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    #31
    Originally posted by disneysteve View Post

    I'm not sure why you put "legal" in quotes.

    Do you voluntarily pay more in taxes than you are required to? If not, I'm really not sure what your point is.

    And yes, I am absolutely looking to pay less in taxes through any LEGAL means to do so. I think you'd have to be a fool to do otherwise (general you, not you personally).
    I'm putting "legal" in quotes, because the code is a joke of complex loopholes. I don't think we spend enough time criticizing our system, or at least take the criticism and comments seriously.

    I think referring to things as "legal" is becoming more and more of a joke.... As I'm growing more and more cynical of the intent of those who set up these "legal systems", and starting to think, they may be legal on paper... But I *Think, the vast majority of American's would agree, that it is not a correct system. And appears to be legal in letter only, and not the spirit it was intended. The spirit intended being, if you make more, you should chip in a fair share. And not the "fair" way to chip in your share of profits to = deploying professionals and utilizing loop holes to reduce the amount wealthy/ Very high earners have to pay, in respects to the rest.

    Maybe I'm on an island here.... I just think it's despicable when I hear how little some people pay in taxes considering their worth.... And all this calorie burning to move money out of the country or state, to let it sit somewhere, where it gets "treated differently" even though it's the same $$$$ going to the same person(s).


    *Edit Added = DS you're explanation of avoidance/evasion is an (unfortunately, to the point i'm trying to make) perfect legit example of the difference. So my "LEGAL" was mostly to be provocative. My target is set higher, at those who receive very large amounts of tax breaks, from more complicated mechanisms, other than going from short term --> Long term cap gains. 1031 exchange for example, a HYPER powerful tool to dodge taxes on commercial real estate, something I Should consider using in the future if my R.e. investments continue to progress. But it seems like much to strong of a tool.... And is only eligible to the small fraction of people who own real estate investments. And I in fact pay for an accountant as well, so NO I do not voluntarily pay more in taxes.

    I assumed you would have some Ire towards the current tax system based on our discussions over the past decade. But maybe my assumptions are off, and people are much more welcoming and content with our current tax codes and systems.
    Last edited by amarowsky; 04-01-2021, 06:42 AM.

    Comment


      #32
      Originally posted by amarowsky View Post

      I assumed you would have some Ire towards the current tax system based on our discussions over the past decade. But maybe my assumptions are off, and people are much more welcoming and content with our current tax codes and systems.
      What I think of the tax system is different than how I employ it for our own circumstances. Whether I think a rule makes sense or ought to be changed doesn't stop me from using it if it is currently a legal and legit thing to do. The powers that be said X is okay to do so I'll do X until they say otherwise.

      Just last night, I printed out the forms I need to donate about $2,400 worth of stock to our synagogue. That will save us about $360 in taxes compared to if we just sold that stock. Should that be the law? I don't know, but right now, it is, so we'll use it to our advantage.

      Do the wealthy pay their fair share? No. Do corporations pay their fare share? Nope. I do think the system needs reforms, but I don't fault anybody for using the system as it currently exists the best way they can.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


        #33
        "In 2018, the top 50 percent of all taxpayers paid 97.1 percent of all individual income taxes, while the bottom 50 percent paid the remaining 2.9 percent."

        "High-Income Taxpayers Paid the Majority of Federal Income Taxes

        In 2018, the bottom 50 percent of taxpayers (those with AGI below $43,614) earned 11.6 percent of total AGI. This group of taxpayers paid $45.1 billion in taxes, or roughly 3 percent of all federal individual income taxes in 2018.

        In contrast, the top 1 percent of all taxpayers (taxpayers with AGI of $540,009 and above) earned 20.9 percent of all AGI in 2018 and paid 40.1 percent of all federal income taxes.

        In 2018, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid roughly $615 billion, or 40.1 percent of all income taxes, while the bottom 90 percent paid about $440 billion, or 28.6 percent of all income taxes."


        https://taxfoundation.org/federal-income-tax-data-2021/

        Comment


          #34
          The Tax Man is going to get his share eventually, regardless of who pays. Long term capital gains tax is, generally, less than ordinary income tax. The highest it can be currently is 20 percent.

          While tax deferred instruments such as 401Ks and IRAs shield the investor from capital gains taxes, you pay ordinary income taxes on every penny you withdraw.

          Example:

          You invest $100,000 in a taxable account. Ten years later, the account is worth $200,000. You cash out, and you owe up to 20% capital gains on your investment ($20,000). Your net is $180,000.

          You invest $100,000 in a tax deferred account. Ten years later, the account is worth $200,000. You want to cash out to buy a retirement get-away in Palm Springs. You pay ordinary income tax on the entire $200,000, as your taxes were deferred when you were contributing to the account. Your income taxes on $200,000 are likely to be anywhere from 24% to 32% of the $200,000 ($48,000 to $64,000, or even higher) on the $200,000. Your net is $136,000 to $152,000, best case scenario.

