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This room is for the discussion of current events,cultural issues and politics especially in relation to Catholic values.

Saint Thomas More was martyred during the Protestant Reformation for standing firm in the Faith and not recognizing the King of England as the Supreme Head of the Church.
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Does anyone see what is wrong with Obama's $250,000 threshold and top 2-percent chant?

First of all, business owners file their company's earnings on their personal Federal 1040's.
The same 1040's where you and I report our measly salaries. Then they use Schedule C
or Schedule E to report the company's income and expenses.

This would easily mean that in many cases, they would have more than $250,000 under
Income under "Gross receipts" or "Rental Income." From this they have to deduct the costs associated
with that Income. This in no way implies that they pocket the $250K.

I am also dubious that only the top TWO PERCENT of the American workforce is above that
$250,000 figure which Obama keeps citing. That is why there is such a strong backlash against
raising tax rates on the TOP TWO percent. Is it really going to be the TOP TWO percent?

Obama, go back to "Community Organizing!" Please. wave wave wave wave

12/05/2012 new

Yeah, the net income from Schedule C goes onto 1040, where employees report salaries.

It's net income that is taxed, not Gross Receipts or Revenues, as I learned to call it.

For instance, a small business that takes in $1 million per year and pays money to employees, rent, suppliers, etc. and is left with a net income of $180,000. The owner reports $180,000 on his or her 1040. Not $1 million.

A small business that takes in $250,000 in revenue - that is a really small business, microbusiness. But the owner surely has expenses so the net income is less than $250,000.

If your question is: are people who make $250,000 (in net income, not gross receipts) rich? My answer is yes. Maybe in the New York City area with sky-high salaries that isn't considered much. But in most of the country it is.

12/05/2012 new

(Quote) Cathy-620979 said: Yeah, the net income from Schedule C goes onto 1040, where employees report salaries. It&#...
(Quote) Cathy-620979 said:

Yeah, the net income from Schedule C goes onto 1040, where employees report salaries.

It's net income that is taxed, not Gross Receipts or Revenues, as I learned to call it.

For instance, a small business that takes in $1 million per year and pays money to employees, rent, suppliers, etc. and is left with a net income of $180,000. The owner reports $180,000 on his or her 1040. Not $1 million.

A small business that takes in $250,000 in revenue - that is a really small business, microbusiness. But the owner surely has expenses so the net income is less than $250,000.

If your question is: are people who make $250,000 (in net income, not gross receipts) rich? My answer is yes. Maybe in the New York City area with sky-high salaries that isn't considered much. But in most of the country it is.

--hide--


Actually, Cathy, I am wondering what the President means when he says $250,000 threshold? On the Schedule C, the
Revenues go under the INCOME section. And, yes, then they go on the front page of the 1040. So, no matter where you
put it on the 1040 or the Schedule C, they are both called Income.

That is why I am concerned. I do think netting $250K is decent.

So, you do your own taxes? Impressive..... clap clap clap Bow Bow Bow

12/05/2012 new

(Quote) Cathy-620979 said: Yeah, the net income from Schedule C goes onto 1040, where employees report salaries. It&#...
(Quote) Cathy-620979 said:

Yeah, the net income from Schedule C goes onto 1040, where employees report salaries.

It's net income that is taxed, not Gross Receipts or Revenues, as I learned to call it.

For instance, a small business that takes in $1 million per year and pays money to employees, rent, suppliers, etc. and is left with a net income of $180,000. The owner reports $180,000 on his or her 1040. Not $1 million.

A small business that takes in $250,000 in revenue - that is a really small business, microbusiness. But the owner surely has expenses so the net income is less than $250,000.

If your question is: are people who make $250,000 (in net income, not gross receipts) rich? My answer is yes. Maybe in the New York City area with sky-high salaries that isn't considered much. But in most of the country it is.

--hide--



So does the answer to the question remain the same for a married couple? Let's say there are a man and wife, both with an AGI of $100K/year doing the typical 50-60hr work week that this salary level usually commands. Consider both to be in their 40's or 50's, and have worked all their careers to get to that point and have saved along the way. It's not unreasonable to expect that this couple could have extra earnings/dividends totaling $50k/yr combined. Does that also make them rich? Could they retire on that income with no other source? Obviously too young for medicare or SS. Hardly seems like society would be petty enough to lump them into the "rich" catch all bucket labled the top 2%. My take is the only people who would ansner yes to that scenario would be those who lived the fast and loose lifestyle when times were good and now resent those that didn't take the plunge along with them.

12/05/2012 new

(Quote) Marianne-100218 said: Actually, Cathy, I am wondering what the President means when he says $250,000 thresho...
(Quote) Marianne-100218 said:



Actually, Cathy, I am wondering what the President means when he says $250,000 threshold? On the Schedule C, the
Revenues go under the INCOME section. And, yes, then they go on the front page of the 1040. So, no matter where you
put it on the 1040 or the Schedule C, they are both called Income.

That is why I am concerned. I do think netting $250K is decent.

So, you do your own taxes? Impressive.....

--hide--

The problem with taxing the "top Two percent" is that the net result would be to decrease revenue. That would result in greater deficits, and calls for harsher taxation.

It will create the vicious "austerity cycle" seen in Europe at present.

12/06/2012 new

(Quote) Brian-699857 said:So does the answer to the question remain the same for a married couple? Let's say there are a ma...
(Quote) Brian-699857 said:
So does the answer to the question remain the same for a married couple? Let's say there are a man and wife, both with an AGI of $100K/year doing the typical 50-60hr work week that this salary level usually commands. Consider both to be in their 40's or 50's, and have worked all their careers to get to that point and have saved along the way. It's not unreasonable to expect that this couple could have extra earnings/dividends totaling $50k/yr combined. Does that also make them rich? Could they retire on that income with no other source? Obviously too young for medicare or SS. Hardly seems like society would be petty enough to lump them into the "rich" catch all bucket labled the top 2%. My take is the only people who would ansner yes to that scenario would be those who lived the fast and loose lifestyle when times were good and now resent those that didn't take the plunge along with them.

