Plain and simple, capitol is another word for money. Capitol is the major reason why US companies can compete globally. True labor can be cheaper elsewhere and raw materials are the same across the board but the US has more capitol to invest. As a result an American worker is many times more productive than workers elsewhere and we remain the world super power.
Another point, more taxes = less money for all which in turn equals less choices and the end result is less freedom.
Don't let the politicians use fancy words to confuse you into believing that they can spend our money better than we can.
When new countries have started up democracies they use a 0% tax on capitol gains because they know how critical it is. They are not stupid, why are we?
Remember
By default, anything the gov't spends money on is a 3rd party purchase. Buying something for someone else with somebody else's money.
My parents were secretive about money not only with us kids but with each other, too! When my dad passed away, a woman gave my mother $10,000 cash and thanked her for my dad's generosity in loaning that to her husband. My mom had no idea. That was the norm, not the exception. Lots of money secrets and intentional misrepresentations.
Ever since I can remember, they told us kids that there was never enough money for whatever we asked for, but they always dragged the whole family to Vegas several times a year, where Dad lost thousands at the blackjack tables and Mom lost at least a thousand in the slots.
Since my parents fought so much about money and seemed to worship it, I became repelled by the love of or desire for money. I still wanted all the things that money could buy but I made the unhealthy disconnect between money and things. I wrongly assumed that if I just got a high-enough-paying professional career, I could easily pay for everything I charged. $120,000 of debt later, I realized I'd better learn about personal finance and slowly dig myself out of that quicksand. Which, thankfully, I did by finally finding a dream worth pursuing (writing through blogging!) and then deciding to become as frugal as possible to support myself exclusively through my writings someday, however humble that income might be.
If I have kids, I will definitely explain personal finance to them as soon as they can understand my words. I would teach it along with safety tips, good hygiene, and good manners. Thanks for the great post!
I'm not sure how far Commerce Bank goes around the US, but around here, (suburbs of Philadelphia) Commerce Bank has a machine just like CoinStar, only it's FREE to use.
You dump the change in, and a ticket with the total comes out.
Take it to the teller, and they give you the cash.
Easy as that.
And you do NOT have do have an account or anything with Commerce, either.
I do it all the time. It's great. And it's free!!
I have a plastic up in a the cup holder of the door in my car, and whenever I get change, or clean out my purse, the couch, my husband's side of the room, etc...I put it in there.
(I usually give the pennies to my Daughter for her piggy bank)
Whenever me and the kids are out, and hungry, we hit McDonald's and order everything from the dollar menu, and I start counting out the change.
By the time I'm to the pay window, I'm ready to pay.
The kids are happy, and I don't feel like I've paid anything.
It's my "emergency fun fund"
I also use it for quick yard sale stops, when the kids need a new "treasure".
I LOVE change. The more I have, the free-er I feel.
And it keeps my Husband off my back, for spending!!!
There are three kinds of lies: lies, damn lies, and statistics.
Mark Twain
This is probably a semantic argument, but statistics can be spun or "conjured" to say just about anything you want them to. Regardless of whether or not the statistic itself is accurate, even semantic differences can be made to completely change the perceived meaning of the statistics.
For example, let's say there was the following statistic:
25% of people want the war in Iraq to stay its current course
You could rewrite the "statistic" to say, 75% of people are against the current Iraq war
Your statistics are probably correct except for the mistake that was already pointed out, but they were used to paint a picture that push forth the agenda of the group manipulating the numbers.
So did they come out of thin air...yes and no. I think it depends on how you look at it.
My father used to share his 'general situation' with us; namely, that we were poor and had no money.
As early as 4, 5, and 6, I felt the weight of responsibility for our family finances. And I felt extremely guilty.
I didn't tell him about field trips, year books, or anything 'frivolous'. (It wasn't until I could start buying my own that I had any.)
When I was old enough, I got a job and gave him every one of my paychecks to hlep out. Now that I am an adult, I am middle class; I own a home, have some debt, pay my bills responsibly, etc.
Where is he? LIVING AT HOME WITH MY GRANDMOTHER and living off her social security and retirement monies.
The point? Kids are more sensitive than you realize about money.
Paul, let me be clear, I commend you for taking a step out of the box and trying to put something like the tax plans into perspective. I really do.
The more I think about it, the more I am happy you put the post up, although I would have ventured to say a full disclosure of your political affiliations might have been in store.
