The Housing Bubble

jojo if i had $15-20K or more it would easily be worth it

2. Under Alan Greenspan, the Fed had clearly and consistently signaled that the central bank would react to any weakness in asset prices by cutting rates aggressively. This became known as the Greenspan, and later the Bernanke, put. The Fed would always provide a safety net to prevent asset-price deflation so that even if there were relative changes to asset prices, overall wealth would be inflated. So, for instance, monetary policy after the bursting of the Nasdaq bubble didn’t return the Nasdaq to its previous highs, but it did boost the equity market more generally and house prices specifically.

It’s like they understand how to control the symptoms (recession) but they don’t understand the underlying cause (malinvestment).

What is the cause of a recession? What are the costs? And the question never asked is, “What are the benefits?”

Is Bernanke the only Fed economist who fails to see the connection between low rates and bubbles?

“Interest rates being ‘too low for too long is always associated with a bubble phenomenon,’ Federal Reserve Bank of St Louis President James Bullard said at the same conference in the territory. ‘It’s not just a US policy, but a G7 policy.’ Borrowing costs in Hong Kong usually follow those set by the Fed because the territory’s currency is pegged to the US dollar.”

And social security, pensions, etc. are adjusted for inflation so you can’t “inflate it away.” That only works for the fixed debt portion.

Polly, only GOVERNMENT pensions are adjusted for inflation. Everyone else has a “defined benefit” fixed pension.

Agreed. Living (and working) in Philadelphia or Baltimore would be better. Wilmington has very little going for it. A lot of McJobs servicing credit card accounts (FIA card services, etc) are based there because office space and workers are cheap and plentiful.

There are undoubtedly a lot of mattsmiths in this world, but by any chance are you a trumpet player from suburban Rochester?

no

Well, she would say that,wouldn’t she. It’s a metaphor and a plagiarized one at that.

I keep getting e-mail messages from E*Trade and Ameritrade about their “Free” investor seminars. The inundation of TV commercials also tell me that Wall St is getting desperate for new money to be pumped into the market. This is a tell to me that these leeches are desperate for money as funds are getting scarce and people are wising up to their complete load of BS!

Agree. This goes along with the stories about how the “everyday investor” is “too scared to jump into stocks.” Memo: we’re not scared, we’re waiting for the crash to buy low for pennies on the dollar, just like Wall Street.

XGS,

I don’t really know, but my father is an accountant and has always said to me “There’s nothing we can do because it’s all W2 income”.

I can guess that, as a 1099 employee, you can likely write off far more expenses than I can as a W2 employee. Your car, a big portion of your house (it’s your office, right?), and many of the expenses that, as a W2 employee, are just not something you can possibly find a way around.

Also, again, not as a tax professional, I’ve heard that the way to go as a 1099 is to incorporate and go B2B with your employers. That may give you much more tax flexibility.

Haven’t you figured out what Bill/LA’s deal is? I think he is doing a variation of it as a W-2 now, but it is basically the same thing.

You keep a “residence” where you don’t live in location A. Then you get a contract/job in place B where you do live, and 1) if you are a 1099, you can deduct most of your living expences on your schedule C because you are “living away from home and it reduces your total income and 2) if you are W-2 and your employer doesn’t pay for your living expenses while you are technically “on a business trip” then you can deduct most of your living expenses as miscellaneous business deductions (after the 2% floor). So, in exchange for having to pretend to live somewhere you don’t live (which means you have to maintain an apartment that looks like you might live there, go visit your furniture once every couple of weeks, and keep as much of your life in the location where you don’t live as possible) you get to deduct most of your living expenses in the place you do live (which means you have to keep receipts sufficient to withstand a tax audit for all of those expenses). You also have to pay any income taxes in the state you are pretending to live in.

Whether the deduction you get saves you enough in taxes to offset the cost of maintaing the extra apartment and flying back and forth to it constantly will depend on your tax rate and how much you spend on your food and rent and transportation in the place you actually live, but it will reduce your taxes.

