Tax breaks for top 1% stimulates economy??? Pffffft.

There has to be a balance, I agree that some CEO are worth their pay, but they need have some degree of social responsibility. Corp's have billions in profit each quarter, while they pay their CEO more for that but fail to pass the rewards to each employee. Instead of having $5 billion in profit per quarter, why not have $4.5 billion and share with the deserving employees. It's not just the CEO that makes a company succeed. It's every worker, so why shouldn't they participate in the earnings?

 

It's both...but you're not giving CEO's their due credit. Hard workers without good direction or leadership will not succeed. Look at GM and Chrysler...think the workers did not work hard there? There are thousands more examples of companies that had hard workers but poor leadership and failed.

 

Many companies do. My bonus is 90% based on company performance. The last company I worked for was the same way. Our company did well last year so my bonus was 150% of what my % I normally get. I am far from an executive. I am 3 bands from the bottom with 4 more bands to go.

The great thing about our country is...if you don't like they money you are making at your company. Go work somewhere else. If you find that you have plateaued in your career/trade...there are resources available to expand your knowledge or learn a completely new career/trade and make more money somewhere else.

 

It's not exactly that simple, though.

Money isn't good or bad. It just is. And companies are "rewarded" by making more of it.

So what happens when you "reward" a company for hiring a domestic worker as opposed to outsourcing, is that the government has to subsidize the difference between the $15/hour and American worker makes, and the $1.00/ hour an outsourced worker makes. This increases the debt because the government isn't pulling in any money by handing out subsidies to keep American jobs (aside from income tax, which isn't anywhere close to even)

By "punishing" a company (i.e. - charging them to outsource) you close that monetary gap without needing to subsidize.

The problem with this scenario is that often times it is still more effective from a Public Relations standpoint to outsource work -- especially in large corporations where layoffs are common -- because despite the fact it costs them the same or more, there isn't political backlash from laying off 1000 Indian programmers than 1000 American programmers.

 

I don't believe in getting worked up when I disagree with others, because the balance of opinions is what makes the US the best. Government waste exists, and will alway exist under any administration, GOP or DEM. We just have to find a middle ground that we all can be happy with.

I truley think that SS will be there when we retire, many are against SS, but many, many rely on it. Under current projections, SS is solvent until 2029, unless changes are made, which they will. http://www.ssa.gov/OACT/TRSUM/index.html

So we will have it. Question to you, if you against it, would you give it up?

 

Yes, many do, but more need to. My company does something similair, though not bonuses. In the past three years, where many were getting laid off or no pay raises, I've received a cumulative raise almost 11%. My company continues to be successful, and subscribes to the share the wealth with those that make it successful.

Tax breaks are not going to being the economy where it should be, it's going to be an increase in the average american pay.

 

I'd give it up but I know many do depend on it. I'd prefer it go into something where it is truly set aside for its intended purpose...not spent and wasted on other programs. I'd also prefer the individual have more control on how it's invested...maybe a fixed rate account for those not investment savy. But for the government to take our $...say its for our own "retirement" and they need to do so because we the people are too stupid to do it for ourselves, and they they spend it away...not a very good program IMO.

 

This is one of those really miserable debates. I don't say that to insult people, but it's like Roe v. Wade. Not something that is gonna end with "Oh, when you put it that way, I guess you're right." It's unfortunate, but true.

Here's my personal (selfish if you choose to see it that way) perspective:
I put myself through school. Undergrad with scholarships: athletic, academic, and anything else I scrounge up. Graduate with student loans, lots and lots and lots of student loans that I now have to pay back. I was, however, very blessed to have the family and upbringing I had. Not because of the financial advantage I was afforded, but because of the support and drive I was infused with.

So, I like to think that I worked for what I will get in this life. That is not to say that others didn't work hard enough, but it certainly wasn't handed to me. I am not currently one of the "Rich" people. Being just out of school, I am still living month to month, not really buying anything (hence my slow 'Build' progress), trying to pay down debt, and looking to a hopefully more comfortable future. But there you have it, I strive to one day be one of those people many of you disdain. Not that I will ever get there, but I'm certainly going to do my best with my work (I will not sacrifice my values) and my business to be as successful as I can.

Now I know this is becoming a bit of a personal mission statement. But my point is simple. There are many people working as hard as they can to achieve in this life. But we all have different goals. Some choose to live life from day one and sacrifice potential earning capacity. While some of us forgo that for a while to enjoy life at a later date. It's just like saving for retirement, you can either have fun now, or live comfortably later. Continued education or dedication to business usually means a lot of work now to hopefully enjoy yourself later.

