Slashdot Mirror

Yes, it's been done that way for a very long time. The taxable income is the adjusted gross income (ADJ). You can see the table here. Remember that the amount of income in the table is ADJ, not your raw income.

Normally, the people who make a complain about the bracket is the people who are in the highest bracket (top 1%) because all of the exceeding income they get will be taxed at the highest rate. I'm not going to go into whether it is good or bad because it is too subjective.

I'm not sure "saving on fees" was the real motivation here. Tax avoidance sounds a lot more likely. ...

As I mentioned elsewhere, Nerdwallet lists the average international bank wire fees as $45 outgoing and $13 incoming, so he risked $422 US to save $58.

I hadn't considered tax issues, if there are any. A post on a CanadaVisa site forum says:

Transferring money between US and Canada is fairly simple. Several Canadian banks have the ability to open a US based account with the same or partner bank. Transfers between your accounts are then very simple. I would suggest that you speak to an accountant with experience in crossborder taxes.

"Deposited his life savings into Quadriga CX's digital exchange" were the stupidity keywords that convinced me not to feel sorry for him.

After all of the Bitcoin exchanges that have failed over the past few years, why do people still DO this?

TFS says he, "just wanted to save a few bucks on transfer fees" moving from CA to Vancouver, so he probably just intended to park the money for a very short time while he moved and found a new bank. Seems dumb in any case. Nerdwallet lists the average international bank wire fees at $45 outgoing and $13 incoming, so he risked $422K US to save $58. Cheaper still would have been to bring some cash, deposit a check to open a new account and use a CC for a bit. Some life lessons are hard, but "penny wise and pound foolish" doesn't have to be one of them.

You may think you do, but you don't.

https://www.nerdwallet.com/blo...

Lowered our grocery bill from $800/mth to $300/mth by switching from credit cards to cash (temporarily, to pay off all our debt). Best financial decision we ever made. Yes, it sucked for a while.

In the US, we do not tax wealth; we tax income. If you look at the actual data you will see the top 1% make about 20% of all the income, but pay 40% of all income taxes. Wealth isn't taxed; income is. If you want to argue for a wealth tax, then do that - otherwise you're just trying to stir up some class-envy to bolster your incorrect argument.

Capital gains taxes for short-term (less than 1 year) gains are the same as ordinary income. Long term capital gains (more than 1 year held) can be lower, but still is not tax-free. It's there to encourage long-term investments and savings - which I would think would be beneficial to society? Or should we encourage all investors to only see short-term gains, in-and-out, churn the funds and eschew long-term stability?

Social Security is capped in terms of benefits, which is why contributions are also capped. You are really mistaken here, stating there is no cap on social security contributions.

For protection, we already tax property on its assessed value. The person with the $500,000 home pays, on average, twice the property tax as the person with a $250,000 home. The more expensive car has higher tabs/registration rates. And those tax payments are what covers things like police, fire, roads, schools, and so on. Federal taxes you on how much you make, so if you make more you pay more (and it's progressive - your payment rate goes from essentially zero income tax to quite high). If anything, it appears the original GP was correct - the more you make, the more you pay, and disproportionately so. Even taxes on Social Security benefits are also progressive and tax the higher income earner at an even higher rate.

So let's cut to the chase - what should the tax rate be? Should it be on income? Should it be on wealth? Who gets away with paying zero, who gets to pay more?

If you look at my original post from actual taxpayer data, you will see that the top 1% pay around 27% effective income tax rate; well above any other group of people (for example, the bottom 50% average around 3.5%). As far as Warren Buffet, Buffet does NOT have to take every tax deduction he is legally entitled to, and in fact he can donate even more if he would like. Additionally capital gains are taxed up to 20% rate, so not too much lower than the average income tax rate for the top 1% (who pay a typical income tax rate around 27%).

Bezos probably paid at least 20% on those capital gains, meaning about $556 million in capital gains taxes.

Capital gains are taxed once you break $38,600 in income - long or short term capital gains. And for many people, capital gains taxes are at a level about the same as their regular income tax rates.

For overseas income, IF you live exclusively overseas then you MAY get up to your first $97,000 in income tax-free in the US, provided you paid taxes overseas. All income above that rate is taxable in the US, regardless of where you live. So overseas income is still taxable.

