Myth465

Warning: rant coming below I just watched this since I had time today - this is so slanted it is not even funny. I'll pick on the section on United's bankruptcy for example. The journalists never allowed that seeing United go bankrupt would have means (1) no jobs, (2) no heath benefits, and (3) no pension. This was just shoddy reporting, very socialistic (the government must provide, the company is evil) and seemingly rejects all tenets of America's founding. Yeah, it bites to see your pension go down by 30% while having to work more for less money on which you now have to also save for retirement - but life is not fair either. If uncertainty kept me alive at night like this poor flight attendant says it does, I'd try to do something about it: get a better job, try to understand more about my future needs and see what I can do to improve it, anything. Also, all these people complaining that now they'll have to work till they drop - is everyone forgetting that up until a few decades ago, retirement didn't exist? How fast people forget, how fast people feel entitled. "I want, I need, I deserve". Argh! >:( Anyway - off my soap box... I don't mind pensions; indeed, I have one. The difference is that I don't count on it anymore than I count on SS; as far as I am concerned, they are just taxes that I 'may' see a return on. My retirement will be what I make of it. So someone enters into a contract with a company, fulfills there end for 40 years. Then has Company default after collecting. This seems like a broken Contract. You think having your contract torn up when it comes time for the other person to fullfill thier end of the bargain is fair game. You dont think the enforcement of a contract has a place in Capitalism. So now its socialist to bitch when you are basically defrauded?

Also Eric I believe its possible for anyone to make it in America, but not for everyone to. God willing you, I and most of the on this board will end up either decently rich or very rich, if we arent there now. Thats the American / Western dream. but I also believe the lifestyle of the people who do not for whatever reason (lack of opportunities, breaks, or effort) achieve this dream are worth considering. I follow the basic line of thinking proposed by Malcolm Gladwell in Outliers and by Warren Buffett. Your ability to allocate capital isnt worth much without a society that values that and like it or not you are never self made. Your parents, teachers, family, friends, or dumb luck / timing had something to do with your progress. Ben Graham obviously had something to do with your progress. You are hard working but, not self made. If you were born in a Fevala in Brazil or Ciudad Juárez Mexico I doubt much would have come out of you. --- TX that was very interesting. My problem with high Corporate taxes is they cause flight by Corporations. Its why companies are based in Bermuda, Ireland, Swiss, and other low tax countries. America should have low Corporate taxes, high enforcement. I would like some sort of tax that hits applys to sales in America by foreign firms not based in America.

Even I laughed out loud on that. Must have been Amy Goodman or something. --- Ericopoly - Well I dont even think we are talking about the same thing. You are talking about the American dream and the fact that people can make decisions right now which would increase their income in the future. Everyone else seems to be talking about averages and numbers. I can understand your point if I had $1million in salary each year and $100 million in net worth. I would feel underpaid, and not too rich. Its all relative I guess. I however would still know that I was doing better than most. At this point we can agree to disagree.

I am 27 and hate news papers. They are annoying and cumber-sum. I like annual reports.

Its an honest mistake. Very few people seem to actually understand Keynes.

Ericopoly I would love to live in your world. The average waiter makes $100k, the average Plumper makes $140k. Most accountants I know make around $20 an Hour or $55k after 3 - 4 years, sometimes it goes up to and sometimes stay flat depending on the city you are in. Small city, than thats about it. Anchoring is true with investing and salary I guess. You are funny. On investments its facts and value. In political discussions its all anecdotal and facts dont matter or are fudged.

Look, you're just plain distorting the facts. 1) You never qualified that as "federal" anything. 2) Medicare and Social Security don't count as federal taxes in support of federal services now? They aren't part of the "federal income tax", but clearly they are part of the federal tax regime. Sound bites make for good TV (Pretty much all TV at this point is entertainment; you can't make money presenting facts in a responsible way), but while repeating falsehoods over and over again may sway the Hoi Polloi, you'll find us "elitists" are a tougher nut to crack. And keep in mind here you're talking to someone who hates taxes! I would love a smaller central government. Scale back/change the war machine, first of all. We can make all sorts of suggestions, but it's inherently a slow process, and politics make certain things impossible. War, for example, has a HUGE lobby behind it, on multiple fronts. Very Good info in this post. Thanks for taking the time to clarify things. That is what is most interesting, I probably hate taxes or most other expenses more than any of you all. The only person who I have read about who is cheaper than me is Buffett. I also know that things costs money and "our" not mines or yours has a cost and that cost needs to be paid in a way that keeps things moving along.

