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Getting Support : Money
You guys don't need to worry about tax cuts! | from ThinkingDavinci - Saturday, November 06, 2004
accessed 2269 times Okay, read this & then leave my tax cuts alone. I'm tired of buying your dinner.
The Top 1% earn 21% of all income; pay 37-1/2% of all taxes.
Top 5% earn 35% of all income; pay 56-1/2% of all taxes.
Top 10% earn 46% of all income; pay 67% of all taxes.
Top 25% pay 84% of all taxes.
Top 50% pay 96-1/2% of all taxes.
Bottom 50% pay 3-1/2% of all taxes.
Just in case we are not completely clear on this issue, here is an old story that we hope will help explain our US Tax System:
Tax Cuts - A Simple Lesson In Economics
This is how the cookie crumbles. Please read it carefully.
Let's put tax cuts in terms everyone can understand. Suppose that every day, ten people go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four people (the poorest) would pay nothing. (This would include most of the overeducated underachievers hanging out at Movingon.org!)
The fifth would pay $1. The sixth would pay $3. The seventh $7. The eighth $12. The ninth $18. The tenth person (the richest) would pay $59.
So, that's what they decided to do. The ten people ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So, now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes. So, the first four people were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share'?
The six people realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth person and the sixth person would each end up being 'PAID' to eat their meal. So, the restaurant owner suggested that it would be fair to reduce each person's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth person, like the first four, now paid nothing (100% savings. The sixth now paid $2 instead of $3 (33% savings). The seventh now paid $5 instead of $7 (28% savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the people began to compare their savings. "I only got a dollar out of the $20," declared the sixth person. He pointed to the tenth person "but he got $10!" "Yeah, that's right," exclaimed the fifth person. "I only saved a dollar, too. It's unfair that he got ten times more than I got!" "That's true!!" shouted the seventh person. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four people in unison. "We didn't get anything at all. The system exploits the poor!"
The nine people surrounded the tenth and beat him up. The next night the tenth person didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.
There are lots of good restaurants in Europe, Asia and the Caribbean. |
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Reader's comments on this article Add a new comment on this article |  from Cultinvator
Thursday, November 11, 2004 - 00:37
 (Agree/Disagree?)
It's kind of funny, but then again it slips you a lot of onesided propaganda as well.
For one, it discusses taxes as merely a practical issue dealing merely with money instead of addressing that economic expantion with corporate intrusion isn't necessarily bringing up the quality of life for most people, but making it more generic with more hours of work for most who do all the hard dirty work. Sure you get a cheap education, a lot of benfits when you don't get paid enough to barely pay rent and food working at minimum wage, sure it is better than the middle ages, but not for first world standards. Not in America it isn't! In terms of real progressive achievement a free meal at the restaurant is something we can't afford when most of decision making is given to those who give us that restaurant voucher, while the dignity of human respect is counted in dollars and dimes.
An education is good because even when overprized by stingy monopolies on textbooks and exponentially raised tuition by this administration, it helps you see what your options are outside of the mere economical arena, how people don't need the latest trend but a more well rounded aproach to the social diseases and stress that permeate our modern 'fastfood' aproach to relationships and community.
Corporate bottom numbers often ignore the ethical decisions made in developing parts of the country that were once a natural habitat to happy living families who did not need a new wallmart in the region, but an opportunty to sell their original goods and services and sure, technocogy speeds the process of getting a better bargain for one's dollar, but the joke is at the expense of those who push and shove, not at those who enjoy posh surroundings and a very convenient infrastructure of power and greed as the god that will solve all your problems.
(reply to this comment)
| from Wolf
Tuesday, November 09, 2004 - 20:01
(Agree/Disagree?)
That’s all well and good except that the restaurant owner’s lovely $20 discount is actually borrowed money that the client’s children are going to have to pay back. So all 10 clients are actually mortgaging away their children’s future. Oh, for the good old Clinton days...
(reply to this comment)
| from ThinkingDavinci
Monday, November 08, 2004 - 20:12
(Agree/Disagree?)
AAAaight, y'all..... feels good to boil the blood sometimes, eh? Nothing like losing an election & getting parables thrown on the wound. Well I didn't come up with it, so Don't be hatin'! It was this guy's fault, so gush your fuzzy math at his fat tenured ass. Personally it's too much for me to read. "Over 28% of wallabies show poverty related stress caused by crack related deficiencies in the workforce of the unemployed" I've gotta get some air. Send your mail to the author.
Hate the economist:
David R. Kamerschen, Ph.D, Distinguished Professor of Economics,
536 Brooks Hall, University of Georgia, Athens, GA.
><http://www.uga.edu/>>)
(reply to this comment)
| | | | from banal_commentator
Monday, November 08, 2004 - 19:12
(Agree/Disagree?)
The only thing I don't get in your little fable, Davinci, Is the part about the poor people beating up the rich guy and then him not coming to dinner next time. How is this analogous? Please expound....
