patrick.net

My proof are my taxes since Obama took office, and I am (upper) middle-class.

What law did Obama pass that raised your taxes?

finehoe 2014 Feb 27, 10:53pm

I am working on getting closer to the 1%

Dream on, honey.

20 control point 2014 Feb 27, 11:51pm

Is the plan revenue neutral? Details are emerging, but the answer cannot be "yes" while cutting tax rates at the top unless taxes are increased elsewhere.

Elimination of write off from State and local taxes while doubling the standard deduction to $22,000? This effectively removes the mortgage interest deduction as well.

Very few other itemized deductions large enough besides taxes paid and mortgage, therefore mortgage interest would have to exceed at least $15-17k to exceed the standard deduction. (assuming at most 5-7k in other itemized deductions)

At 4%, that means a mortgage balance of $375k. At 80% LTV, home value would be ~$470k. About twice the median home.

Effective capital gains tax rate increase from 23.8% to 24.8% for ultra-rich? Yawn. This will most likely be offset by the reduction in their ordinary income rate from 39.6% to 25%.

i.e. if 90% of your income is taxed 1% higher but 10% of your income is taxed 14.6% lower, .9% increase offset by 1.46% decrease. In order to pay more under this plan, the "mix" of income must be greater than about 93.5% capital gains and 6.5% ordinary income.

Anytime you see a reduction in the EIC, you know who is going to have an increased tax burden. With the EIC the working poor have an effective negative tax rate. You could make the standard deduction $100k, but you are never going to get a negative tax rate through deductions.

Lets look at a median income family of 4. $55k income, $100k mortgage balance, 6% state income tax rate, 1.5% property tax rate.

Under Camp's plan, this family would have standard deduction of $22k, taxable income of $33k and a tax rate of 10%, so taxes due $3300, less 2*$1500 child tax credits, taxes of $300.

Currently, this family has 4*personal exemptions ($3900) = $15,600. They have $4k in mortgage interest, $1.7k in property taxes, and $3600 in state income taxes. They take the standard deduction of $12,200 since it is greater. So $55k - $15.6k - $12.2k = $27,200 in taxable income. They pay $1,785 plus 15% of (27,200-17,850) = 1402+1785. Total 3187 less $2k in child tax credits, taxes of $1187. Plus they get EIC of $4455. This median family would get a refund of $3268.

Current law, they have net tax rate of -5.9%. Camp's plan would have a median income family of 4 PAY .5%. Effectively, the tax rate for a median income family of 4 would increase 6.4%.

Beware wolf in sheep's clothing...

21 mell 2014 Feb 27, 11:56pm

bob2356 says

mell says

My proof are my taxes since Obama took office, and I am (upper) middle-class.

What law did Obama pass that raised your taxes?

Surtax on Investment Income
Medicare Payroll Tax
Skyrocketing health care premiums (they had to drop the current provider in the middle of the year and scramble for one with less steep hikes)

All in all I estimated easily in an additional burden over 10K even without factoring in health care - so yeah, hope and change ;)

finehoe says

mell says

I am working on getting closer to the 1%

Dream on, honey.

I know Obummer is killing mobility for the middle-class and protecting the cronies, but whadda you gotta do? You just gotta try harder ;)

lostand confused 2014 Feb 28, 12:13am

edvard2 says

You asked? Should be obvious: Most middle class families own houses. Most have
mortgages. Most benefit from having the ability to reduce their total tax via
mortgage interest deductions. Simple enough

Except in coastal bubble states-middle class don't buy 500k houses.

23 control point 2014 Feb 28, 12:18am

bob2356
says

mell
says

My proof are my taxes since Obama took office, and I am (upper) middle-class.

What law did Obama pass that raised your taxes?

Surtax on Investment Income
Medicare Payroll Tax

Your quote above: I am (upper) middle class, does not mix with paying the Investment Income Surtax (MAGI over $250k/200k. You need gross income of at least $220k/$270k to have this)

This is not middle class, or upper middle class. It is 4/5 times the median household income. It is top 1.5%-2%.

"Middle" means middle. 25%-75% makes most sense. Maybe you could argue it is 35%-85%. But certainly not top 2%. You are rich, and Obama has made no bones about raising taxes on the rich. He campaigned and won on it twice.

Boo freakin hoo you pay .9% more in income taxes,and 3.8% more on investment income. At $300k income with $50k investment income, you pay $2350 more in taxes. $10k? Even at $450k income, $200k investment you pay only $7600 (3.8% of 200k more, you wouldn't pay medicare because that is only on Wages)

You obviously make under $450k because you didn't camplain about that tax increase.

