Obama's tax cut calculator

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oops sorry about the above, but here's my response





Heck in OC 250K is lower middle class! Flat tax is the only fair solution. Eliminate the loopholes and put all the tax lawyers out of business
 
[quote author="socalmd" date=1224659655]oops sorry about the above, but here's my response





Heck in OC 250K is lower middle class! Flat tax is the only fair solution. Eliminate the loopholes and put all the tax lawyers out of business</blockquote>




so the maid who cleans your office and makes $30k/year should pay 9% payroll taxes and 30% income tax, netting 18k



and you as an md making $250k/year should pay payroll 5% (only first $100k) and the same 30% income tax, netting $170k?





it seems to me that you could afford to pay 32%, so that she only has to pay 10%, and not really notice the $5k loss, whereas for her, the difference would be $18k versus $24k, a full third more.
 
skek,



Actually, being in the top 5% of earners, I don't have any animosity towards higher income people. And it's not like I'm in total disagreement. My response was as silly as the previous examples and that's how I meant it to be.



Here's some good data:

http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml



You make 15,900 in 2005 you take home 15,300.

You make 85,200 in 2005, you take home 70,300.

You make 231,300 in 2005, you take home 172,200.



That's if you get all your income through payroll.



I make 100k more and I pay 3% (3k more)... fine. My 3k goes to giving a tax break to people making 70k, fine. I waste money on worse things.



Also, I remember being in that lower quintile income bracket, and it really sucked.



That being said, do I pay a 35% or whatever tax rate? No. I don't like paying high taxes, and I know that what I've said previously is disingenous, But I'll tell you what I do. I take my income through my business and spend it through my business before receiving it as payroll. How do I do that? By spending it on tax-deductible things like employees, and employee healthcare, and business infrastructure. And then I reduce my tax burden even more by giving some of my money to charity.



For me, higher taxes have never translated into job losses. Higher taxes usually mean I spend more money on labor because why give it to the federal government when I can make a product I can sell with that money? Or when I could give that money directly to the specific charity I want? I assume this is why our tax structure is set up the way it is. And it's worked effectively on me. My wealth goes into productive places for the economy (now that I have wealth).



I do know a few people who would pay more who are sympathetic examples. They're doctors who earn about 350k a year through payroll from the hospital they work for. What would the extra tax on that be? 3k? So, no waterworks glass tile upgrade to their 4 year old bathroom. And that IS the choices that they are making. At 100k you wish you could stretch to send your kid to private school. At 30k you think about whether or not you can get through the summer with no air conditioning.



So that's my less divisive answer. In 4 years when the economy isn't such a shambles (crossing fingers), and the disparity in wealth in this country isn't so obvious, then I'll be voting for someone else. Someone like Coburn. In fact, I just voted libertarian on all my local california races because I'm pissed at all these people.
 
[quote author="skek" date=1224652890]It's stunning how successful the Democrat Party have been at fermenting hostility towards anyone with wealth, and then misdirecting that anger towards policies that don't actually tax the people they've demonized.



First, they've managed to equate anyone making over $250k in income with the Warren Buffets and Bill Gates of the world. (See jefa's example of the two guys in the luxury box: "<em>Two guys sit in a 5000 sq foot private box which they paid 5 million for off the 30 million of proceeds they received from sales to the masses watching the game.</em>")



Second, they've managed to convince their constituents that the only way anyone can become wealthy is by stealing money from the little guy. (See blackacre's posts about rooting for fires to destroy McMansions because the owners had to have been crooks: "<em>Where did they get that kind of money anyway, flipping houses during the bubble? Underwriting bad mortgages? Cheating investors out of their money while collecting millions in bonuses?</em>")



Third, as I've said before, they've equated income tax rates with taxes on wealth, without acknowledging that the "super wealthy" that they've so successfully demonized actually earn most of their wealth through capital gains (not ordinary income) and are financially stable enough that they can defer taxable events or set up complex tax avoidance structures. As a result, under the guise of sticking it to the "rich bastards," you end up soaking doctors, lawyers, accountants, small business owners, and dual-income professional couples. The hedge fund managers and Fortune 500 CEOs? You aren't taxing them as much as you think you are.



