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SVreX
SVreX UltimaDork
4/30/12 8:18 p.m.
aircooled wrote: WHY THE HELL ARE GAMBLING LOSSES TAX DEDUCTIBLE?!?!?!? Is gambling NOT illegal at a federal level?!? Why the HELL would they allow you to deduct losses do to an act that (in their eyes) is ILLEGAL!?!

Because they darned sure want to be able to tax you on the winnings, and if they do, then they have to allow the related expenses as deductions.

Gambling losses are an obvious necessary business expense in the business of gambling.

My mother saved her lottery tickets that didn't win for over 30 years. Hundreds and hundreds of them. She said she was going to claim them as business expenses if she ever won.

She didn't.

poopshovel
poopshovel PowerDork
4/30/12 8:26 p.m.

OP: Thanks for posting. I LOVE Steven King's work, and will never pay retail prices for it again. Actually, I think I shouldn't have to pay anything for it. If I'm on Medicaid, I don't pay for healthcare, and that E36 M3 keeps me ALIVE, right? Why the hell should I have to pay for entertainment?

Streetwiseguy
Streetwiseguy SuperDork
4/30/12 10:45 p.m.

blockquote>SVreX wrote:

aircooled wrote: WHY THE HELL ARE GAMBLING LOSSES TAX DEDUCTIBLE?!?!?!? Is gambling NOT illegal at a federal level?!? Why the HELL would they allow you to deduct losses do to an act that (in their eyes) is ILLEGAL!?!

Because they darned sure want to be able to tax you on the winnings, and if they do, then they have to allow the related expenses as deductions.

Gambling losses are an obvious necessary business expense in the business of gambling.

My mother saved her lottery tickets that didn't win for over 30 years. Hundreds and hundreds of them. She said she was going to claim them as business expenses if she ever won.

She didn't.

I think its very bad math. It is a generally accepted fact that gamblers lose more than they win- thats how they pay for the casinos. If you remove the deduction for gambling related losses, and allow the winnings to be tax free, the gov has to pocket more dough...right?

z31maniac
z31maniac UberDork
4/30/12 10:57 p.m.
Johnboyjjb wrote: Dave Ramsey show did a whole show about raising taxes after the Buffet rule. Interesting to me though I agree with him on a lot of things. http://www.daveramsey.com/radio/home/#archives-tab April 17th. I would also like to say that discussions like this are difficult without defining rich. The top 10% of Americans make $112K + From Here My understanding is a the GRM readership plays a healthy part in that demographic: In fact 87% have an annual income over $75,000 and not all of them are shrimpers , and 31% have an annual income over $125,000! From Here So 31% of readers fall into the top 10% of those taxed. At least 87% of readers fall into the top 25% of tax payers. (The statistic I heard was $64K a year puts you in the top 25%) So which of us are rich? And what about the 48% of Americans who paid no income tax? I have $10K to go before I hit the top 25% of earners and paid no income tax again last year. Personally nobody should have a negative tax rate. I've been broke. Really broke. But even then I think just shy of everybody could swing $10 to contribute to taxes.

Good post.

I've always wondered what is considered "rich", "middle class", "upper-middle class" as far as income.

I wonder if in those top 10% homes if only one person is working living off the healthy income vs homes with two incomes.

Not trying to make a political statement either way, just curious.

On the GRM stuff, is that household income vs individual?

SVreX
SVreX UltimaDork
5/1/12 6:40 a.m.
z31maniac wrote: On the GRM stuff, is that household income vs individual?

+1

My brain doesn't even know how to process that stuff. It's not making a bit of sense.

Josh
Josh SuperDork
5/1/12 6:59 a.m.

I always lie on those self-reported income demographics things because I know the magazine gets to charge more for ads if the advertisers think all the readers are loaded .

Josh
Josh SuperDork
5/1/12 7:00 a.m.
Streetwiseguy wrote: If you remove the deduction for gambling related losses, and allow the winnings to be tax free, the gov has to pocket more dough...right?

