Trickle down Obama...........

[Jugghaid]

Wow. New policy from Barack. from his website:

 

 

We

[J.]

Too bad the rest of his tax policy sucks.

 

Raising taxes on the top 5% of income earners? That's well and good, until you realize that a lot of people with small businesses (LLCs, subchapter S corporations) report their business income on their 1040s. Sure, your business might gross $250k or more, but that sure as heck doesn't mean you're taking even close to that in the form of pay. Raising taxes on those people, and there are a lot of them, will be devastating.

 

Furthermore, he's proposing to give tax cuts to people who don't even pay taxes in the first place. A tax cut, by definition, is reducing the amount of taxes one pays. If you don't have any tax liability, how can you truly receive a tax cut? He's even proposing to cut us (yes, I'm included among the meager income earners) a check, more or less. It's very sly that he's able to call a spending program a "tax cut."

 

Allowing the Bush tax cuts to expire, jacking up the estate tax and the capital gains tax - all of these things will have very negative effects on the economy. They're absolutely the worst thing to do during an economic downturn.

 

What about Social Security? What are his plans for that program? I've heard that he wants to raise SS and Medicare taxes, but nothing concrete. I hope it's not true.

 

What will happen to energy prices if he goes along with Nancy Pelosi's idea of an energy plan? Granted, energy costs will rise no matter what, but it's a horrible idea to ban further exploration and other proven technologies. I hope the US Congress doesn't take a cue from Minnesota and force private energy companies to use inefficient, overly expensive "alternative" sources.

 

To be fair, once he gets in office he may not do these things. After all, how many Presidents have delivered on all (or even most) of their campaign promises?

[Emprov]

Wow. New policy from Barack. from his website: Sounds like I've heard this plan before.......demonized. It is a good idea though.

These are the same companies on which he'll be raising taxes? Sounds to me like the companies will be paying for their own tax credits.

[neptunefix]

Too bad the rest of his tax policy sucks. Sure, your business might gross $250k or more, but that sure as heck doesn't mean you're taking even close to that in the form of pay. Raising taxes on those people, and there are a lot of them, will be devastating.

 

 

They don't tax your gross income. They tax the net income, ie profits. If you don't take in that much in the form of pay then it won't be taxed. Although, it would provide some additional bookshuffling to reinvest income before it registers as profits.

 

Additionally, small businesses will be more competitive with larger businesses as the larger businesses's marginal tax rate will be higher. This isn't necessarily a bad thing. It's been done before in the past and has been known to spur innovation from the little guys.

 

Keep in mind that the 50's and 60's were times that saw America blossom into a the dominant world power with a strong middle-class.. and was also the time that the top tax bracket was taxed 70 percent just on a federal level alone. Obviously, jobs didnt dry up and the world didn't end. I think either way the world would move on. Stop scaremongering. The powers that be don't want anything to change, because that's a threat.

[King Kashue]

 

Keep in mind that the 50's and 60's were times that saw America blossom into a the dominant world power with a strong middle-class.. and was also the time that the top tax bracket was taxed 70 percent just on a federal level alone.

 

 

No, they weren't taxed 70% at the federal level.

 

There is a significant difference between an average tax rate and a marginal tax rate.

[J.]

 

They don't tax your gross income. They tax the net income, ie profits. If you don't take in that much in the form of pay then it won't be taxed. Although, it would provide some additional bookshuffling to reinvest income before it registers as profits.

 

 

What do you mean by "bookshuffling?" Obama's tax increases are going to require more paperwork so small business owners don't get hosed? How can they accurately determine what is gross and what is net (or even "take home" pay), especially in something like a small sole proprietorship?

[Crescent Seven]

I like his definition of "small business". $250k in receipts is where his tax increase starts? Seriously? There are businesses with 5 employees out there doing $5M in receipts in a year. There are thousands of sole proprietors generating $250k in revenue annually; I know a few well drillers with 3 guys working for them that bring in well over $1M in business every year.

