Obama's tax cut calculator

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[quote author="T!m" date=1224733353][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.</blockquote>


I agree with you on this but as a daughter/future mom I can see the other side too. I also find the double-taxation argument strange.
 
[quote author="skek" date=1224718653]I'm happy to have a discussion about tax policy with you, Eva. There was some friendly teasing in my response -- I'm sorry if it came off as something else. By having me "in your sights" I was making a joke about the fact that every now and then you seem to put special effort into engaging in a debate, and it seemed that you were about to engage in such an effort with me. I meant no disrespect, and I invite you to continue this debate.



I respect your arguments and I enjoy debating with you, Eva. If you are ever in doubt about the tone of my posts, you should assume I'm being friendly -- if a little sarcastic at times -- unless I say otherwise.</blockquote>


Oops. I was concerned that you might have thought I was picking on you, and then it seemed like you thought I was, and . . . hold on a sec.



<em>Ms. Seraphim, Self Fulfilling Prophecy holding on Line 1.</em>



Hmm... indeed.



Anyway, the statement I found most troubling was



<blockquote>My argument was how well the Democrats have convinced people that wealth was something to be ashamed of or looked down upon. </blockquote>


I don't think that is true at all. My take is that Democrats (1) want everyone to have an equal opportunity at being wealthy (which is why quality public school education and access to higher education is a big deal to them), and (2) that great income disparities are not good for society or the economy (hence the focus on CEO pay). That's merely a thumbnail sketch, but something to get you started. :)
 
[quote author="EvaLSeraphim" date=1224765001][quote author="skek" date=1224718653]I'm happy to have a discussion about tax policy with you, Eva. There was some friendly teasing in my response -- I'm sorry if it came off as something else. By having me "in your sights" I was making a joke about the fact that every now and then you seem to put special effort into engaging in a debate, and it seemed that you were about to engage in such an effort with me. I meant no disrespect, and I invite you to continue this debate.



I respect your arguments and I enjoy debating with you, Eva. If you are ever in doubt about the tone of my posts, you should assume I'm being friendly -- if a little sarcastic at times -- unless I say otherwise.</blockquote>


Oops. I was concerned that you might have thought I was picking on you, and then it seemed like you thought I was, and . . . hold on a sec.



<em>Ms. Seraphim, Self Fulfilling Prophecy holding on Line 1.</em>



Hmm... indeed.



Anyway, the statement I found most troubling was



<blockquote>My argument was how well the Democrats have convinced people that wealth was something to be ashamed of or looked down upon. </blockquote>


I don't think that is true at all. My take is that Democrats (1) want everyone to have an equal opportunity at being wealthy (which is why quality public school education and access to higher education is a big deal to them), and (2) that great income disparities are not good for society or the economy (hence the focus on CEO pay). That's merely a thumbnail sketch, but something to get you started. :)</blockquote>


I would like to add, that it is nice to see skek and Eva have a reasonable, healthy, and intelligent debate. This is certainly not the norm here, and I encourage you both to continue it. I thank you both for overcoming your differences to actually make a point, and not lower yourselves to conjuring up total fallacies from the subject and how you can maintain on topic without calling each other stupid. I thank you both for your points and snark on the subject, and I can't wait to read more.



BTW, there was a recent article in the<a href="http://blogs.wsj.com/wealth/2008/10/13/the-rich-support-mccain-the-super-rich-support-obama/"> WSJ about the uber-wealthy</a> and how they were supporting Obama in the polls.

<em>

The Rich Support McCain, the Super-Rich Support Obama



In Richistan, I wrote about a new political divide emerging among the wealthy. While most Lower Richistani?s ($1 million to $10 million in net worth) were voting Republican, most Middle-and Upper Richistanis (those worth $10 million plus and $100 million plus) were voting Democrat.



Lower Richistanis tended to vote almost exclusively based on taxes. But Upper Richistanis placed a higher priority on longer-term societal issues like health care, the environment and education, which are traditional Democrat issues. Some say Upper Richistanis can afford to minimize taxes, since they have plenty of money even after the government takes its share. Others say the ultra-rich have better tax attorneys so they don?t care as much about tax rates.



Yet a new survey shows that the Richistan split is not only alive and well, but it may even be growing.



According to a new survey by Prince & Associates, voters worth $1 million to $10 million are favoring Sen. John McCain, while voters worth $30 million or more are favoring Sen. Barack Obama.



More than three quarters of those worth $1 million to $10 million plan to vote for Sen. McCain. Only 15% plan to vote for Sen. Obama (the rest are undecided). Of those worth more than $30 million, two-thirds support Sen. Obama, while one third support Sen. McCain.



The reason? Taxes.



