile to tax their income at the Federal level.
RE
Like or Dislike:
3 
1
18th April 2011 at 6:28 pm
Punk in Drublic says:
Lots of stuff happening in my life… Big family decision to make regarding a very old and decrepit farmhouse that has been falling apart and patched together for three generations. Lots of emotions flying around regarding it.
Might play our ace in the hole to finance a massive repair/remodeling project and create a rental property, might be a big mistake considering the uncertainty of the future. I don’t like the idea of not having a windfall. Nor do I like the idea of losing a piece of family history.
Like or Dislike:
2 
0
18th April 2011 at 6:36 pm
Dave says:
RE says….”Went “home” precisely where?”
They’re RICH, they can go any place they want, and leave you holding the marble bag.
Like or Dislike:
1 
3
18th April 2011 at 6:41 pm
Dave says:
I was just wonder…..Is the massive debt this country has run up in the last 100 years the result of just the rich not paying their “fair share”?
Like or Dislike:
1 
2
18th April 2011 at 6:51 pm
llpoh says:
Punk – hang on to family property if you can. Imho.
RE – I know about those taxes. I have ignored them as this was re fed tax.
Dave – absolutely right.
Like or Dislike:
1 
0
18th April 2011 at 6:58 pm
Punk in Drublic says:
Sorry, LLPOH, I also agree with RE’s last post. Well, part of it. The revenue from the bottom 50% would be squat. From a funding perspective, a 1% increase in your taxes would produce more than a 10% increase in mine. I am just guessing and making up numbers here, but I think I am probably on the right track.
So it seems to me, to boil down to these conclusions.
1. The rich already do plenty to fund the government. Not counting the Banksters and corporations, that is. I agree with LLPOH.
2. The poor are too poor to fund the government. I agree with RE.
3. We need a hundred gazzilion dollars to fund all our liabilities and promises and wishes and wants and shouldacouldawoulda’s. It ain’t gonna happen.
We are fucked. Any discussion on how the tax code should be really needs to consider that we will be starting from scratch in anywhere from 1 to 5 years.
Well-loved. Like or Dislike:
5 
0
18th April 2011 at 6:59 pm
Reverse Engineer says:
“They’re RICH, they can go any place they want, and leave you holding the marble bag.”-Dave
No, they can’t, least not if you have political control over the banking system. You institute Capital Controls, and you repo all their locally held property when they book for Argentina. You just don’t think Hugo Chavez well enough.
RE
Like or Dislike:
2 
0
18th April 2011 at 7:02 pm
Punk in Drublic says:
LLPOH
It is a question of repair it or let it fall in. The bill to repair it will be astronomical.
We could raise some money with the woodlot, but that is our only risk free way to go. Any other option (bank loans) would put some or all of the property at risk. Should we have a cutting and then need a chunk of money down the road, we will be fucked, and might have to sell off a piece. that is why I call it our ace in the hole.
There is no debt hanging over the property right now and I feel obligated to hand it down to the next generation in the same condition. The house is sentimentally priceless but the land is far more valuable to me.
Like or Dislike:
1 
0
18th April 2011 at 7:13 pm
Administrator says:
LLPOH
You go ape shit everytime you hear the word rich. You’ll really love my next article that I will begin tonight:
How the Super Rich Gutted America
Like or Dislike:
3 
0
18th April 2011 at 7:41 pm
casamurphy says:
LLpoh’s question: “All of you soak the rich types – please tell us just what you think their fair share is, anyway. I guess they should pay all of the taxes paid.”
Casamurphy’s answer: I would like to see the top 10% of earners who now take in nearly 50% of all income in the country, and own 93% of all assets, increase their share of taxes paid from the current 71% to between 75-80%.
In addition to that, I would like structural tax and financial system reform as outlined in the Smith article linked just below. As a small businessman like myself I am sure you will enjoy it…it is entitled “You Want Small Business to Start Hiring? Here’s What To Do.”
http://www.oftwominds.com/blogmar11/small-biz3-11.html
Here’s a summary:
1.1 Change tax code to favor production of tangible goods and services.
1.2 Tax financial churning for both corporations and individuals 0% up to first $100,000; then 50% from $100,001–1,000,000; and finally 75% for annual amounts over 1 million.
1.3 If Corporations give up their “personhood” and stay out of politics, tax them at 0% since revenue can be had from the taxations of the dividends and profits earned by shareholders, management, and labor.
1.4 If Corporations choose to keep their “personhood” then tax them as persons.
1.5 Ban health insurance…resetting healthcare to the cash basis existing in 1965.
1.6 Accepting the realities of bureaucracy, waits, limitations, etc. expand the Veterans Administration hospital system into a nationwide system available to every citizen so that the corrupt sickcare cartels no longer have political leverage to suck an undeserving extra 10% of GDP out of the pockets of Americans as compared to other industrialized countries.
1.7 Eliminate the then uneccessary Medicaid and Medicare programs.
Like or Dislike:
2 
0
18th April 2011 at 7:42 pm
Administrator says:
LLPOH
If the top 15 million paid the 35% that the tax code says they are supposed to pay, then all would be well. But we know that won’t happen, because the rich can buy off those who write the tax code.
You didn’t seem to address the Eisenhower years. I guess it doesn’t fit into your storyline.
