(Reality) Who will you pay more taxes with
 

Before reading and responding to this thread please first vote in the following thread: http://www.tfproject.org/tfp/tilted-...ore-taxes.html

Then read this post and answer the poll according to who this article says you will pay more taxes with.









The Washington post did a side by side comparison of both tax plans. The full article can be found here
Obama and McCain Tax Proposals - washingtonpost.com


http://media3.washingtonpost.com/wp-...8061200193.gif


Please find your income on this chart and report who you would pay more taxes with.

McCain.

$66,355-$111,645... Looks like I pay more with "no new taxes" McCain to the tune of $281.

I didn't vote because I'm Canadian, but what I found interesting is the average decrease in taxes for 60% of taxpayers (the bottom three groups):

• McCain: 0.47%
• Obama: 3.83%

That's interesting. I think Obama's $500 to $1,000 in individual tax savings is significant to this tax group. That, compared to McCain's $20 to $300.

I'd stand to save $779 more with Obama's plan over McCain's. That's worth the better part of a paycheque. Obama's savings alone is pretty much a paycheque's worth of savings. That's a lot. I knew I'd vote for him if I were American. :)

I would still like to know how either Obama or McCain will give tax cuts to people who do not pay federal taxes in the first place. Is Obama going to give them even more free money than they already recieve?

McCain, easily. But it's the nature of a progressive tax scheme that I'm already undercharged - or among those least overcharged - when it comes to taxes. Obama won't buy my vote this way. If anything, I consider this a point in McCain's favor.

Direct payments should probably be made to the poor and middle class since they pay little or no income tax and still pay a higher percentage of their income to support our government than the wealthy. Obama's plan seems to be trying to make the system more fair.

Hopefully tax rebates/payments to the lower income groups will more than make up for the higher prices of goods and services they will have to pay due to increased corporate taxes.

I didn't even look before I voted, because I knew I'd pay more under McCain.

*cue creepy smile*
That's not change, you can believe in.

I like McCain up to $111,000. Then I like Obama's plan. Although I think how you make your money should impact how much taxes you pay as well. If someone invents something and starts a business, they should pay less taxes than a CEO that gets a large bonus for having a bunch of workers do a good job.

Overall, this country is in the red and it needs to be brought back into the black. It will require more money each year and fewer loans, bonds, treasury notes and whatever other borrowing schemes they have.

It is interesting peoples perceptions so far put people spread fairly evenly with slightly more for Obama however in reality most people would save under Obama. Is this due to the stereotype that democrats tax more or is it due to the misleading adds run by the McCain camp lately.

My support for Obama doesn't rest on income tax. His overall plans are more fiscally responsible, considering the cost of staying in Iraq for a 4 year McCain presidency.

I think it's the stereotype although that is self-fueled.

I still don't understand how people who don't pay federal tax can have their taxes cut in the first place?:confused:

It's called Earned Income Credit. People who make under a certain amount get a refund, even above and beyond what has been withheld. It is also an option to pay for your daycare by getting early EIC payments.

I'll pay more with Mc Cain than with Obama, but not by much.

I'm probably too old for daycare. :sad:

You know what I meant :D

I've seen on tax forms (also w-4's?) where there is an option to receive early IEC payments to pay for daycare.

Again as with the other question..... both are going to have to raise taxes or make serious serious cuts..... I don't see cuts, so taxes it shall be.

a rational approach to state spending would include a wholesale reassessment of the levels of expenditure on the military, the function of the military in a post cold-war environment, etc....there's no need for anything remotely like present levels of spending apart from the republican strategy of using this area to prop up the economy. without such a reassessment, questions like tax rates are trapped inside an irrational framework. folk will pay in a host of ways more under another republican administration--tax rates will be the least problematic of the types of increased payment.

Getting out of Iraq would be a serious expenditure cut....

A shameless cross-reference with another thread: I.O.U.S.A.: A Horror Film?

You'd figure responsible spending would be paired with raising taxes, considering the state of economic affairs....

I think even if we pull out of Iraq, that money would go to Afghanistan or possibly Iran. I believe if we pulled out of both it would be a great cut but we'd also be paying for those countries reconstructions.

No, either wages go up and we put a cap on CEO perks, pay and benefits or we continue to have the rich getting richer and the poor poorer and the rich absorbing more and more taxes for social programs.

Unless you want to cut social programs to a bare bones minimum and then, then you'd see action by the people.

It's simple the less you pay people, the less people can buy, the less they can pay in taxes, the more crime goes up. The Ultra rich don't give a damn because they have spent the last decade building themselves fortresses for houses and have houses in other countries..... The upper middle class and the poor schlob who has a little money will be the ones paying more for police protection and in taxes.

The disparity in this country has reached a high that is destroying this country and if you don't see it or you don't believe it, you really need to check your reality meter.

There is only one way to save this country, raise the wages of the working man, lower or tax heavily, the wages/perks/benefits of the ultra rich and hope it is not too late.

Pan, are you suggesting America needs more socialism to solve its economic problems? Is that the only way?

