Way OT: Taxes

[PMONSTER]

Could someone explain this new tax law from Obama or at least put in a good website that would explain it

[BIGGIEsmalls 23]

Basically, Bush put the current Tax plan into law when he was the President. They are set to expire at the beginning of 2011.

Obama wants to keep the tax cuts for families making $250,000 a year or less, but allow the tax cuts for families making over $250,000 to expire like Bush had planned.

[boogydown]

Basically, Bush put the current Tax plan into law when he was the President. They are set to expire at the beginning of 2011.

Obama wants to keep the tax cuts for families making $250,000 a year or less, but allow the tax cuts for families making over $250,000 to expire like Bush had planned.

Pretty typical for democrats, tax the wealthy, help the middle/poor.

Not saying anything is wrong with that, just a pretty standard thing.

[KingoftheCastle]

I'm all for this. **** the rich!

[ATRAIN53]

i read an article in Kilpinger a few weeks back that clairified some stuff for me-

but i'd still only trust data/info i obtain from irs.gov when it comes to actual numbers and laws.

[BIGGIEsmalls 23]

Basically, Bush put the current Tax plan into law when he was the President. They are set to expire at the beginning of 2011.

Obama wants to keep the tax cuts for families making $250,000 a year or less, but allow the tax cuts for families making over $250,000 to expire like Bush had planned.

Pretty typical for democrats, tax the wealthy, help the middle/poor.

Not saying anything is wrong with that, just a pretty standard thing.

Bush is no Democrat. This is his law that he had set to expire at the end of this year. Even Alan Greenspan (Republican) agrees that Bush's Tax Plan would hurt our economy more if Obama extends the tax cuts for the wealthy.

[anorexorcism]

in any case, it's not passing any time soon. congress decided rather than discuss important issues like this, it was a better idea to head go home early and spend their time campaigning.

[boogydown]

Basically, Bush put the current Tax plan into law when he was the President. They are set to expire at the beginning of 2011.

Obama wants to keep the tax cuts for families making $250,000 a year or less, but allow the tax cuts for families making over $250,000 to expire like Bush had planned.

Pretty typical for democrats, tax the wealthy, help the middle/poor.

Not saying anything is wrong with that, just a pretty standard thing.

Bush is no Democrat. This is his law that he had set to expire at the end of this year. Even Alan Greenspan (Republican) agrees that Bush's Tax Plan would hurt our economy more if Obama extends the tax cuts for the wealthy.

I completely misread what you originally said. You're right, this is not the typical democratic way at all.

[sleepyhead]

Basically, Bush put the current Tax plan into law when he was the President. They are set to expire at the beginning of 2011.

Obama wants to keep the tax cuts for families making $250,000 a year or less, but allow the tax cuts for families making over $250,000 to expire like Bush had planned.

Pretty typical for democrats, tax the wealthy, help the middle/poor.

Not saying anything is wrong with that, just a pretty standard thing.

Bush is no Democrat. This is his law that he had set to expire at the end of this year. Even Alan Greenspan (Republican) agrees that Bush's Tax Plan would hurt our economy more if Obama extends the tax cuts for the wealthy.

Alan Greenspan also said that the housing market/subprime loans would never cause a problem. He also kept the Fed Funds Rate at 1% for WAAAAAAYYYY too long in the beginning of this decade which caused the subprime mess.

The Bush tax cuts are set to expire, i.e. ALL tax brackets will go up. But Obama wants to keep the lower 4 tax brackets at bay 10%, 15%, 25%, 28% (heard different stories on this 28% bracket) and let the 33% and 35% brackets expire and climb to 36% and 39.6%.

I'm all for this. **** the rich!

I am glad you are not running this country. If you tax the rich even more then they will spend even less. The problem with our economy is on the DEMAND side, which means consumers are not spending enough, and that is why we can't create jobs.

If we tax the rich even more then the overall spending will go down as well. Obama is starting to notice this and he will not let the tax cuts expire even for the rich (or at least he is leaning more towards that idea, unlike what he screamed about in his campaign).

P.S. I do not fall under the top tax brackets, but this is America = IF YOU ARE SMART ENOUGH/WORK HARD ENOUGH TO BECOME RICH THEN YOU SHOULD BE ALLOWED TO SPEND THAT MONEY. Otherwise go and find yourself a communistic country to live in.

[philly035]

Most of the spending is coming from the middle class...

I wonder if there's any data to prove how taxing the wealthy effects the economy. If I were that rich, less taxes for me = more money in my savings account, which WOULD NOT help the economy at all.