Like or Dislike:
1 
0
18th April 2011 at 7:45 pm
Administrator says:
LLPOH
I will continue to deal with facts. You can spout off about your brilliance with numbers, but when my facts obliterate your storyline, you’ll do your usual screaming and ranting. Facts are facts and no amount of spin will change that.
Like or Dislike:
2 
0
18th April 2011 at 7:47 pm
Administrator says:
Dave
The super rich don’t have jobs. Their $345 million of annual income is from passive income. You act like they’ll close a business and leave the country. That is bullshit. If you are an American, the IRS will tax you even if you are in another country. You’ve been watching too much Fox News.
Like or Dislike:
4 
0
18th April 2011 at 7:54 pm
llpoh says:
Admin – what bullshit. You are teisting the “facts”. Your 35 percent number is crap. They pay the marginal rates on personal income after deductions. But 80 percent of their income is capital gains. Tax on cg is 15 pecent. I posted the link to the facts. Yours aren’t facts. You say the 35 percent they are supposed to pay. They pay what they are supposed to pay. The “fact” is that the 35 percent is what YOU want them to pay.
You aren’t posting facts. You are parroting soak the rich MSM bullshit. You are talking about tax percentages relative to GROSS income without acknowledging deductions and differing tax rates – which is absolute obfuscation of the facts. You can feed that bullshit to some – but I know the facts. They are paying what the law says they are supposed to pay.
I have proposed increasing capital gains tax rates and narrowing the definition. What do you propose?
Like or Dislike:
0 
1
18th April 2011 at 8:02 pm
Administrator says:
LLPOH
And I posted the situation for 108 million workers using your same fucking tax code. You shreik about carrying the load, but its the same fucking tax code.
The tax law was written by the rich for the rich. Do you actually think the 108 million people making less than $45,000 wrote the fucking tax code?
Who has the lobbyists?
Who pays off the politicians?
It ain’t the working poor.
Well-loved. Like or Dislike:
5 
0
18th April 2011 at 8:07 pm
Administrator says:
Since you are a fucking genius with numbers, I’m still waiting for your brilliant analysis of how horrific the Eisenhower years were with the top marginal rate of 90%.
Like or Dislike:
3 
0
18th April 2011 at 8:09 pm
llpoh says:
Admin – by the way your assertion that the capital gains are largely derivative gains, etc is not a fact – it is at best an opinion based on observation. There are no published facts that support that conclusion – zero, zip, nada. I looked at the source documents. How about you? For all we know, the capital gains are all legit as there are no documents detailing the breakdown. Unless you have a source?
I will get back to you on the fifties and sixties. I need to do a bit of research. I smell a rat but I need facts to support it. I have laready responded that the new global economy has changed the landscape entirely but I want to look into it further. Good old days aren’t always so good under the microscope.
Like or Dislike:
0 
2
18th April 2011 at 8:09 pm
Reverse Engineer says:
“You’ll really love my next article that I will begin tonight:
How the Super Rich Gutted America”- Admin
Can I suggest enhancing that a bit?
“How the Super Rich Leechfuck Vampires Scum Sucking Bottom Feeders Sucked the Lifeblood out of the American Economy and caused 7M J6Ps to Starve to Death”
RE
Well-loved. Like or Dislike:
6 
0
18th April 2011 at 8:11 pm
Administrator says:
LLPOH
The top 1% share of the national income peaked at all-time highs in 1928 and 2007.
Hmmm. What happened next?
The super rich have captured the government, financial system and media. They have gutted America and continue to gut America. They will use their power and influence to convince the masses that corporate taxes and the highest tax rate should be lowered. Meanwhile, they shift our jobs off-shore.
Anyone who defends the actions of the super rich is either one of them or is getting paid by them to spout lies.
Like or Dislike:
5 
1
18th April 2011 at 8:15 pm
Persnickety says:
“They’re RICH, they can go any place they want, and leave you holding the marble bag.”
100% pure and total bullshit. I am so sick of hearing this fucking stupid line which has been spoonfed to the right-leaning sheeple for the last couple years.
I am a professional who does tax and financial advising. I work with, both as clients and colleagues, a lot of people with annual incomes from the mid 6 figures to low 8 figures, and personal net worth from the low 7 figures to approaching 9 figures. There are at least four big reasons why they aren’t going to just pick up their toys and go elsewhere:
1) Most of them don’t want to. They still have personal and social ties to a community. Living 6000 miles away and being unable to be in the US more than half the year (or else face standard income taxes like any citizen) just isn’t an interest for them, regardless of the taxes. The few millionaires who will actually leave just for taxes are an exceedingly rare set.
2) Most of them would lose a lot of their assets to the practical matter of selling their successful business (or in some cases just a bunch of investments, such as real estate LLCs, but hardly ever publicly-traded stock) and getting a pile of cash with, realistically speaking, a far lower net present value than the business they had to sell.
3) Most of them would lose a lot of their remaining assets to taxes if they tried to leave, between the “exit tax” on renouncing your citizenship and the ordinary taxes (like capital gains) realized from selling their productive assets. And you couldn’t stay a citizen because if you do, the IRS continues to tax you on your worldwide income, even if you live elsewhere. (There is a puny exemption from income tax for nonresident citizens, but it’s trivial for anyone with the money we’re talking about here.)
