BUCKNACKT'S SORDID TAWDRY BLOG
We should not be a journey to the grave with the intention of arriving safely in an attractive & well preserved body, but rather to skid in sideways, chocolate, bier or wein in hand, body thoroughly used up, totally worn out and screaming "WHOO-HOO, WHAT A RIDE!!!!!!"
NORTON META TAG
Showing posts with label capital gains tax. Show all posts
Showing posts with label capital gains tax. Show all posts
chris shristie is a liar. desperate to get back to the "grown up" stage for the next republican / tea-bagger debate he is resorting to flat out lies about the tax proposals of the Democratic presidential candidates. This from +PolitiFact sets the record straight.....
The Democrats plan "to raise your tax rates to 70 or 80 percent."
— Chris Christie on Tuesday, November 10th, 2015 in the fourth GOP undercard debate.
By Linda Qiu on Thursday, November 12th, 2015 at 11:25 a.m.
New Jersey Gov.
Chris Christie speaks during the Republican Presidential Debate
sponsored by Fox Business and the Wall Street Journal Nov. 10, 2015.
(Getty Images)
New Jersey Gov. Chris Christie may have gotten bumped to
undercard debate, but that didn’t deter him from aiming above the GOP
field and targeting the other side instead.
Don’t worry about his fellow Republican rivals, Christie said, worry
about the Democrats and Hillary Clinton, who is "coming for your
wallet."
"If anybody believes the stuff they heard from that Democratic debate a few weeks ago, there’s nothing for free," Christie said.
"What they forgot to tell was that they’re going to raise your tax
rates to 70 or 80 percent in order to provide all of that stuff." Severalofyou asked us to look into whether Clinton, Bernie Sanders and Martin O’Malley want to hike up taxes to 70 or 80 percent.
The Christie camp told us that it’s been widely reported that Sanders
"doesn’t flinch" over returning to a 90 percent top marginal tax rate.
But that’s not the same thing as a tax increase of 70 or 80 percent for
the average taxpayer (Christie earned a Pants on Fire
for his statement last debate that Sanders wants a 90 percent rate for
ordinary Americans). Nor does that prove that Clinton and O’Malley also
want a tax rate, top marginal or otherwise, of 70, 80 or 90 percent.
None of the three Democrats have released formal tax plans, but
spokespeople for Clinton and Sanders said Christie’s statement is
"ridiculous" and "completely false." Tax analysts also told us that
there’s nothing in what Clinton, Sanders and O’Malley have said so far
that suggest rates that high. The tax plans
Here’s what each candidate has proposed so far, according to analysis by the free market-oriented Tax Foundation and the nonpartisan Tax Policy Center, as well as our own research:
Clinton’s tax plan
Sanders’ tax plan
O’Malley’s tax plan
• Makes the higher education tax credit permanent and creates a credit for out-of-pocket health care costs
• Repeals the Cadillac tax in the Affordable Care Act
• Creates medium-term capital gains rates between 24 and 39.6
percent (current short-term rate is 39.6 percent and long-term rate is
20 percent)
• Creates a 15 percent tax credit for companies that share profits with workers
• Creates a high-frequency trading tax
• Eliminates carried interest loopholes
• Raises the top marginal income tax rate from 39.6 percent to above 50 percent
• Creates a net investment income surtax of 10 percent
• Raises capital gains and dividends tax rates to the level of income taxes
• Raises the top estate tax rate from 40 percent to 65 percent (estates under $3.5 million would be exempt)
• Repeals the Cadillac tax in the Affordable Care Act
• Raises the payroll tax of 12.4 percent to 12.8 percent
• Eliminates deferral on foreign income
• Creates a $20 per ton carbon tax
• Creates a financial transaction tax
• Creates a Wall Street speculation tax
• Eliminates the cap on Social Security taxes
• Repeals the Cadillac tax in the Affordable Care Act
• Creates a financial transaction tax
Compared to the Republicans’ tax plans,
the Democrats’ proposals are less detailed and make minor changes to
the current system, said the Tax Policy Center’s Roberton Williams. He
and other experts emphasized that no Democrat has offered a detailed tax
plan with specific rates, let alone rates as high as Christie says.
"It does not seem likely that the Democratic candidates intend to
levy very high rates on the median American household," said Scott
Greenberg, an analyst with the Tax Foundation.
"Christie’s claim is more of a statement of ‘there’s no such thing as
free lunch,’ " observed Bill Smith, the managing director of the tax
consulting firm CBIZ MHM, adding, "But I don’t think any of one of (the
Democrats) in their wildest dreams would raise taxes to 70 or 80 percent
across the board." Not exactly ‘your tax rates’
Both Greenberg and the Williams pointed out that it’s plausible that
the Democratic candidates would increase the rate on top earners. But
that’s not the same thing as raising "your tax rates to 70 or 80
percent."
"It may be necessary to raise top individual tax rates to levels such
as 70 or 80 percent to fund Democratic candidates’ spending proposals
without increasing the deficit or taxing middle- and low-income
Americans," he said, referring us to a Wall Street Journalanalysis of the price tag of Sanders’ proposals.
