Here Comes the Tax Increase

[Cats Cats Cats]

This is galling. Tax cheat Giethner is pledging to get tough on tax avoiders:

http://www.breitbart.com/article.php?id=D96MN08G1&show_article=1

You really just cannot make this stuff up.

Sounds like he knows what to look for.

[we vs us]

This is galling. Tax cheat Giethner is pledging to get tough on tax avoiders:

http://www.breitbart.com/article.php?id=D96MN08G1&show_article=1

You really just cannot make this stuff up.

So you're all for the ability of the richest Americans and international corporations to take their taxable income offshore? 

Is this a vote FOR tax cheats, Guido? 

[guido911]

So you're all for the ability of the richest Americans and international corporations to take their taxable income offshore? 

Is this a vote FOR tax cheats, Guido? 

You way overthink things. I was merely pointing out the irony, er brass ones of Turbo Tax Geithner to go after tax cheats.  In fact, given that Obama has no problem placing persons who do not pay taxes in his administration(Daschle, Killefer, Solis, and now Ron Kirk and possibly Rhambo), he has some nerve as well.

In response to your point, I support all legal tax avoidance (not evasion) practices. After all, its the "richest Americans and international corporations" money--not Obama's or, dare say, yours. 

[we vs us]

You way overthink things. I was merely pointing out the irony, er brass ones of Turbo Tax Geithner to go after tax cheats.  In fact, given that Obama has no problem placing persons who do not pay taxes in his administration(Daschle, Killefer, Solis, and now Ron Kirk and possibly Rhambo), he has some nerve as well.

In response to your point, I support all legal tax avoidance (not evasion) practices. After all, its the "richest Americans and international corporations" money--not Obama's or, dare say, yours. 

I appreciate that you're such an internationalist, but really, why should we let tax money go to Aruba, or the Cayman's, or the Turks and Caicos?  We need it right here, and needed it long before the crash happened.   

But I do feel your pain about paying taxes to someone distasteful.  I REALLY hated sending my tax money to President Bush every year -- going, as it was, to fund a misplaced war and to subsidize the wealthy.  But I realized that the link between individual hypocrisy and government policy is pretty tenuous.  You're not paying taxes directly to Geithner, and I wasn't paying them to Bush.  We pay taxes to the Federal government, and there're other things that the Feds do that I would have hated to defund. 

Point being, you take the government as a whole, not as an individual member.

[guido911]

I appreciate that you're such an internationalist, but really, why should we let tax money go to Aruba, or the Cayman's, or the Turks and Caicos?  We need it right here, and needed it long before the crash happened.   

It's NOT your money. How the rich spend their money, where they spend their money, or, yes, hide (legally) their money is not anyone's business but theirs. I am not going to fault the rich people for wanting to keep more of their own money. "Rich" people and corporations are responsible for creating jobs so folks like you can have a means to earn a living. Trying thinking about that sometimes rather than how you can take money from them.

[nathanm]

Trying thinking about that sometimes rather than how you can take money from them.

Interestingly, the folks who pay me aren't concerned in the least by a return to the previous tax rates. Perhaps they aren't rich enough to care.

[Cats Cats Cats]

It's NOT your money. How the rich spend their money, where they spend their money, or, yes, hide (legally) their money is not anyone's business but theirs. I am not going to fault the rich people for wanting to keep more of their own money. "Rich" people and corporations are responsible for creating jobs so folks like you can have a means to earn a living. Trying thinking about that sometimes rather than how you can take money from them.

Only rich people start business and create jobs so they should get their tax rate cut to 0% and everybody $150k below should be taxed at 60%.  We will luckily be able to still buy things from the company store!

Basically, they have a higher tax bracket, hide their money, pay a lower effective tax rate than a lot of workers already.  (I am making a generalization of your statement, not attacking rich people)  It is none of our business, but we should cut their taxes more so they have another $4,000 a year to hire a new worker. 