You aren't the only one getting election fever. Forgive me if I am a bit brash, diplomacy isn't my strong suit.
However strong individuals push back, if you get the discussion going, you are doing something right. To be honest, neither candidate is going to be good for your wallet, and that is the truth.
I should have researched the Tax Policy Center more rigorously, and I took the numbers presented by Sam Pizzigati as a fair and unbalanced representation of the report, which was another mistake. I don't think the figures are conjured though, that gives the impression that they came out of thin air. If this was the case, wouldn't the Tax Policy Center and Too Much be at risk of a lawsuit from either candidate?
*Honestly, why the attacks like sky is falling merely because Paul pointed out Obama is going to give more to the middle class in terms of services (who can afford health care now? It's the biggest growing cost for small businesses, taxes have been the fastest shrinking cost for over a decade but the proportional loss of government provided services has been much greater than the prior cost) and ask for more from the wealthy who have received dramatic increased services and government aid over the past 7 years?
It's because his conjured statistics are fallacious at best. It is proffered as an impartial and objective analysis, when it is far from it. Not only does he impart his own brand of bias, his numbers and statistics are generated by partisan and ideologically based sources in the first place. That has no place here on wisebread. Paul knew firsthand what he was getting himself into when he prefaced his piece with a warning.
I commend him for bringing up the topic, but this isn't the place for it. I know that Paul was acting in good faith, I am not asserting otherwise, but I must admit, it was done in poor form, and all but the most myopic should have seen many of the readers would dislike the "analysis".
The fact is, most people don't get reciprocated services valued at the amount that they pay in taxes. Did you know that the average American taxpayer works until the 3rd week of April for Uncle Same? When put into perspective, many take a step and start seeing the wealth redistribution initiative for the sham it is.
Get real, you're not reading wisebreat because you've got a ton of money, you're a frugal person who's hoping to do better in a reasonable way - that reader may aspire to wealth and fear potentially higher taxes but this fear is irrational, the benefits from services for most readers here will outweigh the minimal cost of increased taxes.
Maybe there are readers of Wisebread who DO have a lot of money, and the reason they do is because of their conservative fiscal ideals.
I disagree with you that individuals receive benefits equal to what they pay in. The numbers just don't substantiate that claim. Ultimately that would be the goal, but it certainly isn't true. Why do you think "governmental efficiency" is considered an oxymoron?
Okay, perhaps I didn't explain what I mean by "double taxation" in the article. First of all, when you get dividend income and capital gains from investments, where do you think the extra money comes from? It comes from the profits and growth of the companies you invest in. Dividends especially are directly paid from the coffers from a company you invest in. Those profits are already taxed at the business rate by the government. If you are a business owner yourself and you want to sell your business, you've also paid taxes on your business income already in the process of building your business. Only with business income and growth do we see capital gains and dividends and so yes, I do consider it a double taxation because the government gets a take from the original business and THEN takes a take from the investors that have profited from the well being of the business. If less people are compelled to invest in businesses because of more taxes, then we will see less growth in our economy as a whole, and that is not that great for everyone.
Jeff, I'd hold off on that vote.
What Obama doesn't mention is that his proposed tax on the "super rich" includes raising the capital gains tax, which is what the federal government takes from any profits we make from the sale of stocks.
ANYONE -regardless of income level- who has a 401(k), an IRA, or any other retirement vehicle is likely invested in stocks or mutual funds that invest in stocks. Obama's proposal would raise the tax on your retirement money from 15% to 33%. This applies to low income, middle income, or high income families. Again, this applies to us all.
This is not a partisan statement, merely the facts. Obama wants to implement many new government programs, and getting more tax revenue is the logical way to do it.
My wife and I combined earn less than you, so our pocketbooks wanted to know the whole story. Hope this helps.
I know that we can't ever really credit any one behavior of our parents for our attitude towards finance. I'm glad that you shared your personal experience, because it shows that communication and openess are valued above hard numbers type info. It sounds like you have a healthy grasp on finance in general.
To this day (where I am a college graduate, employed, married, and own my own home), I do not know what income bracket my parents are in, or what savings they have.
I do know that it was high enough that they told me not to fill out college aid applications, as I would not be eligible. I also know that as a child, we canceled our cable t.v. because finances were getting tight, as well as frequently being told things (like vacations) were too expensive.
From this, I assume that they are well off, and became that way largely through methods like those found here.
