After the unending media coverage of the fiscal cliff throughout December 2012, it was a relief to everyone when a last-minute compromise was reached. In particular, the most reported-on compromise had to do with the extension of the Bush-era tax cuts. Those cuts will remain in place permanently for any individual making less than $400,000 per year, and for couples earning less than $450,000. Those fortunate few who make more than that amount will see their rates rise from 35% to 39.6%.
The news about this particular tax rate increase got me wondering: what professions can expect to earn that kind of money? Since I don’t personally know anyone bringing home $400,000 per year, I decided to find out what kind of jobs command such high salaries:
1. The President
Perhaps the most famous $400,000 per year job is the leader of the free world. The office of president not only pays a $400,000 annual salary, but also provides the president with a $50,000 annual expense account, a $100,000 nontaxable travel account, and a $19,000 entertainment account.
There are some obvious downsides to this particular career, however. Besides being very difficult to get, the job is highly stressful, and advancement post-office can be considered somewhat iffy. And, of course, you can’t expect regular raises: the last salary increase for the commander-in-chief (from $200,000 to the current rate) was in 2001. Prior to that, the previous raise (from $100,000) occurred in 1969.
2. Surgeons and specialists
Even a local general practitioner can expect to pull in over $100,000 per year, but the real money in medicine is reserved for those who specialize. Anesthesiologists, heart surgeons, and brain surgeons can all expect to make up to $400,000 per year at the height of their career. Plastic surgeons can make up to twice that amount.
3. CEOs
The median salary of a Chief Executive Officer is over $700,000. These directors are in charge of both short- and long-term profitability for their companies. CEOs generally have to know the industry backwards and forwards (although there are certainly plenty of counter-examples), and need to have worked their way up over many years.
4. Wall Street Bankers and Lawyers
If you work in either finance or finance law, the place to go for fat paychecks is Wall Street. According to an October 2012 report, “the average salary of financial industry employees in New York City rose to $362,950 in 2011.” While that still falls short of the mark required for the higher tax bracket, it’s important to remember that this figure represents the average (meaning some people are making more) and that there have almost certainly been raises in the past year and a half.
The Top Percent of the Top Percent
These high-income earners are really rare. Consider the fact that most articles listing the highest paying jobs in America don’t even include any professions with median salaries of $400,000. Those individuals making $400,000 per year are in the top one percent of the top one percent — and often, they’re also public figures.
Thankfully, even though individuals in this bracket are few and far between, the government estimates that raising the tax rate on this small group will raise about $600 billion in new revenues over the next decade.
Not bad for a group that small.
What other professions that earn annual incomes of $400,000?
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roads and bridges are paid with gasoline taxes, not FIT
Do you think the Columbia River Crossing will be built without FIT?
http://www.columbiarivercrossing.org/ProjectInformation/CostsAndFunding/Funding.aspx
And it is part of the interstate system. They are talking about huge tolls to pay for the bridge. Tolls like those for Walt Whitman bridge from Philadelphia to New Jersey are unheard of around here. It will change a lot of driving habits and where people will work. Still tolls are the only fair way to fund the CRC but it still would not be build without the gov and its FIT.
Obama has already cut spending? Excuse me? Do you mean the sequestration? Because that is the only spending cut that I am aware of…and it was not his choice, that’s for sure (but of course it was his idea in the first place).
Any other “cutting” he did was partneredwith greater new spending making the net results: MORE SPENDING!
You understand, Angry Rick, that your beloved, hypocritical Republican presidents always spend more than their Democratic counterparts? Why don’t you look up the Bush’s spending. And Reagan’s!
I like Rick and he’s not angry. You left leaning people just don’t like to hear the truth.
By the way, I seem to recall hearing even on CNN, MSNBC, CNBC and reading in the NYTimes etc.. (IE all liberal clones) that Obama, the Chosen One, was increased the deficit (by spending by the way John) more and more rapidly then any present in history. So your statment about spending more by Republicans is refuted by the action of your own belowed Dems Obama, Pelosi and Reid.
Be angry at them, not a contributors to this country like Rick who are supporting themselves, their families and lots of other people too.
Spending has always been, as long as our Republic has been in existence, the responsibility of Congress and only congress. Presidents have no say in spending.
Presidents actually do have some say in the matter Mike. Yes, budgets originate in the house, are then approved by the senate, and finally signed by the president, but he also can choose to veto, and some have. Recall the go round between President Clinton and Speaker Gingrich over spending cuts that delayed budget approval, and almost shut down the government in the mid 90′s. Clinton forced Gingrich to reconsider and eliminate what he believed to be the most egregious cuts. Budgets are a collaborative effort with the president having the bully pulpit to exert political pressure on congress.
Incorrect. In fairly recent times, Republican Presidents Bush (senior) and even Nixon left the country in pretty good shape. Regan and Bush (junior) ruined our debt. [Bush junior LIED to us about WMD in Iraq ultimately costing us 5 Trillion]. Obama has spent far less than any prior President. View following clip which I’ll admit is bit outdated here in May 2013 . . . . http://www.washingtonpost.com/business/economy/adding-to-the-deficit-bush-vs-obama/2012/01/31/gIQAQ0kFgQ_graphic.html
P.S. Let’s NOT forget, Obama is first President to INclude cost of war into the budget which distorts spending. Eh? Previously, cost of war was paid “outside” the budget.
NerdHero, the budget deficit (or surplus) fluctuates as spending and tax revenues change. The current budget was developed in 2008 during the administration of GWB. I have no idea what Rick and John are arguing about. You might be referring to the national debt which is not usually called a deficit. The national debt has increased because of an economic recession and two expensive wars. Please stay away from children as you will corrupt the youth of the country with idelogical baseless arguments.
You are correct but Obama’s deficit spending regardless of who you care it to is in a league by itself…period.
Not really Willy. GW Bush holds the record for his 2008-09 budget deficit. Obama’s next three budgets were lower. Because of the Great Recession, neither man can be villanised for their deficits, although Bush can be blamed for contributing to its cause.
The President has not had a budget since he took office.
It’s like playing whack-a-mole. Since Bush was only around for 4 months of his emergency financing to stop the banks from melting down from their Democrat-sponsored Loans for Deadbeats program. It was only supposed to be a one-time fix. Similar to the $500b that Reagan set up to stop the S&L crisis. Just faster. What it wasn’t supposed to be was a permanent 25% increase in federal spending. Which is what Obama turned it into and then blamed Bush for causing.
Bush’s total deficit in-office was only around $2t for 8 years. So Obama is piling on the deficit at 4x the rate of Bush.
That’s because you have to raise spending after the government gets done with all these new ways to regulate environmental laws, introducing more laws on anything that irritates pro business and growth prospects.
Yeah go ahead and bring Reagan into this, the most common and misunderstood argument against Obama spending. He raised the deficit by 500 billion, yes thats a lot. How about Obama’s whopping 6-7 trillion? just in 4 ½ years. Seems to outweigh Reagan by just a little bit. And yeah you are right, bush did spend a decent amount, still not even close to your savior.
John, you do realize that it’s Congress who authorizes spending and not the President? Under both Reagan and Bush Sr. the Congress was controlled by Democrats. Nice try.
Wob… everyone always gets that wrong. They blame President’s for spending problems when all the President can do is submit a budget and sign a budget. By the time a President get’s it back it barely resembles what they asked for.
The current President has never submitted a budget that even his own party would back. We have a spending problem precisely because this president thinks he can spend his way to prosperity. Margaret Thatcher got it right when she said “The problem with Socialism is that sooner or later, you run out of other people’s money.”
The irresponsible Congresses are to blame for all federal spending, not the President. The Constitution mandates that no money be taken from the Treasury except by Congress. “The President proposes and Congress disposes”. Reagan and Bush were stuck with Democrat majorities in Congress. FDR was the first President ever to spend billions and Obama the first to spend trillions, if you want to play the “blame the President for spending” game. Actually money spent during Reagan’s and Bush’s presidencies was to strengthen our military forces that won the Cold War. Now more tax money isusedto buy votes.
The president must sign the final budget, and meanwhile use his bully pulpit to force politically prudent options on congress. Reagan proposed tax cuts which benefited the wealthy to a much greater extent than the middle class, but by using his pulpit, he made it politically difficult for Democrats to vote against such proposals. He then negotiated the entire budget with Speaker Tip O’Neil. Bush I proposed tax increases to a Democratic congress. No one ever believed that he was a passive victim of congressional action, and as a result, he lost the support his neo-con (“no-more-taxes!”) base who held him accountable, and he lost the ’92 election.
Clinton had six years of a Republican congress, but was able to maintain the tax increase on the top 1.2% of earners passed in 1993 despite the fact that every Republican opposed the increase, and he was able to limit cuts to many important programs and services that the Republican congress passed by refusing to sign the final budgets, almost causing the complete shut down of government. Gingrich and the Republicans backed down when the polls indicated that many more of the voting public would blame them rather than the president.
The tax cuts in budgets of the first three years of the Bush administration aren’t called “Republican Congressional Tax Cuts”. Credit and the blame rests squarely on the president, as does the tremendous deficits caused by such cuts and his spending increases. Did congress go along? Certainly, it’s a collaborative effort. However, the president always has more political leverage in the process.
So, put away the constitutional language of your high school civics or history class and look at the pragmatic way the process works. To say that the president isn’t to be credited or blamed for deficit increases or reductions is simply misinformation or maybe wishful thinking. He is primary to the process.
Oh, and Eugene, Obama wasn’t “the first to spend trillions”, nor did he propose or pass the largest budget. That honor goes to the president who, in October 2008, signed the 2008-2009 budget – GW Bush. Obama gets credit for stopping the acceleration in the budget deficits of the previous administration. Only when substantial growth returns can we reduce the deficit (cut spending) without harming the economy.
Since Nixon, the Republican Presidents have spent more Tax payer dollars then the Democratic Presidents.
Republicans are not conservatives. Democrats are not conservatives.
Libertarian are indeed more conservative then both those parties.
The Truth hurts, then it sets you free………
Your point that Republican presidents spend more than Democratic presidents has merit. As evidence, ignore the reported budget deficits since they can be manipulated, and look at the increase in national debt by presidential term instead.
From Truman to Carter the national debt fluctuated up and down (mostly down) by not more than 7% in any presidents term. Using the beginning and ending debt, adjusted for inflation, for each term, we get:
1977-81……….Carter……………-6.6%?
1981-85……….Reagan…………+57%?
1985-89……….Reagan…………+41%?
1989-93……….BushI…………..+38%?
1993-97……….Clinton…………+16%?
1997-2001…….Clinton………..-3.2%?
2001-05…….…Bush II……….+22%?
2005-09……….Bush II………+42%
2009-13……….Obama……….+55%
Both Reagan and Obama were faced with recessions during their first terms and both knew that austerity rather than stimulus would deepen and prolong the recessions and unemployment. Unfortunately, the Great Recession needed much more stimulus than originally anticipated, but by the time the depth of it was discovered, the Republicans dug in and obstructed any more spending hoping Obama would be blamed for the economy and lose the 2012 election.
An increase of 57% of a small deficit, which Reagan had is much less than an increase of a 55% increase to the deficit of Obama, which is astronomical. You cannot use percentages to show spending when the decifit continues to grow. You have to use the actual dollar amount. Obama increased the national debt by $5.073 trillion. Reagan’s first term did not even result in an increase of the natioanl debt by $200 billion.
Dan – First, raw dollar amounts are meaningless. Inflation, population growth, and productivity must also be factored in to the equasion to be meaningful. If you don’t like percentage increases, perhaps you can search for national debt relative to GDP. There are many sites including this one, > http://www.lafn.org/gvdc/Natl_Debt_Chart.html , which will also give you a similar picture.
Second, Reagan set in motion the ideology of “starve the beast” which cut loose fiscal responsibility from the Republican party and set the stage for the tremendous national debt and crisis we now face. “Starve the beast” was announced by Reagan soon after assuming office as a way to cut revenue and even increase spending to create a debt crisis so that the United States would have no other choice but to reduce the size of government. To achieve that goal, these neocons were ready to sacrifice the economy and popular middle class programs that Americans hold dearly, such as Social Security and Medicare, not to mention those for the poor such as Medicaid. As Dick Cheney said, “Reagan proved deficits don’t matter”. I guess they only matter when a Democrat is president.
Finally the actual point being made is that, unless they want to exact much more pain on businesses and the economy, or increase suffering by increasing unemployment, presidents, whether Reagan or Obama, must pass stimulus measures to encourage growth before addressing the deficit. Both did, as did W. The fact that Obama has increased the national debt at all is simply bullshit. He has no choice if being responsible is part of his job description. Did you notice how fast even the Republicans backed away from the fiscal cliff which called for spending cuts everyone knew would tank the economy?
I find the hubris and hypocracy of you who should know better to be staggering, and serves no purpose in finding solutions to the very difficult problems we face. Look at the facts, not as you want them to be, but as they really are.
The point I was making with the revelation of debt increases was that past Republican presidents haven’t even pretended to be fiscally conservative, while the past Democratic presidents have achieved balanced budgets and reduced the national debt. If you think it’s unfair to compare Reagan’s percentage increase with that of Obama’s because the national debt was so much greater in 2009 than in 1981, then just ask yourself how it happened and who is responsible for that tremendous debt.
Any analysis of spending without looking at the Congress/Senate is moot.
Clinton gets credit for low spending even though it was Gingrich and the Republicans who developed the budget. They put extreme pressure on
Clinton to sign, and eventually, after the US government closed down a couple of times he reluctantly signed. Reagan fought the Democrat Congress/Senate who developed his budgets, but eventually had to sign. Reagan wanted so much to lower spending that he pursued the line-item veto, but the Supreme Court said “no”. Bush called himself a conservative,
but frustrated his conservative base to no end by signing anything the liberal Democrats and a group of liberal Republicans would get together and put in front of him. He forgot he had a veto pen. It all is an expression of who is in Congress and how much they respect that they are
putting contracts on the heads of American taxpayers, much like during the days of slavery–a man could live beyond his means by buying a slave, then “hiring out” the slave to those he owed money to. Our government is living beyond its means; we and our children are going to pay it off at some point when it comes due, and we will no longer have a “tax-freedom day” each year, only the drudgery of always working for the debt of the government, like in England and other “workers paradise” countries.
Your understanding of history is dreadful Rebecca. Clinton should get credit for spending cuts which were hammered out with Newt Gingrich, but more importantly, much credit for greatly reducing the deficit without any cooperation from Republicans – just like now.
When Bill Clinton was elected president, the government was hemorrhaging red ink at a rate of almost $300 billion a year, and forecasters saw little improvement in the offing. Clinton proposed the Deficit Reduction Act of 1993 which barely passed by a single vote in the Senate and by two in the House. NO Republican supported the measure.
Here’s what conservative politicians said about the 1993 deficit reduction legislation that raised taxes on the top 1.2% of our wealthiest citizens. You’ll find it very familiar:
“Clearly, this is a job-killer in the short-run. The impact on job creation is going to be devastating.” —Rep. Dick Armey, (Republican, Texas)
“The tax increase will…lead to a recession…and will actually increase the deficit.” —Rep. Newt Gingrich (Republican, Georgia)
“I will make you this bet. I am willing to risk the mortgage on it…the deficit will be up; unemployment will be up; in my judgment, inflation will be up.” —Sen. Robert Packwood (Republican, Oregon)
“The deficit four years from today will be higher than it is today, not lower.” —Sen. Phil Gramm (Republican, Texas)
Nowhere did Republicans ever describe the plan as a $433 billion, five-year deficit-reduction package as it was intended.
Four years later, the conservative Wall Street Journal says, “The tax increases in the 1993 deficit-reduction package that Mr. Clinton pushed through get credit. And, to a lesser extent, so do the spending cuts engineered by the Republican Congress… ” A year later the WSJ quotes, “The basic fact is that people looked at the 1993 budget agreement and said there’d be a recession, the deficit would go way up and that tax collections would go way down,” says Mr. Summers. “What has happened is there has been a boom, the deficit has gone way down and tax collections have gone way up.”
Newt Gingrich and the Republican Congress fought the president on spending cuts. The president won. After Clinton vetoed numerous Republican spending bills, Republicans in Congress twice refused to pass temporary spending authorizations, forcing the federal government to partially shut down because agencies had no budget on which to operate. It was a game of chicken and Gingrich finally blinked and gave in. In April 1996, Clinton and Congress agreed on a budget which included some of the spending cuts that the Republicans supported (decreasing the cost of cultural, labor, and housing programs) but also preserved many programs that Clinton wanted, including educational and environmental ones.
By the end of the Clinton presidency, the numbers were uniformly impressive. Besides the record-high surpluses and the record-low poverty rates, the economy could boast the longest economic expansion in history; the lowest unemployment since the early 1970s; and the lowest poverty rates for single mothers, black Americans, and the aged.
Tax payer dollars aren’t the only concern though. How much money have we borrowed from China and Russia under Obama’s administration? I don’t remember Bush or Reagan putting us 17 trillion in debt. I never feared for my future when they were in office.
Reagan and Bush practiced “Starve the Beast” to drive debt and spending to record levels, causing both a debt crisis and a recession by the time Obama was elected. Until growth returns, debt reduction must wait. Without sustained growth, any austerity measures will send us back into recession (witness Greece, Portugal, and Spain). Look at Alaxkid’s post above to see which presidents brought us here.
I guess you could look at Clinton as “he won” if you want. That’s a judgement looking back on history that I don’t believe because Clinton’s pattern, with the Democrats in power in both houses, had been to spend so much it incensed the American people. Brought to power by that anger, Gingrich reined that pattern in a little–enough that the economy expanded and produced value. (People will always work hard if they can keep the money they earn–thereby not living the life of slaves.)
Therefore, it was the American people who won when Clinton finally signed the legislation produced by the Contract with America.
If you want to look at it that “Clinton won,” I would agree in some respects, because of the complicity of the Democrat media at the time that censored the full story–because that was before the development of reporters free to provide the whole story. He won personally, and is still being propped up by them–they just affectionately called him “Slick Willy” at that time, and now never discuss the lies that flow from the Democrat Party. Now they just change the subject and call anyone who dissents, a “hater”.
The American people lost with the repeal of the Banking Act of 1933, otherwise known as the Glass-Steagall Act, accomplished by the Democrats, during Clinton’s first 2 years, along with the expansion of Fannie and Freddie accomplished by the Democrats, and young lawyer Obama and his organization ACORN suing banks to force them to issue loans they knew couldn’t be repaid, kicking into gear policies and agencies that eventually led to the banking and housing collapse in the last days before the election of ’08. (What is the coincidence that the collapse happened right then? It was convenient that Barney Frank issued placating words over and over about “everything is just fine–nothing is amiss in Freddie and Fannie” meanwhile blocking every attempt to investigate, something Bush, & even McCain pushed to do over and over, and then the collapse was suddenly upon our nation, just before the election. Their blame game of “Bush caused the collapse” has been loud, and continual rhetoric. Is that the only way the Democrats can “win”? ) I wish so much the Democrats would believe they “win” when the people’s bank accounts are secure, the laws support small business and large, and people can count on government not interfering in their lives as long as they live ethically with their fellow man, not stealing, lying, coveting, murdering, providing rest to their workers/neighbors, and other ideas of the 10 commandments.
When God is the One who guides our footsteps we have wisdom as individuals how to live. The Founders pointed us to Jesus Christ as
the model and king of our Republic–they cried, “We have no king but Jesus!”, depending on His Providence and shaping our laws by His standards–that was the beginning of “the American experiment.”
They counseled that “only a moral and righteous people can self-govern” and also, (paraphrased) that, if people don’t practice self-control that others will forge their chains, that if a people forget
God, they will fail to have a nation. Our founders were believers
that mankind will always choose to live for themselves without
the life of Christ guiding and motivating individuals. Now that the Democrat Party voted to take God out of their platform during the election of 2012, as citizens we are beginning to see that Democrats
want to be the ultimate authority, unsubmitted to our only king,
the authority of the universe, Jesus Christ.
The Democrat media makes no comment on the Federal government “public-private” entities like Fannie-Freddy having greatly lined the pockets of Democrat politicians; each Democrat that has been in leadership in that entity since the expansion took about $90 million of taxpayer money as a personal “bonus”. Why isn’t that talked about? The new legislation to “rein in” the corruption didn’t affect the Fannie Freddie problem at all…I personally think the Senate has not passed a budget for four years because they are trying to hide where the money is going, and that a lot of taxpayer money is still disappearing through Fannie-Freddie. When will we get people in the Congress/Senate in the majority, who will finally pry the lid off of that hole? Meanwhile individual politicians are getting insanely rich personally–again not discussed by the Democrat media.
You mentioned the “Deficit reduction package of 1993″ This name of the package is much like “The Affordable Care Act” which is neither about affordable nor care. Naming pieces of legislation the opposite of what they actually do fools voters over and over. Many times the politicians haven’t even read the bill; right now leadership in the Congress/Senate puts 100s or 1000s of pages of authorization and spending in front of legislators and 10 minutes before a vote is called. Negotiations are done privately without citizens getting to hear the “backroom” deals or follow any hearings that shed light on the “deal”. This is no way for a free Republic to function.
