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Barack Obama Speaks On Economy At Cooper Union
Topic Started: Mar 27 2008, 09:25 AM (606 Views)
Dandandat
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Time to put something here
RTW
Apr 1 2008, 12:36 PM
Someone here doesn't understand the principle of investment tax shelters.  It very well could be me.

Does the government not know about these evil tax shelters or does the government set them up purposely to encourage investment vs stashing cash in our mattresses?

I'm sorry, I used shelter as a colorful metaphor, it was not to imply that there is anything hidden or legally wrong with the fact that investment income is taxed at a lower rate then other forms of income. I used 'shelter' because I think it's an apt analogy, but the concept is not the same as other hidden and at times illegal tax shelters.

The legal practice of taxing this income differently is wrong and amounts to nothing more then another type of tax shelter.

So yes the government knows about it and has set it up this way. And yes propionates claim its there in order to "encourage investment."

However there is a whole group of people, most of which are top earners in this country, who make most if not all of their income through investment. In this way investment as you or I see it is not what these people are doing, it is there job it is there income. This money should be taxed as such but is not.
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Dandandat
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Time to put something here
Minuet
Apr 1 2008, 12:52 PM
RTW
Apr 1 2008, 11:36 AM
Someone here doesn't understand the principle of investment tax shelters.  It very well could be me.

Does the government not know about these evil tax shelters or does the government set them up purposely to encourage investment vs stashing cash in our mattresses?

I am a bit confused as well.

Here in Canada we have Registered Retirement Savings Plans. You invest money for your retirement and you don't pay tax on the money now. You do pay tax when you take the money out - at retirement when you convert the money to a plan that pays out a certain amount each month or year. Your income is presumably lower at retirement and therefore in the end you will pay lower taxes. It's really more of a tax deferment then a shelter. And you can only invest a set amount each year.

I believe you have similar retirement plans in the US. But I get the feeling that the tax shelters being discussed here have nothing to do with retirement plans. If so then I would be curious to know exactly how much money can be sheltered from taxes by investing and what types of investments qualify?

No, that's not what is being disused.

What is being discussed are people who make much if not most of their every day living money (their income) off of investments. Hedge fund mangers for example. Not people who invest for retirement in retirement funds or even other long term vehicles.

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Admiralbill_gomec
UberAdmiral
Minuet
Apr 1 2008, 11:46 AM
I don't believe Mr. Obama was ever a car salesman either. Your comment seemed to imply that anyone who took the point of view that taxes were not being done properly right now was a used car salesman. If I misunderstood then I apologize.

Your problem is: you don't speak American English, Min.

Yes, it is an American figure of speech.

:wave2:
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ds9074
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Admiral
Dandandat
Apr 1 2008, 05:05 PM
Minuet
Apr 1 2008, 12:52 PM
RTW
Apr 1 2008, 11:36 AM
Someone here doesn't understand the principle of investment tax shelters.  It very well could be me.

Does the government not know about these evil tax shelters or does the government set them up purposely to encourage investment vs stashing cash in our mattresses?

I am a bit confused as well.

Here in Canada we have Registered Retirement Savings Plans. You invest money for your retirement and you don't pay tax on the money now. You do pay tax when you take the money out - at retirement when you convert the money to a plan that pays out a certain amount each month or year. Your income is presumably lower at retirement and therefore in the end you will pay lower taxes. It's really more of a tax deferment then a shelter. And you can only invest a set amount each year.

I believe you have similar retirement plans in the US. But I get the feeling that the tax shelters being discussed here have nothing to do with retirement plans. If so then I would be curious to know exactly how much money can be sheltered from taxes by investing and what types of investments qualify?

No, that's not what is being disused.

What is being discussed are people who make much if not most of their every day living money (their income) off of investments. Hedge fund mangers for example. Not people who invest for retirement in retirement funds or even other long term vehicles.

Well we have had this debate in the UK as well - with wealthy businessmen paying a lower tax rate than their cleaners.

Thing is it is actually quite hard to fix this because driving wealthy people out of a country by imposing higher taxes isnt going to help the lower paid.
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Dandandat
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Time to put something here
No it would not, but would making wealthy businessmen pay a equal tax rate than their cleaners drive them out of the country? I would agure that it would not. The thrid richest man and wealthy businessman agress.

where would they go? and how long befor that plase asks them to paby up too?
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