'I Am The "Super Rich" And I Can't Afford Obama's Tax Hike'

[Bond]

This post isn't about politics or anything near that.
What i find amazing is that this guy, a law professor and his wife get $350K after taxes and says he doesn't have enough to live...:smxE:
Man this leaves me

http://www.businessinsider.com/i-am-the-super-rich-and-i-cant-afford-obamas-tax-hike-2010-9

 

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[MJ DeMarco]

The problem this guy has is he is working off EARNED income which is very difficult to shelter. He can't pay himself first as it is organizationally impossible. Now if he had that type of income with his own company, his options would improve, albeit, he'd still be stung -- just not as hard.

 

[HenkHolland]

I live in the wrong country (you'll probably think 'we already knew that'). This guy is paying approx. 23% in taxes at an gross income level of 450k.
With that kind of income he would pay close to 50% in taxes here in the Netherlands.

 

[Russ H]

I live in the wrong country (you'll probably think 'we already knew that'). This guy is paying approx. 23% in taxes at an gross income level of 450k.
With that kind of income he would pay close to 50% in taxes here in the Netherlands.

Hiya Henk!

Good to see ya posting.

Yeah, in parts of Scandinavia, the tax rate would be over 60%!

-Russ H.

 

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[hatterasguy]

$350k isn't super rich, plus its earned income which is the worst kind.

Also its just complaining, most people with money like to bitch a bit now and than about taxes. Heck even those who are broke do it, its an American past time.

 

[Rickson9]

$350K after tax is a lot of money IMO.

 

[Russ H]

These guys currently get about $10,000 PER MONTH after paying taxes.

Moral to the story:

It doesn't matter HOW much money you have coming in. If your outgo (expenses) are equal to or greater than your income, you're hosed.

Can you imagine-- working your a** off, finally getting $500K a year in income . . .

. . . and having nothing left at the end of each year?

Think about that.

-Russ H.

 

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[Rickson9]

Individuals who earn and burn hundreds of thousands of dollars a year pretty much deserve what they get.

 

[Bond]

These guys currently get about $10,000 PER MONTH after paying taxes.

-Russ H.

Isn't it $29,000 per month? 350K/12=29K

 

[Bilgefisher]

Here's the deal. Don't you think for a small percentage of what he is paying in taxes he could find an excellent tax consultant and learn to save thousands. Heck thousands per month in his case. But he probably thinks he is smarter than most and does it via turbo tax.

Its a penny wise, pound foolish mentality. This is a great lesson for most. You can't be an expert in every arena, but if you surround yourself with experts, you will be much better off.

 

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[Bilgefisher]

These guys currently get about $10,000 PER MONTH after paying taxes.

Moral to the story:

It doesn't matter HOW much money you have coming in. If your outgo (expenses) are equal to or greater than your income, you're hosed.

Can you imagine-- working your a** off, finally getting $500K a year in income . . .

. . . and having nothing left at the end of each year?

Think about that.

-Russ H.

There is a story in "the richest man in Babylon" that touches on that very topic. Essentially it talks about the fact that those who earn a lot and those who earn a little are both broke at the end of the month even though there incomes vary greatly. Why? It simply comes down to spending. Good point Russ.

 

[FDJustin]

Can you imagine-- working your a** off, finally getting $500K a year in income . . .

. . . and having nothing left at the end of each year?

Think about that.

-Russ H.

Yes I can actually. Very, very vividly. In fact, I have trouble imagining the opposite. We live in a world that wants to spend your money. You want to spend it, your family wants to spend it, your friends want to spend it, charities want you to spend it, events want you to spend it, every store you walk past wants you to spend it...

