Upper middle class get the shaft (again)

Dec 15, 17 12:10

Post #1 of 57 (2711 views)

https://www.marketwatch.com/...llionaire-2017-10-27

This opinion piece is interesting.
A bit alarmist. And often incorrect. But interesting.

Personally, I feel that:
1) Democrats (post Reagan) typically raise taxes on the upper middle class and claim they are "raising taxes on the rich"
2) Republicans typically cut taxes for the extremely rich and say that they are "cutting taxes for everyone."

It seems this new tax bill is going to attempt to do both a Republican thing and Democrats thing at the same time.
It might be a super duper screw the upper middle!

Politics aside, this seems to be where we are heading anyway.

1) Are we heading for an economy where everyone who is NOT poor will be a "business owner"?
(Where all good jobs will be done by "contractors business owners" and all idle rich will be CEO's of investment companies)?
2) When the middle and upper middle classes have either become poor or become "small business people"
How will the government collect taxes then?
(Clearly, neither the Republicans nor the Democrats have any inclination to cut the government payouts for their pet constituencies).

Re: Upper middle class get the shaft (again) [Velocibuddha] [ In reply to ]

Dec 15, 17 12:18

Post #2 of 57 (2691 views)

It might be a super duper screw the upper middle!
Politics aside, this seems to be where we are heading anyway.

How so? I agree with your characterization of typical Dem/Rep tax approaches, but it seems to me that those in the upper middle class are doing increasingly well overall, while those in the lower middle class are struggling mightily to avoid falling into the lower class altogether.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Upper middle class get the shaft (again) [Velocibuddha] [ In reply to ]

Dec 15, 17 12:29

Post #3 of 57 (2669 views)

Did I just read that 401K Tax Deferred contributions will be limited to $2,400 a YEAR?!!!!!!!!!!!!

-----------------------------Baron Von Speedypants
-----------------------------RunTraining articles here:
http://forum.slowtwitch.com/...runtraining;#1612485

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 12:31

Post #4 of 57 (2661 views)

vitus979 wrote:

It might be a super duper screw the upper middle!
Politics aside, this seems to be where we are heading anyway.

How so? I agree with your characterization of typical Dem/Rep tax approaches, but it seems to me that those in the upper middle class are doing increasingly well overall, while those in the lower middle class are struggling mightily to avoid falling into the lower class altogether.

There are two ways to look at the upper middle:
1) based on assets and income
2) based on status.... "highly paid employees"

Highly paid "employees" are getting progressively more screwed - deductions going away.
Taxes staying the same.
Taxes going down for everyone else.

Many companies are moving towards an "employee ownership model" - where contractors are used and where "employees" get paid with ownership positions (i.e. stock) and are allowed "corporate type" deductions.

Personally, I am assets and income "upper middle" and I have done quite well with this "ownership society" b.s.

So moderately wealthy might still do OK or even proliferate.

But good like trying to save money as an "employee."

Re: Upper middle class get the shaft (again) [BarryP] [ In reply to ]

Dec 15, 17 12:35

Post #5 of 57 (2649 views)

BarryP wrote:

Did I just read that 401K Tax Deferred contributions will be limited to $2,400 a YEAR?!!!!!!!!!!!!

Yeah, I think this is a bit alarmist.
And perhaps a bit fact impaired.

But the bottom line is --- deductions are being targeted, income taxes are going to stay high.
Estate and corporate taxes are going down.
(And these seem to be a long term multi-party, world wide trends).

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 12:37

Post #6 of 57 (2642 views)

This is one of those situations where the use of the phrase "it's all relative" is very appropriate

https://en.m.wikipedia.org/...in_the_United_States

The truth is that banking 6 figures, 2 cars, own your own home, saving and investments puts the upper middle closer to the wealthy than those struggling month to month.

My anecdotal observation on people that make good money but are not "rich" is that many spend up to their income and have barely a pot to piss in with late reg cars, new kitchens, second homes, boats and toys.

