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Bottom-line is all these tweaking and patching of taxes isn't going to solve the issues we have.
They need to overhaul the whole system but congress nor the President have the will or political force to get this done...
Anyhoo that's my two cents. As for whole might not be good time to be homeowner...fear of loosing job and not being able to find a new one before you get crushed from mortgage plays much bigger part than alternative tax.
Aye! My own simplistic solution would be:
1) For taxes, we need several more tax brackets above $500K. There should be escalated taxes for anyone at or above $1M, $2M, and then $3M+ Such a structure would ensure that the REALLY RICH pay their fair share into the system. The current structure, where around $500K is the top bracket really hits too many people who aren't truly rich, and it doesn't hit the rich nearly as much as it should.
2) For Social Security, remove the cap that's currently around $105K/year. Why does this cap even exist? Everyone should pay into SS for every dollar they earn.
Hey, I realize my solutions would negatively affect the folks who make the laws, so I know it's a pipe dream. But it's the only solution I can find that doesn't kill the little guys and the middle guys.
1) For taxes, we need several more tax brackets above $500K. There should be escalated taxes for anyone at or above $1M, $2M, and then $3M+ Such a structure would ensure that the REALLY RICH pay their fair share into the system. The current structure, where around $500K is the top bracket really hits too many people who aren't truly rich, and it doesn't hit the rich nearly as much as it should.
2) For Social Security, remove the cap that's currently around $105K/year. Why does this cap even exist? Everyone should pay into SS for every dollar they earn.
Hey, I realize my solutions would negatively affect the folks who make the laws, so I know it's a pipe dream. But it's the only solution I can find that doesn't kill the little guys and the middle guys.
I agree with statement #1
As to statement #2, if you remove the cap on how much one pays, the only fair solution would be to also remove the cap on how much someone GETS BACK when it is time to collect. Do you realize how huge the tax increase would be if you removed the cap? And, it would adversely affect the people living in high cost states like NJ. In NJ $105K per year does not exactly make you a rich person.
As to the AMT, it sucks! If it was indexed for inflation, it would hit people making over a million dollars a year. Those are the people it was originally intended for (when you take inflation into account). The best defense against this is to start an LLC, as business expenses are not subject to the AMT. Even if you just sell tupperware and dont make any money, the business deductions can help a lot.
Personally I think tax brackets and social securities are probably easier of our tax system to correct.
Part it'll get really dicey is when it comes to capital gains/loss and estate tax for people. And then corporate taxation.
...the super wealthy care more about these far more than tax brackets in my opinion. US is turning more and more Oligarchy than before and this really sucks for lot of us.
1) For taxes, we need several more tax brackets above $500K. There should be escalated taxes for anyone at or above $1M, $2M, and then $3M+ Such a structure would ensure that the REALLY RICH pay their fair share into the system. The current structure, where around $500K is the top bracket really hits too many people who aren't truly rich, and it doesn't hit the rich nearly as much as it should.
2) For Social Security, remove the cap that's currently around $105K/year. Why does this cap even exist? Everyone should pay into SS for every dollar they earn.
Hey, I realize my solutions would negatively affect the folks who make the laws, so I know it's a pipe dream. But it's the only solution I can find that doesn't kill the little guys and the middle guys.
1) Listen, we need fair tax. A flat tax, not a progressive one. Why do rich need to pay more? They are rich for a reason. No, it is not because they are lucky. Because they work hard and take risk. Most of these so call rich people are small business owners who provide jobs to people like you and me. Why do we want to tax them out of existence?
2) Social security is a ponzi scheme. If it is really a retirement account, then we can use it whenever we need, not until a certain age. And if my memory serves me right, SS tax was 1% when it started, now at 12.4% (6.2% each for you and your employer). If you want to see a true retirement account, go read on Singapore's social security account. People who contribute to it can use it to buy home.
1) Listen, we need fair tax. A flat tax, not a progressive one. Why do rich need to pay more? They are rich for a reason. No, it is not because they are lucky. Because they work hard and take risk. Most of these so call rich people are small business owners who provide jobs to people like you and me. Why do we want to tax them out of existence?
They won't cease to exist if they pay more taxes. It's not clear that higher pay for hedge fund managers and CEOs leads to better corporate governance or asset management.
That's not to say that they should be subjected to punitive taxes, but the argument that it's "unfair" for them to pay more taxes is a weak one.
