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Your real tax rate: 40%

articles.moneycentral.msn.com

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Re: Your real tax rate: 40%

#101

Post by byrneseyeview »

JoeAltmaier wrote: post #99
leelin wrote: post #47

Very cool, it seems the researchers took into account all sorts of things like state sales tax, state income tax, corporate tax, welfare / handout type programs, and spending + savings habits. From what I can tell the key inflection points in the graph come from four issues. 1.) How much can one contribute to retirement accounts to avoid paying income tax that year? 2.) Where are the key discontinuous cutoff points i…

Really rich people have little or no income. The dodge comes in taking your jet, car, residence, living expenses etc as work expenses. While you OWN billions, your income may be thousands.

If you own "billions," you presumably own equity or debt (maybe some commodities, but it's not likely). If you own debt, you're paying taxes on the interest. If you own equity, the value of that equity is the net present value of future cash flows--meaning it's 'taxed' at the rate at which corporations are taxed.

In addition, spending a lot of money and then making it a 'work expense' still requires lots of income. You can't effectively write off your limo charges unless your income at least equals them.

And I don't know how common it is to treat a residence as a work expense. There's a home office tax deduction, but that is a common audit flag.

Re: Your real tax rate: 40%

#102

Post by byrneseyeview »

mcknz wrote: post #73
endtime wrote: post #67

Earlier quoted context omitted.

There are some private regulatory agencies already - certificate authorities, for example. Seems to pretty much work.

Then there are the ratings agencies (Moody's, S&P) who did such a great job during the crisis, but that's another topic altogether... :)

They had strong government protections. Smaller ratings agencies like Egan-Jones have a much better record--but they lack the same legal advantages.

Re: Your real tax rate: 40%

#103

Post by winthrowe »

cperciva wrote: post #84
tedunangst wrote: post #80

Earlier quoted context omitted.

American gas prices include all taxes.

I said unlike everything else, not everywhere else. Gasoline is the only thing I can think of in Canada for which the advertised price includes taxes.

Perhaps not advertised as much as gasoline, but at least in NB and NS, the displayed price on alcohol includes all sales taxes, but that's the only other thing I can think of.

Re: Your real tax rate: 40%

#104

Post by randallsquared »

coreymull wrote: post #86
randallsquared wrote: post #34

Earlier quoted context omitted.

It's not like the entire tax goes into a black hole It's arguable that we'd be better off were that so... part of the tax burden is all the people employed by those taxes who don't actually contribute anything to society on net (that is, whose jobs wouldn't be done at all on the free market)... in this way, taxes can have something like double their cost in harm, potentially.

Airlines wouldn't exist in the "free market". Are you arguing that air travel has no net value?

I'm willing to entertain the argument, though I'm not familiar with any arguments that airlines are inherently unprofitable without using force on someone.

Re: Your real tax rate: 40%

#105

Post by AlisdairO »

randallsquared wrote: post #77
AlisdairO wrote: post #58

Earlier quoted context omitted.

I think the fact that a job wouldn't be done in a free market system is not a justification for saying that they don't contribute on net. The free market doesn't lend itself to funding a lot of work that is still worth doing - basic research being an obvious example.

I'm not sure that's the case, since I'm not sure if government-funded research was more of an effect or a cause of the decline of privately-funded research.

Really, though, it's hard to find credible reasons why companies would fund fundamental (say) physics research, isn't it? The benefits of such research are often felt decades down the line.

Re: Your real tax rate: 40%

#106

Post by tedunangst »

cperciva wrote: post #84
tedunangst wrote: post #80

Earlier quoted context omitted.

American gas prices include all taxes.

I said unlike everything else, not everywhere else. Gasoline is the only thing I can think of in Canada for which the advertised price includes taxes.

I interpreted "I think most of the difference is taxes" as ".ca prices are higher because they include taxes".

Re: Your real tax rate: 40%

#107

Post by dminor »

einarvollset wrote: post #52
dminor wrote: post #15

Earlier quoted context omitted.

Well we do pay double per capita what Canada pays for healthcare, so it wouldn't surprise me at all.

That surely can't be for premiums? I remember paying $95/month for full coverage ($179 for a family?) with low (no?) deductible when I lived in BC. I wish, WISH, for that kind of coverage here in CA. I've got catastrophic coverage only for like $200/month.

I'm talking about per capita public money spent on healthcare by the government.

Re: Your real tax rate: 40%

#108

Post by jules »

lazyjeff wrote: post #72
frankus wrote: post #36

Earlier quoted context omitted.

Go down to Seattle and it's probably $2.50. We Bellinghamsters have been getting screwed for years (at least relative to the Seattle metro area). There's an odd effect where a high-price area spills over into the neighbo(u)ring areas. I haven't quite figured out an explanation.

I wish it was $2.50 in Seattle. I'd even be overjoyed to pay the Bellingham price of $2.82. I paid $3.11 to $3.17 the last two times I filled up last week.

Don't complain. Here in the Netherlands it's around $7.6 per gallon.

Re: Your real tax rate: 40%

#109

Post by Dove »

buro9 wrote: post #38
Retric wrote: post #18

Earlier quoted context omitted.

wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. ??? Where is the savings? The IRS is a tiny fraction of US government spending. Edit: IRS $12.15 billion in 2010, total federal expenditures $3.552 trillion . So it's 1/3 of 1% of the federal budget.

You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost.

Be careful with that. Warfighting is every bit as complex, technical and dynamic a discipline as computers. Maybe more so. Do you have a developed opinion on ballistic defense, our nuclear posture, our relative emphasis on COIN vs. conventional warfare? No? Then you are in the position of an executive eying the expensive IT department with a foggy notion that it could get the job done for half the cost, without a clear idea of what a server is or does or why the administrator is so dang expensive.

I recommend poking around the Quadrennial Defense Review site to get a primer on the major issues. It's a report the DOD does every four years to evaluate its priorities and capabilities, explain its budget, etc. There are lots of executive reviews, intelligent and opinionated commentaries, that sort of thing. http://www.defense.gov/qdr/

Re: Your real tax rate: 40%

#110

Post by kenjackson »

rada wrote: post #89
kenjackson wrote: post #74

Earlier quoted context omitted.

I don't get the arbitrage takeaway? I thought that income tax was only a part of the puzzle. Maybe half. The other taxes you pay aren't affected by what you put in retirement accounts.

Tax arbitrage means using the difference in tax rates to make extra money. If the tax rate when you contribute to a tax-deferred investment account is higher than the tax rate when you pull the money out, voila, you've profited from tax arbitrage. So I am not sure why you are thinking of income vs. other taxes. The authors are simply saying, if you are a high earner in a top federal tax bracket, it really pays to put…

OK, I thought the takeaways were implying that you were finding some inefficiency in the system. Rather they were simply saying that retirement accounts work as advertised.

Just an odd takeaway, since that's the expressly stated purpose of most retirement accounts. But fair enough.

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