over the fiscal cliff

[MrsDoubtfire]

The milk/dairy issue was solved on Friday (I think it was Friday). I know it was before the weekend because that would certainly get people all riled up.

I, for one, am happy that the dairy issue was settled. I pay $3 a gallon now for Hood 1% milk and am okay with that, but if that price was doubled, we would have been purchasing 1/2 as much milk over here.

 

[bdcp]

I noticed that the lower incomes get hit with a larger percentage too. That's just wrong.

That's because the lower income levels benefitted the most %wise from the Bush-era tax cuts. With the reversion back to previous tax rates, the benefit is gone.

 

[pintamino]

Can someone tell me exactly what that means to my paycheck? Like how much it will actually be effected.. will it effect income tax returns?
I dont pay attention to this stuff usually.... as you can tell lol

This is a large portion of the problem, and it's not a laughing matter. People need to educate themselves on the issues and policy (yes, I know it's boring and not fun), and be active in the governing process -- not just react at the 11th hour when they realize it may hurt *them*.

 

[ilovemk76]

Yes, I do understand how percentages work.

I believe in a flat rate. I also know that those who are paid less often need every penny. I only care about impact not some tiresome mathematical numbers.

If you believe in a flat rate tax then you do not understand that it is a very regressive tax and the poor are hurt the worst. The current tax system make the richer pay more. The reason that many of the very rich pay less is they do not have income but dividend and investment income.

A flat rate tax will not give out EITCs and other things.

You do not care about tiresome mathematical numbers but you stated them and said it was not fair. Did you look at the actual dollar amount of those numbers and understand that the chart is a generalization and is not how you fill out your income taxes. Look at your last years return and find your AGI and see if you paid the amount it said.

 

[Colleen27]

Must be nice. Mine shows 40% change.

Those of us in median income land are going to be MUCH harder hit than higher earning households. We're a single-income family of 5 and we'll see our taxes jump by 41% according to that graph; a family of the same size with twice our income will see a 21% increase and one with five times our income will see an increase of less than 15%.

 

[eliza61]

If you believe in a flat rate tax then you do not understand that it is a very regressive tax and the poor are hurt the worst. The current tax system make the richer pay more. The reason that many of the very rich pay less is they do not have income but dividend and investment income.

A flat rate tax will not give out EITCs and other things.

You do not care about tiresome mathematical numbers but you stated them and said it was not fair. Did you look at the actual dollar amount of those numbers and understand that the chart is a generalization and is not how you fill out your income taxes. Look at your last years return and find your AGI and see if you paid the amount it said.

In dollars but not percentage. the very rich also have the option of moving their income into investment that almost the rest of the middle class does not.

For example. this is hypothetical You make 100K and you get routine tax. Let's say I make 100K but I take mine 1/2 in stock option because of my company allows me to do this as a ceo. My taxable income is now 50K and usually I can sell those options back very quickly and pay almost no tax on them.

There are all kinds of crazy loopholes. Serve on a public utility board and pocket a cool 75K. taxed at a much lower rate than income, yet it's still income.

So maybe a solution is to get rid of all the loopholes and exemptions. don't know.

 

[mistysue]

Showing the percentages of the jump is just misleading. The actual amounts of change give more information... knowing that a family's tax would raise 40% sounds like a huge crisis- the reality is that if it's only $100/month a "normal" middle income family could get there through cutting back, couponing, many families could cut their cable and actually have money left over.
The higher earners may be going up a lower percentage, but they also start from a higher number. Going up 20% is a bigger change than 40% if it's $300/month instead of that $100.

Arguing the exact numbers doesn't help anybody though. It's a hard situation that sucks for everyone.

 

[4luv2cdisney]

Showing the percentages of the jump is just misleading. The actual amounts of change give more information... knowing that a family's tax would raise 40% sounds like a huge crisis- the reality is that if it's only $100/month a "normal" middle income family could get there through cutting back, couponing, many families could cut their cable and actually have money left over.
The higher earners may be going up a lower percentage, but they also start from a higher number. Going up 20% is a bigger change than 40% if it's $300/month instead of that $100.

Arguing the exact numbers doesn't help anybody though. It's a hard situation that sucks for everyone.

So, by this thought process, I imagine you would be okay with your coworkers (who make less than you) getting a 20% raise or bonus, while you got a 10% raise or bonus, right? I mean, after all, if you made $200,000 per year and they made 50,000 per year, you would still come out way ahead, right?

