[Uncle Skeleton]

Originally Posted by smacintush 

I was talking about PROGRESSIVE RATES. Yes, the income taxes have gotten MORE progressive and people are as happier than ever to push their federal tax liability on other people.

Oh, are we playing the big text game? I can play too. I'll ask a third time now: "more progressive" SINCE WHEN? Because the progressivity ranged from 2% to 67% starting in 1917, and since that time the top rate has only EVAR dipped below 50% for two periods in history: the 7 years spanning the stock market crash of 1929, and right now (the past 20 years). So objectively, the income taxes have gotten LESS progressive to bring us to where we are right now. Do you think you can change the facts just by using larger font?

I brought up other taxes in my first post

I know, that's why I just said that if you were talking about PROGRESSIVE RATES then bringing up other taxes is why your argument is totally bunk, because all the other taxes are REGRESSIVE and balance it out. Get it now?

Originally Posted by turtle777 

Sorry, I misread the statement about retirement accounts.

Don't know why BRussell brought it up, but of course, for businesses, that's irrelevant.

-t

Well do yourself a favor and search the page for "retirement" and take a look at who first posted it (or just look in the mirror)

[Chongo]

Originally Posted by hyteckit 

Those who don't support the 3% increase in taxes for people who make more than $250k/yr are unpatriotic. The 3% goes to supporting out troops in the Iraq War. In times like this, when millions of Americans can't afford to buy food and clothes for their kids, or pay their rent and utilities, it only makes sense for those making $250k/yr to pay an extra 3% in taxes to support our troops. Americans must work together and stop bickering and whine about a minor 3% tax increase to those making $250k/yr or more. It's time to help each other out. That's the American thing to do.

Those who are making $250k/yr and whine about the 3% increase in taxes to support our troops are unpatriotic and un-American.

Then the over 1/3 who pay ZER0 income taxes are the most unpatriotic of all.

[Chongo]

One category of small business that will be hit hard is private practice medical/dental providers. Another group that will be hit are franchise owners. (7-11s Denny's, Ace Hardware stores, etc) Why open another location if it puts me over the $250K threshold?

[besson3c]

I think that health care expenses will kill small business well before a change in tax plan does, unless you can find a comprehensive individual plan for $5000.

[Chongo]

Originally Posted by besson3c 

I think that health care expenses will kill small business well before a change in tax plan does, unless you can find a comprehensive individual plan for $5000.

You can if you look around

[besson3c]

Originally Posted by Chongo 

You can if you look around

Perhaps I should have stated "for my family" instead. I would be utterly shocked if you could find a comprehensive plan for $5000 for a family that didn't have a crazy high deductible.

[Krusty]

Originally Posted by Chongo 

One category of small business that will be hit hard is private practice medical/dental providers. Another group that will be hit are franchise owners. (7-11s Denny's, Ace Hardware stores, etc) Why open another location if it puts me over the $250K threshold?

What a load of rubbish. As has been pointed out numerous times:
250k is marginal threshold amount. You won't retroactively pay higher taxes on the first $250k, you'd simply pay 39.6% on the amount over $250k vs. the current rate of 35%. If you had the opportunity to open another store and make another $100k/yr, are you honestly saying that taking home $65k of that would be "worth it" but somehow taking home $60.4k of it wouldn't be ? The difference of $4600 crosses some magical threshold that all the sudden you wouldn't bother ? That's a pretty stretched assertion considering the economy grew continuously during the 90s under the exact same top tax rate and 22 million new jobs were created. Prior to that, the economy boomed for the better part of 4 decades under rates that were much higher than that (50% or MORE). What percentage of people do you figure that last 4.6% will cause to stop caring about growing their business ? History (both recent and long past) says hardly any.

[besson3c]

Krusty: I think that all of this is basically putting philosophy above practicality.

[Big Mac]

Originally Posted by Krusty 

What a load of rubbish. As has been pointed out numerous times:
250k is marginal threshold amount. You won't retroactively pay higher taxes on the first $250k, you'd simply pay 39.6% on the amount over $250k vs. the current rate of 35%. If you had the opportunity to open another store and make another $100k/yr, are you honestly saying that taking home $65k of that would be "worth it" but somehow taking home $60.4k of it wouldn't be ? The difference of $4600 crosses some magical threshold that all the sudden you wouldn't bother ? That's a pretty stretched assertion considering the economy grew continuously during the 90s under the exact same top tax rate and 22 million new jobs were created. Prior to that, the economy boomed for the better part of 4 decades under rates that were much higher than that (50% or MORE). What percentage of people do you figure that last 4.6% will cause to stop caring about growing their business ? History (both recent and long past) says hardly any.

