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Sat Mar 22, 2014, 09:40 PM

Tax Deductions are a HUGE form of welfare, and the richest people are getting the most welfare

Tax deductions are a HUGE form of welfare. Right wingers constantly say that deductions aren't welfare, but that's bs. If one person can't afford to take a deduction (for example, the mortgage tax deduction), then that person is not keeping money.

Those people who can afford to take a deduction (say, those who are buying homes because they have money enough to buy one), are the ones getting to KEEP money rather than pay it to the maintenance of the country. Keeping money rather than paying it in to maintain the country, is the same as being sent a check in the mail.

There are more ways in which the wealthy get welfare in this video:

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Reply Tax Deductions are a HUGE form of welfare, and the richest people are getting the most welfare (Original post)
Sarah Ibarruri Mar 2014 OP
PumpkinAle Mar 2014 #1
Sarah Ibarruri Mar 2014 #4
Ikonoklast Mar 2014 #23
tayeboss Mar 2014 #2
Sarah Ibarruri Mar 2014 #5
JJChambers Mar 2014 #3
yeoman6987 Mar 2014 #6
yeoman6987 Mar 2014 #7
theboss Mar 2014 #8
JJChambers Mar 2014 #10
theboss Mar 2014 #11
JJChambers Mar 2014 #12
theboss Mar 2014 #13
JJChambers Mar 2014 #14
FreeJoe Mar 2014 #85
NutmegYankee Mar 2014 #135
SickOfTheOnePct Mar 2014 #9
badtoworse Mar 2014 #15
Sarah Ibarruri Mar 2014 #16
badtoworse Mar 2014 #17
Sarah Ibarruri Mar 2014 #18
badtoworse Mar 2014 #19
Laura PourMeADrink Mar 2014 #24
badtoworse Mar 2014 #30
Laura PourMeADrink Mar 2014 #106
Sarah Ibarruri Mar 2014 #35
joeglow3 Mar 2014 #42
Sarah Ibarruri Mar 2014 #45
joeglow3 Mar 2014 #47
Sarah Ibarruri Mar 2014 #68
joeglow3 Mar 2014 #79
badtoworse Mar 2014 #62
Sarah Ibarruri Mar 2014 #64
oldhippie Mar 2014 #69
badtoworse Mar 2014 #74
joeglow3 Mar 2014 #115
Capt. Obvious Mar 2014 #210
joeglow3 Mar 2014 #219
Nuclear Unicorn Mar 2014 #109
Enthusiast Mar 2014 #202
delta17 Mar 2014 #142
treestar Mar 2014 #125
badtoworse Mar 2014 #132
treestar Mar 2014 #134
joeglow3 Mar 2014 #136
Enthusiast Mar 2014 #203
joeglow3 Mar 2014 #207
badtoworse Mar 2014 #138
joeglow3 Mar 2014 #28
Sarah Ibarruri Mar 2014 #34
joeglow3 Mar 2014 #37
Sarah Ibarruri Mar 2014 #40
dawg Mar 2014 #213
hfojvt Mar 2014 #26
Sarah Ibarruri Mar 2014 #36
joeglow3 Mar 2014 #39
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Adrahil Mar 2014 #127
Drahthaardogs Mar 2014 #59
Sarah Ibarruri Mar 2014 #65
oldhippie Mar 2014 #71
FreeJoe Mar 2014 #94
Hoyt Mar 2014 #78
xchrom Mar 2014 #20
Sarah Ibarruri Mar 2014 #43
Le Taz Hot Mar 2014 #21
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Sarah Ibarruri Mar 2014 #162
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Sarah Ibarruri Mar 2014 #174
hfojvt Mar 2014 #29
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hfojvt Mar 2014 #53
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hfojvt Mar 2014 #129
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Sarah Ibarruri Mar 2014 #72
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Skittles Mar 2014 #143
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oldhippie Mar 2014 #66
Sarah Ibarruri Mar 2014 #70
oldhippie Mar 2014 #73
Sarah Ibarruri Mar 2014 #76
oldhippie Mar 2014 #80
badtoworse Mar 2014 #141
joeglow3 Mar 2014 #83
Sarah Ibarruri Mar 2014 #90
joeglow3 Mar 2014 #95
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joeglow3 Mar 2014 #102
LittleBlue Mar 2014 #75
Hoyt Mar 2014 #84
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Hoyt Mar 2014 #91
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Hoyt Mar 2014 #97
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Hoyt Mar 2014 #104
SickOfTheOnePct Mar 2014 #120
EX500rider Mar 2014 #130
Nuclear Unicorn Mar 2014 #139
oldhippie Mar 2014 #126
LittleBlue Mar 2014 #92
Sarah Ibarruri Mar 2014 #96
LittleBlue Mar 2014 #114
Nuclear Unicorn Mar 2014 #140
mainer Mar 2014 #110
YarnAddict Mar 2014 #171
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FreeJoe Mar 2014 #82
Hoyt Mar 2014 #89
mainer Mar 2014 #105
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PoliticAverse Mar 2014 #227
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Throd Mar 2014 #112
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Token Republican Mar 2014 #118
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indepat Mar 2014 #119
joeglow3 Mar 2014 #150
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indepat Mar 2014 #225
Sarah Ibarruri Mar 2014 #161
WhaTHellsgoingonhere Mar 2014 #122
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treestar Mar 2014 #124
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Boom Sound 416 Mar 2014 #217
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joeglow3 Mar 2014 #224
PoliticAverse Mar 2014 #226

Response to Sarah Ibarruri (Original post)

Sat Mar 22, 2014, 09:42 PM

1. And there are so many ways they can

make those deductions.

I only just found out that as well as "claiming" cars are "company cars" they can claim back the tax paid on gas.

No wonder they don't want to give up what they have - because they have so much more than they and the "peons" know.

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Response to PumpkinAle (Reply #1)

Sat Mar 22, 2014, 09:48 PM

4. Yup. The rich take deductions (welfare) in countless ways - even pleasure trips nt

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Response to PumpkinAle (Reply #1)

Sun Mar 23, 2014, 10:48 AM

23. I do that. I'm not 'rich', by any means.

The rules under which the IRS allows one to claim a vehicle as a company car are rather stringent. You better keep real good records as to how that vehicle gets used or the IRS will disallow your claim.


I own a vehicle for personal use. If I used it at any time for business purposes, I would be able to deduct that amount of use.

I own and run my own company. The business owns a company vehicle used exclusively for company business. I am allowed to claim depreciation, taxes, licensing, insurance, fuel, maintenance.


The taxes paid by my company still run into the low to mid five figures.

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Response to Sarah Ibarruri (Original post)

Sat Mar 22, 2014, 09:46 PM

2. The Rich IS welfare Queen

I must agree with you, and you want hear this on the so call new.

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Response to tayeboss (Reply #2)

Sat Mar 22, 2014, 09:50 PM

5. Yup, it's not some black lady Reagan invented. It's suited CEOs making millions and all the rest nt

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Response to Sarah Ibarruri (Original post)

Sat Mar 22, 2014, 09:47 PM

3. Simplify the tax system

 

No more credits or deductions.

The first 50k a person makes is tax free.

After that, create the following brackets:

(0-50k tax free)

50k+ @ 20%

100k+ @ 30%

500k+ @ 50%

1m+ @ 75%

5m+ @ 90%

The tax brackets work as they do now, so that someone making 500k would pay nothing on the first 50, 20% on the next 50 (10k), and 30% on the next 400k (120k) making the total tax liability for someone making 500k would have a total tax liability of 130k.

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Response to JJChambers (Reply #3)

Sat Mar 22, 2014, 10:11 PM

6. I don't think this would pass at all

Out of all of your examples, I like the 50,000 tax free the best.
To have a person making 5 million a year be able to keep 500,000 dollars and maybe 550,000 if you give them the first 50,000 tax free.
Plus why would someone want to make a million a year when they could make 500,000 dollars and pay the same tax and take home the same amount.

Plus 100K at 30% is too much….remember everyone does joint taxes and a married couple easily makes 100K and to pay 30 percent is too much.

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Response to JJChambers (Reply #3)

Sat Mar 22, 2014, 10:12 PM

7. Crap I am so sorry

I just reread your post again. I read it completely wrong the first time. Please ignore my stupid post.

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Response to JJChambers (Reply #3)

Sat Mar 22, 2014, 10:27 PM

8. No more mortgage deduction or child tax credit?

Under your plan, I think my taxes just tripled.

I do not like your plan.

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Response to theboss (Reply #8)

Sat Mar 22, 2014, 10:33 PM

10. How did they triple?

 

The first 50k you make is tax free. If you make 100k with my plan you only pay 10k in taxes. If you make 200k you only pay 40k in taxes (20%).

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Response to JJChambers (Reply #10)

Sat Mar 22, 2014, 10:38 PM

11. Do you own a home or have kids?

If not, sit down and do the math and figure out what a family of five with a income of around $100K and a mortgage on a $200,000 house actually ends up paying in taxes at the end of the year.

In fairness, you probably only doubled my taxes; I actually trying to figure this out with pen and paper now.

(Also: full disclosure. Thanks to the adoption tax credit I'm not really paying anything for the next two and perhaps three years. Which is kind of nice and something I like).

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Response to theboss (Reply #11)

Sat Mar 22, 2014, 10:46 PM

12. I know what I pay in taxes and mine would go down with that plan

 

The percentages and the brackets should be flexible. We need to ensure that the middle class tax burden is bearable. We need to simplify the system. We need to tax the ultra wealthy 1% to such an extent that they have less incentive to continue raping the 99%.

I also strongly support a minimum living wage and salary ceilings so that CEOs are prohibited from making X times more than the lowest paid worker of their company.

