The IRS delays the $600 eBay/Paypal taxation limit...

[Ischgl99]

Some interesting arguments on both sides here. There is something we should all be considering as it seems we may be getting close to the day when our monetary systems will be transitioned to digital only currency systems.

This is something that central banks and governments intensely desire. Should this come to pass, the individual won’t be able to sell an old pair of shoes in a garage sale without that transaction being potentially taxed. Once cash is taken out of circulation and all transactions in local currencies are through the respective central bank digital currency system (Fedcoin?) there will be no limits to what will be taxable.

And that’s just one aspect of control such a system could place on its society. I only bring this up because I wonder how many people are even aware of what is in the works.

I was labeled a nut when I brought that up last spring on a thread here. They will do everything you say, plus they will be able to charge negative interest rates on your savings to force spending if they think that is best for the economy. There is push back against this, but if they start making it a requirement for stimulus payments or government benefits, it will get accepted.

I'm glad to report that I'll be dead before this becomes a reality!

The infrastructure is in place and several commercial banks are currently testing it with business transactions. Unless you expect to leave this earth in the next few years, the probability it will become a reality in your lifetime is very high.

 

[mattthemuppet2]

Not even close to true. Of the top 1% wealthiest people, 80% are self made first or early second gen earners. They pay almost 50% of all income tax so no way the math works that they pay less than the middle class. A few who rely entirely on qualified dividends might pay only 24% federal but that is a small group.

The $600 reporting thing is just stupid though.

Dave

Depends on what numbers you pick and how you define income. For sure the top 1% do pay a higher rate of income tax (26% vs. 20 odd % for the bottom 50%) and overall they pay more in tax, but their effective tax rate is far lower as they gain much less of their income from sources subject to income tax. Warren Buffett's total tax rate is less than 1%, which appears to be about par for the course for his peers.

 

[Ischgl99]

Depends on what numbers you pick and how you define income. For sure the top 1% do pay a higher rate of income tax (26% vs. 20 odd % for the bottom 50%) and overall they pay more in tax, but their effective tax rate is far lower as they gain much less of their income from sources subject to income tax. Warren Buffett's total tax rate is less than 1%, which appears to be about par for the course for his peers.

Why is that a problem? They don’t need a salary, they get paid with their dividends and capital gains, the same as millions of retirees. That is a far riskier method of income and should have a lower tax rate to compensate for the risk.

 

[ArmyDoc]

Unfortunately no, you are only able to deduct a loss as a business. If I could deduct personal items sold at a loss, I would sell everything I didn’t want online at a cheap price and take the deduction, that is probably why they don’t allow it. but if they are going to tax it i

It seems to me that if they are going to tax it as income, then it is a business. Either the rules apply or they don't.

 

[mattthemuppet2]

Why is that a problem? They don’t need a salary, they get paid with their dividends and capital gains, the same as millions of retirees. That is a far riskier method of income and should have a lower tax rate to compensate for the risk.

Retirees don't get paid with dividends and capital gains, they get paid from pensions that they have built over their working lives which is taxed as income, same as any other worker.

I don't think individual would be unhappy to pay less tax as a percentage of their income. Whether that is fair and equitable at the level of a society is a different issue

 

[stupoty]

It seems to me that if they are going to tax it as income, then it is a business. Either the rules apply or they don't.

But if the laws is very very complex then at least everyone is more likely to make a mistake that can be given a fine to make lots more yummy tax revenue

 

[Ischgl99]

It seems to me that if they are going to tax it as income, then it is a business. Either the rules apply or they don't.

No, the IRS specifically states that sales of personal items cannot claim a loss, the most you can claim is up to the price it was sold for giving you zero income. This has been existing law for some time, so has nothing to do with this new 1099 stuff. To be considered a business in the eyes of the IRS, you need to be actively running it for profit, if it is considered a hobby business, then you can’t deduct losses either.

 

[Ischgl99]

Retirees don't get paid with dividends and capital gains, they get paid from pensions that they have built over their working lives which is taxed as income, same as any other worker.

I don't think individual would be unhappy to pay less tax as a percentage of their income. Whether that is fair and equitable at the level of a society is a different issue

Pensions and 401ks are taxed as ordinary income, but many retirees also have investment portfolios outside of that with bonds, stocks, mutual funds, etc. Those investments get taxed at the dividend and capital gains rates just like Warren Buffet.

 

[Boswell]

If you start trying to claim that you sold something at a loss I think you would also have to start calculating depreciation which is a pain the A.

 

[twhite]

I was labeled a nut when I brought that up last spring on a thread here. They will do everything you say, plus they will be able to charge negative interest rates on your savings to force spending if they think that is best for the economy. There is push back against this, but if they start making it a requirement for stimulus payments or government benefits, it will get accepted.


The infrastructure is in place and several commercial banks are currently testing it with business transactions. Unless you expect to leave this earth in the next few years, the probability it will become a reality in your lifetime is very high.

I am one of those nuts that believes it will be here in our lifetime. I think European Union will adopt it first. Say in 3-5 years. First on a voluntary “” basis. Say all governmental transactions at first. Then to everything. Most likely they will tell you that they will not get rid of cash. You will have a choice. But will soon after eliminate it. Costs too much to print or some other lame excuse.

Not at all a good thing for humanity.

Perfect time to increase our machining skills in order to barter for things.


Cutting oil is my blood.