You'll also now being paying 15% of your entire income in redistributive payroll taxes because Barry's going to remove the cap. At least people will finally recognize that Social(ist) (In)Security is a tax and welfare scheme rather than a pension plan that it's sold as.

You know, Krusty, you don't seem to be nearly as far gone as the rest of our "friends" on the other side of the MacNN aisle. How can you continue to defend Barack Obama's obscene tax and redistribution proposals?

[besson3c]

Big Mac: I invite you again to suggest some alternatives to Social Security. I think many of you guys greatly overestimate the intelligence of people to figure out what to invest in, how to manage a portfolio, and the consequences of having a bunch of old people hitting the ER for everything because they can't afford their drugs, proper medical treatment, proper diet, etc.

[turtle777]

Originally Posted by besson3c 

Big Mac: I invite you again to suggest some alternatives to Social Security.

For the "pension plan" intention, how about a forced 401k contribution, which, unlike Social Security contributions, is guaranteed *yours* once you retire.

-t

[Krusty]

Originally Posted by Big Mac 

You'll also now being paying 15% of your entire income in redistributive payroll taxes because Barry's going to remove the cap. At least people will finally recognize that Social(ist) (In)Security is a tax and welfare scheme rather than a pension plan that it's sold as.

Huh ??
http://online.wsj.com/article/SB122497140074869661.html

Sen. Obama wants to institute a 2% to 4% payroll tax on incomes above $250,000, split between employer and employee. It would take effect in 10 years or more.

Where are you getting 15% ? The 2 to 4% on incomes over $250k in not on top of the 13.44% that is currently only incomes below $100k. The 13.44 expires at a certain threshold, there is a gap of no payroll taxes between it and $250k. At $250k, another 2-4% (split, so 1-2% for each of employer and employee) that does not even go in to effect for another 10 years (I'm sure that tax, 10 years down the road, is there to make the long term numbers look better but its really not an immediate concern as it could be repealed long before actually enacted).

You know, Krusty, you don't seem to be nearly as far gone as the rest of our "friends" on the other side of the MacNN aisle. How can you continue to defend Barack Obama's obscene tax and redistribution proposals?

Hah, I'm even more far gone. I've looked into our history, both recently and in the long ago past and there is nothing "obscene" about the proposals at all. In fact, many of them have actually been enacted before ... with great success. Across various threads I've laid out my perception of where we stand right now economically: A highly productive workforce, low rates of true welfare use, and wages that have been declining at the same time basic expenditures have been rising. On the top, we have rapidly increasing incomes to the point that money is pooling in the hands of an increasingly small minority of hyper-wealthy. We are, at the current time, top-heavy and the work being done at the bottom is no longer enough to sustain profitability at the top through consumption. The core problem isn't tax rates or financial liquidity of banks: it's that the large majority of working people have hit or exceeded their financial capacity -- you can't expect ROI from loaning out to working people who are already tapped out --- the rises in gas, groceries, and healthcare have diminished their ability to be good consumers and this is the basic reason why we are stumbling.

If this were 1979, I'd say John McCain's plan all the way. But in today's environment, policies that exalt the working man (no, not the $250k/yr + working man, but the vast majority of working people who make less than that) are what is needed. In my opinion, any policy that makes working for a living more tenable down here in the sub $150k range is a good one right now ... not for moral or ideological reasons, but for purely economic ones. As I've said in a couple other places, feeding the supply-side (again) isn't going to cut it right now. Giving out welfare isn't either .... there needs to be reasonably lavish concessions to the lower half of the income spectrum but they need to be tied to WORKING at the lower half of the income spectrum, not being on aid. Obama's plan does this though credits which rebate payroll tax up to the first $8100 of income ... meaning the WORKING poor (and any worker that pays FICA) will see the benefit but the non-working poor will not. To me, that passes the test of being economically sound given current conditions while at the same time not encouraging laziness or unproductive behavior.

Oh well, I've stated my viewpoint in about 4 different ways in 4 different places. I think I am finally hitting the "agree to disagree" point on some of this stuff.

[Krusty]

Originally Posted by Chongo 

Then the over 1/3 who pay ZER0 income taxes are the most unpatriotic of all.

