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Re: Re: Re: Re: Re: Math and Government
mousehop, I don't know where your logic is coming from, but a cut in taxes is not an increase in spending. Spending is increased through Congressional activity, not by a budget handed to the congress by a president. Remember, the Congress has the power of the purse, not the president. They give him a capped dollar amount to work with, along with manditory legislation to which he must adhere when preparing the budget he will follow in his execution of government. Any tax cut should be BALANCED by a cut in that capped dollar amount, as was presented to Clinton by a Republican Congress. That's how the buget is balanced.
posted by
FineYoungSinger
on November 7, 2008 at 1:10 PM
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Re:
Troosha: You very much misunderstood. From the IRS website: http://www.irs.gov/formspubs/article/0,,id=164272,00.html
Note the top two tax brackets of 33 and 35%.
And regarding the rest of your comment, since my post was not about health care, I guess I have only one question: What's the quality of Canada's health care like?
posted by
FineYoungSinger
on November 7, 2008 at 12:56 PM
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Re: Re: Re: Re: Math and Government
From the projections I've read, Obama's plans will increase the deficit much less than McCain's, with his $300 billion dollar tax cut, and Obama's spending increases will be easier to trim, so his plan over all makes more fiscal sense.
Increases and decreases in revenues are a complex function of the particular tax, the growth of the economy, and time constants. A small tax increase will strongly encourage spending cuts, and if the Republicans get back to their stated principles, and dig in their heels, we could see a balanced budget again, as under Clinton. Okay, maybe I'm an idealistic dreamer, but McCain's insistence on making Bush's tax cuts permanent, and increasing some of the cuts, will do what such plans have always done: increase spending and ballon the deficit.
The effects on the economy and unemployment from Obama's proposed tax increases will not be that great. After all, Republicans predicted a total crash after Clinton's tax increases, which were bigger, and we know what happened then.
posted by
mousehop
on November 4, 2008 at 9:41 AM
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My apologies if my comment or information was taken as my incapacity to digest the math you were trying to explain or the impact Obama’s proposed tax changes might have on small businesses and the other trickle down effects. I extracted my information of 24% from the site you provided: “Overall the top 1% of households – people with an average income of 1.6 Million per year would see their average federal income and payroll tax increase from 21% to 24%” . Perhaps I misunderstood.
I was a little taken aback by your statement “I don’t care what Canada pays. I don’t live in Canada”. This may be true but much can be learned by observing other countries – their economic successes or failures. It is my understanding that we pay higher taxes here in Canada (from Capital Gains taxes to income tax) but what we also have is a paid-for health care system. Ranging from zero to $60/mth (depending on income or Province within which you live) an individual is covered for all their health care. Economics is often viewed as the taking from hand and giving to another, but it is also wealth distribution and, as is the case with providing healthcare for every citizen, a properly managed taxation system can ultimately translate into a substantial savings to the average man/woman if distributed wisely. It was not my intention to challenge your math or to diminish the impact any tax increase would/could have on the average family or a small business. It did, however, want to draw your attention to the fact the Canadian income tax is right up there and although we are not perfect we have a few things that are workin’ for us. I was not trying to get hung up on semantics – I was trying to bring awareness as to how your neighbouring country functions and it’s not far out of line with the proposition.
posted by
Troosha
on November 3, 2008 at 4:47 PM
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Re: Troosha: Not sure where you got that 24% figure.
*24% tax increase= meant to write to which you are referring is a
20% capital gain tax...my bad
posted by
FineYoungSinger
on October 30, 2008 at 12:05 PM
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Troosha: Not sure where you got that 24% figure.
The two upper tax brackets in the US are 33% (for $164k to $347K) & 35% (for $347 and up). The Obama plan is going to increase both of these rates.
Also, the 24% tax increase to which you are referring is a CAPITAL GAIN tax, not an income tax.
As far as my illustration is concerned, it was just an illustration to make you think about how percentage increases work. When a person is too hung up on semantics, a person can't learn.
posted by
FineYoungSinger
on October 30, 2008 at 11:32 AM
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Re: Re: Re: Math and Government
regarding the deficit, my question to you is this: Why, if the deficit is causing the problem, why would you support a person that wants to further increase government spending, thereby increasing the deficit?
Also, the proposed Obama tax increases will not reap the revenue he thinks it will.
1, historically, an increase to the Capital Gains tax results in a DECREASE in tax revenue.
