Home › Forums › Financial Markets/Economics › Good fact based WSJ article on who pays taxes in America
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August 8, 2012 at 12:19 AM #749686August 8, 2012 at 12:27 AM #749687
CA renter
Participant[quote=Allan from Fallbrook][quote=ocrenter][quote=flu][quote=Allan from Fallbrook]Tax evasion is a crime.
Tax avoidance is a Constitutionally guaranteed right.[/quote]
Yes, and as long as romney followed the rules, I don’t see a problem with it at all.[/quote]
You don’t have a problem that Bain capital as well as other private equity firms spent millions to lobby for carried interest tax break that allow Romney to essentially follow his own rules on taxes?[/quote]
OCR: Oh, hell yeah, I have a problem with that. I have a problem with corporate welfare, too, and agribusiness subsidies and how the Pentagon is now a finishing school for the Military-Industrial Complex.
Like I said earlier: We (meaning us proles who aren’t in the oligarchy) have NO advocates in the professional political class and, yes, Brian, that includes BOTH the Dems and the GOP.
They don’t call the Senate the “Millionaire’s Club” for no reason.
Obama is about “authentically” black as Al Jolson. He’s as much a member of the 1% as Romney, given his background, which includes private prep, the Ivy League and law school. Okay, so he doesn’t have a bajillion dollars like Romney, but, believe you me, his net worth is considerable.
We need sweeping reform and we aren’t likely to get it. And I’d ask why. None of the problems we face as a nation are insoluble, nor are they insurmountable. To me, it looks like Simpson-Bowles came up with some good solutions. Why weren’t they implemented? I’m no expert on securities law, but it seems patently obvious that some seriously shady shit went down on Wall Street. Yet, no prosecutions. Hmmm, odd. We’re sitting idly by, while our government performs targeted assassinations of American citizens, intrudes into every aspect of our lives and blithely conducts wars without so much as a how-do-you-do.
We, as a nation, have been subjected to two generations of outright bullshit from our supposed “leaders” and now have fewer rights, less money and less freedom, while we’re busy fighting each other over stupid shit like gay marriage. And, no, Brian, I don’t mean gay marriage is stupid, I mean it’s a contrived “issue” that is sufficiently divisive to keep our focus off what’s really happening.
End rant.[/quote]
That was very, very well said, Allan. Thank you.
August 8, 2012 at 12:28 AM #749685
CoronitaParticipant[quote=KSMountain][quote=flu] …just like I have an issue with General Electric paying to income taxes. Minute distinction.[/quote]
I think the “GE pays no taxes” meme is over done and overly simplistic.GE was founded in 1892. You think they’ve never paid taxes all that time? Don’t you think the amount they pay varies year by year?
Their 2012 net income according to Wiki will be about $14 billion on revenue of $147 billion. You think they aren’t paying all sorts of taxes of various kinds on that, in many different countries?
As we all know, if your business has a losing year, you will pay less taxes that year. Maybe no income taxes if in aggregate your expenses exceed your income. Of course if you do that year after year you won’t be in business for long.
Here’s a quote, admittedly from a company spokesman:
GE paid an effective global tax rate of 7 percent in 2010, counting money paid “to the IRS and foreign counterparts” in other nations. That rate was particularly low, Williams said, because the company lost $32 billion in its financial business during the global financial crisis.
According to the company release, GE’s effective tax rate jumped to 29 percent in 2011. The company paid $2.9 billion in worldwide corporate income tax in 2011, and another $1 billion in other U.S. taxes that year, the release states.[/quote]
I didn’t mean literally paid no taxes. I was being facetious.
