Getting a jump on 2012 taxes

[Dad_of_3]

<p>

Nobody gives a crap about people that work and make 250,000 to 1,000,000 a year. There aren’t that many of you. You don’t make enough to buy favors.

</p>

<p>Is this a “(da*n?) stark” truth that some of us need to swallow?</p>

[Iglooo]

<p>Aren’t we getting a little cynical? Doesn’t $250,000 a year put them top 1%? If top 1% is not rich, what shall we call rich?</p>

[DocT]

<p>people who are rich frequently think that only those who are richer are rich.</p>

[notrichenough]

<p>Top 1% floor is $383,000 in household income.
Top 5% floor is $188,000.</p>

<p>$250,000 is top 3%.</p>

<p>[What</a> Percent Are You? - Interactive Feature - NYTimes.com](<a href=“What Percent Are You? - Interactive Feature - NYTimes.com”>What Percent Are You? - Interactive Feature - NYTimes.com)</p>

[notrichenough]

<p>1% for wealth, according to an old report, is $8.4 million.</p>

<p>[Measuring</a> the Top 1% by Wealth, Not Income - NYTimes.com](<a href=“http://economix.blogs.nytimes.com/2012/01/17/measuring-the-top-1-by-wealth-not-income/]Measuring”>Measuring the Top 1% by Wealth, Not Income - The New York Times)</p>

[dstark]

<p>I don’t think 1 or 2 percent of the population is a lot…</p>

<p>I dislike the term rich. It is very debatable whether somebody who makes 250,000 a year is rich. I prefer using the term wealthy. And wealthy is having more than enough so you never have to work.</p>

<p>We can argue that making 250,000 a year isn’t rich so it is annoying to hear that we are going to tax the rich more and people think, “Wait a minute. I am not rich. If you are going to tax rich people more, and I am not rich, why are you going to tax me more?
Why am I lumped in with the rich people?”</p>

<p>I understand that argument. It is annoying to be called rich when you aren’t rich. There are very few rich people in this country. I am using the term rich because others use the term rich. The reason so many people that make 250,000 a year think they are middle class is because in some ways they are. They still have to work hard for a living. They can’t buy what they want. College is expensive. Retirement is problematic.</p>

<p>But let’s face it. Terminiology aside. The country is undertaxed. The numbers don’t lie. People do. The numbers don’t. We can not run this country with the federal taxes we are receiving now. So although I agree calling people who work hard and make 250,000 a year rich is annoying as hell, their taxes are going to have to go up. And people who make less, maybe their taxes won’t go up. But their benefits are going to be cut. It is going to happen. That is how the people making under 250,000 a year are going to contribute. Their benefits are going to be cut. (taxes will be raised for some of them too). It is going to hurt. I would leave the poor
alone…because they are Poor.</p>

[BCEagle91]

<br>

<p>I’ve never understood how mortgage deductions benefit anyone other
than banks and real estate brokers by inflating prices through a
subsidy. Don’t most people buy a house based on how much they can
afford rather than what they would like? So any benefits in the
deduction is immediately nullified by the corresponding increase in
price.</p>

<br>

<p>I think that those that can benefit from the bubble (flippers, those
that buy, sell and rent at opportune times) can also benefit. But yes,
the tax benefit is eaten up by price increases. Similar to college
prices going up with subsidies. Everyone likes to think that they are
getting a deal though.</p>

<br>

<p>Different question altogether - what is the strategy for long term
protection of the real value of current assets given all the bubbles
that will come to fruition over the next 20-30 years? Asset taxes
(like what Florida used to have - % of value intangible assets like
mutual funds, not earnings)? Hyperinflation to reduce the current
value of debts and assets? Progressive pricing models in more arenas
so that higher income/asset people subsidize others?</p>

<br>

<p>Gold, silver, platinum. Maybe water, rare earths. Oil if you want
income. Soybeans, eggs. Of course we could also go into a deflationary
mode where those things would work in reverse.</p>

<br>

<p>It will be useful to see how societies that have overspent have dealt
with these problems, like the way this country would need to in the
next decades, so that we can plan for it.</p>

