http://volokh.com/archives/archive_2009_02_22-2009_02_28.shtml#1235664195[/align][/align][David Bernstein, February 26, 2009 at 11:03am] Trackbacks[/align]Reminder of Obama's Campaign Promise: A Net Spending Cut:
Obama, in the third debate, on the video below within the first minute: "what I've done throughout this campaign is to propose a net spending cut.... What I want to emphasize ... is that I have been a strong proponent of pay-as-you-go. Every dollar that I've proposed, I've proposed an additional cut so that it matches."
Also, I wonder how Obama's high-income supporters in high-tax, high-cost areas like NYC, California, and DC are feeling right now? According to an article I read today, the top 7% of taxpaying families make over 250K a year, while the top 1% make over 380K. So the vast majority of those affected by Obama's tax plans are in the 250-380K range.
If you live in DC, on your marginal dollar of you'll be paying 39.6% in federal taxes, 10% in DC income taxes (with no deduction thanks to the AMT), ... oh, and that 800K mortgage you took out in 2004, on which you pay 50K a year in interest? Instead of a 20K deduction, it will be 14K. And that's not counting the inevitable push to add 6% or so in social security taxes (really, 12%, half payed by the employer). Your other deductions with face similar limits. For a couple with adjusted gross income about 250K, I'm estimating a marginal tax rate without additional social security taxes of around 52%, 64%, including the employer share, if new social security taxes added.
Tax the rich?
My friends in this income bracket tend to have have high mortgages, work 60-80 hours a week, pay 40-50K or more a year for child care (a nanny is necessary when you often work into the late evening--and even day care for two kids in the DC area costs close to 40K a year), and have six figures worth of student loans, primarily from professional school, that they are still paying off. In other words, approximately 100K of their pretax income is taken up by their student loans and child care costs, which are the equivalent of "startup costs". Their mortgage costs may seem excessive, but you don't easily make six figures in low-housing cost cities like Des Moines, and living in outer suburbs is very difficult when you work 12 hour days.
If a hypothetical couple's initial income is a total of $300K, and they work an average of 70 hours each, and assuming two weeks vacation, they are in effect getting a grand total of $28.57 an hour for their labors, and a fair percent of that is going to pay interest on the mortgage. I'm sure they are glad to know that they are rich enough to be taxed at over 50% of their marginal dollar.
UPDATE: Of course, the situation described above only applies to some fraction of the relevant taxpayers, but in my experience, young professional couples in large urban areas were among the most enthusiastic Obama supporters. Yet they also find themselves lumped by his administration into the category of "the rich," when, because of scenarios like the one described above, they certainly don't think of themselves as such, and indeed, in practice are not, despite their high gross income.
For that matter, my friends and acquaintances in such situations who supported Obama tend to be somewhat fiscally conservative, but voted for Obama for other reasons. In part, I think his calming rhetoric on economic policy (see video above) persuaded them that he wasn't going to govern as a "tax and spend liberal," so they could vote on, e.g., the Iraq War, abortion, et.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Excellent post. One question, is the $250 k gross or after deductions?
I do realize that charities will suffer big time, now that their key donors will get reduced tax shield from contributions, so will simply cut back. Also, how long will the high income earners put up with increasing taxes before they just stop making money for other people? I'm sure a lot of those people who work 80 hours a week to make over $250 k will just work 40 and make the $250 k. Then we'll have to tax lower and lower income levels to pay for the socialist policies, and have those people slink into the cesspool of mediocrity. Nothing like a policy that promotes underachievement relative to one's ability!
Also, how long will the high income earners put up with increasing taxes before they just stop making money for other people? I'm sure a lot of those people who work 80 hours a week to make over $250 k will just work 40 and make the $250 k.
thats something Ive already been dealing with.My contract at my job allows me unlimited overtime which at first I thought was great.It also pays at time and a half between 40 and 60 hours and double time over 60 hours.Sounds great on the surface and for several months I was working between 70 and 80 hours a week, 12 hour shifts 7 days a week with very little time off.
The paychecks were great untill one week due to weather we had a couple days of down time, since I was traveling these days were payed as it was beyond my control.When I got my check it was for 20 some hours less than the previous one but the actual difference in the money I brought home was very, very little.I was effectively working an extra half a week and about killing myself in the process for a couple hundred bucks extra after taxes.
Im no longer as willing to do this if its not neccassary, its not worth it to put in an extra 20 hours just to see it all goto taxes, Ill put in 60 or under under most weeks now as it pays about the same and I still have enough energy left to do something on Sunday when I do get a day off.