 

[MichelleB]

Flame if you like but I'm another proponent for the flat tax. If everyone paid the same percent on taxes, then it'd be fair across the board. My DH busted his behind and made VP of his company but we aren't wealthy by any means and watch every penny spent. I by no means condone our tax system and feel the first place to look is to stop spending hard earned tax money on frivolous things by our government. I realize that many Americans work hard but not all higher paid employees have been "handed the easy money" so hate the ease of taxing those that make more of it. Unless the "rich" stole their money, someone earned that. Requiring them to pay more in taxes to cover those that didn't make it "big" is wrong and part of what's wrong with our country, IN MY OPINION. Income isn't owed to you, it's an earned thing.

Again, though, I am NOT saying our system works. I could go on a long time as to what's wrong, but we can't fix it by changing the tax amounts. It's got to start being fixed at the source. The deficit has to decrease, not increase and that is only being held at bay by taxes but not fixed until we start with the source.

 

[4luv2cdisney]

Flame if you like but I'm another proponent for the flat tax. If everyone paid the same percent on taxes, then it'd be fair across the board. My DH busted his behind and made VP of his company but we aren't wealthy by any means and watch every penny spent. I by no means condone our tax system and feel the first place to look is to stop spending hard earned tax money on frivolous things by our government. I realize that many Americans work hard but not all higher paid employees have been "handed the easy money" so hate the ease of taxing those that make more of it. Unless the "rich" stole their money, someone earned that. Requiring them to pay more in taxes to cover those that didn't make it "big" is wrong and part of what's wrong with our country, IN MY OPINION. Income isn't owed to you, it's an earned thing.

Again, though, I am NOT saying our system works. I could go on a long time as to what's wrong, but we can't fix it by changing the tax amounts. It's got to start being fixed at the source. The deficit has to decrease, not increase and that is only being held at bay by taxes but not fixed until we start with the source.

If we could fix our big problem of income inequality in this country, and every full time job paid a living wage, a flat tax would be a fair solution.

 

[luvmy3]

If we could fix our big problem of income inequality in this country, and every full time job paid a living wage, a flat tax would be a fair solution.

The problem of income inequality? That isn't a problem, you want to make more money, go to school get and education and get a better paying job. That is the great thing about our country, that opportunity is open to ALL that live here.
You want to be in the top 1%, the only thing stopping you is you.

 

[eliza61]

The problem of income inequality? That isn't a problem, you want to make more money, go to school get and education and get a better paying job. That is the great thing about our country, that opportunity is open to ALL that live here.
You want to be in the top 1%, the only thing stopping you is you.

but it's not Luv. case in point. In NJ where school funding is based on property tax.

You go to school, your school has great funding. you've got computers, technology, ap course, fabulous teachers. Your opportunity is better.

Kid goes to school in the hood. building falling down, no computers (or 1 computer for every 60 kids) 10 year old text books. very few AP courses. It's ludicrous to even think the quality of education is the same. So through no other fault than the kid has the misfortune to be born to poor parents he's already screwed.

And yes I know everyone here knows some one who pulled themselves up by the boot straps, walked 20 miles through the snow, etc etc but those cases are far and few in the real world.

Now let's look at another scenerio that I know of personally. Some one is making 75,000 bucks and family member leaves them 500K through a life insurance policy. So now that person is taking his salary and putting half of it into a 401K. he's using the life insurance policy money (which he got tax free) to supplement himself. and his salary is now only being taxed on the 37,000K because he's socking the other in various tax free vehicle.
Middle class Joe does not have that Opportunity to do that. so his entire salary is getting taxed. Over time who has the opportunity to 1) leave more of his wealth to his children who then have better opportunities. 2) accumalate more wealth because he's paying less in taxes therefore keeping more.
If I keep more of my income over time, I get richer. That's exactly where that saying "the rich get richer" comes from. They are no more "hard" working than the middle class, they simply have more legal ways to avoid their income being taxed.

 

[vacationer1954]

The chart with the percentages is no longer important since the President signed the bill and so retroactively we did not go over the fiscal cliff.

I think it is wrong to assume that if you get an education and work hard that you'll get out of poverty. I did. My sister didn't and she's an even harder worker than I am.

I saw a good summary of the bill this morning. Maybe others will find it useful too.

http://kitces.com/blog/archives/463...s-of-HR8-the-Taxpayer-Relief-Act-of-2012.html

 

[luvmy3]

but it's not Luv. case in point. In NJ where school funding is based on property tax.

You go to school, your school has great funding. you've got computers, technology, ap course, fabulous teachers. Your opportunity is better.

Kid goes to school in the hood. building falling down, no computers (or 1 computer for every 60 kids) 10 year old text books. very few AP courses. It's ludicrous to even think the quality of education is the same. So through no other fault than the kid has the misfortune to be born to poor parents he's already screwed.

