Taxing the rich - what is the cutoff?

[onlydarksets]

Originally Posted by firstdown

Also how many people making around 250,000 will decide that it does pay to make the 250,000 and instaed make 245,000 and still bring home more money then if they make $250,000. Heres the math. If a person makes 250,000 their additional tax is $7,000 which drops their pay to 243,000 and if they made $245,000 they do not have this additional tax. For people who have their own business they would just change how they pay themself. For the person who said they only work 2 months to pay taxes here is the math. Their tax bracket is around 33% and 33% of 12 months is 3.96 months or around $82,500 if making 250,000. If we jump that an additional 3% now they are working 4.32 months to pay taxes. I just feel thats not fair.

That's the marginal tax rate, not the average tax rate. You pay the percentage on the bracket in which that particular dollar of income falls:
Tax rate - Wikipedia, the free encyclopedia

[onlydarksets]

Originally Posted by onlydarksets

That's the marginal tax rate, not the average tax rate. You pay the percentage on the bracket in which that particular dollar of income falls:
Tax rate - Wikipedia, the free encyclopedia

Here's a better explanation:
Progressive tax - Wikipedia, the free encyclopedia

[Schneed10]

Originally Posted by firstdown

Also how many people making around 250,000 will decide that it does pay to make the 250,000 and instaed make 245,000 and still bring home more money then if they make $250,000. Heres the math. If a person makes 250,000 their additional tax is $7,000 which drops their pay to 243,000 and if they made $245,000 they do not have this additional tax. For people who have their own business they would just change how they pay themself. For the person who said they only work 2 months to pay taxes here is the math. Their tax bracket is around 33% and 33% of 12 months is 3.96 months or around $82,500 if making 250,000. If we jump that an additional 3% now they are working 4.32 months to pay taxes. I just feel thats not fair.

Bad math, but I suspect just about everyone in this thread is making the same mistake.

They would tax an additional 3% only on the amounts beyond $250K.

So if you make exactly $250K, your tax is not affected. If you make $251K, they take 3% of the money BEYOND $250K. So it would be 3% of $1000. Or $30 extra.

That's the biggest reason why those making $250K wouldn't feel it at all. If you make $500K, you're going to feel an appreciable difference in your tax bill, but you make so darn much it wouldn't be a problem.

[saden1]

Originally Posted by firstdown

Also how many people making around 250,000 will decide that it does pay to make the 250,000 and instaed make 245,000 and still bring home more money then if they make $250,000. Heres the math. If a person makes 250,000 their additional tax is $7,000 which drops their pay to 243,000 and if they made $245,000 they do not have this additional tax. For people who have their own business they would just change how they pay themself. For the person who said they only work 2 months to pay taxes here is the math. Their tax bracket is around 33% and 33% of 12 months is 3.96 months or around $82,500 if making 250,000. If we jump that an additional 3% now they are working 4.32 months to pay taxes. I just feel thats not fair.

You do realize that it's a progressive tax don't you? In 2008 you pay 33% on anything above $164,550 (you pay .33 on 85K not the entire 250K).

[SC Skins Fan]

Originally Posted by saden1

You do realize that it's a progressive tax don't you? In 2008 you pay 33% on anything above $164,550 (you pay .33 on 85K not the entire 250K).

Your fuzzy liberal math makes my head spin. Flat tax baby!!

[firstdown]

Originally Posted by saden1

You do realize that it's a progressive tax don't you? In 2008 you pay 33% on anything above $164,550 (you pay .33 on 85K not the entire 250K).

What source do you have that says its a progressive tax. I did find that he also wants to increase SS tax for people making over 250,000.

[onlydarksets]

Originally Posted by firstdown

What source do you have that says its a progressive tax. I did find that he also wants to increase SS tax for people making over 250,000.

http://www.thewarpath.net/parking-lo...tml#post453152

[firstdown]

Originally Posted by onlydarksets

http://www.thewarpath.net/parking-lo...tml#post453152

So for a link I get someones post here on this thread? I was looking for a real source. I did not see any links on that page so I'm assuming it was a post you directed me too.

[onlydarksets]

Not necessarily - most 5th year attorneys at major firms make around $250k. Starting salary for 1st years at major firms is $160k. Partner track is 8-10 years, so partner at 35 (which actually results in a pay cut at first) is not an unreasonable plan. It's doable, but SGG would feel the 3% hit. If another tax increase comes in a few years, it may not actually be doable.

Of course, if you want to be a public defender, then you're screwed.

[MTK]

Student loans can be a real killer. You're damned if you do, damned if you don't. On one hand a college degree greatly increases your overall earnings potential, but you do pay for it, literally. I'd like to see more loan forgiveness programs.

[firstdown]

I found my daughters 4 year degree cost use around $60,000 going to an in state school. She just graduated this year and has found her first job making $36,000 plus benefits. So while thats not a ton of money it is giving her a good start. When she was looking at schools I gave her the choice of any in state school (not private) which really helped with cost. In Va. we have pretty good schools and I just did not see an advantage of going out of state but I'm sure thats not true for all people.

[saden1]

Probably works for the state or government. Them lawyers get squat diddy. But even at major/minor law firms they still don't make enough to warrant 250K education tab.

[onlydarksets]

Originally Posted by saden1

Probably works for the state or government. Them lawyers get squat diddy. But even at major/minor law firms they still don't make enough to warrant 250K education tab.

To be fair, for SGG that included 4 years undergrad, which probably accounts for half of it.

[MTK]

I remember a professor I had early on in college pulled me aside once and suggested I should look into going to law school. I should have listened.

[That Guy]

750k house with 150k down seems low and high as far as the money goes, especially if they wanted to be close to work.

also, if they actually had to go to a dentist/doctor they'd throw those numbers out of whack as well (besides loans), since PPOs and dental plans just don't pay for everything.

not saying your numbers are completely unreasonable, but it's not the end all, and a dual income household in DC can very easily hit 250k.

the biggest thing is the relative buying power of that 250k isn't nearly as high in DC as it would be in montana, but both households get taxed equally, since there's no CoLA for major cities (of course, it's a bit harder to make 250k/year in montana though).