There's already a stong built-in pressure to use your wealth. Then there's plenty of real social and other pressures.
For example, every week or two someone asks me if I want to go to the movies. I can't afford it, so I usually tell them no- But I rather want to say yes. I don't really care if I go see a movie or not, that doesn't affect my desire. However, I rarely see the friends I have. I have no real means of entertaining them on my own... And they asked me to an event.
If I did say yes, impulsively I would want snacks. They make the 20 minute sit through advertisements more palatable (I think they stuff them there so you finish your snacks and get more, personally.) and it's an image thing. If you go to the movies and don't get any sort of snack, you just know people are thinking "Oh, look at you. You can't afford popcorn. Ah ha ha ha ha." or something equally silly. But seriously, even if you don't have those kinds of thoughts, it's hard not to want the snacks because you get to smell them, see them being eaten, and hear the annoying crunches and slurps around you.
Ah, but is that enough? Half way through the annoying string of advertisements on the eye-strainingly out of focus screen, just when you start to mutter a little louder about how you should be getting paid to sit there and watch this garbage instead of the other way around, Elmer Fudd... I mean, the Cineplex owner guy comes on and reminds you they have a charity you should generously donate to. For the children.
Movie plays. Movie ends. You came in at 7, ate moderately so you could look like you belong to the movie crowd with your medium popcorn and diet coke- And discover that salty snacks make you hungry. After being accosted by a hobo or an Indi... Wait. Aboriginal, is that what they go by now? Anyway, someone wants your change. That dealt with, it's now 9:30, you do a small errand, and can't forget that you're hungry. Too late to cook. So it's off to the nearest fast food dealy for a late night snack, and a $6 movie ticket turns into a $30 event. Plus charity. (To really drive the charity thing, there will be a charity donation box at your choice of fast foodery!)

And now for the money shot. "But Justin." I could hear you say, tone low with thinly veiled annoyance. "That's $30 out of $29,000. You're missing the point."
Nuh-huh, mysterious person who's voice I imagine! You're missing the point!
My point is that it's easy to spend, and when you think you're going off to spend on just one thing, there are going to be a whole lot of periphery things that call you to spend on them. I could slip into the fact that the more money you have, the more opportunity you have to spend it- and in larger amounts. You send your daughter to art classes instead of the theater. You hire Pablo to cut your lawn, instead of Timmy Jr from next door. You lend out $500 instead of $50.. But you know what? You still have to break knee-caps to get it back!

 

[Russ H]

Isn't it $29,000 per month? 350K/12=29K

Sorry-- should have explained my logic:

Husband, wife, and daughter get $29,000/mo = almost $10,000 each per month.

In too much of a hurry to post and get to other things-- sorry for the confusion. :/

-Russ H.

 

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[Bond]

Sorry-- should have explained my logic:

Husband, wife, and daughter get $29,000/mo = almost $10,000 each per month.

In too much of a hurry to post and get to other things-- sorry for the confusion. :/

-Russ H.

Oh i see. OK.

 

[MJ DeMarco]

There is a story in "the richest man in Babylon" that touches on that very topic. Essentially it talks about the fact that those who earn a lot and those who earn a little are both broke at the end of the month even though there incomes vary greatly. Why? It simply comes down to spending. Good point Russ.

I call em Sidewalkers ... paycheck-to-paycheckers!

 

[hakrjak]

This god is an ignorant idiot.... If I had that income, I'd be structured in a way to avoid as much tax as possible. He's playing right into the governments hand if he's paying $100k/yr of taxes. Yikes!

Stupidity kills, folks... and makes you broke!

- Hakrjak

 

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[Russ H]

This god is an ignorant idiot.... If I had that income, I'd be structured in a way to avoid as much tax as possible. He's playing right into the governments hand if he's paying $100k/yr of taxes. Yikes!

Stupidity kills, folks... and makes you broke!

- Hakrjak

Agreed.

Maybe the title of this article should be:

"I am the Stupid Rich, and I can't afford Obama's Tax Hike."

Whatdya think?

-Russ H.

 

[Anon3587x]

They are products of the educational system. What more did you expect?

 

[biophase]

This god is an ignorant idiot.... If I had that income, I'd be structured in a way to avoid as much tax as possible. He's playing right into the governments hand if he's paying $100k/yr of taxes. Yikes!

Stupidity kills, folks... and makes you broke!

- Hakrjak

Actually this guy is making $450k and only paying $100k in taxes? He is good pretty well with his tax strategy. If he and his wife are both employees then they are definitely doing something right, that is a super low tax bracket. In fact, I don't know how you could get it that low as W-2 employees.

If they are self employed then $90k of it is self employment tax and they are paying only $10k above that.

 

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[andviv]

C'mon guys.... these guys help the economy... and you need to have customers for your businesses as well, no?

Why take the harsh approach?

Find out what are these people spending their money on, and make sure you provide them with a service that they want to give you their money.

Isn't this how it is supposed to be?

If everybody ere 'smart' with their money, would they spend it renting limos, spending a week at B&B drinking wine, buying the latest model car, HD TVs, iPhones, laptops, iPads, internet connections, heck, paying us money to visit our sites and use our services?