As far as Flat tax goes: I 100% agree. How much would we ALL save in taxes by not having to pay people to figure out how much you or I should pay. And as someone already said, I'm pretty confident that I can determine for myself who and to what organization I should give my money to. I don't need someone to make that decision for me.


Please don't get me started on Medicaid. In my line of work, it's usually regarded as easier to just do the work and write it off than to expect to get any sort of reimbursement from this government run institution. Paying employees to file the paper work and make the necessary phone calls typically costs more than the money it brings in. Now that's one miserably run government program.

 

We would be a stronger country if we didnt have any of those programs. and for the DOD, a national defense is the only thing out of your list the federal government is required to supply according to the constitution.

 

I agree, changes need to be made, but I don't think people should have access to it like a 401k. Could you imagine those that are aggressive ending without anything? The "lock box" idea is what it should be. The only problem is flucuations in population, like right now, we are paying for more that are on it, then are paying into it. Which from what I've read, the US is at a nuetral birthrate.

 

I always like hearing opinions from people who work in the medical profession and their opinions on the whole medicare/medicaid topic and they healthcare reform debate.

Back in college one of my professors had a good friend of hers who was an 25+ years tenured ER doctor at large hospital here in Atlanta come in and speak one day. It was very interesting because he is a very blunt person. He had to stop himself from time to time on the whole indigent care/payment topic.

 

It could be close to a 401K. Most 401K's today promote (force) more responsible asset allocation (Enron effect). They used to allow 100% in company stock...now most limit one to 5% of allocation into their company stock.

Heck, even if they did not give you choices, but actually put your money in an interest bearing acct, it would be worlds better than today's system of just blowing our "retirement" savings. SS should be independent of any other program and it COULD be self sustaining...but of course it's not because our government wastes it away.

You seem like a very sharp person...I have one question for you. Why do you trust the government so much to handle so many aspects of our lives? I wish they would just provide national security (which includes securing our borders), keep our roads maintained and stay out of the rest of our lives. Non-profits do a much better job at charity than our government does.

 

During almost three decades spanning 1951 to 1980, when America's top marginal tax rate was between 70 and 92 percent, the nation's average annual growth was 3.7 percent. But between 1983 and start of the Great Recession, when the top rate was far lower -- ranging between 35 and 39 percent -- the economy grew an average of just 3 percent per year. Supply-siders are fond of claiming that Ronald Reagan's 1981 cuts caused the 1980s economic boom. In fact, that boom followed Reagan's 1982 tax increase. The 1990s boom likewise was not the result of a tax cut; it came in the wake of Bill Clinton's 1993 tax increase.
A final reason for allowing the Bush tax cut to expire for people at the top is the most basic of all. Although Wall Street's excesses were the proximate cause of the Great Recession, its fundamental cause lay in the nation's widening inequality. For many years, most of the gains of economic growth in America have been going to the top -- leaving the nation's vast middle class with a shrinking portion of total income. (In the 1970s, the top 1 percent received 8 to 9 percent of total income, but thereafter income concentrated so rapidly that by 2007 the top received 23.5 percent of the total.) The only way most Americans could continue to buy most of what they produced was by borrowing. But now that the debt bubble has burst -- as it inevitably would -- the underlying problem has reemerged.

source: http://www.huffingtonpost.com/robert-reich/why-we-really-shouldnt-ke_b_667816.html

doing some research i found that a total of 161 individuals in my ZIP code will be effected by the currently proposed plan.

 

This article gives a hint as to what might happen to our business income and economic health and estate under the various scenarios before Congress. For the most part, it doesn’t look good.

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Not since the Great Depression has Congress had so much tax work to do in so little time.


Congress will have to tackle a mountain of tax decisions in the coming weeks. Laura Saunders joins the News Hub to discuss how American taxpayers can effectively plan to deal with the uncertainty surrounding the future of those taxes.

From the income tax to the estate tax, from the alternative minimum tax to levies on capital gains and dividends—plus much more—nearly every area of individual taxes is in limbo. Come January, for example, the top federal rate on dividends could be as low as 15% or, if nothing is done, as high as 40%.

It gets worse: Lawmakers have only four weeks to tackle these massive issues before Columbus Day, when they adjourn until November. During these weeks, each party will be looking for opportunities to make political theater ahead of the coming elections. The drama will likely slow things further, especially in the Senate, where lately it has been tough to muster a filibuster-proof 60 votes for any measure more controversial than a flag raising.

