Can someone please explain the 95% tax cut please?

[daly]

Barack Obama keeps saying that under his tax plan, 95% of working Americans will not see a rise in taxes, in fact they will receive a tax cut:
OBAMA:
"What I've said is I want to provide a tax cut for 95 percent of working Americans, 95 percent. If you make more -- if you make less than a quarter million dollars a year, then you will not see your income tax go up, your capital gains tax go up, your payroll tax. Not one dime.
And 95 percent of working families, 95 percent of you out there, will get a tax cut. In fact, independent studies have looked at our respective plans and have concluded that I provide three times the amount of tax relief to middle-class families than Sen. McCain does."


I'm confused....because about 50% of working Americans do not pay any income tax at all because of lower income.
So then, will they be receiving a bigger refund check from Uncle Sam?

forgive me if this has been hashed out already.

[4noisyboys]

I think I read on fact checker that it is actually 81% of Americans that will not see an increase in their taxes.

[DirtyFeetDesigns (heb1976)]

Yes, 81.3%. It also says that "32 percent of households with a person over age 65 would see a tax increase" (http://www.factcheck.org/elections-2008/factchecking_obama.html).

As I understand it ... the ones that do not pay income tax, they would receive a $500 to $1000 check from the treasury dept. Isn't that like welfare?

[tammy1999]

Barack Obama keeps saying that under his tax plan, 95% of working Americans will not see a rise in taxes, in fact they will receive a tax cut:
OBAMA:
"What I've said is I want to provide a tax cut for 95 percent of working Americans, 95 percent. If you make more -- if you make less than a quarter million dollars a year, then you will not see your income tax go up, your capital gains tax go up, your payroll tax. Not one dime.
And 95 percent of working families, 95 percent of you out there, will get a tax cut. In fact, independent studies have looked at our respective plans and have concluded that I provide three times the amount of tax relief to middle-class families than Sen. McCain does."


I'm confused....because about 50% of working Americans do not pay any income tax at all because of lower income.
So then, will they be receiving a bigger refund check from Uncle Sam?

forgive me if this has been hashed out already.

You are exactly right! How can and I think its about 40%, receive a tax break when they don't pay any taxes in the first place? This has never been brought up and I can't figure out that one either.

I'm sorry, but this is just another ploy by Obama to buy votes. It seems our congress and canidates are doing nothing today but presenting pork and programs to buy votes. What happened to working for the people? They are working for the votes.

[tammy1999]

I think I read on fact checker that it is actually 81% of Americans that will not see an increase in their taxes.

Why can't it be 100%?

[Chreamps]

Okay, I've been doing some checking and I knew I remembered seeing that his figure of 95% was right, but it was for families (families with children), not households. Here is is from factcheck.org (http://www.factcheck.org/elections-2008/factchecking_debate_no_1.html) (scroll down to "Tax Cut Recipients"):

That should be 95 percent of families, not 95 percent of "American people." An analysis by the Urban-Brookings Tax Policy Center found (http://www.factcheck.org/elections-2008/a_new_stitch_in_a_bad_pattern.html) that Obama's plan would decrease taxes for 95.5 percent of families with children. Overall, 81.3 percent of households (http://www.factcheck.org/elections-2008/keeping_quiet.html%5D) would get a tax cut under his proposal.

From Obama's site (http://origin.barackobama.com/taxes/):

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.
Provide generous tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth.
Eliminate capital gains taxes for small businesses, cut corporate taxes for firms that invest and create jobs in the United States, and provide tax credits to reduce the cost of healthcare and to reward investments in innovation.
Dramatically simplify taxes by consolidating existing tax credits, eliminating the need for millions of senior citizens to file tax forms, and enabling as many as 40 million middle-class Americans to do their own taxes in less than five minutes without an accountant. Under the Obama Plan:


Middle class families will see their taxes cut – and no family making less than $250,000 will see their taxes increase. The typical middle class family will receive well over $1,000 in tax relief under the Obama plan, and will pay tax rates that are 20% lower than they faced under President Reagan. According to the Tax Policy Center, the Obama plan provides three times as much tax relief for middle class families as the McCain plan.
Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s. In fact, dividend rates would be 39 percent lower than what President Bush proposed in his 2001 tax cut.
Obama’s plan will cut taxes overall, reducing revenues to below the levels that prevailed under Ronald Reagan (less than 18.2 percent of GDP). The Obama tax plan is a net tax cut – his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000. Coupled with his commitment to cut unnecessary spending, Obama will pay for this tax relief while bringing down the budget deficit.