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Response to JJChambers (Reply #12)

Sat Mar 22, 2014, 10:51 PM

13. That doesn't answer my question

Do you have a house and kids?

The child tax credit can take a major chunk out of the tax burden.

Anyway, I think focussing on income taxes misses the boat completely. No one becomes mega wealthy on income. They become mega wealthy on capital gains.

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Response to theboss (Reply #13)

Sat Mar 22, 2014, 10:58 PM

14. Yes, two actually (hope to change that soon)

 

Capital gains should count as income. There should be one simple system.

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Response to theboss (Reply #8)

Sun Mar 23, 2014, 01:20 PM

85. How about limiting the value of deductions

Couldn't you allow things like mortgage interest to only be deducted up to the cost of a median priced home and only at the median taxpayer's marginal rate? That would allow people to still keep their deductions, but it would make them more progressive and less of a windfall for the rich.

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Response to FreeJoe (Reply #85)

Sun Mar 23, 2014, 06:51 PM

135. Median priced home for where?

The median home price in CT is $234,000 but only $154,000 in FL. The problem is that unless you add incredible complexity to account for regional changes in prices, you end up screwing people in higher cost of living localities.

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Response to Sarah Ibarruri (Original post)

Sat Mar 22, 2014, 10:33 PM

9. I agree that there needs to be tax reform

Especially raising rates in the higher brackets. And I believe that welfare/WIC/food stamp payments should be increased. I don't see how anyone can survive on the amounts given now.

But I don't agree with your premise that taking a mortgage deduction is the same as welfare. No, I'm not rich by any means, but I do own a home, so I take the mortgage deduction. I don't agree that keeping money that I earned is the same thing as receiving money that someone else earned.

That's not to say that people shouldn't receive aid benefits, just saying that I don't view them as the same thing.

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Response to Sarah Ibarruri (Original post)

Sat Mar 22, 2014, 11:00 PM

15. So paying tax on capital gains is OK, but deducting capital losses is welfare? That is complete BS

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Response to badtoworse (Reply #15)

Sat Mar 22, 2014, 11:01 PM

16. If you're gambling, it should be your problem and your loss completely, don't you think? nt

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Response to Sarah Ibarruri (Reply #16)

Sat Mar 22, 2014, 11:05 PM

17. If you want to look at it that way, then win or lose it's none of the government's business.

You shouldn't get to have it both ways.

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Response to badtoworse (Reply #17)

Sat Mar 22, 2014, 11:10 PM

18. Incorrect. The govt is there to protect the nation, and the entire nation needs to be protected.

Your personal decisions to gamble are your own. If you're hungry and have no home, then the govt should provide for you. If you're not and gambling, it's your problem, entirely.

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Response to Sarah Ibarruri (Reply #18)

Sun Mar 23, 2014, 07:40 AM

19. You're very naive and uninformed about investing.

ETA: I'd be willing to bet you've never made an investment in your life.

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Response to badtoworse (Reply #19)

Sun Mar 23, 2014, 10:54 AM

24. regardless...not a very nice response...is it?

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Response to Laura PourMeADrink (Reply #24)

Sun Mar 23, 2014, 11:39 AM

30. Perhaps not. I'm a serious investor and I found her attitude about this to be not very nice.

Equity and bond investors provide enormous amounts of capital that drive private enterprise in this country. That private enterprise provides millions of jobs. I found her characterization of investing as gambling to be insulting and ignorant. Beyond that, her position that the government is entitled to a share of any investment gains, but it's tough luck on any losses is grossly unfair.

I usually refrain from snark, but sometimes it's called for. This was one of those times.

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Response to badtoworse (Reply #30)

Sun Mar 23, 2014, 01:49 PM

106. Read it too fast...thought she was talking about gambling, literally. You are

right - if no one invested in anything - kept every cent made under a mattress - there wouldn't be any job growth at all. I look at capital loss as money you don't have any more - so why pay taxes on it? Many times people here look only at the liberal intention without looking at the economic side at all. Perfect example...we hate Walmart because it is stocked with cheap Chinese goods. Say we banned the purchase of foreign goods in our stores. You have to look at the impact this would have for poorer people - and that the goods they were buying are now will definitely be more expensive.

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Response to badtoworse (Reply #19)

Sun Mar 23, 2014, 12:00 PM

35. Incorrect. Investing is a choice. My country shouldn't be penalized for your investment losses nt

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Response to Sarah Ibarruri (Reply #35)

Sun Mar 23, 2014, 12:14 PM

42. What happens when no one invests in a business?

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Response to joeglow3 (Reply #42)

Sun Mar 23, 2014, 12:14 PM

45. I don't care. Let me repeat. Your choices with your excess $ is not the country's problem nt

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Response to Sarah Ibarruri (Reply #45)

Sun Mar 23, 2014, 12:15 PM

47. Like I said, the ignorance hurts.

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Response to joeglow3 (Reply #47)

Sun Mar 23, 2014, 01:00 PM

68. No, what hurts is how entitled you feel to our govt "paying you" for your losses nt

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Response to Sarah Ibarruri (Reply #68)

Sun Mar 23, 2014, 01:14 PM

79. Doubling down on the ignorance I see

What have you invested in?

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Response to Sarah Ibarruri (Reply #35)

Sun Mar 23, 2014, 12:54 PM

62. Arguing with the clueless is waste of time, so we're done here.

I will, however, think of you as I deduct my 2013 capital losses from my gains and write off my mortgage interest, property taxes, charitable donations and investment expenses.

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Response to badtoworse (Reply #62)

Sun Mar 23, 2014, 12:58 PM

64. You can deduct all you want, but that money you're keeping is our country's money nt

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Response to Sarah Ibarruri (Reply #64)

Sun Mar 23, 2014, 01:01 PM

69. All your money are belong to us.

 

Yeah, that's it.

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Response to oldhippie (Reply #69)

Sun Mar 23, 2014, 01:07 PM

74. People like that keep the Cayman Islands in business.

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Response to oldhippie (Reply #69)

Sun Mar 23, 2014, 02:01 PM

115. Post of the day

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Response to oldhippie (Reply #69)

Wed Mar 26, 2014, 09:07 AM

210. What you say?

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Response to Capt. Obvious (Reply #210)

Wed Mar 26, 2014, 10:24 AM

219. AYBABTU

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Response to Sarah Ibarruri (Reply #64)

Sun Mar 23, 2014, 01:52 PM

109. When an investor invests money they are using money they earned in another endeavor

and they already paid taxes on it the first time it was earned elsewhere. The investments they make are providing jobs where someone is paid to produce goods and services.

You should also lose the cheap caricature of only cigar smoking, overweight gray-suited laughing billionaires as being the only investors. Plenty of middle class Americans have their pensions and children's education secured by investments.

And it's not "our country's money" it is the money of whoever legally and ethically earned it.

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Response to Nuclear Unicorn (Reply #109)

Wed Mar 26, 2014, 08:03 AM

202. Plenty? It depends entirely on what you call middle class.

Only a TINY proportion of middle class Americans have their pensions and children's education secured by investments.

What you claim used to be true, no longer.

What income range do you consider middle class?

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Response to Sarah Ibarruri (Reply #64)

Sun Mar 23, 2014, 09:01 PM

142. This makes no sense.

If they are being honest on their tax forms, how is it not their money?

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Response to badtoworse (Reply #19)

Sun Mar 23, 2014, 03:50 PM

125. Now you've lost the plot of your argument

and resorted to ad hominem

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Response to treestar (Reply #125)

Sun Mar 23, 2014, 06:40 PM

132. Read the blather she's posted in this thread. I'm not being unfair.

Calling her naive and uninformed was charitable in my opinion.

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Response to badtoworse (Reply #132)

Sun Mar 23, 2014, 06:47 PM

134. You can explain your argument

rather than start in on about the other person, i.e. have you ever invested anything. This is irrelevant. People who invested may know nothing about it other than they have a lot of money and some broker takes care of it. People with no money to invest might still understand the issues.

There are other people on the thread though who at least had the kindness to explain that capital gain is net of loss.

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Response to treestar (Reply #134)

Sun Mar 23, 2014, 07:02 PM

136. And it was clear she has no interest in learning

Her mind has been made up, even though it is clear she has no clue what she is talking about.

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Response to joeglow3 (Reply #136)

Wed Mar 26, 2014, 08:05 AM

203. Insults.

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Response to Enthusiast (Reply #203)

Wed Mar 26, 2014, 08:58 AM

207. Read

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Response to treestar (Reply #134)

Sun Mar 23, 2014, 07:07 PM

138. I think she understands that quite well...

And I found her characterizing investors as gamblers insulting. Her whole approach to taxation is that everyone's money is there for the government's taking and to hell with anyone who put their own money at risk to start a business or invest in one. That is self serving and unfair in the extreme and it really pissed me off.

Maybe I should have had more patience and tried to explain the logic in taxing gains and losses, but reading her responses to other posters, I think it would have been a waste of time.

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Response to Sarah Ibarruri (Reply #18)

Sun Mar 23, 2014, 11:26 AM

28. Wow. The ignorance is burning

Seriously, I have debated you on many things and you have made it clear you felt superior in knowledge. As a tax CPA, with 15 years experience, I can't wait for you to explain how you understand taxes more than me.

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Response to joeglow3 (Reply #28)

Sun Mar 23, 2014, 11:59 AM

34. What? Are you kidding me? Your gambling losses should be my or my country's problem? nt

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Response to Sarah Ibarruri (Reply #34)

Sun Mar 23, 2014, 12:11 PM

37. The fact that you see it as gambling shows just how ignorant you are.

When someone makes money in the market, it is luck, right?

