patrick.net

Zhanka, your description of the tax is faulty. The tax only applies to

1. Capital gains, including capital gains on real estate

2. Capital gains on real estate, only if in excess of the already established 250k+250k capital gain exemption per married couple (note: 1st residence, min holding period, etc).

3. If AGI is over 200k/250k when single/married (as you said)

Please understand that "Capital Gains" means the PROFIT on the transaction (sales price minus purchase price and expenses). This tax is NOT a tax on the transaction amount, it is a tax on the profits (gains).

By the way, the Republican propaganda machine is hard at work spreading lies about the above tax. They try their damndest to convince people that this is a VAT on housing transactions. That is NOT true.

Also keep in mind that nowadays, many people who sell real estate have capital losses and not capital gains!

By the way, this tax is part of the "Obamacare" bill (The Patient Protection and Affordable Care Act (PPACA)).

Reference:
http://taxfoundation.org/blog/show/26741.html

justme says

Also keep in mind that nowadays, many people who sell real estate have capital losses and not capital gains!

Many homeowners like me who bought many years ago, long before the bubble will be impacted. Not everyone ~75% sold their home during the bubble. They too will be inpacted by their future sales transation. Bill shifts the burden and passes the buck to the other people who never particated in the bubble.

When the bubble crashed, expectation was that spending should come down to reality to match the economy. But it seems like the government unions can't accept that, they just rather whine and moan and tax everyone else to get what they want, they want to spend us into their fantasy land benefits and pensions.

I'm going to vote no against it, but this state has way too many socialist lefties so who knows. Either way, hope this does not pass.

thomas.wong1986 says

justme says

Also keep in mind that nowadays, many people who sell real estate have capital losses and not capital gains!

Many homeowners like me who bought many years ago, long before the bubble will be impacted. Not everyone ~75% sold their home during the bubble. They too will be inpacted by their future sales transation. Bill shifts the burden and passes the buck to the other people who never particated in the bubble.

I think that if you have more than 250k/500k in profits it is quite okay that you have to pay this tax.

One can also think of this tax as a bit of poetic justice applied to all the old-timers that have benefitted from lower property taxes in California through the inequities of Prop. 13.

Thomas, I refuse to feel sorry for you regarding this matter.

Justme,

Point being, why pay additional 3.8% on capital gains? Whether most people incur capital loss with real estate is beside the point. And, this apply to all investment incomes, not jus real estate. I don't know how many actually misunderstand that being levied on whole assets ... Well, if SCOTUS strikes down obmacare, maybe, the law would repeal after all.

SparrowBell says

Point being, why pay additional 3.8% on capital gains?

Because it is the right thing to do?

I just don't like who is targeted. How many married couples with children lets say in bay area with income $250,000+ feel rich? We don't, even though we considered the top 1% (although the bottom one) :( Why singles treated better than married; $200,000 for singles and only $250,000 for married?

zhanka says

I just don't like who is targeted.

The law affects roughly the top 2% income bracket. I see little wrong in that. You disagree. Fine.

And yes, I've been known to hit that bracket from time to time, so it is not just me wanting everyone else to pay.

Everyone can make up their own minds. But to do that they must know the FACTS of what the law does. That is the most important matter to me.

Here is some documentation about Republi-cons lying about the tax:

http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/

If you have more than 250k in profits in an existing house, you should be forced to marry someone that is 250k underwater. Then when you do your join taxes it'll all flush out. We could call this new matchmaking site www.overandunderwatermatch.com. Obviously, if you are already married then you would have to do the ceremony up in Utah and have it performed by Jacob himself, away from the watchful eye of the feds. :)

zhanka says

I just don't like who is targeted. How many married couples with children lets say in bay area with income $250,000+ feel rich? We don't, even though we considered the top 1% (although the bottom one) :( Why singles treated better than married; $200,000 for singles and only $250,000 for married?

Boo hoo! You probably don't feel rich because you choose to live in one of the most overpriced areas in the country. That's your decision though; it doesn't change the fact that you're technically rich.

This country is going broke and the middle class has been carrying the load the whole time. It's about time the upper class starts helping out.

thomas.wong1986 says

Many homeowners like me who bought many years ago, long before the bubble will be impacted.

Thomas, just wait until prices go back to 1992 levels or lower (as is often predicted), then you won't have to pay the tax.

Does this only affect real estate or any kind of income?

The health care law contains a new 3.8 percent tax on "unearned income" for high-income taxpayers. Wikipedia: "According to certain conceptions of the Labor Theory of Value, it may refer to all income that is not a direct result of labor."

