What they'll do to your tax bill (McCain Vs. Obama)Estimated deductions on income lvl

[tested911]

What they'll do to your tax bill (http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/index.htm?cnn=yes)

McCain and Obama want to change the bottom-line effects of the tax code. Here's a dollars-and-cents breakdown of what their plans could mean for you.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: June 11, 2008: 1:58 PM EDT

NEW YORK (CNNMoney.com) -- John McCain and Barack Obama have starkly different philosophies about tax policy - how to raise the revenue needed to support government programs, spur growth and ensure economic fairness.

But voters really want to know one thing: How would the presidential candidates' views trickle down to their tax bills? A report released Wednesday by a nonpartisan policy group in Washington, D.C., takes a big first step toward answering that question.

According to the Tax Policy Center's findings, the common assumptions most people make about the plans of McCain, the presumptive Republican nominee, and Obama, the Democrats' pick, are not wildly off-base.

McCain: The average taxpayer in every income group would see a lower tax bill, but high-income taxpayers would benefit more than everyone else.

Obama: High-income taxpayers would pay more in taxes, while everyone else's tax bill would be reduced. Those who benefit the most - in terms of reducing their taxes as a percentage of after-tax income - are in the lowest income groups.

Under both plans, all American taxpayers could pay a price for their tax cuts: a bigger deficit. The Tax Policy Center estimates that over 10 years, McCain's tax proposals could increase the national debt by as much as $4.5 trillion with interest, while Obama's could add as much as $3.3 trillion.

The reason: neither plan would raise the amount of revenue expected under current tax policy - which assumes all the 2001 and 2003 tax cuts expire by 2011. And neither plan would raise enough to cover expected government costs during those 10 years.

"Distributionally, they're markedly different. But in terms of their impact on revenue, the two plans are not terribly different," said Roberton Williams, principal research associate at the Tax Policy Center and the former deputy assistant director for tax analysis at the Congressional Budget Office.

The campaigns haven't had a lot of time to digest the Tax Policy Center's findings.

Jason Furman, a newly appointed senior economic adviser to Obama, said his preliminary response is that the report's findings bear out what Obama's campaign has been saying: that he's for the middle class.

"Middle-class families get tax cuts that are three times larger from Obama than from McCain," Furman said. "And the McCain plan gives nearly one-quarter of its benefits to households making more than $2.8 million annually - the top 0.1%."

The McCain campaign told CNNMoney.com in an e-mail that they would comment on the center's findings, but they had not done so as of early Wednesday afternoon.
A closer look

In addition to making the 2001 and 2003 tax cuts permanent, McCain says he would double the exemption for dependents, lower the corporate tax rate, make expensing rules more generous for small businesses and lessen the bite of the estate tax and Alternative Minimum tax.

The net result: compared with their tax bill today, taxpayers on average would see their tax bill cut by nearly $1,200. That means their after-tax income would rise by 2%.

But those in the lowest income groups would only see their after-tax income rise by less than 1% (or between $19 and $319). By contrast, the highest-income households - those with incomes of at least $603,000 - would see a boost in after-tax income of 3.4%, or more than $40,000.

Obama's plan would keep the 2001 and 2003 tax cuts in place for everyone except those making more than roughly $250,000, and he would increase the capital gains tax.

Obama would also introduce new tax breaks for lower and middle-income groups. Such breaks include expanding the earned income tax credit, giving those making less than $150,000 a $500 tax credit per person on the first $8,100 in income, giving those making under $75,000 a 50% federal match on the first $1,000 of savings, and exempting seniors making less than $50,000 from having to pay income tax.

Like McCain, Obama would lessen the bite of the estate tax and the Alternative Minimum Tax, but to a lesser degree.

The net result: compared with their tax bill today, taxpayers on average would see their tax bill cut by nearly $160 under Obama's plan. That means their after-tax income would rise by 0.3%.

But those in the lowest-income groups would enjoy the biggest after-tax income rise as a percentage of income - between 2.4% and 5.5% (worth between $567 and $1,042). By contrast, the highest-income households - those with at least $603,000 in income - would see a dramatic decline in their after-tax income - a drop of 8.7%, or $116,000.
Not the final word

Williams said the Tax Policy Center analysis should be viewed as a work in progress. Researchers plan to update it as they get more information about the plans from the campaigns and if the candidates introduce new tax policies between now and Election Day.

The center will also incorporate the tax elements of McCain's and Obama's healthcare proposals when they update their findings.

How the candidates' tax plans would affect economic growth is an open question. "It depends on how the deficits are closed," said Tax Policy Center director Len Burman in a call with reporters.

