October 22, 2008
Obama’s 95 Percent Tax Cut? 100 Percent Not True (Ron Christie)
Facts have a pesky way of serving as a fly in the ointment to a perfect story or solution.
To wit: I continue to watch the Democratic candidate for president continue to say that he will provide a tax cut for 95 percent of Americans. Let me repeat: He will provide a tax cut for 95 percent of Americans if his plan is enacted.
This sounds great, but nearly 40 percent of Americans do not pay income tax at all. Providing a tax cut to those who don't pay federal income taxes sounds like wealth re-distribution to me — from those who have it to those who don't. The Obama camp immediately retorts that people who don't pay federal income tax do, in fact, pay payroll taxes — they should get a form of tax relief to alleviate this burden.
Fine, but the FICA taxes we pay go to fund the Social Security Trust Fund. Does Obama truly propose to provide checks to nearly 40 percent of Americans who pay no federal income tax while also giving them a rebate on the payroll taxes that ostensibly will fund Social Security for current (not future) retirees? If so, where will the additional revenue to support these money giveaways come from?
Rep. Barney Frank (D-Mass.) shed a bit of light on this topic earlier this week when he said that taxes must be raised on the richest Americans and that deficit spending will result in the short term. So there you have it: Obama will provide a cash rebate to those who do not pay federal income tax, funded by those who do pay federal income tax.
To make up the difference in lost revenue, Frank, the chairman of the House Financial Services Committee, wants to increase taxes on those who pay a majority of federal income tax while also raising the size of the deficit to fuel additional government spending.
These are the sad facts that many in the media seem uninterested in reporting or discussing. The American electorate best wake up to this reality or get ready to tighten their belts, as the taxman cometh shortly to their door, asking for more of their hard-earned money.
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Ron, your understanding of the facts are stupid and biased. As an American who started her career making 12K back in the 1990s out of college, I was happy when, during income tax time, i was able to get a refund check for $1,000 that helped me to meet additional expenses I couldn't meet off 12 K. Ironically, on that 12K, I did pay taxes. I remember my gross being 232 and my net being 175 or something like that. But I made it. In 2008, I recently looked at my tax bill, so far, my FICO is 18,000. I didn't count my SS or what i'm paying toward Medicare or local taxes. I have just paid 18 grand so far. I always knew I will work hard and get to some place. Those are the values my parents put in me–even though you're poor, don't have a poverty mindset. I didn't. Now I make six figures.
I can afford to pay more. I have no problem being able to pay more on my taxes. Taxes pay for basic infrastructure of this country–those bridges you want to walk on (well, it fell down in Minnesota), those roads, civil servants' salaries etc. Under Obama's tax plan, I expect to pay, say 15,000 around the same time in 2009, all things being equal, so that someone else making 12K or 10K can have the opportunity that I was given. I don't see it as income redistribution but I do see it as allowing everyone a chance at having the wealth. Is there anything wrong with that? Isn't that the fundamental aspect of America? Are you so stuck up in the back of GOP's behind that you can't even take a whiff of the truth.
You know the very wealthy do not carry the economy in terms of spending. That's the middle class who has to buy everything from food to clothes to shelter. The wealthy class owns the manufacturing. They exchange goods. Hilton will offer free hotel accomodations to the owners of WalMart who will give Hilton free food. Comeone, Sam Walton and family are not buying groceries at Safeway or your local farmers' market. We are. I'm out there every weekend putting money back in. Rich people do not spend. The wealth does not trickle down but you betcha pain is trickling up. You disappoint me. You're such a moron.
Comment by Jessara — October 22, 2008 @ 10:13 am
typo, i didn't mean FICO as in score, I meant FICA.
Comment by Jessara — October 22, 2008 @ 10:15 am
Jessara: You claim the facts presented in the blog, which are true, are stupid and biased. Wouldn't that make you stupid and biased, i.e., ignoring the facts?
Comment by Robert Rosencrans — October 22, 2008 @ 11:16 am
Obama said 95% of "working" Americans; Are Republicans afraid of Work?
Comment by Donaldd — October 22, 2008 @ 12:02 pm
Everybody knows that anything that Obama says on taxes and spending is a lie. He will say anything to get into power. His spending vs. taxes doesn't add up. He will promise his adoring fans the moon and eternal life only to get into office and install a Marxist dictatorship. Let's cut to the chase: this is about the survival of the united states and we are parsing the words of the devil.
