Posts tagged taxes
Posts tagged taxes
“We used to have a deal: A rising tide lifted all boats. These days, a few gleaming yachts power comfortably past the wreckage of smaller vessels… executive pay at the country’s largest companies has more than quadrupled since the 1970s. Median wages have stagnated through much of that time and declined since the crisis.” — Ezra Klein
The CEOs have a point. Not on the tax holiday for overseas income — that’s a scam. But the U.S. could make it easier to do business here. We do need more high-skills visas. We do need to reform our tax code, reduce our deficit, upgrade our education system and repair our infrastructure. We even need to compete with the incentives these companies receive to relocate their factories and research centers; it’s a fact of the modern economy, and we can’t pretend otherwise.
But the self-pitying, self-righteous tone of these complaints misses the big picture, and makes the underlying problem worse: The rest of America doesn’t trust corporate America right now. The rich have been getting fabulously richer, corporate America is sitting on trillions in cash reserves, and where has that gotten the rest of the country? A shabby, jobless recovery in the early Aughts, followed by a credit bubble, followed by a crash in which ordinary Americans had to bail out Wall Street, followed by the worst economy in generations.
[…] That’s why corporate America’s solutions are looked on with suspicion. Executives say corporate-tax reform and more immigration would be good for the economy? Well, they said that about the Bush tax cuts along with financial deregulation, the rise in housing prices and credit-default swaps, too. But that era ended with Main Street a shambles and Wall Street richer than ever. Fool me once, and all that.
Anyone interested in the capital-gains tax and the marginal rate on income over $250,000 should spend an hour or two paging through the stories at WeAreThe99Percent. The blog, which posts pictures of people holding signs describing their situation, is a powerful primer on the very real sense of betrayal rippling through the country.
KEEP THIS IN MIND: do you immediately jump to the defense of the CEO’s right to make a huge salary? If so, understand that NO ONE disputes that right. So what do you suppose is the BASIC ISSUE after that knee jerk, ideological malarkey?
Effective tax rates paid by adjusted gross incomes, via the New York Times.
If you’re poor, making more money means you’ll pay more taxes. If you’re rich, making more money means you’ll pay less.
Warren Buffett is a tough negotiator, which is one reason why he’s the second-wealthiest person in America.
So when the President refers to his new initiative to raise taxes on millionaires as the “Buffett rule” we might expect he’d start the bargaining from a tough position.
But this is…
I’ve said it before, and I’ll say it again: Tax the rich. Now.
When even conservative economists are calling for taxes to be raised on the rich, maybe it’s about time. We’re living in this delusional la-la land, where if Warren “El capitalismo espectacular” Buffett suggests raising taxes on the rich, he’s a socialist. If the economy has hope of ever rebounding, spending cuts are not the only answer. We must also raise revenue. The
temporary Bush tax cuts must be allowed to expire.
The super-rich must not be allowed to hold the economy hostage any longer. One percent of the country cannot, logically, dangle the futures of the other 99% off of a cliff without an outcry… can they?
Don’ forget; Reagan and Bush Sr. are also socialists for raising taxes.
Tim Albrecht, a spokesman for the governor, reiterated that Branstad would have supported the tax break if it had been part of a “larger effort” that included lower taxes for corporations. But since this tax break was only for poor families, Branstad suddenly abandoned his “strong support for tax relief.”
So… tax relief is only for the rich and corporations? If this was the other way around, would he have vetoed the bill if it only had corporate tax cuts?
Sen. Orrin Hatch, claiming the wealthy are already doing too much, even as the nation’s effective tax rates are at their lowest rates in over 50 years, and suggesting the middle class and poor should be picking up the slack.
Hatch insinuated payroll taxes that the poor and middle classes pay towards Social Security gives them some kind of advantage in regards to future benefit. Not so. The first $106,800 in yearly income is taxed. After that, no social security taxes are paid. The Medicare tax has no cap. It’s been suggested that lifting the cap on social security would help. Well, it would. Observe:
Explanation: Currently, wages over a certain yearly total ($106,800 this year) are exempted from Social Security payroll taxes. Medicare’s payroll tax has no such cap. This has raised the question of how raising the cap could extend Social Security’s solvency. [T]he Congressional Research Service looked at this question in 2008 by evaluating three different proposals. The first would raise the cap so that 90 percent of wages are taxed and pay higher benefits to those affected; the second would eliminate the cap and pay higher benefits; and the third would eliminate the cap for taxes but would not increase benefits. [This is] how much of the Social Security shortfall is eliminated by each proposal. Completely eliminating the cap without increasing benefits actually creates a long-term surplus, and eliminating the cap while increasing benefits comes close.
The benefits aren’t lavish. I calculated the benefit for an person of retirement age who earned the average income for an individual every year since age 18. Monthly benefit? A whopping $1519.00 monthly, which is $18,228 a year. Incidentally, that’s just a little less than the average individual income in 1987.
As for a family of four receiving subsidies at $80,000 a year?
According to the Kaiser Family Foundation, the cost of coverage for a family of four has climbed 131 percent from 1999 to 2010. The average annual premiums for employer-sponsored health insurance in 2010 was $5,049 for single coverage and $13,770 for family coverage.
For a family of four making $80,000/year, that’s over 17% of their yearly income on insurance alone. Most families are carrying a deductible of $2,000, meaning they have to hit that before receiving full benefits. So we’ll assume that’s their only out-of-pocket health care expense. So yearly expenses are now $15,770 - nearly 20% of their yearly income.
That’s also assuming insurance pays everything. Average out of pocket spending for an individual is now almost $7,000/year. So we’ll assume little Billy broke his leg playing ball, coach freaked out, called an ambulance (was’t pre-approved), and that ambulance took Billy to an out of network provider where the doctor ordered x-rays and set his leg. So now we’ve added that $7,000 for a total of $22,770 - that’s now nearly 29% of their yearly income.
The median family income in the United States is $49,777. Once those health care expenses are lopped off, the $80K family is suddenly down to roughly $56,800, just $7,023 above the median. Keep in mind, the median family and below are dealing with these same numbers.
How about a CEO making the typical pay package ($9 million) for the head of a company in the S&P’s 500? How much of an impact would those health care costs be, just for funsies? $22,770/$9,000,000 = .253% of their yearly income. Sorry, but my pity well is dry.
Oh, and Hatch’s net worth was between $1,656,067 and $4,471,000, according to Hatch’s mandated financial disclosure statements. Whose interests do you think he’s protecting?
In summary, Orrin Hatch can suck it.
Contrary to talking points claiming Social Security, Medicare, Medicaid, and other economic relief programs for poor people as the main reason we have a deficit, the Bush-era tax cuts for the wealthiest Americans are actually the single largest contributor to the deficit—even larger than the wars in Afghanistan and Iraq.