I am not sure if you are aware of this, but based on our completely consumer driven economy.  Average people who work create jobs too.  That is how people in the US get "Rich" in the first place.  However I must admit that when we through "Rich" around there are very different meanings.  $50,000 is rich to some, $100,000 to others, $200k, $300k, etc.  There is obviously a major difference between $250k a year and 1 billion in earnings a year.  Should I pay a higher % of income in taxes than somebody who makes 1,000x than I do?  Probably not, should I pay the same?  Probably...  Am I?  I do not have enough information to figure that out because I don't know how much $$$ is hiding

[we vs us]

It's NOT your money. How the rich spend their money, where they spend their money, or, yes, hide (legally) their money is not anyone's business but theirs. I am not going to fault the rich people for wanting to keep more of their own money. "Rich" people and corporations are responsible for creating jobs so folks like you can have a means to earn a living. Trying thinking about that sometimes rather than how you can take money from them.

I'm with you, brother.  Except, how are we going to get the roads built that their limos drive on?  How are we going to build the airports for their private jets?  How about water and sewer to their mansions?  How will we train people to work in their factories and in their office parks?  We have to fund that somehow, don't we?

[swake]

H2O:

I do not want to engage in a semantics debate with you. The fact is that my family will be paying close to an ADDITIONAL $20K in taxes under Obama's plan. To me, that's a tax increase. Your example that because you cannot claim your child as a deduction any longer is tantamount to a tax increase is an imprecise comparison. This tax increase is not applicable to all taxpayers (only those earning more than $250k) as is the rule governing tax deductions. Furthermore, following your logic, not making charitable contributions or not having  depreciating assets would be a tax increase because there would be a loss of a deduction.

Incidentally, your helping out your child is admirable and what family is supposed to do in times of turmoil. Far too often people believe that its government's job to take care of you when you fall on hard times.

Finally, your contention that the great unwashed (h/t Boortz) will take to the streets and physically take from the wealthy if the wealthy do not pony up more money is abject fear mongering. If anything, I would not be surprised that these wealthy folks that are not only employing the "working class" but give most to charities that assist the "working class" and the needy start cutting them off. As I have previously stated, I have already significantly reduced my charitable giving and several people in the circle I run in have likewise done so. Welcome to class warfare.

An extra $20,000 in taxes?

You are the class warrior here. This country has given you much, the ability to earn a great living. But you just don't want to give back. Let's look at these numbers if you are going to pay another $20,000 in taxes due to Obama.

The top tax rate is going to "increase" from 35% to 39.6%, if your taxes are going up $20k from a 4.6% increase that pegs your taxable income at about $435k a year with real income a probably a lot higher than that. Your monthly take home after federal taxes at 35% is 23,550.72. That will sadly go down to $21,884.06. A month.

Boo friggin' hoo.

not to be rude, but you are a lawyer, which means you don't actually produce anything and you add almost nothing of value to society through your work. And despite you large income you employ almost no one. Your income comes from the complexity and inertia of our legal system and has nearly nothing to with capitalism. Your income is leached off the work and income of entities and people that do actually produce things of value but that have found themselves involved in the quagmire that is our legal system.

If we were to fix the legal system, you certainly wouldn't make enough money to be in the top 1/2 of 1% of wage earners (which is where people that make over half a million a year are). There is no sensible reason for a lawyer to make that kind of money. Income potential like that is what is what has destroyed our legal system.

And if you really make that much money, what in the hell are you doing spending so much time here when you could be getting more billable hours? Or do you bill clients for your TulsaNow posts?

I have zero sympathy over your rediscovered tax burden.

[Cats Cats Cats]

not to be rude, but you are a lawyer, which means you don't actually produce anything and you add almost nothing of value to society through your work. And despite you large income you employ almost no one. Your income comes from the complexity and inertia of our legal system and has nearly nothing to with capitalism. Your income is leached off the work and income of entities and people that do actually produce things of value but that have found themselves involved in the quagmire that is our legal system.

I do not think a more true thing has been said in the history of web forums.  This is why I hate the "Rich" and "Jobs" used over and over again.  Entrepreneurs create jobs not the "Rich". 

[Gaspar]

I do not think a more true thing has been said in the history of web forums.  This is why I hate the "Rich" and "Jobs" used over and over again.  Entrepreneurs create jobs not the "Rich". 

Lawyers, doctors, and evil CEOs, they are all worthless, until we have to go to court, get sick, or need a job.

We all make our place in society based on the skills we choose to cultivate and talents we develop. When we try to make villains out of those who are more successful than we are, we show our disappointment and disdain, not for others, but for our own choices.