My father works in the finance industry, and we do talk about money more than most families: pay off your credit cards but don't be afraid of them, max out your 401k, save and pay cash rather than financing purchases if at all possible. But we never, never talk amounts.
Is this a good policy? I don't know. I believe I developed a relatively healthy attitude about managing my own money. On the other hand, it seems awfully awkward and secretive. I doubt knowing concrete figures now would make a difference. Would it have changed my attitude for the worse as a child? I don't know.
I do think that the actions and examples speak louder than any targeted conversation.
well... YOU'RE right there, my mistake (on the typo and c.g confusion.) but your not right on the taxes. My earned income was was $34205.89 and although i got a refund - i still paid IN a few dollars over $7,000. so ..thats actually slightly OVER 20%. (you may take me for a dummy but i can do my countin'.)
There is no "double taxation" of capital gains. Your facts are not correct. If you believe there is, then you do not have a grasp of the current income tax system. Here are some basics:
Broadly speaking, an individuals monetary gains are taxed as "ordinary income" or as "capital gains". Ordinary income includes wages, and also interest. Ordinary income is taxed at progressive rates depending on how much income one makes in a year. Ordinary income is calculated by starting with the amount of income received, and subtracting out any deductions. Most wage-earners don't have any deductions, and a large number of Americans, ordinary income is typically the amount they earn from work. So if Joe earns $150 from work, Joe pays ordinary income tax on $150 (plus social security / medicare taxes, but those taxes aren't relevant to your post as they very rarely apply to dispositions of capital assets).
Capital gains are profits from the sale of an asset, including intangibles such as stocks or bonds, and also tangibles such as real property. Capital gains are calculated by beginning with the amount received on sale of the item, and subtracting out the amount of post-tax dollars that were paid for the item. This means that if you buy a stock for $100 that you later sell for $150, your capital gain is $50 and you are taxed on that $50. You do not pay tax on what is effectively the return of the $100 you spent in the first place. The reason that you do not pay tax on that $100 is because you paid tax on that in the first place when you earned the money, either through a preceding capital gain, wages, etc.
The system outlines above is repleat with exceptions and special rules. Notably for most individuals, gains from the sale of your principal residence are tax free up to $250,000 (single) / $500,000 (married filing jointly), if the residence has been owned and occupied by you for 2 of the last 5 years. As far as I am aware, no mainstream politician has proposed repealing this very generous exception to the capital gains tax.
Assuming that your policy objections are genuine, consider the lack of parity in the taxation of income from wages versus investments: Why are wage earners "slapped in the face" by being compelled to pay income + other payroll taxes on their wages, while millionaires pay a far lesser % of their income in total tax?
My next few topics should interest everyone, they are not political in any way. Thanks for the comments. And if there's anything you'd like to see any of us, including me, cover on WB then please feel free to ask.
it is up to us consumers to not allow businesses to become rich by being evil. I would rather let someone profit from me and have us both have a clear conscience about it than to scrape the bottom of the barrel of both price and responsibility. As popular as barrel-scraping and corporate mergers are, let us hope that we are able to keep substitutes available to keep us nimble. Healthy competition may be the lifeblood of innovation and capitalism.
We are taking baby steps on this: at Walmart we only buy cheese and sometimes soup flavors our grocery store doesn't have. Sometimes at local businesses I try to remember to pull out my Visa instead of my Discover. I've been buying more of my pleasure items (books, jewelry, etc.) from private individuals--people with used books or new craft items. I bought a Diva Cup (horrible name, I know) to reduce my consumption of mounds of P&G disposables that have nowhere to go. This is a start....
First of all, it's "You're earning dollars" and not "your earning dollars". Second, I highly doubt that you paid 20% in taxes if you earned less than 35k a year. Perhaps you are talking about your highest tax bracket. Finally, interest IS already taxed as ordinary income. Interest income is completely different from capital gains.
(1) Who'll be better for you personally based on economic policy? Well, the poor and middle class benefit more from increased taxes because the services they receive (and yes, we do get services from our taxes despite some wacky thinking here that the money simply disappears) will be a greater relative to their proportion of income than the services received by the wealthy.
(2) The benefits will be most direct for the poor, but the wealthy benefit dramatically by having a more stable social system because they are better able to maintain their current position.
(3) The increases are not "socialism" as some here seem to think - they would increase tax levels from today, but relative to taxes paid under Clinton, taxes will still be substantially lower.
