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"Tax cuts are going to keep being a boon to the shareholder class

The stock market’s rally was the tell.

... it is clear that the shareholder class will be the largest beneficiary of this overhaul to the tax code. This continues a theme we’ve seen since the election — shareholders winning.

Bank of America Brian Moynihan said “most of the benefits” from tax cuts “will flow to the bottom-line through dividends and share buybacks over time.”

RBC Capital Markets said Thursday that this tax indicates Apple will bring back $207 billion after taxes and said they believe “almost all of it” will be used to reward shareholders through share buybacks or dividends.

...the shareholder class, which comprises just over 52% of American adults, is clearly set to be the biggest winner from lower taxes..."

https://finance.yahoo.com/news/tax-cuts-going-keep-boon-shar...

#############################################################################################


No wonder the stock market is on fire. I particularly like the part about "keep being a boon." This is not a one time effect, and the effects result in multipliers.
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This is not a one time effect, and the effects result in multipliers.


Certainly will ... of the national debt?

I'm OK with that.
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This is not a one time effect, and the effects result in multipliers.


Certainly will ... of the national debt?

I'm OK with that.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Corporation tax.
Capital gains tax.
Income tax.
State sales tax.
Gas and vehicle registration tax.
Property tax.
Fees.
Social Security and Medicare tax.
Self employment tax.

We pay taxes on money that has already been taxed more than once. Our takehome is 50% or less. But for our rulers, it's never enough.
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We pay taxes on money that has already been taxed more than once. Our takehome is 50% or less. But for our rulers, it's never enough.

If you believe you are paying more than 50% of your income in taxes, then your accountant is embezzling from you.
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Corporation tax.
Capital gains tax.
Income tax.
State sales tax.
Gas and vehicle registration tax.
Property tax.
Fees.
Social Security and Medicare tax.
Self employment tax.




You missed a few. However some in this list are a bit of a stretch.

http://theeconomiccollapseblog.com/archives/a-list-of-97-tax...

Mike
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If you believe you are paying more than 50% of your income in taxes, then your accountant is embezzling from you.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Here's a common situation:

Federal Income tax 33%
State Income tax 7%
Self employment tax 12% (SS and Medicare is doubled for the self employed).
Property tax $10,000/yr.

Some of these are cross deductible, which reduces the tax bill marginally, but there you have around 50% take home. Add 8% sales tax. Gas tax. Fees and more fees. The capital gains part of income taxes, even though, as a part owner, we have already paid corporate tax. Tax on top of tax. For our rulers, it is never enough.
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You missed a few.

#############################################

It was inevitable. They're constantly thinking of new ways to tax us. For our rulers, it is never enough.
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Here's a common situation:

Federal Income tax 33%
State Income tax 7%
Self employment tax 12% (SS and Medicare is doubled for the self employed).
Property tax $10,000/yr.

Some of these are cross deductible, which reduces the tax bill marginally, but there you have around 50% take home. Add 8% sales tax. Gas tax. Fees and more fees. The capital gains part of income taxes, even though, as a part owner, we have already paid corporate tax. Tax on top of tax. For our rulers, it is never enough.


That's not common. Exactly zero people have that situation.

If you think this is the case, your accountant is embezzling from you.
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If you think this is the case, your accountant is embezzling from you.

In my experience, the people who complain most about taxes are completely ignorant about what they actually pay. If you ask them how much they think they should pay, the only answer is "less". I suspect their actual tax rate could be zero and they would still demand lower taxes.
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In my experience, the people who complain most about taxes are completely ignorant about what they actually pay. If you ask them how much they think they should pay, the only answer is "less". I suspect their actual tax rate could be zero and they would still demand lower taxes.


biggest tax whiners?

Want to lower your taxes, be poor, they don't pay as much?

What is really important is what you get for your taxes paid?


https://www.cnbc.com/2017/08/07/canadians-may-pay-more-taxes...

MONEY

Canadians may pay more taxes than Americans, but here's what they get for their money

Ester Bloom 10:57 AM ET Mon, 7 Aug 2017

Even with all kinds of taxes considered, including income, local and sales taxes, among others — and contrary to what President DT has repeatedly said — Americans do not pay the highest taxes in the world. Not even close. Actually, the U.S. is a little below average compared to our 34 peer countries in the Organization for Economic Cooperation and Development (OECD).
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Federal Income tax 33%
State Income tax 7%
Self employment tax 12% (SS and Medicare is doubled for the self employed).
Property tax $10,000/yr.
Some of these are cross deductible, which reduces the tax bill marginally, but there you have around 50% take home. Add 8% sales tax. Gas tax. Fees and more fees. The capital gains part of income taxes, even though, as a part owner, we have already paid corporate tax. Tax on top of tax. For our rulers, it is never enough.


