Ok after looking I see nothing on this issue, the shutdown.

LittleManAlex

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BECAUSE THEY CANT!
those are museums, police, fire, fbi, other things of that nature, you also ignored my ISP comment. If these things go pure private, you will get that bias where low income neighborhoods face an even greater bias then they do with it being government managed (well that is a reference for schooling)

It is hard to understand that statement when you do not understand what those 800 000 jobs are, no they cannot be cut. This is why i am getting irritated, you can't say something like that while lacking information and insight that makes you draw such bizarre conclusions.

they are not sealing it. This is getting annoying to hear, I feel like I am listeining to trump. You can't just say something without reason or logic and expect people take your word.
I understand perfectly what those jobs are, and other jobs in government are.... unessential.

Please explain in what way it is not stealing, it is taking, by the threat, or even the act of force the fruits of someone else is labor. If any other person or entity did this it would be stealing, the government is no different. It is not difficult to understand... my property is my property and yours is yours, I'm not entitled to yours and you sure as hell are not entitled to mine. For someone going on about reason and logic, you sure are devoid of it.
 

CutePrincess

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I understand perfectly what those jobs are, and other jobs in government are.... unessential.

Please explain in what way it is not stealing, it is taking, by the threat, or even the act of force the fruits of someone else is labor. If any other person or entity did this it would be stealing, the government is no different. It is not difficult to understand... my property is my property and yours is yours, I'm not entitled to yours and you sure as hell are not entitled to mine. For someone going on about reason and logic, you sure are devoid of it.
No it is your job to explain. Because I explained why those jobs are needed. So far you are showing you do not understand why the government has those jobs and what they do. You are not explaining anything.

Remember you have an odd view, one that you are not explaining well, we are not mind readers. If you want to really understand my view, then I have to be blunt here to explain why you need more details. Another way put things, so you understand what I am seeing is "I want to pay no taxes because I do not like paying for things. I think we should just live in anarchy. This is the best because I say so."
 

SnowPrincessSophie

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You say you want 90% of government gone, fine, what exactly would you get rid of and what would you suggest as alternatives?
 

LittleManAlex

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No it is your job to explain. Because I explained why those jobs are needed. So far you are showing you do not understand why the government has those jobs and what they do. You are not explaining anything.

Remember you have an odd view, one that you are not explaining well, we are not mind readers. If you want to really understand my view, then I have to be blunt here to explain why you need more details. Another way put things, so you understand what I am seeing is "I want to pay no taxes because I do not like paying for things. I think we should just live in anarchy. This is the best because I say so."
Well you haven't really, you just provided a flimsy bias against poor neighborhoods as your justification. TSA, the security should be up to the airlines and the airports, hell they are not worth a single cent with how bad they are at the non sexual assault parts of their jobs. National Parks, again a private company, or non profit or charity could do far better. Heck I know in some places groups were stopped from cleaning them up so it looked like we need them. HUD... state issue. Homeland, the less said the better, Agriculture.... another case of the government creating it's own problems to fix. DEA & ATF should be disbanded. US armed forces bases should be closed and the troops brought back home, Intelligence agencies would see massive cut backs. There are a hundred reasons I could provide, but simply the biggest reason is a large government is the biggest enemy to personal and civil liberties.

But I too can come up with stupid statements that misrepresent you position because what I'm seeing is "Government is super duper smart and super duper effecient and would never ever do anything wrong so we should give them our money, we will give them even more money.... Freedom pffft, Wasn't even using it anyway"
 

LittleManAlex

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You say you want 90% of government gone, fine, what exactly would you get rid of and what would you suggest as alternatives?
I would cut many law enforcement agencies to be replaced by nothing, leaving the FBI whose role would be changed. I would severely trim intelligence agencies so they are only capable of providing intelligence of threats to the United States and her embassies. Massive cut backs to the military budget, spending would be limited to the immediate defense of the United States, so bases abroad would be closed. FDA would be streamlined and severely trimmed. Education would largely go private or left to the states with just enough staff to provide a bench mark of achievement. Medicare and Welfare would be tossed down to the states, preferably with the aim of the states taking it private. The government should be the option of absolute last resort. Instead we seem to be using it as the first and only option. The US Government is involved in so much crap it has no business being involved with both domestically and abroad. Especially at a federal level, I don't think the government should be involved much beyond the defending it's borders, and ensuring a degree of uniformity across the states when necessary.
 

