Re: Bush and O'Reilly, in denial.


"tonyp" <tonyp@xxxxxxxxxxxxx> wrote in message
news:v_CdnZjw3toApSHenZ2dnUVZ_tednZ2d@xxxxxxxxxx
>
> "Jim Blair" <jeb@xxxxxxxx> wrote
>
> > ... But how can you have a
> > high income and still not pay the IRS?
>
>
> Aside from outright cheating, a popular way is to "defer" your tax
liability
> far into the future by structuring your income so that it doesn't appear
> like you got paid this year.

Hi,

If your income is deferred, you did not get it this year. You pay the tax
on income in the year you receive it.
Should you pay income tax in 2006 on a pension that you are promised to have
starting when you retire in 2015?
I say you should not have to pay the tax until it is actually part of your
income. And sure, you MAY be in a lower tax bracket when you actually
collect the money promised to you this year.

>...This strategy is not readily available to most
> people: they need to "realize" their income right away because they need
it
> to live on. A big-company CEO who already owns 3 mansions, has enough
cash
> in the bank to live on forever, and gets to pick the people who structure
> his compensation ... well, he's another story.
>
>
> > The income tax applies to rent, interest, dividend, Social Security and
> > pension income, and even capital gains, as well as to wages.
>
>
> "The" income tax? You mean "an" income tax. If I hand you a dollar, can
> you tell whether it came from "rent, interest ... capital gains"? Dollars
> are dollars. Why shouldn't your marginal dollar pay the _same_ income tax
> regardless of its source?
>
Becaue FDR convinced Congress to tax wages differently than other forms of
income. And is it clear to you that "capital gains" is a form of income?
I mean if I sell my house for more nominal dollars than I paid for it 40
years ago, did I "gain" the difference? Or it it mostly that the "dollar"
has lost value?

>
> > ??? You don't think having less deducted from their FICA is giving low
> > income workers a tax break?
>
>
> Say your insurance broker gives you a "price break": he cuts your
"premium"
> in exchange for you parking the savings in a "personal insurance account".
> If he does that _without_reducing_your_policy_limits_, then he's doing you
a
> favor. If not, not.
>
> -- TP
>

The analogy here (Bush plan) is to cut your premium (FICA), keep your
"policy limit" (SS benefit) the same, and insist that you put your saving
into a retirement account for you.

So, yes, he is trying to do you (low income worker) a favor.

This reminds me of when I was teaching a Milton College during the late
1960's. With the 3rd contract, we had the option of putting 5% of our
salary into a TIAA/CREF account (equivalent to an IRA) and the college would
match it..

I said YES! A friend I commuted with said no. She said that would reduce
her take-home pay by 5% I could not convince her that she was being offered
a 5% pay raise, and was rejecting it.

I guess it all depends on how you look at it.




,,,,,,,
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jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
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