Draginol Draginol

The government's "money"

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The government's "money"

from JoeUser Forums

Obama joke

 

So my tax bill for April is starting to come together and it's looking pretty bad. I've been paying estimated taxes all year but we had a particularly good year this year and since many of our projects run under S-corporations, their profits get tied to my personal return (like most small business owners).

Our company has around 70 people in it. We'd have more but we literally can't fit anyone else in the building.  We're in the process of building out other parts of the building we own but of course, that requires a lot of money.

Some of these projects will have to be put off until mid next year or later depending on how well Demigod, Sins of a Solar Empire: Entrenchment, Object Desktop 2009, and ironically, how well our partner Dell does (buy Dell computers! :)).

The reason they have to be put off is not that we don't have the capital to build out more of the building and hire more people, we do. It's that that money is going to go to the government instead in the form of income taxes -- almost $2 million of it in fact.

Now obviously, the government needs money to pay for vital services. I don't begrudge paying taxes on principle.  But too often, people forget where government money ultimately comes from. Worse, they are totally unaware of the consequences of taxation.

Taxes should always be kept as low as humanly possible because when you tax, you are literally taking from the people who are the most productive with capital and often giving it to the least.

Stardock, for instance, is based in the Detroit area of Michigan. So there is a certain sense of irony that the $2 million the government is taking from us is going to be given to the Auto companies and other companies have have absolutely demonstrated that they are terrible with capital.  Heck, our $2 million probably was used up in the hearings leading up to the vote on the bail out for the auto industry which Bush ultimately and unwisely decided to ignore.

So instead of using that $2 million to hire workers to build out another 8000 square feet so that we can hire an additional 24 more people this next year (to open more development teams to work on more projects for OEMs, gamers, and general consumers) we'll have to wait until we make enough money from the sales of our projects next year.  Way to go government...

56,245 views 149 replies
Reply #76 from JoeUser Forums Top

Draginol writes:

So instead of using that $2 million to hire workers to build out another 8000 square feet so that we can hire an additional 24 more people this next year (to open more development teams to work on more projects for OEMs, gamers, and general consumers) we'll have to wait until we make enough money from the sales of our projects next year. Way to go government...
End of quote

Yours is just one of millions of tax stories that will be told......our present tax system needs to be completely re-vamped...something along the line of Steve Forbe's flat tax.  IMO, it's going to get worse....all taxpayers are going to feel the pain.

Draginol posts #59

I like capitalism. I believe it creates a better world.
End of quote

Capitalism can't be mixed with Socialism....its' a big no-no that's getting us in trouble. Socialism isn't the "fix"...but irresponsible people love and demand the handout and liberals (both dems and repubs) either for power or votes can't say no.    

The bailouts are all part of Socialism....Fannie Mae and Freedie Mac were quasi government programs...now totally owned and operated by the government and we know the governement is neither proficient or efficient at anything it runs.  

Reply #77 from JoeUser Forums Top

we know the governement is neither proficient or efficient at anything it runs
End of quote

There may be one exception to that - the FAA's medical certification division.  Remarkably well-run.

Multiplicity - Control multiple PCs using one keyboard and mouse
Reply #78 from Stardock Forums Top

I'm in favor of killing the income tax and all of those other random ones in favor of a national sales tax.  Sure, paying another 6 to 8 cents on each dollar you spend would be annoying, but at least it encourages people to spend their money a little more wisely.  Besides, I've heard that about 40% of your income goes toward some sort of tax, the majority being income tax.  That's a lot of money which you would suddenly have to spend on things, like cars, for instance.  Not only that, but it would encourage the government to spend its money more wisely as well, since they don't have a wasteful lot of it to just hand to anyone they want.

Reply #79 from PolMach Forums Top

Quoting IQofSpam, reply 11
I'm in favor of killing the income tax and all of those other random ones in favor of a national sales tax.  Sure, paying another 6 to 8 cents on each dollar you spend would be annoying, but at least it encourages people to spend their money a little more wisely.  Besides, I've heard that about 40% of your income goes toward some sort of tax, the majority being income tax.  That's a lot of money which you would suddenly have to spend on things, like cars, for instance.  Not only that, but it would encourage the government to spend its money more wisely as well, since they don't have a wasteful lot of it to just hand to anyone they want.
End of IQofSpam's quote

 

Yeah i love how first you get taxed on the money you earn from work but then when you go out and buy non food items like gas... ect ect you get taxed on that too... THEN... i love how when you buy a used car you pay TAXES on something THAT WAS ALREADY TAXED before... its an endless cirlce of taxes and yet the gov STILL cant manage to budget with all this income coming in

Reply #80 from JoeUser Forums Top

This whole debate reminds me of Atlas Shrugged.  It's not what I would call a great piece of literature, and Ayn Rand's objectivism isn't what I would call a sound philosophy, but it does amply demonstrate what socialism in the US would look like.

