I keep hearing terrible things about big tax hikes after the 1st of year. Are there any experts out there that can contribute their thoughts?
Just how big is this "hike"?
What is the worst that can happen?
How do you suppose it will affect this hobby?
Thanks in advance
If nothing is done that portion of your taxable income that exceeds $373,651 will increase from 35% to 39.6% like it was in the good economic times under President Clinton.
Or under various proposals if over $250,000 that excess may be taxed at a few percentage higher rate.
The Republicans insist however that millionaires and billionaires not have to pay the higher pre Bush tax cut for the Rich rate (that it was previously).
The U.S. has some of the lowest individual tax rates in the world. Top rate for decades was 70% with full employment and strong economy. I was in tax dept of major CPA firm when it was great to have earned income over $52,000 since than only paid a rate of 50% on excess earned income vs up to 70% on unearned investment income.
The Republican made up story is that it will hurt job creation. The truth is most individuals that have business income over $250,000 are professional athletes, movie stars and lawyers in partnerships where the income taxed to the individuals. None of which are big jobs creators.
The U.S. corporate tax rate is high but has many deductions other nations do not. A study shows corporate taxes are about average on a net basis with most of the G-20 major countries.
I am neither an athlete, a lawyer, or a movie star, yet I make considerably more than $250K. I also employee dozens of people, increased taxes will effect my hiring decisions. I can also guarantee you that if I ever have to lay off workers (unlikely in my business), I'll start with the Obama voters, if there actually are any in my company.(again, very unlikely)
I can match you political rant for political rant until LB decides to move this thread, or puts a muzzle on both of us. Of course as a moderator I can always unmod myself, can you say the same? lol
I had hoped that I posted on the correct board, I am afraid to go on the P & R board.
There seems to be a lot dire predictions as to job loss and small businesses suffering.
I was hoping to hear from some of the financial guru's out there.
My apologies to LB if this post is misplaced!
I'm pretty sure the response of inappropriate use of moderator power was not in response to you but to the first response.
I don't know what forum the thread belongs in and, speaking as an economist, don't think the hobby will be much affected by marginal tax code changes. Obviously those opposed to the change will make it sound like the end of the world - this goes for all policies not just this one. So, the rhetoric ramps up in opposition (to try to avoid politics rhetoric ramps up in support as well). My professional guess (and it is a guess) is that any reduction in discretionary funds for hobbying will be offset by economic recovery.
To make sure it is as politics free as possible:
I'm not saying there won't be people who feel a pinch, though I honestly think this number of people will be fairly small. I do think that continued economic recovery (which all signs point to if not quickly enough for many) brings more money to the table than any loss through marginal changes in the tax code.
I do my best to avoid having political debates on any board but the P&R board for the obvious reasons. I will not however let only one side be heard from where it comes to taxes. When someone say's the Republicans lied about this, or the Democrats lied about that, it's a blatantly political post that has no place on this board, and he deserves to get called out on it.
If you want to make a political statment and bash one party or the other, fine. go the the P&R board and have at it. I can't speak for LB, but do it on one of my boards, and you'll find yourself moderated in an instant.
That said, I agree with you that the impending tax increases should have little impact on the hobby. Most people here, except for the increase in capital gains, will be completely unaffectd by the increases.
Tax increases have almost always lead to economic slow down in the past not economic recovery. A recession is never the right time to raise taxes. I am in a holding pattern as far as growing my business for fear of the possible backlash to the tax increase. Many in my industry have already went under most in my industry I have talked to are afraid of taking anther hit. But I am no economist.
The OP asked a simple "tax question" what he got was a partisan political rant. I am only balancing the scales, and by P&R standards, which is what this thread had degenerated into, I think I am being quite polite.
These "discussions" never end up not being "rude" which is why I am repeatedly making the point that they don't belong here.
Full list at: http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171##ixzz18Ljs9UWZ
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
The big $ impacts though aren't in the rates, mostly. The child tax credit expires which will probably have a larger impact than the 10 or 25% bracket shifts or the expiration of the "marriage penalty" for most American households. I'd guess that hobbying is what my types call a "barbell distribution" lots of business at the lower but also at the upper ends of the income spectrum. So what affects the middle 80% of households may be less important to client incomes.
