Tuesday, January 08, 2008
|
|
55% Tax Rate under Obamamonics?
|
|
Posted by:
Michael Medved at
2:40 AM
|
The year is young, but it's possible we already glimpsed the scariest horror movie of 2008. In Saturday night's Democratic debate, Barack Obama alluded to his big tax plans--- including repealing the Bush "tax cuts for the rich" and eliminating the cap on Social Security/Medicare payroll taxes. This means that he'd abandon all pretense that Social Secuirty and Medicare are pension programs -- since the elimination of the cap (taxing all income, with no limit) would remove any connection between the level of contributions a citizen makes and the benefits he takes.
In pratcial terms, the impact would be huge. Today, the top marginal tax rate is 35%, and income above $102,000 a year isn't subject to the payroll tax. That means that the money you're lucky enough to earn above $102,000 gets taxed at a rate of 35 cents on the dollar, at most. Under Obamanomics, on the other hand, we would go back to the old Clinton era top marginal rate of 39.6%, PLUS making income above the cap fully subject to the payroll tax--- usually a combined 15%, but almost sure to go up.
In other words, unless my calculation is mistaken (please tell me if you think it is), we'd be looking at paying Uncle Sam as much as 55 cents on the dollar for income earned above that $102,000.
If anyone still thinks this election doesn't matter, just consider....a normal, middle class family (with two incomes) will today earn $200,000 and still struggle to pay a mortgage, and college expenses, and so forth, in many Metropolitan areas. And yet, under a new Democratic President, that family could be looking at additional tax burdens that confiscate THE MAJORITY of their additional income.
Talk about punishing effort and penalizing success.... welcome to the brave new world of "change."
|
|
K.I.S.S. Keep It Simple Simon
Big Government=Little Liberties (working hard to fill government coffers)
Do what you can and vote for candidates that will reduce the oppression of "do good" politics.
The government is supposed to be "by the people, for the people." "For the people" is implication that the government will facilitate policy to protect our personal freedom; not become my federal mother.
The government does some things for us well, but a large percentage of government activity today is fascist/socialism at the expense of the market and personal freedom.
Resist the lies of politicians that promise they will save you from your problems. Our government-republic was set up at its birth to allow citizens to be free, hard working and, with God's help, independent. Overwhelmingly repulsed from needing government handouts.
Grassroots efforts and community causes accomplish more with less money. The government is less efficient and less effective. It should have a county size warning label on it: USE WITH CAUTION! |
|
As a new blogger at this site, I read with great interest the various topics, comments, etc.
It appears that the conservative wing of the Republican party is trying to distance itself from its (former?) core, which has been Christian concervatives, at least since Reagan.
Social Security and Medicare are the best things we've done for ourselves since America was born. We should preserve and improve them, not cut.
All of our American citizens need the hope of a light at the end of their career tunnel, one they can depend on. |
|
|
And this is precisely one of the many reasons why we need someone like MITT ROMNEY; to lead the nation, reduce the national deficit and fix the economy, etc. I would love to see the best business man in the nation, Governor Romney, in action as president. |
|
Republican Scorecard
Romney30
Huckabee21
McCain10
Thompson6
Paul2
Giuliani1
Hunter1 |
|
Scheduled Payments
Romney for...
Romney for President $250.00 01/15
|
|
No, you wouldn't!! Even if you had 200,000 of TAXABLE income--not a single exemption or deduction--you would still only be paying $45,000 in income taxes. Check the tax tables. You don't apply the top marginal rate to the whole income, it's a sliding scale.
Personal exemptions don't get phased out until around $225,000 (and that's just a phase-out, not an utter disappearance).
You NEVER lose the standard deduction. Itemized deductions begin to be phased out at over 156,000, but they also don't vanish--at 200,000, you would still be able to deduct 80% of you itemized deductions.
I do understand this, aaron. I have very complicated taxes. |
|
The military is a worthy cause for our tax dollars. Apparently, the years of muslim terrorist acts killing Americans still leaves you devaluing the life of Americans. Aren't the lives of Americans worth more to you? How can you say the money is wasted? What about the excess of 5000 terrorists caught so far? think about where we would be if they were still running amuck.