Among Lower Richistani?s, 88% cited tax policies as being ?important? in making their decision. Only 11% cited the environment, 22% cited health care and 45% cited social issues.



Among the Upper Richistani?s supporting Sen. Obama, tax policies ranked last, with only 16% citing them as important. ?Social issues? ranked first, with ?policies dealing with wars? ranking second (67%) and Supreme Court nominations and health-care issues ranking next.

Of course, in today?s populist politics, the only thing worse than being the candidate of the wealthy is being the candidate of the superwealthy. You can bet this is one poll that neither candidate will repeat on the campaign trail.



But the survey offers an important insight into the effect of wealth on personal politics. Perhaps the old saying should be changed to: If you?re ultrawealthy and conservative you have no heart; if you?re wealthy and liberal, you have no brain.

</em>



Also, if anyone can tell me how a tax break/credit, will create jobs in this economic environment, then please let me know. Just because you give tax cuts to consumers (middle class) to spend, and just as how giving take breaks to corporations doesn't mean stabilization will not occur until people have and are creating jobs. Find me the company that has produced a profit in the last year and created jobs. For those that have not seen a profit or created jobs, then I would like to see where each candidate's proposals would create this. So far, neither one has shown this.
 
[quote author="skek" date=1224914644]So the Democrats are using an extreme example (like those highly paid CEOs) to argue for tax increases on working professional couples who make 1% of what those CEOs make. How's that for fairness?

</blockquote>


Only 1.5% of household exceeded $250K in 2005.
 
[quote author="skek" date=1224921442][quote author="green_cactus" date=1224920779][quote author="skek" date=1224914644]So the Democrats are using an extreme example (like those highly paid CEOs) to argue for tax increases on working professional couples who make 1% of what those CEOs make. How's that for fairness?

</blockquote>


Only 1.5% of household exceeded $250K in 2005.</blockquote>


That fails to address my points. Even so, there are approximately <a href="http://wiki.answers.com/Q/How_many_households_are_in_the_US">111,162,259</a> households in the US. That means 1.5% is still 1,667,433 households who are getting a tax increase based on disingenuous arguments. How many Fortune 500 CEOs are there? Oh yeah, 500.</blockquote>


Here's a "fun" fact for everyone. The increase in tax burden from applying Social Security taxes on incomes over $250k alone will result in additional tax burden of $40 billion in 2009 alone on high income people. Though this increase doesn't include the higher federal tax rate, the burden placed on the more productive members of society is twice as much as people in the bottom quintile of the population combined. Source : <a href="http://www.taxfoundation.org/publications/show/23319.html">http://www.taxfoundation.org/publications/show/23319.html</a>
 
[quote author="skek" date=1225867986]

Call me simplistic, but yes, when someone puts themself through college or grad school, works nights and weekends, improves themselves, takes the risk of starting a business and at the end of the day is fortunate enough to acquire some wealth, I believe that they should be entitled to keep it.</blockquote>


To keep ALL of it? You shouldn't have to pay for police, fire dept, military, highways, etc.? What about if you inherit the wealth and don't work a day in your life?



The biggest predictor for your wealth as an adult is the wealth of your family when you are a child.
 
[quote author="T!m" date=1225868520][quote author="skek" date=1225867986]

Call me simplistic, but yes, when someone puts themself through college or grad school, works nights and weekends, improves themselves, takes the risk of starting a business and at the end of the day is fortunate enough to acquire some wealth, I believe that they should be entitled to keep it.</blockquote>


To keep ALL of it? You shouldn't have to pay for police, fire dept, military, highways, etc.? What about if you inherit the wealth and don't work a day in your life?



The biggest predictor for your wealth as an adult is the wealth of your family when you are a child.</blockquote>


No way, I should be a lot wealthier!
 
[quote author="skek" date=1225868977]

Oh, T!m, no one said that -- you know very well that I support a progressive tax structure. But the quote is revealing in that a Democrat let his guard down and revealed what I've been saying on this thread -- that he views wealth as some windfall that isn't earned, and tax policy as the appropriate tool to punish and redistribute it. Whereas I view taxes as a tool to pay for essential government services, the burden of which already falls disproportionately on the wealthy. How about you?</blockquote>


I'm just making the point that it isn't so black and white as should you keep your wealth or not. I think wealth is often earned and often the result of luck. My brother works as hard as I do, he just happens to work in a job that doesn't pay as much as mine. I have no problem paying more taxes than him. The issue gets into how much more, right? We all seem to have our own ideas on that.



