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Old 12-29-2010, 06:32 PM   #41
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Nor have I seen welfare louts (the beneficiaries of those paying the five and six figures in taxes) picking up the axe, breathing apparatus and helmets and hopping down the coal mine. I mean, why work when you can get by ok without working?
OK, so they object to some of the uses made of the tax revenue. So do I, and so does probably everyone else who pays taxes, but this bit about "welfare louts" is a red herring. First off, "welfare louts", by which I suppose you mean people who could work but won't, benefit not just from the taxes of people who pay five or six figures, they also benefit from my taxes, and from those of the high-school kid who works part time and pays only a few hundred bucks a year. Big earners haven't any more to complain of in this respect than any other taxpayer. The IRS doesn't put all the money collected from them into a special pile devoted entirely to welfare benefits for neer-do-wells—the same percentage of the tax I pay, or of what the high-schooler pays, goes to "louts" as of what a big earner pays. I am all for getting slackers off of welfare, but even if every last one of them got a job that paid enough so they weren't eligible for any sort of aid, high earners would still have high taxes, because social programs are only 20% of total Federal spending, and part of that 20% goes to people who are genuinely unable to work. (See the pie chart on page 100 of the 1040 form from 2009, showing Federal income and outlays, and the footnotes below.) High earners who complain about their taxes now would probably still gripe, but the fact remains that they are better off financially than the vast majority of people. They remind me of that fairy tale, "The Princess and the Pea"—they're lying on feather beds ten deep, complaining about their terrible bruises from the pea under the bottom mattress.
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Old 12-29-2010, 07:05 PM   #42
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...but the fact remains that they are better off financially than the vast majority of people.
Why?
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Old 12-29-2010, 07:22 PM   #43
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...but the fact remains that they are better off financially than the vast majority of people.
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Why?
Probably a bit too subtle for this simple mind of mine I have tried living on welfare and also of living on a salary paying taxes of ~40k/year and I definitely felt financially better off in the latter situation and was MUCH happier. Or was I? What am I missing?
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Old 12-29-2010, 07:43 PM   #44
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There are plenty of people who work a lot harder, take much bigger risks, or both, and get a lot less money in return for their efforts than the high earners who gripe about their big tax bill, but I don't see any of the latter volunteering to change places with, say, coal miners.
Coal mining doesn't pay as well as many other professions that require higher education, which is why some of worked our way through college at minimum wage while our friends headed off to the mines (or factories, or construction sites) at wages of 4-6 times that amount right out of high school. The same reason we later took career-path jobs that didn't allow us to punch a time clock and be home every evening with our families. And why we looked ahead and put money into our 401K's instead of a bass boat. And why many of are fed up with having higher tax crosshairs on our backs from folks who made different choices and now begrudge us the success we worked so hard to achieve.
True, coal mining doesn't require higher education, but there are plenty of jobs that do, and pay nowhere near as much as the complainers make. I'm thinking of teachers, social workers, librarians, clergy. There are people who risk life and limb on their jobs, rather than the financial losses risked by high earners, and they aren't paid as much as the complainers either.

I don't begrudge high earners anything. I'm just fed up with hearing (from some of them) how tough they have it, or as if that wasn't enough, that they should get preferential treatment! Anyone who is making the kind of income that results in a five-digit tax hit has obviously made some smart economic choices. Equally obviously they are being amply compensated for having made them. Congratulations or kudos may be called for, but sympathy? I don't think so.
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Old 12-29-2010, 07:44 PM   #45
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Probably a bit too subtle for this simple mind of mine I have tried living on welfare and also of living on a salary paying taxes of ~40k/year and I definitely felt financially better off in the latter situation and was MUCH happier. Or was I? What am I missing?
Perhaps that much of this complaining serves as a warning. "Poor" people have a whole bureaucracy of professional complainers working for them. Those who are first in line to be expropriated at threat of criminal prosecution might as well let it be known how they feel; and also that collectively they are not exactly without the power to oppose, mitigate or even cancel this expropriation. Example, Obama's new tax bill.