Whether the incredible annoyance of keeping track of all your living expenses in the place you actually live and knowing that there is a very good chance the entire scheme will be disallowed on an audit is worth it, is a personal choice. Plus the hassle of having to leave the place you do live to visit your furniture (and call the cops on the local kids) every couple of weeks.

As for you, Fixer, if I were you, I’d make sure that I keep track of the mileage I drive scrupulously. Buy a special notebook for it - there may be ones specifically made for the task. You should look up the rules for deducting mileage to a second job. I haven’t looked up those rules since before I went to law school (I had a second job for a while), so I don’t know them, but I’m pretty sure that you can deduct some of it. Keep track of other expenses dealing with the second job too. There is probably a publication on the IRS website that would explain it. I’ll go look.

Essentially, according to my tax guy, I’m screwed because all I have to sell is my labor.

I need to figure out how to get on the “50% who pay no taxes” bandwagon. I must be doing something wrong. I only grossed about $65K last year which barely gets me out of the lucky-ducky class. I’m paying about $20K in taxes on that amount (including the $4K plus check I need to write by April 15…….so much for disposable income for the next 4 months).

This doesn’t include the local 9% sales tax on all purchases, plus property tax, the $500/month I’m spending on commuting, because I can’t afford to live closer to work, etc.

After taxes, I make about $40/night on my part time work. Would you work all day, then drive 30 miles to work a second job from 5pm to 9pm for $10 an hour? I’d be better off working at Mickey Dee’s. At least I’d get free food out of it.

People aren’t lazy. It’s just that the return on labor is so low, in many cases it doesn’t make any sense to work.

If you go to irs.gov, look at publication 334, Tax Guide for Small Business (for Individuals who use Schdule C or C-EZ). Pub 463 is about mileage and a few other other types of expenses. If you look through that stuff, you might find a few deductions that you can take that you aren’t currently thinking about.

Don’t be too quick to fall into the home office trap. It is a legit expense, but you can’t do anything else in the space. If it is where you do all your personal computer stuff, it isn’t a home office.

Your real issue, Fixer, is that you are way under the level to get past you SS taxes. That means that in additon to your marginal rate, you are paying both halves of FICA on your 1099 income. There isn’t anything you can really do about that unless you can find some deductible expenses to take off before you the schedule C income comes on your 1040. Oh and I was wrong about the deduction per mile - the number in the pub was $0.555 per mile.

I only grossed about $65K last year which barely gets me out of the lucky-ducky class.

Sorry, XGS, but that’s nowhere near accurate. If you review the median household income for your state, you’ll likely find that you are above the median… I would check for you, but can’t recall what state you’re in right now.

In other words, above median means that you are one of the rich that need to pay more.

Working on a 1099 is only beneficial if your rate is high enough.

If working out of town and travel to home on weekends is typical for you and your employer is to stingy to cover your costs out of town, request per diem at CONUS rates in return for a salary reduction. This way you get part of your salary as tax free cash every week. I had this arrangement earlier in the decade and it was very lucrative. My current employer is extremely generous in all ways thus I didn’t request a salary reduction. They just came up with the cash for my per diem on top of salary.;)

I know I’m above, but not much.

The problem around here is, my take home is shrinking (I was making $80K in 2002), but the local “median” is shrinking even faster. So I’m considered “rich”.

One of the guys I work for sold his company for $500 million back in 2007-08…….the other has interest in 4-5 companies, and is “only worth” $150 million.

Since all I do is fix their airplanes, and not a “profit center”, I’m considered “overhead” and an expense to be minimized.

It’s a Catch-22 that a lot of technically oriented people are finding themselves in. There are a limited number of people in my specialty, and not many new people coming in. OTOH, there are also a limited number of employers who need my specialist training. Most of the “good” jobs in my business are circulated by word of mouth. Since my contacts in the NEC and California are limited, I’ve got a problem.

