oh noes!! we can't tax the rich!!!! Part II

[LSK]

In my previous example, I compared the sample income levels of different groups: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6081613

In this example, lets examine what a 1% income tax raise would do to "the rich" group of my previous example: those making $480,000 per
year.

As noted previously, $480,000 per year breaks down to $40,000 per month. I like things on a per month basis because my bills come in on a monthly basis, I assume most of yours do to.

Ok, currently that $40,000 is taxed at 35% - giving an after tax income of $26,000. Now lets see what raising the income tax 1% does: now we have an after tax income of $25,600.

Currently: $40,000 * 0.65 = $26,000
Proposed: $40,000 * 0.64 = $25,600

I don't know about you, but $25,600 per month after tax income seems like an awful lot.

I am really struggling here with how it is soooo unfair to raise the income tax on "the rich" by 1%. Help me out here???

:shrug:

[FiveGoodMen]

1. This is why we have lotteries

Someone gets rich suddenly and for no reason.

Every stupid motherfucking 'Murkin figures he (or she) will be next.

So, "don't tax the rich because I'm about to be one of them!"

It's horrible.

And it works.

[unpossibles]

10. well, you have to remember two things

1 - a lot of people think they are rich or elite without being anywhere near either (other than being comfortable or well off). In other words, these people are doing fairly well and better off than the majority of us, but aren't really the big shots they see themselves to be, nor would they be welcome at the top 1% club. Seriously, a study was done recently that showed a surprisingly large number of people thought they were richer than they were, and shockingly (not) that group mostly voted Republican.

2 - a lot of people (also generally Republican) buy into the bootstraps thing, so they see their success as having nothing to do with the health or well being of the society and consumers which helped their great product/idea sell so well in the first place. They think that they are successful with absolutely no external help or advantage so why should they help those who they believe are just not applying themselves? This is the "punishing success" crowd because they think high taxes will somehow discourage someone from wanting to become rich. As if paying an extra few hundred to few thousand dollars is not an acceptable trade to making many more thousands (or more) than they would be paying.

[guitar man]

2. Well, isn't it the "rich"

that are the business owner and employers in this country? Maybe, just maybe, if they hadn't spent the last 30 years throwing their money into getting their puppets elected for the express purpose of screwing the working class into the ground, we wouldn't find ourselves in the predicament we are in now. If they had actually let it "trickle down" like the bullshit Reagan and the goons that followed kept advertising, we'd be in a lot better place.

But,they didn't, they hoarded every stinking dime they could for themselves, so if they get hit for a little tax to try and fix the mess they created, they have no place to go and whine but the closest mirror! :grr:

:rant:

[Laelth]

7. Hear, hear! Righteous rant. n/t

:dem:

-Laelth

[Blue_Tires]

3. k+r

[FormerDittoHead]

4. Because it PUNISHES ACHIEVEMENT! (sarcasm) n/t

[LSK]

5. thats right!!!!

$26,000 was just enough incentive but $25,600, well forget it then!!!!

:D

[Name removed]

19. Deleted message

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[wizstars]

22. well, what do you want to tax--FAILURE?!?!?!?

good luck with that, dude!

[DailyGrind51]

31. Tax away the bonuses of all those investment bankers!

[Laelth]

6. The uninsured will pay a lot more in new taxes if health care "reform" passes.

Let's be clear, the majority of the cost of this bill will be paid by a massive, new tax on the uninsured that equals 12% of gross income. Someone tell me how that is a good idea.

The uninsured are the people who can't afford to pay new taxes now. Heck, if I could afford that, I would have purchased insurance already.

This bill does many good things, I admit, but a new, whopping, 12%-of-gross tax on the uninsured makes no sense, will cause massive resentment, and is likely to drive people away from the Democratic Party in droves.

I would rather Congress do nothing than to pass this bill.


