Would Obama increase taxes on those who make less than $250,000?

That is a claim he made in June and just thinking about the payroll tax had me wondering how he could manage that. In 2008, the payroll tax cap on Social Security is set at $102,000, so that any amount of earned income above that is not subject to the Social Security payroll tax.

So his statement that those whose income is under $250,000 won’t have an increase their payroll taxes can only be wrong. Maybe he is trying to say that he has other tax cuts that will offset the increases to the payroll tax, but I haven’t seen or heard that nuance.

Here is what Factcheck.org reports on his overall plan and those that will see increases:

Obama (June 12, 2008):”If you are a family making less than $250,000 a year, my plan will not raise your taxes. Period. Not income tax, not payroll tax, not capital gains tax, not any of your taxes. And chances are you will get a tax cut.”

The most comprehensive nonpartisan analysis of Obama’s tax proposal available is the Tax Policy Center’s comparison of McCain’s and Obama’s economic plans. That analysis mostly supports Obama’s claim that his plan won’t raise taxes, though it says that families earning between $169,480 and $237,040 would see an average tax increase of $486 under Obama’s plan. All those earning less than $169,480 would see tax cuts. In fact, that hypothetical taxpayer with the $32,000 in taxable income would get a $502 tax cut under Obama’s plan. McCain’s plan, by contrast, would leave that person’s taxes unchanged.

So the statement doesn’t hold up. But the analysis shows those earning less that about $170,000 will see cuts, yeah me. And the comparison of the person making $32,000 in taxable income, would only get a cut under Obama, none under McCain. That is a bit of difference in the candidates tax plans. You may want to recall what McCain said from the Senate floor regarding the 2001 tax cuts:

But I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle class Americans who most need tax relief.

Apparently he has lost his direction as his plan changes NOTHING for that taxpayer with a taxable income of $32,000 while Obama’s has a tax cut for that same taxpayer.

-Josh

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3 Comments

  1. david edsall said,

    August 8, 2008 at 2:43 pm

    So josh, I doubt that you can have an honest discussion but here goes;

    the question. When my tax bracket already pays 65% of all the taxes paid ( I pay 143K out of 305K) and the 32K guy pays almost nothing in % and in dollars, why should I get an increase and he gets $500 back?

    Esp when he uses police, school, fire and gov medical care much much much more than I do? How much more do yo think we will tolerate for you and your “GOD Dam America” kind putting your hand is our pockets and taking the money that I earned by preforming better in school and in the work place than you did. Why dont yo try to get baseball to have Ramirez and A-Rod pay the guy who just got sent back to the minors since he is so unfortunate (code word for unlucky right!) Alter all it is just luck that you get 32k and I get 305K. But you are not interested in fairness. It is your kind that is greedy not my kind. I gave $4000 to charity last year. How much did you give? I bet a big fat 0.

    On strict economic fairness you should pay 17% and I should pay 17%. That would cover government expenses and would be 5k for you and 50 K for me. What is your agrument as to why it should be more for me and less your you and how much more and how much less. I can agree for to more for me but not less for you unless your less goes 100% into your retirement. I would not mind being forced to pay another 50K to the charity of my choice but to be forced to give it to the corrupt wastfull government and then be told that I have not paid my fair share and have to pay more is what makes me hostile. And hostility will lead to bad things.
    Your reduction shoud go into investemtn for retirement becasue you wodl earn 5% instead of the 0.5% your Social csecruity gets (another real great gov program) and you need 320K in an acount to get the sam eincome in retirement that you get now ( 10 tiems the yearly income) I bet you save nothing and by doing so you are choosing povery in retierment. What do you think the capital gains tax will do to that? Tax on money they already taxed thats really fair.

    The company sells a TV for 1k and pays profit taxes on that and then pays you, the worker, after payrole taxes and then you pay income,fica, ss tax on that 1K and then sales tax when you buy gas and food and then you want to pay investment tax on what is left!!!! No wonder you are poor! but that does not mean I am rich and should suport you.

    I know you are probably not the 32k guy but the issues and answers are the same I bet.

  2. D Bain said,

    October 11, 2008 at 8:49 pm

    Mr. Edsall seems to imply that somehow a citizen who makes 32K a year has less honesty than one who makes 305K a year. Moral values such as integrity have little to do with income. Most attorneys are top wage earners; however most of them have developed a reputation for behaving as though honesty is relative to situation at hand. Many often lie by omission or bend the truth to a favorable outcome in their clients’ interest. He states that somehow wealthier citizens uses public services such as fire and police far less than the average taxpayer, however his logic is flawed. While the wealthier citizens seem to think and even sometimes act as though their homes and neighborhoods are isolated islands held in preserve from the common man, they really aren’t. Fire and crime pose not only a threat to property but also to commerce. Commerce, whether Mr. Edsall would like to admit it or not, he is dependent upon as a wealthier taxpayer. Furthermore, left unchecked by our protective services both fire and crime will spread into those “isolated preserves”. Large fires is Chicago, Boston and Southern California are good examples of where such services were neglected and fires destroyed homes of poorer as well as wealthier people. Protective services therefore protect the wealthier citizenry just as much if not more than the rest.