You're only allowed to deduct losses against winnings, you can't just deduct all the money you lose regardless.

N Sperlo
N Sperlo UberDork
5/1/12 7:11 a.m.
SVreX wrote:
N Sperlo wrote: The tax breaks are what makes there big picture. You've just given us what taxes are supposed to be. Unfair, yes, but with all the breaks for the rich, it flips. Taxes should be equal percentage without breaks.
That's only partly true. It also does not represent the tax credits for the poor. In spite of what the tax tables say, no one in this country who makes $5000 is ineligible for benefits. I've received the earned income tax credit several times. That means that I pay nothing, but still get something back. That is effectually a negative rate, by your calculations.

I think you are expanding on my point, correct? Just pointing out that I don't support tax breaks for anyone. Do I take them? Hell yes. Money in my pocket.

Knurled
Knurled Dork
5/1/12 7:22 a.m.
JohnInKansas wrote: From here: Filing single: [annual income : tax percentage] $0-8500 : 10% | 8500-34500 : 15% | 34500-83600 : 25% | 83600-174400 : 28% | 174400-379150 : 33% | 379150-upward : 35% If those numbers are right, the "rich" ARE paying more by either percentages OR dollars. If the numbers are wrong, somebody go find the right ones and post them.

That's why there are people on sites like FARK who brag about how they have an awesome accountant and they were able to pay less than $1k in taxes after making six figures a year.

Of course, the system being fair, people making $20k per year are just as free to hire awesome accountants to manage their income for them in the most advantageous way possible.

mad_machine
mad_machine MegaDork
5/1/12 7:43 a.m.
RX Reven' wrote: In terms of Stephen King, meh, he’s just pulling a Woopi Goldberg. You know, the phone stops ringing with opportunities, bills are piling up, what to do, what to do. I know, I’ll go on a big rant promoting liberal agendas…ring, ring, ring.

Whoopi yes.. but not King. The man keeps putting out the books... and he is not one to bask in the limelight.. so I doubt this was done to bring more oppertunities to him.

Face it.. we have a problem and more and more people are beginning to acknowledge it. As it slowly gains momentium, something will have to be done

4cylndrfury
4cylndrfury UltimaDork
5/1/12 7:51 a.m.

mmmm

Xceler8x
Xceler8x UltraDork
5/1/12 8:09 a.m.

Key Lime pie is awesome. My mouth is watering thinking about a good slice.

Curmudgeon wrote: You read about this all the time, someone gives/leaves umptybazillion dollars to their alma mater which uses the money to build a combination gym, laundromat, house of ill repute and parking garage which gets the benefactors' name all over it as a giant ego stroke and doesn't do a damn thing to address the real problems facing this country.

I usually +1 stuff I agree with and leave it at that. But this needed to be reposted. HERE HERE CURMUDGEON! Harumph! Harumph! (Blazing Saddles reference - view video)

mad_machine wrote: these are "interesting times" to be alive to be sure. I wonder if we are about to turn a corner on the culture of greed we started in the early 80s?

One can only hope.

poopshovel wrote: OP: Thanks for posting. I LOVE Steven King's work, and will never pay retail prices for it again. Actually, I think I shouldn't have to pay anything for it. If I'm on Medicaid, I don't pay for healthcare, and that E36 M3 keeps me ALIVE, right? Why the hell should I have to pay for entertainment?

You're a funny guy poopie.

  1. Side track attempt on health care. Start your own thread you jacker!

  2. Pay for entertainment? See #1!

Clever, clever! Two thread jacking attempts in one post! I declare this an INCEPTION post! A thread jack within in a thread jack!

Knurled wrote: That's why there are people on sites like FARK who brag about how they have an awesome accountant and they were able to pay less than $1k in taxes after making six figures a year. Of course, the system being fair, people making $20k per year are just as free to hire awesome accountants to manage their income for them in the most advantageous way possible.

