Are Americans Ready To Pay Higher Taxes?

[No DUplicitous DUpe]

Are Americans Ready To Pay Higher Taxes?
posted with permission from: http://sane-ramblings.blogspot.com/2011/07/are-americans-ready-to-pay-higher-taxes.html

At Friday's news conference President Obama claimed they are.

"President Obama on Friday kept up the pressure on Republicans to agree to revenue increases in a deal to raise the debt ceiling, claiming 80 percent of the public supports Democrats' demand for tax increases. 'The American people are sold,' he said. 'The problem is members of Congress are dug in ideologically.' "
Rather than support tax hikes on themselves, the American people likely think the tax hikes will apply only to America's rich because the debate has centered around taxing America's highest 2% income earners. The vast number of Americans may not know that regardless of how this debate turns out, as historically been the case, they will be paying most of the taxes because unlike the rich, there are so many of these people and because most of them are wage earners, without the ability to readily redefine what constitutes taxable income,* as the rich are often able to do. Those conducting the debate know this.


*Please see "The Take Home Pay Brackets" http://www.bargaineering.com/articles/the-take-home-pay-brackets.html

[BeFree]

1. well

It has been proven time and again the American people can be sold just about anything.

They can be lead to believe just about anything

It's all in how it is sold.

[FreakinDJ]

2. Are Americans ready to have Jobs

these tax loopholes are preventing a recovery

[hack89]

5. Weren't those same loopholes in place when the economy was booming?

it is not like they are a recent thing.

[FreakinDJ]

8. Off Shore Profits Exemption was part of Bush Tax Cuts

to name 1

[hack89]

12. So how is that stopping the recovery?

The connection is not obvious to me.

[FreakinDJ]

14. $2 Trillion sitting off shore right now waiting for another Tax Holiday

which experts cite did little or nothing last time they passed a Tax Holiday in 2005

Here is how it works

http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

[hack89]

16. So companies don' t worry about making more money?

Even though there are opportunities to expand and make money they are happy with what they have in off shore tax shelters? So just how is that good for.them or their shareholders? Is even legal because of their fiduciary duties?

[FreakinDJ]

19. As in the 1930s they can also Drive Down Wages

by "Holding" their money

A BIG part of the deflationary pressures during the 1930s was Big Corps found if the with held off purchases the prices were reduced. Like holding money in a Bank incurred interest, with holding purchases proved to be a greater means of amassing wealth. What profits the loose today will be outweighed by savings on reduced wages later

[LiberalEsto]

3. In order to pay taxes, I'd need to have a job.

I'd be very happy to have a decent job and pay my fair share of taxes.
But first I'd want to see the mega-corporations and billionaires paying THEIR share.

[FreakinDJ]

4. UnRec - Worse then that - the cited blog is Tax disinformation

The Tax Rates do not reflect "Effective Tax Rates" which take Tax Deductions into account.

Millionaires pay an Effective Tax Rate of 17% compared to school teachers who pay 21%

I'm going UnRec

[No DUplicitous DUpe]

9. The author adds...

When I reference working class people not being able “to redefine what constitutes taxable income,” the wealthy have numerous advantages. For example, there are big deductions for oil investors, big deductions for “gentleman farmers” and bonuses not to grow crops on land they weren’t growing them on in any case, big deductions for professional sports team owners who can depreciate their players, and team “losses” that can offset other forms of income, big depreciation benefits for large scale real estate investors, etc.

Another huge advantage is, “offshore income” in which the wealthy can effectively move money to avoid taxation or another favorite is declaring oneself a Nevada resident and avoiding state taxes. And don’t get me started on the 15% capital gains tax which also came into being at that low a rate under President Bush. Wall Street related income can be channeled into that income bracket before some of the other tax advantages are taken. But you see the point, the average working guy and gal has no idea how big the tax advantages are.

[FreakinDJ]

11. Sorry to Trash on your thread - but ....

there is entirely way too much tax disinformation out on the net. One only need to look at the effective tax rates vs: Tax Brackets to understand this all too well and the author make little or no mention of that.

Add into the loop-sided effective tax rates on low to middle class citizens - property taxes, sales taxes, state auto use taxes ect, ect and Low to Middle Class workers are paying 2x what the Wealthy Class pays in taxes

[Ragnarok]

6. I might actually support it if...

...I wasn't at the bottom of the same bracket as people who make $140k a year. Get some more granular incremental brackets and I might be interested. 25% less of my income impacts my ability to buy any $100 or $1000 or $10000 item more than 25% of twice that income. Someone making $2k less than me gets kicked with 15% which means they take home more than me because they are in the same bracket as someone making $50k less than themselves. Until that crap is addressed I am uninterested in change. Not sure how the math would work, but moving a few percentage points around here or there in the current few brackets means zero to me buying a house or anything else. Getting punitive on "the rich" doesn't change my daily situation one bit.

[quaker bill]

13. This is not how it works

Brackets only effect dollars above the threshold.

Someone making a million still pays the same rate on the first 50K as someone making only 50K. They pay the next rate up to say 140K and then the higher rate for dollars above. The curve is smooth, given it is all ordinary wages.