But this…
(corporate repatriation tax issue)
is what I’m referring to…
Before anyone suggests that upper middle class w2 slave “rich” should pay more taxes….Read this article, and tell me why the hell are we taxing individual more again, and not addressing these fundamental issues? All yes, that’s right because regardless of which political party politicians are in, it would be political suicide to really try to fix the the real problem…So let’s just gloss over it by taxing the upper middle class more…
So…If you’re really not going to fix the real problem with a real solution don’t raise taxes for anyone. Then when we can’t afford to pay our bills, deal with it then, when the government really will need to make some tough choices and really take cutting spending more seriously…
For the lazy (inclusive),
BTW: in 2004…repatriation tax was 5.25%…Imagine that…Or better yet, let’s keep the profits overseas and borrow money domestically so that we get a lower tax treatment in the U.S. while in countries we operate (like China), we already enjoy very low corporate taxes..
Gee, if you thought it was nice to be a rich individual, it must be really nice to be a corporate conglomerate…
Cash Hoard Grows By $187 Billion In Untaxed Overseas ProfitsU.S. companies led by General Electric Co. (GE) and Pfizer Inc. (PFE) stockpiled an additional $187 billion in untaxed overseas profits over the past year, boosting their offshore holdings by 18.4 percent, according to data compiled by Bloomberg.
The 70 U.S.-based companies studied hold $1.2 trillion in profits around the world. GE and Pfizer have built up the most money outside the U.S., with $102 billion and $63 billion respectively, according to securities filings. Apple Inc. (AAPL), Google Inc. (GOOG) and Microsoft Corp. (MSFT) were among the companies that increased their accumulated overseas profits by more than 40 percent in 2011.s U.S.-based companies expand globally, they keep profits overseas, legally out of the reach of the Internal Revenue Service. Lawmakers from both political parties point to the stockpiling as a symptom of a failed corporate tax system, even while they remain deadlocked over whether the U.S. should impose higher or lower taxes on its companies’ global profits.
“You’re seeing more and more business go on overseas, because that’s where an increasing amount of the global purchasing power is,” said Matt Miller, director of public policy at the Business Roundtable, a Washington-based association of chief executives at large companies that backs lower taxes on overseas profits. “We need to get a competitive tax system that is not antiquated and has all the complexities we have today.”
Worldwide Profit Tax
Under the U.S. tax code, the top corporate rate is 35 percent on worldwide profits. Companies receive credits for payments to other governments, and they can defer taxation while the money accumulates. When companies bring their profits home, they pay U.S. taxes after subtracting the foreign tax credits.
Democrats, including President Barack Obama, maintain that the system encourages companies to move jobs and profits overseas. He has proposed a global minimum tax on foreign profits.
Republicans, including Dave Camp of Michigan, the top tax- writer in the House of Representatives, make the opposite argument. They say the residual tax that U.S. corporations face makes them less competitive in global markets and discourages companies from reinvesting their profits at home.
Andrew Williams, a spokesman for Fairfield, Connecticut- based GE, said the company’s operations around the world support U.S. facilities that produce goods for export.
Broader Tax Base
“We believe fundamental tax reform would increase domestic investment, create high-quality jobs and encourage U.S. multinationals to reinvest more overseas earnings in the U.S.,” he said in an e-mailed statement. “We support a broader tax base, lower statutory corporate tax rate and adoption of a territorial tax system even if it means higher taxes for companies like GE.”
Bloomberg analyzed the public filings of 70 U.S.-based companies that had reported at least $4 billion in untaxed overseas profits as of this time last year. The data include information from the two most recent annual reports — covering the years ending Dec. 31, 2011, and Dec. 31, 2010, for most companies.
A May 2011 study by JPMorgan Chase & Co. found that U.S. companies had $1.375 trillion in undistributed foreign earnings. Last year’s total of $1 trillion held overseas by the 70 companies in the data compiled by Bloomberg made up about three- quarters of the total amount cited by JPMorgan.
Low-Tax Countries
As a result, the latest data suggest that, in all, U.S. companies have more than $1.6 trillion outside the country. The total includes cash and investments in assets such as factories and active businesses.
Companies typically bring home money earned in high-tax jurisdictions that can be offset with foreign tax credits and keep profits earned in low-tax countries outside the U.S., said Edward Kleinbard, former chief of staff of the congressional Joint Committee on Taxation.
