Like I was sayin… soon there will be a new minority.
Both candidates are pitching major changes to the tax code. Both candidates paint each others tax plans as bad. However, the devil is often in the details.
One thing that I have always believed is that taxes need to be fair. The very poor shouldn’t be overly taxed, but neither should anybody else. Senator Obama and the democrats believe otherwise.
Senator Obama continues to push that he is cutting taxes for 95% of Americans. Firstly, only 62% of Americans actually pay income and payroll taxes. Take out the evil top 5% and you are left with tax cuts for only 57% of Americans. Secondly, the Obama plan doesn’t cut anybodies taxes. His plan only increases tax credits and refundable items. Tax credits are different than cutting the rates.
Tax credits work like this: suppose based on my income I owe $10,000 in taxes. With kids and other exemptions, I might have $6,000 in tax credits. That means that I end up only owing $4,000. If my with-holding from my paycheck totals to $7,000, then I get a refund of $3,000.
Now lets say that I make a lot less and everything else is the same. I owe $0 in taxes based upon my income, but I still have $6,000 in credits. The IRS then sends me a check for $6,000 (plus anything that might have been withheld. If the government took $2,000 out of my paycheck, then I get a check back for $8,000. There are many people in America who pay no income or payroll taxes, but get tax refunds under the current plan. Under Obama’s plan, those who pay no taxes will get more back. In effect, they are taxing me to give it to somebody else. That’s what’s called “spreading the wealth around”.
In addition, Chuck Rangle the chairman of the house Ways and Means commitee is proposing an additional “surtax” on those making over $200k. That would push marginal tax rates on those making over $250k close to 50%. That means on that 250,001st dollar, you get to bring home 50 cents.
I hate to have to say in addition again here, but Obama also wants to eliminate the cap on social security taxes. Anybody making over $102,000 will see their payroll taxes go up. This will change social security from an insurance program to a massive retirement plan that further “spreads the wealth around”.
Lastly, according to the Tax Policy Center, under the Obama plan the number of Americans paying income taxes will be reduced to 52%. That means that only 52% of us, will be paying all the income taxes. Soon, the majority of Americans will pay no income taxes at all. America is moving to an erie place where a minority of Americans will be taxed so that checks can be sent to the majority of Americans. All this coming from Obama who made several millions from books and gives almost nothing to charity. Chuck Rangle is a gem too as he wants to raise taxes, but has been caught not paying all of his.
Americans need to decide if they want to be a nation with some with their hands out and others with their pockets turned out or a nation where hard work and success is celebrated.