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Thread: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax plan

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by ludin View Post
    So you don't know what fiduciary duty is then? Well it basically means this.
    if you give or someone gives you money to invest then you have an obligation to that person
    to manage their money in a responsible and ethical manner.

    While investor take on an inherent risk when any kind of investment the hedge fund manger must also
    maintain that he is acting in the best interest of his investors and not himself.

    If requested he must produce at any time how the funds are doing and if called to explain any losses the fund may take.
    if the investors feel that he is mismanaging the funds then he is legally libel. the investors can sue.
    you failed to address how the fund manager's investment of other peoples' monies causes it to be found "a risk/reward measure."
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    I could do the wall over a longer period of time.I didn't need to do this. But I'd rather do it much faster. ~ President tRump
    Quote Originally Posted by Cardinal View Post
    Do you often refer to things that don't need to be done as an "emergency"?

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by OldFatGuy View Post
    Meaningless economic semantics. All that matters is collected revenues. There's good reasons smart investors ignore Motley Fool. No one ever paid the high tax rates of the mid 20th century.

    During a recent hospital stay as I walked the hallways to aid my recovery, I noticed a series of prints by Roy Lichtenstein decorating the walls, and a plaque thanking the donor. I own two of those prints, purchased almost 50 years ago for $200 each directly from Roy when he was teaching at a state college in upstate NY. My insurer values them at greater $250k each. I have no doubt the donor used them for a charatible write off on his taxes, and I know the donor is worth 10's of millions. I also know the donor purchased those prints when I bought mine. No doubt he took a charitable deduction at the maximum value, tho on the open market they would be unlikely to return more than $75-100k each, and he avoided any capital gains tax. You were saying....?
    Ignore it if you like. The effective tax rate does go up, when the top tier is raised. I challenge you to prove this wrong. Clinton/Gore used this very effectively when they raised the top tier to balance the budget.

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by justabubba View Post
    you failed to address how the fund manager's investment of other peoples' monies causes it to be found "a risk/reward measure."
    It is risk/reward.

    If not manged properly then people will pull the money out of the fund. if it was so mismanaged to the point that it breaks the fiduciary codes then the investors can sue for their investments back.
    the hedge fund manager is then on the hook for the bill. don't believe me see Madoff.

    that is the risk.
    the reward is that if you are successful then you are awarded your profit pay based on your contract with the investors.

    usually people do not simply get to be hedge fund managers unless they have a proven track record of investing and a detailed
    list of gains and losses they can show people over several years.

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by ludin View Post
    It is risk/reward.

    If not manged properly then people will pull the money out of the fund. if it was so mismanaged to the point that it breaks the fiduciary codes then the investors can sue for their investments back.
    the hedge fund manager is then on the hook for the bill. don't believe me see Madoff.

    that is the risk.
    the reward is that if you are successful then you are awarded your profit pay based on your contract with the investors.

    usually people do not simply get to be hedge fund managers unless they have a proven track record of investing and a detailed
    list of gains and losses they can show people over several years.
    it is other peoples' money at risk
    the money manager is without financial risk, but is eligible for reward
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    I could do the wall over a longer period of time.I didn't need to do this. But I'd rather do it much faster. ~ President tRump
    Quote Originally Posted by Cardinal View Post
    Do you often refer to things that don't need to be done as an "emergency"?

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by Media_Truth View Post
    Ignore it if you like. The effective tax rate does go up, when the top tier is raised. I challenge you to prove this wrong. Clinton/Gore used this very effectively when they raised the top tier to balance the budget.
    *sigh* this is called not knowing what you are talking about.

    The effective rate only goes up if the deductions allowed goes down.
    when it came to clinton and gore they raised taxes and the rates went up yes but
    reagan had already cut most of the deduction and closed most of the loopholes from
    the 1984 tax bill.

    that is why all this bull**** about OMG the 90% tax rate the 90% tax rate.

    no one paid it. the effective tax rate was only about 50%. same during the 70's
    when it was about 70%. the effective tax rate was about 45% with all the deductions they were allowed.

    Reagan nixed most of the deductions and Trumps bill clamped down on them further.

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by justabubba View Post
    it is other peoples' money at risk
    the money manager is without financial risk, but is eligible for reward
    and as is knew it was a waste of time trying to educate you on it.
    being legally obligated is a risk. it is a huge risk.

    don't believe me ask the madoff family.

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    I just ran a basic return for a high income couple living in California and paying California income tax just to see how bad the SALT limitation would be for them. I used the same numbers under both 2017 and 2018 rules.

    Taxpayer situation as follows:
    Taxpayer is married with no dependents
    Income consists of:
    - wages of $1.2M with $100k Ca income tax withheld
    - Ordinary interest of $100k
    - Interest from CA municipal bonds of $350k
    - Dividend income of $35,000, $32,500 of which is Qualified Dividends and $115k capital gains distributions
    - $2,250,000 other capital gains
    - The only itemized deductions claimed are $100k state income tax, $65k property tax and $4500 personal property tax


    In theory, the SALT limitation would mean that the taxpayer would not be allowed to itemize and, sure enough, that's exactly what happens. Under 2017 rules the tax payer had $169,500 itemized deductions and in 2018 they are only allowed $10k. That should jam the taxpayer up!

