It’s a Taxing Situation…

You know, rather than discuss the candidates per se – let’s look at an issue for a change. There has been, over the years, a lot of rhetoric about taxes – good and bad.

The Dems are fond of saying that the Pubbies, particularly Bush, only want to give tax breaks to the rich. While I think that most of us realize that at best, this is an exaggeration – I think a little actual information is a better way to consider things.

And as they say, the truth shall set you free. Honestly, I didn’t realize myself that there was such a difference – I did notice my taxes have been lower for the last several years, but since I’ve never really made much money, I guess the change didn’t really hit me.

But I do think it is noteworthy. The following information came from here, if you want to check it out.

Taxes under Clinton 1999 Taxes under Bush 2008
Single making 30K – tax $8,400 Single making 30K – tax $4,500
Single making 50K – tax $14,000 Single making 50K – tax $12,500
Single making 75K – tax $23,250 Single making 75K – tax $18,750
Married making 60K – tax $16,800 Married making 60K- tax $9,000
Married making 75K – tax $21,000 Married making 75K – tax $18,750
Married making 125K – tax $38,750 Married making 125K – tax $31,250

It is interesting when you consider that many people believe that Bush is not giving them a break tax wise, and that Bill Clinton was the one who was looking out for them. That Clinton had such a great economy and Bush ruined it. The truth is, that the unemployment rate has been consistently lower under Bush than it ever was under Clinton, the stock market has reached all time highs under Bush and despite the trillions of dollars that 911 cost us, we have thrived. Part of the reason for this is the tax cuts.

Both Mrs. Clinton and Mr. Obama have said they intend to end the Bush tax cuts, if elected. So, if that comes to pass, instead of paying 15%-25% of your income – you will be paying 28%-31% of your income – providing they go with the previous Bill Clinton levels. However, knowing politicians as we do – they will likely justify even higher rates based on inflation, cost of living and cost of all their new programs – so we may well see tax levels closer to 40% on the high end.

Yep, I’d have to agree – they surely do want change. The question are you willing to pay for it?

WC

(H.T. to Ger for passing on the info. )

This is a graph for Grace and connects to my response to her comment. WC

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17 thoughts on “It’s a Taxing Situation…

  1. Yikes. you lost me ..
    I go sit in corner now.

    I did? I’m sorry. In short, the point is this – under Bush we have paid a much lower percentage of income taxes than under Bill Clinton – and I’m predicting if Hillary or Barack are elected we will once again pay higher income taxes, probably higher than they were under Bill Clinton. Make sense now?
    A

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  2. Yes, that makes sense, and that not good! .. but ya know, I didn’t realize that we paid higher or lower because of different presidents in office. See? I told ya I dont know squat! πŸ™‚

    Honey, you have to get out more. πŸ˜‰
    Annie

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  3. Hi WC,

    A good and timely topic, well handled. I just have to add a couple of points though.

    First, Clinton left us in a recession as he pardoned a long list of criminals that had made donations to his Presidential Library fund and left office. That was the reason Bush managed to get tax cuts through a Congress controlled by Democrats.

    Second, an item of information that’s commonly not know and ignored by both the political candidates and the news media is that our country derives the bulk of its tax revenue from corporate taxes, which shouldn’t be surprising as we have the second highest corporate tax rate in the world, at %35. Not only is this the main, but little mentioned, reason that so many of our businesses move elsewhere, but, with a little pondering, it’s easy to see that this is really a hidden tax on consumers, as companies hit with this cost of doing business simply pass it along to their customers.

    In general, the idea of income tax is rather silly, and we should return to our initial method of funding the Federal Government, which was by import and export taxes. Oh, and it’s quite possible, depending on the makeup of the Supreme Court at the time, that graduated income taxes are unconstitutional, as the Amendment granting the Government power to levy such doesn’t specify that different income levels can be treated differently, or that some incomes won’t be taxed at all.

    the Grit

    Hi Grit,
    I’m with you – let’s go back to the way we did it originally and we can all be happy. πŸ˜‰
    WC

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  4. If you do some reading on the website you can compare current candidates and their plans..John McCain does want to cut the Corporate Tax from 35% to 25% as for Hillary she doesn’t really have a plan and Obama well open your wallets πŸ˜‰

    Yes, and many people will complain that they are evil and getting unwarrented breaks – never realizing that if businesses can’t operate they also can’t provide jobs. I mean, not everybody can work for the government, right? πŸ˜‰
    WC

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  5. πŸ™‚ Taxes? We don’t need not stinkin’ taxes.