 

Then he wants to give businesses $3000 tax credits for creating a job? Let me get this right. Down economy, struggling to stay solvent, and Obama thinks that $3000 is going to be enough to make creating a job worth it for an employer? Create a $30k a year job, then add in benefits, and suddenly you're at $40k+ a year or more...why would a business want to add jobs they can't afford just to get a $3000 credit? {censored}ing absurd.

 

Obama can't be serious with this {censored}. $250k a year as a salary is incredible, but $250k a year in revenue for a business is {censored}ing peanuts, and he wants us to think he's only taxing the "rich". There are 5 guys on my team at work, and we do that much business in a month.

 

Let me try something. Hey Jugghaid, I'll give you $3000 cash if you hire my wife as an admin for your office and pay her $35k a year. Deal?

C7

[neptunefix]

Who said 250k in receipts? It's 250k in profits. Net income.

 

Stop getting manipulated.

[neptunefix]

I'm not interested in trying to convince anyone to vote for anyone. I'm voting for a 3rd party candidate.

 

However, the way people repeat lies and misinformation to fit the political team they are rooting for is appalling.

 

 

 

No, they weren't taxed 70% at the federal level. There is a significant difference between an average tax rate and a marginal tax rate.

 

 

This whole conversation is about marginal tax rates. They're the only kind of income tax rates that exist. The marginal federal tax rate was as high as 91% from 1951 to 1963 and was 71% until Reagan. The Nation did just fine in the 60's, so stop running around screaming the world is going to end if it goes from 35 to 40. It's stupid.

 

http://truthandpolitics.org/top-rates.php

[ec437]

 

I'm not interested in trying to convince anyone to vote for anyone. I'm voting for a 3rd party candidate. However, the way people repeat lies and misinformation to fit the political team they are rooting for is appalling. This whole conversation is about marginal tax rates. They're the only kind of income tax rates that exist. The marginal federal tax rate was as high as 91percent in the 60's and was 71 percent in the 70's. The Nation did just fine in the 60's, so stop running around screaming the world is going to end if it goes from 35 to 40. It's stupid. http://truthandpolitics.org/top-rates.php

 

 

YOU ARE WRONG. 91%?70%

 

Nice editing there, sly.

[King Kashue]

YOU ARE WRONG. The marginal federal tax rate was as high as 91percent in the 60's and was 71 percent in the 70's. The Nation did just fine in the 60's, so stop running around screaming the world is going to end if it goes from 35 to 40. It's stupid. http://truthandpolitics.org/top-rates.php

 

Yes, I know that the marginal rates were that high, that was my point in emphasizing they were marginal, not average...

 

 

You know, I first wrote "you need to learn the difference between marginal and average rates", but I changed that because I figured there was no need to imply you're ignorant on the matter...

 

However, since you've decided to use all caps (capslock is cruise control for awesome ) and tell me to "stop running around screaming the world is going to end" when I haven't done anything of the sort, I'll go back to my initial statement...

 

 

There is a difference between average income tax rate and marginal income tax rate, and you need to learn the difference because you're currently displaying your gross ignorance on the matter by comparing the marginal rate from the 60s and 70s to the average rate today.

 

What's even worse is that you linked to a page where they note the difference between the two, yet even though they explicitly note that those highest rates are marginal rates, your understanding is so limited that you cited a page that directly contradicts your claim as if it supports you...Congratulations...

 

 

so stop running around screaming the world is going to end if it goes from 35 to 40. It's stupid.

 

And just to reiterate, I haven't done anything of the sort. I just pointed out you were comparing apples to oranges.

 

I'm quite familiar with the so-called "Hauser's Law". Changes in taxation have never resulted in significant changes in tax revenue as a percentage of the GDP. The only way to increase tax revenues is to increase the GDP, so not only is the world not ending, it's not even changing...

[neptunefix]

It's also interesting that the income tax rates were slashed all the way down to 25% in 1925, four years before the greatest depression the modern world has ever known. These are facts.