When you say “33%” what you mean is “around 24%”, since the 33% only applies to the last dollars, that is, anything over $190,000. Income under $9,000 is taxed at 10%, even if you make a million dollars. There’s a tier where you pay just 15%, another at 25% and so on. It’s a *progressive* scheme, see? If you are actually paying 33%, you are earning over a million or so. I weep for you.

State income tax has, to this point, been deductible from your federal tax, so that’s “0%” Likewise sales taxes, to a point. Don’t count this twice, OK?

Your self employment tax may be 12%, it’s true. Congratulations because if you are paying 33% it means your income is seven figures and you have a multi-million dollar asset in your business as well. I weep for you twice. If you have a multi-million dollar business, then (FICA) taxes you pay on employees salaries are deductible as an expense, reducing your business income. Don’t pay this twice, OK? And don’t try to deduct the employee’s half, only the half the business pays.

If your property tax is $10,000 a year, then your house is grand if you live in a low property tax state, and modest if you live in a high state. Those states tend to have more services which require more taxes: snow removal, more density of population requiring more police, fire, highways, and such.

Again, as syke points out to you: if you are paying 50%, your accountant is embezzling from you. Seriously. I know math is hard, but changing accountants isn’t.
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...the shareholder class, which comprises just over 52% of American adults, is clearly set to be the biggest winner from lower taxes...

I would say the number is way higher. While people might not hold stocks personally, I'd bet their pension plans, etc., are invested in the stock market.

JLC
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I would say the number is way higher. While people might not hold stocks personally, I'd bet their pension plans, etc., are invested in the stock market.

It appears that that 52% participation rate is roughly correct as several articles say less than half of people have retirement savings outside of Social Security.

If you look at the Federal Reserve’s Survey of Consumer Finances, it’s indeed true that in 2013 only about 45 percent of households aged 25 to 64 had balances in retirement accounts.

https://www.forbes.com/sites/andrewbiggs/2016/09/20/how-many...

In addition to the 45% that participate in savings plans, there are still a few people who are covered by defined benefit plans.

In 2015, the total U.S. labor force was about 157 million people. Of that group, about 22 million were employed by the federal, state or local governments. And the vast majority of those 22 million government employees have a defined benefit retirement plan. (same link)

While the pension funds supporting defined benefit plans are invested in the stock market, the retiree's pension income is not directly connected to the action in the market. A 30% rise in the market does not mean a 30% rise in his pension benefits.

Steve
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State income tax has, to this point, been deductible from your federal tax, so that’s “0%” Likewise sales taxes, to a point. Don’t count this twice, OK?


This is incorrect.

State income tax is NOT deductible from your federal tax. It's deductible from your taxable income. If state income tax is 10% and you're in a 33% marginal tax bracket, your net state income tax is 6.7% - rounds to 7%.

Last I checked, sales tax and property tax had been removed from the list of taxes that were even deductible from taxable income.
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I'd bet their pension plans, etc., are invested in the stock market.

Which has absolutely NO impact to the amount of pension someone receives. A rich pension fund does not increase an individual's pension.
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Responding to syke6's post simply because it hit Best Of, but I'd like to address what I think is a destructive meme in our society that showed up in this thread after checking out several other posts on this thread.

There was one phrase repeated several times and that many probably believe, at least to the extent of first-level thinking. Here it is: For our rulers, it is never enough.

Actually, we probably get pretty good value for what we pay in taxes. Consider this:

• Paved and marked roads.
• Schools to educate our children.
• National parks and forests to destress in.
• Police protection.
• Fire, police, and other emergency response when needed.
• Help in recovery from natural disasters.
• Investigations of crimes and removal of criminals from our streets.
• The court system where we can challenge any or all of this, or seek redress against those we think have harmed us.
• Traffic signals and lighted roads.
• Utility control boards so that we pay a controlled and fairly well known amount for necessities like water, sewage, and electricity.
• Clean drinking water.
• Pretty clean land and water and air.
• The many things the USDA and other bureaucracies do that are not well known (but Michael Lewis is making a dent in that). Beyond subsidies to farmers.
• Safe drugs and medicines.
• Basic research into many different things that have demonstrably led to better and safer and longer lives.
• Weather forecasting.
• Sand and salt and clearing of roadways when it snows.
• Pretty safe coasts and SAR in our waterways.
• Mass transit.
• Inspections making sure our buildings do not crumble around our ears (or collapse on our heads) and work as they're meant to.
• Clean restaurants and investigations when we get sick at them.