[dice]

this is America = IF YOU ARE SMART ENOUGH/WORK HARD ENOUGH TO BECOME RICH THEN YOU SHOULD BE ALLOWED TO SPEND THAT MONEY. Otherwise go and find yourself a communistic country to live in.

this is a simplistic way of thinking. it's easy to scream 'taxes bad!' but it's impossible for a nation to exist and not be socialist to some degree. society = socialism. the question is what the optimum tax rates are. clinton raised taxes and we prospered. bush lowered taxes and drove us into the ditch. the highest the top tax rate ever was was 91% under ike (a republican). we were just fine as a nation at that time

when the rich get more money, it stands to reason that they are less likely to spend it and help the economy. trickle down economics has not shown to be a valid philosophy. even bush the elder called it "voodoo economics"

my philosophy is that there should be an even balance between the economic freedom of the individual and the needs of society. in economic terms that would mean 50% of every individual's income taxed (federal, state, local combined) and whatever the government does not spend is returned in equal amounts to the people. this would essentially mean social security for all americans. adding in free health care and keeping other applicable government spending levels staying the same this would effectively have the super-rich being taxed close to 50% and those making $25K or less a year not being taxed at all. for those earning less than that gov. financial assistance would kick in and increase up to about $10K/year for those making only $5K in a particular year. my plan would provide a reasonable minimum level of economic security and free health care for all american citizens while lowering tax rates for those making under $70K and increasing rates for those making more. i even have a chart comparing present vs proposed tax rates for each income level

as for the original question, it's really a pretty simple scenario. if congress does nothing everybody's taxes go back up. under the democrat proposal the highest earners and big businesses will have their taxes return to the higher rate that they had under clinton while everyone else stays where they are now. republicans have threatened not to support keeping the tax cuts for those making under $250,000 if the rich are forced to go back up to their modestly higher rates

[Scott May]

No discussion that we are going to have here could possibly approach the sheer brilliance displayed in Brad DeLong's and Michael O'Hare's utter destruction of U of C law professor Todd Henderson. Henderson has attempted to scrub the internets of the post that started it all, wherein he complained bitterly about the prospect of having to pay more marginal tax on his family's income in excess of $250,000.

He and his wife (a pediatric oncologist on staff at U of C hospitals) are very cash poor, having bought a million-dollar Hyde Park home at the height of the boom. They pay to send two of their children to the Lab School, and their youngest is at home with a full-time nanny. They have two car payments, considerable student loan debt, and they contribute roughly $100,000 a year to a variety of retirement investments. Mr. Henderson believes that he will no longer be able to afford his lawn guy or his housekeeper if the tax code changes, and thus raising taxes on the big guys will destroy the American economy. He seems unconcerned that a "private" institution like the University of Chicago gets a very healthy nine-figure subsidy from the government every year in the form of direct cash payments and grants, student loans, tax-exempt status, etc.

The comments on these threads are pretty incredible.

http://delong.typepad.com/sdj/2010/09/i ... erson.html

http://delong.typepad.com/sdj/2010/09/m ... s-war.html

http://delong.typepad.com/sdj/2010/09/p ... ystem.html

We have a pretty good idea of whether "trickle down" economics works -- the years 2001-2008. It doesn't work. What's really needed are additional income tax rates to recapture some of the wealth that goes to the upper tenth of the upper 1% and a crackdown on tax evasion by the very wealthy (S corporation scams, etc.). The Republicans have done an amazing job of recruiting people who don't make and never will make anywhere near $200-250K/year into thinking raising taxes on the wealthy is an assault on truth, justice, and the American way.

[PMONSTER]

Thank All Yall. I'm trying to pay more attention to these kind of thing.......... sucks getting older lol

[Heat3]

Everybody is taxed the same for the first $250k though. So it's not like the rich are going to be poor all of a sudden. I wouldn't mind paying higher taxes for that bracket cause it would mean I'm fortunate enough to in that bracket.

[McBulls]

No discussion that we are going to have here could possibly approach the sheer brilliance displayed in Brad DeLong's and Michael O'Hare's utter destruction of U of C law professor Todd Henderson. Henderson has attempted to scrub the internets of the post that started it all, wherein he complained bitterly about the prospect of having to pay more marginal tax on his family's income in excess of $250,000.

He and his wife (a pediatric oncologist on staff at U of C hospitals) are very cash poor, having bought a million-dollar Hyde Park home at the height of the boom. They pay to send two of their children to the Lab School, and their youngest is at home with a full-time nanny. They have two car payments, considerable student loan debt, and they contribute roughly $100,000 a year to a variety of retirement investments. Mr. Henderson believes that he will no longer be able to afford his lawn guy or his housekeeper if the tax code changes, and thus raising taxes on the big guys will destroy the American economy. He seems unconcerned that a "private" institution like the University of Chicago gets a very healthy nine-figure subsidy from the government every year in the form of direct cash payments and grants, student loans, tax-exempt status, etc.