Thanks for the link.

Thanks for the link. Good interview.

Ericopoloy I always said that minimizing taxes was fair game. I may be able to eliminate mines should I take a position abroad. If I do I will convert my 401k that year and pay very few taxes on the conversion. If that falls through than I was going to buy real estate as a tax shield. I also always said that you werent average, and that there werent many people like you. I also always said you can find ways to compound wealth without paying the taxes. This isnt really about you or I. I am guessing if the rate goes up. Companies will still pay billion and the hole in the budget will get smaller. The goal is to not get you to pay some sort of tax, its to generate the most revenue with the least pain for the economy. I think the raise in Dividends rates will do that. The US doesnt need a hidden VAT taxation system on top of the millions of other taxes that are collected. Americans need to know that the Government they desire costs X and they will have to pay X. Americans have to make choices relating to spending and will have to collectively pay for those choices. Loans arent taxed, and should never be. I think your strategy sounds great, depending on your portfolio size though I think it may reduce your gains going forward. I found one. Its called America. In 2009, 47% of Americans paid no income taxes whatsoever. Whats more, the bottom 40% recieve cash & benefits (EETC, unemployment benefits, S-CHIP, Medicaid, housing subsidies, food stamps, welfare, etc.) paid from reciepts of those who paid their share of this 'social contract'. What kind of perverted theory justifies a system where half the nation are freeloaders? That 47% stat is such bullshit. Not even worth responding to.

THanks for the Write up its very helpful. The best I have found for my odd securities is Think or Swim and the Pink Sheets. I hold options and foreign security based pink sheet shares at TOS. My regular US Exchange securities are held at Wells Fargo which gives 100 free trades per acct when assets hit $25k, they charge $75 for foreign securities which is what made me start looking. Per Share Commission* $.015 per share ($5.00 minimum) OR Flat Fee Trading** $9.95 per trade (market or limit orders; 5,000 shares maximum) Think or swim doesnt charge extra to buy pink sheet securities or low dollar securities. They dont do foriegn securities, but most of the ones I want have a pink sheet equivalent. I purchased ATSG under a dollar at TOS for $9.95. I own LRE.L which is a UK stock, purchased as LCSHF on the pink sheets for $9.95. Bought SFKUF instead if SFK Pulp for $9.95. You have FRFHF for FFH. I am watching these and may buy soon on the pinks - BYD.UN, CEN.V, CAA, RYL.UN. Boyd and Royal have market caps less than $60 million and I can still buy them. The only problem I can think of is volume is very tight on alot of these should you need alot of shares. LRE doesnt trade most days. There may be a slight cheaper option, but so far this works out well and keeps commissions fairly low. TOS also allows option trading in the Roth which should be useful at some point.

Im not but wish I good could to the annual meeting. Any insight to whats driving the stock move today?

Seems like this is really running this week. I wonder who is buying.

A foul and his money are soon partied. No exceptions for being able to throw, catch, or dribble a ball. Its still sad but these guys seem to go out of their ways to surround themselves by idiots. If they went to the local bank and just gave the money to a basic teller, personal banker, wealth manager than they would come out just fine.

All this talk of Oz is interesting. Melbourne is my favorite city in the world (Sydney is more beautiful but sort of pretentious as they say). Aussies are the best types of travelers to meet. Very work to live type of people. It seems like the perfect blend of US Capitalist with European values. With that said Oz reminds me more of Canada then anything and Canada and Oz are closer to Europe then the US. Oz has a high minimum wage, socialized medicine, and several other European programs. The economy is on a tear similar to Canada because Oz is the open pit of the world. It also happens to be right next to China and caulk full of Iron Ore and other medals / resources. They have all sort of resources and only have 20 million citizens. Like Canada its about the size of the continental US, but largely uninhabitable. Beautiful place and people, but I think the resources and low population provides a different set of demographics and tax base that the US would be hard-pressed to copy. I am for tweaking our system, but basically someone is going to have to pay up.

It was very interesting thanks for the link. Why is it amazing to accept the fact that markets arent perfect. Is it amazing to accept the fact that You, I, or governments arent perfect. Why would something that is a collection of imperfect people / entities not itself be flawed. He doesn't appear to be arguing for more regulation. He seems to want much lower leverage implemented over decades. People always assume regulation is bad. I would like to see half the regulation, but much better regulation. A rolling leverage ratio that is 7 at the extremely bad times and 5 at market tops. Common sense rules to avoid conflicts of interest, real consequences financial for those who screw up there institutions. Taking your medicine was tried in the great depression. It sounds good in theory but just leads to a deep and long downturn followed by a long and flat recover.