    Things are so ****ed up now, Annie, that whoever the next President is, how can they ‘fix’ the economy without cutting expenses AND raising taxes???

    More important to me than the taxes, is the National Debt.

    Interesting graphs here for those like me that are visual. http://www.marktaw.com/culture_and_media/TheNationalDebt.html

    I won’t splatter my guts here on your blog about all of the damage I believe the Bush and the Dick have done to the U.S. under their watch…but let’s just say that the mess they’ve left for my kids’ generation (God help them) looks pretty ****ing dark.

    Wow…look at me self edit on this! lolol

    Oh…Gracie, Gracie, Gracie,
    First of all, NO president can FIX the economy – it is a common misconception that the president has a lot of control over the economy. They haven’t. The truth is, the economy is the buying and selling of goods from one person to the other. The government doesn’t produce goods, it consumes them and uses our tax monies to do so. There is no way that a president could possibly know who will and will not buy and what they will and will not buy. And the economy tends to happen in cycles. Ask any economist who controls the economy and their answer won’t be the president or congress.

    As to the National Debt – if you look at it strictly in terms of dollars and cents, of course it will look very alarming, so you really need to factor in population (which is larger now than it was even a year ago) – inflation, etc. So, to get perspective you are better off looking at it in terms of the percentage of GNP (gross national product). Here’s a graph of that:

    And also too, I have to say – that Bush and Cheney are not alone in whatever mess you feel they’ve created and left for future generations. May I remind you that there is a Democrat Congress who has condoned this spending and has done little to curb their spending and in fact, whenever Bush has said no or asked them to come in at budget they balk.

    People act as though we had no national debt before Bush came into office and in fact, we have had national debt for pretty much the last two hundred years. Much of that debt is interest from borrowing to pay for things that Congress wanted and didn’t have the budget for. So, if we are upset about the national debt then maybe we ought go after our reps and so forth, who insist on spending money we do not have, rather than overspending and then expecting us to pay the bill.

    Also, there is another common misconception that debt and deficit is synonomous – it isn’t. I found a great explanation for the difference and it is this:

    There is a common misconception that the national debt and the federal deficit are essentially the same thing, which isn’t true.

    The national debt is the total amount of money owed by the government; much in the same way that you would owe money with interest to your local bank, the government owes money to the Federal Reserve Bank, foreign interests, and other government accounts. The government, or in this case Congress, can owe money to several other parts of the government.
    The federal deficit, on the other hand, is the yearly amount by which spending exceeds revenue. Typically, Congress wants to spend more than it gets in tax revenue so instead of raising taxes or cutting budgets it borrows money from other countries. To get the national debt simply add up all the deficits obtained over the years and subtract those few budget surpluses that we’ve had and there you go.
    Politicians love to crow: “The deficit is down! The deficit is down!”, which isn’t a big deal by itself, since all what we are doing is adding less to the debt this year than we did last year. For instance, if after paying for say job training (0.3%) and defense (30%), and that’s assuming that you still have enough money left, that you do not pay the due interests then the unpaid interest will be added to debt thereby increasing it.

    The fact is, Gracie, that there is no one person, nor one administration to blame, there are many and they share the blame equally – and we should blame ourselves as well – for allowing them to continue to chalk up debt and then convince us that raising our taxes will fix their mistakes.’

    Love,
    Annie

    Okay, the image didn’t work in the comment box, so I added it to the post itself. Sorry.

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  6. What’s the difference between running a national deficit and raising taxes? Isn’t one just paying for it now, and the other paying for it later? One paying cash and the other using the credit card?

    Chris

    I suppose that is one way of looking at it. However, I prefer not to keep paying for Congress’s overspending. Let them write a check for their mistakes. After all, if I bounce a check, then I’m responsible for it, not them. I only expect the same level of accountability.
    WC

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  7. We’re on slippery terrain here my sweet Friend…and I know that we are on differing sides on several issues. However, it is my belief that The Commander in Chief is still ultimately responsible for everything that happens under his watch, Annie. You can bet that George – or any sitting President – would take the credit for the ‘good’ times. If they have an ounce of integrity…they would assume responsibility for the catastropically SHARP increase in the ‘national debt’. Just as any good CEO accepts responsibility for the profitability (or lack thereof) that the shareholders experience.

    I wonder….Is there any correlation between the “War on Terror” and that sharp increase in the debt???

    hummmmm

    LOVE YOU!!