[lunafaerie]

Why can't it be 100%?

Because someone has to pay for the debt and the wars. We can't live off of credit forever, eventually countries will stop lending to us.

[daly]

Quote from Obama's plan:
Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility.

__________________________________________________ _______________

Well, gee, if he is just going to ask that they pay more, then perhaps they can just say, "No, but thanks very much for asking."
:p

lol......it's like when I tell my kids to do something and they say, "Are you asking me to do it or telling me that I have to do it?"

[daly]

Yes, 81.3%. It also says that "32 percent of households with a person over age 65 would see a tax increase" (http://www.factcheck.org/elections-2008/factchecking_obama.html).

As I understand it ... the ones that do not pay income tax, they would receive a $500 to $1000 check from the treasury dept. Isn't that like welfare?

It is A LOT like welfare. It is A LOT like 'redistribution of wealth' which we know Obama supports.

[DirtyFeetDesigns (heb1976)]

Here is a link to the Tax Policy Center that explains both the plans and compares them to each other. It is kinda cut and dry, but with no specifics.

http://www.taxpolicycenter.org/publications/url.cfm?ID=411749

[Chreamps]

DirtyFeetDesigns posted: It also says that "32 percent of households with a person over age 65 would see a tax increase" (http://www.factcheck.org/elections-2008/factchecking_obama.html).


Okay, I would like to know how they arrived at that number (not questioning you or the link Heather, it doesn't give what equation and factors that they used). In his plan he said that any seniors making $50,000 or below would not pay any taxes. Then I would think his tax cut applying the $200,000 individual, $250,000 couple(?) would apply. Maybe because a lot of wealthy Americans are over 65 or even in the upper 2%? KWIM?

As I understand it ... the ones that do not pay income tax, they would receive a $500 to $1000 check from the treasury dept. Isn't that like welfare?

On this I'd like to see more because all I see is a "tax credit". Wouldn't it be nice if they just had a page (factual) that spelled out everything so we wouldn't have to spend so much time digging? (LOL)

[SarahMD]

Well as a lower income family, I know my husband works hard and when I've had to get jobs to help pay, I too have worked hard. If we are ever in the situation where we are grossing over 250K I'm not sure I'd have such a hard time succumbing to the higher taxes.

The fact is that we do the best we can and are greatly appreciative of any breaks or cuts or credits that are bestowed upon us. And if in the situation where we're making that much money, I don't think we would have much of an issue helping out those who are in the position we are in now.

ETA: And with regards to welfare, we actually make TOO MUCH to really qualify for Medicaid, Food Stamps, and any other assistance. We don't even qualify for free Head Start! So I guess this is where I'm coming from, SINCE we aren't taking advantage of the assistance programs we are ever so grateful for the tax return come February!

[scribler]

The fact is that we do the best we can and are greatly appreciative of any breaks or cuts or credits that are bestowed upon us. And if in the situation where we're making that much money, I don't think we would have much of an issue helping out those who are in the position we are in now.

I don't mind people receiving the help either. However, lets be honest about it. Once you (generic you, not you specifically) have received back everything you have paid in, it's no longer a tax break. It's a gift, or a handout or welfare (I hate that word, because it seems to have taken on a stigma of the recipient not being a hard worker and I don't think that's fair.), I don't really care what you call it. Just don't call it a tax break once you've received back everything that's been paid in.

[kjbstevens]

I don't mind people receiving the help either. However, lets be honest about it. Once you (generic you, not you specifically) have received back everything you have paid in, it's no longer a tax break. It's a gift, or a handout or welfare (I hate that word, because it seems to have taken on a stigma of the recipient not being a hard worker and I don't think that's fair.), I don't really care what you call it. Just don't call it a tax break once you've received back everything that's been paid in.
See this is where I am. We don't pay taxes, make a decent income especially since we live in a really cheap rural area. It really makes us feel like we are doing inadequately for ourselves because we aren't up to their standards even though we still have this lower income and provide our own healthcare and do homeschooling through HIPPY instead of paying for daycare. Whatever I guess. I just don't get how raising it off the job creators and chartiable givers is the solution. It's just a different way of doing things than usual I guess.