You get the picture and I'm sure that anyone with half a brain could think of another dozen things to add to the above.

We want all of those things. We want to know if it'll rain today so we can dress and plan appropriately and that means using data generated by NOAA. We want good and safe roads to drive on as we go about our daily lives. We want to be reasonably certain that any and all of the stuff we voluntarily put into our bodies (food, drink, medicine, drugs) will not immediately kill us or make us ill. We want to know that we're reasonably safe as we go outside our homes or even stay within them. We want all of this and more.

But for some reason, many of us do not want to pay for them. What do you think our taxes pay for? Sometimes I think that anyone who doesn't want to pay taxes should be accomodated ... and forbidden to benefit from or use anything that their taxes help pay for. Then we'll see how long that tune lasts.

Yeah, there's undoubtedly a lot of wastage, though it's probably less than many think. Can you name a long-running human institution where that isn't the case over time?

But we sure as hell get a lot for what we pay for. Maybe more than we deserve.

And, no, I'm not some liberal snowflake. I'm a person who tries to at least attempt some second-level thinking. The system's not perfect and I agree that we should work to make it better, but it's a lot better than the alternative.

Jim
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Steve: "While the pension funds supporting defined benefit plans are invested in the stock market, the retiree's pension income is not directly connected to the action in the market. A 30% rise in the market does not mean a 30% rise in his pension benefits."

True, but as you probably know, state pensions do make actuarial assumptions that can impact the ability of the fund to remain fully funded in the long term. For example, jgcspouse's pension is with the Commonwealth of Virginia. Although considered to be in the top half of state pensions in terms of funding, as of last year they were still optimistically estimating 7% returns and 2.5% inflation:

http://www.varetire.org/pdf/publications/valuation-report-20...

I suppose that could happen, but jgcspouse is close to retirement and over the next ten years, some pretty smart people are offering more muted predictions:

http://news.morningstar.com/articlenet/article.aspx?id=84290...

My concern is that we are repeating the mistakes that we made under Reagan, Bush 1 and Bush 2. Deficit spending our way to wealth which is great until we realize that we are increasing the deficits again and have to raise taxes and cut spending to keep from going broke over the long run. I could borrow enough to build a mansion right now and brag about how rich I am, but eventually I would have to pay for it.
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I'd bet their pension plans, etc., are invested in the stock market.

Which has absolutely NO impact to the amount of pension someone receives. A rich pension fund does not increase an individual's pension.

#########################################################################################


However, there is a lot of talk about public employee pension plans shortfalls having to be made up by taxpayers and by the union members having their contributions increased or by current retiree benefits reduced. In California, for one. So in this way, a rising market helps everyone.
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True, but as you probably know, state pensions do make actuarial assumptions that can impact the ability of the fund to remain fully funded in the long term.

-----

However, there is a lot of talk about public employee pension plans shortfalls having to be made up by taxpayers and by the union members having their contributions increased or by current retiree benefits reduced.


What happens when a public employee pension fund is momentarily in surplus? The politicians reduce the amount they pay into the pension fund, and blow the money on something else to buy votes. Then the market goes soft, the pols discover an "emergency" and either cut the pension, or remove pensions from the employee's collective bargaining rights, then cut them, all the while demagogueing the issue as "these government employees are too coddled. their benefits are above the average, so they deserve a cut".

Boeing's defined benefit pension fund had a billion dollar surplus 10 years ago. The company diverted billions into buying back stock, instead of funding the pension plan as it should have. Now, in spite of a stock market that has been rising for years, the pension fund has a $20B deficit, second only to GE.

Steve
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However, there is a lot of talk about public employee pension plans shortfalls having to be made up by taxpayers and by the union members having their contributions increased or by current retiree benefits reduced. In California, for one. So in this way, a rising market helps everyone.


