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SmartMoney: how the the expiration of the Bush tax cuts affects you

Discussion in 'BBS Hangout: Debate & Discussion' started by basso, Jul 8, 2010.

  1. insane man

    insane man Member

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    i can sympathize with inflation adjustment, but that may be a bit complicated. i'd be ok with ordinary income minus a few percentage points if held over a few years.

    as far as double taxation, i dont find it to be a double taxation nor a problem. as a stock holder you have this incredible liability protection. and thus if we're going to give you a liability shield, give the corporation its own personhood, the corporation should pay taxes just like people would. and if it chooses to distribute money to its shareholders, it shouldn't have an unlimited gift tax exemption.

    if you want pass-through taxation there are s-corps and partnerships and what not. consult a tax attorney.
     
  2. Rashmon

    Rashmon Contributing Member

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  3. glynch

    glynch Contributing Member

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    So what if it is only the top 2% tha woud have their taxes appreciably raised? It is a moral issue not to tax them. They should not be taxed (have their money stolen) to go and feed poor kids at lunch in the public schools . Doncha know. :rolleyes:
     
  4. Batman Jones

    Batman Jones Contributing Member

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    basso should get some sort of award or trophy for consistently posting so many wrong or dishonest articles in a row. He has an uninterrupted seven year streak going -- whether he actually acknowledges the original author or tries to pass the article off as his own writing, he is inevitably WRONG. It really is amazing.
     
  5. Rocketman1981

    Rocketman1981 Member

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    I believe its also globalization and technology that has allowed individuals to create massive fortunes for themselves. Like any statistics, most are skewed by a few ultra wealthy people whereas the majority of $250-$350k family incomes wouldn't feel like they were 'ultra rich'.

    The majority in that bracket are doctors offices, lawyers, small plumbing businesses or other restaurants and shop owners. As 70% of jobs in the US are small businesses, these business owners comprise a majority of people in that $250-$500k income I would imagine.

    When you increase the taxes on these people, they simply find a way to reduce overhead and many times fire people. So by raising taxes on these people, the people we were trying to help will be provided some watered down social service with funds that have been diluted by government waste and bureacracy, and many of them will lose their jobs.

    I think if people knew that raising taxes may give them a slightly better social service at the expense of jobs, they would re-think their arguments.
     
  6. surrender

    surrender Member

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    OBAMA WHY AREN'T YOU DOING ANYTHING ABOUT THE DEFICIT?!?

    *lets tax cuts expire*

    OBAMA IS SCREWING US AGAIN
     
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  7. SamFisher

    SamFisher Contributing Member

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    I've posted this in the past - but that number is a ridiculously inflated bit of propaganda from the SBA lobbying group.

    First off, their definition of small business borders on obscene (IIRC, up to 500 employees = small business). So thousands upon thousands of firms that have revenue streams in the hundreds of millions or even billions of $$$ like hedge funds, buyout shops, law firms, etc get classified as "small businesses" when they are not even remotely remotely remotely close to being one.

    Second, IIRC, I think also by their definition, unemployed people (or even employed people) who sell stuff on ebay on the side are classified as small businesses for their purpose of this number. It's all a load of bullsh-t.
     
  8. juicystream

    juicystream Contributing Member

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    Nevermind.
     
  9. GladiatoRowdy

    GladiatoRowdy Contributing Member

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    Would you be OK with implementing the graduated tax rates from 1975 on incomes of over a half million dollars per year?

    That one change would pay for more than half of our deficit overnight, here are my numbers...

    The average weekly salary in January 2010 (from dol.gov) - $754.00
    The number of full time workers in the work force (from dol.gov) - 138,333,000
    Equals total yearly US wages in the amount of - $5,423,760,264,000
    Times the 17% of income earned by the top 0.1% - $922,039,244,880
    Times the 70% income bracket from 1975 - $645,427,471,416

    Cut the military by 40% gives you another $250 billion or so and when the economy turns around, the tax receipts put us into surplus city.

    Conservatives decry the "elites" left and right. Let's go ahead and tax those elites the way Jefferson thought we should...

    Let's get the rich to pay as the founders intended so that our society can be more prosperous for the most people. I would argue that the period that saw us improve our schools, our infrastructure, and our society the most was the period from the end of WWII to the 1960s, maybe the 1970s. During that entire time, the top bracket ranged from 70% to 91%. Reagan was the beginning of the most effective campaign of class warfare since the robber barons precipitated the Great Depression.

    The rich are winning this class war, hands down.
     
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  10. glynch

    glynch Contributing Member

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    You have parroted the Fox News/GOP line but probably sincerely believe what you have said. It is quite effective spin on why we should never tax wealhier people more. Pretend they are all mom and pop businesses and tie it in to tricle down concepts. Such taxation will just hurt the folks making $10/hr.

    1) Only 3% roughly of small business owners net over $250k. http://www.businessweek.com/smallbiz/content/mar2009/sb20090326_784114.htm

    2) Northville, N.Y.: Why do myths like the small business myth persist? Is it because there is no effort made to correct these misstatements when they are put into public discourse, like "our health care system is the envy of the world." It would make a great book for someone like you to debunk all the financial clich├ęs that we all get fed every four years which are flat out not true. It might particularly help California!