Tax studies have shown that when tax cuts are deficit funded and they're paid for by raising taxes in the future, "the economy is worse off than if you didn't cut at all," Burman said. To top of page
First Published: June 11, 2008: 10:31 AM EDT

[flipmode]

now, which income bracket do you fall into?

this plan is cool by me, because i'm part of the 95% of americans that don't make over $250k. :)

besides, the rich have higher propensity to save as income goes up. they wouldn't be circulating extra cash into the most highly-tracked goods of the economy.

[robbie380]

Under both plans, all American taxpayers could pay a price for their tax cuts: a bigger deficit. The Tax Policy Center estimates that over 10 years, McCain's tax proposals could increase the national debt by as much as $4.5 trillion with interest, while Obama's could add as much as $3.3 trillion.

Tax studies have shown that when tax cuts are deficit funded and they're paid for by raising taxes in the future, "the economy is worse off than if you didn't cut at all," Burman said. To top of page
First Published: June 11, 2008: 10:31 AM EDT

They just don't get it. McCain is a self proclaimed economic dullard and Obama thinks we can pay for national healthcare by pulling out of Iraq even though Iraq "only" costs $100 billion a year (that's close to the numbers I have seen please correct me if anyone has seen better numbers because that dollar amount seems cheap to me). I'm resigned to the fact that our nation is screwed because we have utterly incompetent leadership. National debt? Medicare? Social Security? The Dollar? Deficit Spending? (edit...i forgot about this gold nugget) Corn ethanol subsidies? Meh....It's not completely killing us now so who the **** cares?

[RocketMan Tex]

I'm resigned to the fact that our nation is screwed because we have utterly incompetent leadership.

I'm right there with you.

[Supermac34]

On one hand, either tax plan is about the same for me, personally, so I wouldn't care since I don't fit into those brackets (yet).

On the other hand, do I want a tax plan that de-incentivizes success and high performance? That would really hurt some successful small businesses that make a lot of income, but the owners aren't rich yet. Make sense? If I make $650,000 a year, but don't have any money yet, paying $100,000 in taxes really hurts. If I make $650,000 in a year but have $20 million in the bank, it doesn't hurt as much.

[TL]

On one hand, either tax plan is about the same for me, personally, so I wouldn't care since I don't fit into those brackets (yet).

On the other hand, do I want a tax plan that de-incentivizes success and high performance? That would really hurt some successful small businesses that make a lot of income, but the owners aren't rich yet. Make sense? If I make $650,000 a year, but don't have any money yet, paying $100,000 in taxes really hurts. If I make $650,000 in a year but have $20 million in the bank, it doesn't hurt as much.

Dude, if you make 650k and you only pay 100k in taxes that is a dramatic improvement over where we are today. Much less where we will be in 2 years after Obama implements it.

[pgabriel]

On one hand, either tax plan is about the same for me, personally, so I wouldn't care since I don't fit into those brackets (yet).

On the other hand, do I want a tax plan that de-incentivizes success and high performance? That would really hurt some successful small businesses that make a lot of income, but the owners aren't rich yet. Make sense? If I make $650,000 a year, but don't have any money yet, paying $100,000 in taxes really hurts. If I make $650,000 in a year but have $20 million in the bank, it doesn't hurt as much.


yeah, i refused that $650K a year job for tax purposes. no it doesn't make sense. is it fair, that's another topic, but to suggest that people won't strive because of taxes is just not logical on so many levels

[Supermac34]

Dude, if you make 650k and you only pay 100k in taxes that is a dramatic improvement over where we are today. Much less where we will be in 2 years after Obama implements it.

But its $100,000 MORE than you pay today. Not a flat $100,000. So it'll be your current income after taxes today, minus $100,000.

If you make $650,000 today, you'll pay about $200,000 in taxes. Under Obama, you'd pay $300,000.

[deepblue]

Tell people live in NYC, Boston, SF that 250k a year is now considered wealthy and should have their income tax raised.

Of course that's on top of the capital gain and dividend tax Obama is going to jack up, oh don't forget the uncapping of social security tax.

Yup, I am going to get screwed by Obama, along with many other hard working Americans.

[TL]

But its $100,000 MORE than you pay today. Not a flat $100,000. So it'll be your current income after taxes today, minus $100,000.

If you make $650,000 today, you'll pay about $200,000 in taxes. Under Obama, you'd pay $300,000.

agree. i read your post as $100k total, not incremental.

there's no doubt it sucks. and is likely unfair. but since the percentage of those people who earn that kind of money without tremendous wealth is small, they are ignored in the democratic tax policies.

the only question that makes a difference is how will those incremental taxes impact spending? for me, it will mostly reduce spending, not savings.

