Investing 102

[XLexusTech]

Yes the big guys wont have the ability to buy a X Million dollar real estate investment... that really wont effect the home inspector for example. who makes all of his $$ form the middle class buyers who need a mortgage...

What I am learning here is that the ones that are affected believe in the ole Trickle down effect... and all I am saying is..
I don't need an hand out.. don't want to wait for the therotitical trickle down stuff.. let me get my own and don't tax the hell out of me...
What i think I am learning is the threshold for that is 200K and that covers 95% (from the bureau of taxation's website) of the US population including me
:-)

[realcoray]

Originally Posted by XLexusTech

Yes the big guys wont have the ability to buy a X Million dollar real estate investment... that really wont effect the home inspector for example. who makes all of his $$ form the middle class buyers who need a mortgage...

What I am learning here is that the ones that are affected believe in the ole Trickle down effect... and all I am saying is..
I don't need an hand out.. don't want to wait for the therotitical trickle down stuff.. let me get my own and don't tax the hell out of me...
What i think I am learning is the threshold for that is 200K and that covers 95% (from the bureau of taxation's website) of the US population including me
:-)

In terms of tax impact for those of us making under 200-250k, I wouldn't anticipate any notable change unless you are into real estate, where the capital gain taxes going up could impact you (you'd be making a profit, but keeping less of it).

Keep in mind that if actual tax rates go up to levels from the 90s, it's still progressive meaning that your taxes would go up a few percentage points for income above a certain level. Let's say I make 205k and the tax rate for income over 200k goes up by 2%. I pay just 2% more on the 5k as a result of that increase.

Obviously in the case of some of these types of gains, or your situation the actual increase may be higher and for investment purposes you have options. Greg has talked about municiple bonds which may be an option since they are less/not exposed to these shifts. Chances are though that many other people will be thinking the same thing and the yields may drop in turn making it effectively the same as it was in terms of actual yield compared to other bonds.

Also, to keep things in perspective note that tax rates right now are historically low. Just about 50 years ago, the top tax rate was > 90%.

[XLexusTech]

Originally Posted by realcoray

In terms of tax impact for those of us making under 200-250k, I wouldn't anticipate any notable change unless you are into real estate, where the capital gain taxes going up could impact you (you'd be making a profit, but keeping less of it).

Keep in mind that if actual tax rates go up to levels from the 90s, it's still progressive meaning that your taxes would go up a few percentage points for income above a certain level. Let's say I make 205k and the tax rate for income over 200k goes up by 2%. I pay just 2% more on the 5k as a result of that increase.

Obviously in the case of some of these types of gains, or your situation the actual increase may be higher and for investment purposes you have options. Greg has talked about municiple bonds which may be an option since they are less/not exposed to these shifts. Chances are though that many other people will be thinking the same thing and the yields may drop in turn making it effectively the same as it was in terms of actual yield compared to other bonds.

Also, to keep things in perspective note that tax rates right now are historically low. Just about 50 years ago, the top tax rate was > 90%.

Yes that basically what i was getting at... purely from a tax perspective this is a better outcome for 95% of the population.. So why is everyone crying about the taxes that come form Romney losing.. confused...

[Bucketlist2012]

Originally Posted by XLexusTech

Yes that basically what i was getting at... purely from a tax perspective this is a better outcome for 95% of the population.. So why is everyone crying about the taxes that come form Romney losing.. confused...

Dividend stocks taxed from 15% to at least 25% or more ? Not too confusing at all...

Or if they go from 15% to Income tax rates of ???? That is the problem...Or at least one of the many problems...

[realcoray]

Originally Posted by XLexusTech

Yes that basically what i was getting at... purely from a tax perspective this is a better outcome for 95% of the population.. So why is everyone crying about the taxes that come form Romney losing.. confused...

If you believe that the tax money will just be thrown into an incinerator (or given to poorer people), you might just dislike the idea of higher taxes even if it doesn't impact you.

The reality is that whoever won, chances are taxes on the higher earners would have to increase. You can't cut your way out of debt without tremendous economic issues (see: Greece), and you can't tax your way out either and both sides fundementally know this. Expect a balanced package of cuts and tax increases, none of which is drastic, but some of which may affect you in one way or another.

[srh3trinity]

The taxation will be interesting. I am a recent graduate from Residency and practicing hospital medicine. I make a nice living. Doctors have taken a 30 percent pay cut or more from Medicare in the not too recent past. My education cost north of 200K and that has an impact on what I bring home. It seems as though there is a breaking point with taxes and your income. I can influence mine easily by how hard I choose to work. I work 16 plus hours a day now, but if this level of work pushes a person into a higher tax bracket, some of my colleagues will choose to work less hours and bring home about the same net dollars and spend more time with their family. If this happens, it will contribute further to the supply/demand issues we are going to have with physicians as baby boomers age. You are almost de-incentivizing hard work. I don't understand the thought of you make more, you should pay more.
Of course, if I become a government employee with Obamacare, I imagine I won't have much control over my tax bracket. It stinks to finally make some money and then the game changes on you in spite of your hard work.

[realcoray]

Originally Posted by srh3trinity

The taxation will be interesting. I am a recent graduate from Residency and practicing hospital medicine. I make a nice living. Doctors have taken a 30 percent pay cut or more from Medicare in the not too recent past. My education cost north of 200K and that has an impact on what I bring home. It seems as though there is a breaking point with taxes and your income. I can influence mine easily by how hard I choose to work. I work 16 plus hours a day now, but if this level of work pushes a person into a higher tax bracket, some of my colleagues will choose to work less hours and bring home about the same net dollars and spend more time with their family. If this happens, it will contribute further to the supply/demand issues we are going to have with physicians as baby boomers age. You are almost de-incentivizing hard work. I don't understand the thought of you make more, you should pay more.
Of course, if I become a government employee with Obamacare, I imagine I won't have much control over my tax bracket. It stinks to finally make some money and then the game changes on you in spite of your hard work.

There is no situation in which you work less and bring home the the same because of tax brackets assuming the amount you work is tied directly to your income. You don't suddenly enter a 100% tax bracket.

Not to mention that tax brackets have only been going down for basically this entire century. The real reasons for supply/demand issues for doctors are varied, and the government certainly plays a part but you can't simultaneously say you should be taxed even less than you are now, and complain about medicare reimbursements that the government is basically putting on a credit card.

[GregWeld]

Okay --- so let's get back on INVESTING....


Politics will never be "settled"... and so far I've managed to live well regardless of who is in office, for some 59 years. In the end - it's the S.S.D.D.