Obama v. McCain: Who Has the Best Tax Package For You?

I think that the tax cuts for the wealthy should be eliminated all together…If anything the wealthy should have to pay more money then the middle class and lower class. If ya’ll didn’t know we don’t have very much money. The rich get all the breaks and they are rich they don’t need them. Think about the single mothers like me who work for a living trying to bring up or children in this world. The wealthy in this country always seem to come out on top. It just makes me sad.

Wealthy people already pay almost all of the income tax.

Only about 50% of wage earners pay any income tax.

Low wage earners pay no income tax and still get ‘refunds’, often very large ones via EITC.

The top 10% of wage earners pay something like 85% of all income tax.

I think we should just stick with the tax brackets we’ve had under President Bush. The government is collecting record levels of income tax receipts. Don’t fix what isn’t broken.

Don’t forget that both candidates favor an insane ‘cap and trade’ tax program on energy of all forms. We’ll need all the money we can get to pay the $2/gallon increase in gas tax and the 50% increase in home heating and air conditioning bills this brand new tax monster is going to demand.

If we are unfortunate enough to not have a public sector job then we need to save for the day we are laid off, since the proponents of this insanity admit it will cause at least a 4.8% decrease in GDP.

I’m a CPA and tax preparer, and I see a lot of tax returns for individuals with income in excess of $250,000, and they generally pay a lot of tax. I have clients that routinely write $200K+ checks to the IRS. I cannot think of any “tax cut” available to the wealthy that is not also available to the middle class or poor.

In addition, the list of tax deductions that phase out for couples making over $150K is pretty extensive - things like the child tax credit, stimulus payments, etc. are not available to these individuals. In addition, itemized deductions start phasing out over $110K. So, they’re unable to fully utilize deductions, such as mortgage interest, available to lower income individuals. A married couple making $500K will pay approximately $165K in tax (or 35% of their income); a married couple making $80K will typically pay less than $10K (or 12% of their income).

There are a lot of “hype” articles that like to talk about all of the tax cuts available for the wealthy, but they are rarely specific. The only time I see wealthy people with small tax liabilities are the times I see wealthy people attempting to cheat on their taxes - which does happen.

I wish the IRS would focus more on auditing and reduce the cheating.

In response to Kelly, your conclusion is absolutely correct - if you multiply income by the %’s on the tax tables. However, the higher income couple is subject to the Alternative Minimum Tax that effectively eliminates the lower tax brackets. (This is not on the tax table.) Therefore effectively all of the higher income family’s income is taxed at the highest tax bracket (35%).

As for tax credits, you are correct that many middle and lower class families cannot afford to take advantage of these. However, contributions to retirement plans are capped - wealthy people are not allowed to contribute over a certain amount. Lower income taxpayers are able to defer a much larger overall % of their income (while receiving a tax benefit) than higher income. Self-employed taxpayers are not able to contribute to IRAs if their spouse has a 401(K) or other employer-sponsered retirement plan. There are other options available for the self-employed, however, labor laws require that business oweners provide the same benefits for their employees.

Income from stock options is currently taxable income to the employee.

While Social Security contributions do phase out after $102K, this is a completely different tax. I suspect this will change as Social Security stuggles to meet their obligations.

I think we shuld keep duh bush tax cuts bcuz we pa y less and we dont give money to liberalz

As a retiree, I favor Obama’s tax cut. Being on a fixed income makes meeting daily living expenses very difficult for retirees. With gasoline, food and utilities increasing each year working people should think of their parents and the elderly.

When I said ‘I think we should just stick with the tax brackets we’ve had under President Bush’ that is what I mean isn’t broken.

Certainly the tax code could use a lot of simplification, I’m just addressing the question of the basic brackets. The basic brackets we have are just fine.

As far as a federal sales tax goes, I’m fine with that as long as the 16th amendment is repealed first.

That being said, there are still other major issues of concern, even to the little guy. There are questions regarding abortion, partial birth abortion, illegal immigants, National Security, the war in Iraiq, The over all stand on the Mid-East, especially the security of Isrial.

The United States was founded on the Judo Christrian ethic. While it is true that everyone has the right to worship as they see fit, there should never be any one group that dictates which religion one has to worship. In other words freedom of religion is a foundation of The United States.