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Response to joeglow3 (Reply #37)

Sun Mar 23, 2014, 12:13 PM

40. I don't care how you see it. Your choices with your excess money should not be my problem nt

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Response to Sarah Ibarruri (Reply #34)

Wed Mar 26, 2014, 09:32 AM

213. What if I told you that the tax code allows you to deduct *actual* gambling losses ...

to the extent of your gambling income?

Also, deductible net capital losses cannot exceed $3,000 in one year. Hardly a blip on Mitt Romney's tax return, but pretty important for small investors who have lost money for the year.

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Response to Sarah Ibarruri (Reply #16)

Sun Mar 23, 2014, 11:14 AM

26. I wouldn't call it gambling

For one thing, in my last six years of doing it, I have yet to take a loss.

But because of FIFO accounting, some of them are losses on paper, which I had on last years taxes - some paper losses. But then the gains I am paying taxes on this year, some of those are only "paper" gains. Paper gains that balance out the paper losses of last year.

I have no problem if people get to "deduct" their losses - as long as they are not playing accounting games to create paper losses.

I have been critical of deductions http://journals.democraticunderground.com/hfojvt/151

But still think there obviously needs to be a deduction for things like "catastrophic medical bills" - bills greater than 20% of income.

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Response to hfojvt (Reply #26)

Sun Mar 23, 2014, 12:06 PM

36. Again, why should my country have to pay you for your decisions in gambling, or your choices in

investing, if that's what you prefer to call it?

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Response to Sarah Ibarruri (Reply #36)

Sun Mar 23, 2014, 12:12 PM

39. Name one investment you have made

I am guessing it is none, but you will claim yourself as an expert on this (just like you are on everything else).

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Response to joeglow3 (Reply #39)

Sun Mar 23, 2014, 12:13 PM

41. Oh my God. Now we're getting personal here? I said that gambling should not be the country's prob

And it shouldn't be. You invest/gamble/whatever, and it's your problem if you lose.

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Response to Sarah Ibarruri (Reply #41)

Sun Mar 23, 2014, 12:14 PM

44. Answer the question.

What have you ever invested in?

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Response to joeglow3 (Reply #44)

Sun Mar 23, 2014, 12:15 PM

46. Clearly, you think your losing choices with your excess money should be protected by me

And you're wrong.

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Response to Sarah Ibarruri (Reply #46)

Sun Mar 23, 2014, 12:16 PM

48. Answer the question

What have you ever invested in?

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Response to joeglow3 (Reply #48)

Wed Mar 26, 2014, 08:09 AM

204. Answer the question!

Up against the wall!

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Response to Enthusiast (Reply #204)

Wed Mar 26, 2014, 09:04 AM

209. Ignore questions. Who needs a back and forth conversation...

...when you can just spew ignorance and ignore every attempt people make to provide a learning opportunity for you.

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Response to joeglow3 (Reply #209)

Wed Mar 26, 2014, 09:21 AM

212. Agenda

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Response to Enthusiast (Reply #212)

Wed Mar 26, 2014, 09:38 AM

214. Words

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Response to Sarah Ibarruri (Reply #46)

Wed Mar 26, 2014, 08:11 AM

205. How dare you question deductions!

Answer the question! Don't you know your place? Be quiet and sit down.

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Response to Enthusiast (Reply #205)

Wed Mar 26, 2014, 08:59 AM

208. No. Speak about shit you know nothing about

Form opinions BEFORE educating yourself.

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Response to Sarah Ibarruri (Reply #46)

Wed Mar 26, 2014, 09:46 AM

215. Only to the extent that they should offset my winning choices.

Surely you aren't in favor of a heads-I-win/tails-you-lose tax system? The economy would melt down overnight.

Please understand that we are of like-mind when it comes to ending the abusive tax breaks our country gives to the wealthy. But the things you are talking about in this thread are not the things that need to be ended. They are either legitimate deductions that are required in order to accurately measure income, or else, like the mortgage interest deduction, they are middle-class benefits.

The most egregious thing in the tax code is the carried interest rule. Hedge fund billionaires use it to pay a lower tax rate than ordinary working folks with good jobs. That's the sort of thing we should be railing against.

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Response to dawg (Reply #215)

Wed Mar 26, 2014, 02:13 PM

222. I doubt the economy would melt down if the govt doesn't bail out investment losses nt

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Response to Sarah Ibarruri (Reply #36)

Sun Mar 23, 2014, 12:21 PM

51. being an economist

I wouldn't call it investing either.

But if I make $900 by trading some stocks and lose $500 by trading some other stocks, then clearly I have only made a total of $400.

You think that only taxing the $900 is fair?

I think the income tax IS fair, if it is based on actual income. Which simply IS - income minus losses.

Other deductions though, are not the same thing as losses. Except for medical expenses - the loss there being, presumably the loss of health.

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Response to hfojvt (Reply #51)

Sun Mar 23, 2014, 12:26 PM

52. What do you call it when someone starts a couple businesses?

This is not investing? What is it?

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Response to joeglow3 (Reply #52)

Sun Mar 23, 2014, 12:40 PM

55. I thought it was pretty clear

we were talking about the stock market.

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Response to hfojvt (Reply #55)

Sun Mar 23, 2014, 12:44 PM

57. The rules are the same. I did not see anyone make a delineation.

Where is the line drawn? What if I invest in a friend's business? How about an over the counter company? When does a company become big enough that it is no longer investing?

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Response to joeglow3 (Reply #57)

Sun Mar 23, 2014, 01:09 PM

77. I am using the definition from an elementary economics class.

I don't make the rules, I just taught them 20 some years ago.

In economics, 'investing' is actually purchasing (or building) things like plant, equipment, supplies, inventory, etc.

When I buy 100 shares of stock on the stock market all I have done is purchased something that another stockbuyer owns. Since my money is only going to buy a piece of paper, rather than any actual supplies, it is not considered investing.

Now, if it happens that I buy 100 shares of newly issued stock, the company does gain extra money that way, which THEY can then invest, but the fact remains that my own purchase was NOT the investment.

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Response to hfojvt (Reply #77)

Sun Mar 23, 2014, 02:03 PM

116. Fair enough. You are applying economic terms to finance

However, finance has their own terms and investment means something different.

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Response to hfojvt (Reply #55)

Sun Mar 23, 2014, 12:52 PM

61. That wasn't clear to me ....

 

.... since this thread started talking about business expenses.

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Response to hfojvt (Reply #51)

Sun Mar 23, 2014, 12:57 PM

63. I'm not a tax attorney, but I don't think the U.S. govt should be "paying" people for

doing charity and making bad decisions when engaging in activities with their excess money. Charity is either charity or it's a money-making proposition that takes money from our country, and the same should apply to all investments.

I think the U.S. govt should be there to protect us from destitution, homelessness, hunger, law and order, fight real crime (not drug-taking alone), should provide healthcare to all (since for-profit insurance corporations have are unwilling and unable to provide healthcare to all), maintain our country's education, crush criminal corporations, ensure that our foods, medicines, air and water are safe, provide for poor seniors, our country's infrastructure upkeep, enforce rules that ensure the healthy well-being of citizens, and provide defense (though how much defense we really need is debatable since we're pretty much geographically isolated.

I don't think it's there to provide us with a cushion for our excess money and profits should we make bad decisions. At some point, those with excess money need to be responsible with their excess money, and not behave like kindergarten toddlers who want daddy-govt to bail them out if their decisions don't pan out.

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Response to Sarah Ibarruri (Reply #63)

Sun Mar 23, 2014, 01:22 PM

86. what are you calling "excess" money?

If you are taxing the gains, then you gotta take the losses with the gains because they come from the same activity.

I have, as I have noted, http://www.democraticunderground.com/1002625762
lived most of my life in the bottom quintile.

And yet you seem to be wagging your finger at me because I have "excess" money.

Yeah, I guess I should have whizzed away my money on new cars and cell phones and cable TV. Then I would not have all that "excess".

The government is not "paying" people by allowing them to deduct their losses. The government is taxing INCOME, and income simply IS a total of gains AND losses. Calling that "paying" people is just a completely bizarre way to look at it.

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Response to hfojvt (Reply #86)

Sun Mar 23, 2014, 01:23 PM

88. Excess money. Lower income people have no excess money. nt

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Response to Sarah Ibarruri (Reply #88)

Sun Mar 23, 2014, 02:04 PM

117. So, anyone with a dollar to spare is "rich?"

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Response to Sarah Ibarruri (Reply #88)

Sun Mar 23, 2014, 04:57 PM

128. Well I made

$33,359.84 last year and that puts me in the bottom 40% of households in Kansas http://www.itep.org/pdf/ks.pdf

and I have money to save and "invest". In fact, $1,370 of my income last year was from capital gain, interest, and dividends. And that does not include perhaps $1,000 in interest on my IRA accounts.

It's not excess money like I am getting paid so much more than other people, but I CHOOSE to save a fair amount. I am pretty sure I am not the only working class household to do so. And yes, because interest rates on savings accounts are basically negative, I put some of that money in the stock market where I can get higher returns.

I hope Karl can forgive me.

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Response to Sarah Ibarruri (Reply #63)

Sun Mar 23, 2014, 01:39 PM

100. Your ignorance of the economy is astounding

Look at what percentage of money for HUD actually goes into housing costs. NOW, look at what percentage of money going through a charity specializing in low income housing goes to housing. It is EASY to see, economically speaking, we are better off allowing the charitable deduction, as it results in a greater net gain to the working poor.

But, let your cup of ignorance runith over.

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Response to joeglow3 (Reply #100)

Sun Mar 23, 2014, 01:42 PM

103. I'm off to lunch, but when I return, I'll discuss how you can keep your job even if deductions

disappeared.