I don't think the burden of taxes falls disproportionally on the wealthy. I think the wealthy get more benefit from the govt than the rest. The main thing the govt provides is social stability. This comes in the form of the military protecting us, money to keep financial firms solvent, money for unemployment and social security, education, fire, police, distribution of goods, etc. The non-wealthy get benefit from all this, sure. The wealthy get more though, they just get it indirectly. Without the stability, the rich would not be able to be a CEO or invest in anything. Who would work in their offices? The CEO of my company makes a ton more money than me. If his house and my apartment were on fire, and the fire department could only save one, whose would they save? If the country were invaded, who would lose more money? Who benefits more from an educated work force? Not me, it just creates competition for my job. But he benefits by having better people to hire to make more profits so he can get $20 million this year instead of $10 million. blah blah blah....
 
[quote author="skek" date=1225871602][quote author="T!m" date=1225870882]I don't think the burden of taxes falls disproportionally on the wealthy. I think the wealthy get more benefit from the govt than the rest. The main thing the govt provides is social stability. This comes in the form of the military protecting us, money to keep financial firms solvent, money for unemployment and social security, education, fire, police, distribution of goods, etc. The non-wealthy get benefit from all this, sure. The wealthy get more though, they just get it indirectly. Without the stability, the rich would not be able to be a CEO or invest in anything. Who would work in their offices? The CEO of my company makes a ton more money than me. If his house and my apartment were on fire, and the fire department could only save one, whose would they save? If the country were invaded, who would lose more money? Who benefits more from an educated work force? Not me, it just creates competition for my job. But he benefits by having better people to hire to make more profits so he can get $20 million this year instead of $10 million. blah blah blah....</blockquote>




The top 1% of earners pay 40% of taxes. Top 5% pay 60% of taxes. Top 25% pay 86%, and the top 50% pay over 97% of taxes. <a href="http://www.ntu.org/main/page.php?PageID=6">Source</a> for 2006 numbers. You may define "burden" differently than I do, but I think one can fairly argue that the burden I'm thinking of -- which is, you know, actually writing the checks -- falls disproportionately on the wealthy.



You asked: "<em>The CEO of my company makes a ton more money than me. If his house and my apartment were on fire, and the fire department could only save one, whose would they save?</em>"



I suspect they'd save the house that belongs to the first person to call 911. Probably they save both of your houses. You are kidding right? You think the fire departments check the tax rolls to see who's rich and who's poor before responding to a fire call?</blockquote>


No, of course this is a ridiculous either/or choice. I just use it as an example. Wealthy people do get more and easier access to services. How about this, do you think my Governor is more likely to have a meeting with me or with Donald Bren if we both called and wanted to meet at the same time?



As for the burden, yes, we probably define it differently. And that is fine. I have no problem with the numbers you state. The top 1% of earners also "earn" most of the money, so they should pay most of the taxes. Some of them earn it, and some don't. Since I think they also get more benefit, I again think they should pay more. The top 1% probably accounts for 90% of the non-essential income. I can't find stats on this though. "Non-essential" income is my own term for income that isn't needed to pay for bare bones basic levels of housing, food, clothing, transportation, education, etc.



How many people in the bottom 80% does it take to equal the non-essential money of just a few billionaires - Bill Gates, Warren Buffet, Paul Allen, Alice Walton, Helen Walton, Jim Walton, John Walton, S. Robson Walton, Michael Dell, Larry Ellison, Steve Ballmer, Forrest Mars, Jacqueline Mars, John Mars, Sumner Redstone, William Hearst III, Austin Hearst, David Hearst Jr., & George Hearst Jr.?



To get on the <a href="http://www.forbes.com/2008/09/16/forbes-400-billionaires-lists-400list08_cx_mn_0917richamericans_land.html">Forbes 400</a> list of the 400 wealthiest Americans, you have to have $1.3 billion. If you have $1.3 billion, you can afford to pay your taxes.
 
I really don't mind spreading the wealth.



I just don't like the fact of who is doing the spreading for me.



I'm almost positive that for every $100 I'm going to get taxed by the gov... by the time that gets out to the spreadees... it will have become $1.
 
tim, does it matter that many of those billionaires worked up to where they are from nothing? i had a debate the other day with a friend who is an engineer at a well-known technology firm and supported tax increases on "the rich" (obviously his definition of rich was anyone that made more than him - a guy with an MBA, post grad in engineering, and well-paying job) i asked if he would be feel differently if his income rose past $250k and his response was he probably won't ever get there, doesn't expect to, nor does he feel the need to because his current lifestyle and income is good enough as it is. then he proceeded to go on a rant about how much the billionaire founders of his company are worth and why people like him should pay more taxes.