          The Federal government knows full well that a tax-deferred account is a cash cow for the Treasury eventually, which is why they incent investors so heavily to invest in these vehicles.

          Never underestimate the power of stupid people in large groups.

          -George Carlin

          Comment


            #35
            Originally posted by disneysteve View Post

            What I think of the tax system is different than how I employ it for our own circumstances. Whether I think a rule makes sense or ought to be changed doesn't stop me from using it if it is currently a legal and legit thing to do. The powers that be said X is okay to do so I'll do X until they say otherwise.

            Just last night, I printed out the forms I need to donate about $2,400 worth of stock to our synagogue. That will save us about $360 in taxes compared to if we just sold that stock. Should that be the law? I don't know, but right now, it is, so we'll use it to our advantage.

            Do the wealthy pay their fair share? No. Do corporations pay their fare share? Nope. I do think the system needs reforms, but I don't fault anybody for using the system as it currently exists the best way they can.
            Charging corporations higher taxes is circular reasoning: Corporations pay higher taxes by charging you higher prices. Shareholders such as you (in your IRA) aren't going to settle for lower margins and dividends so that the company can pay more tax. Prices will have to go up to make you, the shareholder, whole.
            Never underestimate the power of stupid people in large groups.

            -George Carlin

            Comment


              #36
              Originally posted by TexasHusker View Post

              Charging corporations higher taxes is circular reasoning: Corporations pay higher taxes by charging you higher prices. Shareholders such as you (in your IRA) aren't going to settle for lower margins and dividends so that the company can pay more tax. Prices will have to go up to make you, the shareholder, whole.
              Yep, that's why the conversation is never as clear cut as it seems. I have a bit more sympathy with the question of how much wealthy individuals should pay. While I do not think we/the government should say how much a person can earn, hearing that billionaires may pay the same or less in taxes as you or I never really sits well. Seems like something is wrong with that set up.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment


                #37
                Originally posted by disneysteve View Post

                Yep, that's why the conversation is never as clear cut as it seems. I have a bit more sympathy with the question of how much wealthy individuals should pay. While I do not think we/the government should say how much a person can earn, hearing that billionaires may pay the same or less in taxes as you or I never really sits well. Seems like something is wrong with that set up.
                "Billionaires paying the same or less taxes than you" is really urban legend. It is a myth propagated by liberals as part of their never-ending "soak the rich" campaign.

                A lot of the myth stems from the claim of Warren Buffett a few years ago that he paid less in taxes than his secretary. That’s cute, but if you look deeper into the matter, what Buffett said may not technically be a lie, but it is at best a misrepresentation of the whole of the facts. As Buffett didn’t disclose his tax filings and that of his co-workers, one has to do a bit of a deductive reasoning, using current tax law, to get to the truth. To keep things simple, let’s assume that the secretary and Buffett are both taxed at the highest rate of 39.6% and earned $100 annually. Buffett’s earnings are by way of dividends, but his secretary is salaried. Thus, Buffet would be paying $23.80 in taxes, with a take-home pay of $76.20. The secretary’s taxes would be $39.60, with a take-home pay of $60.40.

                CNN HEADLINE NEWS!!!!!

                But let’s tap the brakes a bit. Buffett's dividends (remember, he isn’t salaried), are already subject to a “corporate tax” of 35%, which means that his corporation already paid $53.85 in taxes on his behalf before giving him is $100 dividend. So when you combine the tax on dividends with the individual tax, Mr. Buffett’s actual tax rate is over 50 percent.

                Don’t believe everything you read and hear. If it sounds too bizarre to be true, it probably isn’t.

                Never underestimate the power of stupid people in large groups.

                -George Carlin

                Comment


                  #38
                  Originally posted by TexasHusker View Post
                  The Tax Man is going to get his share eventually, regardless of who pays. Long term capital gains tax is, generally, less than ordinary income tax. The highest it can be currently is 20 percent.

                  While tax deferred instruments such as 401Ks and IRAs shield the investor from capital gains taxes, you pay ordinary income taxes on every penny you withdraw.

                  Example:

                  You invest $100,000 in a taxable account. Ten years later, the account is worth $200,000. You cash out, and you owe up to 20% capital gains on your investment ($20,000). Your net is $180,000.

                  You invest $100,000 in a tax deferred account. Ten years later, the account is worth $200,000. You want to cash out to buy a retirement get-away in Palm Springs. You pay ordinary income tax on the entire $200,000, as your taxes were deferred when you were contributing to the account. Your income taxes on $200,000 are likely to be anywhere from 24% to 32% of the $200,000 ($48,000 to $64,000, or even higher) on the $200,000. Your net is $136,000 to $152,000, best case scenario.