4) Pretty much all foreign countries you would want to live in have their own hefty taxes. This includes the so-called tax havens like Bermuda and Cayman. Those two have massive import duties and very high costs of living (high even for rich people). Almost anywhere else has income taxes approaching US levels, or worse, and the ones that have lower income taxes usually have crime and corruption issues that make it a bad deal on the whole. Many countries that look like paradise to an outsider do in fact have deep and serious social, political, and economic problems, but they are carefully hidden to avoid spooking the tourists and international business set.
No, I’m not Candide saying the US is the most wonderfulest place ever. My eyes are wide open. I’ve spent years looking seriously at expatriating, but have yet to find any place that, on the whole, provides a significant if any better situation vs. the FSA. In short, you could raise taxes on the US wealthy within reason, like to the “pre Bush tax cut” levels, without any significant number of people leaving as a result, and ones who did leave not avoiding much US tax on the whole as a result.
Whether that’s a good idea is a separate question, well discussed in other comments. I’m just sick and tired of the bullshit claim that all the rich would magically depart to Camelot and leave the rest of us penniless in the FSA, having taken all their wealth with them.
Well-loved. Like or Dislike:
6 
0
18th April 2011 at 8:18 pm
Administrator says:
Yeah, those good old days when America produced things and a middle class family could live a decent life on a truck driver’s salary were overrated. It’s much better today with the super rich sucking 25% of the national income and middle class wages at the same level as 1971, while the country teeters on the verge of collapse. These sure are good times versus those horrific Eisenhower years.
Like or Dislike:
3 
2
18th April 2011 at 8:18 pm
Administrator says:
RE
Great name for an article. The 7 million won’t die. They’ll just go into the SNAP program.
Like or Dislike:
2 
0
18th April 2011 at 8:21 pm
Persnickety says:
RE: J6P has SNAP/EBT and is in no danger of starving to death. Heck his beer gut would probably keep him going for six months. Change that to how 7M poor J6P-juniors got blown up by IEDs because they had no better option than to enlist in the imperial legions and maybe we can start talking.
Like or Dislike:
0 
0
18th April 2011 at 8:22 pm
Punk in Drublic says:
If the top fifteen million paid 35% like they should, then all would be well?
What a reeking pile of steaming shit. Admin, you can’t possibly believe that fucking statement. The financial hole we are in is so fucking deep an increase in taxation is pissing in the wind. Goddamn, our total liabilities is what, a hundred trillion dollars and counting. You cannot be so mind bogglingly stupid as to think we can tax our way into solvency.
All would be well…. Your argument is fucking flawless. I’m sure you will be getting a fantastic offer to work at the treasury nibbling on Geithners balls and sucking the Banksters “liquidity” out of his bunghole.
Like or Dislike:
5 
2
18th April 2011 at 8:28 pm
Administrator says:
LLPOH
It is laughable to contend that the vast majority of capital gains are not generated through stock market gains. Selling your home is exempt. Small business gains are exempt. Anyone with a decent tax consultant will use a like kind exchange of property to avoid capital gains. Please enlighten us as to what other capital gains are being taxed. Any rich dude with a decent consultant is not paying capital gains except on pieces of paper being traded.
Like or Dislike:
3 
1
18th April 2011 at 8:33 pm
Reverse Engineer says:
For so long as the SNAP Card system is functioning, no problemo. Its after they stop functioning I am concerned with.
RE
Like or Dislike:
3 
0
18th April 2011 at 8:38 pm
Administrator says:
Punk
I was being sarcastic to piss LLPOH off. Sorry to pop your bubble, but the super rich control the whole fucking show. They will use their power to lower THEIR tax burden, not yours. These same super rich are the ones who support spending $1 trillion per year on the military, because they control the corporations that make the weapons. They support bailing out Wall Street because they are Wall Street. They are the lenders, so they love debt. They want you to borrow. They want the government to borrow. They love deficits.
Don’t fall for the bullshit about the rich creating jobs. They’ve gutted this country like a pig.
Like or Dislike:
5 
1
18th April 2011 at 8:40 pm
Anonymous says:
Admin – above you said “They are buying and selling pieces of paper. They buying and selling fraudulent derivatives betting against this country.” So you also mean that stocks should not be classes as capital gains but rather as income? So Bill Gates should not be allowed capital gains on his stocks, and when he sells his shares it should be classed as income. Bwahahahahaha! Who the fuck would be want to invest capital in a start-up under those conditions? Stocks are capital gains. Do I think these bastards who run companies deserve the options they are getting – hell no. Does Bill Gates deserve his money – hell yes.
Punk called bullshit on your statement (and indeed it has pissed me off. I hope you are fucking happy. I kicked the dog when I got home!) “If the top fifteen million paid 35% like they should, then all would be well”. Like they should is obviously your opinion (or not, as it is hard to tell).
But if you assume they have no deductions on gross income, and that all non-capital gains income is at the highest marginal rate, what they should be paying is 80% x 15% = 12%, + 20% x 35% = 7 percent = 19%. Hmmm. Pretty close to what they are paying, isn’t it? And they have some incredible deductions.