Politics is a little like American football. Real estate once won tends to be at least somewhat sticky.

Ha
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Old 12-29-2010, 07:56 PM   #46
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Perhaps that much of this complaining serves as a warning. "Poor" people have a whole bureaucracy of professional complainers working for them. Those who are first in line to be expropriated at threat of criminal prosecution might as well let it be known how they feel; and also that collectively they are not exactly without the power to oppose, mitigate or even cancel this expropriation. Example, Obama's new tax bill.

Politics is a little like American football. Real estate once won tends to be at least somewhat sticky.

Ha
I don't understand your reply to my post. WS asked why people who pay 6 figure tax bills are financially better off than people on welfare. When I was on welfare, the "whole bureaucracy of professional complainers " working for me did not make me any better off financially than when I was a high earner.

Now that I'm RE'd I am much happier than I was a year ago but I'm not better off financially.
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Old 12-29-2010, 08:15 PM   #47
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True, coal mining doesn't require higher education, but there are plenty of jobs that do, and pay nowhere near as much as the complainers make. I'm thinking of teachers, social workers, librarians, clergy. There are people who risk life and limb on their jobs, rather than the financial losses risked by high earners, and they aren't paid as much as the complainers either.

I don't begrudge high earners anything. I'm just fed up with hearing (from some of them) how tough they have it, or as if that wasn't enough, that they should get preferential treatment! Anyone who is making the kind of income that results in a five-digit tax hit has obviously made some smart economic choices. Equally obviously they are being amply compensated for having made them. Congratulations or kudos may be called for, but sympathy? I don't think so.
Just who are "the complainers" you so want to categorize? I'd like you to offer a few examples, like the public servants you called out. (if my profession doesn't fall into your stereotype, are you OK with keeping my taxes at their current rates? ) I never said I have it tougher than anyone else, just that I made the financial and lifestyle choices that got me where I am today with my eyes wide open and my future financial security in mind. Paying ever-increasing tax rates jeopardizes that security, just like it would if your taxes awent up X% because lower wage earners wanted a bigger piece of your assets.
I'm just fed up with hearing (from most of them) that I somehow got preferential treatment from the government and now I need to pay a significantly higher tax rate because of it.

I don't recall ever asking for sympathy, just a fair (non-targeted) tax rate. You want me to pay more in taxes, I think I'm paying enough now.
Pretty obvious we'll never agree on this issue.
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Old 12-29-2010, 08:54 PM   #48
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Probably a bit too subtle for this simple mind of mine I have tried living on welfare and also of living on a salary paying taxes of ~40k/year and I definitely felt financially better off in the latter situation and was MUCH happier. Or was I? What am I missing?
Alan, I think you may have misinterpreted my question. The "Why" was intended as "WHY are some folks financially better off than others?" I maintain it is primarily due to making better choices, financial and lifestyle sacrifices, taking some risks, and and working your tail off. Does luck have something to do with it? Perhaps, but it's hard to quantify "luck" as a taxable entity, but in my experience, the harder I worked the "luckier" I seemed to get. We've flogged the luck horse to death in other threads, so I won't belabor it here.

Maybe a better way to phrase the question is WHY did you choose FI over Welfare?
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Old 12-29-2010, 08:58 PM   #49
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I don't understand your reply to my post. WS asked why people who pay 6 figure tax bills are financially better off than people on welfare. When I was on welfare, the "whole bureaucracy of professional complainers " working for me did not make me any better off financially than when I was a high earner.

Now that I'm RE'd I am much happier than I was a year ago but I'm not better off financially.
I absolutely understand. And that was not my point. I must not have made the point. Not that there is anything wrong with that...

I was addressing another question, which I thought had been raised. "Why do heavily taxed high earners complain about taxes"; not "why are welfare recipients happier than heavily taxed high earners", which from what I have seen I would tend to agree with you, that they are not.
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Old 12-29-2010, 09:05 PM   #50
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Just who are "the complainers" you so want to categorize? I'd like you to offer a few examples, like the public servants you called out. (if my profession doesn't fall into your stereotype, are you OK with keeping my taxes at their current rates? ) I never said I have it tougher than anyone else, just that I made the financial and lifestyle choices that got me ahead of others with my eyes wide open and my future in mind.
I'm just fed up with hearing (from most of them) that I somehow got preferential treatment from the government and now I need to pay a significantly higher tax rate because of it.

