http://www.cnn.com/2007/POLITICS/11/09/congress.taxes.ap/index.html

I was kinda curious what our local George W groupies TreeTwista10 and hooksaw felt about this issue. The increasing number of middle class citizens who fall into the AMT category will no longer have to pay AMT. Whereas people like hedgefund managers making $HUNDRES of MILLIONS on "carried interest" will be forced to pay the 35% tax bracket instead of just 15% for capital gains.

[Edited on November 9, 2007 at 5:52 PM. Reason : a]

11/9/2007 5:48:32 PM

you know what would fix AMT

if you changed it to ATM

and im not talking about where you get your money

11/9/2007 6:06:56 PM

I thought that I was the only one immature enough to think that.

11/9/2007 6:34:34 PM

ATM???

11/9/2007 6:38:55 PM

It was never intended in 1969 for the AMT to reach down and grab the middle class like it's doing now. The gov't shouldn't even be getting most of this money..so there is nothing to "pay back" as Pelosi claims. The gov't shouldn't have had this money in the first place.

The fed gov't is taking in a huge amount of tax money this year...well enough to skip shaking taxpayers down for more with the AMT.

Quote :

""Raising revenues takes political courage," said House Majority Leader Steny Hoyer, D-Maryland. "

So now screwing the taxpayer is an act of courage?

[Edited on November 9, 2007 at 9:02 PM. Reason : .]

11/9/2007 9:02:02 PM

^^^^ UNCALLED FOR

11/9/2007 9:13:29 PM

they need to fix this shit fast

11/10/2007 12:22:58 AM

Quote :

"BREAKING DOWN THE NUMBERS Here's how the average tax bill in 2008 would change under Rangel's proposed tax reform bill. Income Avg tax change % change Over $500K +$11,497 +6% Over $1M +$101,082 +10.4% $200k-$500k -$3,582 -4.5% $100k-$200k -$1,569 -4.8% $75k-$100k -$532 -2.9% $50k-$75K -$158 -1.3% $40k-$50k -$84 -1.1% $30k-$40k -$64 -1.3% $20k-$30k -$85 -3.5% $10k-$20k -$162 -24% Under $10k -$47 -19.8%"

The biggest problem I have with the tax reform within the current congressional legislation is that I do not agree that the <20K should get such a reduction in taxes paid. They are the ones that benefit most from the current social programs yet they now will get an additional "subsidy" since they will pay less taxes on the programs that are put in to place for benefits they can not manage to save for themselves.

Also, a good amount of this tax group are part-time teenage workers who are often on mommy and daddy's rent bill and work just to put spinners on their car or to buy the newest video games.

http://money.cnn.com/2007/11/01/pf/taxes/rangel_proposal_breakdown/index.htm?postversion=2007110213

[Edited on November 27, 2007 at 12:35 PM. Reason : a]

11/27/2007 12:35:16 PM

I don't think $147 is enough to put spinners on a car. Seriously, why do you care at all unless you make over $500k a year? All the other income brackets aren't really that bad.

And EarthDogg, just because the government wasn't supposed to collect that money in the first place doesn't mean they didn't choose to spend it. Continuing to make tax cuts without replacing the money from some other revenue will only make the federal deficit bigger and screw you out of more purchasing power by making the dollar weaker. We seriously need to start working to balance the budget whether that means slowing down spending or increasing taxes. Clinton had us running a surplus, there's no reason we can't do it again.

11/27/2007 4:32:53 PM

think its bullshit. I gotta pay another 1500 ontop of the 34k plus in taxes I pay a year. Oh yeah, Im the "wealthy" idiot with 8 years of college and debt, living it up in my 2000 accord with 140k miles on it. Gotta love penalizing productivity.

Clinton also had the largest tax increase in history. How about we CUT spending instead of just raising taxes or running defiects every year. I live on a budget, why cant govt?

[Edited on November 27, 2007 at 4:50 PM. Reason : .]

11/27/2007 4:49:12 PM

Cutting spending is reasonable. But fair taxation is important too. So the wealthiest people have to shell out 1500 extra dollars. I work on campaigns, people shell out $9,200 like its nothing. $1,500 (or even $3,600) ain't gonna hurt em.

Things could be more fiscally solvent, but nobody is willing to make necessary changes....

11/27/2007 4:58:10 PM

^well thanks for telling me how much 1500 will hurt me, after all you know better things to do with the money I make than myself. geez

Yes, we need a fairer tax, like no income tax.

11/27/2007 5:03:25 PM

The idea of replacing federal income tax with a federal sales tax is somewhat decent though. People can't evade paying sales tax, and that way you can actually tax illegal aliens as well.