the founders, like many tech moguls, dropped out of school to start the business. they didn't get guaranteed pay -- they made money if the business succeeded. if not they lost their life savings and have to move on. any early employees or investors also took those same risks. of course in hindsight they gained big rewards and built a huge company, which allowed people like my friend to get jobs paying 65k/yr with benefits and stock options when they're barely 21 yo. and now he gets to ride along in his job and complain why the very people who pay his salary and took on risks he would never have drive, motivation, or balls to take on, need to give him more.



secondly, these billionaires paid their taxes along the way and made their fortunes by creating wealth not just for themselves but for others as well. this is not the era of robber barons that single-handedly dominate the wealth of america. all those billionaires you mentioned own single digit %s of their companies, and the rest of the wealth created by those corporations have gone to employees, pensions, institutions, and other investors aroudn the world. the governor in your example, yes he will likely meet with a corporate CEO over you. but the head of calpers, who represents the interests and buying power of tens of thousands of public employees, asks for a mtg and both the governor and CEO will both clear their calendars.
 
Whenever the conversation comes up about taxing the "wealthy", I point people to Warren Buffet:



<a href="http://www.timesonline.co.uk/tol/money/tax/article1996735.ece?print=yes">http://www.timesonline.co.uk/tol/money/tax/article1996735.ece?print=yes</a>



Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.



Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (?26 billion), said: ?The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you?re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.?



Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.



The comments are among the most signficant yet in a debate raging on both sides of the Atlantic about growing income inequality and how the super-wealthy are taxed.



They echo those made this month by Nicholas Ferguson, one of the leading figures in Britain?s private equity industry, when he criticised tax rates that left its multimillionaire venture capitalists ?paying less tax than a cleaning lady?.



Last week senior members of the US Senate proposed to increase the rate of tax that private equity and hedge fund staff pay on their share of the profits, known as carried interest, from the 15 per cent capital gains rate to about 35 per cent.



Lloyd Blankfein, the chief executive of Goldman Sachs, acknowledged in an interview yesterday that there were justified concerns about the huge profits generated by private equity firms and that he worried that income inequality was ?poisoning democracy?. He also said that he would be voting for the Democrat candidate at the next election. Mr Blankfein is the highest-paid executive on Wall Street, earning $54 million last year.



Mr Buffett, who runs the investment group Berkshire Hathaway and is widely regarded as the world?s most successful investor, said that he was a Democrat because Republicans are more likely to think: ?I?m making $80 million a year ? God must have intended me to have a lower tax rate.?



Mr Buffett said that a Republican proposal to eliminate elements of inheritance tax, which raises about $30 billion a year from the assets of about 12,000 rich families, would broaden the disparity between rich and poor. He added that the Republicans would seek to recover lost revenue by increasing taxes for the less prosperous.



He said: ?You could take that $30 billion and give $1,000 to 30 million poor families. Or should you favour the 12,000 estates and make 30 million families pay an extra $1,000??
 
[quote author="acpme" date=1225942498]tim, does it matter that many of those billionaires worked up to where they are from nothing?...</blockquote>


Oh, yes, most of those on the top 400 list worked hard for their money. I'm continually surprised that so many of them still work hard. Of course, there are some of them who inherited their money: notice the number of Hearsts and Waltons. Either way, it doesn't really matter to me. I think we should have a progressive tax system. Most people agree. It just gets down to how progressive. All those billionaires that are still working don't seem like they would leave the country if their taxes went up. They must feel there is some reason to live in the USA. I'm not out to make them poor. I just expect them to pay more than the poor. I expect me to pay more than the poor. I expect them to pay more than me.



I get tired of those that say "I got mine, now you get yours." There is a lot of luck involved. Many people work hard and don't get lucky. They are just less conspicuous. We like to believe we can all make it big if we just work hard enough. At some point, though, that isn't quite true. If Bill Gates had gotten a debilitating disease when he was starting Microsoft, do you think he still would have made it big?
 
[quote author="IrvineCommuter" date=1225942938]Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.</blockquote>
Fun with numbers!



It takes slightly more than 452 ($18k each) secretaries and cleaning ladies to equal one Warren Buffet ($8,142,000) as far as the Internal Revenue Service is concerned, using the numbers posted.



452 to 1. Wow... that looks pretty simple. Raise his taxes and lower theirs. His income won't be hurt much and we can balance the budget (after increasing spending) simply by making him pay 30% ($13,800,000) and making her pay 25% ($15k) which means one Warren Buffet is now worth 920 secretaries! 920 to 1! As long as he still makes a profit on stock sales and dividends, we'll have health care for everyone and new public housing and perfect schools and everything will be heaven.



What's that? What happens when companies don't pay dividends and stocks lose value in a recession? Well, someone is going to have to pony up more of their fair share. But that never happens and we can always run temporary deficits to avoid cutting any services anyway, so no worries.
 
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