Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Umunhum who wrote (24529)	1/12/2005 11:20:19 PM
From: Jon Tara	Read Replies (2) \| Respond to of 110194

<why not just move to a cheaper state, like Texas? > Cheaper for income tax, but not for property tax. It's at least double the California rates. But, for now at least, the real estate prices are lower. <I am somewhere in the upper 300s> <Don't you have a 401K> Of course, that doesn't let you shelter much when you are in that income bracket. If your income is self-employment income, you can set up a Defined Benefit Plan. Costs about $1000/year to administer. But you can contribute (depending on your age) as much as 100% (or even more - again, depends on age) of your self-employment income. If you set up an LLC, you get some real flexibility. You can arrange for part of your income to be self-employment income (and thus making you eligible for the Defined Benefit Plan) and any excess beyond what is needed for that as Ordinary Income (and thus not pay Self Employment Tax on it.) Salary or guaranteed payments are self-employment income. Distributions which are not guaranteed payments are Ordinary Income. You can slice it whichever way works out best for you. <Anybody out there know a good place to retire?> Well, I know about Brazil. You can get a permanent retirement visa by arranging to transfer $35,000/year to a Brazilian account from your retirement account. The only problem with this is, it's way more than you need to live on. There are no restrictions on foreign ownership of property. (Mexico restricts ownership within 200 miles of the border and coast, and horrible problems recently in N. Baja with conflicting lease claims, forcing American retirees out of their established homes.) Food and clothing are cheap, service is excellent, and housing is cheap, thanks to chronic under-employment. Most Brazilians DO own their homes, though it is nearly impossible to finance - I suppose the inability to finance helps keep the prices down, as well as other factors. (UN-employment is not as scary as other South American countries, such as Argentina, but is made up for in horribly low wages for the masses.) Of course, this could all change. There are security issues in the big cities (mainly Rio and Sao Paulo) mainly involving the drug trafficking and the growth of shanty-towns. But there are very nice areas in the south that are safe. (Check out Curitiba, curitiba-brazil.com )

To: Umunhum who wrote (24529)	1/13/2005 10:42:41 AM
From: Wyätt Gwyön	Respond to of 110194

The bulk of my earnings are taxed at 33%. I am somewhere in the upper 300s if you made 399K (the upper limit of "the upper 300s") on Schedule C and had zero itemized deductions/shelters/IRAs/etc., and used married filing jointly in 2005, then according to Quicken Tax Planner you would owe $106,170 in federal income tax, which works out to just 26.56%. so you see you pay a lot less than 35% on average. the 33% is if you include self-employment tax, and raises the bill in this Quicken scenario to $127,756. still, that's not bad--it doesn't even include anything like mortgage-interest deduction or IRA contribution. i can't think of a lot of first-world countries where one could make $400K and come out so well. this is why George Bush says, "Some people call you the elite class; I call you my base." the excess you are paying above the figures in the Quicken scenario sounds largely due to living in the hell-hole known as California. other than NYC, i can think of few places in the US where a high earner would be more heavily taxed. if your job has geographical flexibility, then you can think of your situation as paying extra rent just for the privilege of living in CA. father told me never to go to Texas. The bugs there are ten times the size of ours i guess it depends where you go. i don't think the bugs in Austin are that bad. but it gets quite hot in the summer. I think I want to go check out Mexico, Belize, Argentina. I i wouldn't want to live in Mexico or Argentina. they seem very unsafe as people are kidnapped all the time. after Davide Nalbandian, an Argentinian, won Wimbledon a couple years ago (pocketing around $750K prize money), he had all sorts of worries about his family members being kidnapped. and that is for somebody who actually lives in the country and knows the system. i can't imagine clueless or semi-clueless Americans going to places like Argentina or Mexico would be safer than the natives. i don't know about Belize. i have also heard Costa Rica is a popular destination. if the SS cap were removed my last dollar earned would be taxed at 59.6% the point is, if there were no cap, the SS tax rate would be a LOT lower. since the 35yr-old working stiff making 80K is never going to collect on his social security contributions, it is a straight tax on him. he is subsidizing all the people making 300K or $80 million, and that is unfair and regressive.