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Why do you think people are poor?

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Re: Why do you think people are poor?

#181

Post by gigantor »

sparkie wrote: post #164
wtn wrote: post #159

Earlier quoted context omitted.

> How many of you were taught in school that if you pay yourself a minimum wage and make up the rest as a dividend/bonus you can avoid paying a significant amount of tax (legally)? You shouldn't do that, it's not permissible under current tax rules… IRS requires that officer shareholders be paid a reasonable salary, and if you're making enough money to pay dividends, minimum wage will be hard to justify as "reasonabl…

IRS only applies to US companies. Each country has it's own different loopholes that allow you to pay less tax if you're earning more. The big corps pay far less tax than they should. Note to term, "tax avoidance". "Tax evasion" is illegal, but there are plenty of legal ways to avoid tax, many of which I'm not aware of myself, but will be grateful for anyone willing to share. And that's a big part of it - people don'…

In Canada, the minimum wage + large dividend payment system is allowed and encouraged. Encouraged because it's a transparent way of declaring your income and earnings without using any complex loopholes to bypass the system. Encouraged because:

1) Having your own company is more risky as opposed to a Permanent employee role in the government's eyes, hence more opportunities to pay less taxes

2) Companies are far more likely to work towards creating employment than individuals working for companies, benefiting the economy

3) Dividend income is taxed at a reduced bracket to stimulate investment, regardless whether you're investing in your own company or getting dividends from a large public corporation by being a shareholder

10 years of filing corporate taxes, having every accountant follow this practice, and an official audit with no complaints shows the Canadian Revenue Agency has no issues with this system.

Re: Why do you think people are poor?

#182

Post by natep »

Produce wrote: post #108
Ralith wrote: post #100

Earlier quoted context omitted.

> A year after graduation, ten of the first sixteen Clemente Course graduates were attending four-year colleges or going to nursing school; four of them had received full scholarships to Bard College. The other graduates were attending community college or working full-time. Except for one: she had been fired from her job in a fast-food restaurant for trying to start a union. It sounds like it was successful to me.

So the solution is to make everyone a nurse or an engineer or a manager? Who's going to sweep the streets and grow food?

There is so much wrong with this statement and way of thinking that I don't even know where to start. I'm upvoting, because I don't want this comment to disappear, but it's still wrong-headed.

1. Answering the first quesiton directly:

No, that's not the solution proposed by the article. The goal was to get the poor involved in politics, in the largest sense of the word. At the end, he reported that almost everyone in the first class was either in school or employed full-time. No mention of managerial roles, or what they were training to be. One tried to start a union, so she is not heading towards a managerial role.

There are plenty of programs out there that do try to train people in technical skills, like nursing, engineering, or management, but this was _not_ one of those programs. This is a way to help the poor break out of the vicious cycle of poverty themselves by giving them the tools to think about their situation. Who knows what they'll do with those tools.

2. Answering the second question, allowing for your premise:

Robots, programmed by all of these engineers we wouldn't've had otherwise, and the people that are too poor to be helped, or unable for other reasons. This is what we call a _good_ problem.

3. Making fun of you/sarcasm:

OK, sure, lets not help the poor at all, because what if we're _too successful?!?_ That would be horrible! We'd starve to death in dirty streets, because people would be too busy nursing, engineering, and managing each other, and not realize there was no food!

4. Rejecting your premise and addressing the second question:

Who's going to do the blue collar jobs? Mostly the same kinds of people that do them now, except they will have more political empowerment, and a greater capacity for reflection and critical thinking. I know a few educated people that choose to work as farmhands, so it's not impossible, and I myself enjoy an "honest day's work" (speaking as someone with the privilege of an education in the humanities).

Can you imagine how awesome it would be if we had a society of critical thinkers and moral philosophers, instead of the reactionary, anti-intellectual, gullible, fundamentalist society we have now[1]? Can you imagine if the lowest common denominator weren't so low? I'm not saying it would be a utopia, but for at least the last few hundred years, people have been dreaming of a time when machines had taken over every menial task, and humans could spend their time as they wished, free to follow pursuits of their own choosing.