Best advice I have ever read is hang out with people that make less than you...........

Re: Upper middle class get the shaft (again) [Velocibuddha] [ In reply to ]

Dec 15, 17 12:38

Post #7 of 57 (2642 views)

Right, I'm not arguing about the upper middle class getting shafted on taxes. I'm saying despite that, the upper middle class is continuing to thrive. My impression is that you're fairly typical- you're upper middle class in terms of assets and income, and you're losing some deductions, but you're also doing quite well with the current employment trends. So while it might not be fair, you aren't hurting, either. Quite the opposite, overall.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Upper middle class get the shaft (again) [Velocibuddha] [ In reply to ]

Dec 15, 17 12:39

Post #8 of 57 (2636 views)

Was published Oct 29, lots changed since then unless it has now looped back

Re: Upper middle class get the shaft (again) [Andrewmc] [ In reply to ]

Dec 15, 17 12:42

Post #9 of 57 (2622 views)

The truth is that banking 6 figures, 2 cars, own your own home, saving and investments puts the upper middle closer to the wealthy than those struggling month to month.

Yep. I think the upper middle class is moving closer to wealthy and the lower middle class is moving closer to poverty. More polarization in every area of life.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 12:49

Post #10 of 57 (2607 views)

vitus979 wrote:

Right, I'm not arguing about the upper middle class getting shafted on taxes. I'm saying despite that, the upper middle class is continuing to thrive. My impression is that you're fairly typical- you're upper middle class in terms of assets and income, and you're losing some deductions, but you're also doing quite well with the current employment trends. So while it might not be fair, you aren't hurting, either. Quite the opposite, overall.

Yeah.
Also I could just as easily be a "contractor" as a "highly paid employee."

So, part of what I think is happening is that "highly paid employees" and "wealthy individuals"- are simply being replaced by "contractors" and "investment business owners."

Last edited by: Velocibuddha: Dec 15, 17 12:50

Re: Upper middle class get the shaft (again) [BarryP] [ In reply to ]

Dec 15, 17 13:05

Post #11 of 57 (2566 views)

BarryP wrote:

Did I just read that 401K Tax Deferred contributions will be limited to $2,400 a YEAR?!!!!!!!!!!!!

That was floated at one point by a couple people but I don’t think that got anywhere near the actual bill.

Re: Upper middle class get the shaft (again) [Velocibuddha] [ In reply to ]

blueraider_mike

Dec 15, 17 13:07

Post #12 of 57 (2558 views)

Newsflash for you...slowly but surely, all things deductible will go away for those above average means. They have to get the money from some place, they will keep going back to the same 20% of taxpayers until they realize that will not be enough and then they will come for the middle class.

Meanwhile this article is from Oct and is factually incorrect. Don't worry poor and middle class get all the goodies, at least for now.

Re: Upper middle class get the shaft (again) [Velocibuddha] [ In reply to ]

Dec 15, 17 13:43

Post #13 of 57 (2488 views)

Velocibuddha wrote:

https://www.marketwatch.com/...llionaire-2017-10-27

This opinion piece is interesting.
A bit alarmist. And often incorrect. But interesting.

Personally, I feel that:
1) Democrats (post Reagan) typically raise taxes on the upper middle class and claim they are "raising taxes on the rich"
2) Republicans typically cut taxes for the extremely rich and say that they are "cutting taxes for everyone."

It seems this new tax bill is going to attempt to do both a Republican thing and Democrats thing at the same time.
It might be a super duper screw the upper middle!

Politics aside, this seems to be where we are heading anyway.

1) Are we heading for an economy where everyone who is NOT poor will be a "business owner"?
(Where all good jobs will be done by "contractors business owners" and all idle rich will be CEO's of investment companies)?
2) When the middle and upper middle classes have either become poor or become "small business people"
How will the government collect taxes then?
(Clearly, neither the Republicans nor the Democrats have any inclination to cut government).