 

Please stop saying that Obama will tax businesses with total receipts of 250k at some high rate. It's not true. The total PROFITS above 250k will begin to be taxed at the new rate. The first 250k of NET income will not be considered for the high marginal rate.

 

I heard Rush Limbaugh spew these lies on the radio this morning and I was actually shocked. He later said "well, i'm assuming he meant gross income and not net income". Wow, what a conveniently dumb assumption.

[neptunefix]

 

YOU ARE WRONG. 91%?70% Nice editing there, sly.

 

 

Um, no. I was right. You are right that 91% does not equal 70%. Very good! It's actually higher and the nation did not collapse. It actually prospered and saw the greatest growth and innovation in our history.

[way2fat]

 

It's also interesting that the income tax rates were slashed all the way down to 25% in 1925, four years before the greatest depression the modern world has ever known. These are facts. Please stop saying that Obama will tax businesses with total receipts of 250k at some high rate. It's not true. The total PROFITS above 250k will begin to be taxed at the new rate. The first 250k of NET income will not be considered for the high marginal rate. I heard Rush Limbaugh spew these lies on the radio this morning and I was actually shocked. He later said "well, i'm assuming he meant gross income and not net income". Wow, what a conveniently dumb assumption .

 

 

The guy is a junkie. Surely you know better than to believe a word that comes out of a junkie's mouth?

[neptunefix]

What is your point about marginal rates being different from actual rate? If anything, that works in Obama's favor. You should be letting these 250k profit businesses know that it's a marginal rate that we are discussing. I thought it was obvious, though.

 

I don't even remember anyone discussing total tax burden, so I dont know why you even brought it up. Again, it works in Obama's favor because some people harp on marginal rates @ 250k and don't realize that if a person makes 260k a year, only the last 10k is taxed at that progressive tax rate.

 

But, I expect you'll keep arguing just for the sake of arguing.

 

You know, I first wrote "you need to learn the difference between marginal and average rates" , but I changed that because I figured there was no need to imply you're ignorant on the matter... However, since you've decided to use all caps (capslock is cruise control for awesome ) and tell me to "stop running around screaming the world is going to end" when I haven't done anything of the sort, I'll go back to my initial statement... There is a difference between average income tax rate and marginal income tax rate, and you need to learn the difference because you're currently displaying your gross ignorance on the matter by comparing the marginal rate from the 60s and 70s to the average rate today. What's even worse is that you linked to a page where they note the difference between the two , yet even though they explicitly note that those highest rates are marginal rates, your understanding is so limited that you cited a page that directly contradicts your claim as if it supports you...Congratulations... And just to reiterate, I haven't done anything of the sort. I just pointed out you were comparing apples to oranges. I'm quite familiar with the so-called "Hauser's Law". Changes in taxation have never resulted in significant changes in tax revenue as a percentage of the GDP. The only way to increase tax revenues is to increase the GDP, so not only is the world not ending, it's not even changing...

[King Kashue]

 

Um, no. I was right. You are right that 91% does not equal 70%. Very good! It's actually higher and the nation did not collapse. It actually prospered and saw the greatest growth and innovation in our history.

 

 

Again, it was a marginal rate.

 

Only the personal household income over the highest tax bracket was taxed at that rate. (That's what marginal means)

 

Throughout the 50s and early 60s, that top tax bracket was $400,000...Right now it's $366,000...Adjusted for inflation, $400,000 in 1960 would be $2,960,621...

 

What that means is that a household making $500,000 in 1960 would have paid 91% on the $100,000 that was above the $400,000 top bracket. That 91,000 in taxes would represent 18.2% of their total income.

 

However, today, that same level of income ($500,000 in 1960s dollars) would be $3.7 million. That means the $3.34 million over the top bracket would be taxed at 35%. That would total $1,166,900 which represents 31% of their gross income, or 1.75 times the percent it represented in 1960...