(reply to this comment)
| | | | | | | | | | | | | | | |  From tax play
Wednesday, November 10, 2004, 09:57
(Agree/Disagree?)
Umm, U dont quite need to get all that elaborate to avoid corporate (not personal or estate) taxes. A common practice is "transfer pricing", done pretty much anywhere a U.S. company has an equity position in a foreign subsidiary (U dont even have to fully own the subsidiary, just 25% to have a sophisitcated equity position or 75% for a simple equity position).
All the Net Income from the US company and subsidiaries shows up in their Consolidated Financial Statements, while each company/subsidiary pays income tax in the country they're physically located on their plant's Net (taxable) Income. With transfer pricing, the subsidiaries in the low-tax countries "sell" goods or services to the high-tax home-company(ies) at artificially high prices (5 or 6 times higher than what they sell to the rest of the market) so the low-tax subsidiary shows an artificially high taxable income and pays the low tax-rates on it, while the high-tax company shows an artificially low taxable income (or none at all) so they have little income taxed at higher rates.
The problem with this article is when you over-simplify, you end up with bullshit; sounds cute but the analogy doesn't work on about any level -- starting with the fact that the restaurant also employes some of the diners and provides the infrastructure for the top 1% to make the income they do (THATS where a large part of the 1%'s taxes go); cut taxes that way and you have a long-term loss of infrastructure so the top 1% can't make money like they used to -- cut off their nose to spite their face. I really dont have time to go through it, but I'm sure someone here has done some tax experience and could expound.(reply to this comment) |
| | | | | | | | From Nick
Tuesday, November 09, 2004, 08:31
 (Agree/Disagree?)
I have no idea what tax bracket Sam is in and I really don't care. However, lets just speculate for a min that he makes 200k a year and falls into a much higher bracket than the rest of us.
Well Sam grew up in the same environment as the rest of us, had the same educational resources that the rest of us had growing up and his opportunities were very similar to what we had when we left.
So lets say Sam did go off and work very very hard. Get some education and does succeed in life. Makes that 200k a year while Joe Blow down the road left the cult and decided that he would rather party his ass of, settle for a job in retail and has no ambition to better his income withought winning the lotto. Exactly how is it fair to tax Sam so much higher than Joe because of his ambition??? (Yes I do agree that they are taxed at a slightly higher level, but within reason!)
Again I have no idea how much Sam makes but am just using him as an example.(reply to this comment) |
| | | | | From Cultinvator
Thursday, November 11, 2004, 01:48
(Agree/Disagree?)
Thinking DaVinci doesn't seem to know much about Da Vinci or his code of ethics, and certainly has more stakes in a reganomic approach to 'supply side economics' and a GDP standard of evaluating success than gross domestic happiness in terms of respect for the human being independantly of how much money one makes. I think there are better meters to one's success in dealing with the environment one lives in than a strictly taxbased, expansionistic approach to using resources as a way of making a fat paycheck for tomorrow's retirement instead of really taking to time to see what the global impact is for generations to come. I'm not entirely dissagreeing with you DV, but you certainly don't paint a very well balance picture of real true to the world economics. Europe may have a higher unemployment rate, but per capita the quality of life is far better in my opinion. People get more time to spend with their families, although I agree that the welfare system is a bit out of whack, giving less incentive to ambitious achievers. I also think that un unlimited amout of money is something that probably is not good for anyone. With lots of wealth comes lots of power, and absolute power corrupts absolutely, no matter how many charities are created to mask the inequality of that 5 percent who uses 90 percent of the worlds resources. Such a waste.
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| | From ThinkingDavinci
Thursday, November 11, 2004, 07:28
(Agree/Disagree?)
You guys keep pretending I actually came up with this shit. This is an economics piece written by a university professor. I appreciate the attention, but it's just a point to ponder, not my life statement or anything. Geeezzus! "ThinkingDavinci is a bad, bad, fascist who would only be happy if his proverbial restaurant served up the poor of the World medium rare with a Fava Bean salad & a stiff Martini"... Yadda yadda. It's just somebody's perspective that's interesting to consider. (reply to this comment) |
| | | | | | | | | | | | | | | | | | | | | | | | | | from Ruthie
Monday, November 08, 2004 - 18:23
(Agree/Disagree?)
ThinkingDavinci, there are a few things that you should have considered before writing such a harsh article:
It is simply unreasonable to expect the poor to pay the same rate of taxes as the wealthy. Think about it. Money does not have the same value to a wealthy person as it does to a poverty-stricken individual. For example, Paris Hilton thinks nothing of dropping thousands and thousands of dollars so that her teeny dog can wear fancy jewelry/ expensive clothing. Meanwhile, there are poor families in the ghettos who can barely afford basic necessities such as rent, electricity, and/or clothing. (I remember that my family often got kicked out of places because my parents couldn’t afford the rent, or because we had 12 people packed into a 2 bedroom apartment. And when we actually started school, I got made fun of because I wore the same clothing for 3 days. Meanwhile, the wealthiest wear a piece of clothing only once before retiring it!) Obviously, a progressive tax rate is what makes sense. Imagine what it would be like if the tax rates were equal!