I am trying not to pass judgment. Instead, I am trying to find out how to have these people being desperate for giving me their money in exchange of something I am producing for them.

 

[biophase]

Yes I can actually. Very, very vividly. In fact, I have trouble imagining the opposite. We live in a world that wants to spend your money. You want to spend it, your family wants to spend it, your friends want to spend it, charities want you to spend it, events want you to spend it, every store you walk past wants you to spend it...

There's already a stong built-in pressure to use your wealth. Then there's plenty of real social and other pressures.
For example, every week or two someone asks me if I want to go to the movies. I can't afford it, so I usually tell them no- But I rather want to say yes. I don't really care if I go see a movie or not, that doesn't affect my desire. However, I rarely see the friends I have. I have no real means of entertaining them on my own... And they asked me to an event.
If I did say yes, impulsively I would want snacks. They make the 20 minute sit through advertisements more palatable (I think they stuff them there so you finish your snacks and get more, personally.) and it's an image thing. If you go to the movies and don't get any sort of snack, you just know people are thinking "Oh, look at you. You can't afford popcorn. Ah ha ha ha ha." or something equally silly. But seriously, even if you don't have those kinds of thoughts, it's hard not to want the snacks because you get to smell them, see them being eaten, and hear the annoying crunches and slurps around you.
Ah, but is that enough? Half way through the annoying string of advertisements on the eye-strainingly out of focus screen, just when you start to mutter a little louder about how you should be getting paid to sit there and watch this garbage instead of the other way around, Elmer Fudd... I mean, the Cineplex owner guy comes on and reminds you they have a charity you should generously donate to. For the children.
Movie plays. Movie ends. You came in at 7, ate moderately so you could look like you belong to the movie crowd with your medium popcorn and diet coke- And discover that salty snacks make you hungry. After being accosted by a hobo or an Indi... Wait. Aboriginal, is that what they go by now? Anyway, someone wants your change. That dealt with, it's now 9:30, you do a small errand, and can't forget that you're hungry. Too late to cook. So it's off to the nearest fast food dealy for a late night snack, and a $6 movie ticket turns into a $30 event. Plus charity. (To really drive the charity thing, there will be a charity donation box at your choice of fast foodery!)

And now for the money shot. "But Justin." I could hear you say, tone low with thinly veiled annoyance. "That's $30 out of $29,000. You're missing the point."
Nuh-huh, mysterious person who's voice I imagine! You're missing the point!
My point is that it's easy to spend, and when you think you're going off to spend on just one thing, there are going to be a whole lot of periphery things that call you to spend on them. I could slip into the fact that the more money you have, the more opportunity you have to spend it- and in larger amounts. You send your daughter to art classes instead of the theater. You hire Pablo to cut your lawn, instead of Timmy Jr from next door. You lend out $500 instead of $50.. But you know what? You still have to break knee-caps to get it back!

Sorry but all I hear are excuses and maybe giving into peer pressure. I don't know of anyone who thinks that a person not eating popcorn in a theater cannot afford it. Maybe it's due to your age and your friends.

If you can't afford to go to a movie, don't do it. Why can't you and your friends just hang out? I'm sure you can spend 2 hours somewhere just chillin. Why is 9:30 too late to cook? Why didn't you eat before the movie?

I know that you are just telling a story above, but there are so many ways to avoid spending money. The poor people just give in to the advertisements and temptation. There is a reason why they have commercials!

 

[andviv]

If they are self employed then $90k of it is self employment tax and they are paying only $10k above that.

From IRS' site:

Maximum earnings subject to SE tax. Only the first $106,800 of your combined wages, tips, and net earnings in 2009 is subject to any combination of the 12.4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax.

Check out this table:
http://www.wwwebtax.com/miscellaneous/self_employment_tax.htm

Maximum Social Security tax (Self Employed) $13,243.00

Maximum Wages Subject to Medicare tax Unlimited
Medicare tax rate (Self Employed) 2.90%

 

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[Russ H]

C'mon guys.... these guys help the economy... and you need to have customers for your businesses as well, no?

Why take the harsh approach?

Find out what are these people spending their money on, and make sure you provide them with a service that they want to give you their money.

Isn't this how it is supposed to be?

If everybody ere 'smart' with their money, would they spend it renting limos, spending a week at B&B drinking wine, buying the latest model car, HD TVs, iPhones, laptops, iPads, internet connections, heck, paying us money to visit our sites and use our services?

