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Old 01-11-2014, 11:24 PM   #41
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Deciding to retire because you don't like being in the 39% tax braket? PM me, I'll be more than happy to un-retire and take up your miserable existance.
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Old 01-12-2014, 08:11 AM   #42
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Originally Posted by ERD50 View Post

Regarding the earlier posts about the difference between marginal and effective tax rates, it would be interesting for reference if the OP would calculate their effective tax rate. But still, the marginal tax rates do set the measure for any marginal income.

-ERD50
Thank you for your thoughts and I have the same concern you do.

It is true that until a married couple filing joint makes more than $450,000.00 annually they do not reach the 39.6% level. I am aware of the difference between marginal and effective and it is an important difference. To answer your question, most of my income is at the highest rate causing most of it to go to the government. My effective federal tax rate is closer to 39.6% than the next rate of 35%. That is why at 54 I have determined it is no longer worth the time, sleepless nights and aggravation. A number of my friends feel the same way.

I started this discussion with the concept that this result was never intended by the founders. It was never intended by Lincoln, by T. Roosevelt or even John Kennedy who said " he was committed to "an across-the-board, top-to-bottom cut in personal and corporate income taxes." which was actually passed by Congress a few months after his death.

The current tax rates are stifling and although it is currently popular to "hammer" the wealthy it is very important to remember the long range effect it will have on everyone. Shoot at me if you will but it does not change the facts.

Happy New Year to all.
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Old 01-12-2014, 09:21 AM   #43
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My effective federal tax rate is closer to 39.6% than the next rate of 35%.
My back of the envelope calculation of fed. income tax says you have an annual income north of $1M. Difficult to garner much sympathy here for paying less than 39% of that in taxes.
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Old 01-12-2014, 09:54 AM   #44
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My federal income tax calculator results yield 35.4% on $1 million as a single, 34.5% married.
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Old 01-12-2014, 10:06 AM   #45
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My back of the envelope calculation of fed. income tax says you have an annual income north of $1M. Difficult to garner much sympathy here for paying less than 39% of that in taxes.
+1

I think the OP suffers so much tax for his level of income because he said it was mostly W-2 income. There are some high income wealthy people who have publicly declared their income have very low effective tax rates (<15%) because they can structure much of their income to be from sources such as stock options, carried interest, qualified dividends etc that are taxed at 15% and also can be offset some of it with CG losses.
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Old 01-12-2014, 10:14 AM   #46
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Crazy as it sounds, I am happy to pay my share of taxes. I see the results everyday in our great country, either in the infrastructure, the care we take of our citizens, the security that the money has brought us, the education of our kids, the supporting of our elders, etc.....None of this is free.

Excessive taxation? Maybe to you, but I'll gladly pay it for the lifestyle I enjoy and the country that I currently live in.
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Old 01-12-2014, 10:27 AM   #47
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Deciding to retire because you don't like being in the 39% tax braket? PM me, I'll be more than happy to un-retire and take up your miserable existance.
I don't think the OP described his existence as 'miserable' - he merely said he was not motivated to continue to work for that marginal income when so much was taxed. He is at the cusp of his own personal "Laffer Curve".

It's easy for you to say "I'll take yours", but if you did what it takes to achieve that income level on your own, you might feel the same as the OP. What's stopping you?

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Growing up I didn't pay too much attention to the lyrics of the Beatles tax man. I later learned that UK top tax bracket back in the 60s was actually 95% and Harrison was right 19 for you and one for me. ....
Yes, I always thought that was poetic licence - it was years later that I made the connection between the UK 95% marginal tax rate and the 19/1 ratio.

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Crazy as it sounds, I am happy to pay my share of taxes. I see the results everyday in our great country, either in the infrastructure, the care we take of our citizens, the security that the money has brought us, the education of our kids, the supporting of our elders, etc.....None of this is free.

Excessive taxation? Maybe to you, but I'll gladly pay it for the lifestyle I enjoy and the country that I currently live in.
And what is your marginal/effective tax rate?