    Steven Pearlstein: This myth has a germ of truth attached to it, as most of these false stories do. If you look at the data in a certain way (net new jobs in two broad categories: businesses with more than 500 employees and under), and you look at a 10 year period, then you can show that "small" businesses generate most of the net new jobs. That doesn't mean only small businesses are generating new jobs -- it means that big businesses are losing lots of jobs these days as a result of technology and outsourcing, domestic as well as overseas. It also shows that Google in year 1 becomes Google in year 10, by the rules of these studies a "small " company (it was small in Year 1) that has now generated tens of thousands of jobs. There are other technical problems with the data. But the real problem is that it paints an untruthful picture, which is revealed when you look at the share of employment at any point in time accounted for by small and big firms. It's tilting smaller all the time, but very slowly, as I recall the last time I checked.

    http://www.washingtonpost.com/wp-dyn/content/discussion/2009/07/07/DI2009070701598.html
     
  11. Rocketman1981

    Rocketman1981 Member

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    The problem with those statistics are that as tax rates increase, small business owners funnel expenses through their companies to avoid taxation.

    They're willing to do things like cash balance defined benefit plans and in many cases to make less returns (db plans force lower returns) just to avoid taxation. If taxes were lower, they would pay the taxes and not accept a lower rate of return.

    Even if there is some skew to the 70% figure ( > 500 people or part-time ebay etc), even if it was 50%, its still the largest component of jobs in this country.

    I think the Google example is relevant as we must keep taxes low on business and owners which allows them to reinvest into their businesses and one day become the next Google or Microsoft or Walmart. This is an efficient creator of capital and jobs and a driver of societal wealth.

    The contrary to that would be not reinvesting into the business and having the government be the allocator of capital.

    Its just a basic fundamental difference here. I believe that people and businesses with their own best interests will deploy capital in a much more efficient and direct manner than the government will.

    Just a fundamental difference here boys.
     
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  12. krnxsnoopy

    krnxsnoopy Contributing Member

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    People who look for loopholes will always look for loopholes. Whether the tax rate is 40% or 10%, they'll still try to 'save that buck'!
     
  13. SamFisher

    SamFisher Contributing Member

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    Just a poorly-understood platitude masquerading as analysis.
     
  14. Rocketman1981

    Rocketman1981 Member

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    Do you believe that the government is a more efficient deployer of capital than individual business?

    Will lower taxes on business owners provide them the ability to expand their business during a recession when its truly needed?

    If you don't agree with these two statements then there is not much to discuss here.
     
  15. GladiatoRowdy

    GladiatoRowdy Contributing Member

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    There are times and situations where the government is far more efficient, the best example being Medicare/Medicaid. These programs run with less than 5% overhead while the for-profit insurance companies have overhead up to 30% of premiums paid. Feel free to dispute the hard numbers and statistics, but you will only be denying reality.

    The ability, yes, but in practice, business owners put those dollars in the bank and wait for the economic situation to improve before adding jobs.

    No, there isn't. You prefer to deal with theories and speculation while others prefer to talk about hard numbers and statistics.
     
  16. SamFisher

    SamFisher Contributing Member

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    In many situations, absolutely. That's why we have a government. The main problem with this line of argument from you though is that, even if it were as true as you believed, which it's not - it's not really relevant to the issue at hand.

    Why would a business expand in a recession in which there is no demand? Why do you believe that lack of supply capacity is the problem? It's actually the opposite - that's why there's a recession.

    If you're going to cling to these ill-taken assumptions that are short on both truth and relevance as unyielding dogma, in the face of a contravening reality, then yep.
     
  17. Rocketman1981

    Rocketman1981 Member

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    If people have the financial ability to expand their business and the desire/opportunity to do so, we should make it easier to do so.

    Even if these people 'put these dollars in the bank' lets think where those dollars go?

    Money Market - These are deposits in banks that are used to allow others to borrow money to buy a car, a home or start a business. The interest is taxable

    Equities - Capital is invested in a corporation in order to give them needed monies to expand which increases jobs, production and wealth. The capital gains and interest are taxable.

    There are other investments out there but its a multiplier effect that is why people and commerce create wealth in society, not government.
     
  18. SamFisher

    SamFisher Contributing Member

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    You just hung yourself with this statement - I'll let somebody else do the honors but your logic disembowels itself here.
     
  19. Rocketman1981

    Rocketman1981 Member

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    This is laughable. The best time to expand is during a recession as one can take advantage of competitors that are over-leveraged and gain market share. Then when the market inevitably turns, profits will rise significantly which should be used to pay off debt and manage leverage.

    Its cheaper to gain market share during a recession than over-pay and grow unsustainably and at an excessive cost during a boom time.
     
  20. GladiatoRowdy

    GladiatoRowdy Contributing Member

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    The problem is that they don't have the desire to do so. We are in a recession because people can't afford to go out and buy like they have been for the last 15-20 years. Giving money to rich people will see them bank it, as the evidence has showed over the past decade.

    Exactly, the deposits go to other corporations (which aren't expanding because we are in a recession marked by reduced demand) or go to the money markets, where banks aren't making loans. Much of the reluctance to give loans is the reduced demand caused by the recession.

    Of course, the numbers show that there is a much larger multiplier effect when money is given to people at the bottom of the food chain, like people who are unemployed. When money is given to people at the top of the food chain, they spend a far lower percentage of that money, leading to a lower multiplier and lower improvement of the economy.
     

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