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Old 02-26-2013, 02:15 PM   #21
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I've been called some low-down names in my time, but "tax unit" just about takes the cake!
Is that better or worse than being called "headcount?"
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Old 02-26-2013, 08:50 PM   #22
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I've been called some low-down names in my time, but "tax unit" just about takes the cake!
LOL!!! I just blew my drink out on that one. Sounds like a great screen name, Tax Unit.
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Old 02-26-2013, 09:35 PM   #23
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May not be long before the rules for the Roth IRA are also changed.

This entire concept is most disappointing. Mainly because decades ago, the defined benefits plan was the primary vehicle in small businesses. The government urged the use of 401 K plans to encourage employee savings.

As the article said, saving for retirement is getting fainter and fainter.
(sigh )
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Old 02-26-2013, 09:40 PM   #24
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To me, a more straightforward solution would be just to raise the tax rates a percent or two and leave the deduction as is. Tax rates are already pretty low in the U.S.
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Old 02-26-2013, 10:09 PM   #25
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To me, a more straightforward solution would be just to raise the tax rates a percent or two and leave the deduction as is. Tax rates are already pretty low in the U.S.
photoguy, that's probably a better way to deal with revenue enhancement. Maybe we could help the gummint come up with some ideas of ways not to spend so much money, but YMMV on that score.

Even more straightforward than raising tax rates would be to just send all our money to the gummint and then everything (like health care is becoming) is "free". I realize that's an exaggeration, but I do it for effect. Things that we used to buy (like food, health care, housing, university, etc. etc.,) is now either "free" or subsidized to half the population. I understand there are folks who need help, but at some point, my first statement could become true. I don't mean to turn this political 'cause both sides have played the game well. Now, it's probably too late to untangle it. Unfortunately, "free" things and "subsidized" things seem to have a way of costing more and more to the end payer (i.e., taxpayers - those of us left in the 50% who actually still pay taxes). Think I read something in HS about the law of supply and demand. Yeah. I'm sure I did. If the gummint makes things "free", we'll consume more of them and let someone else pay. Again, not an attack (though maybe a rant). As always, YMMV.
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Old 02-26-2013, 10:23 PM   #26
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I've been called some low-down names in my time, but "tax unit" just about takes the cake!
I just hope they don't start taxing my unit...
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Old 02-26-2013, 10:40 PM   #27
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Even more straightforward than raising tax rates would be to just send all our money to the gummint and then everything (like health care is becoming) is "free". I realize that's an exaggeration, but I do it for effect. Things that we used to buy (like food, health care, housing, university, etc. etc.,) is now either "free" or subsidized to half the population. I understand there are folks who need help, but at some point, my first statement could become true. I don't mean to turn this political 'cause both sides have played the game well. Now, it's probably too late to untangle it. Unfortunately, "free" things and "subsidized" things seem to have a way of costing more and more to the end payer (i.e., taxpayers - those of us left in the 50% who actually still pay taxes). Think I read something in HS about the law of supply and demand. Yeah. I'm sure I did. If the gummint makes things "free", we'll consume more of them and let someone else pay. Again, not an attack (though maybe a rant). As always, YMMV.
Actually I would be very happy if the US went to a single payer system and health care became free -- even if it meant raising taxes.

I understand that nobody likes to pay taxes, and I certainly try to minimize my own tax payments, but when you make many times the median income and only pay 15-20% taxes, it feels like we're not paying our fair share. For us, an increase of a few percent in taxes wouldn't be noticeable at all.

FYI the 50% paying no taxes is a myth and the actual number is closer to 10% (for federal taxes)
Who Doesn't Pay Taxes? - NYTimes.com
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Old 02-26-2013, 11:15 PM   #28
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I do understand that richer people have more money, and of course don't identify myself as one of them - it's only people with more money than me. But if we look at every problem as one that requires disproportionately increasing taxes on the "rich" it won't be long before the definition of rich needs to be broadened to include anyone amassing enough to ER. Higher SS limits but lower bend points, reducing 401k deductions, phase out IRA and/or 401k limits, means test everything. How many times can we go to the same well?
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Old 02-26-2013, 11:19 PM   #29
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There is no myth that 50% of Americans pay no taxes. There is the misquoted and misused factiod that nearly 50% (or 47%) pay no net income taxes. Payroll taxes (Social Security and Medicare) are not counted in that calculation, so this latest NYT piece adds those back in to get to 10% pay no tax. No news. Just posturing.
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Old 02-26-2013, 11:26 PM   #30
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Actually I would be very happy if the US went to a single payer system and health care became free -- even if it meant raising taxes.