A bit like hiring lawyers. You get just as much justice..er...tax relief...as you can afford.

Curmudgeon
Curmudgeon MegaDork
5/1/12 8:22 a.m.

'Harumph! Harumph! You watch your ass!'

fast_eddie_72
fast_eddie_72 SuperDork
5/1/12 9:22 a.m.

Directed at no one in particular:

racerdave600
racerdave600 Dork
5/1/12 9:23 a.m.

Do any of you have real experience, or are you just spouting numbers? For the most part, what percentage of taxes do you think the "rich" pay from their earnings? Are you saying 25%? Lower? Do you even really know? Do you know what it takes to get to the 1%? Do you know what percentage is fair that the government should take?

My dad would die if he knew I was posting this, but he falls in the 1% bracket, but he's definitely not a Buffet or King. He sold his business a couple of years ago and did OK, and still is partners in 2 more.

He started with absolutely nothing and lived in poverty, put himself through college and was an engineer with NASA for 40 plus years. At 73 he still works 60 to 70 hours a week. And yes he has numerous investments.

So what is his tax rate? It's over 60%. All this federal tax rate hype never mentions all the other fees and taxes you also have to pay. There's also state and local taxes as well as sales taxes. And in his case, the money is also taxed twice as I didn't include what the business pays. So again, what is fair?

We do not have a revenue problem, we have a spending problem. With all this 1% crap, all you are going to do is penalize people like this who work incredibly hard, and narrow the amount they actually do make. In doing so, many will simply board up shop and call it a day.

And will also impact employment numbers, not only for businesses that that shut down, but for all the service people they employ to pick up slack for personal chores, such as yard work, etc. All these things have an impact, ones that get overlooked as the numbers get tossed around.

All this 1% crap is a distraction for re-election. The money that would result in taking all the 1% money is nothing in the overall scheme. The government wastes more than that everyday. And what is fair, to me it is having the same opportunity to succeed. The Buffet's of the world are few and far between, the average 1% person is not what you may think.

And to the guy that said he'd never have 5 million, why not? Get off your butt and get to work. You never will saying you won't. All the people I know that have lots of money have one thing in common, they aren't lazy. They have an idea and are motivated to make it work.

alfadriver
alfadriver UberDork
5/1/12 9:58 a.m.

In reply to racerdave600:

I get my hard data from the IRS- http://www.irs.gov/taxstats/indtaxstats/article/0%2C%2Cid=96981%2C00.html#_grp8

Just read the selected income and tax returns file, and you'll see the data where the tax vs. adjusted gross income data show clearly a rate that actually levels out at 25%, and does go down to 22% for earners who get more than $10M.

We DO have a revenue problem. Yes, we have a spending problem, too, but to pretend that it can be fixed by cutting taxes more is either ideoligical or just greedy, since the people who benefit the most are the ones who need the least help.

here's a very easy exercise to run so that we can see the core problem. The most recent income data was for 2009, which was in the middle of the resession, yes? If you go through the IRS income data (Sources of Income), you can see that most people what people are reporting as income.

Since I'm personally harping on long term capitol gains, I'm going to separate that out of the equation, and look at it alone. As a population, we lost $19B in long term gains, as reported in 2009. But of the earning brackets that the IRS breaks out, 5 of them had net gains, pretty sizeable ones, at that.

Now, I can quicly add up the total of that against the extra 20% tax they would need to report- all the groups are in the 35% bracket, so instead of 15%, they should (IMHO) pay it as normal 35% income. Anyway, I'm taking a percentage of the total income that the long term is, and then applying that to the adjusted income- so that one can assume that people would find the same percentage to discount from their total income vs. taxable income.

Only looking at the areas were there was actual income in capital gains, the income was roughly $40B. Adjusted for reductions, that's roughly $35.5B.

Now, if you change the long term gains from 15% to just normal income, that 35.5B in taxable income goes from $5.1B of revenue to $12.1B in revenue. An increase of $7B of revenue, in a down year. We argue over less than that.

