JPMorgan cutting 55% of Bear staff

Jordyn, you are too much! "In a progressive tax system, your marginal rate is never lower than your effective tax rate."

Who said it was? I said the OPPOSITE.

Let me rephrase what I said for the weak-minded:

If your marginal rate is 30%, then you pay $300 in tax for every $1,000 you make.

If your marginal rate is 25%, then you get a $250 tax reduction.

If your effective rate is 27%, then you get a $270 tax reduction.

Therefore, if you allocate ALL of your mortgage interest and real estate tax deductions to your highest marginal rate, you are skewing the benefit because it leads to a greater tax benefit. That's why you need to use the effective rate to calculate what the benefit it.

Effective tax rate is defined as "Actual income tax paid divided by net taxable income before taxes, expressed as a percentage."

Your "effective tax rate" is your "average tax rate." IT MUST, BY DEFINITION, BE LOWER THAN YOUR MARGINAL TAX RATE IN A PROGRESSIVE TAX STRUCTURE.

You don't need to go to ProSeries for a quick example. Go to:

http://www.dinkytown.net/java/TaxMargin.html

And plug in your own numbers.

Second-year CPA, ha, RClavi~ I guess I tremble from my years as a senior audit manager and managing consultant (equivalent to director in Spain) at Price Waterhouse in London and Madrid. Or my time at "plebian" BofA - where I worked in the wholesale banking division, not retail, in London (EMEA) and Latin America (based out of Miami) - or maybe even my formative years as an assistant at Arthur Young.

"Big 4, Tier 1 client experience." LOL. I ran the external audits at Barclays and Banesto and many others for PW.

I'll be at Comic Strip next week and Gotham in June.

Does that make you happer?

Steve, I've already plugged in the numbers. They're in two separate posts above. If you think any of them are wrong, go ahead and point out the flaws. In the meantime, they clearly show that using the effective tax rate is inaccurate.

(And, as for weak-minded, you're the one that can't seem to grasp that the way I'm doing the calculations puts the mortgage deduction into the lowest of the possible affected tax brackets. So I'm dis-favoring the mortgage deduction, not favoring it.)

How do you expect people to take you seriously with any of your other points when you can't seem to come to grips with the fact that the math absolutely demonstrates that you're wrong in this case. It's really beyond absurd, because even after I computed this above, I still came to the conclusion that there was a large spread in buy vs. rent prices. Rather than saying "oh, I see how I was wrong, but it doesn't change my overall point" you seem hell-bent on proving that you don't have a grip on reality by ceaselessly arguing a point where it's beyond obvious to everyone reading that you're wrong.

wow, steve, the more you try to save your argument here, the worse you come across. Let me just point out one incredibly wrong statement you just made:

If your marginal rate is 30%, then you pay $300 in tax for every $1,000 you make. - Are you kidding because you really can't be this uninformed? The marginal rate is the rate applied on your last dollar earned. If you pay based on a progressive system, your first dollars earned are taxed at a lower rate, and as your income moves past a certain level, dollars earned over that level are taxed at a higher rate. If your overall income exceeds an amount where a higher tax rate applies on your income above such amount, your marginal rate only applies to the income above the point where the tax rate adjusts. Therefore, if your marginal rate is 30%(which doesn't exist in the current tax code but we'll stay with your hypothetical), you do not pay $300 in tax for EVERY $1,000 you make. I'm sure Jordyn can explain this better than I can.
Your argument here is really bush league, you should be embarrassed. I guess your experience was in auditing and not in tax.

Are people still arguing with Steve? If Steve was so smart he would have bought in Manhattan when his precious equilibrium was in place. He didn't. He was in Miami. He times one market right and one wrong. It's all random. But, he clearly is hell bent on being right about something that is impossible to predict. At his age and income level he should have owned for years and years and this should all be amusing discussion. It's sad, at his age, to be renting. He should wait for the market to drop, quietly buy and shut up.

steve, you've lost, please cease and desist or if you must proceed please address jordyn's examples.

"Let me rephrase what I said for the weak-minded:

If your marginal rate is 30%, then you pay $300 in tax for every $1,000 you make.

If your marginal rate is 25%, then you get a $250 tax reduction.

If your effective rate is 27%, then you get a $270 tax reduction."

What you actually said was:

"Example: you have no mortgage. You make $100,000. Your marginal rate is 30%. You pay $300 in tax for every $1,000 you make.

You pay $1,000 in mortgage interest. You deduct it from your wages giving your wages giving you $99,000, yielding you a tax benefit of $300.

Your marginal rate is 25%, you get a $250 tax reduction.

Your effective rate is 27%, you get a $270 tax reduction."

Neither one makes any sense.

Nice, stevie, more numbers out of your ass, surprise!

"I ran the external audits at Barclays and Banesto and many others for PW." What happened, Lazard and Paribas were fully staffed so they rolled ya over to less demanding EM clients?

I'll be out of town next wk, but we'll try to support your stand up in June. If only you were as bitter, self-loathing, and infantile on stage as you are behind your computer screen, you might actually have a real shot at Hollywood. If you bring real estate or Spunky onto your set I might even talk to some people for you, best.

Uh oh RCLavi....you might get flagged by steve. You called him names and now streeteasy might have to remove your comments. even though they are 100% accurate.

steve, I know you have admited when you were wrong in the past so how about now?

"What happened, Lazard and Paribas were fully staffed so they rolled ya over to less demanding EM clients?"

No, actually, I worked on BZW, Barclay's merchant banking subsidiary at the time, as well as First Boston and Credit Agricole.

Lazard was not our client, to the best of my knowledge. If I work on Credit Agricole I can't work on Paribas (if they were our client).

divvie - what am I wrong about?

Mortage interest deduction is applied at highest marginal rate.

I have done all the math on my own returns, calculated affect of AMT, no AMT etc if you recall my other posts about AMT.

From the NY Times: New York City%u2019s financial sector might only slice 15,000 to 25,000 jobs in the current downturn, which could prove shorter than the mayor has predicted, the city comptroller said on Thursday.

In contrast, the financial sector that is such a vital part of the city's economy slashed 40,200 jobs in the previous 2000 to 2003 retreat that straddled the September 11, 2001, air attacks, Comptroller William Thompson said in his report.