“The companies continue to reap the harvest of their years of aggressive tax planning to locate as much of their profits as possible in low-tax foreign jurisdictions,” he said.
Representatives of several of the companies, including Pfizer and Citigroup Inc. (C), said they keep money outside the U.S. to support their international businesses.
‘Matter of Course’
“Citi maintains a presence in more than 100 countries and some of its earnings are retained outside of the U.S. to provide the necessary capital to fund its international operations,” said Jon Diat, a spokesman for Citigroup, which increased its accumulated overseas profits to $35.9 billion from $32.1 billion.
Joan Campion, a Pfizer spokeswoman, said the company repatriates profits “as a matter of course.” That strategy gives Pfizer a higher effective tax rate than its competitors, its chief financial officer, Frank D’Amelio, told investors on a conference call Jan. 31.
Some tax policy analysts, including law professor Thomas Brennan of Northwestern University in Chicago, say companies are holding money outside the U.S. in part because they are waiting for Congress to repeat a 2004 tax holiday law that set a maximum tax rate for repatriation of 5.25 percent.
“Why not do it?” he said. “It’s pure upside. In the worst-case scenario, you’re going to be taxed as you would have been in any event.”
Issuing Debt
Many large companies can meet their cash needs by issuing debt in the U.S. without tapping their offshore holdings, Brennan said.
A coalition of U.S.-based companies, including Google, Cisco Systems Inc. (CSCO), Qualcomm Inc. (QCOM) and Oracle Corp. (ORCL), has been lobbying for the past year for a repatriation holiday.
“Google’s practices are very similar to those at countless other global companies operating across a wide range of industries, such as technology, pharmaceuticals and retail,” Google said in an e-mailed statement.
The temporary repatriation proposal hasn’t advanced in Congress. Obama opposes a one-time tax holiday, arguing that it would be a giveaway to big corporations.
Doug Thornell, an adviser to the pro-repatriation coalition, called the inaction a “missed opportunity” for Congress.
“The money keeps piling up while Washington fiddles,” he said in a statement.
Permanent Change
Other companies, including International Business Machines Corp., have emphasized a permanent change and not a one-time holiday.
Camp has said he prefers to address repatriation as part of a tax-code overhaul. His draft proposal would shift the U.S. to a territorial tax system that exempts 95 percent of foreign profits. That would resemble the systems of other major economies, such as the U.K., Japan and Germany.
All four Republican presidential candidates have endorsed a territorial tax system. In an essay in the Boston Herald yesterday, Mitt Romney wrote that companies will continue to park profits outside the U.S.
“With our high rates and our punitive incentives, we are shooting ourselves in the foot with a machine gun,” he wrote. “This has to end and I will end it.”
Under the Obama or the Camp approach, the accumulated offshore profits must be addressed, said Kleinbard, now a law professor at the University of Southern California in Los Angeles.
Camp Proposal
“It would be extraordinarily and unnecessarily complicated to imagine a world in which old earnings were taxed one way and new earnings taxed a different way,” he said.
Camp has proposed a 5.25 percent tax on the accumulated offshore profits to finance a transition to a territorial system. In his proposal, that one-time revenue would help offset the cost of the territorial system.
Representative Kevin Brady, a Texas Republican, has sponsored a bill for a repatriation tax holiday. He said the punitive nature of the U.S. tax code is illustrated by the growth in offshore holdings.
“It’s both a cry for immediate repatriation and an assurance for fundamental tax reform that there will still be stranded profits,” Brady said in an interview. “The pot will still be large and I think it will continue to grow exponentially.”
August 8, 2012 at 12:42 AM #749689Participantflu,
You’re hyper-focused on tax rates for upper-middle income earners who’ve EARNED their income.
Can we agree that ALL income should be taxed at the same rate — passive as well as earned income? And no BS about “job creators.” We’ve had historically low tax rates this past ~decade, and our job base has been shrinking dramatically. We haven’t seen a mess like this since just before the Great Depression…and the years just prior to the GD happened to be the last time we saw such low tax rates. They also happened to coincide with a credit bubble and huge growth in wealth/income inequality, too. It just might not be a coincidence.