                  The Federal government knows full well that a tax-deferred account is a cash cow for the Treasury eventually, which is why they incent investors so heavily to invest in these vehicles.
                  But it's not quite that straightforward, is it? Yes, tax-deferred accounts will be taxed eventually and everyone needs to account for that in their financial planning.
                  But while you are investing in the tax-deferred account, you have your tax savings each year to invest & grow elsewhere.
                  And, you can plan ahead and have a mix of tax-deferred and taxable savings/investments, and plan your withdrawals from the tax-deferred accounts strategically so that they are only up to the top of xx% tax bracket.

                  Comment


                    #39
                    Originally posted by TexasHusker View Post
                    Don't believe everything you read and hear. If it sounds too bizarre to be true, it probably isn't.
                    Choice advice, Mr. Husker!

                    Except it has nothing to do with liberals, it's just how the tax code in this country currently works, which provides greater advantage for those with wealth.

                    https://www.businessinsider.com/amer...th-gap-2019-10

                    Comment


                      #40
                      Originally posted by ua_guy View Post

                      Choice advice, Mr. Husker!

                      Except it has nothing to do with liberals, it's just how the tax code in this country currently works, which provides greater advantage for those with wealth.

                      https://www.businessinsider.com/amer...th-gap-2019-10

                      I'll assume you only read the last sentence of my post. The article you reference is only a half-truth. Look at the ENTIRE tax policy, not just earnings on income on a 1040.

                      Use your brains and dig a little deeper. Tax policy's first priority isn't to fund the Treasury; it is to control the electorate.
                      Never underestimate the power of stupid people in large groups.

                      -George Carlin

                      Comment


                        #41
                        Originally posted by scfr View Post

                        But it's not quite that straightforward, is it? Yes, tax-deferred accounts will be taxed eventually and everyone needs to account for that in their financial planning.
                        But while you are investing in the tax-deferred account, you have your tax savings each year to invest & grow elsewhere.
                        And, you can plan ahead and have a mix of tax-deferred and taxable savings/investments, and plan your withdrawals from the tax-deferred accounts strategically so that they are only up to the top of xx% tax bracket.
                        I never said tax-deferred accounts weren't a viable option. Deferring taxes is often sound strategy.
                        Never underestimate the power of stupid people in large groups.

                        -George Carlin

                        Comment


                          #42
                          Originally posted by TexasHusker View Post


                          Use your brains and dig a little deeper. Tax policy's first priority isn't to fund the Treasury; it is to control the electorate.
                          So are you saying the tax code doesn't currently provide advantage to the wealthy?

                          Comment


                            #43
                            Originally posted by ua_guy View Post

                            So are you saying the tax code doesn't currently provide advantage to the wealthy?
                            The wealthy pay the vast majority of taxes in this country. Whether they have an "advantage" or not is purely a matter of opinion. I guess it depends on what you consider "fair".

                            But billionaires paying less in taxes than you and me is nothing but click bait. It simply isn't true.
                            Never underestimate the power of stupid people in large groups.

                            -George Carlin

                            Comment


                              #44
                              Originally posted by TexasHusker View Post

                              The wealthy pay the vast majority of taxes in this country. Whether they have an "advantage" or not is purely a matter of opinion. I guess it depends on what you consider "fair".

                              But billionaires paying less in taxes than you and me is nothing but click bait. It simply isn't true.
                              No, it's not a matter of opinion. It's fact. Wealthy people have distinct tax advantages.
                              https://www.cbpp.org/research/federa...tion-or-enjoys

                              It doesn't matter that the wealthy pay the vast majority of taxes. The fact that they are given advantage which also perpetuates their wealth lends itself to somewhat of a caste system instead of progressive and equal tax code.

                              Comment


                                #45
                                Originally posted by ua_guy View Post

                                No, it's not a matter of opinion. It's fact. Wealthy people have distinct tax advantages.
                                https://www.cbpp.org/research/federa...tion-or-enjoys

                                It doesn't matter that the wealthy pay the vast majority of taxes. The fact that they are given advantage which also perpetuates their wealth lends itself to somewhat of a caste system instead of progressive and equal tax code.
                                I am going to take liberty to re-post Like2Plan's post to put this in a bit of perspective:

                                In 2018, the top 50 percent of all taxpayers paid 97.1 percent of all individual income taxes, while the bottom 50 percent paid the remaining 2.9 percent."

                                "High-Income Taxpayers Paid the Majority of Federal Income Taxes

                                In 2018, the bottom 50 percent of taxpayers (those with AGI below $43,614) earned 11.6 percent of total AGI. This group of taxpayers paid $45.1 billion in taxes, or roughly 3 percent of all federal individual income taxes in 2018.

                                In contrast, the top 1 percent of all taxpayers (taxpayers with AGI of $540,009 and above) earned 20.9 percent of all AGI in 2018 and paid 40.1 percent of all federal income taxes.

                                In 2018, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid roughly $615 billion, or 40.1 percent of all income taxes, while the bottom 90 percent paid about $440 billion, or 28.6 percent of all income taxes."




                                I think the "rich" are doing their part quite adequately, but that's again my opinion.
                                Never underestimate the power of stupid people in large groups.

                                -George Carlin

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