Fixed it for ya!

No need to thank me. ;-)

"Politics is just show business for ugly people."

Re: Upper middle class get the shaft (again) [blueraider_mike] [ In reply to ]

Dec 15, 17 13:46

Post #14 of 57 (2480 views)

It appears that the upper-middle class gets hit big-time (esp. in blue states), and that pays for tax cuts for corporations and the ultra-wealthy. The corporate tax cut is also partially funded via debt. Middle and lower classes get very small tax cuts that are actually much smaller than they would get if they simply got a rebate check paid out of the $150B/year that this thing costs. Of course, there are winners/losers throughout the system. Eventually, since all individual tax breaks are sunsetted after 10 years, all individual filers could/will be screwed then. This is based on prior news and may have changed. We won't know the specifics for another hour.

Last edited by: oldandslow: Dec 15, 17 13:52

Re: Upper middle class get the shaft (again) [oldandslow] [ In reply to ]

Dec 15, 17 13:52

Post #15 of 57 (2466 views)

Did they keep the provision to kill the individual health insurance mandate?

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 13:54

Post #16 of 57 (2464 views)

Quote:

Did they keep the provision to kill the individual health insurance mandate?

Don't know, rumors say yes. The upper-middle class already has coverage and didn't receive subsidies. The rises in health care costs to cover the uninsured will be borne by those who are covered.

Last edited by: oldandslow: Dec 15, 17 13:55

Re: Upper middle class get the shaft (again) [oldandslow] [ In reply to ]

Dec 15, 17 14:02

Post #17 of 57 (2439 views)

If I don't have to pay a penalty for the privilege of not being able to afford health insurance, that's a silver lining for me at least.

I'll take my cold comfort anyway I can get it.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Upper middle class get the shaft (again) [oldandslow] [ In reply to ]

blueraider_mike

Dec 15, 17 14:05

Post #18 of 57 (2438 views)

oldandslow wrote:

It appears that the upper-middle class gets hit big-time (esp. in blue states), and that pays for tax cuts for corporations and the ultra-wealthy. The corporate tax cut is also partially funded via debt. Middle and lower classes get very small tax cuts that are actually much smaller than they would get if they simply got a rebate check paid out of the $150B/year that this thing costs. Of course, there are winners/losers throughout the system. Eventually, since all individual tax breaks are sunsetted after 10 years, all individual filers could/will be screwed then. This is based on prior news and may have changed. We won't know the specifics for another hour.

You can spin this anyway you like, but the vast majority of folks are getting a tax cut. Only 30% itemized and after this bill the number may only be 15%. Your are right, those is high tax states will get less but then again, they have be subsidized the most through the years but it will be mostly anyone making over $150K. So I would tell you to make more money and feel confident that you next marginal dollar earned will be taxed less.

And once again, middle and lower classes cannot get large tax cuts because they don't pay much in taxes if at all...do you suggest that we send them bigger checks?

Re: Upper middle class get the shaft (again) [blueraider_mike] [ In reply to ]

Dec 15, 17 14:16

Post #19 of 57 (2417 views)

blueraider_mike wrote:

oldandslow wrote:

It appears that the upper-middle class gets hit big-time (esp. in blue states), and that pays for tax cuts for corporations and the ultra-wealthy. The corporate tax cut is also partially funded via debt. Middle and lower classes get very small tax cuts that are actually much smaller than they would get if they simply got a rebate check paid out of the $150B/year that this thing costs. Of course, there are winners/losers throughout the system. Eventually, since all individual tax breaks are sunsetted after 10 years, all individual filers could/will be screwed then. This is based on prior news and may have changed. We won't know the specifics for another hour.

You can spin this anyway you like, but the vast majority of folks are getting a tax cut. Only 30% itemized and after this bill the number may only be 15%. Your are right, those is high tax states will get less but then again, they have be subsidized the most through the years but it will be mostly anyone making over $150K. So I would tell you to make more money and feel confident that you next marginal dollar earned will be taxed less.

