Earned Income Credit

[kelpdiver 2]

kallend

39.6 > 23.8 when I went to school.

And 23.8 > 0-16 as well.

But...if you want to propose that all income, not just wage income in the AGI, determines the capital gains tax paid, I wouldn't object. People who earn a million in dividends but no wage income should be paying 20%, not 0.

[kelpdiver 2]

DrewEckhardt

1. Capital gains in a Roth IRA are tax-free which makes such accounts a nice place for high-risk high-return investments like venture capital by way of self-directed accounts.

But gains in a roth ira for the year wouldn't show up on your tax return, which was the context here.

BTW, you left out the roth 401k, which I use 50/50 with a traditional 401k. That gets you past the 5.5k limit for IRAs. Not all companies feature it yet, but it's been growing.

Is muni bond returns always tax free? I recall there being some gotchas, but not at the point where I need them yet.

[kallend 1,648]

billvon

>If I make an extra $1000 this year, $396 of it will go in extra federal income tax.
>A billionaire making an extra $1000 this year will likely pay somewhere between $0
>and $160 in extra income tax.

That is true if you do no accounting tricks and the billionaire does many.

If you do the same accounting tricks and the billionaire does none, then you won't be paying anything and the billionaire will be paying $396.

What accounting tricks do you suggest, Bill, for someone whose income is all salary? Should I start managing a hedge fund? I hear that's a great way to cut taxes.

The super-rich have bought the tax laws that favor them.

...

The only sure way to survive a canopy collision is not to have one.

[billvon 2,435]

>What accounting tricks do you suggest, Bill, for someone whose income is all salary?

One easy way - charitable donations to a program your wife works on. You then deduct the amount, and she gets some or all of it. An even easier way is to increase your 401k contributions. Increase it by $1000 a year and you will pay zero tax on that extra $1000 you make.

>Should I start managing a hedge fund?

You can - and you can surely hire someone to do that for you if you want - but there are far easier ways.

[DiverMike 5]

Your example does not work. If you give $1000.00 to a charitable organization, you reduce your gross by that amount, which reduces your tax liability by $380.00 (assuming you are in 38% tax bracket). Your wife increases her salary by $1000. After 15.2% in taxes (Med & Soc), her gross is increased by $848. Assuming she has to pay 38% on her increased gross, her take home pay is increased by $576.64. Add that to the decrease in tax ($380.00) you get $956.64. You spent $1000.00, so your net loss is $43.36.

It isn't as simple as you make it to avoid taxes.

For the same reason I jump off a perfectly good diving board.

[kallend 1,648]

billvon

>What accounting tricks do you suggest, Bill, for someone whose income is all salary?

One easy way - charitable donations to a program your wife works on. You then deduct the amount, and she gets some or all of it. An even easier way is to increase your 401k contributions. Increase it by $1000 a year and you will pay zero tax on that extra $1000 you make.

We don't have a 401k plan in my university. and I'm maxed out on my 403b.

So I guess I'll have to persuade my wife to change jobs then.

...

The only sure way to survive a canopy collision is not to have one.

[billvon 2,435]

>We don't have a 401k plan in my university. and I'm maxed out on my 403b.

Ah, so you have already managed to find a trick to not pay any taxes on many thousands of dollars of your income!

>So I guess I'll have to persuade my wife to change jobs then.

Another trick that's available to you. See? It's not just for rich people. (Or more accurately, you _are_ one of those rich people who has lots of tricks they can use to not pay taxes.)

[SkyDekker 1,145]

wayneflorida

***

I feel far better about helping out poor people than I do about giving special breaks to billionaire hedge fund managers.

I just read Buffet legally evaded 400 million of taxes due to special tax laws. And that is fine, the supreme court says so.

But just don't stand next to the President and say the rich need to pay more taxes. Fork tongue.

Do you know why he advocates for the rich to pay more taxes?

[wayneflorida 0]

SkyDekker

******

I feel far better about helping out poor people than I do about giving special breaks to billionaire hedge fund managers.

I just read Buffet legally evaded 400 million of taxes due to special tax laws. And that is fine, the supreme court says so.

But just don't stand next to the President and say the rich need to pay more taxes. Fork tongue.

Do you know why he advocates for the rich to pay more taxes?

He stands next to the President, President says the rich need to pay more, Buffet says the President is right and the rich need to pay more taxes, they go off screen, President signs some bill/executive order that has a nice tax advantage for Buffet.

Pretty simple.

[kallend 1,648]

wayneflorida

*********

I feel far better about helping out poor people than I do about giving special breaks to billionaire hedge fund managers.

I just read Buffet legally evaded 400 million of taxes due to special tax laws. And that is fine, the supreme court says so.

But just don't stand next to the President and say the rich need to pay more taxes. Fork tongue.

Do you know why he advocates for the rich to pay more taxes?

He stands next to the President, President says the rich need to pay more, Buffet says the President is right and the rich need to pay more taxes, they go off screen, President signs some bill/executive order that has a nice tax advantage for Buffet.

Pretty simple.

Can you cite an instance of this?

...

The only sure way to survive a canopy collision is not to have one.

[kallend 1,648]

It's economic inequality that will doom us.

news.discovery.com/human/life/society-is-doomed-say-scientists-140320.htm

...

The only sure way to survive a canopy collision is not to have one.

[SkyDekker 1,145]

wayneflorida

*********

I feel far better about helping out poor people than I do about giving special breaks to billionaire hedge fund managers.

I just read Buffet legally evaded 400 million of taxes due to special tax laws. And that is fine, the supreme court says so.

But just don't stand next to the President and say the rich need to pay more taxes. Fork tongue.