It is sad that there are people like you who live in denial of what would be if Bush didn't have the guts to do what is necessary. |
|
Spend some time on http://cgi.money.cnn.com/tools/collegeplanner/collegeplann er.jsp
if you think my numbers are way off on the college expenses.
As to the rest, even if I were to cede you points re: debt and Iraq, there is not a chance we make it to 2014 without a full-blown recession if tax hikes come in the interim, imho.
Signing off. Good chatting with you.
|
|
I am of two minds. Let me say this: there is indeed altogether too much boo hooing from very wealthy folks. If their attendant costs and expectations include saving $12000 a year for college tuition, then there is indeed too much complaining. On the other hand, you are correct that what constitutes "rich" depends very much on where one lives.
The deathblow to the economy will not be these taxes. The death blows will be the overwhelming burden placed on the culture by the cost of entitlements, beginning about 2014, and the the irresponsible increase in the national debt over the last 8 years, in particular the 1.5 trillion wasted in Iraq.
|
|
There seems to be some confusion about my original post. My apologies. I was simply trying to put together a rough sketch of how quickly $200k could go in a metropolitan area without flying to work in helicopters, living in East Hampton, having a steambath, wiping with $100 bills, etc. These weren’t my “expectations” nor my suggestions on how to spend a $200k salary, and $200K is not my income level (I used it because Medved did). Again, I choose to live where I do, and willingly pay the taxes/expenses/fees that I am assessed, which I feel are more than or at least equal to my “fair share”. I’m simply not wild about Obama’s plan to increase those, nor do I think that on a RELATIVE basis, many metro families, with their attendant costs and expenses, should be labeled “rich” at the $200k threshold. Unfortunately, not all of us can have the planning and foresight of “Jack” with his low mortgage, taxes, savings, and costs, and apparently, his recession-proof job.
I guess what I find most striking about this comment thread is the energy expended trying for the “gotcha” errors in my estimates/calculations, or the “boo-hoo rich boy” comments, with very little energy spent trying to refute my suggestion that Obama’s proposed tax hike would be an unwelcome incremental levy (an understatement to be sure) and a potential deathblow to an already tenuous economy.
|
|
|
do I not understand the impact of my opinions, I do not understand what you mean. |
|
|
It must be wonderful to be you and not understand the impact of your opinions. i guess for you, ignorance is bliss. |
|
Duh?
Of course costs are relative to your locale. My point is that these things are all choices. I make good money, live in an afforable neighborhood, walk to work everyday, and have covered my kids education because I planned it that way. New York, as much as I love it, is not the only place in the world fit to live in.
That said, I have no sympathy for those who are in the top 1 or 2% of income earners in the US and complain about how hard it is. I fully support the idea of making all income subject to payroll taxes.
|
|
Clearly your analysis is based upon your living location. In NY, real estate tax on an apt is 500-600 a month, and this is just a basic apt, not anything fancy. Oh, and a mortgage on a one bedroom apt [avg price 700-800K] would not be 12k a year. If you choose to rent, a small apt would be between 2k to 3k a month, which would not include utilities.
To also help you put it into perspective, I can tell you that I used to live outside NYC and commuted 1.5hours EACH way to work. It cost me 420/month to commute and the fares are even higher now. If you do your math, 420 x 12 months is 5k....But a person has to go where the jobs are. So maybe we earn more, but it costs us more, and we end up with the same standard of living. I actually moved to NYC because it was cheaper to live hear than paying to commute!
Clearly, those that live in non-metro areas have lower salaries AND also lower expenses. This is what it means to say it is all relative. Put things in perspective and stop being swayed by the numbers.
|
|
Tom clearly does not have the same set of expectations I do.
