The new Banana Republic -- the USofA

Originally posted by Chai_An
reply to post by TheBandit795

 

You overlooked the fact it cost more and that means more of the poor's money will be spent just trying to survive with the necessities. No I won't argue with your comment about saving habits with most poor people, you must admit it is harder to save when you have a constant flow of bills to pay. However you must bear in mind the poor is carrying the greatest financial burden in this society. Why? The rich pay less taxes but benefit the most from governmental welfare so they don't have to be savings astute,no they have lobbyists in Washington wetting hands to make sure their wealth is secured through legislating.

The rich pay less tax as a percentage of their earnings, but they still pay more than you... If I ran a country and someone creates jobs, I would support them! That person might less tax than you on a percantage, but the money they save goes into capital, so they might hire more people, and invest in job security... In other words, usually the rich make it so that the poor get anything at all.

I'm not saying that the rich should pay a bit more tax, but to call them a financial burden to society?...I'm not so sure.

I’m trying to be the lest political I can but the most ignorance I find on this board comes from liberals or democrat supporters. Their arguments come as “if you give tax breaks to the rich they are just going to send their money to off shore bank accounts.” Or “they are so rich what’s another million extra dollars when they have 10 million already” another favorite is “the rich get richer and the poor get poorer” I find all these statements as talking points from the MSM. They provide no evidence and no substance and come from people who I believe have no concept of the market and how business is ran.

Why do the “RICH” need tax breaks? Simple, they need more money to start businesses and open up branches in new markets. Let’s create a business model. Let’s say the federal corporate tax is 35 %( I believe this number is correct) and state corporate tax is another 10%. (California) So right off the bat you are going to pay 45% in any gross profit.

Let’s say your net sales is $5,200,000 (revenue) for the year and you’re a small construction company

A good guess of goods sold would be (cost to supply jobs and finish)
Materials $2,200,000
Labor and Burden $1,213,000
Subcontract $87,000
Total Cost are $3,500,000

This leaves us with $1,700,000 Gross Profit and 32.69% margin (margin is the percentage of return on our sale, our $5,200,000 number)

But wait we must now pay for overhead! (the cost to keep the doors open and pay admin)

General and Admin expenses
Insurance $237,000
Facilities Expenses $84,000
Vehicle expenses $241,000
Other $656,000
Total overhead expense $1,218,000

We are now left with $1,700,000- $1,218,000 = $482,000 profit at 9.27% margin (margin is the percentage of return on our sale, our $5,200,000 number)

Now its April 15th, Time to pay taxes!!! Our profit of 482,000 must now be taxed at 45% so $216,418 gets taken for taxes. We are now left with $265,582 our company made for the year at 5.10% Margin (margin is the percentage of return on our sale, our $5,200,000 number) and this is a very conservative number. Company usually make about 3% return on investment!

So we invested 5.2 million dollars to make $265,582! These are true life real numbers. It takes a lot of money to invest and make money. And to be able to finance this work for the year the company need to have 5.2 million in the bank! So when you libs talk about company hording money in banks that’s not the case. The companies need this money in the bank to finance the jobs and as insurance if anything goes wrong.

So the next year we have 265,582 to invest with. We need at least $350,000 to open another branch and start work but since 45% went to taxes we have to wait and save till next year to open up another branch and hire more people to bring in more money. If we were taxed only 25% this number would have been achieved and we would have hired more people and started up more jobs!

These are the number and numbers don’t lie. You need a large bank roll now a day to make a little money. If only our taxes were cut for company it would take less money to start up more companies in more markets to gain more jobs. simple as that.

Remember the owner of the company is forking out 5.2 million of his own money for this company. if it falls he loses it all ( unless you know obama and he bails you out) other wise he is intiteled to the win falls and the money the company makes. would you be willing to lay your life on the line like that to make a buck. lucky your have bosses who are. other wise you would not have a job.

dont forget the owner will take out 60k for himself in this company so we are left with $205,582 to invest in growing the company. Not alot!

reply to post by buddhasystem


I read something a long time ago that tied economic inequality to social unrest. The further apart the rich and poor got the more crime there was, the more violence there was and the more general unrest there was. Socialism just doesn't work long term, redistributing wealth en masse doesn't work (although the people who argue against this often forget they themselves are taxed daily), but some form of redistribution is needed. Simple because if the balance isn't maintained then people tend to get angry and kill all of the rich people in society. I'm not saying they should i'm just making the point.