[Edited on November 27, 2007 at 5:09 PM. Reason : .]

11/27/2007 5:07:04 PM

^^ Dude, quit your bitching. I'm having to take out loans right now for 4 years and I'm gonna end up with a lot of debt when I get out. I'm guessing your in the 100k-200k bracket, so at the very least your making 68k after taxes. I'm gonna come out of school and maybe make that before taxes. You're not hurting that fucking bad, so just stop talking like your scraping by.

[Edited on November 27, 2007 at 5:08 PM. Reason : ]

11/27/2007 5:08:22 PM

^I agree on the sales tax.

I too was talking about rangels plan, the 1500 is on the 100k to 200k, Im just over 100k and so 1500 is a big deal to me. I didnt mean to come off like an ass, I just wonder where the idea of taking from someone else's earnings and justifying it by sayin "they dont need it". How do we know, and who are we to say what someone does or needs with thier own money? The idea itself is ridiculous to me, just like the income tax.

420, you are off by about 10k take home. sadly. Really, how much debt you going to be in? I have over 100k in just my last 4 years, all school no credit cards, and the 8 years it took to graduate. thanks for telling me, again, how much I need my own money Ive worked hard to make.

[Edited on November 27, 2007 at 5:13 PM. Reason : .]

11/27/2007 5:10:03 PM

If there was only a sales tax then the super rich would go outside the country to make big ticket purchases and a huge amount of revenue would be lost that way. It's a novel idea, but once again, one that would benefit the wealthy more than the poor. No one wants to pay taxes, but it's just something that has to be done. It's done fairly enough though that there is no incentive for making less money. The people who make more are still better off than the people who make less, regardless of how much they pay in taxes.

I'm gonna have around 50k by the time I'm done probably, which is nothing to scoff at.

[Edited on November 27, 2007 at 5:19 PM. Reason : ]

11/27/2007 5:16:49 PM

Quote :

"I too was talking about rangels plan, the 1500 is on the 100k to 200k, Im just over 100k and so 1500 is a big deal to me. "

Dude with the new tax plan you will be SAVING $1500 not losing. Learn your "+" and "-"

The chart is the change of the tax bill not how much after tax money you will have

[Edited on November 27, 2007 at 5:21 PM. Reason : a]

11/27/2007 5:20:55 PM

^ oh shit you're right...i didn't catch it either

11/27/2007 5:22:21 PM

^^^ What would they buy outside the country that would be worth the hassle and the shipping costs and wouldn't already be covered under current import tax laws?

[Edited on November 27, 2007 at 5:26 PM. Reason : dsfg]

11/27/2007 5:26:45 PM

you are forgetting about the black market and smuggling.

11/27/2007 5:31:06 PM

If you're going to start talking about illegal stuff, then yes they can evade anything. Just like they evade cap gains taxes and income taxes currently. I think the question is, what system taxes the most fairly, while still getting the necessary revenue out of them.

(okay...sidenote after reading this http://economics.about.com/cs/taxpolicy/a/fairtax.htm all the way through, I'm not sure if a "fair tax" would be such a hot idea)

11/27/2007 5:45:53 PM

Thanks Hur, I didnt catch that. Actually I would get the biggest tax benefit from his plan. However, Im still against the income tax. All they are doing is shifting the burden. Why not just tax what we spend? and not penalize peopel for being productive?

People would actually take home what they make and THEY would decided how much tax they would pay. There would be no need for tax shelters, overseas accounts, overseas headquarters simply to avoid taxes. THEN let the govt make due with what they bring in.

420, 50k is a nice amount. What are you going for? You will feel the pain of working hard and investing in yourself, which should make you more defensive when people start talking about spending your money that you "dont need".

Lunak, what makes you not think the fairtax is a good idea from that link? I support it, although Im not sure about the pre-bate. I would rather there be no tax on unprepared food and clothes under a certain dollar amount, hell even gas is debatable.

[Edited on November 27, 2007 at 6:14 PM. Reason : added a question.]

11/27/2007 6:01:22 PM

Quote :

"A weakening of the U.S. dollar as Americans who want to buy foreign goods will need to exchange their U.S. dollars for foreign currency. We should expect to see the U.S. dollar become less valuable relative to other currencies, particularly the Canadian dollar."

The weakening of the US dollar would be my main concern. It's already weakening against the Yen and the Euro, and I would just worry that this could further that problem.

11/27/2007 6:37:27 PM

I might support an income tax if it were flat. I have a major problem with the poor have the least % taken out of their paychecks; yet a lot of this money is paying for their inability to take care of some of the basic necessities themselves.