Do you know why he advocates for the rich to pay more taxes?

He stands next to the President, President says the rich need to pay more, Buffet says the President is right and the rich need to pay more taxes, they go off screen, President signs some bill/executive order that has a nice tax advantage for Buffet.

Pretty simple.

Yeah, I didn't think you did.

Maybe if you put your preconceived notions aside for a second and look into why Buffet is advocating for it, you might understand. Doesn't mean you agree, but at least you would understand.

[billvon 2,435]

>It's economic inequality that will doom us.

Not too worried. As long as the poor keep getting richer, we're headed in the right direction. From the article:

"Meanwhile the bottom three-quarters of the U.S. population has seen slow economic growth . . . "

[SkyDekker 1,145]

billvon

>It's economic inequality that will doom us.

Not too worried. As long as the poor keep getting richer, we're headed in the right direction. From the article:

"Meanwhile the bottom three-quarters of the U.S. population has seen slow economic growth . . . "

This study gives a different perspective:

http://news.nationalpost.com/2014/03/18/the-utter-collapse-of-human-civilization-will-be-difficult-to-avoid-nasa-funded-study-says/

[billvon 2,435]

It's the same study.

[SkyDekker 1,145]

billvon

It's the same study.

Then your response doesn't make sense. Study is global, you are dimissing it based on US numbers.

Unless you are suggesting the US will be fine even if globally shit hits the fan?

[billvon 2,435]

>Study is global, you are dimissing it based on US numbers.

I agree the study is global. The quote I posted up there was from the first article, which also included US numbers - but both referenced the same study.

Worldwide the poor are also getting richer. This is a good trend. As long as the poor get richer we are doing better overall. To me it doesn't matter if the rich get much richer as long as EVERYONE is headed in the right direction - which, at least for the past few decades, has been the case (with temporary exceptions during recessions and the like.) From Foreign Policy:
===========
The Poor Are Getting … Richer
It really is getting better -- even for the bottom billion.

BY Charles Kenny

For most of the last 200 years, the story of global incomes has been one of the rich getting richer and the poor staying poor -- or "divergence, big time," as Harvard Kennedy School professor Lant Pritchett put it in a 1997 article. Pritchett argued that in 1870, the world's richest country was probably about nine times as rich as the poorest country. By 1990, that gap had increased to a 45-fold difference. And populations grew fast in many of the stagnant economies at the wrong end of this divergence. By 1981, according to the World Bank, 1.9 billion people, or half of the population of the developing world, lived on $1.25 a day or less.

It's easy to assume, faced with images of continuing destitution in rural Africa and South Asia, that things have just kept getting worse. But they haven't. In fact, over the last two decades the pattern has reversed. The world has got a lot less poor -- and the nature of the poverty that remains has changed in important ways.

Start with the numbers: In the 1980s, the average GDP per capita growth rate in developing countries was 1.4 percent, according to data from the World Bank. By the first decade of the 21st century, however, the average had shot up to 4.4 percent -- considerably higher than growth rates in rich countries. As a result of this economic explosion, the number of countries classified as low income -- that is, with a GDP per capita of less than about $1,000 -- has fallen from 60 in 2003 to 39 today.

It's not just countries that are getting richer -- individual people are, too. In 2005, the number of people worldwide living in absolute poverty, or on $1.25 or less a day, was around 1.3 billion, according to estimates from Laurence Chandy and Geoffrey Gertz of the Brookings Institution. The same researchers suggest it was below 900 million last year. From one-half of the developing world in 1981, they estimate the proportion of people in absolute poverty today at less than one-sixth.

This isn't just a story of Chinese tigers and Indian elephants -- even Africa is getting in on the action. To be sure, the continent was late to the party, but the last 10 years have seen impressive growth in countries both oil-rich and oil-poor, landlocked and coastal. According to Xavier Sala-i-Martin and Maxim Pinkovskiy of Columbia University and the Massachusetts Institute of Technology, respectively, Africa is on track to halve the number of people living in absolute poverty between 1990 and 2017. Already, poverty rates are 30 percent lower than they were in 1995.
. . .

A related trend is that poverty is becoming more disbursed -- no longer concentrated in a few very large countries, but spread among a greater number of mid-sized nations. In 1990, China accounted for more than a third of a global total of 1.8 billion living on $1.25 a day. In 2015, Nigeria is predicted to have the most poor people of any country in the world -- but it will account for just over a sixth of the global total, 585 million.
======================

[kallend 1,648]

billvon

>It's economic inequality that will doom us.

Not too worried. As long as the poor keep getting richer, we're headed in the right direction. From the article:

"Meanwhile the bottom three-quarters of the U.S. population has seen slow economic growth . . . "

Well nothing to worry about, then.

www.livescience.com/44204-study-civilization-doomed-by-overconsumption-wealth-inequality-infographic.html

...

The only sure way to survive a canopy collision is not to have one.

[billvon 2,435]

>Well nothing to worry about, then.

OK. So since we're talking about resources I assume those charts start around 1850 (start of industrialized civilization.) I assume you prefer the "equitable" graph over the "unequal" graph.

In that case we are in good shape. We are about 150 years into the equitable graph. Wealth is climbing, workers (population) is climbing and non-working population is a fraction of the working population - but also climbing. Natural resources are on the decline but we anticipate a leveling out of that degradation in another 200 years.

On the unequal graph we wouldn't be seeing any significant number of "elites" for another 400 years or so in any case. Until then the only significant difference is population growth. And since the equitable graph requires the population to level out in another 200 years or so, and it looks like we will level out in another ~120 years, we're in pretty good shape there.