As we’ve previouslynoted,
Sanders has said he doesn’t think a top marginal tax rate of 90 percent
would be too high. And he’s specifically proposed to raise the top rate
from its current rate of 39.6 percent to above 50 percent. In other
words, for individuals making more than $400,000 a year (roughly the threshold
for the top 1 percent of incomes), any amount they make above $400,000
would be taxed at 50 percent. The income earned below $400,000 is taxed
at lower rates.
Sanders has also proposed to raise the top estate tax to 65 percent,
which would affect estates worth more than $1 billion (there are 537 individuals with that much wealth in the United States today).
Again, both of those top rates would affect just a tiny fraction of
Americans. Sanders’ proposal to increase the federal payroll tax from
12.4 to 12.8 percent would hit everyone — but that’s nowhere near 70 or
80 percent.
Clinton and O’Malley, for their parts, haven’t said anything specific
about raising income or estate tax rates. But like Sanders, their
proposals would mostly affect the wealthy and still not at the levels
Christie is suggesting.
Take for example, Clinton’s proposal to raise taxes on capital gains,
the profits that come from selling an asset like a stock or property.
In 2014, 42 percent of these investments, about $305 billion out of $722
billion, came from the top 0.1 percent, reported PolitiFact Virginia.
Currently, the short-term rate is 39.6 percent (the same as income),
but it decreases to 20 percent once you’ve held on to that stock for
longer than a year. Clinton’s plans adds four additional brackets
for investments held between one and six years. The highest rate
proposed by Clinton, 39.6 percent, still doesn’t come close to
Christie’s purported 70 or 80 percent. Our ruling
Christie said the Democrats plan "to raise your tax rates to 70 to 80 percent."
We understand the spirit of Christie’s statement, but that doesn’t
make it accurate. None of the three Democrats running have proposed
raising rates to 70 or 80 percent for the average taxpayer or is it
likely that they will. Christie is exaggerating the rate hikes proposed
by the Democrats, the amount of people they’ll affect or both.
We rate Christie’s claim False.
PRACTICAL PROGRESS NEWSLETTER from the Agenda Project, reports from the world of Bold Progressive activism....
Back by popular demand, today we bring you the inaugural issue of our re-imagined Practical Progress newsletter which offers influential progressives a now-weekly, smart, insightful, actually ‘brief’ briefing on the most important News From The Movement.
As we continue our collective Road Trip to Progress (Are we there yet?! Are we there yet?!), we remind ourselves that a journey of 1,000 miles is . . .really, really, long; irritatingly slow; and only has so-so scenery.
So to pass the time we re-read (for the 912th time) Anne Lamott’s Instructions on Writing and Life, taking comfort in her words:
"Thirty years ago my older brother, who was ten years old at the time, was trying to get a report on birds written that he'd had three months to write. It was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books on birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother's shoulder, and said, 'Bird by bird, buddy. Just take it bird by bird.'"
These are our favorite Birds.
PRACTICAL PROGRESS: The Agenda Project Action Fund’s actually ‘brief’ briefing on the most important News from the Progressive Movement.
All You Need is a Gun License to Vote
Yesterday, Center for American Progress published a five-point primeron why protecting Section 5 of the Voting Rights Act during the Supreme Court’s hearing of Shelby County v. Holder on Feb 27th is critical for preventing voter-suppression laws from rising up in 16 states. Section 5 requires states with historically discriminatory voting practices to seek 'pre-clearance' with the DOJ or a three-judge court in DC before making any legal changes to their voting laws. Highlight from CAP’s primer:without Section 5, Texas would have considered concealed handgun licenses a valid form of voter ID, but not college or state employee IDs. (For more progressive substance on Section 5 this month, check out these pieces from:Brennan Center for Justice, American Constitution Society, Lawyer’s Committee on Civil Rights, Color of Change, Asian American Legal Defense and Education Fund,America Votes, and NAACP).
A new Citizens for Tax Justice report shows that while Facebook will not be paying any federal or state taxes this year in spite of turning over $ 1.1 billion in profits, it is expecting to get $429 million back in net tax refunds. In a footnote on Facebook’s January financial statements, CTJ found that the company’s half a billion dollar refunds result from taking advantage of a single (and legal) corporate tax break: the tax deductibility of executive stock options. CTJ’sRebecca Wilkins, Senior Counsel on Federal Tax Policy, says: “Why does the company get to take a deduction for stock option compensation, when it didn't cost them a dime? If Mark Zuckerberg won the lottery tomorrow, would we expect Facebook to get a tax deduction for his winnings? Stock options have pretty much the same impact on a company's income as do lottery winnings."In a similar report last year, CTJ identified the stock option tax break as one of the reasons why Fortune 500 companies pay so little taxes. (See CTJ’s Facebook report inBusinessWeek, Gawker, and The Atlantic).
Fox News prime-time hosts and their guests have used the terms ‘Illegals,” “Illegal Aliens,” and “Anchor Babies” 99 times since the election, even though these terms are banned on Fox News’ website for Latinos, according to a new Media Matters research analysis released on Tuesday. In an interview with The New Republic a few days ago, Fox President Roger Ailes admitted that Fox News really needs to find a new message on immigration.