    Yep, we’re on slippery terrain to be sure. But, the sharp increase is about 7% – and given that we are at war – I don’t have a problem with it. Shortly after WWII we were at about 90% of our GNP – and look what happened. Nothing. We prospered and flourished. As to the increase in spending of the war, it’s about 7% of our GNP. Again, not that much of sacrifice if it means that L.A. doesn’t end up in the Pacific after a nuclear blast.

    I don’t really want to get into a protracted argument – and I don’t think do, either – so can we just agree to disagree and leave it there?

    The point of this post was that I liked the tax cuts and don’t want to see them go away. And no, as the capitalist American piglet that I am – I don’t agree that raising taxes is the solution. Because it doesn’t change behavior – the solution is changing the behavior that puts us in debt in the first place. Not expecting us to constantly keep paying for the problems wholly created by those in power.

    Annie

    Love you too. πŸ™‚

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  8. Add me to the list of those who consider taxing someone’s labor (i.e. income tax) to be a genuine evil. The great canard of the democrats is this notion of tax breaks for the “rich”. By their definition, I am one of the “rich”. Yeah, right. I’ll happily take my tax break, thank you.

    -smith

    Yeah, well Smith, apparently it only counts when a democrat does it – Kennedy did it and that was great. Bush does it and that’s bad. Go figure.

    Nobody bothers to notice either tht since the tax cuts the IRS has collected record tax revenues as a result.

    The reason the dems want to raise taxes is not to lower the debt but to finance their new programs. Apparently, they aren’t getting enough to steal from the social security fund any more. I heard today that Barack’s proposed programs will cost two trillion? So much for the idea of paying down debt.

    WC

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  9. I just got my ’07 returns back and I’m feeling like I’ve been robbed.
    Anyway you slice it, taxes suck.
    Rich or poor, they suck.
    End of story.
    ~m

    Yes, they do. I agree.
    A

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  10. Wow – it’s quite shocking when you see things side by side like that. Thanks for putting all this info together here.

    Hey Teens,
    I’m starting to wonder if it was worth it – but you’re welcome. πŸ˜‰
    WC

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  11. Which is why I have long argued that before any new federal program can be funded, two old ones ought to be scrapped.

    Hey CG,
    I’d say you double that equation and then we’d be onto something.
    WC

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  12. Yeah, well Smith, apparently it only counts when a democrat does it – Kennedy did it and that was great. Bush does it and that’s bad. Go figure.

    You phrase that almost as if you’re expecting an argument from me. Not a chance; I’m in complete agreement with you on this one.

    -smith

    Hey Smith,
    Yeah, I was pretty sure we did agree on this – I guess I was just reinforcing our meeting of the minds. πŸ˜‰
    WC

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  13. … only want to give tax breaks to the rich. While I think that most of us realize that at best, this is an exaggeration

    Billionaire Warren Buffet asked his secretary what her tax rate was, and she told him. He pointed out that his tax rate, on the far greater amount of his capital gains, was far lower than the tax rate she paid.

    Buffet’s point is that it’s absurd for the rich and super-rich to be taxed at a lower rate than working stiffs.

    It’s no “exaggeration”, and some of you ought to listen to one of your own on this.

    Hey Ben,

    Once again, the point of this post is being missed. The statement ‘only giving tax breaks to the rich’ is still misleading. As the table shows, people paid less taxes under Bush and paid more taxes under Clinton. And that since both Dem candidates have made it clear they were going to recind the tax cuts, that people can count on going back to previous tax rates or higher.

    No, we weren’t discussing the very rich – I agree, they live in a world all of their very own. And frankly, I don’t begrudge them their wealth. Most wealthy people have worked very hard for their money – contrary to what many may think. If they are bright enough and smart enough to make a bagillion dollars, then I say, more power to them. And no, I don’t think they ‘owe’ the world their money, either. Although, it does seem that most wealthy people also spend an enormous amount of money toward charities and charitble causes. Still, just because they have it and I don’t isn’t any reason for them to give it to me, the government or anyone else. That’s like saying – hey you’ve got a pretty house there and I only rent – you can afford to give me that house cuz you have so much.

    And I’m not sure what you mean by Warren Buffet being ‘one of your own’ – I’m certainly not rich and he ain’t no Republican, so maybe he’s one of your own? This link might give you more data. http://en.wikipedia.org/wiki/Warren_Buffett#Public_stances

    WC

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  14. The obvious point from that Buffett story: it’s not that his taxes are too low, it’s that the secretary’s are too high.

