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08:45 AM on 11/10/12 
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David87
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Wilmington, DE
Male - 26 Years Old
The income tax rate here is tiered....our top marginal tax rate is 35%, then 33%, then 28%, etc and so on.


However, because of a lot of loopholes in the tax code, people in the 35% tax bracket usually pay an effective income tax rate of like 26%.

On top of those income taxes, Americans also pay payroll taxes....6.2% of our paychecks go to Social Security (up until around 115K or so, every dollar made after that is not subject to the SS tax) and 1.45% go towards Medicare. Employers also pay 6.2% and 1.45% towards those things.

Unfortunately, people who make their income through other means (like investments) only pay a 15% tax on the money earned, and nothing into SS or Medicare. Though the new healthcare bill does levy a 3.9% Medicare tax on investment income
09:14 AM on 11/10/12 
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David87
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yeah ours is much more tiered then that...

10:38 AM on 11/10/12 
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David87
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Wilmington, DE
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I guess. I mean the intent of the tax law is to take 35% of income made, but certain tax breaks give people legal ways to get around paying that amount. That's pretty much what a loophole is. But I do think the word carries a certain negative connotation to it and the "loopholes" a lot of people use are often things like tax credits for children and mortgage payments and whatever.
10:56 AM on 11/10/12 
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David87
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Wilmington, DE
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I'm jealous. Seriously.

I don't know...the way he's describing it makes it sound almost like the flat tax some of the Republicans were pushing. Have everyone at one level, and then maybe a 2nd higher level for extremely high incomes.


But I don't know enough to know if their poor have to pay that 35% rate or if there are ways for lower income folks to pay less in taxes and etc
11:11 AM on 11/10/12 
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David87
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Wilmington, DE
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Their taxation system is actually more regressive than ours, they just use government spending in a far more progressive manner.

Well I look at the debt I'm for getting the education I want and the cost of me going to the doctor (and a health care system with huge problems in just about every area) and I am very jealous of their tax rate. Its because as tkamb said, they use their taxes to directly benefit the public in ways far more efficient than our system.


Yeah true enough. I certainly wouldn't care about poor people paying a 35% tax rate if it meant they were getting more services for the taxes they pay. Unfortunately Americans have been hypnotized since Reagan into believing all public services are bad, anti-american, etc....bleh.
03:09 PM on 11/10/12 
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David87
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Wilmington, DE
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People are still going to invest money whether the gain is taxed at 15% or 25%.


A businessman is going to worry about one thing, and one thing only...making money. He'll pay the taxes on the money he makes later.
04:43 PM on 11/10/12 
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David87
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So you're agreeing that a business person will invest if they see opportunity to make money.

A 25% tax rate is not going to stop any significant amount of investment. The uncertainty of what the rates are going to be are a far bigger roadblock to investment than the actual rates themselves.
08:46 AM on 11/14/12 
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David87
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No, a businessman will take tax into consideration before he invests anything.

I've heard many businessmen say making money is making money....in fact I lifted that quote pretty much word for word from Mark Cuban.
02:34 PM on 11/14/12 
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David87
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When we're talking about "job creators" who are investing with the expectation of making large sums of money over a long period of time, the difference between a 15% tax rate and a 25% tax rate is very low on the list of "things I should be worried about with this investment."

Ie if someone is investing a large amount of money and is expecting to see a 2 million dollar gain over a 5 year period...the tax change we're talking about takes the profit from 1.7 million to 1.5 million. As in "I still just made a million and a half dollars"

Uncertainty in what the rate is going to be in 5 years is much more detrimental to investment than what the actual rate is, at least when we're talking about changes from 15 to 20 to 25 percent. If someone was pushing a 70% rate, then that might be a big deal. As it stands now, the expected impact on the economy is relatively small. People will still invest, people will still make large gobs of money.
12:32 PM on 11/20/12 
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David87
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Wilmington, DE
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What about someone who is 10 years away from retirement and has an investment portfolio that he could sell off now at a 15% cap gains tax or wait and sell it at a 25% rate. Why wouldn't they sell now and reinvest under the new tax code? Why would they reinvest at all?

We aren't talking about a billionaire here either, we are talking about your parents.

Raising the tax rate for the 1% is about symbolism, it's not a solution. Can we get an actual solution already?

Neither of my parents are lucky enough to have any type of investments, let alone have significant investments that would be vastly effected by an increase in the tax rate.
12:41 PM on 11/20/12 
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Luck might not be the right word....fortunate, maybe. Definitely some luck though.

Usually, when you choose a career path that doesn't include college, you end up busting your ass for 40-50 hours a week at a full time job for an income on the lower end of median. If you're lucky, you'll be part of a union that fights to get you decent health benefits and maybe some dental. But chances are the income you're taking it won't be nearly enough to raise a kid, live in a halfway decent area, and still have extra income at the end to invest. That is, assuming you have any sort of education at all on even how to go about investing. As luck would have it, she's lucky enough to have a union that fought to get her a 401K and pension as well. Of course, sacrifices had to be made by the union to get those things...she can't touch either account until she reaches a certain age, and if god forbid something happens to her, her children (aka me) don't get to inherit those accounts. Only a spouse can. Kind of discriminatory towards single parents, IMO.
01:50 PM on 11/20/12 
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David87
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Wilmington, DE
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If you are not married you can select someone else as your beneficiary.

Not according to her company, she can not. Only a spouse can be listed as the beneficiary for her 401k and pension.
02:10 PM on 11/20/12 
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David87
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Wilmington, DE
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She should try again. Unless there is something special going on with the 401(k), that is not right.

My guess is it was written into the union contract that way. She's in constant contact with her Union rep and is the union liaison (or whatever the title is) at her store so I know she's inquired about it before. I'll have her double check it, because I agree it definitely isn't right. It's discriminatory towards single parents or people who aren't married.
06:07 PM on 11/20/12 
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David87
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Wilmington, DE
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I find it pretty unlucky to have third parties (ie unions) provide you with things. But that's just me. Sometimes unions are necessary.


If the unions didn't fight for it, the "job creators" wouldn't always provide it.

So yes, I consider myself lucky to be the son of someone in a trade union



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