Fourth, they've created a myth that tax brackets are static -- that you are born into your bracket, like a caste, and there you shall stay. But that's not the reality of the American experience. Many taxpayers spend time in all brackets -- on the way up and again on the way back down.



I understand that no one is going to have an ounce of sympathy for someone who makes in excess of $250k. But the notion that those paying the lion's share of the taxes are somehow an "other" that should be punished is a dangerous sentiment to encourage in these difficult economic times. We should encourage people to go out and start businesses and try to create wealth, not sneer at those who do.</blockquote>


I have so much to say to this and yet so little energy to do so. Let's see what I can muster.



First, a big nit: <a href="http://www.newyorker.com/archive/2006/08/07/060807ta_talk_hertzberg">It's not "Democrat Party,"</a> but <a href="http://www.democrats.org/">"Democratic Party."</a>



Second, a small nit: I think you meant "fomenting" and not "fermenting," unless you're talking about wine, beer, or spirits.



Three: I think Jefa and Blackacre will be surprised at their status as policymakers or spokespeople for all Democrats.



Fourth: I don't know of anyone who equates multibillionaires with upper middle class (or, depending on your geographic location, "rich" people) with income of $250K or higher annually. I don't have the stats in front of me, but I believe that a single person with income of $250K+ annually places one in the top 5% of all earners (if not higher). Being ahead of 95% of other people is not a bad place to be. There are plenty of people who work long and hard five to seven days a week and make much less.



Fifth: <em>"they've managed to convince their constituents that the only way anyone can become wealthy is by stealing money from the little guy"</em> Really? Do you have a quote from any Democratic officeholder saying that? Are you unaware that there are many truly wealthy people that are Democrats?



With respect to the following statement: <em> "they've equated income tax rates with taxes on wealth, without acknowledging that the "super wealthy" that they've so successfully demonized actually earn most of their wealth through capital gains (not ordinary income) and are financially stable enough that they can defer taxable events or set up complex tax avoidance structures. As a result, under the guise of sticking it to the "rich bastards," you end up soaking doctors, lawyers, accountants, small business owners, and dual-income professional couples. The hedge fund managers and Fortune 500 CEOs? You aren't taxing them as much as you think you are."</em>



I don't think that is true at all. Which party led the charge for reducing taxes on capital gains? <a href="http://www.nytimes.com/2003/05/08/politics/08TAX.html?ei=5007&en=3f9cea5d90e54e1e&ex=1367812800&partner=USERLAND&pagewanted=print&position;="> Hint: Not the Democratic Party.</a> Of course, one way to increase receipts from Fortune 500 CEOs and others would be to increase the marginal tax rates. Want to know how much better off (tax wise) the wealthy are now versus in the past? Let's look at a historical tax chart (sorry for the size!):



<img src="http://i210.photobucket.com/albums/bb27/evalseraphim/TaxTables_0002.jpg" alt="" />



and



<img src="http://i210.photobucket.com/albums/bb27/evalseraphim/TaxTables_0001.jpg" alt="" />





<a href="http://www.irs.gov/pub/irs-soi/02inpetr.pdf">Source.</a>



I'll get to the rest later.
 
Skek,



Don't you think the doubling of the federal deficit under 43 blows out your chance to maintian income tax rates over time?



Nobody likes taxes. But that's the thing about them - when our government racks up the bill, we pay it. If you don't like what the Dems are about to do (probablly not next year, maybe the year after) it would be a good idea not to run up the bill in front of the guys who aren't afraid to collect on it.



<img src="http://zfacts.com/metaPage/lib/National-Debt-GDP.gif" alt="" />



<blockquote>Dick Cheney says to O'Neill, "Reagan proved that deficits don't matter. We won the midterm elections. Our due is another big tax cut." </blockquote> - Ron Suskind



Two paragraphs later:



<blockquote>RAY SUAREZ: For another view on the inner workings of the Bush White House, we turn to Mitch Daniels, former director of the U.S. Office of Management and Budget, where he oversaw the U.S. budget. He is now a Republican candidate for governor in Indiana.