And loans that are forgiven are taxable income; if you default on a secured loan and lose stock/assets because of it, then it is considered income and can be subject to income tax (exclusion for the first $500K in home value). Get a loan against $1MM in shares, and default and have to sell those shares to cover the loan? You also have to pay any capital gains taxes due on that sale.

Perhaps...

https://www.nerdwallet.com/blo...

And, again, if you don't carry the phone at all times? Or pull the battery?

Not something you would do normally. And if you do, you'll be flagged by the system just for that. It will certainly retain your picture and the driver will remember you, etc.

BTW - the goal isn't total anonymity. It's FRAGMENTATION of data

No disagreement here. Yet the cellphone gives marketeers and police alike a single source...

The link for the credit cards was from 2007.

The first link was from 2007 and talked about BOFA piloting the program. The second link is from 2014 and talks about the credit-availability to illegals from a much wider array of financial institutions. "Illegal immigrant" and "no credit card" are (nearly) orthogonal — if anything, an immigrant can get a card from a bank in his home country... Other options exist too.

And, after all, both Lyft and Uber accept Paypal and debit cards. Having an established credit is not necessary...

I think, I'm done here. It is getting tedious — especially because I find myself hunting for evidence to cite, while you reply with unsubstantiated (or outright incorrect) statements...

Thank illegal immigration and the underground economy created by it -- many people have no choice OTHER than to pay cash for services.

More naiveté. An illegal immigrant can get a credit card, not a problem...

But if cash is paid, all the system knows is that cab #5A4D went from point A to B at such-and-such a time and date.

Your naiveté is touching. We already know, how easy it is to uniquely identify you just by your web-browser. And that's something you can control somewhat.

With an active smartphone in your pocket, you are uniquely identifiable by definition — the MAC-addresses of your WiFi and Bluetooth chips betray you. It may be just a bit more difficult to obtain the IMEI from your phone's conversations with the cell-towers. Not to decipher the context of your SMSes and voice-conversations — that'd be illegal and impractical — but simply to keep track of your movements.

Will these systems know your name? You only need to slip up once, allowing to tie your phone to your name (and your cellular provider has the link already). Perhaps more importantly, they don't need to know your name to peddle wares to you — they just need to know, where you are going with any frequency.

Customer photos aren't uploaded to said system.

As I already said, not for very long. The ever-Increasing wireless bandwidth will make real-time uploads of such images to the cloud practical... But these are not even necessary to identify you...

You know, everything you say is based on the belief that the government is not the peoples' voice. Everything is done with full consent. Just look at the reelection statistics. 95% speaks volumes.

That fact is, the post office would operate just fine if they were allowed to fund their pensions the same way the privates do. What congress did is sabotage, and for obvious reasons. The post office is one of the few institutions that can keep the delivery (and banking) services honest. It is our government that provides us (if we demand it with our vote) some real clout in the market.

Fully agree. It's why I also believe that we should NOT have a national "minimum wage", nor nationalized health care. Diversity of the nation pretty much prevents us from having a system that will service everyone efficiently. We can have a wide disparity in costs/users just within a 5 hour drive. Back to the concept of "50 experiments running in parallel" would probably suit our nation much better.

An interesting take on Southern California's school districts. Note that Imperial United, with a $177K average house value and ~24 students per teach outperforms Beverly Hills Unified with $1,000,000+ average house value and 17 students per teacher.

There is a similar scheme involving whole life insurance. If I understand it correctly (and I don't promise that I do) you can put your money into the whole life policy. As it grows you would have to pay taxes on it if you pull it out. Instead of pulling it out you get "loans" against the policy which is tax free. Then, when you die, the policy passes to your heirs tax free as part of the policy pay-out. https://www.nerdwallet.com/blo...

It looks good on paper but I actually question how well it really works. For example: if your investment only grew at a meager 4% in the life insurance policy after fees while an index mutual fund grew at 8% then you'd better off just paying taxes on the growth of the index fund. (The actual numbers depend on your tax level but you get the idea)

I have no intention of getting a whole life insurance policy to do this.

Business property taxes cover the same kinds of real property (real estate and buildings) that personal property taxes do.