--hide--

No matter how you try to explain it; anyone or couple earning $250K/Yr., no matter how they earn it are earning more than 98% of taxpayers.

They are income rich, but potentially may not be asset rich.

On the other hand, a person or family with a net worth of $1 million is worth more than probably 98% of the population and are asset rich. However, they may only be as low as lower middle class in actual income.

To be truly rich a person would have to have an income in that top 2% range plus net assets of $1 million or more.

12/06/2012 new

(Quote) Paul-866591 said: No matter how you try to explain it; anyone or couple earning $250K/Yr., no matter how th...
(Quote) Paul-866591 said:

No matter how you try to explain it; anyone or couple earning $250K/Yr., no matter how they earn it are earning more than 98% of taxpayers.

They are income rich, but potentially may not be asset rich.

On the other hand, a person or family with a net worth of $1 million is worth more than probably 98% of the population and are asset rich. However, they may only be as low as lower middle class in actual income.

To be truly rich a person would have to have an income in that top 2% range plus net assets of $1 million or more.

--hide--

True, although let me add that a lot more than 2% of the population has new worth of over $1 million.

According to CNN, 10.5 million US families had a net worth of over $1 million in 2011. money.cnn.com That includes the value of their houses. And it's the worth of the families, not individuals. If there are 112 million households in the country (wiki.answers.com that works out to 9% of the population is in a household with a net worth of over a million dollars.

If you define millionaires at $1 million or more in investible assets and don't count the house they live in, the Wall St. Journal says 3.1 million individuals in the US blogs.wsj.com So about 1%.

12/06/2012 new

(Quote) Steven-706921 said: The problem with taxing the "top Two percent" is that the net result would be...
(Quote) Steven-706921 said:

The problem with taxing the "top Two percent" is that the net result would be to decrease revenue. That would result in greater deficits, and calls for harsher taxation.

It will create the vicious "austerity cycle" seen in Europe at present.

--hide--

You have absolutely no basis for making that assertion. Every credible projection shows that a modest tax increase would increase federal revenue, not decrease it. The Bush tax cuts did not pay for themselves. They resulted in lower tax revenues, not more. This has been established and nobody is arguing about it any more.

As far as the "austerity cycle", yeah that is a plausible reason Europe is struggling. But the dominant idea on CM is that the US should also practice austerity. I guess we want to adopt Europe's austerity policies.

12/06/2012 new

(Quote) Cathy-620979 said: The Bush tax cuts did not pay for themselves. They resulted in lower tax revenues, not more. This...
(Quote) Cathy-620979 said:

The Bush tax cuts did not pay for themselves. They resulted in lower tax revenues, not more. This has been established and nobody is arguing about it any more.

--hide--


You certainly get your education from those Harvard journals that you've been reading... rolling eyes


Now for the facts...


The 3 highest-grossing revenue years in our nation's history were 2007, 2008, and 2006, respectively. The federal government collected $2.567 trillion in 2007, $2.524 trillion in 2008, and $2,407 trillion in 2006.


Yes, these were during Bush's presidency. Concidentally, they came after he lowered taxes. And if you think Clinton's tax policies brought in so much revenue, think again. The highest revenue collected during Clinton's presidency was $2,025 trillion in 2000, his final year.


In 2011, the federal government collected $2,303 trillion in revenue - about $200 billion less than was collected in 2007. So, as you can see, despite the present financial conditions that exist in our country today, the federal revenues are virtually the same today as they were during the previous administration.


Oh, and for those who want to blame "Bush's 2 wars that haven't been paid for"... the total cost of both the Afghanistan and Iraq wars is presently around $1.4 trillion. Obama's deficit for just last year was $1.3 trillion.


So, the question is, why has the yearly budget deficit more than doubled? Anyone with half a brain in their head (no offense to liberals) can see as clear as day that we do not have a revenue problem, but rather a spending problem.


theheart

12/06/2012 new

"The Bush tax cuts did not pay for themselves. They resulted in lower tax revenues, not more. This has been established and nobody is arguing about it any more."

These are strong statments. What are your sources, Cathy-620979 ?

Actually, most wrtiers admit it can be difficult to determine exact numbers for the effective loss of income tax revenue at the federal level for the Bush tax cuts. Even our best federal sources admit that they don't have an exact figure.

However, when looking at gross receipts and estimates of the costs of the Bush tax cuts, evidence shows that the Bush tax cuts probably at least paid for themselves. And, certainly, the psychological effect of the federal government looking out for the little guy echoed multiple times in the commercial markets.

If you use the Joint Committee on Taxation estimates - the most commonly cited source which plugged the cost at $160 billion a year - and contrast them with federal fiscal receipts and outlays from President Obama's Web site for those same years, which would include not just income but also federal excise and sales (gas) taxes, the Bush tax cuts more than paid for themselves in the two terms Bush was in office (and in 2009 and in 2010; as the JCT used a 10 year average).

The markets responded.

The national Gross Domestic Product - a measure of national commercial commerce - went from a low in 2001 of 3/10 of 1 percent to 2.45% in 2002, 3.1% in 2003 and 4.4% in 2004 - the end of the first Bush term. Also, GDP stayed strong through Bush term two.

Also, the overall unemployment rate was 6.0 in 2003. After the Bush tax cuts that year for business, we experienced a declining rate with the lowest of 4.6 percent in 2006. (Bureau of Labor Statistics)

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