I don't recall ever asking for sympathy, just a fair (non-targeted) tax rate. You want me to pay more in taxes, I think I'm paying enough now.
Pretty obvious we'll never agree on this issue.
Well for starters, let's take the OP on this thread, who "doesn't feel rich" even though he's in the top 1/1000 of one percent of incomes worldwide. And to that I would add fantasm who later in the thread described himself as " sad/angry/depressed/annoyed" by his tax bill of $195K, though he must be earning, at a guess, at least three times as much as the OP (because his tax bill is ~3x the OP's), and maybe more. By "complainers" I was referring to individuals of like attitudes, not to people in specific professions. I don't know what either the OP or fantasm do for a living, and I wouldn't expect everyone in those professions to have the same attitude about taxes in any case, any more than all the people in my line of work do. The professions I listed have in common that they require higher education and don't pay incomes in the range that result in five-digit tax bills. But I don't suppose all teachers, social workers, librarians and clergy have the same attitude toward taxes either. Some of them probably complain that their taxes are too high, and others of them think "even after taxes I have all the money I need, in fact enough for more than just the necessities—all in all, I've nothing to complain about". My remark about preferential treatment did not refer to you either, or to high earners in general, but to fantasm's suggestion in #20 that he (and other high earners?) should get "preferential treatment or better benefits than someone who makes less". Nor do I see you as asking for sympathy, but OP and fantasm certainly struck me as wanting some.

I pay a higher percentage of my income in taxes than a low wage earner, or (I'm pretty certain) than a household with children at the same annual income, and IMO that's how it should be—the low earner or the household with kids needs a bigger proportion of what they make for necessities than I (a childless single) do. I've got earnings over and above what I need to live (and to save for retirement) on, and to an even greater extent so do fantasm and the OP—and possibly you too. I think earnings that are "over and above" should be taxed before eating into what a low-income household needs for the bare necessities. If that's a targeted tax rate, you're right, we never will agree.
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Old 12-29-2010, 09:14 PM   #51
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Well for starters, let's take the OP on this thread, who "doesn't feel rich" even though he's in the top 1/1000 of one percent incomes worldwide. And to that I would add fantasm who later in the thread described himself as " sad/angry/depressed/annoyed" by his tax bill of $195K, though he must be earning, at a guess, at least three times as much as the OP (because his tax bill is ~3x the OP's), and maybe more. By "complainers" I was referring to individuals of like attitudes, not to people in specific professions. I don't know what either the OP or fantasm do for a living, and I wouldn't expect everyone in those professions to have the same attitude about taxes in any case, any more than all the people in my line of work do. The professions I listed have in common that they require higher education and don't pay incomes in the range that result in five-digit tax bills. But I don't suppose all teachers, social workers, librarians and clergy have the same attitude toward taxes either. Some of them probably complain that their taxes are too high, and others of them think "even after taxes I have all the money I need, in fact enough for more than just the necessities—all in all, I've nothing to complain about". My remark about preferential treatment did not refer to you either, or to high earners in general, but to fantasm's suggestion in #20 that he (and other high earners?) should get "preferential treatment or better benefits than someone who makes less". Nor do I see you as asking for sympathy, but OP and fantasm certainly struck me as wanting some.