Like or Dislike:
0 
1
18th April 2011 at 8:53 pm
Reverse Engineer says:
The Rich create jobs. SLAVE Jobs that pay $2/day in Egypt.. They hire Efficiency Experts who are GENIUSES with an Excel Spreadsheet who can show them how they can make more PROFIT by moving their Factories to China. Here in Amerika, the Rich DESTROY jobs because its not PROFITABLE to pay a decent wage to their Slaves.
RE
Like or Dislike:
4 
1
18th April 2011 at 8:54 pm
Punk in Drublic says:
You thumb downed my Smokey impersonation!? Well, fuck you too. This thread has had a lack of name calling and general insolence that I felt needed to be addressed.
Like or Dislike:
4 
0
18th April 2011 at 8:56 pm
Reverse Engineer says:
Big U.S. Firms Shift Hiring Abroad
Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization .
By DAVID WESSEL
WSJ’s David Wessel has the story of the downside of economic globalization: U.S. multinational corporations, that employ 20% of all U.S. workers, are increasingly hiring overseas workers.
.U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization’s effect on the U.S. economy.
The companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That’s a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.
A General Electric worker in Belfort, France, examines a component for a gas turbine. These days, GE gets about 60% of its business overseas.
.In all, U.S. multinationals employed 21.1 million people at home in 2009 and 10.3 million elsewhere, including increasing numbers of higher-skilled foreign workers.
The trend highlights the growing importance of other economies, particularly in rapidly growing Asia, to big U.S. businesses such as General Electric Co., Caterpillar Inc., Microsoft Corp. and Wal-Mart Stores Inc.
The data also underscore the vulnerability of the U.S. economy, particularly at a time when unemployment is high and wages aren’t rising. Jobs at multinationals tend to pay above-average wages and, for decades, sustained the American middle class.
Where the Jobs Are
Multinational companies are creating jobs overseas and cutting their U.S. staffs. See cumulative changes in the U.S. and abroad since 1999.
.Corporate Globalization
See the percentage of workers overseas for selected U.S.-based companies, from Caterpillar to Walmart.
View Interactive
..Some on the left view the job trend as reason for the U.S. government to keep companies from easily exporting work overseas and importing products back to the U.S. or to more aggressively match job-creating policies used in some foreign markets. More business-friendly analysts view the same data as the sign that the U.S. may be losing its appeal as a place for big companies to invest and hire.
“It’s definitely something to worry about,” says economist Matthew Slaughter, who served as an adviser to former president George W. Bush. Mr. Slaughter, now at Dartmouth College’s Tuck School of Business, is among those who think the U.S. has lost some allure.
A decade ago, Mr. Slaughter, who consults for several big companies and trade associations, drew attention with his observation that “for every one job that U.S. multinationals created abroad…they created nearly two U.S. jobs in their [U.S.-based] parents.” That was true in the 1990s, he says. It is no longer.
The Commerce Department’s summary of its latest annual survey shows that in 2009, a recession year in which multinationals’ sales and capital spending fell, the companies cut 1.2 million, or 5.3%, of their workers in the U.S. and 100,000, or 1.5%, of those abroad.
The growth of their overseas work forces is a sensitive point for U.S. companies. Many of them don’t disclose how many of their workers are abroad. And some who do won’t talk about it. “We will decline to comment on future hiring or head-count numbers,” says Kimberly Pineda, director of corporate public relations for Oracle Corp.
Those who will talk say the trend, in some instances, reflects the rising productivity of U.S. factories and, in general, a world in which the U.S. represents a smaller piece of a bigger whole. “As a greater percentage of our sales have been outside the U.S., we have seen our work force outside the U.S. grow,” says Jim Dugan, spokesman for construction-equipment maker Caterpillar, which has added jobs more rapidly abroad than in the U.S.
A Caterpillar assembly line England. The company has added jobs more rapidly abroad than in the U.S.
.The Commerce Department’s totals mask significant differences among the big companies. Some are shrinking employment at home and abroad while increasing productivity. Others are hiring everywhere. Still others are cutting jobs at home while adding them abroad.
At some companies, hiring to sell or make products abroad means more research or design jobs in the U.S. At others, overseas hiring simply shifts production away from the U.S. The government plans to release details about various industries and countries in November.
While hiring, firing, acquiring and divesting in recent years, GE has been reducing the overall size of its work force both domestically and internationally. Between 2005 and 2010, the industrial conglomerate cut 1,000 workers overseas and 28,000 in the U.S.
Jeffrey Immelt, GE’s chief executive, says these cuts don’t reflect a relentless search for the lowest wages, or at least they don’t any longer. “We’ve globalized around markets, not cheap labor. The era of globalization around cheap labor is over,” he said in a speech in Washington last month. “Today we go to Brazil, we go to China, we go to India, because that’s where the customers are.”
In 2000, 30% of GE’s business was overseas; today, 60% is. In 2000, 46% of GE employees were overseas; today, 54% are.
Mr. Immelt says GE did or will add 16,000 U.S. jobs in manufacturing or high-tech services in 2010 and 2011, including 150 in Erie, Pa., making locomotives for China, and 400 at a smart-grid technology center in Atlanta.
View Full Image
.Caterpillar increasingly relies on foreign markets for its sales. It has been adding workers world-wide—except for global layoffs in 2009, amid the recession—but is hiring much faster abroad. Between 2005 and 2010, its work force grew by 3,400 workers, or 7.8%, in the U.S. and 15,900, or nearly 39%, overseas.