Obama seems to be saying we should follow in the footsteps of Europe. This country was born as a result of a conflict with Europe. I might add that Europe is more into Socialisim, is that the Obama proposition?

Christrans are between a rock and a hard place. They have to think about these issues in a Christrian context as they come to their decision as to whom the next Presidient will be. Have no doubt, to Christrians, these are the real issues.

These are just some of the questions that Americans are asking. They feel that the future of this Nation, the very foundation of The United States centers on this election. While their minds are not yet made up, you can bet Americans are watching.

Bala,
A lot of this is semantics (aren’t all politics, really?) when it comes to raising or lowering taxes.
Obama’s plan to “raise” taxes has a lot to do with eliminating cuts that were made previously. Specifically, this applies to adjusting phase outs which would eliminate tax preference items for top producing households, revert capital gains and dividend rates back to pre-Bush rates and restore the top tax brackets.
The non-partisan Tax Foundation has a detailed description of both plans. Read my post here: http://www.taxgirl.com/mccain-v-obama-on-tax-is-it-really-just-the-lesser-of-two-evils/ You’ll find a link to the entire report there.

The wealthy give a lot to charity, provide jobs to many people and pay a majority of the taxes. Don’t let liberals get in the way of capitalism and American Entrepeneurs. It is Capitalism, Freedom and Liberty that made the US the best damn place in the history of the world in only 200+ years of existence. What has liberalism ever accomplished?

The rich will take kindly to Obama playing Robin Hood with their hard earned money. Your doctors, lawyers, businesspeople - these are the ones Obama is targeting. They will pack their bags and head to where their skills are paid the most. Could you imagine the effect of a US brain drain?

Obama will send the US into certain recession, and when the income of the rich is reduced because of the faltering economy, they won’t have that quarter-million dollar income to tax anymore. ie: no one for Robin Hood to steal from anymore. ie: everyone loses.

Hauser’s Law will kill Obama, and it’s something US citizens have to see to believe, I think. Right now it’s all about instinct. “Yeah, let’s make those fat cats pay. They have enough money anyways. What’s a couple of grand to them”.

What you don’t immediately think about is the benefit of the rich having expendable income. The trickle down benefits of having money in the hands of people who can do great things with it.

The top 1% of the country own approximately 90% of all the wealth.
However they pay nowhere near 90% of the tax for the country.
People always say these people pay MOST of the income tax - it is a ridiculous point becuase COMPARED TO THE WEALTH THEY CONTROL that is after PROTECTED BY THE MILITARY they DON’T pay their fair share. Most of these people’s INCOME is EXCLUDED from the definition of INCOME but instead called Capital Gains or Dividends.

If they own 90% of the wealth they should pay 90% of the taxes.

“Income ” tax figures are irrelevant.

In a perfect world you would never tax INCOME becuase people making INCOME are actively contributing to the economy that year. as opposed to dividends or capital gains which are simply PASSIVE investments (usually extremely subsidized by government tax policy)

Yet the Republican tax policy is just the opposite - minimize taxes paid by those not earning income but simply inheriting or living off passive dividends.
Republicans want to reward the lucky sperm club members who aren’t WORKING while putting all the emphasis on taxing INCOME which is made by the people actually WORKING.

Adam Smith wouldn’t like it.
No real conservative or free market or free enterprise believer thinks you should tax those contributing while letting those who simply are clipping coupons or inheriting wealth never pay taxes.

the Republican party has become a modern Tory Party. for those of you who don’t know what that means it means they believe in the Kings interests. What is a king? Kings inherit wealth and own all property and simply charge land rent to those actually working and producing while never letting the serfs ever own anything. Kings don’t actually work. they just own and control.
they never pay inheritance tax . They don’t have income so they don’t pay income tax.

That pretty much describes the modern Royal Republican Tory party of today .

Jim said
>George, do you understand that raising the top >rates will >decreasegovernment?