Welcome to the program, Mr. Daniels. You've heard Ron Suskind's view from his sources of the workings of the Bush White House. Does it sound like the place where you worked?



MITCH DANIELS: No, that's not the president I know, it's not the White House I worked in. And I believe history will ignore this book and should.

</blockquote>


<a href="http://www.pbs.org/newshour/bb/politics/jan-june04/loyalty_01-15.html">http://www.pbs.org/newshour/bb/politics/jan-june04/loyalty_01-15.html</a>



Wonder how history will ignore those deficits?



(Before anybody gets on me about "Hey, there's a war on!" the Iraq deal cost $600 billion. We spent over $5 trillion, so we got another $4.4 odd billion to account for).
 
[quote author="skek" date=1224684274] Still, raising taxes should be the last resort. I don't think we've done enough to limit government spending and reform entitlement programs. If we do that and there is still a shortfall that can't be closed through organic revenue growth, then we can talk about tax increases. </blockquote>


Bill Gross, Paul Krugman, and I all feel it's gmnt's obligation to not increase taxes and run a bigger deficit till things pick up. At that point, it's strap up and pay for it time. I also think the second tax cut was ill advised - mostly becuase I think the second cut coupled with the addtional spending created deficits that will give the Dems a hall pass to run taxes to the moon on everybody - in the spirit of fairness.



<blockquote>I'll grant you that it sure is lonely being a fiscal conservative these days.</blockquote>


Had the social Conservatives not turned into conservative Socialists in front of my eyes, I suspect neither of us would be having this discussion.



I'm the small government "Blue Dog" remember?
 
[quote author="freedomCM" date=1224672893]

so the maid who cleans your office and makes $30k/year should pay 9% payroll taxes and 30% income tax, netting 18k



and you as an md making $250k/year should pay payroll 5% (only first $100k) and the same 30% income tax, netting $170k?



it seems to me that you could afford to pay 32%, so that she only has to pay 10%, and not really notice the $5k loss, whereas for her, the difference would be $18k versus $24k, a full third more.</blockquote>


isn't the tax bracket up to 32k only 15%? the bracket from 160k to 360k is 33%.
 
Thanks skek, for the reasoned reply.



Just as a final note: I don't think overall it's wise to get a majority of your tax revenue from the wealthy. Tax revenue should be diversified for the well being of the nations economy, which we all are reliant on. If you consistently only tax the wealthy and then the wealthy get hammered, then your system is destabilized and you have to do rapid changes which will further destabilize the system.



Typically states try and rely on property tax since it is "stable", though that has just gone out of the window.



However, when you get the wealth spread that you have today that's also destabilizing. You have too much wealth concentrated in the hands of too few and you start getting two societies, one where the wealth is and Mexico. It's about where China is today. There are vast areas that aren't participating at all in their new economy (and this is more logisitics than Chinese policy), and then you have their super economy areas. The difference between China and America (there are many, and I'm sorry to oversimplify) is that we can and should have our economy pervading the entire country. Or we should at least try to achieve that. It makes for a more stable country, and frankly, a nicer one to live in.



I think the South is STILL not fully recovered from living in an entirely separate economy than the north back before the civil war. Completely agrarian with almost no transfer of wealth from the rich to the poor (white or black). The top 5% probably had 90% of the wealth in those days, and that wealth went right back into their pockets or into the pockets of those in the north. A lot has changed, but it's surprising how many people in the hills are still living in that old economy of 100 years ago.



I don't think the democrats need to do much to "vilify" the rich. In fact, I think the US is lucky that so much of its poor population admire the rich. Most countries have a lot of angst between the haves and have nots. That's just human nature. Here, there's a big section of people who have nothing and then fight for a tax cut for the wealthy. They noted this back during the great depression too. It's unusual, and it's typically the republican poor. It's probably why we didn't have riots on the streets back in the great depression, and that's a pretty nice thing.



