Are W-2 physicians being suckered?

[BobLoblaw78]

A flat tax has other criticisms but most pertinent is that it still wouldn't affect rich people, since it only implies to income. Rich people love to support flat tax because it creates the illusion that they are paying their share, when in reality they still will pay next to nothing.

Since rich people don't pay taxes already, wouldn't this be an improvement? Or do you believe that rich people DO pay taxes >10%? Rich people have to take some money out of the bank/investments. I don't believe that they are living off of $100,000/year. But I am fine with coming up with some adjustment to capital gains. And an adjustment to wealth tax albeit fairly low. I think it is folly to tax all the incentive out of a saving strategy.

Hasn't there been flat tax models proposed that would provide as much (or more) tax revenue and decrease the burden on the IRS?

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[Baron Samedi]

Since rich people don't pay taxes already, wouldn't this be an improvement? Or do you believe that rich people DO pay taxes >10%? Rich people have to take some money out of the bank/investments. I don't believe that they are living off of $100,000/year. But I am fine with coming up with some adjustment to capital gains. And an adjustment to wealth tax albeit fairly low. I think it is folly to tax all the incentive out of a saving strategy.

Hasn't there been flat tax models proposed that would provide as much (or more) tax revenue and decrease the burden on the IRS?

Buy borrow die, in terms of how richies finance their lifestyle.

 

[lobelsteve]

A flat tax has other criticisms but most pertinent is that it still wouldn't affect rich people, since it only implies to income. Rich people love to support flat tax because it creates the illusion that they are paying their share, when in reality they still will pay next to nothing.

Rich people do not buy expensive things?

 

[clubdeac]

How on Earth did 40% of your income go to taxes?

My combined total tax was 37% of my gross income. That includes federal, state, social security, Medicare Medicaid, additional 3.8% Obamacare tax etc. that was also after over 6 figures in deductions due in large part to charitable donations. So not quite 40 but close

 

[clubdeac]

his effective tax rate is almost certainly less than 40% (i.e. you don't pay your tax bracket)

My effective federal rate may be closer to 30-33%. I can’t remember bc that number doesn’t really affect me. What matters is the total amount paid in taxes which was 37% of my gross income last year. I’m including federal, state, social security, Medicare/caid, NIIT etc.

 

[clubdeac]

it didnt

he doesnt know what rate is. he was trying to make a (poorly informed) point.

You really are a complete dick head aren’t you.

 

[Baron Samedi]

Rich people do not buy expensive things?

Those things are subjected to state sales tax, if applicable.

 

[deleted185747]

I had someone file for tax refunds under my name in multiple states. These were states that I had never traveled to, much less worked in. The IRS blindly sent them hundreds of thousands of dollars. They should have easily known that it was a scam. Had I been this incompetent, I would have been writing a check to someone for malpractice. They are grossly incompetent and someone else (us) get to pay for their mistake. This gave me serious reservations about the IRS.

I am sure that I was not the only one that dealt with this scam.

Please explain how this scam works and your SS number

 

[lobelsteve]

Those things are subjected to state sales tax, if applicable.

If we had a flat tax, it could be a consumption tax.

 

[SSdoc33]

If we had a flat tax, it could be a consumption tax.

careful.... you are getting awfully progressive here.....

 

[SSdoc33]

You really are a complete dick head aren’t you.

well, unlike your yourself, i prefer to deal in realities....

so yes, I AM a complete dickhead.

 

[hyperalgesia]

I'm not sure about this. I would think people would still give to charitable causes, but less so. And I think this type of giving is usually more efficient than government charitable spending. I also worry about the government having even more control over who gets government/charitable funds. It seems like there is so many things the government funds already. And that shouldn't be the role of the government.

If you look at select charitable organizations, sure they are absolutely more efficient than government. But if you look at deductions as a whole, I seriously doubt it.