When Clinton was elected in 1992 he had two years of a free hand with a compliant Democrat Congress/Senate. There were so many new spending ideas passed that the American people were distressed, they were revulsed by Hillary’s attempt to take over health care, along with the scandals the Clintons brought to the WH, so that the people had a revolution in 1994 and supported the Republican’s Contract with America–bringing Gingrich and a Republican conservative majority into power to stay the hand of the Democrats, much like has happened with current history. Among the Republicans was a new conservative movement that wanted to cut whatever programs that were functioning as bloated, ineffective bureaucratic nightmares, but others wanted to just reduce the spending a little where possible. However, for all, the “$400.00 hammer” Reagan’s administration had brought to light, was a poignant reminder of what happens when government spends money that isn’t theirs. (Third party money spent by government is seldom examined closely for what’s happening with it because of the politics). Heroes of the American people look at the legislation, ask questions, and work to keep the money our life work earns, in our pockets. Free people get to choose what happens with their own money–instead of handing it over to politicians to decide how to spend it. Each person working at their own trade provides the value that builds a nation. It is free businessmen who built the infrastructure of our lives that we take for granted. A free individual decides to support charitable efforts in their own town. A free individual doesn’t choose to “donate” tanks and bombers to the new terrorist Muslim Brotherhood rulers of Egypt, strengthening a faction of Islam that was formed to create chaos in the western world. A free individual can choose to follow in the way of Jesus Christ and be his hands and help to other individuals. A free individual respects how much work it takes to create order and sanity in a neighborhood. An individual can admit to himself and others if he has been motivated by unethical urges that overwhelmed the best thing that could have been done.
Government, can do none of these things well. George Washington
famously warned us, “Government is not reason, it is not eloquent;
it is force…and like fire is a dangerous servant, and a fearful master.”
So tiresome. Every lefty wants to call Austerity lack of spending. Austerity also includes tax increases. Stimulus includes tax cuts. GDP growth AFTER recession proves which ones work and which ones don’t. History is so clear on this. Focusing solely on the percentage increase in debt ignores the finish line: the ratio of Debt to GDP. Reagan started slow and finished fast. Obama started fast, and GDP has grown almost not at all. See Europe, 2013, for what works and what doesn’t.
In 3 years Obama “spent” more than the combined spending by all the previous presidents.. We are broke, insolvent and close to complete collapse. Only the Fed keeping the money printing presses working around the clock enables the federal government to keep spending and borrowing 46% of the total money spent We have unfunded federal obligations of more than $123 trillion and can look forward to hyperinflaion. Worse still Obama ignores the Constitution, has perverted a republican government into Socialism and does nothing to raise GDP. He demands upping minimum wage. That kills jobs for millions for sure.
And exactly what would you have done to reduce those Obama deficits Eugene? Cut spending? The CBO estimated that the current sequester cuts of @$80 billion will reduce the nation’s GDP by 0.6% and, as you must know, that’s just a drop in the deficit bucket. So, O.K. Mr. Economist, how does Obama reduce the budget deficit and not plunge the economy back into recession?
You’ve been drinking the Rush Limbaugh/Paul Ryan Kool-aid again, haven’t you.
Sorry, that’s nonsense. You so badly want to believe that the President is responsible for things like spending, but he isn’t. You are. You are responsible. Congress represents you, not the President. Congress has the power to authorize all spending and to levy taxes. The President has no such authority, in fact, the President is REQUIRED BY LAW to spend whatever Congress orders him to. You just don’t like him. Not liking him isn’t a valid position to have.
I need to speak with the 100,000,000 Americans who voted in the last presidential election to point out that the President is responsibe for nothing, has no power, has no influence, has no platform, has not access to world wide media, and I guess I missed the article where the power of veto was stripped from him.
Based upon your points Eric, I see no reason to even have a president.
Oh, and I guess all those Presidential executive orders, and rules and regulations coming out of his (controlled) agencies were just a series of bad dreams.
I seem to recall a presdient saying….the buck stops here. Obivously not in the case of our teflon president, who not only takes no responsibility but who is even quicker to blame a republican, a conservative, a religious person or group or especially those mean old Rich People.
The President is needed to execute the laws passed by you (Congress). Period. The people have no authority to enforce the laws they pass…hence separation of powers. So, which is it? Do you want a President who does everything, or is extremely limited? Don’t get grumpy about the letter of the law. The first 3 articles of the Constitution clearly illustrate what each component of the Federal government can and cannot do. Congress, actually, in the big scheme of things, has pretty much all the power because they have the power of the purse.
The President is required to ASK for money to fund a budget PROPOSAL every year (granted, a new one hasn’t been submitted yet), but that’s all it is…a proposal. Congress has absolute authority in this matter. They can approve or disapprove it, in either case, the President has no choice but to comply.
As for executive orders, he’s the chief executive. His office has virtually complete and total autonomy in the way it interprets/enforces laws. Congress can’t tell the President how to do his job, because it’s a separate entity. Do we really need to go over how a republican system works???
And the President isn’t the only one who blames Republicans…pretty much everyone else does. Unless you’ve been in a coma for the past 5 years, the GOP has made no attempt to hide their contempt for the President or their desire to, quite literally, burn the whole house down to make sure he doesn’t get anything he wants. They have made it ABUNDANTLY CLEAR what their objectives are…to not cooperate or negotiate until they get another Republican in the White House. The Congressional Democrats are equally as worthless. Personally, Obama has been the only adult in Washington relatively speaking.
So the sequester sucks…and because Obama suggested it, it’s his fault. But I thought the GOP wanted spending cuts? Oh, right, they do…just not for the military (in fact, they want to increase spending on that). So ridiculous. RIDICULOUS. It’s a Catch-22 for Obama, really. He can basically NEVER please conservatives. The only way conservatives will be happy is when he’s no longer in the White House. That’s unacceptable. Grow up.
I actually think Social Security should be reformed. If you’re retired, it needs to be there as a safety net. What ISN’T necessary is SSDI, for example. That’s what workers compensation should be for…but people don’t like using that because the companies that fund that program watch them like hawks to ensure they aren’t defrauding it. People don’t like being watched. Getting SSDI because you have carpel tunnel or “depression” shouldn’t even be an available option to anyone. But that’s my opinion, but if you are retired, you are ENTITLED TO IT. Believe it or not, I, like the majority of Americans, think the government has a responsibility to us beyond providing a military.
Oh, and what about the rich? You mean the same rich people who, over the past 2 decades, have seen their wealth nearly triple (on average)? You mean THEM? I have news for you, friend, when people who make $10-15 million per year (like Mitt Romney) only pay 14% in taxes back to the government because their income was derived from capital gains and not a paycheck they EARNED then that is unfair. So yes, the rich should, and ultimately WILL, pay more. Much more. CEOs make 400% that of their average employees, but pay HALF the tax liability, then that’s NOT ACCEPTABLE. The rich people of this country should, instead of whining like babies, show some solidarity. The attitude of the 1% is disgusting. No loyalty to anyone but themselves. There was a time when the super rich gave something back to society instead of taking everything from it.
Eric:
You have just stepped into it in my opinion. Nobody disagrees with your comments about the super rich. Whether it is CEOs, Mitt Romney or whoever might be included based on the facts. But when you end with the following statement you blow it:
“The attitude of the 1% is disgusting. No loyalty to anyone but themselves. There was a time when the super rich gave something back to society instead of taking everything from it.”
The 1% starts at $370K per year according to recent IRS data. The super rich in my opinion, starts at probably $2(?) Million per year – and at such a level sustained over multiple years by the way.
The 1% label is clearly a political ploy from the last election that is easy for populists, such as yourself, to latch on to. But in reality the super rich start at a much higher level than that and those at the $400K level , as defined by the original topic, have taken strong exception, over and over and over, in these posts to being included in diatribes about CEOs and Mitt Romney.
This kind of input is why a lot of people don’t really pay attention and tune you and your like minded posters out. If You want a real discussion, then be fair – rants about Romney’s 14% than translated into a targeting of the 1% just isn’t fair and is far from accurate or justified.
By targeting people making $370K and up, populists have made it very difficult to have a real interchange with conservatives.
Thanks Jack. Well stated. The people that Eric and others complain about represent .1% (that one tenth of one percent) of the taxpaying population, maybe even a smaller group. Eric and his friends think that every person who is the “CEO, Presdient or chairman” of any company or business makes the same as their counterpart at Disney Microsoft or Apple.
Eric, do yourself a favor and educate yourself with facts from the IRS, not rants from the left leaners here, on TV and in DC.
http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012
You have a point about the super rich being very different than the rest of the 1%. However, I don’t see too many of you separating yourselves to condemn Romney’s 14% effective tax rate or indeed, any of the other benefits of the super rich at our expense. Here’s a great little video about who now controls our legislature and why none of you really count to your senators and representatives. These are the super rich and they’re the .05%.
http://www.nationalmemo.com/american-democracy-is-a-corruption-how-05-percent-of-our-population-have-bent-our-republic-into-an-oligarchy/
PS: Don’t tune Eric out Jack. He has some very valid points also which agree with those of many if not most Americans.
And if Eric and Man of Reason snuck into the homes of the super rich over night and stole away with ALL THEIR WEALTH, how would it compare with the amount of the deficiet created by our Presdient in 5 short years????? Drops of water into the Pacific Ocean.
Here’s a thought for you. Bottom 50% of Taxpayers have AGI of about 1 Trillion a year. Have them pay the same avg of Federal Income Tax as the top 50%, about 14%. Now you are are talking! $140 Billion a year, or in Obama’s terms, $1.4 Trillion dollars towards the deficit or spending! Instead all you want to talk about are 347 men and women at the top of all income earners, 47 companies with company jets, and how they are not paying their fair share. (along with the rest of us who get caught up in your definition of the “Not paying their fair share Rich People.”)
It should be abundantly obvious in this day and age of catch phrases who “the 1%” refers to. I think part of the reason nothing gets done in this country is because SOME of you choose to take everything literally (yes, I’m positive you guys looked up what the ACTUAL threshold for the top 1% is…you utterly, and hopelessly, miss the point).
The 1% is a euphamism for a broader problem. Wealthy people, per se, aren’t the problem. It’s the way wealth is coveted now that is. As much as you will vehemently deny it, the wealthy are more socialist than the poor. Think about all they are handed for nothing in the form of tax deductions, write-offs, etc… This tax liability doesn’t disappear…it’s still owed to Washington, it just gets passed down the line to someone else. The 1%-ers are the ones who think they are somehow above (or below) their civic responsibility. “1%-ers” are takers. These are Americans in name only. They actually DON’T believe in equality or justice for anyone…unless they somehow directly benefit from it. THOSE are who the 1% are. You guys get so caught up in the numbers that you completely lose focus on the actual issue.
And yes, the behavior and attitude of the rich in this country, in general, is sickening. I’ve never seen people who feel so entitled in my life. I’m certainly not poor, but I don’t think that my success is imperative to sustaining this country. Some people clearly have very high opinions of themselves.
Where does one start listing failed concepts that are proven to not work, but some people still adhere to. Deregulation, for one. Almost no good has come from this. In the short term it works great, in the long term it guarantees oligarchy–examples include the finance/banking industry, the airline industry, the telecommunication industry, and media. Nothing noticiably good to society has come from deregulating everything…it’s great for those who stand to profit from it, but that’s it. In Denmark and Iceland, they threw their rich bankers and financiers in prison for what they did. Not here. Nope. Even after saving them from their own malice and incompetence we celebrate them as “job creators”. This, on it’s own is probably the single most asinine and ludicrous attitude to emerge from the entire financial meltdown saga. These people became even MORE wealthy after ruining everyone else and were rewarded for it…but we shouldn’t punish “success”, right?
The rich are not job creators. Demand and income [relative] equality are, and global statistics pretty much prove it. It’s like the wealthy think their success shouldn’t come with a price. I fail to see how taxing people who earn a lot of money every year more equates to “punishing” them for being successful. And doing so will not de-incentivize innovation or motivation.
By the way, since you want to cite IRS stats, I’ve read them. I’ve also looked at the Federal Reserve and Bureau of Economic and Labor Statistics data. They all point to one trend…the rich get richer, the poor get poorer, and the middle class is joining the poor. You might want to look up another fun statistic from the IRS. In 2008 there were 131 individuals who earned more than 50 million in one year and they had a mean income of I think $89-91 million. In 2009, after the crash, that number fell to 74 individuals, but the mean income INCREASED 5-fold to about $519 million each. These are the wealthiest of the wealthy, but it’s a microcosm of the whole. This is what is happening everywhere across all income levels. Too few people who own all the wealth is POISON for prosperity. If you disagree, then I guess our debate is over.
Eric: Please advise this Tax attorney of who gets the benefit of the following tax deductions, credits and loopholes: Earned income credit, childcare credit, deductions/credits for college tuition and student loan payments, full deductibility of itemized deduction; full deductibility for persoanl exemptions (including for your dependent children) and not being subject to alternative minimum tax? Rich people? NO! but these deductions, credit and Loopholes are available to all others! So tell me, what are the tax loopholes that are only available to these Evil Rich people? Cap Gain rates….sorry….available to all!
And by the way, the Evil Rich people…read on as to who really makes contributions of not ony $$$ but time too. Liberals think that the taxes they pay are their charitable contributions! Love the title of this NYTimes articles….”Bleeding Hearts Tighwads!” Ha Ha
http://www.nytimes.com/2008/12/21/opinion/21kristof.html?_r=1&
Rick, who can afford the services of such a distinguished tax attorney to help them not pay the government what they actually owe? Everyone else? Nope! Just the rich. Everything is relative, dude. Just because it’s TECHNICALLY available to everyone, doesn’t mean everyone is able to benefit from it. Most Americans can’t afford a bloodsucking lawyer to represent their financial interests. But I don’t know who your clientel is. Maybe you’re a lawyer with a big heart who chooses to help all these people who you say are entitled to the same tax benefits as the rich…I doubt it though. After all, if everyone could take advantage of them, you’d be out of a job, I reckon.
I am well aware of the abusers of the tax system on the lower end of the income spectrum. These are the same people who don’t even qualify for paying income taxes, but it sounds like your beef is more with the tax code than who is benefiting from it. If that’s the case, we’re actually in agreement. Everyone SHOULD pay. All income should be taxed…no distinction between “earned” or “investment” incomes. Capital gains are income, tax it as income…not as capital gains. This is unfair and even redundant. If, however, you are somehow implying that the wealthy carry this country, you and I are going to have a problem. They don’t.
Gosh Rick, you sound so bitter, especially for someone who will not be affected by the income tax rate hike to 39.6%.
Oh, and the deficit wasn’t created by Obama. He’s just not been able to close it much since to do so will reduce GDP in this very fragile economy. The $85 billion in sequester cuts are expected to cut .6% of GDP and increase unemployment by 750,000, and the annual deficit is about $1,000,000. So, do the math and stop criticizing the grown-ups.
Oops, I left off 6 zero’s. Make that $1,000,000,000,000.
Eric:
You are about to see me at my sarcastic best, I know of no other way to respond.
First of all I did not miss your “point” as this statement from my response indicates.
“Nobody disagrees with your comments about the super rich. Whether it is CEOs, Mitt Romney, Michael Milkin, Gordon Gecko, or whoever might be included based on the facts. ”
Second, excuse me if I take data at face value. When you say 1 % in the context of your discussion leading up to that point, I admit that my stupidity led me to believe that you really meant 1%. Silly me. I should have known that facts only get in the way of subliminal communication. I stand corrected, and intend to take all numbers thrown around here as euphemisms for some other message. Although I must admit I am not a mind reader. But I will try.
And I guess all these people posting that they are not rich at $400K per year need not worry. You guys don’t really mean them – it is all just a Euphemism. OK guys, not to worry – it is just a euphemism for those people who think “greed is good”! And of course, none of us, from top to bottom, would admit to that!
I do point to the AMT not indexed to inflation as a case of the insidious nature of such government “tax the rich” programs. It would seem that over the ensuing years that one need not be anywhere near rich to be bitten by the AMT.
Of course this country has a case of elephantitis at the high end of the pay scale. And of course something has to be done about it. The key is a rational government design that does not throw the baby out with the bathwater by throttling motivation. I would say though that this is an oxymoron. The government and a rational design?
Anyway, be accurate when you refer to that ultra rich end and we have no problem, at least in that their tax situation needs to part of a comprehensive budget deficit package.
Better yet, as I said previously, maybe the best option is just to tune out.
“However, I don’t see too many of you separating yourselves to condemn Romney’s 14% effective tax rate or indeed, any of the other benefits of the super rich at our expense.”
Why should Romney be condemned? My capital gains and dividends are taxed like like his are. It is talk like this that puts me on the defensive. Now I know how the useless think about me. I will be prepared.
Why can’t the liberals get that it isn’t a zero sum game? Wealth can be created.
A liberals want to do is redistributed it.
I don’t think Rick is bitter at all. I think he speaks from facts and reason and not from envy and jealousy as you do MOR. I applaud his ability to be civil with youOh, and the deficit wasn’t created by Obama. He’s just not been able to close it much since to do so will reduce GDP in this very fragile economy. when you make comments like:
“The deficit wasn’t created by Obama. He’s just not been able to close it much since to do so will reduce GDP in this very fragile economy.”
Not been able to close it much? You obviously just arrived on that asteroid that hit Russia. Your president is breaking his own deficit records monthly, while telling Americans that the trillions in deficit are not a problem, nothing to worry about.
You are sad loser MOR, who even can’t understand simple logic or fact or who is so scarred by envy and jealousy that you can’t see your namesake reason in front of your face.
I understand there is a comet passing by soon. I suggest you hitch a ride.
Rick, PeterN, and you NerdHero, say,
“our teflon president”
“mean old Rich People”
“the Evil Rich people”
”Bleeding Hearts Tighwads!’ Ha Ha”
“Now I know how the useless think about me.”
“not from envy and jealousy as you do MOR”
“You obviously just arrived on that asteroid… who is so scarred by envy and jealousy”
And that’s in just the last few posts. Okay, just call me “crazy” but it sounds a little bitter to me; kinda like that fat guy on talk radio, what’s his name.
The president can veto budgets he doesn’t like. When was the last time a President vetoed a budget? They are all guilty.
This is deteriorating fast.
When Jack quotes the statistics that the 1% starts at $370k and he is mocked, I think this is foolish. Eric, quoting this doesn’t miss the point. Maybe it makes a different point, but a crucial one nonetheless.
If we are REALLY going to have a dialogue about this, then the people making $370k-$1m need to be left out of this discussion that attacks things like expensive tax attorneys, 14% tax rates, Cayman Island accounts and corporate jet tax deductions. I agree that the majority of Americans think that these people could see tax hikes, deductions dropped, or loopholes closed and it wouldn’t affect the economy or their own personal lives. No point going round and round on this one.
The problem is that the proposed legislation and rhetoric continually attacks the people in the $370k-$1m range (in fact, Obama wants to go as low as $200k). This is where our debate should lie.
The reason why just taxing the Romney/CEO type is that is simply doesn’t bring in enough revenue. They have to tax a much larger base of people to really bring in impactful revenue increases.
The other problem is the top 0.1% got everyone elected – including Obama. They can’t attack these people directly for political reasons. They have to put them in a bigger group to reduce the political impact of a direct hit.
Anyway, we could have saved a lot of posts in this thread if we would just differentiate between those people making $500k and the Mitt Romneys of the world. It is a BIG difference.
Well said Peter.
All the posts to which you refer and to which I plead guilty in my participation, sadly show the amount of misinformation that has caused the class warfare mentatility that pervades the thinking of many. I really believe that if people looked for and understood the facts, many of which you stated above, this feud between fellow Americans would go away quickly. I hope it will.
I don’t understand your post Peter, at least the part about Jack being mocked. I went back to read what Eric said afterwards, along with all the others, and saw no mockery of Peter at all, although Man-of Reason used quotes (not by Jack) to explain his use of the word “bitter” referring to the tone of some here. Those phrases were mocking, but it was MOR who was the target, not Jack, yet it was MOR who backed up your contention that the super rich really are different from 95% of the top 1% because they are a political oligarchy who decide who gets elected and thus corrupt democracy. Did you read the link?
While I’m at it, Rick, stop constantly using the trite soundbite, “class warfare”. It makes about as much sense as “war on women”, and “death taxes”. Those are simply propaganda slogans which have no real meaning or place in civil discourse.
Just so you know – I was referring to this:
“It should be abundantly obvious in this day and age of catch phrases who “the 1%” refers to. I think part of the reason nothing gets done in this country is because SOME of you choose to take everything literally (yes, I’m positive you guys looked up what the ACTUAL threshold for the top 1% is…you utterly, and hopelessly, miss the point).
The 1% is a euphamism for a broader problem. “
Eric,
You are very naive. Hopefully young, but naive none the less.
Go to the office of management and budget (http://www.whitehouse.gov/omb/budget/Historicals/), grab the numbers and spend some time looking at them. Take the government outlays, and compare the increases.
What you find might surprise you.
The average percentage increase in government outlays by president:
Reagan : 7.6% per year
Bush Sr : 6.7% per year
Clinton : 3.3% per year
Bush Jr : 6.6% per year
Obama (so far): 4.4% per year
Obama has already cut spending? Excuse me? Do you mean the sequestration? Because that is the only spending cut that I am aware of…and it was not his choice, that’s for sure (but of course it was his idea in the first place).
Any other “cutting” he did was partnered with greater new spending making the net results: MORE SPENDING!
Spending, as a percent of GDP, has decreased every year since 2009.
Actual stats: (spending as a percentage of GDP – from Whitehouse.gov)
2009 25.2
2010 24.1
2011 24.1
2012 24.3
However, these are the four highest years in American history.
We hadn’t been below 20% since the recession of the early 70′s until 1997. Then we stayed below 20% for about 10 years until 2008 when we crept up to 20.8%. Then Obama took us to 25.2%.
