[an]

joec, point is, we all chose our path based on what we’re good at and what we value. Just because we pick one path doesn’t mean we can’t point out the facts. I’ve never said it’s easy or not risky being a biz owner. I’m just pointing out the fact that there are stuff biz owner can write off that W2 earners can’t. Company cars is one example. Home office is another. However about computers, internet, cell phone, electricity, water, home remodel, etc. All of those cost W2 earner some serious change while biz owners gets all of those stuff before they even get to their taxable income. So, $100k is not $100k when comparing W2 vs small biz owner.

I know many small biz owners and I see what they’re putting in. I also see many hard working W2 earners who put in just as much time as those hard working biz owners, trying to move up the corp ladder. So, you can’t say one is easier than the other if you tried to get to the same level of income.

What I’m pointing out is, a small biz owners making $500k/year is much more well off than 2 W2 earner making $500k/year, since there are many things you can write off. Same can be said at $200k level as well or even $100k level.

Back to the original topic. My selfish side don’t mind if this passes. I will be net positive if this passes. But like you said, I don’t see this passing with the replucan controlled Congress. Yay for divided government.

[an]

[quote=SK in CV]Like most all other income taxes, I’m sure it will be a marginal increase. There won’t be a $40K increase in taxes with a $1 increase in income.

And I thought we were talking about the really rich. Those with income of $.5 million even without selling something big. They’ll get hit with it every year.[/quote]We’ll just have to wait and see. Since neither of us have seen the proposal, there’s no point is assuming.

$500k/year as a couple ain’t that rich. You’re talking about a husband/wife Sr. Director level or a couple of doctors or a couple of dentist, etc. These are not the really rich. The really rich are the CEO type who take $0 salary and everything as stock. They’re the one who can pick and choose when to sell and how much to sell. A couple of W2 working stiff aren’t the same as a couple of CEOs making millions.

[an]

[quote=SK in CV][quote=AN]does this touch the truly rich with 0 income and all cap gain and dividends?[/quote]

I suspect what you mean by 0 income is no wage or business income. Yes it does. It would increase the top marginal tax rate on long term capital gains to 28% (not including the 3.8% medicare tax). Still more than 25% lower than the top marginal rate on high wages.[/quote]Not unless they’re smart enough to only sell enough to fall below the top tax rate, right? Then this wouldn’t affect them. They’re the people who can afford to pick when the sell stuff. If you only sell to have $457,600 of cap gain, then your tax would be 20%, if you sell $457,601, then your rate would be 28%. If I was in that position, why would I want to sell $457,601 and incur $40k more in taxes. I would hold off or find other way to subsidize my life style.

[an]

The more I see these kind of stuff, the more I’m convinced that it’s not worth it to be a rich W2 earner. If you want to be rich, be a biz owner. There are a shit load of stuff you can write off or have the company pay for your life style. Then, you don’t need a big pay check to live just as lavish of a life style as those W2-er in the upper echelon.

[an]

[quote=SK in CV][quote=flu]Ever wonder when politicians go after “rich” and attempt to tax “rich more”….somehow, they always leave out all the corporate tax loopholes…but instead go after the much lower hanging fruit, typical higher W2 wage earners (double income earners) with supplemental dividends/investment income that is slightly 1 step above middle class but certainly not “rich”, the ones that typically can’t dodge the tax bill through some sketchy slight of hand… Funny how that always seems to work…..[/quote]

This doesn’t do anything like that. Taxes on wages would be unaffected. Some of the supplemental income would be affected if it was capital gains. No change to taxes on dividends or interest for high wage earners. The biggest effect will be those that have big cap gains. The cap gain tax rate will still be more than 25% lower than on marginal earned income for those affected. There’s no good reason it should be any lower.[/quote]does this touch the truly rich with 0 income and all cap gain and dividends?

[an]

[quote=flu]I wonder if the biggest impact what is being proposed have the biggest impact on the middle class that plans on passing on a small biz or primary home to their kids, especially the baby boomers.

Afterall, if my understanding is correct, the proposal also eliminates the capital gains exemption from properties over $500k (not sure how small farms would work)…So…..upon death, the youngsters will need to cough up the capital gains tax bill or sell the property (and most likely they won’t have the money to pay the tax bill)….So in high cost areas…ouch…..And chances are, most of these middle class heirs won’t have the money for the cap gains bill.

For rich(er) people, this won’t be a problem, since I’m sure aforementioned heirs already have their trust funds set up well before that…

Oh, an foreign money aren’t subject to this, so that’s great news for foreign money…

Can you say, screw the upper middle class again?[/quote]
If your understanding is correct and this goes through, then it would make perfect sense to do a cash out refi and then let the property foreclose near your death. That would guarantee your tax rate of the property to be 20% or less, depending on how much they let you pull out. Or you can slowly withdraw money out of your house to help your kids pay for their houses. Then foreclose on your properties. At near death. In another word, there’s no point in having a paid off house if the intention is to pass it on.

[an]

[quote=utcsox][quote=AN]With 28% rate, for a married couple making $230,450 or a single person making $189,300, there would be no point in keep stocks for a year for long term cap gain anymore. I wonder if this will drive up volume and volatility. At the very least those W2-er who participate in ESPP, there would be no reason to keep it for a year anymore.[/quote]

The long-term captain gains tax rate is 20% if and only if your ordinary income tax rate is at 39.6%. The proposed rule change does not apply to the example you described.[/quote]I didn’t read the part about it only apply to highest earner.