 

 

Again, learn the difference between average and marginal tax rates...

[King Kashue]

What is your point about marginal rates being different from actual rate?

 

You mean, the guy posting in all caps and saying my posts were stupid (even though I didn't actually post what he claimed I did) doesn't know?

 

I'm shocked.

 

If anything, that works in Obama's favor. You should be letting these 250k profit businesses know that it's a marginal rate that we are discussing. I thought it was obvious, though. I don't even remember anyone discussing total tax burden, so I dont know why you even brought it up. Again, it works in Obama's favor because some people harp on marginal rates @ 250k and don't realize that if a person makes 260k a year, only the last 10k is taxed at that progressive tax rate. But, I expect you'll keep arguing just for the sake of arguing.

 

Or because when you look at precisely where the income brackets were located instead of just focusing on the rate themselves, it becomes "obvious" why your comparison is invalid...

 

The number of people above the top bracket is vastly different because even though average income has significantly increased (many times over), the top bracket is much lower, and an equivalent income level means a significantly different percentage of net income paid.

 

My previous post provides some hypothetical numbers.

 

 

 

As for "arguing for the sake of arguing", considering I said Changes in taxation have never resulted in significant changes in tax revenue as a percentage of the GDP. The only way to increase tax revenues is to increase the GDP, so not only is the world not ending, it's not even changing, I'm not even disagreeing with your main point...

 

I'm just pointing out that you're using a flawed argument to reach a valid conclusion...

[neptunefix]

I give you points for creativity.

 

However, this is really pointless if you're going to keep making stuff up that isn't even true. You conveniently forgot to add up the taxes owed on 80% of the income from the 1960's. Furthermore the top tax bracket started at $200k, not the $400k number you made up.

 

I'm not sure if your point is against or for progressive taxes, but I'm sure you are just anti-Obama. The least you could do is follow through with the math. I'll do it for you this time.

 

1960's tax burden for $500k:

 

{censored} it, even if you may hate being wrong, here' s a link anyway:

http://en.wikipedia.org/wiki/Internal_Revenue_Code_of_1954

 

As you can see, the lowest rate was 20%

 

Anything above $16k was taxed at 50% and so on...

 

I understand that you hate Obama, and that's fine. One could argue that they don't like the progressive tax system, and that's fine too.

 

Just please stop making stuff up. As a financial analyst and one who is fascinated with American history, I get annoyed.. That's the only beef I have. If you need numbers, just look into it. Find reputable sources. Hard numbers are especially good. The internet can be useful.

 

 

 

Again, it was a marginal rate. Only the personal household income over the highest tax bracket was taxed at that rate. (That's what marginal means) Throughout the 50s and early 60s, that top tax bracket was $400,000...Right now it's $366,000...Adjusted for inflation, $400,000 in 1960 would be $2,960,621... What that means is that a household making $500,000 in 1960 would have paid 91% on the $100,000 that was above the $400,000 top bracket. That 91,000 in taxes would represent 18.2% of their total income. However, today, that same level of income ($500,000 in 1960s dollars) would be $3.7 million. That means the $3.34 million over the top bracket would be taxed at 35%. That would total $1,166,900 which represents 31% of their gross income, or 1.75 times the percent it represented in 1960 ... Again, learn the difference between average and marginal tax rates...

 

[neptunefix]

 

Or because when you look at precisely where the income brackets were located instead of just focusing on the rate themselves, it becomes "obvious" why your comparison is invalid... I'm just pointing out that you're using a flawed argument to reach a valid conclusion...

 

 

In the previous comment I provided an actual chart of the tax brackets used in 1960. You'll find that in reality, no matter what you say, the total tax rate of the wealthy and upper middle class was much greater back then than it is now. Read it and weap, baby!

 

http://en.wikipedia.org/wiki/Internal_Revenue_Code_of_1954

[Bluescout]

Wow. New policy from Barack. from his website: Sounds like I've heard this plan before.......demonized. It is a good idea though. :poke:

 

Need a linky. Can't find it on the site.