Furthermore…. What was the higher spending from 09-12 actually on?
It can be found in two places. First, means-tested entitlement spending increased to about 4% of GDP. From 1992-2008 it averaged about 2.5% of GDP.
Secondly, discretionary spending increased dramatically. Obama spent about 9% of GDP on discretionary spending – split about evenly between defense and non-defense – for his 4 years. Just to compare to prior years, from 1992 to 2008 we averaged about 7% of GDP on discretionary spending.
Good research Peter. I missed 2012. In inflation adjusted numbers, the size of the budget deficit has decreased each year since 2009 as follows:
2009…….$1.413 trillion
2010…….$1.344 trillion
2011……..$1.322 trillion
2012……..$1.128 trillion
Remember also that the 2009 budget year is President Bush’s. It passed prior to and started in October of 2008 and ran through September 2009.
Very true MOR. And by the way, those 4 numbers you just posted showing the deficit declining are also the largest numbers in history even when adjusted for inflation.
It is amazing the number of people who feel that the current system is unfair when they have to pay a considerable amount tax while 47%/49% pay no tax.
These people have no compassion for others. They do not realize the difficult time that many people have in this country.
Sadly, the percentage of low paying jobs in our economy continues to increase with each passing year, so this is a problem that is only going to get worse. So don’t look down on the working poor. The good paying job that you have right now could disappear at any time and you could end up joining their ranks very soon.
The following are 35 statistics about the working poor in America that will blow your mind…
#1 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#2 According to the U.S. Census Bureau, 57 percent of all American children live in a home that is either “poor” or “low income”.
#3 Back in 2007, about 28 percent of all working families were considered to be among “the working poor”. Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
#4 Back in 2007, 21 million U.S. children lived in “working poor” homes. Today, that number is up to 23.5 million.
#5 In Arkansas, Mississippi and New Mexico, more than 40 percent all of working families are considered to be “low income”.
#6 Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
#7 Half of all American workers earn $505 or less per week.
#8 At this point, one out of every four American workers has a job that pays $10 an hour or less.
#9 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
#10 Median household income in the United States has fallen for four consecutive years.
#11 Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.
#12 The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
#13 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
#14 According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
#15 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#16 Low income families spend about 8.6 percent of their incomes on gasoline. Other families spend about 2.1 percent.
#17 In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
#18 According to one survey, 77 percent of all Americans are now living paycheck to paycheck at least part of the time.
#19 Millions of working poor families in America end up taking on debt in a desperate attempt to stay afloat, but before too long they find themselves in a debt trap that they can never escape. According to a recent article in the New York Times, the average debt burden for U.S. households that earn $20,000 a year or less “more than doubled to $26,000 between 2001 and 2010″.
#20 In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.
#21 According to the Economic Policy Institute, the wealthiest one percent of all Americans households on average have 288 times the amount of wealth that the average middle class American family does.
#22 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#23 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
#24 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.
#25 Sadly, the bottom 60 percent of all Americans own just 2.3 percent of all the financial wealth in the United States.
#26 The average CEO now makes approximately 350 times as much as the average American worker makes.
#27 Corporate profits as a percentage of GDP are at an all-time high. Meanwhile, wages as a percentage of GDP are near an all-time low.
#28 Today, 40 percent of all Americans have $500 or less in savings.
#29 The number of families in the United States living on 2 dollars a day or less more than doubled between 1996 and 2011.
#30 The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 47 million today.
#31 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.
#32 More than one out of every four children in the United States is enrolled in the food stamp program.
#33 Incredibly, a higher percentage of children is living in poverty in America today than was the case back in 1975.
#34 If you can believe it, the federal government hands out money to 128 million Americans every single month.
#35 Federal spending on welfare has reached nearly a trillion dollars a year, and it is being projected that it will increase by another 80 percent over the next decade.
There are many conclusions concerning cause and effect that could be applied here. One of course that is implied by this post is that this is a zero sum game and the fact that the rich get richer is the root cause of the poor getting poorer.
Is it not possible that the poor getting poorer just might have something to do with the growth of the nanny state in this country since the 1970s? Is it not just possible that the “compassion” shown by this country has predictably backfired and robbed many of the necessary incentive required to better oneself and thus have become in essence wards of the state? There are many that require help, no doubt at all. There are many others that require a swift kick in the backside.
The US economy is moving up the food chain and away from manufacturing in the 21st century as certainly as it moved away from an agrarian society a hundred years ago. Workers who don’t grow with this will be (and are) being left behind. The state may be “compassionate”, but it has failed to grow and migrate the capabilities of the working class in this country. All the “compassion” in the world will not change the fact that the US has failed in this regard. The decision to upgrade ones abilities is a personal one and unfortunately, the state may have robbed many of us of the incentive to make the correct one.
The upshot of all this is that demanding that the rich pay their “fair share”, while appropriate for the truly really wealthy, will rob many more of the appropriate incentive and just accelerate the downward spiral of all. The problem is the definition of “truly”.
I hate to think of where this spiral will end.
There were studies conducted in Micronesia in the 1950s of robust thriving cultures that deteriorated when a “compassionate” government appeared with those dreaded words – “I am from the government and I am here to help you”.
The truly poor and indigent indeed require a helpful hand from society. Like all other issues described in this post, again, what is the definition of “truly”.
For example, 47 million on food stamps. By law, one cannot have total assets of $2,000 to qualify. This is a program for the “truly” poor. To verify this I would suspect would be a full employment act for government workers. I just wonder how many of our unemployed, with no income, but plenty of assets are using food stamps these days? I understand that everybody needs to eat, but 47 million in this country have less than $2,000 in assets ($3,000 if senior or disabled)?
Again, the ongoing discussion in these posts turns on the definition of the word “truly”. Arguments about the rich and the poor, share and fair share are logical and cogent in most of these posts. However the issue comes down to the word “truly”. Where do these definitions start and end? In many cases, unfortunately it depends on which side of the definition one is coming from.
Many of you will immediately decide that I am completely wrong and lacking in “compassion” in this, and provide many anecdotal examples that “prove” how wrong I am. Maybe, just maybe, some may recognize the fundamental macro level wisdom of this view of cause and effect of governmental policies of the last 40 years.
Just a thought.
Jack says, “I understand that everybody needs to eat, but 47 million in this country have less than $2,000 in assets ($3,000 if senior or disabled)?”
So what does “assets” mean?
Bank account balances, investments and other similar resources count toward your limit, but your home and many types of retirement accounts do not. States set their own rules about the value of vehicles, with some waiving the fair market value of the primary vehicle and others setting a standard deduction off the value. And yes Jack, many of our unemployed have spent down their savings accounts and cashed in their investments long before qualifying for SNAP (aka Food Stamps). 47 million Americans now qualify – unfortunately.
The food stamp program is an absolute necessity; but, not for 1/6th of all Americans. I just cannot believe that. Forty Seven Million are actually receiving food stamps, that is different than “truly” “qualifying”.
My understanding was that food stamps were for the “truly” needy. But, as I read between the lines of your post, if you move all your cash into retirement accounts, your home and maybe your vehicle(s), then borrow against those assets to fuel your consumption, you can qualify for food stamps? Is that what this program was designed for? Are such people truly needy? That is even assuming that many do not just lie about their assets in the first place.
I hesitated even bringing food stamps up, since it is besides the point I was trying to make about government dependency harming motivation. However, your list of what is counted and what isn’t just proves my point. It is obvious that it is easier to game the food stamp system than to push oneself to create the necessary skills for the 21st century job market. That is one of the problems inherent in such programs – they can always be gamed.
And as usual, I include the usual qualifiers about those “truly” in need requiring and deserving help, etc, etc …………………..
Tax cuts enacted by the Republican Congress and signed by President Bush in 2001, 2003, and 2004 reduced taxes on the wealthy, but also actually reduced the tax burden on many low and middle-income taxpayers (8% more pay nothing) as well. Tax Foundation economists estimate that for tax year 2004, one-third of the returns filed last year had no tax liability after they took advantage of their credits and deductions. That’s up from 25% in 2000. Millions more paid next to nothing.
That 33% has increased to 47% in 2012, not due to a “Nanny State” as some here would want us to believe, but due to the Great Recession’s doubling of unemployment, the typical reemployment into lesser paying jobs, and to the Republican tax policies passed in the early 2000′s.
So, who are these non-payers of income tax? The following are quotes from a 2005 study:
Income
Of the income-earning households that do not file a tax return, some 98.9 percent earn less than $30,000, while roughly 99.5 percent earn less than $40,000.
Age
While non-paying Americans tend to be young, two-thirds (or 9.4 million) of the non-filers are older than age 55. By contrast, only 15 percent of the larger population of non-payers are older than age 55. As Table 3 shows, when non-payers and non-filers are combined, more than half of all households that pay no income taxes are either younger than age 25 or older than age 55.
Work Status
Not surprisingly, 93 percent of non-filing households are considered non-workers – meaning they worked less than 13 weeks out of the year. Only 1.46 percent of non-filers will have worked full-time during 2004.
Conclusion
In 2004, a record one-third of all returns filed had no income tax liability because of the available credits and deductions in the tax code. This is a 42 percent increase in the number of zero-tax filers in just four years. In addition to these zero-tax filers are the 15 million individuals or households who do not earn enough to file a tax return.
Jack, you are 100% correct. Most things that made America the greatest country the world has ever known revolve around the concepts of hard work and risk lead to monetary success and life isn’t fair. What liberal policy seeks to do is make life “fair”. In fact, that is an impossibility and what’s more a fools errand. Liberal policy ignores human nature to the point of thumbing it’s nose at it! Here are the basics of human nature: people are lazy and needy to differing degrees. Human nature dictates a person works to the level of their own acceptance and no more. We view people as caring and compassionate when they go beyond these levels to help others. It may be human nature to help others short-term and it makes us feel better about ourselves. There is a point though where the person working to help someone else begins to see the other person as a burden and it becomes work. The other truism about human nature is people don’t value things handed to them the same way they do the things they worked for. In fact, if you hand people money just for being alive they will start to feel that you owe them that money and want more in order for society to be “fair”.
Scott — I agree with everything that you say here. There are many people who are able to work that take advantage of the system. They get easy money from the government. Generations of people from the same families work the system and feel that the easy money is owed to them by the government. This should change.
I am concerned about that the truly needy people (the infirmed, handicapped, those that need medicine and do not have the money to buy it, etc.). There are many who need to be helped and were not being considered here.
Spike – I think most people would agree that the least fortunate amoungst us should be helped. We, and I mean Western society, have had a cultural shift in values. Our society used to value the “Protestant Work Ethic” as a means to acheive success. In other words, delayed gratification was seen as the smart choice for young people to make. This has changed. Our society now hold-up instant gratification as the standard people should strive for. Ask yourself how often choosing instant gratification has worked for you in the long-run. America’s become the idiot brother-in-law that has a new get-rich-quick scheme every Christmas. You know, the guy you wouldn’t trust to take care of the family dog while you went on vacation….
Jack,
Well said. I am one of the very fortunate individuals that make the kind of money that is mentioned in these posts and I realize how blessed I am to live in the United States that has enabled this type of fortune.
At times it has been suggested that I should feel guilty for earning such an income, that no man is worth such a sum regardless of what they do. I would suggest that the founders of our country would disagree.
The term “wealthy” has evoked such passionate criticism to many Americans that those in this category, which is somewhat subjective in itself, are reluctant to share their views on the topics surrounding wealth and the need to have more “compassion”.
I could go on about the two-bedroom house I grew up in with my parents and four siblings, about the need to start working at 14 and putting myself through school. But, that is not the point. The position I would like to make is derived from two angles; 1) the thought of “Fair Share” and 2) Conditional Giving.
Fair Share: I find it interesting that many people suggest the wealthy need to pay their “fair share”. I realize I am a data point of 1, but I would image many in my income bracket are similar. I pay approximately 7-8 times more federal and state income tax than the average person living in my community. I live in a nice house which I pay approximately 5 times more property tax then the average person in my city.
However, I don’t drive on the roads more than the average resident. I only have one child that we now send to private school because the public schools have degraded at an alarming rate. I use little to no social services, no food stamps, no medical services, etc… So I would question, what is really “fair”.
Conditional Giving: I consider myself a man of faith and I do believe we all need to help out our brothers and sisters in need, both at our church and in our communities. I actually don’t mind paying a “little” more than the average American to fill this need. However, where I struggle is that much of this giving on behalf of our local, state, and federal governments is unconditional. There are few strings attached and very little incentive to improve one’s condition with hard work, commitment to a cause, care for one’s children, and so on. The presumption is that the government can do a better job at benevolence that I. I would have to disagree.
This is not what our forefathers intended. When our country was young, folks in communities helped each other out when in need but there was a catch, once on their feet they were to pay forward their benefit and help others in need. This is not occurring. We’ve become a “what’s in it for me”, “Its my right to live off of others” society.
I’m not sure how to crack this nut, but I believe it is worth the discussion.
My thoughts as well…
You sir, are a person that I hope to be like one day. Not the money, but the logic, and clearheaded-ness.
Thanks for the comments
db
So do you believe that you could have risen to the position you are in now if you went through the public school system of today? Or how about the skyrocketing cost of higher education which is available to a smaller percentage of the population every year and burdens them with loads of student debt. So now you are arrogant enough to say that these people who were unfortunate enough to be born into a family which can’t afford private school and are stuck with the public school system are less successful because they don’t work hard enough? Many of these “lazy” “ungrateful” working poor who can’t afford to provide even the most basic necessities of food and shelter ARE working. More and more jobs being created are low wage unskilled labor jobs so what choice do many of these people have when the workforce outnumbers the demand for employment? It’s a race to bottom.
I”ll answer….yes and ys and yes. I went to a school with no textbooks younger than 10 years old, no honors classes, no A/P classes, etc…
Stop blaming the schools, the Rich and start pointing the finger at the parents and the persons themselves. All these “Obstacles” can be overcome. It doesn’t mean that everyone can make $1,000,000 a year. But they can be successful enough to support themselves and their families and leave behind the next generation with an atttude based upon hard work and self reliance, not entitlement for things paid for by those who worked hard and took care of themselves and their families.
Ask not what your country can do for you, but what you can do for your country (And that was not JFK inferring: “And all the successful people, pay for everyone else!”)
Taylor, that is a good question regarding public schools of today although it is a little off point from my original positions centering around conditional giving and fair share. I don’t know the answer but I believe the kids of today have many more challenges than I had in the 1970s. You are correct, tuitions have gotten out of control and make it difficult for the average citizen to pay for eduction without going into debt.
The characterization of “lazy” and “ungrateful” are your words, not mine. There are millions of hard working folks that I am sure are worth more than their pay. I applaud them and the dedication. I believe the discussion was centered around the group of able folks that have, for whatever reason, given up the charge and are soley reliant on society to take care of their every need. I am suggesting giving them a helping hand but in return, expect something back that can help out another member of society. With regards to lower tech jobs and a lack of matching employment opportunities, I would like to see us as a nation strengthen our skills training programs to enhance the capabilities of our constituants such that they could retain higher paying technical jobs. As an employer, I am always looking for people with skills, drive, and the ability to solve problems in team environment.
Thank you for your comments Taylor. They continue to sharpen my saw and help keep my eyes and ears open to new thoughts .
Regards,
Robert
Taylor, I went to a public grade school, high school and state college. My mother said the world does not owe me a living and my foot ball coach said get tough or die.
I was brought lower middle class but I taught the right attitude from about first or second grade. My mother taught me about socialism and communism. She used grades. She said socialism is when you work hard to get an A and others goof off to get a C and everyone gets a B.
What was wrong with the way you were brought up? What is wrong with the way all these losers were brought up?
I have no sympathy. Call it the revenge of the nerds.
So your parents were also among the losers sucking on the government tit, today’s equivilant of the 47%. Your education was provided by those who made much more than you and yours. They gave a great deal more to the government in proportion to their incomes so that the ungrateful son of what you term a “lazy” loser could be educated, succeed, and then advocate closing the door on those who he fails to see, are just like he was.
The thing that I found startling with you lengthy post are items 34 and 35 that only demonstrate and prove that when you adopt and force upon your people a culture that you are not reponsible for you lot in life, that others are at fault, that others should pay to support you, etc… What do you get? The expansion of the welfare state that can only be paid for by….families not on welfare.
I feel badly for people in need. But not people in need who can rise up by their own action and initiative. By encouraging their children to excell in school. To be willing to work hard, etc…
My mother did not attend one day of high school. My Dad got his HS Diploma and then was drafted. We lived in a 1200 sq ft house. My dad never made more than 30k in a year. My mother didn’t work. We lived in a rural town on the edge of Appalachia. Some of our relatives called us “Hill Jacks.”
But my parents made us work hard in school I had my first job at 14. Two jobs at 16. My sister and I both went to college. She was Phi Beta Kappa. I have two graduate degrees. Many of the kids in our high school classes never left our little down and probably are included in the statistics you cite above. They thought school was stupid. They were not kind to my sister and I nor our friends who were “book worms” and “nerds” because we studied hard, went to the fairs, were boy and girls scouts, etc…
I hope no animosity for their ridicule. And I also know that there are many in this country whose lot in life is not within their control. But there are so many who now simply believe that others should pay their way, not because they have “given up” but because they have not been trained by Dems, Liberals and the liberal media, that it is their right and their entitlement and others, like my sister and me, are obligated to pay.
the rich paying more taxes won’t help 98% of a poor person’s problem. none of us have job security but those with marketable skills will have jobs.
Increasing revenue by taxing the wealthy may help stabilize Social Security or any of a myriad of other programs meant to allow self sufficiency and dignity, especially in retirement.
Your solution to EVERYTHING MOR is to tax the wealthy. You should make up some tee shirts to sell on this blog. Just don’t forget to collect and pay over sales and use taxes!
No Rick, that’s not a solution, but a simple response to JB’s comment that increasing tax revenue, especially from the rich, won’t help the poor. I disagreed.
My tee shirts will read, “If I agreed with you Rick, we’d both be wrong”, or maybe, “You’re never too old to learn something stupid.”
Actually MOR, if Rick will send me his address, I will be happy to send him a shirt that I saved from the 80′s. He can wear it when you stroll together. Has an arrow pointing in your direction and in large letters that says “I’m with Stupid.”
Is that like, “I’m with child”?
Mom always said, “Do not argue with an idiot. He will drag you down to his level and beat you with experience.”
Too bad you didn’t follow your mother’s advice.
there is not a finite amount of money in the world
You are right. It’s about how it’s distributed.
Those on food stamps should go to soup kitchens. At least we now the money isn’t being wasted.
I am going to go on a partial retirement rather than be a slave to these dead beats.
I don’t need the money. Time is more precious. Starve suckers.
A wonderful thought for Easter.
Yes please, leave the job market. Let someone who wants to work take your job. I sincerely hope you become destitute and are forced to go to food banks to survive. You social Darwinist prick.
The whole problem is just a bunch of lazy people who want make kids to prove they are da man. If you wnt screw the lady and have her hav a kid you need get a job and feed the bastid cause I would let them starve.
So in SteveWorld, 47% of Americans are just a “bunch of lazy people who want make kids to prove they are da ma, and he’d “let them starve.”
That exagerated stereotype is dangled before you by a propaganda machine intent on making sure you’re angry enough to support, “no more taxes!”, especially on the wealthy. The truth is much different. But then again, you comment on April Fools’ Day and we’re here to celebrate you.
There are clearly some extreme positions being voiced here. I can quote some doozies from the left leaners too. But MOR and Left Leaners, don’t discount the number of folks scamming the system under the guise of being needy.
The government in Britain recently did something interesting.
It asked everyone receiving an “incapacity benefit” — a disability program slowly being phased out under new reforms — to submit to a medical test to confirm they were too disabled to work. A third of recipients (878,000 people) didn’t even bother and dropped out of the program rather than be examined. Of those tested, more than half (55 percent) were found fit for work, and a quarter were found fit for some work.
Don’t think that American’s with their entitlement thinking and “Get the Rich Man and make him pay for you” attitudes are any better.
Briton has an old and well established social welfare system with many flaws which it now is trying to correct. When acne and sprains can qualify for “incapacity benefit” in Briton, you can understand why it can’t be compared to the U.S.
If you are saying that fraud happens in all “insurance systems”, which is what all of these programs are, then I would have to agree. You are a tax attorney who’s handled workers comp cases as I recall, so you may be aware that the U.S. Chamber of Commerce believes once said that 25% of all WC filings to private insurance companies are fraudulent in one way or another. (They didn’t say how many fraudulent claims were paid or how they determined that percentage.) I tend to think the number greatly exaggerated but regardless, it’s substantial. But so is WC premium payment fraud by various companies who list employees as sub-contractors, or working in positions of less risk, or even paying high risk workers under the table. In the Bay area of California, it is estimated that honest contractors are paying eight times the WC premiums to make up for such dishonesty.
Fraud is everywhere and it’s extent in government subsidies to individuals is probably minor in comparison. So, do you propose eliminating disability benefits? Certainly, cancelling the tax rate hike to 39.6% won’t eliminate fraud. That’s just silly.