(4) McCain has committed to continuing to spend similarly to how Bush has spent - "big" government has become bigger than ever under, you guessed it, first Reagan, then Bush #43. If you want your taxes to make it back to you and your community in the form of services and benefits (health care, schools, streets, police, firefighters) then expanding the federal government as is the elected Republicans' plan and history (though clearly counter to the plan and hopes of most Republican VOTERS) is not going to help. Out biggest debt, our harshest cuts to schools and service programs, and our loss of moral authority internationally and stability domestically, have been under Republican presidents and congressional control.
*Honestly, why the attacks like sky is falling merely because Paul pointed out Obama is going to give more to the middle class in terms of services (who can afford health care now? It's the biggest growing cost for small businesses, taxes have been the fastest shrinking cost for over a decade but the proportional loss of government provided services has been much greater than the prior cost) and ask for more from the wealthy who have received dramatic increased services and government aid over the past 7 years?
Get real, you're not reading wisebreat because you've got a ton of money, you're a frugal person who's hoping to do better in a reasonable way - that reader may aspire to wealth and fear potentially higher taxes but this fear is irrational, the benefits from services for most readers here will outweigh the minimal cost of increased taxes.
Imagine how many more people would employed by small businesses if they didn't have to pay so dearly for health care under Obama's plan (or better yet, under an expanded medicare program making all providers negotiate bulk costs with the government rather than screwing businesses and individuals with higher costs and worse service?
i agree with the plan. If your earning dollars - from money sitting in the bank, you should be taxed on that just as much as income you go out and work for. I make under 35K a year and paid 20% of that out to taxes last year - i don't think there should be an exception to people making money off interest.
No, you have a fellow writer that is also trying to push forth his agenda. The title of this site is Wise Bread | Personal Finance and Frugal Living...I didn't know that meant Wise Bread | Partisan Proselytizing.
Let's keep the blog on topic, or if you are shifting your focus, be honest about it so the readers can make a choice whether or not to continue their patronage to this site.
I've always shied away from bumper stickers. But oddly, in an almost territorial way. I went so far as to remove the license plate holders and sticker put on by the dealership. It's my car, I'm not going to give the dealer free advertising!
Another reason I dislike bumper stickers is I feel that they give people a chance to associate the way I drive with my views. I like to think I'm a decent driver, but I make mistakes every so often, and when the guy behind me silently (or not so silently) cusses me out, I'd rather he just call me stupid than a stupid Christian, stupid hippie, or stupid conservative. Katy's point, though I hadn't thought of it, reinforces this. If someone is angry enough to follow me home, why would I want to give them information that might help?
I agree with Dar that how quick someone is on the horn may not be the best metric, but at the same time, it is perhaps the easiest. To get consistent data, researchers needed to essentially "create" road rage without actually breaking any laws or putting other drivers in danger. Access to information about pullovers and tickets versus bumper stickers, while more telling, would require police to do the research.
One last thought: does this mean people with larger families are more aggressive? The rather odd fad of putting stickers representing each family member and pet on the back of a vehicle, if number of stickers is truly proportional to rage, would imply this.
Ummm, have you ever heard of World War II? Our boom had nothing to do with taxation.
Let's also not forget that the subprime mortgage boom rests at least partial blame on liberal attempts to make housing more "accessible" to those that otherwise shouldn't be given mortgages.
There were screams in 2000+ that housing was just too expensive for most individuals, which caused certain fiscal policies to be implemented that created the subprime culture that has wrecked the mortgage industry.
America loves to legislate...and 99% of the time, we legislate ourselves into a hole.
The subscription isn't free, and as narcissistic as it may be, my attention and readership is worth something. This blog isn't born out of altruism, this blog is born out of capitalist intents.
A blowhard without readership is just a blowhard. This post isn't in the spirit of blog, and the term evil is thrown around so lightheartedly nowadays it is painful.
Obviously you don't see the hypocrisy in the OP's post. How much do you make off of our fiscal ignorance again OP? Are you taking advantage of me? Maybe you are one of the evil ones. *GASP*
EVIL EVIL EVIL EVIL EVIL - you are right, it has a nice ring to it. I think I'll be Captain Sensationalist and start using it more often as well.