Legally I dont think they can. My advice is to move to Texas, or Florida. Cali and NY are in worse shape. This is a great documentary on retirements. Should be required watching. View it if you have time. Frontline's Can You Afford to Retire - http://www.pbs.org/wgbh/pages/frontline/retirement/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid This is a great book on pensions and should be required reading. Roger Lowenstein - While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis (Paperback) http://www.amazon.com/While-America-Aged-Bankrupted-Financial/dp/0143115383/ref=sr_1_5?ie=UTF8&s=books&qid=1271257512&sr=1-5

Thanks Dealranker. Truth be told we have the same sort of things in the private sector. I work in oil and gas and whenever things go down we have massive layoff at the plants. They will layoff 15 people making $15 an hour but will keep the over head at the same level. We could layoff 1 of the 40 VPs we have and keep 10-15 workers who are probably adding more value. The difference is its paid for in the private sector either now or later by shareholders. I dont have a problem with pensions or stock options or salary. Its all compensation. If you have a pension with healthcare after 20 years of work and can retire at the age of 40 then you probably shouldnt make more than $25k giving the long term annuity stream you are getting. I think Government work should have extremely low pay, rewarding work, and no risk at all. Its public service or it should be high pay, rewarding work, with the same risks as the private sector. We have Charter schools in Houston where you start off at $55k, work 60 hours a week, and can be fired at anytime with 401k like retirement options or you have public schools with $40k pay, 35 hour weeks, and really nice pensions. You can have either but, no mixing and matching. The public sector wants the pay of the public sector with the risks of the pubic one. They simply bribe the politicians with votes, cash, and manpower for elections and get the best of both worlds. Its a nice racket. The big issue with pensions is they are too easy to muck around with. The payments are far off into the future. There should be some sort of office that audits pensions for governments and a law saying pensions must be paid and are irrevocable once agreed unless there was fraud or (we have this on the books), we should have a matching law saying they must be funded in full each year with serious fines for underfunding. That would solve the problem.

I bought more in my Roth Account. Was trying to buy last week Monday, but an ACAT transfer has cost me 10% considering this run-up.

I think the public sector in most cities needs to be restructured, they feel the impact of the recession in terms of layoffs and furlows, but there is too much overtime and an entitlement culture by those who are high enough to avoid these such things. I think alot more things need to be outsourced using a blind low bid strict quality setup. When you have civil employees saying they dont care about the Economy, you have a problem. Its like auto suppliers with long term contracts saying they dont care about the fall in car volumes. Eventually it will effect them one way or the other. The pension issue will be a nightmare. Roger Lowenstein had a good book about it. GM first and New York and California next. Im probable the most liberal person on this board, but Cops, Fire Fighters and Nurses should be making $200k due to overtime. Outside of Police and Fire FIghters young retirements shouldnt be on the tax payers dime.

