It's quite easy to take this to it's extreme where it is de facto throttling. What if Verizon (for example) offers unlimited service to every site except ones owned by AT&T and T-Mobile. For those sites they charge $100/kb. For 99% of users that means you can't use those sites if you are on Verizon's network.
This may be overkill as many people have suggested just using a linux VPS. But we are using a VPS from arpnetworks to host an instance of pfSense (FreeBSD based firewall distro). This is connected to our main site's firewall via a VPN tunnel. We have a/29 on the arpnetworks side to get a few extra public IPs (we need them to host SSL web sites). We then route traffic from those IPs over the tunnel to our internal network. There's no reason you couldn't do the same thing for a single address. I think it costs us $10/month +5/month for the/29 (single IP would be free).
At the risk of being redundant, for those who haven't even read the summary, let alone the original article. The income limit is double for families. So the family would have to be bringing in 400k. (And yes a family doesn't necessarilly have to mean married filing jointly, but even then we would be looking at each person's income independently, and the family as a whole could be making significantly more than 200k without paying a state income tax.)
As for small businesses, this is a PERSONAL tax, not a business tax, and the small business owner would not be claiming 200k as income if they are making 200k and paying out 150k in salaries. They would be claiming 50k as income. (The business wouldn't even be claiming 200k as profit).
I'm sure there are some edge cases (someone earlier brought up Medicaid eligibility). But the point is that there are way too many people who think it's as simple as you edge one dollar over into the next tax bracket and you owe thousands of dollars more in taxes.
Nah, I think those sites oversimplify things. IANAAccountant, but I believe if you have under $100k you have to use the tax tables, which break it up into $50 increments, so you are bound to have these stair step artifacts. But as I said above, this is very different from people who think going up $1 in income could cost you thousands of dollars. This is more of a rounding error, and caps out at $14. Also, after $100k you calculate it based on percentages, so it is a continuous function.
Yes, taxes as determined by tax tables are not a continuous function. But plenty of people are misconstruing things in a big way. They think that because the tax rate jumps from 25% to 33% at 60k, that at $60001 you are paying a 33% tax on every cent of your income. That's a very different issue that being out $12 from a rounding error. (And ignoring the people who make $49 extra dollars in income and pay no extra tax whatsoever in it.) Maybe it's to prevent errors, or because the IRS doesn't trust everyone to do the math, but you're coming at a different side of this than most people are arguing against.
But that is not how tax brackets work. In your not fully fleshed out example, I'm assuming the rate is 30% below 40k and 35% above it, right?
That means if you made 39800 you would pay 11940 and take home 27860. If you make 40200 you would pay 30% on the 1st 40k ($12000) and 35% on the remaining $200 (or $70) So your total tax bill would be $12070, and you would take home $28130 which is shockingly more than $27860.
The tax codes weren't made by idiots, but by beaurocrats.
Sort of. If you include sales taxes and property taxes. These generally will not increase as fast as your income. In the grandparent's study, the lowest income range paid almost nothing in income tax nationwide, but almost 11% of their income in sales/excise/property tax. The top 1% paid about 2% in sales/excise/property and another 4% in income taxes.
Alternatively if you do this, then those taxes need to be high enough that everyone's basic necessities can be provided for them when they can no longer feed/cloth/house/doctor themselves.
Or, if you need $20k to survive and are paying 25% of your $20k income in taxes, then you could just get $5k back from the government either in cash or social services. There are many different ways of accomplishing the same thing, with varying degrees of efficiency. Is a soup kitchen more efficient than welfare? It probably depends on the individual and the soup kitchen. Of course you can just let people starve, which is free, until they steal your car stereo to feed themselves.
Your figures are a bit off. I'm going to ignore his marital status and his spouse's income (if he has one). He'd be paying 5% on 200-500k. ($15k) 9% on 500k-554833 (almost $15k) for a total of $30k.
And for the people acting like this is a huge burden on people who make something like $210k a year. They would be paying $500 dollar as a result of this tax.
For our international readers who may not be familiar with the rigamarole of the US tax structure there are many layers.