Add to this the aversion that employers seem to have against the over 45 crowd.

GS, my advice would be to switch over to using your skills at a corporate level. Check with Siemens or Alcoa in Hutchinson, Ks. which is 45 min from Wichita. Both companies would benefit greatly from your expertise and would offer benefits and steady work. Alcoa will likely have work for decades given the continues need for polished fuselage sheet. They are always looking for mechanically skilled folks to work on the polishing machines, etc. You could always freelance on the GS stuff on your terms and as your free time allows.

Once again, Ive got to write another big check to the IRS for my 1099 work.

It’s workman’s compensation insurance more than income taxes that upsets me. Workman’s comp is rife with fraud from tatooed grunts, scam lawyers and even doctors; everyone on the take…and the blissful blind running the system see no other solution than raising the rates on those still trying to make a living honestly.

“I rather imagine I’m not alone in my gratitude, nor in my goal.”

Unfortunately, I think your perspective on this is rarer than you think.

“I look forward to the day when I can again pay substantial taxes and feel put-upon because of it.”

As do I; please make sure you throw yourself a personal “HBB pity party” when you write out the check (as I did today). It has helped to remove some of the sting to hear other viewpoints and some support on the issue. And, make no mistake, it’s better to have a huge tax bill and be able to pay it than to not have a tax bill but not be able to pay your heating bill for the month. But, even better still would be for our government to stop the madness and reduce our aggregate tax burden and waste, a noble but apparently impossible goal.

Our income taxes are lower than they’ve ever been! You know we had a 70% tax rate in the 70’s? And if Bush’s tax cut are allowed to expire, you can plan on paying even more!

IIRC, his fiance’s earnings are at a similarly near-stratospheric level…

The marriage is actually going to put them solidly in “marriage tax” territory. They will pay dearly for the privilege.

In his situation, I would try to negotiate a marriage-like but non-married relationship.

“The marriage is actually going to put them solidly in “marriage tax” territory. They will pay dearly for the privilege.”

You recall correctly, this is my last year (well, 2011 was) of filing single. Saved us somewhere between 5-10K this year because we could avoid some of the AMT by putting lots of the our taxes paid (RE tax, sales tax, etc) on her return.

“In his situation, I would try to negotiate a marriage-like but non-married relationship.”

We’ve had that for the past 7 years. But she wants to be married, and I’m willing to pay the penalty to the government to keep her happy.

If I had to guess, I’d say that since we’ve met each other, we’ve saved somewhere in the 30-50K range by not being married (for the past 7 years). Some of the big ones:

8K first time homebuyers credit (if we were married we would have limited out)
1.5K energy efficient tax credit
500 energy efficient tax credit

So, there’s 10K in direct payments that we would have been unable to take if we were married. Add in the fact that she’s taken the std deduction and I’ve itemized, and (the big one) using the shifting of (primarily RE and sales) tax between our returns to avoid AMT.. It’s a big deal, a really big deal.

Our incomes are both high, but not all that similar. She makes about 1/3rd of what I do (and probably works harder, but works in HR, a field world renowned for terrible pay). We’re still going to see a big hit every year by being married; the AMT and the lack of shifting for credits makes us a much easier target for the IRS.

But, if you don’t save any money, there’s none to lend, right?

Is there any stats that show that higher (not stratospheric, let’s say below 500K/yr) income folks spend less of their income than lower income? I thought I read once that many of the higher income spent even MORE than they earned?

Google “personal savings rate by income percentile”

Click on the pdf file (second in my results but I block ads) called “Do the Rich Save More?”

The answer is yes.

Polly,

Interesting, I did Google it, and you’re right. I’ve always thought of myself as a very efficient spender, but, apparently, many in the upper income ranks are saving too much of their income to be effective in their spending.

Very interesting, I wouldn’t have thought that was the case (at least, not until you got to the 1M+ income category).