Wealth comes from successful individual efforts to please one's fellow man ... that's what competition is all about: "outpleasing" your competitors to win over the consumers. – Walter Williams 

The standard of living of the common man is higher in those countries which have the greatest number of wealthy entrepreneurs. – Ludwig von Mises

[Cats Cats Cats]

Lawyers, doctors, and evil CEOs, they are all worthless, until we have to go to court, get sick, or need a job.

We all make our place in society based on the skills we choose to cultivate and talents we develop. When we try to make villains out of those who are more successful than we are, we show our disappointment and disdain, not for others, but for our own choices.

Wealth comes from successful individual efforts to please one's fellow man ... that's what competition is all about: "outpleasing" your competitors to win over the consumers. – Walter Williams 

The standard of living of the common man is higher in those countries which have the greatest number of wealthy entrepreneurs. – Ludwig von Mises

Doctors are properly paid.
CEOs are worth millions of dollars if their decisions create millions of dollars for the company.
A CEO is not worth millions of dollars and then bought out at millions of dollars for running a profitible company into the ground through poor business decisions.  Shareholders should approve all CEO wages and their golden parachutes.

[swake]

Lawyers, doctors, and evil CEOs, they are all worthless, until we have to go to court, get sick, or need a job.

We all make our place in society based on the skills we choose to cultivate and talents we develop. When we try to make villains out of those who are more successful than we are, we show our disappointment and disdain, not for others, but for our own choices.

Wealth comes from successful individual efforts to please one's fellow man ... that's what competition is all about: "outpleasing" your competitors to win over the consumers. – Walter Williams 

The standard of living of the common man is higher in those countries which have the greatest number of wealthy entrepreneurs. – Ludwig von Mises

I'm not demonizing anyone. But you have to understand the gap in income between the rich and the middle and the overall decline in the middle class is a huge problem for our nation. Doctors and Lawyers are service industry workers, certainly well educated service industry workers, but the idea that they somehow deserve half a million to a million to many millions a year for their work is idiotic.

As for CEOs, the gap between the average workers wage and a CEOs compensation is at an all time high. CEOs do not (usually) own the companies they work for. They also do not somehow "deserve" 50-100 million a year. That is money that is coming out of the pockets of shareholders, who are the actual owners and who should be gaining the greatest benefit of a profitable company. But CEOs often aren't really working for the shareholders interests anymore.

And I know most lawyers don't make anywhere near that kind of money but a lot do and almost none should. This isn't class warfare, a huge gap in income like what we are developing is more like what you see in third world countries. It isn't healthy economically.

[nathanm]

We all make our place in society based on the skills we choose to cultivate and talents we develop. When we try to make villains out of those who are more successful than we are, we show our disappointment and disdain, not for others, but for our own choices.

I don't think that pointing out that it's disingenuous for someone making $450,000 a year to complain about their $20,000 tax increase so as to make it seem larger than it really is in proportion to the total income or to take note of the ever-widening gap between rich and poor in this country is what you think it is. It is disappointment that government policy and the market (which is run by the rich) discourages long term investment and job creation in favor of short term profit and outsourcing.

The more you make, the more you benefit from the infrastructure (both physical and virtual) provided by the government.

And it stands to reason that lawyers are not the best job creation engines out there. Most need a paralegal and perhaps a clerk and/or runner if they've got a lot of work. Pretty weak sauce, really. Distribution, hospitality, or even aircraft rental and leasing end up creating more jobs. Yet Guido constantly drones on about his contribution to society and how the gub'mint is taking it away from him.

[Gaspar]

Understood and understood.  But I keep hearing the term "Class Warfare".  By expressing anger, envy, or dismay at someone based on their income IS class warfare.

Correct, the proposed tax increase on the top earners will not affect wealthy people too much.  You are exactly right about that. 

Businesses that operate under S-Corp or LLC will suffer the most.  If you work for a small business that makes $1,000,000 a year and employs 40 or 50 people, you will lose about $50,000 dollars out of your bottom line.  Now of course you will try to recoup that through deductions, and you can reduce your exposure that way, but now there's talk of reducing the number of deductions too. 

So businesses that rely on a lean income model will have some hard choices to make when it comes to which middle-income employee to let go or which two low income administrative positions to eliminate.