Che'_Moderator Posted September 21, 2011 Report Share Posted September 21, 2011 Middle class and poor can suck it. Here is the annoying thing. Just did quarterly taxes and I am annoyed. If long term capitol gains rates expire, here is how it works out. Say my company buys property in 2008 for $1,000,000 and decides to sell in 2013. Figure 5% equity per year for a selling price of call it 1,275,000. So tax burdon is 275k. So 55k goes out the window. 220k profit left. If I bonus myself out personally I will be lucky to see 132k. So over 5 years thats $26,400 per year for having over a million dollars tied up. Thats also assuming a no interest loan/cash. Figure in 4% inflation and you lose over 15k a year.... And people wonder why the money is going off shores. Link to comment Share on other sites More sharing options...
theForgottenone Posted September 21, 2011 Report Share Posted September 21, 2011 Like p diddy said " more money, more problem" 1 Link to comment Share on other sites More sharing options...
JCviggen Posted September 21, 2011 Report Share Posted September 21, 2011 (edited) I'm sorry but I can't see this as a great example it just sounds like maybe you've been spoiled for too long making money out of thin air. First of all the whole idea seems to be that simply owning property for a while and then selling it on will make you rich. Thinking like that was what helped the financial crisis to get as big as it did. "House prices can only go up! Don't worry about those mortgage payments your house will be worth more than you're paying for it!" That seems to be what you're suggesting. Property is not guaranteed to go only one way, but it is a very good protection against inflation. The 4% inflation part at the end is bullshit, if inflation is high your real estate value will go with it. It's based on supply and demand not so much the value of the currency it's priced in. That makes it a heck of a lot safer to invest than to put your 1 million in a bank account or into the stock market (of course there are safe inflation-resistant stocks out there as well but just saying) but that does not mean its a "free money" scheme. When you trade capital for a profit you are not creating anything of value. You're betting that the economy will grow on behalf of others and prices will go up. If they don't, you are out of luck. If they do, you make more money for no reason except that you already had some money in the first place. I don't see taxes on thàt as a bad thing. If you would have argued for example that manufacturing (you know, actually creating some added value) needs to be stimulated with tax breaks I'd be the first to agree. Your example still made a net 4.4% yearly which is nothing to cry about. And it's not like there are no tax loopholes and loads of tax deductible things that you can factor in. You don't think there are any taxes overseas? Not every country has a capital gains tax, but that just means they're taxing elsewhere. The US still has a very low tax take as part of GDP compared to most developed nations. Developing nations are something else, because basically they are still shit poor. You can't have your cake and eat it too. All that civilization when you step out the door isn't free. God forbid anyone would have to do some actual work to keep the show going :rolleyes: Edited September 21, 2011 by JCviggen 8 3 Link to comment Share on other sites More sharing options...
Snabb T5M Posted September 21, 2011 Report Share Posted September 21, 2011 Your numbers don't make sense. You should only be taxed on the gain of $275k, not the full sale price. Also define "property" in your example. Per the US Master Tax Guide (which isn't primary authority, but cites the IRC and accompanying Regs), "A capital gain or loss arises from the sale or exchange of a capital asset. Generally, the term "capital asset" means any property except the following: 1. an inventoriable asset; 4. depreciable business property; 5. real property used in the taxpayer's trade or business. What tax rate are you using in the example? Middle class and poor can suck it. Here is the annoying thing. Just did quarterly taxes and I am annoyed. If long term capitol gains rates expire, here is how it works out. Say my company buys property in 2008 for $1,000,000 and decides to sell in 2013. Figure 5% equity per year for a selling price of call it 1,275,000. So tax burdon is 275k. So 55k goes out the window. 220k profit left. If I bonus myself out personally I will be lucky to see 132k. So over 5 years thats $26,400 per year for having over a million dollars tied up. Thats also assuming a no interest loan/cash. Figure in 4% inflation and you lose over 15k a year.... And people wonder why the money is going off shores. Link to comment Share on other sites More sharing options...