You’ve got it better than 90% of the people in this country and 99.9% of the people on the planet [...]

Try better than 97% of the people in this country. I just checked the 2011 income percentiles; 98th percentile for all tax units is 360,435, vs. Overtaxed’s approx $400K.

And that has to be closer to 99.999% of the world; that’s just a guesstimate on my part, but it has to be way better than 1 in 1000.

“You knew you were going to get that response when you first posted this”

I did. But I enjoy stirring the pot and trying to provide another perspective as well.

“SS is a massive, cruel ponzi scheme, yet you support it? ”

I wouldn’t say “support it”, but would say that it’s not my least favorite tax. Mostly because it eventually limits out; there’s a cap on the amount that you can pay because after that, “there’s no further benefit”. My problem with income tax is that “there’s no further benefit” from about dollar 1, IMHO. 95% of that money is going right into the crapper, with SS, I feel about 50% is going into the crapper, the rest into someone (who likely paid into the system) else’s hands.

“Freedom is incompatible with arbitrary state confiscation from the population. Don’t sit facing backwards on your high horse and claim to be showing leadership.”

I don’t intend to lead. I intend to complain impotently about the current state of affairs to a mostly unreceptive audience. However, I do agree with your statement, taxes are money aquired, in almost all cases (and certainly income tax), by force from the populace by their government. That is, IMHO not a free society, that is a society that is continually bribing their “masters” to remain free.

This is also why, with rare exception, I don’t get too spun up about “voluntary” taxes. Sales taxes, RE transfer taxes (like I paid on my slip) and the like are much less averse to my thinking than income taxes.

And finally, thank you for letting me, and others with conflicting views stir the pot; this is a great forum to see other people’s view of the world, I think we have a huge cross-section of the population who post here, and it’s one of my favorite ways to check my perspective against a wider population.

when my dad applied for social security at 62 he said he was the only one with gray hair in the room.

I grew up duck hunting out in the marsh behind my house, I can assure you that there’s not too many folks out there that are too “unwashed” for me. I do hang out in the dens of wealthy, and yes, the audience is quite receptive to talk tracks like this in those circles. But I assure you, I’m didn’t grow up on 5th Ave and never live any way other than how I do today. Not that my lifestyle resembles the truly wealthy in any real sense of the word; I’m closer in wealth to a bum on the street than I am to the Wall St elite.

I’m just worried that we may be a little too unwashed for you.

Did you read what he wrote, oxy?

this is a great forum to see other people’s view of the world, I think we have a huge cross-section of the population who post here, and it’s one of my favorite ways to check my perspective against a wider population.

He LIKES that it is a diverse and different crowd here; he values that.

PiC, that was the thickest snark I’ve laid in a while and you MISSED it.

Overtaxed is not here for “other people’s views.” He’s here to feel superior to us mere mortals. Oh woe is me, I had to pay taxes on my $350K income. Oh woe is me, I have a W-2 job. Oh woe is me, getting married will cost me 1.4% of my income. Oh woe is me, I had to pay transfer taxes on my boat slip.

“Checking perspective” my butt. More like stroking ego.

Oxide,

I think the difference between us; I’d be thrilled to hear, next year, that you made more than I did and happily paid the (IMHO, absurd) taxes on it.

You, on the other hand, would love me to come back next year and tell you how much worse my life is because I didn’t make what I did this year.

It’s a totally different perspective, I’m thrilled to see others move up, and, unfortunately, most of population is much happier to see others fall and suffer.

You think I view myself as “better than you” or “superior to mortals”; when, in fact, I’m pretty sure that my life is dramatically closer to yours than you think. Yes, I have a boat slip, nice cars and a relatively large house. But, no, I couldn’t lose my job and be “Ok”. I can’t realistically afford to have children (because my wife will have to quit her high paying job). I don’t have “F-U” money, which is really the point that I’m trying to get across. There’s a massive difference between my lifestyle and that of a hedgie making 10M a year (who, after the first year, NEVER needs to work again).

