Is There a Home-Sale Tax to Pay for ‘Obamacare’?

[ocrenter]

[quote=flu]Bump so the $400k/450k limits for the 20% cap gain tax rate IS incremental.

But it’s a pretty f..d up law.

Basically, it punishes wage earners that make that income in the majority in income, while it’s much for forgiving on people who are hitting those limits via capital gains…

For joint filers, if your AGI is $500k for example, it depends on where that income is coming from.

If $450k was from your W2/1099 and $50k was from capital gains, then what ends up happening is the entire $50k in capital gains gets taxed at 20%.

If, however, your W2/1099 income was $200k, and your capital gains was $300k, then $250k of your capital gains get’s taxed at 15% (up to the $450k threshold) and the remaining $50k of your capital gains gets taxed at 20%.

So who loses in this?

1) Doctors/lawyers who get most of their income as wages.

Who wins?

2) I’m guessing people who get their AGI mostly from investments…

Lol….

http://fffcpas.com/news/2013/02/04/how-do-i-compute-the-new-20-percent-net-capital-gain-rate-under-the-new-tax-law/%5B/quote%5D

agree the 5%ers are always getting screwed by the 1%ers. yet when it come time for their class warfare, we are suppose to have their back.

[Coronita]

[quote=ocrenter][quote=flu]Bump so the $400k/450k limits for the 20% cap gain tax rate IS incremental.

But it’s a pretty f..d up law.

Basically, it punishes wage earners that make that income in the majority in income, while it’s much for forgiving on people who are hitting those limits via capital gains…

For joint filers, if your AGI is $500k for example, it depends on where that income is coming from.

If $450k was from your W2/1099 and $50k was from capital gains, then what ends up happening is the entire $50k in capital gains gets taxed at 20%.

If, however, your W2/1099 income was $200k, and your capital gains was $300k, then $250k of your capital gains get’s taxed at 15% (up to the $450k threshold) and the remaining $50k of your capital gains gets taxed at 20%.

So who loses in this?

1) Doctors/lawyers who get most of their income as wages.

Who wins?

2) I’m guessing people who get their AGI mostly from investments…

Lol….

http://fffcpas.com/news/2013/02/04/how-do-i-compute-the-new-20-percent-net-capital-gain-rate-under-the-new-tax-law/%5B/quote%5D

agree the 5%ers are always getting screwed by the 1%ers. yet when it come time for their class warfare, we are suppose to have their back.[/quote]

2-5%’ers get hit on the freeway both ways. It doesn’t matter who’s in charge. Rich people think you’re middle class. And middle class thinks your rich… You’re screwed both ways… You end up bearing the brunt of class warfare both ways…It’s been like that for some time…heh heh…

I stopped caring about my “salary” increase for some time. Those 4-6% increases might be able to pay for a few extra cups of starbucks coffee (which I don’t drink)…I’ll argue of stock compensation instead. Fortunately, I like what I’m doing…That and building up passive income for this very reason…Adapt, or die..

[no_such_reality]

[quote=CA renter]So…you’d finally agree with me that the fairest sort of tax system would tax ALL income at the same progressive rates?[/quote]

No the fairest tax system would tax all income like dividends. A flat rate.

Make $10,000, pay 15%, or $1500.
Make $100,000 pay 15%, or $15000.
Make $1,000,000 pay 15% or $150,000.

Then just provide a back credit to poverty level.

[spdrun]

I don’t have a huge problem with a progressive tax system that taxes lower levels of income less, so long as most types of income are taxed the same, and productive activity is encouraged.

i.e. people who hoard property for the depreciation without it being profitable should be slapped.

[Coronita]

[quote=no_such_reality][quote=CA renter]So…you’d finally agree with me that the fairest sort of tax system would tax ALL income at the same progressive rates?[/quote]

No the fairest tax system would tax all income like dividends. A flat rate.

Make $10,000, pay 15%, or $1500.
Make $100,000 pay 15%, or $15000.
Make $1,000,000 pay 15% or $150,000.

Then just provide a back credit to poverty level.[/quote]

Meh, I just want to know what the tax laws are so I can work around them and ensure I get screwed the least….

Personally, I’m fine with lower cap gain tax rates, simply because it’s one of the ways people can stop being a wage slave when they get to a point that they can no longer physically work.

But I just thought it was amusing that the tax on the “rich” was defined as such to mean income earned as wages would be taxed more than capital gains, considering that really rich people I think derive most of their wealth from capital gains….

Lol….

[SK in CV]

[quote=flu]But I just thought it was amusing that the tax on the “rich” was defined as such to mean income earned as wages would be taxed more than capital gains, considering that really rich people I think derive most of their wealth from capital gains….

Lol….[/quote]

If you’re referring to the medicare surtax which was part of the ACA, wages are not taxed more than capital gains. The rate is .9% on wages and 3.8% on net investment income.