Right now, people can afford to give roughly 30% more because that 30% is funded by OTHER involuntary taxpayers. People donate for all kinds of reasons but I submit the most COMMON reason is for a selfish purpose. Maybe it's to curry favor with a future politician or maybe it's to dump their $300 car and take a $2000 deduction on it.

But the deduction system is the thing that brings crooked politicians and industry into our charitable hearts.

 

[hyperalgesia]

it didnt

he doesnt know what rate is. he was trying to make a (poorly informed) point.

My take home pay is about 55% of my gross. It's not all income tax obviously but I still consider it tax. So his point is completely valid. Stop splitting hairs.

 

[hyperalgesia]

I think ideally, you probably want to have multiple different ways to tax to get the broadest tax base. Simplify and lower the income tax and add a simple, flat consumption tax. Eliminate ALL deductions. There should be exactly zero wiggle room.

You need a consumption tax because even the unemployed should pay something in taxes. You can't just tax people for working.

 

[lobelsteve]

No deductions. 10% consumption tax to replace all other sales tax. 10% income tax.
No tax if income less than 100k.

 

[SSdoc33]

No deductions. 10% consumption tax to replace all other sales tax. 10% income tax.
No tax if income less than 100k.

Herman cain died of coronavirus, btw

 

[Ferrismonk]

My effective federal rate may be closer to 30-33%. I can’t remember bc that number doesn’t really affect me. What matters is the total amount paid in taxes which was 37% of my gross income last year. I’m including federal, state, social security, Medicare/caid, NIIT etc.

Not counting sales taxes, etc.

 

[clubdeac]

Americans Will Spend 6.5 Billion Hours on Income Taxes This Year

For new father and first-time homeowner Erik Breidenbach, this year's tax-filing season was one of the more difficult of his…

reason.com

 

[Doctodd]

A flat tax has other criticisms but most pertinent is that it still wouldn't affect rich people, since it only implies to income. Rich people love to support flat tax because it creates the illusion that they are paying their share, when in reality they still will pay next to nothing.

It's just not accurate to repeat the narrative that rich people dont pay taxes. I think it blew up in Elizabeth Warren's face too.

 

[Baron Samedi]

It's just not accurate to repeat the narrative that rich people dont pay taxes. I think it blew up in Elizabeth Warren's face too.

What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans? | CEA | The White House

By Greg Leiserson, Senior Economist (CEA); and Danny Yagan, Chief Economist (OMB) Abstract: We estimate the average Federal individual income tax rate paid by America’s 400 wealthiest families, using a relatively comprehensive measure of their income that includes income from unsold stock. We do...

www.whitehouse.gov

 

[BobLoblaw78]

A flat tax has other criticisms but most pertinent is that it still wouldn't affect rich people, since it only implies to income. Rich people love to support flat tax because it creates the illusion that they are paying their share, when in reality they still will pay next to nothing.

Help me reconcile this statement with the fact that 50% of income taxes come from the top 1% of rich people.

 

[hyperalgesia]

Let's talk actual dollar numbers.

We don't need a complex analysis on "effective rates".

 

[Baron Samedi]

Help me reconcile this statement with the fact that 50% of income taxes come from the top 1% of rich people.

Top 1% of earners includes many posting in this thread. The issue isn't with millionaires, its with billionaires. Top 1%ers are still W2 employees.

 

[Baron Samedi]

Let's talk actual dollar numbers.

We don't need a complex analysis on "effective rates".

Okay, go for it.

 

[hyperalgesia]

40% of all income taxes paid to the government, is paid by only 1% of the population. That is far more than their "fair share". Why should Bill Gates be obligated to pay more to fund the US military than anyone else who benefits in the same way? We're not talking about corporate taxes here - that's another question.

The reason politicians and others focus on the tax rate, rather than the actual relative contribution to fund the government, is because it plays on the absurd and quaint notion of "equity" - no one should be richer than anyone else or it's "not fair".