I think more people than you would think who are “financially similar” to me feel the same way about it than I do. You have this image in your head of me and Muffy driving over to the high-end golf course to play a few rounds on a Tuesday before we go booze it up at The Breakers on Palm Beach. I couldn’t afford a high-end golf club membership without selling my house. “Muffy” and I both travel a ton for work, so, Tuesday (and perhaps Saturday, depending on when I get back) are out for golf.

We’re comfortable, and yes, we own a boat slip (which, surprisingly, seems to have raised quite a few quills). We own one home (with a sizable mortgage) and have no children.

I was making 35K/yr 6-7 years ago, and my salary has grown as a result of many position and career changes. So, please don’t paint me with the brush that I’m here to tell everyone how much better I am; I’m lucky and have worked hard, and I realize that it’s a combination of the 2 that got me (and keeps me) here.

I was making 35K/yr 6-7 years ago, and my salary has grown as a result of many position and career changes.

Wow, that’s quite a trajectory! Nice work…

But remember, easy come, easy go. Build the nest-egg/F-U money for a rainy dat. If you don’t have substantial savings at your income level, you need to work on that.

Many high-income earners do not have the high net-worth that you would expect. Avoid being one of them.

PiC, that was the thickest snark I’ve laid in a while and you MISSED it.

Whooops!!

Will public schools still exist after the system implodes? I would think not. So what will you do for a living?

“Will public schools still exist after the system implodes? I would think not. So what will you do for a living?”

I’ll figure something out.

Which part of the FIRE sector do you work for?

Which part of the FIRE sector do you work for?

None.

It is a bit ironic that alpha was giving Blue Skye a hard time for being a “banker apologist”—while all the while playing up the “system would implode” line.

alpha, I’m not suggesting you are a FIRE sector worker, but out of curiosity, what DO you do in the real world?

what DO you do in the real world?

I’m chairman of the bored.

Yes, this is what I am getting at. I don’t get it.

What does Alpha want me to do. Work fours jobs? That’s MY system imploding… I want the banksters to implode. How about a little RTC type stuff.

Auction time. Mark-to-market.

Get it done.

“I’m chairman of the bored.”

I never would have guessed you’re a middle school history teacher!

What does Alpha want me to do.

I want you to recognize that since you work for the ’system’, it is perhaps unwise of you to wish for the destruction of the system.

I want the banksters to implode.

Well, now that’s an entirely different thing, and one with which I agree.

I’ve been pretty clear about my views on education and housing/banking. Somewhere in this dialogue you smooshed the two together. I think perhaps we’re missing each other. When I say “government,” I don’t include cops, teachers, firefighters, etc. I mean lawmakers.

Somehow we’ve become ruled by a government of banksters. I am not interested in sustaining that type of thing, and want it to implode.

I think pubic education is cool. Some people, mostly elitist, rich, white people, don’t like it, because it supposed to give everyone a chance (yes DJ, even kids with saggy pants). They don’t like that. I am managing this very situation in my current role.

I think we’re on the same page, right? I don’t recall saying I want to implode education. I said, “I want the government to get out of the way (IWTGTGTOOTDIHJNWWXOXOHTH),” but we were talking about housing, not education.

Pollution. I want the government to get in the way and so on.

Where we do differ, is that I think I’d rather have the Blue Plan instead of continuing what we currently have going on.

I don’t see how we get to your “controlled price discovery.” Shouldn’t that happen between me, and a seller?

*crickets* Figures.

*crickets* Figures.

Isn’t it obvious? He wants to IMPROVE his bottom line by paying less taxes; your suggestion would REDUCE his bottom line while also reducing his taxes.

It is not net to his advantage.

The problem is, back in the 80s and early 90s, I could afford to have kids. Twenty years later, I can’t.