Moo

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I do, and that's why I'm only getting rid of 90% of the government, not all of it. I understand how government works. The government steals your money because it knows best how to spend it, if it runs our, it steals some more, it forces you to pay for services that would be far better provided for on the free market
Have you ever heard of a Public Good?
Something that is non-excludable (ie: you can't prevent people who haven't paid for it using it), and non-rivalrous (ie: something where you consuming it doesn't stop me consuming it).
Examples would include national defense, clean air/water, the benefits of having safety-tested food, etc.
These sorts of things just cannot be funded privately, because its not possible to exclude non-payers from the benefits of these things.
For example, if only half the public paid for food safety inspections, then the other half would still be getting safer food as a result of the inspections - without paying for it.
If only half of the public paid into the military budget, the military would still defend the whole country. If it did not, the whole country would fall apart.
There are lots of public goods, and they cannot be privately funded. So, how do they get funded? Government, and taxes.
By forcing everyone to pay for them, via taxation, they can be adequately funded with no one person being forced to pay without getting the benefit, and nobody who can afford to pay for it being able to get it for free.

Essentially, we have to have a government, and it has to tax people, in order to provide public goods.
You mentioned national defense. That's one example. There are tons of others.
Even things like banking regulations could be seen as public goods.
Having them benefits everyone (prevents another crazy 2008 speculation-fueled financial crisis), and you can't stop people who haven't paid for them privately from getting the benefits of them.

When you start looking at things through the lens of public goods, you realize that the vast majority of what the government does simply could not be done by the private sector.
Even in cases where it could technically be done by the private sector, there's a concept called "economies of scale" which means that running things on a bigger scale tends to be more efficient.
Thus, for example, a huge federal program can be more efficiently managed than that same program managed at a state level.

I could go on, but suffice it to say there are arguments for many things that no, the private sector simply couldn't do them... and for many others, the private sector might be able to do them, but way less efficiently than the government can.
There are still things that private enterprise can do better than the government, but the idea that they can do everything better than the govt can is simply not true.
There are many things they can't do as well... and there are many others they can't do at all.
 
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LittleManAlex

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Have you ever heard of a Public Good?
Something that is non-excludable (ie: you can't prevent people who haven't paid for it using it), and non-rivalrous (ie: something where you consuming it doesn't stop me consuming it).
Examples would include national defense, clean air/water, the benefits of having safety-tested food, etc.
These sorts of things just cannot be funded privately, because its not possible to exclude non-payers from the benefits of these things.
For example, if only half the public paid for food safety inspections, then the other half would still be getting safer food as a result of the inspections - without paying for it.
If only half of the public paid into the military budget, the military would still defend the whole country. If it did not, the whole country would fall apart.
There are lots of public goods, and they cannot be privately funded. So, how do they get funded? Government, and taxes.
By forcing everyone to pay for them, via taxation, they can be adequately funded with no one person being forced to pay without getting the benefit, and nobody who can afford to pay for it being able to get it for free.
I have and a few of them I would actually consider good, I do think some government needs to exist, but I'm not going to be pretend that taxation is theft. I always hear it is the price we pay to live in a civilized society, or some crap like that, but there is no option to opt out, both of the obligations and protections. But Taxation is dangerous slope, because you justify one thing and suddenly by that logic this needs tax payer money to. I'm not even American, but the government collects a ridiculous amount of money in tax.. I will use here in NZ as an example. If you earn $100, you pay $33 in income tax. Leaving you with $67. You spend that money to put gas in your car, 48% Fuel Tax = $32.16 + 6.70. From $100 I earned $71.86 goes to the government in tax.... tell me that is not ridiculous.
When you start looking at things through the lens of public goods, you realize that the vast majority of what the government does simply could not be done by the private sector.
Even in cases where it could technically be done by the private sector, there's a concept called "economies of scale" which means that running things on a bigger scale tends to be more efficient.
I mean there's nothing stopping the private sector running things nationwide either.... well maybe laws against ponzi schemes ;)
 

Moo

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The reason there is no option to opt out is that its impossible to opt-out of paying for things like national defense, clean air, etc.... without still getting the benefit of other people paying for those things.
In effect: you being able to opt-out of paying for them is unfair to everyone else who pays for them. Hence, no opt-out.

