Can we just default on congress instead?

07/30/2011 01:19:21 PM · #201

Originally posted by shamrock:

Any money made in this kind of time span would be "short-term" capital gains, and taxed at the normal income rate.

I agree with you there. I think Paul was making the argument that these people aren't "working" for the money in the same way you would think of a school teacher or janitor. I don't think how hard you work for the money should be justification for higher or lower taxes, but consider this: Steve Jobs has received a salary of $1 every year since 1997 and apparently hasn't sold a single share of Apple stock during that time. He lives entirely off $48 million in annual dividends from 138 million shares of Disney stock from the buyout of Pixar. As qualified dividend income, his tax rate is 15% and that money comes in whether he's inventing a new product category or watching Gilligan reruns on his AppleTV. Hedge fund managers enjoy a similar benefit. In 2009, the top 25 hedge fund managers pulled in $25.33 billion, but their compensation comes primarily from capital gains in private equity taxed at 15%. So, at that rate these 25 people would pay nearly $3.8 billion in taxes (the basis for arguments like "the top 10% of earners pay 70% of the taxes"), however that's only because they made so much, NOT because they paid their fair share. Is there any conceivable justification for these guys to enjoy the same tax rate as an individual earning $10,000 a year? Is a hedge fund manager going to create any more jobs or boost the economy in any way due to this effective tax break? Probably not... and when just 25 people can avoid paying some $5 billion in taxes, it's not hard to see why revenues are so low and the rich are richer than ever.

Originally posted by shamrock:

It tickles me that anyone would believe that a billionaire would give $10M to charity just to avoid paying the income tax, which would amount to what, $1.5M?

You make it sound like they're only giving out of the kindness of their hearts. If they're not doing it for the deduction, then we should expect charitable contributions to be nearly as high if that deduction was eliminated?

07/30/2011 01:20:32 PM · #202

Originally posted by SDW:

For the ones that are playing politics; we will remember in 2012!

Isn't that exactly WHY they're doing it?

Tamron SP AF 28-75mm f/2.8 XR Di for Canon

07/30/2011 01:50:30 PM · #203

A great analysis from Senator Bernie Sanders, an independent on the Senate Budget Committee, in the Wall Street journal today. Full text here.

BrennanOB

Canon EOS-1D Mark II

07/30/2011 02:05:17 PM · #204

Originally posted by SDW:

Thanks to all congress democrats and republicans that are really trying to solve this huge problem. For the ones that are playing politics; we will remember in 2012!

It is hard to remember that there are still folks from both parties in the middle, partly because they get very little air time in the news. Who wants to hear about reasonable compromise when there are battles for the soul of our country being promulgated on the extremes?

One ray of hope here in California was proposition to get rid of closed primaries. Next election you can vote for whoever you want in the primary. No longer will the two big parties candidates be rewarded for running to the extremes in the primaries, leaving the general election to be a choice of bad and worse. We have gone as far as we can go into special issue fringe politics, we need to start addressing the stuff in the middle.

yanko

Canon EOS-5D Mark II

Carl Zeiss 50mm ZE f/1.4 Planar T for Canon

07/30/2011 03:18:20 PM · #205

Originally posted by scalvert:

Originally posted by shamrock:
It tickles me that anyone would believe that a billionaire would give $10M to charity just to avoid paying the income tax, which would amount to what, $1.5M?

You make it sound like they're only giving out of the kindness of their hearts. If they're not doing it for the deduction, then we should expect charitable contributions to be nearly as high if that deduction was eliminated?

It's more than just the tax deduction. The real benefit is avoiding capital gains taxes althogether. The way I understand it is you can setup a charitable trust (there are several kinds) and make anyone the trustee, including yourself and make anyone the beneficiary. You can then transfer appreciated assets over to the trust, assets that normally would be subject to high capital gains taxes are now exempt once in the trust and that's for life. Also, if the assets grow in value and you sell them off that new profit will also not be subject to capital gains tax. So if for example, you wanted to avoid paying capital gains tax on stock that increased in value from when you bought it just "donate" it to the trust and it magically becomes exempt. It would be one thing if these assets actually went to pay for some charity's cause but the reality is the only requirement is that 10% of it goes to charity at some point. Meaning the rest can just sit there and grow. You could also reinvest it or pay yourself a percentage as regular income. As long as you keep about 10% in there (fair market value) you're fine to do pretty much whatever you want with the money.