I understand that nobody likes to pay taxes, and I certainly try to minimize my own tax payments, but when you make many times the median income and only pay 15-20% taxes, it feels like we're not paying our fair share. For us, an increase of a few percent in taxes wouldn't be noticeable at all.

FYI the 50% paying no taxes is a myth and the actual number is closer to 10% (for federal taxes)
Who Doesn't Pay Taxes? - NYTimes.com
Why should health care be the only thing that is free? Anything else on your list of things that should be free? How about food, electricity, gasoline, houses ( how many bedrooms should that house have ? And how many square ft), cars, entertainment?

When the median income is $50000 a year, people who makes "many" times more that that do not only pay 15 to 20% tax. Are you only selectively using total federal income tax? But even that often exceeds 20%. Do people not have to pay payroll tax, state and city income tax, property tax , sales tax and gasoline tax? Or those do not conveniently fit into your rhetoric?

It is somewhat contradictory to say on one hand that you would not notice a few percent more in more taxes, and admit you try to minimize your tax payments at the same time. Spare everyone else of your fairness, especially when that is a personal definition. By all means, send in all you want in donation to the US Treasury. Do you need the address?
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Old 02-27-2013, 12:28 AM   #31
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Why should health care be the only thing that is free? Anything else on your list of things that should be free? How about food, electricity, gasoline, houses ( how many bedrooms should that house have ? And how many square ft), cars, entertainment?
The list was Koolau's not mine.

Everybody has different opinions on what services the government should provide. Personally I think healthcare should be free and perhaps university education should be heavily subsidized. We could argue about the worth of these items to society but in the end it comes down to value judgement which each person has to make for themselves.



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When the median income is $45000 a year, people who makes "many" times more that that do not only pay 15 to 20% tax. Are you only selectively using total federal income tax? But even that often exceed 20%. Do people not have to pay payroll tax, state and city income tax, property tax , sales tax and gasoline tax?
My tax return begs to differ. See this example on bogleheads on how 200k turned into a taxes of about 23k (30k with property tax). That is 15%.

Bogleheads • View topic - Taxes on a family with $200,000 gross income

My numbers are a little different (i'm in CA not texas so I do have state taxes) but still in the same ballpark.


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It is somewhat contradictory to say on one hand that you would not notice a few percent more in more taxes, and admit you try to minimize your tax payments at the same time. Spare everyone else of your fairness. By all means , send in all you want to donate to the US Treasury. Do you need the address?
When I say not notice, I mean that it would not materially affect my standard of living in any way. Of course I would notice the actual dollars because I'm a little too obsessive with spreadsheets.

The notion of whether an individual should donate to the US government is a little like the prisoner's dilemma problem. If everybody sacrificed a little and paid more taxes to the government we'd be much better off w.r.t to deficits, but if each person is left to their own devices the tendency is for everyone to defect (i.e., no player has anything to gain by changing only his own strategy unilaterally -- see Nash equilibrium - Wikipedia, the free encyclopedia )
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Old 02-27-2013, 01:03 AM   #32
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Everybody has different opinions on what services the government should provide. Personally I think healthcare should be free and perhaps university education should be heavily subsidized. We could argue about the worth of these items to society but in the end it comes down to value judgement which each person has to make for themselves.

See this example on bogleheads on how 200k turned into a taxes of about 23k (30k with property tax). That is 15%.

Bogleheads • View topic - Taxes on a family with $200,000 gross income

Like I said, what one thinks should be provided free by the government and what is fair are his personal opinions, so do not foist your fair share concept on someone else.