    Well, not exactly. Under 2017 rules the high income taxpayer was not allowed to claim all their itemized deductions. In fact, their itemized deductions could be limited by up to 80%. Anyway, in this case the taxpayer was still allowed to deduct roughly $68 k of their itemized deductions. They were not allowed to deduct personal exemptions because high income taxpayer simply weren't allowed that deduction. The result is that under 2017 rules the taxpayer has $3,632,000 taxable income and under 2018 rules they have $3,676,000 taxable income

    From here the tax calculation is pretty much the same under both sets of rules. There is a calculation for additional medicare tax and then ordinary tax is calculated based on capital gains rates for CG income and ordinary rates for ordinary income. The result is that under 2017 rules the taxpayer would owe right around $1,014,000 and under 2018 rules they'd owe roughly $995,000....which is LESS than 2017.

    So, is it really the SALT limit that screws taxpayers in high income states? No, it isn't. If I cut all the figures to 10% of the example above we end up with comparable results. Even if I back out most of the capital gains and have the taxpayer avoid limitations on itemized deductions they STILL come out better under the 20108 rules.

    The question, then, is why are these people having problems with Trump's tax cuts?

    Well, the most likely reason is that their withholding was reduced too much. If you will owe $3,000 less tax but have $6,000 less withheld it will sure FEEL like you paid more. The other possibility is that these people were deducting "unreimbursed employee expenses" such as the cost of eating lunch while at work, the cost of needing a cell phone for work, the cost of travel related to work, etc. Since those deductions are no longer allowed (and were often HIGHLY abused) that can cause a whole lot of tax difference.

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by ludin View Post
    and as is knew it was a waste of time trying to educate you on it.
    being legally obligated is a risk. it is a huge risk.

    don't believe me ask the madoff family.
    then you are sharing with us an inability to distinguish between investment and fraud
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    I could do the wall over a longer period of time.I didn't need to do this. But I'd rather do it much faster. ~ President tRump
    Quote Originally Posted by Cardinal View Post
    Do you often refer to things that don't need to be done as an "emergency"?

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by Xelor View Post
    Gross income, adjusted gross income and after-tax income indeed are different from taxable income; however, the only one that one's tax liability is calculated on is taxable income. Given the information the member provided, most especially his specific reference to his "taxes owed" (aka, tax liability), taxable income is the only income value that makes sense to use in evaluating the plausibility/legitimacy of the member's assertion.
    But he said his income increased by about 2%, which you took to mean that his taxable income increased by 2%. This fails to account for the change in the standard deduction, which is one of the most significant changes that occurred.

    Unless he's pulling in close to $200,000, his taxable income is actually less this year than in 2017, despite the 2% pay increase.

    Let's take a quick look at someone making $30,000/year in 2017.

    Income: $30,000
    Standard Deduction: $10,400
    Taxable Income: $19,600
    Tax Liability: $2,474

    Let's say he gets a 2% raise for 2018:
    Income: $30,600
    Standard Deduction: $12,000
    Taxable Income: $18,600
    Tax Liability: $2,042

    Thus, despite an increase in income, the taxpayer benefits not only from a reduced tax rate, but an increase in the standard deduction. Taxable income actually goes down. The overall tax savings for this individual is $432. While I would call this a 17% reduction in tax over the previous year, you could also say that he paid 21% more last year than he did this year, which is completely in line with the original claim.

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    Re: ‘I trusted you!’ Trump voters seethe after realizing they’re getting screwed by the GOP’s tax pl

    Quote Originally Posted by Taylor View Post
    But he said his income increased by about 2%, which you took to mean that his taxable income increased by 2%. This fails to account for the change in the standard deduction, which is one of the most significant changes that occurred.

    Unless he's pulling in close to $200,000, his taxable income is actually less this year than in 2017, despite the 2% pay increase.

    Let's take a quick look at someone making $30,000/year in 2017.

    Income: $30,000
    Standard Deduction: $10,400
    Taxable Income: $19,600
    Tax Liability: $2,474

    Let's say he gets a 2% raise for 2018:
    Income: $30,600
    Standard Deduction: $12,000
    Taxable Income: $18,600
    Tax Liability: $2,042

    Thus, despite an increase in income, the taxpayer benefits not only from a reduced tax rate, but an increase in the standard deduction. Taxable income actually goes down. The overall tax savings for this individual is $432. While I would call this a 17% reduction in tax over the previous year, you could also say that he paid 21% more last year than he did this year, which is completely in line with the original claim.
    Blue:
    From a tax analysis standpoint, that's the only income measure that makes any sense to use, particularly given that the member referred expressly to his tax liability, something that is calculated based on taxable income, not AGI and not gross income. Had the member's remarks given me reason to use any other income measure, I wouldn't have bothered to perform the analysis I did, but s/he didn't, and s/he damn sure could have...2018 is clearly not the member's "first rodeo" as a taxpayer. The member's specific point of reference was his/her tax liability.


    Red:
    It's hardly that at all. What they did was eliminate personal exemptions and merge a portion of the formerly available reductions to AGI that formerly came from personal exemptions into the standard deduction (SD).


    Pink:
    If his taxable income is indeed lower, a supposition that doesn't follow from the context of the member's remarks, then of course, his tax liability will be lower provided the tax rate applicable to his taxable income is lower than the relevant 2017 rate. Nobody's suggesting that Trump didn't lower the tax rates.

    That notwithstanding, look at the example you provided. It doesn't account for the claim that the member's tax liability decreased by 22% -- which is a very specific number, it's not ~22% (which would make it be anything from 21.5% to 22.4%) it's not 21% or 17% -- and that assertion is the one with which I took exception and it's the assertion for which I showed no average rate extant in the TCJA will make that decrement happen.
    Those who jettison the epistemological standards of science are no longer in a position to use their intellectual product to make any claims about what is true of the world or to dispute the others’ claims about what is true. - Tooby & Cosmides
    The lion does not turn around when a small dog barks. -- African Proverb

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