[halfbreed]

Tax cuts for the rich? More like tax cuts for everyone. Since when did 66K = rich?

Of course the rich are getting more of a dollar benefit. It only makes logical sense that if you're giving them a break it's going to be more of a dollar benefit than the cuts to those who (a) make less; and (b) already pay little in taxes.

http://i158.photobucket.com/albums/t89/backwithblack/tax.jpg

As you can see, the only real difference is for those making less than 66K a year (not 250K). Even then, most of these people are paying far less in taxes (percentage wise) than those who make more.

[FranchiseBlade]

Tax cuts for the rich? More like tax cuts for everyone. Since when did 66K = rich?

Of course the rich are getting more of a dollar benefit. It only makes logical sense that if you're giving them a break it's going to be more of a dollar benefit than the cuts to those who (a) make less; and (b) already pay little in taxes.

http://i158.photobucket.com/albums/t89/backwithblack/tax.jpg

As you can see, the only real difference is for those making less than 66K a year (not 250K). Even then, most of these people are paying far less in taxes (percentage wise) than those who make more.
No the richest of the rich would see a pretty big difference in the McCain and Obama bill. Also under Obama's bill 66k a year would receive a bigger break than under McCain's.

[halfbreed]

No the richest of the rich would see a pretty big difference in the McCain and Obama bill. Also under Obama's bill 66k a year would receive a bigger break than under McCain's.

True the upper levels do see a big difference. However that's due more to Obama's increase (of more than half a million dollars in some instances) than a McCain decrease. The only reason those numbers are so high is because those taxpayers already pay a disgusting amount of money in taxes.

Furthermore, the difference at the 66K level is minimal (approx 200). So I don't see how anyone can say McCain is any less favorable to the middle class than Obama. They might say that about the lower class but those earners already pay very little in taxes anyway.

[vlaurelio]

Furthermore, the difference at the 66K level is minimal (approx 200). So I don't see how anyone can say McCain is any less favorable to the middle class than Obama. They might say that about the lower class but those earners already pay very little in taxes anyway.

maybe for the middle class, $200 in savings plus knowing lower class saving since they need more help and richer class appropriately getting taxed more can be assuring..

[tested911]

90% of Americans will pay less income tax under Obama than McCain (http://www.dailykos.com/storyonly/2008/6/11/141710/932/876/534084)

Today, CNN posted an article online summarizing the Tax Policy center's report comparing John McCain and Barack Obama's proposed tax plans. It is available here. The numbers are remarkable, but CNN failes to notice the obvious punchline: more than 85% of Americans will pay less in taxes under Obama than McCain.

Data tables below the fold.

* ARingMD2B's diary :: ::
*

Here is a table showing the change in your tax bill in 2009 vs 2008 if McCain or Obama's policies are fully implemented:

McCain Obama
Income Avg. tax bill Avg. tax bill Difference
(O-McC)
Over $2.9M -$269,364 +$701,885 +$971,249
$603K and up -$45,361 +$115,974 +$161,335
$227K-$603K -$7,871 +$12 +$7,883
$161K-$227K -$4,380 -$2,789 +$1,591
$112K-$161K -$2,614 -$2,204 $410
$66K-$112K -$1,009 -$1,290 -$281
$38K-$66K -$319 -$1,042 -$723
$19K-$38K -$113 -$892 -$779
Under $19K -$19 -$567 -$548

Source:Tax Policy Center

From the table, we can see that if you make less than $112,000 a year, then you will pay less in taxes under Obama's policies compared to McCain's. According to the IRS, 89% of Americans report less than $100,000 in adjusted gross income (2005).

[Rule0001]

A TAX PARABLE From reader "Z":

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men --- the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33%savings).

The seventh now pay $5 instead of $7 (28%savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.

It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

[tested911]

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

Is it me or does anybody here believe men 7-10 actually hang out with 1-4?
And 8-10 don't drink beer they drink that fine wine,crystal,merlot,blah blah blah.
Serious can you imagine Guy #10 pulling out a bud out of his $30,000 refrigerator?

[SamFisher]

Yup, I am going to get screwed by Obama, along with many other hard working Americans.

Considering you don't make that much, I doubt it, deepblue buffet.

[halfbreed]

maybe for the middle class, $200 in savings plus knowing lower class saving since they need more help and richer class appropriately getting taxed more can be assuring..

What are you saying here? I'm not sure.

