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I'm going to take up smoking so I can give that up!
the payroll tax is 2% on gross income. If you're an average Joe making $80,000 that's $1,600 less in take-home pay. That isn't meaningless and certainly not some kind of false doom as you suggest.
Politicians become remarkably adept at putting two and two together when the answer equals "failing to get re-elected."
I suppose they could try to do something on either people with incomes over a certain amount or people with account sizes over a certain amount, but doing anything to IRAs and 401(k) plans rapidly moves from attacking Wall Street (good!) to attacking Main Street (boo-urns!)
We're headed to uncharted territory...who knows what's next? All I know is I'm this government's favorite target.
The "deferred" in 401(k)'s/traditional IRA's refers to taxes. Roths aren't tax-deferred for the very reason you suggest - you've already paid your taxes on your contributions (and by Roth definition, everything in the account).
I think so, because you essentially would be paying taxes on the gains. At this point any gains in roth's are 0% but you are deferring the gains so in 2014 you could be paying between 0 - ordinary income rates.
Exactly. I was commenting because it sound like you were lumping Roths into the deferred category in the previous post.
classlessthug: I have too much on my plate to worry about the fact that my junk intimidates some needle D undergrad.
I think the tax on Roth assets is even less likely than a (different) tax on other retirement plans. Roths are pretty much by definition Middle America. Since 2010 you have some upper income types contributing to a non-deductible Traditional IRA and then converting the basis to Roth, but by and large, taxing Roths = taxing Main Street. I think there are much easier targets out there than this.
I didn't mean to, though I can see where my wording might have been confusing. I meant to include Roths in the general theme of "plans that have more favorable taxation laws that could change," not that they were deferred plans.
Everyone who has a Roth will eat at Olive Garden tonight. Fact.
I will also be using fewer special characters.
I'm gonna let Paul pay my 2%.
plus Joe might now get hit with the unpatched AMT, amirite?
completely agree. Roth IRA's come with really low income limits and Roth 401K's just aren't that popular.
The big tax on any tax deferall plan is the delta in rates. I really see much higher rates in 20-30 year outlook, that's the tax bite.
I guess but I do agree with Paul that some deal will get settled and most earners below 250K will be saved.
The payroll tax holiday isn't even on the table (I don't think). It's pretty much a foregone conclusion that every american wage earner will have at least 2% less in their pocket come Jan 1
Ditto. I'm a household making under 200k in NYC. I should be GETTING an extra 2%.
Average Joe doesn't make $80K.
But yeah, it isn't meaningless but it's also being hyped to ridiculous proportions. Payroll tax cut was always meant to be temporary stimulus, the rest of the stuff the gov't can mitigate to various degrees, and I would bet the markets don't freak out too much because impending Congressional failure has to be baked in by now.
median household income last year was 45K. If you scope out retirees, students, under/un-employed, the average working Joe is probably in the 80K range. I'd even bet median househould income in the suburban Maryland counties somewhere in the 60-80K range. The thing with payroll taxes is that it's on gross income, so you're paying on every dollar of gross income.
I actually don't disagree, it was always meant to be temporary (by both parties), it's just that the tax factored into other tax increases scheduled (Obamacare 0.9% and now the looming increase on income taxes) all baked together to impact on the same day doesn't make for a good recipe.
FWIW, this thread wasn't meant to be on policy, just that every american wage earner will see a signinifcantly less take-home pay and was curious how it would affect their behavior.
The suburban Maryland counties are some of the richest counties in the country, the median there is by no means "average joe"
I know, I just think the impact of this whole thing on most people will be minimal. Carry on.
im also gonna switch from canned beans to dried. much much cheaper.
As you know, we are kicking off a basic homemaking series here on FLNW : making pie crust, baking bread, buying meat. I am going to share what I know. You are going to add what you know. We are all going
NYCTerp is now OCTerp
Except they don't. $173k household is not REALLY low. $110k individual is not REALLY low. By no reasonable person's definition is over double the median "really low". 2011 median was $51k HH
This post was edited by PKP 313 16 months ago
To answer the OP's question, travel, which of course means less money back into the economy if many do the same.
I need to find out what the exact tax brackets are. I make ~84K and put 11% in a 403b which puts my gross income at around 75K. If I put a little bit more in, will it take me down to the next lowest bracket? Of course those on the left want more of my pathetic little income to go back in the government pot for those "less fortunate".
less milk shakes and more milk steaks!
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