What A Country!
Sometimes, I'm still struck by the power and majesty of America as the land of opportunity.
This is particularly true in these days when so many people are facing hard times, when so many find themselves set adrift because some greedy bankers in Manhattan or London invented some way of selling fantasies and pretty lies for billions of dollars to corporations and bankers around the world.
Still, here in America, there are some amazing stories of success. For example, the Louisana lawyer mentioned in this news story from ABC News:
See, I would have thought that if you were smart enough to make that kind of money, you'd understand how tax brackets work, and the concept of marginal tax rates. I bet, to earn that kind of money in Canada or Britain or Germany you would have to be able to figure out that it wasn't like crossing that threshold would affect how much you paid on the amount below. In some other country, you'd need the kind of smarts that would mean you'd automatically realize that the actual payment difference between $249,999 and $250,001 would be zero.
As a financial advisor explains:
But hey, this is America! This is a country where you can earn not only more money than most of the billions of people on the planet, but more than most of the millions of people in the country, without needing the wattage upstairs to understand any of that. It is still a great land of opportunity.
It's fascinating that such people have such high personal incomes, and are so fiercely devoted to not paying Obama's tax rate that they would willingly lose income, yet they are apparently unwilling to spend the relatively small amount it would take to hire someone like financial advisor Gary Schatsky, or an accountant, to figure out how to structure their finances to their advantage.
Maybe that's why I don't make the Big Bucks.
(Oh, by the way, do you think someone should tell these people the changes don't take effect until 2011, or should we just spend a couple years laughing at them earning less to avoid taxes they wouldn't be paying anyway?)
This is particularly true in these days when so many people are facing hard times, when so many find themselves set adrift because some greedy bankers in Manhattan or London invented some way of selling fantasies and pretty lies for billions of dollars to corporations and bankers around the world.
Still, here in America, there are some amazing stories of success. For example, the Louisana lawyer mentioned in this news story from ABC News:
A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.Imagine. We live in a country where someone SO STUPID can make a quarter of a million dollars a year! Incredible! What an amazing country we live in.
"We are going to try to figure out how to make our income $249,999.00," she said.
"We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama's tax plan," she added. "Why kill yourself working if you're going to give it all away to people who aren't working as hard?"
See, I would have thought that if you were smart enough to make that kind of money, you'd understand how tax brackets work, and the concept of marginal tax rates. I bet, to earn that kind of money in Canada or Britain or Germany you would have to be able to figure out that it wasn't like crossing that threshold would affect how much you paid on the amount below. In some other country, you'd need the kind of smarts that would mean you'd automatically realize that the actual payment difference between $249,999 and $250,001 would be zero.
As a financial advisor explains:
But Gary Schatsky, a financial advisor and the president of NY-based Objectiveadvice.com, said that reducing your income won't help a great deal because of the way the country's tax system is set up.Plus, it's not like they would get none of that last $100,000. They'd get just as much of it as they'd get back in the 90s, when, as I recall, rich people didn't find it a waste of time to go to whatever work was earning them millions of dollars. They wouldn't be "giving it all away" by any means. At worst, they would find it slightly harder, but certainly not impossible, to continue get richer after that first quarter-million.
"Just going over $250,000 doesn't mean it impacts your tax liability for every dollar before that," said Schatsky, "It impacts you at the margin."
Marginal or graduated tax systems like the one in the U.S. means only the money earned over a certain amount -- $250,000 in the case of Obama's proposal -- will be taxed at an increased percentage.
For instance, for a person earning $350,00, the first $250,000 of income would be taxed at lower tax rates, while the last $100,000 would be taxed at Obama's higher rate.
"Only the incremental earnings above [a quarter of a million dollars] are taxed at a higher rate," said Schatsky.
But hey, this is America! This is a country where you can earn not only more money than most of the billions of people on the planet, but more than most of the millions of people in the country, without needing the wattage upstairs to understand any of that. It is still a great land of opportunity.
It's fascinating that such people have such high personal incomes, and are so fiercely devoted to not paying Obama's tax rate that they would willingly lose income, yet they are apparently unwilling to spend the relatively small amount it would take to hire someone like financial advisor Gary Schatsky, or an accountant, to figure out how to structure their finances to their advantage.
Maybe that's why I don't make the Big Bucks.
(Oh, by the way, do you think someone should tell these people the changes don't take effect until 2011, or should we just spend a couple years laughing at them earning less to avoid taxes they wouldn't be paying anyway?)
posted by Paul at 6:53 PM |
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