I cant imagine the people in this artical will be much different, tax them that much more and theyll no longer have a reason top put in the hours
Peta, this is where we could take a lesson from the French. Sarkozy was trying to, I think he succeeded, to make overtime tax free. At a minimum, overtime should be at a reduced rate and allow those who want to get ahead, get ahead.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Peta, this is where we could take a lesson from the French. Sarkozy was trying to, I think he succeeded, to make overtime tax free. At a minimum, overtime should be at a reduced rate and allow those who want to get ahead, get ahead.
That won't happen in this vile administration. Their aim is to suck the lifeblood of the productive to fund
social engineering projects and payoffs to Obama's power-base, the non-earners and biblically stupid.
The 'upshot' of this will be pretty amazing:
a: there will be a conscious effort for 'producers' to limit earnings to below that level where taxation levels
jump
b: the tax-exempt and charitable institutions who SO supported the current socialist regime will suffer.
I say GOOD, but charitable orgs generally target a truly needy segment of society which will no longer
have the benefit of such charity or, at best, a much lowered amount of assistance from these orgs.
I say good...in a mean-spirited way, because the ones running the charities overwhelmingly voted for
'change' and those benefitting from these agencies overwhelmingly supported the socialists, so
payback's a bee-yotch.
c: companies will be motivated to stop doing business in the USA because of the crushing tax burdens,
as well as the suffocation of government regulation. They can do business elsewhere, a bit more
UNencumbered than in the USA where they got their start.
d: those who have money and object to giving it to people who should not have it, or to those who should
not control it, will just leave. There are places in the world where American dollars will be welcomed,
where the atmosphere is not as opressive for the wealthy as it is becoming here.
e: with a shrinking tax base, those of us who remain in the remaining cesspool of government control and
stifling of individualism, will bear more and more of the burden. What's next ? Taxing welfare checks to
fund yet another failed socialist initiative ?
There's not much to look forward to here, my friends. And now that the fascists have proposed to
lower and/or eliminate the ability to claim mortgage interest against a growing tax burden, Im sure
this housing depression is just gonna take off like a bottle-rocket. Oh and let's not forget the millions
of retirees who subsist on Social Security and dividends will now have to pay higher taxes on those dividends. I guess they'll just have to cut back and develop a taste for cat food...a refrigerator box in the park will certainly allow for 'green' living and a positive nod from our D.C. oppressors.... And yet, in spite of all this, I STILL have not faith that the intellectually challenged American electorate will have the good sense to make a POSITIVE change come the 2010 midterm elections.
One of the funniest and most ironic things about those who discuss the wealth of others is the fact that if they were given the opportunity on a golden platter to do the same things and make the same income, most people, especially the crowd that loves to hate "the rich," would never do it. Why? Because they are unwilling or incapable of making the sacrifices necessary to be part of the intelligent, hard-working, disciplined groups of high earners which they so love to hate.
You could hand them the reigns of any of those positions and because they would have to forgo bowling on Tuesdays and pizza and beer with the gang every Friday night, they'd run as fast as they could back to the shelter of their mundane little buck-nickel-ninety-five-an-hour worlds...where they belong.
One of the funniest and most ironic things about those who discuss the wealth of others is the fact that if they were given the opportunity on a golden platter to do the same things and make the same income, most people, especially the crowd that loves to hate "the rich," would never do it. Why? Because they are unwilling or incapable of making the sacrifices necessary to be part of the intelligent, hard-working, disciplined groups of high earners which they so love to hate.
You could hand them the reigns of any of those positions and because they would have to forgo bowling on Tuesdays and pizza and beer with the gang every Friday night, they'd run as fast as they could back to the shelter of their mundane little buck-nickel-ninety-five-an-hour worlds...where they belong.
The short-sighted amongst us do not see the 'journey' that was undertaken to achieve the goal.
THey only see the goal. Morons.
Good post gang! I often laugh at the people who make their little snide remarks like "you got it made dont ya" or "i wish i had your money". As I tell them...its not against the law to do what I have. I guess they start to reallize they dont really wanna work the 300+ hour months and sacrifice most everything they enjoy and basically have no lives to get there so they just take solace in belittling and being jealous of those who do...
Actually I was just looking at my last paystub, the one where the whole crew got fired and there were only 2 of us trying to get the same amount of work done as 4 guys were doing.It actually makes me want to puke.Without getting into the actual figures I made approx 500- 600$ for 38 hours of overtime and 1/2 hour of double time.WTF?? it comes out to way less than I make on straight time after they take the taxes out.On the bright side I paid in a little over twice that much in taxes in one pay period.Glad Im doing my part in the bail outs[:'(]
Quote:
Peta, this is where we could take a lesson from the French. Sarkozy was trying to, I think he succeeded, to make overtime tax free. At a minimum, overtime should be at a reduced rate and allow those who want to get ahead, get ahead.
FM, this is becoming a little to common but I agree with you entirely, were punishing people for working harder the way it stands right now
Obama's Campaign promise, pay as you go
, were punishing people for working harder the way it stands right now
