Comments on: Purposeful Obfuscation http://www.coyoteblog.com/coyote_blog/2008/12/purposeful-obfuscation.html Dispatches from a Small Business Sun, 12 Feb 2012 09:39:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: morganovich http://www.coyoteblog.com/coyote_blog/2008/12/purposeful-obfuscation.html/comment-page-1#comment-15255 morganovich Wed, 17 Dec 2008 15:49:31 +0000 http://www.coyoteblog.com/?p=6634#comment-15255 this is also largely the result of capital gains taxes. few people have million dollar salaries. much of that income comes from investment. hold that investment for over a year, and BINGO, 15%. if one were to look only at "regular" income, the story would be very different. my enormous wake up call came in 1999 when my cash bonus was taxed at an incremental rate of 55%. that prompted me to get much smarter about how i interact with the tax code. as an investment professional, it's easy to earn seven figures and pay single digit tax if you pay attention. this is the ludicrous flaw in our tax system. the complexity makes it highly manipulable. unsurprisingly, those with the most to gain from doing so are the rich. so they do it (at considerable expense). between the IRS and tax lawyers and accountants etc i'll bet we waste several % of assessed taxes on way or the other. this is money that could be spent on something useful. tax planning is only useful if you have a complex tax system. it's just make work. (and another broken window fallacy but this time with it's own lobbying group) flat tax is the way to go. this is also largely the result of capital gains taxes. few people have million dollar salaries. much of that income comes from investment. hold that investment for over a year, and BINGO, 15%. if one were to look only at “regular” income, the story would be very different. my enormous wake up call came in 1999 when my cash bonus was taxed at an incremental rate of 55%. that prompted me to get much smarter about how i interact with the tax code.

as an investment professional, it’s easy to earn seven figures and pay single digit tax if you pay attention.

this is the ludicrous flaw in our tax system. the complexity makes it highly manipulable. unsurprisingly, those with the most to gain from doing so are the rich. so they do it (at considerable expense).

between the IRS and tax lawyers and accountants etc i’ll bet we waste several % of assessed taxes on way or the other. this is money that could be spent on something useful. tax planning is only useful if you have a complex tax system. it’s just make work. (and another broken window fallacy but this time with it’s own lobbying group)

flat tax is the way to go.

]]> By: Noumenon http://www.coyoteblog.com/coyote_blog/2008/12/purposeful-obfuscation.html/comment-page-1#comment-15249 Noumenon Wed, 17 Dec 2008 13:34:57 +0000 http://www.coyoteblog.com/?p=6634#comment-15249 The establishment has been telling my generation not to expect Social Security to be there when we retire since 1983. It says so right in the envelope you get every year. And they've been spending the tax money on the general fund instead, since 1983. So why should I say "Oh, those don't count as real taxes, because I might get them back someday?" They go straight from my check into the Federal budget. They're taxes. The establishment has been telling my generation not to expect Social Security to be there when we retire since 1983. It says so right in the envelope you get every year. And they’ve been spending the tax money on the general fund instead, since 1983. So why should I say “Oh, those don’t count as real taxes, because I might get them back someday?” They go straight from my check into the Federal budget. They’re taxes.

]]> By: Jay http://www.coyoteblog.com/coyote_blog/2008/12/purposeful-obfuscation.html/comment-page-1#comment-15236 Jay Wed, 17 Dec 2008 03:28:24 +0000 http://www.coyoteblog.com/?p=6634#comment-15236 It's worse. In the measure of income it includes capital gains, but nowhere in the tax calculation does it account for corporate taxes paid. Since shareholder's by definition have claims to the residual value of a corporation any taxes paid by the corporation are infact an income tax on the shareholders. I'm not sure what percent of Berkshire Hathaway Buffet owns, but they payed $6.6 billion in corporate taxes last year. A large chunk of that was an income tax on Buffet. It’s worse. In the measure of income it includes capital gains, but nowhere in the tax calculation does it account for corporate taxes paid. Since shareholder’s by definition have claims to the residual value of a corporation any taxes paid by the corporation are infact an income tax on the shareholders. I’m not sure what percent of Berkshire Hathaway Buffet owns, but they payed $6.6 billion in corporate taxes last year. A large chunk of that was an income tax on Buffet.

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