Anyway, Great Depression: I think when you have more and more wealth concentrated in the hands of the few it starts to create a two economy structure. I think then you get into this issue where the main avenue for recieving wealth is through borrowing and then people can't pay the money back because the primary avenue to pay the money back is through more borrowing, which eventually wipes out the wealthy and puts you in a nasty transition phase where the wealth gets re-distributed through the "free market". Which is what we've got now. The free market is brutal and it doesn't care how much you suffer when it "corrects". So I like the idea of trying to control these swings through some human methodology... like a tax structure which keeps the disparity under control so we don't go through this type of rapid, scary correction. As opposed to being forced to spend gobs of money, and inflate our currency to deal with it after the fact.



But again, now we're likely to see a correction to the other side, and at that point we'll need those republican poor to fight for the wealthy man who is over-regulated and over-taxed. But I personally feel that the pendulum is currently at unsually low oversight and very historically low taxes for the very wealthy. It's all a balance. No scenario is true in the extreme. At least that's my philosophy.



Edited to add: the free market, in my opinion, usually takes the money from the wealthy at some point and gives it to gamblers and risk takers.... and those who concentrate on parting their money from fools. Not my idea of a good system.
 
[quote author="skek" date=1224683854][quote author="EvaLSeraphim" date=1224681810]I have so much to say to this and yet so little energy to do so. Let's see what I can muster.



First, a big nit: <a href="http://www.newyorker.com/archive/2006/08/07/060807ta_talk_hertzberg">It's not "Democrat Party,"</a> but <a href="http://www.democrats.org/">"Democratic Party."</a>



Second, a small nit: I think you meant "fomenting" and not "fermenting," unless you're talking about wine, beer, or spirits.</blockquote>


Oh dear. I see Eva's got me in her sights again. OK, I'll concede you two points -- Democratic Party and fomenting. I love how you start with the important stuff.</blockquote>


As for the points I started with, you might note that my post addressed your post in the order in which the statements were made.



If responding to your post is me having you "in [my] sights," then I guess so. It appeared to me that you wanted to <em>discuss</em> tax policy, but maybe you just wanted to soap box instead? If so, I misunderstood. Please disregard. Sorry.



I will say this on the subject and no more: I don't enjoy paying taxes, but I do like some of the things I get for them including, but not limited to (and looking at federal spending only), a standing army, national parks, interstate freeways, the Coast Guard, food safety, the Do Not Call list, water delivered to my home in SoCal, minimum standards for vehicle safety, flood control, the printing and coining of money, promulgation and enforcement of nuclear safety regulations, and (everybody's favorite) DOD's research that brought us the Internet.



Thanks, and have a nice day.
 
[quote author="freedomCM" date=1224672893][quote author="socalmd" date=1224659655]oops sorry about the above, but here's my response





Heck in OC 250K is lower middle class! Flat tax is the only fair solution. Eliminate the loopholes and put all the tax lawyers out of business</blockquote>




so the maid who cleans your office and makes $30k/year should pay 9% payroll taxes and 30% income tax, netting 18k



and you as an md making $250k/year should pay payroll 5% (only first $100k) and the same 30% income tax, netting $170k?





it seems to me that you could afford to pay 32%, so that she only has to pay 10%, and not really notice the $5k loss, whereas for her, the difference would be $18k versus $24k, a full third more.</blockquote>










That's socialism and redistribution of wealth. The fact I could "afford" to pay more taxes is not the point. It is a matter of what is fair. I work hard and went to school for a long time. This should just show you how much I dislike McCain/Palin. Even despite my opposition to taxes I'm still voting for Obama.
 
[quote author="socalmd" date=1224723114]That's socialism and redistribution of wealth. The fact I could "afford" to pay more taxes is not the point. It is a matter of what is fair. I work hard and went to school for a long time....</blockquote>


Not to pick on you, but I see people talk about "fair" a lot in a way that doesn't make sense to me. The whole system is man-made. We make the rules. Fair is whatever the rules say. If the rules say you should pay 30% taxes, then doing so is the only thing that is fair.