Income is taxed at several levels: Federal (35% on income over about 375k, 25% between 35 and 80k, and various other levels above and below that) State (0% to 11% with each state having their own rates and brackets Municipal taxes (with some random searching i found up to 3% in parma heights, ohio I'm sure some are more, and many there are none)
And there are of course many other non-income sources of taxation: Property (meaning houses, usually taxed at the county level in my experience, in between state and Municipal, depends on the value of the house, sometimes the use) Property (some states tax additional forms of property, cars, boats, etc.) Sales tax (most states have this in some form or another, but also some counties and some towns will tack on some themselves)
Payroll Taxes (15.3 for social security and medicare combined, which is genrally split with your employer) and of course some states have their own disability insurance or unemployment insurance that is taken from your payroll as well.
Then you have to mix that all together. Some taxes will not count as income for other taxes (e.g. money you pay on your property tax may not be counted as income on your federal and state taxes). And each type of tax may allow various different deductions and credits (e.g. medical insurance payments may count as income on your federal taxes but not your state, etc, etc.
As a random and personal yardstick, about 25% of my paycheck is deducted for various non-voluntary things.
And those are almost universally phased out gradually.
To use a large and recent credit, the 1st time homebuyer credit. It's an $8000 credit that you are fully eligible for at an income of under $125k. It phases out linearly over the next $20k, so for each extra $1k of income between 125 and 145k you are only effectively bringing in $600 because you are losing some of your credit. But YOU ARE STILL GETTING $600 more, not $0 more or $400 less. Also that is a one time credit, and quite large, not something that recurs year after year.
Can you provide an explicit example of a $1k bump in gross income resulting in less net income?
If that's the case then his employers need someone competent handling their payroll. His entire withholding shouldn't shift to a different basis if his income goes up by $1k, just that $1k should be withheld at a higher rate.
Granted. And I have some experience with this, and the rigamarole you need to go through when a grandparent is going into assisted living, making sure they have enough income to pay for long enough that they will be covered, but not so much that they are ineligible.
But this is a problem at the opposite end of the spectrum (and highlights the absurdity of healthcare costs). A cutoff of medicaid at $20k or so is not a problem for people making 200k+ a year.
I still would want to see an actual hard example before I would believe that someone would actually be getting less by earning more. I don't believe there's an actual income band where someone is effectively in a tax bracket of over 100%, _even with_ a contrived set of credits/deductions.
As a hypothetical example, you pay: 0% on your 1st $10k 10% on your 2nd $10k 20% between $20k and 70k and 33% after that. That doesn't mean at 100k you are paying 33k in taxes. It means you are paying $1k on your 2nd 10k, 10k on your next 50k, and 10k on your next 30k, for a grand total of 21k. At no point did you bring home less because you are making more.
Also, I understand how increasing tax rates may create less of an incentive to make more money. But a disincentive? Come on! I may only get to directly benefit from 60c out of every dollar I earn after 200k. But that doesn't mean that I see no benefit from it. I would just get a slightly smaller marginal return than I was before.
While that's true, they are "phased out" for just that reason. They don't decrease faster than your income is increasing. a $1,000 credit might phase out between 100k and 110k of income. That means that for each extra 1k of gross income your net income is only increasing by 900. It is not decreasing!
I haven't used pfSense, but have used m0n0 for quire a while. If you're concerned about your old hardware crapping out (or don't have any lying around), you should be able to put your own box together for under $200 easily that will have far more horsepower than anything you can buy for even close to that price. You can easily use a CF card for booting and pick a fanless board. You can avoid all moving parts and hopefully up the reliability quite a bit. If rolling your own box is beyond your skills or time, in additioning to putting my own box together I've also gotten two units from these guys: http://www.logicsupply.com/categories/firewall_systems in rackmountable units, but they also make smaller ones (10"x2"x7"). They also have boxes running untangle (which I haven't used myself either).
I wasn't trying to make the case that there is no intent to distribute with bittorrent, but that rather than actually comitting the illegal act you are engaged in a conspiracy to commit it. My point was more that it is not a 1:1 comparison with transferring a file via FTP, not that it renders you law-proof. There is a fundamental difference between a distributed action and a unilateral action. They may be similar and have the same ends, but it isn't quite right to claim that uploading 100% of a file to 1 person is quite the same as uploading 1% of a file to 100 people. You are acting as part of a crowd, which may make your culpability worse. I believe that in some cases conspiracy only requires planning to be charged, not necessarily action on your part. So you could begin downloading a torrent, and never successfully download (or upload) any pieces, and potentially still be guilty of conspiracy.
