Taxes

[one...two...tree 2,762]

Anyone want to take a stab at what the tax rates were for the wealthiest Americans over the last century?

If you feel lost, you can looky here:

http://www.whitehouse.gov/agenda/taxes/

sigh...Bill, click on the link and there is a (macromedia flash doc) that shows the tax rates from 1913 - 2008. I'm sure though you can find them from another source if you believe that somehow the document has been doctored by Obama's Administration.

If you look at the rates, the wealthiest Americans fall into ranges from 70 percent down to the current rate which is about 35 percent.

Since the Republicans maintain that tax cuts are what create wealth, then where's the beef? Find statistics that prove cutting taxes for the wealthiest 2 percent of Americans creates wealth for the majority of Americans? You won't find any such stat. But the GOP will keep hammering away at that notion no matter how it gets or how much facts and history stand in their way.

Edited March 5, 2009 by Mister Fancypants

[mkg265 2]

Following up on an earlier item, there are obviously grumblings from some of the less progressive members of the Senate Democratic caucus about President Obama's budget blueprint. Specifically, though, there's apparently one area of unique concern.

Moderate and conservative Democrats in the Senate are starting to choke over the massive spending and

tax increases

in President Barack Obama's budget plans and have begun plotting to increase their influence over the agenda of a president who is turning out to be much more liberal than they are. [...]

As for the

tax increases

on high-income earners called for in Obama's plan, [sen. Evan Bayh (R-Ind.)] said, "I do think that before we raise revenue, we first should look to see if there are ways we can cut back on spending." [...]

Obama has proposed

an array of tax hikes

that have been greeted with a chilly reception from Republicans and moderate Democrats. [...]

"I have major concerns about

trying to raise taxes

in the midst of a downturn of the economy," said [sen. Ben] Nelson, the conservative Nebraska Democrat.

Ezra Klein responds to this by asking the right question: "If the majority of Americans are facing a tax decrease, then are "taxes" going up?"

Well, no, probably not. Obama's economic stimulus package included one of the largest, if not the very largest, tax cut in American history. His broader economic plan does exactly what was promised during the campaign -- it cuts taxes on the middle class, and raises taxes on the wealthy. The tax increase on the wealthy wouldn't kick in until 2011, and simply returns the top rate to where it was before Bush/Cheney took office.

Many seem to have internalized conservative, conventional thinking on taxes -- Obama wants to "raise" them, centrists and Republicans don't like the idea. But the details matter here, and it's simply inaccurate to characterize the White House plan as a tax increase when most Americans are getting a tax cut.

Maybe someone should let Sens. Bayh and Nelson know.

Post Script: Ezra also hammers home a point for the Democratic centrists to consider: "Does Ben Nelson think universal health care is more or less important than keeping itemized deductions for filers making $250,000 a year at 35 percent rather than 28 percent? Because that's the actual question at hand. No one is attempting to 'raise taxes.' They're attempting to 'raise taxes in order to pay for things.' The relevant question, then, is not whether Nelson opposes raising taxes, but whether he opposes raising taxes more or less than he opposes not having the thing the new revenues would pay for."

http://www.washingtonmonthly.com/

Does the grammar seem off in that sentence? If someone makes a living writing, I expect better grammar than my own.

[I AM NOT THAT GUY 5,715]

sigh,

http://www.taxpolicycenter.org/taxfacts/di...t.cfm?Docid=213

http://www.taxfoundation.org/files/federal...ry-20080107.pdf

https://www.policyarchive.org/bitstream/han....pdf?sequence=1

Edited March 5, 2009 by Mister_Bill

[one...two...tree 2,762]

sigh,

http://www.taxpolicycenter.org/taxfacts/di...t.cfm?Docid=213

What exactly is your point? That tax rates on the wealthiest haven't been traditionally high over the last century? Look at the rates.

[I AM NOT THAT GUY 5,715]

How the Tax Works

The best way to understand the AMT is to view it as a separate tax system. It has its own set of rates and its own rules for deductions, which usually are less generous than the regular rules. Because of these confusing rules, the only ways you can tell if you owe the tax are by filling out the forms (essentially doing your taxes a second time) or by being audited by the Internal Revenue Service. If it turns out you should have paid the AMT but didn't, you will owe the back taxes plus any interest or penalty that the IRS decides to dole out.

You should definitely run the numbers if your gross income is above $75,000 and you have write-offs for personal exemptions, taxes and home-equity loan interest. Ditto if you exercised incentive stock options during the year, or if you own a business, rental properties, partnership interests or S corporation stock. If you earn more than $100,000, run the numbers for that reason alone.