Presente’s Movement Building Director Ana Perez says: “Fox can't have it both ways, loving Latinos on Fox Latino and hating Latinos on Fox in English. If Fox really wants to enter the Latino media market in a serious way, Roger Ailes needs to steer the network away from racial profiling and immigrant scapegoating. The Latino community knows this about Fox and we don't appreciate it. As the Univision-ABC Latino venture and other new Latino media initiatives indicate, you either lose the bigotry or lose the Latino market.”
On Monday, American Bridge launched a websiteoutlining passages that are “extreme by any standards” from VA Attorney General and aspiring Governor Ken Cuccinelli’s new book, The Last Line of Defense. According to the most overtly partisan Attorney General in Virginia history: “Carbon dioxide and other greenhouse gases like methane were pollutants dangerous to public health because they allegedly caused global warming. Yet carbon dioxide is what we exhale every second of the day. It keeps the trees alive and allows them to make the oxygen that keeps us alive. It’s a wonderful symbiotic system that sustains life on earth. But to environmentalists, carbon dioxide is a slow killer” (p10). *See also:American Bridge’s Part-Time Cuccinelli video and Planned Parenthood Action Fund’s Keep Ken Out, which MIGHT explain this from WaPo:“Democrats urge sales of Cuccinelli Book” (h/t The Atlas Project). Update: HuffPo reports Terry McAuliffe and Ken Cuccinelli are running dead even in the polls today – yikes!
JUST RELEASED:
The League of Conservation Voters launched a new Environmental Scorecard revealing whether members of Congress stood with the people or polluters last year. According to LCV President Gene Karpinski: “This was hands down, the most anti-environmental House of Representatives ever.”
Advancement Project launched a new website to end the Schoolhouse to Jailhouse Track. Must-read: The Top 12 Reasons to end the School-to-Prison Pipeline. (If you haven’t already, check out these awesome pictures of Advancement Project Co-Director Judith Browne-Dianis with Michelle Obama’s special SOTU guest, 102-year old Desiline Victor and Practical Progress’2012 MDV (‘Most Determined Voter’).
Americans for Financial Reform issued a letter last week criticizing 43 Senate Republicans for attempting to filibuster Richard Cordray’s appointment to Director of the Consumer Financial Protection Bureau. Lending full support to Cordray’s nomination, the letter accosts Republicans for exercising “extreme political brinkmanship of refusing to consider a well qualified nominee in order to extract changes in the law,” adding that their effort to block Cordray in order to “relitigate policies would hold hostage not just the CFPB director, but the future well-being of consumers, financial markets, and the economy.”
Email tips, news, and reactions to Practical Progress Editor, Shruti Sehgal at ssehgal@agendaproject.org (and add her email to your safe-list).
Make sure you SUBSCRIBE to our Practical Progress Newsletter. (We only send one newsletter per week. Trust us, it’s worth it).
Today's QOTD comes from Stephen Breitstone,
co-head of the taxation and wealth preservation group at Meltzer,
Lippe, Goldstein & Breitstone LLP, commenting on one of the tax
avoidance schemes that Mitt Romney used in the $100 million trust he set
up for his children and grandchildren:
It’s going to be harder to do tax planning in the future. He’s bringing attention to things that weren’t getting attention.
This comes from a Bloomberg story about Romney's use of an "I Dig It"
trust, which Breitstone says is so important to the wealthy that ending
its tax benefits "would put an end to much of estate planning as we
know it." Here's how it works:
The person setting up the trust, like Romney, contributes assets such
as an interest in a fund or shares in a company. If he makes that
contribution before those assets appreciate — particularly when they are
privately held and difficult to value — he can claim the gift tax
obligation is low or non-existent since the declared value is low or
zero.
If the trust generates any income — such as by selling stock — the
eventual tax bill is the responsibility of Romney, not the trust. By
paying the capital gains tax, which was 20 percent in the late 1990s and
is now 15 percent, he can avoid depleting the funds in the trust — in
essence making an additional donation that’s free of gift taxes....Gains
in the trust for Romney’s heirs remain free of gift taxes and potential
estate taxes.
Very cool, no? First, Romney undervalues the assets he puts into the
trust so he owes little or no gift tax. Then, later, when the assets
appreciate, he pays only the capital gains tax, which is considerably
lower than the gift tax. And to make it even better, he pays the capital
gains tax out of his own pocket, so the trust owes nothing. It's like
making a second gift to his kids free and clear.
Bloomberg says Romney did this with some DoubleClick shares he got in
1997, back when he was CEO of Bain Capital, but that's undoubtedly just
the tip of the iceberg. The DoubleClick payday amounted to a piddling
$674,000 out of a trust worth over $100 million. Sadly for our nation's
ultra-wealthy, though, the spotlight Romney is shining on stuff like
this might spur Congress to close some of these loopholes. Maybe.