Mr. Dugan, the company spokesman, says Caterpillar still does most of its research and development in Peoria, Ill., where it is based, and that “a little over half” of its planned $3 billion in capital spending this year is earmarked for facilities in the U.S.
Several high-tech companies have been expanding their work forces both domestically and abroad, but doing much more of their hiring outside the U.S.
Oracle, which makes business hardware and software, added twice as many workers overseas over the past five years as in the U.S. At the beginning of the 2000s, it had more workers at home than abroad; at the end of 2010, 63% of its employees were overseas. The company says it still does 80% of its R&D in the U.S.
Similarly, Cisco Systems Inc., which makes networking gear, has been creating jobs much more rapidly abroad. Over the past five years, it has added 10,900 employees in the U.S. and 21,350 outside it. At the beginning of the decade, 26% of its work force was abroad; at the end, 46% was.
Microsoft is an exception. It cut its head count globally last year, but over the past five years, the software giant has added more jobs in the U.S. (15,300) than abroad (13,000). About 60% of Microsoft’s employees are in the U.S.
While small, young companies are vital to U.S. economic growth, big multinationals remain a major force. A report by McKinsey Global Institute, the think-tank arm of the big consulting firm, estimates that multinationals account for 23% of the nation’s private-sector output and 48% of its exports of goods.
These companies are more exposed to global competition than many smaller ones, but also more capable of taking advantage of globalization by shifting production, and thus can be a harbinger of things to come.
The economists who advised McKinsey on its report dubbed multinationals “canaries in the coal mine.” They include Mr. Slaughter and Clinton White House veterans Laura Tyson, of the University of California, Berkeley, and Martin Baily, of the Brookings Institution.
They warn that a combination of the U.S. tax code, the declining state of U.S. infrastructure, the quality of the country’s education system and barriers to the immigration of skilled workers may be making the U.S. less attractive to multinationals. “We can excoriate them” and also listen to them, Mr. Slaughter says of the multinationals. “But we can’t just excoriate them.”
Other observers see the trend as a failure of U.S. policies to counter aggressive foreign governments. “All the incentives in the global economy—an overvalued U.S. dollar, lower corporate taxes abroad, very aggressive investment incentives abroad, government pressure abroad versus none at home—are such as to steadily move the production of tradable goods and the provision of tradable services out of the U.S.,” says Clyde Prestowitz, a former trade negotiator turned critic of U.S. trade policy. “That has been having, and will continue to have, a negative impact on U.S. employment and wages.”
Like or Dislike:
1 
0
18th April 2011 at 9:11 pm
Administrator says:
Punk
Great Smokey impersonation.
I can’t believe LLPOH kicked the dog. Now I’m upset.
I don’t know what the right tax rate is for the right level of income. What I do know is that the IRS tax code is 60,000 pages. It was written by politicians and paid for by rich people. The rich have thrown bones to the poor so they’ll ignore their pillaging of America.
The bigger problem is the spending.
I think a simple tax system based on consumption would be better, but politicians and the super rich see the tax code as a major source of power and they will never relinquish that power.
I wonder how high I was able to get LLPOH’s blood pressure.
Well-loved. Like or Dislike:
5 
0
18th April 2011 at 9:11 pm
llpoh says:
Admin – My blood pressure went high. Very fucking high. The dog nearly reached escape velocity (a little terrier). I’ll give him a few meaty tidbits later and he will get over it. He just now landed. When we quit motherfucking each other we are probably pretty close to the same views. I don’t mind paying more if the bastards spend within reasonable limits – which they don’t, and if they reel in the FSA to some sort of sustainable level. I don’t go for the soak the rich stuff because that means me, and a lot of aspirational rich/psuedo-rich/kinda rich/wannabe rich, not just the super rich, and I have had fucking enough. I do not get to claim capital gains so I pay top marginal rates. Plus I carry all the bullshit as a result of running a business and employing folks.
Persnickity says it isn’t so easy to take your ball and move out. Bullshit. I could largely do it tomorrow, the same way many do it – move my business offshore and leave profits overseas at lower rates, and trickle feed profits back. That is one reason that you have to be damn careful with tax rates. Even low rates like we have at the moment are high compared to some other places, and it is easy enouigh to offshore work and set up new companies/subsidiaries. I won’t be doing it – I will eventually take capital gains and then take my ball and go home. I would then pay taxes only on interest/dividend income. Big fucking deal. I can live off my principle. So go ahead, jack up my tax rates until I get sick of it and piss off. What will happen to the company then? Nothing good, I suspect. It is very frustrating and risky running a business these days, and they still want to make it ever harder. Higher tax rates make it harder and the return for risk becomes greater and more unbearable.
I didn’t really kick the dog. He’s my buddy. The fucking cat is another story.
Like or Dislike:
1 
3
18th April 2011 at 9:38 pm
Administrator says:
llpoh
I put you in a different class than the super scumbag rich. If most of the rich made their money the way you make money, the country would be in much better shape. Real business owners employing Americans are what built the country. It’s the slime on Wall Street who’ve sold us down the river. I’ll expose them in my next article.
Like or Dislike:
4 
0
18th April 2011 at 10:01 pm
llpoh says:
Wall Street slimey rich – now there is a side I will join you on whole heartedly. Fuck them all.