Comment by Igor R. — October 22, 2008 @ 12:36 pm
Robert, I take exception to you calling me stupid, especially with your rants and posts recently. I'm talking about Ron's understanding of Obama's facts are stupid and biased. What fact is Ron citing about 40 percent of Americans don't pay income tax? That's not a fact. Even low-income Americans have to pay tax–state tax, SS, Medicare and at least that 5 or 8 percent tax when you purchase items. My fact is this, I've lived the fact of having a 12 grand a year job. Before that, I had two jobs–one making 4.25 an hour at a Hardees and one making 5 bucks an hour on weekends at Hallmark. Both in South Carolina right before i graduated from college. When I moved to NY, i made the 12 K. So don't go about telling me i'm ignoring any facts. The fact of the matter is it's still hard to purchase all that you need, to get your paycheck to last through the month. This morning, there was a news report of this family of 9 (seven kids, whew)–the hubby got laid off from his mortgage job, and the family had to reduce the food budget from 300 a week to 200 a week. Wow, with my small family of five, i was complaining about spending 100 bucks every two weeks. Wow.
That's what a Bush/McCain presidency will get you. Not enough income to last, job lost, even interns can't get the opportunity to have a gig. All people need are the opportunities to work hard and to do what they need to do. So, you must be very rich, Robert, because you're fighting for a man who has seven homes, and who doesn't care about the middle class because he's rich and his VP is getting 150 K spent on clothes. Wow. What a reality. Wake up, Robert.
Comment by Jessara — October 22, 2008 @ 12:44 pm
It's a cold day in hell when Ron Christie is the judge of who's lying and who's being truthful.
Ron, for God's sake you worked for Cheney, carrying his water. Now that is flat out dishonest. Cheney is the source and core of a whole, whole lot of our nations' problems today. And now Christie is pining about some spinning words he heard.
This topic is as big as a pimple on a gnats ass.
Comment by Lester — October 22, 2008 @ 2:38 pm
Jessara: I was asking a rhetorical question, the answer of which could make you look like you do not know the facts. Here are the facts.
The top 50% pay 97 percent of all federal taxes. If you have a problem with state taxes, quit electing liberals in your state.
The top 1% pay 39% of all taxes.
According to the Wall Street Journal, when taxes were higher, the rich PAID MUCH LESS.
Check it out. Those are the facts.
http://online.wsj.com/article/SB119786208643933077.html
Last week the Congressional Budget Office joined the IRS in releasing tax numbers for 2005, and part of the news is that the richest 1% paid about 39% of all income taxes that year. The richest 5% paid a tad less than 60%, and the richest 10% paid 70%. These tax shares are all up substantially since 1990, and even somewhat since 2000. Meanwhile, Americans with an income below the median — half of all households — paid a mere 3% of all income taxes in 2005. The richest 1.3 million tax-filers — those Americans with adjusted gross incomes of more than $365,000 in 2005 — paid more income tax than all of the 66 million American tax filers below the median in income. Ten times more.
Comment by Robert Rosencrans — October 22, 2008 @ 4:13 pm
By the way, I apologize for implying that you are stupid. If you are actually seeking information then you are not stupid.
Comment by Robert Rosencrans — October 22, 2008 @ 4:14 pm
http://theladnerreportblog.blogspot.com/2008/10/amazing-obama-helped-stranded-stranger.html
Sen. Obama helped this person 20 years ago and she never forgot. Wow.
Comment by Jessara — October 22, 2008 @ 4:43 pm
Lester, the truth about Obama's tax plan is a pimple on gnats ass? What should we talk about since his associations are off limits, how good he makes you feel?
Comment by Igor R. — October 22, 2008 @ 4:57 pm
Please do not let socialistic policies ruin the spirit of innovation and initiative in this country. All the motivation that made this the land of opportunity will deplete fast.
I came to the US some 25 yrs ago to avoid one socialistic model and I am very concerned this is headed towards another.
It is one thing to tax and spent towards building bridge or education system - that is what the taxes are for. But to tax one and put it in the pocket of the another is quintessential NATIONAL SOCIALISM (look it up in Google, look it up in Wikipedia) and that is absolutely NOT healthy.