This is not true. This is often cited as fact but in fact is only proven in the reverse. In the past higher tax rates when lowered caused people to stop using tax shelters which where simultaneously eliminated and therefore claim more income thus producing ore revenue.
The Laffer curve is a hypothesis and not even claimed as true at all levels of taxation. (if it was then a marginal tax rate of zero would produce the most tax revenue - obviously not true.
Furthermore Tax revenues for this country have been highest when we had some of the highest marginal tax rates in history such as in the 50’s 60’s and 70’s when the top rates were over 70%
. The 50’s are usually thought of the hey day of America and top rates were in the 70’s.

furthermore the lower rates during Reagan’s years were accompanied by an artificial accelerated depreciation schedule in real estate combined with leverage loan accounting which created huge false wealth and income through real estate limited partnerships (which resulted in overbuilding and later real estate and S and L collapse.)
The increases in tax revenues during Reagan’s term were a result of that not the lower of the top rate. In fact had Reagan not lowered the top rate and still changed the real estate accelerated depreciation rate the tax revenues would have been even higher.

People who make money don’t stop making money becuase they have to pay higher rates. People always like to make more money period.

[...] My quick summaries of the tax plans can be found here. [...]

And add real estate taxes and personal property taxes. The list of where and how we’re taxes is endless, so just looking at federal tax brackets does not show the whole picture of what we have to pay.

More taxes = less money in consumer pockets which = less consumer spending.

More taxes = less money collected by the government (the Laver Curve)

More taxes in a recession or slowing economy = even a more slowing economy

I live in Md. Take a look at our state, taxes have increased and the state is 377 million in the whole. Obama will do to the country as O’Mailey has done to Md

Remember people spend / buy and sell more when taxes are low and they have more money in their pocket. This is not my opinion it is fact.

Obama’s tax plan will destroy the Social Security system.

Obama says his income tax plan will lower taxes for 95% of Americans. There is just one problem with this, 40% of Americans already pay no income tax. Obama’s response to this is that these people pay Social Security tax. Well, that’s not income tax, but a contribution to their retirement plan. So if he wins and implements his tax plan, for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them. Social Security will then loose all pretext of being a retirement plan, and will become a national welfare program.

This will cause Social Security to lose public support in a massive way. Leave Social Security contributions out of income tax plans. If you take some peoples income taxes to pay others Social Security taxes, Social Security will be destroyed forever.

http://strategicthought-charles77.blogspot.com/2008/10/obamas-tax-plan-will-destroy-social.html

Ashley - I don’t believe you realize that 80% of the taxes are paid by the top 20% of the taxpayers (quote from the “New York Times”. So it goes to commonsense that when a taxcut is given it needs to go to the ones who are doing the paying. Nearly 40% of wage earners pay no income tax. So if you are not paying income taxes, how can one play less than ‘Zero’. Below is a story that gives a great analogy of our tax code.

It seemed that 10 men decided to have a business lunch once a week. They always met in the same restaurant and the bill was always, $100.00, for all 10 men. If each man was responsible for his share of the bill that would be, $10.00, each. The men decided to divide the bill based upon their ability to pay (using the progressive structure of the tax code). Using this formula the following payment arrangement was worked out based upon income.

Men 1-4 who made the least amount of money paid nothing.

Man 5 paid $ 1.00

Man 6 paid $ 3.00

Man 7 paid $ 7.00

Man 8 paid $12.00

Man 9 paid $18.00

Man 10 paid $59.00

After several weeks the owner of the restaurant told the men that because they were such good customers he was reducing the bill by $20.00. Their dilemma was how to divide up the, $20.00. If each person got the same amount then the first 4 men would be getting money back but they never paid anything for the dinners. After much discussion and no resolve the owner offered the following suggestion which they all agreed to.

Original Payment-New Payment-$ Amount Saved-% Saved

Men 1-4 paid $ 0.00 $ 0.00 $0.00 0%

Man 5 paid $ 1.00 $ 0.00 $1.00 100%

Man 6 paid $ 3.00 $ 2.00 $1.00 33%

Man 7 paid $ 7.00 $ 5.00 $2.00 28%

Man 8 paid $12.00 $ 9.00 $3.00 25%

Man 9 paid $18.00 $14.00 $4.00 22%

Man 10 paid $59.00 $50.00 $9.00 15%

Once outside the men began to argue about the settlement. Man 5 said he only got, $1.00, while Man 10 received, $9.00. Men 1-4 were upset because the received nothing. They said that the cut only benefited the rich and the poor got nothing. They were upset so they beat up Man 10 and left him. The next week they met for lunch as usual except man 10 did not show up. When the new bill arrived the men discovered that between them they did not have enough money to pay even half of the bill.

Remember take to much from the rich they will find a new and friendlier place to have lunch.