Che'_Moderator Posted September 21, 2011 Author Report Share Posted September 21, 2011 OK lets say you guys a hospital. You save little sick orhan children for a modest 10% a year profit. When you sell it, you are still taking an almost 60% tax hit and thats assuming no state tax. God forbid you be some place like california. 4.4% a year? I don't piss for 4% a year. No business should. ...... back to you in a second the reply below is so bad its annoying me. Your numbers don't make sense. You should only be taxed on the gain of $275k, not the full sale price. Also define "property" in your example. Per the US Master Tax Guide (which isn't primary authority, but cites the IRC and accompanying Regs), "A capital gain or loss arises from the sale or exchange of a capital asset. Generally, the term "capital asset" means any property except the following: 1. an inventoriable asset; 4. depreciable business property; 5. real property used in the taxpayer's trade or business. Can you read? In the example the tax burdon was 275k not 1,275,000 Ok back to that I was saying. 26k a year is just over 2%. Current inflation is 3.77%. Thats a loss of 1.5% a year. If that makes sense to you than that explains the economy. Link to comment Share on other sites More sharing options...
flyfishing3 Posted September 21, 2011 Report Share Posted September 21, 2011 aren't even for profit hospitals tax exempt? also, if you don't like it chuck MOVE. and see how you do. the free ride is over, pay whats right and hire more people. 3 Link to comment Share on other sites More sharing options...
Che'_Moderator Posted September 21, 2011 Author Report Share Posted September 21, 2011 aren't even for profit hospitals tax exempt? also, if you don't like it chuck MOVE. and see how you do. the free ride is over, pay whats right and hire more people. You know how many people I fired 3 years ago.I would never hire back an american worker for the most part. I really have no problem with it, I just think its funny when people bitch I am selling their condo to build a mall. And no. Hospitals pay tax, but are usually owned by groups so tax burdon is a little different. Link to comment Share on other sites More sharing options...
JCviggen Posted September 21, 2011 Report Share Posted September 21, 2011 4.4% a year? I don't piss for 4% a year. No business should. I'd agree with you but my point was more about your bad example. You're not actually doing any work for the 4% in your example. You're holding property waiting for it to magically increase in price. Sitting back in your chair and watch your capital increase isn't really a business in the traditional sense of the word is it? I see nothing wrong with this kind of dressed up gambling being taxed. Businesses that actually employ a bunch of people let's give those a break. Those who expect to gain money by simply parking their capital somewhere, tough luck, that game makes no economic sense in the long run. 3 2 Link to comment Share on other sites More sharing options...
Che'_Moderator Posted September 21, 2011 Author Report Share Posted September 21, 2011 Doing work? How about gambling with a million dollars hoping market does not collapse. Or giving people who cannot afford their own property a place to live. Risk 7 figures for 4% profit. Suckers bet 1 Link to comment Share on other sites More sharing options...
flyfishing3 Posted September 21, 2011 Report Share Posted September 21, 2011 put mil in bank get 3pts if lucky, sounds like good investment to me. 2 1 Link to comment Share on other sites More sharing options...
Che'_Moderator Posted September 21, 2011 Author Report Share Posted September 21, 2011 put mil in bank get 3pts if lucky, sounds like good investment to me. Explains a lot. 3% means -.77%. 4% means almost break even. Put it in china = 15%+. Medical and energy are about only thing left worth while here. Link to comment Share on other sites More sharing options...
flyfishing3 Posted September 21, 2011 Report Share Posted September 21, 2011 your investment in china will get blasted with 17%VAT from jump. start your own credit card, usary laws can be played with. also, open LLC in Delaware under shell Co.. this piece of widget property, what did you do with it, let it go fallow or make/do something there. Link to comment Share on other sites More sharing options...
ErikS Posted September 21, 2011 Report Share Posted September 21, 2011 We've grown the "Chinese" end of our business by 300% in 1 year, service oriented but hey its where the market is now. Looking for EBITA to go from 22% last year to over 25% this year. Link to comment Share on other sites More sharing options...
Che'_Moderator Posted September 21, 2011 Author Report Share Posted September 21, 2011 your investment in china will get blasted with 17%VAT from jump. start your own credit card, usary laws can be played with. also, open LLC in Delaware under shell Co.. this piece of widget property, what did you do with it, let it go fallow or make/do something there. I don't pay VAT. I dont live there and trade is VERY favorable right now. Link to comment Share on other sites More sharing options...
flyfishing3 Posted September 21, 2011 Report Share Posted September 21, 2011 Doesn't matter. We have a plant there Every nail -17% every sheet of plywood-17% The game is the give back 3-12% of it back as a credit Everybody pays, even Chinese co Link to comment Share on other sites More sharing options...
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