[Gina.Maria]

So you're welcome to leave the refundable credits off your tax return. No one is forced to accept them (except those damnable stimulus checks! Ugh!) but you should also understand that your income, while adequate for your area, would put others at the level of poverty elsewhere in the U.S.

I don't know what the answer is but when incomes at the top level are climbing at an alarming rate and wages at the bottom aren't even keeping up with inflation we're heading for disaster. The larger the gap grows, the more desperate our working class becomes. Our government purposely set out to create a consumer economy and that's what they've gotten. We're taught from early childhood that enough is never enough. Now we have to live with it and all the talk of "living within our means" and "cutting back" is meaningless when few are capable of understanding what that entails.

[mama_pajama]

I guess I don't see the issue with this. If people who make over $250k/year get to keep more of their income, what will they do with it? That money will probably go into savings and investments, which does help stimulate the economy somewhat, but nothing like good old fashioned spending.

If that money is collected in taxes and given to lower income people in the form of credits, what will they do with it? They'll spend it! That spending gives a much needed boost to our economy, and who profits when the economy is doing well? Yup, the people making over $250k/year are the first ones to see added income when other people have more money to spend.

This is why trickle down economics didn't work. When the tax breaks go to the top income earners, the money stays there. When the tax breaks and credits go to the lower income earners, it tends to float to the top with everyone getting a share. At least that's how I've come to understand it.

[Hollie]

Our government purposely set out to create a consumer economy and that's what they've gotten. We're taught from early childhood that enough is never enough. Now we have to live with it and all the talk of "living within our means" and "cutting back" is meaningless when few are capable of understanding what that entails.

This is so very, very true.

[DirtyFeetDesigns (heb1976)]

O.K. but the point I am trying to make is why would someone want to pay for 4 years of school to get a decent education and eventually get that high paying job, if they are just going to be *forced* in a way to pay for those that aren't making much.

I believe in the higher incomes paying more in taxes. That is as it should be ... but I do not believe that said person should be responsible to take care of those of us that make under that amount. That is not their job.

And yes you are right, someone making $250K and above may take their money and invest it or save it, but they earned it, it is *their* money to do as they wish. I personally wouldn't want someone telling me what I should or shouldn't do with my money. It is not fair.

[HLWalter725]

O.K. but the point I am trying to make is why would someone want to pay for 4 years of school to get a decent education and eventually get that high paying job, if they are just going to be *forced* in a way to pay for those that aren't making much.

I believe in the higher incomes paying more in taxes. That is as it should be ... but I do not believe that said person should be responsible to take care of those of us that make under that amount. That is not their job.

And yes you are right, someone making $250K and above may take their money and invest it or save it, but they earned it, it is *their* money to do as they wish. I personally wouldn't want someone telling me what I should or shouldn't do with my money. It is not fair.

I agree that it wouldn't be fair to take all of a rich person's hard earned money and just give it to the poor -- not exactly what we are looking at here though. But don't you think its equally unfair that many of the very rich are able to use tax loopholes to pay a SMALLER percentage than you or I in taxes, just because they can afford a load of great accountants? I say we need to close the loopholes and even the playing field a little.

[NellieRose]

But don't you think its equally unfair that many of the very rich are able to use tax loopholes to pay a SMALLER percentage than you or I in taxes, just because they can afford a load of great accountants? I say we need to close the loopholes and even the playing field a little.


Bravo......hit the nail on the head.:clap

[mama_pajama]

O.K. but the point I am trying to make is why would someone want to pay for 4 years of school to get a decent education and eventually get that high paying job, if they are just going to be *forced* in a way to pay for those that aren't making much.

I believe in the higher incomes paying more in taxes. That is as it should be ... but I do not believe that said person should be responsible to take care of those of us that make under that amount. That is not their job.

And yes you are right, someone making $250K and above may take their money and invest it or save it, but they earned it, it is *their* money to do as they wish. I personally wouldn't want someone telling me what I should or shouldn't do with my money. It is not fair.

