Debt Debate in Congress

[guido911]

That's exactly right - that is exactly how they do it - hold them for one year and it becomes long term capital gain at 15%.  Who wouldn't sign on for that deal??  I want it so bad I can taste it!!!

And even the so-called "small businessmen" who make over magical 250,000 per year are entitled (maybe THAT is where the sense of entitlement comes from...) to play.  Suppose you had a company (small S corporation) that made about 500k per year.  Since IRS rules say you must pay yourself a 'reasonable' salary, you do so - you want it to be somewhere close to 100,000 depending on age - the older the higher - to maximize your retirement SS check.  And keep the IRS from digging too deeply.

The rest goes into the ISO world.  And you not only save the 14% of FICA on everything above the salary, you also get to save the extra 20% or so by missing out on regular income on the 400k.  That would be probably around 34% savings, so even with a small business, there are ways to stick it to the W-2 workers for another $140,000.  Pretty neat little scam, isn't it!!?

You do have to be more careful in how you set up ISO for S corporations, but that's just paperwork for the accountant.  That's how I am trying to save guido several hundred thousand per year.  And he is not even willing to compensate me for it.  He bragged one time about all the advisors he has to pay to manage all that money he has, but won't even pay the one person in this world who is gonna save him more than all those others combined!

I am so damned tired of your complete lack of understanding of the tax code and how it applies to me. First of all, I do not pay hundreds of thousands dollars per year in taxes. I don't know where you got that from. Second, both my wife and I each are the sole members of our own  P.L.L.C. and not an S corp. Third, the money we take home after taxes we need to keep up with our expenses (and we contribute big time to our 401(k) and other investments), so I can't pay myself nickles to avoid taxes. Fourth, how do you stop an employer from not withholding taxes and not issuing a W-2 at the end of each year? Finally, if your little ISO idea was legitimate, then every working person should form little S corps and take advantage of its tax breaks.

As for my advisors, I have an accountant and an investment counselor. I'll take their advice over yours.

[guido911]

Obama told to take a pill.

[Teatownclown]

^ Ironic since POTUS OBAMA already seems too sedate. But Guido, it's a white guy trying to temper down an angry black man. You're a clown for posting this.

[guido911]

^ Ironic since POTUS OBAMA already seems too sedate. But Guido, it's a white guy trying to temper down an angry black man. You're a clown for posting this.

I knew it. It's racism.

Well, here ya go @ssclown:

[nathanm]

[we vs us]

Amongst the left (and some centrists), a new argument for raising the debt ceiling has bubbled up . . . that NOT raising the ceiling is actually unconstitutional, per the 14th Amendment, which in part reads:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

An interesting history of that part of the amendment seems to indicate that it was put in place to mediate precisely this sort of squabble.  (It arose out of the debate about Confederate war debt, and whether or how the Union would address it). 

[heironymouspasparagus]

Leave it to the Republicontins to find yet another way to break the Constitution.


guido,
Just trying to tweak you a little bit on your relationship with the IRS.  I'm sure you are trying every method your guys know about for tax avoidance.


As far as ISO's, well that is not my little tax scheme.  That one belongs to the 1%'ers, complements of the Congress they own.  And that 500k example is valid. It is a good method to sidetrack the tax train.  Anyone making half a million per year would be pretty stupid to leave that kind of change on the table. 

As far as W-2, well the IRS has it locked up pretty tight so the vast majority of people cannot get off that little treadmill.  Otherwise the whole income tax scam wouldn't work.  But the richest amongst us have the power and influence and money so that they bought Congress to put in the means for them to do this little thing.  Because they are "entitled"  (there's that entitlement mentality again...).

Pay yourself nickles to avoid taxes??  The example I used was $100,000 per year.  That's pretty big pile of "nickles" to me.  And probably a lot of people on this site.  And if it saved you an extra $140,000 per year in taxes??  Wow!!!  I had no idea that 240k would be so trivial in your world!  I knew you were rich, but not THAT rich!!  Well, I congratulate you on doing so well!!  I truly AM happy for you because is demonstrates the fact that it is actually possible for one to achieve and do well in Oklahoma.  There is hope for me yet.