I think the real annoyance of most poor people is that the very rich very often don't work for it in our age. You have the occasional guy/gal who worked to get where they are but then you have plenty who didn't work that hard. Bankers come to mind, stock market investors as well. Getting paid 6 figures in their first job to sit around and basically gamble with other peoples money. Others like third and fourth generation rich kids get on peoples nerves if they don't fufill some form of positive role in society. There are many rich kids who do plenty for charity and these people are fine by me, then there are people like Paris Hilton. They believe they can do what they want, regardless of law, as if they are aristocracy of old.

The rich and poor divide will continue and i can't help but remember those classic 80's films where corporations rule the world and the rich live amazingly different lives to the poor. Where the poor can't even hope to climb the financial ladder and will forever languish in poverty while the rich just get richer.

reply to post by Fiberx


Nice story.

How does any of that in any way, shape or form explain why the middle and poor classes spend all their wealth trying to "emulate" the rich lifesyle?

I could care less what a rich guy does with his time or money, he is rich, he can afford it.

I can not.

When I have made the money I want, I will spend my time doing what I want as well.

reply to post by peck420

Lol me too, if I could play Golf everyday i guess I'd work super hard to get somewhere first.

reply to post by kykweer

but the money they save goes into capital, so they might hire more people, and invest in job security.

The key points are they MIGHT hire more people, they MIGHT invest in job security.

This is the flaw with trickle down economics. There is no guarantee what the wealthy will do with their extra money. You cant argue that some investments have a better personal return and some might have a better return back into the economy.

And the point made by Chai_An, that what it costs to live must be calculated into tax rates. While the rich do pay more in taxes, their tax burden is absolutely less. It has less of an impact on their daily lives and their ability to survive less than people who make under 100k.

Originally posted by kykweer

The rich pay less tax as a percentage of their earnings, but they still pay more than you... If I ran a country and someone creates jobs, I would support them! That person might less tax than you on a percantage, but the money they save goes into capital, so they might hire more people, and invest in job security... In other words, usually the rich make it so that the poor get anything at all.

I'm not saying that the rich should pay a bit more tax, but to call them a financial burden to society?...I'm not so sure.

No I disagree with your assumption the rich pay more than the "average joe". If you are wealthy you have access to legal loopholes that you can take advantage of so as to avoid paying the taxes supposedly required of all people. So not only are their taxes lower they have loopholes to avoid paying those low taxes. Those corporate bailouts over the last two years, did they not help the wealthy folks behind the walls of those corporations? So who will pick up the tab for those bailouts? The "average joe".

Within these last few months have the media not pointed out how much bonus pay major Wall Street bankers, same folks who benefited from the bailouts, have "earned" this year? So how are these folks carrying their fair financial weight getting major governmental welfare?

If they are entitled to direct or indirect financial breaks because they are wealthy are they not passing the burden down the ladder to the next guy?

reply to post by iamcamouflage


And the rich might take their money and leave.

There are a lot of things they "might" do.

Increasing their tax rates just helps the "might" move away scenario.

Inversly, decreasing business tax "might" make them setup more business'.

And, decreasing personal taxes "might" make them spend more.

There is no simple fix to the problem, there is just trying to create a setup that is fair to everyone and works...kind of.

Originally posted by ImaginaryReality1984
reply to post by buddhasystem

 

Bankers come to mind, stock market investors as well. Getting paid 6 figures in their first job to sit around and basically gamble with other peoples money.

So Bankers and investors have no responsibility whatsoever, and basically anyone could do it without consequences?

There are thousands of bankers from the last year that would disagree with you.

reply to post by Chai_An


my family runs a company and im yet to see these "loop holes" please tell me where they are so we can save more money.

please give examples of these loop holes. again more talking points. lets present facts people

Originally posted by kykweer


The rich pay less tax as a percentage of their earnings, but they still pay more than you.