11/27/2007 6:42:59 PM

Yeah, and none of it goes to roads, military, education, or anything like that...

11/27/2007 6:44:25 PM

but that benefits everyone in society.

6.5% of my paycheck pays for social security for old people who couldn't manage to save for retirement; yet at least everyone is taxed equally regardless of income. Then after a certain amount you are no longer charged for FICA

[Edited on November 27, 2007 at 6:52 PM. Reason : l]

11/27/2007 6:51:18 PM

Quote :

"6.5% of my paycheck pays for social security for old people who couldn't manage to save for retirement"

That's the same thing they said 40 years ago. And just because someone claims social security doesn't mean they didn't save. You can have plenty of money and still be eligible for social security. Poor people aren't the only ones who milk the system.

I just think it's incredibly ignorant to blame poor people for high taxes when doing any research on the subject at all will reveal that a relatively small portion of taxes goes towards welfare programs. If taxes are such a huge deal to you, argue against the war, the military, and education as much as you argue about poor people.

11/27/2007 6:57:13 PM

Quote :

"If taxes are such a huge deal to you, argue against the war, the military, and education as much as you argue about poor people."

You damn right I argue and bitch about the War in Iraq. This is my #1 issue going into the presdential elections. This thread is not about that though.

Btw I support tax payer money on education. This one of a few gov't programs that in my mind is an investment and profitable in the long run.

Eduaction leads to people with better jobs. Better jobs means more income. Bigger income means more spending to help the economy, more $$ for investment, and more money that is taxed whether it be income; sales; capital gains etc.

11/27/2007 7:01:24 PM

Quote :

"I just think it's incredibly ignorant to blame poor people for high taxes when doing any research on the subject at all will reveal that a relatively small portion of taxes goes towards welfare programs. If taxes are such a huge deal to you, argue against the war, the military, and education as much as you argue about poor people."

I think you'd have to use a pretty narrow definition of "welfare" to come to that conclusion, though. Toss in Medicare, Medicaid, and SS, and it becomes a huge chunk of government spending. And part of that problem is the lack of any means-testing whatsoever - should we really be cutting checks for Social Security to wealthier retirees who can easily do without it? Isn't that the definition of a regressive wealth transfer?

Then, if you want to get really creative, we can throw in corporate welfare - the budget-busters of ag subsidies, etc. And then there's always the security subsidy we provide to about half of the civilized world, which certainly isn't cheap...

11/27/2007 7:01:45 PM

Quote :

"You damn right I argue and bitch about the War in Iraq. This is my #1 issue going into the presdential elections."

Well then good. I just don't like it when people use poor people as their go-to argument against higher taxes.

^ You're right. I'm certainly for tighter control of who gets that money. But the fraction of money that people take from the system and turn around and go spend on crack or something like that is pretty small. There is a pretty bad problem with Medicare or Medicaid or whatever it is. My mom is a nurse and she used to tell me about how people on that shit would come in and lay in bed for weeks using like $15000 worth of morphine just because they could. That shit is retarded.

[Edited on November 27, 2007 at 7:10 PM. Reason : ^]

11/27/2007 7:10:04 PM

Quote :

"should we really be cutting checks for Social Security to wealthier retirees who can easily do without it? Isn't that the definition of a regressive wealth transfer"

I mean everyone pays into it; why shouldn't the "wealthier" retirees get some of the money back just b.c they were smart enough to save for their silver years.

Do they less deserve the SS money then another guy who works his way up in salary to 100K a year by 40; but wastes every penny on stupid shit then collects SS as his only source of income at 65??

11/27/2007 7:13:37 PM

Quote :

"I mean everyone pays into it; why shouldn't the "wealthier" retirees get some of the money back just b.c they were smart enough to save for their silver years."

Because A) They don't need it, just the same way that any of us making above the poverty line don't get welfare checks, and B) They're collecting more than they put in, which means it's a wealth transfer.

Again, what is the logic in making SS a catch-all entitlement rather than a very, very expensive middle-class entitlement?

Quote :

"Do they less deserve the SS money then another guy who works his way up in salary to 100K a year by 40; but wastes every penny on stupid shit then collects SS as his only source of income at 65??"

Does a crackhead deserve welfare any more than someone who actually punches in a 9-to-5 job? I think you're missing the point here. If we handed out government checks based on simple merit alone rather than circumstances, it really wouldn't be solving the supposed problem it's intended to solve.

11/27/2007 7:17:26 PM

Im actually agreeing with HUR alot in this thread.