The problem comes in with the rich and near rich who take increasing portions of their earnings in "capital gains" (stock options). Regardless of how much money you make in capital gains, it is all taxed at the same rate, 15% currently. Republicans would like to repeal the entire tax on capital gains, which would mean that the typical CEO would be taxed on almost none of his/her income, because capital gains is how they are paid for the most part.

[jmowreader]

18. Taxes would have to skyrocket...

for you to pay "25 percent more of your income."

Here are the current tax brackets:

10% - $0 to $8500
15% - $8500-$34,500
25% - $34.500 - $83,600
28% - $83,600 - $174,400
33% - $174,400 - $379,150
35% - $379,150 and above

Few Democrats and almost no Republicans know how this works, so when we're done here today you'll be WAY smarter than your neighbor!

First, you add up all the money you made from whatever source.
Next, you subtract any money you spent on a fairly long list of things (educator expenses, health savings account deposits, penalties on early withdrawal of savings and tuition are among these things) to arrive at Adjusted Gross Income, or AGI.
You then remove any deductions and exemptions to arrive at Taxable Income.

We will use "married filing jointly, two children" as your filing status, so:

standard deduction is $11,600
exemptions total $14,600
since you're at the bottom of the same bracket as people who make $140,000 per year, we'll say your taxable income is $85,000...so, if this is a nice easy 1040A tax return with no unusual deductions we'll say you make $111,200 per year. (This, of course, will gain you no sympathy from many of our number, but we'll go with it.)

The tax rates are not "all encompassing" (every dollar you make is taxed at the same rate) but "marginal."

So...

Your first $8500 of taxable income is taxed at 10 percent, or %850
The dollars from $8500 to $34,500 will cost you $3900
The dollars from $34,500 to $83,600 will cost you $12,275
And the dollars from $83,600 to %85,000 will cost you $392

Add them all up and your federal income tax bill is $17,417. Your total EFFECTIVE tax rate is 20.4% on taxable income, or 15.7 percent on all your income. (Of course, if you really are making $111,200 per year you've got other deductions, like business travel, that someone making $35,000 per year doesn't have.

To cost you another 25 percent of your income, you would have to more than double the tax rate at all brackets plus leave the Reagan-era deductions in place. (One thing a lot of people, especially freepers and teabaggers, like to talk about is the fact Reagan cut tax rates. This is true, but he eliminated a LOT of deductions available to working class people, like non-mortgage interest. The result was Reagan's fans could run around bragging about "tax cuts" while in reality the working class's taxes went up under Reagan, sometimes dramatically.) Even the most serious leftist isn't calling for that. Some of us talk about the 70 percent rate Kennedy left us with as a good top rate, but take that in context: only if the Kennedy deductions and exemptions are reinstated should taxes go that high. Kennedy's rates plus Reagan's deductions equal widespread tax evasion.

[Ragnarok]

20. Thank you for the...

...explanation. Most people just get angry with a knowledge gap on this subject. The tax brackets are a bit less murky to me now. FWIW, it's more like $70k and Married Filing Jointly for my 25%. There are no education or health deductions; just a house losing value every quarter. :) Thanks again for an excellent explanation!

[jmowreader]

21. Not a problem.

The funniest thing you will EVER see is the Republicans' annual April 15th Bullshit Fest. I think you've seen it: where the Repukes print out the Internal Revenue Code in its entirety and drag it onto the House floor. This is to show you how huge and complicated the tax code is and how no one could understand it. Well...the part of the Internal Revenue Code that applies to 80 percent pf Americans is about half an inch thick and is written at a sixth-grade level. If you look at...oh, Section 4611, which is an environmental tax applied to petroleum at the refinery or point of import...or Section 4661, which is environmental tax on 42 different chemicals, yeah they have a point. But come on: how many people even know what butadiene is?

[No DUplicitous DUpe]

22. Thank you for the education..

very enlightening.

[dmosh42]

7. Just a rollback on Bush tax cuts for those over 1/2 mil per yr+raise cap gain tax to 20%=Surplus!

[Uben]

10. Not the ones who need to be....

.....namely, the very rich. They had rather spend their monies championing causes like tax cuts for the rich, so they can keep more of their money and use more of yours. They are driven by greed. They have chased the dollar most of their lives and feel they deserve more than anyone else, even if it means taking food out of poor people's mouths. That, put quite bluntly, is pathetic. And, I would spit on every goddamned one of them. Class envy? Not hardly. I have enough to rest me the rest of my life, and I have enough to pay a little more in taxes if necesssary. Right now, I give to multiple charities, both monetarily and time-wise, to make up for what I think are low taxes. We need to go back to the tax tables of the sixties to make things work right.

[customerserviceguy]

15. President Obama lost his moral authority on this issue

when he didn't veto the extension of the Bush tax cuts, together with the payroll tax 'holiday' that he now wants to extend to loot Social Security.

At that point, I knew the Rethugs would NEVER go along with any tax increases, because they found his weak spot.

[66 dmhlt]

17. Americans Support Higher Taxes. No, Realy - We Do!

Americans Support Higher Taxes. Really.

Contrary to Republican dogma, polls show that the American people strongly support higher taxes to reduce the deficit and improve income inequality. Following are 19 different polls since the first of the year that say so...
(See Link below for the polls)

http://capitalgainsandgames.com/blog/bruce-bartlett/2292/americans-support-higher-taxes-really