THERE is a serious threat to democracy, freedom and the nation if newt gingrich(k) is the gop / tea-bagger nominee for president. He is a racist, a liar, a neo-con extreme right winger controlled by the interest of the rich, the greed of corporate America and by powerful, dangerous members of the military-industrial complex. His mastery of propaganda and manipulation of the ignorance of the white electorate is frightening, these skills present the greatest threat to the unity of the nation, recovery from the recession and the re-election of Pres Obama. To discount him a buffoon is a mistake, and the Democratic Party has to be ready to challenge him. This from HuffPost......
Republicans are worried sick about Newt Gingrich's ascendance, while Democrats are tickled pink.
Yet no responsible Democrat should be pleased at the prospect that Gingrich could get the GOP nomination. The future of America is too important to accept even a small risk of a Gingrich presidency.
The Republican worry is understandable. "The possibility of Newt Gingrich being our nominee against Barack Obama I think is essentially handing the election over to Obama," says former Minnesota Governor Tim Pawlenty, a leading GOP conservative. "I think that's shared by a lot of folks in the Republican party."
Pawlenty's views are indeed widely shared in Republican circles. "He's not a conservative -- he's an opportunist," says pundit Joe Scarborough, a member of the Republican Class of 1994 who came to Washington under Gingrich's banner. Gingrich doesn't "have the temperament, intellectual discipline or ego control to be either a successful nominee or president,"says New York Republican representative Peter King, who hasn't endorsed any candidate. "Basically, Newt can't control himself."
Gingrich is "an embarrassment to the party," says New Jersey Republican Governor Chris Christie, and "was run out of the speakership" on ethics violations. Republican strategist Mike Murphy says "Newt Gingrich could not carry a swing state in the general election if it was made of feathers."
"Weird" is the word I hear most from Republicans who have worked with him. Scott Klug, a former Republican House member from Wisconsin, who hasn't endorsed anyone yet, says "Newt has ten ideas a day -- two of them are good, six are weird and two are very weird."
Newt's latest idea, for example -- to colonize the moon -- is typically whacky.
The Republican establishment also points to polls showing Gingrich's supporters to be enthusiastic but his detractors even more fired up. In the latest ABC News/Washington Post poll, 29 percent view Gingrich favorably while 51 percent have an unfavorable view of him. (Obama, by contrast, draws a 53 percent favorable and 43 percent unfavorable.)
Independents, who will be key to the general election, are especially alarmed by Gingrich.
As they should be. It's not just Newt's weirdness. It's also the stunning hypocrisy. His personal life makes a mockery of his moralistic bromides. He condemns Washington insiders but had a 40-year Washington career that ended with ethics violations. He fulminates against finance yet drew fat checks from Freddie Mac. He poses as a populist but has had a $500,000 revolving charge at Tiffany's.
And it's the flagrant irresponsibility of many of his propositions -- for example, that presidents are not bound by Supreme Court rulings, that the liberal Ninth Circuit court of appeals should be abolished, that capital gains should not be taxed, that the First Amendment guarantees freedom "of" religion but not "from" religion.
It's also Gingrich's eagerness to channel the public's frustrations into resentments against immigrants, blacks, the poor, Muslims, "liberal elites," the mainstream media, and any other group that's an easy target of white middle-class and working-class anger.
These are all the hallmarks of a demagogue.
Yet Democratic pundits, political advisers, officials and former officials are salivating over the possibility of a Gingrich candidacy. They agree with key Republicans that Newt would dramatically increase the odds of Obama's reelection and would also improve the chances of Democrats taking control over the House and retaining control over the Senate.
I warn you. It's not worth the risk.
Even if the odds that Gingrich as GOP presidential candidate would win the general election are 10 percent, that's too much of a risk to the nation. No responsible American should accept a 10 percent risk of a President Gingrich.
I'd take a 49 percent odds of a Mitt Romney win -- who in my view would make a terrible president -- over a 10 percent possibility that Newt Gingrich would become the next president -- who would be an unmitigated disaster for America and the world.
Republicans are worried sick about Newt Gingrich's ascendance, while Democrats are tickled pink.
Yet no responsible Democrat should be pleased at the prospect that Gingrich could get the GOP nomination. The future of America is too important to accept even a small risk of a Gingrich presidency.
The Republican worry is understandable. "The possibility of Newt Gingrich being our nominee against Barack Obama I think is essentially handing the election over to Obama," says former Minnesota Governor Tim Pawlenty, a leading GOP conservative. "I think that's shared by a lot of folks in the Republican party."
Pawlenty's views are indeed widely shared in Republican circles. "He's not a conservative -- he's an opportunist," says pundit Joe Scarborough, a member of the Republican Class of 1994 who came to Washington under Gingrich's banner. Gingrich doesn't "have the temperament, intellectual discipline or ego control to be either a successful nominee or president,"says New York Republican representative Peter King, who hasn't endorsed any candidate. "Basically, Newt can't control himself."
Gingrich is "an embarrassment to the party," says New Jersey Republican Governor Chris Christie, and "was run out of the speakership" on ethics violations. Republican strategist Mike Murphy says "Newt Gingrich could not carry a swing state in the general election if it was made of feathers."
"Weird" is the word I hear most from Republicans who have worked with him. Scott Klug, a former Republican House member from Wisconsin, who hasn't endorsed anyone yet, says "Newt has ten ideas a day -- two of them are good, six are weird and two are very weird."