So MOR which certainly is a subject that might be debated and perhaps your chouce of a name says something regarding your egocentric, egotistical feeling of self righteousness, I will try to appeal to your reasonable side. Have you a clue about how well paid welfare moms are? Do you know how much they earn in benefits by staying home and doing nothing except watch tv, drink beer, smoke dope and play boy toy for some other welfare bum who is busy making babies and abandoning them for the 53% to care for the poor children not fortunate to have been aborted. The system is broke and it is why Obama and all those who support food stamp politicians want to ban guns prepare to confiscate them. Now the the community organizers have failed to educate the community and failed to instill any proper morals and ethics they have chosen to organize the 43% to vote themselves the entitlements they refuse to work for. And to insure they can replace the few who don’t get out of jail in time to vote or are too any the left will import Mexicans and others who want to suck on the programs that the 53% are forced to endure.
You’ve mentioned so many issues Steve, I can not respond to all. Many appear nonsensical. What does, “…support food stamp politicians want to ban guns prepare to confiscate them” mean or have to do with this discussion on progressive taxation?
Tell me though, how much are welfare moms paid, and what percentage of the population are they? How much of that money is due to fraud? I thought that welfare (not including food stamps, section eight housing, etc.) was limited in 1996 to five years during anyone’s lifetime. No? And, what’s your answer to this? Do we let those who are legitimately disabled, or temporarily unemployed, or are children of those despised “welfare moms” suffer and starve?
By the way, The 47% did not vote themselves entitlements. The Republican administration and congress passed tax cuts in 2001, 2003 and 2004 which cause the numbers of those paying no federal income tax to rise from 25% in 2000 to 33% by 2005, and now to 47% in 2012. Along with unpaid for prescription drug coverage, they were buying the 2004 election, so don’t blame the pawns in that game.
What solution do you propose Steve. What do those “proper morals and ethics”, with which you were instilled, tell you to do.
Its interesting to me all the energy on the idea of food stamps. I live in the San Francisco Bay area, and one cannot make over $1200 month as a single individual to qualify for Food Stamps. The average studio in our area is appx 1000/month. I had a job where my department was eliminated. During my waiting period before my unemployment benefits became effective, I received $200.00 month in food stamps. This is not sufficent to survive on, I was able to supplement from Church Pantries. Once my unemploymet benefits begain, I received $50 month in food stamps.
Unless one has a VERY large family, the benefits are so small. Often I will hear men who are married make outrageous claims that a family can eat for $300.00/month. Clearly their wives are the ones who do the cooking and SHOPPING! My partner and I spend about $500 a month on food. We shop at Costco and reasonable markets. If we were on food stamps, we would get $375.00/month. If I shopped at Whole Foods and gourmet markets it would be closer to $700/month. No one on Food Stamps is getting rich off the system.
For those who are getting rich off the system, why don’t we focus on members of Congress. How does someone like Dianne Feinstein have an estimate network of 100 million dollars off her salary that is under 200k year. She’s been a senator for 20 years, do the math. What about Donald Rumsfeld who couldn’t figure out where over a Billion plus in the budget disappeared to. Explain how the Clinton’s came to Washington with less than 1 million dollars and after 8 years had a net worth of 30 million. I know that 11 of that 30 million was for Bill’s book he wrote but that still leaves 19 million. That’s over 2 million year for the 8 years that they were in office. FIgure that out.
Thanks for chiming in here J-M. It’s good to have the perspective of someone who’s experienced the actual government largess so demonized by the know-nothings.
The labor force participation is only 63%. Why don’t the rest create their own jobs instead of waiting for some one to GIVE one to them? Then the rest can all be CEOs.
I’m new to this discussion would like to chime in on the subject matter. For years, I have built a business from the ground up. Today, our company employs 65 people, and is continuing to grow. I’ve always shared in the profits, never took a big salary (so the company could grow), and now as I get older and want to enjoy he fruits of our labor, I am being told how much more in taxes I am going to have to pay annually, and I am angry. I’m angry for a couple of reasons. First, there are countless numbers of people that walk into my office and “ask” for a job. The minute I show interest in them, they get very nervous and explain they really only want me to sign a form so they can continue unemployment benefits. This happens 2-3 times a week.
Secondly, between my wife and I, and our company, we were able to donate a large sum of money to charities the past few years, and I am now being told the “deductibility” of those donations is going to be limited, or worse yet, not allowed at all. WHAT THE HECK?
I don’t claim to be a genius, or have a grasp of he facts like some of you do, but when you combine the fact my taxes are going through the roof, that I can no longer give to my church or charity of choice and not be deductible, or have people come to my business only for a signature so their u employment benefits can continue, I am now very angry at what the USA has become.
And for those that will probably ridicule me over this post, I want to go on record and say people like Romney or Buffet that only pay 14% tax rate, should have to pay the same amount of money as ordinary income people do up to the point of maximum threshold. By that I mean, if a couple earns $450,000 and pays $175,000 in taxes, then 39.6% after that, then Romney or Buffet should pay the first $175,000 then get the 15-20% rate after that. I agree they should get by at 14% on everything. Thanks for reading my vents.
Thank you David H.
Many of us appreciate your post, your honesty and most of all the hard work and sacrifice that you put into your life to be productive, to create jobs, to pay your significant taxes and to make contributions to charities. I encourage you to read this post and then never come back to this blog, as you will shortly be receiving condescending comments to you that you: A. Didn’t build your business. B. Are not a job creator. C. Are an owner and CEO and therefore make at least as much as the CEO of Disney (because that’s what all CEO’s make, you know?). D. Don’t pay your fair share of taxes because you are using lots of secret tax loopholes that only the “Rich” have access to E. Are running your family vacations, your daughters wedding, your birthday gifts to your wife, etc… thru your business as secret deductions, etc….
Don’t let them bring you down my friend. Just keep fighting the good fight.
People who scam the system piss us all off David. But, rest assured, your life and living standard are many times greater than theirs, even with the progressive income taxes that you pay.
Thomas Jefferson believed the tax burden of this nation should fall on the wealthy alone, and even Adam Smith favored progressive taxation. Ever since income tax was conceived and enshrined in our constitution, we’ve had a progressive tax where the more someone made, the greater percentage they paid to the country that provided the opportunity for their success. Progressive taxation has been accepted as the common wisdom of Americans for the past century of income tax at least.
Taxes no longer fall only on the wealthy, nor is anyone spared. even the poorest 20% of Americans average 17.8% of their incomes in federal, state, and local taxes. No, most don’t pay federal income tax, but even paying such tax, the top 1%, to which you no doubt belong, will average only 33% in all taxes with the top rate being 39.6%.
No one condemns Romney or Buffet. They condemn the legal tax avoidance schemes written into the code that allows them to contribute a less percentage of their income in taxes while their middle class workers contribute much more. That’s simply wrong. However, none of this matters when it comes to a top tax rate of 39.6%. Whether it’s accepted or repealed, it won’t eliminate fraud, it doesn’t address the tax avoidance schemes, and probably won’t affect many peoples contributions to charity.
No one LIKES paying taxes, but we all say we love our country.
Hey Eric. For $29.95 you too can have tax expertise sufficent to deduct your itemized deductions, take the child care credit, receive the benefit of the earned income tax credit: Its called Turbo Tax. Or have you noticed the resurgence of HR Block and all the tax services popping up in strip centers around the US. They will basically do your taxes for free, or for a small cut in your refund. Even will advance the refund to your fee. The an online service and a help phone line too. So you don’t need a tax professional to do a 1040. Hey, you could even look at the 1040 instructions themselves and if you are not capable of preparing your own return yourself, I suggest you take a long look in the mirror at the state of affairs in your life.
Gosh Rick, Will they tell me how to establish some companies in the Bahamas, pay them for services which I can deduct in the U.S., and not pay taxes on the profits of the straw companies? All for 29.95? What a deal!
Sorry you have to go to the Cayman islands for that!!
I only read through a dozen or so of the posts here before I had to quit because the ignorance of the people involved was starting to making me feel very depressed about the future of this once great country. I never saw one reference to the illegal wars started by the Bush/Cheney war criminals which put this country’s economy in jeopardy. Not one. I saw a few ignorant people arguing with other ignorant people about meaningless statistics, offering links to this site and links to that site to “verify” their stupidity, but nobody mentioned the trillions of dollars spent and STILL BEING SPENT on the insanity of GW Bush’s desire to go down in history as the man who brought peace to the middle east.
I may be one of the “stupid” that you are referencing, but I do agree with your post. (So maybe that makes me “smart”)
But honestly, this original article and this discussion aren’t really about the wars. They are about the taxation of the wealthy. We are where we are at this point, so I think the debate should be framed about the future rather than looking backwards to point fingers – although I’m sure many share your sentiment.
Wow Peter, Here’s where you and I totally agree! Good post.
So most of you assume Romney is a crook or at the least someone who benefited from being on the inside. It wouldn’t be a horrible assumption. Based on the article below it is estimated that Romney was able to amass so much money in his IRA. Well, if you believe that as an insider he was able to capitalize on a few good deals, it only takes one year of a $50,000 contribution, which anyone with a SEP_IRA can put up to like $44K into, but Romney “enjoyed” a 25% return each year. Since we don’t know how long he contributed to the IRA and what was actually in it, I just used an initial $50,000 contribution and a 25% return. It gets to $10M rather quickly. But as the article states, it wasn’t the smartest move, but Romney will be paying a ton of taxes once his RMD kicks in, so he will helping the Treasury soon enough.
http://www.boston.com/news/politics/articles/2012/08/11/mitt_romneys_ira_is_unlikely_centerpiece_of_wealth_and_tax_avoidance/
hhttp://www.planningtips.com/cgi-bin/annuity.pl?abal=50000&pymt=&time=25&intr=25&ryld=6.5&infl=4.5&raiz=0&wdrw=&Calculate.x=42&Calculate.y=20
Here is a novel concept. Flat tax. Everyone pays. No loopholes. The inherited wealthy like John Kerry and thE Kennedy’s would pay it. Bill Gates woulday it. Romney would pay it. Even precious Obama would pay it after his income swells to $100 million per year when all his favors are paid back. We Americans are to blame for all this. We let the Government run amuck for years. Dozens of years. From Truman on. The tax code is illegal. Shame on us for letting the government determine how to met out pain. They treat us all like tools and we let them.
Money can still be hidden from the gov’t.
You’ve been listening to those angry voices again Joe. Their purpose is to piss you off so that you will think stupidly and repeat, “no more taxes, no more taxes!” The flat tax is so much less confusing for the mathematically challenged and appeals to the simple of mind, but, run the numbers. It would result in regressive taxation. The wealthy would pay 27% in state, local, and federal taxes (on income they can’t hide or deduct as a business expense), while the poorest fifth of Americans, who struggle to pay rent, would pay 38%. Flat tax sounds good on talk radio, but the reality is quite different.
I don’t agree with either of you really, but I do think he is saying that if you had a flat tax, there wouldn’t be ways to “hide income” or “deduct business expenses”. That’s kind of the point of a flat tax. Plus, payroll tax and other things that penalize the poorer people more would likely be rolled into this.
The poor already pay sales taxes that aren’t fair, payroll taxes, if they are actually working, property taxes in their rent. The only thing they aren’t paying taxes on is investment income. It won’t matter what the tax rates are. Those making under $50,000 can pay zero and it will always come down to the wealthy. Even if you make $20,000 and pay $2,000 in taxes, that isn’t fair to many people since it would be the same proportion as someone making $200,000 and paying $20,000. We paid about $85K in taxes and the effective rate was about 25%. I am not getting much direct benefit from my tax dollars since I can’t contribute to an IRA. My deductions are limited, I don’t have a mortgage, I don’t have kids. My gas taxes pay for the roads, my property taxes pay for police and fire. So apart from paying for defense, which we really don’t need as much of since nobody is really going to attack us in the US in the near future, what am I paying taxes to? What useful programs are my taxes going to? I won’t be eligible for Medicare when I get old. I hope the Fed raises interest rates soon so I can get something in my checking account in the form of interest instead of the .08 cents I got last month. I don’t have a lobbist, I don’t have offshore accounts, I don’t own a business. I am just a taxpayer not happy with what I am getting for my taxes.
Why aren’t sales taxes fair? They a voluntary. You don’t have to buy anything with a tax.
Why aren’t payroll taxes fair? The bottom 47% are the people that will need SSI. Who do you expect to pay for them? Remember you only pay half. Company owners pay the other half. Stop whining.
Ditto what the other Peter said. We think very closely alike.
I haven’t got my tax return back from the accountant yet. When I do I will probably post a rant.
Actually, many lower income people do not pay property tax either. Many states offer relief for lower-income people on this front. (I know my home state does – neither of my parents pay property tax)
JB – Great point here – “I am just a taxpayer not happy with what I am getting for my taxes.”
Enough said. Regardless of whether it is 10% of your income or about 45-50% of your income (my situation), this is the major problem.
@Peter N
“You only pay half”? No, you pay the full 12% only you don’t see half of it.
If your company offers you $50K a year, it is with full expectation to pay $53K a year, you only get to see $50K of it because the other $3K goes to the government before you even see it.
This is a benefit to you, because it essentially makes 50% of the payroll tax, tax deductible since you only have to pay income tax on the 6% that you see.
Instead of paying income tax on $53K, you’re only paying income tax on $50K.
@ Peter N
Since when are sales taxes voluntary!! I can’t drive down the street without paying sales tax, I can’t walk down the street without paying sales tax. I don’t know where you live but in some states clothing is taxable and some food is taxable. Hell, I can’t even type in this discussion without paying sales tax!! what I want to know is what will you not be able to get by without because you have to pay a little more on earnings over 400K. Caviar and Cuban cigars aren’t that expensive!!
Jeff, you don’t have to buy stuff and pay taxes on it. Buy what you truly need and no more. The exception is what it takes to get ahead.
The less our incomes, the more we spend on goods that have sales taxes applied. Therefore, the least among us pay the highest percentage. That is just simple fact.
I do happen to need clothes and a place to work and food, all taxable. Remember, “the only things certain in one’s life is death and taxes.”
Not to mention, how many CPAs would lose their job?
You would instantly destroy a sector of the economy.
Flat tax is always code words for the wealthy to pay less in taxes. The poor have to spend money on necessities to survive. So an extra $10 in taxes could mean they don’t eat that day. The wealthier you are the more discretionary income you have. Flat Tax and Sales Tax hits the lower incomes more because they have little or no discretionary income. What they take in they have to spend.
Remember “the wealthy can always take care of themselves”. We don’t need to worry about them. They have no incentive to hire people, so that’s all imaginary about them being “job creators”.
They have no incentive to hire people……so you think Bill Gates could have run the whole company himself? Even the guy that has a lawn company has to hire people to cut more than 1o lawns a day.
“so that’s all imaginary about them being “job creators”.”
Then who are the job creators. Certainly not the gov. The gov spends hundreds of thousands per job created when an private person can create more with less waste.
So create your own job and become an instant CEO. I dare you.
There is an incentive to hire good people that can make you money. There must be an environment where there are opportunities to make money by hiring people but that is getting harder.
Automation will replace many people. I have seen it. I have made it possible but on the other hand there is a need for those that can design, build and maintain the machines. Finding these people is hard. On LinkedIn there are lots of job postings that will pay good money but many of these jobs go unfilled, why?
Companies don’t hire people unless there is a greater demand for their products or services. Many companies today are flush with money, but, because the American middle class is earns 7% less that ten years ago, the increase in product sales hasn’t materialized and companies won’t hire. Therefore, hiring isn’t about how much the business owner gets to keep after taxes, it’s about demand for the product and competition with all other business owners who make similar products or provide similar services.
I don’t know why all of you repeat the mantra about the government not creating jobs. It certainly does! It’s no only the nation’s largest employer, it funds many industries, without which, many wouldn’t survive. The 1937 double depression was finally broken and employment made full again only when the U.S. entered WWII and government spending exploded. The government created those jobs, both in the public and private sectors.
This country will start healing more quickly when everyone quits buying into the created distraction of political party politics. Neither Republicans nor Democrats have done anything good for anyone but themselves, and if you think they have it is only because they threw out a bone to win another election, take the eyes off their thievery, or cover-up the dastardly deed they were planning behind closed doors. When more people realize this truth then a revolution will bring Americans back into power.
Well said. I cringe every year when I vote – I have no party affiliation at all because…. how can you affiliate with the buffoons on both sides? They also feed into the ridiculous circus of misinformation on the internet and media on both sides and make the issues so polarizing and muddy for the average citizen to even begin to decipher.
I really like that revolution idea Screamer! Me and Bubba are with you on this one. We’ll bring our shotguns and deer rifles to the fight. You can take on the Abrams tanks while I’ll shoot down those pesky F-16′s. Bubba, well, Bubba will do something too. What can I say about Bubba?
We can’t lose with “Right” on our side. God bless the US of A and no one else!
I’ve been reading the rhetoric on this commentary for a while now. This will be my last comment, though some people will be happy about that. I have come to the conclusion that the 1%r’s on this blog must have been very lucky to be where they are. Let’s give you a break, you can pay no tax, but, you cannot use any government service unless you pay for it directly. If you want you property protected then you must pay for it directly. If you want to sell your wares in other countries or other states for that matter, then you will just have to pay the duty imposed by the government your dealing with. If you want keep your country safe from foreign invasion, you must pay for all of the infrastructure for the defense of the country. How much did you say was the cost of the last missile defense system that you developed? Oh, that’s how taxes work. The more you have to be protected, the more you must pay for the service!!!
Why are you business owners griping about a 4.6 percent increase in taxable income after 400K when you can always just not take any income over that amount and take dividends on everything else which is only taxed at 14%. We can always go back to an 80% capital gains tax.
YOU CAN’T HAVE IT BOTH WAYS!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Business owners and corporations should either put more people to work or pay for them to be out of work. Which way is better for you. Put people to work and your taxes will go down. The more people paying into the system, the less each individual will have to put in, and, the lower the cost of government. The reason that 43% of Americans aren’t paying taxes is because there is not enough work available for the 43% to make enough money to pay taxes. Most low and middle income people only see that the richest(.1%) among us are so greedy and have taken so much capital out of the system that there is no use to do anything because there is less benefit working than taking government subsistence. The government did not create this mess. Business did, and Business needs to either fix it or pay for what they broke. You decide which is the better way!
So, it’s funny you mention hiring paying for property protection. A few years ago in San Diego during the wildfires, the rich were hiring private fire companies to protect their houses while other houses burned down. Is that fair? Well, according to you it is. The poor can’t afford private firemen so once again, the rich win. The state wins since the expensive house is saved that thousands of dollars of property tax is paid on, which pays for the poor person’s fireman. Seems fine by me.
I was visiting a friend in La Jolla at that time, saw the fires, and followed all reports very closely but never heard anything about firemen hiring themselves out to private homeowners or of them saving homes. Do you have more information, links or cites that I might go to to read more about this?
There were in fact, reports of wealthy homeowners hiring private fire/rescue protection for their homes.
Not city fire fighters, private, for-hire fire protection.
When the ash started falling in long beach, from the station fire, we could see tanker trucks with water rigs, cruising the neighborhoods, going door to door offering water delivery and spray rigs to private home owners.
At a price, I’m sure.
You can’t just hire people at a company. There has to be something for them to do. You need the revenues to pay for those people and they need to be helping the bottom line. Domino’s can’t just hire 100 drivers if there are only 40 pizza orders a night. It is about supply and demand for the services rendered.
Tho I said I’d do no more commenting, but as a postscript, If there were more people working, more people would be buying pizzas!
Any gov’t created job can be done by the private sector. A gov’t job is just a re-allocation of income taxes. Gov’t/County/City don’t pay property taxes on buildings or interest earned or many other things.
I think Jeff’s got a point there JB.
We rarely buy pizza for delivery. We have food delivered maybe twice a year.
Any gov’t created job can be done by the private sector. A gov’t job is just a re-allocation of income taxes. Gov’t/County/City don’t pay property taxes on buildings or interest earned or many other things.
Yes JB, it can, and the private sector has tried to do all of them at one time or other. The problem is that the private sector, while doing a great job of many things, cannot do many government jobs well or economically. So people get together to improve the service through government.
Insurance companies once provided fire protection. If you subscribed to their fire insurance, you were given a plaque to put on your house. If fire broke out and your company’s fire brigade arrived in time, they would see your plaque and put the fire out. If they didn’t see their plaque, they wouldn’t. You can see the problem.
Blackwater was a private police force. How would you like Blackwater protecting your family? Then again, with the many common areas such as roads and parks, you could have toll booths on every road to pay a private company for access and maintenance, and fence the private parks in so that admission could be charged. I could go on and on, but I think you get the point. There are some things governments are more cost effective at providing while private industry is more effective at others.
Government is you and me.
There are plenty of things I am willing to pay a usage fee if it meant lower taxes. There are many things we pay for that we never use. There aren’t free govt airlines or govt cruises. Vacations are a human right.
The major reason we use government is to reduce overall costs, even when we agree to raise taxes. For example, the City do Santa Fe Springs was formed in L.A. County by citizens and businesses who wanted to lower fire insurance costs. Previously, L.A. County FD provided protection with one station. When incorporated, the city then staffed four stations and improved the water system so that their insurance rating which determines the rates we all pay, rose from a 7 to a 2, and saved many times more for everyone in fire insurance premiums than the tax increase of $4.90 per thousand cost.
