65 % of americans not preparing for retirement.

[sportbikerider78]

Thats true but you really cant defend a lower tax rate on dividends and capitol gains. Money you made while sleeping ,to salaries and earned income you bust your butt for. You can try but i just dont see the fairness in that.
.

Simple solution. Lower the income tax as well. It is ridiculous.

Before I had kids and my wife became a stay at home mom, my wife and had high combined salaries. We both got decent bonuses that year as well. I paid more in tax that year then I made as an entry level engineer.

 

[sportbikerider78]

People set their own wage. If your job is going nowhere, thats where it will take you, upgrade!

Agreed.
I have done it and it takes a TON of effort, but it is rewarding. I personally like change, so it fits my disposition.

I heard one time "you are getting paid exactly what you are worth". Hard to argue with that.

 

[BrotherBart]

Agreed.

I heard one time "you are getting paid exactly what you are worth". Hard to argue with that.

A few times I have said "I am worth twice what I am getting paid but what they have me doing is worth half of what I am getting paid."

 

[EatenByLimestone]

Maybe it's easier to blame others than clear a new road?

 

[Seasoned Oak]

Simple solution. Lower the income tax as well. It is ridiculous.

Before I had kids and my wife became a stay at home mom, my wife and had high combined salaries. We both got decent bonuses that year as well. I paid more in tax that year then I made as an entry level engineer.

Hasnt that been lowered recently ? Perhaps if we didnt have sweeheart deals for protected classes of income it could all be the same. Lowering any taxes while running deficits make no sense either. I prefer freezing spending until the deficits disappear.

 

[begreen]

Hasnt that been lowered recently? Perhaps if we didnt have sweeheart deals for protected classes of income it could all be the same. Lowering any taxes while running deficits make no sense either. I prefer freezing spending until the deficits disappear.

 

[Ashful]

View attachment 227285

When looking at that graph, you must remember that median household income has increased by roughly 10x since the 1940’s. Someone making $100k in WW2 would have typically had a net worth over $10M in today’s dollars, making the 90% tax rate a little more understandable. These are the folks at which the alternative minimum tax was originally aimed, which was then unfortunately left unadjusted for decades, until it was affecting a much larger fraction of the population than ever intended by its original proponents.

 

[CaptSpiff]

Ha ha BB It s pretty easy to level the playing field. All they need is a floor for the special low grandma rate of, say the first 10K at the low rate ,everything over that gets the same rate as everyone else,s(salaries,wages) So the Warren Buffets of the world pay the same rate on the lions share of their income as you an i. As always your only taxed on NEW INCOME not your principal which you busted butt for.

Except when you die, then they want 50% of your principal as well.

I have been a fan of a flat tax since college days, thought we were close this time. All my reading puts that number between 17 and 22% rate. I would expect that your "grandma" provision would probably be more like 10-15K per adult and 5-8K per dependent. Everything there after is on the table including pensions & benefits. Yup, I'm talking my Cadillac health and drug plan benefits too. If measurable value was transferred into your control, it's a taxable event.

The govt still gets to play with stimulus provisions, but they take the form of post tax incentives.

Now, lets talk about forward looking losses.

 

[sportbikerider78]

Hasnt that been lowered recently ? Perhaps if we didnt have sweeheart deals for protected classes of income it could all be the same. Lowering any taxes while running deficits make no sense either. I prefer freezing spending until the deficits disappear.

So far..zero success with that.

 

[sportbikerider78]

View attachment 227285

Here is the top bracket adjusted for inflation, if anyone is interested.



In addition to what has been posted by Ashful, was there a big property tax, state income tax, sales tax, FICA, ect back then?

I think you guys are also very much confusing what a "marginal tax rate" and "effective tax rate" are. Let's take 1955. Top 1% means that you need to earn $3,425,766 when adjusted for inflation. you are only paying that super high rate on your taxes on the money you made OVER $3,425,766, not below it..that's your effective tax rate, even though your marginal tax rate might be 90%.

Let's take an example from today. This part is a copy and paste because I couldn't say it as well.

The first of many reasons that this was the case is that we need to look at the effective tax rate, not the top marginal tax rate. So for example, if I make $20,000, I owe 10 percent under today’s tax code, but only on any income over $18,450 (filing jointly). So I only owe 10 percent of $1550, or $155. Yes, my marginal tax rate may be 10 percent, but my effective tax rate is 0.78 percent.

If you look at taxes vs. GDP since the 50's, it has been about 17-20% every year, regardless of tax law changes. Take it for what it is worth. This does not take into consideration the additional local taxes and fines that have been created since then and (in some cases) represent a big tax burden locally.

 

[Ashful]

Here is the top bracket adjusted for inflation, if anyone is interested.

View attachment 227323

In addition to what has been posted by Ashful, was there a big property tax, state income tax, sales tax, FICA, ect back then?