    Mr. Edsall further implies that his donation to charity of 4k is out of the kindness of his heart, however as most of us are aware the current tax system is designed to “encourage” the wealthier citizens to make such donations to lower their tax burdens. In regards to his “generosity”, 4k is a rather paltry sum when considering it is less than 2% of Mr. Edsall’s overall stated income. Many wage earners and small businesses I know give far more. It is interesting to me that Mr. Edsall states that he wouldn’t mind being “forced” to give 50k more to charity implying he is somehow forced to give the 4k he states he gives, thereby acknowledging his donation is anything but willful or generous in the first place. Irregardless, his statement is false in that no one actually “forces” Mr. Edsall to give the 4k in the first place. Mr. Edsall could choose not to donate the 4k but in turn would not benefit from a reduced tax burden overall, thus it would appear from Mr. Edsalls statement he is genuinely not interested in a “fairer” flat tax system after all.

    Mr. Edsall further alludes that a “fairer tax system” would be a flat 17% rate for all incomes. Most of the citizenry who are wage earners in the range of 32K would probably agree with Mr. Edsall on this point, especially given that it remains a flat 17% without deductions or credits of any kind. However while the 300+K earner will pay 50k and the 32k earner will pay 5K, all “incentives” to donate to charity to reduce tax burdens will be effectively eliminated. The money to support such programs to preserve commerce must come from somewhere; therefore the government will logically look at increasing the tax rate. Some data has suggested that such a flat rate could result in a rate as high as 65% of all incomes. The logic behind our current tax system that is graduated with higher percentages for wealthier citizenry with deductions and credits available to those citizenry is; that they have more disposable income above and beyond their basic needs than the less wealthier citizenry; that they have more available to them the means to seek those deductions and credits, and that they have benefited most from a cabalistic system of government. The system was intended to again give incentive to others to work towards lessening their own tax burden through donations, purchasing, investing in businesses etc to stimulate commerce.

    While Mr. Edsall resents giving his 50K to a corrupt, wasteful government, I have no doubt that a wage earner of 32K resents giving his 5K to a corrupt wasteful government just as much, if not more given the 32K wage earner has far less disposable income to do so. Implying that somehow it is less disdainful to either party is asinine. As such, if our government is corrupt and wasteful then, as citizens of this country, we have a certain responsibility for not holding those we elect more accountable. Mr. Edsall actually provides a great example in this statement regarding “a corrupt and wasteful government” actually acknowledging instinctively that income has nothing to do with integrity. However in regards to “corrupt and wastefulness within government the trend has been to privatize profits for the more wealthy and to socialize the losses to the general taxpayer, i.e. the current 700 billion dollar bailout.

    As for references to luck versus better education, integrity, education etc… There are many in our country who have benefited from all the above qualities especially luck. I don’t even think Donald Trump would deny the contribution of luck in his life. Therefore while luck is a definite contributing factor for the fortunate it is also a contributing factor for the unfortunate. I once had the great pleasure to know a young man who was born in India. Whilst this young man was intelligent, honest, hard working and charismatic he had the unfortunate circumstance of being born into a poor family in a rather poor country at the time. However a wealthy patron saw fit that this young man could come to America and attend college here. This young man went on to become a highly successful and well to do Engineer. I have no doubt in my mind that if you asked my friend whether he would rather be lucky or smart he’d definitely choose lucky.

    Last but not least… the insinuation that somehow the less fortunate or even less wealthy is somehow digging around in Mr. Edsalls pocket for his hard earned money is truly a jackass and unintelligent comment made further asinine by the insinuation that his hostility towards others less wealthy and the government could lead to “bad things”. Overall it is the hostility of the less fortunate we should fearfully respect, historically it is their hostility which leads to the bloodiest of revolutions.

    I have had the privilege to live both in America and abroad in my career and personally witness the difference. I challenge any American to do the same. You may be well surprised at how “fair” our tax system and our form of government really is in comparison.

  3. Stephen Clark said,

    November 1, 2008 at 2:32 pm

    What a load of crap! Mr. Edsall was right in his assement of your inability to have a true and fair discussion. What do the inequalities and unfairness of other countries have to do with anything? If things are unfair in Uganda then I should be happy that things are only somewhat unfair here? And I notice that no mention is made of the fact that Ireland has turned itself around economically by REDUCING its tax burden on business and its people. Gee what a concept. Doesn’t this also fit in with your “other countries” argument?
    And to blame the less fortunate for the “bloodiest of revolutions” is really off the deep end. It was and is the elite, over controlling, over taxing “leaders” who forced the less fortunate into rebellion. Where would you be today without the “less fortunate” kicking the English out of our country?
    This is pure socialist hyperbole. Karl Marx would be proud of you.
    Remember, there is no such thing as luck. As a wise man once said “Luck is the residue of design”, perhaps you should try a little harder.
    You sir, are a fool. You and your socialist buddys (especially Obama) are going to ruin this country.
    I will make a small prediction: If Obama is elected his confiscitory tax policies will drive us into a depression worse that that of ’29-’39.


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