Newt's latest idea, for example -- to colonize the moon -- is typically whacky.
The Republican establishment also points to polls showing Gingrich's supporters to be enthusiastic but his detractors even more fired up. In the latest ABC News/Washington Post poll, 29 percent view Gingrich favorably while 51 percent have an unfavorable view of him. (Obama, by contrast, draws a 53 percent favorable and 43 percent unfavorable.)
Independents, who will be key to the general election, are especially alarmed by Gingrich.
As they should be. It's not just Newt's weirdness. It's also the stunning hypocrisy. His personal life makes a mockery of his moralistic bromides. He condemns Washington insiders but had a 40-year Washington career that ended with ethics violations. He fulminates against finance yet drew fat checks from Freddie Mac. He poses as a populist but has had a $500,000 revolving charge at Tiffany's.
And it's the flagrant irresponsibility of many of his propositions -- for example, that presidents are not bound by Supreme Court rulings, that the liberal Ninth Circuit court of appeals should be abolished, that capital gains should not be taxed, that the First Amendment guarantees freedom "of" religion but not "from" religion.
It's also Gingrich's eagerness to channel the public's frustrations into resentments against immigrants, blacks, the poor, Muslims, "liberal elites," the mainstream media, and any other group that's an easy target of white middle-class and working-class anger.
These are all the hallmarks of a demagogue.
Yet Democratic pundits, political advisers, officials and former officials are salivating over the possibility of a Gingrich candidacy. They agree with key Republicans that Newt would dramatically increase the odds of Obama's reelection and would also improve the chances of Democrats taking control over the House and retaining control over the Senate.
I warn you. It's not worth the risk.
Even if the odds that Gingrich as GOP presidential candidate would win the general election are 10 percent, that's too much of a risk to the nation. No responsible American should accept a 10 percent risk of a President Gingrich.
I'd take a 49 percent odds of a Mitt Romney win -- who in my view would make a terrible president -- over a 10 percent possibility that Newt Gingrich would become the next president -- who would be an unmitigated disaster for America and the world.
GOT this e mail from a friend who wanted to know if it is true or not. Here is the link to the Snopes page on it http://www.snopes.com/politics/taxes/realestate.asp Too bad more people aren't like her and be responsible enough to check things out before forwarding something that is deceptive, misleading and actually works against their own best interest. Their voluntary ignorance ends up hurting themselves, how stupid is that? Check this out and then click the link and get the truth from Snopes....
The National�Association of REALTORS is all over this and working to get it repealed, before it takes effect.� But, I am very pleased we aren't the only ones who know about this ploy to steal billions from unsuspecting homeowners.� How many REALTORS do you think will vote Democratic in 2012?� Did you know that if you sell your house after
2012 you will pay a 3.8% sales tax on it?� That's $3,800 on a $100,000 home, etc.� When did this happen?� It's in the health care bill and goes into effect in 2013.� Why 2013?� Could it be to come to light AFTER the 2012 elections?� So, this is "change you can believe in"?
Under the new health care bill all real estate transactions will be subject to a 3.8% Sales Tax.� If you sell a $400,000 home, there will be a $15,200 tax.� This bill is set to screw the retiring generation who often downsize their homes.� Does this make your November and 2012 vote more important?� Oh, you weren't aware this was in the Obamacare bill?� Guess what, you aren't alone.� There are more than a few members of Congress that aren't aware of it either.� http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home�
�
I hope you forward this to every single person in your address book.��VOTERS NEED TO KNOW.�
Real Estate Tax
Claim: A provision of health care legislation creates a 3.8% Medicare tax on real estate transactions.
MIXTURE OF TRUE AND FALSE INFORMATION:
FALSE: Health care legislation imposes a 3.8% tax on all home sales.
TRUE: Health care legislation imposes a 3.8% transaction tax on profits over the capital gains threshold.
Example:[Collected via e-mail, April 2010]
3.8% tax on real estate transactions
Under the new health care bill - did you know that all real estate transactions are subject to a 3.8% "Sales Tax"?
You can thank Nancy, Harry & Barack (and your local Congressmen) for this one.
If you sell your $400,000 home, this will be a $15,200 tax.
Remember Obama’s battle cry — take from the workers and give to the drones.
TAX ON HOME SALES
Imposes a 3.8 percent tax on home sales and other real estate transactions.
Middle-income people must pay the full tax even if they are "rich" for only one day — the day they sell their house and buy a new one.
Origins: One of the provisions of the recently passed Patient Protection Affordable Care Act (PPACA) health care legislation calls for high-income households to be subject to a new 3.8% Medicare tax on investment income starting in 2013:
The PPACA creates a new Code Section 1411, which will generally impose a 3.8 percent tax on the lesser of "net investment income" or the excess of modified adjusted gross income over a "threshold amount" (generally, $250,000 for taxpayers filing a joint return, $125,000 for married taxpayers filing a separate return and $200,000 in all other cases). Net investment income generally means the excess of (i) interest, dividends, annuities, royalties, rents, income from passive activities, income from trading financial instruments and commodities, and gain from the disposition of certain non-business property, over (ii) allowable deductions properly allocable to such income. In determining the amount of net investment income, special rules apply with respect to dispositions of equity interests in certain partnerships and S corporations, and to distributions from certain qualified plans. This additional tax applies to taxable years beginning after December 31, 2012.