This number is a little skewed and I wonder if anyone has some real stats on it. For instance: There are a whole lot of teenagers and college age adults (16-22 or 23) that probably don't make enough to pay taxes. There would also be a goodly number of spouses (mostly wives, but probably some husbands too) that work part time to make a few extra bucks between dropping off and picking up the little ones. Point being: I wonder what percentage of that 1/3 are actually receiving the remainder of their support from parents or spouses (i.e. not a burden on society and not having tax dollars supplement their lives). I'm guessing there has got to be a pretty good chunk of marginally-employed-but-not-a-drain-on-society types out there making up that 1/3.

[besson3c]

Originally Posted by turtle777 

For the "pension plan" intention, how about a forced 401k contribution, which, unlike Social Security contributions, is guaranteed *yours* once you retire.

-t

Guaranteed yours and dependent on however the stock market and your broker company fares. What happens if this company decides to take a look of risks and risk away your portfolio? What happens if the stock market crashes like it has?

I'm not saying that there is no feasible, fathomable better alternative to our current social security, but all of this blabber about it being fatally flawed because it is "socialist" just puts philosophy above practicality. Let's find something that works.

[turtle777]

Originally Posted by besson3c 

Guaranteed yours and dependent on however the stock market and your broker company fares. What happens if this company decides to take a look of risks and risk away your portfolio? What happens if the stock market crashes like it has?

I'm not saying that there is no feasible, fathomable better alternative to our current social security, but all of this blabber about it being fatally flawed because it is "socialist" just puts philosophy above practicality. Let's find something that works.

I don't understand your concerns.

Of course, you should be in control HOW the money in your 401k gets invested. You pick the stocks, funds or bonds or even cash, whatever you want. YOU should be solely responsible. By default, the investment should go into a lifecycle funds that invests more and more conservatively, the older and closer to retirement you get.

-t

[besson3c]

Originally Posted by turtle777 

I don't understand your concerns.

Of course, you should be in control HOW the money in your 401k gets invested. You pick the stocks, funds or bonds or even cash, whatever you want. YOU should be solely responsible. By default, the investment should go into a lifecycle funds that invests more and more conservatively, the older and closer to retirement you get.

-t

My concern is that there is risk involved with investing in the stock market. A 401k is a great idea for people like you or myself, but if you are unhappy with the prospect of having to bail out the economy now or unhappy with the concept of welfare, you most definitely are going to be unhappy with some company and/or individual with an f-ed up 401k and us having to bail them out so that they can afford their drugs and all of the fun that comes with old age. It could become f-ed up because the individual picked bad, high risk stocks and forgot to monitor their account, the company in charge becomes too greedy, or whatever.

The concept that seems to allude most fiscal conservatives is the idea that poverty is expensive, and somebody has to pay for it.

[Chuckit]

Poverty also does not exist in any great quantity in the US. Most people living in "poverty" here actually eat on a regular basis. Many even have cars and TVs. I don't want to have to pay for some poor impoverished person's daughter to go to three Miley Cyrus concerts in a month.

[besson3c]

Chuckit: abuse of welfare and the fatness of our welfare system is a whole other argument. I don't understand why these sorts of debates have to be either/or issues? Why can't we make welfare leaner and meaner, close loopholes and abuses, AND improve social security so that it works for everybody and does not put accounts at risk?

[Krusty]

Originally Posted by turtle777 

For the "pension plan" intention, how about a forced 401k contribution, which, unlike Social Security contributions, is guaranteed *yours* once you retire.

-t

Wow, that sounds totally like "Socialism". How is forcing a 401k contribution substantively different that withholding FICA taxes as we currently do ? In fact, it's somewhat more socialist than SS because it requires a person to give a chunk of their paychecks directly to a for-profit entity. If it were a paycheck, it be like giving you a $5 credit at the fast-food restaurant of your choice but not giving you the choice on whether or not you wanted to spend your $5 on fast-food in the first place. The only differences I see is that you get more choice over where your investments go with a 401k but you also end up with the risk of having a major market crash (similar to the 2 we've had in the last 7 years and 3 we've had in 20) throwing a huge monkey wrench in your retirement plans. (In 2001, my GF's mom was set to retire "in a year" on her 401k. A dot com crash later and now she has JUST retired in 2008 --- 6 YEARS later than originally expected ... YIKES!!). The current crash would probably have pulled her out of retirement too except that she's hit the age where SS has kicked in with full force. As of right now, the Dow's $8378 level puts almost exactly on par with its level of $6000 in October 1996 when adjusted for inflation. So, essentially, 12 years has netted 0% overall progress on in the stock market on average. Not to mention that private investment companies fees and expenses are actually somewhat larger than the carrying cost of SS (which, by mandate, always invests in the same thing).