Chaos, I disagree with your SS example. They paid in THIER money, damn right they are entitled to it. The best policy would have been a SS savings account, where your portion is saved for you and you collect YOUR money. That is a fairer system, imo.

11/27/2007 7:35:30 PM

Here's the problem - you also pay in YOUR money for lots of government programs - including Medicaid, which is need-based. Given that, should you expect to simply drop your health insurance right now and just demand the government pay for it? (I mean, it is "your money" after all). Or how about welfare? We're all paying taxes for it too, why can't we get in on that glorious government cheese?

You can make a plenty fair argument that SS is a bogus scheme anyways - through the amount we take out of people's checks, we turn it into a middle-class entitlement boondoggle. But just because we have embraced terrible policy is no reason to continue to do so.

Your argument rests in the notion that by making a change, we making a breach of contract. Here's the solution to that, though - start by phasing it out where it'll have the least impact, and gradually get rid of the notion of a generic entitlement overall. It's expensive, paternalistic (seriously, government forcing you to save? At below-market rates to boot?), and essentially boils down to nothing other than an accounting trick - one that would be illegal if anyone in the private sector ever tried it.

[Edited on November 27, 2007 at 7:47 PM. Reason : Additional example]

11/27/2007 7:45:17 PM

again, I disagree. SS wont be around when I retire, and if it is I will get means tested out of most of my benefits. Why? because I save extra. I am not planning on SS to be my sole retirement as NOONE should. So what little if any I get, hopefully will be bonus. However, life takes many turns and I may not be able to retire on my savings alone, so knowing that I pay in the maximum every year and that amount is doubled by my employer. If I was allowed to keep my own money, I could retire very well.

The problem is we dont limit SS income to SS. They spend that money on other programs instead of keeping it only for SS. I believe NY state does just that and has a self sufficent account. There would be more than enough. However, if you send a dollar to the government, they figure out how to spend 3. If there is extra, time to expand.

11/27/2007 11:20:21 PM

But what you're arguing is a terrible reason for perpetuating the status quo - it's a sunk cost fallacy. Look, if you keep putting in money to SS, the government is going to keep pissing it away. Guaranteed.

Meanwhile, the math simply doesn't add up. Let's assume for a moment that the magical "Trust Fund" actually had money in it instead of a bunch of IOU's. Given the dynamics of the working population, SS will still exhaust its surpluses and run a net deficit sometime around 2040. And this assumes those IOU's are actually worth anything other than promises to pay.

When you have more people cashing out for longer spans of time than you have people putting in, it's a net negative. There's just no way around it.

So again, we can continue to perpetuate this stupid boondoggle, and you can continue to pay more and more into it, or we can actually do something which would allow you to keep more of your money to save for yourself by just restructuring this program for what it's supposed to be - social insurance, not some wealth transfer scam.

We've all paid into it already, and it sucks, but we can either continue to try and milk a system that's going to bleed us all dry in the hopes that we might recover a few bucks out of it, or we can admit it's just a sunk cost and stop feeding cash into it like crazy with the hopes that you may actually see a payout before the system goes broke. Your call.

11/27/2007 11:29:51 PM

^I agree with you. I dont think the current system will continue to work. I think there are many reasons and MATH being the best one. We have a system that has reworded being nonproductive and surprise, less people are working.

However, If given the option TODAY to not pay it I would not pay it. I would then invest. If everyone was given the option they would do the same. However, then some sob story of how people just pissed it away and now they cant work and poor....then what? You know it would happen. I kinda like the idea of forced savings, however dont let the money be spent on other programs.

Quote :

"Look, if you keep putting in money to SS, the government is going to keep pissing it away. Guaranteed. "

great line. I suggest we dont let them piss it away. Only let the SS money be spent on SS. Oh and get disability OUT of SS. We dont need to be taking money out of SS to pay for medicaid kids with ADD so there families get an extra 500 a month.

11/27/2007 11:36:19 PM

I totally agree, and this is my point. Get rid of SS, stop taking money out of peoples' paychecks, and if we have to take care of people who can't manage to save for their retirement, just call it for what it is - Social Insurance, i.e., welfare for old and/or foolish people. Just take it out of General Revenues and stop calling it a blanket entitlement.

I'm not as sure on the idea of forced savings, however, if only because A) It's completely paternalistic, B) There's bound to be craploads of inefficiencies inherent in that, especially in the opportunity costs for young workers. For some people who actually understand financial planning, it can be more hindersome to take away that extra money and force them to save it now than to let them invest it as they see fit (i.e., in a business venture, when they're young enough that failure is not utterly catastrophic).