Not necessarily. The rich pay a higher percentage on adjusted gross income, but they benefit from having no taxes on dividend income (which they used to have to pay until the Bush Administration and Republican Congress got repealed) and they have accountants and attorneys that manage their money and take advantage of loopholes so they only pay on a small percentage of their income. They have tax shelters, off-shore "accounts" set up as businesses and they can take advantage of power perks.

For example, the corporation my brother works for bought a 2 million dollar mansion. This was technically used to entertain clients (though it was only used for that purpose a half dozen times) but was really used as the CEO's residence. Not counted as the CEO's income, though, because it wasn't in his ownership. They used it for ten years to write off the depreciation and thereby lower corporate taxable income. When they had completely used up the depreciation benefit, the CEO bought it...for ten thousand dollars. It was not considered income for the CEO, though he did have to pay sales taxes on 10 thousand dollars. The yearly property taxes on this place were twice what he bought it for!!

This, I'm told, is not uncommon.

reply to post by iamcamouflage


look up camaro68ss's post, I could not have said it any better.

reply to post by camaro68ss


I like how you explained the expenses of opening and operating a business, however the example you used are not the business folks people are talking about in regards to special privileges . The super wealthy have $100s of millions and they are the ones who are skating by not the personage you used in your example.

reply to post by Chai_An


There is no such thing as "wealthy only" tax loopholes.

All tax loopholes are accessable if you qualify, end of story.

You are quick to mention the loopholes they use to their benefit, but make no mention of the risks they took to open said loopholes.

If I invest money, I can shelter some in tax "loopholes". But I can also loose that money because it is an investment, it is not guaranteed.

If I start a business, I can shelter some in other business tax "loopholes". But, I also have the risk of the business itself.

Every single tax "loophole" involves spending money (or assets) to first open the loophole.

Originally posted by Chai_An
reply to post by camaro68ss

 

I like how you explained the expenses of opening and operating a business, however the example you used are not the business folks people are talking about in regards to special privileges . The super wealthy have $100s of millions and they are the ones who are skating by not the personage you used in your example.

but your wrong, this person in my example makes 250,000 + a year. so what tax hikes you make on the "RICH" "the super wealthy 100's of millions" also hit the small business man in my example. this opens and divides the class gap even more. The small business many cant expand.

its a catch 22. raise taxes on the RICH and the small business man gets hit too. the super wealthy can take the tax hit to an extent. but the small business man/woman cant.

Originally posted by camaro68ss
reply to post by Chai_An

 

my family runs a company and im yet to see these "loop holes" please tell me where they are so we can save more money.

please give examples of these loop holes. again more talking points. lets present facts people

As I said previously the example you used don't qualify. My comments were regarding the super wealthy and how they keep their money.

Originally posted by camaro68ss
reply to post by Chai_An

 

my family runs a company and im yet to see these "loop holes" please tell me where they are so we can save more money.

please give examples of these loop holes. again more talking points. lets present facts people

You obviously do not hire a tax lawyer to help you with your taxes, do you?

Originally posted by peck420

There is no such thing as "wealthy only" tax loopholes.

All tax loopholes are accessable if you qualify, end of story.

True, but most tax loopholes are basically useless to the middle class. How many people in the middle class, for example, claim significant dividend income? How many are paid in stock options, which technically aren't income?

www.999ideas.com...

Even Warren Buffet acknowledges that the rich ultimately pay less than the poor.

Originally posted by camaro68ss

Why do the “RICH” need tax breaks? Simple, they need more money to start businesses and open up branches in new markets.

So first you say the rich need tax breaks, then in your next post claim that they dont exist.......right....


how about this. Give ME a tax break so i can start my own business. Why give it to people that already have opportunities and the capital, ie RICH GETTING RICHER.

reply to post by ClintK

reply to post by Chai_An


In a perfect world there will be no corruption, so I am not saying or implying that every person opening a company is a Saint, and in my beliefs, those people will eventually get what is coming to them.

Having the freedom to start a business and to create jobs for the "American dream" has benefited America significantly, how could you deny this?

There is no way a successful company or rich person will pay less than $10k a month on taxes, just no way they pay less than the "average Joe"