August 8, 2012 at 12:44 AM #749690CoronitaParticipant[quote=CA renter]flu,
You’re hyper-focused on tax rates for upper-middle income earners who’ve EARNED their income.
Can we agree that ALL income should be taxed at the same rate — passive as well as earned income? And no BS about “job creators.” We’ve had historically low tax rates this past ~decade, and our job base has been shrinking dramatically. We haven’t seen a mess like this since just before the Great Depression…and the years just prior to the GD happened to be the last time we saw such low tax rates. They also happened to coincide with a credit bubble and huge growth in wealth/income inequality, too. It just might not be a coincidence.[/quote]
Ok, I’ll play…Define “income”.
What is income?
August 8, 2012 at 12:54 AM #749691Participant[quote=flu] Attempting to lower one’s assessed values to tricks and games as to what Romney has done is purely legal and no different than anyone else trying to lower his/her tax burden. People who rail against Romney doing this better not have submitted his/her or her own reassessment request and/or tried to lower the assessed value by playing games at closing with the closing cost…Otherwise that’s a huge double standard there and an immediate loss of credibility imho.
[/quote]
Realtors (and others) will tell you all day long that the sellers are the ones paying the commissions. If the *sellers* are the ones paying the commission, then the commission should not be part of the price, right? If the commission IS included in the price, then it is the buyer who is paying the commission, and sellers should not be able to deduct these “selling expenses” from the gains on the sale of a property.
If the buyer pays commissions out-of-pocket, why should they be included in the sales price? If the buyer is the one paying the commissions, why can’t they add the costs to their cost basis when they sell? Why should buyers pay **property** taxes on **transaction** costs?
August 8, 2012 at 1:00 AM #749693Participant[quote=flu][quote=CA renter]flu,
You’re hyper-focused on tax rates for upper-middle income earners who’ve EARNED their income.
Can we agree that ALL income should be taxed at the same rate — passive as well as earned income? And no BS about “job creators.” We’ve had historically low tax rates this past ~decade, and our job base has been shrinking dramatically. We haven’t seen a mess like this since just before the Great Depression…and the years just prior to the GD happened to be the last time we saw such low tax rates. They also happened to coincide with a credit bubble and huge growth in wealth/income inequality, too. It just might not be a coincidence.[/quote]
Ok, I’ll play…Define “income”.
What is income?[/quote]
Money that is earned by working (earned income) or received as interest, cap gains, dividends, etc. Yes, the water gets muddy when one considers equity-based compensation, but maybe we need to take a closer look at how we handle compensation.
Either way, it doesn’t matter. If ALL types of income were taxed at the same (progressive) rates, that would go a long way toward solving our problems. That, and get serious about fraud and corruption. Again, the #1 place where you’ll see HUGE wastes of taxpayers’ money is where public money and private corporations intersect.
August 8, 2012 at 1:01 AM #749692CoronitaParticipant[quote=CA renter][quote=flu] Attempting to lower one’s assessed values to tricks and games as to what Romney has done is purely legal and no different than anyone else trying to lower his/her tax burden. People who rail against Romney doing this better not have submitted his/her or her own reassessment request and/or tried to lower the assessed value by playing games at closing with the closing cost…Otherwise that’s a huge double standard there and an immediate loss of credibility imho.
[/quote]
Realtors (and others) will tell you all day long that the sellers are the ones paying the commissions. If the buyer pays commissions out-of-pocket, why should they be included in the sales price? If the buyer is the one paying the commissions, why can’t they add the costs to their cost basis when they sell? Why should buyers pay **property** taxes on **tranaction** costs?[/quote]
That’s not usually what happens.
What usually happens is the followingSuppose a house is listed at $1million as fair market value let’s just say for purchased of discussion total closing cost is 7%.. I know that’s high.