Also, why is it appropriate that the rich get taxed more? Just because they have more? That makes no logical sense.

I never understood the notion that because someone has something better they owe something to someone who doesn't have it. Should a student with an "A" in a class be forced to share part of his grade with a failing student so they both have a "C" in the class? After all it's obvious the failing student needs help right?

[SamFisher]

A TAX PARABLE From reader "Z":


For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

And for those who wish to see how this old e-mail chestnut got started, the explanation is here:
http://www.snopes.com/business/taxes/howtaxes.asp

[FranchiseBlade]

True the upper levels do see a big difference. However that's due more to Obama's increase (of more than half a million dollars in some instances) than a McCain decrease. The only reason those numbers are so high is because those taxpayers already pay a disgusting amount of money in taxes.

Furthermore, the difference at the 66K level is minimal (approx 200). So I don't see how anyone can say McCain is any less favorable to the middle class than Obama. They might say that about the lower class but those earners already pay very little in taxes anyway.
For a person who is earning 66K while also trying to save and/or invest, or has any type of chronic health issue, then that $200 can be at least somewhat significant.

[robbie380]

Considering you don't make that much, I doubt it, deepblue buffet.

i wonder how many people on cf.net that would be hit by obama's tax plan. i know i would but at least i don't have to pay into social security! :D but it's really gonna suck when he screws with the dividend and cap gains taxes. :(

[SamFisher]

i wonder how many people on cf.net that would be hit by obama's tax plan. i know i would but at least i don't have to pay into social security! :D but it's really gonna suck when he screws with the dividend and cap gains taxes. :(
there's no dividends this year anyway :(

[deepblue]

Considering you don't make that much, I doubt it, deepblue buffet.

So you are my accountant now.

Even though I don't make buffet money, I can assure you that I am above the 250k line Obama's proposing. Its really not that that much here in northeast.

Are you still saving up for the 1 bed room that's out of your reach?

[deepblue]

there's no dividends this year anyway :(

Maybe you are holding the wrong securities. My Canadian oil/gas trust is paying very nice dividends.

[Steve_Francis_rules]

Even though I don't make buffet money, I can assure you that I am above the 250k line Obama's proposing. Its really not that that much here in northeast.



You are so full of it. I live in the Boston area and have a household income of less than 66k and I am living quite comfortably. I live in a nice apartment and still manage to save about 1/3 of my income every year.

250k is a lot no matter where you live.

[deepblue]

You are so full of it. I live in the Boston area and have a household income of less than 66k and I am living quite comfortably. I live in a nice apartment and still manage to save about 1/3 of my income every year.

250k is a lot no matter where you live.

Wife, kids, house? What's the average house price in a town that has a good system?

66k might be comfortable living in an apartment with no family obligations. Try raising a family in Boston area.

[TL]

sweet. everyone loves a pissing contest about how much they make.

[pgabriel]

sweet. everyone loves a pissing contest about how much they make.


hey, I don't mind the perspective of someone with a high income on this subject even with the pissing.

I would like them to at least acknowledge that bush cut their taxes while running up the deficit to extreme levels and someone's going to have to pay eventually.

[rhadamanthus]

In the latest issue of Business Week there is an article about how families making over 250k are terrified of these taxes because they are already feeling "squeezed". I think that's a load of bull**** - but feel free to explain why my take on someone't pity party is wrong.

I know cost-of-living can vary substantially - but if you make 250k+ and feel like your just barely making it each month - you own too much **** and you're probably an idiot with respect to your lifestyle.

IMHO.

[TL]

hey, I don't mind the perspective of someone with a high income on this subject even with the pissing.

I would like them to at least acknowledge that bush cut their taxes while running up the deficit to extreme levels and someone's going to have to pay eventually.

Fair enough, but there's a difference between "perspective" and comments like "Are you still saving up for the 1 bed room that's out of your reach?".

Yes, Bush cut taxes significantly, and I didn't fell what it was like at those levels pre-Bush, so I can't comment on that. I have run the numbers under the old Clinton tax brackets to estimate what my post-election tax liability will look like, and it's frightening.

Yes, the difference is big, which implies, I saved a lot. But I can't be more sick of people forgetting that when they are out for a drink on Thursday night, I'm working. When some people are on vacation and leave work behind, I'm on calls or my blackberry. Having Obama saying we want to extend the tax cuts to "hard working" Americans makes me bitter, since it implies when I'm working my a$$ off, I'm not hardworking just because it happens to be in an office instead of on a construction site.

I saved a lot with the tax cuts. But I already pay more than my share.

