Who are Job Creators?

[nathanm]

Keep in mind that I actually agree with the exemption for capital gains on a primary residence but....
I don't agree that it is necessary to exempt capital gains on a primary residence to have a highly mobile workforce.  Being able to sell a home for what you paid for it is a plus in itself.  The profit (gain) is what is taxed.  Trying to channel the liberal that is not really in me, why shouldn't you share your good fortune (profit portion only)  of selling a home at a profit?

The main reason I'd not tax profit that was put into another house is the variance between markets. That 15% may be the difference between someone being able to sell a house in Oklahoma and having a reasonable mortgage in California and not. If it's cashed out, it should be taxed, IMO.

We have an Employee Stock Purchase Program where I work.  We use after tax dollars to purchase stock.  We used to get a 15% discount from market price but in order to punish the rich, now even the rest of us only get a 5% discount.  I can sell right away but pay ordinary income rates if I sell before 1 year.  After one year, I get 15% capital gains rates.  Since I have to buy stock with after tax dollars, I could go along with the top execs having to pay ordinary wage rates based on some value at the time the stock is issued.  A discount, but no more than available to everyone (like me), would be OK.  Then either short term or long term would apply on gains/losses based on that value. (That might be what you said but I'm not sure.)

To clarify, I think whatever the value is at the time of exercise should be taxed as normal wages (possibly at the time of sale, but the paperwork would be complex on that). Any further appreciation should be taxed at the applicable capital gains rate as it is now, presuming a special capital gains rate is kept, which I'm not entirely sure is a great thing.

Please see Table 8.  The top 0.1% paid less from 2004 to 2008 than the top 1% but even at the top 5% level, the top 0.1% paid a higher average rate.  Other years, including 2009, the top 0.1% paid the top average rate. http://www.taxfoundation.org/news/show/250.html#table6  I understand that average means that someone paid less but it also means someone paid more.  I would like my discount returned to 15%.

I would expect that the top 0.1% would pay a higher effective rate in a crappy economy, as more of their income is normally derived from capital gains. When investment income is low, their rates will naturally be higher. 2009 isn't a normal year in that respect. You'll note that the period of weirdness came after the Bush tax cuts. Also, that particular source only counts federal income tax, not payroll tax and state and local taxes. The source I have on that is getting outdated (I believe 2007 is the latest year). I'll see if I can dig up something more fresh.

Edited to add: Here's something from 2009 from the DC local government which lists, as best as they can calculate, the state/local tax burden for families of three residing in the largest cities of all 50 states, for incomes between $25,000 and $150,000:

http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/09STUDY.pdf

The interesting part, presuming the methodology ends up looking OK is this; I'm only pulling out Oklahoma:

$25,000: 10.9%
$50,000: 8.2%
$75,000: 8.2%
$100,000: 8.6%
$150,000: 7.8%

That seems somewhat off to me. I'd like to find a source that includes higher income levels, just for kicks.

[Red Arrow]

The main reason I'd not tax profit that was put into another house is the variance between markets. That 15% may be the difference between someone being able to sell a house in Oklahoma and having a reasonable mortgage in California and not. If it's cashed out, it should be taxed, IMO.

I have no interest in supporting the cost of housing in California or any other place with crazy housing costs. Those people need to get their costs in order.

Also, that particular source only counts federal income tax, not payroll tax and state and local taxes.

I know you and I depart ways on this but it doesn't bother me that payroll taxes are a much higher percentage of people's income whose income is below the cutoff level.  Social Security will be a significant portion, maybe all, of the retirement income for many lower income groups.  Payroll tax is just a way of forcing them to pay for the ability to retire at all.  Benefits are based on contributions, not your AGI.  I do not see that as unfair at all.  Bill Gates and Warren Buffet won't be getting any more Social Security benefits than Guido, except that when Guido is old enough there may not be enough money for anyone.   Social Security retirement income can be taxed if you have enough other income.  Means testing is already here.  The levels are in the lower 5 figure range.  Below an income level, SS retirement is not taxed.

[guido911]

Guido, you and the rest of the under-100 employee set employs a grand total of 20 million people, or about a fifth of all employees, despite being over 60% of all businesses with payroll. It's an important contribution, and it would be nice to grow it. However, that's not really where the jobs are, in the main.

I'd love to see capital gains (aside perhaps on one's primary residence) treated as normal income and otherwise fix the distribution of taxation. It's not right that you pay a higher percentage of your income in tax than CEOs making tens of millions or more a year, just as it wouldn't be right for someone making $20,000 a year to pay as high of a percentage as you do.

I cannot take advantage of any tax benefit as a result of those several people I employ. Nor do I care. The folks that work for me get to take advantage of my culinary school education in the free very high end lunches and a get Christmas bonus. I deeply appreciate those who come into my home and work.  But please, tax me for my gratitude because that will only encourage me to do more to express my appreciation.

[Teatownclown]

I cannot take advantage of any tax benefit as a result of those several people I employ. Nor do I care. The folks that work for me get to take advantage of my culinary school education in the free very high end lunches and a get Christmas bonus. I deeply appreciate those who come into my home and work.  But please, tax me for my gratitude because that will only encourage me to do more to express my appreciation.