I think you guys are also very much confusing what a "marginal tax rate" and "effective tax rate" are. Let's take 1955. Top 1% means that you need to earn $3,425,766 when adjusted for inflation. you are only paying that super high rate on your taxes on the money you made OVER $3,425,766, not below it..that's your effective tax rate, even though your marginal tax rate might be 90%.

Thank you for posting that. At least we can now say there is one honest and accurate post in this whole thread without an obvious political slant.

 

[Ashful]

Except when you die, then they want 50% of your principal as well.

Say... what? Hilarys proposed “death tax” of 45% - 65% was voted down in 2016. It is currently only 40% on any amount over $5.49 million, those being under that threshold being exempt from all federal estate and gift taxes.

The only way the gub’ment is touching your principle when you die, assuming you’re below that threshold, is if you’re so careless and irresponsible as to die intestate. Of course, it’s not typically folks worth more than $5.49M who are dying with no will.

The ones getting royally screwed in this current program are the hard working folks who had some successs with starting their own business, such as successful restaurant owners, entrepreneurs, and farmers. They might get up into that net worth $5.5M territory, esp. with their property equity (farmers), and find themselves in a situation where their net worth is growing at a rate that exceeds their ability to gift it to their children prior to death ($17k per giver per receiver, if I recall). In this situation, the family can literally lose the farm, when the kids don’t have the capital to pay 40% tax bill on that transfer. This has happened numerous times over the last two dozen years, in my own family, and is the reason I’m not currently living in a house that has been in my family since the 1690’s.

 

[venator260]

Say... what? Hilarys proposed “death tax” of 45% - 65% was voted down in 2016. It is currently only 40% on any amount over $5.49 million, those being under that threshold being exempt from all federal estate and gift taxes.

The only way the gub’ment is touching your principle when you die, assuming you’re below that threshold, is if you’re so careless and irresponsible as to die intestate. Of course, it’s not typically folks worth more than $5.49M who are dying with no will.

The ones getting royally screwed in this current program are the hard working folks who had some successs with starting their own business, such as successful restaurant owners, entrepreneurs, and farmers. They might get up into that net worth $5.5M territory, esp. with their property equity (farmers), and find themselves in a situation where their net worth is growing at a rate that exceeds their ability to gift it to their children prior to death ($17k per giver per receiver, if I recall). In this situation, the family can literally lose the farm, when the kids don’t have the capital to pay 40% tax bill on that transfer. This has happened numerous times over the last two dozen years, in my own family, and is the reason I’m not currently living in a house that has been in my family since the 1690’s.

Can one still do the sell it for a dollar trick? Toward the end of his life, my grandfather did that with several pieces of property. It was not in the millions; more like a couple hundred thousand in fair market value, but more than the 17K per person limit also.

 

[venator260]

Here is the top bracket adjusted for inflation, if anyone is interested.

View attachment 227323

In addition to what has been posted by Ashful, was there a big property tax, state income tax, sales tax, FICA, ect back then?

I think you guys are also very much confusing what a "marginal tax rate" and "effective tax rate" are. Let's take 1955. Top 1% means that you need to earn $3,425,766 when adjusted for inflation. you are only paying that super high rate on your taxes on the money you made OVER $3,425,766, not below it..that's your effective tax rate, even though your marginal tax rate might be 90%.

Let's take an example from today. This part is a copy and paste because I couldn't say it as well.

The first of many reasons that this was the case is that we need to look at the effective tax rate, not the top marginal tax rate. So for example, if I make $20,000, I owe 10 percent under today’s tax code, but only on any income over $18,450 (filing jointly). So I only owe 10 percent of $1550, or $155. Yes, my marginal tax rate may be 10 percent, but my effective tax rate is 0.78 percent.

If you look at taxes vs. GDP since the 50's, it has been about 17-20% every year, regardless of tax law changes. Take it for what it is worth. This does not take into consideration the additional local taxes and fines that have been created since then and (in some cases) represent a big tax burden locally.

Thanks.

Many people do not understand marginal vs. effective tax rates. I've lost count of the number of times I've had to draw a chart to explain how getting into the next higher tax bracket will not reduce your overall take home pay. At one job, I sat down with 4-5 people and a paystub from a paycheck with a large amount of overtime and a paycheck with no overtime to prove that the percentage of federal tax taken from each was the same.

 

[Seasoned Oak]

Can one still do the sell it for a dollar trick?.

Have to be careful with that one .If your going to divest to your kids you've got to do it long before you pass. Theres a time limit they can go back on.

 

[EatenByLimestone]

Either 3 or 5 years iirc.

 

[venator260]

Have to be careful with that one .If your going to divest to your kids you've got to do it long before you pass. Theres a time limit they can go back on.