The other big changes for those generally at the upper incomes, would be an increase in capital gains and dividend rates, and major changes in the inheritance tax structure.
In addition in 2011, coming in July and unrelated to the expiring taxes are a bunch of taxes passed with the health care bill. The relevant two are a tanning tax 10% on tanning salons, and for those with creative accountants, the IRS can now disallow transactions that lack "economic substance". So if the IRS rules that an agreement was entered for the tax benefits they can bar it from your taxes.
This is a pretty simplistic overview, so for specifics to your situation and decisions, you should probably talk to a tax professional.
I am not a lawyer, movie star, or pro athlete. I have over 50 employees. I know of many others in that my tax bracket (well over $250,000) and most are not in the professions you listed. What they are is small business owners like me who employ people. Small businesses are what usually generate new jobs. If my profit is reduced my ability to grow my business. Have you ever been employed by a poor person? Please note I am not talking about having a business that a poor person patronized but actually employed by one? I have not and I bet it is true for most.
I use my surplus income to grow my business and help those in need. The government mostly just helps itself. My business grows the economy and generates new wealth, the government does not. If you ever went door to door in a projects or been homeless or near homeless you would see the government is not helping the poor get out of poverty but trapping the in poverty. I have done both and I beat the odds despite a ton of road blocks put in my way by the government. These tax increases are just anther hurdle keeping the poor poor.
The top income tax rate will go up as other mentioned by about 5%, but also keep in lind that the healthcare tax of another 3% also comes aboard very soon, a combine dincrease of 8% (or about 43% total). and add to that the 3% medicare tax that applies without ceiling, state income taxes of 5% to 11% depending on your state of residence; many also are subjec to local taxes of another 5-8%, or potentially a combined marginal tax rate of 65%.
The adverse effect is that as an investor/businessman, why should I take a risk on a new business or expanding my current business? When I consider an expansion/investment/capital expenditure decision for my business, it has to show an after tax internal rate of return exceeding 20% or it does not even get to my desk. An increase in federal rates of 8% represents a 20-25% increase over other taxes, thus effectively turning an investment that previously was rated for a 25% rate of return into one that falls below the threshold. On average, most of the proposals I see and approve project out in the 25% range, thus this tax increase will probably eliminate half from any consideration. Instead, I'll look more to investments/expansion abroad - then shelter the income thru an offshore entity with a favorable tax treaty and never repatriate the income to the US, just keep investing it abroad in the form of unrealized (and untaxed) gain. On net, I'd say if the increases go into effect, my company's future job creation in the US will be cut in half (and we added over 2,000 jobs so far this year)
Just how big is this "hike"?
What is the worst that can happen?
How do you suppose it will affect this hobby?
Thanks in advance
Just how big is this "hike"?
What is the worst that can happen?
How do you suppose it will affect this hobby?
Thanks in advance
Not anything about anything else, the OP really wanted to know what would happen to the hobby.
Answer: Pretty much nothing.
Now that everyone got to rant about the supposedly ill-advised tax hikes can we return to legal questions here?
"supposedly" ill advised tax hikes???
You had to throw a zinger in there yourself. What a fucking hypocrite. You were perfectly fine with Dave bashing the GOP, but the moment a couple of us who are actually effected by the hikes chime in, all of a sudden it's off topic. Let me repeat, "what a fucking hypocrite"
Ok - I don't like hiding behind the anonymous internet but
You are a moderator? For real? With those reading skills?
I pointed out that a lot of people got to complain about the supposedly ill-advised tax increases. I made no comment. They are supposedly ill-advised based on what people are saying. For the purposes of this thread (other than DAVE) we can SUPPOSE them to be ill-advised.
To be clear, as I have to do this with students, when I say supposedly that merely means it is supposed and not proven (kind of like the definition of the word implies). The word means what the word means and nothing else. I never supported ANY line of thought or reasoning on the tax increases, merely commented that lots of incorrect facts have been tossed around in answer to a fairly simple question that you agreed with my answer on. The fact that you don't comprehend the meaning of the word supposedly as it is used in logical discussion in American English is NOT my problem.