As for wealth, the biggest predictor for how much money a person makes is how much money was made in the household he/she grows up in. So, do we want to reward people for having wealthy parents, or do we want to reward people for being productive members of society?
 
[quote author="T!m" date=1224724208][quote author="socalmd" date=1224723114]That's socialism and redistribution of wealth. The fact I could "afford" to pay more taxes is not the point. It is a matter of what is fair. I work hard and went to school for a long time....</blockquote>


Not to pick on you, but I see people talk about "fair" a lot in a way that doesn't make sense to me. The whole system is man-made. We make the rules. Fair is whatever the rules say. If the rules say you should pay 30% taxes, then doing so is the only thing that is fair.



As for wealth, the biggest predictor for how much money a person makes is how much money was made in the household he/she grows up in. So, do we want to reward people for having wealthy parents, or do we want to reward people for being productive members of society?</blockquote>


My dad was an immigrant from mexico. His parents were very poor. He was pretty much middle class all his life, though a very hard worker, and is now in his late fifties making a lot of money now that he is in business for himself. Explain why he should be taxed as much as he is?



Or me? I don't have any writeoffs, because I didn't fall into the trap of buying a toxic mortgage... I should be paying thousands of dollars a month while i'm saving up so I can afford a condo? Its not like I'm saving up for a mansion...



Don't get me wrong, McCsame's a douchebag too, he wouldn't lower my taxes any more then Obama would. I just think both of them are screwing the middle class bigtime.
 
[quote author="25w100k+" date=1224726081]

My dad was an immigrant from mexico. His parents were very poor. He was pretty much middle class all his life, though a very hard worker, and is now in his late fifties making a lot of money now that he is in business for himself. Explain why he should be taxed as much as he is?



Or me?...</blockquote>


I can't really tell you why your dad should be taxed as much as he is. I don't know how much he is being taxed. Same for your tax. I'm not even trying to defend Obama's tax plan or anything. I was just commenting in general.



For my personal preference, I think we should do away with the home interest tax credit. I also think capital gains and estate taxes should be taxed the same as income. In fact, all ways that you get a dollar should count the same. And income taxes should be progressive.
 
[quote author="acpme" date=1224710380][quote author="freedomCM" date=1224672893]

so the maid who cleans your office and makes $30k/year should pay 9% payroll taxes and 30% income tax, netting 18k



and you as an md making $250k/year should pay payroll 5% (only first $100k) and the same 30% income tax, netting $170k?



it seems to me that you could afford to pay 32%, so that she only has to pay 10%, and not really notice the $5k loss, whereas for her, the difference would be $18k versus $24k, a full third more.</blockquote>


isn't the tax bracket up to 32k only 15%? the bracket from 160k to 360k is 33%.</blockquote>




The discussion was that socalmd is advocating a 'flat tax', and I responded that it may be nice for him/her, but it pretty much sucked for everyone else.
 
[quote author="T!m" date=1224726663] In fact, all ways that you get a dollar should count the same. And income taxes should be progressive.</blockquote>


Just out of curiosity - what about inheritance? Should that be taxed the same/as income?
 
[quote author="NewToOC" date=1224730135][quote author="T!m" date=1224726663] In fact, all ways that you get a dollar should count the same. And income taxes should be progressive.</blockquote>


Just out of curiosity - what about inheritance? Should that be taxed the same/as income?</blockquote>


Well, I think so. I see no reason not to. You just got a dollar. You could make a case that you got a dollar you didn't earn, but I don't care about that. It is simpler to just tax every dollar you get the same.



Some people, and I'm not saying you are one of them (cuz I don't know if you are or not), say taxing inheritance is taxing the same dollar twice, but that doesn't really wash. Every dollar gets taxed lots of times: I get a paycheck and pay taxes. The company that paid me paid taxes. The company that paid that company paid taxes. When I buy something with my paycheck, I pay sales taxes. The company I give that dollar to pays taxes on it. They then use the money to pay their employees. Etc.
 
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