:dem:

-Laelth

Re-posted from the last thread on this subject. Sorry, OP. I just don't want people to forget who will really be footing the bill if the House version of "health care reform" becomes law.

[Hello_Kitty]

9. Oh but someone on another thread told me

People just need to get rid of their cellphones and satellite TV and gadgets - because all uninsured people squander their considerable disposable income on those things when they could be buying insurance dontchaknow. :eyes:

[Laelth]

13. They would rather the uninsured die than for them to pay more in taxes.

Sad but true.

:dem:

-Laelth

[hfojvt]

11. that's only true if the uninsured are making 4 times the poverty level

People making less than 4 times the poverty level get credits to offset the cost of buying coverage.

[Laelth]

14. It's still a tax equal to 12% of gross income.

In fact, the law is better for the uninsured who make more than $88K for a family. Their total new tax bill is capped at $10K/year.

For the "struggling middle class," those making more than 133% of poverty, but less than $88K, this bill will impose a new tax at the rate of 12% of gross income. It is a massive new tax, in exchange for weak insurance with high co-pays, that no doctor and no hospital will be required to take.

The bill is pretty good for those with pre-existing conditions who can afford the new tax. It's also good for people who have chronic illnesses because it eliminates the life-time caps on insurance pay-outs. But for those of us who are healthy, uninsured, and in the struggling middle class, this law is a disaster, and it will create massive resentment that will drive people away from the Democratic party. It is a huge, regressive tax increase.

I simply can not understand how the powers that be in the Democratic Party think this is a good idea.

:shrug:

:dem:

-Laelth

[Hello_Kitty]

17. Thank you. Why, oh why would Democrats squander the youth vote like this?

70% of under-30s are voting Dem these days, which bodes for a bright future for us. If we don't fuck it up. So what are we going to do? Impose a whopping mandatory expense on them. Great.

[Laelth]

25. Makes no sense, does it?

Seriously. I want someone to explain this to me. How in the world can this be a good idea?

:shrug:

If this is the best we can do in this political climate, we'd be better off waiting until 2011 when we might have 63 Dems in the Senate.

:dem:

-Laelth

[Hello_Kitty]

27. I met so many young people when I was canvassing last fall who were terrified of a mandate

And that included several hardcore Obama supporters. Remember this was back when Obama was saying he was against mandates. A lot of working young people I know can't afford fucking toilet paper! I'm serious about that. They tell me how they "borrow" TP and other necessities from their jobs. And yet somehow they're going to be able to cough up a monthly health insurance premium.

[Laelth]

28. I know. My wife works with a lot of people like that.

Most people who lack insurance simply can't afford it. Forcing the uninsured to cough up 12% of gross income is insane. They definitely can not afford that.

:dem:

-Laelth

[hfojvt]

26. where are you finding a tax?

If people spend 12% of their gross income on health care and then get a credit because they make less than 4 times the poverty level, then their net is less than 12%. Much less, depending on how poor they are. I don't have details on the credit, or I could be more exact, but I do not see where you are getting this 12% from.

[Laelth]

30. If uninsured you must buy insurance.

If your income is between 133% of poverty and $88K for a family, the cost of your public option insurance will be 12% of your gross income. If you don't buy it, you are a criminal. That's a tax--a tax of 12% of your gross income.

For weak insurance that no doctor and no hospital will be required to take. But you must buy the insurance all the same. How is that not a tax?

:dem:

-Laelth

[hfojvt]

33. it's not a tax because of the credit

the credit might be 12% of your income too, and thus your net is a big zero. Or the credit might be 8% of your income and thus it costs 4% of your income. And so on. Until you know what the credit is, you don't know what your net tax increase is.

Are you against universal health care? How do you expect to get universal health care without somebody paying for it?

[Laelth]

34. You're right about the sliding scale.

I absolutely support universal health care. I don't need single payer. A robust public option like the U.K.'s NHS will do. In civilized countries a progressive tax that puts the burden on those most able to afford it pays for the system. The proposed, regressive tax that we're talking about now puts most of the burden on the shoulders of those who can least afford to pay for it--the uninsured, themselves--in the form of a new tax of between 1.5% and 11.5% of gross income.