<br>

<p>Well, war has been a traditional approach.</p>

<br>

<p>Even people who make 250,000 to 1,000,000 defend the people that
make more using capital, so the million dollar plus people are
protected by those that make less and the power the wealthy can buy.</p>

<br>

<p>If you’re making this much working, how could you not be making money
via the capital markets?</p>

<p>I remember a piece in The Millionaire Next Store - at some level of
wealth, you have to be in the stock market to make more.</p>

[Iglooo]

<p>^Read the link posted in #305. By and large, higher earners have large assets. Calling people who make $250,000-300,000 rich is not off by much. What I don’t like is the tone of tax debate. Top earners are isolated and attacked while cleverly leaving out that most of those earning $250,000 or more have already seen tax increase 3.8% in ObamaCare that kicks in 2013.</p>

[dstark]

<p>One thing that bugs me is the defending of the wealthy, the truly wealthy when they pay little to no taxes on their wealth. </p>

<p>Like the wealthy are more noble than others, that bugs me. And because they are more noble, they shouldn’t have to pay a tax. Then these same defenders of the wealthy complain about people that don’t have skin in the game as if the income tax is the only tax that exists. It is such bs. I don’t know why people have the need to buy that crap.</p>

<p>I think that somebody that works two jobs, works 50 to 70 hours a work for crap pay, can’t save much, but makes sure there is food, shelter, clothing for his family is pretty noble. I was talking to one guy, he
commutes an hour each way, works at two places, over 13 hours a day of work, supporting a family, and some of you are worried because he doesn’t pay enough income tax? I have talked to others in similar circumstances. </p>

<p>I think there is something wrong with a society, any society, when somebody works hard, over 40 hours a week, and he barely can make it. I think societies like that are in danger of breaking down.</p>

[BCEagle91]

<br>

<p>One thing that bugs me is the defending of the wealthy, the truly wealthy when they
pay little to no taxes on their wealth.</p>

<br>

<p>We don’t have wealth taxes. We have income taxes.</p>

<p>Those that do make a lot do seem to contribute a pretty decent percentage of Federal Income Taxes though.</p>

<br>

<p>Like the wealthy are more noble than others, that bugs me.</p>

<br>

<p>Straw man.</p>

<p>But I certainly do appreciate the company that I work for founded by someone of vast wealth today.</p>

<br>

<p>And because they are more noble, they shouldn’t have to pay a tax.</p>

<br>

<p>Flawed logic from flawed premise.</p>

<br>

<p>Then these same defenders of the wealthy complain about people that don’t have
skin in the game as if the income tax is the only tax that exists. It is such bs. I don’t
know why people have the need to buy that crap.</p>

<br>

<p>I think that it would be helpful if everyone had an appreciation for income taxes. If someone is paying your freight, you tend not to appreciate it.</p>

<br>

<p>I think that somebody that works two jobs, works 50 to 70 hours a work for crap
pay, can’t save much, but makes sure there is food, shelter, clothing for his family
is pretty noble. I was talking to one guy, he commutes an hour each way, works at
two places, over 13 hours a day of work, supporting a family, and some of you are
worried because he doesn’t pay enough income tax? I have talked to others in similar
circumstances. </p>

<br>

<p>What’s the big deal about working 50 to 70 hours per day? Isn’t that the new normal?</p>

<br>

<p>I think there is something wrong with a society, any society, when somebody works
hard, over 40 hours a week, and he barely can make it. I think societies like that are
in danger of breaking down.</p>

<br>

<p>China has been like that for a long time. Are they in danger of breaking down? Hong Kong? Brazil? Indonesia? Malaysia?</p>

[dstark]

<p>Igloo, on defining rich, it depends on a person’s situation. </p>

<p>As far as that new medicare tax…unearned income will be taxed. Earned income is already taxed. And only unearned income will be taxed if that increases your income above 250,000 a year. And with unearned income, only income above 250,000 a year will be taxed, unlike earned income.</p>