This past week, President Obama gave a barnstorming speech in favor of dropping the 2001 tax cuts for those making more than $250,000, and House Minority Leader John Boehner (R, Ohio) countered with a proposal to extend them for all taxpayers for two years.

Despite the theatrics, says veteran analyst Clint Stretch of Deloitte Tax LLP, "The unprecedented uncertainty on taxes is unlikely to be resolved until December." What's more, he warns, lame-duck sessions are unpredictable as well.

Already the uncertainty has been a costly distraction for many. Laura Wilson, an owner of Asheboro, N.C.-based Pyramid Services, a building and road-maintenance firm with 700 employees, regrets two moves she says were prompted by the current void. This year, she says, she and her co-owner brother, who inherited the firm from their father, plan to distribute its first-ever dividend. "We'd prefer to leave the money in the business," she says, "but considering how much the rate could go up, a distribution made sense."

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Associated Press
Tea partiers rally in Olympia, Wash.: The stage is set for an epic battle over the nation's tax laws, from income and capital gains to estate taxes.



Ms. Wilson says she and her brother also are paying more than $100,000 to buy "key man" insurance that would help pay taxes if either one dies suddenly. (Currently there is no estate tax but heirs may owe significant capital-gains taxes, while next year the estate exemption is slated to be only $1 million.) If Congress reimposes 2009's much larger $3.5 million exemption, she says, "that would do a lot" to lower her premiums.

Other taxpayers feel overwhelmed just trying to keep up. "A typical question from my clients is whether the expiring Bush tax cuts will affect their 2010 or 2011 returns," says Leonard Williams, an accountant in Sunnyvale, Calif. (The answer: 2011.)

Despite lawmakers' foot-dragging, one fact is sure to galvanize their attention, says Mr. Stretch. It is the certainty that if Congress doesn't act this year, the "Bush tax cuts" will expire and early in 2011 tens of millions of paychecks, at incomes high and low, will shrink as a result of higher withholding.

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Sean McCabe


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1. Pres. Barack Obama 2. Larry Summers, Director, National Economic Council 3. Sen. Harry Reid (D., Nev.), Senate Majority Leader 4. Sen. Mitch McConnell (R., Ken.), Senate Minority Leader 5. Rep. Nancy Pelosi (D., Calif.), Speaker of the House 6. Rep. John Boehner (R., Ohio), House Minority Leader 7. Rep. Steny Hoyer (D., Md.), House Majority Leader 8. Sen. Max Baucus (D., Mont.), Chairman, Senate Finance Committee 9. Sen. Charles Grassley (R., Iowa), ranking minority member, Senate Finance Committee 10. Rep. Sander Levin (D., Mich.), acting chair, House Ways and Means Committee 11. Rep. Dave Camp (R. Mich.), ranking minority member, House Ways and Means Committee 12. Sen. Ron Wyden (R., Ore.), outspoken tax reformer 13. Rep. Paul Ryan (R., Wisc.) tax and budget reformer 14. Sarah Palin, potential 2012 presidential candidate 15. Timothy Geithner, Secretary of the Treasury



That's because the changes of 2001 lowered tax bills for millions of taxpayers with modest incomes as well as for the rich. So the expiration is far more politically volatile than this year's estate tax lapse, which—although stunning—will affect the heirs of perhaps 50,000 people.

Here is a guide to where things stand, along with suggestions for what to do—or not do—in order to cope:

Income-tax rates
• Status: The "Bush tax cuts" of 2001 expire at the end of 2010. The top nominal income-tax rate would revert to 39.6% and the current 33% rate would rise to 36%. Taxes on millions of low- and moderate-income taxpayers will rise as well.

• What's ahead: a fierce battle. President Obama is demanding the 2001 cuts be extended only for those making less than $250,000. But some in his own party, plus many Republicans, want to extend them for all taxpayers, perhaps for two years. Many political analysts don't expect resolution until late this year.

Given that most of the benefit of a tax-cut extension for those making more than $250,000 goes to taxpayers with incomes over $1 million, some are wondering whether lawmakers may wind up imposing a "millionaire's tax," while preserving the cuts for those making less.