24 mell 2014 Feb 28, 12:31am

You obviously make under $450k because you didn't camplain about that tax increase.

That is correct, I am just over the lower end to pay for the other taxes I mentioned.

"Middle" means middle. 25%-75% makes most sense. Maybe you could argue it is 35%-85%. But certainly not top 2%. You are rich, and Obama has made no bones about raising taxes on the rich. He campaigned and won on it twice.

You cannot make a tech salary like that outside of CA, prob outside of the bay area. And that is upper middle class here. Nothing more. I give a fuck about what Obama thinks is rich, if he wanted to tax the "rich" he'd tax the 1% like the proposed levied surtax on the most wealthy by the GOP plan.

25 control point 2014 Feb 28, 12:38am

You cannot make a tech salary like that outside of CA, prob outside of the
bay area. And that is upper middle class here. Nothing more. I give a fuck about
what Obama thinks is rich, if he wanted to tax the "rich" he'd tax the 1% like
the proposed levied surtax on the most wealthy by the GOP plan.

You don't understand math then. Even in the CA, or the BA, a $250k income is top 5%. That is rich compared to the median.

As an aside - I agree with you. I think the taxes should be more progressive - I think they should be 90% on incomes over $10 Million, I don't think there should be a different rate for capital gains and wages. I don't think they should have increased taxes on guys like you, it would have been better to do it MORE onthe generationally wealthy, the true capitalists. I think this because of large numbers - yeah, you are only 1.4999% away from Warren Buffett - but you are closer in income to the bum who just panhandled $20 bucks than your are to him in both absolute and percentage terms.

Your interests are not any more aligned than his are to the bum's. You would be better off if he paid more, FWIW.

But don't argue that you are middle class when your income is 4-5 times the median. By math, this is not true.

26 SiO2 2014 Feb 28, 12:54am

bob2356 says

mell says

My proof are my taxes since Obama took office, and I am (upper) middle-class.

What law did Obama pass that raised your taxes?

There is an increase on investment tax for those with agi more than $250k. I can imagine that someone living in the Fortress might think that $250k annual income is middle class.

However, they would be wrong.

(this is not class envy or anything like that, just a factual statement. )

finehoe 2014 Feb 28, 1:15am

Warren Buffett - but you are closer in income to the bum who just panhandled $20
bucks than your are to him in both absolute and percentage terms.

This in a nutshell is the problem with the vast majority of Republican voters. Because they make a decent salary and have some money in the bank, they think their interests are alligned with the Bill Gates and Jamie Diamonds of the world, when in reality they are wage-slaves like the rest of us. And are viewed that way by their plutocrat masters, just like the rest of us.

lostand confused 2014 Feb 28, 1:29am

finehoe says

control point says

Warren Buffett - but you are closer in income to the bum who just panhandled $20
bucks than your are to him in both absolute and percentage terms.

This in a nutshell is the problem with the vast majority of Republican voters. Because they make a decent salary and have some money in the bank, they think their interests are alligned with the Bill Gates and Jamie Diamonds of the world, when in reality they are wage-slaves like the rest of us. And are viewed that way by their plutocrat masters, just like the rest of us.

And the problems with democrats is they want to grab what meager savings I have and give it to octomom and any numbe rof "worthy" causes.

29 mell 2014 Feb 28, 2:25am

finehoe says

control point says

Warren Buffett - but you are closer in income to the bum who just panhandled $20

bucks than your are to him in both absolute and percentage terms.

This in a nutshell is the problem with the vast majority of Republican voters. Because they make a decent salary and have some money in the bank, they think their interests are alligned with the Bill Gates and Jamie Diamonds of the world, when in reality they are wage-slaves like the rest of us. And are viewed that way by their plutocrat masters, just like the rest of us.

But see it's not, had 2008 played out without market intervention, the wealthy with leveraged assets (even Buffet is leveraged) would have gotten wiped out or seen their wealth reduced dramatically while savings rates would have shot up for those who cannot leverage but save. The point is to allow and encourage investment with reduced taxes or - if same as income tax - dramatically reduce the income tax to like 25% whereas removing special deductions to discourage leveraging and too much speculation that will be payed for by the taxpayer when it fails. People who make 100K-300K need to have the ability to move upwards by investing smart and with calculated risk, not debt-driven leverage. The current tax system is killing mobility and - as lost and confused pointed out - rewards entitled dependents and thew 1% by burdening the middle class. The fact that by numbers middle class means far less income speaks volumes about this failed policy. Nobody considering themselves middle-class should have to depend on any special deductions or government handouts.