<p>This explains it better…But yes, there is a new tax…</p>

<p><a href=“http://health.burgess.house.gov/uploadedfiles/one_page_on_unearned_medicare_tax.pdf[/url]”>http://health.burgess.house.gov/uploadedfiles/one_page_on_unearned_medicare_tax.pdf&lt;/a&gt;&lt;/p&gt;

<p>Post 310, you just want to argue, BCEagle91. Let me know when somebody works 50 to 70 hours a day. ;)</p>

<p>By the way, you supported my arguments. Thanks.</p>

<p>Gotta go now.</p>

[BCEagle91]

<br>

<p>Let me know when somebody works 50 to 70 hours a day.</p>

<br>

<p>In the past, teachers used to complain that they had to work a lot of extra hours every day grading papers, meeting with parents and setting up lessons. I guess that was to compensate for paid time off during the summer. Several years ago, that approach stopped working because everyone is working over 40 hours, whether or not it is paid.</p>

[DocT]

<p>“China has been like that for a long time. Are they in danger of breaking down?”</p>

<p>really - when was the last time you were there?</p>

[BCEagle91]

<br>

<p>when was the last time you were there? </p>

<br>

<p>1980s. But I work with a lot of people that were born there and that travel there often.</p>

<p>China, like most other countries, has people that live on the edge and people that are doing well.</p>

[DocT]

<p>There are very wealthy people and many very poor people especially when you get out of the central portion of the urban areas. Maybe if you’re a Han, you’re doing ok, how about the minorities? How do the people of Hong Kong feel? It isn’t a rosy picture there and they will have to make changes. How does the burgeoning elderly population feel about their futures?</p>

[mcat2]

<p>From what I heard, to help stabilize their country, China needs the consumers in a country like ours who keep buying their products, even to the extent that they may be willing to lend money to us (at low cost) to keep consuming.</p>

<p>Whenever I heard terms like earned vs unearned income, my head spins.</p>

[Iglooo]

<p>

One thing that bugs me is the defending of the wealthy, the truly wealthy when they pay little to no taxes on their wealth.

</p>

<p>Someone upthread said top 1% earn 17% and own 40% of wealth. And they pay tax 37% as a group. if true, I don’t see how anyone can say the wealthy don’t pay tax. We could argue they should take a bigger burden, maybe increase their share to 40-45% instead of 37%. 37% is not nothing. Besides, we should blame our government. They are the ones who write tax laws. They are charged with looking out for our well being.</p>

<p>

As far as that new medicare tax…unearned income will be taxed. Earned income is already taxed. And only unearned income will be taxed if that increases your income above 250,000 a year.

</p>

<p>I know. I was assuming most people in this group also has unearned income that will be subject to the new health care tax. If you earn $250K and have investment income $50K, the last $50K will be taxed for healthcare and also at a higher rate if the marginal tax goes up. I am not saying it should not be that way. Just pointing out that.</p>

[DocT]

<p>There are a lot of issues there. The population is moving to the cities. Apparently, traditionally, people take care of their elderly parents which means the parents move in with them like it used to be here. This is accentuated because the young cannot afford the apartment costs in the major cities so there are multi - generations living in the same small living quarters. A lot of younger people are becoming more mobile like we did here and some of the elderly have less options for living. Also a lot of younger people see what we have here in terms of single family dwellings which are not particularly prevalent over there. The ruling party is going to have to give in to a lot of changes to prevent future strife.</p>

[mcat2]

<p>I also heard the one-child policy there over the past severel decades started to give many families stress when the parents are near the retirement age. One young couple may have the burden of taking care of the parents on both sides.</p>

<p>Arguably, the best retirement system is such that each generation can save enough to take care of themselves. They were not there yet when the one-child policy was enforced. (Heck, US is not there yet even today. It will not the the case any time soon. It is human’s nature not to see anything that is far in the future. If if they see it, it is totally another matter whether they have the discipline to do it. (Maybe only those tea baggers have the discipline, according to their words. It is because they are from a more developed/“superior” species and are always responsible when they are babies, toddlers, teenagers, adults, or even after they have been dead.)</p>

[DocT]

<p>By the way the one child policy only applies to the Han majority, it is not applicable to the minorities who are largely farmers and migrant workers.</p>