Conversely the fire chief of a Rhode Island town recommended improvement to his department costing an average of $9 per home which would eventually recoup more than $40 in insurance premiums. Being an upscale community with many anti tax conservatives, the proposal was rejected by a town manager who wasn’t going to risk their ire for proposing an increase in taxes. So, what would you do? Reduce taxes and pay more for insurance?
http://wildfiretoday.com/2008/05/12/private-firefighting-companies-in-southern-california/
Government by definition is the necessary evil. On one hand- criminal law&justice and border protection at least in part must be done by the government, on the other hand in 100% of everything else government is an enemy of the people . As was shown by the greatest economists Milton Friedman and Bill Niscanen, 1 dollar in government budget automatically decreases GDP for 3 dollars. As soon as government usurps the family role (retirement, long term disability, kids raising and so forth) the birth rate drops below survival level and the country is doomed. In order to survive a country needs 2.2 children per woman. Under Obama it dropped from 2.2 to 1.7. Japan- 1.3, Europe-1.38, Canada 1.4. Now due to obamunism USA also joined the suicide club. Too much government as too much of any medicine will kill you. (and too much means over 5% of GDP spent for the necessary evil fo government, according to American history data). That’s how Big GOvernment, Nanny State, socialism or its equivalents (national socialism, communism, obamunism, Euro-socialism) destroy their own countries. The “cultural war” against decency, reasons and personal responsibility waged by the Left, by the Democrats promotes destructive emotions: envy, animal instincts and and worst ever greed- greed of politicians for your money and your decisionmaking powers. The more government- the more accelerated self-destrution is, from Europe to Zimbabwe and North Korea. California is bancrupt, next Illinois and NYC.
laissez faire is not black and white- it’s a continuum from zero to 100% (both extremes, as absolute zero temperature, never exist per se, even in slavery the masters had to pay for some creative work, as Thomas Sowell pointed out). The best ever approximation was in America before 1905, where the people gave to the necessary evil of government only 3-5%, and the freedom (per Jefferson, freedom is freedom from the government) is what made America great and exceptional country. Since 1905 government, politicians and bureaucrats gradually erode our freedom, nibbling away piece by piece, and consequently position of America progressively worsens due to “progressives” policies. America sued to generate over 50% of world’s GDP, a decade ago due to increasing size and scope of powers of government it dropped to 1/3, and now is less than 1/4.
The economy is not a zero sum board game like Monopoly. The more freedom = free unregulated market & free from the government people, the bigger the national pie is. Free market makes 100% of population richer (even though the richest get richer faster-but it’s a necessary price for the progress) and the poor are the greatest beneficiaries (if a billionaire double his wealth it changes nothing in his life style while for a poor person having 20 buck for dinner instead of 10 is a huge difference).
Government is a universal problem while free market and individual liberties are universal solutions to any problem (majority of which are created by the big government interference in the first place). And no- in no case Big Government is “more efficient” than free market because the only way to optimize a complex systems in the dynamic stability state (such as our body, life in general, economy or society) is by self-regulation with a tight feed-back loop. Government by definition has weaker feedback from the results of its action, and only on temporal basis – only during election campaign).
The free market is based on feed-back loops, exerted by free competition. When government under any excuse (including “anti-trust” laws that allow dirty politicians pick winners and choosers) controls and mandates (of course, “for our own greater good”) it creates crony capitalism, which is an enemy of free market.
There’s total disconnect between regulation and manipulation by the feds and Wall Street speculators and true unregulated free market, between makers of Main Street and takers of lazy generations on welfare. Hard working people, poor or rich (like Koch brothers), are for freedom to retain the fruits of their hard work. Lazy folks that are getting easy (somebody else’s) money, whether speculation billionaires like Soros or parasites of welfare are for the coercive Big Government, inevitably “progressing” to the police state with accelerating speed. In Europe Big Government already decides almost everything for you (in North Korea and Zimbabwe about 100%) and the socialist state in America go that way too – what kind of soda you can drink, what kind of car you must drive and so forth.
How to fix it? Balanced budget Amendment that limits all government expenses combined by 5% of GDP; term limit Amendment that would limit terms of all elected and unelected bureaucrats and the most important – ALL THE LAWS except Constitution – by 8 years of so. This way the powers stolen from the people will be like handful of sand in politicians hands – they must prove that this particular law is the exception from the rule with benefits outweighing unintended negative consequences (may be one law out of thousand). If any bill increases Big Government powers or money – kill the bill, because whatever government does almost always has a negative over-all balance.
If only we could fire our Congressmen for not achieving goals. Yes, we have the power to vote, but most in Congress run un-opposed. In the great 18th District of Texas, the ‘honorable’ Sheila Jackson Lee is so gerrymandered, she will never lose and her ‘people’ will never let a competent person run against her as a democrat. In the last 4 elections, it has been an 80/20 split on the vote between SJL and the person running against her. She doesn’t even raise money in her own district. She goes out in West houston where she know where the money is. We need Term Limits for Congress, but it will never get passed.
The problem is that those who say they want to fire a congressman, are always talking about someone else’s congressman, not their own. However, some states have made excellent attempts to limit gerrymandering, and most Americans agree that such limits need to be enacted. The problem is that a majority in congress represent gerrymandered districts and would never want to suffer the insecurity of a level playing field.
Be careful of what you wish for. California instituted term limits on state legislators and as a result, have very few competent legislators. By the time they learn the ins and outs of a complicated state, their terms are up. Ergo, the fiscal calamity they now face.
I woud fire some of the ones I didn’t vote for. They DON’T REPESENT ME! They represent someone else.
Of course you would, and I’d probably fire yours since he doesn’t represent me. Fortunately, that’s not our system.
The sad truth is not many of the 47% are able to adapt even if they were educated.
http://www.chron.com/opinion/outlook/article/Friedman-Why-are-3-million-jobs-unfilled-4048487.php
There are plenty of job openings out there if you are qualified. This requires a little effort. No one is going to simply give somebody a job unless there is an upside to it. One has to qualify for a job.
Welding is a skill. You aren’t paid minimum wage for welding. You need to know how to read and understand math and science. I would suppose the advanced welding degree pays well, but there has to be the workforce like the article says.
Those welding jobs don’t just require arithmetic. They can requires algebra, trig, sometimes calculus, and also chemistry. There are many other jobs that require the same skills and pay much more. A welder in that company only makes $41,600/year and not many people with the required math skills and science background will apply. That’s usually the problem with all those jobs cited as “just not having people with the right skills” when you really look into them. It’s not that there is no one out there with such skills, it’s that companies must pay more highly skilled employees more money, and many refuse to do that. “They’re just welders after all”.
The rest of the story and its call for more math and science education are excellent, but let me relate this. My son is finishing his first year of college as a math major and I’ve be looking for financial aid in the form of scholarships and grants. Now, you’d think there would be many for math or science majors since we all have known for years that America’s ability to compete in a global economy depends on educating many more people in those disciplines and we currently fall very short. In two years of searching, I’ve found almost nothing for math at all. I’ve found many for music, if your father works in a restaurant, if your mother belongs to some silly organization, if you’re of certain heritage, if you caddy or work as a grounds crewman on a golf course, if your a fire science major, if you write poetry or dance or paint, if your a female business major, and on and on. But no math or science scholarships.
We give this great need of ours lip service, but it’s all talk and no walk. This country needs to put money where it’s actually needed to encourage the development of people with critical skills needed for the future and in this case, the present also. It’s called “investment”.
http://www.gowelding.org/7_Incredible_Facts_About_a_Career_in_Welding.html
This article is really sparse.
Some DB Warehousing consultants in software making $400k+ full compensation. Also, some CIOs, CTOs, VPs, Directors and others make $400k+ when you consider full compensation including stock options, etc. Finally, lawyers can make $400k. As can tech consultants at IP law firms (typically working almost 24/7). Additionally, so can actuaries.
Obama proposal to reduce the deficit includes a minimum 30 percent tax on people making $1 million or more a year.
The will make many of the tax loopholes, that only the rich can use, worthless.
Please ID the secret tax loopholes that only the rich can use…and please do not use some fictitional: “Fly the Corporate Jet to the Bahamas, while shipping jobs overseas” malarky.
Please also advise if this group of taxpayers can take the following loopholes:
Earned Income Credit, Tuition tax credit/deduction, Student loans deduction/credit, Child Care Credit, No phaseouts of their itemized deductions, etc…, Exempt from the alternative minimum tax?
I got screwed out of an additional $1,400 in refund (after paying 85K in taxes) due to the AMT. We double paid property taxes last year and gave too much to charity so that was capped as well. Where are all these loopholes again?
Many Americans avoid taxes by…
1. Structuring their corporations so that their compensation is from capital gains on stock options rather than wages.
2. Structuring their corporations so that their corporate taxes are very low and their compensation is from dividends rather than wages.
3. Setting up off-shore corporations in tax haven countries so that their American corporations operate at a loss to the benefit of the untaxed off-shore corporations which record the profits.
4. Hiding profits and investments in tax haven countries.
5. Purchasing real estate and depreciating it over 20 years to get a tremendous write-off, while recapturing the profits as capital gains when sold.
6. Expensing phone, internet service, transportation (auto, air, etc.), meals, hotels, publications, home office, computers etc., and even their pet dog which, of course, they need to protect their business property, etc., etc. – all to their business.
7. Passing on their estate, mostly tied up in shares of their corporation which they acquired for next to nothing, to their heirs upon death so that the basis can be readjusted to their cash value at the time of death. That way, if their heirs cash out immediately, there is no tax on the capital gain – zip – zero – nada.
These are not “secret” at all. Although few can do all of them and for some you need much more wealth than being at the bottom end of the top 1%. However, 4, 5, and 6 are routinely practiced by business owners and landlords at all income levels and the tax savings are much much greater than the meager tax write-offs and credits you’ve mentioned for the middle class wage earner.
Neither Romney nor Buffett pay AMT. Take a lesson.
Buffet and Romney don’t have high incomes. Buffet can sell 1 share a year and live off of it.
MOR’s #2 doesn’t work. Search this thread for my post about how much money I get to keep after using $100K to pay myself a dividend.
The effective tax rate is 48.5%. First the company pays 39% and then I must pay 15% on the 61% that is left.
MOR, you need to become rich so you can speak from real experience on what you think you know.
#4 This is difficult to do and now reporters are blowing the whistle on those that do. Rick would have a better idea of what this would take. Even so you are at risk of losing almost all like those that put their money in Cyprus.
#5 I/we actually built a new building 2008-2009 ( btw, that created some jobs when things were darkest ) . The depreciation is over 30 some odd years.
#6 doesn’t work unless you can prove it is for business.
#2: I said “… structure corporations so that their corporate taxes are very low…”. Look up how much corporate tax Facebook, General Electric, Boeing and Wells Fargo paid in 2012. Try zero. (And Facebook made $1.1 billion). When I said “dividends”, I assumed you would understand it as qualified dividends taxed at 15%.
#4: Yes, the U.S. is getting more cooperation from foreign banks, but it’s not complete by any means yet and there are still ways to hide money overseas, and probably always will be.
#5: Residential real estate can be depreciated over 27.5 years (purchased post 1986). I was purchasing in late 1970′s at 20 year depreciation I believe. Commercial property has a 39 year depreciation.
#6: Since you have receipts for all costs that are not related to business as well, claiming personal expenses works unless the IRS can prove otherwise. Almost impossible, the business owner must be absolutely honest which even his closest friends may not know.
Because you haven’t been able to do some of these, doesn’t mean they aren’t done, especially by the wealthy and especially if they have creative tax advisers to structure their businesses to take advantage of tax laws which create such loopholes.
You forgot all the stupid athletes that everyone loves to watch (and spend their hard earned $ on) who make MILLIONS
Structuring their corporations so that their compensation is from capital gains on stock options rather than wages.
2. Structuring their corporations so that their corporate taxes are very low and their compensation is from dividends rather than wages.
_____________
Both of these can cause officers to cook the books to boost the stock price. See Enron, Global Crossing, Tyco….
Good point JB.
Pls advise how many execs last year or in 2011 were paid stock options? My clients: ZERO
Dividends received by individuals from corporations, even corporations who are their employers, are subject to tax at ordinary income rates….just like wages…no difference in tax treatment. Corporations can’t deduct dividends, so their is double taxation when dividends are declared: Tax to the corporation (because they are not deductible) and then taxed (at oridinary income rates) to the recipient individuals.
Their are certain qualified captial gains type dividends, but they make up a small percentage of all didivends. These receive different tax treatment:Qualified dividends received by individuals in the 10% and 15% income tax brackets were taxed at only 5% from 2003 to 2007. The qualified dividend tax rate was set to expire December 31, 2008; however, the (Bush) Tax Increase Prevention and Reconciliation Act of 2005 (“TIPRA”) extended the lower tax rate through 2010 and further cut the tax rate on qualified dividends to 0% for individuals in the 10% and 15% income tax brackets. On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The legislation extends for two additional years the changes enacted to the taxation of dividends in the JGTRRA and TIPRA. So those pesky lower level income earners get the big break re taxation for qualified dividends: NO FIT AT ALL!!! Another 47% tax loophole not avaialble to the RICH!
Any more RICH ONLY LOOPHOLES YOU WANT TO POINT OUT?
You asked for someone to ID tax loopholes used by the rich and I was simply responding Rick. I guess you didn’t like the answer (or any answer).
Do you think that These CEO’s got paid salaries in cash??????
APPLE INC Timothy D. Cook 2011 $377,996,537
SIMON PROPERTY GROUP INC David Simon 2011 $137,166,545
GOOGLE INC Eric E. Schmidt 2011 $100,980,262
ORACLE CORP Lawrence J. Ellison 2011 $77,556,015
CBS CORP Leslie Moonves 2011 $69,900,677
GAMCO INVESTORS INC Mario J. Gabelli 2011 $61,693,390
KOSMOS ENERGY LTD Brian F. Maxted 2011 $57,553,715
PENNEY (J C) CO Ronald B. Johnson 2011 $53,281,505
DISCOVERY COMM INC David M. Zaslav 2011 $52,404,119
ABERCROMBIE & FITCH Michael S. Jeffries 2011 $48,069,473
Excellent point JC. However, since Rick doesn’t know any of these people personally, it won’t count and he’ll repeat his inanity again.
OK, so JC lists 10 CEO’s of high profile public companies. My client list here with designated “corporate” work id numbers, list 467 clients. I know them personally. They hired me for professional counsel and advise. NONE OF THEM RECEIVES STOCK OPTIONS. NONE OF THEM HAS OFF SHORE ACCOUNTS.
One of them is in the process of selling his buisness for $18.6. He is not moving to Monte Carlo, or revoking his citizenship (see Liberal Facebook owners), or incorporating in Bermuda.
The point here, as more eloquently stated by others, is that you cannot take an extremely small percentage, actually a small, fractional percentage of 1% of CEO’s/Presidents, and say they all are paid millions, and/or receive stock options or compensation that receives some favored tax status. When you iondict the APPLE or GOOGLE CEO’s and then apply that same criticism to the guy or gal who owns the company that you work for, it would be the same as saying: LeBron plays basketball-Rick played basketball: ERG and logically Rick was as good as LeBron. Nice compliment…completely false.
Use of that analogy as “proof” or “fact” is wrong, misrepresents both LeBron’s and Rick’s talents and is worthless for any meaningful discussion….as it should be here.
You know just once, I would like to read someone while complaining about CEO comp for APPLE, GOOGLE, ORACLE, etc… state: “Of course I know that these men/women have nothing in common with the millions of small business owners, CEO’s and Presidents who are regular people and regular taxpayers like the other 99.9%. I never hear that statement…..
You need to read more carefully Rick. Let me repeat this again in another way.
Bad neighbors come in all colors at every income levels. But that’s not the point at all, so stop repeating the red herring about “attacking the rich”. Good neighbors come in all colors at every income level too. (We’re equal opportunity here.)
What we are saying is that some people are afforded unjustified tax breaks which greatly favor the wealthy over the middle class. Those tax “loopholes” or manipulations are wrong and need to be fixed. Warren Buffett is absolutely correct when he brings this fact to the attention of the American public and proposes a minimum tax on the wealthy which will allow them to pay at least the same percentage as their secretaries.
Furthermore, we are advocating a more progressive tax system which America has had during it’s greatest decades of growth over the past century. Conversely, we have arrived at this sorry economic state of affairs over thirty five years of income tax regression, which has taken money, whether in taxes or services, from the consumers who drive 70% of America’s economic engine.
That you have hundreds of clients who don’t receive stock options has nothing to do with anything at all. It’s the fact that capital gains on stock options, when exercised, are taxed at half the rate and now are substituted so freely for wages taxed at twice that rate, that’s being questioned, along with other tax avoidance advantages of those most able to pay.
That anyone would believe that someone making $10 million per year should be taxed a lesser percentage of income than you, who earns much less, is absurd to me, whatever the simple minded justification. Until recently, that sort of thinking has been foreign to a vast majority of Americans since Thomas Jefferson.
I think the fundamental problem in this debate MOR – which Rick is trying to express (and Rick, correct me if I’m reading you wrong) – is that we don’t settle arguments or make laws because there are a handful of people who are benefiting from loopholes or gaming the system.
Look at it this way….
We all acknowledge that some CEOs and multi-millionaires have offshore accounts, expense everything or do any number of the things you have listed. Our argument is that these are few and far between – and naming the CEOs of gigantic successful companies like Apple and Google doesn’t automatically correlate that the 500 CEO clients Rick has are doing the same thing.
On the other side, the same is true for people “sucking off the system” via welfare, food stamps, or whatever other Fed assistance. The right loves to portray lazy people who just won’t get their act together who are living off of Fed assistance subsidized by those of us who are working. While there are no doubt some of these people, it is likely a small percentage as well.
The bottom line is that our tax system is already a progressive one. All we have to do to fix this is get rid of the ridiculous loopholes that only help the Apple and GE CEOs (without hurting Rick’s clients) and put stricter requirements on public assistance (drug testing for instance) without hurting the people that are legitimately in need.
Thanks for your reasoned response Peter. I believe there is also a perception problem too. Rick believes that an increase in a tax rate is a punishment, as if this is a class war and those who are taxed are also hated. It’s not and they’re not, any more than having to pay 10% more in taxes on income over $69,000. It’s simply progressive taxation and the safest way, according to OMB, to raise much needed revenue without sacrificing economic growth. We all know that we need to eventually close the tremendous deficit caused by tax reductions, unfunded spending increases for wars and drugs, and the reduction of revenues and stimulus spending due to deepest recession since the thirties.
I appreciate that you recognize that there are a handful of people who greatly benefit from these legal but unjustified tax loopholes and avoidance schemes. Although few (.05% to .1%), they nevertheless involve a tremendous chunk of the GDP, and therefore, of possible tax receipts were taxes progressive. You are also right to estimate the difficulty in changing the laws since these are the same people who are politically active in assuring that only politicians who favor their viewpoints run for office. But we must all recognize the problems, and try our best to do something to solve them.
Fraud is another topic entirely and distracts from the discussion of the need for tax revenue and spending reduction. We are not going to solve fraud anytime soon, whether it’s a welfare mom who secretly works on the side, or a small business who doesn’t report cash receipts and exaggerates expenses.
The biggest problem for us all is that we need honest information to make rational decisions, but we’ve been divided in to tribes which only repeat the latest propaganda sound bites from our tribal leaders. For many of us, that’s easiest since it doesn’t involve thinking or decision making. We simple say, “Me too!” rather than doing the research to find the truth for ourselves.
In closing, civil discourse like we’ve experienced here, causing us to listen to the others point of view and doing side research to find the truth rather than repeat a sound bite, helps us all to become informed citizens, regardless of differing points of view. We’ve all been challenged and motivated to think.
(Just as a note, I’ve seen an objective peer reviewed study of welfare recipients which concluded that that population contains the same ratio of drug users as the general population, no more, no less. But listen to certain demigods, and you wouldn’t guess that, would you.)
The point you seem to keep missing is the perception of what the “average Joe” sees. He sees that the super rich are reaping amazing wealth all the while seeing the average Joe’s pay and benefits being reduced by a third.
Economist Paul Krugman summarized the causes of increasing deficits and debt in May 2011: “What happened to the budget surplus the federal government had in 2000? The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.
Who caused this? The top of the top corporations taking the money and running from people of this country. The banks, the insurance companies, the pharmaceutical companies, Wall Street corporate raiders.
This is what the public sees, unfortunately the middle class takes the brunt of the assault and the lower upper class gets the second worse hit. And believe me 99% of the people currently on government assistance do NOT want to be on subsidies, but would rather have a job and and to find satisfaction in doing it.
Oh, very well said JC!
I also think an addition to the tremendous debt handed Obama, which Krugman left out, was the purchase of the 2004 election with unfunded Medicare drug coverage.
Enjoyed MoR’s and Peter’s posts also.
MOR – appreciate your reply. I’m not going to argue the percentages of loophole-users or welfare parasites. We just don’t know the answer no matter how much anecdotal evidence we think we see.
My point is that even if we were to “clean up” both groups somehow, this is a drop in the bucket in the major deficit problem our currently finds itself in. It is crazy to think if we get the deadbeats off of welfare and close loopholes for the 0.05% that are using them that we solve our problems. Not saying it isn’t worthwhile, just saying it doesn’t matter overall.
We already have a progressive tax code, so taxes would need to be raised on everyone – which even Obama knows isn’t smart in a flimsy economic recovery such as ours.
The answer to our problems lies in reducing spending. Maybe it’s defense, maybe it’s social programs, maybe it is ending the drug war. Maybe it’s all of those things. But the hours we have spent debating the revenue side are likely better spent focusing on how to reduce the bloated size and cost of our own Federal government.
I agree with most of what you say Peter, and believe that income taxes will have to be raised on everyone when we get back to normal economic growth in this country. I don’t believe we will be able to cut spending so greatly that we can close the annual deficits without causing great pain and dangerous social/political backlash. We also differ on how progressive our tax code is. My contention is that it was far more progressive from 1913 to 1980 with few exceptions, and should be made more so again in order to help resolve our current problem.