This is a complicated section of a complicated piece of legislation, and the 3.8% Medicare tax has been frequently misreported as amounting to a 3.8% "sales tax" on all real estate transactions. This is incorrect: the Medicare tax is not a sales tax, nor does it apply to all real estate transactions; it is a tax on investment income (income which may or not derive from the sale of property) for persons who earn more than the amounts specified in the bill: As Sara Orrange, Government affairs director of the Spokane Association of Realtors noted in response to a repetition of the "sales tax" rumor in the Spokane Spokesman-Review:
In his recent guest column regarding the impact of the health care bill, Paul Guppy of the Washington Policy Center claimed that a 3.8 percent tax on all home sales was a part of the recently passed legislation. This is inaccurate and needs to be corrected. The truth about the bill is that if you sell your home for a profit above the capital gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the additional 3.8 percent tax on any gain realized over this threshold.
Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made. This tax is aimed at so-called "high earners" — if you do not fall into that category you will not pay any extra taxes upon the sale of your home.
(In other words, a couple who sold their home would be subject to the 3.8% tax only if they made a profit of at least $500,000 on the sale, and the tax would apply only to the portion of that profit in excess of $500,000.)
The referenced tax is therefore not a tax on all real estate sales; it is an investment income tax which could result in a very small percentage of home sellers paying additional taxes on home sales profits over a designated threshold amount. In short, if you're a "high earner" and you sell your home at a substantial profit, you might be required to pay an additional 3.8% tax. However, given that the existing home sale capital gains exclusion on a principal residence ($250,000 allowable gain for individuals, or $500,000 for couples) still stands and no Medicare tax will apply for gains within those limits, that the bill's definition of "high earners" encompasses less than 5 percent of all taxpayers, and that the median sales price of existing single-family homes in the U.S. was only $170,700 in March 2010, the Medicare tax will likely affect only a small percentage of home sellers when it is implemented in 2013.
THE rich get richer and the rest of us struggle along trying to make ends meet.....so why are so many of the 99% supporting gop / tea-bagger candidates who want to keep the status quo? From Mother Jones...
While we're all waiting for the Iowa straw poll to finish up, here are some new income inequality charts for you to munch on. These come from a new CRS report, and the first one shows where most of us get our income. For 80% of us, the answer is: almost all of it comes from ordinary wages and salaries. We get a grand total of 0.7% of our income from dividends and capital gains.
For the top 0.1%, it's flipped around. They get less than 20% of their income from ordinary wages and more than half from dividends and capital gains. So when Republicans eagerly insist on reducing or eliminating taxes on dividends and capital gains, this chart shows you who benefits. Most of us get nada, but the very rich benefit handsomely.
Got that? Onward, then. This next chart comes from Jared Bernstein, based on the same CRS report, and it shows how various kinds of income contributed to growing income inequality between 1996 and 2006. Overall, America's Gini coefficient, which measures income inequality, increased by 0.057 points between 1996 and 2006. Of that increase, most comes from dividends and capital gains, which became a higher percentage of the pay of the rich, and taxes, which went down a lot for rich people.
There's more detail at the link, but you get the picture. For the rich, the amount of their income that comes from capital gains went up, while the taxes they paid on their capital gains went down. As a result, income inequality zoomed ever higher. Pretty sweet deal, no?
FOR those of those who are stupid enough to support newt gingrich(k)'s campaign for president, an analysis of his tax plan for the nation....
Newt Gingrich has done it again. With his new tax plan he has raised the bar from irresponsibility to recklessness.
Every dollar estimate I'm about to share with you comes from the independent, non-partisan Tax Policy Center -- a group whose estimates are used by almost everyone in Washington regardless of political persuasion.
First off, Newt's plan increases the federal budget deficit by about $850 billion -- in a single year!
To put this in perspective, most forecasts of the budget deficit cover ten years. The elusive goal of the White House and many on both sides of the aisle in Congress is to reduce that ten-year deficit by 3 to 4 trillion dollars.
Newt goes in the other direction, with gusto. Increasing the deficit by $850 billion in a single year is beyond the wildest imaginings of the least responsible budget mavens within a radius of three thousand miles from Washington.
Imagine what Standard & Poor's or Moody's or Fitch would do if it became law. We'd go directly from a triple-A credit rating to triple X -- the veritable porn star of fiscal mayhem. Interest on our debt would become larger than most of the rest of the budget.
Most of this explosion of debt in Newt's plan occurs because he slashes taxes. But not just anyone's taxes. The lion's share of Newt's tax cuts benefit the very, very rich.
That's because he lowers their marginal income tax rate to 15 percent -- down from the current 35 percent, which was Bush's temporary tax cut; down from 39 percent under Bill Clinton; down from at least 70 percent in the first three decades after World War II. Newt also gets rid of taxes on unearned income -- the kind of income that the super-rich thrive on -- capital-gains, dividends, and interest.