Toms analysis doesn't refelct my reality. If I had the $200,000 income it woulddl look more like this.
less Federal taxes: 30,000, not 66,000
Mortgage: 12000 not 36000
Property Taxes: 1800, not 18000
Health Insurance: 2400, not 15000
Car/Life Insurance: 1800 not 12000
Commute: 0 not 5,000
Utilities: closest item 10,000
College loans: 0 not 12000
College savings: 0 not 12000
Food: 9,000 not 12000
total of about 55,000, leavin gme 145000, 12000 a month, to buy beer and wine.
|
|
I think you should check your facts before posting false statistics.....and makre sure to read the last sentence from the IRS excerpt!
(excerpts, read the full article here http://www.taxfoundation.org/news/show/250.html):
October 5, 2007
Summary of Latest Federal Individual Income Tax Data
by Gerald Prante
Fiscal Fact No. 104
The latest release of Internal Revenue Service data on individual income taxes comes from calendar year 2005, a year in which the economy remained healthy and continued to grow, as well as a year with higher-than-average price inflation.
This year's numbers show that both the income share earned by the top 1 percent and the tax share paid by the top 1 percent have reached all-time highs. In 2005, the top 1 percent of tax returns paid 39.4 percent of all federal individual income taxes and earned 21.2 percent of adjusted gross income, both of which are significantly higher than 2004 when the top 1 percent earned 19 percent of AGI and paid 36.9 percent of federal individual income taxes.
The top-earning 25 percent of taxpayers (AGI over $62,068) earned 67.5 percent of the nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86 percent). The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.
|
|
|
Can't believe so many people would support a guy whose parents, grandparents and school pal Neil Abercrombie were ALL STONE COMMUNISTS!! Check out the facts, people! I don't know about you, but it makes me VERY nervous...looks like the MSM is covering these facts up folks! |
|
"a NORMAL, middle class family (with two incomes) will today earn $200,000 and still struggle to pay a mortgage, and college expenses, and so forth,"
nor·mal /'n?rm?l/ Pronunciation Key - Show Spelled Pronunciation[nawr-muhl] Pronunciation Key - Show IPA Pronunciation
–adjective 1. conforming to the standard or the common type; usual; not abnormal; regular; natural.
Percentage of families in America making over $200,000 = 1.2%
1.2% to me, seems like "the rich". I don't feel bad or see their "plight". |
|
Tom's guestimates are a bit off for his expenses, but you don't really understand the reality of income taxes. At $200K in income, you'd be facing phaseouts of exemptions and deductions. Unless you had sizeable itemized deductions, you are still likely to be paying over $85K in total taxes (federal, state, local).
|
|
I am a tax professional and to all of you disputing Medved's comments, you need to understand the reality.
Living in any metor area is expensive, so the salary is relative, but many people do so because that is where the jobs are. Metro areas also pay more tax. Do you know that NYS tax is 8% and NYC tax is 4%? Then add NYS sales tax of 8.65% on top of that. This is on top of the federal tax and fica/med tax. Real estate taxes are also a fortune.
NO ONE should have to pay more than 50% of their income in tax. And the more the DEM's increase the tax rates, those folks that qualify under the gov't's perception of "middle class" will get to keep less and less of their money and be downgraded into "lower class". When a person's standard of living is decreased, there is less money going into the econmony. When there is less money going into the economy, there are fewer jobs because companies do not have the revenue to pay people and they don't have the demand for their products. Supply vs. demand is a basic economic principle. Therefore, higher tax hurts the economy. It is a simple truth, just like the sun rises and sets each day.
Unless, you long for the days of Jimmy Carter's high tax rates, high unemployment, and odd/eve days for gas, I would expect people to come to their senses and vote for the GOP. |
|
Your federal tax calculation is completely bogus.
You calculate your actual tax rate as being equivalent to you marginal tax rate.
First of all, you have personal exemptions and at least a standard deduction, which would substantially reduce your burden; however, I am guessing that with a mortgage of $36000 a year, you should have substantially more than the standard deduction based on your home mortgage interest alone. Not to speak of the interest deduction for that ludicrous student loan debt.