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Response to Sarah Ibarruri (Reply #103)

Sun Mar 23, 2014, 01:49 PM

107. Yeah. PLEASE explain it to me

Show me how you are the queen of knowledge in all areas. Explain to me all the areas that go into getting a CPA. Explain to me how taxes is nothing more than someone sitting at a Jackson Hewitt or h&r block.

PLEASE put your ignorance of the accounting field on greater display!

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Response to Sarah Ibarruri (Reply #103)

Wed Mar 26, 2014, 08:20 AM

206. Hurry back so you can be slapped down and insulted more.

This will teach you upstarts to question low low low taxes for the job creators!

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Response to Enthusiast (Reply #206)

Wed Mar 26, 2014, 02:14 PM

223. "This will teach you upstarts to question low low low taxes for the job creators!" I know! nt

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Response to Sarah Ibarruri (Reply #63)

Sun Mar 23, 2014, 04:36 PM

127. Tax deductions on charitable donations is NOT paying people to donate...

It's simply saying you don't pay taxes on the amount you donate.

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Response to Sarah Ibarruri (Reply #16)

Sun Mar 23, 2014, 12:44 PM

59. You can only deduct gambling losses from income taxed from gambling wins.

You cannot deduct gambling losses from wages.

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Response to Drahthaardogs (Reply #59)

Sun Mar 23, 2014, 12:59 PM

65. Sorry, I was actually referring to losses in cap gains :) nt

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Response to Sarah Ibarruri (Reply #65)

Sun Mar 23, 2014, 01:04 PM

71. Oh, Jesus .....

 

"Sorry, I was actually referring to losses in cap gains."

Losses are gains? No, losses are losses, not gains.

Keep digging.

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Response to Sarah Ibarruri (Reply #16)

Sun Mar 23, 2014, 01:31 PM

94. Gambling? Who said anything about gambling?

People can end up with capital losses for all sorts of reasons. Not allowing them to offset gains sounds unfair.

Let's say that my wife and I each decide to quit our jobs and buy small businesses. We each spend $200,000 of our savings on our business and run them for five years. After that time, my business is doing badly and sells for only $25,000. Her business has done well and sells for $375,000. Basically, we got our original investments back. With your plan, it sounds like we'll have to pay $175,000 on capital gains taxes just to get back to where we were. That hardly seems fair.

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Response to badtoworse (Reply #15)

Sun Mar 23, 2014, 01:10 PM

78. That would pretty much end most startup businesses that need investors.


I don't think that would be smart for the country because those kind of businesses provide a lot of jobs and taxes that go for food stamps, unemployment insurance, Social Security, health care, etc.

I'd be for moving our country back to the 1870s where we live on little pieces of land, grow or kill our own food, ride jackasses, etc., but we need a plan that gets us there without creating an environment where those with the gunz survive.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 07:44 AM

20. du rec.

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Response to xchrom (Reply #20)

Sun Mar 23, 2014, 12:14 PM

43. Thanks! nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 08:49 AM

21. Cool!

Let's raise taxes on the middle class and the poor 'cause we haven't been fucked over enough.

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Response to Le Taz Hot (Reply #21)

Sun Mar 23, 2014, 12:12 PM

38. Who said that? Did you view the youtube, or merely posted a response just to respond something? nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 09:13 AM

22. a mortgage deduction is a tool of the rich?

No middle-class folks with mortgages?

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Response to DrDan (Reply #22)

Sun Mar 23, 2014, 11:07 AM

25. It favors the rich more than poor or middle class

it also favors owners over renters, which, in general, have more wealth and income.

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Response to taught_me_patience (Reply #25)

Sun Mar 23, 2014, 11:18 AM

27. the deduction is for a mortgage. Don't believe that applies renters.

That is like saying those that contribute to a charity get preferential tax treatment over those that do not contribute to a charity.

Owners also pay for insurance, are responsible for repairs, stand the risk of a downturn in the real estate market.

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Response to taught_me_patience (Reply #25)

Sun Mar 23, 2014, 11:55 AM

32. Does the link take into account the phase out of itemized deductions?

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Response to taught_me_patience (Reply #25)

Sun Mar 23, 2014, 01:15 PM

81. I can assure you that if your landlord can't deduct his mortgage, your rent will increase.

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Response to Hoyt (Reply #81)

Sun Mar 23, 2014, 11:32 PM

147. So when he/she pays off their mortgage, rent will be free right?

And I thought supply side economics was dead here at DU?

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Response to taught_me_patience (Reply #147)

Sun Mar 23, 2014, 11:41 PM

148. By that time, he'll be putting in big bucks to refurbish the place.

Ate you going to pay the total freight for that?

The rent is always to high for most of us, even though we could move somewhere cheaper.

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Response to Hoyt (Reply #81)

Mon Mar 24, 2014, 06:01 PM

162. That's the argument that if you treat the rich nicely, they'll trickle down to you.

I thought we were over that, and realized it's BS.

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Response to Sarah Ibarruri (Reply #162)

Mon Mar 24, 2014, 06:19 PM

172. No, that is the argument that a landlord has to cover expenses and price his apartments so as to be


competitive. Do you gravitate to the highest rental rates?

Truthfully, if you are as much a victim as you believe, you ought to start learning how to negotiate and stand up for yourself.

You ought to start learning something about taxes, rents, etc., before whining. I've been in apartments that jacked the rent up. Guess what? I told them to eat it and moved to a place that needed to fill vacancies and, therefore, charged a more reasonable rent.

No doubt, there are lots of landlords that rip folks off, particularly the poor. But, there are plenty of ways nowadays to get retribution. Similarly, there are tenants who do the same and make life difficult for all us.

Nowadays, you can research a landlord to find out how fair they are. I suspect there are plenty of folks on DU that rent rooms, houses, apartments at very good rates and would not screw a tenant.

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Response to Hoyt (Reply #172)

Mon Mar 24, 2014, 06:32 PM

174. Paraphrasing. You said that if the landlord was doing okay, the rents would be lower. Right?

Or did you say something completely different?

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Response to DrDan (Reply #22)

Sun Mar 23, 2014, 11:27 AM

29. Mostly

unless your house is fairly expensive, the mortgage interest is not going to be more than the standard deduction.

Some details on WHO gets the benefits of itemized deductions.

http://journals.democraticunderground.com/hfojvt/151

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Response to hfojvt (Reply #29)

Sun Mar 23, 2014, 12:20 PM

49. I'm hardly rich and the deduction is a big deal for me

I have a modest 1500 sqft house, but the interest deduction plus the local and states taxes, creates quite a savings in federal taxes. The Northeast with high home prices and high taxes needs that deduction.

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Response to NutmegYankee (Reply #49)

Sun Mar 23, 2014, 12:35 PM

53. I dislike it when people say "I am hardly rich"

without providing any details. What is your idea of "hardly rich"?

The other day I was listening to a speech by somebody who had donated $100,000 to Eliminate.

I think that is awesome. Heck, I donated $1,000 to it myself.

But then she said "and we're not rich ..."

And I am like "seriously?" Lots of rich people seem to be in denial about their own richness.

Here's the breakdown for Connecticut http://www.itep.org/pdf/ct.pdf

I note that the federal deduction is NOT worth very much to the bottom 40%. Actually I am kinda surprised it is worth anything, because generally less than 10% of those in the bottom 40% will itemize.

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Response to hfojvt (Reply #53)

Sun Mar 23, 2014, 12:49 PM

60. Household income of 89K.

I'm a mechanical engineer, so I make a good wage. I would be in the 60-80% (4th 20%) portion of your link. CT has an interesting quirk in it's tax law - A single person making over 56K has the 3% income tax bracket phased out and replaced with 5%. It added about $600 a year to my income tax, which didn't bother me much as it covers an Earned income credit for the poor.

The high property taxes, high income taxes, and mortgage interest all feed the itemized deduction in federal taxes and helps make living in New England easier. It's not like we are leaching off the country - only 60% of what we pay in taxes comes back to us in services.

If you look at the table at the bottom, you see that the 4th 20% bracket has the highest tax load, but come in third highest overall because of the federal deduction offset. So yes, it's important to me.

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Response to NutmegYankee (Reply #60)

Sun Mar 23, 2014, 05:19 PM

129. with a household of one

that makes you 90th percentile http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

But as a single guy, I can appreciate that the tax system is slanted against us.

The federal offset makes your state taxes a lower rate than that paid by the bottom 20%. I am sure you like it - but is it fair? And the deductions that you get, provide even more benefits to those above you. And again - is that fair?

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Response to hfojvt (Reply #129)

Sun Mar 23, 2014, 05:31 PM

131. For personal income, yes.

But most households have two earners, so I am not that well off. I bear the costs of maintenance and utilities alone. But that has been my choice.

I'm actually much closer to the 20% tax rate as my actual state income tax is 4.4% and my property tax is 5.0%. Adding that up - 4.4+5.0+3.0=12.4. 12.4-1.4 (deduction)=11.0% The PDF you supplied didn't account for the single income tax rate change.

As for fair, remember that this is only state and local. While I'll pay 14% into federal income taxes, the bottom 20% won't. I still pay twice the rate.

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Response to NutmegYankee (Reply #131)

Mon Mar 24, 2014, 12:53 PM

152. but even in Connecticut

many of those households with two earners are making less than $73,000 - 60% of them are, and 40% making less than $44,000. A two income household making $40,000 has two people to pay maintenance and utilities

(and the "great" thing about a utility bill is that you can usually double usage without doubling the bill. I pay $15.40 a month for garbage removal. If I had a spouse and two kids, I would pay $15.40 a month. I pay $18 a month for water and sewer. My family of four might pay $30. A couple might pay $22. Utility bills are set up to have single people subsidize families.)

but they also have to buy food for two people, clothing for two people, might need two cars, and so on.