Under Newt's plan, each of the roughly 130,000 taxpayers in the top .1 percent -- the richest one-tenth of one percent -- reaps an average tax cut of $1.9 million per year. Add what they'd otherwise have to pay if the Bush tax cut expired on schedule, and each of them saves $2.3 million a year.
To put it another way, under Newt's plan, the total tax bill of the top one-tenth of one percent drops from around 38 percent of their income to around 10 percent.
What about low-income households? They get an average tax cut of $63 per year.
Oh, I almost forgot: Newt also slashes corporate taxes.
I'm not making this up.
This might be amusing if Newt were just being old Newt -- if this were another infamous hot-air bubble emerging from an always provocative, sometimes clever, often bizarre mind.
But it's the tax plan of the leading candidate for president of one of the two major political parties of the United States.
And it comes at a time when America's super rich are raking in a larger portion of total income and wealth than at any time over the last eighty years, and when their marginal taxes are lower than they've been in three decades; a time when the nation's long-term budget deficit is causing cuts in education and infrastructure which will impair our future and that of our children, and when safety nets and social services are being slashed.
Can Newt get away with this?
Probably -- because his plan also comes at a time when Americans are so cynical about the major institutions of our society that someone who offers huge, outrageous plans holds a special fascination: The whole system is so awful, people tell themselves, why not just jettison everything and start from scratch? Let's throw caution to the winds and do something really big -- even if it's colossally stupid.
This is why the more outrageous Newt can be, the better his polls. The more irresponsible his bomb-throwing, the more attractive he becomes to a sizable portion of Americans so fed up they feel like throwing bombs.
History is full of strong men with dangerous ideas who gain power when large masses of people are so desperate and disillusioned they'll follow anyone who offers big, seemingly easy solutions.
At times like this a nation must depend on its wise elders -- people who have gained a reputation for good judgment and integrity, and who are broadly respected by all sides regardless of political affiliation or ideology -- to call out the demagogues, speak the truth, and restore common sense.
The great tragedy of America today is the paucity of such individuals when we need them the most. Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
I wish the gop and tea-baggers were offering a credible slate of candidates and had a serious front runner to challenge Pres Obama for the presidency. Unfortunately their primary choices are creeps or clowns, some both, and so Obama may not feel enough pressure to listen to the majority of Americans who want the rich to pay more in taxes on their income and capital gains, who want corporate tax loopholes closed, who want the government to be more involved in reviving the American economy and ending this recession. Yet the opposition's candidates may be more of a threat than Obama's campaign wants to admit because if the President doesn't heed the advise of people like Robert Reich in this article then enough good people may not vote to reelect him next November, or may cast protest votes for third party candidates or for the gop/teabagger candidate. The American people don't just need the President to commit to the principles and policies offered in this article if he is elected for a second term, we need concrete action on them starting now to prove he represents the entire nation and not just the 1%.
Mr. President, we heard what you said last week in Kansas -- about the dangers to our economy and democracy of the increasing concentration of income and wealth at the top.
We agree. And many of us are prepared to work our hearts out to get you reelected -- as long as you commit to doing what needs to be done in your second term:
-- Raise the tax rate on the rich to what it was before 1981. The top 1 percent has an almost unprecedented share of the nation's wealth and income yet the lowest tax rate in 30 years. Meanwhile, America faces colossal budget deficits that have already meant devastating cuts in education, infrastructure, and the safety nets we depend on. The rich must pay their fair share. Income in excess of $1 million should be taxed at 70 percent -- the same rate as before 1981.
-- Raise capital gains taxes to the same level. It's absurd that the 400 richest Americans -- whose wealth exceeds the wealth of the bottom 150 million Americans put together -- should pay an average 17 percent tax on their incomes, the rate day laborers and child-care workers pay. That's because so much of the income of the super-rich is considered capital gains, now taxed at only 15 percent. Close this loophole.
-- Tax financial transactions. A tiny tax on every financial deal would yield billions of dollars more. It would also slow speculators and reduce the wild gyrations of financial markets.
-- Use the bulk of this money to create good schools, give our kids access to a college education, and build a world-class infrastructure, so all our children have a chance to get ahead.
-- Resurrect the Glass-Steagall Act, that used to separate commercial from investment banking. It was put in place after the Great Crash of 1929 to prevent financiers from gambling with peoples' bank deposits. But it was repealed in 1999 -- and its repeal contributed to the Crash of 2008. Wall Street lobbyists have made sure the new Dodd-Frank law has enough loopholes to allow financiers to continue to gamble with other peoples' money. The only way to stop this is to bring Glass-Steagall back.
-- Cap the size of Wall Street's biggest banks and break up the biggest. They were too big to fail before the bailout. They're even bigger now. And because of their huge size they get preferential treatment from the Fed, giving them an even greater competitive advantage over smaller banks. Cap their size and break them up before we have to bail them out again.
-- Require the big banks that got bailed out to modify the mortgages of millions of Americans now under water, who owe more than their homes are worth. It's not their fault the banks created a housing bubble that burst, causing home values to plummet.