End of quote

Yes. That is exactly what I thought, to the word!

(I guess the book would have been better if Ayn Rand hadn't thought of herself as a great love story author, which she was not.)

 

 

Reply #81 from JoeUser Forums Top

BTW, Brad knows as well as I that dollars invested in business reduce his tax burden. Even sole proprieters know that they are taxed only on dollars after the cost of doing business is deducted.
End of quote

NO, they do not.  Companies are taxed on profit.  WHich means less to re-invest.  I dont know where you get your information from, but one thing is for certain, it is not the IRS code.

Reply #82 from JoeUser Forums Top

I agree with you. Our roads here in Michigan are ridiculously bad.
End of quote

Back in the 80s, I had to go to Detroit on a business trip - they sucked then too!

If the government sends you a letter saying that they may well give you $10k, would you say no,
End of quote

Bad analogy.  The government only gives to those who do not pay.  The rest just get a reduction in the confiscation rate.  A better question - if a robber says he will leave you $10k of your money instead of taking it all....

Ok, that is not accurate either, but it is as accurate as the quoted statement.

 

Reply #83 from JoeUser Forums Top
[quote]

Of the three methods, I prefer the raid and sack option, but we're never going to do that because we're too in love with wearing the white hat.

[/quote

Go ahead and do it. The world accuses you of it anyway.

 

Our roads here in Michigan are ridiculously bad.

End of quote

Ironically, roads in Iraq are very good.

http://gallery.me.com/ajbrehm#100028/DSCN7644&bgcolor=black

 

Reply #84 from PolMach Forums Top

Quoting little-whip, reply 14

Not only that, but it would encourage the government to spend its money more wisely as well, since they don't have a wasteful lot of it to just hand to anyone they want.
Reality check:  The government will get money whenever the government wants money, end of story.  They can raise taxes, print more, or raid and sack some other nation for their wealth, as we should have done in Iraq.

Of the three methods, I prefer the raid and sack option, but we're never going to do that because we're too in love with wearing the white hat.

That leaves either raising taxes or printing more money.  Printing more money makes everyone's money less valuable, so nix that.

That leaves raising taxes.  Accept reality, folks, it's going to happen despite all your kicking and screaming.

Since taxes *are* going to be raised, the only legitimate question remaining is 'from who?'

The poor pay little to no tax already.  That leaves the middle class and the wealthy.

I'm middle class, so nix that, our back is breaking already.

If they wanna tax the rich, how could I not be ok with that?  Better them than me, lol.

Having said that, I'll add the following...

In a perfect world, our government would be compelled to spend within its budget, but without a Constitutional amendment forcing the issue, it aint gonna happen.  To expect our ignorant and wasteful public servants to do so voluntarily is laughable, nothing but a pie in the sky wish. 

 
End of little-whip's quote

 

See this is where your flawed little... you have a "me" metality. They should raise taxes on the rich because its not you so its okay?

Reply #85 from JoeUser Forums Top

There may be one exception to that - the FAA's medical certification division. Remarkably well-run.
End of quote

Ha, I'll concede...it's true..... there are a few exceptions!

Reply #86 from JoeUser Forums Top

LW POSTS:

In a perfect world, our government would be compelled to spend within its budget, but without a Constitutional amendment forcing the issue, it aint gonna happen. To expect our ignorant and wasteful public servants to do so voluntarily is laughable, nothing but a pie in the sky wish.
End of quote

Hmmm.....Aren't there some governors and state legislatures who are running their state governments with balanced budgets and not in the red?

As far as the federal government is concerned, all  it takes is will power of the people...we hold the power and we should hold every one of our Congressmen accountable....if they spend like there is no tomorrow or like bottomless pits, then the ballot box is where the issue is forced.   

Reply #87 from JoeUser Forums Top

Ha, I'll concede...it's true..... there are a few exceptions!
End of quote

It's the only exception, mind you. :grin:

Reply #88 from PolMach Forums Top

Quoting little-whip, reply 21

They should raise taxes on the rich because its not you so its okay?
Yes.

The middle-class has been squeezed just about dry, I think.  It's time WE got a break.  Everyone else gets breaks, the rich, the uber rich, the poor, the destitute, and even the merely 'low income.'