It is a stretch of the imagination to say that the wealthiest are the slightest bit hurt by higher taxes! If this were so, the wealthy would be able to invest less, and therefore would eventually experience a significant drop in their incomes. If you investigate the U.S.’s current economic trends, the exact opposite is occurring. The gap in incomes between the poor and wealthy has been steadily increasing in the past decades. Click on the link, then the chart, to see the different growths in income between the rich and poor:
http://seattletimes.nwsource.com/html/nationworld/2002007291_income17.html
“Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Europe, Asia and the Caribbean.”
Don’t you think that if the wealthy had it SO good in other countries, they would have already moved there (a long time ago). There are many reasons why the U.S. has many more millionaires than most other countries (especially the industrialized ones). Taxes in the U.S. are among the lowest in the industrialized world!
This shows the how the wealthy’s tax rates compare to those of other nations:
http://www.straightdope.com/columns/001201.html
Here, you can see an average of U.S. tax rates compared to other nations:
http://moneycentral.msn.com/articles/tax/basics/9196.asp
So, sorry to tell you this, but the U.S. is pretty easy on taxing the wealthy. The rich don’t live here in the U.S. just because they feel some kind of undying patriotism/ loyalty to our country, they stay here ‘cause they get to pay less taxes!
“The first four people (the poorest) would pay nothing. (This would include most of the overeducated underachievers hanging out at Movingon.org!)”
You seem to have such a disparaging view of the poverty stricken- you imply that they are poor because they are lazy (underachievers). This is a silly misconception. There are many people that work full time and are still poor. These people are poor because the minimum wage is an insufficient amount, not because of their “laziness.” In fact, “seventy-one percent of low-income families work” and “The average annual work effort for low-income working families is 2,500 hours, equal to 1.2 full-time jobs.”
Read more:
http://www.aecf.org/initiatives/jobsinitiative/workingpoor/working_hard_new.pdf
Your article implies that you would support a flat tax rate. Well, flat taxes have numerous problems. One problem is, as I stated above, that money does not have the same value to a poor person as it does to a rich one. Do you remember how our parents were supposed to tithe? And that was only giving 10% of our income. Most proponents of a flat tax believe that in order to still support the government, the flat tax rate would have to be around 20%. I don’t believe that any poverty-stricken family would be able to pay this rate. And the proponents of the flat tax rate also agree. Most of them do recognize that there are some people that cannot pay this rate; and thus should have the flat tax rate of 0%. Does this idea seem much fairer to you? That individuals/families either pay 20% or 0% (and nothing in between). I would say that it makes much more sense to have a sliding scale; a progressive rate.
Read more about flat tax:
http://www.wordwiz72.com/flattax.html
http://www.cnn.com/ALLPOLITICS/1996/analysis/time/9601/29/forbes.special/forbes.flattax.shtml
http://www.buec.udel.edu/pollacks/Downloaded%20SDP%20articles,%20etc/NEWSJ'L%20on%20flat%20tax.DOC
Last thought: If you still believe that the poor are lazy and you “shouldn’t have to pay for their dinner,” you should consider those that are poor that cannot help themselves. Many poor people have mental or physical handicaps, are sick, and/or have been laid off (OUTSOURCING is not some imaginary concept). The group that you should consider the most, though, is poor children. If their parents are/were lazy, should they have to suffer even more than they already do? When was the last time you have actually been to the poorest ghetto and seen the way the poor really live (meanwhile, rich celebrities show off their fancy houses and 10 brand new cars on MTV Cribs). Then, you tell me WHO can afford what taxes and WHO has it HARD.
Oh, and P.S., don’t start talking to me about how the rich people got it by working so hard, etc., etc. Because for every Oprah (who worked her way up from being poor) there are hundreds of Steve Forbes. Can you guess how Mr. Flat Tax Himself became so wealthy? No, not through hard work and ingenuity. Through good, ole-fashioned inheritance.
(reply to this comment)
| | | | From Cosmicblip
Tuesday, November 09, 2004, 11:27
(Agree/Disagree?)
M’kay. First of all, poor people shouldn’t be breeding. Second, we can just let evolution (survival of the fittest) take care of those that can’t take care of themselves, & voila! The surplus population is decreased.
Consider nature: it’s not communistic. Mother nature does not come around with a spare tit for animals that can’t feed themselves (excluding children to some degree).
Also, being from a poor family is, & should be, incentive to succeed; to lift one’s self from the gutter. None of us here want to remain in the same impoverished & uneducated state that we were in when we were in the cult. Nor do we wish to leave our offspring in such a state. We should not be punished for taking good care of our children.