The other items you listed not only are not subject to business property taxes but actually can be written off taxes as either expenses (pencils, paper) or depreciation (PCs are actually listed, same here at the IRS).

It looks like the base cost of raising a child to 18 not including private/home school or college is about $260,000 per child. Including college/sports/music lessons/etc. that can more than double. https://www.nerdwallet.com/blo...

... pretty soon you're talking real money.

But come on fellas, this is the US government! I mean, the Pentagon lost $6 trillion down the back of a sofa - did anyone complain about that? The Fed spent over $16 trillion of the taxpayers' money to bail out the banks in 2008, and no one was even charged with wrongdoing.

Basic tax arithmetic: there are (about) 333 million Americans, so $1 billion is (about) $3 apiece - or about $8 per taxpayer. And $1 trillion is (about) $3000 apiece - or $8000 per taxpayer.

"Today, the average household with credit card debt has balances totaling $16,748, and the average household with any kind of debt owes $134,643, including mortgages". https://www.nerdwallet.com/blo...

So why worry about the odd trillion here or there? It's government of the people, by the people, for the people - so you gotta love it!

Really? Everyone except you reports a cost around $700/month for a typical car. How are your expenses so much lower than this? Perhaps you miscalculated something?

Usually, however, it is the banks that get hurt the most. This includes small regional banks. Visa and MasterCard’s contracts generally put the burden of fraud reimbursement onto the bank.

The answer might surprise you. According to an in-depth study by the U.S. Department of Energy's Argonne National Laboratory, hybrid cars do, in fact, require more energy to produce than conventional cars, emitting more greenhouse gases and burning more fossil fuels during the manufacturing process. The production of hybrid batteries, in particular, requires much more energy than producing a standard car battery and results in higher emission levels of gases like sulfur oxide [source: Burnham et al].

But do the environmental impacts of hybrid vehicle production outweigh the long-term benefits of driving a cleaner running automobile? That answer is a resounding "no." If you drive both a conventional and hybrid car for 160,000 miles (257,495 kilometers), the conventional vehicle requires far more energy to operate and emits far more greenhouse gases over its lifetime, significantly canceling out any imbalance during the production stage [source: Burnham et al].

Basically, to be that awesome "green citizen", you'll need to drive that electric car near 160,000 miles. Something that would take ~10 years or so to do. A more recent study looks at cost of ownership and appears to have an approximately $10k difference between gasoline and electric over 5 years.

I think the reason that they mention "people of color" separately (I don't know why they didn't just say minorities), is that being a person of color is correlated with having low income.

That's not the reason. People of color are generally shut out of the same banking products that we take for granted.

http://www.nytimes.com/2015/10...

There's been several studies now that show that with a black family and white family with exactly the same income and credit scores, the black family is less likely to be given loans and more likely to be steered toward "sub-prime" type of banking products, even though they're repayment rates are the same.

http://www.epi.org/publication...

https://www.nerdwallet.com/blo...

I'm too drunk for this, but..

I think it is smart to have a 30 year mortgage rather than a 15 year one because my rate is much less than I expect from my investments, and the difference in payments is being invested.

So.
Monthly payment: M
Principle (amount borrowed): P
Interest rate (monthly): i
Number of repayments: n

M = P [ i(1 + i)^n ] / [ (1 + i)^n â" 1]
(stolen from https://www.nerdwallet.com/blo... )

So 30 year mortgage:
T = P(i(1+i)^360) / ((1+i)^360 -1)
vs 15 year mortgage:
F = P(i(1+i)^180) / ((1+i)^180 -1)

Frankly that's a pain in the arse for me to calculate while drunk - and wolfram alpha can't tell me the difference between T and F. So lets assume

i = 4% annually, so 0.04/12 = 0.00333 recurring
P = 400,000, on the grounds any less means you're not investing enough to generate a decent return anyway

T = 1910
F = 2959

Now, you're stating that you can generate greater returns than the mortgage would cost. That equates over a 30 year timeframe to:

((2959-1910) * ( (1 + x)^360 â" 1) / ( x(1 + x)^360)) - (30 * 12 * 1910) > (2959 * ( (1 + x)^180 â" 1) / ( x(1 + x)^180 )) - (15 * 12 * 2959)

Ok, that's ignoring the time value of money. However, at no point on that equation does any value of (x) actually translate to a real number. You have to start using the square root of -1 to make that equation resolve.