[1] I'm not trying to say 100% of society is like that I'm just saying that significant fractions of the American population at least show one or more of these characteristics, and I don't think it's making for a better society.

Re: Why do you think people are poor?

#183

Post by usablebytes »

May be because the feeling of 'being important' has died inside them.

A lot of social factors can be blamed for that situation and truly though; but the important fact is 'it starts with the very individual'. Unless that individual feels the need, the situation won't change, no matter what. So if non-poor part of the society wants to do anything about it, the first thing that should be tried is to 'awaken' the poor.

Re: Why do you think people are poor?

#184

Post by sparkie »

gigantor wrote: post #181
sparkie wrote: post #164

Earlier quoted context omitted.

IRS only applies to US companies. Each country has it's own different loopholes that allow you to pay less tax if you're earning more. The big corps pay far less tax than they should. Note to term, "tax avoidance". "Tax evasion" is illegal, but there are plenty of legal ways to avoid tax, many of which I'm not aware of myself, but will be grateful for anyone willing to share. And that's a big part of it - people don'…

In Canada, the minimum wage + large dividend payment system is allowed and encouraged. Encouraged because it's a transparent way of declaring your income and earnings without using any complex loopholes to bypass the system. Encouraged because: 1) Having your own company is more risky as opposed to a Permanent employee role in the government's eyes, hence more opportunities to pay less taxes 2) Companies are far more…

Hey, thanks for your input. The Canadian system seems similar to the UK. Every accountant is doing this, but there just doesn't seem to be an openness about it. It seems you only know how to do this if you're an accountant, or know an accountant - which was the point I was trying to get across in my original post - you aren't told this in school - they only tell you how to get a job, where none of it applies.

Re: Why do you think people are poor?

#185

Post by omgsean »

dedward wrote: post #178

I see lots of people blaming "the system" and whatnot for not teaching you to be rich..... and getting you into debt. And to be sure, the financial industry has been given too much rope to hand out credit without enough risk. But I seem to recall seeing many other forums about university, mortgages, etc, where people who's parents paid for their education, helped with a house, etc, are ridiculed - and I don't mean su…

>It only takes a generation and some common thinking for a family to stick together and get ahead, and ensure their children never need to borrow money from a bank to get an education, or buy a house. You don't have to be rich... but why can't we live, you know, a generation ahead? I know a guy who told me his parents paid for all his stuff, his house, etc, and therefore all his work and all that (good tech guy) was just being saved up for HIS kids, ad-infinitum. They aren't trying to be rich - they just stay a generation ahead.

You are talking about unbelievable sums of wealth that are completely unavailable to the working poor. This is great advice for people who are already unbelievably privileged (probably most of us at HN) but it does jack shit for people who are living pay cheque to pay cheque because their pay cheque is barely enough to sustain any standard of living.

Re: Why do you think people are poor?

#186

Post by rprasad »

sparkie wrote: post #148

Because the system makes sure people stay poor. How many of you were taught in school that if you pay yourself a minimum wage and make up the rest as a dividend/bonus you can avoid paying a significant amount of tax (legally)? Or how many of you were taught how to become "employable" so that you can earn the same amount of money and pay considerably more tax, unavoidably - because you aren't in control of your own fi…

What you have suggested is tax evasion. You must pay yourself reasonable rates, otherwise, you will be treated as evading employment taxes. For a white collar job, that means significantly more than minimum wage.

The penalties (higher back-interest rates and fines) for tax evasion are quite severe. Jailtime is also a possibility.

Re: Why do you think people are poor?

#187

Post by rprasad »

sparkie wrote: post #180
hij7898 wrote: post #176

Earlier quoted context omitted.

You seem quite naive. I'm assuming you're fairly young. 1) Top marginal tax rate is 35%. 2) Bonuses are taxed as income as well. 3) The rich pay the majority of taxes. ( http://www.usatoday.com/money/perfi/taxes/story/2011-09-20/b... ) The world isn't out to screw you.