Well-loved. Like or Dislike:
6 
0
18th April 2011 at 10:04 pm
Persnickety says:
llpoh – I see your reading comprehension is as bad as your spelling. You said “I could largely do it tomorrow, the same way many do it – move my business offshore and leave profits overseas at lower rates, and trickle feed profits back.” Well whoop dee fucking do. Your profits are stuck overseas, and you can’t get them back into the US to use without incurring tax. Sure, if you’re in an industry that doesn’t require specialized labor or materials you can duplicate your business somewhere else, probably a shithole. But the profits of that new business are going to be in that somewhere else too, not in your personal account where you can spend them on stuff you might like to have. Repatriate them and get taxed. Set up your business structure in many ways that otherwise make sense, and get taxed even if you don’t repatriate them. Not to mention you’re either shit-canning your existing US business, which is pretty dumb, or you’re still getting taxed in the US, by the US, on your US income from that business.
Like or Dislike:
0 
0
18th April 2011 at 11:28 pm
llpoh says:
Persnickety – I comprehend just fine, thanks very much. What you do is leave your profits overseas, where they are taxed little. You re-invest them, where they increase further, again at low rates, and ultimately you do repatriate them, but in the meantime they have grown. How do I put this so that you can grasp the concept –
Overseas Profit = $100, tax = 0 (it is not zero, of course, but hang in there). Retained profit overseas = $100 vs $65 in the US.
Invest the $35 extra at 5% percent. Compound similarly for a decade, at the end of which you have $350 dollars of extra profit in the bank, plus the extra income. Then repatriate the money as needed – and it will not be at highest marginal rates. There are even ways of getting deductions as you repatriate the money back (but you know that, don’t you?), like paying yourself a salary out of the parent company, etc., so you do not take a full whack. I do not need all of my money at once. After a few years I could live on the INTEREST on the saved taxes. You understand that, right? Right? Within 10 years I would be in that situation if I decided to move business overseas. But the main reason to move is to retain profits in the business itself, to be drawn down over time.
Truly – why the fuck do you think that companies are set up overseas? Answer: to preserve capital. They re-invest the money they do not pay in tax. Companies are holding TRILLIONS of dollars in unrepatriated profits. There is a reason – and I have given it to you. If I needed ALL of the profits – it wouldn’t work. I don’t need any of the profits. It is only for my kids now, in the long run.
Jesus, you financial planning guys think you are the only ones that know anything are unbelievable.
Like or Dislike:
1 
0
18th April 2011 at 12:18 am
llpoh says:
To be a bit fair to Persnickety – the benefits to smaller companies largely are no longer there – the tax rates have climbed overseas such that in order to take advantage of the disparities in rates you need to be generating very large profits. Some Eastern Euro bloc nations are still ok, plus a few odds and ends in Asia. In my case, I would deem it too risky, unless the tax rates change substantially. But big companies, who can take advantage of both cheap labor and lower tax rates, find it impossible to resist.
Like or Dislike:
3 
0
18th April 2011 at 12:42 am
Reverse Engineer says:
The great terror that the Rich will Leave the Building was a much bigger threat before Peak Oil. Now if they want to leave, I say let ‘em go. They are Parasites and Leechfucks anyhow.
When they leave, they Forfeit any Property they hold in your Region of Control. Remember, we are witnessing a collapse of World Trade here, so we are going to have a Return to Localism anyhow, so you are going to have to make do with the resources in your neighborhood anyhow.
Being rich depends totally on a functioning Monetary system and a Legal system which acknowledges your Property Ownership. The Monetary system is collapsing on its own, and if a Rich person abandons the country, he also abandons any claim to Property he Owns here. Would you accept the idea of Absentee Landlords living overseas
in China collecting Rents from you? I hardly think so, unless they send over Enforcers to collect their rents they are SOL.
About the only problem I see with this is that you do not get the Opportunity to put said Pigmen on Trial for Crimes Against Humanity in your Locale. However, I suspect wherever they go as the spin down proceeds here, somebody else will do this. If Lloyd Blankfein migrates to Israel, he will eventually Meet Eternal Justice probably at the hands of Al-Quaeda, So let him go to Israel, but freeze all his bank accounts Repo any Stock he holds in companies that are based here inside our borders. If he can maintain his control over assets he holds overseas I would be surprised, but that would be the problem of some Chinese Chen Rice Wines to deal with.
You have to STOP thinking inside the Box of a failing Global Monetary system. The quicker people reject the model of an International Banking System defining who owns what, the quicker we can rid ourselves of these Parasites.
RE
Like or Dislike:
2 
0
18th April 2011 at 1:54 am
Colma Rising says:
The race to escape taxation:
The middle class doesn’t stand a fucking chance.
Well-loved. Like or Dislike:
5 
0
18th April 2011 at 1:55 am
Colma Rising says:
RE says: ” Now if they want to leave, I say let ‘em go. They are Parasites and Leechfucks anyhow.”
I agree (with that part of the post) 110%. The United States is my tribe. If some assleach wants to forsake it, then visualize me waving my arm, beckoning them to leave.
At least for the time being, even I, a Joe 12 pack (six packs get me started), do not need armed guards at the entrance of my happy resort we call California (bear with me, I don’t live in Richmond).
