Obama tax plan - punishing the family?

[lpk]

Individuals who earn more than $200,000 a year and families that make more than $250,000.....

Can someone please help me understand how the Obama tax rate hikes/repeals for individuals earning 200k and families earning 250k makes any sense at all? I'm referring to the ratio between the individual vs. family numbers. Shouldn't the numbers have a ratio of 2 to 1? 125k/250k or 200k/400k.

Please help me understand the logic behind these numbers, because from where I sit they sure seem to punish the family vs. individual filer.

Link to article: http://seattletimes.nwsource.com/htm..._budget27.html

[cjppjc]

Re: Obama tax plan - punishing the family?

Can someone please help me understand how the Obama tax rate hikes/repeals for individuals earning 200k and families earning 250k makes any sense at all? I'm referring to the ratio between the individual vs. family numbers. Shouldn't the numbers have a ratio of 2 to 1? 125k/250k or 200k/400k.

Please help me understand the logic behind these numbers, because from where I sit they sure seem to punish the family vs. individual filer.

Link to article: http://seattletimes.nwsource.com/htm..._budget27.html

Like Willy Sutton said when asked why he robbed banks "It's where the money is."

[serge_oc]

Re: Obama tax plan - punishing the family?

This is a VERY good question.

Why would anyone file jointly? Is that what 'family' means?

How do you define 'family' in IRS terms?

[bpr]

Re: Obama tax plan - punishing the family?

I believe it's for married filing separately. From the article:

That proposal is a fraction of the new taxes Obama proposes to heap on the highest earners. Individuals who earn more than $200,000 a year and families that make more than $250,000 also would lose tax cuts enacted during the Bush administration, meaning their top income-tax rate would rise from 35 percent to 39.6 percent, their investment income would be taxed at 20 percent rather than 15 percent and their deductions for mortgage interest, state and local taxes and charitable contributions would be reduced.

If Obama's tax plan is approved, a family making $500,000 a year would see its annual tax bill soar from about $120,000 to nearly $132,000, a 10 percent increase, said Clint Stretch, managing principal of tax policy at Deloitte Tax.

EDIT: of course, if the hyperinflation scenario plays out, it'll effectively be a flat tax by 2012.

[lpk]

Re: Obama tax plan - punishing the family?

I just went to lookup the Federal Tax Brackets to see what I could learn and it turns out this odd ratio isn't something Obama invented.

Here are the current tax brackets for single, married filing jointly, and married filing.

Single

10% on income between $0 and $8,350
15% on the income between $8,350 and $33,950; plus $835
25% on the income between $33,950 and $82,250; plus $4,675
28% on the income between $82,250 and $171,550; plus $16,750
33% on the income between $171,550 and $372,950; plus $41,754
35% on the income over $372,950; plus $108,216

Married filing jointly

10% on the income between $0 and $16,700
15% on the income between $16,700 and $67,900; plus $1,670
25% on the income between $67,900 and $137,050; plus $9,350
28% on the income between $137,050 and $208,850; plus $26,637.50
33% on the income between $208,850 and $372,950; plus $46,741.50
35% on the income over $372,950; plus $100,894.50


Married Filing separately

10% on the income between $0 and $8,350
15% on the income between $8,350 and $33,950; plus $835
25% on the income between $33,950 and $68,525; plus $4,675
28% on the income between $68,525 and $104,425; plus $13,318.75
33% on the income between $104,425 and $186,475; plus $23,370.75
35% on the income over $186,475; plus $50,447.25


Seems like the assumption is that as income increases it is less likely both work.

However, in many metro areas you need both people to work just to get by and in turn the government takes more of each persons' salary....thank you, may I have another

[BrianL]

Re: Obama tax plan - punishing the family?

In what metro area is the median 250k, let alone the poverty line?

I'm not making a pro-tax argument here, but I don't buy the '250k is required to survive in some places' stance. I'd wager median family income is in the 60-80k range in the the more expensive metro areas. National median is probably around 55k.

I'd wager 250k applies to 5% or less of the families in metro areas, though I can't find up to date stats on it.

Edit: Okay, I might be off in those assumptions. http://www.usnews.com/articles/busin...-you-live.html Unfortunately this link talks about 'average income for those in the top 5%'; now the minimum incomes. If the top 1% is extremely high, they may be moving the average disproportionately.

Still, the numbers are higher than I expected in many ares.

[Scott4139]

Re: Obama tax plan - punishing the family?

this is all smoke and mirrors anyway. Most everyone making over 100K is paying on the AMT system so these rates are meaningless.

Tax cuts or tax increases - who cares? I'm stuck in the shadow AMT tax system.

[Uno]

Re: Obama tax plan - punishing the family?

Well here on Juniper Island it would be impossible to survive on 250K per year, life would really suck for us hard working Americans.

My CPA tells me that Obama is going to cost me a small fortune and that I might even have to pay taxes this year. I never had to pay taxes once under GW Bush, what is this country coming to! Damm Socialists!

You know I spend lots of money on Mexicans each week already, what is paying taxes going to do for me?

Oh and I almost never use the public roads, only a few times a year do I need to drive through the ghetto to the public airport when my jet in down for service.

[Uno]

Re: Obama tax plan - punishing the family?

Joking aside, the stats for Jupiter Island are interesting. It one of the wealthiest zip codes in the USA. Yet the median income is $200,000.

I think it reflects that "income" is NOT the way to wealth in the USA. A study on the debt based wealth holdings for these super rich folks would be interesting.

Amazing there are families on Jupiter Island that live below the poverty line and so probably don't pay taxes, life must be tough there.

"The median income for a household in the town was $200,000, as is the median income for a family. Males had a median income of $156,250 versus $129,545 for females. The per capita income for the town was $200,087. 8.1% of the population and 3.1% of families were below the poverty line. Out of the total population, none are under the age of 18 and 2.7% of those 65 and older were living below the poverty line."

[WDCRob]

Re: Obama tax plan - punishing the family?

Some basic info from Wikipedia...

In 2007, the median annual household income [was] $50,233.00 according to the Census Bureau.[3]

In 2006, there were approximately 116,011,000 households in the United States. 1.93% of all households had annual incomes exceeding $250,000.

Of course when most of the folks that make up the TV press corps are in the top 2% you find there's a great deal more opposition to the plan on the airwaves than is reflected in the rest of the country.

The press conference the other day where the press was incredulous that Obama was doing exactly what he said he was going to do and raising their taxes was classic. You'd have thought he arrived on a spaceship speaking an unknown tongue. Then shot their dog.

[Uno]

Re: Obama tax plan - punishing the family?

Some of the other wealthist locals:

Atherton, CA - median family income just over 200K, per capita income 112K

Beverly Hills, CA - median family income 110K, per capita 65K

Hillsborough, CA - "Hillsborough's $263,456 median household income is the highest in the country"

So there you have it, Obama is basically correct again. You can argue that his plan does not go far enough in taxing the super wealthly as most of thier wealth is not generated from income.

Doctors and Lawyers probably get hit the most. Doctors I respect, tax the hell out the corporate lawyers as they tax America in the same way as the financial parasites do.

and keep watching Fox and CNBC news, if you want to feed that cabbage inside your head.