OT When does 999 = 666?

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When your tax plan is simple - and wrong. http://www.foxnews.com/politics/2011/10/18/study-cain-tax-plan-raises-taxes-on-84-percent /
R
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http://www.foxnews.com/politics/2011/10/18/study-cain-tax-plan-raises-taxes-on-84-percent /
Screw it, those making over a million, their taxes would be cut in half. After all- we're talking about the job creators! Let's continue to balance the budget on the backs of the working stiffs. C'mon, give the rich a break!
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On Tue, 18 Oct 2011 21:54:25 -0400, Twayne wrote:

2009 info from the IRS: the top 1% income earners paid 39% of the income tax collected (Kerry's wife is a notable exception to this, otherwise the figure would be significantly higher) while the bottom HALF income earners paid only 3%. Be fair, quadruple thhe low income tax rates!
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Those buying yachts & new vehicles paid significantly more tax money on their purchases than those buying row boats & clunkers. Let's raise the tax on who are paying less!
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Michael Dobony wrote:

Does this take into account the income tax collected at the state level?
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Nope. But since most of the debates surround candidates for President and Congress, it doesn't seem relevant to THIS discussion.
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See also:
http://sociology.ucsc.edu/whorulesamerica/power/investment_manager.html
The following is taken from that web-page:
============================= I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and if working make over $300,000 per year. My observations on the sources of their wealth and concerns come from my professional and social activities within this group.
Available data isn't exact, but a family enters the top 1% or so today with somewhere around $300k to $400k in pre-tax annual income and over $1.2M in net worth. Compared to the average American family with a pre-tax income in the mid-$50k range and net worth around $120k, this probably seems like a lot of money. But, there are big differences within that top 1%, with the wealth distribution highly skewed towards the top 0.1%.
The Lower Half of the Top 1%
The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. On earned income in this group, we can figure somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes, leaving them with around $250k to $300k post tax. This group makes extensive use of 401-k's, SEP-IRA's, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month.
The net worth for this group is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn't really buy freedom from financial worry or access to the true corridors of power and money. That doesn't become frequent until we reach the top 0.1%.
The Top Half of the Top 1%
Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M in net worth.
Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%.
Membership in this elite group is likely to come from being involved in some aspect of the financial services or banking industry, real estate development involved with those industries, or government contracting. Some hard working and clever physicians and attorneys can acquire as much as $15M-$20M before retirement but they are rare. Those in the top 0.5% have incomes over $500k if working and a net worth over $1.8M if retired. The higher we go up into the top 0.5% the more likely it is that their wealth is in some way tied to the investment industry and borrowed money than from personally selling goods or services or labor.
They are much more likely to have built their net worth from stock options and capital gains in stocks and real estate and private business sales, not from income which is taxed at a much higher rate. These opportunities are largely unavailable to the bottom 99.5%.
The picture is clear; entry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. I find it questionable as to whether the majority in this group actually adds value or simply diverts value from the US economy and business into its pockets and the pockets of the uber-wealthy who hire them. They are, of course, doing nothing illegal.
I could go on and on, but the bottom line is this: A highly complex set of laws and exemptions from laws and taxes has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules.
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You left out the most important part. What percent of income in taxes do you claim those in the upper part of that 1% group are paying? You said for the lower part of the 1% it was 25-30%, which is substantial. And what exact mechanisms are they using to reduce it?
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" snipped-for-privacy@optonline.net" used improper usenet message composition style by full-quoting:

I didn't write that material - I just quoted it.
And why did you full-quote it - you knucklehead? Don't you know how to trim unnecessary quoted material when you're composing a usenet reply?

Again, I'm not claiming anything. The guy that wrote that material did all the claiming.
He doesn't say what the effective tax rate is for the top 0.5% or even the top 0.1%, but he does say that the income of those groups are more likely to have come from stock options, capital gains (probably made with borrowed money), and real estate - all of which are taxed at a lower rate than "earned income".

To quote from the article:
===========Those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits.
Those in the top 0.5% have incomes over $500k (if working) and a net worth over $1.8M if retired. The higher we go up into the top 0.5% the more likely it is that their wealth is in some way tied to the investment industry and borrowed money.
They are much more likely to have built their net worth from stock options and capital gains in stocks and real estate and private business sales, not from income which is taxed at a much higher rate. =========== And here's more that I did not quote originally:
===========Recently, I spoke with a younger client who retired from a major investment bank in her early thirties, net worth around $8M. We can estimate that she had to earn somewhere around twice that, or $14M-$16M, in order to keep $8M after taxes and live well along the way, an impressive accomplishment by such an early age.
Folks in the top 0.1% come from many backgrounds but it's infrequent to meet one whose wealth wasn't acquired through direct or indirect participation in the financial and banking industries. One of our clients, net worth in the $60M range, built a small company and was acquired with stock from a multi-national. Stock is often called a "paper" asset. Another client, CEO of a medium-cap tech company, retired with a net worth in the $70M range. The bulk of any CEO's wealth comes from stock, not income, and incomes are also very high. Last year, the average S&P 500 CEO made $9M in all forms of compensation.
Another client with a net worth in the $10M range is the ex-wife of a managing director of a major investment bank, while another was able to amass $12M after taxes by her early thirties from stock options as a high level programmer in a successful IT company. ============= I think what we have here is some bit of trickery on the part of the upper 1% to say that they're supporting the federal gov't (or maybe all levels of gov't) off their own back.
The top 1% may be paying close to 40% of all federal income tax, but they're also earning something like 25 to 30% of all income in the country.
If you factor in property taxes, payroll tax, sales tax, gasoline tax, you'll see that the funding of all levels of gov't (state, local, federal) is more equitably or evenly funded by a broad range of citizens across all income levels vs just narrowly looking at how the federal income tax pie is sliced up.
I also read somewhere that Bush's tax cuts have actually *increased* the tax burden on what I think is the lower half of the upper 1%, probably by reducing the tax burden on the upper half of the top 1% as well as the 95% to 99% segment.
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Geez, having a bad day are you? OK, so you didn't leave it out, the anonymous source did. But why is it left out? Isn't the whole point to compare what the very upper income folks are paying? Yet that part is just not there, but there is a lot of implying that something unfair is going on.