As for the 14% federal tax rate. A household making less than $24,000 is probably paying a negative tax rate. But I bet they would love, if they had that option, for their income to goto $72,000 even if they got hit with a 14% tax rate. Even after federal and state taxes that would leave them $26,000 ahead, more than doubling their income. And you have $10,000 more than that.

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Response to hfojvt (Reply #152)

Mon Mar 24, 2014, 02:21 PM

153. So what is your point?

You seem to want to imply I'm wealthy, which is just absurd. I live in a modest area in a 1960's era Cape Cod house. In many parts of the region there are $400,000+ homes. I'm not part of their social class. They tend to be business types or higher level executives. I'm a member of the Professional middle-class since I'm an Engineer. My local neighbors living in similar type houses are mostly lower middle tradesmen or local government workers. There are a few single households near me, with professionals like teachers and accountants as well.

You make comparisons to lower income families, but I will note that many of them are not homeowners. Connecticut is well known for having some of the wealthiest suburbs and some of the poorest cities. You discuss utilities, but neglected heat - which is very expensive here. The average home uses 700 gallons of heating oil, at $3.69 a gallon currently.

Overall, you want to lay out statistics to define class, but the middle class is NOT the middle of the income spread. It's based on a standard of living and some economic security. I have the life I have because I am employed. Lose that, and it all crumbles. In that aspect, I'm working class.

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Response to NutmegYankee (Reply #153)

Tue Mar 25, 2014, 01:31 AM

194. I would say rich, rather than wealthy

you are at the median of the fourth quintile, with just ONE income.

Although the lack of a spouse, keeps you in the middle class rather than the upper class.

Still, UPPER middle class.

Like I said, most of the benefits of itemized deductions go to the upper classes.

And if the middle class is NOT in the middle of income, then why the hell is it called 'middle'?

Oh, I am quite sure that the upper middle class is all too happy to re-define the middle class upwards. After all, that allows THEM to be the beneficiaries of politicians who claim to cater to the 'middle class'. http://www.democraticunderground.com/?com=view_post&forum=1002&pid=4085402

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Response to hfojvt (Reply #194)

Tue Mar 25, 2014, 05:51 AM

195. Well then, let me go get my monocle and tailored suit.



You have a seriously twisted view of what is middle class. According to you, every engineer is rich.

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Response to hfojvt (Reply #29)

Sun Mar 23, 2014, 12:39 PM

54. right - but that standard deduction has doubled in the last 20 years or so

so what you describe has not always been the case.

Plus, 20 years ago, there were many more deductions allowed so it was easier to reach and exceed the standard deduction. I worked for a guy who would pick up every receipt he would see on the ground, that had tax applied. Claimed it made a significant difference in his itemized deductions.

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Response to DrDan (Reply #54)

Sun Mar 23, 2014, 01:00 PM

67. actually it has not

and I do not believe there were significantly more deductions in the past. I am pretty sure there are still significant deductions that are still with us, as the current stats I looked at showed.

In 1993, the standard deduction was $3,700. The inflation calculator tells me that is $5,964 in 2013 dollars. Not all that much different from the $6,100 the standard deduction was in 2013. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=171

It was $2,300 in 1984 which is $5,156 in 2013 dollars, but the 1984 number was rather low. It was $2,300 in 1979 which is $7,380 in 2013 dollars. Making $6,100 actually 17% lower than it was in what I call the "good old days" (before Reagan ruined the country). The real value was closer to $7,000 in most of the 1970s (although it went up and down - in 1977 it was boosted to $8,457 in 2013 dollars!!!!)

Here's the inflation calculator.
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=2200&year1=1977&year2=2013

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Response to hfojvt (Reply #67)

Sun Mar 23, 2014, 01:50 PM

108. married filing jointly was $6200 in '93, or $9,995 adjusted

last year the sd was $12,200 - or $2,205 increase. I would consider that significant.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 11:46 AM

31. Deductions for charitable giving should go away?

Without tax deductions (and estate taxes), charities serving human interests and research could possibly shrivel up.

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Response to Ilsa (Reply #31)

Sun Mar 23, 2014, 11:58 AM

33. Of course they should. Why should someone get money from charity? Either it's charity, or it's not

This charity deduction thing is ridiculous.

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Response to Sarah Ibarruri (Reply #33)

Sun Mar 23, 2014, 01:57 PM

113. No one gets any money by donating to charity


If I write a check to charity for $100,000, and I'm in the 50% tax bracket, it means that I save about $50,000 in taxes. But I've still written that check for $100,000. So in the end, I'm out $50,000. I didn't get anything.

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Response to mainer (Reply #113)

Mon Mar 24, 2014, 06:03 PM

163. So are you saying that you wouldn't give charity if you couldn't get $ advantages from it?

So if the govt doesn't give you benefit by reducing your tax load, you will not give charity?

Then it's not charity.

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Response to Sarah Ibarruri (Reply #163)

Mon Mar 24, 2014, 07:04 PM

180. I give lots to charity, out of generosity.

I'm just challenging YOUR misinformed view that I'm getting any benefits from it, other than goodwill.

Your posts make me suspect you don't give any charitable donations whatsoever, because you'd know this.

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Response to mainer (Reply #180)

Mon Mar 24, 2014, 07:11 PM

182. Let me tell you what charity is NOT

Charity is NOT giving something and expecting something in return.

Giving something expecting something in return is a business exchange like any other, not charity.

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Response to Sarah Ibarruri (Reply #182)

Mon Mar 24, 2014, 07:12 PM

184. The only thing I expect in return is a thank-you note

The fact I get a deduction simply means I can afford to give twice as much.

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Response to mainer (Reply #184)

Mon Mar 24, 2014, 07:14 PM

186. Deduction is what you get in return. Look, don't bother responding.

You're behaving purposefully obtuse.

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Response to Sarah Ibarruri (Reply #186)

Mon Mar 24, 2014, 07:15 PM

188. I know what I'm talking about, because I'm the one who writes the checks.

"Obtuse" is ignorance.

I think what we have here is a disagreement on definitions.

You think my money is your money, and you want it.

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Response to mainer (Reply #188)

Mon Mar 24, 2014, 07:16 PM

190. You are repeating the very words Republicans say. Goodbye. nt

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Response to mainer (Reply #188)

Mon Mar 24, 2014, 08:24 PM

192. That's her bottom line ....

 

She wants your money to do what she wants with it. And she wants the government to do the work for her.

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Response to Sarah Ibarruri (Reply #33)

Sun Mar 23, 2014, 07:05 PM

137. Charities oppose eliminating estate taxes and

The deduction for charitable giving because they know their receipts decrease (alot) when the preferential tax treatment is absent.
Yeah, some people give to boost their deductibles.

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Response to Ilsa (Reply #137)

Mon Mar 24, 2014, 07:06 PM

181. How does getting back 50% change the fact you've given 100%?

You've boosted your deductibles, but you're still out money.

I suspect that people who don't understand this have never actually given to charity.

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Response to mainer (Reply #181)

Mon Mar 24, 2014, 07:11 PM

183. Yes, they are still out money.

But the donations might also bring them into a lower tax bracket on the remainder of their income, and that might help with justification of the gifts.

I'm not saying that all donations are purely for a tax payback. I'm certain there are charities that people in those tax brackets want to support. But the tax incentives help support the arts, research, and humanity.

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Response to Ilsa (Reply #183)

Mon Mar 24, 2014, 07:14 PM

187. It doesn't lower my tax bracket

but deductions mean I can afford to give twice as much to a charity.

I don't even think about the deduction when I write a check. I only think about what that charity means to me, and whether it's worthy.

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Response to mainer (Reply #187)

Mon Mar 24, 2014, 07:16 PM

189. Most of us give from the heart, I think.

Only the 1% has the means to throw math into a gift, I guess.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 12:21 PM

50. Childfree folks should get a tax credit, IMO

We are doing the environment a big favor by not breeding....

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Response to PasadenaTrudy (Reply #50)

Sun Mar 23, 2014, 12:41 PM

56. Also by helping to remove the sanctimony gene from the pool. So thanks. nt

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Response to PasadenaTrudy (Reply #50)

Sun Mar 23, 2014, 12:44 PM

58. however, you are not adding to the taxpayer pool - who will pay taxes in the future?

just kidding of course.

Deductions for more children is not wise. Raise the standard deduction for all and eliminate the dependent deduction.

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Response to DrDan (Reply #58)

Sun Mar 23, 2014, 03:13 PM

121. People will never stop breeding...

We are in the minority.

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Response to PasadenaTrudy (Reply #121)

Sun Mar 23, 2014, 03:47 PM

123. I can understand both sides

we have two children - both grown.

And lucky enough to have a wonderful Granddaughter. We love sharing time with her, traveling with her, helping with her homework, etc.

However, I will never criticize those who have decided to not have children. Life is complicated, and children add to that complication.

Everyone has different priorities.

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Response to PasadenaTrudy (Reply #50)

Sun Mar 23, 2014, 01:05 PM

72. I'm on board with that. If those with kids get a deduction, why not us?

Hey, why not get a deduction for NOT giving to charity? And one for NOT losing because one has no capital gains? Heck, everyone should get deductions for just about everything. Some in here feel quite entitled, why shouldn't the rest?

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Response to PasadenaTrudy (Reply #50)

Sun Mar 23, 2014, 01:40 PM

101. Agreed.

 

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Response to PasadenaTrudy (Reply #50)

Sun Mar 23, 2014, 09:22 PM

143. THANK YOU

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Response to Skittles (Reply #143)

Sun Mar 23, 2014, 09:46 PM

144. Leave it to me

to stir up the hornet's nest that is pronatalism, It had to be said though.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 01:00 PM

66. So you think me giving less of my income to Fed Tax ....

 

... for taking the mortgage and medical deductions is the same as the govt GIVING me money?