And yet, there is still the missing of the point.  The W-2 IS issued.  Can't stop that.  For 100k in my example.  But it does not have to include the whole amount.  The other 400k becomes the ISO.  But I can understand if your lifestyle dictates that the other 400k be available this year instead of deferred 366 days.  (Must be rough living paycheck to paycheck or "hand to mouth" on only a few hundred thousand per year...)

[Cats Cats Cats]

Leave it to the Republicontins to find yet another way to break the Constitution.


guido,
Just trying to tweak you a little bit on your relationship with the IRS.  I'm sure you are trying every method your guys know about for tax avoidance.


As far as ISO's, well that is not my little tax scheme.  That one belongs to the 1%'ers, complements of the Congress they own.  And that 500k example is valid. It is a good method to sidetrack the tax train.  Anyone making half a million per year would be pretty stupid to leave that kind of change on the table. 

As far as W-2, well the IRS has it locked up pretty tight so the vast majority of people cannot get off that little treadmill.  Otherwise the whole income tax scam wouldn't work.  But the richest amongst us have the power and influence and money so that they bought Congress to put in the means for them to do this little thing.  Because they are "entitled"  (there's that entitlement mentality again...).

Pay yourself nickles to avoid taxes??  The example I used was $100,000 per year.  That's pretty big pile of "nickles" to me.  And probably a lot of people on this site.  And if it saved you an extra $140,000 per year in taxes??  Wow!!!  I had no idea that 240k would be so trivial in your world!  I knew you were rich, but not THAT rich!!  Well, I congratulate you on doing so well!!  I truly AM happy for you because is demonstrates the fact that it is actually possible for one to achieve and do well in Oklahoma.  There is hope for me yet.

And yet, there is still the missing of the point.  The W-2 IS issued.  Can't stop that.  For 100k in my example.  But it does not have to include the whole amount.  The other 400k becomes the ISO.  But I can understand if your lifestyle dictates that the other 400k be available this year instead of deferred 366 days.  (Must be rough living paycheck to paycheck or "hand to mouth" on only a few hundred thousand per year...)

If I had a choice of when I got paid what.  I would take 25% salary one year and then take 177% (2% in interest) the next year so I didn't ahve to pay so much FICA. 

[Conan71]

If I had a choice of when I got paid what.  I would take 25% salary one year and then take 177% (2% in interest) the next year so I didn't ahve to pay so much FICA. 

Just another wealthy tax cheat wanna be, gaming the system, eh Sheen? 

[guido911]

Amongst the left (and some centrists), a new argument for raising the debt ceiling has bubbled up . . . that NOT raising the ceiling is actually unconstitutional, per the 14th Amendment, which in part reads:

An interesting history of that part of the amendment seems to indicate that it was put in place to mediate precisely this sort of squabble.  (It arose out of the debate about Confederate war debt, and whether or how the Union would address it).  

Does that take into account debt YET incurred, because that is what Congress wants to do in raising the debt ceiling. And what about Congress' power of the purse. Can that be arbitrarily taken over by the executive branch of government?

Fact is that this "debt ceiling" crap has been in place for years without a constitutional challenge. And I call it crap because all of us should live within our means. Like I wrote before, even Obama voted against raising it and he didn't make this argument. Why is this such a problem today?

[Conan71]

Does that take into account debt YET incurred, because that is what Congress wants to do in raising the debt ceiling. And what about Congress' power of the purse. Can that be arbitrarily taken over by the executive branch of government?

Fact is that this "debt ceiling" crap has been in place for years without a constitutional challenge. And I call it crap because all of us should live within our means. Like I wrote before, even Obama voted against raising it and he didn't make this argument. Why is this such a problem today?

Basically so they can be wimps and keep borrowing until after the next election and avoid having to disappoint potential voters with tax increases or spending cuts prior to the 2012 election.

[guido911]

Basically so they can be wimps and keep borrowing until after the next election and avoid having to disappoint potential voters with tax increases or spending cuts prior to the 2012 election.

And then do it again the following year so to avoid losses in 2014. Here is a vid that made me chuckle about raising the capital gains tax:

[we vs us]

Does that take into account debt YET incurred, because that is what Congress wants to do in raising the debt ceiling. And what about Congress' power of the purse. Can that be arbitrarily taken over by the executive branch of government?

Fact is that this "debt ceiling" crap has been in place for years without a constitutional challenge. And I call it crap because all of us should live within our means. Like I wrote before, even Obama voted against raising it and he didn't make this argument. Why is this such a problem today?

