Joe The Plumber - $250,000 Before or After Write Offs?

[Apoptosis]

After hearing the debate last night and how Joe the Plumber was upset that his tax rate was going to go from 36% to 39% ($7,500 increase for $250,000) it got me thinking... They say that only 5% of small businesses make over $250,000 and that only a small percentage of people are impacted by this change.

My question is...

Is that $250,000 and up before write offs or after? Because if a company profits $250,000 after expenses what is an extra 3%.

[Skippman]

It's an extra 3% that he earned that the government is taking away from him to give to someone "more deserving".

[camaroguy1998]

After hearing the debate last night and how Joe the Plumber was upset that his tax rate was going to go from 36% to 39% ($7,500 increase for $250,000) it got me thinking... They say that only 5% of small businesses make over $250,000 and that only a small percentage of people are impacted by this change.

My question is...

Is that $250,000 and up before write offs or after? Because if a company profits $250,000 after expenses what is an extra 3%.

Not 100% positive but I would think it would be based on your AGI(Adjusted Gross Income) so after write offs!

[hnzw_rui]

I believe the term should be taxable income (adjusted gross income - tax deductions & exemptions). And yes, that 39% is based on taxable income so that's after write-offs. Also, they don't feel the tax 3% increase on the whole $250,000. I believe what it means is they pay 39% on amounts earned above $250,000. For example, if they earned $300,000, instead of paying $18,000 on the last $50,000, they now have to pay $19,500. Someone correct me if I'm wrong. I don't claim to be a tax expert or anything, this is just based on what I've learned from preparing my own taxes.

[Apoptosis]

Not 100% positive but I would think it would be based on your AGI(Adjusted Gross Income) so after write offs!

No offesne, but if you clear $250,000 year and bring in more than 95% of Americans, then I think you should get taxed more. Now I'm no where near that tax bracket, but looking at the top from the bottom it makes me sick... People making $250,000+ a year crying about taxes when they cleared that much... I just don't get it.

How is Joe the plumber going to buy a company that profits that much... a company generally sells for 3-4 times it's yearly profit, so he's going to buy a $1 million plus plumbing company?

[Sovereign]

Not 100% positive but I would think it would be based on your AGI(Adjusted Gross Income) so after write offs!

No offesne, but if you clear $250,000 year and bring in more than 95% of Americans, then I think you should get taxed more. Now I'm no where near that tax bracket, but looking at the top from the bottom it makes me sick... People making $250,000+ a year crying about taxes when they cleared that much... I just don't get it.

How is Joe the plumber going to buy a company that profits that much... a company generally sells for 3-4 times it's yearly profit, so he's going to buy a $1 million plus plumbing company?

I have a friend who I got into it with over this very concept (that if you earn $250,000+ you should be taxed more). She was complaining about how her poor (not monetarily) parents were frantically trying to figure out how to deal with "King Obama" since they earn enough to qualify for a tax increase. This is a completely normative judgment (as most of this discussion is bound to be), but I believe if you are making that much, you lost your right to complain about taxes at least $100,000 ago. I figure if I'm paying 39% of my income in taxes, what does that say for the rest of my income? There's a lot of it.

And really, I personally believe that the more money one gets, the tendency becomes to try to get even more, despite what one already has. Those who have, have an insatiable appetite for more.

Also, the idea to cut the capital gains tax is stupid (from 15% to 7.5%). Yes, doing so may encourage investment, but it's more of the same trickle-down that I don't believe in. Most of the benefits would go to those earning $1 million or more. I don't agree with that, let's shower more on those with more than enough already! NOT...

[Skippman]

So, by your logic, the reward for success is higher taxes?

Personally I believe everyone should pay the same percentage reguardless of income. I find it ironic that there are people who contibute nothing to the tax system yet get refunds. How can you be "refunded" something you never paid?

This is the land of equality and liberty. Taxing someone at a higher rate because they make more is communistic and socalistic. Redistrobution of wealth is not what this country is about. Mind you I'm no where NEAR the $250,000 mark. But if I were to some day reach that point, and someone were willing to pay me that much, I've earned it and it's unjust of the government to take that away from me.

[Sovereign]

So, by your logic, the reward for success is higher taxes?

Personally I believe everyone should pay the same percentage reguardless of income. I find it ironic that there are people who contibute nothing to the tax system yet get refunds. How can you be "refunded" something you never paid?

This is the land of equality and liberty. Taxing someone at a higher rate because they make more is communistic and socalistic. Redistrobution of wealth is not what this country is about. Mind you I'm no where NEAR the $250,000 mark. But if I were to some day reach that point, and someone were willing to pay me that much, I've earned it and it's unjust of the government to take that away from me.