In 1 Chart, How Much the Rich Pay in Taxes

Sen. Elizabeth Warren (D-MA) holds a news conference to announce legislation that would tax the net worth of America's wealthiest individuals at the U.S. Capitol on March 01, 2021 in Washington, D.C.

www.heritage.org

 

[Dr. Ice]

This whole debate is..well..mute. Here’s the reality. This country is moving extremely close to becoming a socialist economy. There probably is no stopping it. The concern about the safety net worries both sides of the isle and as we have seen in different scenarios from extremists, an uprising is very concerning.

The argument that the EU and other non third world nations are able to “adequately” exist in a socialist society, where people drink wine and are content living in row homes with no actual owned property, will continue to be forced down our throats to the point where there is no way to debate it.

Let’s face it, for those of us who love afternoon naps, the concept is wonderful. I’ll just take a nap from 1-4pm and open back up at 5pm listening to pain patients. Hey, I could use the break…

It’s also think it’s quite laughable that the republicans (I’m not a democrat by the way) would actually consider trump as their party front runner in 2024. If they can’t pony up another normal human being to run…well…

 

[Baron Samedi]

40% of all income taxes paid to the government, is paid by only 1% of the population. That is far more than their "fair share". Why should Bill Gates be obligated to pay more to fund the US military than anyone else who benefits in the same way? We're not talking about corporate taxes here - that's another question.

The reason politicians and others focus on the tax rate, rather than the actual relative contribution to fund the government, is because it plays on the absurd and quaint notion of "equity" - no one should be richer than anyone else or it's "not fair".

In 1 Chart, How Much the Rich Pay in Taxes

Sen. Elizabeth Warren (D-MA) holds a news conference to announce legislation that would tax the net worth of America's wealthiest individuals at the U.S. Capitol on March 01, 2021 in Washington, D.C.

www.heritage.org

Ah yes the same Heritage Foundation that argues against independent investigations of military sexual assaults and tried to block paternity leave for servicemembers. Real big fan of those guys...

 

[clubdeac]

Ah yes the same Heritage Foundation that argues against independent investigations of military sexual assaults and tried to block paternity leave for servicemembers. Real big fan of those guys...

Baron you’re a socialist? You really think that’s best for our country? For humanity? Can I ask where did you go to undergrad and what economic class was your family? May help understand these views

 

[Ducttape]

short term capital gains and nonqualified dividends ARE taxed as normal income.

I recently read that 57% of Americans didn't pay taxes last year. Why did I pay 40% of my income last year in taxes while 57% of the population paid no taxes? Tell me how that's right and fair when 57% didn't pay their fair share

my best friend from high school lives in Cali. He and his friends know how to bilk the system and have been receiving unemployment for the last 15 years. He hasn't paid taxes since ~ 2008. Kinda irks me

The majority of these 57% make so little income that they have no expendable income for healthy food or other necessities of healthful living. This in turn leads to higher Medicare and Medicaid expenditures due to poor health and mostly using ER for their primary care.

I like the idea of a flat tax (10% or whatever). I like the idea of reducing that to a lower amount for people making less (2% for people under $50,000). I want everyone to pay taxes. I want everyone to get upset about government wasteful spending. It is hard to be upset about that if you don't pay taxes. Tax law is already too complex for me. Adding more laws appears to be ineffective and it makes the IRS's job even more cumbersome. You always hear how rich person X paid only 3% tax or how the rich don't pay their share. This should help eliminate many of those loopholes.

Except the ultra rich who own >50% of wealth in the US are not paying their fair share of taxes. Their wealth gain is not through income, so the majority of "income" is not taxed.

 

[hyperalgesia]

Except the ultra rich who own >50% of wealth in the US are not paying their fair share of taxes. Their wealth gain is not through income, so the majority of "income" is not taxed.

20% of 100 million dollars is 20 million dollars.

