Your Federal Government Shutdown Thread

[guido911]

Why wouldn't they? What else are they going to do with their money, sit on it?

Yep. Or bank it. Or donate it. Or buy tax free munis. Or take it overseas (along with themselves).

[Red Arrow]

Why wouldn't they? What else are they going to do with their money, sit on it? You make me laugh sometimes. 

Not all investments are treated equally.  The (miniscule) interest I am earning on CDs is taxed at my top income bracket.  If I sell any stocks from my employer's stock purchase program (15% discount available to all employees) is taxed as ordinary income if sold earlier than keeping it for one year.  Why should I help someone else buy a house to live in through the mortgage interest deduction.  I don't own a house, not even co-owned with a bank.

401K and IRA retirement savings have upper limits on the contributions to limit the benefit to the rich.  Due to those limits, the average guy gets to deduct a greater percentage of his income than a rich guy.

You are just as guilty as the rest of us at cherry picking your examples.

[Red Arrow]

[youtube]http://www.youtube.com/watch?v=EKx8szuzioI[/youtube]

Jumpin Joe, you never fail to deliver.

Nah, he was just checking his eyelids for leaks.

[Gaspar]

Why?

I didn't mention social/economic justice in my response.

How about you define mid century intellectualism?

No but that's what I was discussing above.

[Red Arrow]

9. characterized by generosity and willingness to give in large amounts: a liberal donor.

Read number 9 over and over.

Give all of your money that you want to.  Let me chose my level please.

[nathanm]

Yep. Or bank it. Or donate it. Or buy tax free munis. Or take it overseas (along with themselves).

Clearly, you're not much of an entrepreneur. Either that or you already forgot the 90s.

Maybe the people I know who have gobs of money are unusual for the wealthy sort, but not a one of them is content to let their money sit around doing nothing. Or making what little a tax free municipal bond makes. Sure, some of their money goes overseas, but this being the US and them being US citizens, their entire world income is subject to tax.

That's not to say they won't do things to reduce their tax burden when it's within the rules. I've never argued anyone should pay more tax than required. I think the rules shouldn't advantage one particular group over another, though.

Of course, we might disagree on what constitutes an advantage. I don't think it's much of an advantage to not be taxed to the point where a person can't afford basic necessities, as they might be if we taxed people living in poverty as much as those not living in poverty. That makes it pretty much impossible to get out of poverty and become more productive. Maybe I should stop surrounding myself with (archetypical) Clinton Democrats. The philosophy seems to be keeping me from buying into the Oklahoma brand of "eff you I got mine" conservatism.

[Conan71]

Nathan, do you not recall all these wealthy people and corporations sitting on billions and billions of dollars in cash while waiting to see what the outcome of Obamacare and whether or not the Bush tax cuts would be repealed?  That's only been a few months back...

[nathanm]

Nathan, do you not recall all these wealthy people and corporations sitting on billions and billions of dollars in cash while waiting to see what the outcome of Obamacare and whether or not the Bush tax cuts would be repealed?  That's only been a few months back...

I recall that being their excuse. I didn't buy it and still don't. The problem is counterparty risk, not the specter of government regulation, despite what the bought and paid lobbyists and political "analysts" like to claim. It simply makes no sense. Was there a dearth of investment in the 90s? My memory just goes back farther.

[Gaspar]

Nate, Conan, you can both be pissed!

CBO has scored the cuts to be voted on today.
A Congressional Budget Office analysis of the fiscal 2011 spending deal that Congress will vote on Thursday concludes that it would cut spending this year by less than one-one hundredth of what both Republicans or Democrats have claimed.

A comparison prepared by the CBO shows that the omnibus spending bill, advertised as containing some $38.5 billion in cuts, will only reduce federal outlays by $352 million below 2010 spending rates. The nonpartisan budget agency also projects that total outlays are actually some $3.3 billion more than in 2010, if emergency spending is included in the total.