Plain and simple, capitol is another word for money. Capitol is the major reason why US companies can compete globally. True labor can be cheaper elsewhere and raw materials are the same across the board but the US has more capitol to invest. As a result an American worker is many times more productive than workers elsewhere and we remain the world super power.
Another point, more taxes = less money for all which in turn equals less choices and the end result is less freedom.
Don't let the politicians use fancy words to confuse you into believing that they can spend our money better than we can.
When new countries have started up democracies they use a 0% tax on capitol gains because they know how critical it is. They are not stupid, why are we?
Remember
By default, anything the gov't spends money on is a 3rd party purchase. Buying something for someone else with somebody else's money.
My parents were secretive about money not only with us kids but with each other, too! When my dad passed away, a woman gave my mother $10,000 cash and thanked her for my dad's generosity in loaning that to her husband. My mom had no idea. That was the norm, not the exception. Lots of money secrets and intentional misrepresentations.
Ever since I can remember, they told us kids that there was never enough money for whatever we asked for, but they always dragged the whole family to Vegas several times a year, where Dad lost thousands at the blackjack tables and Mom lost at least a thousand in the slots.
Since my parents fought so much about money and seemed to worship it, I became repelled by the love of or desire for money. I still wanted all the things that money could buy but I made the unhealthy disconnect between money and things. I wrongly assumed that if I just got a high-enough-paying professional career, I could easily pay for everything I charged. $120,000 of debt later, I realized I'd better learn about personal finance and slowly dig myself out of that quicksand. Which, thankfully, I did by finally finding a dream worth pursuing (writing through blogging!) and then deciding to become as frugal as possible to support myself exclusively through my writings someday, however humble that income might be.
If I have kids, I will definitely explain personal finance to them as soon as they can understand my words. I would teach it along with safety tips, good hygiene, and good manners. Thanks for the great post!
I'm not sure how far Commerce Bank goes around the US, but around here, (suburbs of Philadelphia) Commerce Bank has a machine just like CoinStar, only it's FREE to use.
You dump the change in, and a ticket with the total comes out.
Take it to the teller, and they give you the cash.
Easy as that.
And you do NOT have do have an account or anything with Commerce, either.
I do it all the time. It's great. And it's free!!
I have a plastic up in a the cup holder of the door in my car, and whenever I get change, or clean out my purse, the couch, my husband's side of the room, etc...I put it in there.
(I usually give the pennies to my Daughter for her piggy bank)
Whenever me and the kids are out, and hungry, we hit McDonald's and order everything from the dollar menu, and I start counting out the change.
By the time I'm to the pay window, I'm ready to pay.
The kids are happy, and I don't feel like I've paid anything.
It's my "emergency fun fund"
I also use it for quick yard sale stops, when the kids need a new "treasure".
I LOVE change. The more I have, the free-er I feel.
And it keeps my Husband off my back, for spending!!!
There are three kinds of lies: lies, damn lies, and statistics.
Mark Twain
This is probably a semantic argument, but statistics can be spun or "conjured" to say just about anything you want them to. Regardless of whether or not the statistic itself is accurate, even semantic differences can be made to completely change the perceived meaning of the statistics.
For example, let's say there was the following statistic:
25% of people want the war in Iraq to stay its current course
You could rewrite the "statistic" to say, 75% of people are against the current Iraq war
Your statistics are probably correct except for the mistake that was already pointed out, but they were used to paint a picture that push forth the agenda of the group manipulating the numbers.
So did they come out of thin air...yes and no. I think it depends on how you look at it.
My father used to share his 'general situation' with us; namely, that we were poor and had no money.
As early as 4, 5, and 6, I felt the weight of responsibility for our family finances. And I felt extremely guilty.
I didn't tell him about field trips, year books, or anything 'frivolous'. (It wasn't until I could start buying my own that I had any.)
When I was old enough, I got a job and gave him every one of my paychecks to hlep out. Now that I am an adult, I am middle class; I own a home, have some debt, pay my bills responsibly, etc.
Where is he? LIVING AT HOME WITH MY GRANDMOTHER and living off her social security and retirement monies.
The point? Kids are more sensitive than you realize about money.
Paul, let me be clear, I commend you for taking a step out of the box and trying to put something like the tax plans into perspective. I really do.
The more I think about it, the more I am happy you put the post up, although I would have ventured to say a full disclosure of your political affiliations might have been in store.
You aren't the only one getting election fever. Forgive me if I am a bit brash, diplomacy isn't my strong suit.