I would like some people to at least ackowledge that, as well. And the "someone" that has to pay isn't just anyone. It's people like me.

Rhad - why is it surprising that when you are facing a $20+k reduction in your disposable income it's going to cause a squeeze? I could either cut my spending or my savings. I have targets for the savings and things I want to build. So, that means I cut my spending. And it sucks to have such a dramatic drop in spending.

[pgabriel]

Yes, the difference is big, which implies, I saved a lot. But I can't be more sick of people forgetting that when they are out for a drink on Thursday night, I'm working. When some people are on vacation and leave work behind, I'm on calls or my blackberry. Having Obama saying we want to extend the tax cuts to "hard working" Americans makes me bitter, since it implies when I'm working my a$$ off, I'm not hardworking just because it happens to be in an office instead of on a construction site.




I don't want to get into your personal situation but I do hate when politicians (including Obama) call middle income earners hard workers as if people who earn over $250K are just collecting checks. That kind of rhetoric gets us no where as a nation. its divisive, but all politicians do it.

[deepblue]

Fair enough, but there's a difference between "perspective" and comments like "Are you still saving up for the 1 bed room that's out of your reach?".

That was a response to the "deepblue buffet" comment.

Yes, Bush cut taxes significantly, and I didn't fell what it was like at those levels pre-Bush, so I can't comment on that. I have run the numbers under the old Clinton tax brackets to estimate what my post-election tax liability will look like, and it's frightening.

Yes, the difference is big, which implies, I saved a lot. But I can't be more sick of people forgetting that when they are out for a drink on Thursday night, I'm working. When some people are on vacation and leave work behind, I'm on calls or my blackberry. Having Obama saying we want to extend the tax cuts to "hard working" Americans makes me bitter, since it implies when I'm working my a$$ off, I'm not hardworking just because it happens to be in an office instead of on a construction site.

I saved a lot with the tax cuts. But I already pay more than my share.

I would like some people to at least ackowledge that, as well. And the "someone" that has to pay isn't just anyone. It's people like me.

Rhad - why is it surprising that when you are facing a $20+k reduction in your disposable income it's going to cause a squeeze? I could either cut my spending or my savings. I have targets for the savings and things I want to build. So, that means I cut my spending. And it sucks to have such a dramatic drop in spending.

Exactly, Obama is pretty clever in drawing the line at 250k, this "uniter" clearly is pitting the people on either side against each other. He knows the math, since one side is about 95% of the population.

[GladiatoRowdy]

Also, why is it appropriate that the rich get taxed more?


Because we have a progressive income tax code, which means that the people who make more pay more. That is the way a progressive tax code works.


Just because they have more? That makes no logical sense.

Yes, it does because we have a progressive income tax. I would be all for scrapping it and going to a consumption tax, but as long as we have a progressive income tax, that is how it works.


I never understood the notion that because someone has something better they owe something to someone who doesn't have it. Should a student with an "A" in a class be forced to share part of his grade with a failing student so they both have a "C" in the class? After all it's obvious the failing student needs help right?

The rich people owe a debt to the society that allowed them to become rich in the first place. The institutions that their tax dollars pay for allow people the opportunity to live the "American Dream," and people who become rich should not shirk their duty to assure that the dream remains alive for the next generation of Americans.

Since the income tax was implemented, the rich have seen their tax rates drop by over 2/3 while the rest of us have seen no net reduction in our rates. Coincidentally, as this has happened, we have begun to run massive deficits, our education system has gone down the tubes, and our infrastructure has suffered. Actually, I don't think it is coincidence at all.

[rhadamanthus]

Fair enough, but there's a difference between "perspective" and comments like "Are you still saving up for the 1 bed room that's out of your reach?".

Yes, Bush cut taxes significantly, and I didn't fell what it was like at those levels pre-Bush, so I can't comment on that. I have run the numbers under the old Clinton tax brackets to estimate what my post-election tax liability will look like, and it's frightening.

Yes, the difference is big, which implies, I saved a lot. But I can't be more sick of people forgetting that when they are out for a drink on Thursday night, I'm working. When some people are on vacation and leave work behind, I'm on calls or my blackberry. Having Obama saying we want to extend the tax cuts to "hard working" Americans makes me bitter, since it implies when I'm working my a$$ off, I'm not hardworking just because it happens to be in an office instead of on a construction site.

I saved a lot with the tax cuts. But I already pay more than my share.

I would like some people to at least ackowledge that, as well. And the "someone" that has to pay isn't just anyone. It's people like me.