Governments can tax anything they want. Its actually very good they tax gas, because fossil fuel use (including gas) creates terrible amounts of pollution.
Governments have to get their money from somewhere, and taxing things that are bad for society (because they harm the environment we live in) funds the government whilst at the same time encouraging people to make better behavior choices. (ie: drive less, use less gas)
That seems like a double-win to me. Govt gets funding to do the things it needs to do, and it gets the funding it needs by taxing things that are actively harmful to the environment we live in. Even the tax is actually helping us, in a way, because its helping to lower emissions of pollutants like CO2.

My previous post outlined that its impossible for the private sector to run certain things, and why.
Regardless of laws, it is just not practically possible for the private sector to run things like national defense, or environmental protection.
 

MrGnome

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Oh ya I forgot about this quote and mixed it up with my other post, I edited that.
but since you did not answer my question I would really like to know, where did you get this information from?
This where I got the info about the the democratic party creating the KKK. From good old wikipedia!
"The first Klan flourished in the Southern United States in the late 1860s, then died out by the early 1870s. It sought to overthrow the Republican state governments in the South during the Reconstruction Era, especially by using violence against African-Americanleaders. With numerous autonomous chapters across the South, it was suppressed around 1871"

"Historian Eric Foner observed: "In effect, the Klan was a military force serving the interests of the Democratic party, the planter class, and all those who desired restoration of white supremacy. Its purposes were political, but political in the broadest sense, for it sought to affect power relations, both public and private, throughout Southern society. It aimed to reverse the interlocking changes sweeping over the South during Reconstruction: to destroy the Republican party's infrastructure"


https://en.m.wikipedia.org/wiki/Ku_Klux_Klan
 

LittleManAlex

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The reason there is no option to opt out is that its impossible to opt-out of paying for things like national defense, clean air, etc.... without still getting the benefit of other people paying for those things.
In effect: you being able to opt-out of paying for them is unfair to everyone else who pays for them. Hence, no opt-out.

Governments can tax anything they want. Its actually very good they tax gas, because fossil fuel use (including gas) creates terrible amounts of pollution.
Governments have to get their money from somewhere, and taxing things that are bad for society (because they harm the environment we live in) funds the government whilst at the same time encouraging people to make better behavior choices. (ie: drive less, use less gas)
That seems like a double-win to me. Govt gets funding to do the things it needs to do, and it gets the funding it needs by taxing things that are actively harmful to the environment we live in. Even the tax is actually helping us, in a way, because its helping to lower emissions of pollutants like CO2.

My previous post outlined that its impossible for the private sector to run certain things, and why.
Regardless of laws, it is just not practically possible for the private sector to run things like national defense, or environmental protection.
Which brings into practice the governments practice of trying to solve problems they create. Their tax has done nothing what so ever to protect the environment, what it has done is made it so poor people can no longer afford to travel to work and become even more reliant on the government. Their kids can no longer participate in sports because they can't get there. It's virtue signalling pure and simple, something our government is good at, They banned gas and oil experiation, at a cost of $22 Billion a year to the crown accounts, and then there are the jobs lost and less being cent, and even then the act of doing so, will only increase it greenhouse emission not lowering them. It's like our government putting the tax on Tabacco up far beyond the point of covering health related costs, the biggest anti smoking fascists admit it doesn't work, the government admits it doesn't work, armed robberies have drastically increased and yet the put it up again. I wish governments around the world would declare war on politicians with honesty and integrity.... we would have an abundance of them then.
 