[an]

[quote=Hatfield][quote=AN]What gap are you referring to?[/quote]

The dominant mobile platforms are ARM based. It’s going to take an awful lot to induce a handset maker to retool all the h/w & s/w to switch to an x86 architecture. Why would they expend all those resources only to achieve BOM parity and something allegedly “approaching” battery life parity? It’s a huge, expensive risk with not much payoff.[/quote]The OEM would disagree with you. Just look at the 46M tablets Intel was able to get their chip into in 2014.

You’re right, ARM is the current king of the hill. My point is, not about today, but about 1-2 years from now. I’m predicting a change of guard as Intel push their way into the mobile market. You’re also discounting volume discount. If OEM can buy the same chip to put in their Android tablets, phones, Windows tablets, Windows 2-in-1, Windows laptop, Windows Phone. That’s a huge proposition. Then there’s the engineering cost of designing two separate tablets (androids and windows) for the same form factor. It would save them money if they can share the hardware r&d cost. Also, I don’t think you understand that most if not all mobile devices made today are made by ODM, not OEM. So, I don’t foresee OEM spending much more to make an INTC base device vs a QCOM device, assume the BOM cost are at parity. Then there’s also the fact that OEM don’t want to beholden to one chip vendor. That fact alone would be enough incentive for OEM to have both.

[an]

I totally agree. But unlike QCOM, INTC have a huge cash cow that they can lean on (their PC/server dominance), while they catch up in mobile.

[an]

With 28% rate, for a married couple making $230,450 or a single person making $189,300, there would be no point in keep stocks for a year for long term cap gain anymore. I wonder if this will drive up volume and volatility. At the very least those W2-er who participate in ESPP, there would be no reason to keep it for a year anymore.

[an]

[quote=Hatfield]Indel dominates the desktop and server world because that world is almost entirely based on x86 architecture devices. The mobile world is entirely dominated by ARM devices. Unless Intel figures out a way to reconcile that gap, they’re doomed to fail in wireless.[/quote]What gap are you referring to? BOM cost, Intel is subsiding for the BOM difference, that’s why they’re losing money. But with 2015 chip, they claim to have BOM parity with ARM platforms. Performance, they’re superior to ARM and battery life, they’re approaching parity. With their fab advantage, I can see them pulling ahead sooner rather than later in the tablet and high end smartphone range. Not sure they can get down to the midrange and low end phone range though.

[an]

[quote=flu]I can see this on the tablet… I’m having a hard time to picture this on the phone though…Phones still seem to be ARM after ARM after ARM….[/quote]You’re talking about currently. I see 2016 for Intel smartphone is like 2014 for Intel tablets. 2015 is when Intel can start selling their chips for tablets instead of giving it away.

[an]

[quote=CA renter][quote=AN][quote=CA renter][quote=Leorocky]overvalued /= bubble[/quote]

speculation + leverage = bubble[/quote]There were a lot of speculation in 2009-2011 in housing and no other market can you leverage like housing. Yet, it wasn’t a bubble then.[/quote]

But, compared to other times, there was less leverage being used during this time in the housing market. The only reason there wasn’t a bubble in housing at that time was because of the huge deleveraging that was occurring at the same time. The money being pulled out of the housing market at that time offset the money going in…but only briefly. We quickly shot back up to fairly crazy levels (and I respectfully note that some would disagree with me on this). We can’t look to price/rent ratios during this time because the rental market has been affected by this speculation as well — more rental demand because people can’t compete with the investors, and the investors controlling rents in many markets because they (recent/large/institutional investors and speculators) control a significant portion of the rental inventory in many areas.[/quote]
But your equation simply said: speculation + leverage = bubble. So, I’m just pointing out one instance where you have a lot of leverage and a lot of speculation (by the smart money), yet you didn’t have a bubble. So your equation isn’t correct.

[an]

[quote=CA renter][quote=Leorocky]overvalued /= bubble[/quote]

speculation + leverage = bubble[/quote]There were a lot of speculation in 2009-2011 in housing and no other market can you leverage like housing. Yet, it wasn’t a bubble then.

[an]

I’ve been saying this for a few years now. Don’t discount the 800 lb gorilla in the room. Their server biz are making big bucks, which allows them to buy market share in the mobile space until they’re also the 800 lb gorilla in the mobile space as well. You see with the Q4 result that although they’re losing money in the mobile space, they’re still making more money as a whole and beating analyst forecasts. Once they start making money in the mobile space, it’ll be very hard to beat.

With the growth of mobile devices and the cloud, I think Intel have the cloud part locked. Now, it’ll be interesting to see how QCOM response. What I think 2015/2016 will bring is that, Intel’s mobile chip will be good enough for high end smart phones and all tablets compare to QCOM’s ARM offering. There’s also a rise in the 2-in-1 in the PC/tablet biz. I can see OEMs picking Intel chip over ARMs/QCOM for the tablets and high end smartphones. This allow them to have a single BOM for both platforms Windows/Android. This will reduce total engineering cost and all them to sell more accessories, which is where the profit margin is. If they can have a single tablet that can have either Android/Windows, then their accessories will have to support only 1 tablet instead of 2.

[Author]

Posts