1. In a normal transaction, buyer pays $1million for the home, seller gets $1million and pays 7% $70k to agent,escrow,etc.
In terms of property tax, $1million is assessed value, and buyer is taxed accordingly…
2. In some transactions, buyer tells seller hey, sell me the house for $930k, and I’ll pay the $70k that normally you would have paid. From sellers, perspective it’s a wash. From buyer’s perspective assessed value is now at $930k.
Legal? Yes…Dodging taxes? Definitely…Again, the key here is what was the intent. The intent was really to get around paying more taxes.
Anything wrong with it?…Not any more wrong that Romney hiring a bunch of lawyers to reduce his/her assessment, with the exception of Romney having a lot more firepower. It’s no different than folks try to skirt paying sales tax.Bottomline, is it’s always easier for say someone else should pay more taxes. But no one really wants to “do their part”…Everyone just wants someone else to do “their part”.
August 8, 2012 at 1:09 AM #749694Participant[quote=flu][quote=CA renter][quote=flu] Attempting to lower one’s assessed values to tricks and games as to what Romney has done is purely legal and no different than anyone else trying to lower his/her tax burden. People who rail against Romney doing this better not have submitted his/her or her own reassessment request and/or tried to lower the assessed value by playing games at closing with the closing cost…Otherwise that’s a huge double standard there and an immediate loss of credibility imho.
[/quote]
Realtors (and others) will tell you all day long that the sellers are the ones paying the commissions. If the buyer pays commissions out-of-pocket, why should they be included in the sales price? If the buyer is the one paying the commissions, why can’t they add the costs to their cost basis when they sell? Why should buyers pay **property** taxes on **tranaction** costs?[/quote]
That’s not usually what happens.
What usually happens is the followingSuppose a house is listed at $1million as fair market value let’s just say for purchased of discussion total closing cost is 7%.. I know that’s high.
1. In a normal transaction, buyer pays $1million for the home, seller gets $1million and pays 7% $70k to agent,escrow,etc.
In terms of property tax, $1million is assessed value, and buyer is taxed accordingly…
2. In some transactions, buyer tells seller hey, sell me the house for $930k, and I’ll pay the $70k that normally you would have paid. From sellers, perspective it’s a wash. From buyer’s perspective assessed value is now at $930k.
Legal? Yes…Dodging taxes? Definitely…Again, the key here is what was the intent. The intent was really to get around paying more taxes.
Anything wrong with it?…Not any more wrong that Romney hiring a bunch of lawyers to reduce his/her assessment, with the exception of Romney having a lot more firepower. It’s no different than folks try to skirt paying sales tax.Bottomline, is it’s always easier for say someone else should pay more taxes. But no one really wants to “do their part”…Everyone just wants someone else to do “their part”.[/quote]
Okay, but let’s say that “fair market value” is based on other sales in the neighborhood. Those sales might (probably) include the commissions in the price of the house. Should the next seller have to pay a higher price because the commissions were baked into the sales prices of neighboring homes?
Tell you what I’ve seen FAR, FAR, FAR more often than buyers paying commission costs: idiot buyers who wrap all the transaction costs into the price of a home. How many times have we seen sellers pay a portion of the buyers’ closing costs and downpayment? Should the next buyer have to pay a higer price because the reported price of the idiot’s house is artificially inflated with all of the “seller assist” goodies?
August 8, 2012 at 2:39 AM #749695ParticipantSince we’re talking about taxes and “the rich,” let’s discuss the whole meme regarding risk and reward.
Far too often, we hear that “the rich” earned their wealth by taking risks that others wouldn’t take. Personally, I think that people should be entitled to whatever they can get **IF** they are the ones who are actually taking the risk (as opposed to risking other people’s money and livlihoods), and IF they are the ones who will suffer 100% of the consequences of these risks. In other words, no corporate veil or limited liability, no bankrupting the company and stiffing vendors, employees, lenders, and investors, etc. In every case I’ve seen, the ones who reap the greatest rewards are those who are most insulated from the consequences of their own actions.