And once again, middle and lower classes cannot get large tax cuts because they don't pay much in taxes if at all...do you suggest that we send them bigger checks?

All I know is, we took in RECORD tax revenues in November -- more than has ever been taken in before -- yet we're still on pace this year to run a damn $600 BILLION deficit. Seriously?

We don't have a tax revenue problem. We have a SPENDING problem.

We're out of our damn minds, pure and simple. And the two major political parties are to blame. They both need to die painful, excessively gory and overly long deaths, in fact. ;-)

"Politics is just show business for ugly people."

Re: Upper middle class get the shaft (again) [big kahuna] [ In reply to ]

Dec 15, 17 14:20

Post #20 of 57 (2407 views)

yet we're still on pace this year to run a damn $600 BILLION deficit.

If we cut military spending back to the level we agreed to with our NATO peeps, we could cut that almost in half.

"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Re: Upper middle class get the shaft (again) [blueraider_mike] [ In reply to ]

Dec 15, 17 14:22

Post #21 of 57 (2406 views)

Quote:

So I would tell you to make more money and feel confident that you next marginal dollar earned will be taxed less.

The rates are virtually the same for upper-middle earners, aren't they? Given the lack of SALT deductions, the next marginal dollar earned will certainly be taxed more (double taxation, remember?). The tax cuts are extremely small for folks making under 100K (unless you happen to have a lot of kids). Singles don't make out too well either. The cuts definitely pick winners and losers, and the overall amount saved is way lower than the variance in individual tax bills.

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 14:41

Post #22 of 57 (2375 views)

vitus979 wrote:

yet we're still on pace this year to run a damn $600 BILLION deficit.

If we cut military spending back to the level we agreed to with our NATO peeps, we could cut that almost in half.

Both parties need to put their big boy pants on, and that means cuts across the board and some increase in revenue, with the goal of decreasing taxes once things stabilize while maintaining those cuts. And those cuts have to be to entitlements, military, and discretionary programs (agencies). I was a big fan of sequestration because it triggered the cuts side of the equation to some degree when politicians could not do their job.

In my perfect world, the tax plan would be somewhere at least tax brackets based on income and absolutely no deductions. But that won't happen due to too many lobbyists in real estate, tax preparation services, ....

Bottom line, we are screwed.

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 14:44

Post #23 of 57 (2374 views)

vitus979 wrote:

yet we're still on pace this year to run a damn $600 BILLION deficit.

If we cut military spending back to the level we agreed to with our NATO peeps, we could cut that almost in half.

Where do we sign? The rate we're going, we're going to have money for two things: defense/entitlements and debt service. And that's it. Yes, the economy will expand and tax revenues will rise, and a bit of leverage is fine, yada yada. But this is no way to run a budget or reasonably balance the books.

"Politics is just show business for ugly people."

Re: Upper middle class get the shaft (again) [tigermilk] [ In reply to ]

Dec 15, 17 14:54

Post #24 of 57 (2363 views)

Quote:

I was a big fan of sequestration because it triggered the cuts side of the equation to some degree when politicians could not do their job.

X-infinity. Sequestration was a spectacular success. Of course, the GOP hated it....

Re: Upper middle class get the shaft (again) [vitus979] [ In reply to ]

Dec 15, 17 15:54

Post #25 of 57 (2321 views)

vitus979 wrote:

Right, I'm not arguing about the upper middle class getting shafted on taxes. I'm saying despite that, the upper middle class is continuing to thrive. My impression is that you're fairly typical- you're upper middle class in terms of assets and income, and you're losing some deductions, but you're also doing quite well with the current employment trends. So while it might not be fair, you aren't hurting, either. Quite the opposite, overall.

I'm not sure how related those two issues should be. That's like jacking up the taxes on millenials, and then explaining to them "yeah, but look at all the great sex you're getting! You're doing great."

Last edited by: SH: Dec 15, 17 15:55

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