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Texpat

Essentially, someone who makes < $20K isn't paying taxes anyway. Standard deduction is $11K and $3.5K for exemptions. So it's a matter of how much the candidates are willing to give.

In the top bracket, those suckers are being taxed at 50% or more and are paying in excess of a million in taxes.

I'm for the flat tax -- 15% across the board as taxes are nothing more than Robin Hood-style redistribution of wealth.

Shouldn't the second bracket be 603K - 2.9 mil?

Norton

Are you mad! You'd be putting all the tax accountants out of business. Can't have that with all the unemployment in the country.

AntRobertson

Sorry, don't quite follow you there? Do you mean that those earning <$20k are at set levels of deductions?

Yeah, strange layout.

Butterfly

a bit simplistic, as usual

Texpat

And eliminate all the loopholes. No itemizing, no shelters, no charity deduction, no tax consultants, no hassle. The simple key to making this work is identifying what is income and what isn't -- and taxing it. Forbes is my hero.

Butterfly

He is a fool. No surprise he is your hero

Texpat

No, those earning less than 20K have enough standard deductions, roughly, to offset any taxes they might owe. They could set their withholding to zero (pay no taxes throughout the year) and still come up oweing nothing or very little. So tax cuts to that group mean nothing more than a payday they otherwise wouldn't have realized. Redistributing from those who make more.

sabang

Nowhere near that- there are many tax breaks and deferrals available to the wealthy. As much as possible, "income" is paid in the form of dividends or capital gains anyway and taxed at a much lower rate. Then you have estate planning bequests, Trusts and foundations, 401K's and so on.

If a US citizen is paying more than an effective 25% on that sort of income, it is basically because he chooses to do so or is not bothered doing anything about it.

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sabang

I'd like a similar system- Flat tax on all income be it wages, capital gains, dividends or trust distributions. Charitable bequests and inheritance gifts OK, but after Flat Tax paid. Death taxes also at the flat rate. Corporate bodies taxed the same also.

AntRobertson

Ahh follow you now! Sorry, misunderstood what you meant by "deductions". I read that to mean what they have to pay, not what they are exempt from.

"You can judge a society by how they treat their weakest members." - Gandi

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Norton

^There is also a school of thought the graduated tax system is in place to keep the "middle/upper middle class" from getting too rich!

Texpat

There is an element in every society that is perfectly content to get more out -- than they put in. To the extent that a government can reduce that element, improving the society's efficiency, the better off everyone will become. When you make that element too comfortable, they're disinclined to contribute at all. IMO many western nations are encroaching, increasingly, into a zone where they're creating more people dependent upon the society than are contributing to it.

Ghandi was a hippie liberal.

Milkman

Thanks for the work, AntR. Texpat, thanks for the tax explanations.

On these radio shows I keep hearing that Obama is going to "raise taxes, raise taxes, raise taxes." If the chart above is telling-all, and accurate, this seems not to be the case unless someone/couple is making $600K per year.

Capital gains? What Obama's position? (I'll look it up.)

My question: is it true that Obama is going to raise taxes? Or, is this election year fear mongering?

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Norton

The chart clearly shows where the tax increases will occur. I have the same thought as you. What does all this mean to the bottom line regarding total tax revenues?

Texpat

Well, the peace dividend is right around the corner.
Remember the riches and fabulous wealth available to all hard working American taxpayers at the end of the cold war?

Neither do I.

Milkman

Norton:I believe he's raising the capital gains rate, again, I'll check the figures. At this time, it seems there is a lot of misinformation beind put out on the MSM (mainstream media). I just saw Ben Stein fill in for Glenn Beck (I don't like Beck) and he associated higher gas prices with Obama, and said they'll go higher because the US won't drill more off-shore because of Obama's position. Waaay, oversimplified. Very dishonest reporting. There is a concerted effort on radio and TV to keep hammering the "raise taxes" and other negatives. These are not honest.

I remember George H. Bush talking about the "Peace Dividend" after the end of the Cold War? Yes, Tex, it never happened. We have to build those $500 Stealths , and keep the MIC happy.

As for Iraq, if you mean in jest that the "peace dividend" is around the corner, Iraq is costing us money, but not as much as the other problems. We'll be paying for a Iraq for a long time to come. It doesn't matter who's in office.

Norton

This seems a fairly unbiased site. All sorts of data and detail. Based on this Obama would raise taxes (increase revenue) $300B and McCain decrease, $1 trillion.

A tax decrease has no hope of decreasing the current deficit and McCain has no real plan to curb spending other than vague references to vetoing earmark funding.

Obama's tax increase will be needed to fund his social programs. Tax increase coupled with "peace dividend" may or may not allow for a decrease in the deficit.

Obama has said reduction of the deficit is a priority, McCain has been silent on the issue. The huge deficit run up in the last 8 years is going to a challenge for either to make much of a near term dent.

*snip*

Although both candidates have at times stressed fiscal responsibility, their specific non-health tax proposals would reduce tax revenues by $3.6 trillion (McCain) and $2.7 trillion (Obama) over the next 10 years, or approximately 10 and 7 percent of the revenues scheduled for collection under current law, respectively. Furthermore, as in the case of President Bush's tax cuts, the true cost of McCain's policies may be masked by phase-ins and sunsets (scheduled expiration dates) that reduce the estimated revenue costs. If his policies were fully phased in and permanent, the ten-year cost would rise to $4.0 trillion, or about 11 percent of total revenues.

Both candidates argue that their proposals should be scored against a "current policy" baseline instead of current law. Such a baseline assumes that the 2001 and 2003 tax cuts would be extended and the AMT patch made permanent. Against current policy, Senator Obama's proposals would raise $300 billion, an increase of 2 percent, and Senator McCain's proposals lose $1.0 trillion (if fully phased-in and permanent), a decrease of roughly 2 percent. Senator McCain has stressed that deficits should be closed by spending cuts, but policies he identifies, such as limiting earmarks, would offset only part of the revenue losses attributable to his tax plan. As noted, both candidates may be overoptimistic in their revenue targets for closing tax loopholes-Obama probably more than McCain.


A Preliminary Analysis of the 2008 Presidential Candidates' Tax Plans (Full Report): revised June 20, 2008

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Jet Gorgon

Cutting taxes is OK if more business incentives are provided, which in turn would increase the number of companies and thus the need for more workers who would pay tax rather than living off of social benefits.

Boon Mee