I'm kind of biased in this, because I don't think anyone truly earns $250k a year unless they are running their own business. I don't think there are enough hours or responsibilities to make one person's time worth $250k a year. So when you say that they earned their money, I'm not buying it. Who decided that an attorney's time is worth $250k a year, while a teacher's is only worth $30k? Many teachers spent just as much time in school as that lawyer, they have just as much job stress, just as much responsibility. Talk about not fair! So I am not going to cry a river if that attorney has to pay a higher percentage of his salary to taxes than the teacher. The attorney's salary will go up much more than the teacher's when the economy takes a turn for the better, fueled in part by lower income people having a little extra money to spend.

[MommySpice]

Depends on where you live. Some of the hardest working people I know are making close to that as a family. They are a firefighter and a teacher. But in this part of California, that is not close to being rich.

[SarahMD]

I'm kind of biased in this, because I don't think anyone truly earns $250k a year unless they are running their own business. I don't think there are enough hours or responsibilities to make one person's time worth $250k a year. So when you say that they earned their money, I'm not buying it. Who decided that an attorney's time is worth $250k a year, while a teacher's is only worth $30k? Many teachers spent just as much time in school as that lawyer, they have just as much job stress, just as much responsibility. Talk about not fair! So I am not going to cry a river if that attorney has to pay a higher percentage of his salary to taxes than the teacher. The attorney's salary will go up much more than the teacher's when the economy takes a turn for the better, fueled in part by lower income people having a little extra money to spend.

Its funny when I can't come up with the words to explain my opinion or how I feel on these issues... then someone like you makes some awesome posts that make me go... "well YEAH!"

I guess this is just my way of saying I agree...

[Gina.Maria]

I'm kind of biased in this, because I don't think anyone truly earns $250k a year unless they are running their own business. I don't think there are enough hours or responsibilities to make one person's time worth $250k a year. So when you say that they earned their money, I'm not buying it. Who decided that an attorney's time is worth $250k a year, while a teacher's is only worth $30k? Many teachers spent just as much time in school as that lawyer, they have just as much job stress, just as much responsibility. Talk about not fair! So I am not going to cry a river if that attorney has to pay a higher percentage of his salary to taxes than the teacher. The attorney's salary will go up much more than the teacher's when the economy takes a turn for the better, fueled in part by lower income people having a little extra money to spend.

Brava! :clap

And, may I say, teachers deserve to be some of the highest-paid of our workers. Not only do they have our future in their hands but, at the height of their careers, they will have spent as much, or more, time in continuing education as that lawyer. Which puts the idea that his extensive education makes it worth all those extra dollars.

[strangejen]

And, may I say, teachers deserve to be some of the highest-paid of our workers. Not only do they have our future in their hands but, at the height of their careers, they will have spent as much, or more, time in continuing education as that lawyer. Which puts the idea that his extensive education makes it worth all those extra dollars.

YES! I take every opportunity to let Jake's teacher know how much I appreciate her, because I am in AWE of her loving and caring and hard work. She is definitly not in it for the money, which is why it bothers me when people just say to "work harder and you will succeed" -- she works EXTREMELY hard and is always smiling and she LOVES my child. That is PRICELESS.

And for what they pay teachers -- she is on her 6th year of teaching, and is at a new school, so I know she can't be making much -- she could not support her family without her husband's job.

[SarahMD]

As much as I CAN wait for Brooklynn and the other two to start school... I can't wait! I look forward to being one of those homeroom helper mommies that give the teachers a hand and help out a lot. My mom was like that with me and did a lot for my teachers! Gifts, cards, and just all the help she was willing to give the teacher I would hope said a lot about who she was and how much she appreciated the educators of her daughter... and I want to be able to do the same with my children's teachers!

[mama_pajama]

Thank you! I am a teacher, although I'm on a childcare leave of absence for a few years, and I can't tell you how important it is that people realize most of us don't go into teaching because we can't do anything else. Most of us LOVE teaching, we LOVE being with kids, and I do get annoyed when people imply that making less money is a result of either not getting enough education or not working hard enough. As a whole, we are VERY well educated and we work hard! I don't think it's absurd to go to college to do something you love, even if you make less money doing it. Money isn't everything, it's also important that you love what you do.