I, for one, refuse to be charged for someone else’s incompetence. If you can’t cut it, then get out of the way of those who can.(reply to this comment) |
| | From ThinkingDavinci
Thursday, November 11, 2004, 10:57
(Agree/Disagree?)
I like how you think. My position is that we spent many years hobbled & without access to any resources that could enrich our lives. Now that we've broken away from a very confining situation we should at least get whatever it is we want, & there aren't any excuses for those who don't. That could be absolutely anything, it's not just money or toys or actual things, it could be experiences or education. Whatever. It's an even playing field. Like Nick says, we all came from the same place, & if some of us have focused our energy on getting into a higher tax bracket more power to them. All politics are local. I can't vote for France, Russia, Iraq. I vote right here based on my town & how I'm directly affected locally by my politicians. Sure it'd be nice if the whole World played together nicely, but I don't care enough about these aforementioned countries who hate me & don't give a shit about my interests to waste a vote in their favor on a leader who will benefit THEM.... They wouldn't do it for me.
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| | | | | | | | From Ruthie
Tuesday, November 09, 2004, 15:09
(Agree/Disagree?)
Interesting… Just curious, do you have the same opinion to handicap people as you do towards poor (not saying that they are the same)?
A minor point, but Mother Nature is often communistic. Ever had a biology class? Well, then you would know what I am talking about… Also, humans came together to form communes not just because they liked each other’s company, but it was beneficial. Last, thought, but what exactly makes us different from other animals? I guess it wouldn’t be compassion…
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| | | | | From Ne Oublie
Tuesday, November 09, 2004, 16:08
(Agree/Disagree?)
Let's distinguish here between compassion and institutionalised subsidies through tax. Someone being Right Wing doesn't mean they care any less for - or even want to give any less to - the needy. They just don't want it to be something that is mandatory, and done through a governmental structure. Governments are probably the least effective financial institutions imaginable, which is due to their very structure.
A governmental department or project is worth as much as it spends, as opposed to the corporate equivalent which is valued at what it saves. Government employees know that the only way to benefit from the money they receive is by spending it, therefore there is no incentive to spend economically. Conversely, a corporate employee will typically receive bonuses based on the gains that the company has made (ie: savings) so there is a very real incentive for wise and careful spending.
That is why governments are so prone to paying way over the odds for services that could have been done even better for a fraction of the price. Naturally, private companies, aware of this mentality, are all to happy to take advantage of the situation, and overcharge for their services - but that's what's called supply & demand, they will only charge as much for their services as they know the government is prepared to pay.
I'm curious as to how you could define mother nature as communistic. Seeing as humans are the only animals with a system of currency, I don't see how an accurate comparison can be drawn. Even in a capitalist society people will band together to achieve a goal, the difference between communism and capitalism is the way in which the responsibilities and rewards are apportioned. Communism/Socialism attempts to legislate a uniform (or close to uniform) standard of living for all citizens regardless of their contribution to society, while Capitalism rewards initiative and individual effort by making the rewards directly linked to the individual's performance.(reply to this comment) |
| | | | | From Ne Oublie
Wednesday, November 10, 2004, 14:32
(Agree/Disagree?)
Actually, no, I'm opposed to regulated giving - ESPECIALLY when, as I said above, it is given to, and perpetuates, an inefficient and wasteful system.
Equally as important as giving is the decision of where to give to. This is the kind of decision that I don't want someone making on my behalf, I earned the money, so I should have the right to CHOOSE where it's spent/given to. And the same for every other citizen.(reply to this comment) |
| | From lilac
Wednesday, November 10, 2004, 18:34
(Agree/Disagree?)
As far as tithing in TF , the Family is so money minded that when one month when I was in TF a long time ago, our full 14% came up to $210. So we sent it in, then our home got a letter back correcting the home saying that we are not allowed to send anything less then $20.00. Since our tithe was $210 they said we should of sent $220.
IT is so ridiculous for TF to say your tithe was not enough. I heard that in the early days of TF that homes had to tithe 10% or 14 % of everything they provisioned for the home. So therefore homes couldn't afford to so they stopped provisioning in some homes. The Family gets wackier every year. Who comes up with these crazy ideas? The Family leadership has way to much control when they start telling you who you can have sex with& that you should do it with so & so or your not a true CM person, how to discipline your kids, how to think, how to run your lives etc...
One thing that really was annoying was how the leadership came up with the term EA's. Like when you turn 18,19,20 your an experimental adult. How funny, last time I checked 18 was an adult. You can do anything at 18 except buy alcohol. Also before the charter I bet a lot of us SGA 's & teens were about to leave but the charter came out & gave people more "freedom". But of course most of the charter is not black & white, so they can put you on babes status when they like & correct me if I'm wrong, but I think Mama even said they can take away the charter if we don't handle the "freedoms" responsible. HA ! What freedoms. In some areas they wanted to still call their country a senstive country so they could still have "control."