And yes I know everyone here knows some one who pulled themselves up by the boot straps, walked 20 miles through the snow, etc etc but those cases are far and few in the real world.

Now let's look at another scenerio that I know of personally. Some one is making 75,000 bucks and family member leaves them 500K through a life insurance policy. So now that person is taking his salary and putting half of it into a 401K. he's using the life insurance policy money (which he got tax free) to supplement himself. and his salary is now only being taxed on the 37,000K because he's socking the other in various tax free vehicle.
Middle class Joe does not have that Opportunity to do that. so his entire salary is getting taxed. Over time who has the opportunity to 1) leave more of his wealth to his children who then have better opportunities. 2) accumalate more wealth because he's paying less in taxes therefore keeping more.
If I keep more of my income over time, I get richer. That's exactly where that saying "the rich get richer" comes from. They are no more "hard" working than the middle class, they simply have more legal ways to avoid their income being taxed.

I'm not arguing that its easy for everyone, I'm just arguing that it is possible for everyone, and it is. Will it take hard work, discipline, sacrifices, yes. While that may be easier for some, the problem is, not everyone is willing to do that for themselves because it isn't easy for them. Its so much easier to blame "income inequality" and let govt make it fair for you instead.

 

[luvmy3]

The chart with the percentages is no longer important since the President signed the bill and so retroactively we did not go over the fiscal cliff.

I think it is wrong to assume that if you get an education and work hard that you'll get out of poverty. I did. My sister didn't and she's an even harder worker than I am.
I saw a good summary of the bill this morning. Maybe others will find it useful too.

http://kitces.com/blog/archives/463...s-of-HR8-the-Taxpayer-Relief-Act-of-2012.html

I don't believe anyone ever claimed that is all it takes to get out of poverty, but it certainly puts you on the road to be able to.

And we are still going over the cliff since the deal has actually added to the deficit and has done nothing to reduce it. Our taxes may not be going up, but we will be paying for this mess, and so will our children and theirs.

 

[MichelleB]

I 100% agree with Luvmy3. Part of the problem is the expectation that it should be a right to have. It's not.....you have to work hard, find the opportunities, and go for them. It IS available to everyone but isn't GIVEN. YOU have to do it. No one said life is easy but the opportunities are out there for each of us.

 

[MichelleB]

They're reporting that the crisis has only been averted until March 1 when our country will have reached it's debt ceiling unless the debt ceiling is increased. Increase the debt ceiling???? You've got to be kidding.

I know without a doubt that I won't see our country out of this mess in my lifetime (I'm 45) and am not sure that my kids nor their kids will see it. We're in so deep that it'll take a major overhaul.

All the while, we've got so many spouting inequality and that things "aren't fair". Forget that and get out there and dig up the opporuntity instead of expecting it to be handed to you. As my BIL likes to say....."you think life's not fair, what until you have to pay taxes!" There's a lot of power in that one sentence.

 

[eliza61]

I 100% agree with Luvmy3. Part of the problem is the expectation that it should be a right to have. It's not.....you have to work hard, find the opportunities, and go for them. It IS available to everyone but isn't GIVEN. YOU have to do it. No one said life is easy but the opportunities are out there for each of us.

While I use to agree with Luv, I think me and many others no longer believe that.
We don't want stuff given to us. I've never had one single thing given to me in my life (outsideof what my parents gave me) but I think people see that they are working 2, 3 jobs at a time and falling deeper and deeper.
They are seeing their homes (and no not everyone purchased a home they could not afford) value go down the toilet. they are losing their homes through no fault of their own and it's becoming impossible to educate their kids.

and with the unemployment rate stuck at 7% I find it hysterical when they say "there are opportunities out there". So what you are saying is that over 2 million folks are too lazy to work. or don't want to do it.
That's illogical.

 

[luvmy3]

They're reporting that the crisis has only been averted until March 1 when our country will have reached it's debt ceiling unless the debt ceiling is increased. Increase the debt ceiling???? You've got to be kidding.
I know without a doubt that I won't see our country out of this mess in my lifetime (I'm 45) and am not sure that my kids nor their kids will see it. We're in so deep that it'll take a major overhaul.

Yes, the crisis is still there because we are still spending more money than we are bringing in. I cant really say too much without turning this thread political but the bottom line is, spending needs to be cut. If it isn't we will NEVER be out of this crisis, ever.

 

[MichelleB]

I think we all agree in one way or another that something needs to be done to fix our system. The path we're on isn't the answer.

There are a lot of people struggling out there and raising our taxes won't fix the problem that exists whether it's to tax the lower, middle, or upper class. The source of spending has to be addressed.