-ERD50
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Old 01-12-2014, 10:49 AM   #48
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'And what is your marginal/effective tax rate?"
25/12.9
not quite sure of the relevance since it is top line dependent. If I made more, I'd still be happy to pay the going rate (render unto Caesar). I also pay 4% state, almost 10% sales, and 1.9% ad velorem. I pay tolls to cross bridges, and donate back my gov't stipend for sitting on a local governing board.
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Old 01-12-2014, 10:50 AM   #49
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My back of the envelope calculation of fed. income tax says you have an annual income north of $1M. Difficult to garner much sympathy here for paying less than 39% of that in taxes.
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Old 01-12-2014, 11:37 AM   #50
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I have multiple marginal tax rates depending on the type of income it is. If the extra income is home-state muni bond income then it is zero. If it is out-of-state muni bond fund income then it is about 6.5% (my home-state marginal income tax rate). Same is true if it is QD or LTCG because I am in the 0% federal bracket for those types of income. If the extra income is ordinary dividend income, then it is about 21.5%, my combined fed+state marginal income tax rate.

Oddly, in recent years when I was itemizing my deductions, if they included medical expense then sometimes the federal 0% QD and LTCG was not quite zero because they each raised my income floor on Schedule A and therefore boosted my taxable income slightly.

My average tax rate (fed+state) as a percent of all income (including all tax-free muni bond income) is about 8%.
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Old 01-12-2014, 12:22 PM   #51
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It is unclear to me why the board is so hard on Phil 1 Ben. Jealousy perhaps?

His success might well be able to teach us things, a lot more than one more member who hates his job and spends all his time figuring out ways to get a little more at the public feeding trough. Perhaps Phil1Ben is a little tired of providing the fodder? It is hard for me to see why he should be castigated for paying for the subsidies that other millionaire but non-working members very carefully secure on their government mandated health insurance policies.

Not many millionaires are making unusual demands on public budgets, but plenty are making outsized contributions to these same budgets.

Are we mostly communists here? Our country began in protest at taxation that was perceived to be unfair and outrageous.

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If I were Phil, I would pack up and spend my time with other rich people who don't despise the rich at his country club.

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Old 01-12-2014, 12:33 PM   #52
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I started this discussion with the concept that this result was never intended by the founders.
It is a perhaps inevitable but unfortunate debating tactic to invoke the names of a bunch of dead guys who are no longer capable of expressing their own opinion by putting words in their mouths that they never uttered. As far as whether the founders would have been outraged by a 39.6% tax rate on multimillionaires, I guess the jury is still out on that one. My guess is that there would have been a mixture of different positions on the issue, just as there typically are on any issue. George Washington, for example, not only supported the whiskey tax, but even personally led the army sent to enforce it. And all this in spite of the fact that it was a patently "unfair" tax, levied only on the oppressed class of whiskey distillers and no one else.


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even John Kennedy who said " he was committed to "an across-the-board, top-to-bottom cut in personal and corporate income taxes." which was actually passed by Congress a few months after his death.
Sure, the tax cut of 1964 lowered the top marginal tax rate from 91% to 77%. Let's all take inspiration from John Kennedy's inspiring example and reinstate the 77% rate on upper incomes. I'm sure we could all get behind that proposal.
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Old 01-12-2014, 12:46 PM   #53
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Old 01-12-2014, 01:36 PM   #54
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Ha, whether the system is "fair" or not is beside the point. And we can only speculate what the founders would think about a world where your false teeth could be something other than a piece of wood.

More to the point, I can't fathom why OP wants to waste his time squealing about the tax system. Just about all of us here are "price" takers when it comes to taxes, wages, and just about everything else. I am sure those that can afford their own PACs, offshore vehicles, tax lawyers, etc. may be other than price takers, but I suspect there are few or none of those here. The game is what the game is, so play it well. If OP is really in the 39.6% bracket either he is making substantially more than $1MM annually or he is playing the game wrong. He, you and I cannot change the system and we can change the laws of gravity, so why waste time and energy caterwauling about it? Figure out how to best play the game to suit you, respond to incentives, and get on with life. If you want to change the system, either go fund that PAC or try a grass roots campaign among all those with million dollar plus annual incomes.
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Old 01-12-2014, 05:18 PM   #55
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This thread is closed after multiple complaints that some posts are too disrespectful of the views of others. A reminder from our community posting guidelines (here)


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