Obama to Lower Income Taxes for 95% when only 67% pay...?

[ParanoiA]

Straight from Obama's website: Obama’s Comprehensive Tax Policy Plan for America will: Cut taxes for 95 percent of workers and their families with a tax cut of $500 for workers or $1,000 for working couples.

 

How can Obama cut taxes for 95% of workers when only 67% of them even pay taxes? Isn't that a lie?

 

http://www.taxfoundation.org/research/show/1410.html

http://www.taxfoundation.org/research/show/542.html

 

According to a 2007 report by the Statistics of Income division of the Internal Revenue Service,[5] in 2006 the Internal Revenue Service received 134,372,678 individual income tax returns, of which 90,593,081 (67.42%) showed that they paid or owed federal income tax for 2005. That is, 32.58% of those Americans who filed income tax returns did not owe any federal income tax at all for 2005[/b'].

 

As Figure 1 and Table 1 show, the number of Americans who paid no income taxes because of the preferences in the tax code has varied greatly since 1950. While the number of these “non-payers” has averaged about 22 percent of all filers over the past five decades, it has spiked to record levels in recent years and the trend line does not appear to be slowing.

 

In addition to these non-payers' date=' roughly 15 million individuals and families earned some income last year but not enough to be required to file a tax return. When these non-filers are added to the non-payers, they add up to [b']57.5 million income-earning people who will be paying no income taxes.

Even 57.5 million is not the actual number of people because one tax return often represents several people. When all of the dependents of these income-producing people are counted, roughly 120 million Americans – 40 percent of the U.S. population – are outside of the federal income tax system.

[iNow]

95% of workers with families... not all workers have families, so the percentage changes when that group is included.

 

http://money.cnn.com/2008/06/27/news/economy/obama_wealthy_taxes/index.htm

 

 

EDIT: Also, one presumes that the percentage is calculated based on people paying taxes, not based on total population. Lies, damn lies, and statistics.

Edited September 16, 2008 by iNow

[ParanoiA]

95% of workers with families... not all workers have families, so the percentage changes when that group is included.

 

http://money.cnn.com/2008/06/27/news/economy/obama_wealthy_taxes/index.htm

 

 

EDIT: Also, one presumes that the percentage is calculated based on people paying taxes, not based on total population. Lies, damn lies, and statistics.

 

No, one presumes that the percentage is calculated based on what he said: workers, not people paying taxes, or else he would have said that. Those are two different percentages. Obama would have had to say that his plan cuts taxes for 67% of workers and their families. Obama did not say workers with families either.

 

I'm actually just having fun taking your guy to task for particulars. Since there's so much of that going on with Palin and McCain here, I figured I would try to balance it out. Not nearly as enjoyable as I thought it would be.

[waitforufo]

Democrats have a tendency to call subsidies tax cuts. So for example the earned income credit (EIC) also called the earned income tax credit (EITC), which is a subsidy for low income earners is called a tax cut. You don't pay any taxes but you get "tax return" anyway. So Obama may just be planning to send low income earners more money even though they don't pay taxes.

 

Democrats also have a tendency to call tax cuts subsidies as well. I recall the head of Housing and Urban Development (HUD) under Clinton saying the middle class in America was the greatest recipient of housing subsidies. The justification for saying this was that people are able to deduct mortgage interest from their income when filing their tax returns. This "tax cut" was therefore as subsidy.

 

In other words, letting you keep the money you earn is subsidy, and giving you money you did not earn is a tax cut. That's Democrat speak for you.

[Phi for All]

In other words, letting you keep the money you earn is subsidy, and giving you money you did not earn is a tax cut. That's Democrat speak for you.

How about letting you borrow on next year's tax refund, make it sound like it's free money from the president, spend the money to send out three notices that it's on it's way to every taxpayer, and then call it an economic incentive? That's Republican speak for you.

 

And they only do it in election years, so their numbers look good. If the Dems get elected, next April the Reps will be sure to blame Obama for the "extra" tax you're paying, even though it was Bush's stimulus plan that caused it.

 

This is the age of spin. It's used by both sides and it stinks.

[bascule]

Here was the Washington Post's take on it:

 

 

If you want to get technical about it Obama is cutting taxes for 99% of families

[ParanoiA]

It's shifting more tax burden to the top 1%. We've established the principle of ganging up and pushing our tax burdens to a minority. There is no reason to think class envy will not continue to pimp this bullshit under the guise of fighting for the working man. It's crap and it's wrong. We're just basically saying there's more of us than them, so we'll continue to vote for them to take our burdens. Why not? What could possibly stop that trend?