Am I small-minded? Jingoistic?
Only as small as my fortunes, and only as patriotic as the fortunate may acknowledge.
Like or Dislike:
0 
0
18th April 2011 at 2:06 am
Reverse Engineer says:
This is the Fundamental Point CR. The GOOD people of this country must STAND TALL and STAY here to help build a New, if not Better Tomorrow. Anyone who leaves is Persona Non Grata. Cowards.
They should not be allowed to leave with their ill gotten gains, and because MOST of the wealth is all electronic, as long as the underlying assets are inside our borders, you can flick them off with keystroke on a laptop. This “wealth” won’t last all that much longer anyhow, but for so long as it does you most certainly can Repo it.
The REAL wealth, such as is left of it comes in what Natural Resources we have not totally destroyed and the willingness of people who STAY, BRAVE PEOPLE, to work together and to reorganize our society along a sustainable paradigm, insofar as this remains possible.
We are for the most part quite LUCKY that so much Industrial Manufacturing moved offshore, because of that we do not have the kind of SEWER the Chinese now have made of their plot of land.
Its not going to be easy by any means, and quite surely MANY people are going to die here. I SEE Dead People, However, the Rich Leechfucks who were the primary cause of this are not people we need hear anymore, and I for one will be happy to see them go. We need Working Men who do not think because they are smart Managers or can manipulate numbers on a Blomberg Terminal they deserve to live like Kings while working Men barely can survive.
I know there are many people out there who have become dependent, they are victims of a sick culture, not the cause of it, but they also are doomed regardless. You will have to find ways to REALLY work and make yourself of REAL value to your community to survive this Apocalypse. I would like to give as many people as possible the CHANCE here to Repent their Sins of Sloth or of Greed and to Join in the real work of recreating our society. Those who will not Repent will Perish, many with Extreme Prejudice. That is Eternal Justice at work. So be it, it will be DONE.
RE
Well-loved. Like or Dislike:
5 
0
18th April 2011 at 2:38 am
Reverse Engineer says:
BTW, the reason I am able to write such long responses tonight from the cabin is that I bought an external Bluetooth Keyboard for my Iphone
I can now keyboard directly onto the phone just as fast as I can onto my laptop! Boy, I sure will miss this technology when it goes the way of the Dinosaur! For as long as it lasts though, this shit is simply AMAZING. $77 at Walmart, what I spent could have kept an Egyptian eating for over a MONTH. Hypocrisy in action.
RE
Like or Dislike:
3 
0
18th April 2011 at 3:01 am
Pirate Jo says:
I think this all boils down to what Punk said, above:
“1. The rich already do plenty to fund the government. Not counting the Banksters and corporations, that is. I agree with LLPOH.
2. The poor are too poor to fund the government. I agree with RE.
3. We need a hundred gazzilion dollars to fund all our liabilities and promises and wishes and wants and shouldacouldawoulda’s. It ain’t gonna happen.”
Well, we have a lot of people who think they should get to have all the kids they want, whether they can afford them or not. And they should be able to live in as big of a house as they want, and drive whatever kind of car they like, buy all the stuff they want, and that they should in no way be limited by the amount of income they earn. This has actually been made possible because of debt. But what happens to these dumbshits when they start getting old? They haven’t saved a dime, but oh well, they should still get to quit work while they’ve still got 25 years left and enjoy retirement. Why should their savings level have anything to do with it? And if they need medical care, the rest of us can’t just stand around and watch them die, can you? Fork over a few tens of thousands and buy this guy a surgery, since he couldn’t be bothered to buy insurance of his own.
But there honestly is NO reason why people can’t live within their means. Being broke always seems to start out with people having kids they can’t afford. Well, wait until you CAN afford them! It doesn’t have to be when you’re 20 years old. Rent a cheap place with a couple of roommates, share a car, take the bus, drive a beater, whatever, and focus on finding ways to increase the amount of money you make, whether that means getting some training, working a second job, or just waiting patiently until you have enough work experience to apply for something that pays better. Drink the cheap kind of beer, and don’t run up big tabs at the bars. Choose well when you marry, and don’t get divorced.
When you buy a house, buy something you can afford to pay off in ten years, and then stick with the same house. Build up an emergency fund of savings – a year’s worth of living expenses. Put money into a 401K and purchase an annuity policy that guarantees you won’t outlive your money. Take care of your health. You will do FINE! You won’t need to live off the government. But man, there are a lot of morons out there. What Punk demonstrates above is that there simply isn’t enough money to give everyone everything when people don’t carry their own weight. This has always been the question we’ve had to ask ourselves: What do we do with all the stupid people who can’t or won’t take care of themselves? And there are a lot of them. It probably doesn’t help that, as Punk said in another post, we pay people to breed.
My brain was a bit boggled by Jim’s breakdown of the average family income of $48K, with two kids and a mortgage. Because it seems to me that a family, whether that’s one breadwinner who makes $48K, or two people both working $12/hr jobs and paying for daycare, cannot afford to have two kids. I guess the fact that they don’t pay any taxes helps, and they can always mortgage themselves to the hilt and rack up credit card debt. But jesus, it’s no wonder they don’t manage to save any money for their old age. Why would people in this situation be having kids? Don’t they understand that they need to be able to take care of themselves first? People must really suck at math.