BrennanOB

Canon EOS-1D Mark II

Tamron SP AF 28-75mm f/2.8 XR Di for Canon

07/30/2011 04:00:13 PM · #206

Originally posted by yanko:

It would be one thing if these assets actually went to pay for some charity's cause but the reality is the only requirement is that 10% of it goes to charity at some point.

How sure are you that this is true? My family has a charitable trust and 100% of that money is locked down to go to charity, and there are strict rules about what constitutes a legitimate charity and that no funds can go to satisfy existing pledges or the like.

There are charitable annuities that are donated to a cause and pay a fixed annual amount for the life of the donor with the principal going to the charity on the death of the sole survivor, but I have never heard of a trust that got full tax exemption and allowed 90% of the funds to revert to the trustees.

GeneralE

Canon PowerShot S3 IS

Canon 12x IS USM (S3 IS built-in Lens) -- 36-432mm (35mm EQ)

07/30/2011 04:20:48 PM · #207

FWIW as of yesterday morning Apple Computer has more cash on hand than the Federal Government.

Canon 12x IS USM (S3 IS built-in Lens) -- 36-432mm (35mm EQ)

07/30/2011 04:24:01 PM · #208

Nice to see the House just voted down a bill that hasn't even been fully debated yet in the Senate. So now we have a complete impasse. Each side believes it knows what's best for America, regardless of what polls show Americans want and practices that contradict their own positions, and each is willing to distort facts to achieve those goals. I just watched Mitch McConnell in an interview with Brian Williams claim that Obama, by agreeing to extend Bush tax cuts [as a compromise on other legislation], effectively agreed that you don't raise taxes in a recession, and that the rich already pay more in taxes (see my note on 10% of earners five posts back). Weasel. OK, so neither side is willing to believe what the other claims, and neither will budge from opposing sacred cows. How to break the deadlock?

I would challenge both sides too put their beliefs to the test. Since most of these folks are acting on personal belief or ideology rather than any actual economic expertise, bring in the non-partisan CBO (and Moody's, S&P, Greenspan or anyone else they can agree to as objective), and ask THEM what must happen to address the deficit. Whatever answer comes back becomes the working basis for a bill. Period. Both parties already defer to CBO analysis as objective truth, so use that mutual arbiter of truth to light the path ahead. Anyone who balks isn't working in good faith.

Message edited by author 2011-07-30 16:45:11.

GeneralE

Canon PowerShot S3 IS

07/30/2011 04:34:07 PM · #209

Originally posted by shamrock:

Any money made in this kind of time span would be "short-term" capital gains, and taxed at the normal income rate.

Given that this type of gain is strictly for the personal benefit of the transactor, and in no way contribute to the creation of jobs or the improvement of the public condition -- in fact they harm the public bu sucking money out of the economy with no compensatory contribution of goods or services, I think they should be taxed at far above the "normal" rate. I've suggested a "progressive" capital-gains tax system to encourage true investment, along the lines of

Time      Tax

Asset     Rate

Held      (%)

<1min     99

1-5min    95

5min-1hr  90

1hr-1day  85

1day-1wk  75

1wk-1mo   65

1-6mo     60

6mo-1yr   50

1-3yr     40

3+yr      30

07/31/2011 12:22:51 AM · #210

Originally posted by BrennanOB:

Originally posted by SDW:

Thanks to all congress democrats and republicans that are really trying to solve this huge problem. For the ones that are playing politics; we will remember in 2012!

It is hard to remember that there are still folks from both parties in the middle, partly because they get very little air time in the news. Who wants to hear about reasonable compromise when there are battles for the soul of our country being promulgated on the extremes?

I read the unfortunate news that an independent group (can't recall the name) which ranks congressmen based on their voting record said for the very first time there is zero overlap between the two parties. In other words, the most conservative democrat is more liberal than the most liberal conservative (and vice versa). That can't be good.

Here' my prediction. You heard it here first.

1) Trial balloons have been floated about Obama unilaterally raising the debt ceiling by invoking the 14th amendment.
2) Republicans catch wind of this and play the brinksmanship game to the very end.
3) Obama raises the debt ceiling via the 14th amendment.
4) Republicans are "outraged" (but privately joyful for being able to wash their hands of the mess).
5) They crucify him for it in 2012 (or attempt to).

07/31/2011 08:33:18 AM · #211

Originally posted by DrAchoo:

Originally posted by BrennanOB:

Originally posted by SDW:

Thanks to all congress democrats and republicans that are really trying to solve this huge problem. For the ones that are playing politics; we will remember in 2012!