Granted this would be computationally impractical, but what if rather than distributing the actual work, you distributed hashes of the work only. For example you take a 12 byte segment of the work and generate a MD5 hash of it. (We can substitute whatever value of 12 bytes would gaurantee no collisions The uploader sends the downloader a sequence of these hashes. The downloader then attempts to generate each possible 12 byte segment until it gets a match and then concatenates them. They aren't actually sending you the contraband bytes, or something that can directly be turned into them. This would be somewhat analogous to asking someone (about the book they are reading): Is the 1st letter A? Is the 1st letter B? etc. until they say yes. And continuing for each subsequent letter. Horrendously inefficient, but are you copying it? revaling it?
Is telling someone the answer is 42 really the same as telling them the question is what do you get when you multiply 6 by nine? (Unless they have access to a planet sized computer.)
I agree that this seems a bit silly, but there is a difference here. Transferring a file over FTP, for example, you are sending all the pieces to one person. With bittorrent, you are sending some of the pieces to one person, some to another. Unless you are the sole seeder, it is highly likely that anyone is getting the copy solely from you. One could make a tortured analogy to illegal drug manufacture. While it might be illegal to sell some drug, the chemicals one could use to create it are not. Even if some are, the chemicals that in turn make those up may not be. If you go far enough down the chain you will eventually arrive at something which can legally be distributed. So if you take these perfectly legal components, and distribute each one to a different person, are you culpable when they exchange these pieces amongst themselves and manufacture an illegal end product?
Yes, I know that you could then make an argument that you are conspiring with them to commit this illegal act. But IANAL and certainly IANAAL (Australian Lawyer), so I'll leave the technicalities of conspiracy to wiser heads.
Fair enough, but the entity here is a corporation, not an individual. So this is being distributed by someone, at least within the company.
If you formed a nonprofit organization that discovered and then distributed circumvention devices amongst its members would that run afoul of the DMCA?
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Jeez, practically 3 digits, you have been here a long time :)
It's quite easy to take this to it's extreme where it is de facto throttling.
What if Verizon (for example) offers unlimited service to every site except ones owned by AT&T and T-Mobile. For those sites they charge $100/kb.
For 99% of users that means you can't use those sites if you are on Verizon's network.
This may be overkill as many people have suggested just using a linux VPS. But we are using a VPS from arpnetworks to host an instance of pfSense (FreeBSD based firewall distro). This is connected to our main site's firewall via a VPN tunnel. We have a /29 on the arpnetworks side to get a few extra public IPs (we need them to host SSL web sites). We then route traffic from those IPs over the tunnel to our internal network. There's no reason you couldn't do the same thing for a single address. I think it costs us $10/month +5/month for the /29 (single IP would be free).
At the risk of being redundant, for those who haven't even read the summary, let alone the original article. The income limit is double for families. So the family would have to be bringing in 400k. (And yes a family doesn't necessarilly have to mean married filing jointly, but even then we would be looking at each person's income independently, and the family as a whole could be making significantly more than 200k without paying a state income tax.)
As for small businesses, this is a PERSONAL tax, not a business tax, and the small business owner would not be claiming 200k as income if they are making 200k and paying out 150k in salaries. They would be claiming 50k as income. (The business wouldn't even be claiming 200k as profit).
I'm sure there are some edge cases (someone earlier brought up Medicaid eligibility). But the point is that there are way too many people who think it's as simple as you edge one dollar over into the next tax bracket and you owe thousands of dollars more in taxes.
And you think your landlord's property tax isn't getting passed straight on to you? Except you don't get to deduct it.
The cited study is including sales tax, property tax, etc in the calculations, not just the income tax.
Nah, I think those sites oversimplify things. IANAAccountant, but I believe if you have under $100k you have to use the tax tables, which break it up into $50 increments, so you are bound to have these stair step artifacts. But as I said above, this is very different from people who think going up $1 in income could cost you thousands of dollars. This is more of a rounding error, and caps out at $14. Also, after $100k you calculate it based on percentages, so it is a continuous function.
Yes, taxes as determined by tax tables are not a continuous function. But plenty of people are misconstruing things in a big way.
They think that because the tax rate jumps from 25% to 33% at 60k, that at $60001 you are paying a 33% tax on every cent of your income.