That means filling out Form 6251. In effect, you are simply adding back some tax deductions and income exclusions to your regular taxable income to arrive at your alternative minimum taxable income. Here is where the middle class gets soaked. First you have to add back your personal- and dependent-exemption deductions ($3,650 each in 2009, $3,500 each in 2008), then your standard deduction if you don't itemize ($11,400 for joint filers in 2009 and $10,900 for joint filers in 2008; $5,700 for singles in 2009 and $5,450 for singles in 2008). You also lose your state, local and foreign income and property-tax write-offs, as well as your home-equity loan interest, if the loan proceeds are not used for home improvements.

The AMT also ignores some itemized deductions, such as investment expenses and employee business expenses, and some medical and dental expenses. It also counts as income the interest from private-activity bonds, a type of tax-exempt bond issued by governments, usually to finance sports stadiums and the like. Finally, AMT rules force you to pay taxes on the "spread" between the market price and the exercise price of incentive stock options granted by your employer. For example, if you exercised an option to buy 100 shares of stock for $3 a share and the stock was trading at $10, the spread would be $7 a share, or $700. Under the regular rules, you wouldn't pay current taxes on that amount, but under the AMT, it's considered income.

Don't give up hope. You do get a few small breaks under AMT rules that you wouldn't see under the regular tax rules. For example, while you can't deduct state, local and foreign taxes under AMT rules, you can deduct the refunds, which would be considered income under the regular tax rules. And because you're taxed on the spread on your incentive stock options, your tax basis for the shares you bought is higher under the AMT, meaning your tax bill will be lower when you sell the shares.

The AMT form has quite a few other pluses and minuses, but you can probably ignore them unless you own a business, rental properties or interests in partnerships or S corporations. If you do, you may need a tax pro to prepare at least the Form 6251 part of your return.

Finally, you get to deduct the AMT exemption — $69,950 for 2008 joint filers; $46,200 for unmarried persons; $34,975 for those married filing separately. However, this exemption is reduced by 25 cents for each dollar of AMT taxable income above $150,000 for couples ($112,500 for singles and $75,000 for married filing separate status), and it's not adjusted for inflation, which is one reason why more people owe the AMT every year.

After the exemption (if any) has been deducted, the result is subject to AMT rates — 26% on the first $175,000 ($87,500 for married couples filing separately) and 28% on the excess. Again, the AMT brackets are not adjusted for inflation, which causes much greater exposure to the tax as the years go by. If the AMT exceeds your regular tax, you have to pay the greater amount. Technically, the AMT is just the liability over and above the regular tax, and this figure is entered on page 2 of Form 1040.

Sorry, you're not finished yet. People get pushed into the AMT zone for different reasons, and some are actually better than others. That's because you could be eligible for the so-called minimum tax credit, which allows you to claim a credit on your tax return in future years for some of the extra taxes you paid under AMT rules. So you have to fill out another document, Form 8801, to determine if you are eligible. For whatever reason, the tax rules say that exercising incentive stock options is one of the few things that qualifies you for the credit, so if that's the reason you ended up paying the AMT, pay special attention to this form.

http://www.smartmoney.com/personal-finance...nimum-tax-9540/

Edited March 5, 2009 by Mister_Bill

[one...two...tree 2,762]

Bill, what on earth are you on about? Look at the rates you bloody well posted the link to...and tell me where over the last century have they fallen below 35 percent for the wealthiest 2 percent? Then comparatively, where will Obama's tax plan put their rate at?

All this fuss over nothing. But the Right Wingers keep on belaboring that it's bad Democrats who want to take away all that hard earned cash from the top 2 percent income earners. Cry me a river.

[I AM NOT THAT GUY 5,715]

THE FEDERAL INCOME TAX BURDEN

New data released by the Internal Revenue Service (IRS) offers interesting insights into the distributional spread of the federal income tax burden, according to a new analysis by the Tax Foundation.

Consider:

• The top-earning 25 percent of taxpayers -- those with an Adjusted Gross Income (AGI) over $62,068 -- earned 67.5 percent of nation's income, but they paid more than 4 out of every 5 dollars collected by the federal income tax (86 percent).
• The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income taxes.
• That means the top 1 percent paid about the same amount of federal individual income taxes as the bottom 95 percent.

The IRS data also shows increases in individual incomes across all income groups:

• Just as the highest earners lost the biggest percentage of their incomes during the recession of 2001, so they have prospered the most as the economy has continued to rebound.
• Between 2000 and 2005, pre-tax income for the top 1 percent group grew by 19.1 percent.
• In the same time period, pre-tax income for the bottom 50 percent increased by 15.5 percent.

This pattern of income loss and growth at the top of the income spectrum is the same during every recession and recovery, says the Foundation. The net result has also been a sharp rise in federal government tax revenue from 2003-2005 compared to previous years.

http://www.ncpa.org/sub/dpd/index.php?Article_ID=15117

Does that make you happy? Screw the rich!