• What to do: Watch and wait. Prepare to take bonuses or accelerate income into this year and defer deductions into next year, when they will be more valuable, if it becomes clear that rates will rise. Mr. Stretch from Deloitte Tax points out that whatever happens next year, taxes for upper-income taxpayers are all but certain to be higher by 2012 or 2013, especially with the 3.8% investment income tax that will take effect in 2013, so plan accordingly.

Stealth income taxes
• Status: Two provisions that used to limit benefits for upper-income taxpayers aren't in current law. One is the personal exemption phase-out (PEP), which erodes the $3,700 deduction per family member for singles with income above about $170,000 and joint filers above about $255,000.

The other is the "Pease haircut" (named for the congressman who pushed it), which shrinks the value of itemized deductions for taxpayers with incomes above about $170,000. The Pease haircut often adds about 1% to the tax rate of affected taxpayers, according to Roberton Williams of the nonpartisan Tax Policy Center.

• What's ahead: Both limitations will return unless the Bush tax cuts are extended. Mr. Obama's budget reinstates them, as would expiration of the cuts.

• What to do: These back-door tax increases are hard to counteract, but affected taxpayers should remember that absent extension of the 2001 cuts, their tax rate will be higher than advertised.

Capital gains
• Status: The current top rate on long-term capital gains is 15%, which expires at the end of this year.

• What's ahead: Unless Congress acts, the top nominal rate will revert to 20% in January, which is the rate Mr. Obama's budget has called for. A temporary extension of current law would leave the 15% rate in place. The issue will probably be decided along with income-tax rates.

• What to do: "Don't let the tax tail wag the dog on investments," says Kenneth Kossoff, an attorney with Panitz & Kossoff LLP near Los Angeles. The big exception: He and others are advising clients with transactions involving large capital gains to complete them in 2010 if possible. Remember that if tax rates rise next year, so will the value of long-term capital losses carried forward from the past decade's market slaughters.

Dividends
• Status: The current top rate on qualified dividends (generally, those held longer than 60 days) is 15%. It expires at the end of this year.

• What's ahead: Unless Congress acts, the top nominal rate on these dividends will revert to the top rate on ordinary income of 39.6%.

A temporary extension of current law would leave the 15% top rate in place. Mr. Obama's budget calls for a top tax rate of 20% on dividends, rather than 39.6%. This issue will probably be decided along with income-tax rates.

• What to do: Owners of C-corporations who normally distribute dividends after the new year may want to accelerate them into 2010, and those who don't typically pay a dividend may want to consider it.

Alternative minimum tax
• Status: The "patch" to narrow this tax's reach for the 2010 tax year hasn't been passed yet by Congress. Thus the exemption for married joint filers is currently $45,000, as opposed to nearly $71,000 last year. If the patch doesn't get done, 32 million taxpayers will owe AMT in 2010 versus 5 million last year.

Clint Myers, an investment actuary in Georgetown, S.C., figures it would raise his tax bill 10%—more than the expiration of the 2001 tax cuts would.

• What's ahead: Congressional tax staffers say they think the patch will get done when Congress addresses income-tax issues.

• What to do: People who owe estimated taxes are supposed to be paying at higher "nonpatch" rates until Congress fixes the problem. You can avoid paying at these higher rates or risking penalties by using an IRS "safe harbor," such as paying 110% of last year's taxes.

• Also: if tax rates go up next year, it becomes harder to fall into the AMT. Thus deductions may become more valuable, says Douglas Stives, an accounting professor at Monmouth University in New Jersey.

Charitable donations
• Status: No radical changes are imminent. Congress hasn't, however, reauthorized a provision allowing taxpayers older than 70½ to donate directly from individual retirement accounts to charities for 2010.

What Would You Owe?
This year's extreme tax confusion has yielded one useful outcome: a bumper crop of free online calculators allowing taxpayers to estimate their federal income tax bills under several scenarios.

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• What's ahead: The IRA provision is part of an "extenders" bill that with luck will pass before the new year. But Mr. Obama has proposed limiting the value of donation deductions for upper-bracket taxpayers to 28%.

• What to do: Prof. Stives is advising taxpayers who want to make large contributions in 2011 to consider making them in 2010 instead.

Retirement funding
• Status: This is the first year all taxpayers have been allowed to convert regular IRAs into Roth IRAs, which allow tax-free withdrawals and have other benefits. In addition, there are several proposals before the Senate that would broaden retirement plan options. One would allow employees to convert regular 401(k) assets to Roth 401(k) accounts.

• What's ahead: These proposals are part of a small-business bill that may be passed before Congress adjourns in October.