What do you suggest that we do, smother them with a pillow?

That’s the trouble with the US brand of optimism. You work thru the bad times, hoping they will get better. Except for a lot of us, they never got better.

X-GS,

No, and, your right, that is the problem with “US Brand” optimism.

IMHO, before having kids, ask yourself; can you afford to lease a Ferrari for the next 25 years? Through good and bad times. If the answer is no, you probably should reconsider having children. But, I’m also aware that there’s only about 1% of the population that can afford to lease a Ferrari, and, therefore, not nearly enough people who can afford to have children by my standards. Therefore, I leave the task to others, who, through some miracle of financial engineering, somehow figure it out.

Too bad the PTB didn’t have a giant press conference in 1990 and say:

“IF you are a working stiff, we are going to spend the next 20 years enacting policies that are going to screw you. Taxes and inflation will be higher that the “official numbers”, but your pay is going to stagnate or shrink. You will be competing with $10 a day labor from Mexico, China, and India, and God Knows where else. Sure, some prices may go down 5-10%, but the benefit will mostly go to the bottom line of the MNCs, at the cost of your neighbors jobs.

20 million plus illegals will be allowed into the country, suppressing blue collar wages that benefit business, but all of the social costs (police, medical, property damage-insurance, deterioration of the general community quality of life) will be borne by you.

You will be regulated and drug tested, but our buddies on Wall Street will be given carte blanche by either deregulation, or by non-enforcement, to pillage at will. Then you will get the bill, when they lever up 40X, and the Wall Street ponzi implodes.

Disregard anything we say about “free markets” There are no such thing, not when oil, the lifeblood of our current economy, has it’s price artificially set by OPEC and speculators.

And on top of all this, the formerly enlightened leadership in this country will be traded in for a bunch of kleptocrats,oligarchs, and banana-republic wanna-bees, who will form a partnership with the Wall Street looters to implement these policies, while profiting from the ensuing chaos”

There are some statistics out there that date the disconnect to the 1970s. During the 50s and 60s, the benefits of economic growth were shared among families at all income levels. Sometime during the 70s there was a great divergence. The economy kept growing, but the typical family only barely kept up inflation.

On another topic, fixer, do you think that many travellers benefit from what’s been going on in your industry over the past few decades? If the airlines are spending less on maintenance, is some of that savings passed on to their customers?

Okay, then. If right-wingers are so incensed about being over-taxed then why are they so opposed to birth control and family planning? This “love the fetus, hate the child” philosophy is not tenable. Who pays for these unwanted children?, taxpayers do. Bottom line, this fetus worship is just a power/control fantasy men want over women. The GOP will never get my vote because of their outrageous and invasive position on birth control.

X-GSfixr wrote:

Too bad the PTB didn’t have a giant press conference in 1990 and say:

Well stated.

“Who pays for these unwanted children?, taxpayers do. Bottom line, this fetus worship is just a power/control fantasy men want over women. The GOP will never get my vote because of their outrageous and invasive position on birth control.”

The GOP gets my vote simply because they are the party that at least pretends to want to lower taxes. I’m not a right winger (I’m a libertarian); I hate their social policies, but social engineering has far less impact on my life than tax policy. So I vote my pocketbook only; they can keep their guns and god; I could care less either way.

So I vote my pocketbook only; they can keep their guns and god; I could care less either way.

Well great. You admit you’re a shallow, greedy person. You’ll make a great libertarian.

“You admit you’re a shallow, greedy person. You’ll make a great libertarian.”

I prefer to think of it as “not dependent on the government to make my decisions for me, either financial or personal”, but, if you prefer it your way, so be it.

My father once said, “If everyone waited till
they could afford children, there wouldn’t be any”.

I’d say that’s about right (5% can actually afford it).

This is the “paradox of thrift”, just applied to children. It’s in our best interest as a society of have children. For most people, it’s in their best financial interest to not have children, hence, the paradox.