Right.

I'll add my thought to a couple of others above and opine that you know nothing of how an economy operates or even what investing really is. Like the others have said, you are showing your ignorance.

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Response to oldhippie (Reply #66)

Sun Mar 23, 2014, 01:03 PM

70. I believe taxes are too high on the working poor and middle class BECAUSE those who have

excess money are expecting all of us to pay them for their losses.

As for medical deductions, if Obamacare is modified in the long run, and turned into a single-payer system as in Europe, there will be no use for that.

Oh I do. You clearly watched the youtube I posted, didn't like it one small bit, and proceeded to respond the way you did.

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Response to Sarah Ibarruri (Reply #70)

Sun Mar 23, 2014, 01:07 PM

73. I believe ....

 

... your posts here make it very clear to most of us how much you understand about economics.

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Response to oldhippie (Reply #73)

Sun Mar 23, 2014, 01:09 PM

76. I believe that you don't know squat about economics, but you like your excess money - a lot nt

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Response to Sarah Ibarruri (Reply #76)

Sun Mar 23, 2014, 01:14 PM

80. I believe you like my "excess money" .....

 

.... more than I do.

Have a nice day.

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Response to oldhippie (Reply #80)

Sun Mar 23, 2014, 08:18 PM

141. Right on the money! Brilliant!

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Response to Sarah Ibarruri (Reply #70)

Sun Mar 23, 2014, 01:19 PM

83. You believe many of the working poor are making money from the EITC

Now, I personally don't have a problem with it. However, paying a negative tax rate is not what I would define as a high tax rate. I find those that use that term are usually extremely ignorant to taxes. However, continue to educate this fifteen year tax CPA.

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Response to joeglow3 (Reply #83)

Sun Mar 23, 2014, 01:24 PM

90. I should've known you were in the business. lol So is my brother-in-law, which is why I know what

BS deductions are.

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Response to Sarah Ibarruri (Reply #90)

Sun Mar 23, 2014, 01:36 PM

95. Nice job of not addressing my point

You know it is fact, so you try (poorly) to discredit me. Nice defense mechanism.

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Response to joeglow3 (Reply #95)

Sun Mar 23, 2014, 01:39 PM

98. Without deductions you'd have no job. Let's examine it from that angle! :-P nt

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Response to Sarah Ibarruri (Reply #98)

Sun Mar 23, 2014, 01:41 PM

102. I am a CPA with a strong understanding of GAAP

There are any number of areas I could seamlessly go into. In fact, our corporate accounting department is currently recruiting me to transfer.

Good to see you ignore facts again and double down on your attempt to discredit me.

You are a piece of work...

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 01:08 PM

75. Deductions are just a way to encourage positive behaviors

Home ownership, education, charitable contributions, etc.

Deductions aren't evil.

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Response to LittleBlue (Reply #75)

Sun Mar 23, 2014, 01:19 PM

84. Some deductions are abusive, but I basically agree. And, one thing a lot of folks miss is

that if I get to deduct a $50 lunch -- which I haven't in decades, and even for sales folks it's harder to do nowadays -- at best I get a $20 tax savings. I'm still out $30. So, I wouldn't go around having a $50 lunch every day, at my income level anyway.

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Response to LittleBlue (Reply #75)

Sun Mar 23, 2014, 01:22 PM

87. Charity is such a scam

First, charity is either charity, or it's a money-making (tax lowering, if you will) proposition. It makes me laugh when people in the U.S. say they give to charity and then take a deduction. That's not giving. That's taking. It's basically the govt paying charity for garbage, because...
Second, a huge amount of what people give, are items that they would've thrown out, so they're making money off garbage

As for home ownership, it's a subsidy of the real estate industry. The government subsidizing the real estate industry. Most lower income and middle income people benefit almost not at all. If interest on personal loans are not permitted, why is this any different? And it doesn't help the lower and middle income people buy a home. It's hella shocking that it's allowed up to the first million. If someone can get into an expensive home, really, are they needing a home ownership deduction? Of course not. I'm all for doing it like France, where there's no such thing.

Educational deductions are out of the reach of lower income people, so what exactly is the point?

Deductions (money paid by the govt) to people who are doing well, need to be eliminated.


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Response to Sarah Ibarruri (Reply #87)

Sun Mar 23, 2014, 01:27 PM

91. Look, if I had $100,000 to give, I'd get a deduction "returning" $35,000, I'd still be out $65,000.

The deduction is an incentive, but it does not return every penny you gave or lost as an investment.

Now some folks do abuse deducting art, etc., based upon inflated valuations, but the IRS is supposed to monitor that.

I'm not sure deductions need to be eliminated, but tax rates need to be increased.

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Response to Hoyt (Reply #91)

Sun Mar 23, 2014, 01:30 PM

93. So you think I (and the others in the U.S.) should "pay" you for giving charity? Excuse me?

Look, I'm off to lunch so I'm outta here. However, I'm pretty shocked at how many feel that the govt should be there to prop them up, EVEN WHEN they're doing okay.

I'm all for the govt providing for all those who need or are having trouble with adequate shelter, food, and I believe healthcare should be automatically provided, but provide for those who are doing okay? Not on your life. I don't believe it now, and never will.

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Response to Sarah Ibarruri (Reply #93)

Sun Mar 23, 2014, 01:38 PM

97. No one is paying me (because I'm not taking that deduction). The government is saying we value

contributions to homeless shelters, cancer research, abuse shelters, orphanages, etc. So, here's an incentive to do that -- If you contribute $100,000, we'll let you off the hook for $35,000 in taxes. I don't see any problem with that, especially if the government gets off its rear and increases the tax rate on taxable income for those able to make big contributions.

I do want the IRS to make sure those deductions aren't going to the KKK, NRA, lobbying organizations, etc.

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Response to Hoyt (Reply #97)

Sun Mar 23, 2014, 01:39 PM

99. The govt is keeping you from having to pay what you would've paid. Therefore, it's paying you. nt

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Response to Sarah Ibarruri (Reply #99)

Sun Mar 23, 2014, 01:42 PM

104. I would still be contributing a net $65,000. Are you against orphanages getting contributions?

Because that is exactly what would happen.

If you want to punish rich people, cool, they deserve it. But, there are better ways to do it without hurting the poor, abused, sick, etc.

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Response to Sarah Ibarruri (Reply #99)

Sun Mar 23, 2014, 03:08 PM

120. No

If, due to deductions, I keep money that I earned, that is not the same as the government giving me money.

You saying it 3,946,235 times still doesn't make it true.

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Response to Sarah Ibarruri (Reply #99)

Sun Mar 23, 2014, 05:20 PM

130. Taking less of your money isn't "paying you" at all. n/t

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Response to Sarah Ibarruri (Reply #93)

Sun Mar 23, 2014, 07:40 PM

139. YOU aren't paying anything.

Someone investing, whether they see a return or not, doesn't take a dime out of your pocket.

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Response to Hoyt (Reply #91)

Sun Mar 23, 2014, 04:16 PM

126. It's no use trying to explain ....

 

She totally doesn't understand the concepts of deductions and credits.

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Response to Sarah Ibarruri (Reply #87)

Sun Mar 23, 2014, 01:28 PM

92. Okay, here is the issue

You can never gain a net economic benefit from charitable contributions. Whatever you save in taxes is eclipsed by what you've given up, since you only get to deduct a portion of what you've donated up to 50% of your AGI.

It will lower your tax bill, but what the taxpayer has given is far in excess of the benefit they'll receive.

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Response to LittleBlue (Reply #92)

Sun Mar 23, 2014, 01:37 PM

96. It boils down to money the govt is giving you, and the govt should not be in the business of handing

out money to those who are doing okay.

Besides, as I said before, people give a lot of trash, stuff that belongs in the city dump.

Lastly, getting a benefit for charity, is not charity at all.

Charity: The practice of benevolent giving and caring. What it is not is the practice of getting rid of your trash, and getting to pay lower taxes.

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Response to Sarah Ibarruri (Reply #96)

Sun Mar 23, 2014, 01:58 PM

114. Here is the way I think about it

Forget about what money is going where. Whether it goes to the government or to charities, the money should be used to benefit society.

Most taxpayers who take deductions pay around 20%-35%. So (at 20%) for a cost of only $200, the government encourages a donation of $1000. This makes it a net societal benefit of $800, or a 400% return on the cost. And while not every donation is made for the purposes of avoiding taxation, many donations are given despite the taxpayers later deciding to take the standard deduction, where the taxpayers can't even use the charitable deduction but gave with the thought that they would.

It really does benefit society to encourage donations. We end up with a much greater benefit than the cost. If those charities didn't exist, their services might have to be provided by the government anyway.

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Response to Sarah Ibarruri (Reply #96)

Sun Mar 23, 2014, 07:59 PM

140. The government isn't giving people money when people donate to charity.

As the government does not tax at a 100% rate any tax revenue not realized due to charitable deductions would still mean the giver is accepting a net "loss" in income they spend for their own personal benefit and the amount donated is more money for social programs than the government could spend on similar programs.

If someone donated $10,000 and because of that their income rate saw a deduction that lowered their tax burden by $1,000 they are still donating $10,000 to charity and not using it to their personal benefit. They're still paying $9,000 MORE to social work than the government would be able to do had they not taken the deduction. In other words, they am putting NINE TIMES more benefit into society than the government would be able to do.

Even if they were taxed at 90% they would still be donating more than the government would not realize in revenue.

What is more important: taking money that doesn't belong to you or actually helping people?