Rhad - why is it surprising that when you are facing a $20+k reduction in your disposable income it's going to cause a squeeze? I could either cut my spending or my savings. I have targets for the savings and things I want to build. So, that means I cut my spending. And it sucks to have such a dramatic drop in spending.

I understand the sentiment - but perspective is in order. Savings and goals are not the same as basic needs. I guess I felt that the aforementioned article was acting like these folks were suffering and just barely staying above poverty - on 300k/year. I think that's flat-out ridiculous.

I make a good deal of money, and while my friends buy stuff and go out - I prefer to be frugal and save. So I can sympathize with what you're saying.

Although my previous post was pretty harsh, the reality is that I'm torn. I don't think it's right to place this burden on the poor, or jsut barely middle class, but what number really constitutes wealthy?

Frankly, the obvious solution is to just STOP THE FEDERAL GOVERNMENT FROM WASTING MY MONEY TO BEGIN WITH. Of course, that will never happen until we vote against both repubs and democrats since they both don't have a clue how to reign in idiotic spending.

[rimrocker]

The two candidates' plans would have sharply different distributional effects. Senator McCain's tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those whose taxes fall would, on average, see their after-tax income rise much less. In marked contrast, Senator Obama offers much larger tax breaks to low- and middle-income taxpayers and would increase taxes on high-income taxpayers. The largest tax cuts, as a share of income, would go to those at the bottom of the income distribution, while taxpayers with the highest income would see their taxes rise.
http://www.taxpolicycenter.org/publications/url.cfm?ID=411693

http://www.washingtonmonthly.com/blogphotos/Blog_TPC_Obama_McCain_Tax_Plans.gif

[halfbreed]

...

I didn't say we DON'T have a system where the rich pay more. I'm saying it shouldn't be that way. I have no problem with them paying more "dollar wise" but for them to pay such a large portion of the overall tax revenue of the nation while so many are left paying next to nothing is not right. Even if you think it is, when we give tax cuts, the cuts should go to those who are paying the lion's share.

[FranchiseBlade]

I didn't say we DON'T have a system where the rich pay more. I'm saying it shouldn't be that way. I have no problem with them paying more "dollar wise" but for them to pay such a large portion of the overall tax revenue of the nation while so many are left paying next to nothing is not right. Even if you think it is, when we give tax cuts, the cuts should go to those who are paying the lion's share.
The cuts should go to those that it need it most. The wealthy don't need it most.

[robbie380]

there's no dividends this year anyway :(


tons of dividends everywhere. i did see an interesting note that some analyst was saying utility stocks may get hit hard if obama is elected. it will be interesting to watch it unfold to see they do get sold as we get closer to the election.

[robbie380]

Maybe you are holding the wrong securities. My Canadian oil/gas trust is paying very nice dividends.

nice divs but underperforming relative to energy and i am not sure they are subject to the div tax rate in the u.s. how does that div withholding from the canadian govt work also? a obviously depends on what you are holding and how they are organized. either way some of those trusts, reits, and some closed end funds have some very confusing and overly complicated tax rules. were you in them back when the canadian govt was screwing around with their tax status? how hard of a hold was that? :eek:

man i remember way back when the whole subprime thing started and there was some major margin calls. some of those pipeline/trust stocks were getting flat out raped one day. no one could find any news and it looked like a margin call to me since it was only high yield securities getting sold and obviously the subprime whores were yield whores as well so you had to figure it was those fools getting squeezed out of their stock positions to raise cash. anyhow, it ended up getting reported as a margin call by david faber on cnbc. that's my little story about trusts. :p

[deepblue]

nice divs but underperforming relative to energy and i am not sure they are subject to the div tax rate in the u.s. how does that div withholding from the canadian govt work also? a obviously depends on what you are holding and how they are organized. either way some of those trusts, reits, and some closed end funds have some very confusing and overly complicated tax rules. were you in them back when the canadian govt was screwing around with their tax status? how hard of a hold was that? :eek:

man i remember way back when the whole subprime thing started and there was some major margin calls. some of those pipeline/trust stocks were getting flat out raped one day. no one could find any news and it looked like a margin call to me since it was only high yield securities getting sold and obviously the subprime whores were yield whores as well so you had to figure it was those fools getting squeezed out of their stock positions to raise cash. anyhow, it ended up getting reported as a margin call by david faber on cnbc. that's my little story about trusts. :p

My position is in one of the larger oil/gas trusts in Canada. Dividends were around 15% minus the Canadian tax withhold, which still gave me some very nice cash returns. Yes the stock price have been lagging some of the high flyers, but its a decent hedge against some of my other positions, and dividends are taxed at a much lower rate than short capital gains. I believe the Canadian tax status haven't been changed just yet, couple more years maybe?