Flat taxes are regressive and therefore unfair. 10% of $10,000 means much more to that not-so-well-off individual than 10% of $100,000 means to some upper middle class person. Pull out the tired old "communist" and "socialist" arguments if you will, but to me they hold no water. It's just a smear (because both of those words are no-no's in American politics), nothing more. It's not "equal" when those with the most always get the biggest benefits while leaving those at the bottom with nothing. What is numerically equal (flat taxes) don't lend themselves to an equal-opportunity society.

I already dealt with the "I earned it" zealotry with my friend (she was quite adamant about it). I don't believe in it, and if I ever get to that bracket, I will more than happily pay my taxes.

[Apoptosis]

flat taxes just don't work and millions and millions would get screwed.

I feel that if you make a ton of money ($250,000+) then you have an obligation to help others out be it higher taxes, charity or so on. I agree with Sovereign, if some day I ever get to that point I'll be more than happy to pay the extra 3% or whatever the taxes may be. Remember it's $250,000 after AGI, so I think those 5% of americans can suffer.

Someone has to pay the bills here in america... the lower income jobs aren't cutting it here and with so many jobs already lost over seas you have to keep what we have here... no tax hikes for the lower class period. The middle class is suffering as well with the economy and gas prices and are already paying high taxes, so leave them where they are at. If you are upper class and still raking it in during these tough times, then hell yes you should pay more taxes. Increases the taxes on companies that have already shipped jobs overseas is a bad idea as I see them moving even more stuff away if we jack up taxes on them. We're screwed in a nut shell... What can we cut?

[Skippman]

We can reduce the size of the government for starters. The goverment has gotten FAR to large and now performs tasks that the founding fathers had no intention of them governing. The best thing the goverment can do is get out of a mans way and allow him to make it on his own steam.

I think we need to reconsider where we're spending out money. Education is the only hope this country has out of getting out of this mess. They should have taken some of that $700 Billion buyout and given it to the American education system.

I disagree with the progressive tax from an ethical, not a political, standpoint. It seems to me your punishing someone for being successful. I was in favor of a national flat tax with a national consumption tax. That idea never seemed to gain traction. For the record, I'm not a "staunch right wing republican". I'm a Liberterian. All I want is to be left alone and allowed to make my own way without infringing on the rights of others. But to tell me I have to pay more because I worked for an earned but others need it more it is a social justice concept that borders on government sponsered robbery. And that's my OPINION.

This government bailout for instance. You, everyone in the US on this board, and I are paying for this. The goverments budget is made up from what taxes it levies. So we are being held responsible for the fiscal irresponsibility of these companies and individuals. That's one of the things that bothers me the most. I work, I save my money, plan for retirement, and pay my taxes. Now, because of someone elses irresponsibility I'm being told I have to pay MORE. I'm not responsible for my neighbor any more than I choose to be.

This is a discussion/debate not an argument. I'm not flaming nor looking to be flamed. I'm only presenting my view of the topic.

[dicecca112]

So, by your logic, the reward for success is higher taxes?

Personally I believe everyone should pay the same percentage reguardless of income. I find it ironic that there are people who contibute nothing to the tax system yet get refunds. How can you be "refunded" something you never paid?

This is the land of equality and liberty. Taxing someone at a higher rate because they make more is communistic and socalistic. Redistrobution of wealth is not what this country is about. Mind you I'm no where NEAR the $250,000 mark. But if I were to some day reach that point, and someone were willing to pay me that much, I've earned it and it's unjust of the government to take that away from me.

Oh don't give me that success bull, we all know success is 90% luck. Ohh boo hoo Mr. Richy Rich can only have 3 BMWs instead of 4. Fix the tax loop holes. There wouldn't be a problem, but the middle class is all but gone.

[Darkstar]

So, by your logic, the reward for success is higher taxes?

Personally I believe everyone should pay the same percentage reguardless of income. I find it ironic that there are people who contibute nothing to the tax system yet get refunds. How can you be "refunded" something you never paid?

This is the land of equality and liberty. Taxing someone at a higher rate because they make more is communistic and socalistic. Redistrobution of wealth is not what this country is about. Mind you I'm no where NEAR the $250,000 mark. But if I were to some day reach that point, and someone were willing to pay me that much, I've earned it and it's unjust of the government to take that away from me.

Oh don't give me that success bull, we all know success is 90% luck. Ohh boo hoo Mr. Richy Rich can only have 3 BMWs instead of 4. Fix the tax loop holes. There wouldn't be a problem, but the middle class is all but gone.

Beaker for President!

[Skippman]

Oh don't give me that success bull, we all know success is 90% luck. Ohh boo hoo Mr. Richy Rich can only have 3 BMWs instead of 4. Fix the tax loop holes. There wouldn't be a problem, but the middle class is all but gone.

I consider myself successful. I'm no where near the $250,000 mark, not even by half. I'm self sufficent, have a place to live, and am not in debt (more than my house loan). But do I think it was luck that got me where I am? Maybe a small part of it if I'm honest. But I worked hard to have everything I have. I saved my money for a down payment on a house, I drive a used car I paid cash for, etc.