30 bob2356 2014 Feb 28, 2:47am

lostand confused says

And the problems with democrats is they want to grab what meager savings I have and give it to octomom and any numbe rof "worthy" causes.

As opposed gabbing what meager savings you have and blowing it on military and wars?

31 control point 2014 Feb 28, 2:50am

the wealthy with leveraged assets (even Buffet is leveraged) would have gotten
wiped out or seen their wealth reduced dramatically while savings rates would
have shot up for those who cannot leverage but save.

The would have been MORE of a consolidation of wealth not less. Warren Buffett maybe, maybe not. I seriously doubt he was leveraged and legally liable so much that without a bailout he would have been wiped out, but don't know his specific personal balance sheet in 2008.

Do you really think EVERY rich capitlaist was leveraged?

Prime example: Hostess Brands - no bailout there. Twinkies are still in production - the owner just changed. Now a new capitalist produces the same Twinkies at a lower marginal cost because he was able to eliminate the long term liabilities of the previous owner of Hostess, while acquiring the same income producing asset.

Who got screwed? Well, the union. That union (and the workers therein) contributed years of economic capital to build and maintain the value of Twinkies. Their deferred compensation (read: Pension) was what was destroyed when the new owners acquired only the assets (and not the liabilities) of the brand.

Without the bailouts, this would have happened everywhere. At least one rich guy was not leveraged, and after the deflationary spiral, his billions in unleveraged capital would have been all that remained in relative terms, suddenly enough to buy EVERYTHING. He would be able to outbid you unless you were willing to borrow, from HIM. This is an extreme example of ONE unleveraged rich guy, but in reality - there would have been enough Joe the plumber certainly isn't going to be acquiring income generating assets.

In the best times, Joe the plumber is barely treading water. In a deflationary depression - he is broke because all of his customers lost their jobs and are roke too.

You would have lost your job. Your investments would have plummeted in relative value. Any debt you had would have increased in relative value. Most of your net worth is the present value of your future earning potential. No job = no future earning potential. You couldn't borrow to take advantage of the buying opportunity. Your net worth would have been GONE. Even if it wasn't, you wouldn't be able liquidate your assets to buy more valuable assets.

32 mell 2014 Feb 28, 5:24am

You would have lost your job.

Doubtful, I had enough offers even throughout the recession, but sure there's never a guarantee, that's why you need to save for a nice cushion instead of buying a house and leveraging yourself to the hilt.

Your investments would have plummeted in relative value.

Doubtful, I invest mainly in results driven biotech (even during the recession small caps were acquired if they had interesting pipelines), some agriculture, precious metals and solid real tech companies, instead of bullshit-hyped leveraged tech, financial or housing trannies. The portfolio didn't look great, but was doing ok in 2008.

You couldn't borrow to take advantage of the buying opportunity. Your net worth would have been GONE. Even if it wasn't, you wouldn't be able liquidate your assets to buy more valuable assets.

You shouldn't have to borrow, that's not sane capital formation, but debt-driven speculation. Unless you or your family is hit by a mostly unforseeable catastrophy (health, natural disaster etc.), you should never have to liquidate anything - and recessions don't count as catastrophies, they are part of the market cycle and necessary corrections, and they would be less often and shorter if not for government and Fed meddling which continues to distort the markets and blow bubbles left and right. Capital formation without leverage is the cornerstone of any successful and healthy economy, not deficit spending and debt-driven leverage. You can clearly see that it is not working and hammering the middle class.

tatupu70 2014 Feb 28, 8:31am

Doubtful, I had enough offers even throughout the recession, but sure there's never a guarantee, that's why you need to save for a nice cushion instead of buying a house and leveraging yourself to the hilt.

Doubtful, I invest mainly in results driven biotech (even during the recession small caps were acquired if they had interesting pipelines), some agriculture, precious metals and solid real tech companies, instead of bullshit-hyped leveraged tech, financial or housing trannies. The portfolio didn't look great, but was doing ok in 2008.

Clearly you don't 'understand what a deep recession/depression is. It's not only bullshit-hyped leverage tech that goes down. There would be no job offers when you get laid off.

34 mell 2014 Feb 28, 9:30am

tatupu70 says

Clearly you don't 'understand what a deep recession/depression is. It's not only bullshit-hyped leverage tech that goes down. There would be no job offers when you get laid off.

BS - in fact more productive jobs would have been created in the aftermath as the drain of the parasitic TBTFs would have come to a halt. You have a bad economy because you let crony-capitalist, parasitic lobbying companies exist that do nothing but siphon off money from the Fed spigot.

35 corntrollio 2014 Feb 28, 9:59am

Which is good as investments are made from already taxed money and only the uber wealthy would pay higher investment taxes.