That example in Boglehead was hypothetical and heavily relied on many deductions and the mathematics practically screamed "torture". To get to a 15% tax rate the couple had a $44000 401k contribution on a 190k salary, $12000 mortgage interest deduction, maximum capital loss carried forward, $8000 charitable donation, and tuition credits etc. The couple had 2 children, including one in college, whose tuition they supported to get the tuition deduction. They had a $8000 property tax bill. Despite all that, the couple managed to raise a family of 4, bought a nice enough house that got taxed $8000 on, saved and accumulated a 500k taxable nest egg that gave them a $10000 a year dividend income. That may be do-able, but it took inventing (?)a rather atypical American couple, living way below their means, and had a compulsive saving habit, to prove a point. There were a number of comments in that thread disputing the original poster's numbers, and they cited examples that entailed a fair bit more taxes paid, even for people with much lower income than the couple with the hypothetical 200k income.
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Old 02-27-2013, 04:50 AM   #33
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Everybody has different opinions on what services the government should provide. Personally I think healthcare should be free and perhaps university education should be heavily subsidized. We could argue about the worth of these items to society but in the end it comes down to value judgement which each person has to make for themselves.
Well, I think we have to do better than that: There needs to be reasons for government expenditures - reasons that serve the public interest rather than personal interest. In the case of health care the argument can be made that a free market approach leads to results that society considers unacceptable, i.e., the proverbial "poor people dying in the streets" scenario, and its less egregious but still unacceptable cohorts, correlations between wealth and either infant mortality, general infirmity, or (lack of) longevity. In the absence of these consequences of a free market approach to health care, I don't think a strong argument against a free market approach could (or should) be made. It is only the tight connection between the inherent worth and dignity owed to everyone in society and how that's affected by level of health care afforded to everyone in society that justifies any interference in the market.

I can see why you're trying to include a university education in the same basket, given how tightly linked it is to the extent to which society affords worth and dignity to people, but I think there are several equivocations there: First, there are some occupational pursuits that lead to financial independence that don't require a university degree, even in today's society. However, more importantly, the competition for jobs that pay a living wage, among those with so many more university degrees than society perhaps "needs", only works to drain resources from society (to achieve those extra measure of university degrees) without actually paying back in terms of more high-paying jobs that fully utilize that which those degrees offer: A taxi driver with a PhD doesn't serve society's need for ad hoc transportation better than a taxi driver without a university degree.

So rather than focusing on fostering pursuit of an increasing number of academic degrees, which goes beyond the number of such degrees necessary for an optimal level of innovation, etc., I think we need to dig down into the reason why people think that is the answer (given that it appears to be an answer that "eats itself"). The reason is, of course, the inadequate value society places on many (though not all) of those occupational pursuits that don't require university degrees. That is a reflection of forty years of increasing economic inequity. Reverse that, and the system can right itself. We would be able to legitimately have university degrees be someone people choose (and pay) for themselves, gaining only a marginal economic advantage rather than the excessive advantage that is the case today.
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Old 02-27-2013, 07:49 AM   #34
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Porky must be asleep...to allow this in this forum.
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Old 02-27-2013, 08:06 AM   #35
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Old 02-27-2013, 08:20 AM   #36
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Old 02-27-2013, 08:24 AM   #37
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Porky must be asleep...to allow this in this forum.
Folks in this country better start having this conversation!
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Old 02-27-2013, 08:29 AM   #38
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Folks in this country better start having this conversation!
I don't disagree, but this thread seems to be drifting away from having much to do with FIRE and it's NOT even the FIRE Related Political Topics forum, this is FIRE and Money.

Believe me, there are plenty of political issues for us to discuss, but we're supposedly confined to FIRE related here. Very hard to call indeed. YMMV
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Old 02-27-2013, 09:00 AM   #39
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Neither on topic nor off topic, this thread is. He he he
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Old 02-27-2013, 09:03 AM   #40
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I don't disagree, but this thread seems to be drifting away from having much to do with FIRE and it's NOT even the FIRE Related Political Topics forum, this is FIRE and Money.

Believe me, there are plenty of political issues for us to discuss, but we're supposedly confined to FIRE related here. Very hard to call indeed. YMMV
So why not just ignore the thread? Other people may wish to discuss, and I don't see any harm in it, it's all been civil. And certainly the amount that the govt decides to support various activities will affect our taxes, and that affects FIRE. The deeper they have to dig, the more they will look at things like taxing Roths, means based SS adjustments, etc.

I suppose the thread could be moved, I have no view on that as I rarely bother to notice which sub-forum a thread is in, I generally start at the 'portal', that mixes them all in, which is fine for me.

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