$15,000 gold price by 2025? Jim Rickards and Peter Schiff!!

Folks, the U.S. Dollar will remain the Resereve Currency for DECADES unless AOC & Co. implement their screwball anti-free market nonsense.

And I would remind you that those screwballs are already present in the UK, EU, etc.

So don't look for a repeat of the 1970's when gold went up 20-fold. But a doubling to the $3,000 range in a few years is not out of the question, IMO, even if things remain stable.

 

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Has nothing to do with being infallible, but by the time the USD is gone everyone alive currently will have been long gone as well. Every major country has trillions in debt and every one of them is spending heavily right now to keep the world from completely falling apart with lockdowns

 

I'd like to see a little more detail on the math here.

 

My view of high income individuals overall taxation:

Fed - 35%
State - 12%
FICA - (soon to be if a party gets in) 7.65% - Currently around 2%
Real Estate taxes - Maybe 4%
Sales Tax - Maybe 3%, as not all income used to buy stuff for higher earners

So, just direct taxes, somewhere around 55% is paid in taxes. It will hit 60% once the cap to SS is lifted and all income subject to this.

Yeah, the rich don't pay "their fair share", yet half of all Americans collectively net pay ZERO. And, to add to the joy, they do not get ANY Federal stimulus payments, get almost no deductions everyone else gets, and get savaged in the media as greedy creeps daily.

 

For California in the example above their top State rate is already 13.3%, if their new proposal goes through it would be 16.8%. If that isn't bad enough it would also be applied retroactively to the full year even though I have no idea how that should ever be legal to retroactively tax things.

 

Okay, digging into those devilish details just a little bit:

Fed: the top tax bracket is actually 37% -- but that only applies for income over $500K or so. The 35% rate kicks in just over $200K/year. If you make less than $160K/yr, your maximum marginal rate is 24%.

FICA: for Social Security, 6.2% of your income up to $137.7K, plus 1.45% for Medicare. Above that income level, additional income incurs zero SSI tax. (There's no limit for the 1.45% Medicare.) If you make $500K, your effective FICA rate is (137700 * .062 + 500000 * 1.45) / 500000 * 100% = 3.1%.

State, real estate, sales tax -- too much variation by state, I won't address it here. However, it is frequently the case that taxes paid to one entity can be deducted when you're computing taxes for the next entity. (The ironically named Tax Cuts and Jobs Act did limit those deductions, thereby INCREASING taxes for many taxpayers. I'm happy to say this isn't the place to go into the politics involved there.)

I will say that anyone earning enough to land in that top tax bracket will certainly be structuring their assets and income so that they pay a lot less than 37%. I'm not a big fan of tax codes complex enough to both allow and encourage that sort of thing, but that's what we have, and what we're likely to have for the rest of my life, regardless of who wins what when.

 

40% for the Feds....16% for California....add in some FICA, property, sales, Medicare investment tax, and other taxes....it's almost 60%.

 

In the 1960's the Top 50% of earners paid 85% of the taxes, the Bottom 50% paid 15%.

Today, it's 97% and 3%.

Yet because we have a non-transparent tax system...and a media which isn't that smart....many Americans are CONVINCED that "The Rich" don't pay their "fair" share.

 

Substitute smart with honest and you nailed it.

 

I was aware of the "devilish details". I chose 35% because the 37% rate is the catchup to make all income 35% rate. I rounded for Medicare. And unless you are in a hedge fund, there is no "structuring" compensation into lower taxable brackets unless you defer it and hope will be taxed lower later.

I just get tired how much most people do not understand how overtaxed higher earners are. $200 or $300k on the coasts are very little money today.

 

I see here a table from 2015 stating that the top 50% of taxpayers pay 97.3% of income taxes -- and earn 87.25% of the adjusted gross income. (And again, "adjustments" can cover a multitude of sins.) I've dug a bit, but so far I can't find the same comparison for any year in the 1960s.

 

I sort of assumed that.

Ah, yes, compensation. The stuff that Jeff Bezos gets to the tune of maybe $1.7 million a year. (Interestingly, less than $100K of that is salary.)

But by being frugal, I guess, and despite his onerous marginal tax rate, he's tucked away enough spare change to build a nest egg of something like $180 billion -- that's about one hundred thousand YEARS of salary. HIS salary.

That would cover the average American household for, let's see, (tap-tap-tap) three million years.

Clearly.

 

My thesis was on taxation, I remember the date from 35+ years ago.

I can probably dig out the IRS data on it. It was alot more skewed thanks to tax loopholes despite higher marginal rates.

 

Those are the people who get screwed when the Tech, Media, Social Media, and Wall Street super-rich relocate to the Bahamas or Florida or Texas.

It's the middle-class and upper middle-class that can't relocate and end up getting stuck with taxes.

When hedge-fund owner David Tepper left New Jersey, he took $25 MM - $150 MM in annual tax payments with him. Those payments are now ZERO.

ZERO !!!!!!!

You think spending got cut to reflect that ?

Of course not...they just jacked up the taxes on working-class and middle-class people and keep underfunding the Ponzi Plans, er, Pension Plans.

 

Middle class to upper middle class always bears the brunt of everything. Some states will learn the hard way you can’t just tax your way out of everything

 

We could always run for congress.... approx. 50% are millionaires , only 1% of the rest of the population.

 

Stop with the highest tax bracket non sense. Nobody pays anywhere near those rates in reality. If you do, fire your accountant immediately.

 

Mr. Tepper now pays the same Fed income tax as all of us, he simply fled a state that tried to fleece him. You know something isn't right when they have to change the annual budget of a state due to one person leaving. Maybe if New Jersey cut spending and had a fairer state income tax structure he would still be living there, paying property taxes, hiring people, and contributing to the economy there.

State governments tend to think of everyone as an "asset" they can freely fleece, and get infuriated whenever someone calls their bluff and moves.

Btw, @-jeffB , I should I spoke more clearly. I was referring to salary cannot be restructured unless in an hedge fund. Yes, stock compensation can. Should stock options be treated the same as salary? I would not argue against that. I participate in deferred comp at work, (I actually created the plan). Is that ok? Idk, but they take so much from me in MN I am not going to bring it up.

 

Last I heard, the catch up rate applies until ALL income is taxed at the real highest rate. I know of people who do pay 35% of all their salary at 35%. I bet you hundreds of thousands do, so that is not "nonsense" to me.

 

Millionaires as defined by assets ? Then I think that probably 10-20% of the U.S. population is considered "millionaires" if you include retirement assets via a lump-sum calculation. I can get the exact numbers or guestimate if you want it. But it's WAY more than 1%.

Just as an FYI....I manage money for a few friends and family members, and they all have more than $1 MM in financial assets....and some never made more than $75,000 a year.

1/3rd of Congress is lawyers, which is why they never demonize the trial bar or talk about tort reform. They worry about Big Tech, Big Pharma, Big Tobacco, Big Autos, Big Farms, Big Banks, Big Wall Street -- but not the group that produces nothing in terms of a valuable product.

Apologies to any lawyers here....