From Ike to W
by crowsfoot - 3/10/13 3:13 PM
The top tax rate has gone 91% to 15%
What's up with that? Cadilac driving welfare queens? Lets do the numbers.
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by: crowsfoot March 10, 2013 3:13 PM PDT
1 person likes this thread
Total posts: 29 (Showing page 1 of 1)
What was it before Wilson
(NT) Dumb question! This isn't 1916, things have changed. R
(NT) things have changed a lot since 1960 too
by Roger NC - 3/12/13 4:54 AM
In Reply to: (NT) Dumb question! This isn't 1916, things have changed. R by Ziks511
Not the least of which has been the huge
growth in numbers of the two earner family. That alone dramatically changed the country's financial landscape and family life in general. I'd dare say that it also added to inflation pressures. If you take in more money, you're going to pay more for what you buy.
true I guess, but the growth in 2 earner families
started and at first grew because one wasn't enough at many jobs anymore to have a family and take care of it.
Some families both work by choice, but now the choice is because they want to keep their "lifestyle" for most. Maybe it isn't strictly necessary for food, so the question becomes how extravagant the family lifestyle actually is.
I know when I was in high school all those decades ago, my mother went to work because they needed the money, and at a quite low paying job. But that little extra can make a lot of difference.
Did both need to work as long as they did? maybe not, but then after the kids are all gone, and you've worked 30 years, what else would you expect to do?
One side of my family came as immigrants
and I remember hearing noise that a working wife meant a failed husband. If the man couldn't support his family, he was looked down upon by his peers. How things have changed.
and your bracket is based on the last dollar earned so no one paid those rates across the board. So what is it you want to do? Would you like to see 91% on the wealthiest? Do you think the government would spend it more wisely than the earner?
I wonder what the effective rate
on average is for each wage group vs the official rate?
After all the deductions, credits, dependent allowances, etc.............
I wonder if we did away with all the adjustments and everyone paid by the tables and their gross income what the intake would be.
I know it would be much more even on my salary in taxes.
Though after this year anyway, I go back to the single wage earner class, penalized for not being married or having children. I'll probably end paying at least 10-20 % more in taxes unless I put that much into 401K and/or traditional IRA.
Forget the traditional IRA
I got burned badly with that one. My wife and I started out with those in the 80's when new and put in the maximum for a few years until my company went with a 401k type. I let the IRAs ride and the interest rates dropped to almost zero. I set up a distribution plan 2 years ago to pay it back over 5 years but suddenly found myself without work but with a fairly generous severance that caused my earnings for the last year to bring me into a higher bracket. I ended up paying about 15% more on the IRA distribution than had I just put the money in a regular savings account at the same interest. Not a happy camper about that. I think the government and IRA knew that sort of thing would happen when the rules were put in place.
Hmmm, not sure I understand exactly what your
situation was, but it sounds like it was because of the high severance.
Personally I would't plan on cashing and IRA until I was out of work, and hope to have regular savings to end that year.
Actually some advise against traditional IRA's and 401K deposits (in excess of the company match anyway) in favor of Roth and other investments.
The idea of 401K and IRA is that you'll be in a lower bracket later, and you can't actually know what the tax brackets will be in the future. However, every time I heard that argument, they totally ignored (deliberately?) the interest you earned on the portion of that money that would have been paid in taxes if invested in after tax vehicles.
One thing about savings you pay as you go, what you got is what you got. But will it keep up with inflation? No guareetees anywhere of course.
Too bad severance pay isn't paid out in regular payments equal to your normal pay amount and schedule before you were terminated. Severance pay is good for some, a lot get little or nothing of course.
Right now I'm just doing the match and doubling up on house payments. After the house is paid, I'll reconsider.
The problem was my timing
I was getting virtually no interest on the IRA and was too close to retiring to try and move it. I'd set up a distribution schedule with the financial institution that was to begin the year after I'd planned to retire. I didn't know then about the company buyout and how things were going to change. I had tons of vacation when I left and that was part of the severance. I ended up with a large boost in income for one year which just happened at a bad time to receive the IRA distribution. I suppose, in hindsight, I could have called the financial institution and tried to delay payments. I fault myself for that.
facing a unusual bump in my income
myself this year.
I made a choice to excercise the death exclusion of penality for cashing out retirement benefits of a deceased spouse and pay the house off, so my income this year is half again normal. I did have taxes taken out, and between state and federal, owe one, get back enough to cover from the other, so I'm lucky I guess.
You mentioned the low interest rates, I decided I was unlikely to make as much as I would save on the house interest, fixed 6% loan and not enough time to pay all the fees to refinance if I pushed on payments, so I cashed her's out and paid enough on the house to hopefully finish it by the end of the year.
Then I have to decide what to do with the payments I'll no longer have.
That is unless I buy a new pickup truck, that's just about as much as my mortgage payments, LOL.
The biggest raise I ever got
was when both of our kids were finally out of school. We paid tuition from K-college. During that time we learned to live more than a little bit frugally. I still put away the maximum I could to get a company match for the 401K. We accelerated mortgage payments on a variable rate loan that hit over 13%! I did everything to save and have fortunately been very good at doing home repair myself. Once the kids were out of college, we didn't change our lifestyles much and continued to be frugal. We did everything wrong by today's lifestyle standards.