That's insane, and it will drive people away from the Democratic Party in droves.

:dem:

-Laelth

[Hello_Kitty]

8. The total income would not be taxed at 35%. That's the marginal tax rate.

Only the income over $372,950 would be taxed at 35%. And remember that is adjusted income. It's after you take all your deductions. Anyone making $480,000 who is paying 35% on their gross income needs to fire their accountant, ASAP.

[unblock]

12. just to be clear, 35% is the MARGINAL tax rate. the AVERAGE tax rate is no more than 28.8%

even if we take the entire $480,000 to be the adjusted gross income (a silly assumption, as there are always deductions and exemptions), the final tax bill is only 28.8% because some of the income is taxed at lower rates.

factor in a more reasonable amount of exemptions and deductions (e.g., a lot of mortgage interest) and retirement contributions and that $480,000 gross income becomes a $380,000, which is very nearly back down to the 33% bracket, average tax is only 27.2% of adjusted gross income and average tax as a percentage of the gross $480,000 is only 21.5%.

NEVER let a rich person claim that MARGINAL tax rates are AVERAGE tax rates.

[LSK]

15. so basically they have even less to bitch about than my OP implies?

[unblock]

16. yup, that's about the size of it.

[Egalitariat]

36. Most people who make $480K aren't allowed any deductions and exemptions above the standard deduction

That was taken care of years ago. If you're subject to the AMT, and I'm betting most people who make $480K/year are, you generally get no credit for any deductions or exemptions. Not mortgage interest, not charitable contributions, nothing. Not that they should complain, I'm just correcting one of your assumptions.

[Name removed]

18. Deleted message

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[Hello_Kitty]

20. Okay. I'd be fine with lowering all income tax to 3%.

Just raise capital gains to 70% and that should more than cover it!

[LSK]

21. what do you consider government programs and services???

http://www.federalbudget.com

Maybe you can find your answer there??? I know you are trying to make a point but I REALLY DOUBT you have ever looked at a federal budget.

Yes Paulson robbed us blind with the bailouts that started IN THE BUSH ADMIN.

None of this really has to do with taxation as much as it does with spending.

BTW the original Boston Tea Party was about a Corporate Monopoly:

"The real Boston Tea Party was a protest against huge corporate tax cuts for the British East India Company, the largest trans-national corporation then in existence. This corporate tax cut threatened to decimate small Colonial businesses by helping the BEIC pull a Wal-Mart against small entrepreneurial tea shops, and individuals began a revolt that kicked-off a series of events that ended in the creation of The United States of America."

http://www.commondreams.org/view/2009/04/15-10

[ieoeja]

24. The Boston Teaparty was over being forced to purchase that tea against their will.

People were not buying it in the first place because they were being taxed (1) without representation and (2) for a military they did not want and that were rather obvious in their intent by stationing them in the forts the French built, not to protect the English colonies, but to threaten them.

And this was only after far more violent protests over worse abuses by the crown over the past decade.

[Egalitariat]

23. $10,000 a month after-tax income seems like a lot to me. Why not tax them

at 75%? I think you're being too generous.

[LSK]

32. I'm not being too generous, the Dems in Congress are

I'm with you on that 75% proposal.

:)

[Kansas Wyatt]

29. Bull God Damned Fucking Shit!

Those mother fuckers have been riding the rest of us into the fucking ground for the last thirty years, and increasing their wealth while doing it. The time has come for those smarmy fucking piece of shit bastards to pay for the position that they put everyone else into. Everyone below them has already been taxed heavily to make up their difference, and they are due to pay for the last thirty years of their 'trickle down economics.'

[Laelth]

35. My wife wants to bring back the guillotine. n/t

:dem:

-Laelth