Near

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This where I got the info about the the democratic party creating the KKK. From good old wikipedia!
"The first Klan flourished in the Southern United States in the late 1860s, then died out by the early 1870s. It sought to overthrow the Republican state governments in the South during the Reconstruction Era, especially by using violence against African-Americanleaders. With numerous autonomous chapters across the South, it was suppressed around 1871"

"Historian Eric Foner observed: "In effect, the Klan was a military force serving the interests of the Democratic party, the planter class, and all those who desired restoration of white supremacy. Its purposes were political, but political in the broadest sense, for it sought to affect power relations, both public and private, throughout Southern society. It aimed to reverse the interlocking changes sweeping over the South during Reconstruction: to destroy the Republican party's infrastructure"


https://en.m.wikipedia.org/wiki/Ku_Klux_Klan
Worth remembering which recent president called the founder of the Democratic party his favourite president and had his portrait installed in the most prominent area of the Oval Office. Hint: it wasn’t Obama, Clinton, Carter, LBJ or JFK.
 

MrGnome

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Worth remembering which recent president called the founder of the Democratic party his favourite president and had his portrait installed in the most prominent area of the Oval Office. Hint: it wasn’t Obama, Clinton, Carter, LBJ or JFK.
Trump, and it's Andrew Jackson he hangs a portrait of. Which yes I find that highly suspicious knowing what an asshole Jackson was especially to the Native Americans! I don't know if you seen my other post but I was never a die hard trump supporter. Like I said voted for him as a wild card I didn't have much faith in him. I already knew the system was rigged all could do is vote for the lesser evil and minimize the damage. I officially dropped my support after he attacked Syria last year and just appointing more and more warmongers. I still do not regret NOT voting for Hillary, she would of opened up the flood gates and poured millions of refugees into our country like a trojan horse. That would skyrocketed the unemployment and she also would had her war with Russia shes been wanting. She would still built the stupid dirty oil pipeline through natives american land like Trump. She was Trump on steroids basically in my opinion. We be in the same mess as europe right now if she got in. I really don't like voting for lesser evil either but having cpacs makes impossible to get real candidates, that actually care about the people. Until CPACS are removed I'm done voting. We have better chances getting what we want through revolution rather than hoping another plastic wrapped politician gonna do it for us.
 

Moo

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Which brings into practice the governments practice of trying to solve problems they create. Their tax has done nothing what so ever to protect the environment, what it has done is made it so poor people can no longer afford to travel to work and become even more reliant on the government. Their kids can no longer participate in sports because they can't get there. It's virtue signalling pure and simple, something our government is good at, They banned gas and oil experiation, at a cost of $22 Billion a year to the crown accounts, and then there are the jobs lost and less being cent, and even then the act of doing so, will only increase it greenhouse emission not lowering them. It's like our government putting the tax on Tabacco up far beyond the point of covering health related costs, the biggest anti smoking fascists admit it doesn't work, the government admits it doesn't work, armed robberies have drastically increased and yet the put it up again. I wish governments around the world would declare war on politicians with honesty and integrity.... we would have an abundance of them then.
I can't speak to what tax policy does, or doesn't, work in your country. I have not seen any good scientific reports on the subject.
What I can say is that since failure is guaranteed without govt intervention (look at the huge smoking rates in countries without anti-smoking laws, or the huge CO2 emissions worldwide), I would rather the govt try to fix problems, even if they will sometimes screw it up, than do nothing at all. My hope is that over time govts learn what works and what doesn't, and interventions get better over time.
 
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LittleManAlex

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I can't speak to what tax policy does, or doesn't, work in your country. I have not seen any good scientific reports on the subject.
What I can say is that since failure is guaranteed without govt intervention (look at the huge smoking rates in countries without anti-smoking laws, or the huge CO2 emissions worldwide), I would rather the govt try to fix problems, even if they will sometimes screw it up, than do nothing at all. My hope is that over time govts learn what works and what doesn't, and interventions get better over time.
Unfortunately the government screws it up 99 times out of a hundred, 50 of those times they create new and even bigger problems.
 