SiO2 says

thomas.wong1986 says

Many homeowners like me who bought many years ago, long before the bubble will be impacted.

Thomas, just wait until prices go back to 1992 levels or lower (as is often predicted), then you won't have to pay the tax.

Yup, problem solved. That goes to show if you find yourself complaining about paying taxes on your gains, things are not that bad for you. Gain=good, Loss=Bad

zhanka says

I just don't like who is targeted. How many married couples with children lets say in bay area with income $250,000+ feel rich? We don't, even though we considered the top 1% (although the bottom one) :( Why singles treated better than married; $200,000 for singles and only $250,000 for married?

Prostoye obyasneniye (simple explanation) - single person faces higher monthly fixed costs - rent/mortgage, all utilities, some insurance, thus they have less discretionary income left. When it comes to big ticket items, including travel, you get a 50% discount basically when you are married, so I don't see anything inherently unjust about $200Gs/$250Gs single/married tax policy.

dublin hillz says

zhanka says

I just don't like who is targeted. How many married couples with children lets say in bay area with income $250,000+ feel rich? We don't, even though we considered the top 1% (although the bottom one) :( Why singles treated better than married; $200,000 for singles and only $250,000 for married?

Prostoye obyasneniye (simple explanation) - single person faces higher monthly fixed costs - rent/mortgage, all utilities, some insurance, thus they have less discretionary income left. When it comes to big ticket items, including travel, you get a 50% discount basically when you are married, so I don't see anything inherently unjust about $200Gs/$250Gs single/married tax policy.

I guess you don't know my wife. She came with a 4X multiplier to my spending habits. A 2X would be an improvement, let along a 1.5 like you reference. ;)

dublin hillz says

zhanka says

I just don't like who is targeted. How many married couples with children lets say in bay area with income $250,000+ feel rich? We don't, even though we considered the top 1% (although the bottom one) :( Why singles treated better than married; $200,000 for singles and only $250,000 for married?

Prostoye obyasneniye (simple explanation) - single person faces higher monthly fixed costs - rent/mortgage, all utilities, some insurance, thus they have less discretionary income left. When it comes to big ticket items, including travel, you get a 50% discount basically when you are married, so I don't see anything inherently unjust about $200Gs/$250Gs single/married tax policy.

There should be NO tax structure in place that treats anyone person differently due to marriage status. The fact that the single person can reduce those "higher monthly fixed costs" by having others live with them in a room mate situation shows that if they are smart, they can divide those costs just as easily as a married couple. "travel" is not a living requirement. Again, there should be NO TAX that is applied differently to persons of varying marital status. Plain and Simple.

dublin hillz says

including travel, you get a 50% discount basically when you are married

Do you have kids? "50% discount"? Hmm... maybe for hotel, what about air tickets lets say for 4, dining out...?

What about cost of education? UC system charges $30,000+ per year, private school twice as much

There are lots of new taxes coming. If you vote AGAIN for Obama you deserve to be broke forever and should be sterilized after your lobotomy.

FortWayne says

Does this only affect real estate or any kind of income?

Ignorance is the hallmark of right-wingers. Read my first comment again, and try to engage the brain.

I'll give you a hint: The tax applies to CAPITAL GAINS, not earned income (wages).

If you do not know what a capital gain is, you have no business at all opining about tax policy (as you did earlier in this thread). You need a remedial course, start looking it up in Wikipedia.

Obamacare also imposes a special tax on medical devices and pharmaceuticals.
Of course these new taxes are all going to be wonderful for these industries and will help them compete worldwide better than ever before.
I mean, how can poor Swiss drug companies ever compete? They have no such special tax and they have an 8.5% corporate tax (V. USA 35%).
justme you have only 3,130 posts. You need to get your numbers up, eventually you'll convince all of us of your brilliance.

clambo says

Obamacare also imposes a special tax on medical devices and pharmaceuticals.
Of course these new taxes are all going to be wonderful for these industries and will help them compete worldwide better than ever before.
I mean, how can poor Swiss drug companies ever compete? They have no such special tax and they have an 8.5% corporate tax (V. USA 35%).
justme you have only 3,130 posts. You need to get your numbers up, eventually you'll convince all of us of your brilliance.

Clambo,

Big FAIL to you. You cannot make a coherent argument relevant to the subject matter of this thread, so you go fishing for something else (corporate tax rates in Switzerland versus US??) to squabble about.

If you want to discuss that, start your own thread.

justme says

The law affects roughly the top 2% income bracket. I see little wrong in that. You disagree. Fine.