[tammy1999]

Thank you! I am a teacher, although I'm on a childcare leave of absence for a few years, and I can't tell you how important it is that people realize most of us don't go into teaching because we can't do anything else. Most of us LOVE teaching, we LOVE being with kids, and I do get annoyed when people imply that making less money is a result of either not getting enough education or not working hard enough. As a whole, we are VERY well educated and we work hard! I don't think it's absurd to go to college to do something you love, even if you make less money doing it. Money isn't everything, it's also important that you love what you do.

Oh man!!! Who would ever think teachers aren't educated enough? WOW, I love teachers. Use to be one a very long time ago. My son teaches too and loves it! Thank you for being a teacher! :hug And shame on people who think teachers only teach because they can't don't anything else or aren't educated. pooh

[Miss Chris]

amen and thank you. DH is a a teacher and I am a school counselor.

[txmusicmom]

I'm kind of biased in this, because I don't think anyone truly earns $250k a year unless they are running their own business. I don't think there are enough hours or responsibilities to make one person's time worth $250k a year. So when you say that they earned their money, I'm not buying it. Who decided that an attorney's time is worth $250k a year, while a teacher's is only worth $30k? Many teachers spent just as much time in school as that lawyer, they have just as much job stress, just as much responsibility. Talk about not fair! So I am not going to cry a river if that attorney has to pay a higher percentage of his salary to taxes than the teacher. The attorney's salary will go up much more than the teacher's when the economy takes a turn for the better, fueled in part by lower income people having a little extra money to spend.

NOT to take up for attorneys-:lol

But both doctors and attorneys had to pay for law school or medical school- plus additional TIME in school......they do have a larger liability in their profession-

THAT being said- a GOOD teacher.......should be paid so much more! A good teacher is worth GOLD!!!!
( Also remember it's a 9 month contract......)

[mama_pajama]

NOT to take up for attorneys-:lol

But both doctors and attorneys had to pay for law school or medical school- plus additional TIME in school......they do have a larger liability in their profession-

THAT being said- a GOOD teacher.......should be paid so much more! A good teacher is worth GOLD!!!!
( Also remember it's a 9 month contract......)

I'm not sure what you mean by the liability part, all of the .......... throw me off. Are you saying they have a greater financial liability due to their time in school?

Teachers had to pay for their bachelors degree, plus teachers are required to continue taking classes in order to renew their certificates, and every district I've worked in requires a masters degree to go past a certain point on the pay scale. Talk about additional time and money spent in school! And believe me, I am fully aware of 9 month contracts, but that would mean that we should get 75% of the pay of someone in another profession that requires similar education, but we don't even come close.

Teachers aren't the only ones who choose to go to college in order to enter professions that don't pay very well, they're just the ones who are near and dear to my heart. I just don't think we need to assume that people who make $250k/year are working harder than someone who makes less money. My step dad worked in a lumber mill for 11 hours a day making barely enough to support the family. But somehow the terms 'hard work' and 'more money' have become synonymous for some people. I don't think they necessarily go hand in hand.

[Tiffikat]

You do realize that most teachers are required to have at least a Master's degree and then to still continue their education beyond that gaining more credit hours each year in order to renew their license right? When you add it all up I would say many teachers end up having as much education as an attorney and sometimes even as much as a doctor.

[HLWalter725]

I have as much education as a doctor. In fact I have a doctorate. I have as much time devoted, and as for liability. . . you must mean being sued for malpractice kind of stuff? Yup -- that can happen to me as well. In fact one of my colleagues is having that happen right now, a student cheated and failed and the parents are suing for discrimination. All that being said, I do not make $250k, not anywhere close. I chose education because I love it, and it is only with that choice that I am not making more money. No one worked harder than me to make the money, its just that my profession isn't as valued by our society as other professions.

[txmusicmom]

its just that my profession isn't as valued by our society as other professions.

I understand- I'm a college instructor....... ;)

I wasn't taking up for them..........I have no problem with doctors making money-- My doctors are awesome. Most general doctors are rolling in the dough.

My hats off to you who teach K-12.