Moo

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Unfortunately the government screws it up 99 times out of a hundred, 50 of those times they create new and even bigger problems.
Are you sure?
When I think of all the problems the govt tries to address... they seem to have a pretty good record.
Examples:
  • Police service. Okay, yeah, there are some issues with it, but I feel safe walking around my city, which means fundamentally they're doing their job.
  • Fire service. Ditto. While there are some issues around the edges, I am not worried my home will burn down, and they seem to respond quickly.
  • Medical service. Lots of issues here, but then again in my country the medical service is mostly private... and recent efforts by the govt have been helpful.
  • National defense. Well, they keep us safe, so they're doing their job.
  • Civil engineering. The roads seem decently maintained.
  • Education. While education is expensive, its also well known as being some of the best in the world, so they must be doing something right.
See what I mean?
If I was afraid of being shot on the street, or everything burning down, or dying from a preventable disease, or the country being invaded and taken over, or falling into a hole in the road due to lack of maintenance, or similar, I might see the govt as fundamentally screwing things up.
Thing is, none of that is happening.
Of the things the govt does, sure there are a few high-profile failures, but when I look around, most stuff basically works.

I try to imagine life without a police service, without a fire service, without a medical service, without a national defense force, without any civil engineering maintaining the roads, without schools, without any of the services the govt provides. I can't. It would be like living in hell.

I don't think you can really argue the govt screws up most of what it does.

If that was really true, then you'd be too busy just trying to survive to be posting on the internet.

If you want to see what it really looks like when the govt truly does screw everything up, look at hyperinflation in Zimbabwe, where your entire life savings might buy you literally a loaf of bread.

Governments are not perfect, and there are some bad ones, but on the whole, they make life much better.
 
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SorcerorElf

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Obviously not.

He doesn't understand how ATC keeps our airspace moving efficiently and safely.
He doesn't understand the millions of elderly and disabled Americans that depend on Social Security and Medicaid.
He doesn't understand why our diplomats or officials deserve security when traveling abroad.
He doesn't understand why we need the Secret Service to protect the President and dignitaries.
He doesn't understand why we need inspectors to guarantee the safety of our foods instead of getting toxic baby food like in China.
He doesn't understand why we need a Coast Guard to rescue mariners and secure our borders.
he doesn't understand why we need workers to maintain our nuclear arsenal (hint, it's DOE that does this, not DOD)

Like most Republicans, he mindlessly repeats talking points heard on Fox News and talk radio without any thought of his own. People like this are what an earlier generation of totalitarians called "useful idiots".
Can you please not talk about other people like that? ADISC is a support community, not a debate forum.
 

CutePrincess

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I'm not even American, but the government collects a ridiculous amount of money in tax.. I will use here in NZ as an example. If you earn $100, you pay $33 in income tax. Leaving you with $67. You spend that money to put gas in your car, 48% Fuel Tax = $32.16 + 6.70. From $100 I earned $71.86 goes to the government in tax.... tell me that is not ridiculous.
This is the issue right here, and why you are not making sense to the rest of us. You issue is that they charge too much in your country so you believe it is theft and should pay no taxes.

Here in America, there is too many loopholes for the rich to exploit. I am not sure on the feelings if the poor and middle class pay too much/not enough but there is poverty brackets where you have to pay no taxes out of your income, but there is still taxes attached for sales and such, while the rich do not pay enough due to these loopholes (but berine's taxes on the rich is literally insane)we just need loophole control for the rich and I am sure trump ninja passed some things so he pays less himself (I forget the details now and unsure if it passed then but there was a tax plan that he would hugely benefit from)

There is a difference of saying you feel governments charge too much and saying no taxes at all. You need to pay some sort of tax for a society to function, like what moo explained. So stop insulting others because you are not clear what you are saying. I do read, I do know what logic is.

Some countries can charge like 80% tax (I forget the figures) but collage is free and a lot of other things is provided making that manageable. Maybe your country charges 40% in gas to control shortages issues, I do not know, I am not there to know and comment. Also there could be other reasons for tax amounts like that, and another being what moo said.