Where people fall prey to Liz Warren's scam is if the person reinvests all their money into risky growth, non dividend producing investments. Then they don't pay capital gains tax because they realize nothing. As it should be.

 

[Doctodd]

That yacht or car or plane bought by the rich guy paid for the livelihoods of all the factory workers and suppliers and craftsmen. If you force the rich people to pay more taxes, and they decide not to spend on luxury items, you are only hurting the factory worker, craftsmen, and suppliers. You will also kill innovation and the evolution of technology that goes into these items. Do you think the govt could have produced an electric car? Another example is SpaceX vs NASA. And how many technological innovations have been created in Europe?

Hey baron, where in your graph does the $80+ billion of US military equipment left in Afghanistan go?

 

[Doctodd]

What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans? | CEA | The White House

By Greg Leiserson, Senior Economist (CEA); and Danny Yagan, Chief Economist (OMB) Abstract: We estimate the average Federal individual income tax rate paid by America’s 400 wealthiest families, using a relatively comprehensive measure of their income that includes income from unsold stock. We do...

www.whitehouse.gov

Not a very unbiased, reputable source. It was probably written by Bernie Sanders. So they argue that stock gains should be taxed(no mention of when)?

“When an American earns a dollar of wages, that dollar is taxed immediately at ordinary income tax rates.[1] But when they gain a dollar because their stocks increase in value, that dollar is taxed at a low preferred rate, or never at all.[2]”

 

[Baron Samedi]

Not a very unbiased, reputable source. It was probably written by Bernie Sanders.

Its written by the Chief Economist of the Office of Management and Budget.

Edit: clarified his title a bit since it was a bit misleading how originally worded

 

[Baron Samedi]

That yacht or car or plane bought by the rich guy paid for the livelihoods of all the factory workers and suppliers and craftsmen. If you force the rich people to pay more taxes, and they decide not to spend on luxury items, you are only hurting the factory worker, craftsmen, and suppliers. You will also kill innovation and the evolution of technology that goes into these items. Do you think the govt could have produced an electric car? Another example is SpaceX vs NASA. And how many technological innovations have been created in Europe?

Oh, so like if you tax rich people less, then their wealth will trickle down to everyone else?

 

[hyperalgesia]

Oh, so like if you tax rich people less, then their wealth will trickle down to everyone else?

The key word here is THEIR wealth. It doesn't have to trickle anywhere. The money that YOU earn, where does it trickle? That wealth is YOUR wealth, not some imaginary communal pot that some authority should reallocate.

The goal of our system is freedom, economic and otherwise. We want opportunities for all. Not equal outcomes.

The phrase "trickle down" implies that there are peasants waiting in the wings for the rain to fall. That's just not how it works.

 

[hyperalgesia]

Not a very unbiased, reputable source. It was probably written by Bernie Sanders. So they argue that stock gains should be taxed(no mention of when)?

“When an American earns a dollar of wages, that dollar is taxed immediately at ordinary income tax rates.[1] But when they gain a dollar because their stocks increase in value, that dollar is taxed at a low preferred rate, or never at all.[2]”

They fail to mention WHY "that dollar" may never be taxed at all. Obviously this is UNREALIZED wealth they're talking about. It's very disingenuous how they portray this issue. It deliberately preys on young and ignorant people.

 

[Doctodd]

Oh, so like if you tax rich people less, then their wealth will trickle down to everyone else?

i wouldnt say that a $50k-$100k job is trickle......these folks have a specific skillset that they take pride in and improve at. They arent packaging boxes at Amazon. And it's obvious where you get your talking points.

 

[Baron Samedi]

i wouldnt say that a $50k-$100k job is trickle......these folks have a specific skillset that they take pride in and improve at. They arent packaging boxes at Amazon. And it's obvious where you get your talking points.

Where do I get my talking points?

 

[Baron Samedi]

They fail to mention WHY "that dollar" may never be taxed at all. Obviously this is UNREALIZED wealth they're talking about. It's very disingenuous how they portray this issue. It deliberately preys on young and ignorant people.

