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Taxes - whew
According to the information I have recieved, here is what has happened:
*2001 and 2003 tax cuts have been extended for all taxpayers for 2 years
*Some of the 2009 stimulus tax cuts have been extended
*Reduce the employee share of SS taxes from 6.2% to 4.2% for 2011
*100% expensing for bonus depreciation investments through 2011
*Provide an estate tax rate of 35% and exemption of $5mm
*Extend AMT relief for two years
*some other stuff that most people can't take advantage of anyway.
Overall, I am somewhat satisfied but I do think the government's version of "rich" needs to be re-evaluated. For instance, the government defines a "rich" household as $200k/year filing single. In Oklahoma, that is quite a bit of money but what if you consider a person making $200k filing single in New York or California? That isn't rich - also keep in mind, that person is taxed at the same rates as Bill Gates. Now I don't know what Bill Gates' taxable income is but I am pretty sure it is a billion dollars more than $200k. This amount was determined in the 80s and hasn't been adjusted - its probably time to take a second look at it.
Also, the estate tax has me concerned. Determining a rate doesn't even touch most of the problems we have in this area but I will be satisfied...for now...
Re: Taxes - whew
I agree...200k in most parts is not even close to rich.
I'm glad they're extended for the time being, though.
Ditto.
The tax tables are graduated. Let's say you make $400K and are single.
You pay 10% on the first $8375, 15% on the next $25625 you earn, 20% on the next $48400 you earn, and so forth. You only pay the highest tax bracket (35%) on the money earned above $373,650 (about $26,350). The entire amount is not taxed at 35%.
More info:
http://www.moneychimp.com/features/tax_brackets.htm
The top single bracket is not 200K, it is $373K.
I am well aware of how our tax system works.
The $200k I was refering to relates to AMT.
Regardless of the graduated tax system, I still do not think that the $200k OR $373k is high enough.
I'm OK with adjusting the tax tables, but, overall, I'm really concened. When/how are we going to pay the federal debt? And what happens if we can't?
oh? I was just confused by what you were talking about. I wasn't aware of a government decision to call 200K income earners 'rich'. ATM can hit people making less than 200K. It is not automatically tied to inflation but it has been adjusted (somewhat) since the 80's. etc.
I don't disagree with reform, but that statements were not clear or accurate.
You won't help the federal debt with the economy in the toilet. Some of the deficit reduction ideas would further hurt the economy.
I'm not sure when we'll EVER deal with it, though (or at least stop making it worse.) We've gotten so used to it at this point that anyone who tries to even appear to raise taxes (even in a good economy) would be political toast, I'm afraid. Hopefully someone will sack up and do it soon, but I just can't forsee it in the next 20 years.
I don't mind someone who will do something reasonable. I am really disappointed that proposals include not extending unemployment benefits, freezing federal salaries, no COL increase for retirees, etc but the 'rich' are hands off. These things end up being pennies compared to the entire deficit and don't address the real issues that contributed to the deficit.
And I don't see how reducing (indirectly through freezes) or eliminating the income of million of middle class Americans will help the economy and ultimately help the deficit. People not employed and companies not selling stuff reduces taxes collected. How are the rich (who can't be touched because 'they create jobs') create jobs when the demand is not there.
Truly, the rich can not be touched because they contribute millions to our politicians campaigns and they NEED that money. Then again, those "rich" people that contribute make MILLIONS a year and not a crappy $200k.
I agree - we need to stay paying down on our deficit. At the same time, raising taxes right now is not the way to do so. For one thing, the government needs to stop unnecessary spending. For another, our programs need to actually reform people - if someone is on welfare, fine, but welfare should not be a lifelong employment program and whether anyone believes it or not - for a lot people - these programs ARE lifelong programs. Third, increasing taxes right now will do two things: a. cut our citizens budgets which means less money going into the economy and causing a worse recession or b. people will save less and continue to spend at their current levels which is how we got into this economy mess in the first place.
Do taxes need to be raised? Yes. Do I think the rich need to be taxed? Yes. But the government really needs to evaluate what "rich" really is.
I love the idea of a consumption tax. I am a spender. I will be taxed out of my @ss - but its a fair tax and I am okay with that.
I actually think we're on the same page here
That's a good point! And someone told me we can't raise taxes on rich because they find loopholes to get out of it...they would end up paying less. I wonder if they put those loopholes in there to help themselves out.
I agree that 200k is not rich!
I am not happy that it has been proposed that my pay be frozen for two years which would save $2B BUT then there is a proposal to have a $120B cut in payroll taxes.
That is a major F-U. It is not about the deficit then?
Our fine senator (coburn) is saying federal employees are compensated over double private employees. Really? Comparing a taco bell employee to a skilled government employee with a degree and a lot of years of experience is unfair. Studies of similar jobs in private and government reveal that often government pays less. link I know who I will not be voting for.
http://www.huffingtonpost.com/max-stier/five-myths-about-federal_b_791994.html
I would agree with everything in this article.
I like this too.