Are you rich or poor?

[JimC]

How's that crow taste?

Thank you sir, can I have some more?

(Humble pie is the best. They say the three jewels of Taoism are compassion, moderation and humility. Some days I'm just sure I'm missing some marbles. It's what happens when you've got a mouth you can't keep productively occupied.)

This wins the "year's best reply to a provoking (although accurate) Sethian post" AWARD...

Kudos...

[Warren Dew]

This wins the "year's best reply to a provoking (although accurate) Sethian post" AWARD...

Why "although"? The reason people find his posts provoking is generally exactly because they're accurate.

[Hermit]

It apparently is determined by your tax bracket in the US. If your income tax bracket is closer to 29% you are rich.

Sounds oversimplified and factually wrong.

Oversimplified: What about those who are asset-rich and simultaneously cashflow - poor?

Factually wrong: Warren Buffett is a billionaire. He wrote an article reporting that his tax rate was only 17.4 percent of his taxable income, while the tax burden of the twenty people he employed in his office ranged from 33 percent to 41 percent and averaged 36 percent. While Buffett's assets and income both place him in the "rich" category, his employees may be comfortably off, but they are definitely not rich in comparison, yet their tax rate is twice as high as his on average. And look at Seth. He sold his family's property for several million dollars, yet claims not to be paying any income tax at all.

[Seth]

It apparently is determined by your tax bracket in the US. If your income tax bracket is closer to 29% you are rich.

Sounds oversimplified and factually wrong.

Oversimplified: What about those who are asset-rich and simultaneously cashflow - poor?

Factually wrong: Warren Buffett is a billionaire. He wrote an article reporting that his tax rate was only 17.4 percent of his taxable income, while the tax burden of the twenty people he employed in his office ranged from 33 percent to 41 percent and averaged 36 percent.

That's because he's fiddling the numbers to pander his agenda. His tax rate is slightly higher than the vast majority of US taxpayers who pay at a 15 percent rate. But that's just the INCOME TAX rate. When he says his employees are paying an "average" of 36 percent, he's adding in the FICA, SS and Medicare contributions, which makes the number bullshit. So because he doesn't pay FICA, SS and Medicare on his investment (capital gains) income, his rate is naturally lower. But then again, his capital gains income is not taxable for FICA, SS and Medicare because it's "unearned income" and therefore he is not contributing to his entitlement accounts like his employees are.

If he has employees in the 29 percent bracket, he's paying them very well, but they are still required to contribute to social welfare programs that they will eventually get to make use of (theoretically) in their dotage, just like everyone else who gets a paycheck from an employer.

So he's comparing apples to oranges, and his claim is complete shit as a result.

While Buffett's assets and income both place him in the "rich" category, his employees may be comfortably off, but they are definitely not rich in comparison, yet their tax rate is twice as high as his on average. And look at Seth. He sold his family's property for several million dollars, yet claims not to be paying any income tax at all.

Indeed. I will pay capital gains on the sale, both federal and state, amounting to about 20 percent, in a lump sum, next April 15th. Once that's paid, I will have no income tax liability unless I earn some income from that principle, which I don't plan to do. I plan to live off my principle until I die. This means I will generate no income and therefore owe no taxes. And because I arranged my life so that I never paid enough into SS to qualify for even minimum payments, I'll not get any benefits. As for Medicare, I'm not sure about that, but perhaps if I shuffle my money around properly, I can sponge off the system if I need to do so by claiming zero income, although the paperwork is a pain in the ass, so I'll probably just go on paying for my own medical care like I have been doing the last 40 years or so.

But if Obama demands that I pay for Obamacare anyway, trust me, I'll soak the system for every dime I can. If you force me to be a socialist, I'll be the most avaricious socialist you've ever seen, and I'll laugh my ass off all the way to the bank. But I don't expect they will be able to find me, since I won't have to file any tax returns and they don't know where I live. I'll drop off the IRS radar and good fucking luck collecting on Obamacare from me.

That's the fatal flaw in Obama's Progressive tax agenda: You see, income taxes are paid on income, not on money in the bank. What this means is that all the "wealthy" have to do to destroy the Obama administration (and the economy) is take their money OUT of the markets and refuse to invest it, and just sit on it in a bank and not make any interest. They can afford to live off their principle for at least two more years, which will deny Obama the tax revenues he needs to pay for his social welfare programs. This will destroy his chance at reelection and doom the Progressives.