Should they be allowed to spend unrealized wealth?

 

[hyperalgesia]

Should they be allowed to spend unrealized wealth?

How do you do that?

 

[Baron Samedi]

How do you do that?

It's been discussed ad nauseum in this thread. Borrowing against unrealized gains.

 

[Doctodd]

It's been discussed ad nauseum in this thread. Borrowing against unrealized gains.

I can borrow from my Vanguard retirement account but I have six months to put it back in. My understanding is this proposal is going to destroy everybody’s retirement accounts. Why would anybody put money into the market/retirement account if the gains might be taxed immediately? Of course I understand this is just a proposal and nothing is set in stone. but that’s what it sounds like.

I’m no expert, but you and AOC and socialist democrats say the same things. Funny how they are whining about Florida threatening to take away tax exemptions from Disney.

 

[Baron Samedi]

I can borrow from my Vanguard retirement account but I have six months to put it back in. My understanding is this proposal is going to destroy everybody’s retirement accounts. Why would anybody put money into the market/retirement account?

I’m no expert, but you and AOC and socialist democrats say the same things. Funny how they are whining about Florida threatening to take away tax exemptions from Disney.

I have no idea what AOC says or what proposal you're speaking of, but I simply want to ban borrowing against unrealized gains for the ultrawealthy. I've also mentioned in this thread that I'm against raising capital gains taxes to income levels as that disincentives the middle class from participating in the market. Not sure what other beliefs you are projecting on me. I also have no idea what's going on with Disney but screw Disney.

I'd strongly recommend against withdrawing from your retirement accounts, by the way. You also aren't "borrowing", you are withdrawing and redepositing.

 

[SSdoc33]

This is a great thread. I appreciate both viewpoints.

The answer is to increase rates on upper end capital gains and clamp down on billionaires borrowing against unrealized gains (somehow). No wealth tax.

 

[SSdoc33]

Orlando property taxes are going to go up 20-30%. Desantis just screwed over everyone in Central florida just to make a culture warrior point

 

[Baron Samedi]

Orlando property taxes are going to go up 20-30%. Desantis just screwed over everyone in Central florida just to make a culture warrior point

Property taxes are the bane of my existence. In TX they are sky high.

 

[SSdoc33]

Property taxes are the bane of my existence. In TX they are sky high.

I thought you were in GA.

Texas property taxes suck bc of their lack of income tax. Public schools still stink

 

[Baron Samedi]

I thought you were in GA.

Texas property taxes suck bc of their lack of income tax. Public schools still stink

Moved a bit ago, enjoying TX much more. Unfortunately I am not a TX resident yet, so I pay both state income tax and am subject to property tax. Double whammy. The schools do seem pretty dismal.

 

[SSdoc33]

Moved a bit ago, enjoying TX much more. Unfortunately I am not a TX resident yet, so I pay both state income tax and am subject to property tax. Double whammy. The schools do seem pretty dismal.

Can claim taxes paid in 1 state against the other, no?

Texas is definitely the best 'red' state. Money goes pretty far, and no income tax is a big deal. But if that 5% savings goes towards 30k private school tuition x #of kids, then it is a wash at best.

Best of luck

 

[Baron Samedi]

Can claim taxes paid in 1 state against the other, no?

Texas is definitely the best 'red' state. Money goes pretty far, and no income tax is a big deal. But if that 5% savings goes towards 30k private school tuition x #of kids, then it is a wash at best.

Best of luck

So military finances are a little funny -- essentially you pay state taxes to whereever you lived prior to joining, regardless of where you currently live. I am working towards changing my "official" residence to TX to avoid that, but it takes some time.

The private school costs are no joke. Our choices are to buy an overpriced house in the "best" school district(still not very good) or to spend a significant chunk on private school. Yikes, either way.