
Earning six figures and just scraping by - peter123
http://blogs.moneycentral.msn.com/topstocks/archive/2009/04/17/earning-six-figures-and-just-scraping-by.aspx
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smoody
A quick question:

Is it or is it not the case that the higher tax rate is only applied to income
_over_ the $250K threshold? So, if you make $260K, then only $10K would be
taxed at the higher rate and the rest would be taxed at the lower rate. Or is
it that 100% of the income gets taxed at the higher rate? I've heard it argued
both ways.

The majority of the people out there seem to think it's the latter, but the
people who believe it's the former, though fewer in number, are very
passionate. I always tend to believe the few-but-passionate over the general
consensus when it comes to issues that are glossed-over in the press.

~~~
ivank
<http://news.ycombinator.com/item?id=501825>

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eru
Yes. And if you still have any questions, why not read the relevant laws?

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smoody
People ask questions here because there's an efficiency that comes from asking
someone who already knows the answer vs. the time to, say, read through pages
and pages of tax laws.

I'm happy to share wisdom when it's quick and easy to spread if it saves
someone else a couple of hours of work.

But, your suggestion does result in a new acronym: RTFL! :-)

~~~
eru
Yes, the time savings can be huge, but you have to take into account that
legal opinions voiced in internet fora can be less than reliable.

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jleyank
If you think the US tax system is bad, get a job in Canada or Europe. I've
done this and am dealing with the combination of lower income, higher taxes
and currency fluctuations. However, it's interesting work so it's an
acceptable tradeoff (and we've been able to lower expenses and expectations).

~~~
davidw
I think what's worst about the US system is that it's confusing and arbitrary
and has tons of loopholes.

Also, the US is one of the few countries that still taxes you even if you
don't live in the country.

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jleyank
Yeah, but there's several ways to avoid paying US taxes in such cases. Foreign
taxes are credited against US taxes, and something like 85K income and then
housing expenses are removed from one's foreign income...

Unless you make gobs of bucks, this double taxation isn't a problem (other
than having to give the IRS and Treasury info about one's finances).

~~~
davidw
Sure, but still, you can go to the US from a country with really high taxes
(Sweden, for example) and they won't mess with you because you are living
abroad. You can earn as much or as little as you want, and you pay US taxes
only.

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arjunnarayan
As a citizen of the United States, you still benefit enormously from the power
and wealth of your country. As a non-citizen, I've seen the power that blue
passport with the eagle possesses. The next time there's a disaster and you're
abroad, where do you head to? Straight to the nearest consulate/embassy. Flash
that passport, and you disappear behind the high walls with barbed wire and
guards with submachine guns.

The safety net your country provides you is incredible. If you're so detached
from the US and don't want to pay for it, (and are already abroad and settled
somewhere else) why don't you give up your US citizenship? You still could
visit the US as much as you wanted (as long as you left within 6 months).
Ponder that, and then you'll realize the enormous benefits of simply wielding
the blue-eagle passport.

~~~
davidw
Even if you give up your citizenship, you _still_ have to pay your taxes.

Since I come in under the fairly high tax level where you get foreign taxes
discounted, it doesn't really affect, me, I just think that it's odd that the
US is one of very few countries that lays a claim to your foreign income if
you live abroad. Sort of like using inches, feet and yards.