[Edited on November 27, 2007 at 11:50 PM. Reason : Savings issue]

11/27/2007 11:47:43 PM

^I think we agree on most of this. However, look at the savings rate of americans, its horrible. If you force them to save some it "should" lighten the load on taxpayers in the future. The young are too foolish to save and are often the most instant self gradification people in society, so they would rather spend thier money now, than plan ahead when compounded intrest and time would benefit them the most.

So I really like the idea of forced savings. For ONCE the govt actually does something that helps teach responsibility. However, Ill admit that any program the govt overseas is terribly ineffiecent. Just ask anyone who works for the govt, they will tell you.

11/28/2007 8:20:55 AM

SS needs to be phased out. If we just ELIMINATED SS what would happen to all the old people currently relying on it.

Over a 30 year period they could steadily decrease the 6.5% going toward SS and use this money as part of the forced savings.

11/28/2007 10:00:27 AM

You for forced savings too Hur?

I would rather people get tax payer money from a system that they paid into for decades, than given out to those who do nothing to help themselves. So, I would propose taking some money from other programs to fund SS for the current elderly. Is there any reason that medicaid should be paying for hair pills, accutane(expensive), or fertility drugs? We can make some serious cuts, and need to in my opinion.

11/28/2007 10:08:07 AM

[NO]

11/28/2007 10:13:19 AM

^so what do you propose for retirement? Every man for themselve? That wont work, bc people will spend the extra money and some bleeding heart will take away from those who have saved to give it to the irresponsible.

11/28/2007 10:16:03 AM

Quote :

"Is there any reason that medicaid should be paying for hair pills, accutane(expensive), or fertility drugs? We can make some serious cuts, and need to in my opinion."

i agree with this sentence.

11/28/2007 10:44:39 AM

I dont think that the solution is to get rid of SS all together.

Quote :

"Only let the SS money be spent on SS"

Is one part of the solution, the other is to incrementally increase the eligibility age and then increase the salary cap from 200,000 to say 1 million. When the age was set, it was above the average life span.

Two things that the AARP won't let happen, too bad people our age don't have a similar lobbying group to help us out.... (oh that's right, we don't vote enough for politicians to care...)

11/28/2007 10:55:39 AM

^^

I said it earlier. "Phasing" out SS over the years so that people currently on the system are simply a canoe stuck w/o a paddle. While initiating a new system that through tax credits/deductions/exemptions heavily encourages people to save for retirement. Meanwhile possibly use the 6.5% currently used for SS to go into a "forced retirement savings account" as SS is slowly phased out. This money would be the individuals not a collective pool that the gov't can dip into at any time to fund its wars or other expenses.

I really do not know and do not think I have enough knowledge to create a viable solution. Obvious, however, is the fact that the current system will not be sustainable much longer.

[Edited on November 28, 2007 at 10:58 AM. Reason : a]

11/28/2007 10:56:37 AM

http://biz.yahoo.com/ap/071201/tax_hit.html

Theres a good article on our current situation. If they dont get this resolved pretty quickly there is a significant chance that the IRS wont be accepting tax returns till the middle of February.

Thats going to piss off alot of people.

12/3/2007 3:19:01 PM

it's definitely something that needs to be changed... probably reclassified income level or eliminated

special taxes on items like yachts has been tried before and failed... it just kills the yacht makers when the rich don't buy them.

best way to fix the tax system is to scrap it wholesale and create another much simpler one. result, less loopholes. if everyone paid what they had to in taxes your overall tax rate could drop and the govt. would get the same amount. probably more b/c they would use less manpower to run the IRS

Quote :

"This money would be the individuals not a collective pool that the gov't can dip into at any time"

exactly what I think it should be. frankly, should be forced below a certain income level, then as income rises the % drops and breaks for saving kick in.

but exactly what i think they should do


redistribution of wealth (from the young to the elderly in particular) is one of the biggest mistakes a government/society can make...

12/4/2007 1:58:31 PM

In our modern Mixed economy while no Socialist paradise like the over taxed people in Europe definitely allows people to abuse social programs, using it as a hammock instead of a safety net. We should therefore revert to a flat tax rate on income tax. Absolutely ridiculous is the fact that the working class and underclasses receive grossly a higher % of gov't handouts paid by tax payers while paying the absolute least % into the system that subsidizes their laziness/irresponsibility.

[Edited on December 4, 2007 at 2:58 PM. Reason : 5]

12/4/2007 2:57:17 PM

^there should never be a tax on income. IMO

Federal sales tax is the way to go.

12/4/2007 3:09:08 PM