Maybe my maths is broken. I'm not terribly good at it and I'm drunk, but frankly it's looking pretty unlikely for you.

All you can eat internet is going to drive up prices.

http://www.washingtonpost.com/...
http://nypost.com/2015/02/12/n...
http://www.techtimes.com/artic...
http://www.nerdwallet.com/blog...

Since the losses due to card fraud are almost entirely borne by the banks, I have to assume it is more cost effective to take the losses than to chip all of the cards.

No sir! In the US, fraud is borne by the merchant. http://www.nerdwallet.com/blog...

You are correct that it's more economical for the banks to incur 0 cost than a non-zero cost, however.

Either you didn't have an average balance of $15,000 or you have an interest rate of .008%. I'll admit that I didn't compound that, but that would only work to a lower interest rate. That's definitely not the high end: http://www.nerdwallet.com/rate...

The merchants are responsible for eating the costs. Merchants are also liable for chargebacks.

Because if I use a firm who charges 0.05% and gives me a 3% return, that's better than a firm that charges 1% and gives me a 10% return.

Funds that charge higher fees DO NOT give better returns.

Higher Fees Don't Mean Higher Returns, Study Finds 24% of Active Mutual Fund Managers Outperform the Market In every single time period and data point tested, low-cost funds beat high-cost funds Morningstar Study Says High Fees Are Bad for Investment Performance

Anybody that thinks that high fees are buying high performance is delusional.

A reasonable point. Often (as is evidenced by the links you provided), higher fees are associated with organizations which maximize their profits at their customers' expense. My point was most certainly not "you should find a money manager who charges you more! They're the ones who will make you the most money!" My point was that money managers who charge a percentage of money under management (regardless of what that percentage might be) have a strong incentive to maximize your returns, as it maximizes their profits as well.

That said, my point about returns is still valid. If (and, as you correctly point out, that's a big if) you are being charged a certain percentage and are receiving a certain return, that doesn't necessarily mean that it's impossible for someone to pay a higher fee and get an even higher return. How does that disclaimer go again? "Past performance is no guarantee of future performance."

The truth is that regardless of how someone manages (or pays someone else to manage) their assets, they should keep a close eye on them and make sure they are maximizing their returns. Making the point that, in the aggregate, higher fees don't necessarily translate into higher returns, is useful and should be factored into investment decisions.

However, each person needs to make their own decisions and those decisions may or may not track with the graph. It's in that decision space that the aphorism generally (and incorrectly) attributed to PT Barnum is proven correct every single day.

Because if I use a firm who charges 0.05% and gives me a 3% return, that's better than a firm that charges 1% and gives me a 10% return.

Funds that charge higher fees DO NOT give better returns.

Higher Fees Don't Mean Higher Returns, Study Finds
24% of Active Mutual Fund Managers Outperform the Market
In every single time period and data point tested, low-cost funds beat high-cost funds
Morningstar Study Says High Fees Are Bad for Investment Performance

Anybody that thinks that high fees are buying high performance is delusional.

I'm trying to come up with an explanation that makes realistic and consistent assumptions about the stupidity of the buying public, and still makes sense

For years, companies (and even some government entities) basically kept saying "can't afford something, no problem, finance it". Which is fundamentally what caused the meltdown in '08 -- too much borrowing, and financial institutions giving out credit like candy to people who couldn't pay it back.

People have been conditioned to believe that their wants are in fact needs.

Can't afford that $700 smart phone? No problem, get it on credit. Can't afford the new sofa for your house? No interest no payments. Can't afford that new house? We'll give you a mortgage anyway.

When your buying public doesn't really understand credit, and when everybody "needs" to have the latest and greatest thing, the lure of convenient monthly payments (which you may still not be able to afford) solves your problem.

If the average America has $15K in credit card debt, you seriously have to ask why people buy their phones on an extended contract?

Seriously, you're trying to find the answer to a far broader issue than just cell phones.