Very high end lunches? Christmas bonus! Slave labor? Making a mockery of your own gratitude?

You might not take advantage of any tax bennies, but you sure do take advantage of our time!

[Red Arrow]

Edited to add: Here's something from 2009 from the DC local government which lists, as best as they can calculate, the state/local tax burden for families of three residing in the largest cities of all 50 states, for incomes between $25,000 and $150,000:

http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/09STUDY.pdf

The interesting part, presuming the methodology ends up looking OK is this; I'm only pulling out Oklahoma:

$25,000: 10.9%
$50,000: 8.2%
$75,000: 8.2%
$100,000: 8.6%
$150,000: 7.8%

That seems somewhat off to me. I'd like to find a source that includes higher income levels, just for kicks.

Sales tax will do that when things like groceries are taxed.  I have previously noted that when we lived in PA, groceries, clothing, and prescription drugs were not subject to sales tax which was 6% in 1971.  I have not kept up with current policy.  I could support a revenue neutral change in sales tax policy to exempt certain necessities.  Necessities do not include a wide screen television.

[guido911]

Very high end lunches? Christmas bonus! Slave labor? Making a mockery of your own gratitude?

You might not take advantage of any tax bennies, but you sure do take advantage of our time!

F you. I pay all my employees and contractors more than what they bid or ask for you sexstain as tax consequences are irrelevant. The unexpected thankfulness makes me feel good. As for you, as a damned inspired doosh water, get bent.

[nathanm]

I have no interest in supporting the cost of housing in California or any other place with crazy housing costs. Those people need to get their costs in order.

I know you and I depart ways on this but it doesn't bother me that payroll taxes are a much higher percentage of people's income whose income is below the cutoff level.  Social Security will be a significant portion, maybe all, of the retirement income for many lower income groups.  Payroll tax is just a way of forcing them to pay for the ability to retire at all.  Benefits are based on contributions, not your AGI.  I do not see that as unfair at all.  Bill Gates and Warren Buffet won't be getting any more Social Security benefits than Guido, except that when Guido is old enough there may not be enough money for anyone.   Social Security retirement income can be taxed if you have enough other income.  Means testing is already here.  The levels are in the lower 5 figure range.  Below an income level, SS retirement is not taxed.

If we were still living in 1978 and the payroll tax actually funded Social Security and Medicare, rather than general government operations (or if Gore had been elected and gotten his "lock box"), I wouldn't necessarily disagree with your position on that. However, for the past 30 years, payroll tax has been used to provide budget room for income tax cuts. It is, at this point, just an income tax by a different name and only applied to wage income below a certain threshold.

That deal is precisely the reason why we have a supposed problem with Social Security and Medicare. Had we not spent the money we were supposedly funding SS and Medicare with, we'd have a nice sovereign wealth fund to pay all those retirement benefits with, and it could have been earning money in the market all these years. While the last 10 years of capital gains would have been wiped out in the housing crash, the previous 20 would have more than made up for it, relative to holding nonconvertible Treasury IOUs. Now that it's time for those who reaped the benefits of prior tax cuts to repay, they're all saying we're tapped out. (yes, lower incomes also got cuts, but they were much lower in both the rate change and the dollar amounts.

FWIW, Philadelphia is now more regressive than Oklahoma City. I don't know if they instituted a grocery tax or not.

Oh, I guess I'm an employer, too. I thought you were against counting household help as employees in answer to the "how many people have you put to work?" question, guido. I wouldn't mind a tax deduction for that money, but it wouldn't be terribly fair, not being a business expense.

[Teatownclown]

F you. I pay all my employees and contractors more than what they bid or ask for you sexstain as tax consequences are irrelevant. The unexpected thankfulness makes me feel good. As for you, as a damned inspired doosh water, get bent.

LOL! Sue me for intentional infliction of emotional distress. ROTFLMFAO!

[guido911]

LOL! Sue me for intentional infliction of emotional distress. ROTFLMFAO!

F off.

[Red Arrow]

If we were still living in 1978 and the payroll tax actually funded Social Security and Medicare, rather than general government operations (or if Gore had been elected and gotten his "lock box"), I wouldn't necessarily disagree with your position on that. However, for the past 30 years, payroll tax has been used to provide budget room for income tax cuts. It is, at this point, just an income tax by a different name and only applied to wage income below a certain threshold.

Those lower income payroll tax payers will still get benefits as a greater portion of their retirement than the upper income levels.  I agree that SS income should not have been used for the general fund.

FWIW, Philadelphia is now more regressive than Oklahoma City. I don't know if they instituted a grocery tax or not.

Philadelphia had (I believe still has) a city income tax.  I don't know how it is structured.  I remember when my dad's office got moved from downtown Philadelphia to a maintenance facility in another county, he considered it a pay raise because he didn't have to pay the city tax anymore.  We didn't live in Phila city limits. When his office got moved again to King of Prussia, he still didn't have to pay city income tax.  Again, I don't know current conditions.  That was 40 years ago.  Family and friends have scattered so I haven't even visited in over 20 years.


Edit: found this
http://www.phila.gov/revenue/Tax_Types_and_Codes.html