Historically it's always been the middle class that pays for the tax breaks of those above and below them on the economic ladder, and I'd like to see that change.

You're free to buy all the sob stories the uber-wealthy have to sell you, but that doesn't mean I have to buy them anymore.
End of little-whip's quote

 

So your solution is to just take more money becuase they have more than you. Brilliant.

 

Why dont you support balance over taking more money? No one should get taxed more . We get taxed enough the way it is. You say poor people dont pay taxes... maybe at the end of the year, but poor people still consume things and buy non food items... and in fact are more likely to buy the TV;s and such which are taxed. So just because they dont pay income tax at the end of the year does not mean that they dont pay taxes.

 

I refuse to give on raising taxes on the rich let alone anyone else UNTILL the government can show some intelegence in balancing the budget .... and not for only one year... they need to show a patern.

Scare tatics of " OMG WHEN HAVE TO CUT SCHOOL LDKHLDKG UNLESS WE RAISE TAXES!" are geting old and to be honest... I can think of many things the gov can cut in order to save bundles...

Reply #89 from PolMach Forums Top

Quoting lulapilgrim, reply 23
LW POSTS:
In a perfect world, our government would be compelled to spend within its budget, but without a Constitutional amendment forcing the issue, it aint gonna happen. To expect our ignorant and wasteful public servants to do so voluntarily is laughable, nothing but a pie in the sky wish.
Hmmm.....Aren't there some governors and state legislatures who are running their state governments with balanced budgets and not in the red?

As far as the federal government is concerned, all  it takes is will power of the people...we hold the power and we should hold every one of our Congressmen accountable....if they spend like there is no tomorrow or like bottomless pits, then the ballot box is where the issue is forced.   
End of lulapilgrim's quote

 

The problem is people are tooo stupid to vote them out or the other person running are just as stupid as the current person in there. I mean if you got a person that is up for re election that spend like no tomarrow yet you got a person running agenst him whos veiws are so opposite of yours... who would you vote for? its not like you have 2 people from the same party running for the same thing when one of them is an incubent

Reply #90 from Stardock Forums Top

The middle-class has been squeezed just about dry, I think.  It's time WE got a break.  Everyone else gets breaks, the rich, the uber rich, the poor, the destitute, and even the merely 'low income.'
End of quote

How exactly has the middle-class been squeezed just about dry? 

The middle class barely pay income taxes at this point. Go ahead, look at your last year's tax return and see just how much in federal income taxes you actually ended up paying in. 

..

Also, to correct the person who said that profit is the same as what is left after investing in your business, no, they're not the same.  You cannot deduct assets from your "profits" and the government defines assets extremely loosely.  I cannot, for instance, deduct the build out I'm doing on our office because I am creating an asset. In fact, my property taxes will rise as a result.

Reply #91 from JoeUser Forums Top

say brad, what about getting some people working from home, with video chat. This might allow you to expand further without need to build more taxable buildings.

Reply #92 from Stardock Forums Top

Historically it's always been the middle class that pays for the tax breaks of those above and below them on the economic ladder, and I'd like to see that change.

You're free to buy all the sob stories the uber-wealthy have to sell you, but that doesn't mean I have to buy them anymore.

End of quote

This is only because you're incredibly ignorant on the subject.

The middle class in the US pay very little of the income taxes in this country.  I am, frankly, surprised that you weren't aware of this given how often it has been discussed here and elsewhere.

The top few percent of the income earners pay the vast majority of taxes in this country.

Nearly half the population of the United States pays no net federal income taxes.

You're just falling into the lame loser-think claptrap that tries to rationalize their failures in life by blaming everyone but themselves.

It's a rather sudden change for you. I suppose that your views have changed now that you're taking from the government far more than you pay in and your husband works for the government directly. So now you find the need to rationalize the way you live.

I accept paying taxes. I accept paying lots of taxes. I believe the wealthiest Americans should pay most of the taxes because they have the most disposable income.  

But I also think all Americans should have to pay some net federal taxes so that there is some sort of direct connection between their beliefs and the consequences of their beliefs. Because no matter how clearly people like me who create the actual jobs for the middle class put it, most people are quite obviously too stupid to recognize the connection between them losing jobs and opportunity and business owners paying high taxes.

