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#1
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Leona as right- only the little people pay taxes
http://economix.blogs.nytimes.com/2011/02/23/the-little-people-pay-taxes/?ref=business
very interesting piece on how taxes in the US are really hard on the low earners.
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Ben 1987 190d 2.5Turbo |
#2
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I take it that it is other than federal income taxes?
Last edited by MTI; 02-23-2011 at 04:24 PM. |
#3
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The comments there offer some interesting insight on the author's analysis.
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#4
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Thats because its easier getting a thousand people to pay $1 each than getting a thousand dollars out of a millionaire.
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1985 380SE Blue/Blue - 230,000 miles 2012 Subaru Forester 5-speed 2005 Toyota Sienna 2004 Chrysler Sebring convertible 1999 Toyota Tacoma |
#5
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Payroll contributions to SS are capped at a relatively low income level, as are the benefits that are eventually paid. If you want to increase both the contribution limit and the maximum benefit, that will work; but I suspect that most people who max out their contributions would be willing to opt out of the whole system anyway.
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#6
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From the article:
The Little People Pay Taxes By CATHERINE RAMPELL Jennifer Graylock/Associated Press Leona Helmsley, who reportedly said, “Only the little people pay taxes.”Leona Helmsley’s legacy lives on in the building that bears her name. Over at tax.com, Martin A. Sullivan, an economist and contributing editor to Tax Analysts, has a fascinating post on the tax rates paid by the residents of the Helmsley Building. The building’s tax-evading billionaire namesake, as you may recall, supposedly once said, “Only the little people pay taxes.” Mr. Sullivan shows that she was mostly right. The building has its own ZIP code, and so Mr. Sullivan was able to use Internal Revenue Service ZIP code records to find data on the 130 individual tax returns filed by residents of the building in 2007. He then compared their tax liabilities to the estimated tax liabilities of the blue-collar workers employed by the building. He found that the average adjusted gross income in the tax returns of building residents was $1.17 million. Which is of course impressive. More impressive, though, is the tax rates this group pays. The table below shows the total income and payroll tax liability of a typical resident of the Helmsley building, alongside the same tax liabilities of janitors and security guards earning the average wages for the jobs in the New York area. ****************** Here's the interesting part: The Building has it's own zip code. Yes, most giant commercial office buildings do. It's 35 stories tall and 2.3MM sf. As far I can tell, nobody actually "lives" at 230 Park Ave. since there are only businesses that occupy the building. The "130 individual tax returns" are probably small business owners filing as sole proprietorships. I wonder what the true revenues were, after businesses expenses or deductions (how much was capital gains income). The author is not making a fair assessment of his argument, but rather wishes to present an agenda/perspective many willingly lap up! Last edited by el presidente; 02-23-2011 at 05:30 PM. |
#7
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The revenues were likely much higher, would make the tax paid percentage even lower.
And I doubt the individuals were sole proprieters, more likely they were principals in LLCs, just to get the deductions for healthcare insurance if nothing else. |
#8
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The kind of income also hurts you, earned income, IE a job is the worst kind in regards to taxes.
People who earn a lot usually tend not to get W2's at the end of the year. They usualy own businesses and as a result have more write offs and the ability to a certain extent to determine there level of income. IE come the end of the year if I have a house closing I can push the date around to decide when to take the hit. My last one I pushed to January so I don't have to pay taxes on that money until April of 2011. Every business is different but right now I rather keep every cent as long as possible and push the tax hit off as long as I can. SS is the biggest drag, I would love to opt out of that system. I have a feeling that most productive people would since they could reinvest that money at a far greater yield.
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1999 SL500 1969 280SE 2023 Ram 1500 2007 Tiara 3200 |
#9
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What would you opt into; a fund run by Bernie Maddoff?
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#10
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No I'd buy more property or possible some equipment with it. The ROI is far higher than SS which for my generation will be zero or pretty close.
$12k a year is enough to buy a Ford F550, or a little excavator. With some equipment I could do some of the site work myself on the simple houses, say 2-3 a year @ $10k a pop. Far better use of the money than the black hole known as SS.
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1999 SL500 1969 280SE 2023 Ram 1500 2007 Tiara 3200 |
#11
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Not everyone, in fact I think most people, do not have the ambition, time, or skills you seem to have. |
#12
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If my memory is correct it is capped at $95,000. As a self employed person would pay $13,110 in SS taxes. Given the return on investment of roughly 1500 a month (maxed out) this person would have to live to 95 to break even. SS is a black hole for anyone who is right at 100k. My opinion.
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86 300SDL. 250,xxx on #14 Head. One eye always on temp gauge.. Cruising towards 300K |
#13
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Quote:
Could you expand your example of a self-employed earning over $95K. How many years for instance and the average income of those self employed. I'm quite curious about your figures since I was self employed for almost 30 years. |
#14
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Well I disagree, the figures don't work out its going to be bankrupt unless drastic changes are made long before I retire.
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1999 SL500 1969 280SE 2023 Ram 1500 2007 Tiara 3200 |
#15
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Quote:
Something that could be done right now, but likely won't, is to buy t-bills with your SS tax. Such a purchase would give one a good steady and secure return on investment. |
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