Points a) and b) are not as prevalent as you'd think - Americans don't all 'live on credit'. You do see a lot of card-based transactions, but they're either debit transactions or credit transactions of convenience. I'm not sure what the UK equivalent is, but funds I spend via my debit card (looks just like a credit card; even has Visa on it) come directly from my bank account linked to that card. It's like a card-based check (cheque to you). Debit card volume in the US exceeds credit card usage.

The other thing you see is people using their credit card to make purchases to get 'points' or other rewards. Personally I don't bother with that, since the CC companies are betting that you'll 1) forget to pay off your balance on time, 2) let the points expire, or 3) earn fewer points than the yearly cost of the card. I only have CC's with no annual fee, and I don't have time to bother with balance-juggling.

While that sounds nice in theory but for most people it doesn't make any different. For example say you get back $2,000 from your tax return. If you intend on saving you could keep in your weekly check that money and put it in an interest barring account and come out ahead. but when your saving account is paying 0.1% interest you are making less then $2 by doing so. $2 a year for most people isn't even worth time time to figure out the proper withholding. And don't tell me about the stock market or similar where i am putting my money at risk. so until interest rates go to a sane level its just not worth it.

Unless of course you're one of the unwashed masses that has an abundance of credit card debt. Using that extra money to pay off your debts more quickly can give you a great return, at least in the sense that you'd LOSE less money.

The vast majority of bankruptcies in America were related to medical bills as recently as last year, even with people who had insurance.

Depending on where you go, a "routine" doctor's visit can range from $50 to $200. Still, it's much cheaper for both you and an insurance company to cover a once a year "wellness" visit and catch anything early on than it is for you to skip the yearly visit since it costs an extra $50, and then suddenly learn you've had a slow growing tumor in your ear and now you're going deaf.

Your main point is right. Co-payments are terrible health policy.

Actually, the most common example is people with asthma. If they use their controller medication, they won't get asthma attacks, but the controller medication can be expensive. There were health insurance plans that covered 100% of medication costs. Then they shifted to co-payments. Even with small co-payments, people stopped taking their controller medication. They got asthma attacks, and wound up in the hospital. One ER trip will cost as much as several years of controller medication. So the plans wound up paying more under co-payments as they did with 100% payments. Same with co-payments for blood pressure medication -- more heart attacks and strokes. If you want to look this up, to make sure I'm not repeating an urban myth, it was reported in the New England Journal of Medicine by Amal N. Trivedi, who published a few other studies like that. Also see the Rand Health Insurance Experiment on Wikipedia or elsewhere.

The vast majority of bankruptcies in America were related to medical bills as recently as last year, even with people who had insurance.

Depending on where you go, a "routine" doctor's visit can range from $50 to $200. Still, it's much cheaper for both you and an insurance company to cover a once a year "wellness" visit and catch anything early on than it is for you to skip the yearly visit since it costs an extra $50, and then suddenly learn you've had a slow growing tumor in your ear and now you're going deaf.

Catch anything early on? Oh, you put so much faith in those wellness checkups. Most of that "diagnosis" is left on the paper, and your cheap-ass insurance only pays for the doctor to be paying attention for about 2 minutes per paying customer. Better talk fast if you've got family history.

The vast majority of bankruptcies in America were related to medical bills as recently as last year, even with people who had insurance.

Depending on where you go, a "routine" doctor's visit can range from $50 to $200. Still, it's much cheaper for both you and an insurance company to cover a once a year "wellness" visit and catch anything early on than it is for you to skip the yearly visit since it costs an extra $50, and then suddenly learn you've had a slow growing tumor in your ear and now you're going deaf.

It takes that many cards to hold all the debt an average American family has

http://www.nerdwallet.com/blog...

O_o
That's crazy high!

About 9 years back I received a pre-approved offer for a credit card (Visa, IIRC) with a limit of $100,000. I tore that sucker up into teensy-weensy bits. The utterly bizarre thing was I didn't gross that at the time (though I was close.)

It takes that many cards to hold all the debt an average American family has

http://www.nerdwallet.com/blog...

O_o
That's crazy high!

Most community banks and credit unions have true free checking accounts.

http://www.nerdwallet.com/blog...

Commercial banks, not so much.

The problem is at least as much with bank location as it is the availability of free checking.

To paraphrase Willie Sutton, banks go where the money is.