This ridiculous adversarial attitude towards investments would actually result in a net loss of revenue for the government because if people stop investing no goods and services are produced and no wages are paid to produce those goods and services. That means the economy grinds to a halt and no revenue coming from the economy; no personal income taxes, no sales taxes, no corporate taxes, no investment income taxes.

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Response to LittleBlue (Reply #92)

Sun Mar 23, 2014, 01:52 PM

110. And that's something a lot of people don't understand

They assume that if you give $100,000 to charity, the deduction means you haven't actually lost a thing.

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Response to Sarah Ibarruri (Reply #87)

Mon Mar 24, 2014, 06:18 PM

171. You know, people don't just give their "garbage"

to charity, right? I mean, some people give $$$$$. If someone gives my favorite charity $10,000, then the charity is better off by $10,000. So what if the donor gets to deduct a PORTION from his taxes??

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Response to YarnAddict (Reply #171)

Mon Mar 24, 2014, 06:32 PM

175. Maybe not everyone, but LOTS of people give their trash, stuff that belongs in a dumpster nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 01:18 PM

82. Some deductions are necessary

Surely you have to be able to deduct legitimate business expenses. Let's say that you run a business selling widgets. You make $100,000 a year selling the widgets. You take a $70,000 deduction for business expenses, like the cost of materials, your building, shipping costs, marketing costs, etc. If you didn't allow for the deduction in business expenses, you could end up owning more money in taxes than you earned in profits. Low margin businesses wouldn't be possible.

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Response to FreeJoe (Reply #82)

Sun Mar 23, 2014, 01:24 PM

89. Truthfully, I think that is OK with some short-sighted folks.


If we removed that $70,000 business expense deduction -- or significantly reduced it -- within just a few years there really would not be enough tax money to fund social security, food stamps, health care, local governments, unemployment insurance, or anything else. We'd all be in a world of hurt and in a situation where those with the gunz survive.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 01:47 PM

105. Deductions let you keep more of the money YOU earned

It's not the government giving you something.

This is an argument that riles anyone who works for a living. You earn a hundred bucks, Uncle Sam says: "Give me 30 of those bucks." And the deduction allows you to say to Uncle Sam: "Give me back five bucks of the thirty you took from me."

Now, we can argue about whether capital gains and investment income should be taxed at a higher rate. But deductions are not welfare.

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Response to mainer (Reply #105)

Mon Mar 24, 2014, 06:08 PM

165. So you are against taxes then. Am I correct? Because if you consider that YOUR money,

you are under the impression that taxes are a charity you give, and not part of what you pay for living here.

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Response to Sarah Ibarruri (Reply #165)

Mon Mar 24, 2014, 06:22 PM

173. The poster never said anything about eliminating all taxes.

Stop being silly.

You keep calling income tax deductions your money, are you claiming the government is entitled to 100% and anything anyone keeps is a payment by our kindly masters in Washington DC?

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Response to Sarah Ibarruri (Reply #165)

Mon Mar 24, 2014, 07:02 PM

179. Never said I was against taxes. I only argue with your definition

that anything the government gives back to me from my taxes is welfare.

Joe earns 10 bucks.
Bob says, "gimme five bucks."
Joe says, "Please can I have one buck back from the five dollars you took?"
Bob says: "So now you want welfare?"

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Response to mainer (Reply #179)

Mon Mar 24, 2014, 07:13 PM

185. You can argue all you want. The money the country needs to survive needs to come from us...

if we're playing games that KEEP money from being used by the country, it damages the country.

It's actually very simple, which is why economists want to throw themselves off buildings when you look at it that simply. Confusing things is a great way to cheat.

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Response to Sarah Ibarruri (Reply #185)

Mon Mar 24, 2014, 08:08 PM

191. I pay the maximum tax rate.

I take no mortgage deduction (because I'm lucky enough to have paid off my house.)

My only deductions are for charity and for (modest) business expenses.

I have a feeling I contribute a lot more to the federal government than you do.

So are you calling me a slacker for not giving 100% of my income to the government?

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Response to mainer (Reply #191)

Mon Mar 24, 2014, 09:09 PM

193. I'm merely saying that those who have plenty to live on, should get no deductions. nt

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Response to Sarah Ibarruri (Reply #165)

Wed Mar 26, 2014, 06:16 PM

227. Is any money you earn and the government doesn't take 'welfare'?... n/t

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 01:54 PM

111. Allowing people to keep more of their own money

isn't welfare. Maybe you're just trying to be provocative. There are a lot of middle class families who can afford homes because of the mortgage interest deduction. Do you really want to take that away? How about the small business owners who can afford to hire people because of the business deductions they take? Should we really penalize entrepeneurship?

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Response to YarnAddict (Reply #111)

Mon Mar 24, 2014, 06:09 PM

166. You obviously didn't watch the youtube video. nt

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Response to Sarah Ibarruri (Reply #166)

Mon Mar 24, 2014, 06:15 PM

168. So how do you feel about the EITC? n/t

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Response to YarnAddict (Reply #168)

Mon Mar 24, 2014, 06:34 PM

176. I'm fine with that. They need it. Did you watch the video or not? nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 01:56 PM

112. I don't tax with you!

Your uniformed rantings remind me of someone similar.

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Response to Throd (Reply #112)

Mon Mar 24, 2014, 06:09 PM

167. Another one that didn't watch the youtube, but merely responded in a knee-jerk response nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 02:16 PM

118. Tax Deductions aren't what you think

 

Most tax deductions don't do what most think they do. Keep in mind that our tax system is such a convoluted mess that it defies any real analysis.

Tax deductions only benefit people who pay taxes. While this is obvious, what's not so obvious to some is that lower income people don't pay a lot in taxes to begin with. The progressive tax rates coupled with the deductions that everyone gets means that taxes really don't kick in until about $40,000 to $50,000.

But tax deductions themselves aren't as great as they seem, since many of them are phased out for incomes over $100,000 or so. That means as a rough ballpark, deductions mean the most for people in that sweet spot, tax wise, of 50k to 100k.

After 100k, due to the phase out of deductions and higher tax rates, the amount of taxes climbs fast; actual tax rates are a combination of higher taxes and lost deductions.

All this being said, I agree with the OP and many in this thread that deductions are counter productive. Many exist to encourage specific behavior, but that comes at a cost of taxing others more who don't engage in that behavior. Case in point, the mortgage deduction. Renters are often people who can't afford a mortgage, why should they pay more taxes than people who can afford to buy? That's the cost of a deduction designed to help out homeowners.

There was a little discussion on business related deductions. Those are a no brainer. If you sell widgets for 100 dollars each, you have to deduct the cost of each widget. If for example widgets cost 80 dollars each, you should only be taxed on the net profit of 20 bucks each. And from that net profit, you have to deduct overhead. If your store of Widgets-R-US costs 50k a year in rent, that's a cost of business and you shouldn't be taxed on it. Likewise, if you pay an employee 50k a year, that is also a cost of doing business (which costs the business maybe 60k or more due to employer related taxes and costs) so that too is a business deduction.

The real gray area of business deductions are those that are a mix of business and personal. If Mr. Big, who owns the Widget company takes a pleasure cruise for the purpose of wining and dining business prospects and lands a 10 million dollar widget contract with Ms. GoGetter, owner of Wonka Widgets, should Mr. Big and Ms. GoGetter be allowed to deduct the cost of the cruise from their respective businesses.

On one hand, there's a good reason to argue yes, since now there's that much more work for Widget workers and possibly more jobs. The result of this business meeting is more work.

On the other hand, there's a good reason to argue no, since both Mr. Big and Ms. GoGetter are smart. They both know that if they plan their family cruise as a business trip, they can make their family vacation a business expense and save on taxes.


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Response to Token Republican (Reply #118)

Mon Mar 24, 2014, 06:16 PM

170. The real beneficiaries of the mortgage tax deduction

are the construction industry and the mortgage industry. Without the mortgage tax deduction, builders wouldn't be able to jack up the prices on their homes as high.

That's not to say I disapprove of the mortgage tax deduction. It is phased out for certain incomes. Also, the standard deduction and exemptions have been raised significantly over the years, so that those in lower incomes can choose to rent if it benefits them. If someone lives in a cheaper property and doesn't have much mortgage interest to deduct, it may not be to their advantage to itemize their deductions.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 02:31 PM

119. Giving the richest and large corporations welfare through deductions, low maximum tax rates,

and preferred tax rates on the types of income inuring mostly to the richest are perhaps what a radically-right corporatist government does best if one doesn't count bombing the shit out of third-world nations that don't cow-tow to the wishes of TPTB.

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Response to indepat (Reply #119)

Mon Mar 24, 2014, 12:23 AM

150. I understand deductions, but not tax rates

We have the highest corporate tax rate in the world.

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Response to joeglow3 (Reply #150)

Tue Mar 25, 2014, 08:42 PM

196. Is not the effective corporate tax rate just +/- 7%?

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Response to indepat (Reply #196)

Tue Mar 25, 2014, 09:26 PM

197. I can't speak for all companies.

I am a tax manager for a Fortune 500 company. Our tax rate is about 31.5% (statutory rate of 35% less about 3.5% for the domestic manufacturing deduction) less about another 0.8 percent for credits (primarily research and development).