I pay a higher percentage of my income in taxes than a low wage earner, or (I'm pretty certain) than a household with children at the same annual income, and IMO that's how it should be—the low earner or the household with kids needs a bigger proportion of what they make for necessities than I (a childless single) do. I've got earnings over and above what I need to live (and to save for retirement) on, and to an even greater extent so do fantasm and the OP—and possibly you too. I think earnings that are "over and above" should be taxed before eating into what a low-income household needs for the bare necessities. If that's a targeted tax rate, you're right, we never will agree.
Good post! You are right, we'll never agree on what "over and above" means, (maybe we only need two tax rates- one for "just enough" and another for "too much") but I appreciate your considered reply.
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Old 12-29-2010, 09:41 PM   #52
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Old 12-29-2010, 09:53 PM   #53
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Many years ago, when I made nowhere close to what I did that last few years of employment, I complained to my accountant (now deceased) about paying so much income tax.
His reply, "you have a choice to make, you can pay less taxes by having a lower income."
Have been in the 35% bracket for a while and not complaining any more.
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Old 12-29-2010, 10:14 PM   #54
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Alan, I think you may have misinterpreted my question. The "Why" was intended as "WHY are some folks financially better off than others?" I maintain it is primarily due to making better choices, financial and lifestyle sacrifices, taking some risks, and and working your tail off. Does luck have something to do with it? Perhaps, but it's hard to quantify "luck" as a taxable entity, but in my experience, the harder I worked the "luckier" I seemed to get. We've flogged the luck horse to death in other threads, so I won't belabor it here.

Maybe a better way to phrase the question is WHY did you choose FI over Welfare?
Thanks, I misunderstood what your "Why" question referred to.

As to your question as to "WHY I chose FI over Welfare", I would have thought that was obvious, - why would I want to choose welfare when there were options? We grew up "below the poverty line" and had free school meals, coupons for school uniforms etc, it is not pleasant at all having no money. As it happens I became FI on the "backs" of the better off, as did my brother and sister. We all qualified for free tuition by way of passing national examinations, and we also qualified for support grants based on our parents low incomes (Dad was a miner, mother was a "skivvy"). If we didn't have those options my brother and I would have gone the mines like all our male cousins. (As it happens my brother still went down the mines, but only after he got a degree in Mining engineering).

DW and I had a few months on welfare before we got a job after graduating. We lived in a really grotty bed-sit in a red-light area that was pretty grim. That is why I don't understand folks who pay 6 figures in taxes being so sad.

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I absolutely understand. And that was not my point. I must not have made the point. Not that there is anything wrong with that...

I was addressing another question, which I thought had been raised. "Why do heavily taxed high earners complain about taxes"; not "why are welfare recipients happier than heavily taxed high earners", which from what I have seen I would tend to agree with you, that they are not.
I figured I must just have had my knickers in a twist and hadn't understood your post - thanks for the explanation
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Old 12-29-2010, 10:27 PM   #55
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Good post! You are right, we'll never agree on what "over and above" means, (maybe we only need two tax rates- one for "just enough" and another for "too much") but I appreciate your considered reply.
Maybe you did not mean what I thought by a "non-targeted" rate. If the standard deduction, exemptions etc were set so that no tax was paid on earnings up to "enough income for the necessities" (however much that is) and any earnings over that amount (regardless of how far over) were taxed at the same rate, we might agree after all. Who'da thunk it?
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Old 12-29-2010, 10:50 PM   #56
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Coal mining doesn't pay as well as many other professions that require higher education, which is why some of us worked our way through college at minimum wage while our friends headed off to the mines (or factories, or construction sites) at wages of 4-6 times that amount right out of high school. The same reason we later took career-path jobs that didn't allow us to punch a time clock and be home every evening with our families. And why we looked ahead and put money into our 401K's instead of a bass boat. And why many of are fed up with having higher tax crosshairs on our backs from folks who made different choices and now begrudge us the success we worked so hard to achieve.

Heck, some of these people still make more money than I do... and I am pretty good....


I have a friend who went into the Navy.. learned about nukes and power plants... got a job with a utility and was always making more money than I was until about 10 years ago when I took an overseas assignment and got a few good raises.. have lost some of that back after being let go, but still am OK....