However strong individuals push back, if you get the discussion going, you are doing something right. To be honest, neither candidate is going to be good for your wallet, and that is the truth.
I should have researched the Tax Policy Center more rigorously, and I took the numbers presented by Sam Pizzigati as a fair and unbalanced representation of the report, which was another mistake. I don't think the figures are conjured though, that gives the impression that they came out of thin air. If this was the case, wouldn't the Tax Policy Center and Too Much be at risk of a lawsuit from either candidate?
i am working at this Ramada Baku hotel in position of bellboy:)))))
*Honestly, why the attacks like sky is falling merely because Paul pointed out Obama is going to give more to the middle class in terms of services (who can afford health care now? It's the biggest growing cost for small businesses, taxes have been the fastest shrinking cost for over a decade but the proportional loss of government provided services has been much greater than the prior cost) and ask for more from the wealthy who have received dramatic increased services and government aid over the past 7 years?
It's because his conjured statistics are fallacious at best. It is proffered as an impartial and objective analysis, when it is far from it. Not only does he impart his own brand of bias, his numbers and statistics are generated by partisan and ideologically based sources in the first place. That has no place here on wisebread. Paul knew firsthand what he was getting himself into when he prefaced his piece with a warning.
I commend him for bringing up the topic, but this isn't the place for it. I know that Paul was acting in good faith, I am not asserting otherwise, but I must admit, it was done in poor form, and all but the most myopic should have seen many of the readers would dislike the "analysis".
The fact is, most people don't get reciprocated services valued at the amount that they pay in taxes. Did you know that the average American taxpayer works until the 3rd week of April for Uncle Same? When put into perspective, many take a step and start seeing the wealth redistribution initiative for the sham it is.
Get real, you're not reading wisebreat because you've got a ton of money, you're a frugal person who's hoping to do better in a reasonable way - that reader may aspire to wealth and fear potentially higher taxes but this fear is irrational, the benefits from services for most readers here will outweigh the minimal cost of increased taxes.
Maybe there are readers of Wisebread who DO have a lot of money, and the reason they do is because of their conservative fiscal ideals.
I disagree with you that individuals receive benefits equal to what they pay in. The numbers just don't substantiate that claim. Ultimately that would be the goal, but it certainly isn't true. Why do you think "governmental efficiency" is considered an oxymoron?
Okay, perhaps I didn't explain what I mean by "double taxation" in the article. First of all, when you get dividend income and capital gains from investments, where do you think the extra money comes from? It comes from the profits and growth of the companies you invest in. Dividends especially are directly paid from the coffers from a company you invest in. Those profits are already taxed at the business rate by the government. If you are a business owner yourself and you want to sell your business, you've also paid taxes on your business income already in the process of building your business. Only with business income and growth do we see capital gains and dividends and so yes, I do consider it a double taxation because the government gets a take from the original business and THEN takes a take from the investors that have profited from the well being of the business. If less people are compelled to invest in businesses because of more taxes, then we will see less growth in our economy as a whole, and that is not that great for everyone.
Jeff, I'd hold off on that vote.
What Obama doesn't mention is that his proposed tax on the "super rich" includes raising the capital gains tax, which is what the federal government takes from any profits we make from the sale of stocks.
ANYONE -regardless of income level- who has a 401(k), an IRA, or any other retirement vehicle is likely invested in stocks or mutual funds that invest in stocks. Obama's proposal would raise the tax on your retirement money from 15% to 33%. This applies to low income, middle income, or high income families. Again, this applies to us all.
This is not a partisan statement, merely the facts. Obama wants to implement many new government programs, and getting more tax revenue is the logical way to do it.
My wife and I combined earn less than you, so our pocketbooks wanted to know the whole story. Hope this helps.
John Kopmeier
I know that we can't ever really credit any one behavior of our parents for our attitude towards finance. I'm glad that you shared your personal experience, because it shows that communication and openess are valued above hard numbers type info. It sounds like you have a healthy grasp on finance in general.
I appreciate the comment!
To this day (where I am a college graduate, employed, married, and own my own home), I do not know what income bracket my parents are in, or what savings they have.
I do know that it was high enough that they told me not to fill out college aid applications, as I would not be eligible. I also know that as a child, we canceled our cable t.v. because finances were getting tight, as well as frequently being told things (like vacations) were too expensive.