The comments on these threads are pretty incredible.

http://delong.typepad.com/sdj/2010/09/i ... erson.html

http://delong.typepad.com/sdj/2010/09/m ... s-war.html

http://delong.typepad.com/sdj/2010/09/p ... ystem.html

We have a pretty good idea of whether "trickle down" economics works -- the years 2001-2008. It doesn't work. What's really needed are additional income tax rates to recapture some of the wealth that goes to the upper tenth of the upper 1% and a crackdown on tax evasion by the very wealthy (S corporation scams, etc.). The Republicans have done an amazing job of recruiting people who don't make and never will make anywhere near $200-250K/year into thinking raising taxes on the wealthy is an assault on truth, justice, and the American way.

I'm in a similar position as Henderson -- live in Hyde Park with kids in Lab school, paying $50K to various domestic assistants, have rent-mortgage payments of $7500 a month on residences we own, and face considerable raises in taxes if Obama gets his way... Don't feel sorry for us, we'll do fine.

Go get 'em Obama!

[jump]

Ten years ago, the top 1% of income earners had 9% of the wealth in the country. Now, that top 1% owns 25% of the wealth. I realize that those earning more than $250K per year includes more than the top 1%, but there is no reason to renew a tax cut for them.

When Bush layed out the tax cut, the CBO said it would cost the country $1 trillion dollars. No one in control of the House or the Senate seemed to care. They just rubber stamped the idea. Now they're worried about government spending too much? If it weren't for the Great Recession and high unemployment, the whole tax package should be allowed to expire.

[RoseveltChapman]

Which ever side of the fence you are politically, the inherent unfairness of a significantly regressive income tax is that the many get to decide how to spend the resources of a few (consider that the top 5% of U.S. earners pay 61% of all federal income tax). As purely an allocation of resources, tax and spend liberals have a superior "winning" business model as they can make promises to 95% of the public that center on the 95% getting more than they put in (considered that nearly 50% do not pay income tax, that's a pretty good deal).

Again, whatever the side of the fence you are on politically, please understand the inherent unfairness of the "tax cuts go to the richest" argument. Consider this widely sourced analogy, in this case attributed to a Dr. T. Davies, professor of accounting at the University of South Dakota:

"This is a very simple way to understand the tax laws," says Professor Davies. "Read on, as it does make you think!" Here's his analogy:

"Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. 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 pays $12;
the ninth would pay $18;
and the tenth man, the richest, would pay $59.
"That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement --- until one day, the owner threw them a curve (in tax language a tax cut).

"'Since you are all such good customers,' he said, 'I am going to reduce the cost of your daily meal by $20. So now dinner for the ten only cost $80.00.

"The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six--the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share?'

"The six men 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 end up being PAID to eat their meal. So the restaurant 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:

as before, the first four men paid nothing;
now the fifth man also paid nothing;
the sixth man now paid $2;
the seventh paid $5;
the eighth man paid $9;
the ninth man paid $12;
leaving the tenth man with a bill of $52 instead of his earlier $59.
Each of the six was better off than before. And the first four continued to eat for free.

"But once outside the restaurant, the men began to compare their savings. 'I only got a dollar out of the $20 reduction,' declared the sixth man, but he, pointing to the tenth. 'But he got $7!'. 'Yeah, that's right,' exclaimed the fifth man, 'I only saved a dollar too; it's unfair that he got seven times more than me!'

'"That's true,' shouted the seventh man, 'why should he get $7 back when I got only $2? 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 he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were now Fifty-Two Dollars short of paying the bill. Imagine that!

And that, boys and girls, journalists, and college instructors, is how the 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 at the table anymore."

My advice to "tax and spend liberals" would be to focus on maximizing the tax base and forget about who is paying what - because they are going to lose the argument - the U.S. needs the Rich - both as the largest portion of their tax base, but importantly, as a consumer.

Peace out.

[McBulls]

Which ever side of the fence you are politically, the inherent unfairness of a significantly regressive income tax is that the many get to decide how to spend the resources of a few (consider that the top 5% of U.S. earners pay 61% of all federal income tax).

I think you mean "progressive", not regressive.

A progressive tax is essential for a society to progress, rather than regress into a semi-feudal, medieval society in which a privileged few dictate terms to the majority who have not earned the divine right to send their kids to ivy league schools and eat cake while the rest of the people starve. If the privileged few choose to leave -- then so be it. Maybe they had better, since history suggests their heads may be in baskets if they don't.

A maximum capital gains tax of 15% is wildly regressive. Wall street robber barons whose remunerations are designated largely as such will pay a lower share of taxes than the lowest paid members of our economy, who directly and indirectly pay at least that much in payroll taxes -- before income taxes are assessed.

[BULLDURF]

Both a flat tax, and a national sales tax make more sense than the mess we have now. Look them up

[RosettaStone]

It really doesn't matter what class is and isn't taxed. You have to understand that the Federal Reserve has a mandate in place, and basically it F's everyone up by keeping them near or at the core of debt.