That's a very different issue that being out $12 from a rounding error. (And ignoring the people who make $49 extra dollars in income and pay no extra tax whatsoever in it.) Maybe it's to prevent errors, or because the IRS doesn't trust everyone to do the math, but you're coming at a different side of this than most people are arguing against.
But that is not how tax brackets work.
In your not fully fleshed out example, I'm assuming the rate is 30% below 40k and 35% above it, right?
That means if you made 39800 you would pay 11940 and take home 27860.
If you make 40200 you would pay 30% on the 1st 40k ($12000) and 35% on the remaining $200 (or $70)
So your total tax bill would be $12070, and you would take home $28130 which is shockingly more than $27860.
The tax codes weren't made by idiots, but by beaurocrats.
Sort of. If you include sales taxes and property taxes. These generally will not increase as fast as your income.
In the grandparent's study, the lowest income range paid almost nothing in income tax nationwide, but almost 11% of their income in sales/excise/property tax.
The top 1% paid about 2% in sales/excise/property and another 4% in income taxes.
Alternatively if you do this, then those taxes need to be high enough that everyone's basic necessities can be provided for them when they can no longer feed/cloth/house/doctor themselves.
Or, if you need $20k to survive and are paying 25% of your $20k income in taxes, then you could just get $5k back from the government either in cash or social services. There are many different ways of accomplishing the same thing, with varying degrees of efficiency. Is a soup kitchen more efficient than welfare? It probably depends on the individual and the soup kitchen. Of course you can just let people starve, which is free, until they steal your car stereo to feed themselves.
Your figures are a bit off. I'm going to ignore his marital status and his spouse's income (if he has one).
He'd be paying 5% on 200-500k. ($15k)
9% on 500k-554833 (almost $15k)
for a total of $30k.
And for the people acting like this is a huge burden on people who make something like $210k a year. They would be paying $500 dollar as a result of this tax.
For our international readers who may not be familiar with the rigamarole of the US tax structure there are many layers.
Income is taxed at several levels:
Federal (35% on income over about 375k, 25% between 35 and 80k, and various other levels above and below that)
State (0% to 11% with each state having their own rates and brackets
Municipal taxes (with some random searching i found up to 3% in parma heights, ohio I'm sure some are more, and many there are none)
And there are of course many other non-income sources of taxation:
Property (meaning houses, usually taxed at the county level in my experience, in between state and Municipal, depends on the value of the house, sometimes the use)
Property (some states tax additional forms of property, cars, boats, etc.)
Sales tax (most states have this in some form or another, but also some counties and some towns will tack on some themselves)
Payroll Taxes (15.3 for social security and medicare combined, which is genrally split with your employer)
and of course some states have their own disability insurance or unemployment insurance that is taken from your payroll as well.
Then you have to mix that all together. Some taxes will not count as income for other taxes (e.g. money you pay on your property tax may not be counted as income on your federal and state taxes). And each type of tax may allow various different deductions and credits (e.g. medical insurance payments may count as income on your federal taxes but not your state, etc, etc.
As a random and personal yardstick, about 25% of my paycheck is deducted for various non-voluntary things.
And those are almost universally phased out gradually.
To use a large and recent credit, the 1st time homebuyer credit. It's an $8000 credit that you are fully eligible for at an income of under $125k. It phases out linearly over the next $20k, so for each extra $1k of income between 125 and 145k you are only effectively bringing in $600 because you are losing some of your credit. But YOU ARE STILL GETTING $600 more, not $0 more or $400 less. Also that is a one time credit, and quite large, not something that recurs year after year.
Can you provide an explicit example of a $1k bump in gross income resulting in less net income?
If that's the case then his employers need someone competent handling their payroll. His entire withholding shouldn't shift to a different basis if his income goes up by $1k, just that $1k should be withheld at a higher rate.
Granted. And I have some experience with this, and the rigamarole you need to go through when a grandparent is going into assisted living, making sure they have enough income to pay for long enough that they will be covered, but not so much that they are ineligible.
But this is a problem at the opposite end of the spectrum (and highlights the absurdity of healthcare costs). A cutoff of medicaid at $20k or so is not a problem for people making 200k+ a year.
