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Taxes on dividends will screw pensions

Discussion in 'Politics, Elections & Legislation' started by 635 G, Nov 12, 2012.

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  1. 635 G

    635 G Well-Known Member

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    To all the union people who voted for Obama,get ready to kiss your pensions good bye. If the tax rate on dividends are raised to the level that Obama wants--your pension funds will be so under funder --adios.

    Phil Berkowitz
     
  2. 870

    870 Well-Known Member

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    What does a tax on dividends have to do with pensions?
     
  3. Setterman

    Setterman Well-Known Member

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    401K's will be affected, but union pensions will be exempt despite they are invested no different than a 401k. Wait and see.
     
  4. 870

    870 Well-Known Member

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    Don't follow you at all. What affect will the increased tax on certain individual's investment income have on pension plans (including 401ks)?

    Well, answer is none that I can think of. Qualified plans are not subject to these taxes.
     
  5. 548

    548 Guest

    This thread is another rediculous thread.

    I always enjoyed Phil's posts. Posts like this chip away at his credibility though.
     
  6. 635 G

    635 G Well-Known Member

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    Dividend yields will be decreased. Unions need @ least 5% to keep even with the cost of living . California pensions are in the toilet because they planned their payouts on continued 8% yields---these yield haven't existed in a while. How do unions expect to keep funding their pensions, when yields approach bank interest?

    Phil Berkowitz
     
  7. Rick Barker

    Rick Barker Well-Known Member

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    Sure am glad I invested all my money in beenie babies.
     
  8. likes-to-shoot

    likes-to-shoot Well-Known Member

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    What kind of pensions are you talking about?...Source of information?

    Defined pensions...funded or unfunded?

    Guaranteed pensions?

    401 K's?

    Private or employer funded?

    One more question.....I would bet a high percent of the union members on this site were in the 40% of union voters who voted for Romney and the republican party....the rest doesn't even know this site exist.....So why the constant barrage of insults against members on this site???

    Bill
     
  9. Bisi

    Bisi TS Member

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    If they are going to tax the c*** out of dividends then nobody will want to buy stocks. People will just switch to tax free munis. Yeah it can screw up your pension.
     
  10. Big Az Al

    Big Az Al Well-Known Member

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    Ok,

    This is not dividends, BUT

    One of the TAX hikes that will kick back in if the Bush era tax cuts are not extended, is the alternitive tax,

    This tax was passed when 10,000 dollars a year was a good middle class income,

    And

    "THOSE POEPLE MAKING 50,000 DALLARS A YEAR HAD IT MADE AND NEED TO PAY THEIR SHARE!"

    Now I am in that tax bracket not well off by any means, and am looking at taxes as high as those wealthy people making 250,000K a year, because of this little known tax,

    So check it out, and than tell me that, that little 3% tax is not going to be 13%.

    Also part of what has made my 401K grow as it has many others. Has been dividend payments.

    So with barry and many others wanting to tax the 401K's because they need to spread that wealth better. Are they going to defer the tax, Or take it off the top.

    And as my dad and his friends talked about when the alternitive tax was passed, "HOW LONG AT 10% 15% OR 20% INFLATION IS IT GOING TO BE BEFORE THOSE OF STRUGGLING TO GET BY AT 55 TO 60k A YEAR ARE STRUGGLING TO GET BY AT 250k A YEAR?

    Al
     
  11. Big Az Al

    Big Az Al Well-Known Member

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    Having sat here with a piece of paper I will say that at

    5% infaltion it will take 32 years for me to go from my current income to 250K

    10% is 16 years

    15% is 12 years

    and 20% is 8 years

    I know the answer BUT

    "has anybody seen a tax reduced in any way shape or form because it is NOW the poor people at that income?"

    Al

    for those that will flame me for what I am saying

    The industry I work in, 35 to 40 years ago had starting wages that where 2.00 to 3.00 dollars an hour top wages that where 5 to 6 dollars an hour

    Now they are 14 to 16 starting and 26 to 32 top.

    that means we are making a little over 5 times what the wages where 35 to 40 years ago, compared what I would need to be making 32 years form now If infaltion is only 5%, is just under 5 times what making right NOW!