So no tax is not theft. Get a full understanding of the situation before spewing nonsense like that.

It also seems you have issues with the government not being efficient, while true, we try, by voting people in that vow to make things more efficient But right now, society wants to vote in someone just to trigger a group of people, more so who will do the job better. that is where our society is messed up in, education, informing and the common people's bias impairing judgment on what is better for society as a hole.

Our founding fathers over 200 years ago had no ability to foresee the technology of today, this is a big part why this is no longer working. (as far as the voting process)
 
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PCPilot

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Here in America, there is too many loopholes for the rich to exploit. I am not sure on the feelings if the poor and middle class pay too much/not enough but there is poverty brackets where you have to pay no taxes out of your income, but there is still taxes attached for sales and such, while the rich do not pay enough due to these loopholes (but berine's taxes on the rich is literally insane)we just need loophole control for the rich and I am sure trump ninja passed some things so he pays less himself (I forget the details now and unsure if it passed then but there was a tax plan that he would hugely benefit from)
Which loopholes are you referring to?

Keep in mind that if anything, the tax system is structured towards the middle/upper-middle classes who are married, own homes and have children. If you're single and don't have children or a house, you have very few of the traditional deductions available to you. I was looking over my taxes and found some interesting examples.

In 2016, I had a gross income of around $115k, an adjusted gross income of $100k and taxable income of around $61k. That turned into a federal tax liability of $8900 and an overall tax rate of around 7.7%. I was able to deduct significant amounts of money because I'm married, had three kids, mortgage interest and state/local taxes to deduct plus 401k, HSA and IRA contributions. Some was self-employment income which allowed certain expenses (computer purchase, health insurance for the family) to be deducted against it. The following year was $166k, AGI of $161k, taxable income of $115k and a tax liability of $19k - overall tax rate of 11.5%.

I don't say this to brag, but to point out a few interesting things.

First, I only pay tax on around 2/3 of my income because of various deductions. Second, you'll notice that from 2016 to 2017 my income went up by around 50% but my tax liability more than doubled as more of my income became wage income and various credits (child tax credit) phased out and I moved out of the 0% bracket for dividends. The lesson from this (and the reason why the rich can pay surprisingly little) is that how you structure your income matters, and having more money gives you more options in how you structure it.

Lesson #1: Because your tax rates go up with income, it makes perfect sense to move income from year to year if you can. That's why I deduct 18% of my pay into a 401K. I pay no money on it today, but will many years down the line when I am making half as much as I do now. I save 21% or so in taxes today, and pay 16%, 11% (or zero!) when I take it out. Plus it grows tax-free. In years (like 2016) when I had low tax rates, I can contribute to a Roth IRA where I pay low tax rates now, then withdraw it later and pay zero taxes.

Lesson #2: The types of income matter. Roth withdrawals are tax-free. Qualified dividends and long-term capital gains are taxed at 0%, 10 or 15%. In 2016 I was below the threshold so all of my taxable dividends incurred no tax - in fact that year I received $10k in dividends and paid zero tax because they were either in tax-deferred accounts or I was below the 0% dividend rate threshold. The point is that once you can structure your income, if you need $10k you have choices where to pull it from where it could save you significant taxes in other areas.

Lesson #3: Capital Gains are awesome. If I invest in stocks in a taxable account and they go up, I don't pay taxes until I sell. I can control, therefore, when I pay taxes and I incur no liability until then.... which means I can save it for when I have a lower income year and pay lower taxes (see lesson #1). Even better, the rate is 15% up to $475k (married). At most it's 20% - so the really rich aren't getting traditional income; they're getting capital gains. If I buy a $100m Picasso and sell it two years later for $200m, I have a liability of only 20% on the $100m profit, rather than 39.6% if I made that $100m as regular income.

Lesson #4: Mortgages are a great subsidy. While they don't save much money in the buying vs. renting equation, the interest deduction means you can borrow more than you strictly speaking need and save/invest the rest. I could pay off about $200k of my mortgage today, but I prefer to keep that money invested gaining 7% tax free (see #3) while paying an effective rate of 2.5%. That's around $10k of free money every year.