I am trying not to pass judgment. Instead, I am trying to find out how to have these people being desperate for giving me their money in exchange of something I am producing for them.

Thanks once again, Andres, for turning my head back in the right direction.

It's people like this who buy stuff from our businesses!

-Russ H.

 

[Anon3587x]

This sudden realization Andviv brought upon us brings me to a very good point.

Just because the vast majority of people believe in blowing their money, does not by any means; prove it is the right thing to do.

How a fastlaner should look at this;

Us beginner fastlaners are fighting a battle and we are outnumbered greatly. But in the end, who is correct? The many or the few?

How anybody should look at this;

If out of 100 people you find yourself the sole believer in a specific opinion. Do not shy away from your idea because no one shares your thought. The views of the many are often wrong, the ideas of the few are often great.

 

[Davidla]

If out of 100 people you find yourself the sole believer in a specific opinion. Do not shy away from your idea because no one shares your thought. The views of the many are often wrong, the ideas of the few are often great.

This is one of my main principles.

I take it even further:

You can't be like everyone else - Otherwise you end up exactly where they are.

If you find yourself believing what everyone else believes - shy away from that idea =)

 

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[Bilgefisher]

Andres,
thanks for the calibration. These are the same type of people who once owned houses I buy. They might as well hand them to me and cut out the middle man bank. Would save everyone a headache.

 

[rxcknrxll]

These guys currently get about $10,000 PER MONTH after paying taxes.

Moral to the story:

It doesn't matter HOW much money you have coming in. If your outgo (expenses) are equal to or greater than your income, you're hosed.

Can you imagine-- working your a** off, finally getting $500K a year in income . . .

. . . and having nothing left at the end of each year?

Think about that.

-Russ H.

I know, right? I have a couple friends in this boat also. They earn quite a bit of money, and they're dead broke. They work every hour of every day, and they are considered at the top of their field. If they stopped working, they'd be bankrupt almost immediately. I just don't understand it.

 

[FDJustin]

Oh hey, cool. A direct response.

Sorry but all I hear are excuses and maybe giving into peer pressure.
... Excuses and peer pressure? You got that right on the nose!


I don't know of anyone who thinks that a person not eating popcorn in a theater cannot afford it.
I'm used to negative and catty people.

If you can't afford to go to a movie, don't do it.
I don't go. It is still tempting though.

Why can't you and your friends just hang out? I'm sure you can spend 2 hours somewhere just chillin.
We do just hang out on occasion... But the mentality = movies special/fun chilling = common/timewasting.

Why is 9:30 too late to cook?
Actually, I have no idea why that's too late to cook. It isn't for me, but plenty of other people see that it's getting dark and feel like their personal kitchen is closed to anything but the microwave and toaster.

Why didn't you eat before the movie?
:banana:

I know that you are just telling a story above, but there are so many ways to avoid spending money. The poor people just give in to the advertisements and temptation. There is a reason why they have commercials!

Yes, many people... Maybe even most people? Are pretty impulsive and swayed by temptations, peer pressure, and apt to use excuses. Whether you consider something a reason or an excuse, the process is still going to be about the same. Money is passed off, there is a cause to do so, and you justify doing it. I can see someone with 29k/month income having that exact same mentality, so I can easily see them not having a dime at years end.

And guys, the 100k tax thing might have just been a nice round looking number they tossed down because it gets the point across and looks impressive, rather than for accuracy's sake. There might even be a little insight into the personality there. If the taxes were instead, say, $138,873 rounding off about 40k might show how they handle all their money. Or maybe I'm being over-analytical.

 

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[Kung Fu Steve]

Maybe some of you have a strategy to avoid this trap? While I've learned to be real frugal these days there have been times in my past that money has come and gone faster than I knew. I could see myself buying something silly once I hit that 1 million mark. :smxB:

MJ? Russ? Anyone? What were/are your strategies for not going wild with your money?

I think we've talked about rules for this as far as "what can you really afford to spend on..." What were those formulas again?

 

[andviv]

Thanks once again, Andres, for turning my head back in the right direction.

It's people like this who buy stuff from our businesses!

. . . hey, ya changed your post-- now my reply makes me look obtuse!

. . . hey, wait . . . I like being obtuse! . .

-Russ H.

I don't recall changing my post... I did post twice within a couple of minutes, but don't remember changing it (even have a typo I have not corrected)