Yes, an anonymous source.

And to that alone I say he's full of crap.
keep profits and production overseas, hold personal

Why did you repost all that? Can't you trim? And when you find a real number, the percentage of their income that the very upper part of the 1% pay, instead of BS, let us know.
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" snipped-for-privacy@optonline.net" wrote:

To quote from the article:
=========This article was written by an investment manager who works with very wealthy clients. I knew him from decades ago, but he recently e-mailed me with some concerns he had about what was happening with the economy. What he had to say was informative enough that I asked if he might fashion what he had told me into a document for the Who Rules America Web site. He agreed to do so, but only on the condition that the document be anonymous, because he does not want to jeopardize his relationships with his clients or other investment professionals.
G. William Domhoff Sociology Dept. University of Santa Cruz ========== The legitimacy of the source can at least be traced back to Domhoff, and the article itself is hosted on SCSC's website - not some fly-by-night do-it-yourself blog.

Those with the best credit scores get the lowest interest rates. You didn't learn that in the school of life?

What kind of a moron are you?
Only 15% of that was re-posted, and it was re-posted only to answer your direct questions.
The remaining 85% was new, original material in this thread.

Yea - you do the same.
But it's still true that the people that pay the majority of federal income tax also earn the majority of the income in America.
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Wow, I'm impressed. It's hosted at the University of California. You have any idea how many radical, nut job professors there are in academia? The source is still anonymous. And doens't it bother you that while the piece drones on, raises all kinds of red herrings, it never gives the most basic piece of information. That information would be what percent of their incomes does the upper part of that last 1% pay? Wasn't that the whole point of the frigging piece?

That isn't what the article said. It said that those in the very top income brackets can often borrow for almost nothing. That's not the lowest rates, it's saying they borrow for almost nothing.
So, yeah, call me skeptical.

I'm not the one raising the issue.

That seems reasonable.
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I guess it depends on how you define "almost nothing". Anyone with a significant portfolio of stocks or bonds can borrow money at the broker's call money rate, currently 2%, plus a broker's markup ranging from 0 to around 3%. The markup depends on how much you borrow and how good a client of the broker you are. For the folks we are talking about, it will be between 0 and 0.25%.
-- Doug
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Yes and if you want to look at borrowing against assets, many homeowners who aren't in the top 1% of incomes could also refinance their house, take money out with a new mortage at 3 to 3.75%. That's pretty close to the margin loan rate, ie they can borrow at low rates too.
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wrote:

You're not comparing apples to apples. It costs money to refinance. It's also a lot harder to refinance than it was before the bubble popped. People that have less than stellar credit are between a rock and a hard place.
Compare Donald Trump with your average schmoe. He views bankruptcy as a game. That's a luxury that few can afford. http://abcnews.go.com/Politics/donald-trump-filed-bankruptcy-times/story?id=13419250
R
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Fine. Add the closing costs and amortize it over the life of the loan. So someone with a job and a house can borrow at 4%. The rich can borrow at 3.5%. You want to argue the difference?

Having poor credit and not being rich are not the same thing. The claim was made that the very rich can borrow for almost nothing. The fact is that many ordinary people can too. Not only could they do it using the equity in their homes, if they have even a modest stock portfolio they can do it via the same margin loan the rich guy can. Yeah, the rate might be 1% higher, but is that some big difference to try to make the claim that the rich can borrow for free?

What does bankruptcy have to do with any of this? Not a very good example. Plenty of ordinary people are using bankruptcy every day too.. AFAIK, Trump never declared personal bankruptcy. It was businesses, most or all of which were publicly traded companies with Trump as a major shareholder that filed bankruptcy. Bankruptcy has become more acceptable today for everyone, rich and poor alike.
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Which is why you use the effective tax rate. This takes their entire income, no matter what source or the taxable rate for specific parts, gloms it altogether and then says what the rate of TOTAL income went to taxes.
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On Tue, 18 Oct 2011 18:39:49 -0700 (PDT), RicodJour

The plan, as it stands, does not seem so good, but the idea of a flat tax and elimination of tons of loopholes is a great idea. Maybe it should be 12-2-4 or 13-1-3. Exemptions for incomes under $x.
No matter how you cut it, our present tax code sucks big time.
It will eliminate the need for tax accounts, lawyers, other tax preparers that prey on low income or low educated people.
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It certainly contributes to the discussion and at least it's an actual plan. But from the start I too was surprised that someone running for President, who's been a CEO, and has economic advisors would put forward this plan. It's easy to tear apart. Start with those on social security and limited retirement income. Right now they pay zero income tax. The 9% sales tax would be a huge tax increase for them.
Then take those lower income tax payers who are paying no income tax. That's almost half of all taxpayers. They get hit with not only the 9% sales tax, but also a 9% income tax. They go from paying nothing to close to 18%, assuming they spend nearly all they make.
At the same time, upper income tax payers who are probably paying at about a 30% rate overall, wind up only paying 9%. And Warren Buffet would get a huge cut because there would be zero capital gains tax.
How he could possibly put this forward as a serious proposal is beyond me.
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No matter what combination of 3 numbers you use, it still looks like a code for some kind of fertilizer
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with the average voter. (Winston Churchill)
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