Now is the time to get entitlement spending under control. (wholesale, accountant)
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Another poster making this assertion without any explanation of how exactly it’s done.
Oh comeon. Some of it is obvious. Carried Interest for instance has been an issue for a while. A small business runs his income into enhancing the value of the enterprise instead of taking it in income. An athlete or an entertainer sets up a personal corporation to collect his revenue. A professional corporation is set up by MDs or Attorneys and wealth is built up in the firm. Real Estate is another place where the income can be taken by enhancing the value of the endeavor rather than as income. Or run a mess of rentals into a final home than live in it for a couple of years and own it for 5. Half a million in tax recovery...a relative has done it three times.
Simple cure is tax all income the same. And you might consider making it all subject to an uncapped FICA to fund entitlements.
Oh comeon. Some of it is obvious. Carried Interest for instance has been an issue for a while. A small business runs his income into enhancing the value of the enterprise instead of taking it in income. An athlete or an entertainer sets up a personal corporation to collect his revenue. A professional corporation is set up by MDs or Attorneys and wealth is built up in the firm. Real Estate is another place where the income can be taken by enhancing the value of the endeavor rather than as income. Or run a mess of rentals into a final home than live in it for a couple of years and own it for 5. Half a million in tax recovery...a relative has done it three times.
Simple cure is tax all income the same. And you might consider making it all subject to an uncapped FICA to fund entitlements.
Take a look a couple pages back, I carved out carried interest as a known quantity. Even in that case, which I think is wrong by the way, the income isn’t salary. It could be zero, it could be millions, you never know.
For the other examples, cap gains isn’t the objective because it isn’t the result. Limited liability and maximum deferral through qualified retirement plans are the benefits of those structures.
Our Republican House and Senate just passed a tax bill that will raise the deficit 1.5 trillion. Now you want to tell the middle class who depend on SS and Medicare that they have to pay for it.
Take a look a couple pages back, I carved out carried interest as a known quantity. Even in that case, which I think is wrong by the way, the income isn’t salary. It could be zero, it could be millions, you never know.
For the other examples, cap gains isn’t the objective because it isn’t the result. Limited liability and maximum deferral through qualified retirement plans are the benefits of those structures.
BS - Worked with a dozen people over the years on the 1031 deal. Has nothing to do with retirement simply a way of saving a whole lot of taxes. And most of the others listed are run as ways of tax avoidance... perhaps in combination with retirement plans in some cases but not in others.
Of course. But as has been well pointed out the income of the rich and of the working class are in fact different and taxed at significantly different rates. And there are a number of schemes that convert what could be ordinary income into capital gains.
So yes the tax code does favor the rich.
Anyone can structure their financial lives to take advantage of preferred tax treatments. To claim otherwise is simply wrong.
Anyone can structure their financial lives to take advantage of preferred tax treatments. To claim otherwise is simply wrong.
Not true.. Much of the literature points out that many of these schemes take far too much effort to set up until the incomes involved are in 6 figures or more. So yes anyone could do it...but only the well off can afford the front end costs.
Not true.. Much of the literature points out that many of these schemes take far too much effort to set up until the incomes involved are in 6 figures or more. So yes anyone could do it...but only the well off can afford the front end costs.
One not taking a particular path doesn’t mean that path isn’t an option.
And a path that is quite out of reach financially is not a real path.
If one chooses not to buy and sell appreciating capital assets, one is unlikely to have capital gains. By the same token, all preferential tax treatments require something on the part of those wishing to avail themselves of the preferential treatment. If you want to do X, but you don’t do the things that are necessary in order to do X, you can’t really complain that X is not available to you.
Sorry that you’re having such a difficult time understanding this - it really is a pretty basic concept.
If one chooses not to buy and sell appreciating capital assets, one is unlikely to have capital gains. By the same token, all preferential tax treatments require something on the part of those wishing to avail themselves of the preferential treatment. If you want to do X, but you don’t do the things that are necessary in order to do X, you can’t really complain that X is not available to you.
Sorry that you’re having such a difficult time understanding this - it really is a pretty basic concept.
Sorry but I expect I likely understand it as well as you do. The issue is that you are refusing to accept that some schemes to minimize taxation can only be work-ably implemented by those with sizable resources.
The simple solution is to simply tax all forms of income at the same rates.
There may in fact be counter arguments against such a tactic but it would stop the use of income shifting strategies which in fact favor the rich.
I have no doubt that the rich will develop new tactics but we can continue to try and make that less rewarding.
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