When the stock market is going up, that's a lot of money that we just don't collect, and since in 2009, the only groups who made any long term gains also claimed income in excess of $500k, it's not as if they need it. For that matter, if you are an owner of many shares of stock, you can aruge that your ownership actually uses a much larger share of the government pie in the first place, between defense, roads, sewers, internet, etc.

If you think it's a distraction, you've not done the math, as provided by the IRS.

As for employment numbers- that's a red herring if I've ever heard one. If you pay less taxes, you keep more money. For most jobs, it's a whole lot less about taxes than your ability to deliver the product. If your company is capable of making enough product, why would you bother hiring? It's a better move to keep the money. And on the flip side, if you are struggling with making enough product, you will probably hire in spite of the taxes, since you should be able to make more money via that labor than what the taxes will cost you.

One final thing- the idea of capital gains- that means it's better to have money and make it by buying and selling than to work hard and earn money. So people who already have wealth are better than those trying to earn wealth. Simple.

alfadriver
alfadriver UberDork
5/1/12 10:04 a.m.

In reply to alfadriver:

Sorry, counted my # of numbers wrong. $7B it is.

But it is just the one loop hole of income, and only for individuals. Not chump change by any means.

fast_eddie_72
fast_eddie_72 SuperDork
5/1/12 10:30 a.m.

I shouldn't, but...

When Ronald Reagan took office, wasn't the top marginal rate 75%? I didn't look it up, but I have before and I want to say that's what it was. Feel free to correct me on that. But it was in that neighborhood.

What is it now? 36% I think? Something like that?

I understand the argument that people will not work hard to make more money if they don't actually get it. But I find it difficult to believe that the line in the sand, as it were, is one percent higher than our current highest marginal rate. What should it be? That's the rub. It's hard to say, exactly. But it was higher in the 90s. I know that a lot of people in the top marginal bracket worked real hard in the 90s to make more money. I don't think we saw the "chilling effect" of high taxes on creativity and productivity of our best and brightest.

Where I get a little frustrated is when we lower taxes - quite a lot actually - but continue with the drone of "taxes are too high." Nobody likes to pay taxes, but don't we have to, at some point, say "this isn't working"?

It isn't the left, but the right that claims the broad and mighty power of tax rates to determine economic health. And yet, we lowered taxes, and they remain at those low rates, but we still had a pretty devastating recession. I go back to the Laffer curve that, all those years ago, was used to explain this all to us and think that evidence shows we’re somewhere on the low end of it. But the people who touted it as a revolutionary and superior way of looking at taxation don’t talk about it much anymore and, indeed, don’t even pretend that generating revenue to run the country is even the goal.

I dunno, that’s just what I’m thinking. Good luck all.

z31maniac
z31maniac UberDork
5/1/12 11:00 a.m.
alfadriver wrote: In reply to alfadriver: Actually, I made a mistake in the math- the IRS reports are in $1000's, and not straight dollars, so instead of $7B in lost revenue, that's $7TRILLION in lost revenue. Yes, $7 TRILLION. If that's not significant, I'm not sure what is.

So $7 Trillion in lost revenue from the capital gains tax from an economy with a total GDP of ~$15 Trillion?

That doesn't seem right, does it?

fast_eddie_72
fast_eddie_72 SuperDork
5/1/12 11:13 a.m.

I don't know about capital gains, but the numbers I've seen thrown around for the Bush tax cuts in total are $200B to $300 a year. In ten years, something on the order of $3.9T. That's not chump change. I'm quick to agree that things have spiraled out of control pretty desperately. If you look at things objectively, though, you really have to come to the conclusion that the unfunded wars played a key role in that. Getting our financial house in order certainly must address that. And since we didn't pay for them as we went, the hole is very deep indeed. It will take many years to pay it off. But that has very little to do with Social Security or Medicaid. If we want to be objective and look for a real way forward we need to look at what is long term spending and what is short term spending. Some of the short term spending issues can be address in relatively simple ways, and I think, whoever is president, they're working themselves out. No one wants to dump a ton more in Iraq and no one wants to dump more than we can get away with in Afghanistan. That will help a lot with regard to the anual deficit.