Lots of tax experts disagree. Reagan's certainly did. Reagan's tax plan, which continued through the Bush I and Clinton administrations, taxed capital gains and labor the same. This would help with a lot of wealth disparity, certainly.

My proof are my taxes since Obama took office [and a bunch of other nonsense]

That's not really an argument -- and I bet it's actually untrue. You haven't explained exactly what happened -- again, we need some facts and then an argument that logically flows from those facts.

Surtax on Investment Income

Medicare Payroll Tax

Skyrocketing health care premiums (they had to drop the current

No, actually, Congress passed those first two. Check your Constitution, bud.

The third one is based on the economy and the level of coverage. People who don't understand how insurance works always say this crap. Insurance is based on having assets and liabilities. The assets are the premiums paid in, which are invested. The liabilities are payments. If the investments aren't doing well, then you have to get more assets by raising the premium.

Hence, when the economy isn't doing well, premiums go up. When liabilities go up, premiums also go up. If your coverage is better, then premiums could go up, sure. You haven't given us enough information to know whether this claim is BS or not. I don't think you have the information, most likely, because you haven't done enough research into this to know whether it's true, and you don't have access to the actuarial formulas.

jojo says

End Prop 13

Agreed.

36 corntrollio 2014 Feb 28, 10:02am

People who make 100K-300K need to have the ability to move upwards by investing smart and with calculated risk, not debt-driven leverage. The current tax system is killing mobility and - as lost and confused pointed out - rewards entitled dependents and thew 1% by burdening the middle class.

I agree with this part to a point. What gets obscured in all this is that a $180-200K salary is definitely in the top 5% of households. However, there's a big difference between top 5% and top 1%. And there's also a big difference between the top half of the top 1% and the bottom half of the top 1%. Most people from the top 5% up to the bottom half of the top 1% are wage slaves. Most people in the top half of the top 1% are living off investment income.

Budgets are being balanced on the back of the 0.51-5%, whereas they should be balanced more on the back of the top 0.5%. That's why investments should be taxed the same as labor -- this would equalize those groups better.

37 mell 2014 Feb 28, 10:36am

No, actually, Congress passed those first two. Check your Constitution, bud.

Of course they did, eventually. There is not much difference between mainstream Republicans and Democrats when it comes to the financial policy, as the two wings closest to each other eventually continue more of the same.

Hence, when the economy isn't doing well, premiums go up. When liabilities go up, premiums also go up. If your coverage is better, then premiums could go up, sure. You haven't given us enough information to know whether this claim is BS or not. I don't think you have the information, most likely, because you haven't done enough research into this to know whether it's true, and you don't have access to the actuarial formulas.

There is not much formula research you have to do when your insurance provider tells you that they had to hike premiums due to provisions in the ACA. Sure you can accuse them of lying and maybe they are exaggerating their premium hikes either for pure greed or to cover their bases if payments will be higher than estimated, but there is no doubt that this has caused premium hikes.

Budgets are being balanced on the back of the 0.51-5%, whereas they should be balanced more on the back of the top 0.5%.

Agreed if that's the two choices.

That's why investments should be taxed the same as labor -- this would equalize those groups better.

I think that would discourage investment for the non 1%ers too much, certainly under the current income tax structure. I'd prefer something similar, taxing up to a certain amount at a reduced rate and the rest as income. Of course if income tax is 25%, then the tax burden would not be higher than today.

Paralithodes 2014 Mar 1, 11:14am

No, actually, Congress passed those first two. Check your Constitution, bud.

So when Congress passes something, when does it become law?

39 corntrollio 2014 Mar 4, 7:35am

Paralithodes says

So when Congress passes something, when does it become law?

Well, it could become law if the president signs it. It also could become law if a larger proportionate of Congress agrees to it.

Again, presidents can't drive the agenda here. They can propose things and have Congress accept or reject them, but at the end of the day, they can't dictate legislation. Trying to say a president has extra-presidential powers is usually going to be a losing argument. You would do better to focus on a good counter-argument than the blame game.

There is not much formula research you have to do when your insurance provider tells you that they had to hike premiums due to provisions in the ACA. Sure you can accuse them of lying

Ding ding ding, a lot of them *were* lying. But they often simultaneously increased coverage while increasing premiums too. That will "raise premiums" but you'll get more back on the back end, on average.

Even Mr. Armstrong of AOL was lying. What did a couple babies being born premature in 2012 have to do with the Affordable Care Act? Absolutely nothing. Even his complaints about healthcare costs were somewhat bogus anyway -- they made bumper profits far beyond any alleged healthcare cost increase. He was just trying to make political hay.