Edited March 5, 2009 by Mister_Bill

[_Simpson_ 250]

I clicked on your gov. link FP and got a good laugh out of this sentence - “ Obama will ask the wealthiest two percent of families to give back a portion of the tax cuts...” Interested to see how that plays out, “ah yes excuse me sir do you mind if I bend you over the counter ”

I bet you the wealthiest 2% aren't going to get a choice in the matter. Once again the wealthiest are going to take a huge hit under a democratic president. Even if all 2% of the wealthiest were thieves and didn't deserve the money they have, there will be some bad side effects. The democrats dont get it, over taxing the wealthiest has bad side effects, like moving there business elsewhere or passing it on down to the consumer.

So you're saying that the tax rates during Reagan through Clinton were unfair and it wasn't until Dubya cut them for the wealthiest 2 percent of Americans did they become fair?

No I am not saying that, Reagan came under the same criticism. Which was true then as it was with Bush. Often democrats go on and on about how the wealthiest are benefiting the most from the tax cuts, which is true but misleading. The wealthiest put in the most of course there going to get the biggest break, if fairness is a issue. Problem is that many people(mostly democrats) think its ok to disproportionaly tax the wealthiest. The mentality is that they can afford it so its ok. I dont share that opinion.

[_Simpson_ 250]

[one...two...tree 2,762]

No I am not saying that, Reagan came under the same criticism. Which was true then as it was with Bush. Often democrats go on and on about how the wealthiest are benefiting the most from the tax cuts, which is true but misleading. The wealthiest put in the most of course there going to get the biggest break, if fairness is a issue. Problem is that many people(mostly democrats) think its ok to disproportionaly tax the wealthiest. The mentality is that they can afford it so its ok. I dont share that opinion.

My point is that if you look at the tax rates of the wealthiest over the last century - they have traditionally paid at a higher rate. Most people who gripe over the notion have no real understanding of why our tax structure has been this way since its inception, but in a nutshell, our tax rates are designed to prevent a plutocracy. Again, we're talking about the top 2 percent of income earners in America. Do you know who falls into that category? A lot of people in Hollywood, professional sports stars, rock stars, etc. You'd think of all the things they get involved with politically, they would be doing ads on TV to fight having to pay higher taxes, but amazingly they don't. So, instead, they have regular Joe's like you who'll never reach that kind of income fighting for them to keep more of their money because you believe it's only fair.

[_Simpson_ 250]

Yes this is how many democrates think the average Joe thinks, well us average Joes are out there busting our #### everyday and put some serious though into this, there is a bigger picture here that I dont think many democrats get.

This is how I feel about that money from the richest 2% I believe that the 2% would be better spent by those who earned it than the gov. Gov. is wasteful and does very little right. I believe that there is a moral majority and given the opportunity to do as they please with this money I think most of it would go to a good cause, but because of the overtaxing of the wealthiest the government gets to choose and I have very little faith in the government. I by no means think that every sports star is going to spend his money on noble things but I think more good will come if the people who earn the money choose were the money is spent. Also the more money the government has the more power they have, not good.

The whole taxing the wealthiest idea is a slippery slope and it has directly affected me because this kind of thinking is the foundation for the tax bracket system, taxing the middle class more than the "poor" for example. I remember when I finally got responsible and went out and got a real job, I learned a cold hard lesson about our tax system. When I made a certain amount of money in a week I jumped up to the next bracket and found that my 15 hours of overtime led to me jumping into the next tax bracket and only getting paid the equivalent of 2hrs of overtime.

[one...two...tree 2,762]

Shelby, by default - without higher tax rates on the wealthiest, a larger concentration of wealth funnels upward, creating a plutacracy. That is why tax rates for the wealthiest in this country have been traditionally high. This isn't some socialist movement by the Democrats - it's a principle of understanding how capitalism operates.

Look at this way - if you're a pitcher in MLB, earning 5 million a year, you're not going to be staying at a Best Western hotel when you travel. You're not going to be clipping coupons and shopping several grocery stores to buy their sale items. Chances are, you have a personal assistant, an accountant, possibly your own personal chef and you're own personal trainer, as well your talent agent - all of which cost you loads of money (which also reduces your taxable income). You've accepted that such costs come with being a high paid baseball player. If your tax rate goes from 28 percent to 35, you know what you're going to do? Have your accountant handle it...that's it. Are you going to whine and say all that hard earned dough is yours? Doubt it - considering it's the fans who show up for the games that pay your salary.

You're a regular Joe (no offense) who'll never even come close to that kind of income level, so you'll never have to worry about your tax rate going up. In fact, if you and your wife make less $200,000, you'll be getting a tax cut under Obama tax plan. That's 98 percent of all Americans - getting a tax cut. So all your worrying about MLB pitchers making 5 million a year having to pay more taxes is really much ado about nothing.

