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[quote=zk]
Those Obama and Clinton comments were made, I believe, in 2008. The Lancet retracted Wakefield’s paper in 2010.[/quote]

That’s the difference between science and beliefs. Both Clinton and Obama favored relying on science. (And I suspect, still do.) Beliefs survive criticism. They exist irrespective of criticism. Science doesn’t. Science asks for it. Constant review. Constant scrutiny. Science relies on the best available evidence, that will stand up to that criticism and scrutiny.

Obama may have been a little late to the criticism and subsequent conclusions about the quality of Wakefield’s work. But he was right. These things did need to be studied. And now, almost 7 years later, they have been. Conclusively.

[SK in CV]

[quote=AN][quote=SK in CV][quote=AN] But its good to see where the president want to get more revenue for his spending.[/quote]

Your framing is revealing. At least so far, this isn’t a proposal to get more revenue or to increase spending. It’s a proposal to redirect tax expenditures.[/quote]hmmm…
Washington Post: “President Obama unveiled an ambitious $3.9 trillion budget blueprint Tuesday that seeks billions of dollars in fresh spending to boost economic growth but also pledges to tame the national debt by raising taxes on the wealthy, slashing payments to health providers and overhauling the nation’s immigration laws.” http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/04/obama-budget-seeks-new-spending-new-taxes-to-boost-economy-tame-debt
Yahoo: “Obama’s 2015 Budget Proposal: More Spending, Less Pretending” http://news.yahoo.com/obama-39-2015-budget-proposal-more-spending-less-141900462.html

I guess you know something they don’t. Now, that’s revealing.[/quote]

No, not something that they know and I don’t. It’s something I know and you don’t. Context is everything. We haven’t been talking about the budget as a whole, we’ve been talking about a single proposal. And this particular proposal is one that would replace one tax expenditure with another. Not new spending.

It’s now a dead deal. It shouldn’t be. But Obama is a realist. He knows how politics work. And this small proposal wasn’t worth the fight. And he knows at this point he’s just as likely to get what he wants with new spending. Though neither are too likely. Republicans in congress never met a tax cut they didn’t like. Unless it benefits low and middle income taxpayers. And this one does.

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[quote=flu]It’s more about the more sheer lunacy of the proposal.

But you are correct, that the likelihood of a retroactive tax on the 529 was unlikely. [/quote]

I’m sure why anyone would consider the proposal “lunacy”. Redirecting tax benefits to those who need it most seems pretty logical.

The “retroactive tax” was unlikely because it was never proposed.

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[quote=AN] But its good to see where the president want to get more revenue for his spending.[/quote]

Your framing is revealing. At least so far, this isn’t a proposal to get more revenue or to increase spending. It’s a proposal to redirect tax expenditures.

[SK in CV]

[quote=flu]

I think the bloomberg editorial summed it up pretty well….

Why target a tax benefit that goes to a lot of your supporters (and donors), that tickles one of the sweetest spots in American politics (subsidizing higher education), and that will hit a lot of people who make less than the $250,000 a year that has become the administration’s de facto definition of “rich”?

Presumably, because you’re running out of other places to get the money.

[/quote]

Stupid, illogical conclusion. The benefit doesn’t go to a lot of supporters (or donors). It hardly goes to anyone. And those that the benefits do go to, are disproportionately not those that need it the most.

The reason to dump it obvious. It doesn’t reach a wide enough population. So the proposal is to scrap it for future benefits, (NOT for people who have already taken advantage of it.) and replace it with a program with a wider market.

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[quote=AN]
Just because it didn’t happen before doesn’t mean it can’t happen in the future. If a charismatic president who want to increase SS benefits and pay for it by completely eliminating 401k/IRA retroactively. I can see that gaining populous support. Especially if they can frame it as helping the poor and middle class by increasing SS by making the rich pay a little more, by just removing tax break that rich people don’t need. I see that as a very possible scenario. We’ll just have to wait and see.[/quote]

You’re arguing that the existence of some mythical boogeyman may come and take your money. That boogeyman doesn’t exist. No presidential candidate has ever proposed those changes. It’s like worrying about vampires or the living dead. Rand Paul being elected, and the US returning to the gold standard is much more likely. Do you think that’s likely to happen?

[SK in CV]

[quote=AN][quote=FlyerInHi]AN, you can call it whatever you want.

But it’s not like rules change overnight that you can’t plan.

Life is fluid and estate planning is a continuous process mostly because changing personal circumstances. Nothing to get riled up about.

On Obama Care, it depend what your view is. Considering that universal health care is taken for granted in the developed world, the US was bound to implement something sooner or later. In that context, Obama Care is just a patch to the old system.[/quote]I never said rules doesn’t change. In fact, that’s exactly what I said. It’s within the realm of possibility that we can get “Roth” tax free gain rule be changed retroactively. I pointed out that when you have Democrat super majority in both chamber and the presidency, it’s likely that it will happen.

If you call Obamacare a patch and incremental, then the change in Roth rules would be an even more minor patch and there’s no point in arguing that it can’t happen.[/quote]

When in the state of California has a super-majority of either party has passed a retroactive tax increase? (Please note, your previous example of Proposition 30 doesn’t qualify.)