For Roger, and James D. Tax rates over the years
5th section of graphs, entitled Who's Winning?
has a graph labelled Millionaires Tax Rates Then and Now which runs from 1913 to 2010
Yes, James, Millionaires paid less than 2% in 1913. If that pleases you, don't hesitate to go there and deal with disease, poor medical treatment, the up coming Influenza Pandemic of 1918, and the Great Depression. And any money you take will be worth very little. You can't even take gold with you and expect to get more than $35 an ounce.
Check the section labelled Your Loss Their Gain, which shows that gains occurred only for the top 10%.
90% of people lost ground.
You misplace blame
and then claim that as an argument in your favor?!
Govt monetary policies caused Great Depression.
Private industry improved medicine, often supported by private grants.
Possible that lack of good immigration control allowed entry of Influenza.
Govt manipulated gold prices.
In any Depression there are always more losers than winners, that's why it's called a depression.
I sure don't see how you can blame the rich for it all.
......tax rates for the wealthiest have gone down considerably, contrary to what some would have us believe.
The next steps in this discussion would be to look for a correlation between that and the increasing disparity between rich and poor in this country, and to look at what the federal budget was like when the rate was 91%. Deficits? Debt? How was revenue affected by reducing those tax rates?
you'll see the apparent affect of war and post-war as having significant impact on tax rates. Perhaps, if an all out war situations happens again, we could see the rates grow. Personally, I don't think lower rates on the wealthier are the major cause of disparity between rich and poor. The bigger factor, IMO, is eagerness to achieve. We could always just skim off the upper portions of wealth from the rich and redistribute it among the poor but I doubt that would serve a good purpose. If there is condemnation to be made of the wealthiest, I'd think that some of the condemnation also needs to be redistributed among lower income persons who moan about being poor but put out little effort to change their station on their own.
According to that chart, tax rates on the wealthiest are the third lowest they've ever been. The only times they were lower were during the first Bush Administration and (curiously) in the four years immediately preceding the Great Depression. I wonder if there's any correlation there.
They went up during World War I and World War II/Korea but went down a bit during the Vietnam war.
I think what's more interesting is the threshold
at which the highest rates kicked in during those war and post-war times. As for the depression era...pre and post crash...you'll see that, although the top rates were lower, they were on much lower incomes.
Lower incomes adjusted?
$100,000 in 1925 would translate into a couple million today.
Can't agree that not wanting to achieve is
primary cause of disparity, at least not all of it.
Desire and native ability? maybe more a portion, but even then I don't believe everyone poor is lazy.
Everyone rich didn't work that hard or make that smart a choice.
Of course, it's easier when you start rich, but that's just the breaks I guess, the parents you're born to I mean.
I have to say some never see a need to share, they want it all, and take what they can no matter how. That can apply to either I guess, those poor that expect to be provided for and the Scrooges of the rich.
It's harder and harder for someone to lift themself up by their boot straps after quitting school at 16, like the old fables.
No, the effective tax rate for the wealthy is between 20%
and 25% in Federal Taxes. You can research it online.
says it's 20.9%, Forbes and the Wall Street Journal say it's 39.6%, but nobody else does.
says it is about 20%.
Most people in the middle class pay about 30+ percent.but that's only Federal taxes in all cases. State and local taxes change those numbers, and bear most heavily on the bottom 80%.
I already noted that the top bracket rate
by Steven Haninger - 3/12/13 3:56 AM
In Reply to: No, the effective tax rate for the wealthy is between 20% by Ziks511
was only on the last dollars earned and that the actual rate would be lower. I would have to dispute your 30% figure as to the % paid by the "middle class". That would be approximately their bracket and not their effective rate. A family of 4 would have about 1/4 to 1/3 of their gross income pared off just by taking the standard deduction and this drops them into a lower bracket. If they owned a home, paid mortgage interest, property taxes and got education credits, their rate would be even lower. I'd dare say around 15%. How do I know?...been there, done that.
And if you're rich and know how to work the system......
......you can get your rate down to the single digits. Just ask the former Republican nominee for president. His rate was around 9% before he artificially modified his return to bring it up to a whopping 14%, so that he wouldn't be called out as a liar for claiming to have paid more than he actually did.
"Working the system" just means that one takes
by Steven Haninger - 3/12/13 5:15 AM
In Reply to: And if you're rich and know how to work the system...... by Josh K
the opportunity to distribute their extra money in a way they prefer rather than allowing the government to do it. That's not necessarily a bad thing.
Interesting how those "opportunities".......
.......only seem to exist for people with a LOT of money, isn't it. Tax reform would hopefully eliminate those "opportunities." I remember when Swiss bank accounts were considered underhanded.
the less money you make. That's just a fact. The corollary is true, too. The more money you make, the less work you do per-unit income. To have "made" a billion dollars, you would have to CLEAR a million dollars a day for almost 3 years. A million a day after taxes! Every day for three years!
I think we should take a hard look at inheritance.
>>>When I was young I caught a fleeting glimpse.
Out of the corner of my eye.<<<
Thom Hartmann "The No Billionaires Campaign"
So when we come together and throw all the cheaters on the low end, off the boat. THEN we can start collecting some from the billionares?
Has anyone actully died from giggling? No really. Untill there is a documented instance of death by giggling, then there hasn't been quite enough leveraging. Want water?
The Republican ice plan.
EVERYBODY get's the same amount of ice! The rich get their's in the summer. And the poor, in winter.
Total posts: 29 (Showing page 1 of 1)