Reply #93 from JoeUser Forums Top

Quoting little-whip, reply 105


Why dont you support balance over taking more money?
I do, intellectually and morally. But I am also a realist, and a bitter pragmatist.  Despite our outrage, the government continues to spend like there's no tomorrow, and short of a violent and blood soaked revolution, I see little hope of change.
So...working within the status quo, I'm all for taxing the rich.  It's better than taxing the middle class...again.
And yeah, people are too stupid to change the situation at the ballot box, our most recent Presidential election certainly demonstrated that.  I'm also in favor of a basic civics test for all potential voters, if you don't pass you don't vote.  This is as much of a pipe dream as expecting our government to hold itself to a budget.
Get real, folks.  If wishes were horses even beggars would ride.

End of little-whip's quote

Except "the rich" just pass on those taxes to the middle class because "the rich" have the power to do it.

Hence, you should be arguing for no taxes on anyone.

Guess what, LW: No matter what the taxes are, I keep the Porsche and the big house and my life style.  I just don't hire as many workers, invest in as much new business and, at worst, lay off existing workers that either don't generate a net profit from their labor or don't produce enough a profit for short term needs.

That's the real world, LW.  So if you were a pragmatist, you would favor lower taxes for everyone.

Reply #94 from JoeUser Forums Top

say brad, what about getting some people working from home, with video chat. This might allow you to expand further without need to build more taxable buildings.
End of quote

We already do now.  Much of our software, games, skins have components developed and created in places like England, Brazil, Italy, Australia, and various parts of the United States and Canada.

But you can only do so much of that.

Reply #95 from JoeUser Forums Top

 lay off existing workers that either don't generate a net profit from their labor

End of quote

Why are you keeping those workers at the moment? Charity?

 

Reply #96 from JoeUser Forums Top

they could potentially be making a profit at the current tax point.

Or they could be generating a small loss with hope that whatever they are working on generates a large profit in the future.

Reply #97 from PolMach Forums Top

Quoting little-whip, reply 5

Why dont you support balance over taking more money?
I do, intellectually and morally. But I am also a realist, and a bitter pragmatist.  Despite our outrage, the government continues to spend like there's no tomorrow, and short of a violent and blood soaked revolution, I see little hope of change.

So...working within the status quo, I'm all for taxing the rich.  It's better than taxing the middle class...again.

And yeah, people are too stupid to change the situation at the ballot box, our most recent Presidential election certainly demonstrated that.  I'm also in favor of a basic civics test for all potential voters, if you don't pass you don't vote.  This is as much of a pipe dream as expecting our government to hold itself to a budget.

Get real, folks.  If wishes were horses even beggars would ride.
End of little-whip's quote

 

See this is what I am getting at and your seeing it. THis is why I appose any kind of tax hike ATM for anyone. Rich poor middle class. They have to learn some how some why and your giving in in a way. Your thinking... well, it wont happen so we should just bend over and take it. I for one rufuse to do that as so should you. I am sure that the gov can cut spending easy and keep this country running good if not better than it is now.

Reply #98 from JoeUser Forums Top

Companies are taxed on profit.  WHich means less to re-invest
End of quote

But that investment will often count as an expense which will be tax deductable (albeit not immediately depending on the type of investment - e.g hiring a staff and spending a ton of money getting them up to speed will likely be deductable immediately, while buying a group of computers to improve the productivity of your workers will either have a proportion allowed for tax purposes over the years, or possibly require you to wait until disposal before getting the tax reduction - I'd have thought the former, but haven't looked into it in any great detail for the US), meaning investment will reduce the tax payable.

 to correct the person who said that profit is the same as what is left after investing in your business, no, they're not the same...I cannot, for instance, deduct the build out I'm doing on our office because I am creating an asset
End of quote

Presumably if you were to make a (nominal) loss on selling the property in the future you'd get tax relief on that though; also leasing (or sale+leaseback) could be used. Also the person wasn't actually saying that profit is the same as what's left after investing in their business, but was the same as dollars after the cost of doing business is deducted - building a new office to expand your business wouldn't be a cost of business, since you would be spending the money to obtain an asset (just as buying $100k of stock and selling 1% of that for $2k in the year means you've made an accounting profit of $1k as opposed to a loss of $98k, ignoring stock depreciation issues etc.). Of course some things that might be viewed as costs of business might not be for tax purposes, but those tend to have smaller impacts on the overall picture.