I heard ,but I could be wrong, but that a home in Thailand was blindfolding people when they went on outreach so they wouldn't know where they lived, as it was for security reasons. How far does TF have to go. If they are supposed to be christains & missionaries, they are not supposed to be all freaked out to the point the "missionaires them selves don't even know how to get home. I say it out right ludicrious.
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| | From
Wednesday, November 10, 2004, 20:22
(Agree/Disagree?)
You had to send the tithe in cash? I guess I shouldn't be surprised.
When I was growing up you had to tithe on provisioned goods. Much of the time there was not enough cash to pay the tithe much less cash for anything else, especially after the $100 minimum came out in the (early-mid?) 80's. We went hungry sometimes. During most of my pre-teen years I remember a constant low-grade hungriness, when we weren't invited to eat at a "sheep's" place.
As late as the early 90's, I had to have my eyes covered when I went to visit at the Home where my sibling lived. I usually did not know the telephone number of the Home where I lived.
And EA's, yeah, quirky. At 12 I was an adult being screwed by grownups; at 16 I was a teen being slapped. I think I escaped before being an EA for long, if at all.
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| | | | | From someone
Thursday, November 11, 2004, 20:19
(Agree/Disagree?)
If TF is making people send their tithe in cash only, that sounds a little strange. I remember we were supposed to send a money order blank. How crazy is that. The Family says they are proud of their beliefs, but has to hide & act so secretive, that they obviously aren't proud of their beliefs. Jesus didn't hide. What is crazy is, if they didn't receive your tithe they would automatically put you on probation, but if your home had proof through a receipt from a money order then you could prove it. But sometimes even then they will want you to send it again. Shows how much being in TF is all about money & being a slave to the home, then really caring about each individual person. As much work as I did in TF growing up as a teen & a young adult, putting in overtime, I'd be wealthy by now. It's amazing how the leaders got free childcare workers & if they didn't want to watch their kids, they'd make the teens watch them. Some kids would call the teens mommy or daddy, as they didn't even know their own parents. They wouldn't even want to sleep with their parents, but the teens. I never understood how they wouldn't let the mothers sleep with their babies & make the mothers wean them sometimes at 5 months, so the mother could be there for the "home". It really disturbed me how when Grandpa would say or do something it was "the rule". Like guys having to wear boxer shorts, or using a fork or only a spoon as that is what Dad would use. The thing that still haunts me to this day is how he said that at 6 or was it 7 months is when you can start spanking them. How cruel. Maybe the baby has colic, or is hungry or needs a diaper change. Shows how "Dad" didn't have any childcare knowledge or undersatnding. (reply to this comment) |
| | From Ne Oublie
Monday, November 08, 2004, 23:55
(Agree/Disagree?)
So, you consider there to be something wrong with someone working hard and smart, in order to have a significant inheritance to pass on to their offspring? Because that's definitely the impression you're giving in that last paragraph. Whether the wealth is inherited or earned independently, the fact remains that someone, somewhere, did earn it.
Oh, and just to comment about the lower taxes abroad. The US still has lower taxes (which is only fair since it offers fewer governmental services) than most European nations, which has contributed to the number of millionaires that have moved there. But, that said, I'm sure you are aware of Offshore Trading, which is a growing trend for companies based in countries like the US and Western Europe. I recently did research on all the foreign SEC-listed companies, and a significant proportion of them were actually Offshore holdings for US companies. Obviously, it's a lot easier to set up a head office in Bermuda, than to actually move there, and if you've set up your accounting properly, that can end up saving you a lot more money than just moving.(reply to this comment) |
| | | | | From Ruthie
Tuesday, November 09, 2004, 14:30
(Agree/Disagree?)
I'm so sorry that I gave you the wrong impression. That was never my intention. Of course there is nothing wrong with people inheriting money that their parents or grandparents (or great-great-great-great grandparents) worked for & rightfully earned. The point that I was making was about the “laziness” which people such as your self often point out. The implication was that people are poor because they are lazy. I was trying to stress that rich people are not just rich because they are hard-working, but because they often inherit lots of money! Let’s provide another example for you so that maybe my meaning won’t fly over your head this time! One could not seriously say that Paris Hilton is harder working than someone who works full-time at a fast food restaurant for minimum wage. However, she certainly is a lot richer. In other words, rich does not equal hard-working and hard-working does not equal lazy!