Here’s a good piece on fraud settlements and who is paying for them:
WASHINGTON — Pharmaceutical companies, military contractors, banks and other corporations are on track to pay as much as $8 billion this year to resolve charges of defrauding the government, analysts say — a record sum and more than twice the amount assessed last year by the Justice Department.
…But while the collections are a boon to the government and taxpayers, they are resurrecting questions about the relative lack of charges against executives at the companies that are getting the stiffest penalties.
“A lot of people on the street, they’re wondering how a company can commit serious violations of securities laws and yet no individuals seem to be involved and no individual responsibility was assessed,” Senator Jack Reed, Democrat of Rhode Island and chairman of a subcommittee that oversees securities regulation, said at a recent hearing.
President Obama, lawmakers and government watchdog groups have called for holding more individuals responsible. The Justice Department has collected $8.6 billion over the last three years, more than in any similar period in history, but relatively few prosecutions of individuals have come from the biggest settlements.
August 8, 2012 at 7:28 AM #749715ocrenter
Participantback to the OP.
I hope you realize from the ongoing discussion that the 5% is not “the rich”, rather, we are pawns in a tug of war fought between two groups owing their patronage to people that do not work (be it the entitlement underclass or the entitlement 1%). btw, the non-workers ultimately have more voice because, guess what, they have time to kill! (interesting how the mediapiece of the 1%, WSJ, wanted you to think you are “the rich” by graphing you in with them.)
both groups want you to think you are “the rich” because it ultimately help their own cause. the 1% hide behind our struggles as proof that taxes are still too high for them. meanwhile, the entitlement underclass continue to look to us for handouts because obviously they’re not going to get it from “the rich.”
ultimately the strategy may simply to split the ticket once again. for me, the thought that an entrenched lifetime member of the oligarchy now as the president? I’m going to have to go with the lesser evil. as for the congress, keep the GOP in so the paralysis can continue. what a hard pill to swallow.
August 8, 2012 at 7:29 AM #749714Anonymous
Guest[quote=Allan from Fallbrook][quote=briansd1][quote=Allan from Fallbrook] while we’re busy fighting each other over stupid shit like gay marriage. And, no, Brian, I don’t mean gay marriage is stupid, I mean it’s a contrived “issue” that is sufficiently divisive to keep our focus off what’s really happening.
End rant.[/quote]
Abortion and gay marriage are contrived issues only by those who’ve contrived them.
On abortion, the issue was settled a long time ago but conservatives keep on wanting to reflight a lost flight.
On gay marriage, legalize it and be done with it like other advanced countries in the world. It’s only an issue for the conservative side.
Like I said before, conservatives will cave sooner or later. So might as well give up now so that the country can move forward.
We will continue to have legal abortion. It could be 10 years or 5 decades, but gay marriage will be legal at the Federal level. Mark my words.
With a Democrat in the White House and Democratic nominee to the Supreme Court, we will put those “contrived” issues to rest sooner rather than later. So, Allan, they are not “all the same.” One side is better than the other.[/quote]
Brian: Go have a cookie and sit in the corner. The adults are talking.
You have now officially turned your brain off and decided to propagandize yourself into oblivion.
How on earth can you, as a supposedly intelligent, rational human being, ever believe in one side being COMPLETELY RIGHT 100% OF THE TIME and the other side being COMPLETELY WRONG 100% OF THE TIME? Dude. And then you turn and accuse FLU of a false equivalence. Sweet bearded Lord Jesus. None is so blind as he who will not see…[/quote]
[Emphasis mine]
The word “strawman” is pretty popular around here. Many use it to describe any argument that they don’t like. But “strawman” actually has a more specific definition.
The text in bold above is perhaps the best example of a strawman we’ve ever seen on this site.
Brian has never claimed that any “side” is “completely right 100% of the time.” (How would you explain his position on public pensions?)