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2) Social security is a ponzi scheme. If it is really a retirement account, then we can use it whenever we need,
No, a retirement account is an account that can be used when you retire. A 401k can't really be used "whenever you want".
If social security were funded (the way pension plans are supposed to be), it wouldn't really solve the deeper problem that regardless of whether you use a funded or unfunded plan, you can't "store" consumption.
For example, if GDP were to shrink or stagnate, it wouldn't really matter whether social security was an unfunded program (a "ponzi scheme" as the simplistic line of criticism goes) or a funded program -- one way, you wouldn't have enough tax dollars to pay the beneficiaries, the other way, you wouldn't have large enough dividend payments to pay the beneficiaries.
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If you want to see a true retirement account, go read on Singapore's social security account. People who contribute to it can use it to buy home.
Singapore is a much smaller country than the USA. When you're a sizeable chunk of the worlds GDP, you can't just "stash money away" somewhere. You end up back at the basic problem that you can't store consumption.
They won't cease to exist if they pay more taxes. It's not clear that higher pay for hedge fund managers and CEOs leads to better corporate governance or asset management.
Hedge fund managers dont pay income tax. They pay capital gains tax. There is something called "The Hedge Fund Loophole" that the government has been unable or unwilling to close.
Thanks again bradykp. I'll check out the NPR podcasts. I currently receive their Science Friday episodes, but never looked at their other offerings. This sounds good ... and more reasons to start bringing the BT Headset with me on the trainride. They are GREAT for the Non-Quiet-Commute cars ;-)
yeah i actually don't do science fridays yet. i do their tech podcast though, which has some of the science friday material in it.
Hedge fund managers dont pay income tax. They pay capital gains tax. There is something called "The Hedge Fund Loophole" that the government has been unable or unwilling to close.
it's because it's a grey area where it's not really investment income and not really salary. the loophole should be closed though. i agree.
as for SS mentioned above. SS is a well designed system. it was the execution of the government that messed it up. to avoid raising taxes (or not spending the money), the government has borrowed money from itself (SS fund) to pay for spending, with no intentions of ever raising taxes to pay itself back. The people (US Voters = The Government) allowed this to happen and turned a blind eye. So now, some of us will suffer. It's always great when older generations mortgage the future. Hope my generation doesn't continue with it. But if you can't beat em, join em right?
As to statement #2, if you remove the cap on how much one pays, the only fair solution would be to also remove the cap on how much someone GETS BACK when it is time to collect. Do you realize how huge the tax increase would be if you removed the cap? And, it would adversely affect the people living in high cost states like NJ. In NJ $105K per year does not exactly make you a rich person.
Not sure if I agree that there should be NO cap on benefits ... but I'd wager that if the ceiling on payments was eliminated, the ceiling on payouts could be made higher, and the system would be structurally sound (given that the fund is PROPERLY managed ... I know that might be a stretch).
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Originally Posted by AnesthesiaMD
As to the AMT, it sucks! If it was indexed for inflation, it would hit people making over a million dollars a year. Those are the people it was originally intended for (when you take inflation into account). The best defense against this is to start an LLC, as business expenses are not subject to the AMT. Even if you just sell tupperware and dont make any money, the business deductions can help a lot.
Isn't it amazing how these laws are written? I don't think it was an oversight. I think it was intentionally designed to do exactly what it's doing.
pvs - i think you're right above but, anesthesia makes a good point. SS isn't supposed to be a welfare type program. everyone pays in, and gets out of it based on their earnings. so if we raise the cap, then those earning being taxed would be considered part of the earnings towards benefits.
now, if people would be ok with it, not providing benefits to those that don't need it is alright with me, and i will hopefully likely be in that group at some point where mine and my wife's salaries are beyond the cap, and we did enough on our own to be ok with just the SS below the cap. but most people are not ok with this, and i understand.
i'd like to see some people put their money where their mouth is. if you don't believe in SS system, then don't collect the benefits. Collecting because one is entitled to it is part of the problem, and as long as people do that, their arguments to eliminate the system or privatize it are fruitless. Like this past year, there were people who filed income tax returns of more than $10 million AND collected unemployment benefits in the same year. Now, they're entitled to the benefits because they paid in, but how does that even make sense?
as for the AMT not being indexed to inflation - i think it was just a mistake, a mistake that no one has the ball$ to fix, but i don't think they intentionally did it. it's possible though. lol
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I don't think it was an oversight. I think it was intentionally designed to do exactly what it's doing. 