You have definitely earned your keep and made the best decisions in terms of increasing your wealth. You have earned a place squarely in the upper middle class to rich (if you are paying the death tax you are rich). We however do need Joe and Jane 6 pack to do well. Someone has to consume. Not everyone can make $100k in our society. For every promotion you got there had to be 6 others who didnt. Someone will have to flip the hamburgers, iron the shirts, sweep the floors, and wash the cars. If everyone had a college degree and was hard working we still wouldnt have enough $100 k jobs. I travel for work and meet people in third world countries who have masters degrees and drive school buses. We cant succeed without them. Your capital allocation skills arent worth much on a desert island. I think you have have an extremely skewed view on the average American. I am single, no kids, 27, and make a bit more than half of what your peak earnings were. I just got an 8% raise, but made more on Monday in unrealized gains than my entire raise. I could likely have more in unrealized equity gains in my portfolio than I make all year in earned income. The average American though is not like you or I. They make $40 - $50 K average in Combined income and spend slightly more than they make. This is household income - Man, Women, and child. I joke all the time that I am poor and dont see how a person raises a salary on my income. I have a small apartment, and a 10 year old car, but people do it every day. In my opinion its not fair for me to get $1 million, put it in a stock yielding 5%, make $50k a year and live off it paying 15% in taxes while someone making 60k who has to work day to day pays more than that than that if you include payroll taxes. $104k puts you fairly close to the top 10%. If you were married and your wife brought in decent cash then maybe 8 or 9%. You may not feel rich, but you are a rich American, and a very rich person Globally. I dont feel rich because I look towards Buffett and Prem, but compared to most I am doing pretty good. http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Median_income I also think that the income breakdowns are highly skewed as they should be. People should make more and enrich themselves as they enrich society, but they should pay more in taxes without screaming bloody murder. The government needs income. We are no longer in a surplus and you have to tax the people who have the income in ways that dont fuck up the economy. ----- Here is an interesting post about the real tea party. The guy is a conservative and not a socialist if that helps some members. http://capitalgainsandgames.com/blog/bruce-bartlett/1647/truth-about-tea-party-original-one?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CapitalGainsAndGames+%28Capital+Gains+and+Games+-+Wall+Street%2C+Washington%2C+and+Everything+in+Between%29 t bears repeating that the colonists were not objecting to the financial burden of the tea tax. Or any other tax, for that matter. Instead, they were making a point about political legitimacy. They were more than willing to pay taxes imposed by their own representatives. But they were utterly unwilling to pay taxes imposed by Parliament -- a more or less alien power, given the lack of colonial representation. Historian T.H. Breen recently made that point in an article for The Washington Post. Even after the Tea Party, he noted, colonists in Massachusetts continued to pay taxes originally levied by the Crown. But instead of sending the money to British authorities, they gave it to one of their own leaders. "Anyone who misses this point risks missing the fact that ordinary American patriots accepted the legitimate burdens of supporting a government in which they enjoyed genuine representation," wrote Breen.

This is just not true. I would usually say disingenuous but this is a flat out lie. Poor people dont own stocks. Poor people dont live off investment income. Few people live off investment income. Its sort of a leisurely thing to own a company and live off dividends. If you take away retirement accounts most people dont own stocks. Stop extrapolating your situation to Joe 6 pack or most other Americans. The average guy has a W2 and a 1099 INT from Wells Fargo / JP Morgan and thats it. Maybe a kid and a house, some sort of pet, and a bit of debt. You are one of the chosen few. Buffett is hiding wealth in Berkshire. If he doesnt sell Berkshire and donates it then he never used the benefit of the wealth. Whats your point? Its still income vs wealth. Realized vs non realized. Buy a company use it as an investment vehicle. DOnt pay dividends. Then donate your holdings to avoid paying taxes. Mission accomplished and taxation minimized. Be careful though they have an investment company tax. So find a way to justify the accumulating capital. I think buying some sort of Manufacturing company will help with that.

You are right she doesnt pay a dividend tax. She pays property, payroll, sales, state, county, and other taxes. Where did people get the idea that money is taxed once, and any more would be a moral sin. I guess a man has to sleep at night, and just saying I dont want to pay cause I want to keep the cash in my pocket to compound it doesnt aid in that process. Its sounds much better to say this is double taxation and I am not going to take it anymore. Also there are plenty of legal structures an owner can use to avoid double taxes. Corporations choose to be corporations. They have all types of options which eliminate double taxation.

Eric you have to learn the difference between income and wealth. The difference between unrealized and realized gains. Income is taxed, wealth generally not unless you die. Buffett lives off income. Buffett lives of the salary from Berkshire, and the dividends on his personal portfolio. Thats whats taxed. Its more than you or I probably make and its taxed at 17% or so. The Buffett shares have never been taxed and will never be taxed. They have never been sold. You can do the same with your unrealized gains. Are you advocating taxing unrealized gains. I have never met someone who wants to tax unrealized gains - left, right, green, blue, or red. They are unrealized. I can see why you would like a VAT its highly regressive. I dont like a VAT, they will introduce it and keep all other taxes and it falls heavily on the poor / middle. Everyone will be worse off. Interesting report from the Hillary Clinton fundraiser last night: Warren Buffet complained that he paid a 17.7% tax rate on his $46 million of taxable income in 2006, while his employees paid an average 32.9% tax rate (his receptionist's tax rate was 30%). 100k of that is from Berkshire - Where do you think the rest comes from? How can you talk about double taxes then make several posts complaining about unrealized gains not being taxed.

Why do you come up with these crazy scenarios. Loans arent taxable. You can borrow 1 billion off a credit card and never pay it and that income will never be taxed. So what. You could just borrow $1 million from a bank without the shares and it wouldnt be taxed. We are talking about income. Honestly you should be the last one complaining. I am sure you will find an ingenuous way to avoid paying this tax. If you do, shoot me a PM. I may need the advice if ATSG keeps going up.