It’s not likely it will happen. For one, there hasn’t been a super-majority in congress for decades. The likelihood of it happening any time in the next couple decades is slim. And second, I can’t recall a retroactive tax increase being suggested in the last 40 years. (It did happen once. During either late in the Reagan administration or early Bush I administration. Congress quickly fixed it.) If it’s ever happened at the federal level and stuck. Creating precedent like that is almost impossible without a super-majority.

Beyond that, nobody is even suggesting removing the current tax benefits of deferred taxes for things like 401Ks, Roths or IRA, much less the future benefits of those accounts. Nothing like that has ever happened before.

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[quote=flu][quote=SK in CV] There has almost never been an unfair retroactive change to federal tax law. With extraordinarily minor exceptions, changes have been prospective only.[/quote]

Uh?

California Proposition 30 came pretty close, right?[/quote]

See bolded words.

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[quote=UCGal]The idea of changing the rules mid-course is inheritantly unfair… Perhaps – if this passes, they’d write is to 529’s are frozen to new contributions, and the old rules apply. (She says hopefully….)

That said – it might work out ok for me. My income is super low, so I’m back in the 15% bracket.

Ironically, I just put this months contributions into the kids 529’s yesterday. I might open a separate investment account and put the money in there. It’s not like the 529 is invested differently than I’d invest it – Vanguard index funds….[/quote]

Changing the rules mid-course would be unfair. That’s not the proposal. The proposal (which isn’t finalized) would only apply to new contributions. Distributions related to prior contributions would continue to be treated as they are under current law.

All this hand wringing is for nothing. Tax laws change almost every year. New benefits appear, and old ones disappear. There has almost never been an unfair retroactive change to federal tax law. With extraordinarily minor exceptions, changes have been prospective only.

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[quote=AN]W2 earner can’t write off any of that. I have a home office that I use for work. Can’t write that off. I have a car that I use to take myself to work and back. Can’t write that off. Biz owner can have the company pay for the car and maintain the car, so it’s not a piece of the cost, it’s the entire cost + maintenance. Biz owner can have their company own the cellphone contract. I don’t know about you but having your computer, cellphone, car, etc. paid for does improve their life style. Especially if it allow you to have extra money to spend on other stuff.

Let me put it another way. Lets say a W2 earner and a biz owner both making $200k (based on their taxable income). The W2 earner would have to pay for the stuff I listed and more with their after tax income. The biz owner can have a lot of those stuff paid for through their biz. So the $200k can be use purely for their enjoyment to enhance their life style.

BTW, I thought you said it’s fantasy and does not exist?[/quote]

In order:

As I said, w-2 wage earners can deduct home office expenses under almost identical rules as business owners.

Business owners are required to pay income tax on personal use of business owned cars. Driving to and from work is personal. Irrespective of whether you own the business or not. Exactly the same as for you.

If you use your cell phone for business, the rules for you to deduct those costs are identical to a business owner. If the business owns and pays for it, personal use is a taxable fringe benefit.

Do people cheat on their taxes? Absolutely. But the law is not significantly different for you than it is for very small business owners. For slightly larger businesses that are incorporated, the rules for some of the deductions are exactly the same for you as for them.

Your fantasy does not exist. Except for those that cheat on their taxes. If you approve of that, go for it. You own rental property? Claim all those deductions on your rental schedule.

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[quote=AN]Poorgradstudent, I’m talking about legal deduction, not fraudulent activities. As for home office, W2 Warner can’t deduct home office, so what’s your point?[/quote]

The rules for a business owner (sole proprietorship) deducting a home office are almost identical to a wage earner. If we’re talking about the home office of a wealthy business owner (that will almost always be incorporated, and therefore the income will come out as wages) the rules are identical.

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[quote=AN][quote=SK in CV]That fantasy world doesn’t exist. Business owners can’t write off a lavish life style legally.

It is hard to become super rich as a wage earner. But it isn’t hard to become super comfortable as a very high wage earner. Don’t live like you’re super rich, don’t spend it all and invest wisely. It doesn’t happen overnight.[/quote]
I’ve listed many things that biz owners can write off that W2 earners can’t. It ain’t fantasy. I’ve seen first hand many biz owners who do it. You’re telling me company cars are illegal? How about company paid cellphones. How about company computers? How about have a home office? I can go on, but you obviously thing it’s fantasy.

I’m not saying it’s harder or easier to be super rich as a wage earner or as a biz owner. I was just pointing out the double standards.[/quote]

If they use a home office exclusively for work and there is no other local office, then there might be a small deduction. If they use their cars for business, they can write off a piece of the cost, exactly like you can. They can write off their cell phones if they use it for work and it’s a 2nd cell phone (can’t write off 1st cell phones). Bottom line is, they can legally write off costs that are related to the business. Not unrelated costs that improve lifestyle outside of work.

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[quote=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.[/quote]

That fantasy world doesn’t exist. Business owners can’t write off a lavish life style legally.

It is hard to become super rich as a wage earner. But it isn’t hard to become super comfortable as a very high wage earner. Don’t live like you’re super rich, don’t spend it all and invest wisely. It doesn’t happen overnight.

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[quote=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.[/quote]

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.

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[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.

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