And after all that, you only pay the marginal rate on the top part of your income, not the whole shebang. So you're either lying or have a really, really bad accountant.
And honestly, I think you need to take a good hard look a your finances. It looks like you bought a house you can't afford the mortgage and taxes on, which isn't the government's fault. Likewise, I have a hard time believing you are spending close to $833 a month on utilities. Do you have a grow room and your own private steambath?? For me cable/internet = $100, phones (cell-only)=$100, water=$25, and my combined electric and gas don't go above $400 even when it's coldest and I've been splurging with the thermostat.
My student loan payment is $160 a month. You're paying $1000 a month?? A quick look at an amortization calculator shows that you must have had close to 100,000 in debt. Ever think of working your way through school instead of doing it all on Uncle Sam's dime and then whining about it?
Don't blame it on the government because you are living above your means. But maybe if you go buy TurboTax and figure out how taxes are calculated, you'll find it's not that bad... |
|
Medved characterizes 200k incomes as middle class today, but last week he was writing about the real middle class, the 30-100k crowd. The real middle class is restless and Medved and the elites know it. What scares them is the prospect that real middle class voters are slowly coming to the realization that any way you parce it, %100 of their earnings are subject to payroll taxes while half of the earnings of Medved's fantasy middle class are exempted.
I ask the posters here to pull out their paystubs and reflect on how much of their own income is subject to payroll taxes then versus Mr. Medved's. It may put his opinions in a different light. |
|
Michael has been defending McCain for opposing the Bush tax-cuts for months, what gives? Medved shouldn't complain about any Dem candidate after his support of tax-raiser Huck and big-governement McCain.
Recovering Medved Listener. |
|
|
I'm not exaclty looking for sympathy either. But when I don't hire your business to do work on my house because my tax bill went up, don't come looking for sympathy when your business goes under either. There is no reason why we should have to pay more than half of our income in taxes simply because we make more money. |
|
In places like Los Angeles and New York, such incomes are quite normal. When I lived in Los Angeles, I lived about 35 miles East of downtown where I worked. On a good day, I could get to work in about 1.25 hours. I sold my 2011 sq ft home for $659,000! I 950 Sq ft townhome (i.e. it had another home attached like a duplex) for over $300K. My friend bought a 1000 sq foot condo for almost $400K. To purchase a cheaper home you'd almost have to commute from Arizona. Rent for a small apartment ran above $1,500 per month.
Fuel costs in LA were nearly .50 cents per gallon higher than most other places in the nation. In addition to Federal Tax and FICA, you also had property taxes, city taxes, and state income taxes. Sales taxes were 8.125% in LA County. Oh and don't forget the annual tax on your car which for one year (the year Gray Davis got recalled) I paid $1000 for each vehicle to register it. Normal costs were $450 per year.
I can tell you that $200K in Los Angeles doesn't buy you a whole lot of amenities if you want to raise a family. |
|
Not asking for sympathy. No one is forcing me to live in one of the most onerous states and counties (tax-wise), or drive a car, or insure my family's health, or save for college, or eat; I choose to.
My example was only meant to lend a little color as to how quickly $200k can go when living in a big metro area. Where I grew up, I could buy and sell my home town 10x over with $200k. In NY/NJ, it does not move the needle. (To further the point, yahoo's real estate page has my town's Cost of Living Index at 180, meaning it is 80% more expensive than the national average. Again, relayed for context, not to draw sympathy.)
The OP was about how Obama's plan will potentially increase my tax liability, something I would like to avoid. Ostensibly, the GOP candidate will not raise taxes, whereas Obama has stated that he will. When viewed through that prism, seems like a simple choice.
|
|
I've never made the kind of money above 102K he mentions, nor do I know many who do. As for "normal middle class families earning 200K" cry me a friggin river. Maybe too many decades of living on low wages in the military has made me callous but my sympathy level is not that high. 200K dual income families are not the norm.