Get off your fucking soapbox. I didn't agree with DAVE. Never. I didn't agree with you. Never (though you did agree with the only substantive answer given in this thread made by me). You have absolutely no clue what I think about these tax hikes and it will remain that way as I don't participate in those kinds of discussions with childish, anonymous forum users. I think this whole thread is ridiculous beginning with DAVE's first response. So I said so. From what I can tell I am the only person (plus you agreeing with me) that answered the OP's question. The rest has been ranting.
I made one passing comment about you stating that if both of you were moderated you could unmoderate yourself. Apparently you didn't understand that reference and decided to go on the offensive from the get go with me but hey, it's an anonymous setting why be civil right? Probably not a wise comment to make if you wish to retain moderator power as it is clearly a "baiting" comment and a presumptive abuse of moderator power and the kind of CRAP most users of this board hate to see in the threads. I also bet you can't actually do it (and be a moderator the next day anyway), which is besides the point.
No zinger from me. No comment on relative merits of the tax hike from me. Absolute loss of respect for yet another forum member from me. And I did try to answer you in a meaningful way OP.
and this is why political rants aren't allowed on other boards besides P&R,
Deny it all you like, anyone with a room temperature IQ who made it through remedial English in the third grade can see through your bullshit.
If you've got a problem with me or my moderating style, take it up with admin, or just STFU.
lol. Again, there is nothing to see through....
I'm done in here. I answered the OP and unfortunately commented on stupid behavior. Find my rant on politics anywhere in ANY post.
I'm glad the SUPPOSED transparency matched your IQ and English skills however.
I see you also have no respect for TER rules.
I hope you make good on your promise and stay "done".
Come back when you stop being a hypocrite. Or is that a "supposed" hypocrite? Not to mention a liar.
-- Modified on 12/4/2010 7:59:34 AM
As there will always be demand for pussy.
Related to how the industry will be effected
Incomes overall are rising which should help escorting.
Even with high unemployment, Goldman Sachs 11/22/10 reports that private households and businesses are currently running a financial surplus of 7% of economic output - 5 percentage points above the historical norm.
Many that enjoy the hobby are often the higher end spender due to its cost. Main street continues to suffer unable to get jobs while corporation and the affluent get richer. There has been a huge transfer of wealth over about the last 10 years from the middle class to the most affluent.
Retail sales are at the highest level since August 2008 especially at high-end luxury stores. Reuters reports: All Is Sparkly for Tiffany – “The comfortably off are splurging. Tiffany is reaping the benefits, posting double-digit sales growth across the globe in its third quarter... Together with a bright outlook, that suggests well-heeled and aspirational consumers are not expecting another painful downturn."
Consumer spending has been accelerating for more than a year as average wages grow. The consumer confidence index rose to the highest level in five months as reported in late November. The National Restaurant Association announced that its members are reporting all time record high sales.
Bonuses on Wall Street are in many cases now even higher than pre Lehman days.
U.S. companies’ profits rose in the third quarter to an annual rate of $1.66 trillion, the highest on record.
Full-year total earnings for the S&P 500 is expected to jump 42.3% for 2010 and another 14.1% in 2011 per Zacks Investment Research, one of the most highly regarded firms in the investment industry. The 2011 growth is lower since calculated from a high level of 2010 profits.
While jobs growth disappointed for November, private employment increased for the 11th straight month adding almost 1.2 million private sector jobs year-to-date, but government job losses continued. This contrasted with the ADP report released in early December of stronger expected job growth – especially for small business hiring.
Corporate balance sheets are very strong with $1.4 trillion of cash piled up and the lowest amount of debt in 20 years (CNBC reports).
The economy is healing just too slowly for the middle class, but the outlook strictly from a financial standpoint is favorable especially for the wealthy.
For the escorting industry, offsetting that is the increasing legal issues with the excuse of children and trafficking to entrap and waste so much resources going after in private consenting adults - legal at least outcall - in almost all the world except the U.S. with no big deal.
I can back everything I ever say but will back out of the more political debate because of all the misinformation and deceptions being tossed around to some extent on both sides.
It is only going back to what it was when Bush took office!
Congress still has to decide on whether or not to extend the Bush tax cuts and the Alternative Minimum Tax (AMT). I read that they are supposed to vote on that today, but we'll have to wait and see.