Yes, I am aware of offshore trading and that companies try to use it to avoid paying the higher taxes here. However (I am no financial/economic expert, so bear with me), aren’t citizens supposed to report all income (including incomes in other countries) and therefore be taxed on that income, even if it is in an offshore account? Is it legal to store money in such accounts and not report it to Uncle Sam? Also, don’t virtually all of these offshore institutions charge fees? How much does a U.S. citizen ultimately save by opening an offshore account? How secure are these institutions? Isn’t it possible for the U.S. government to access these accounts even though they are in other countries? My last question is: What is possible harm to the U.S. economy by such practices? Just because someone CAN do something doesn’t necessarily mean it is right. (reply to this comment) |
| | From Ne Oublie
Tuesday, November 09, 2004, 15:51
(Agree/Disagree?)
Offshore trading is something that I am generally familiar with from my experience in accountancy, but as I haven't actually been involved in it myself I'm not going to vouch for the specific details. It is a fairly common practice, and can be done entirely legally.
Essentially the way that it works is by registering a company (a company, not an individual) in another country, that then becomes where you are required to pay taxes - essentially what you're doing is having the money paid to the Bahamas instead of the States, therefore you're not required to pay American taxes on it.
Obviously, this practice decreases the tax income in the 'home' country, which isn't going to help the budget any - the decrease is considerably greater than a tax cut, obviously. But since we are talking about corporate capital gains, there is still the opportunity for some of it to be taxed when paid (whether in salaries or dividends) to US citizens.
For an individual to do that would be a lot harder, and would typically involve an actual relocation - at least as your permanent address. There is also what is called Offshore Banking, which people use when saving large amounts that they don't want to pay tax on the interest of. In an Offshore Account the interest is not taxed until brought back to the country in which you are resident. Although not strictly 'legal' you could get away with spending it abroad, and avoid paying any tax on it, since it hasn't entered your home country's jusrisdiction.
There isn't really a way to comment on the security of 'these institutions', since it's not done by specific institutions - the main risks would be in regards to the respective governmental, legal and banking systems. The profits are obviously due to the difference in tax rates between the countries, but there are bound to be other differences which could prove detrimental if you're not fully aware of them.
As for the potential saving, that would depend on how much money is at stake - the more that you have, the greater your potential gain from the procedure.
Of course the likes of Paris Hilton are accomplishing less than the average wage earner. But who are we to legislate our idea of morality on them. So long as they have obtained their money legally, aren't they entitled to spend it how they like? And if that means lazing around, well they've earned the right to it (or their ancestors did it on their behalf) even though it's not going to help them maintain their wealth or standard of living for too long.
The difference between judging the actions of the rich who are living off their own money, and those who are living off subsidies or payouts from the government is exactly that. If someone's living off of your money, then you're entitled to somewhat of a say over how they spend it, no?
See why I'm so keen on financial independence? So long as you are financially independent you aren't answerable to anyone other than yourself in regards to how you spend that money - which effectively covers every aspect of your life.(reply to this comment) |
| | From night_raver
Thursday, November 11, 2004, 20:08
(Agree/Disagree?)
To quote Homer Simpson, "Gahhhhhhhhhh"...one tax play posting should've been enough fore me, maybe it's been a long day...but this comment annoyed me.
Ne Oublie wrote "Offshore trading is something that I am generally familiar with from my experience in accountancy"
'accountancy' has to do with record-keeping and creating ( and auditing) Financial Statements and their related internal controls so 3rd parties (banks, the SEC or investors) have an objective way to evaluate whether they should loan money, allow the company to be publicly listed,or buy equity in a company.
What are the 3rd parties evaluating using the Financial Statements that ACCOUNTANCY prepared? One thing they evaluate is the financial decisions made by the FINANCE department, including Ne Oublie's previously alluded to "offshore banking and offshore trading".
I guess for the sake of fairness (to everyone here who cares so deeply), I should say that the accountancy definition above would be public accounting; the other type, managerial or cost accounting, is where the accountant takes a sneak peak at the accounting records before they become Financial Statements to see if you can give those FINANCE guys a heads-up if their "offshore banking and offshore trading" activities arent contributing to Net Income (or increasing Gross Revenues, which seems to have become the new investment mantra since Net Income can be easily manipulated from one year to the next).
Then there's 'Tax Accounting', which seems to be a catch-all for Tax-Return Preparation, Tax Planning, Personal Finance/Retirement Planning, Tax Law, anything with the word 'tax' in it. I suspect Ne Oublie feels that "offshore banking and offshore trading" are solely a tax-avoidance activity instead of a finance (money-making) activity...I'm too tired to get into it, fuck I dont even care, I'm just pissed and tired.(reply to this comment) |
| | From Ne Oublie
Thursday, November 11, 2004, 23:58
(Agree/Disagree?)
... which is exactly why my experience is only general. I'm familiar more or less with what is happening, but I HAVEN'T evaluated the specific benefits/drawbacks. Most recently I have been working on the process of converting from local GAAPs to IFRS, which is all about assessing the value of a company - as in for Shareholder reports as well as Taxes, since they would have to be at least nominally comparable.