2, If tax increases cause unemployment to increase, income tax revenue will decrease. (In my state, unemployment compensation is 60% of base wage. It's probably similar in other states. This will cause a DECREASE, in taxes collected on 60% of your base income).
Add to this the fact that both an increase in prices and unemployment that result from an increase in taxes will stall consumption and decrease the GDP, thereby pushing us further in to a recession.
posted by
FineYoungSinger
on October 30, 2008 at 10:42 AM
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Re: Re: Re: Math and Government
I didn't write about a 15% increase. I wrote about a 15% tax, and illustrated a 5% representing the increase, which would be 20% total. I didn't think I'd have to spell it out that clearly. Usually people can add.
posted by
FineYoungSinger
on October 30, 2008 at 10:25 AM
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Re: Re: Math and Government
What Troosha has right and you have wrong is the math, not the country. A 15% tax increase is an increase of 15% over what you pay now, not adding 15% to the current rate of taxation. And the increase does apply only to the marginal rate, so it applies to all money above the beginning of the tax bracket, not all money earned, as implied by your illustration.
Obama is planning to roll back some of Bush's tax cuts, not all. He is not using pre-Bush taxes as his baseline; he is using current taxes, and making his changes from there. He does use current law, which includes letting the Bush cuts expire, in his estimates of changes in revenues, which is deceptive because everyone knows the current law will not be followed, but that is not the basis of his changes in tax rates and credits.
You're right about prices increases and unemployment, but in the current budget mess, I suspect that the deficit does more harm to the economy than the tax increase will, even in the short term. Certainly in the intermediate term. We cannot sustain half trillion dollar annual deficits.
posted by
mousehop
on October 30, 2008 at 8:32 AM
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Re: An excellent and informative post.........
Thanks Corbin.
posted by
FineYoungSinger
on October 30, 2008 at 5:37 AM
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Re: Math and Government
mousehop, first of all, Troosha is not correct in her guess that we are adopting a Canadian tax system. Obama clearly states that he is repealing the tax cuts of the Bush administration. That means very simply a higher tax rate on $250,000 of earnings (QUOTE: "Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years." His rationalization and rhetoric on social responsibility is irrelevant.)
Furthermore, calling a tax increase an "adjustment" does not change the effect. A basic economic principle: an increase in taxes is always followed by an increase in prices and/or an increase in unemployment.
posted by
FineYoungSinger
on October 30, 2008 at 5:37 AM
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Re:
Troosha: I don't care what Canada pays. I don't live in Canada. I live in the United States, where an increase in taxes over $250,000 will adversly affect the US economy.
posted by
FineYoungSinger
on October 30, 2008 at 5:30 AM
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Math and Government
As far as I can see, Troosha had this one right. The increase in taxes is only the marginal rate that applies to the top income group, and even they will also get the increased tax credits. And while your illustrations are right in principle, they are off in principal (your math is skewed), and then someone must pay for the government we have. Obama's plan is an adjustment in tax burdens, not a brand new imposition of taxes where none existed. Deficit spending is also a drag on the economy in the intermediate term if not the short term.
posted by
mousehop
on October 29, 2008 at 2:36 PM
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An excellent and informative post.........
posted by
Corbin_Dallas
on October 29, 2008 at 8:07 AM
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Thanks for the link and I just thought I'd share this with you...
Canadian higher-earner income tax rate
- 29% of taxable income over $123,184.
Obama’s proposition
- 24% for those earning over $250,000
posted by
Troosha
on October 29, 2008 at 7:36 AM
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Re:
sam, that's how they sold America on income tax in the first place---it looked good on paper. But who carries the burden? NOT THE WEALTHY.
posted by
FineYoungSinger
on October 29, 2008 at 5:34 AM
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Re: FYS
Troosha, no. It's not like that.
READ THE PLAN.
posted by
FineYoungSinger
on October 29, 2008 at 5:33 AM
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I see how the savings allegedly would look good on the surface but the real impact is the one that reduces jobs to compensate for the bad plan. Great information! sam
posted by
sam444
on October 28, 2008 at 3:09 PM
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FYS
Is it not a similar proposition to the Canadian system whereby it’s every dollar above $250,000 that’s impacted by a higher tax rate? In which case you math is skewed. Or is it calculated back to the first dollar the minute your business exceeds $250,000?
posted by
Troosha
on October 28, 2008 at 9:24 AM
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