From this, I assume that they are well off, and became that way largely through methods like those found here.
My father works in the finance industry, and we do talk about money more than most families: pay off your credit cards but don't be afraid of them, max out your 401k, save and pay cash rather than financing purchases if at all possible. But we never, never talk amounts.
Is this a good policy? I don't know. I believe I developed a relatively healthy attitude about managing my own money. On the other hand, it seems awfully awkward and secretive. I doubt knowing concrete figures now would make a difference. Would it have changed my attitude for the worse as a child? I don't know.
I do think that the actions and examples speak louder than any targeted conversation.
well... YOU'RE right there, my mistake (on the typo and c.g confusion.) but your not right on the taxes. My earned income was was $34205.89 and although i got a refund - i still paid IN a few dollars over $7,000. so ..thats actually slightly OVER 20%. (you may take me for a dummy but i can do my countin'.)
There is no "double taxation" of capital gains. Your facts are not correct. If you believe there is, then you do not have a grasp of the current income tax system. Here are some basics:
Broadly speaking, an individuals monetary gains are taxed as "ordinary income" or as "capital gains". Ordinary income includes wages, and also interest. Ordinary income is taxed at progressive rates depending on how much income one makes in a year. Ordinary income is calculated by starting with the amount of income received, and subtracting out any deductions. Most wage-earners don't have any deductions, and a large number of Americans, ordinary income is typically the amount they earn from work. So if Joe earns $150 from work, Joe pays ordinary income tax on $150 (plus social security / medicare taxes, but those taxes aren't relevant to your post as they very rarely apply to dispositions of capital assets).
Capital gains are profits from the sale of an asset, including intangibles such as stocks or bonds, and also tangibles such as real property. Capital gains are calculated by beginning with the amount received on sale of the item, and subtracting out the amount of post-tax dollars that were paid for the item. This means that if you buy a stock for $100 that you later sell for $150, your capital gain is $50 and you are taxed on that $50. You do not pay tax on what is effectively the return of the $100 you spent in the first place. The reason that you do not pay tax on that $100 is because you paid tax on that in the first place when you earned the money, either through a preceding capital gain, wages, etc.
The system outlines above is repleat with exceptions and special rules. Notably for most individuals, gains from the sale of your principal residence are tax free up to $250,000 (single) / $500,000 (married filing jointly), if the residence has been owned and occupied by you for 2 of the last 5 years. As far as I am aware, no mainstream politician has proposed repealing this very generous exception to the capital gains tax.
Assuming that your policy objections are genuine, consider the lack of parity in the taxation of income from wages versus investments: Why are wage earners "slapped in the face" by being compelled to pay income + other payroll taxes on their wages, while millionaires pay a far lesser % of their income in total tax?
My next few topics should interest everyone, they are not political in any way. Thanks for the comments. And if there's anything you'd like to see any of us, including me, cover on WB then please feel free to ask.
it is up to us consumers to not allow businesses to become rich by being evil. I would rather let someone profit from me and have us both have a clear conscience about it than to scrape the bottom of the barrel of both price and responsibility. As popular as barrel-scraping and corporate mergers are, let us hope that we are able to keep substitutes available to keep us nimble. Healthy competition may be the lifeblood of innovation and capitalism.
We are taking baby steps on this: at Walmart we only buy cheese and sometimes soup flavors our grocery store doesn't have. Sometimes at local businesses I try to remember to pull out my Visa instead of my Discover. I've been buying more of my pleasure items (books, jewelry, etc.) from private individuals--people with used books or new craft items. I bought a Diva Cup (horrible name, I know) to reduce my consumption of mounds of P&G disposables that have nowhere to go. This is a start....
Hi Guest,
First of all, it's "You're earning dollars" and not "your earning dollars". Second, I highly doubt that you paid 20% in taxes if you earned less than 35k a year. Perhaps you are talking about your highest tax bracket. Finally, interest IS already taxed as ordinary income. Interest income is completely different from capital gains.
(1) Who'll be better for you personally based on economic policy? Well, the poor and middle class benefit more from increased taxes because the services they receive (and yes, we do get services from our taxes despite some wacky thinking here that the money simply disappears) will be a greater relative to their proportion of income than the services received by the wealthy.
(2) The benefits will be most direct for the poor, but the wealthy benefit dramatically by having a more stable social system because they are better able to maintain their current position.