For us in the situation that we were in, the number of years was 3. The laws may have changed or vary by state; that was around 15 years ago.

 

[kennyp2339]

I just wrote an easement for work, the deed I had had the grantor as the father and the son as the grantee, sale of $, made in 2017, point being, this still occurs

 

[venator260]

I just wrote an easement for work, the deed I had had the grantor as the father and the son as the grantee, sale of $, made in 2017, point being, this still occurs

I know that it still occurs, as I bought the house I'm living in for a dollar. The reason for that is because one is not able to give property away, it was my mother's, obtained as a result of the transactions made by my grandfather mentioned above. But I thought perhaps the rules were different for multi-million dollar properties than they were for a 1950's 4 bedroom that needed a good bit of work.

 

[Seasoned Oak]

You can buy or sell a property off a stranger for $1 if you want but the local tax bureau has a fix for that when it comes to collecting transfer taxes .They get 1% from the buyer and same from the seller. The lowest allowable sales price for tax purposes is the assessed value. Usually a better deal for buyers and sellers around here as its been quite awhile since properties were reassessed. If a bank loan is involved adjusting the sales price is not an option.

 

[EatenByLimestone]

I know that it still occurs, as I bought the house I'm living in for a dollar. The reason for that is because one is not able to give property away, it was my mother's, obtained as a result of the transactions made by my grandfather mentioned above. But I thought perhaps the rules were different for multi-million dollar properties than they were for a 1950's 4 bedroom that needed a good bit of work.

"Needing a good bit of work" is probably relative. We may consider that to be rewiring, plumbing, roof, etc. A multi million dollar property owner may think that if the new house needs it's own bowling alley.

 

[venator260]

You can buy or sell a property off a stranger for $1 if you want but the local tax bureau has a fix for that when it comes to collecting transfer taxes .They get 1% from the buyer and same from the seller. The lowest allowable sales price for tax purposes is the assessed value. Usually a better deal for buyers and sellers around here as its been quite awhile since properties were reassessed. If a bank loan is involved adjusting the sales price is not an option.

Hm...

The above was completed in late 2016. No local tax collectors threw a fit, at least not that I heard about. We promptly got a home equity loan, as the septic was, according to the local authorities alerted when we completed a subdivision, in need of a complete replacement. The house also needed windows, we wanted siding, and had some debt to consolidate. The bank had no issues after it was clear that we were able to occupy the property in the interim, and that the septic issue would be fixed in a way that kept the local inspector happy.

 

[venator260]

"Needing a good bit of work" is probably relative. We may consider that to be rewiring, plumbing, roof, etc. A multi million dollar property owner may think that if the new house needs it's own bowling alley.

I suppose you are right. My house needed a good bit of work according to the common man, all of the plumbing, new septic system, siding was dated, and the single pane windows were in rough shape. The electric panel died in the first 6 months, and my grandmother, God bless her, put red carpeting in that had faded to a burnt orange during it's 35 year life. The bathroom had no shower, three layers of flooring, and black and pink tiling on the walls. The chimney liner failed during the first year too. And the kitchen...

well, you get the idea.

 

[kennyp2339]

Think it’s a local laws then, I know in my area our land w/ improvements are assessed much higher than the going market price.
Tax office doesn’t care what you buy the property for, they only care who pays the current tax bill, and they really care when that current bill is challenged by private appraisal, usually takes a year and a couple court dates to get your property reassessed to a more fair price.

 

[peakbagger]

I just wrote an easement for work, the deed I had had the grantor as the father and the son as the grantee, sale of $, made in 2017, point being, this still occurs

Estate planning is a very tricky and complex thing. I have a 2" thick book of planning estates written by a lawyer for lawyers doing estate planning.

Plenty of "free" seminars at the local Holiday Inn for planning seminars offered by lawyers. Anyone who goes to one gets a high pressure sales effort to pay for the privilege of stripping themselves or their parents of any asset and put them on "old peoples welfare", Medicaid. About the only thing they can take with them is prepaid burial insurance. With some luck one spouse can stay in the family home while the other one goes in a home but usually the state has the spouse living in the home sign it over to the state when the spouse in the home goes on Medicaid. There can be no binding legal attachments on the folks who get the parents assets, once they are handed over they can do what they want with them. Hopefully the benefactors were raised well and will use the transferred assets to take care of their parents but some folks figure out why not dump them on the state?.

The sad part is most states underreimburse nursing homes for Medicaid substantially, the facilities cannot operate solely on Medicaid patients, those that do have to cut a lot of corners or go out of business. Those residents on Medicaid are allowed to keep $40 a month for personal items and that includes personal items like diapers. Some states and counties try to give the residents a respectful old age but many do not.

The other thing rapidly coming to the fore is filial responsibility laws. Some states are dusting off the old laws and some are writing new ones. Pretty simply the state can go after the children of folks on Medicaid.