Quote:
Originally Posted by aceventura3
The "devil is in the details". His website states that he will make the credit refundable - meaning that for people who owe no tax would still benefit from the credit - sort of like ending up in a negative tax bracket. At some point in the income range that credit will go away. The family going from poverty to a livable wage will face not only the loss of the credit but will also potentially owe taxes on the additional income. Hence the marginal tax rate goes up at the threshold or cutoff point.
People who get the credit win. People who are getting the credit today but start making more money in the future are in for a marginal tax hit that is going to be pretty hard for working families. So, under Obama people will have an incentive to stay poor.
Like I wrote earlier in this thread, adding in state, local, and FICA taxes, a poor person trying to get ahead should not have to face what could easily be a 50% marginal tax hit. In many cases the "rich" wont face marginal tax rates that high. Just ask Warren Buffet or people like him. I think they actually secretly laugh as they support Democrats and their ideas about hitting the "rich" with more taxes.
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This makes no sense to me....
Assume we have a tax credit of $1000 and a tax rate of 10%. (the numbers are chosen to be small and simple on purpose and not representative of real numbers)
Family A) makes $900 and they get the tax credit for $100 for a total net income of $1000.
Fmaily B) makes $1100 they get no tax credit and pay taxes on $100 for a total tax liability of $10 for a total net income of $1090.
According to your argument a couple of things are true:
1) Family B would rather be Family A because they pay less taxes even though they have less income.
2) Family A would rather not make more than $1000 because it means less tax liability. Thus if Family A were offered a $200 raise they would say "thanks, but no thanks".
3) The world is flat.
-----Added 25/8/2008 at 05 : 52 : 10-----
look at the graph at the bottom of the link you posted:
http://www.taxpolicycenter.org/Uploa...es_summary.pdf
it says that 4/5ths of Americans will have more after tax income with Obama than with McCain. Are you claiming these people would rather pay more taxes as long as their marginal rate was lower?
-----Added 25/8/2008 at 05 : 54 : 36-----
Let's take a quick straw poll. Everyone reading this please tell me if you which of these you would prefer:
A) To pay more total taxes or B) to have a higher marginal tax rate?