Has ERE changed your political outlook?

Spartan_Warrior · Post by **Spartan_Warrior** » Tue Sep 25, 2012 12:45 am

@Tylerrr: Actually, I disagree with a national sales tax for a few reasons. First off, it's easily avoidable--that is, it creates all new problems in terms of enforcement. Think black markets. Secondly, I don't like the way it would increase the wealth gap and favor high incomes. The people with less money by definition spend more of the money they have just to survive, and so would foot an unfair proportion of the tax bill. Finally, it just seems unintuitive to disincentivize consumer spending in a consumer economy.
Those policies would be simpler to file with less technical loopholes, I'll give you that. That alone probably makes them preferable to what we have now, which as you say, is catered to special interests. (Go figure, the wealthy happen to be the highest paying special interest in town.)
What do you disagree with about the tax plan I posted? Just curious. Although at this point, we've gone way into the weeds... I'd be interested in continuing a civil discussion on tax policies, but I don't want to hijack this thread any further. Should I start a new one? Never know how to handle this...
@Toska: You wouldn't prefer to watch? At least get a show for the money, right?

C40 · Post by **C40** » Tue Sep 25, 2012 1:15 am

Interesting point Toska. Maybe I should demand that my coworkers send their children over every Wednesday evening to do my laundry, dishes, and cleaning?

C40 · Post by **C40** » Tue Sep 25, 2012 1:15 am

Double post. whoops.

Dragline · Post by **Dragline** » Tue Sep 25, 2012 3:39 am

Lions and tigers and tax bears, oh my! Much of the discussion above evinces extreme and perhaps willful ignorance about the way the tax code actually works.
Due to the nature of my business, I have to pay taxes in about 26 different countries. And let me tell you, things are tough all over. Should I be angry about paying for an Autobahn I have never driven on?
The reason we have relatively high tax rates on worked-for income in the U.S. is because we have lots and lots of exceptions for very special people who do very special things, and maybe some not so special, but still quite creative. So the real trick is to do as many of those special things as possible so you qualify for lower tax rates. For instance, the average worker can only put $17K per year in an employer-sponsered 401(k). Structure things right and you can goose that up to about $100K or maybe more. Also, moving income outside the U.S. can work wonders if you put it in the right place. If you are good at playing the game, you can probably get yours down to between 10-15%, no matter how much you make.
Honestly, if you are ERE, you should be paying very little, because you would have very little earned income. All the more reason to get there sooner rather than later. Here's a real world example: http://www.mrmoneymustache.com/2012/06/ ... etirement/
When we get rid of the exceptions, we can have lower base rates. Until then, if you are paying 50%-plus, you probably are not playing the game right. Or need to talk to a tax accountant. I can't say I have much sympathy for people who choose to remain ignorant of their potential options.
The alternative solution is very simple -- just move somewhere where the taxes are low or non-existent. It will be underdeveloped, but you can build your own compound and live in relative security from the tax man. For example, Doug Casey touts moving to Argentina. If you expect to live in the relative comforts of modern societies, expect to pay for it.

GandK · Post by **GandK** » Tue Sep 25, 2012 1:16 pm

@tylerr: SPOAFing (Stating Personal Opinion As Fact) seems to be what sets people off most around here.
Although I agree with you about the national sales tax, as does my retired CPA mom.

If we had basic levels of exemptions for food, shelter, health care and transportation, I think that type of a tax would be fairest. Yes, it would encourage saving over gluttonous spending. At the macro level, I fail to see how that's a bad thing. It would also encourage things like recycling.

JasonR · Post by **JasonR** » Tue Sep 25, 2012 3:23 pm

Dragline · Post by **Dragline** » Wed Sep 26, 2012 4:15 am

IRS Tax Publications are the ultimate source -- although I would not say they are for the faint of heart. But lots of the more common things like SEPs and HSAs are described in some detail on websites like Vanguard and Raymond James who want to hold them for you. 529s if you will be paying for anybody's further schooling -- including your own. But I would always look at the most up-to-date IRS pubs on any given idea.
As you have observed, there is a conflict here between saving for ERE and reducing current tax liabilities. Ideally, you would figure out what you needed for the earlier years and shelter the rest. But there is also the possibility of tapping into retirement vehicles early. See http://www.forbes.com/2009/04/04/ira-40 ... nalty.html
Then there is the idea of starting your own hedge fund to take advantage of the favorable tax treatment they receive. Its an idea I have toyed with but never implemented. For a discussion, see http://www.greencompany.com/HedgeFunds/ ... gies.shtml
It will take some serious planning for sure.
Sorry for going way OT here.