Dont let the spirit of this country die.
Comment by skmckinny — October 22, 2008 @ 5:01 pm
Ron:
How does it feel to work for a party of RACISTS? Your spin has ZERO credibility.
Comment by Jeff — October 22, 2008 @ 5:04 pm
Jeff-
How does it feel to think that you make any significant point calling someone's party RACIST (all caps? really? a lower-case racist isn't racist enough?).
ZERO credibility…something about a capitalized zero would make me assume it meant something more, if that weren't an affront to mathematics.
Rich people pay more income tax. You can argue that it is less significant to them (Jessara did so quite nicely), but you cannot 'spin' data. A=A, even for Obama, Jeff.
Comment by Karl's Brother Groucho — October 22, 2008 @ 9:28 pm
For those center of the road voters, Obama is the best choice for helping restore fairness and equity to the tax code. The Republican trickle down compassionate conservative policies of the past eight years haven't worked. As a 63 year old, Vietnam infantry combat Vet, I can honestly say McCain just doesn't understand anything about the average guy, pilots never do, they don't lead, they simply fly and drop bombs.
Comment by Evando in Missouri — October 22, 2008 @ 10:18 pm
Jessaria-
Robert's post says it all. Obama and the other socialists can't spin the actual numbers. Unfortunately, the actual facts are not reported by the media, who might as well work for Obama (actually, they in effect already do).
Of importance, the Obama tax hike on those making over $250K is NOT to pay for infrastructure, etc. It IS to partially offset govt. checks to those who don't pay tax. I.e, it is to be used to pay for Obama's handouts to his voters NOT for infrastructure! Only a Dem. could term a govt. check to someone who pays no tax, a tax cut.
Obama notes that these people still pay the SS payroll tax. This is NOT an income tax (of which about 40% of Americans pay none). It is supposed to be a pension plan. In making it so that lower earners pay little or no SS tax but still get benefits, Obama is in effect turning SS into welfare as well. Socialism pure and simple. Since it's inception, those who pay more into SS get more out. Obama would totally reverse this, more welfare!
As to who drives the economy with spending, this has NOTHING TO DO WITH WHO PAYS THE TAX!. There are many more people numerically in the lower earner catagory so as a group they spend more. As individuals they spend less. In fact, higher earners keep a lot of people in the service industry employed.
Finally, I worked very hard to finally make >$250K/yr. The 40%+ that I pay in tax is FAR more than my fair share. The ones who are not paying their fair share are the LOWER 50% of earners! They are getting an almost free ride, and in many cases a totally free ride! THEY pay nothing and call those of us who have half of our income confiscated selfish for not agreeing to have more of our money taken and given to them. How could anyting be more backwards??
Comment by Ron — October 22, 2008 @ 10:57 pm
Jeff: I don't believe Ron is a Democrat.
Comment by Robert Rosencrans — October 23, 2008 @ 7:03 am
The Obama 95% tax cut is a shell game and will not benefit anyone but the politicians. He wants to raise the ceiling on FICA which is an increase that will be far more than the puny give back to the lower 40%. Once again it is to create confusion to dip deeper not just on the top 5% but all working people. Most workers start low and grow the wonderful thing about the USA is that we are allowed to grow. There is also nothing to stop the people earning more from sharing more of what they earn. If the top 5% choose to give the government a larger portion I am sure the government will be quite happy to accept. Just mail the check.
Comment by relang — October 23, 2008 @ 8:07 am
The point is that taxes are too high. Nobody wants more of their money taken to support ridiculous government programs.
Jessara: If the guy still had his job, wouldn't we be crying how the family of nine only has 300 a week for food? By the way, when you complete your tax forms, the figure you arrive at is a minimum. You can pay more if you want to. Why not take your gross income, divide by two, and write a check?
Anyone who is for higher taxes is only willing to pay more when everyone else is forced to do the same. They love to spend other peoples money.
Comment by bushwood — October 23, 2008 @ 8:35 am
While the 12K job in the 1990's example is entertaining, I don't think we will get the luxury of paying 1990's income tax rates today. The claim was made that there was a net tax paid (something like 175). Well, here is what 12K TODAY would pay in Federal Income Tax (not FICA, Medicare or State Tax). Right out of college, just starting off a teaching career, we have to make some assumptions. I have assumed that this person is SINGLE, and withholding at the SINGLE rate per IRS publication 15. No additional income or credits/adjustments/deductions. Simply making $12000 annually.