If you reduce risk by choosing more conservative investments ... well now you really are just substituting a for-profit model in place of SS. What's the point of doing that other than for a politician to grease the palms of his buddies in the financial services industry ? And what about SS precludes you from having your own, more aggressive, investments in addition to SS. Overall, I'm not opposed to some sort of hybrid public/private model but with the recent behavior of our financial sector, privatization just seems an excuse for them to bet your retirement on their own get-rich-quick-and-get-the-heck-out schemes.

[Chongo]

Originally Posted by Krusty 

Wow, that sounds totally like "Socialism". How is forcing a 401k contribution substantively different that withholding FICA taxes as we currently do ? In fact, it's somewhat more socialist than SS because it requires a person to give a chunk of their paychecks directly to a for-profit entity. If it were a paycheck, it be like giving you a $5 credit at the fast-food restaurant of your choice but not giving you the choice on whether or not you wanted to spend your $5 on fast-food in the first place. The only differences I see is that you get more choice over where your investments go with a 401k but you also end up with the risk of having a major market crash (similar to the 2 we've had in the last 7 years and 3 we've had in 20) throwing a huge monkey wrench in your retirement plans. (In 2001, my GF's mom was set to retire "in a year" on her 401k. A dot com crash later and now she has JUST retired in 2008 --- 6 YEARS later than originally expected ... YIKES!!). The current crash would probably have pulled her out of retirement too except that she's hit the age where SS has kicked in with full force. As of right now, the Dow's $8378 level puts almost exactly on par with its level of $6000 in October 1996 when adjusted for inflation. So, essentially, 12 years has netted 0% overall progress on in the stock market on average. Not to mention that private investment companies fees and expenses are actually somewhat larger than the carrying cost of SS (which, by mandate, always invests in the same thing).

If you reduce risk by choosing more conservative investments ... well now you really are just substituting a for-profit model in place of SS. What's the point of doing that other than for a politician to grease the palms of his buddies in the financial services industry ? And what about SS precludes you from having your own, more aggressive, investments in addition to SS. Overall, I'm not opposed to some sort of hybrid public/private model but with the recent behavior of our financial sector, privatization just seems an excuse for them to bet your retirement on their own get-rich-quick-and-get-the-heck-out schemes.

Guided Choice Reps came to my work and gave a presentation on their 401(k) management services. The #1 mistake people make with their 401(k) no diversification, the old all your eggs in one basket. Unlike many who have seen 35% to 38% losses, because my 401(k) contributions are sufficiently diversified, I'm down only 25%. It still hurts, but not as much as it did in 1987. The other mistake people make is prior to retirement, not transferring out of the higher risk funds(small cap stocks/international stocks, etc) to the lower risk funds(Large Cap/bonds). They stressed it's all about managing risk because you cannot eliminate it.. The more diversified, the lower the risk.

One of the new options we will have in January, provide George Miller et al don't get their way and force us into government run "guaranteed" plans, is the Roth 401(k). Just as with the Roth IRA, post tax contributions goes in and withdrawals are tax free after age 59 1/2. This was passed by the (R) controlled congress in 2001, and made permanent in 2006. It had a sunset date of 2010.

[besson3c]

I might be for replacing social security with something like a 401k, but only if this was constructed with enough regulation and checks and balances to really eliminate as much risk as possible and possibly prohibit or limit the extent in which people can manage their own accounts, doing stupid things which could potentially affect us all.

[Krusty]

Originally Posted by besson3c 

I might be for replacing social security with something like a 401k, but only if this was constructed with enough regulation and checks and balances to really eliminate as much risk as possible and possibly prohibit or limit the extent in which people can manage their own accounts, doing stupid things which could potentially affect us all.

That's what I'm saying. But, if you do that, you've essentially just re-created Social Security with a little more choice, a little more risk, and a little more operational overhead . In other words, seems like a bit of wash unless you open it up to taking significant risks which could actually provide significantly better rewards than currently. For me, I'd rather see a reduction of SS benefits but leave it as a lifelong, guaranteed pension. If a person want to have a wine and caviar retirement, they can add their own, riskier investment portfolio on top of SS while still maintaining a floor to how far they can actually drop.