 

That's what I've always thought about so-called "big company tax breaks", that they are there for a reason, not because they are the presiden't s buddy.

[Incubitabus]

 

I give you points for creativity. However, this is really pointless if you're going to keep making stuff up that isn't even true. You conveniently forgot to add up the taxes owed on 80% of the income from the 1960's. Furthermore the top tax bracket started at $200k, not the $400k number you made up. I'm not sure if your point is against or for progressive taxes, but I'm sure you are just anti-Obama. The least you could do is follow through with the math. I'll do it for you this time. 1960's tax burden for $500k: {censored} it, even if you may hate being wrong, here' s a link anyway: http://en.wikipedia.org/wiki/Internal_Revenue_Code_of_1954 As you can see, the lowest rate was 20% Anything above $16k was taxed at 50% and so on... I understand that you hate Obama, and that's fine. One could argue that they don't like the progressive tax system, and that's fine too. Just please stop making stuff up. As a financial analyst and one who is fascinated with American history, I get annoyed.. That's the only beef I have. If you need numbers, just look into it. Find reputable sources. Hard numbers are especially good. The internet can be useful.

 

 

Not arguing one way or the other on this, but you might want to find a non-wikipedia source. People around here are apt to dismiss any evidence from wikipedia.

[neptunefix]

 

Not arguing one way or the other on this, but you might want to find a non-wikipedia source. People around here are apt to dismiss any evidence from wikipedia.

 

 

 

Dude, I think even if I took them back into a time machine and made them live 5 years over and over in 1960, they'd still tell me that my sources were biased. Those physics people that build time machines are all part of liberal academia!

[Crescent Seven]

 

Need a linky. Can't find it on the site. That's what I've always thought about so-called "big company tax breaks", that they are there for a reason, not because they are the presiden't s buddy.

 

 

Right, but we're supposed to think big businesses are evil and hate on them and punish them for being successful because they're, like, exploiting us. Or something.

 

This class warfare bull{censored} is for the birds. I wish democrats would quit trying to play me against the people to whom I depend on for my job. I'm fairly certain that no democrat has a "plan" to cover my salary when I get laid off after my evil company gets whacked with an outrageous tax increase.

 

The less tax my company has to pay, the better off I am. Period.

C7

[King Kashue]

I give you points for creativity. However, this is really pointless if you're going to keep making stuff up that isn't even true. You conveniently forgot to add up the taxes owed on 80% of the income from the 1960's.

 

I didn't claim that it was their total, I claimed that was the total marginal tax for the highest bracket. Below that, they're paying what a larger portion of the population was paying. If we're discussing the highest bracket, then comparing only the taxes that apply to them are what's valid.

 

Furthermore the top tax bracket started at $200k, not the $400k number you made up.

 

I "made up"? Calling me a liar. Nice.

 

Especially since YOUR OWN SOURCE puts the top bracket at$400,000 in 1960.

 

Learn to read your own links if you're going to throw about insults.

 

I'm not sure if your point is against or for progressive taxes

 

I couldn't care less either way. Tax revenues will stay at approximately 19.5% of GDP no matter what happens. It's been that way since the institution of the income tax, and giant taxes and low taxes haven't changed that.

 

but I'm sure you are just anti-Obama.

 

I understand that you hate Obama, and that's fine.

 

And you have precisely what evidence to support this claim?

 

Just please stop making stuff up.

 

 

One, your own source shows the top bracket at $400,000 in 1960, and you claim that I'm "making stuff up"...

 

Learn to read...

[King Kashue]

In the previous comment I provided an actual chart of the tax brackets used in 1960.

 

And the first source you provided says the top bracket was at $400,000...

 

As a "financial analyst", why is it you're providing incorrect sources to support your arguments?

 

Read it and weap, baby!

 

Oh, I'm "weap"ing all right...