[GladiatoRowdy]

I didn't say we DON'T have a system where the rich pay more. I'm saying it shouldn't be that way. I have no problem with them paying more "dollar wise" but for them to pay such a large portion of the overall tax revenue of the nation while so many are left paying next to nothing is not right. Even if you think it is, when we give tax cuts, the cuts should go to those who are paying the lion's share.

Since the income tax was implemented, the rich have seen their taxes slashed by over 2/3 while the rest of us have seen no net reduction in tax rates. This coincides with the erosion of our infrastructure, educational system, etc. The rich owe more to our society for providing an environment that allowed them to become rich, so they should pay more in taxes.

[GladiatoRowdy]

In the latest issue of Business Week there is an article about how families making over 250k are terrified of these taxes because they are already feeling "squeezed". I think that's a load of bull**** - but feel free to explain why my take on someone't pity party is wrong.

I know cost-of-living can vary substantially - but if you make 250k+ and feel like your just barely making it each month - you own too much **** and you're probably an idiot with respect to your lifestyle.

IMHO.

Quoted for truth.

[GladiatoRowdy]

And it sucks to have such a dramatic drop in spending.

Oh, darn. Talk to some people who can barely afford to fill their cars up with gas to get to work, then perhaps I will listen to your b!tching about your drop in spending.

Bush cut your taxes like nobody's business and ran some of the biggest deficits in history to do it. One of these days, those chickens are going to come home to roost and I would prefer sooner than later.

[TL]

Oh, darn. Talk to some people who can barely afford to fill their cars up with gas to get to work, then perhaps I will listen to your b!tching about your drop in spending.

Bush cut your taxes like nobody's business and ran some of the biggest deficits in history to do it. One of these days, those chickens are going to come home to roost and I would prefer sooner than later.

1.) It's my money. I work way more than most of the people who can't fill up their gas tank, so get off your soapbox.

2.) You have no clue what my spending habits are. People have this deluded image that the "wealthy" are sitting around buying caviar. I know for a fact that I spend significantly less than the average american.

3.) Raising my taxes and cutting everyone else's, isn't going to let the chickens come home to roost. It's still balooning the deficit. This isn't fixing the problem. If this were to fix the problem, that would be a different story.

4.) Garbage like this is what incents people to structure businesses off shore and form tax shelters.

[GladiatoRowdy]

1.) It's my money. I work way more than most of the people who can't fill up their gas tank, so get off your soapbox.

The people I know who are having trouble are working two and three jobs to get by. I seriously doubt you work more than some of them.


2.) You have no clue what my spending habits are. People have this deluded image that the "wealthy" are sitting around buying caviar. I know for a fact that I spend significantly less than the average american.

Not if you have the ability to take $20,000 out of your spending budget. The "average" American makes about $40,000 and will not have anywhere near $20,000 for discretionary spending.


3.) Raising my taxes and cutting everyone else's, isn't going to let the chickens come home to roost. It's still balooning the deficit. This isn't fixing the problem. If this were to fix the problem, that would be a different story.

This is where we agree. We need to have a balanced budget amendment that includes a provision for having enough money to actually pay down the national debt. I would raise taxes enough that we could pay for all of this and would raise these taxes mostly on the people who have actually had their tax rates cut by more than 2/3 since the income tax was instituted.


4.) Garbage like this is what incents people to structure businesses off shore and form tax shelters.

And those people are garbage and deserve to be deported to whatever offshore PO box they structured their business in and barred from doing business in the US.

[Supermac34]

Wow. Its a little different when you can actually hear from one of those "rich" people. We have someone here flat out saying that if Obama gets elected he loses $20,000 a year. Then we have several people telling him that he owes it for us propping him up and making him successful.

Awesome.

Even if you make $250,000 a year, $20,000 is STILL A LOT OF MONEY...and its $20,000 MORE than the HUGE amount he already pays. It is a lifestyle changer. Its not some super wealthy guy thinking he won't be able to lay down one more bet on black in Vegas. Its a hard working successful American, who has made choices to excel and earn more, and is going to have a government punish him for it.

Maybe he figures he can get educated, work his ass off, sacrifice time, fun, family and earn more now, for saving a lot of money and retiring early. Obama would like to prevent him from doing that by taking 20K a year away from him....maybe its 20K a year that he would need to retire 10 years early and devote to things he enjoys...who knows...but I think it sucks.

AND

$250,000 a year is NOT rich anymore. Its upper middle class.