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Response to joeglow3 (Reply #197)

Tue Mar 25, 2014, 09:54 PM

198. GE reportedly pays no FIT on an income probably many multiples that of your Fortune 500 company

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Response to indepat (Reply #198)

Tue Mar 25, 2014, 10:10 PM

199. But, you are being misled

As a tax accountant, I like to look into how these numbers get reported. For instance, a few years ago, people were mad that YUM Foods did not pay taxes. However, the issue was much more technical and hard to understand for those who don't do taxes. I will try to explain:

There are adjustments when preparing your income tax return called "temporary differences." An example is depreciation: book accounting and tax accounting depreciate fixed assets at different rates. Over, the long term, both will expense the entire cost of the asset, but the deductions will be different in any given year. In the case of YUM, they had expensed pension costs for years for book, but never made any cash contributions to their plan. For book, they recorded an expense and an offsetting liability on their balance sheet. Every year, they had to add back this expense on their income tax return, creating a deferred tax asset (future tax deduction when a cash payment is made). In the year in question, they made a HUGE cash contribution to their pension plan, (they reduced cash and the offsetting liability for book, since the expenses had already been recorded). This resulted in them getting to deduct all the book expenses they had added back for years. In reality, this is very favorable tax treatment for the government as the deduction is deferred for years. It was misleading for people to claim outrage over this, as the government benefitted greatly from this treatment.

In the case of GE, their tax rate looks low since so much of their income is earned overseas (ie the product is made and sold overseas). The US is one of only a few countries that taxes worldwide income (ie income not earned in their country). However, that income is not taxed until it is repatriated. Thus, the shareholders have ZERO access to that money until it it comes back to the US and taxes are paid. When that happens, GE will have a tax rate well over the income (ie a tax rate of many multiples of 100%).

Now, there are companies like Apple that hide IP overseas to artificially transfer profits outside the US and that should definitely be changed.

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Response to joeglow3 (Reply #199)

Wed Mar 26, 2014, 06:03 PM

225. Many thanks. Knew some but not all these tidbits.

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Response to indepat (Reply #119)

Mon Mar 24, 2014, 06:00 PM

161. Absolutely! nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 03:32 PM

122. What a fantastic video!!! Posted to Facebook.

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Response to WhaTHellsgoingonhere (Reply #122)

Mon Mar 24, 2014, 05:56 PM

159. Thank you so much. Keep passing it around. nt

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Response to Sarah Ibarruri (Reply #159)

Mon Mar 24, 2014, 06:46 PM

177. Here's what I wrote on my Facebook page

Put this 13 minute video on your bucket list.

This is the most important lesson you'll ever learn in your entire life.

This isn't about Dems vs. Republicans. This is about the super wealthy vs. you! I do have friends who make 10x the income I make, but even at that, they aren't part of this club, the super wealthy.

We live in an Orwellian society in which the wealthy have sold us the idea that the world is upside down. Specifically, contrary to what the rich and corporations are telling you, it is they who are the mega welfare queens.

Let the *self-identified* welfare queen and professor from UC Berkeley explain the whole thing in 13 minutes.

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Response to WhaTHellsgoingonhere (Reply #177)

Mon Mar 24, 2014, 06:48 PM

178. Wow, that's awesome! Thank you! nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 03:48 PM

124. Good point

To get that deduction, you have to be able to buy a house.

The personal deduction is the same no matter how much money you make, too. Though the EIC and child care credits may help the pooper taxpayers.

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Response to treestar (Reply #124)

Mon Mar 24, 2014, 05:56 PM

160. Exactly. No homeless or poor person would be able to buy a house and get that welfare nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 06:42 PM

133. There has been some interesting post here. On home mortgage interest deduction,

On personal income filers it is one of a few deductions, it is a"business" deduction on personal income. Homeowners normally do not get to expense utilities but filing on a business return this may be allowed.

On the other hand, if you are a renter the landlord gets many more deductions allowed for owning the property. If everyone was renters just where would you get housing.

The portion of the tax code is those who get their incomes from capital gains is too damn low, put the capital gains up with incomes of working folks. Halt the off shore tax havens enjoyed by people and corporations alike. Make everyone responsible for maintaining our military. Charitable deductions allow those with means incentives to donate of which was not available may never give to those in need.

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 09:50 PM

145. Let's Tax Offshore Wealth

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Response to Octafish (Reply #145)

Mon Mar 24, 2014, 12:04 AM

149. +1. Have no use for folks who made money here and hid it.

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Response to Octafish (Reply #145)

Mon Mar 24, 2014, 05:55 PM

158. I'd be all for that. nt

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Response to Sarah Ibarruri (Original post)

Sun Mar 23, 2014, 10:00 PM

146. I heard from Thom Hartman that

the average American household pays $36 per year in taxes for food stamps and anywhere between $800-$1,600 for tax breaks for big business (iirc). Just think of how many children, elderly people, and vets we could feed if we didn't give big corporations all that money. I don't know if it would completely solve our hunger problem, but it would be one hell of a start.

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Response to Lunacee_2013 (Reply #146)

Mon Mar 24, 2014, 05:54 PM

157. Lunacee - I would be very interested in reading about that. Wouldn't surprise me! nt

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Response to Sarah Ibarruri (Reply #157)

Wed Mar 26, 2014, 01:44 AM

200. Here's a link (sorry I don't know how to make it small):

http://www.examiner.com/article/a-person-making-50-000-a-year-pays-10-cents-a-day-taxes-for-food-stamps

It covers a couple of different things, but shows the math behind the food stamp fact.

ETA: Two more links on the money, our tax dollars, that big business takes:

http://www.alternet.org/economy/average-american-family-pays-6000-year-subsidies-big-business

http://billmoyers.com/2013/09/24/average-american-family-pays-6k-a-year-in-subsidies-to-big-business/

According to the last two stories, BB takes around $6,000 in subsidies from every tax paying American house hold each year.

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Response to Sarah Ibarruri (Original post)

Mon Mar 24, 2014, 12:28 AM

151. No kidding

fucking assholes...and they are the same shitwipes that wine about the poor and those needing help.

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Response to gopiscrap (Reply #151)

Mon Mar 24, 2014, 05:53 PM

156. Exactly. The same ones whining about the poor and homeless are bleeding the country dry nt

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Response to Sarah Ibarruri (Original post)

Mon Mar 24, 2014, 02:31 PM

154. I wish I could rec this a thousand times! One of the most important

things that gets under reported by the millionaires and billionaires on their privately owned news stations!

CORPORATE WELFARE...billion and billions...not a peep...gee real hard to figure out. NOT.

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Response to Rex (Reply #154)

Mon Mar 24, 2014, 05:53 PM

155. Thank you! Corporate welfare is like a broken faucet from which the water is shooting out non-stop

If that "FAUCET" were fixed, our country would be doing a thousand times better.

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Response to Sarah Ibarruri (Reply #155)

Mon Mar 24, 2014, 06:04 PM

164. It would! Nobody wants to talk about it, but boy do they love to beat up on

social welfare!

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Response to Rex (Reply #164)

Mon Mar 24, 2014, 06:16 PM

169. They're like the Nazis - creating scapegoats so no one realizes what THEY are doing. nt

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Response to Sarah Ibarruri (Original post)

Wed Mar 26, 2014, 06:47 AM

201. k&r for the truth. n/t

-Laelth

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Response to Sarah Ibarruri (Original post)

Wed Mar 26, 2014, 09:20 AM

211. Most business deductions are 100% necessary.

Taxing incomes is the fairest way for a government to raise money. Sales taxes favor the wealthy because they don't need to spend most of their income like poorer folks do. Wealth taxes punish savers and reward spendthrifts who buy luxury cars and McMansions.

So taxing income is the way to go. You make money; you pay taxes.

But what is "income"? That's the $64,000 question.

If someone has a steel fabrication business that brings in $100,000 a year, should he have to pay tax on the entire $100,000? What if he's spending $80,000 on raw steel and only clearing $20,000? Shouldn't he be able to deduct the cost of his materials?

The general rule is whether or not the expenses are ordinary and necessary expenses incurred in the generation of the income.

If we did not allow deductions for ordinary and necessary business expenses, most labor or capital-intensive businesses in America would be forced to close their doors. Only businesses with a net margin greater than the tax rate would be able to survive.

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Response to dawg (Reply #211)

Wed Mar 26, 2014, 09:58 AM

216. it sounds like she wouldn't let you deduct business losses

while insisting that you get taxed on all income (even if you had no profits) because you owe society for supporting your success.

Because, oh yeah, you had absolutely nothing to do with your own success. It was society that put in all the hours and took the risks.



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Response to mainer (Reply #216)

Wed Mar 26, 2014, 10:21 AM

218. Her heart's in the right place.

Rich people shouldn't get unfair tax advantages. And we all know that they do. But deducting ordinary and necessary businesses expenses is not one of those unfair advantages. Nor is deducting capital losses against capital gains.

Now that special lower tax rate for long-term capital gains ....

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Response to Sarah Ibarruri (Original post)

Wed Mar 26, 2014, 10:03 AM

217. The more you spend, the more you save.

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Response to Boom Sound 416 (Reply #217)

Wed Mar 26, 2014, 10:25 AM

220. For every dollar you spend, you save ... like 35 cents. Do that long enough and ...

you'll be broke as hell.

No one saves money by purchasing things they do not need. Regardless of whether they need them or not.

Until the tax rate reaches 100%, it is always better to pay your tax and keep what is left over.

Every December I get two or three calls from clients. "dawg, should I buy a new work truck before year-end?"

My standard answer is "Do you need one?".

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Response to dawg (Reply #220)

Wed Mar 26, 2014, 10:29 AM

221. Agreed. But my comment is about incentive,as well as,

Double taxing.

I buy equipment every year and take advantage of the deductions, but as you point out (and I agree) I don't do as a way to save on my tax burden.

What's the saying, 'you don't get rich by writing checks.'

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Response to dawg (Reply #220)

Wed Mar 26, 2014, 05:08 PM

224. As a tax CPA, I laughed and appreciate your comment

I wish I could count how many times people buy shit they don't need because they can "write it off."

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Response to joeglow3 (Reply #224)

Wed Mar 26, 2014, 06:09 PM

226. "Write it off what?!"...

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