Brian has a position and makes arguments to support it. Although I don’t always agree with his positions, I respect the fact that stands up for them. We actually know what Brian is about.
Some people refuse to take any position. But they have plenty to say about everyone else.
Give it up Allan, both parties aren’t the same. They both have flaws, but they have very different agendas. Neither has all the solutions, but only one has been overwhelmed by extremism. That is the key difference.
It’s somewhat painful to watch Allan struggle with his “both parties are the same” arguments. The claim is so obviously wrong and, as Brian frequently demonstrates to Allan, so easy to refute.
Yeah Allan, it’s a shame that conservative America has been overwhelmed by nutcases. I’m sorry that the American version of conservative has now been redefined by the likes of Bachmann, Limbaugh, and Santorum. It’s too bad that there are so few significant reasoned conservative voices in the media.
It sucks that “conservative” no longer has anything to do with fiscal priorities, and now has everything to do with believing that Jesus wrote the Constitution and that going to chicken restaurants is an effective way to support righteous bigotry.
But attacking Brian with weak and desperate arguments isn’t going to change any of that. The Republican party is f#ked up, big time. Allan chooses to sidestep this reality with hopeless attempts to equate the two parties.
“Our political class has failed us” is weak sauce. Politicians have always been politicians, but as voters we do have choices and there are difference between those choices.
Allan, we’ve got another election coming up and the American people need to make a choice. Yup, it’s a choice between imperfect, perhaps even crappy, alternatives – but we still have to make the choice. Are you going to be decisive and make a choice? It’s not clear from your posts, which are rarely more than vocabulary strewn complaints mixed with political references – there is no substance whatsoever. The continuous name-dropping adds no value to the conversation.
If you actually stand for something or someone, then man-up and advocate your position, like Brian does.
Otherwise quit being a crybaby.
August 8, 2012 at 7:47 AM #749719CoronitaParticipant[quote=ocrenter]back to the OP.
I hope you realize from the ongoing discussion that the 5% is not “the rich”, rather, we are pawns in a tug of war fought between two groups owing their patronage to people that do not work (be it the entitlement underclass or the entitlement 1%). btw, the non-workers ultimately have more voice because, guess what, they have time to kill! (interesting how the mediapiece of the 1%, WSJ, wanted you to think you are “the rich” by graphing you in with them.)
both groups want you to think you are “the rich” because it ultimately help their own cause. the 1% hide behind our struggles as proof that taxes are still too high for them. meanwhile, the entitlement underclass continue to look to us for handouts because obviously they’re not going to get it from “the rich.”
ultimately the strategy may simply to split the ticket once again. for me, the thought that an entrenched lifetime member of the oligarchy now as the president? I’m going to have to go with the lesser evil. as for the congress, keep the GOP in so the paralysis can continue. what a hard pill to swallow.[/quote]
Lol… So you’re adopting my mantra that if you put equal number of republitards and democraps in office, they can’t agree on how to waste your money? Yeah, that’s my party line…
Question is. Who’s gonna control house and senate in upcoming elections. If it turns out to be a GOP thing, wouldn’t it make sense to keep ineffective-no-obamator in office, so we don’t get Bush era craziness again?
August 8, 2012 at 7:59 AM #749720CoronitaParticipant[quote=CA renter][quote=flu][quote=CA renter][quote=flu] Attempting to lower one’s assessed values to tricks and games as to what Romney has done is purely legal and no different than anyone else trying to lower his/her tax burden. People who rail against Romney doing this better not have submitted his/her or her own reassessment request and/or tried to lower the assessed value by playing games at closing with the closing cost…Otherwise that’s a huge double standard there and an immediate loss of credibility imho.
[/quote]
Realtors (and others) will tell you all day long that the sellers are the ones paying the commissions. If the buyer pays commissions out-of-pocket, why should they be included in the sales price? If the buyer is the one paying the commissions, why can’t they add the costs to their cost basis when they sell? Why should buyers pay **property** taxes on **tranaction** costs?[/quote]
That’s not usually what happens.