I also have an in-law who make 50% more than me working on drilling rigs or something like that... did not know this until a few months ago when BIL told me about it (it is his SIL).... now I know how they afford a Hummer and a bigger house than me even though they are in their early 30s....
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Old 12-29-2010, 11:26 PM   #57
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Maybe you did not mean what I thought by a "non-targeted" rate. If the standard deduction, exemptions etc were set so that no tax was paid on earnings up to "enough income for the necessities" (however much that is) and any earnings over that amount (regardless of how far over) were taxed at the same rate, we might agree after all. Who'da thunk it?
Well, almost...

I still think that everyone needs some skin in the game; otherwise you foster the entitlement mentality that seems to be growing in this country.
But in principle, I would support the notion of a system that required a very minimal tax rate for those earning below a certain threshold; any earnings over the threshold amount would be taxed at the same flat rate, regardless of how far over. Also, eliminate thousands of pages of tax code, close loopholes, and "incentify" people to save for their long-term financial security.
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Old 12-30-2010, 09:23 AM   #58
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Interesting posts. Agree with Alan and kyounge's point of view. I will paraphrase someone else: "I have been rich and I have been not so rich. Rich is better." I generally pay 7 figures of tax each year. As you can imagine Life is really good. No complaints from me!
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Old 12-30-2010, 09:40 AM   #59
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Interesting posts. Agree with Alan and kyounge's point of view. I will paraphrase someone else: "I have been rich and I have been not so rich. Rich is better." I generally pay 7 figures of tax each year. As you can imagine Life is really good. No complaints from me!
I think we have a workable compromise here. We soak the he|| out of the truly rich (those able to pay 7 figures in tax) and leave the poor old middling rich alone (defined as those currently only paying low six figures in tax).
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Old 12-30-2010, 11:12 AM   #60
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Well, almost...

I still think that everyone needs some skin in the game; otherwise you foster the entitlement mentality that seems to be growing in this country.
But in principle, I would support the notion of a system that required a very minimal tax rate for those earning below a certain threshold; any earnings over the threshold amount would be taxed at the same flat rate, regardless of how far over. Also, eliminate thousands of pages of tax code, close loopholes, and "incentify" people to save for their long-term financial security.
No arguments here. And they could do with tightening up some of the loopholes that Corporations use. The other day I saw a Dilbert cartoon where Dogbert was recommending a Dutch Sandwhich so I had to Google to discover that in fact it is something that Google, among others, uses to save tons in taxes.

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"Dutch sandwich” is a financial term to reduce U.S. tax obligations. For example, a Dutch corporation is formed and an investment is made in a Netherlands bank; an Antilles trust company (where secrecy laws don’t reveal the owner) helps to “lend” a U.S. investor his own money from the Dutch bank. The sham is a “Dutch sandwich” between the Netherlands and the Dutch Antilles (two Dutch jurisdictions).
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Interesting posts. Agree with Alan and kyounge's point of view. I will paraphrase someone else: "I have been rich and I have been not so rich. Rich is better." I generally pay 7 figures of tax each year. As you can imagine Life is really good. No complaints from me!
This thread had DW and I talking about that short spell we had on Welfare. It is funny looking back but was horrible at the time. We both graduated with EE degrees and rented a bed-sit in a red-light area (nice and cheap). After 6 weeks we started work at the same company on good money and needed to save for a deposit for a house asap, so we stayed for another 2 or 3 months. (In 1977, the most you could get was a 95% mortgage).

We bought an old banger to get around in (our first car- a mini) for 100 pounds. It was parked on the street and was broken into regularly - we left it unlocked after the first couple of times and twice walked back from the pub to find the thieves hadn't even bothered to close the door. Each day after we got back I would disable it by removing the wire between the coil and the distributor cap, so the engine would turn but never start. (it was an art to get it started anyway ).

The bedsit was on the 2nd floor of a 3 storey terraced house and the rooms above were occupied by prostitutes. There was one doorbell for the whole house and that bell was right above the door into our bedsit. Every night it would be ringing into the early hours followed by folks going up and down stairs. So I poked a hole through from inside our room to behind the bell and pulled through the power wires and fitted a switch. At 11pm when we went to bed I'd switch off the bell then turn it on again next morning. I'm sure their business took a big hit for the time we lived there
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