Right now yes. The greed of the ultra rich.... and I'm not talking about the poor schlub that has a couple rental properties and savings but the extreme wealthy who have controlled the media to sell these poor schlubs the belief that they will be taxed out of everything they own...... has destroyed this country.

What happened with Reagan was the unions became weak, management became powerful and unchecked.

The unions were greedy and had damaged this country and for the past years management has now taken that spot.

Back to your question.... lol..... yes, either we socialize wages and this country to a manageable degree or companies and CEO's do it on their own.... or we continue to collapse and in the end that will cost more than just taxes to everyone.

When you beat men down to the point where they feel they have nothing to lose .... and there are many getting that way in this country...... the only reaction is to fight back, because they have nothing to lose. They worked hard to prevent it, doping the population with Paxil, WellButrin, Prozac etc, then doping the kids with Adderall and Ritalin. The people saw all this happening but didn't care. Then, the pharms got greedy, the meds rose, wages and insurance didn't, people couldn't afford the "meds" and now they are waking up. They don't like what they see.

That is why the powers that be have given us 2 of the worst candidates in the history of this country.

We will pay more under Obama by a sliver, but that sliver is so slight that our average charitable donations will more than make up for it.

Plus, factor in the fact that McCain's plan only increases the defecit which damages people's faith in the economy.

Even when my income bracket changes in another couple of years, I would pay more under McCain and less under Obama.

You emphasized the word "reality", so for the record I offer the following for consideration.

A family of 4 (two adults and two children) making $40,000 (in the bottom 60%) would have a standard deduction of $10,700 (using 2007 tax laws), personal exemptions of $13,200 ($3,300 x 4). The taxable income would be $16,454. The tax would be $1,629. But then they would have the Child tax Credit of $2,000, reducing their tax to $0 and allowing a net payment from the government of $371. And then they qualify for the earned Income Tax credit, of $4,470. They pay no tax and actually get a check for $4,841.

O.k., but let's look a another scenario for a person in the bottom 40%.

A family of 4 (two adults and two children) making $66,354 (in the bottom 60%) would have a standard deduction of $10,700 (using 2007 tax laws), personal exemptions of $13,200 ($3,300 x 4). The taxable income would be $42,454. The tax would be $5,589. They would have the Child tax Credit of $2,000, reducing their tax to $3,589. Unfortunately they don't qualify for the Earned Income Tax credit. So they actually pay the $3,589. Obama's plan to save them over $1,000 is good for this family, but is actually a savings of 27%. The Post did not show how they calculated the savings they came up with. so we don't really have "reality" until they show us, and given the complexity of the tax code two families in the same "category could see dramatically different amounts under either plan.

But there is a bigger picture - marginal tax rates. Using the two cases above. The one family paid $3,589 in taxes the other paid nothing and got a check for $4,841 - the difference is $8,430. Wow! The difference in income was $26,354. So if the first family hit good times (new job, raise, spouse entering the work force, whatever) and earned what the second family earns, their marginal tax rate would be - ***32%***. That is pretty close to the highest marginal tax rate available, the one for the "rich".

So, the bottom line is that people who have the potential to earn more money over time should favor tax simplification and generally low marginal tax rates. Also note we were just looking at federal income taxes, not FICA, state and possibly local taxes. Imagine being near poverty, getting an opportunity to make more and having to give half of that additional income, ouch!:grumpy:

i voted obama because i can't get taxed more with mccain when he loses.

Its probably a wash for me but I am not overly troubled by how much taxes I currently pay.

I am more interested in seeing both candidates and the next Congress implement a serious pay-as-you-go approach to the federal budget, much like the late 1990s where the deficit was eliminated and a significant budget surplus created.

Can the Democrats do it if they control both branches? Or will it take a divided government? Who knows with any degree of certainty?

And in either case, is the country ready for that kind of sacrifice? I think not.

That's the fun thing about data. If you play around with it enough, you can make any argument you want.

Does your analysis offer any speculation as to whether the second family in your example would trade places with the other family to get a larger refund check?

Americans are frighteningly obsessed with taxes. If anything, I'd rather pay more taxes, if it means getting more shit done where it should be done, and taking care of more people who need it. Sign me up for the Scandinavian way, baby. :thumbsup:

No. But the point was to illustrate things are not as simple as they appear. Obama's plan adds complexity to an already complicated system. The Post may of had an agenda. If you exclude tax credits, deduction, and adjustments the results can vary from reality. And, clearly added complexity will be disproportionally harmful to average taxpayers with the potential to earn more over time.

Well, yes. Things are more complicated than they frequently appear. The Post's agenda might have had more to do with not boring and confusing their readers than anything else.

No one is going to turn down an extra $20k in pretax income because they don't want to pay more taxes (provided they net an increase in money). I haven't owed taxes for most of my adult life, but I'm still going into considerable debt to put myself in a position to earn a lot more money (and pay a lot more taxes). When a computer program does your taxes, simplicity of the tax code becomes less relevant.

And it could just as easily be complexity that ends up benefiting the less wealthy. The devil is in the details.

QFT.

Werd.

The Canadian way ain't bad either. :thumbsup: To vote for a leader based on changes to income taxes boggles my mind.