Previously, my involvement was in the Advisory section of PwC, which DOES involve advice on topics such as Offshore Trading. Again, I was not involved in it myself, which is why my understanding of it is only general.(reply to this comment) |
| | From Ne Oublie
Thursday, November 11, 2004, 23:57
(Agree/Disagree?)
... which is exactly why my experience is only general. I'm familiar more or less with what is happening, but I HAVEN'T evaluated the specific benefits/drawbacks. Most recently I have been working on the process of converting from local GAAPs to IFRS, which is all about assessing the value of a company - as in for Shareholder reports as well as Taxes, since they would have to be at least nominally comparable.
Previously, my involvement was in the Advisory section of PwC, which DOES involve advice on topics such as Offshore Trading. Again, I was not involved in it myself, which is why my understanding of it is only general.(reply to this comment) |
| | From Nick
Tuesday, November 09, 2004, 08:18
(Agree/Disagree?)
Your right. I hardly pay any taxes here in the US compared to what my Brothers pay on a comparable salary in the UK.
While I do have to pay higher prices on things like health care, it evens out when I don't pay as much on taxes.
As for higher taxes for the higher earner? IMO I do not see the logic in penalizing someone’s success in such a capitalist country like the US. Yes I agree that those in a higher tax bracket should to an extent be taxed at a higher rate, but not so much as to give them an unfair share of the bill at the dinner table. (Nice analogy there Sam. I am goanna pass that on to my GF to reference to in her Gov class.)(reply to this comment) |
| | | | | | | | | | | | | | | | | From ThinkingDavinci
Monday, November 08, 2004, 20:20
(Agree/Disagree?)
Sorry... where did anyone say "flat tax"??? That's a very bad idea. Go restructure your comments accordingly, please. Only then can you go out and play.
It's just a vey simple illustration of why the wealthy get a bigger TAX BREAK than the less welathy. That's all. Bigger REFUND, IE Money back?
I do advocate working SMART over working hard, & working for minimal wage really isn't a great idea either. I hope most of us learned to sell something in our previous experiences? But you are wonderful, I'm sure, even brilliant in your own sense of your place in the bathtub. (Quack!)
(reply to this comment) |
| | From Ruthie
Tuesday, November 09, 2004, 15:02
(Agree/Disagree?)
Hmm… It’s true you never did say “flat tax.” However, the tone your article did imply that you resented (or at least had a problem with) the progressive tax rate. Since a flat tax is the opposite of a progressive tax I naturally assumed… Ah well, let me try to “play” with you again, as you so sweetly put it.
First, if you don’t like a progressive tax rate but you believe a flat tax is “a very bad idea,” how would you, the financial genius, fix the tax rate?
Secondly, the wealthy have always gotten a bigger tax break than the less wealthy. So then what is the point of writing this article arguing for something that has already been around? Another thing I just have to point out: who, in this troubled economy of ours, really needs MORE of a tax break? The wealthy (ah yes, they are so hard up)? Or the working class? The working class is actually the group that has been hurt the most recently because of outsourcing. How does it make sense to try to help the economy (is that what Bush was trying to do?) by giving the most benefits to those that are already on the top?
Yes, I agree with you, working SMART it a much better idea. However, the problem comes when people try to escape this working hard but not-smart (stupid?). In case you haven’t noticed, this trickle-down stuff doesn’t exactly work, now does it? The wealth hasn’t begun to spread out more evenly; it actually has become more concentrated in the hands of those who are already wealthy. Why is that? Well, too many reasons (I could go on for hours). For one, the U.S. is not exactly the land of equal opportunity. If you want to know exactly what I am talking about, go visit an affluent neighborhood then visit the ghetto. Go to a school in both. Observe the environment, the learning materials, the teachers (yes, even TEACHERS are different there), the teaching methods, the students themselves, the parents, the neighborhood, the crime rate, etc. Maybe then you will be able to see how easy it is to get SMART (or not-smart?).
P.S. Don’t make presumptions about how I am in my bathtub.
P.S.S. Before anyone starts attacking me about how I try to blame one’s poverty on anything but the individual, note that I do believe that the individual themselves can escape the vicious cycle of poverty. However, I am merely trying to point out that the wealthy do start off with a much bigger advantage. Society should try to equalize the opportunities, instead of simply blaming the individual for his/her cycle of poverty which society does help to perpetuate.(reply to this comment) |
| | From Ne Oublie
Tuesday, November 09, 2004, 16:20
 (Agree/Disagree?)
'The wealthy' do NOT necessarily start out with an advantage - there are plenty of examples of people who have worked their way out of poverty and into wealth. Granted, they are still only a fraction of the total population, but the fact remains that it is possible. It is also common for the formerly wealthy to bankrupt themselves through ineffective investments and spending, proving that the process can also be reversed.