I still would want to see an actual hard example before I would believe that someone would actually be getting less by earning more. I don't believe there's an actual income band where someone is effectively in a tax bracket of over 100%, _even with_ a contrived set of credits/deductions.
That's not how brackets work.
As a hypothetical example, you pay:
0% on your 1st $10k
10% on your 2nd $10k
20% between $20k and 70k
and 33% after that.
That doesn't mean at 100k you are paying 33k in taxes. It means you are paying $1k on your 2nd 10k, 10k on your next 50k, and 10k on your next 30k, for a grand total of 21k. At no point did you bring home less because you are making more.
Also, I understand how increasing tax rates may create less of an incentive to make more money. But a disincentive? Come on! I may only get to directly benefit from 60c out of every dollar I earn after 200k. But that doesn't mean that I see no benefit from it. I would just get a slightly smaller marginal return than I was before.
While that's true, they are "phased out" for just that reason. They don't decrease faster than your income is increasing. a $1,000 credit might phase out between 100k and 110k of income. That means that for each extra 1k of gross income your net income is only increasing by 900. It is not decreasing!
I haven't used pfSense, but have used m0n0 for quire a while. If you're concerned about your old hardware crapping out (or don't have any lying around), you should be able to put your own box together for under $200 easily that will have far more horsepower than anything you can buy for even close to that price. You can easily use a CF card for booting and pick a fanless board. You can avoid all moving parts and hopefully up the reliability quite a bit.
If rolling your own box is beyond your skills or time, in additioning to putting my own box together I've also gotten two units from these guys:
http://www.logicsupply.com/categories/firewall_systems
in rackmountable units, but they also make smaller ones (10"x2"x7"). They also have boxes running untangle (which I haven't used myself either).
I wasn't trying to make the case that there is no intent to distribute with bittorrent, but that rather than actually comitting the illegal act you are engaged in a conspiracy to commit it. My point was more that it is not a 1:1 comparison with transferring a file via FTP, not that it renders you law-proof. There is a fundamental difference between a distributed action and a unilateral action. They may be similar and have the same ends, but it isn't quite right to claim that uploading 100% of a file to 1 person is quite the same as uploading 1% of a file to 100 people.
You are acting as part of a crowd, which may make your culpability worse. I believe that in some cases conspiracy only requires planning to be charged, not necessarily action on your part. So you could begin downloading a torrent, and never successfully download (or upload) any pieces, and potentially still be guilty of conspiracy.
Granted this would be computationally impractical, but what if rather than distributing the actual work, you distributed hashes of the work only. For example you take a 12 byte segment of the work and generate a MD5 hash of it. (We can substitute whatever value of 12 bytes would gaurantee no collisions The uploader sends the downloader a sequence of these hashes. The downloader then attempts to generate each possible 12 byte segment until it gets a match and then concatenates them.
They aren't actually sending you the contraband bytes, or something that can directly be turned into them.
This would be somewhat analogous to asking someone (about the book they are reading):
Is the 1st letter A?
Is the 1st letter B?
etc. until they say yes.
And continuing for each subsequent letter.
Horrendously inefficient, but are you copying it? revaling it?
Is telling someone the answer is 42 really the same as telling them the question is what do you get when you multiply 6 by nine? (Unless they have access to a planet sized computer.)
I agree that this seems a bit silly, but there is a difference here.
Transferring a file over FTP, for example, you are sending all the pieces to one person.
With bittorrent, you are sending some of the pieces to one person, some to another. Unless you are the sole seeder, it is highly likely that anyone is getting the copy solely from you.
One could make a tortured analogy to illegal drug manufacture. While it might be illegal to sell some drug, the chemicals one could use to create it are not. Even if some are, the chemicals that in turn make those up may not be. If you go far enough down the chain you will eventually arrive at something which can legally be distributed.
So if you take these perfectly legal components, and distribute each one to a different person, are you culpable when they exchange these pieces amongst themselves and manufacture an illegal end product?
Yes, I know that you could then make an argument that you are conspiring with them to commit this illegal act. But IANAL and certainly IANAAL (Australian Lawyer), so I'll leave the technicalities of conspiracy to wiser heads.
Fair enough, but the entity here is a corporation, not an individual. So this is being distributed by someone, at least within the company.
If you formed a nonprofit organization that discovered and then distributed circumvention devices amongst its members would that run afoul of the DMCA?