However, I consider myself to be open to anyone who can propose a better answer, including showing me where spending can be cut so that all of us share the pain equally and it doesn’t fall on those who have the least political power disproportionately, since that’s usually what happens in these circumstances. Yes, I do believe spending will also have to be cut. So let’s agree to disagree on the rather small differences in those uncertain facts we both admit, and discuss where spending can be cut to eliminate the deficits. Tell me where you think we can save a trillion dollars per fiscal year.
and most small business aren’t even public, so that goes out the door. There are many more private companies than public. Phones, internet, all those costs you think are tax dodges are costs of doing business. They reduce profit as costs. That is why you price your product to cover your fixed costs.
I didn’t say everyone could do it. Much of this takes wealth. And yes, there are legitimate business expenses. I’m talking about personal use of phones, internet, and the other costs I’ve mentioned. Regardless, I know that these tax avoidance schemes are widespread and I personally know people, or of people, who’ve used them.
Not again man of reason with your two buddies that told you that they wrote off lunches with you as business expenses! Gosh, if they only had been caught that would have generated another $ 4.95 towards all the social welfare you want to pass out to the 47%.
Please change your name to “Broken Record Man of Reason.”
You’re absolutely correct, Broken Record Rick. I’ve responded to you before by pointing out the information you again requested. So why did you ask again?
Broken Record MOR
Your tone and words are words that anyone that owns a business or is a CEO is a cheat and crook.
Many Americans avoid taxes by……define MANY?? Even if you say MANY CEOs it isn’t true. There are crooks from all walks of life. Crooked doctors, lawyers, and accountants, but it is such a tiny fraction that it doesn’t really affect the rest of the market.
JB – this is exactly my point. The entire argument to raise taxes on everyone making over $200k/$250k/$400k or wherever you draw the line is based on the fact that Mitt Romney can deduct his phone bill or has offshore accounts.
No JB, not any more than your tone and words are words that anyone who’s income falls into the lowest 47%, especially anyone benefiting from a government program, is a cheat and crook.
You misunderstand. Avoiding taxes is not illegal, and the target of my tomes is not any group, but laws that allow unjustified avoidance to the point where the wealthy pay a relatively lesser amount than those whose incomes are much less. “Many” means all who can, which is virtually everyone who can take advantage of such loopholes.
and when you say MANY….I know very few people that own their own business, own real estate as an investment or hide money in tax havens. You just read too many NY Times. There are probably 10% of the 1% that commit fraud, but plenty of people on welfare commit fraud just as well.
That’s a lot more than the estimated 3% defrauding welfare!
This from http://spritzophrenia.wordpress.com/2011/01/04/how-bad-is-welfare-fraud-in-the-usa/
Less than 2% of all people on welfare in the USA commit fraud.
“The myth of the Cadillac-driving welfare queen who defrauds the system lingers even though there’s no proof of it”, said Erin O’Brien, a poverty expert at the University of Massachusetts, Boston.
In fact, welfare fraud among Philadelphia’s 95,456 recipients is “minute,” according to Peter Berson, assistant chief of the government fraud unit in the Philadelphia District Attorney’s Office.
The 200 to 400 cases of welfare fraud in the city each year – down 50% since 2002 because of better enforcement and fewer recipients – are not nonworking women having babies to game the government, but working women receiving welfare and working at other jobs without reporting the income, Berson said.
In conclusion, the rate of welfare fraud is so low as to almost not be worth mentioning. The next time you hear an allegation of welfare fraud, ask to see the hard facts. Anecdotes are just that, and urban myths develop quickly. In hard times, Americans blame the poor.
But I have PERSONALLY SEEN them at Kroger by my house. We are a few miles from a socio-economically disadvanted population. I see it ALL the time.
There, that proves it is the same amount of people committing welfare fraud as those committing tax fraud.
What exactly are you seeing? Someone with a 2000 BMW using food stamps at the Kroger? How do you know what his/her situation is? Maybe the got layed off 2 years ago and have gone through their unemployment and are now existing on food stamps and welfare. That BMW may be the only thing they own and need it to get to the Kroger Mart!!
Get real!!!
Here are some real numbers:P
Lewiston, ME
Officials in Lewiston say they have removed 84 people from the city’s General Assistance welfare rolls, including 50 who could face criminal charges for allegedly lying on applications for the voucher-based program.
In Portland, ME, the state’s largest provider of aid, 103 cases of fraud were identified in the past 12 months out of 2,171 individual cases, a rate of about 3 percent, said Doug Gardner, the city’s director of Health and Human Services.
Hmmm. Well, when you are in line behind them and they whip out the LoneStar card to pay for the food and load up the 10 bags into the 2010 SUV, you do the math. We live in a neighborhood where you can pretty much tell who live nearby and who doesn’t. Mainly with neighborhood stickers on the back of cars.
A client owns a Papa Murphy Store. They take the EBT card (food stamps). He told me that customers that use the card, rarely buy pizza, or salad or lasagna. They use it for Soda and Cookie Dough.
Maybe it is one of your former employees that you downsized and sent offshore so you could reap the tax benefit from, and they are now paying off their 2010 SUV with their retirement savings they had to withdraw at a tax penalty just to survive in this economy. They don’t get to pay the bank with their LoneStar card, do they?
There are many explanations for someone in a BMW using food stamps (which no longer exist by the way). Use your imagination in a positive way rather than negative for justification of a prejudice. You also can’t force those with EBT cards to make wise decisions although most probably do.
Only two of the seven (4 & 6) are actually fraudulent, but those two are wide spread because of the difficulty in proving them. The rest, however, are completely legit as written in the tax code (money buys legislators to pass such laws). I have many close friends who own businesses, have practiced the real estate scheme myself, my son’s godparents manufacture in Ireland and have unreported off-shore accounts in tax havens (of which I do not approve), and from personal experience and not the Times, can tell you that major as well as minor fraud is much more widespread than you believe, or at least admit.
So once again, you know A person. Not hundreds of people. It isn’t a real estate scheme. It is what it is in the tax code. It isn’t a loophole to deduct charity or mortgage interest. you can argue weather or not it should be in the tax code, but it isn’t a loophole. Anyone who itemizes can give money to charity and deduct it. Anyone that owns a home and has interest can deduct it and the property taxes. Why doesn’t the gov’t just raise the standard deduction to $15,000 a person so those that make less than that won’t pay taxes, but they won’t get any other breaks either.
Buying, holding, and selling real estate is absolutely legal. I did it and am far from rich, but it saved much in taxes. The loophole is that capital gains are taxed at half of what wages are. I’m really don’t care about the other deductions you mention since they aren’t used as egregiously, and most of us understand the reasoning behind them.
You have to understand that MOR adopts the attutude that if he knows one or two small business owners that claim to write off personal expenses or if he has heard of someone in a foreign country that has an off shore account, that means that EVERY US BUSINESS OWNER, even the guy who cuts your grass or mulches your yard, cheats, has off shore accounts, etc… So easy to say, but so hard to prove especially when we never hear what MOR’s basis is for access to such inside info. Of course the fact that I have easily served 1000′s of business owners in 30 yeras of practice and none of them have taken options, none of them have offshore accounts, etc… well to MOR, that doesn’t count. You see he knows better than all of us!
Sadly, more than just MOR thinks this way.
I actually think he hopes that people that have heard his nonense on this blog for months, have gone away, so he has a whole new audience to “educate” with the insight….sorry MOR….same old fictional, blown out of proportion, unsubstantiated baloney you keep regergitating.
What is your professional background by the way, so we can better apprciate your insight?
I grew up in Congo, the daughter of a missionary doctor, who trained up in a university here in the states. He could have spent his whole life here, but chose, out of God’s love for African people, to spend his career, the best years of his life, operating for long hours, under poor conditions, serving the poorest of the poor. He spent 12 years of study to achieve the status of surgeon, bore the cost of his education and made every effort to use his life up for others. My mother, a nurse, ran a school for nurses, and both gave their lives for others. In the whole discussion here, I sense a bitterness, a coveting what others have–a sense of unhappiness. I can hardly stand it because it’s not the attitude I was trained to have in life. I follow the Lord Jesus Christ in His attitude and actions as my model–making others the focus of a life of purpose. This is the attitude my parents brought to the mission field, making the purpose of their lives to bring other people the goodness of all that God had brought them. Those who spend their lives worrying about others making too much are really the world’s poorest people. If all you can think about is that some people make too much money you are poorer than some of the most happy followers of Jesus Christ–raised up out of pagan depradation by the good news of the love of God, who rejoice that He DIED for us and ROSE up from the dead, all because He loved us–who, in following Jesus Christ in the poorest of villages, having nothing much of this world’s goods, have happiness and goodness to share with each other–so pleased are they to have come into the blessing of the LORD. I knew a man who walked around on club feet, holding his Bible with club hands because he had not had a surgery and casting as a child due to no doctors, and all I ever heard him talk about was the goodness of the LORD. He, with his poverty, was richer than the author of this article. I suggest you do as he had and turn to the LORD, the maker of heaven and earth, who can make you happy.
You can have this attitude in life without falling into fables, myths or legends or especially religion. A great attitude to have indeed.
Didn’t Jesus tell us that the mite the widow gave was a great deal more than what all others, including the very rich gave?
Didn’t he also say that it would extremely difficult for the rich man to enter God’s Kingdom? Was he perpetrating “class warfare”?
And, what is the root of all evil?
Just thoughts.
Although I received the text of your last post through email, I can’t find it again on this site. The gist, however, was that you are angry with Peter because you believe he lumped your religious faith in with fables, myths, and legends. Read it again. I don’t think he was doing that at all, but merely saying that you have a great attitude even without linking it to Christianity or any other belief system. He was complimenting you!
As for science, I highly support its effort to find the truth because, as you know from John, truth will “set you free”. Therefore, regardless of the efforts of a few to exploit evolution for evil, I support evolution and Christian faith also. Science and Christianity are not mutually exclusive at all, but two sides of the same coin. I am the CEO of the oldest continuous Christian congregation in American, which I submit to you, not out of pride, but affirmation.
Yours in faith,
Many people who reject God believe that science supports evolution and that evolution disproves God–therefore relegating Him to the dustbins of myth. I listed one fraud committed in 1906 for the purpose of making people believing that evolution was true–which fraud greatly enhanced the work of Margaret Sanger’s Negro Project, which is implemented through Planned Parenthood, and Hitler’s Final Solution–both of which were based on evolution’s idea that we are not made in the image of God, are like animals, and that some people are less desirable, and that it’s up to the elite to set up governmental programs to eliminate them. The fraud was that Ota Benga, a Congolese pygmy was put into the Bronx Zoo for over a year in the ape house, with commentary that he was the “missing link”.
I said that the Bible is historical, archeologically accurate, geographically accurate, and in other sciences correct, and should be studied for the claims of Jesus Christ. He either was who he said he was, or He wasn’t.
But he was not a religion, a myth or a fable. More than 500 people testified to his having risen from the dead, some of them not believers.
No way am I angry…why would I be angry? Jesus isn’t angry. Jesus loves us so much he came to his Creation even though he knew His creation would reject him and hang him on the cross. It was his Love that held him there, and his desire to “give His life, an atonement for many” that caused him to give up His life to draw all men to Himself.
Our founders (23 of the signers of the Constitution were pastors) were convinced that only a “moral and righteous” citizenry could self-govern.
Have you read The 5000 Year Leap? Excellent, full of quotes of our founders. We will, as a nation, go into the dustbin of all other nations and the world will lose the greatest nation for the working of good to others in the history of mankind, if we forget God. We will forge our own chains.
When I have been overseas I have met many people, and everywhere people dream of living in America. People long for liberty–but liberty cannot be achieved without a strong sense of duty to God, and to our neighbor. It’s through a strong sense of moral duty that we learn to deny ourselves and choose morally righteous activities. Jesus calls us to do those things out of love for Him.
Remember Rebecca, it’s the TRUTH that will set us free, not what we want the truth to be. Brace yourself.
Only one of the 56 was an active clergyman, and that was John Witherspoon. Witherspoon was a Presbyterian minister and president of the College of New Jersey (now Princeton University).
A few more of the signers were former clergymen, though it’s a little unclear just how many. The conservative Heritage Foundation said two other signers were former clergymen. The religion web site Adherents.com said four signers of the declaration were current or former full-time preachers. But everyone agrees only Witherspoon was an active minister when he signed the Declaration of Independence.
I doubt that even 23 signers even attended church regularly at the time.
The dastardly deeds perpetrated in the name of evolution that you cite, are nothing compared to the vile cruelty and excesses of Christianity. For instance, I don’t recall anyone burned at the stake in the name of evolution. The TRUTH is that people will distort and misuse any idea for the sake of wealth and power and therefore, it is highly illogical to discount either Christianity or evolution because of that misuse.
This could really send us off on a tangent…..
The beauty of our wonderful country is that everyone can choose to believe what you wish. As MOR says, I wasn’t insulting you. I’m simply saying that you can achieve the same morality and attitude any number of ways. You have chosen to do so through the belief in Christianity.
It seems a bit off topic to delve into a debate about the ‘facts’ here. You clearly believe what you believe and there is no harm to those that don’t believe in you “holding those truths to be self evident”. Just don’t condemn those who have drawn different conclusions and we can all live together happily.
Oh and if you are looking for more research….read “Founding Faith” as well that discusses how while many (not all) of our founding fathers were religious, they actually believed in a secular government.
First, I’ve really enjoyed everyone’s perspective. I don’t think the bashing is very cool, but it’s the great and anonymous interwebz.
I actually ended up here, while researching my own tax situation for 2012. My case is not unique. Substitute the “comma” anywhere to want in the number, and it’s all very easy to understand. Mathematically, as a population, we simply spend more than we produce. It’s not mired in some confusing calculus style equation. It is truly 3rd grade math. Without some significant reform the the way these so called “entitlements” are doled out, there’s going to continue to be a steady rise in the percentage of Americans getting Medicaid, food stamps, wic, and unemployment.
The numbers of payers continues to stay flat, and the number of payees is growing at an alarming rate. Yet nothing has been changed to the qualification or verification criteria for these programs.
Are you aware that there are still people in south Texas and Louisiana living in FEMA trailers ? Because we allow them to be invalid. We don’t invest in programs for empowerment, drug testing and prevention, family planning, voluntary sterilization, or personal development. Why isn’t there a continuing education requirement for unemployed workers or underemployed workers ? Not just an online questionnaire “did you look for work this week?”
I’m not alone in this sentiment toward government assistance. I’m also not new to it, I lived it most of my pre-adult life, in Kentucky.
I’m a skilled knowledge worker. My company has shrunk from over 1200 to under 400, in the last 5-years. My company, was able to preserve their profit margins by reducing costs. Yet the 400 of us left, still produce about 75% of the previous output. We are truly doing more, on less. But no more bonuses, 401k match, vacation buy-back, or tuition reimbursement and our health costs have risen 3 straight years. This, is essentially a 15% pay cut for people like me, who use and value these corporate “entitlements”. So I have to cut back on my discretionary spending, to enjoy the same benefits. Hint: they reduced my entitlements, so now I have to adjust my expectations. How is this macro example, so different than the larger US economy ?
My income has stayed flat for 5 years, yet my AGI has grown every year. For laymen, that means the “people’s” share of “my income” continues to grow while I earn the same liquid income. Less of it is mine to spend. Thankfully the large auto manufacturers are still making cars I choose not to buy.
Like many, I leverage every tax advantage I can, to reduce the taxable portion of my family’s $190k income. (2 earners, high tech field)…we don’t have offshore accounts or capital gains. But we do have things like 401k contributions, flex-spending accounts for health and dependent care, and other generally well known deductions. I have a modest sub $200k home, I pay mortgage interest, and live in a state with no state income tax. I also served in the military, and neither myself nor my spouse have student loan debt, or revolving debt. We only borrow for our automobiles and our home. For everything else, we pay cash, essentially. We are definitely not poor, and far from rich. But I don’t think you have to make $38,000 a year to be considered “middle class”.
However, under recent changes, I’m taxed now, more than ever. Although due to my income bracket, I see no additional advantages. I would actually net more income, making 20k less base, because of the recession we’ve lost things like a 401k match, and reduced maximums in our FSA contributions. So for those who can’t or don’t work, they maintain a consistent and Cola driven increase in their “benefit” while my spending and buying power is reduced by inflation and taxation.
How is this bettering the economy at large, again ? Ah , more revenue you say ! To preserve the entitlements. Because we expect to see a steady rise in the need for them. Brilliant !
Unless I want to start pouring every penny I can spare into investments, I can no longer “save”. The only way to reduce my tax burden is to invest, and then take the earnings and dividends and use them for my “wants”. At which point they’ll become income, once again. For us “high middle” earners, there is no safe haven, and my friends, people like me, millions, of me, are paying our fair share while consuming no services, and being essentially self-funded. I drive on toll roads which I pay out of pocket for, non-deductible since its considered a “commute” per the IRS. I cut my own grass, I change my own oil, I recycle and I volunteer for meals in wheels. (Which is deductible, somewhat).
What’s troubling is that I was a product of a very poor family. I’m in my late 30′s and fully expect to work into my late 60′s to put my 3 kids through school, and treat my wife to a European vacation in this lifetime. In the last ten years I have grossed over $1,000,000 in income, yet have less than $30,000 liquidity, due to erosion in home values, increased taxes, reduced benefits and interest, and increased competition in the workplace.
I was a free lunch, food stamp and free clinic kid. My clothes came from DAV, and my ride to school was a bus. My neighbors were mostly blacks and Hispanics, my neighbors are still, incredibly diverse. Mostly black, white and Hispanic. Neither f my parents ever made more than $20,000 in a year, and never more than even close to $40,000 combined. And this was in the 1990′s. yet they made too much for any substantial benefit, and when I joined the Marine Corps, they lost a dependent and were penalized for it.
My children get dropped off, pay cash for lunch or bring it with them, donate their time to local programs, and are very well adjusted considering the life their relatively young parents had at their ages.
When we start asking that fundamental question about “how is the average American making it work?” You have to understand that average is relative. I learned a hard lesson, very young, that poverty is not enviable nor a desirable situation to be in. I made a concerted and determined effort to avoid situations and decisions which might tend to lead me there. Sadly due to the odds, some of us will experience it and some of us won’t. Maybe you’d call me “lucky”.
Sure, right now, I have enough
In the future, I want more
It’s what makes us Capitalists
It’s what makes us American
You don’t punish grit, determination, and good luck, by giving into pity and guilt.
We weren’t all meant to be the “same”…. It’s what makes us human.
Well said, the Brad. I do, however, question why the education the unemployed got didn’t work the first time. How much should we spend to educate those that can’t be educated?
Your statement about the number of payers and payees is very true. Those of us in the baby boom generation have a lot of the assets because we are older and have had time to accumulate them. The problem is that there isn’t a younger generation that will be able to afford to by them. Our assets will decrease in value eventually.
You are doing much better than the average American at your income level. The problem that most of us have is that their expectations are way too high.
You need to save more. $30K is not a lot. A 401K manager said we need to save at least 5% of you income at least.
You ask how the average person is going to make it. You have to realize that average is cheaper over seas. You need to be special. We weren’t all meant to be the same. It takes a lot of effort to be special.
Absolutely love your post. Thanks for sharing your story.
The Brad:
Absolutely the best post of this several weeks of posts. Thank you.
The lesson of hard times is that, while unfair, we cannot always get what we want and must adjust to the times. Looking at the 1 in 10 guy down the street who is successful to give us a hand out, rather than a hand up solves nothing.
One of my favorite movies is “Second Hand Lions”. In that movie there are two sets of obnoxious relatives (definitely not dirt poor, by the way) aggressively nosing around in search of (and demanding) a share of the wealth that two old reclusive guys (Robert Duvall and Michael Caine) had hidden away. They weren’t doing this for any other reason than they wanted it because they felt entitled – and it was there. Why not? Why is it fair for these guys to have all this money when they don’t? They certainly can afford it can’t they? Why can’t they help us to buy that second Cadillac? And if they won’t, we are then justified just to take it.
The problem I see is not that the government should or should not help people; should or should not increase taxes on the rich; should or should not eliminate loopholes only the rich can use; etc, etc. The problem is the entitlement attitude displayed over and over by many that seem to believe that access to the wealth of successful people is a right. It is not a right. Is it fair that someone else is more successful? Probably not. Since we can’t just go steal it, does that mean that gives us the right to use the federal Government to appropriate their wealth just because it isn’t fair? Absolutely not.
This nation is on the verge of this kind of behavior, and it is very worrisome. Are we becoming a nation of relatives circling around the ever more reclusive and aging successful for a share of the spoils? I certainly hope not.
“My company has shrunk from over 1200 to under 400, in the last 5-years. My company, was able to preserve their profit margins by reducing costs. Yet the 400 of us left, still produce about 75% of the previous output.”
This is the root of all the current problems beset on out country and “The American Way” There was a time when there was a change in the philosophy of American Business from the traditional model from looking at long term corporate building to short term profits for the top few and the decimation of the working class. WHY? What reason did your company reduce its workforce by 2 thirds. Has your product become obsolete? Or, is it because you BOD and CEO decided that taking the profit was more important than growing the company and seeking innovative solutions without cutting off the body of the company to save the head. Or, was it because the corporate heads had been bad at their jobs creating inefficiencies in the business. Why are they now being rewarded with dividends, bonuses, and other entitlements? Why is it that your company can do 75% of it’s previous output with only 33% of it’s workforce and still be making a profit? Then tell me what became of the 66% who lost their jobs! Someone still has to pay for the welfare of the dismembered body, at least until it dies!