    Right and if you read the data from the link – you see why his taxes were lower.
    WC

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  15. No point was missed at all. You seem afraid of anyone disagreeing with you, so you then claim that they miss your point.

    Staying calmly on your point: Clinton balanced the budget with his tax rates, strengthening our country; Bush has weakened America in numerous ways, including spending us into debt (especially debt to China). Comparing taxes in the 90s (a time of peace) to taxes now (wartime) begs remembering what the war debt of the 60s and 70s did, when taxes also were not raised and we paid a heavy price in inflation — anyone remember Gerald Ford’s slogan “WIN” for “whip inflation now”?

    (It was Jimmy Carter who put Volcker in at the Fed, whose wise policy got us back on track, not that they get credit for it.)

    So get ready for another round of inflation, this time induced by Bush and his war-spending while in tax denial — that belongs in the tax comparisons, too.

    It reminds me of what someone else said regarding statistics. Football coach Buddy Ryan once said that statistics reminded him of loose women: “you can get them to do whatever you want.” You may think the loose statistics are coming from my side, WC; I can assure you that I see them in yours.

    No, Ben, I’m not afraid of anyone disagreeing with me – if that were the case, I would simply delete your comments or anyone else who disagreed with me- (although, I do admit I have actually deleted 4 comments made on this blog over the last 15 months) – and be done with it. But I don’t. And if you’ve read my blog very much at all – you would know that isn’t true.

    But I do take exception at the way some have commented on this post – I wouldn’t go onto their blogs and act that way -(I’m not singling you out here, please don’t misunderstand) – meaning the sort of snide comments/remarks that seem to have the intent of belittling. I have to tell you, it really bothers me. Because you know what, I’ve gone onto other blogs (and I’m talking about those who I would call my blog buddies and those on my blogroll) and have read things that have really bothered me – but if I felt I couldn’t make a comment without being mean or cutting, I’ve opted not to comment – or have tried to find a way to comment without be offensive. I only expect the same in return.

    I’m not an idiot – nor have just fallen off the turnip truck. The fact that I don’t see things the way you do doesn’t even make me wrong – it just makes me someone who disagrees with you. That’s all. No need to get personal about it.

    While, I could argue all the glowing statements you make about Clinton and Carter (the worst president in history in my opinion) I won’t, because…frankly, I’m moving on.

    This was just a little post about something I thought was interesting. And to be honest with you, I think a lot of the comments coming on this post have more to do with another that very few people commented on – which is why I find this so frustrating and annoying.

    That being said – stick a fork in me – I’m done.

    WC

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  16. The fact is, the President doesn’t set tax rates, whether Bush, Clinton, or otherwise. The House sets tax rates, as they do the Budget. The President can use the bully pulpit to nudge the Congress to pass the tax cuts, and they can follow or not.

    What’s the difference between running a national deficit and raising taxes? Isn’t one just paying for it now, and the other paying for it later? One paying cash and the other using the credit card?

    Chris

    Running a deficit can be bad, if out of control. The fact is, that despite the increasing deficit (as opposed to the nat’l debt), as a percentage of GDP, the deficit is lower than it was in the 90s or the 80s. Tax increases, OTOH, have a negative effect on the economy. As has been shown in the 1960s, 80s, and 2000s, revenues to the government go through the roof after tax cuts. Counterintuitive? Not when you realize that the economy isn’t a zero sum game, or a static economy, but a dynamic one. If I lower your taxes, you have more money in your pockets, which means you can buy more widgets, which means the ABC Widget company needs to hire more workers to meet demand, more workers paying taxes, more product being sold, and so on. Where we run into trouble is the blankety blank people in Washington on both sides of the aisle see the new revenue and go on spending sprees.

    As to the table you posted, WC, that was one of my very first posts. BTW, your link for the source takes you to your about page. I got the info at Dr Sanity’s site. Great site, great reading, you should check her out. Everyone I talk to on the matter, I use the example: You’re a single mother, maybe a teacher or nurse, making $40,000 or so per year? Vote Democrat, and prepare to have about $250 less in your take home pay. That’s about what it will take to cover your increased tax burden when the current tax cuts expire in 2010. The poor? Get ready for a 50% tax increase, because you’re going from a 10% bracket to a 15% one. Yeah, Bush lowered you down. The ten million of the very poor who were paying taxes under Clinton, who were taken off the tax rolls all together? Prepare to start paying taxes again, because you’re on the rolls again.

    Well said, Chris. I checked the link and it looked alright from my post writing screen but redid it and it seems to work now. I wonder how that happened.
    WC

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