Until our government can demonstrate their ability to manage our money responsibly, it's absolutely moronic to hand them another single dime. Corruption and incompetence run rampant at all levels of government. Unless we hold the politicians to the same standards we are expected to live under, we deserve what we get.

Well, except for the fact that if you don't send them your dimes, they'll send you to PIMTA prison.

Balancing the budget is one thing that I really wish we could address, and neither of the current presidential candidates have really addressed it. I personally have more hope (uh-oh) that Obama will be fiscally responsible than McCain, but right now neither of their budget proposals will balance the budget.

IMHO, one of the things we *must* do to balance the budget is cut military spending. Say, in half. Of course, that will *never* *ever* fly in the current political environment, especially if it came from a democrat. Even Clinton's modest (peacetime!) military budget cuts were decried as 'destroying the military' and opening our country to imminent invasion (invasion by who, I wonder?).

Right now the US spends more on our military than the other countries in the world. All of them. Combined. Sure, we need a strong military, but do we really need the capability to wipe out the entire rest of the planet?

This is one of several reasons why China is poised to dethrone the U.S. as the world's most influential nation.

Oh, that and purchasing power parity. Despite America's budget, they don't have the hardware and troops to maintain proportionate integrity when considering budget dollars and assets. China has a lot of hardware despite the much lower budget. So does Russia. So does....

What about truth? Isn't that more important than simplicity?

Why does our tax code have to be so complicated? Shouldn't the average person be able to easily figure their tax obligation, with no surprises?

The point is not making the extra money, but the "smoke and mirrors" games our government makes with the tax code. In addition don't you find it disturbing that those advocating for the poor are actually making it more difficult for the poor to accumulate wealth. Are you happy that poor people face what amounts to a 50% marginal tax burden when they start to do better? Like I have written in other threads, the "rich" are going to be o.k., because they have options and armies of tax experts to work with. The entrenched poor don't have a problem, because they have no real opportunities to make more money. Again, the real burden is carried by the middle class and high income earners (in some cases, not really "rich"). So, Obama's plan is basically a plan intended to fool people into thinking his plan will do what it is not really going to do. McCain's plan is not much better, but at least there is no pretense with his goals.

The guy who spends time understanding taxes is going to have an advantage over the guy who does not. the more complicated the tax code the bigger the advantage. In the examples I gave if both families had the exact same cash flow, but the first family had 1099 income that could be offset by legitimate business expense lowering their taxable income to the amount in the example - perhaps they have a net advantage of $8,000. If they did that every year for 20 years, saved the money in an account earning 5%, they would have about $300,000 in the bank.

But, I am betting that person will be highly scorned by the left as being a greedy capitalist deserving of having that money taken to support the family that did not take the time to understand taxes. But, like I said - tax policy does not have to be so complicated - simplify it and put everyone on an equal playing ground.

Please disregard everything I wrote and believe what you currently think. Let's compare notes in 20 years.:thumbsup:

Is anyone else surprised by how many TFPers make more than $600K/yr? 26% of us, if you match the percentage who say they'll pay more under Obama to the chart in the OP.

(Of course, some of those might be single and make less than $600K/yr)

It's a limitation of the medium. There is a market for complex economic info; I hate to break it to you, but the post ain't it.

You might as well ask why the legal system has to be so complicated.

It is complicated because the world is a complicated place. Apparently the people who have glued the tax code together over the years found the virtues of a simple tax code less than compelling.

Who is making it more difficult for the poor to accumulate wealth? It's a hallmark of progressive tax systems that people pay more money when they make more money. I am fairly certain that I will pay less taxes under Obama's plan, regardless of whatever trickery you think his plan contains.

There is definitely a threshold over which you start paying more taxes. But, your net gain is still positive with respect to the taxes you owe. I don't know about you, but I've never heard anyone expressing the desire to go back to making $15,000 a year because their tax burden is too much when they make $40-50,000. You can pull this "won't somebody please think of the upwardly mobile members of the lower class" business if you want, but to me it seems a bit too contrived.

What do you mean "is going to have an advantage over"? Ceteris paribus aside, you have to be pretty far removed from any sort of general notion of how things work to presume that there is much of an advantage to be gained over your fellow man by having a better understanding of tax code than him. Even then, I think you mean to say that the guy who knows a good accountant is going to have an advantage over the guy who doesn't. Just like the guy who knows a good lawyer will have an advantage over the guy who doesn't.

This is fantasy. You must not be communicating effectively, because it sounds to me like you think that an important difference between rich people and poor people is that rich people have a better understanding of the tax code. I don't know if you've ever seen rich CEO's testify in front of congress, but those folks don't seem to know how to tie their shoes, much less fill out a tax form.

The people who deserve scorn are the people who are already obscenely wealthy who hide their money from the government because they can't bear to part even a fraction of it.

Right, because you're going to use your superb understanding of the U.S. tax code to develop of overwhelming advantage over me. Because we're in direct competition and whatever extra money you can glean from your superior knowledge of the U.S. tax code will come directly out of my pocket. Clearly, there are no other factors at play. At all.