The Tax Thread

TIDE-HSV said:

No, it's when the tax takes a larger percentage of income, the less you earn The sales tax (or VAT) is the classic example. A progressive tax takes a higher percentage of income, the more you earn, like the income tax...

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Go Bama said:

I’m no expert, but I thought what you describe is called a proportional tax. Sales tax is a proportional tax because everyone pays the same percentage therefore it takes a larger percentage of a poor person’s income.

From wiki: “A proportional tax is a tax imposed so that the tax rate is fixed, with no change as the taxable base amount increases or decreases.”

A regressive tax is a tax imposed in such a manner that the average tax rate (tax paid ÷ personal income) decreases as the amount subject to taxation increases.

I’m not arguing here, rather trying to clear my own confusion.

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Proportional taxes are a type of regressive tax because the tax rate does not increase as the amount of income subject to taxation rises, placing a higher financial burden on low-income individuals. A tax is said to be regressive if it has an inverse association where the average tax carries less impact on higher income individuals or businesses.

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RollTide_HTTR said:

Proportional taxes are regressive taxes. It's not mutually exclusive. I find Investopedia to have better definitions/explanations for all of this than most other sites.


Edit: This basically gets at it...

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DzynKingRTR said:

Here is a question for you tax experts.


When I initially got my stocks last year I was charged a fee to open the accounts. Can I write off those fees? It was about 10% of my initial investment.

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TIDE-HSV said:

You must have missed my question above. Did you say that you're now a government employee?

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The wealth team embarked on a contentious audit of Schaeffler in 2012, eventually determining that he owed about $1.2 billion in unpaid taxes and penalties. But after seven years of grinding bureaucratic combat, the IRS abandoned its campaign. The agency informed Schaeffler’s lawyers it was willing to accept just tens of millions, according to a person familiar with the audit.

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NationalTitles17 said:

Link doesn't match the post content. Mistake?

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When the departure of just one resident sends your state’s legislative budget office into a panic – it might be time to take a closer look at your tax policies. Such is the current predicament in New Jersey, where the relocation of hedge-fund manager David Tepper to Florida is causing serious concern among finance officers and legislators alike.

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Acting New Jersey Treasurer Ford Scudder recently told the Senate Budget and Appropriations Committee that “the top 100 filers pay over 5.5 percent of all [gross income tax] payments” in the state, underscoring the impact a move like Tepper’s has on the Garden State economy.

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In New Jersey, personal income taxes account for about 40% of state revenue. Compounding the issue (and the instability) even further is the fact that less than 1% of taxpayers contribute about a third of those personal income tax collections. Haines adds that Tepper’s unexpected departure could mean a “one percent forecasting error in the income-tax estimate or a $140 million gap.” That’s huge for a state already in rather dire economic straits. According to the nonpartisan Tax Foundation, New Jersey imposes the nation’s third-highest tax burden. In addition to a super-high personal income tax (8.97% in Tepper’s bracket), residents also pay the nation’s highest property taxes and are subject to both an estate tax and an inheritance tax.

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Tepper may be the most high-profile migration in recent months, but Bramnick’s concern over losing taxpayers and businesses is supported by over two decades’ worth of data. Between 1992 and 2014, New Jersey lost $24.91 billion in net adjusted gross income (net AGI). Nearly 60% of that net AGI ($14.79 billion) went to – you guessed it – Florida. Clearly, it’s not just billionaires and hedge-fund managers who are seeking sunnier climates for their financial futures. It’s anyone who takes a look at how much they could save by making a move. (According to the website SaveTaxesByMoving.com, a single New Jersey taxpayer making $50,000 annually would save $1,215 per year by moving to Florida. If that money is invested at 6% interest until retirement at age 67, that taxpayer would have an additional $110,408 net worth – not exactly small change.)

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seebell said:

Leave my taxes like they are and tax the hell out of all incomes above mine!:biggrin:

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Relayer said:

My income went up $2000, my tax went down $1700. Did not itemize for the first time in maybe 30+ years.

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2. $400,000 to promote asset forfeiture…in Paraguay.

You know how various federal and local police agencies can take suspected criminals’ money and other possessions, often without even obtaining a conviction? Apparently, the State Department loves the concept so much that it decided other countries need to do it as well.

Paraguay’s government established an agency in charge of seizing assets back in December 2017. The U.S. government allocated $400,000 to support the new agency’s “strong and sound institutional growth from the beginning and help it become effective at managing and liquidating seized and forfeited assets for the benefit of Paraguayan national interests.”

Which is worse? Watching the U.S. government seize its own citizens’ property, or being forced to fork over money to help a foreign government seize its people’s possessions too?

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