I suspect the answer will be if the 66% did not lose their jobs, then the job loss would have been 100%.
So you agree that it is better to drop 66% of you’re workforce than to replace the bad management at the top so that the bad management gets bonuses and perks. In that case the bad management should still liable to the 66% to provide at least food and clothing. The main reason for increase in deficit spending is because of the downsizing of the American workforce and bloating the unemployment rolls. Just when did profits become more important than people? Even the wealthy play the “entitlement” game.
As the Brad says, “This, is essentially a 15% pay cut for people like me, who use and value these corporate “entitlements”. ”
Why is corporate entitlement good, while government entitlement is bad?
The government did not cause this current crisis, the corporate world did!
Oh gosh…already another assumption that is purely speculative by you….”bad managment is to blame” and those bad managers get more money and more benefits, entitlements, etc… as a result of a RIF.
Just like saying that only the Rich get tax breaks and loopholes, yet I have asked at least 10 times in different posts to define for me in terms that acutally set forth these secret loopholes or exclusive tax benefits.
Not one intelligent response (I don’t accept cap gain rate when all get it and in fact, lower income earners don’t have to pay any tax on cap gains at all. Now that’s a real tax break).
We can not expect corporations to act in moral fashion. Their goal is the bottom line, as in profit, and if that differs from the “general welfare” of society as a whole, it’s really not their fault. Recognize that’s the creature they are – amoral, neither moral nor immoral.
We can expect people to act in moral fashion however, and suffer the consequences when they do not. That, however, is not to say that the CEO can’t decide what is best for his company and act on it without regard for society because the corporation’s profitability is his number one responsibility, not society. That’s just a given.
The problem, therefore, arises when some idealogues decide that amoral corporations have the same rights as people, yet will suffer no consequences for their speech or behavior, especially to influence our political system to favor their amoral profitability at the expense of the “general welfare” of the moral citizenry. And now there are no limits to their political influence which they can exercise anonymously.
What the hell have we done and how do we put that genie back in the bottle?
Rick’s right. When that homeless bum sells his shopping cart for a profit, he doesn’t pay capital gains. Hell, he probably doesn’t even report it. Them low income people are screwing us too! Me and Bubba should roll that bum and crush them cans he’s collected.
Essentially, yes. Cut off the nose, to spite the face.
We are an American Subsidiary of a Foreign owned Product and Services company. They’re tired of pumping cash into our economy, for no ROI.
The product(s) have become commoditized to the point of zero margin on the sale of goods. The Services competition has increased to the point that you have to derive value through partnerships, and leverage the services of others, in pursuit of whats left of the market share. There’s no brand loyalty, nor is it about best of breed, it’s all short term goal based now.
Instead of cornering the competition, you more or less back them to a wall. “Coopetition” as we call it. They still have lateral movement, but any north / south growth is completely impossible.
So, when you can still enjoy a relatively decent GM, but not sustain a large workforce, you make the hard decision “do we want to make less profit and stagnate our growth, or do we cut costs drastically to preserve the long term potential for a sustainable business ?” (no that wasn’t a quote from anyone, that’s a direct and literal anecdote on the issue.)
The reason I replied again, is because whats happening in my little world, is truly a macro example of what is happening to the US in general.
The deep-pocket Democrats are hoping to demonstrate that continued deficit spending will initiate some forward progress, which will hopefully gain enough inertia, that it will eventually overrun the actual losses being incurred, and create a surplus, as a result. But how many years of a surplus would be required after 2018 to actually begin reducing the National Debt ? Has anyone seen an estimate on that ?
There isn’t one, because they have eleventy-nine permutations of it in the machine and none of them are right. The wild cards are a.) inflation and b.) international currencies.
Neither of which we can directly control. We used to be able to control (a.) because we manipulated the fed rate and the printing of money. But now, we have so b@astardized the Fed that it’s meaningless as a currency manipulation tool.
Lookit, I’m all for no nonsense cuts, and definitely understand the social programs have to be preserved, because of the sheer number of American’s that actually legitimately need them, to survive.
Arguing over the how during a lame duck term, is inconsequential.
There will likely be a Republican president in the next General Election. And although I align more closely with Conservatives from a social policy perspective, I am vehemently opposed to their opinions on many other topics.
We will have had 8 years of the current administration and Congress’ “10 year deficit reduction plan” and will probably see the majority of the substantial changes wiped out, from sheer arrogance and cronyism under the next administration.
We have made cuts before, and we have provided stimulus before. And they have both provided “some result”.
Why don’t we look at how to create some new change, in the positive direction, as opposed to turning knobs and sliders like we’re trying to “tune in Tokyo”. The poor and indigent are still going to be many and the rich and powerful will still be the few.
The USSR enjoyed several years (not decades, but years) of Socialist Economics during the cold war, until it collapsed under the weight of its aging populace and incredibly naive foreign policies. We’re looking very much like the Soviet Union of the mid 90′s, if this keeps up.
greatly benefit from these legal but unjustified tax loopholes and avoidance schemes……………………….ONCE AGAIN…..This is what is in the IRS TAX CODE. They aren’t unjustified….they may not be necessary, but stop using language that only the rich are using these. The rich don’t get interest deductions on houses over $1,000,000, the phase out for charitable deductions. If you want to have the discussion of getting rid of mortgage deduction or getting rid of the myrid of other deductions, then fine, but stop saying they are unjustified or that they are loopholes. It is what it is. They aren’t loopholes. If you have mortgage interest, you get to deduct it. If you give to charity, you get to deduct it. Unless you make more than below.
Starting in 2013, itemized deductions are phased out for taxpayers with adjusted gross incomes above a threshold, which is $300,000 for married taxpayers filing jointly, $250,000 for single taxpayers, $275,000 for heads of households, and $150,000 for married taxpayers filing separately. These thresholds will be adjusted for inflation. The reduction resulting from this phaseout is the lesser of (a) 3% of the excess of adjusted gross income over the threshold or (b) 80% of otherwise allowable itemized deductions.
Have you read Paul Krugman extensively? He is one of the most liberal thinkers on the planet. He is particularly well known for asserting that everything that is wrong with the USA, can be solved by “raising taxes on the rich.” I met him once, but could not shake hands with him, as I had to keep both hands on my wallet in his presence.
If you really want to know what he is all about, read his 911 column on the anniversary of the 911 attacks. He states at the end that he will not accept any replies, email responses. In it he blames the USA shamelessl and violently. . I choose to treat him as a non person, and you will too after reading his diatribe.
You completely miss the point JB. When legal deductions, which help mostly the wealthy, cause them to avoid taxes so that they pay a lesser percentage (sometimes half) than those with much less income, something is very, very wrong. Such deductions (aka, “loopholes”), can never be justified, especially in a democratic society which has always valued progressive taxation.
Comparing that injustice, by claiming that the wealthy are somehow victimized by the middle class, who have other deductions but still pay relatively more in taxes, is victim mentality on an absurd scale. (Most of the wealthy would not benefit from mortgage deductions anyway because they pay cash for their homes – at least in Newport Beach, California, they do.) Regardless, such an argument is ridiculous.
The rich don’t get the same deductions as the middle class. I can’t contribute to a Roth IRA. Mitt Romney paid millions in taxes and I could care less if he had no W-2 and is able to live off his investment income. There is a reason why investment income is taxed less, but everyone else wants investment income taxed as ordinary income. But until the IRS changes the law, get over it. I hope to have $100,000 in investment income when I retire. Most will be taxed when I take it out of my IRA and 401K, just like Romney will be taxed soon enough. The rich pay millions more in taxes and the libs want them to pay more just because they have the abiltiy. Where does it end?
Maybe ‘the poor’ should go hit a free library and gain some kind of marketable skills in the world. Community College is the cheapest form of college out there. Or according to MOR, the poor just have bad luck being in their situation.
Why would you want to contribute to a Roth IRA .
“Funds that reside in a Roth IRA cannot be used as collateral for a loan per current IRS rules and therefore cannot be used for financial leveraging or cash management tool for investment purposes.” -Wiki
You cannot realize any potential tax benefit. You have no need to limit your investments. You have the ability to turn your investments into perpetual income for life and beyond. A Roth IRA is limited in what you can invest. It was designed for the marginal wage earner to have something for retirement where he can pass on to his family with little residual tax penalty. It is not for people who earn enough to support full blown trusts and can leverage retirement funds.
Why save any money then? The tax benefit is the money is withdrawn tax free so if the money grows from $5,000 to $500,000 I withdraw the money with no additional taxes. I don’t need to use a Roth as collateral for a loan since my house is paid off and I pay cash for cars. What else would I need to borrow money for? That is the the lamest reason ever to not fund a Roth IRA. I can invest in whatever I want in the market. ETFs or mutual funds that cover the gambit of investments. We don’t have a trust so I am not really sure how that helps or hurts. Roth IRAs also dont’ have a RMD so if the market is down, I don’t have to withdraw the money. Any other reasons you see for not saving money? I mean the gov’t set this up so it must be beneficial even though they cap who can contribute and how much. I mean why not get rid of the 401K and raise the Roth IRA limit to $20,000 per person per year. Many people don’t contribute to their 401K, many don’t have one at work. Why not have a vehicle that anyone with disposable income can save? Well, the theory is the “poor” don’t have money to save, but there is always the story of the janitor leaving millions to a college. It can be done, but most people live day to day and can’t think 40 years down the road.
A Roth IRA is is designed as a hedge against future tax increases. It is taxed at the beginning as regular income. That is why there is a limit on the amount you can invest. The only real benefit is that you don’t have to take the distribution at 70yrs of age. You can pass it on to your heirs, and where it has already been taxed at inception, you are relieved from paying tax when it is distributed. If the tax rate is lower when it is distributed, you have lost your tax advantage!
Tax deductions available to the middle class are moot if the overall result is that Romney pays 14% on income of $10 million while someone else pays 20% on $1 million, and another pays 17% on $110k. When Romney saves $2 to $5 million per year on his taxes, others must make up for it – you and me. But since you don’t care, why don’t you pay for Romney’s tax savings. I don’t want to.
IRS taxes are on earned income. Once you have earned the income,
you are able to invest your income in investments. If the investments
yield profit the profit is taxed at 14%. This is available to you, too. The lower investment taxes are, the more people invest in the projects that make America work. This has been all twisted around by Obama for political reasons. By the way, Romney has paid all taxes he owes, and will continue to pay–but Warren Buffett has been trying to get out of paying $1 billion he owes in taxes. The 3 richest Americans are Warren Buffett, Bill Gates, and Oprah, all multi-billionaires. Romney isn’t even as rich as the richest Democrat Senator. These kinds of things seem to really bother the left–and the millionaire Koch brothers, well, do you even know why you hate them? This obsession with riches and who has them is what communist agitators have used in various countries to get people to the point that they are willing to kill their neighbors. The Communist Party, wherever it’s in control, is a one-party, totalitarian, tyrannous killing machine. Even after all these years in China, the Communist Party officials reserve the right of life and death over its subjects. The state is all powerful and extremely RICH officials lord it over everyone else. They control the army and use it to control everyone else. People disappear all the time and are never heard from again. Be careful what your discontent brings into power. No corporation maintains an army or will come in the middle of the night to put you in a concentration camp.
When Romney avoids paying $5 million in income taxes, that’s $5 million that the rest of us must make up to pay our government’s bills. That’s $5 million less that we spend on consumer products and services and $5 million less that the makers and providers of those products and services use to expand to meet our demand. That’s also $5 million less to hire people who are now on the unemployment roles. The “job creators” can’t hire anyone if there is no demand. THAT’S what makes our American capitalistic free enterprise system function or not.
Keep to the subject at hand.
Rebecca –
Are you seriously talking about the communist party? Who even brought that up? Not sure even Man of Reason is a supporter of communism.
I’m also not sure where you get all of your facts.
- Oprah is not one of the three richest people in our country. In fact, she is somewhere around #150-200.
- Mitt Romney actually paid MORE than the tax he owed by not taking some of his deductions.
- What senators are richer than Mitt Romney? Last I saw, Romney’s net worth was about $300 million.
- When was Warren Buffet trying to get out paying $1 billion in taxes? In fact, he is giving away 90% of his estate to AIDS research and other foundations. (Mostly Gates’ foundation)
- And when has the majority of the scientific world disproved evolution? This isn’t even being debated anymore in the scientific world.
Why does money have more value than people? If I earned 100 dollars (after taxes) and use that money to make more money i.e. capital gains why should my money get a tax break that I personally don’t get. Not that I don’t like that, but I believe that it’s not fair that money making money is taxed differently than people making money. If I spend a dollar on the lottery, Why then are the winnings taxed at 35%? Aren’t they just a capital gain. Investments are a gamble as well as the lottery only with better odds! I’m using after tax money! The capital gains tax rate has never been lower than it is now and it is killing the economy bring it back to the late 70′s rate at 40%. I’d imagine that the revenue problem would go away. More investors don’t make for a stronger economy it just takes capital out of circulation, more workers make a strong economy. As it’s been said, If you think that a corporations taxes is a double tax, don’t become a corporation, then profit would become only simple income taxed at 35% or 39.6% over 400K. The corporate structure protects you from losses not from taxes.
Investing is not gambling. There is research to do on a company. Financials will tell you if the company is making money. Gambling is throwing money away. The lottery is throwing money away. The lottery is not about investing money, it is a 1 in 175,000,000 chance of winning, therefore it is counted as ordinary income/bonus, not capital gains. I would love it if capital gains weren’t taxed at all. Maybe more people would save money and not end up just living off of social security. Can’t wait until the gov’t has a means test on SS. So if you have more than X in money in retirement, you don’t “need” SS. Well tough nuggies. I put into the system, I should be able to take a lump sum of what I put in and invest it on my own.
I am fine with Romney paying 14% on 10M. It means he is paying over a million dollars in taxes. he could have just blown the money on drugs and hookers and the go’vt never would have received the taxes when it is time. You can make millions and blow it all. I would think the gov’t would want people to save more money so they can take their taxes. If it were reversed and income was taxed low and capital gains taxed high, nobody would save money. They would just spend it. you have to have an incentive to save money, just like the mortgage deduction. It is supposed to be an incentive to buy a house, but plenty of people buy a house that doesn’t even qualify due to the house being under $150K and low interest rates now. If the gov’t raised the standard deduction to $10,000, millions of people wouldn’t itemize anymore. Maybe that is the solution to the low income people.
The you agree to make up the difference so the rest of us don’t have to? How gracious of you JB. Many thanks.
Investment is not a gamble?? I lost 75% of the value of my 401K when the mortgage bubble burst. I lost money when the tech bubble burst. No, I wasn’t able to write off the losses as I did not have enough invested to cover the standard deduction. My son lost 50% of the value of his home due to the mortgage fiasco. Investment is not a gamble!!!
Buying a house is not an investment. It is an asset and yes, home prices go up and down, but you didn’t buy the house thinking it would go down in value only up. Well, there is the problem with most people that put zero down on a house. Housing is shelter. Over the long run, most housing goes up in value, but not always. You are paying for shelter. And if your 401K lost 75% while the market was down 50%, you weren’t diversified enough. Again, Investing isn’t gambling just because the values of stocks go up and down. There is no way to assure you win in Vegas. There is no financial statement at a Craps table or with the lottery. You can do fundamental research on companies to determine if they are worthy of investing in.
Our house didn’t lose 50% of value. I don’t think it ever went down, but that is because we live in a stable housing environment, not Vegas or California.
The value of my portfolio went down like everyone elses, but it is back to where it was before and more because I kept buying in the down years. If you are only invested in 1 stock or one aggresive mutual fund, then you are at a higher risk, but that still isn’t gambling.
http://www.investorguide.com/article/12525/what-is-the-difference-between-gambling-and-investing/
Totally agree JB – investing is not gambling.
JC – if you lost 75% on your 401k, you must have been insanely aggressive. And you didn’t lose unless you sold – and if you sold, you aren’t exactly making wise investment decisions. Maybe you should seek the help of a financial planner.
And you weren’t able to write off the losses because the assets are in an already tax deferred account. It had nothing to do with the standard deduction or the tax code.
It really is amazing how much misinformation is on here (and the internet in general)
Oh…. and this is also not true Rebecca –
“IRS taxes are on earned income. Once you have earned the income,
you are able to invest your income in investments. If the investments
yield profit the profit is taxed at 14%. ”
Investments can yield profit a number of ways. One is through interest, which is taxed as ordinary income. Municipal bond interest is not taxed at all. Dividends are also taxed as ordinary income unless they are qualified dividends, which are taxed at 0%, 15% or 20%.
However, most money made in investments is through capital appreciation which is not taxed at all – until you sell. And even then, assuming they are long-term gains, you are taxed at 15% or 20%.
I’m now wishing for more debate with MOR – at least he knew what he was talking about. Please get informed with the reality of the situation…… (Of course if you do that you might question whether evolution is garbage too)
Romney HAS paid all his taxes. It’s Buffett that is in court trying to get
out of paying $1 billion that he owes. Romney is not my cup of tea in
all of his political positions, but he is a man who has used his money
for others, gone out of his way to help others, practiced Christian
giving extensively. He is not the man to put on your exhibit table
for the ungenerous. If all rich people were as non-greedy as Romney’s
example of how to live, the world would be a better place. Jesus
taught that the love of money is the root of all evil…not that money is
the root of all evil. God can bless you in your activities and money can
come into your hands through the talents God gives you. If you don’t use
the talents God gives you that is another way the world is robbed–by lack
of adding value. Romney is very good at adding value–helping people
organize their businesses to be profitable and bring value to the neighborhood.
Then he has given and given out of the value he has created. He has never
taken a salary for his work in government–thereby saving the treasury
of the taxpayers added expense. He was planning to not draw a salary if
elected president, unlike the current occupant, who last year cost taxpayers
$1.6 billion–more than the royalty of Europe together. It’s not evil to be
rich. It’s evil to covet what others have. It’s evil to steal. It’s evil to lay upon
the backs of others the burden for the licentious (giving yourself license) life
that you choose. The government of the United States is choosing very
unwisely to put our children and grandchildren deep into debt for today’s
frivolous spending. If you look only at the 22 ladies in waiting of Michelle
each costing quite a bit in salary, then compare with every other FLOTUS,
who had one secretary, except Hillary, with 3, the difference brings to mind
the word frivolous.
Do you even know part of the story about Buffet fighting the IRS about taxes? It comes down to the stupid IRS tax codes.
http://dealbook.nytimes.com/2012/03/26/netjets-case-warren-buffett-and-taxes/
My guess is that she doesn’t…… People on one political side or another take a snippet of a story “Buffett fighting IRS on taxes” and build a whole show on it – and tell the pieces of the story that fit their narrative. Of course, when you have hours and hours of airtime to fill, what else are you going to do.
A great example is in sports. Take someone like Randy Moss. He is portrayed by the sports media as a “me first” type of guy, who has a certain “street” persona. Some of this is deserved of course. However, I do know from personal experience about the charity work Randy Moss has done – particularly with spending time in Children’s Hospitals and how much it means to him and the people he is helping. Yet this story doesn’t make the front page because it doesn’t fit the narrative. Another good example is when ‘good guy’ Tom Brady is seen smoking pot at a rock concert at 3 AM – a big deal isn’t made of this because it doesn’t fit the narrative.
Extrapolate this out to politics or religion and one can easily see how most people are getting their information through a cloudy lens. If you watch or read any one source too long (Rolling Stone, Fox News, Rush, MSNBC, etc.), you will start to speak the narrative. It’s frankly not much different from religion or to some extent, corporate America. But it doesn’t make it true.
I really do hate to bust your bubble Rebecca, but Romney isn’t Snow White. This was in Rolling Stone Magazine:
“Mitt Romney likes to say he won’t “apologize” for his success in business. But what he never says is “thank you” – to the American people – for the federal bailout of Bain & Company that made so much of his outsize wealth possible.
“According to the candidate’s mythology, Romney took leave of his duties at the private equity firm Bain Capital in 1990 and rode in on a white horse to lead a swift restructuring of Bain & Company, preventing the collapse of the consulting firm where his career began. When The Boston Globe reported on the rescue at the time of his Senate run against Ted Kennedy, campaign aides spun Romney as the wizard behind a “long-shot miracle,” bragging that he had “saved bank depositors all over the country $30 million when he saved Bain & Company.”
“In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney’s initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had “no value as a going concern.” Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.
But the FDIC documents… show that… Romney was willing to go to extremes to secure a federal bailout to serve his own interests. He had a lot at stake, both financially and politically. Had Bain & Company collapsed, insiders say, it would have dealt a grave setback to Bain Capital, where Romney went on to build a personal fortune valued at as much as $250 million. It would also have short-circuited his political career before it began, tagging Romney as a failed businessman unable to rescue his own firm
“Even though Bain & Company was deep in debt and sinking fast, the firm was actually flush with cash – most of it from the looted money that Bill Bain and other partners had given back….
“Under normal circumstances, such ample reserves would have made liquidating Bain an attractive option: Creditors could simply divvy up the stockpiled cash and be done with the troubled firm. But Bain had inserted a poison pill: Instead of being required to use its cash to pay back the firm’s creditors, the money could be pocketed by Bain executives in the form of fat bonuses…. “The company can deplete its cash balances by making officer-bonus payments,” the FDIC lamented, “and still be in compliance with the loan documents.”