Lesson #5: Lessons 1-4 don't matter if you don't have any extra money. If you're a W2 earner spending every penny, you cannot take advantage of any of this.

Lesson #6: Unless you're really rich, you're stuck with mostly wage income so your efforts to shift things around will be at the margins, with IRA/HSA contributions and some taxable savings. Over time, however, that really adds up. But you often can't do what really well-connected or rich people do, like structuring a corp-to-corp contract with your S-corp, opening a solo 401k, taking some wage income and the rest as dividends.

Lesson #7: Some of the highest marginal rates are paid at surprisingly low incomes. Like I said earlier, if you're single with no deductions you're kind of screwed. It gets worse as EITC phases out, or the child tax credit phases out and you're still paying FICA. Same thing if you're a W2 employee with no employer-provided health insurance so you need to pay for it after-tax. (Ouch).

[Political rant - if the GOP actually wanted to provide meaningful tax reform for working class Americans, they would raise the EITC thresholds, or make all health insurance to a point tax deductible (no matter how it's paid) or raise the limits on the lowest brackets. Instead they give a huge break to higher income taxpayers or people with massive mortgages to deduct.]

None of this, by the way, is really secret or illegal or unethical. The tax code is structured the way it is, and like the rules of any game it makes sense to do what it encourages you to do, and avoid what it punishes. The challenge is that most people cannot do so because they aren't - or can't- putting money aside.
 

CutePrincess

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Which loopholes are you referring to?

Keep in mind that if anything, the tax system is structured towards the middle/upper-middle classes who are married, own homes and have children. If you're single and don't have children or a house, you have very few of the traditional deductions available to you. I was looking over my taxes and found some interesting examples.

In 2016, I had a gross income of around $115k, an adjusted gross income of $100k and taxable income of around $61k. That turned into a federal tax liability of $8900 and an overall tax rate of around 7.7%. I was able to deduct significant amounts of money because I'm married, had three kids, mortgage interest and state/local taxes to deduct plus 401k, HSA and IRA contributions. Some was self-employment income which allowed certain expenses (computer purchase, health insurance for the family) to be deducted against it. The following year was $166k, AGI of $161k, taxable income of $115k and a tax liability of $19k - overall tax rate of 11.5%.

I don't say this to brag, but to point out a few interesting things.

First, I only pay tax on around 2/3 of my income because of various deductions. Second, you'll notice that from 2016 to 2017 my income went up by around 50% but my tax liability more than doubled as more of my income became wage income and various credits (child tax credit) phased out and I moved out of the 0% bracket for dividends. The lesson from this (and the reason why the rich can pay surprisingly little) is that how you structure your income matters, and having more money gives you more options in how you structure it.

Lesson #1: Because your tax rates go up with income, it makes perfect sense to move income from year to year if you can. That's why I deduct 18% of my pay into a 401K. I pay no money on it today, but will many years down the line when I am making half as much as I do now. I save 21% or so in taxes today, and pay 16%, 11% (or zero!) when I take it out. Plus it grows tax-free. In years (like 2016) when I had low tax rates, I can contribute to a Roth IRA where I pay low tax rates now, then withdraw it later and pay zero taxes.

Lesson #2: The types of income matter. Roth withdrawals are tax-free. Qualified dividends and long-term capital gains are taxed at 0%, 10 or 15%. In 2016 I was below the threshold so all of my taxable dividends incurred no tax - in fact that year I received $10k in dividends and paid zero tax because they were either in tax-deferred accounts or I was below the 0% dividend rate threshold. The point is that once you can structure your income, if you need $10k you have choices where to pull it from where it could save you significant taxes in other areas.

Lesson #3: Capital Gains are awesome. If I invest in stocks in a taxable account and they go up, I don't pay taxes until I sell. I can control, therefore, when I pay taxes and I incur no liability until then.... which means I can save it for when I have a lower income year and pay lower taxes (see lesson #1). Even better, the rate is 15% up to $475k (married). At most it's 20% - so the really rich aren't getting traditional income; they're getting capital gains. If I buy a $100m Picasso and sell it two years later for $200m, I have a liability of only 20% on the $100m profit, rather than 39.6% if I made that $100m as regular income.

