If you are not making anywhere near $250K, I sincerely hope you are not voting for Republicans based on their baloney tax policies?
By Daniel at 1 February, 2010, 1:29 pm
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From the tax tables and in real terms, your taxable income (after all deductions) must be greater than $374,000 before you would be “forced” to pay 5 cents on your next marginal dollar when the Bush tax cuts are rolled back. Also, in a progressive tax table, every wage earner reaching the $374,000 cutoff point has received every proposed tax cut from the middle class brackets as well.
Typically these wage earners are consistent with their annual income. So if I make $500K, I would pay an additional $6,300 in tax if the Bush tax cuts expired. If you use 40% as the then top bracket, you still have $75,600 left over net of the $6,300. Or more importantly after taxes you have $348,000 in the bank from the entire $500K at a net effective rate of 30%. In 3 years you have $1,045,000 in the bank BUT forbid you have paid an additional $18,900 (less any tax cut benefits received from the middle class brackets) due to the expiration of the Bush tax cuts for the wealthy!
What are your thoughts about these numbers and amounts? I want to learn why any voter not in the top bracket would ever think this alleged Supply-Side rate cut makes sense? You still can pay cash for a top of the line Mercedes, go on mega vacations and tuition for your kids is totally immaterial!
This point is strictly about the marginal tax rates. I am outraged about the FISCAL spending in Congress but this is for another discussion. Economically I do not think this increase will change anybody’s personal spending or investment habits. Plus I believe people who need stuff (middle class) will spend their extra after tax income. Believe me I rather buy a factory with increased sales demand from middle class consumers than continually short the stock market!
PS The new Republican spin a la Scott Brown is Kennedy rolled back taxes and it spurred the economy. He cut the top bracket from 90% to 70%. Now I think both of those rates are still egregious. I am totally okay with 40%!
- GarysOpinion
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Daniel and Gary’s Opinion,
There is so much wrong with this post it’s hard to know where to begin.
The tax policies of both parties is pernicious. The Dems tax policies are materially worse than the Repubs, which are simply bad. The populist interpretation and criticism of the Republican tax policy above reflects a lack of understanding of capital formation, among other things.
What is needed is a 15% to 18% flat tax. No deductions, no exceptions. Eliminate the ability of politicians to dole out favors and for big business to manipulate the system simply because of bigness. Also, everyone has skin in the game unlike today.
But the real issue is spending! Spending!! SPENDING!!!
Government spending, which is predominately for current consumption, and the unbridled issuance of debt that is never repaid will destroy America.