“… Romney approached the banks and played the bonus card. Allow Bain to pay off its debt at a deep discount, he demanded – just 35 cents on the dollar. Otherwise, the “majority” of the firm’s “excess cash” would “be available for the bonus pool to its officers at a vice president level and above.”
“In the end, the government surrendered…. The FDIC agreed to accept nearly $5 million in cash to retire $15 million in Bain’s debt – an immediate government bailout of $10 million. All told, the FDIC estimated it would recoup just $14 million of the $30 million that Romney’s firm owed the government.
“It was a raw deal – but Romney’s threat to loot his own firm had left the government with no other choice. If the FDIC had pushed Bain into bankruptcy, the records reveal, the agency would have recouped just $3.56 million from the firm.”
Someone once said, “Behind every great fortune, there is a great crime.” Do you really think that Jesus would approve?
I think the truth lies somewhere between the Biblical/Fox News perspective of Mitt Romney and Matt Taibbi’s articles in Rolling Stone.
There is still a lot of whining going on. Have any of the whiners started their own company yet? Don’t you want to be a rich CEO and work 12-14 hrs a day to get your company off the ground? I guess not, so stop whining. You should be asking those that have ‘made it’ how they did it but in you limited jealous minds all you want to do is enslave them with more taxes.
In the end there should be winners and losers. Bad policies will make us all losers.
I think things are going to keep getting tougher unless we can reign in spending in a huge way. The amount that we pay in interest just to service the debt will keep escalating, and this will continue to be a noose around our collective necks.
I would remind everyone that even though Clinton achieved a surplus, the national debt continued to rise during his presidency. E.g., we could make more than the minimum payments on our credit card, so we increased the line of credit. We were able to service more debt while still achieving a surplus.
In other words debt is a huge problem. Spending is a huge problem. Erosion of our tax base is a huge problem. We need politicians willing to address all of these issues, and we need Americans to be willing to forego some of the benefits they have received from government.
Actually Joe, debt decreased in real dollar terms during Clinton’s second term and we pay less of budget to interest on our debt now than 20 years ago because interest rates are so much lower. However your concerns are well taken in that the Fed has kept interest rates artificially low, and when growth strengthens, we could face more than twice the current interest rates or even more which will bring interest to record levels within the budget and effectively tighten that noose of which you speak.
Had Bush II continued Clinton’s fiscal policies, we would not be having this discussion, but he didn’t, and now that’s water over the bridge. Going forward, our government has many fewer solutions to resolve the weak economy and budget deficits because of policy decisions from 1981 to 1992, and again from 2001 to 2008. Most Americans know that we not only will have to increase everyone’s taxes, but also make painful cuts. With everyone guarding their sacred cows, I only wonder who’s will get gored. (Most likely, those who have the least money to exercise their freedom of speech and effective persuasion.)
All I know is that the US National Debt is fast closing on 17 TRILLION Dollars. . . unsustainable, and soon will implode the entire economy if it continues. . .
I am a physician in nyc and I make over 400K. I am a 54 year old Ob/Gyn and I plan on laying off my entire staff the end of the year and retire. Let Obama treat the patients, I am finished.
Anyone that is a doctor for the money only, should get out.
Leverage your practice, lease or sell it to a young physician. Let your employees keep their jobs. Laying off people is only going to lead to additional taxes. On the other hand, why get out? Just pass your costs on to the customer and be done with it. Everybody that pays taxes is in the same boat. Most everybody that is not paying taxes would rather be paying taxes if it meant income in which to live on.
Good for you. Let these people figure it all out. You reach a point where enough is enough.
Alan, fortuantely, for you that you can retire. Many of us who are self-employed are not in such good shape. Spike, its not just the money, its that the goverment does not have the right to be in our lives. ITs that simple.
Alan, good for you and I don’t blame you. I own half an automation company and could retire years ago. I object to paying the obamacare tax. I have found out that I have a niece and nephew that need money for college. If I pay that I have a big deduction. If I cut back on my hours and take lots of vacation perhaps I will get below the obamacare tax. Otherwise I may simply retire like Alan.
Alan, the problem I have with truly retiring is that it is not good for you unless you can find a way to keep active doing something. Every time I meet a retire guy is seems like one day is like the next. There is little or nothing new. They may as well died the day they retired. There needs to be a course on how to retire the right way.
BTW, I bet Alan cringes when he hears how much it costs now to get the same education he got. I know I was shocked to hear how much my niece and nephews education cost per year. How can they justify that cost? There had better be a good return or investment, ROI. How is Alan’s replacement going to pay for his or hers education?
As it is I am happy to slow down and pick my jobs so I am doing only what I want to do.
Spike, it isn’t just the money. Those of us that have made lots usually have a passion for what we do and that is what made us good and exceptional. That kind of person will find it hard to truly retire. I bet if Alan could do what he like to under his own conditions he would continue to do so. Alan, what say you? I know I would. It is such a waste.
If I truly retired it would be such a waste but the government takes out all the incentive to do anything. History will record that the 21st century is where the US started to decline in a big way.
If you want to call Obamacare a tax, so be it, it’s a tax. Why did you stop providing your employees with health care benefits? If you didn’t create the healthcare crisis in the first place, then there would be no Obamacare! You were obviously waiting for the government to step in and provide your employees with health care. Now that you have that, you must pay for it anyway. If you provide health care to your employees then you can always deduct it.
I/we haven’t stopped health care for our employees yet but obamacare demands that I pay for other peoples health care and I am not willing to do that. I/we pay about $900 to $1000 an month per month per employee. It is much cheaper to dump everyone on the obamacare plan because the penalty is only $2000 per employee per year. You do the math.
There is nothing in the Constitution that say health care is a right.
Now you know what it’s like to be “Middle Class” !! So again, you’d rather have your employees be on government healthcare for 2000 a year per employee rather than the 10-12,000 per year per employee that you already pay? Where does the “Penalty ” come into play. Does it mean that you have a choice, to either pay your growing healthcare costs, or, devalue your company by putting your employees on government healthcare. When you should be looking at why healthcare costs are are outpacing the economy by 10 times. It is certainly not the government fault!
“Now you know what it’s like to be “Middle Class” !! So again, you’d rather have your employees be on government healthcare for 2000 a year per employee rather than the 10-12,000 per year per employee that you already pay? ”
I must only match what other companies are willing to pay.
“Where does the “Penalty ” come into play. Does it mean that you have a choice, to either pay your growing healthcare costs, or, devalue your company by putting your employees on government healthcare. ”
Paying the penalty does not devalue the company. It avoids costs. Even though the penalty can’t be deducted it is still cheaper than paying up to 6 times more. Every time the gov adds a new tax it makes our company less profitable and that decreases the value of our company to anybody that would want to buy it.
I shouldn’t be looking at why health care cost are outpacing the economy. Obamacare is should be doing that. I take a drug that costs 389 for a 3 month supply but I can buy it for $109 in Canada but it is illegal for me to do so. Why? This government is not acting in my interest at all. It wants to tax be to give to others and it supports pricing fixing for drugs and it makes it illegal for me to buy from alternative sources. Do you think this government deserves my loyalty? I don’t. When the market is free and I am free then I will reconsider.
Governments are about staying in power, force and control. They aren’t about freedom.
What you conveniently seem to forget is that “YOU” and everybody around you “ARE” the government! Now you are starting to see where the problem lies, The bigger the company, the more lobbying power it has to influence the government. Your drugs are too expensive!!! Place blame exactly where it belongs, with BUSINESS. The biggest companies get to charge what they want and because you elected all those right wing republicans for big business and trickle down, you pay what you pay. If your so called republican party representatives were not in the pockets of big business, none of us would be in this mess to begin with.
The point is that I am not the government. If I were the government would be restricted to what is in the Constitution. The government has made it illegal to buy drugs from Canada, not businesses.
You paint too broad a picture. Don’t blame the republicans alone. Obama could veto these monopoly like bills or make an executive order but he hasn’t because he doesn’t want to lose control of the medical system to Canada. How does a bill that outlaws buying drugs get past the democratically controlled senate? You can’t blame just the republicans, the democrats are just as guilty.
Those laws are not in the sphere of Obama. They were passed 10 or more years ago when the republicans were in power, and all Obama can do is recommend a change in the law. Remember he doesn’t have the authority to present bills to congress, he can only sign them or veto them.
And just WHY did the government make it illegal to purchase drugs from Canada? Pressure “or was it” lobbying from the pharmaceutical companies?? The “fact” is that you are the government!
You would rather just bitch and moan than to participate in government as is your “RESPONSIBILITY”!!! Remember “Rights and Responsibilities” go hand in hand. You can’t have one without the other just because you think your entitled because you have money.
It is in the purview of business to keep the economy going. It is in the purview of government to do the will of “the people”. If you wish not to be “the people” then take your money and go somewhere else and try their laws for a while!
If the people want entitlement reform they can get entitlement reform. If the people want healthcare reform they get healthcare reform. The more people that don’t have work gives the majority to the poor. If you want the government off your back, put the people back to work. Take a little less now and it gets you lower taxes later. The more money you put back into your company rather than take it out by paying dividends and bonuses, the lower overall tax burden you will have to support in the future.
Obama had no chance to veto the bill restricting the purchase of drugs to the U.S. pharmicutical companies which excluded Canadian companies. Yes, you can certainly cast blame on Republicans for that one. To do otherwise would be extremely ignorant of historical facts.
This story is very misleading. Most attorneys do not make anywhere near $400,000 a year. Less than 2% of the attorneys in my community make $400,000 a year or more. The attorneys that make this type of money are generally partners in huge cities like Manhattan if they are even still making that type of money.
I used to work at a law firm in Houston and although it was a large, national firm, there are plenty of lawyers making $400K when it encompasses bonuses. Most of the partners were making well over $500K. We started the newbies at 160K a few years ago. They are the 10% of the 1%, but like any field, there are always those at the top of the game that make the most, but also have the most risk. Law firms have gone bankrupt. They also need big dollars in revenue to make that kind of money. My wife’s boss is a partner in an big 4 accounting firm and is over $800K in salary. But once again, not every can make partner. You have put in thousands of hours of work and have the skills necessary.
So I noticed they didn’t mention California’s infamous city official’s $440,000 per year pensions. Wait, they said “earned”.
Most of Apple’s cash is sitting overseas, though, and with interest rates at record lows, it’s cheaper for Cook to borrow money than to pay the taxes on repatriated profits.
I know a couple of patent lawyers who make at least $400K..
First thing is to downsize government by getting rid of unnecessary programs like Homeland Security. Why do we need a homeland security department when we already have one. It’s called the the National Guard and the Coast Guard, the Army, Navy, Air Force, and Marines. Why do we need FEMA when we already have the Army Corp or Engineers. How many duplicate agencies do we need? Then term limits need to be placed on all government elected officials 2 terms for President (which we already have) 2 for the Senate and 5 for congress to ensure continuity. Then a Constitutional amendment that no law shall be passed for the benefit of any elected official that does not apply equally to all the people of the United States of America. That would be a good start!
There are countless claims as to who is spending what, but the only reliable source of accurate information is the Congressional Budget Office. The POTUS is not supposed to present a budget that is passable, it is supposed to be challenging to both sides of the aisle. Both houses of the legislature are responsible for making things work, but with the Republicans engaged in civil war there is nothing that is being resolved. Our elected officials have become whores to the re-election plague and are close to worthless. The proliferation of lobbyists and campaign contributions has tilted the focus away from the vast majority of people. Everyone has an opinion that is more often than not misinformed or blatantly subversive. It is long past time to clean the House and Senate and some of the most recent additions are the most egregious of them all.
No one should vote for any Republican who votes for Grover Norquist’s “Taxpayer Protection Pledge”, which asks all candidates for federal and state office to commit themselves in writing to the American people to oppose all tax increases.
It is too restrictive and prevent Republicans from making compromises that are necessary to get anything accomplished.
PeterN said:
“Spoken like one of the 47% losers that don’t have any skin in the game. The country has a spending problem, not a taxing problem.”
Well PeterN, the lowest 20% of American earners, a special sub-category of “losers” to you, pays out almost 18% of their incomes in all taxes. Why do you call them “losers” or suggest they have “no skin in the game”? That’s a tremendous contribution from those least able to afford it and certainly causes them substancially more pain than Mitt Romney’s 14%.
Then again, we have a problem balancing the federal budget which includes the least revenue per GDP since Truman, not just a spending problem. But, how do we negotiate or compromise when your myopic view negates revenue, especially tax increases? I’m also amazed at you neocons who say we have a spending problem without telling the rest of us exactly where we spend too much or what you would cut. Of course, to do so would quickly reveal how stupid and unpopular your position really is.
We have been through this before. The bottom 47% pay NO FIT so naturally they think people like Grover Norquist are evil.
” Of course, to do so would quickly reveal how stupid and unpopular your position really is.”
It isn’t stupid. I am looking out for my best interest and I don’t care about yours when you want to make me more of a slave to the gov. Since there are more losers than winners. I understand that the loser position is more popular. That is why we are in this mess. Almost half the US budget is spent on stuff that do me no good.
I am waiting for the crying and howling that will come when obamacare is fully in place and small companies reduce employees to get under the limits or reduce hours worked to under 30 so they don’t have to pay for insurance.
You made an interesting observation there, Mr. Peter N. “Since there are more losers than winners. I understand that the loser position is more popular.” You seem to think that it is a natural human condition for there to be more losers than winners. Why must it be so? Even with 6.6 billion people, there are enough resources to go around on this beatiful green planet. So why must the top 1% hog 90%? Why must there be “winners,” who arrogate superabundance to themselves at the expense of everyone else? Why indeed?
While I agree with you that there is too much money in the system, I think the problems run deeper than that. The problems are structural and are rooted in our hallowed Constitution. First, and as a direct result of the Art. I, sec. 3, the Senate is no longer a representative institution. Rural, lightly populated states like Wyoming, Alaska, and Maine are vastly overrepresented. The citizens of Wyoming have 66 times more votes in the Senate than the citizens of California. There is no justification for that kind of imbalance. Second, we elect our presidents by chance. Depending on how the votes are distributed, the loser of the popular vote can win the electoral vote and presidency–and has done so four times. We could fix this by requiring proportional awarding of the electoral votes, but we never will because the less populous states will never agree to it. Third, by allowing gerrymandering of congressional districts since shortly after the Constitutional Convention, we have turned the House into a non-representative body as well. In the last election, 2.5 million more votes were cast for Democrats than Republicans–yet Republicans retained a strong majority in the House because they concentrated Democratic voters into fewer congressional districts after the 2010 Census. Clearly an anti-democratic, anti-republican perversion of the Constitution, but hey, it didn’t bother those rabid constitutionalists in the Tea Parties.
I fear we may have jumped the shark in American representative democracy.
You used to pay employees insurance costs without government help as an incentive to happy employees. So why not now? Do you actually think that employees will want to work for people that don’t pay for their insurance costs? The “47%” that you think pay no taxes, actually pay a larger percentage of their income in taxes than you do. Even if on unemployment insurance their income is taxed at the federal level.
Those so called companies that reduce employees hours will end up closing their doors and “SMART” company CEO’s will pay their employees health insurance costs so that they will not be penalized.
Once again you have it backwards. It is American Business that needs to change. The more employed people, the less burden there is on everyone. Rich and poor!!!
“You used to pay employees insurance costs without government help as an incentive to happy employees. So why not now? Do you actually think that employees will want to work for people that don’t pay for their insurance costs? ”
I will have to but it costs me about $12K per year per employee. If I dump them on he system and pay a $2K per year fine I come out ahead IF I can keep the employees. However, if I pay the employee directly $5K so he can offset deductibles and have money for some catastrophic insurance then both of us will come out ahead. There will be insurance companies that will come out with a complementary insurance options because it makes sense, just wait.
“Those so called companies that reduce employees hours will end up closing their doors and “SMART” company CEO’s will pay their employees health insurance costs so that they will not be penalized.”
We’ll see. You are not thinking, just repeating your class war fare garbage. See my option above.
“Once again you have it backwards. It is American Business that needs to change.”
It has. It has automated so not as many workers are needed or the jobs have shifted from brainless assembly line work to jobs that require skills to build and maintain the same machines.
“The more employed people, the less burden there is on everyone. Rich and poor!!!”
I agree but business will only do what makes profit. That means that these workers must have skills that can’t be done by a robot.
“The “47%” that you think pay no taxes, actually pay a larger percentage of their income in taxes than you do.”
Are you drinking and posting? How is someone that doesn’t pay any FIT going to pay an extra 33% that I pay in FIT? Local taxes aren’t that high and I must pay them too. This is a prime example of leftist misinformation and myths that they spread. Don’t forget, dividends are taxed twice. The effective tax rate is actually about 48.5%. See my previous posts.
Your corporate dividend taxes are paid by increased cost to your customers not you, or you wouldn’t be in business at all! Dividends are not considered income otherwise you would be paying much more in taxes. I didn’t say they pay more money, I said they pay a larger percentage of their income in taxes than you. If 47% of the countries citizens are on welfare or not paying any FIT then it is your fault for not retraining your employees to do more technological jobs rather than just downsizing them and forcing them onto the welfare roles. You think it is up to the government to take up your slack without charging you for the burden. Would you rather make more money by investing in people or pay more in taxes by letting your employees go on welfare?
“I will have to but it costs me about $12K per year per employee. If I dump them on he system and pay a $2K per year fine I come out ahead IF I can keep the employees. However, if I pay the employee directly $5K so he can offset deductibles and have money for some catastrophic insurance then both of us will come out ahead. There will be insurance companies that will come out with a complementary insurance options because it makes sense, just wait.”
Now, isn’t that exactly what global healthcare is all about, reducing your costs?
Now tell me again how by having the government pay for your employees healthcare benefits that you won’t pay because it is not as profitable, but in the same sentence say that Obamacare is a bad thing. You have to pay one way or another.
GET AMERICA BACK TO WORK!!!
By the way, $5K wouldn’t pay the deductible for any catastrophic illness or injury.
“Your corporate dividend taxes are paid by increased cost to your customers not you, or you wouldn’t be in business at all!”
This just goes to show how clueless you are. Customers are not pay dividends to share holders. It is up to the company to decide that.
“Dividends are not considered income otherwise you would be paying much more in taxes.”
Not earned income but they are income that I as a stock holder has paid corporate taxes and I as an individual must pay taxes on yet again.
“If 47% of the countries citizens are on welfare or not paying any FIT then it is your fault for not retraining your employees to do more technological jobs rather than just downsizing them and forcing them onto the welfare roles.”
I do train my employees. I also pay a lot in property taxes that supports local schools. I pay for my home and LLC that own the business building.
What I object to is that you seem to think I must pay to educate all the others that I don’t employ and didn’t learn the first time in public schools.
“You think it is up to the government to take up your slack without charging you for the burden.”
Education is not mentioned in the Constitution. Education should be a government function. States and school districts should take care of education so people can vote on how it is run instead of big gov dictating mandates.
“Would you rather make more money by investing in people or pay more in taxes by letting your employees go on welfare?”
I said before, I train my people. I don’t want to be forced to train others. Get it. If they work for me they are doing better than average.
“Now, isn’t that exactly what global healthcare is all about, reducing your costs?
Now tell me again how by having the government pay for your employees healthcare benefits that you won’t pay because it is not as profitable, but in the same sentence say that Obamacare is a bad thing.”
Obamacare is bad because it raises taxes and costs. It does not make medical care more affordable for me. I don’t like the gov taxing me, holding a gun to my head, an extra 3.8% just to give to some losers.
Health care is not a right. It is not in the Constitution or the Bill of Rights. The problem with you leftist is that you think the world owes you a living and you are unwilling to work for it. If you were raise in an environment where to get anything you had to work you would have more incentive to learn in school instead of showing up to be cool.
Not all rights are in the Constituttion Mr. Justice Peter N. Like the right to travel, the presumption of innocence, and the necessity for the state to prove criminal guilt beyond a reasonable doubt.
Your rights stop when they infringe upon mine.
Health care and other things are not a right especially when you expect others to pay for it. You are infringing on other people freedom.
Cool – let’s keep taxing the hard workers more and more to allow the rest of our country to enjoy a life they aren’t earning.
With the exception of the POTUS (all of them, even the clowns like Bush and Reagan), who earns every penny of his $400k, there isn’t a man or woman alive who actually EARNS $400k.
You obviously have no idea what it means to manage 10,000 people at a large company. Doctors earn every penny and so do most that earn 400K. When you get up into the actors and athletes salaries, you can debate if they are worth it. But the market sets the salaries, so who are you to be a bitter person about what someone makes. You obviously don’t have the skills to make 400K.
Ditto what JB said but on top of that there are idea that are worth much more than $400K.
I still suggest that the lefties try starting their own company instead of relying of the government or business people to give them a job.
You can’t really blame the GOP if the various minorities chose to live in particular districts. Here in Chicago we have a gerrymandered two-part district specially created to create a hispanic majority. Think the connection between the two districts is a water pipe.
Likewise California has more than enough representation to get all the representation it needs without having to sacrifice smaller states.
Tyranny of the majority is a well-recognized phenomena that goes all the way back to ancient Greece, Rome and Babylon. Why encourage it?
Making 400K in 2013 is not a big achievement. Surgeons can make 100k-150k/month in an active practice. I know – my son does. Corporate lawyers involved in finance can make several millions/year, again by working very long hours. I know because my younger son does.
I am a Physician And a specialist and no one I know makes even close to 400k a year. Some pediatric doctors I know make less than a good plumber or electrician these days. The difference is that plumbers and electricians don’t go to school for 12 years after high school or have over 250k in school loans!
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