And guess what? That's EXACTLY what the "wealthy" are doing. Wealthy corporations and banks are sitting on trillions in retained earnings that they are not going to spend on hiring people or expanding their businesses until Obama is out of the picture and the tax and regulatory atmosphere has stabilized under a new (hopefully Ron Paul lead) administration. Then the money will flow like wine and the economy will skyrocket, and federal spending (and employees) will be slashed wholesale and the federal government will be required to live within its means.

Of course, if I was really smart, I'd take my money and flee the country for some non-extraditable country where the tax structure is more amenable to wealthy ex-pats and tell the IRS to go fuck itself for my capital gains taxes. Problem is, there's no place like that where I would consider living for a moment, much less the rest of my life, because they tend to be shithole banana republics that don't respect my right to keep and bear arms.

So, I'll dutifully pay what the law says I owe, and then never pay them another dime. And in doing so, I will have paid far more than most of the rest of you will pay in your lifetimes for the government services I'll be using for the rest of my life. So fuck y'all, I'm done playing the game.

[Hermit]

he's fiddling the numbers to pander his agenda. His tax rate is slightly higher than the vast majority of US taxpayers who pay at a 15 percent rate. But that's just the INCOME TAX rate. When he says his employees are paying an "average" of 36 percent, he's adding in the FICA, SS and Medicare contributions, which makes the number bullshit.

I got the impression from his article that Buffett is comparing the total of the taxes he pays on his taxable income with the total of the taxes his employees pay on theirs, and that his rate amounts to 17.4 percent while theirs average out to 36. Do you have any evidence that he is fiddling the figures, and if so, can I have a link please?

[Seth]

he's fiddling the numbers to pander his agenda. His tax rate is slightly higher than the vast majority of US taxpayers who pay at a 15 percent rate. But that's just the INCOME TAX rate. When he says his employees are paying an "average" of 36 percent, he's adding in the FICA, SS and Medicare contributions, which makes the number bullshit.

I got the impression from his article that Buffett is comparing the total of the taxes he pays on his taxable income with the total of the taxes his employees pay on theirs, and that his rate amounts to 17.4 percent while theirs average out to 36. Do you have any evidence that he is fiddling the figures, and if so, can I have a link please?

It's patently obvious. Most of his income is the result of investments, and is taxed at the capital gains rate only. Most of his employees income is wages and salary, which always includes FICA, SS and Medicare, plus withholding. The top income tax rate is 35 percent, but you only pay that if your wage (earned) income is $379,150 or greater. Therefore it's IMPOSSIBLE for any of his employees to be paying "an average of 36 percent" in income tax alone, because there is no 36 percent tax bracket, much less a 41 percent bracket. This means that he MUST BE counting FICA, SS and Medicare contributions in coming up with his bogus numbers. Of course he may also be including STATE income taxes in that figure too, which makes his duplicity and mendacity all the worse.

And if Buffet thinks what he pays is unfair, he can simply write a check to the treasury and pay at whatever rate makes him feel good about himself. It's hypocrisy of the highest order for him to make use of tax breaks and then complain about it. Nobody forces him to pay only 15 percent. And what's worse is that he's using his hypocrisy as justification for demanding that others pay "their fair share" when the fact is that people in the top income brackets already pay some 70 percent of all the revenues the Treasury collects from income tax, so they are already paying FAR MORE than their fair share, while the bottom half of the population pays essentially nothing.

Fuck Buffet, he's a buffoon and a hypocrite.

[Hermit]

he's fiddling the numbers to pander his agenda. His tax rate is slightly higher than the vast majority of US taxpayers who pay at a 15 percent rate. But that's just the INCOME TAX rate. When he says his employees are paying an "average" of 36 percent, he's adding in the FICA, SS and Medicare contributions, which makes the number bullshit.

I got the impression from his article that Buffett is comparing the total of the taxes he pays on his taxable income with the total of the taxes his employees pay on theirs, and that his rate amounts to 17.4 percent while theirs average out to 36. Do you have any evidence that he is fiddling the figures, and if so, can I have a link please?