Lesson #4: Mortgages are a great subsidy. While they don't save much money in the buying vs. renting equation, the interest deduction means you can borrow more than you strictly speaking need and save/invest the rest. I could pay off about $200k of my mortgage today, but I prefer to keep that money invested gaining 7% tax free (see #3) while paying an effective rate of 2.5%. That's around $10k of free money every year.

Lesson #5: Lessons 1-4 don't matter if you don't have any extra money. If you're a W2 earner spending every penny, you cannot take advantage of any of this.

Lesson #6: Unless you're really rich, you're stuck with mostly wage income so your efforts to shift things around will be at the margins, with IRA/HSA contributions and some taxable savings. Over time, however, that really adds up. But you often can't do what really well-connected or rich people do, like structuring a corp-to-corp contract with your S-corp, opening a solo 401k, taking some wage income and the rest as dividends.

Lesson #7: Some of the highest marginal rates are paid at surprisingly low incomes. Like I said earlier, if you're single with no deductions you're kind of screwed. It gets worse as EITC phases out, or the child tax credit phases out and you're still paying FICA. Same thing if you're a W2 employee with no employer-provided health insurance so you need to pay for it after-tax. (Ouch).

[Political rant - if the GOP actually wanted to provide meaningful tax reform for working class Americans, they would raise the EITC thresholds, or make all health insurance to a point tax deductible (no matter how it's paid) or raise the limits on the lowest brackets. Instead they give a huge break to higher income taxpayers or people with massive mortgages to deduct.]

None of this, by the way, is really secret or illegal or unethical. The tax code is structured the way it is, and like the rules of any game it makes sense to do what it encourages you to do, and avoid what it punishes. The challenge is that most people cannot do so because they aren't - or can't- putting money aside.
I am not talking about upper class on an individual level but corporations, such as this:
https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-offshore-corporate-tax-loopholes/
I did not know what I said could be taken the wrong way, sorry about that.
(and likely some of the top 1% try exploit i am sure *stare trump*)

Also you are in a group i am def not refering to, 100k-200k is like top 45%? i do not think they really abuse the system, talking about the top of the top.
 
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I am not talking about upper class on an individual level but corporations, such as this:
https://americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-offshore-corporate-tax-loopholes/
I'll make a bit of an unusual statement - Corporations shouldn't pay income taxes. I'll explain in a second, but the reason why many of these corporations are keeping all this money offshore is that it's already been taxed where it was made, and America wants to tax it again.

Now the reason I don't believe in corporate income tax is that I want corporations to spend their money (and they want to as well. Cash makes around 2% a year.) I want them to transfer the money to the US, and spend it here. They could spend that extra money on wages for their US employees - in which case the federal and state governments get tax money. They could give it to their shareholders, in which case many (but not all, see above) will pay taxes on that dividend. They could buy back their stock, in which case people pay capital gains taxes. They could use the money to buy goods or materials, in which case sales taxes are paid as well as more income (and taxes) for whoever they buy from. Lastly, they could buy property or buildings, which means taxes to states and municipalities.

No matter what, if a corporation spends money in the USA governments are very good at ensuring that a tax liability is created. So let them repatriate it to the US. Right now, they are sitting on a lot of money. It's sort of like I gave you a billion dollars completely tax-free but you weren't allowed to spend it or do anything with it. Would you really be rich?

I did not know what I said could be taken the wrong way, sorry about that. (and likely some of the top 1% try exploit i am sure *stare trump*)
You didn't offend me.

Also you are in a group i am def not refering to, 100k-200k is like top 45%? i do not think they really abuse the system, talking about the top of the top.
If you have a family income of $110k, you are in the top 25% of US households. $178k gets you in the top 10%, $236k is top 5% and top 1% is around $435k. The median household income is around $61k.
 
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