I recently read a definition of 'wealthy', which I think is far more accurate than just the number of digits in ones' bank account, which is when one's income exceeds their outgo. In other words, if what you earn from your assets is greater than your cost of living during that same timeframe, then there is a good case for defining you as 'wealthy'. I mean, otherwise how do you define it? Is it someone who HAS a lot of money? Or someone who EARNS a lot of money? And how do you define 'a lot' of money?(reply to this comment) |
| | from PopNFresh
Monday, November 08, 2004 - 16:03
(Agree/Disagree?)
Great article!
(reply to this comment)
| from Haunted
Monday, November 08, 2004 - 06:49
(Agree/Disagree?)
Whoa there pal! Easy does it!
"The first four people (the poorest) would pay nothing. (This would include most of the overeducated underachievers hanging out at Movingon.org!)"
"Overeducated underachievers"???? Shows how little you know us....
I'll gladly pay for mine or any other ex-cultie's dinner...we're the ones who weren't even in any tax bracket to begin with and many of us are probably paying for your supper.....
PS: At least we're educated? Are you?
(reply to this comment)
| | | | | | | From roughneck
Tuesday, November 09, 2004, 18:23
(Agree/Disagree?)
It's called being charitable, luv. - Though I'd be happy to make an exception for you if it's your opinion that I'm egregiously in error. :)
To have left a cult you were raised to remain in makes you an achiever, dammit. To make a better life for yourself is even better, hence "over-". Like I said, being generous today. The Undereducated bit we seem to agree on. I wonder why... :)
(reply to this comment) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | From
Thursday, November 11, 2004, 12:44
(Agree/Disagree?)
Heh. I was going to ask the same thing. Seems that a "VS" title slapped on someone can change them. Espcially when they added the "married to a SG CRO", she went full out into standard Family leadership position: a brown nose stuck up the ass of superiors, with the feet stepping on everyone below them. (reply to this comment) |
| | | | | | | | | | | | | | From ThinkingDavinci
Wednesday, November 10, 2004, 22:46
(Agree/Disagree?)
I agree with you there, Banal... Seems watching Sex in the City does more to distort one's idea of beauty than being in a cult. BTW she's one hot girl, & who would know better than me. If I hadn't been an ABM & found the secrets & $10 million in reserves for Family leadership, & had my legendary "doubt attacks" we'd still be married. Heaven & Hell know a country bumpkin like Miguel makes a better passive Family Hubbie than a logical freethinker. We all give up something to become who we need to be, or we're given up so someone else can continue being apathetic, when they find your direction challenges their comfort zone or belief system. (reply to this comment) |
| | | | | | | | | | | From banal_commentator
Thursday, November 11, 2004, 07:20
(Agree/Disagree?)
Totally, and then like I could like join your harem.
Slightly off the subject....I have nothing against tax bracket motivated voting habits. I envy and aspire to be like people who are in a position that they will benefit from a republican in office, for fiscal purposes. But let me tell you something, most of middle America and the red states, are not in that elusive tax brackett. The smart republicans (the rich ones) manipulate average white america, with the promise that voting for a conservative will keep them (their God, their religion, their race, their homophobia, their anti-abortion dogma, and basically their "American values") reigning supreme. Unfortunately, this things is what the Republican party has come to represent. The yeoman is scared of change, because change is a threat to his status (his status of being superior to the blacks the gays the jews and even women, because of abortion). The hicks who think they're getting a better deal by being republican need to realise that when it comes to voting THINK ECONOMICS!!! Don't think morals or culture!!! This would eradicate the racial issues that stem from the blacks in the ghetto and the white trash, redneck, hicks that like to lynch them. They are one and the same! They are uneducated, bigoted and pigheaded and both parites would benefit from the same social programs that the yeoman denies himself by voting for the republicans.
Unfortunately, Politics is no longer about economics but has become, thanks to FDR and the Chirstian Collision, well.....Political. But you young man, should be ashamed of yourself for being a Bush supporter at a time like this. When he is using your taxes, that you mourn over and curse "those liberals" for having to pay, to finance an unethical, banal war, that has killed way more people then 9/11, the """cause""" of the war in the first place. You republicans are fools, you think you're getting a break by Bush being in office. I highly doubt that you do fall under that enviable tax brackett, where tax cuts really could make a difference, or at least I know you didn't when Bush used up the surplus. This war has to be financed somehow! And we the taxpayers are paying for it, and you the fiscally minded voters along with the hicks that you have manipulated, have ensured that we will be paying for this war for another four years. Thanks a fucking lot. At least if the democrats were in office our taxes would stay in the country.
Oh well, this topic is so October, 2004. Let us not become embittered by Bush's victory, but instead plan a left wing conspiracy to make him choke on another pretzel, and this time fatally. Hee hee just kidding.
What are you saying about Sex and the City? I don't get that either. (reply to this comment) |
| | | | | | | | from Ne Oublie
Sunday, November 07, 2004 - 23:42
(Agree/Disagree?)
EXCELLENTLY put!
(reply to this comment)
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