(3) The increases are not "socialism" as some here seem to think - they would increase tax levels from today, but relative to taxes paid under Clinton, taxes will still be substantially lower.
(4) McCain has committed to continuing to spend similarly to how Bush has spent - "big" government has become bigger than ever under, you guessed it, first Reagan, then Bush #43. If you want your taxes to make it back to you and your community in the form of services and benefits (health care, schools, streets, police, firefighters) then expanding the federal government as is the elected Republicans' plan and history (though clearly counter to the plan and hopes of most Republican VOTERS) is not going to help. Out biggest debt, our harshest cuts to schools and service programs, and our loss of moral authority internationally and stability domestically, have been under Republican presidents and congressional control.
*Honestly, why the attacks like sky is falling merely because Paul pointed out Obama is going to give more to the middle class in terms of services (who can afford health care now? It's the biggest growing cost for small businesses, taxes have been the fastest shrinking cost for over a decade but the proportional loss of government provided services has been much greater than the prior cost) and ask for more from the wealthy who have received dramatic increased services and government aid over the past 7 years?
Get real, you're not reading wisebreat because you've got a ton of money, you're a frugal person who's hoping to do better in a reasonable way - that reader may aspire to wealth and fear potentially higher taxes but this fear is irrational, the benefits from services for most readers here will outweigh the minimal cost of increased taxes.
Imagine how many more people would employed by small businesses if they didn't have to pay so dearly for health care under Obama's plan (or better yet, under an expanded medicare program making all providers negotiate bulk costs with the government rather than screwing businesses and individuals with higher costs and worse service?
Oy!
i agree with the plan. If your earning dollars - from money sitting in the bank, you should be taxed on that just as much as income you go out and work for. I make under 35K a year and paid 20% of that out to taxes last year - i don't think there should be an exception to people making money off interest.
No, you have a fellow writer that is also trying to push forth his agenda. The title of this site is Wise Bread | Personal Finance and Frugal Living...I didn't know that meant Wise Bread | Partisan Proselytizing.
Let's keep the blog on topic, or if you are shifting your focus, be honest about it so the readers can make a choice whether or not to continue their patronage to this site.
I've always shied away from bumper stickers. But oddly, in an almost territorial way. I went so far as to remove the license plate holders and sticker put on by the dealership. It's my car, I'm not going to give the dealer free advertising!
Another reason I dislike bumper stickers is I feel that they give people a chance to associate the way I drive with my views. I like to think I'm a decent driver, but I make mistakes every so often, and when the guy behind me silently (or not so silently) cusses me out, I'd rather he just call me stupid than a stupid Christian, stupid hippie, or stupid conservative. Katy's point, though I hadn't thought of it, reinforces this. If someone is angry enough to follow me home, why would I want to give them information that might help?
I agree with Dar that how quick someone is on the horn may not be the best metric, but at the same time, it is perhaps the easiest. To get consistent data, researchers needed to essentially "create" road rage without actually breaking any laws or putting other drivers in danger. Access to information about pullovers and tickets versus bumper stickers, while more telling, would require police to do the research.
One last thought: does this mean people with larger families are more aggressive? The rather odd fad of putting stickers representing each family member and pet on the back of a vehicle, if number of stickers is truly proportional to rage, would imply this.
Ummm, have you ever heard of World War II? Our boom had nothing to do with taxation.
Let's also not forget that the subprime mortgage boom rests at least partial blame on liberal attempts to make housing more "accessible" to those that otherwise shouldn't be given mortgages.
There were screams in 2000+ that housing was just too expensive for most individuals, which caused certain fiscal policies to be implemented that created the subprime culture that has wrecked the mortgage industry.
America loves to legislate...and 99% of the time, we legislate ourselves into a hole.
The subscription isn't free, and as narcissistic as it may be, my attention and readership is worth something. This blog isn't born out of altruism, this blog is born out of capitalist intents.
A blowhard without readership is just a blowhard. This post isn't in the spirit of blog, and the term evil is thrown around so lightheartedly nowadays it is painful.
Obviously you don't see the hypocrisy in the OP's post. How much do you make off of our fiscal ignorance again OP? Are you taking advantage of me? Maybe you are one of the evil ones. *GASP*
EVIL EVIL EVIL EVIL EVIL - you are right, it has a nice ring to it. I think I'll be Captain Sensationalist and start using it more often as well.
EVIL EVIL EVIL EVIL EVIL