I'm less naive than I was a few years ago since learning somewhat how the system works. 1) Perhaps you missed the part where I said IRS only applies to US? Tax rates do differ in different countries, if you weren't aware. That's one of the major tax avoidance methods - do what you can offshore, wherever you benefit by paying less. 2) Again, depends where you are. While all bonuses may not be tax free, they are usuall…

You have now suggested two forms of tax evasion: falsely allocating income to "dividends" and using offshore tax shelters. Please stop trying to give tax advice.

Bonuses are income. They are taxed as ordinary income (or the equivalent of ordinary income in E.U. nations). Bonuses are not given lower rates; if anything, certain types of bonuses are subject to higher rates than ordinary income. Companies pay bonuses because bonuses are discretionary, while salaries are contractual. In other words, giving a bonus one year does not commit them to paying the bonus again the following year.

Re: Why do you think people are poor?

#188

Post by rprasad »

sparkie wrote: post #179
hij7898 wrote: post #167

Earlier quoted context omitted.

1) Wealth is not zero-sum. 2) You're recommending that we defraud our federal government in your original post. Just stop.

Perhaps relevant: yesterday's news. ( http://www.bbc.co.uk/news/uk-politics-18521468 ). Those are just few of the tax avoidance schemes that come to light - which it should be noted are not necessarily illegal. The reality is that the rich and famous are involved in these schemes - earning big money and paying less tax than hard working, honest men. The government doesn't take the necessary steps to put an end to the…

I suggest you read the article more carefully. The comedian in the article is being investigated for using a tax shelter to evade British taxes. If you read more about the K2 tax shelter, you will learn that British tax authorities consider it to be illegal (obviously, taxpayers using the K2 do not) and are launching enforcement actions.

Re: Why do you think people are poor?

#189

Post by sparkie »

dedward wrote: post #178

I see lots of people blaming "the system" and whatnot for not teaching you to be rich..... and getting you into debt. And to be sure, the financial industry has been given too much rope to hand out credit without enough risk. But I seem to recall seeing many other forums about university, mortgages, etc, where people who's parents paid for their education, helped with a house, etc, are ridiculed - and I don't mean su…

Interesting point on the "avoid debt," because that's what naive young adults here are told not to worry about. Get a student loan, no problem - bank overdraft, fine. They are roped into the system when they're young and naive, and they spend half of their adult working life trying to climb their way out of it before they can really start saving whilst still paying off their mortgages.

I agree with your sentiments about being conservative with your finances, and there's no doubt a huge portion of poor people are terrible with money. You see people struggling to pay rent, but queuing up for the new iPhone - such way of living is ludicrous, and they are bound to stay poor that way. The reality is they don't need it - you don't need gadgets, fashion accessories, takeaways, beer, drugs and other money drains - but at the same time, if you're not buying the latest and greatest, someone else isn't making enough money - which is considered bad for the economy. They encourage you to spend.

Re: Why do you think people are poor?

#190

Post by sparkie »

rprasad wrote: post #186
sparkie wrote: post #148

Because the system makes sure people stay poor. How many of you were taught in school that if you pay yourself a minimum wage and make up the rest as a dividend/bonus you can avoid paying a significant amount of tax (legally)? Or how many of you were taught how to become "employable" so that you can earn the same amount of money and pay considerably more tax, unavoidably - because you aren't in control of your own fi…

What you have suggested is tax evasion. You must pay yourself reasonable rates, otherwise, you will be treated as evading employment taxes. For a white collar job, that means significantly more than minimum wage. The penalties (higher back-interest rates and fines) for tax evasion are quite severe. Jailtime is also a possibility.

I've not suggested tax evasion - stop exaggerating.

The only point I've mentioned is one of tax avoidance, which is in common practice. I've not advised you to do it either, just making a point that it is done - the system is unfair - people avoid tax (legally), whilst you are paying your honest share.

And please, Americans - are you able to think outside of your own country and it's laws?

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