[Coronita]

No I was referring to the convoluted way the 20% cap gain rate is determined

[SK in CV]

[quote=flu]No I was referring to the convoluted way the 20% cap gain rate is determined[/quote]

That’s not a tax on the rich. It applies to everyone. Capital gains tax preferences should be repealed in their entirety. Given the current economic conditions, there’s no good reason to tax profit from capital at a lower rate than income from working.

[CA renter]

[quote=no_such_reality][quote=CA renter]So…you’d finally agree with me that the fairest sort of tax system would tax ALL income at the same progressive rates?[/quote]

No the fairest tax system would tax all income like dividends. A flat rate.

Make $10,000, pay 15%, or $1500.
Make $100,000 pay 15%, or $15000.
Make $1,000,000 pay 15% or $150,000.

Then just provide a back credit to poverty level.[/quote]

Depends on what one would call “fair.” A flat tax is patently regressive.

Assuming everyone needs $100,000 in order to live at a particular level (just picking a number, not saying it’s true), then the person making close to that number will not be able to amass wealth in the same way that a person with $2MM in disposable wealth can, yet they will be taxed at the same rate.

Unless you exclude the first, say, $100K or $150K of income, a flat tax will be unnecessarily regressive and damaging to those who work for a living since those who “earn” more than a certain level make most of their money from investments.

So…the fairest tax is one that taxes ALL people’s income at the SAME, progressive rates. That way, everybody is taxed the same.

[Coronita]

[quote=SK in CV][quote=flu]No I was referring to the convoluted way the 20% cap gain rate is determined[/quote]

That’s not a tax on the rich. It applies to everyone.[/quote]

20% tax rate applies only to MAGI folks above $400k/450k. The rest still are at 15% level.

How is this not a tax on the wealthier..

[quote]
Capital gains tax preferences should be repealed in their entirety. Given the current economic conditions, there’s no good reason to tax profit from capital at a lower rate than income from working.
[/quote]

Fine by me. Again, my point was the irony in the rules for how the 20% cap gain tax rate kicks in…

[SK in CV]

[quote=flu][quote=SK in CV][quote=flu]No I was referring to the convoluted way the 20% cap gain rate is determined[/quote]

That’s not a tax on the rich. It applies to everyone.[/quote]

20% tax rate applies only to MAGI folks above $400k/450k. The rest still are at 15% level.

How is this not a tax on the wealthier..

Fine by me. Again, my point was the irony in the rules for how the 20% cap gain tax rate kicks in…[/quote]

I’m not sure how that’s ironic. Higher income, higher tax.

[poorgradstudent]

My god, you poor, poor people, paying taxes on your $250k profit on home sales.

Where’s my tiny violin?

[Coronita]

[quote=SK in CV][quote=flu][quote=SK in CV][quote=flu]No I was referring to the convoluted way the 20% cap gain rate is determined[/quote]

That’s not a tax on the rich. It applies to everyone.[/quote]

20% tax rate applies only to MAGI folks above $400k/450k. The rest still are at 15% level.

How is this not a tax on the wealthier..

Fine by me. Again, my point was the irony in the rules for how the 20% cap gain tax rate kicks in…[/quote]

I’m not sure how that’s ironic. Higher income, higher tax.[/quote]

$500k AGI in which most of it is from wages versus
$500k AGI in which most of it is from capital gains, and in both scenarios, they are taxed differently where the former ends up being more than than the later

Don’t you think that is kinda ironic, considering the entire purpose is to tax the rich more where as wealth accumulation by rich(er) people have been more rampant via capital gains versus “wage” income?

[livinincali]

[quote=flu]
Don’t you think that is kinda ironic, considering the entire purpose is to tax the rich more where as wealth accumulation by rich(er) people have been more rampant via capital gains versus “wage” income?[/quote]

Our current tax code is more about social engineering than attempting to fairly collect revenue to run the government. We want people to buy houses, have kids, invest in new businesses, encourage consumption, etc. Therefore we create all kinds of tax codes to encourage people to do things they might not otherwise do. Just tax all gross revenue streams the same and if you want, do it progressively. Taxing consumption would likely be the most fair way but it’s more difficult to tax consumption progressively.

[SK in CV]

[quote=flu]
Don’t you think that is kinda ironic, considering the entire purpose is to tax the rich more where as wealth accumulation by rich(er) people have been more rampant via capital gains versus “wage” income?[/quote]

I guess I just don’t get the bolded part. For the last 3 decades, Republicans have been fighting for just the opposite with their bogus claim that lower taxes on the rich is better because they’re “job creators”. It has become “conventional wisdom” among conservatives and Democrats have been, for the most part, not much better. Either accepting it or fighting weakly against it. It would be ironic if there was any significant movement to tax the rich. There just hasn’t been.

[Author]

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