Fill out form 1040, for year 2007 (latest available). One exemption for yourself (Line 6a). Income $12000 (line 22). No adjustments, so AGI (Line 37) is also $12000. Line 42, 1 exemption for yourself times $3400, and subtract this from $12000, leaves $8600 as taxable income (line 43).
Withholding per IRS Pub 15, paid weekly ($12000/52=$230.77 per week) is $14.70 + 0.15(Wage - $198) = $19.62/Week. For the entire year, the withholdings would be 52*$19.62=$1020.24.
Tax due from Schedule X on $8600 taxable income is $782.5+0.15(Income - $7825) = $898.75.
This person would get a REFUND of $1020.24-898.75= $121.29
THE "NET" TAX LIABILITY IS -$121.29, a refund in other words. This person paid no Federal Income Tax…the Federal Government will return some money to him/her.
If somebody likes paying extra taxes to the government, then go ahead….it's your money.
Now Obama wants to cut this person's taxes….HOW?! They already get a REFUND, and that is without any credits or adjustments to their income (children, mortgage interest, expenses, EIC, etc). A tax cut is a bigger refund for the other payroll taxes (FICA)? Gimme a break!
Comment by MB — October 23, 2008 @ 8:40 am
Now, there will be somebody that says…$12000 is not the same today as it was in the 1990's. TRUE, so let's do this again for a salary of $32000 per year.
$32000 / 52 weeks = $615.38 / wk
Withholdings on that amount are: $14.70+0.15($615.38-$198) = $77.31 / week
Total withholding for the year = 52 * $77.31 = $4020.12
Income on Form 1040, Line 22 is $32000, no adjustments so AGI (Line 37) is also $32000. Still one exemption for yourself, so Line 42 = 1 * $3400 = $3400, subtracted from $32000 = Taxable Income (Line 43) of $28600.
Tax due on $28600 = $782.5+0.15(28600-7825) = $3898.75
Tax Liability = $3898.75 - $4020.12 = -$121.37
You STILL GET A REFUND, without any other credits or adjustments.
Comment by MB — October 23, 2008 @ 8:56 am
MB:
A refund means the withholding was greater than the annual tax liability. Just because a taxpayer gets a refund does not mean that they do not pay any taxes.
Your own examples:
$12,000 income = $898.75 tax
$32,000 income = $3898.75 tax
I suggest we eliminate withholding. Make everyone write a check on April 15. The productive (taxpayers) would revolt.
Comment by bushwood — October 23, 2008 @ 9:25 am
#10 Jessara. Thanks for posting. This was wonderful. It shows the real character of Obama; his compassion and decency.
#14. Evando, You and I are the same age. Thank you for your service to our country, and for your excellent post.
Comment by Joyce — October 23, 2008 @ 11:42 am
Why do people think they do not pay federal income tax if they receive a refund? You are paying taxes every time you get paid - called withholding.
Why is no one talking about Barry's fake birth certificate? Was he really born in Kenya and not eligible to run for preseident?
Comment by Sam — October 23, 2008 @ 12:47 pm
Correct me if I misunderstood the Obama plan…when he says a "tax cut" on "Payroll Taxes" that is a reduction in the withholding rate, and by extension, the amount of tax due at the end of the year? Is there a job that does not withhold any money at all during the year, but allows the employee to file a federal return and owe nothing on the earnings?
Even if a Single worker earned only $3400 per year, thus making your taxable income $0 after the exemption, according to IRS Publication 15, page 38, you would still be subject to withholding at the following rate:
$3400 / 52 weeks = $65.38/week
Weekly earnings over $51 but under $198 are subject to a withholding rate of 10%, so 0.1($65.38) = $6.54 per week, or $340.08 for the entire year. A person would have to earn less than $51 / week ($2652 annually), to avoid any withholding. How many jobs pay only $2652 a year!?
Since form 1040 rounds to the nearest dollar, your taxable income would have be $5 in order for a tax due amount to be calculated (Taxable income from $0 to $7825 is the 10% bracket), 10% of $5 would be $0.50, which rounds to $1.00 on the form. That would make the threshold for "paying taxes" an annual income of $3405. So 40 million people have earned income of $3405 or less?