The argument is valid; but the numbers don’t support the conclusion (yet, they could, they just don’t yet), there’s far more children than are “needed” born every year. Just look in China/Japan/Africa for some excellent examples. It’s a tragedy of human suffering because of wrong headed social policy to “out-breed” the enemies. It’s like picking up rocks to go to war today, makes about as much sense; technology determines who rules the world today, not the number of children born in the US.

Don’t forget his $40K+ boat slip.

Oxide,

What in the heck does a boat slip have to do with it?

Prime,

250K in the bank and 250K in “flushable money” are 2 very different things to me. To “flush” 250K, I better have a few million in the bank. 250K in the bank and you can, in fact, go buy a Ferrari. But would that be a wise move?

A few million in the bank, if you want to blow 250K on something, nobody is really going to bat an eyelash.

Also, that 250K number (per child) is absurdly low for my situation. Having my wife out of work for 3 years would cost 250K, right off the top. Forget about Drs, hospital bills, absurd cost of college, etc. If my wife was out of work until the child went to grade school and we never spent another penny on the child, it already be close to 500K. I’d guess that, in my situation, it would probably be close to 1M to get a child to 21-22 (through college); or 4 Ferraris.

“And 70 hrs per week? When are you going to live your life? I am qualified to ask this particular question.”

It’s a fair question, and one that I ask myself occasionally. I don’t know how long I can do this, or how long I’ll have to (the level up from where I am today is much more forgiving; it’s really the travel that pushes my schedule from “average-high” to “extreme”).

I enjoy what I do, and like the challenge that my job provides. I’m working to build a new class of product in a historically under served IT market, and it’s exciting and, more importantly, it’s what I’ve wanted to do since I was about 10 years old. I’ve always worked in this field, and about 5 years ago, I got the “big break” that really expanded my income dramatically.

I’m probably pretty snarky today because I’ve been on the road for the past 8 weeks; I’m getting married in 2 weeks and have seen my fiance for maybe 10 nights over the last 8 weeks (never a good way to bring out the best in someone). Add to that writing my check to the IRS today, and it’s a tinderbox for boiling over anger at my personal and financial situation.

” what I’ve wanted to do since I was about 10 years old”

Well, that should get you a pass. I confess that I took a different path and now wish to do what I “wanted to do since I was”.

I confess that I took a different path and now wish to do what I “wanted to do since I was”.

Do tell, Blue: what did you want to do since you were a wee one?

LOL, you can do the math, I’m not here to talk about what I earned, it’s what I spent that matters. And, spending that much on my taxes seems like an excessive number to me. Especially with all the nice (well, I think they’re nice) things that I’m fortunate enough to have that cost dramatically below that much every year.

Wait a sec….. you don’t want to discuss what you earn but complain about your tax?

If you assume he has NO income that is taxed at lower rates (like dividends), then his taxable income (not total, this is after any deductions and/or exclusions) then it is about $303,400. That also assumes no credits.

If I had to guess, we are talking about at least $350,000, if not more. And the marginal rate is only 33%. The top rate doesn’t kick in until your taxable income is over $379,150.

This is what I hate about turbo tax. People would have a better *feel* for the numbers if they actually did the math. The info you need is in a little worksheet right after the tax tables on the 1040 instructions. It took less than 5 minutes total.

Polly,

It’s now evident that you and I ask questions for entirely different reasons.

What I earn and what I pay in tax aren’t really as connected as you may think. I could earn 500K on dividends from munis and pay 0 in tax. I could earn 500K on W2 and pay 150K in tax, same income, totally different tax bill. And, of course, the way the really rich do it, earning 1M or so in long term capital gains will also get you to around the same 150K tax bill that the poor slob with 500K in W2 income is making.

As I said, the $303K is a minimum.