It is hard to remember that there are still folks from both parties in the middle, partly because they get very little air time in the news. Who wants to hear about reasonable compromise when there are battles for the soul of our country being promulgated on the extremes?

I read the unfortunate news that an independent group (can't recall the name) which ranks congressmen based on their voting record said for the very first time there is zero overlap between the two parties. In other words, the most conservative democrat is more liberal than the most liberal conservative (and vice versa). That can't be good.

Here' my prediction. You heard it here first.

1) Trial balloons have been floated about Obama unilaterally raising the debt ceiling by invoking the 14th amendment.
2) Republicans catch wind of this and play the brinksmanship game to the very end.
3) Obama raises the debt ceiling via the 14th amendment.
4) Republicans are "outraged" (but privately joyful for being able to wash their hands of the mess).
5) They crucify him for it in 2012 (or attempt to).

...Or, he refuses to use the 14th amendment, the repug's lose in their game of chicken, along with the rest of us. Everyone is outraged. Civil war begins.

Nah, Americans just don't really seem to care all that much any more.

Most likely you're right, because there really doesn't seem to be any other options besides default.

07/31/2011 09:22:42 AM · #212

Most likely scenario at this point IMO:

A deal is announced, but with no guarantee of passage. It will be rejected by Tea Party members for not requiring the balanced budget amendment to pass and by some Democrats as a sellout since it only offers a "clean" raise to the debt ceiling that was previously routine in exchange for targeting social programs without restoring taxes on the wealthy. The bill might narrowly pass the Senate, but could fail in the House because they've managed to split the Overton Window there in two (policies now fall outside the range of acceptability for each group). In response, the stock market will plummet and we'll hear ominous talk from credit rating agencies. A temporary reprieve will be announced in the form of either a very short, unconditional raise to the debt ceiling and/or a Treasury announcement that they can hang on for a few more days before actual default. At that point (assuming Dems grow a spine), maybe the Constitutional option is revisited for considerationâ�� not actually used, but put back on the table to suggest Republicans could end up with nothingâ�� and we start to hear loud reminders that the Republicans' own deficit reduction study in March recommended 85% spending cuts and 15% revenue increases. Then the real negotiations begin under pressure of a developing stock market and ratings drop that cost the country more than the eventual agreement.

07/31/2011 09:11:45 PM · #213

No details really yet, but it appears the Dems have caved again.

link

Message edited by author 2011-07-31 21:28:30.

Sony 24-70mm F4 Vario-Tessar T* FE OSS

07/31/2011 09:33:04 PM · #214

BTW - I think this whole mess would put an Independent in good advantage come 2012.

Bear_Music

Samsung Galaxy S24 Ultra

07/31/2011 09:56:48 PM · #215

Originally posted by Kelli:

BTW - I think this whole mess would put an Independent in good advantage come 2012.

Sadly, if s/he managed to win that'd just make things worse, 'cuz NEITHER party would support anything s/he tried to accomplish.

R.

cynthiann

Nikon D810

Nikon AF Nikkor 50mm f/1.8

07/31/2011 10:49:00 PM · #216

Originally posted by Kelli:

BTW - I think this whole mess would put an Independent in good advantage come 2012.

I was thinking the same thing. Considering the current Republican line-up, I'm still favoring Obama as the lesser of the two evils, but there are a couple of Independents that are certainly of interest to me. Namely, Bernie Sanders.

Nikon AF-S DX NIKKOR 18-200mm f/3.5-5.6G ED VR II

07/31/2011 10:51:28 PM · #217

Originally posted by cynthiann:

Originally posted by Kelli:
BTW - I think this whole mess would put an Independent in good advantage come 2012.

I was thinking the same thing. Considering the current Republican line-up, I'm still favoring Obama as the lesser of the two evils, but there are a couple of Independents that are certainly of interest to me. Namely, Bernie Sanders.

I agree with you about the favoring the lesser of two evils thing. But, Obama seems to just be letting them walk all over him. From what I'm reading he pretty much gave in to all Boner's demands. I'll need to put some time into looking into the independents though.

Judith Polakoff

Nikon D7000

08/01/2011 01:11:50 AM · #218

Bernie Sanders for President 2012

Unfortunately, he probably will not run.

yanko

Canon EOS-5D Mark II

Carl Zeiss 50mm ZE f/1.4 Planar T for Canon

08/01/2011 01:09:23 PM · #219

Originally posted by BrennanOB:

Originally posted by yanko:
It would be one thing if these assets actually went to pay for some charity's cause but the reality is the only requirement is that 10% of it goes to charity at some point.