What usually happens is the followingSuppose a house is listed at $1million as fair market value let’s just say for purchased of discussion total closing cost is 7%.. I know that’s high.
1. In a normal transaction, buyer pays $1million for the home, seller gets $1million and pays 7% $70k to agent,escrow,etc.
In terms of property tax, $1million is assessed value, and buyer is taxed accordingly…
2. In some transactions, buyer tells seller hey, sell me the house for $930k, and I’ll pay the $70k that normally you would have paid. From sellers, perspective it’s a wash. From buyer’s perspective assessed value is now at $930k.
Legal? Yes…Dodging taxes? Definitely…Again, the key here is what was the intent. The intent was really to get around paying more taxes.
Anything wrong with it?…Not any more wrong that Romney hiring a bunch of lawyers to reduce his/her assessment, with the exception of Romney having a lot more firepower. It’s no different than folks try to skirt paying sales tax.Bottomline, is it’s always easier for say someone else should pay more taxes. But no one really wants to “do their part”…Everyone just wants someone else to do “their part”.[/quote]
Okay, but let’s say that “fair market value” is based on other sales in the neighborhood. Those sales might (probably) include the commissions in the price of the house. Should the next seller have to pay a higher price because the commissions were baked into the sales prices of neighboring homes?
Tell you what I’ve seen FAR, FAR, FAR more often than buyers paying commission costs: idiot buyers who wrap all the transaction costs into the price of a home. How many times have we seen sellers pay a portion of the buyers’ closing costs and downpayment? Should the next buyer have to pay a higer price because the reported price of the idiot’s house is artificially inflated with all of the “seller assist” goodies?[/quote]
Um.. sure if you say so…But like I said, majority of the people don’t do this when they buy a house. And doing this goes against the norm, with the only the purpose of paying less taxes than the norm. If in doubt. Take a poll of people on piggington and ask them if they paid for the seller’s closing cost to have the price of the home lowered. I would venture to same most people didn’t do this. And there’s really no benefit except to have a lower assesed value so one doesn’t need to pay their fair share of taxes.
But then again, I’m not one to judge…I don’t have issues with anyone trying to legally maneuver to pay less taxes. I just think it’s fairly hypocritical for folks that do this would also expect other people to “pay more taxes”….when the same folks are doing everything possible and every possible maneuver to pay less, while simultaneously telling others should pay more.
August 8, 2012 at 7:59 AM #749717Guest[quote=ocrenter]back to the OP.
I hope you realize from the ongoing discussion that the 5% is not “the rich”, rather, we are pawns in a tug of war fought between two groups owing their patronage to people that do not work (be it the entitlement underclass or the entitlement 1%). btw, the non-workers ultimately have more voice because, guess what, they have time to kill! (interesting how the mediapiece of the 1%, WSJ, wanted you to think you are “the rich” by graphing you in with them.)
both groups want you to think you are “the rich” because it ultimately help their own cause. the 1% hide behind our struggles as proof that taxes are still too high for them. meanwhile, the entitlement underclass continue to look to us for handouts because obviously they’re not going to get it from “the rich.”
ultimately the strategy may simply to split the ticket once again. for me, the thought that an entrenched lifetime member of the oligarchy now as the president? I’m going to have to go with the lesser evil. as for the congress, keep the GOP in so the paralysis can continue. what a hard pill to swallow.[/quote]
One thing that missed in these discussions is the steepness of the curve at the top. Most of us here are in the top 5%, few here are anywhere near the top 1%, (and certainly nowhere near the top 0.1% – the group that has huge influence.)
Also, I personally think the magnitude of “entitlement underclass” is exaggerated, and for sure their demographics are widely misunderstood. The “welfare queen” stereotype has some roots in reality, but the fiscal impact of benefits to the very poor is overstated, especially relative to other costs. There is an “entitlement class” but I don’t know if it is an “underclass.” Lots of old folks getting SS and Medicare are squarely in the middle class.
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