• What to do: Consider whether to convert IRA assets to a Roth account, which means accelerating income taxes. The good news is that 2010 converters may undo such conversions until Oct. 15, 2011.

Estate taxes
• Status: Because of Senate inaction, the estate tax lapsed as of Jan. 1, 2010, and it returns in 2011 with a $1 million exemption per individual and top rate of 55%. Although there is no estate tax this year, heirs of those dying in 2010 may owe full capital-gains tax on sales of inherited property if the total estate is more than $1.3 million (plus $3 million if the heir is a spouse).

By contrast, 2009 and 2011 laws tax heirs only on gains from the date they inherit an asset. Current law requires extensive recordkeeping and actually raises taxes on many heirs affected by 2010 law.

• What's ahead: Many believe Congress will return the estate tax to its 2009 level—a $3.5 million exemption per individual and a top rate of 45%—with an outside possibility of raising the exemption.

There also is sentiment for giving heirs of those who die in 2010 the choice of using 2009 rules. Congressional staffers have said they expect lawmakers to address estate taxes at the same time as income taxes. Tax returns for those who die in 2010 are due April 15, 2011, or Oct. 15 with a six-month extension.

• What to do: The IRS hasn't yet published a form or guidance for 2010 law. Many advisers are telling heirs of those who die in 2010 to gather records and, if possible, put off irreversible actions until the outcome is clearer. But some executors of estates that benefit under 2010 law have taken the opposite tack and settled them quickly, vowing to sue if Congress makes retroactive changes raising their tax.

Gift and generation-skipping taxes
• Status: This year the top gift-tax rate is 35% and there is no generation-skipping tax. In other years the latter imposes a second layer of tax when donors or trusts make very large transfers to someone two or more generations removed.

• What's ahead: Unless Congress acts, the gift-tax rate will rise to 55% in January. If Congress extends 2009 rules, the rate will be 45% instead. The generation-skipping tax also returns in January. It is unclear how lawmakers will treat these issues when they deal with the estate tax. This late in the year, it would seem unfair to impose these taxes retroactively for 2010, says Carol Harrington, an attorney with McDermott, Will & Emery in Chicago.

But, she adds, "if they are hunting for pennies in the sofa cushions, who knows what will happen?"

• What to do: Many advisers, including Ms. Harrington, are suggesting that wealthy clients plan for taxable gifts in 2010 but not pull the trigger until late December. This minimizes the chance of the donor dying shortly after the gift, which would mean paying unnecessary tax. In addition, the law might be clearer.

Write to Laura Saunders at taxreport@wsj.com

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Thanks,

 

Because I trust less in corporations just out to make a profit. We are a nation of laws that we elect people to make, and people that do not have the same access to success as some would argue, "If you can dream it, you can do it", that is an absolute fallacy. I grew up poor, very poor, my family was discriminated against because of our religion, I swear it. My family was on food stamps for a while, my dad was a retired disabled vet, so he could not work and the income was not enough. I have never been unemployed, never been of food stamps or any government assistance besides the Pell Grants I received while in college. I have worked my way through college; I have a house, wife, two kids and have worked hard to get here. That being said, I feel there are people that do not have the same opportunities as I did that did not have parents forcing me to go to college and make a better life. I swore that I will always watch out for the less fortunate and those that are discriminated against to give them a close to equal playing field. BTW, I'm white, if you care.

I don't have a "I trust the government 100% all the time" mentality, but have much less trust in corporations.

 

I know not all corporations are perfect...far from it. I would argue there is far more corruption and even more waste in the government than in corporations.

 

It's possible, but remember corporations don't have nearly the transparity that the government does. I work for a government organization now but have worked for a fortune 100 company, actually more like a fortune 20, and there was waste and money thrown around as bad as it is here.

 

I would not call our current administration "transparent". What happened to all those promises of transparancy...the proposed bills being posted on the internet 10 days before being voted on, getting rid of earmarks, etc. Both parties are guilty of this but the people are guilty of tolerating it.

 

FLAT TAX!!!!!! Then we will see a balanced budget. You can only spend this much Mr. Senator. No more of this creative accounting BS. FLAT TAX!!!

 

I agree, they should be much more. But all candidates, say a little more than they actually do. I'm not as pleased as I wanted to be with the current admin, not becuase of what many are, but because Bush talked about "political capital" when he won the second time, just barely, but Obama won huge, with way more "political capitial" that he did not use.