[Peikko 1,575]

Yes this is how many democrates think the average Joe thinks, well us average Joes are out there busting our #### everyday and put some serious though into this, there is a bigger picture here that I dont think many democrats get.

This is how I feel about that money from the richest 2% I believe that the 2% would be better spent by those who earned it than the gov. Gov. is wasteful and does very little right. I believe that there is a moral majority and given the opportunity to do as they please with this money I think most of it would go to a good cause, but because of the overtaxing of the wealthiest the government gets to choose and I have very little faith in the government. I by no means think that every sports star is going to spend his money on noble things but I think more good will come if the people who earn the money choose were the money is spent. Also the more money the government has the more power they have, not good.

The whole taxing the wealthiest idea is a slippery slope and it has directly affected me because this kind of thinking is the foundation for the tax bracket system, taxing the middle class more than the "poor" for example. I remember when I finally got responsible and went out and got a real job, I learned a cold hard lesson about our tax system. When I made a certain amount of money in a week I jumped up to the next bracket and found that my 15 hours of overtime led to me jumping into the next tax bracket and only getting paid the equivalent of 2hrs of overtime.

Either you ###### up your W4 or whoever was doing your wages was screwing you. What you described is impossible otherwise.

[_Simpson_ 250]

Shelby, by default - without higher tax rates on the wealthiest, a larger concentration of wealth funnels upward, creating a plutocracy. That is why tax rates for the wealthiest in this country have been traditionally high. This isn't some socialist movement by the Democrats - it's a principle of understanding how capitalism operates.

Look at this way - if you're a pitcher in MLB, earning 5 million a year, you're not going to be staying at a Best Western hotel when you travel. You're not going to be clipping coupons and shopping several grocery stores to buy their sale items. Chances are, you have a personal assistant, an accountant, possibly your own personal chef and you're own personal trainer, as well your talent agent - all of which cost you loads of money (which also reduces your taxable income). You've accepted that such costs come with being a high paid baseball player. If your tax rate goes from 28 percent to 35, you know what you're going to do? Have your accountant handle it...that's it. Are you going to whine and say all that hard earned dough is yours? Doubt it - considering it's the fans who show up for the games that pay your salary.

You're a regular Joe (no offense) who'll never even come close to that kind of income level, so you'll never have to worry about your tax rate going up. In fact, if you and your wife make less $200,000, you'll be getting a tax cut under Obama tax plan. That's 98 percent of all Americans - getting a tax cut. So all your worrying about MLB pitchers making 5 million a year having to pay more taxes is really much ado about nothing.

Funnel up, that is a theory, the opposite of the trickle down theory. Its easier to tax the rich than it is the poor, thats why I think traditionally the wealthiest have been taxed more.

Ok lets take this same player and pretend that he wasn't taxed disproportionately. Whats he going to do with this money? He not going just keep it under a mattress in his bedroom. He might give it to charity or pay his accountant more. He might go out and buy a sports car that will need a tune up ever so often by average Joe. Whos going to wash it, average Joe. Now Joe has money, when he tries to move up the ladder he will have better odds at moving up the ladder if everyone is paying the same tax rates.

You dont have to be a baseball player to feel the pain of this, sure your not the wealthiest but if your in the middle class you are wealthier than the "poor". I may never be in the wealthiest tax bracket but the way the system is set up I will probably never get out of the middle class bracket.

[_Simpson_ 250]

Yes this is how many democrates think the average Joe thinks, well us average Joes are out there busting our #### everyday and put some serious though into this, there is a bigger picture here that I dont think many democrats get.

This is how I feel about that money from the richest 2% I believe that the 2% would be better spent by those who earned it than the gov. Gov. is wasteful and does very little right. I believe that there is a moral majority and given the opportunity to do as they please with this money I think most of it would go to a good cause, but because of the overtaxing of the wealthiest the government gets to choose and I have very little faith in the government. I by no means think that every sports star is going to spend his money on noble things but I think more good will come if the people who earn the money choose were the money is spent. Also the more money the government has the more power they have, not good.

The whole taxing the wealthiest idea is a slippery slope and it has directly affected me because this kind of thinking is the foundation for the tax bracket system, taxing the middle class more than the "poor" for example. I remember when I finally got responsible and went out and got a real job, I learned a cold hard lesson about our tax system. When I made a certain amount of money in a week I jumped up to the next bracket and found that my 15 hours of overtime led to me jumping into the next tax bracket and only getting paid the equivalent of 2hrs of overtime.

Either you ###### up your W4 or whoever was doing your wages was screwing you. What you described is impossible otherwise.

No not necessarily, thats how the tax bracket works. If your in one tax bracket you pay this percentage, if your in another tax bracket you pay a different percentage. Those extra hours put me in the next tax bracket.

Edited March 5, 2009 by looking_up