After President Obama says very clearly in his speech the other night, taxes will go up ONLY on those earning over $250,000.
Today, Republicans all over the media are saying how Obama's raising everyone's taxes - another in their series of reality-denying spinfests.
Here's how it really works (this doesn't go into a sound bite so the media isn't gonna tell you this. Don't sweat it - I will. And I suggest you check this with your tax professional; check up on me and prove to yourself I'm being straight):
Let's say you're a single person, and after taking ALL of your deductions, you're left with $265,000 in taxable income. First, congratulations! You made more than 98% of Americans make! (FYI - average American salary is $40,690/yr - before deductions.)
Now, about your taxes under Obama:
The top rate will go up to 40% in 2011, when the Bush-era cuts expire.
Now, most folks assume that you pay the 40% on ALL of it.
Most folks are wrong.
It works like this: (Tax rate schedules are pulled from About.com )
(NOTE: I'm only changing the top rate here and assuming all else stays the same - according to the 2009 budget proposal, everything but the top rate goes DOWN slightly, so these numbers will be high)
You pay 10% on the first $8,350; $835
You pay 15% on the next $25,600; $3840
You pay 25% on the next $48,300; $12075
" "28% " "$89,300; $25004
" "33%" "$78,450; $25880.50
And 40% on anything over $250,000. $6000.00
TOTAL TAX: $73,634.50
Now let's compare this to how it is now for your taxable income of $265,000:
You pay 10% on the first $8,350; $835
You pay 15% on the next $25,600; $3840
You pay 25% on the next $48,300; $12075
" "28% " "$89,300; $25004
" "33%" "$93,450; $30838.50
TOTAL TAX: $72,592.50
The difference? A Mighty: $1042.00! That's gonna bring the Republic down, fer sures. Now, given that folks under $250K/yr are gonna get a tax CUT, that difference could be even less, depending on how they do it.
So, an extra thousand from you per year can help reduce the deficit, and maybe leave a country to pass to our grandkids - I'd say it's worth it.
As an aside: If there are any entrepreneurs out there who will stop doing business because of this tax increase, you're not worthy of the name "entrepreneur". A TRUE entrepreneur doesn't see obstacles - s/he sees OPPORTUNITIES.
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2 comments:
I'd rather they keep the $1000 and use it however they want. They would do more for the economy as individuals and keeping it out of the hands of the crooks in DC is always a good thing.
Besides, I don't believe Obama when he says he's only going to raise taxes on the wealthy. He's lied so much over the course of the last 2 years, as has the Democratic party, I don't believe anything they have to say.
As someone who earns well over $500K/yr, I will continue to shelter the income that I can, and the rest will likely cause some creative bookkeeping on my part to reduce my tax load. Democrats/liberals hate the poor, homeless, widows, and orphans, so I will use the money I retain as a result of this to help them in their time of great need.
Skinner
Skinner,
That's assuming, of course that they actually put that $1000 into the economy - history shows they tend to do the opposite. On the other hand, governmental stimulus (foodstamps, etc.)has been shown to put about $1.50 back into the economy per dollar spent, where upper-bracket tax cuts have only returned about 50-70 cents per dollar. I'll take the better ROI.
Not believing Obama is your choice, and you have every right to do so, but fact augurs against you there - he made it a centerpiece of his campaign, and going back on that would carry a MONUMENTAL price tag in political capital. As to "lied so much...the last 2 years", facts are VERY much against you - in the last 42 days, he's done exactly what he said he'd do.
Go ahead and shelter what income you can - totally American, and I'd have been shocked if you didn't.
Your assertion that "Democrats...hate the poor..." has no basis in fact whatsoever. Perhaps if you stepped out of the Limbaugh Hannity/Savage echo chamber, you might see the world as it actually is, as opposed to the fantasy that the Right would have you buy.
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