Now as for the tax code, I agree. We need a complete rewrite. I'm all for closing the "loop holes". I'm also in favor of social security becoming a "Lock Box" fund that's inaccessable for anything other than paying social security benifits (retirement and disability).

[Apoptosis]

don't you hate paying sales tax on a car that you bought used when the original owner already paid the sales tax when he drove it off the lot?

That is one thing about missouri that pisses me off every time I think about it...

[Sovereign]

When rich people and big corporations actually pay their freakin' taxes, then maybe they can complain. It's stuff like this that makes me mad. Even if it's only "one year" out of the 1998-2005 period, these companies do their business here, enjoy the protections (of property, speech, liberty, and a whole lot more) provided by the government, then don't pay for them. Taxes are the price we pay for civilized society (which includes the ability to do business). When these companies stop being able to avoid their taxes with loopholes, then I'll listen to the argument that the corporate tax rate is too high. Until then, I don't care what the "rate" is; if you're not paying anywhere near the rate, the rate doesn't mean squat (just like a price ceiling that is above the market clearing price or a price floor below the market clearing price).

Reminds me of a cartoon I saw in Dr. Seuss Goes to War showing a large man in a top hat and tails climbing through a large hole in the wall using the back of another man, who is telling a third (much smaller) man "G'wan small fry, you pay at the turnstile!" The large hole is labeled "Tax Exempt Securities Loophole for Rich." I think you could relabel the hole "Capital Gains Tax Cut for Rich" without a problem... (Sorry I couldn't find the image, but its posting would most likely violate copyrights blah blah blah). Get the book from your library, it certainly shows a different side of a man known for his children's literature.

While there are cases of "success" that didn't involve knowing the right person or being in the right place or even, more controversially, being the right race/sex/something else, much success is built on the backs of those who came before you, as well as connections you might have. To say that absolutely anyone in this country has an equal shot as things currently stand is bullcrap, in my estimation. Put everyone at the same starting line, then we can talk. Equality of opportunity is very important to me. If you are given a fair shot and waste it, however, then that's your fault. I'm not for "equality of outcome" in that sense.

[Skippman]

don't you hate paying sales tax on a car that you bought used when the original owner already paid the sales tax when he drove it off the lot?

That is one thing about missouri that pisses me off every time I think about it...

The only thing I hate more is when the goverment forces a dealer to move. Did you have about the deal with Saturn of West County? They used to be at the corner of 141 and Manchester. When you buy a car in MO the tax goes to your municipality of residence, not the municipality where the car was purchased. So if I live in Ballwin and buy a car in Manchester, Ballwin gets the tax not Manchester.

So Manchestered used eminant domain to force the Saturn dealer to move so they could build a HUGE mall like thing that would generate revenue for the city. Eminant domain is for building roads and water ways - things needed by the public - not economic development. So Manchester made them move just so they could have more taxes.

*Edited for spelling*

[Darkstar]

eminent domain is theft!

http://www.mo-cpr.org/

(Missouri Citizens for Property Rights)

[Alathald]

I know I'm a bit late into the foray but do you really think those people that make $250,000 actually pay even close to the same percentage? Because they have money they can afford to donate their car and write it off for far more than fair market value. Not to mention all the 'write-offs' for 'business meetings' which just turn out to be something like dinners with friends or family. It's just ironic to me that the richer you are, the easier it is to lower you're taxes through unscrupulous means. You think someone making under $10,000 a year could write off a 'business dinner' and get away with it? Doubt it...

For example, Warren Buffet (whose views I like for the most part) released a statement saying that because of loopholes and such (he doesn't have a professional accountant and stays away from so called 'tax shelters'), he paid a measly 17.7% of his income for 2006 ($48.1 million) in total federal taxes, while his employees paid 32.9% of theirs, despite making much less money. Here's an enlighten video and a short article: [video][article]

[hnzw_rui]

I know I'm a bit late into the foray but do you really think those people that make $250,000 actually pay even close to the same percentage? Because they have money they can afford to donate their car and write it off for far more than fair market value. Not to mention all the 'write-offs' for 'business meetings' which just turn out to be something like dinners with friends or family. It's just ironic to me that the richer you are, the easier it is to lower you're taxes through unscrupulous means. You think someone making under $10,000 a year could write off a 'business dinner' and get away with it? Doubt it...

I think you forgot to mention the write-offs for the Porsche, Bentley, Maserati, Lamborghini and Bugatti that they still use. Those are qualified business expenses.

[martini161]

its incredible how many ways disgustingly rich people find to get out of taxes. theres a mansion in my town (the guy who lives there makes 1mil+ ) and he gets out of all kinds of taxes by growing soybeans on one quarter of his property, so he can claim he is a farmer. disgusting!