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Abrignac
Herf-A-Holic Topic Starter

11 years ago

#21

Honestly, I think we should scrap the whole damn IRS and go to a federal sales tax. Instead of loopholes for the rich to jump through, and pages upon pages of stuff the rest of us don't understand, we tax purchases.

Poor people do not buy a lot of stuff. They will pay much less. Rich people buy more stuff, and more expensive stuff... so they will pay more. This way EVERYONE will have to pay. Including the folks working under the table and illegally... they'll pay their taxes when they buy stuff.

It's fair, they'll generate more revenue, and folks who like to live thrifty will keep more of their own money.

MACS wrote:

Not a novel idea. But, it will vastly be disproportionate in terms of tax as a % of income. The median household income in the US per household for 2012 was $51,371. Down from $55,030 in 2000. A family with a household income of around $50,000 is going to spend most if not all of their income on necessities. As a result, the national sales tax will be a percentage of their entire income.

Here's a link to one such chart:
http://www.businessinsider.com/chart-savings-rate-by-income-level-2013-3

If one were to extrapolate from that it's easy to see that the least wealthy would pay taxes at an overall higher % of income than the those at the higher end of the wage spectrum. This is why the flat tax proposed by Steve Forbes in his failed Presidential bid was championed by only the very wealthy.

Based on the chart above and assuming a sales tax rate of 10% the top 1% would pay 5.1% of their income in taxes.
Conversely, the average household would pay in the neighborhood of 10% of their income in taxes.

Not sure about anyone else, but I sure as hell don't want to pay damn near twice the % as say the CEO of HP.

stogiefan
Enthusiast

11 years ago

#22

My wife graduated from a liberal arts school with a BA in English Literature and she currently makes more than me (BS in Electrical Engineering). Certainly not every case fits into such a nice box as "you got a BA in basket weaving so you won't be financially successful". 🌫

College is not for everyone. I think the secondary education system in this country is fundamentally flawed. There should be a better network of trade schools that give people marketable skills beyond a high school education.

If they push this Tax change through they are beyond stupid. [ram27bat]

Buckwheat wrote:

I was speaking very generally and yes there are exceptions to every rule, however, based on the cost of college today I wouldn't suggest everyone go all in that they will be the exception in a less than marketable degree program. People with natural talent or entrepreneurial ability will be financially successful regardless of college.

I totally agree that the secondary education system is flawed. Unfortunately there is also a stigma placed on going to trade/technical school. Many kids also shy away from that path because they won't get the full college experience of partying and girls. I didn't want my post to come across that I am anti college. However, I do believe that colleges prey on naive students and parents and promise them that college is this great one sized fit all solution to a secure financial future. Quite frankly we have too many students in college. 1/2 of college graduates today are taking jobs in field that requires no degree. There simply isn't the job demand to justify the number of bachelor degree programs that colleges offer today. This will all be fully exposed when the student loan bubble bursts in the coming years.

MACS
Herf-A-Holic

11 years ago

#23

Abrignac wrote:

I'd be willing to bet, with all the loopholes for rich people, you already are. I'm already getting yelled at by my tax lady to put more money in deferred comp because I am just a red hair below the next higher tax bracket... and I ain't nowhere NEAR fuggin rich.

Abrignac
Herf-A-Holic Topic Starter

11 years ago

#24

MACS wrote:

If you have some disposable income you really ought to consider listening to her. Also, see about setting it up as a Roth. Been doing that for years. FWIW, my DC is up 73.64% for the past 3 years.

MACS
Herf-A-Holic

11 years ago

#25

^I was not liking the up and down. I moved my whole can of worms to a fixed account. 🤦

DrafterX
Herf-A-Holic

11 years ago

#26

I used to move money around in the 401 but decided they prolly no best so I leave it alone now... i started dumping some funds in an IRA that I play with a little bit but not much.... 😟

Abrignac
Herf-A-Holic Topic Starter

11 years ago

#27

^I was not liking the up and down. I moved my whole can of worms to a fixed account. 🤦

MACS wrote:

That's a big hurdle one must overcome. I've had a few o'**** days since I have always invested in high-risk, high-return securities. Even with them though I'm way better off than had I put my savings in a more "conservative" investment.

I figure I've got about 15 more years of growth before I have to worry about withdrawals. If I can get the same return over next 15 years as I've had over the last 15 years I should have about 6-8 times as much then as I have now. If I continue making monthly contributions that amount should be even higher.

MACS
Herf-A-Holic

11 years ago

#28

I was in a managed account that wasn't doing any better than the 3.5% I am guaranteed right now, and was costing me 1%. Our deferred comp choices are Valic and Nationwide. I started with the former, and moved it to the latter.

Had I left it the hell alone (when the market was at 13,000 or so) it would be doing very well (at 17,000) but I'd be worrying about the bottom falling out.

I'll be fine at 55 if I keep doing what I am doing. But I guess if I wanted to risk things I could be doing a lot better (or a lot worse). Since I am happy with where I'll be... I'm going to let it ride in the fixed account and not worry.

DrafterX
Herf-A-Holic

11 years ago

#29

You're still young so to speak.. gotta gamble a little bit... but im no expert... 😟

Abrignac
Herf-A-Holic Topic Starter

11 years ago

#30

MACS wrote:

Not sure what types of investments they allow. I'm pretty lucky. We have tons of choices. Within the plan itself, there are about 30 different investment choices which include a handful of proprietary funds as well as institutional versions of publicly available mutual funds.

If you have more than $2500 you can open a TD Amritrade account. Anything above that amount can go into the TD account where one can invest in just about any publicly traded security from stocks, bonds, commodities futures, mutual funds you name it. I keep the bare minimum in the base plan split between a few decent mutual funds. The rest is in the brokerage account.