Comment by MB — October 23, 2008 @ 1:34 pm
Hey, Jessara…
If you're "happy" to pay more taxes, DO IT! Get out your checkbook and write a check to the US Treasury.
You can DO that, you know. Put YOUR money where YOUR mouth is. If you want to lead, lead by example!
Comment by Yum Yum — October 23, 2008 @ 4:15 pm
Evando-
Obama restores "fairness" in the tax code? Have you read the posts above which detail specifically who pays the taxes? Fairness = confiscating more money from those who already pay nearly half of their income in taxes, as well as the majority of the entire fed. tax burden so that checks can be given to millions who pay no tax is FAIR??? No, its WELFARE and SOCIALISM pure and simple. What is the incentive to work hard and be successful if the Govt. will only take the MAJORITY of your income and give it to those who didn't earn it??
As to the SS payroll tax, from its inception, those who put the most in got the most out. It is a PENSION system, not a welfare system. Obama, by decreasing or eliminating $ put in by lower earners and forcing higher earners to pay more and get less, he would just be turning SS into anoter welfare system. Eventually, those putting $ in will realize what a raw deal thier getting and will no longer support this program.
Finally, Obama's claims that higher earners will pay the same as under Clinton is, like most of what Obama says, a lie. He will bring back the Clinton tax brackets AND force these people to by more into SS. He is a pathetic socialist.
Comment by Ron — October 23, 2008 @ 7:23 pm
If the republicans can throw $750 billion+ to their rich friend with this BS bailout, we can get a tax cut!!!!!!!!!!!!!!!!!!!!!!!
Comment by Joyce — October 24, 2008 @ 5:40 pm
Ok! Please correct me if I'm wrong but I think there is another side to this story that people are missing. Part of the reason that 40% of workers don't pay taxes is because many of these workers get a child tax credit. From what I've seen many of these workers get a federal tax refund that is greater than what they've paid in federal tax (SS and Medicare not included). McCain has stated that he want's to increase the child tax credit. Wouldn't the result of the increase of the child tax credit will mean that these people who don't pay taxes will get an even bigger refund at the end of the year?
Comment by Geo — October 24, 2008 @ 9:13 pm
Ron Christie will not fall for the old banana in the tailpipe trick.
You worked for Cheney, and you want to call anybody a liar? Get serious.
Larry Craig and Lindsey Graham might hire ya.
Comment by trifecta — October 26, 2008 @ 4:52 pm
vote for joe the plumber … write him in
Comment by Steve J — October 27, 2008 @ 1:09 pm
I cannot wait to hear you idiots whining if McCain is elected and Phil Graham (his new fed chairman), G Gordon Liddy (his new defense sec) and Charles Keating (his new banking and commerce sec) come into office. When your children are drafted (anyone who believes that mccain will not try to forcefully reinstate the draft is insane) to fight in IRAN and anywhere else this ERRATIC, SENILE old man wants to send them on a whim and leave them there until "VICTORY" is achieved…human waves…same military strategy as the Chinese in Korea…you will regret your voting choice. OBAMA is the ONLY sane choice in this election. Establishing a tax CUT for the middle class is NOT a redistribution of wealth. Let's remember, the ONLY balanced budget in the last 40 years was when Clinton was in office…yes, a DEMOCRAT.
Comment by jim k — October 27, 2008 @ 4:39 pm
oh…and ron christie?
sell out…..who got stuffed into a lot of lockers in school….he was a loser in school and he is a loser now…makes comments to get attention only….if you could dislodge the republican talking points that have been shoved up his ass long enough for him to remove the vibrating butt-plug, maybe he would have time to read the facts…with the good eye…
Comment by jim k — October 27, 2008 @ 4:42 pm
I'm not sure if Mr. Christie is lying or is utterly confused about taxes.
Let's try one more time. Obama's plan offers tax relief to 95% of Americans who pay federal income taxes and that, Mr. Christie includes payroll taxes. Payroll tax includes federal, state and employee paid FICA taxes. The Obama campaign has never made a distinction between federal taxes and payroll taxes. They talk specifically about payroll taxes because wages account for the primary source of income for middle class Americans. Under Obama's plan, individuals/families with less than $200K in income from all sources, including wages, dividends and capital gains, will see tax savings. Income between $200-$250K will be tax neutral and incomes above $250K will revert back to 1992 levels.