Medved's calcs about the rate going from 35-40% on income above 102K means an extra 500 in taxes for every 10K of income. Maybe he should list his addresses so we can donate food stamps and clothes.
|
|
My wife and I had taxable income last year of $233,000. We paid $57K in Federal taxes and about $16K in FICA taxes. We don't have state income taxes (since we fled from CA) and paid property taxes of about $12,000.
I think that $85k in taxes is more than plenty to pay for the privilege of living in America.
|
|
Is a phrase that these days is about as meaningful as "for the children".
|
|
Other candidates are babes in the woods when it comes to understanding the connections between money and misery in our overtaxed economy.
Mitt understands how to stimulate the economy to get it back on track towards financial health. Others only understand to raise taxes or create more entitlement programs to buy the voters.
We need real-world fiscal direction, real-world solutions, not political sound bites. Obama is a great cheerleader but we need a coach to run the plays-game on the ground, not just creating waves in the stands.
Group "good feelings" attract the youth as they confuse comfort with policy. Do young political novices understand the perils of not addressing the problems of the fiscal unsoundness of this nation and physical safely from terrorists?
This is more than a great national party in the stands, this is our life-blood on the line. |
|
Other candidates are babes in the woods when it comes to understanding the connections between money and misery in our overtaxed economy.
Mitt understands how to stimulate the economy to get it back on track towards financial health. Others only understand to raise taxes or create more entitlement programs to buy the voters.
We need real-world fiscal direction, real-world solutions, not political sound bites. Obama is a great cheerleader but we need a coach to run the plays-game on the ground, not just creating waves in the stands.
Group "good feelings" attract the youth as they confuse comfort with policy. Do young political novices understand the perils of not addressing the problems of the fiscal unsoundness of this nation and physical safely from terrorists?
This is more than a great national party in the stands, this is our life-blood on the line. |
|
I live in Essex County, NJ and I agree that I am being swindled by the Democrat-led state government, but the facts remain, I pay $18,000 per annum. Your commuting record is noteworthy and commendable, but doesn't suggest that you have a better sense for the middle class than I do, fwiw.
My point, which you apparently missed, is that $200,000, on a relative basis, does not qualify as "rich" in many metropolitan areas, especially New York metro. (Note: perhaps that is why the Internet has city-by-city Cost-of-Living Calculators?)Even if you adjust my $18K tax number to something that is more palatable for your middle-class sensibilities, I think you could perhaps see that there is not a whole lot left over for "pin money" even with $0 credit card debt (which I have).
As for "paying my share", I could bludgeon you with the statistics that illustrate the inequity of the current progressive system (which has become increasingly more top-end loaded), or I could simply submit that the reason I don't want Obama elected is because he would indeed use his status as head of a "democratically elected Federal administration" to jack up my cost-of-living.
Call me crazy, but I think I can spend my money more effectively than the US Gov. |
|
|
Not to mention that it is more than just money at stake. Taxes are a strike at freedom and at productivity. For some reason, people still don't get that. Also, the Fed takes in more money when taxes are lower, that is proven. Not to mention that businesses grow under less tax, investment grows under less tax, etc. When that grows, jobs grow. Then companies have more money to invest in research and development. The only thing that grows under more tax is the government. |
|
|
I believe you are off with your federal tax calculation. |
|
Tom,
I didn't miss "the important phrase". I have commuted to NYC for over twenty years so I think I have a pretty good understanding of the cost of a metropolitan living standard. My heart bleeds for you. It sounds like you are barely scraping by. You didn't include your credit card debt, which I suspect is pretty high because someone with your "needs" would not be restricted by limiting your pin money to $2,000 a year. Where in God's name do you live that requires $18,000 a year for property taxes? Unless your live in East Hampton, Long island and are helicoptered in to mid-town every day, you are being swindled by your local government.