 

We obviously have no scruples. Maybe I'm just in a crap mood, but I hope we implode because of it. We deserve it.

[waitforufo]

How about letting you borrow on next year's tax refund, make it sound like it's free money from the president, spend the money to send out three notices that it's on it's way to every taxpayer, and then call it an economic incentive? That's Republican speak for you.

 

Are you writing about the bush tax rebate stimulus plan? My understanding was that if you did not actually spend the money it would be considered taxable income. Still, the amount of tax paid would still be based on your marginal rate. Also, if you were not smart enough to just cash the check, you know good old benjamins, perhaps you deserve to pay that tax.

[Pangloss]

What IS the percentage of workers with families who pay taxes?

 

Just curious.

[big314mp]

What I don't get is how the people in the third bracket from the top ($226,982 - $603,402) pay $12 less, when their tax rate doesn't change

 

It's shifting more tax burden to the top 1%. We've established the principle of ganging up and pushing our tax burdens to a minority. There is no reason to think class envy will not continue to pimp this bullshit under the guise of fighting for the working man. It's crap and it's wrong. We're just basically saying there's more of us than them, so we'll continue to vote for them to take our burdens. Why not? What could possibly stop that trend?

 

We obviously have no scruples. Maybe I'm just in a crap mood, but I hope we implode because of it. We deserve it.

 

The premise of the graduated income tax being "From each according to his ability, to each according to his need."

 

Obama talked about this in his interview with Bill O'Reilly, where he acknowledged that it is stealing from the rich and giving to the poor. He justified it by saying that the poor need it, and the rich can afford it.

 

Mugging for charity, if you will

[swansont]

"Tax" and "income tax" are not the same thing. There are payroll taxes, too, that are paid by people who end up paying no income tax. Apples and oranges.

[Severian]

We obviously have no scruples. Maybe I'm just in a crap mood, but I hope we implode because of it. We deserve it.

 

Well, there are scruples and there are scruples. If the government took the speculators who made millions out of the collapse of AIG, put them against a wall and shot them, I wouldn't complain too loudly.

[bascule]

It's shifting more tax burden to the top 1%.

 

No, it's not. Obama would simply let the Bush tax cuts lapse for the top 1%. You know, the tax cuts that lead to record budget deficits and a national debt that will soon top $10,000,000,000,000.

 

Bush's tax cuts were irresponsible and have lead to a massive devaluation of the dollar. The fortunes of the top 1% are now worth 3/4 of what they used to be.

[ParanoiA]

It's not tax cuts. It's tax cuts while spending money like you own a printing press. It's not living within our means that lead to record budget deficits. It's irresponsible and is a failure of the most basic function that all of us must master. I don't get to pull accounting tricks to make it til next payday.

[Dak]

It's shifting more tax burden to the top 1%. We've established the principle of ganging up and pushing our tax burdens to a minority. There is no reason to think class envy will not continue to pimp this bullshit under the guise of fighting for the working man. It's crap and it's wrong. We're just basically saying there's more of us than them, so we'll continue to vote for them to take our burdens. Why not? What could possibly stop that trend?

 

We obviously have no scruples. Maybe I'm just in a crap mood, but I hope we implode because of it. We deserve it.

 

capitalism naturally increases the divide between rich and poor, which is generally considered a bad thing; progressive tax counters that natural progression.

 

in principle, i might agree that the reason that people vote for this is bad, same as how it's bad to suggest upping the drinking limit just because over x year-olds outnumber under-x-year-olds (most of which are disenfranchised anyway).

 

If it makes you feel any better, i hope america implodes too

[waitforufo]

Democrats have a tendency to call subsidies tax cuts. So for example the earned income credit (EIC) also called the earned income tax credit (EITC), which is a subsidy for low income earners is called a tax cut. You don't pay any taxes but you get "tax return" anyway. So Obama may just be planning to send low income earners more money even though they don't pay taxes.

 

Democrats also have a tendency to call tax cuts subsidies as well. I recall the head of Housing and Urban Development (HUD) under Clinton saying the middle class in America was the greatest recipient of housing subsidies. The justification for saying this was that people are able to deduct mortgage interest from their income when filing their tax returns. This "tax cut" was therefore as subsidy.