Mr. President, we know nothing good happens in Washington unless good people outside Washington are organized and mobilized to make it happen.
So here's the deal: We'll reelect you. We'll stand behind you. We'll give you a mandate to do all this -- and more -- in your second term.
As long as you stand behind us.
Deal? Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
GEE, here's a big surprise...the only satisfaction in this proposal is so many of those stupid, ignorant, prejudiced lower income tea-baggers that voted for the republicorp republican and tea-bagger candidates are going to be paid back for their actions, their votes....to bad their children are going to suffer too....
The deal to extend the Bush-era tax cuts for two years includes a bevy of additional credits and deductions that will reduce the burden on nearly all households.
But the tax benefits will flow most heavily to the highest earners, just as the original cuts did when they were passed in 2001 and 2003. At least a quarter of the tax savings will go to the wealthiest 1 percent of the population.
The tentative deal includes a two-year patch for the alternative minimum tax, a reduction in the payroll tax and a plan to reinstate the estate tax with lower rates and higher exemptions than in 2009 — all of which will offer far more savings for high earners than those in the low- or middle-income bracket.
The wealthiest Americans will also reap tax savings from the proposal’s plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.
And negotiators have agreed that the estimated $900 billion cost of the cuts will simply be added to the deficit — not covered by reductions in spending or increases in other taxes. That is good news for hedge fund managers and private equity investors, who appear to have withstood an effort to get them to pay more by eliminating a quirk in the tax code that allows most of their income to be taxed at just 15 percent.
In fact, the only groups likely to face a tax increase are those near the bottom of the income scale — individuals who make less than $20,000 and families with earnings below $40,000.
“It’s going to look like the rich are getting richer again,” said Anne Mathias, an analyst for MF Global Inc.
In the agreement, which breaks a campaign pledge to eliminate some tax breaks for the top 2 percent of American earners, President Obama won a few concessions from Republicans, including a 13-month extension in government benefits for the long-term unemployed. After several extensions, the maximum has been 99 weeks.
The administration also succeeded in extending several of the tax credits in last year’s stimulus plan to aid low- and moderate-income Americans: the earned-income tax credit, the child credit, the child and dependent-care credit and the tuition deduction.
As a result, families with an income near the median of $55,000 would owe about $2,700 less in taxes than if the Bush-era cuts had been allowed to expire.
A two-income couple earning $146,000 would owe about $7,000 less than if the tax cuts were allowed to expire, and about $3,400 less than they did in 2009.
The proposal does not include an extension of Mr. Obama’s signature tax cut, the Making Work Pay credit, which provided a credit of up to $400 for individuals and $800 for families of low and moderate income. Instead, the plan creates a one-year reduction in Social Security payroll taxes, which are generally levied on the first $106,800 of income. For an individual earning $110,000, that provision would reduce payroll taxes by $2,136.
Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit.
“It will come to a few dollars a week,” said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, “but it is an increase.”
To the wealthiest Americans, however, an assortment of breaks is available.
The plan includes a two-year “patch” for the alternative minimum tax, which is now paid by about 4 million taxpayers with income in the mid- to high six figures. Without the patch, more than 20 million additional taxpayers would have been liable for that tax.
The estate tax — which was allowed to lapse this year and was scheduled to resume at a rate of 55 percent on most assets above $1 million — will be reinstated under less onerous terms. Estates over $5 million will be subject to a 35 percent tax.
The proposal will also maintain the current rates on dividends and capital gains, averting scheduled increases to ordinary income and 20 percent, respectively.
The marginal tax rate on high incomes will also remain unchanged. The top brackets had been scheduled to increase to 36 percent and 39.6 percent, from 33 percent and 35 percent.
Under Mr. Obama’s failed proposal, which would have raised the rates on income over $250,000 for families and $200,000 for individuals, the taxpayers at the top 1 percent of the income scale — those with incomes above $564,000 — would have received an average tax break of $28,000. Under the agreement reached with Republicans, the top 1 percent will receive breaks of about $70,000.
http://www.huffingtonpost.com/2010/12/07/tax-cut-compromise-whose-taxes-rise_n_793572.html
You know, with all the talk about who is mad at President Barack Obama and who stands to win or lose what election over this tax-cut deal, not as much attention has been paid to the practical beneficiaries of the deal. Well, over at The New York Times tonight, David Kocieniewski's got the hard numbers, and finds that the deal is actually a very good one, as long as one or more of the following terms describes you:
--"the highest earners"
--"the wealthiest 1 percent of the population"
--"the wealthiest Americans"
--"hedge fund managers and private equity investors"
--"an individual earning $110,000"
--"4 million taxpayers with income in the mid- to high six figures"
--"Estates over $5 million"
To those of you who fit the descriptions above, congratulations! Really, is anyone not making out like a bandit, with this tax-cut compromise?
In fact, the only groups likely to face a tax increase are those near the bottom of the income scale -- individuals who make less than $20,000 and families with earnings below $40,000.
There's probably a way of looking at this that doesn't make it seem so bad, right?
Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit. "It will come to a few dollars a week," said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, "but it is an increase."
No worries! Poor people don't create jobs, anyway, I hear.