The astonishing result, according to CBO, is the result of several factors: increases in spending included in the deal, especially at the Defense Department; decisions to draw over half of the savings from recissions, cuts to reserve funds, and mandatory-spending programs; and writing off cuts from funding that might never have been spent.



Holy smoke-screen Batman, we've been BSed.  I wish Biden were awake to see this!

http://cbo.gov/ftpdocs/121xx/doc12109/ContinuingResolutions.pdf

Guess those Tea Party nut jobs were right!  Neither side is serious.

[Red Arrow]

Or making what little a tax free municipal bond makes.

Remember the effective rate is higher since the income is tax free.  How much more obviously depends on your tax rate.  How one scatters their money about also depends on how risk adverse they are and if they have enough to lose some.

[nathanm]

Remember the effective rate is higher since the income is tax free.  How much more obviously depends on your tax rate.  How one scatters their money about also depends on how risk adverse they are and if they have enough to lose some.

Given that we're talking about the investor class, they're not terribly risk averse and they have enough to lose some without going completely broke.

If you're talking about me, I'm risk averse and don't have much to lose.

[Townsend]

David Cay Johnston is a columnist for tax.com and teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management. He has also been called the “de facto chief tax enforcement officer of the United States” because his reporting in The New York Times shut down many tax dodges and schemes, just two of them valued by Congress at $260 billion. Johnston received a 2001 Pulitzer Prize for exposing tax loopholes and inequities. He wrote two bestsellers on taxes, Perfectly Legal and Free Lunch. Later this year, Johnston will be out with a new book, The Fine Print, revealing how big business, with help from politicians, abuses plain English to rob you blind.

Interesting article by Johnston:

http://www.wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxes.html

[Red Arrow]

Given that we're talking about the investor class, they're not terribly risk averse and they have enough to lose some without going completely broke.

If you're talking about me, I'm risk averse and don't have much to lose.

There is a class in between that has money to invest but isn't really rich in the world of big money.  My perception of this class is in the magical $250,000/yr area.  They may want to have some money in a relatively secure place to make sure they don't go completely broke if the market takes a nose-dive.  

That's above my income.  I fall into the group above living from paycheck to paycheck but don't make enough to be willing to lose much.

[nathanm]

There is a class in between that has money to invest but isn't really rich in the world of big money.  My perception of this class is in the magical $250,000/yr area.  They may want to have some money in a relatively secure place to make sure they don't go completely broke if the market takes a nose-dive.  

That's above my income.  I fall into the group above living from paycheck to paycheck but don't make enough to be willing to lose much.

The $250k/yr folks who are the sort to invest (outside of a 401(k) or IRA, anyway) have enough savings in stable instruments like CDs to make losing their entire portfolio not what it would be for you or I. They'd not be taking vacations to far flung places, rather than buying ramen.

At least that's how it works for my clients, generally speaking. Obviously there are some folks who are completely risk-averse despite having plenty in savings and there are those living paycheck to paycheck on twenty grand a month (what's with that?) and there are those who are all in all the time. The couple of folks who really invest in a lot of startups and that sort of thing are the ones who are least likely to give a whit about the tax code. They do it because that's just what they do, not because of a few percent here or there out of their profit.

They almost all are reliable voters and donors for the Democrats, though. Maybe the ones who are Republicans, who I admittedly speak to less about this sort of thing, would quit investing if they had to pay more. I doubt it, but maybe.

It's just my perception that your investment or my investment isn't really what makes the economy go 'round, and we're the ones most likely to care about the tax rate being higher or lower. The folks I'm talking about invest in startups or stock or whatever like you fly or I play with computers. It's just what we do, and the money isn't really the big motivation. I get a thrill out of solving a computer problem, they get a thrill out of solving a business problem. As long as they have money to invest in something, they're going to do it, just like I'll buy electronics as long as I have the money to do it.

[Townsend]

Just saw on a breaking news segment that the Obama administration is pulling the plug on the border fence.