But the last 10 years have left us in a very deep hole indeed. I don't see the argument that we can somehow get out of it unless we are ready to open our wallets and pay the bills. We need to do it slowly and carefully so as not to upset a fagile economy. I'm sure when the decisions were made, it was estimated that economic growth would make the impact on the next couple of decades much smaller. No one saw the huge recession coming. But it came and now we have to look at where we are.

It's kind of like we bought a house we really wanted and could afford. Then, unexpectedly, we lost our job and had to take one that pays a lot less. And just like that scenario, we're going to have to look for was to bring in some extra cash and spend a good deal less. Probably a good idea to sell the expensive house, but probably a good idea for Mom to decide to go back to work too so we can pay off the credit card bills.

alfadriver
alfadriver UberDork
5/1/12 11:14 a.m.
z31maniac wrote:
alfadriver wrote: In reply to alfadriver: Actually, I made a mistake in the math- the IRS reports are in $1000's, and not straight dollars, so instead of $7B in lost revenue, that's $7TRILLION in lost revenue. Yes, $7 TRILLION. If that's not significant, I'm not sure what is.
So $7 Trillion in lost revenue from the capital gains tax from an economy with a total GDP of ~$15 Trillion? That doesn't seem right, does it?

No, it doesn't- something is odd. The page says that all numbers are $1000's, except when noted- which is exclusive to the average columns. But when you go through the math- you the final number I got was this.

I think it's $7B. Sorry about that, I'll remove that note.

B430
B430 New Reader
5/1/12 11:25 a.m.

I dont understand why the people keeps saying the rich pay less taxes. Whatever the percentage they do pay more $$, substantially more than most people.

When you go out to the bar with your friends, does the one who makes the most $$ pay every time? Cuz you know, he makes more money so he can afford it. Do you get pissed off if he doesn't pay?

alfadriver
alfadriver UberDork
5/1/12 11:32 a.m.
B430 wrote: I dont understand why the people keeps saying the rich pay less taxes. Whatever the percentage they do pay more $$, substantially more than most people. When you go out to the bar with your friends, does the one who makes the most $$ pay every time? Cuz you know, he makes more money so he can afford it. Do you get pissed off if he doesn't pay?

because they can and should pay more of the governments bills. Generally, if you look very hard, the ones who own lots of stock in companies - you will see that those companies use lots of resources of the government. Roads, sewers, defense, interent- etc. It tends to be very proportonate to your wealth.

If I pay 25%, people who earn over $10M should as well, at least that.

(and the data does show that it does max out at 25%, and drops to 22% if you earn more than $10M.)

fast_eddie_72
fast_eddie_72 SuperDork
5/1/12 11:33 a.m.
B430 wrote: I dont understand why the people keeps saying the rich pay less taxes. Whatever the percentage they do pay more $$, substantially more than most people. When you go out to the bar with your friends, does the one who makes the most $$ pay every time? Cuz you know, he makes more money so he can afford it. Do you get pissed off if he doesn't pay?

Do you think we should do away with the graduated tax code all-together? Each American pays the exact same amount?

z31maniac
z31maniac UberDork
5/1/12 11:44 a.m.
fast_eddie_72 wrote:
B430 wrote: I dont understand why the people keeps saying the rich pay less taxes. Whatever the percentage they do pay more $$, substantially more than most people. When you go out to the bar with your friends, does the one who makes the most $$ pay every time? Cuz you know, he makes more money so he can afford it. Do you get pissed off if he doesn't pay?
Do you think we should do away with the graduated tax code all-together? Each American pays the exact same amount?

www.fairtax.org

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