[TL]

The people I know who are having trouble are working two and three jobs to get by. I seriously doubt you work more than some of them.

If its 2-3 40 hour/week jobs, then we're probably very very close, but if it's close, then they win, so I'll give you that. On the other hand, I see people who work 40 hours a week and can't get by, but are living well outside their income. Anecdotal stories from either of us are meaningless. I don't think that's representative of most people.

Not if you have the ability to take $20,000 out of your spending budget. The "average" American makes about $40,000 and will not have anywhere near $20,000 for discretionary spending.

True. And frankly I overstated dramatically (which I know is a rarity in this forum ;) ). The reality is everything I can cut from a spending perspective will be cut. The rest will have to come from other sources. My bigger point was that this will have an adversely large effect on my spending, which isn't good for anyone given the fact that our economy is consumer driven.

This is where we agree. We need to have a balanced budget amendment that includes a provision for having enough money to actually pay down the national debt. I would raise taxes enough that we could pay for all of this and would raise these taxes mostly on the people who have actually had their tax rates cut by more than 2/3 since the income tax was instituted.

I on the other hand would want the government to be more responsible about spending. If that is done AND I have to pay higher taxes, I'm actually ok with it. But I hate seeing money wasted and being asked to pay higher taxes at the same time.

And those people are garbage and deserve to be deported to whatever offshore PO box they structured their business in and barred from doing business in the US.

That's nice to say, but it would have a hell of a an effect on the economy and is 100% impractical. The point is, that by raising taxes to levels like that, you end up creating the wrong type of incentives. The people that get caught in the tax trap aren't the ones who can most afford to pay the taxes. They avoid them. The rest of us get caught.

[rimrocker]

When listening to McCain talk about economics, remember this...

Report: McCains Have Over $100,000 In Credit Card Debt
By Eric Kleefeld - June 13, 2008, 10:57AM
http://tpmelectioncentral.talkingpointsmemo.com/2008/06/report_mccains_have_over_10000.php

In an interesting peek into John McCain's personal finances, it turns out that John and Cindy McCain -- in spite of their personal wealth -- are carrying well over $100,000 in credit card debt.

The Hill took a look at the latest Senate financial disclosure forms and found that a joint card held by the two has between $10,000 and $15,000 in charges, while a card that is solely in Cindy's name has between $100,000 and $250,000 in debt. Another card for a dependent child has between $15,000 and $50,000 in charges.

This is despite Cindy McCain having sold a property in California for a profit of more than $1 million.

Barack Obama, who has become wealthy in recent years thanks to book royalties, did not report any financial liabilities.

[bobrek]

When listening to McCain talk about economics, remember this...

What is the interest rate on the debt and what are they earning on their assets that they would use to pay the debt?

[robbie380]

What is the interest rate on the debt and what are they earning on their assets that they would use to pay the debt?

the answers are too much and not enough. if those aren't then answers then something questionable is going on with those cards.

[bobrek]

the answers are too much and not enough. if those aren't then answers then something questionable is going on with those cards.

Not saying this is the case, but you've never received a CC offer with X% interest for the life of the purchase or transfer?

[GladiatoRowdy]

Anecdotal stories from either of us are meaningless.

Agreed.


True. And frankly I overstated dramatically (which I know is a rarity in this forum ;) ). The reality is everything I can cut from a spending perspective will be cut. The rest will have to come from other sources. My bigger point was that this will have an adversely large effect on my spending, which isn't good for anyone given the fact that our economy is consumer driven.

Yes, but the people who do most of the spending are the people who will receive the biggest cuts under Obama's plan. Thus, spending will drop very little.


I on the other hand would want the government to be more responsible about spending. If that is done AND I have to pay higher taxes, I'm actually ok with it. But I hate seeing money wasted and being asked to pay higher taxes at the same time.

I agree, but what would you cut? I would argue that defense spending could drop dramatically given that we spend more on our military than the next 10 countries combined. There is plenty of pork that could be cut and I am all for it. However, I don't see it happening unless we have a balanced budget amendment that does not allow spending unless revenues increase. This is part of the reason I support a consumption tax. It is relatively easy to tie spending to a sales tax increase that everyone would feel immediately.


That's nice to say, but it would have a hell of a an effect on the economy and is 100% impractical. The point is, that by raising taxes to levels like that, you end up creating the wrong type of incentives. The people that get caught in the tax trap aren't the ones who can most afford to pay the taxes. They avoid them. The rest of us get caught.

Two words: consumption tax. You get to choose exactly how much you pay in taxes each year by controlling your consumption.