If someone tells you their federal tax you can figure out the lowest amount they must have earned and you can do it with minimal effort. If you care about that minimal number, that is how you do it. Do you want a person to admit in a public forum the actual number? Why? It is a huge amount of money. Not hedge fund huge, but huge never the less. Unless you are qualifying someone for a loan, I can’t imagine why you need to know more.

Not hedge fund huge, but huge never the less.

Yep—working-man huge. High-earner huge. Not 1% huge, though, by any stretch.

It is a huge amount of money.

Yes it is. And yes I want them to admit it.

Aren’t you an attorney Polly?

Yeah. So? All you have to do for court is prove something. Confessions are for cop shows.

And $350K (or more) plus his fiance’s income is well within the 1%. Easily.

Overtaxed- Your real problem is you make money like a little person- as income. Your beef should be with the 1%ers, who have devised the tax code to favor their type of earnings over the little people’s (and yours).

But you’ve been blinded by their propaganda, and taught to blame the other little people. Too bad, so sad. But quite typical.

“But you’ve been blinded by their propaganda, and taught to blame the other little people. ”

I like to think of myself as an “equal opportunity complainer”, I’m not happy about the rich making all their money with cap gains and paying a lower income rate than me either. However, I think the cry to “tax the rich” is somewhat misdirected; you can call me “rich” all day long, it doesn’t make me any closer to Mitt Romney than I am to being a homeless bum.

Tax the rich is really a codeword for “tax the high earners, no rich yet” crowd. It’s impossible to really “tax the rich” in the world today; if you put in a 90% tax rate over 10M in income about 0 people would actually pay it. They would move overseas, shift their income around, and hire the best lawyers and accountants that money can buy to make sure they avoided it. The people who really get caught by that are the doctors, lawyers, engineers, scientists, etc who earn lots (but a fraction of the “rich”) of W2 income and don’t have the ability to move their income around like the really wealthy do.

I’m not trying to blame the little or the big people, I blame the government for totally out of control spending. I’d feel much better about my taxes if I didn’t see a HUGE proportion of it going right down the toilet. My biggest revision to the tax code would be to make sure that everyone pays something (in income tax) so that they feel vested in the system. Almost all of my other changes are on the spending side (which directly impacts the amount of tax I pay if we stop the 22 year old drunken sailor with daddy’s credit card style fiscal responsibility).

It was also possible to “cash out” at $60/share, leave it in the 401k, and not pay any taxes at all.

Not in my plan…….it was all in company stock.

And, as we have seen, every other “asset” is being screwed with.

I figured I’d be money ahead to go to zero on the debt meter. Especially since I’d be looking for a job.

Not in my plan…….it was all in company stock.

Yikes! That’s a _terrible_ plan!

In that case, I can understand the choice to cash out and pay the penalty.

If you haven’t noticed, income taxes for everyone have been reduced, but sales/property taxes have increased, along with those pesky “User fees”

My daughter paid a big chunk of her pathetic income in Federal income taxes. Because shes not 26, and/or “head of household”.

Having 50% of the population paying 0 in income tax is a recipe for disaster.

Half the people paying zero in income taxes is dittohead propaganda, because it ignores the fact that they pay all sorts of other taxes, and of course pay higher rates of social security taxes than people like yourself, who benefit from the income cap, and higher rates of sales taxes, since they usually spend more of their money than the rich do.

It is also designed to draw attention away from the fact the super-rich pay lower tax rates than pretty much everyone else.

Hey look, diitoheads, over there! Poor folk living large! Just ignore the rich folks’ super-low tax rates. Keep the focus on the little people.

Buy your food in PA. Collect your benefits in NY. Problem solved.

I’ve made my predictions. If they can prove this happened, someone is going to jail. I can’t predict exactly who it will be. I wasn’t there. But someone will.

If they can prove this happened, someone is going to jail.

I’m sure it was all a mis-understanding. He authorized a transfer, not meaning customer funds; she took that as an authorization by him to transfer customer funds.

He said, she said. No fault…