The new law potentially applies to almost every one of tens households in San Jose - San Francisco-Oakland-Vallejo. So, how you feel about that now?

http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html

A household income of $250,000 places you in the Top 3% of people who live in the United States.
INCOME REQUIRED TO BE IN THE:
TOP 1% $383,001
TOP 5% $188,001
TOP 10% $140,001
TOP 25% $89,125
TOP HALF $50,742
BOTTOM 25% $25,411
BOTTOM 10% $12,154

A household income of $250,000 places you in the Top 10% of people who live San Francisco-Oakland-Vallejo, Calif..
INCOME REQUIRED TO BE IN THE:
TOP 1% $558,046
TOP 5% 349,693
TOP 10% 238,855
TOP 25% 141,790
TOP HALF 78,086
BOTTOM 25% 37,500
BOTTOM 10% 15,246

A household income of $250,000 places you in the Top 8% of people who live there San Jose, Calif..
INCOME REQUIRED TO BE IN THE:
TOP 1% $517,000
TOP 5% 298,164
TOP 10% 225,852
TOP 25% 146,348
TOP HALF 85,784
BOTTOM 25% 42,892
BOTTOM 10% 19,820

zhanka says

The new law potentially applies to almost every one of tens households in San Jose - San Francisco-Oakland-Vallejo. So, how you feel about that now?

Tax the crap our of then all. Tax the crap out of me. We are living on borrowed money. We need new borrowed money to pay back the liabilities on the last set of bond auctions. Rinse, repeat. All the while we boast about the wealth of this country. Let stop the shell game and tax us all enough to get back to a baseline. No one got the balls to do what is needed, so we are all setup to continue to fall into the abyss together. I'd vote for a double of all existing taxes. Turbo tax says you owe X amount, then you really owe 2X. Didn't even make 2X last year, tough, leave. There are many foreigners that would love your passport.

zhanka says

The new law potentially applies to almost every one of tens households in San Jose - San Francisco-Oakland-Vallejo. So, how you feel about that now?

I feel like this: Stop whining and pay your damn taxes.

Nomograph says

So why do they stay? The same reason that Pharma, Biotech, and high-tech stays in expensive areas such as San Diego, San Francisco, and Boston; the most important factor in success is the ability to recruit and retain the best possible talent. Switzerland has excellent universities such as ETH that provide the skilled workforce they need.

That was true. The sad thing here is that if you are not part of the landed gentry, you cant afford to live in these places anymore. You are a wage slave at the table looking for scraps.

Also, have you noticed, only the kids of the 1% come out of schools debt free, and the rest, saddled with debt, but again, the top schools in these top areas take in wealthy kids pretty much exclusively.

We've ended up with rich people's rich kids go to top schools and graduate and take over companies with their highfalutin credentials and live in posh areas completing the cycle.

What isnt true anymore is this isnt really competitive. And if you think you are so great and so smart you cant be outsourced, just wait. Youll see. The 0.01% who are really in control have something planned for you, and its not pretty.

And most of the best possible talent is wasted. Big companies are mostly antagonistic against innovation. The whole thing is screwed up, and if you've been in the valley for the last 10 years and think things are getting better for innovation or work life or anything you are nuts. Its a crisis.

This isnt going to last. Crowding into these ridiculous cities jammed in traffic. Then we sign over all the fruits of our knowledge to the corporations seen as "people" in the eyes of the law. We do all of the work. Pay all of the taxes. And we do this because we are afraid of sinking into the lower classes. Its all fear. Nothing is about self actualization or innovation. Its about enriching corporations and their preferred owners.

"Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice . . . you don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own, and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying . . . lobbying, to get what they want . . . Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want . . . they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that . . . that doesn’t help them. That’s against their interests. That’s right. They don’t want people who are smart enough to sit around a kitchen table and think about how badly they’re getting screwed by a system that threw them overboard 30 years ago. They don’t want that. You know what they want? They want obedient workers . . . Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly crappier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it, and now they’re coming for your Social Security money. They want your retirement money. They want it back so they can give it to their criminal friends on Wall Street, and you know something? They’ll get it . . . they’ll get it all from you sooner or later cause they own this place. It’s a big club and you ain't in it. You and I are not in The big club. By the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care. Good honest hard-working people . . . white collar, blue collar it doesn’t matter what color shirt you have on. Good honest hard-working people continue, these are people of modest means . . . continue to elect these rich cocksuckers who don’t give a crap about you. They don’t give a crap about you . . . they don’t give a crap about you. They don’t care about you at all . . . at all . . . at all, and nobody seems to notice. Nobody seems to care. That’s what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick that’s being jammed up their butt everyday, because the owners of this country know the truth. It’s called the American Dream cause you have to be asleep to believe it . . .”