You mean growth and an expanding market helps encourage bad management of funds. Sure.
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Let me tell you how it will be
There's one for you, nineteen for me
Cos I'm the taxman, yeah, I'm the taxman

Should five per cent appear too small
Be thankful I don't take it all
Cos I'm the taxman, yeah I'm the taxman

If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold I'll tax the heat
If you take a walk, I'll tax your feet

Taxman!
Cos I'm the taxman, yeah I'm the taxman

Don't ask me what I want it for (Aahh Mr. Wilson)
If you don't want to pay some more (Aahh Mr. Heath)
Cos I'm the taxman, yeah, I'm the taxman

Now my advice for those who die
Declare the pennies on your eyes
Cos I'm the taxman, yeah, I'm the taxman

And you're working for no one but me
Taxman!

https://www.azlyrics.com/lyrics/beatles/taxman.html
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So if we were to conduct a poll, we would find that macro board participants overwhelmingly love taxes and hate tax cuts.
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we would find that macro board participants overwhelmingly love taxes and hate tax cuts.

De los dientes pa' fuera (lies).

https://www.youtube.com/watch?v=TKJ7VHXbnYM

The Captain
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So if we were to conduct a poll, we would find that macro board participants overwhelmingly love taxes and hate tax cuts.


That is so incredibly stupid it doesn't deserve an answer.

Perhaps we would find that people would prefer no taxes as all and instead try to survive in a bankrupt dysfunctional country?
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Which has absolutely NO impact to the amount of pension someone receives. A rich pension fund does not increase an individual's pension.

But it does increase the chance that it will be able to pay out what is promised, not cut future payouts, or file for pension "bankruptcy".

The main point being, many people might not think they are invested in the stock market, but sense their pension fund is, they are too by default.

JLC
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Tim

Don't feed the troll
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So if we were to conduct a poll, we would find that macro board participants overwhelmingly love taxes and hate tax cuts.

That is so incredibly stupid it doesn't deserve an answer.


Tim, don't they have sarcasm in Canada?

You're turning into a grouchy old man - loosen up!
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Tim

Don't feed the troll


Jim, Tim hadn't recognized the sarcasm in the post he was responding to. In any case, Tim's response was over the top and inappropriate for the "transgression".

Desert (lighten up people) Dave
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It turns out that people in countries with higher tax rates are happier (http://stopcontinentaldrift.blogspot.com/2017/12/happiness-a...). The top 5 happiest are (in decreasing order): Norway, Denmark, Iceland, Switzerland, and Finland.

They are happier because of all the benefits they get for their money.

In case you think Americans are happy, think of the last presidential election. Seems like I heard Americans are angry. With all the protest marches going on, it appears to me Americans are angrier than ever.

brucedoe
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Tim

Canada came in #7 in happiness. The U.S. came in at #14 (probably high).

brucedoe
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A couple of things that seem odd though...

1) your expectation that we'll be surprised when a higher level of happiness is reported from countries where, culturally, it's impolite to say you aren't happy

2) you think being more like those countries would make Americans less angry, when Americans seem to mostly be angry at the politicians who are trying to make America more like those countries
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Thank you for recommending this post to our Best of feature.

Tim

Canada came in #7 in happiness. The U.S. came in at #14 (probably high).

brucedoe


Chuckle, if it wasn't for the damn weather and our troublesome neighbours to the south we'd probably be #2 behind the Norwegian Vikings. }};-D

Many years ago a Hagar the Horrible cartoon came out where his son asked him if it was OK to say we are Norwegians and Vikings, Hagar replied that would sound like bragging.

Tim
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State income tax has, to this point, been deductible from your federal tax, so that’s “0%” Likewise sales taxes, to a point. Don’t count this twice, OK?

That's not how tax deductions work (that's how tax credits work).

Seriously. I know math is hard

Obviously! :-)
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Shame that when the shareholders try to eat their money they're going to find that it doesn't taste all that good.

Cutting taxes and running bigger deficits so you can cut services to the people who need them and research to protect you from the future and infrastructure expense that you now can't afford still looks good in the short term.

In the longer run it is poisonous to the social structure, erosive of trust between people, unpatriotic and arguably treasonous. Looks good until you realize that it isn't actually real money.

Real money represents work done.

Banks don't make a lot of real money.
Investors don't make a lot of real money.
Speculators don't make a lot of real money.
Ownership does not make a lot of real money.

All those things are largely parasitical, rent-seeking occupations and the financial sector that they represent is the largest and fastest growing bunch of horse-thieving varmints in the history of the planet.

Glad you like 'em. Not likely you're going to like what they actually bring you. The last Global Financial Crisis was bad. The one we're being primed for won't be bad at all... it'll be a lot worse than that.

Be CAREFUL out there.
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