    So when are we going to say STOP raising taxes, becuase our aim is and always will be way off!
     
  12. 870

    870 Well-Known Member

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    Phil:

    You still haven't explained how this will affect pension plans. Now you say dividend yields will be lowered, what are you talking about? I can't tell you if dividends will increase or decrease, but they won't be affected by this tax.

    For those reading these posts, the tax will affect a lot more things than you think, but pensions aren't one of them. If you are making over the $200,000/$250,000 limits, you do need to think about this, but TS.com is obviously NOT the place to get your info,
     
  13. Joe Potosky

    Joe Potosky Well-Known Member

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    If you don't have your investments in a 401 or Roth IRA account the upcoming taxes will be felt if not properly shielded via said accounts.

    By the way, if you don't have a 401 and/or a Roth IRA you really need to look into it. Invest to the max allowable each year....

    The best deal for many is:

    Roth IRA funds are taxed going in, but not taxed coming out. Monies maintained in the Roth IRA are not taxed (dividends, selling and keeping in the Roth, stock splits). Penalties for early withdrawal! A lifetime of say $120,000 investment would be tax free (even if $2,500,000) coming out.

    In 2013 the annual Roth IRA investment limit on earned income will be $5,500. If both the husband and wife are working you can have two accounts.

    Even if you have a 401 you can also have a Roth IRA.

    Any brokerage firm can set up an account for you.
     
  14. rpeerless

    rpeerless Well-Known Member

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    I heard that O wants to equalize the pensions in that he wants to pool all the pension funds and divide them equally amongst the pensioners. You know kinda like when you send your kid to school with school supplies and the teacher collects them all and redistributes the supplies amongst all the students. You never get back what you put in. You send your kid with a box of crayons and he returns home with four.
     
  15. 870

    870 Well-Known Member

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    Joe:

    The only problem with what you point out is that people that might be subject to this new tax aren't generally eligible to make contributions to a Roth IRA because of their income levels. Just pointing out that IRA's aren't really a solution for most people that might be subject to the tax. Not a knock on Roth IRA's and yes, there are still indirect ways to get funds into one for those people.

    Remember, this applies to, among other things, interest, dividends, capital gains, rental income, income from other passive investments including partnerships and S Corps etc that you may own but not materially participate in. But generally only if you are making more than the $200,000 or $250,000 limits.

    Muni Bonds will work, but you need to consider the returns compared on an after tax basis to see if it works.
     
  16. Joe Potosky

    Joe Potosky Well-Known Member

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    RE: aren't generally eligible to make contributions

    True. But, for everyone else who is investing for a retirement, they better take advantage of all the programs out there, especially when monies can grow tax free. Even if 20 years old, $25 a month into a Roth IRA is a good start. Increase the amount after every pay raise received!

    Only a small portion of the populations is investing the max allowed.

    If I was writing the law. All such investments would be in a lock box, not to be withdrawn until retirement age. Look around. Many have drawn on their accounts and are basically screwed when it comes retirement time. No withdrawing to send kids to collage or what have you. May seem the thing to do when money is needed, but when your 70 years old and just have SSI....
     
  17. Brian in Oregon

    Brian in Oregon Well-Known Member

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    I wouldn't be surprised if the next thing the Dems come up with is ObamaRetirement, where they nationalize all of the 401K and IRA accounts and put them into the Social Security system. Of course, it will be "your" money, but will be given back on their schedule and doled out in their amounts, not yours. Plus your SS check will be offset by any of your own 401K or IRA money they give back to you. I hate to sound paranoid, but since ObamaCare is working out so well...
     
  18. 635 G

    635 G Well-Known Member

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    Lets say you get a 100k a year in dividends, current you net 85k. With the new taxes you will net 68K. So let say you're funding a pension plan for your employees, that means they will have less in their plan. CALPERS is so greatly underfunded, this will only make in worse. Wait to you see what happens in NY &NJ.

    Phil Berkowitz
     
  19. Gunnerandbabe

    Gunnerandbabe TS Member

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    They may not tax some of that money now. But thay can change that too.Food stamps cost a lot of money, you will pay like it or not.
     
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