It's patently obvious. Most of his income is the result of investments, and is taxed at the capital gains rate only. Most of his employees income is wages and salary, which always includes FICA, SS and Medicare, plus withholding. The top income tax rate is 35 percent, but you only pay that if your wage (earned) income is $379,150 or greater. Therefore it's IMPOSSIBLE for any of his employees to be paying "an average of 36 percent" in income tax alone, because there is no 36 percent tax bracket, much less a 41 percent bracket. This means that he MUST BE counting FICA, SS and Medicare contributions in coming up with his bogus numbers. Of course he may also be including STATE income taxes in that figure too, which makes his duplicity and mendacity all the worse.

So, taking all taxes into consideration, the bottom line is that Buffett paid 17.4% on 40 million dollars of taxable income while total tax liability of his employees on, say, 0.1 million dollars of taxable income amounts to 36% of their taxable income.

In a more limited form we have a similar situation wherein certain types of income are not taxed at the ordinary marginal rate. Tax on capital gains from the sale of personally owned residential real estate, for instance, is discounted by 50%. Capital gain realised on the sale of your primary residence counts as income in Australia, but there the discount is 100%. Ordinary wage earners find it difficult to arrange their financial affairs such that they can avail themselves to those features, but if you are rich enough, there is no problem at all to do so.

[Seth]

he's fiddling the numbers to pander his agenda. His tax rate is slightly higher than the vast majority of US taxpayers who pay at a 15 percent rate. But that's just the INCOME TAX rate. When he says his employees are paying an "average" of 36 percent, he's adding in the FICA, SS and Medicare contributions, which makes the number bullshit.

I got the impression from his article that Buffett is comparing the total of the taxes he pays on his taxable income with the total of the taxes his employees pay on theirs, and that his rate amounts to 17.4 percent while theirs average out to 36. Do you have any evidence that he is fiddling the figures, and if so, can I have a link please?

It's patently obvious. Most of his income is the result of investments, and is taxed at the capital gains rate only. Most of his employees income is wages and salary, which always includes FICA, SS and Medicare, plus withholding. The top income tax rate is 35 percent, but you only pay that if your wage (earned) income is $379,150 or greater. Therefore it's IMPOSSIBLE for any of his employees to be paying "an average of 36 percent" in income tax alone, because there is no 36 percent tax bracket, much less a 41 percent bracket. This means that he MUST BE counting FICA, SS and Medicare contributions in coming up with his bogus numbers. Of course he may also be including STATE income taxes in that figure too, which makes his duplicity and mendacity all the worse.

So, taking all taxes into consideration, the bottom line is that Buffett paid 17.4% on 40 million dollars of taxable income while total tax liability of his employees on, say, 0.1 million dollars of taxable income amounts to 36% of their taxable income.

No. Their total income tax liability cannot exceed 35 percent, which is the maximum tax rate. And yes, Buffet pays less on unearned income because that's the way Congress stimulates people to invest their money, which stimulates the economy and makes jobs available. If the government taxed Buffet 99 percent on his capital gains, he'd just withdraw his capital from the market, quit producing wealth and providing jobs and creating lendable capital and retire to live on his principle, leaving the economy, and the feds, in the lurch. The capital gains tax rate is about equal to what the average wage laborer pays in income taxes, or higher, and it's set there precisely to encourage people, and not just the wealthy Warren Buffett's of the world, but your average Joe wage earner, to INVEST THEIR MONEY in the economy. While 40 percent of stocks are held by the very wealthy, the other 60 percent are held by ordinary average people making ordinary average wages, and by pension funds and others who serve Joe Average as much as they serve "the wealthy."

In a more limited form we have a similar situation wherein certain types of income are not taxed at the ordinary marginal rate. Tax on capital gains from the sale of personally owned residential real estate, for instance, is discounted by 50%. Capital gain realised on the sale of your primary residence counts as income in Australia, but there the discount is 100%. Ordinary wage earners find it difficult to arrange their financial affairs such that they can avail themselves to those features, but if you are rich enough, there is no problem at all to do so.

How is it difficult for an ordinary wage earner to take advantage of the capital gains discount when he sells his house?

[Jason]

It apparently is determined by your tax bracket in the US. If your income tax bracket is closer to 29% you are rich.
is supposed to be on the poll line for the poor.

Rich.. I guess? Middle class is rich these days? wth.