When a business owner hires employees or builds out their building, that is part of a long-term investment...it has nothing to do with charity. It has to do with managing capital, timing, and investments

End of quote

I'm still failing to see how firing employees would keep your profit the same given a tax rise though. Lets say you cut plans to build an extension on the current building (or move to bigger premesis), and once doing that hiring more employees to fill the new place; that would decrease future jobs, but not lead to current firings. Meanwhile if you were to fire current employees, that would only keep your profit at the pre-tax-rise levels if those employees were loss making, which, in investment purposes, I could only really see occuring if the employees in question were being given training to become proficient at their relevant task (and weren't proficient at the time, resulting in them costing more than they produced in the short term). The only other reason I can think of (although I may have missed some) for keeping loss making employees would be charity (unless it was felt that the morale effects of firing those employees would cause productivity among other workers to fall, or some related reason), hence why I mentioned it.

Edit: ignore the last part, for some reason I thought you'd said you'd cut your workforce to maintain your salary, as opposed to cutting back your investments to maintain your salary (just realised my mistake when going back to the original post to refresh my memory, sorry for not realising sooner!) 8O .

 

Reply #99 from Stardock Forums Top

In the first place, you're wrong on every count, Brad.  I am almost 48 years old.  I worked from the time I was 15. That's 33 years I paid into 'the system.'  I've been on SS Disability for a little less than five years now---and I pay taxes on that income.

Secondly, my husband does not work for the government directly.  He works for a company based in India (gotta love that outsourcing) who was contracted to do some work for the local government.  It would be far more cost effective for the taxpayers to hire him directly, but we aren't to blame for the situation.  Bitch at the Mayor of Richmond about the waste.

And lastly, I feel no need to justify (or rationalize) my existance or my lifestyle, and I find your personal attacks distasteful and irrelevant to the topic at hand, so before I say something that you can use to 'justify' my exile, I'll just abandon this thread.

End of quote

My personal attacks are just a bit more direct than yours (with your not-so-subtle references to me in your various comments and blogs) but I don't blame you for that. But don't cry me a river about personal attacks, you are the queen of skirting the edge.

Now, getting back:

Let's be real, the trivial amounts in taxes you paid between 15 and 43 before you went on SS disability will soon, if they have not already been, totally made up by the money you've gotten back.  Complaining that you are taxed on your welfare is patently offensive.

I happen to support social security disability as a concept (though it is remarkably easy to get on SS disability -- I have no doubt you are a legitimate case but many are not).  

But sitting back and saying how the middle class is so squeezed is patently offensive and ignorant. The middle class pay trivial amounts in taxes compared to what they get back.  

And someone who is currently getting more back than they're likely paying in advocating that I should pay more could, at the very least, read what is written instead of projecting your screwy world view onto it.

You read what I write as "whining" about taxes as if taxes somehow affect my life personally. 

I am "whining" about taxes in the same sense that one might "whine" about the government banning DDT due to its unintended consequences in Africa

Reply #100 from Stardock Forums Top

I'm still failing to see how firing employees would keep your profit the same given a tax rise though. Lets say you cut plans to build an extension on the current building (or move to bigger premesis), and once doing that hiring more employees to fill the new place; that would decrease future jobs, but not lead to current firings. Meanwhile if you were to fire current employees, that would only keep your profit at the pre-tax-rise levels if those employees were loss making, which, in investment purposes, I could only really see occuring if the employees in question were being given training to become proficient at their relevant task (and weren't proficient at the time, resulting in them costing more than they produced in the short term). The only other reason I can think of (although I may have missed some) for keeping loss making employees would be charity (unless it was felt that the morale effects of firing those employees would cause productivity among other workers to fall, or some related reason), hence why I mentioned it.

Edit: ignore the last part, for some reason I thought you'd said you'd cut your workforce to maintain your salary, as opposed to cutting back your investments to maintain your salary (just realised my mistake when going back to the original post to refresh my memory, sorry for not realising sooner!)  8O  .

End of quote

 

Glad you got the idea at the end. But just to spell it out:

Employees don't lay golden eggs that are collected in real-time. They work on things that one hopes will produce a figurative golden egg in the mid-term or long-term.

Let's use video games as an example:

If I hire the 12 to 16 people I'd like to hire this next year to create a game team, the game they produce won't materialize for 30 to 36 months from the time we start.

In effect, to a business owner, hiring employees is a lot like when a middle class person buys a 36 month CD (except with greater risk / greater reward).

If the capital to do that investment is taken by the government, then the business owner simply doesn't hire those employees / the middle class person doesn't get that CD because they need the remaining money for nearer term things.

That's why anytime I see someone accusing "the rich" of "whining" about taxes or whatever, I know that we're dealing with a dumb person because they don't see that the taxes don't affect the rich in the same way as they affect the middle class.

The best solution therefore is to consciously elect and support federal politicans who lower taxes while supporting local politicans with specific agendas you agree with (like fixing roads).