The debt ceiling actually doesn't cover debts to come; it covers debts already incurred. Congress has already spent the money via spending bills, this just authorizes the executive to actually incur debt to cover the expenditures. So this doesn't really abrogate Congress's power of the purse --- after all, they can still make whatever spending bill they want and the executive still must fund it. As the history of the amendment implies, it was put into place very specifically to work around partisan Congressional gridlock which was rampant (duh) right after the Civil War.  It was supposed to remove the nation's debt as a political football. 

And because this is a part of the Constitution . . . well, you can't really challenge something like this, afaik.  There's the amendment process -- votes of the states, whatnot -- but you can't challenge it in court. 

Obama's explicitly reversed course on his prior comments on the debt ceiling, and says it should be raised.  So while his prior opinion might make you feel better at yelling at him, he still currently (and I believe, honesty) supports it.  It isn't just him, either, btw.  LOTS of people support raising the debt ceiling, including Republicans and some pretty conservative economics folks. 

[nathanm]

Pay yourself nickles to avoid taxes??  The example I used was $100,000 per year.  That's pretty big pile of "nickles" to me.  And probably a lot of people on this site.  And if it saved you an extra $140,000 per year in taxes?? 

He and his wife probably don't pay even $140,000 a year in tax. It's at least $100,000, based on his statement that he paid six figures in income tax this year, but he's also made clear it's not "hundreds of thousands," so it can't be $200,000. I figured somewhat over $400,000 a year in income and a hair over $100,000 in tax a few months back based on his statements about his financials. This is a pretty unseemly discussion, though. His exact tax burden (or income) isn't really any of our business. It's plenty to know that he has at least some income in the top bracket.

It's actually somewhat refreshing to see someone arguing for their own financial benefit, as opposed to making aspirational arguments. (The "I might be rich someday, so we better not tax the rich!" sort) What's not nice is that he breaks out the name calling when other people argue in favor of their own financial benefit.

we vs us: Pretty much all the experts, all the bankers, all the big time market participants all see the need for the debt ceiling to be raised. They also say that we need to work on reducing the deficit in a few years once the economy has had time to recover somewhat.

Here's the thing. If we default, we will almost certainly not continue to enjoy the extraordinarily low level of interest we pay on our existing debt. Increasing our interest expense on the existing debt is about one of the stupidest things we can do right now. It's like a person with a manageable, but high, amount of credit card debt calling up their credit card company and saying "please ratejack me, I have too much money!"

I did see a poll the other day that shows that we Americans are being pretty effing stupid as a whole. A plurality responded that they did not want the debt ceiling raised. A majority said they were aware that not doing so could cause a financial catastrophe and still wanted to not raise the debt ceiling. What in the love are these people thinking? Have they really been paying so little attention to both history and current events that they don't get it?

As for the Congressional Republicans, it's more about extracting savage budget cuts to kill off more of the safety net than anything else. It's a cynical ploy to get Ryan's idiotic budget passed.

[guido911]

The debt ceiling actually doesn't cover debts to come; it covers debts already incurred. Congress has already spent the money via spending bills, this just authorizes the executive to actually incur debt to cover the expenditures. So this doesn't really abrogate Congress's power of the purse --- after all, they can still make whatever spending bill they want and the executive still must fund it. As the history of the amendment implies, it was put into place very specifically to work around partisan Congressional gridlock which was rampant (duh) right after the Civil War.  It was supposed to remove the nation's debt as a political football. 

And because this is a part of the Constitution . . . well, you can't really challenge something like this, afaik.  There's the amendment process -- votes of the states, whatnot -- but you can't challenge it in court. 

Obama's explicitly reversed course on his prior comments on the debt ceiling, and says it should be raised.  So while his prior opinion might make you feel better at yelling at him, he still currently (and I believe, honesty) supports it.  It isn't just him, either, btw.  LOTS of people support raising the debt ceiling, including Republicans and some pretty conservative economics folks. 

First, I don't know that the raising of the debt ceiling is to cover current debt or if its that plus the cost of on-going government programs. Please clarify. Second, whatever Obama did prior to he becoming president, and that he has since backed off, I am not yelling at him in the slightest. Only that it makes it very difficult for him to argue that the U.S. will essentially be sent to history's dustbin. That's it. But overall, if this is a constitutional question, then let's have at it and get some finality.