We can argue about whether this makes sense, but it seems to me that the consistent lies about the plan's construct supports the assertion that Republicans know that they can't win on this issue.
Mr. Christie, you seem better suited to arguing more base issues, like refuting the truth about Mr. Allen's racist remarks during his senate campaign. You lost that one, you're going to lose this one as well.
Comment by Stacey — November 1, 2008 @ 8:16 pm
Shouldn't the real question not be who pays more, but rather how the money is spent and why can't 35% of Americans make enough money to pay taxes?
Wealthy Americans are just paying more in dollar amounts to a broken system. Real contributions to society are not measured in dollars.
The accounting of our income tax shows we finance a war mongering bloated government, a sloppy "feed select men for a day" welfare system, and a quasi-governmental Central Bank, which no doubt collects interest off our hard earned dollars. The Fed was created to maintain economic stability. Great job, eh?
Our debt is so large that all our tax dollars are a essentially a lower than minimum monthly payment.
Think the debt isn't a big deal for our ownership society? The US is going to be a share croppper for China for generations to come.
Instead of worrying about getting taxed more on your $250k+ yearly income, consider taking ownership about the state of your country. If you do not like paying taxes (and who does), then do your part to push for a fair tax.
Debates like this one are completely myopic and self-centered. What about Country First?
Comment by Cynizen — November 2, 2008 @ 6:35 pm
"You know the very wealthy do not carry the economy in terms of spending. That's the middle class who has to buy everything from food to clothes to shelter. The wealthy class owns the manufacturing. They exchange goods. Hilton will offer free hotel accomodations to the owners of WalMart who will give Hilton free food. Comeone, Sam Walton and family are not buying groceries at Safeway or your local farmers' market. We are. I'm out there every weekend putting money back in. Rich people do not spend. The wealth does not trickle down but you betcha pain is trickling up. You disappoint me. You're such a moron.
Comment by Jessara — October 22, 2008 @ 10:13 am "
Lord help us.
The rich do not eat. They do not prurchase high end automobiles. They do not purchase Yahts, jets, $200,000 entertainment systems for their homes………….. all 5 of them.
They do not hire painters to paint those homes, nor roofers, electricians, plumbers, gardening and lawn maintainenece professionals. Heck, these people are so freekin' cheap they install their own carpet and Italian marble and granite counter tops.
They don't buy plasma TVs, nor expensive electronic surveylence systems. Thye do not purchase insurance, nor do they buy cloths, drqperies or sheets for the beds they also do not buy for each of their homes………… they also do not pay for utilities………. they climb telephone poles and steal it like everyone else does.
Rich people hide their money under their matresses, so they do not have to employ people…………….. heck, buying products might create tax paying jobs by the lower classes…………… and we don't want any of that nonsense do we?
My GOD, does anyone ever thing a though through?
Lets all just retire and have the fat rich folks pay for us weak and lazy folks to sit on our butts. I'm poor, they're rich……….. so they freekin' OWE ME!!!!
…..right??
Every day I get more and more amazed.
Comment by Randy L — November 10, 2008 @ 1:05 am
Pardon my spelling in the last post.
……… but that stupid/ignorant rant got my $20,000 per year blood pumping.
I have never been employed by a poor person…………… think it through before responding.
Comment by Randy L — November 10, 2008 @ 1:11 am
I will make it more simple, Jessara. Rich people employ the boat builders, the carpenters and electricians………. the boat builders and the gardeners, pool keepers, plumbers, car salesmen, real estate people, pest control people, airline hostesses as well as the people that refine, truck, and fuel those multi million dollar private jets.
One more time. …………….. I was never employed by a poor person.
Comment by Randy L — November 10, 2008 @ 1:18 am
To Randy L -
yeah, poor people don't employ, rich do. ok ok.
And republicans didn't make them pay their employees minimum wages, over 40 hour overtime pay, and make them stop using 8 year old child labor, those crazy liberals did.
I guess we need a mix to survive then, don't we.
republicans to keep taxes kind of low, and democrats to force employers to pay their employees just barely enough to survive. those bastards.
Comment by Matt — November 10, 2008 @ 10:28 pm