Well-loved. Like or Dislike:
6 
0
18th April 2011 at 9:17 am
jmarz says:
Pirate
That was a great rant. Your points are valid. A huge problem among Americans is their lack of common sense. Any person with common sense would agree with everything you said. It is unbelievable how the people that really shouldn’t be spending money or having kids are the people who are spending money and having kids. I just don’t get it. Their parents struggled and now their kids will struggle. We each can control our destiny. I don’t give a shit if you are poor or rich, there are no excuses. The FSA wants to make excuses and always blame someone else other than themselves. Our government enables the FSA instead of empowering them. Creating dependency among a group of people hurts the people rather than benefit them. The welfare system is a failure and so is our government. Time for a real change.
Like or Dislike:
2 
0
18th April 2011 at 10:56 am
Persnickety says:
llpoh – thanks for the much more intelligent response than the napalm I was expecting. I still disagree though. What you outline is taking some of your existing money and starting up a business overseas in order to make money grow overseas. It is NOT taking your existing pile of wealth out of the US and living like a prince somewhere else. Maybe, with a Keyser Soze approach, you start the overseas business, and once it’s successful you burn down your US operation (literally or figuratively), renounce your US citizenship and go live elsewhere off your foreign business. Maybe. Not many people could or would do that.
The reasons why a company might invest overseas are quite different from the common claim that the US rich will simply take all their money and leave. Which, as I’ve said, is bullshit.
Like or Dislike:
0 
0
18th April 2011 at 11:45 am
llpoh says:
Persnickety – I thought about the napalm route, but generally you are a reasonable soul, so I went with a more measured approach! And I am just too damn cranky these days. Admin managed to piss me off – fancy that – and no use taking it out on you. Admin is an evil bastard at times. He holds onto his positions like a Scotsman does a penny.
Like or Dislike:
3 
0
18th April 2011 at 7:41 pm
Eddie says:
This article is on the verge of insanity, hardly anything in it is based in reality. The numbers, almost all of them are completely wrong, not even close. The only thing he got close to right is that almost half the country pays NO TAXES, this included much of the middle class.
Like or Dislike:
0 
4
18th April 2011 at 3:55 pm
Administrator says:
Eddie
Please enlighten us with a detailed analysis of what is wrong in the article.
Sound of crickets.
Like or Dislike:
0 
0
18th April 2011 at 4:28 pm
bob says:
i say we just have one flat tax rate 10%, if 10% is good enough for Jesus, i should be good enough for uncle SAM, this way everybody pays their fair share 10%. if someone makes a million dollars then they pay 100,000 if the make only 25k they pay 2,500 see the rich still end up paying 40% more. and the government need to cut back on spending, that the real problem not the rich not paying enough but the government just spends to damn much and it becomes more and more with each president.
Like or Dislike:
3 
0
18th April 2011 at 2:16 am
8D says:
There is a huge difference in the marginal tax rate and the effective tax rate. You say the top marginal tax rate was 90%, and you’re right about that. Does that mean that someone in 1955 making a half million dollars had to fork over $450,000 of it to Uncle Sam? No. You would have to be an absolute fool to believe such a thing. What you fail to include in this article is the effective tax rate. The rate that the “supr rich” actually paid after taking their deductions. That rate was somewhere between 34% and 41%. Also,since we’re on the subject, those who are making about $32,350 and under in todays dollars, paid a marginal tax rate of 20%. And, generally speaking, they had less write-offs. I have a waaaay better idea. Why stop at 1950? Why don’t we go back to 1913 when this Country was kicking the hell out of every other country, economically speaking, of course. The top tax rate back then was 7%. Of course, back then we didn’t have a bunch of whiny, so called adults who looked at everyone else as the reason for their own shortcomings.
Like or Dislike:
1 
0
18th April 2011 at 6:13 pm
sunny says:
we the american people are so naive, we think that the promise of lower taxes is for us… that promise is for the rich and super rich… no capital gain taxes benefits them the most thats the bulk of their income… federal tax income…its just a game of freebies and tax breaks to them. the middle class is the one paying the most… wake up america… while we are anger at the people receiving food stamps, welfare money or any other government benefit… the rich and super rich are getting richer with all the tax laws in the books and the new benefits that the republican will create for them, its not about you america its about power and the rich.
Like or Dislike:
2 
0
18th April 2011 at 12:10 pm
Administrator says:
One of the best threads ever. I sure kicked llpoh’s ass.
This was back when I still had fire in my belly.
I’m definitely running out of steam.
Like or Dislike:
1 
0
18th April 2011 at 12:29 pm
aime casavant says:
It seems your full of crap when you say 310,000,000 American pay no taxes. You are apparently counting the children population. Your nuts right from the start. Otherwise the article is not bad.
Like or Dislike:
0 
1
18th April 2011 at 7:29 am
Llpoh says:
Damn, great thread. My size 11 fit nicely up Admin’s ass. I will have to redouble my efforts to piss him off. He is getting slack.
Like or Dislike:
0 
1
18th April 2011 at 8:27 am
Administrator says:
It seems you can’t read. Nowhere in the post does it say 310 million Americans pay no taxes.
Like or Dislike:
0 
0
18th April 2011 at 10:12 am