Casting aside my sarcasm Tom, you are clearly not in touch with this country's middle class. You are not average when considering Federal taxes. This may be a difficult concept for you to comprehend, but it is an American privilege to pay taxes for the life you and your family lead in this great country of ours You should be grateful to be a benefited American and only too happy to pay your share as determined by a democratically elected Federal administration.
|
|
|
Didn't McCain vote twice against the Bush Tax Cuts? How is McCain different from Obama? Did you miss a Right Turn here? |
|
Finally the kind of commentary we love to hear from MM. Gird up your loins ladies and gents because any D pres is going to be a disaster for taxes.
Huckabee would not be far off if he is that concerned commited to his populist message. (And no I don't think I would like it better if the candidate reminded me more of the guy I work with. The vast majority of those guys have no ubderstanding of what created the job in the first place. This was one of the most practically useless slogans of any campaign.)
McCain would be better than Huck but he is too excited to get bills like McCain-Feingold/ McCain-Kennedy through which tells me we will still end up with a lot of crap.
As for the rest of the field (and no I don't include Ron Paul with the rest of the field), Romney is clearly the candidate most capable of dealing with economic situations includin taxes. I would take Giuliano too. Now, I would vote for the entire R ticket over any of the Ds, but the facts speak for themselves on this issue. |
|
I think you may have missed the important phrase: "in many Metropolitan areas". Here is a small sample of costs for me, and for convenience sake, we'll use your rich pr!ck threshold of 200,000:
Start with 200,000:
less Federal taxes: 66,000
Mortgage: 36,000
Property Taxes: 18,000
Health Insurance: 15,000
Car/Life Insurance: 12000
Commute: 5,000
Utilities: 10,000
College loans: 12000
College savings: 12000
Food: 12000
That leaves $2,000, perhaps enough to donate to whatever GOP candidate will keep Obama far, far, far away from his new "taxes on the rich" |
|
|
we need a good communicator of conservative ideas to pick up seats in congress |
|
To Micheal
Only Rudy or Paul can stop the Libs.
How Rudy Win the GOP
I know that sounds absurd but listen...
Rudy can win if he can explain or even justify his liberal positions. He can steal ideas from 1,Paul, use the idea of federalism and the constitution to make the argument to the people that governing at local level is different from federal level.
This is key. At the LOCAL level you have to represent the needs and desire of the LOCAL people. At the Federal level you swear an oath to the Constitution to protect the people from Government, and from Domestic and international attacks.
2,He can also say new york was so bad he had to make some compromises to get things done.
3,He then can say social issues should be dealt with at the local level by officials directly elected by and accountable to voters.
He needs to explain clearly that abortion should be dealt with at the local level. That by trying to deal with it at the federal level nothing will ever or has ever gotten done. (invoke the constitution)
4. He then needs to explain that president has very little power, according to the constitution, which was designed to protect people from the government, to legislate morality and issues like abortion.(he escapes his liberal positions and his moral one). Then he needs to be clear, that he would always veto abortion bills because it is not a Federal issue, and she be dealt with by the states.. All the time speaking about returning the power back to the people where it was intended by the founders.
If Rudy goes Ron Paul (takes this party back to its roots) he can still win.
Then Rudy needs to hire me.
So I can tell him how to win the General Election.
I wanted to tell you that yesterday on the air but you hung up on me
Sincerely your Favorite Caller
Jeff From Sacramento. |
|
When you run RINO's that do not understand that capitalism is compassionate, and that big government is not.
2 Terms of Bush that were disastrous for the GOP.
Followed by an attempt to elect
Flip Flopping, Rich Corporate goon named Romney, He has not back bone because he has no core principles.
McCain who thinks 10,000 years in Iraq is OK. We will be bankrupt after 10 and Iraq will hate us more. But that is OK for McCain. McCain also said "Blood is our most precious treasure". He spent so much time getting tortured he forgot that Liberty is.
McCain got brain washed, and lost some sense. He is not predictable and that is never ever a good thing.
Huck may be able to unite the party if he keeps stealing ideas from Ron Paul (abc story confirmed)
Paul has a shot because he convinces people that he wants to protect them from intrusive government. Bush was suppose to "protect us from enemies far and near". In protecting us from enemies far he became the enemy near. |
|
|
|