Bush Economic Stimulus Package - Some ammunition for you to use when talking about it

http://apnews.excite.com/article/20030106/D7OCSDAO0.html ^ | 1-6-03 | Drewman626

[dalebert]

Nice quote.

[agincourt1415]

I wonder if the National Sales Tax, is getting any more traction since Treasury Sec. O'Neill left?

[Drewman626]

I thought I had addressed that... but I appreciate the feedback.


What kills me is this... I'm still trying to understand that rational behind WANTING increased taxes. One of the benefits (unsaid) of having a tax system was introduced in the 1950 - you can control people's actions. If you want people to buy land, make it tax free. If you want people to save money for themselves, make it tax free. If you want people to buy life insurance, make it tax free... etc.

The old system of the States paying "dues" to the Fed seems to make more logical financial sense to me. But that's what we get for allowing the New Deal to kill the last bit of the Democratic Republic we once had in this country.

[Iowa Granny]

Thank You for this. Saving for my files. I think I can create several Malox Momments with the information you've provided.

[BlessedAmerican]

Thanks! Good info....will save to be reread later...

[jigsaw]

Thanks for writing this!

Free Republic at its finest!

[luckodeirish]

"Hate the rich, ask a poor man for a job"

Great quote. I am having a real hard time understanding why there is such a hate for people who are perceived as "rich". Sure, some folks inherit money, good for them. But most likely the majority of "rich" have worked hard, made choices etc, but for some reason being "rich" is now a mortal sin, and there is a strong assumption that a "rich" person is evil, greedy, Republican, mean spirited, and got their "riches" by hurting others.
What gives?

[Wolfstar]

Thank you VERY much for sharing your professional insights with us. When it comes to finance, I am among the pretty nearly clueless, so having these issues explained clearly helps a lot.

I don't mean to take advantage of your generosity, but wonder what your outlook on real estate is for this year? Prices are extremely high here in Southern California, and my gut instinct tells me the bubble will burst this year.

[RandyRep]

Of course - dumb question on my part. I had both sides tied behind my back I guess.

The good news is that elimination of the dividend tax will increase the return on the mutual fundsd in the tax deferred accounts, so we win some more, eh?

[AmusedBystander]

This will reduce your FICA.

None of your suggestions will reduce your FICA, as this is social security and is taxed based on earnings. You are right in that a person should lower their withheld income taxes as much as possible and invest this money instead of leaving it for the IRS for a year.

[fatrat]

everybody pays the same tax rate on fica taxes (fica taxes are for social security and medicaid). the only difference between low income and high income folks is that the fica tax is not collected on income over a certain level (don't know what the level is exactly and don't want to look it up) but it is somewhere near the 60K level. In other words, higher income people will quit paying fica taxes each year after they have paid on the first 60K prox of income. a rebate of payroll (fica) taxes is very much a bad idea. these taxes are specifically to pay for the individual's retirement and medicaid. If you recall, democrats have previously said they wanted these funds in a LOCKBOX but now they want to give them away!!

[NYS_Eric]

FICA for Social Security had a 2002 limit of $84,900 if I recall correctly. For 2003 it goes up to $87,000.

FICA for Medicare has no upper limit, which makes it more of a welfare program. Face it, Bill Gates is never going to consume as many FICA Medicare dollars as he puts in. Not even close.

For this reason, I strongly object to this idea being bandied about by the Democrats to drop upper limits on Social Security FICA taxes. If that is done, then Social Security will be 100% welfare, which is "the plan" all along.

[B4Ranch]

I'm still trying to understand that rational behind WANTING increased taxes.

The Democrats cannot get past the idea on NOT controlling people. Why in the hell we call them DemocRats instead of COMMUNISTS is what I'll never figure out.

The only other thing that bothers me more than that is why are our gloriously wonderful Republicans continiously moving to the LEFT? It is time for some serious 3rd party formations. I would appreciate a couple of highly qualified Constitutionalists. Ron Paul would be my #1 choice in this league because he already knows the weaknesses of everyone in Washington.

[B4Ranch]

I forgot to congratulate you on your 'easy to understand' dissertation. Have you considered becoming an online financial educator for FReepers?

[Drewman626]

You are correct. I meant to seperate the two by stating that the majority of deductions were due to FICA. I did not mean to say that doing the witholding increases would reduce FICA... it reduces withholdings. Thanks for the correction!

In response to the MANY financial questions I've gotten...

One - I'm not a stock picker. There are people that get paid a lot of money (let's just say they're part of the top 1%) to do that... they're called Mutual Fund Managers. They have YEARS of experience and training on how to analyze a company and understand the specific challenges to not only one segement of an industry, but also geographic business issues, market trends in that sector, etc. These managers typically visit with a company, it's shareholders, it's officers and owners, get a tour of the facilities, etc, before they decide to invest any of the mutual funds' monies in it. If you think you can do better than them, good luck.

Any finacial advisor will tell you that the key to investing is to one, do for the long term (at LEAST 5+ years, preferablly ten), start early, and DIVERSIFY. Never put all your eggs in one basket. The best way to get diversification AND professional guidance is via a mutual fund. If you want to know the best way to make money short term, go to Vegas... the odds are about the same as daytrading.

I cannot and will not give stock tips... not only because I don't believe in "hot tips", but because I could theoretically lose my licenses doing so over the Internet.

Of all the mutual fund families out there, I cannot endorse one over another and cannot advise you on what's right for you and your situation ('cause I know nothing of your situation). I can say that most of my mutual fund holdings is with American Funds and Mason Street. I also have real estate holdings, life insurance cash values (Northwestern Mutual is the only one to consider... best rates out there, even better than a lot of mutual funds if you can believe it), bonds and cash. Again, Diversification.

As for the real estate question I got. Real estate is tricky... there is no measure or "warning" for how the market is going to do. Right now, there's a lot of construction, which is a good sign. The new Terrorism INsurance Bill was GREAT for this. I don't know about Northern California, but I can say that NY and NE are hot areas minus NYC and Boston. People and businesses are getting out of the major cities like rats on the Titanic. It's almost scary. I've seen skyrises that were full two years ago over half empty now. I've seen rents go from $110/ft2 to $50/ft2. Most of the property in cities is overpriced now not due to demand, but from sellers who are trying not to lose their shirt, therefor they can't sell property for less. I'm sure the same is happening in San Fran and Oakland.

I will say that tax advantages of owning real estate are unbeatable. If you get the chance to buy a three or four unit building, talk to you accountant, and then buy it.

Last question - when purchasing investment property, the rule-of-thumb is a 7-1 ratio: the cost of the property should not exceed 7X's the annual income. If it does, you'll be hard pressed to break even.

That's all.

And yes, I would be interested in being a Financial Educator on here.

[Drewman626]

I just realized a minor misquote I made.

51% of ALL senior citizens recieve dividends. I did not mean that 51% of all dividends go to Senior Citizens.

I appoligize for the mistake but the emphasis still remains.

[Crossbow Eel]

I understood it the first time---I hope most here did as well?