State shutdown -- thousands of Minnesotans will lose their jobs (public school, quality of life)

[southernsmoke]

Originally Posted by golfgal

Talk to any business owner what their effective tax rate is, talk to anyone that owns investment properties, etc. There are a lot of LEGAL avenues to do this but most people making 50K or less just don't have the extra cash to buy rental properties or put away a full amount into a 401K, etc.

But there are limitations on how much mortgage interest you can deduct (which I hate altogether, but that's another story altogether). I am very curious about your "books" now, but I stand by the assertion that it is near impossible to make $800k and pay less than 10% effective rate. As Glenfield said earlier, the AMT would get you if nothing else.

[nick is rulz]

Wasn't Dayton's last ditch effort to raise for individuals who make over $1 million? Thats less than 8000 people. Also, he made several compromises in trying to establish a sensible budget. Im not a huge fan of the guy, and I didnt vote for him....but I side way more with him on this than I do the state house and senate.

The GOP effectively ended employment for more than 8000 people in order to benefit the wealthy.

[Camden Northsider]

Originally Posted by Oildog

Good. Time to BUDGET, not just create more entitlement programs.

Says "Oildog". Sorry, but the majority of us Minnesotans (natives and people that transplanted from other areas) would prefer not to end up like your state of residence.

[rcsteiner]

Originally Posted by southernsmoke

Somebody please give me a logical reason why any state should not require ID to vote. Please. I can't wait to hear this. (And for my purposes, "to facilitate voter fraud by [a particular organization or political party]" does not qualify as a logical reason.)

Well, it depends on what you consider an ID. I can see a state requiring that you prove that you're a registered voter in some way.

[rcsteiner]

Originally Posted by southernsmoke

But there are limitations on how much mortgage interest you can deduct (which I hate altogether, but that's another story altogether). I am very curious about your "books" now, but I stand by the assertion that it is near impossible to make $800k and pay less than 10% effective rate. As Glenfield said earlier, the AMT would get you if nothing else.

What are the limits of a small business owner's business expense write-offs? I've gotten the impression from friends that it can be a fairly sizable amount...

Not being a small business owner, I don't have a clue.

[Glenfield]

Originally Posted by golfgal

Talk to any business owner what their effective tax rate is, talk to anyone that owns investment properties, etc. There are a lot of LEGAL avenues to do this but most people making 50K or less just don't have the extra cash to buy rental properties or put away a full amount into a 401K, etc.

I'm in finance. I'm not a tax lawyer or an accountant but I deal with both all the time. Your first example was a doctor making 800k a year. It is not possible to have an effective rate of 10% on earned income because of the Aternative Minimum Tax.

Now you have switched to an example of 800k in investment income through rental properties. While it might be possible to conjure up. A scenario where the depreciation schedule of the real estate effectively reduced your gross income to something like 200k, resulting in a 80k tax burden, it is not reasonable to look at taxes as a percentage of revenues. That's why they're called income taxes.

I think this is must something that you heard from someone. What is your background and can you cite specific tax strategies such that a person with a net income of 800k pays a combined 80k in state and federal income taxes?

[Oildog]

Oildog feels that Texas is doing much better economically than the state he was raised in.

[southernsmoke]

Originally Posted by rcsteiner

What are the limits of a small business owner's business expense write-offs? I've gotten the impression from friends that it can be a fairly sizable amount...

Not being a small business owner, I don't have a clue.

Well, you can deduct your business expenses, but as Glenfield just said, that's kind of a whole different issue. Generally, the above the line deductions (e.g., business expenses) exist for the purpose of making your adjusted gross income accurately reflect your true income. So expenses incurred in the production of income get deducted. In other words, we subtract your expenses from your revenues to arrive at a number which actually reflects how much wealth you gained through the operation of your business. That's really not a "tax break"--it's just accounting.

Edit: Re-reading your post, maybe you were literally just asking what the limits are (because there are some limits on certain business expenses). If that was what you were asking, I don't recall well enough to say without looking it up, but I think entertainment and meals are limited, for instance.

[Glenfield]

By the way, I believe that this discussion about taxes, where no one, including me, seems to have a good idea of how they exactly work argues for a simplified tax structure where there are almost no deductions or credits and much flatter rate structure. One where we'd all have idea that if a person made X they'd pay Y. It would also ensure that everyone who had income paid a portion of it in taxes.

[southernsmoke]

Originally Posted by Glenfield

By the way, I believe that this discussion about taxes, where no one, including me, seems to have a good idea of how they exactly work argues for a simplified tax structure where there are almost no deductions or credits and much flatter rate structure. One where we'd all have idea that if a person made X they'd pay Y. It would also ensure that everyone who had income paid a portion of it in taxes.

Agree completely. Keep above the line deductions basically the same, minus a few that are policy driven. Get rid of all but charitable contributions maybe below the line. And then set one flat rate for all income. No ifs, ands, or buts.