pooablo · Post by **pooablo** » Wed Sep 26, 2012 5:30 am

I am shocked at how high the tax rates are for some individuals like tylerrr and jennypenny in the States. I always hear people complaining in Canada about how high taxes are up here compared to the US.
I only paid the following tax percentages last year:
Income Tax (Canadian Federal and Albertan Provincial Taxes) 11% (My marginal income tax rate is 32% but my effective tax rate is 11%)

CPP and EI (CDN equivalent of Social Security and Unemployment Insurance) 5%

GST (Sales Tax) 1.5% (The actual rate is 5% but I don't spend all of my income on stuff)

Property tax 0% (Benefits of renting)
Total Tax = 17.5%
For that I get public health care, great public schools, public libraries, parks, public transit, safe communities, and so much more.
I think I get a lot of value for what I pay. I am sure many people on this forum, particularly in the States where there are many more deduction items than in Canada, can achieve a lower tax rate.
I certainly agree with Dragline. It's all about tax-planning. If you don't agree with paying taxes to the government, focus on using the tax code to reduce your tax burden.

JohnnyH · Post by **JohnnyH** » Wed Sep 26, 2012 2:23 pm

Like Harry Browne said in "How I Found Freedom..." you can spend your entire life railing against something and attempting to convert people to your cause and change the political system (indirect solution).
OR, you find a direct solution like finding a way around/out of what you're against, say paying high taxes. Easily doable, like George and Pooablo said.
The ease at finding ways out of paying high taxes is just another example at how ridiculous the whole tax system is.

Dragline · Post by **Dragline** » Thu Sep 27, 2012 3:10 am

Certainly no argument there! The way I think about it is summarized in this presentation starting at about 5:11:30: http://www.youtube.com/watch?v=pjByxZKCjD8&feature=plcp
The next couple minutes are pretty ERE-related as well. And the rest is worth listening to if you have the time or inclination.

secretwealth · Post by **secretwealth** » Thu Sep 27, 2012 4:13 am

"Like Harry Browne said in "How I Found Freedom..." you can spend your entire life railing against something and attempting to convert people to your cause and change the political system (indirect solution).
OR, you find a direct solution like finding a way around/out of what you're against, say paying high taxes. "
I should read Browne, although I expect I'll disagree with much of what he has to say. Nonetheless, reading that gave me a chill. The first paragraph defines me in my twenties--the second paragraph defines me in my thirties...

Spartan_Warrior · Post by **Spartan_Warrior** » Mon Oct 01, 2012 3:55 am

Heh, both paragraphs describe me. What's wrong with screaming bloody murder about the oncoming iceberg WHILE you're preparing your life boat?

Post by **jacob** » Wed Oct 03, 2012 2:26 am

Actually, to elaborate ... writing ERE has empathetically demonstrated to me that 1) "the great masses" are beyond reason; 2) individuals are worth reaching, but 3) it's a lot of work.
I probably lean towards the Harry Brown "How I found Freedom" approach even more now than I did five years ago.
Politically, I now see things in the kingdom sense... this was due to reading Survival+ by CHS.

aussierogue · Post by **aussierogue** » Wed Oct 03, 2012 7:56 am

I will need to check out harry brown
This from his wiki page
qte
He suggested that people think about structuring their lives in a way that would allow them freedom from social, economic, moral, and psychological entanglements. In the social sphere he taught about what he called the "identity trap" in which a person expects of others and themselves what is not in their nature. Instead, he taught how one should recognize one's nature and the nature of others, and then maximize the benefit that is there in reality, rather than wasting one's life trying to change oneself and others.
unqte
This is my experience also. Being (or trying) to be authentic is my major life goal (overall goal). It just makes sense for so many reasons. Its the most efficient way to move forward with anything.
It also doesnt mean being stuck in poverty. If your calling to be a teacher then do it - then write a book, do some lectures, appear on tv - plenty of ways to turn a vocation into a better paying one.