How sure are you that this is true? My family has a charitable trust and 100% of that money is locked down to go to charity, and there are strict rules about what constitutes a legitimate charity and that no funds can go to satisfy existing pledges or the like.

There are charitable annuities that are donated to a cause and pay a fixed annual amount for the life of the donor with the principal going to the charity on the death of the sole survivor, but I have never heard of a trust that got full tax exemption and allowed 90% of the funds to revert to the trustees.

Obviously I'm no expert, but from what I recall from past conversations I've had with people who do setup these kinds of trusts for estate and retirement planning, it can hold great tax advantages especially for avoiding capital gains tax. I don't recall which kind they were exactly but doing an online search I found that charitable remainder trusts only requires 10% be given to charity.

These trusts aren't just for charity but also for avoiding taxes and for keeping more of the wealth in the family from generation to generation. If I said lets play monopoly but I start off with a million dollars and you start with zero you probably wouldn't want to play yet this is how we run society. Worse off some people actually think this is fair.

Message edited by author 2011-08-01 13:15:38.

08/01/2011 07:26:51 PM · #220

You know, nothing that comes out of the Capitol is perfect, but I have to say the result is actually better than I anticipated. Two key things down the road: 1) Obama can veto any continuation of the Bush tax cuts in 2013 (I guess assuming he makes it that far). 2). Cuts come automatically and include defense but spare the most important safety nets if people can't agree on cuts. Plus the cutting recommendations come from a committee of only 12 people then get a simple up or down vote.

It's possible a grand compromise is in the works. The more bellyaching we hear from the far right and left, probably the better off we are.

Nikon AF Zoom-Nikkor 80-400mm f/4.5-5.6D ED VR

08/02/2011 08:23:26 PM · #221

LOL. CNN poll...approval of congress: 14% An all-time low since the poll has been done in the 1970s.

Way to go guys! You really knocked this one out of the park!

Message edited by author 2011-08-02 20:23:43.

TheDruid

Nikon D3X

08/02/2011 10:11:24 PM · #222

Originally posted by DrAchoo:

We should start a pool on whether or not we are going to get this thing done. Frankly it's a bit scary because all I hear are games and posturing and covering your tail by both sides. Where are the consensus builders? Where are the people who care about our country?

The Republicans make me so frustrated when they seem to think negotiation involves deciding whether we are going to do it their way now or later. The Dems aren't much better and Pelosi can go jump out a window for all I care. I honestly think Obama is trying to build some consensus, but he's a bit too much mild-mannered parent trying to calm the third-grade classroom after punch and cupcakes. "Please behave children. Johnny, you shouldn't do that to Ashley. Ok, who took the juice?"

Whew. Sorry, I just had to vent. I'm trying to decide whether to pull all my money out of the market in anticipation of Armageddon. Somehow I still suspect there's going to be a last minute deal of no substance...

Frankly, your population base makes up very little of the world population. Your ideals are greater then your abilities. You are the Rome of the 2000's. Like all other military nations, you will be swept into time.

BrennanOB

Canon EOS-1D Mark II

Tamron SP AF 28-75mm f/2.8 XR Di for Canon

08/02/2011 11:29:39 PM · #223

Originally posted by TheDruid:

You are the Rome of the 2000's. Like all other military nations, you will be swept into time.

You seem to draw a distinction between military and non-military nations in their permanence. All nations will be swept into time, as will all people, creations and concepts. All great empires have had a military base, and they have hit a high water mark and receded. I'm not a huge fan of the military, but without one, you tend to get swept into time a bit sooner.

Message edited by author 2011-08-02 23:30:26.

Mike

Canon EOS-5D Mark II

Tamron SP 24-70mm f/2.8 Di VC USD Canon Mount

08/03/2011 07:48:04 AM · #224

Originally posted by Cory:

Really, get rid of all the f-ing politicians and replace them with programs - THERE IS NO REASON FOR ANYONE TO REPRESENT ME, I CAN REPRESENT MYSELF JUST FINE THANKS!

Seriously, we need to take back our democracy - and the only way we're going to do that is to kick the children out of their playhouse.

we all want change but as a whole we are not willing to make the sacrifices that are required for change.