 

In other words, letting you keep the money you earn is subsidy, and giving you money you did not earn is a tax cut. That's Democrat speak for you.

 

As I said...

 

http://www.washingtontimes.com/news/2008/oct/13/obama-tax-cut-refunds-those-who-dont-pay/

[D H]

"Tax" and "income tax" are not the same thing. There are payroll taxes, too, that are paid by people who end up paying no income tax. Apples and oranges.

Payroll taxes aren't taxes, at least not in the eyes of Democrats. That money (at least the share paid by taxpayers) is going into some trust fund, a "lock box" kept just for me, isn't it? That's not a tax, its a retirement program.

 

Except of course it isn't. These "tax cuts" for people who aren't paying any income taxes will only further the outcry against Social Security. There is no "lock box", and there is no trust fund. These tax cuts are indeed a hidden form of welfare.

[Tsadi]

Ouch, my head hurts.

[swansont]

Payroll taxes aren't taxes, at least not in the eyes of Democrats.

 

The democrats in waitforu's link call them taxes.

 

The Obama campaign dismisses such criticism, arguing that even if many working taxpayers owe no income taxes, they pay Social Security payroll taxes out of their earnings. The campaign also notes that Mr. McCain's economic plan also includes refundable tax credits.

 

[...]

 

"Evidently, John McCain, who also proposes to make his health tax credit refundable, appears to agree," Mr. Furman told The Washington Times.

 

"One can argue that while you don't pay income taxes, you are paying Social Security payroll taxes and this is a tax cut against that," said Roberton Williams, principal research associate at the Tax Policy Center. "It depends on whether you consider [the taxpayers'] income tax liability or their total federal tax liability."

[john5746]

I thought this link might be interesting:

 

http://www.ntu.org/main/page.php?PageID=19

[waitforufo]

Another link about Obama's "tax cut" Illusion.

 

http://online.wsj.com/article/SB122385651698727257.html

 

This pandering is really quite amazing. Also, somehow people never seem to think that this part won't apply to them.

 

There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income.

 

Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year.

 

A great example of a Democrat targeted tax cut. Basically it says never expect to find yourself in the bullseye of that target.

[ParanoiA]

It's already insidious that we tax labor, let alone the stab in the back of a progressive rate on that labor.

 

Also, what's this bit in the attack ad by Obama about McCain taxing benefits for the first time ever?

[swansont]

Another link about Obama's "tax cut" Illusion.

 

http://online.wsj.com/article/SB122385651698727257.html

 

This pandering is really quite amazing. Also, somehow people never seem to think that this part won't apply to them.

 

 

 

A great example of a Democrat targeted tax cut. Basically it says never expect to find yourself in the bullseye of that target.

 

The graph doesn't show what's happening below $25k, so you can't really see what's going on. The article seems to be a whopping load of sleight-of-hand, but doesn't actually give enough information to check. Neither does the original article by Brill and Viard http://www.american.com/archive/2008/august-08-08/the-folly-of-obama2019s-tax-plan — they focus on the marginal tax rate instead of total tax burden. And guess what: it's possible for your marginal tax rate to be higher at some income levels and yet have a lower tax liability. From what little facts are provided, it seems that this is liars-using-statistics taken to an art form.

 

———

 

example: Let's say the marginal tax rate out to $25k was 10%, and above that it was 15% out to $100k.

 

Let's say the new marginal tax rate is dropped to zero up to $25k. But the marginal tax rate above that is raised to 17%.

 

You earn $100k. The old plan taxes you at $13750. The new plan is $12750, so you save $1000. In fact, there is no income in that range where you would pay more in taxes. But the analysis of this article would focus on the new, higher marginal tax rate, and deem this a tax increase. Which it isn't.

[CharonY]

If you are interested in the marginal tax rate (just to stress it, it is the marginal tax rate) below 25,000 here is another calculations, which also takes in McCain's proposal:

http://taxprof.typepad.com/taxprof_blog/2008/10/marginal-tax-ra.html

 

Is it just a coincidence that the sharpest drops in marginal tax rate in Obama's plan are not included in the above posted chart?

[swansont]

Is it just a coincidence that the sharpest drops in marginal tax rate in Obama's plan are not included in the above posted chart?

 

I'm guessing no. It would hurt the argument and foil the misdirection.