What's the difference between HARD and EASY earned income?

Employer's matching contributions........When I was employed, said matching was considered ''Free Money'' by several of my co-workers.

By the way, what's Uncle Sam's incentive(s) that mainly encourages people to save money for retirement?

Why Uncle Sam has/is indirectly paying ME, YOU, and THEM to save money for retirement?

Note: 3rd largest tax expenditures; Tax-qualified retirement saving accounts, $157.8 billion

https://www.taxpolicycenter.org/briefing-book/what-are-largest-tax-expenditures

 

-Employer "matching" contributions is a part of their compensation package. They work hard to get their compensation. Some people speaking in shorthand may choose to call it "free money", but in reality not taking advantage of it would be unnecessarily leaving money on the table. It would be similar to not taking advantage of ones legal tax deductions.

-How does Uncle Sam pay me to save for retirement? Do you mean a tax write off? That is not earned money. That is keeping more of one's hard earned money. How do you not understand this distinction?

 

My dividend income is much easier earned than my paycheck twice a month.

 

What about our MNE's who have explanded abroad, and cheap labor significantly lowered their COG's?

Easy earned profits?

 

...or just plain survival?


Is all of this going anywhere?

 

Summary;

There are tons of loopholes, tax incentives, exclusions, credits, deductions, benefits, tax shelters, subsidies, that REDUCE both businesses and individual's taxable income, thus, allow hundreds of millions of people to keep more of their hard earned income, AND a Republican's favorite;

''Reductions in taxes paid on income''

HOWEVER, what's the negative consequences of allowing taxpayers to keep more of their hard earned income?

Higher deficits = a higher Public Debt = Higher interest payments/expenditures

Thus, let's go back to;

GOP; Closing Tax Loopholes will help pay for tax cuts

''The White House has proposed doing that by closing almost all of the roughly 200 loopholes that riddle the system. These special carve-outs are worth an estimated $18.4 trillion over the next decade — money that the GOP wants to use to pay for across-the-board tax cuts instead''

https://www.cnbc.com/2017/08/09/simplifying-the-us-tax-code-isnt-so-simple-heres-why.html

 

A “majority” in the House would pass appropriate legislation; unfortunately a simple majority in the Senate doesn’t do squat since it takes 60 votes to avoid filibuster.

 

Which "loopholes" do you want to close. You can't lump them all into one bucket, smear them, and expect to persuade anyone.

 

He did at one point, now he doesn't.

 

Mr. fmw, or anyone;

Question; When Uncle Sam finally decides to close/eliminate tax loopholes, will it also reduce businesses and/or individual's hard earned income/money?

 

Which loopholes?

 

Any loopholes.

Once again, when Uncle Sam finally decides to close/eliminate tax loopholes, will it also reduce businesses and/or individual's hard earned income/money?

 

In my experience, as a CPA, lots of people ignorant of tax law call deductions and credits "loopholes" when they have a legitimate economic purpose. It's difficult to discuss this topic if you're not being specific.

 

In my county, your property taxes are based on how the land is zoned so agriculture lands are taxed at a much lower rate than they would be if they were not. You have to be really mindful of this when buying that land, however, because of what they call rollback taxes. If a farmer decided to sell you an acre of that farm land to build a house on, after you close and your plat and deed get recorded, the county assessor will send you a nice fat property tax bill due immediately for the difference between what was actually paid in taxes and what the taxes would have been as residential property all the way back to when the land was first given the agricultural zoning status, which could be as far back as 1983.

 

Alright then, I'll specify;


Quoted by DONALD TRUMP; "As part of this reform, we will eliminate the carried interest deduction and other special interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers."

When Uncle Sam finally decides to eliminate ''the carried interest deduction'' will it also reduce a fund manager's hard earned money/income/compensation/profits?

 

I'm fine changing the characterization of those fees. They'll just raise their fees, though.

 

Wait a minute, if fund managers were to raise their fees, for example; from 2% to 3%, will it also lower my investment's rate of return by 1%, thus, negatively affect my hard earned money?

Thus, just like rasing the corporate tax rate.......''They will just raise prices and pass the costs on to their customers''

 

I don't know about that... my dividend income is accompanied by research, tough decision making, the inherent risk in the market, daily vigilance, and worry/stress. Maybe I am doing something wrong?

 

Per hour, I work harder for my paycheck than my dividends, even after checking investments. Could certainly be different for you, though!

 

Sure it will. Changing the characterization of that fee will cost the managers money, so they will be pressed to raise their fees. That's going to come at least in part out of my future earnings.

 

Thanks for your input.......When I receive prospectuses, I don't even read them.....I just pile them up beside my fireplace.

NOW, let's talk about the SALT;

For your info.......

On December 19, 2017, Elise Stefanik voted against the Tax Cuts and Jobs Act of 2017. In a December 18 Facebook post, she wrote, "The final bill does not adequately protect the state and local tax deduction that so many in our district and across New York rely on ... New York is one of the highest taxed states in the country, and families here rely on this important deduction to make ends meet."

Rationally, if we were to eliminate, and/or further reduce SALT's deduction, it would negatively affect millions of taxpayer's hard earned income.

Bottom line; I'm just looking for a loophole we could eliminate, and would not adversely affect the average Joe's/Jane's hard earned income.

Suggestion?

 

The SALT deduction was one that I supported because for the longest time, one could deduct state income taxes paid on your federal tax return. Taxpayers in states with higher sales taxes and no income taxes had no similar deduction (both types of states would allow for property tax deductions).

If you moved to a flat tax and eliminated most itemized deductions then that's one way to get rid of a deduction.

I think offshoring gains is something that needs to be looked at on the corporate side. A company like Apple keeps profits in China or elsewhere to avoid paying US income tax. And they do this by keeping the money oversees. That's something else that could be looked into.

A lot of the billionaires avoid income taxes by simply avoiding taxable income.

 

I am glad you dedicate the time you do for your investments. If you are experiencing a lot of worry or stress maybe just switch to a good Dividend ETF. Compare your returns to something like Vanguard High Yield dividend ETF and see if it is worthwhile for you.

 

Have you done the math for your proposal?

I once did the math for the FLAT TAX proposal, and if we were to implement a rate that would generate exsisting revenues, we would need a 25% flat rate, and said rate would negatively affect a majority of taxpayers.

 

Sorry, but I agree with the previous poster whose position is that the Federal government spends entirely too much money on things it should not. I do, however, agree with you that we should eliminate the vast overwhelming majority of special tax breaks/loopholes both for corporations and individuals, even though this would likely result in a tax increase for me. I abhor the use of the tax code by the government as a social weapon, placing value judgements on people's personal choices that should be neutral, neither subsidized nor penalized. Examples: choosing to have children vs. choosing not to have children, choosing to own a home versus choosing to rent. ALL income should be treated the same, no deductions or loopholes, and tax all at a flat rate above a basic minimum, i.e. 40K. And absolutely STOP abusing the "general welfare" clause and STOP growing the Federal government in any way. There are many things the govt funds that may be "nice" for some segment of society but that are in no way necessary or deserving of forced support, and these should be eliminated.