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plan for higher income tax rates

As the article explains, the inexorable logic of "tax the rich" is to extend the definition of "rich" to lower and lower incomes.

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and the Tax Tipping Pointby Adam Lerrick Wall Street Journal October 22, 2008 What happens when the voter in the exact middle of the earnings spectrum receives more in benefits from Washington than he pays in taxes? Economists Allan Meltzer and Scott Richard posed this question

27 years ago. We may soon enough know the answer.

Barack Obama is offering voters strong incentives to support higher taxes and bigger government. This could be the magic income- redistribution formula Democrats have long sought.

Sen. Obama is promising $500 and $1,000 gift-wrapped packets of money in the form of refundable tax credits. These will shift the tax demographics to the tipping point where half of all voters will receive a cash windfall from Washington and an overwhelming majority will gain from tax hikes and more government spending.

In 2006, the latest year for which we have Census data, 220 million Americans were eligible to vote and 89 million -- 40% -- paid no income taxes. According to the Tax Policy Center (a joint venture of the Brookings Institution and the Urban Institute), this will jump to

49% when Mr. Obama's cash credits remove 18 million more voters from the tax rolls. What's more, there are an additional 24 million taxpayers (11% of the electorate) who will pay a minimal amount of income taxes -- less than 5% of their income and less than $1,000 annually.

In all, three out of every five voters will pay little or nothing in income taxes under Mr. Obama's plans and gain when taxes rise on the

40% that already pays 95% of income tax revenues.

The plunder that the Democrats plan to extract from the "very rich" -- the 5% that earn more than $250,000 and who already pay 60% of the federal income tax bill -- will never stretch to cover the expansive programs Mr. Obama promises.

What next? A core group of Obama enthusiasts -- those educated professionals who applaud the "fairness" of their candidate's tax plans -- will soon see their $100,000-$150,000 incomes targeted. As entitlements expand and a self-interested majority votes, the higher tax brackets will kick in at lower levels down the ladder, all the way to households with a $75,000 income.

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Reply to
beliavsky
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So, what is your point?

-- Ron

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Reply to
Ron Peterson

I think he made his point rather clear.

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Reply to
Gil Faver

I am not quite sure where you get your facts (maybe Fox News?)

Venezuelan bolivar's exchange rate to dollar has been relatively stable, certainly not collapsing:

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- 37% below poverty line

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was estimated that in 1997 about 67% of the population had incomesbelow the poverty line. Probably, a large role in their relative prosperity is oil prices, but badmouthing Venezuela would be better done with actual facts.

Reply to
Igor Chudov

I lived there and keep contacts with friends.

The populist movement began in the late 1970's with Carlos Andres Perez' call to nationalize oil, and stop the Americans from stealing Venezuela's non-renewable natural resources, "the nation's legacy to our children". Prior to that nationalization, the Bolivar (pronounced Boe-lee-var, with accent on 'lee'), was Bs.4.5 to the dollar. A true middle class was forming at that time, with condos and rental high- rises being built for young Venezuelans (not just for the wealthy foreigners and rich nationals).

Following the nationalization, productivity took a nose-dive (05% of the economy was oil). Industry supported by oil scaled back as well. American's and their work-ethic management know-how exited. The emergence of the middle class was snipped off at the bud, and the Bolivar began its long slide to the current what? Bs. 700 to the $US? The price of a cup of coffee went from Bs.0.50 to Bs.1,500 - and the price of rice, milk, and beans followed. Chavez was merely the latest, living conditions have deteriorated the most under his reign, and he is still attempting to conolidate the death-grip on the economy and the people.

Be careful who you decide to make fun of. That I know of, no one here posts irresponsibly without some firm knowledge to back up their opinions.

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Reply to
dapperdobbs

To correct a typo - 95% of Venezuela's economy was oil, not 05%. Ninety-five percent, not five percent.

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Reply to
dapperdobbs

This is no surprise to boomers. ANyone who has been investing since the 70s and 80s has seen income and gain tax rates yo-yo a few times. Some pundits advocate "tax diversification" that is investing in different taxable instruments to antiicipate change.

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Reply to
rick++

Here is a depressing article about how taxes are likely to rise a lot.

2020 Vision: Prepare yourself: No matter what the politicians promise, long term, the government is going to grab more of your money. Forbes October 29, 2008 by Janet Novack
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If you make more than $250,000 you are perhaps fretting about how much the bailout and the fiscal stimulus will cost and how much you will pay for them. Tune out these dark thoughts. There is something much bigger to think about: the rising cost of government over the next 15 years. This should be on the minds not just of the upper class, who already pay half of the income tax, but of the vast middle class. If we define the larger group as those in families with incomes between $25,000 and $250,000, we're talking about three-fourths of the country. The government is destined to extract a pound of flesh from the middle class because this is where the money is; there simply aren't enough millionaires around to pay for everything. The pain will take the form of both taxation and broken promises.

Here's what sober budget analysts (from both parties) see when they focus on 2020 and beyond: The well-off will pay higher federal taxes, for sure. But ordinary folks will pay more, too. They will pay as tax burdens diffuse into the costs of things they buy. They will likely pay more for fuel and electricity, as the costs of carbon permits and renewable-fuels mandates get built in. They may be asked to pay a European-style value-added tax. And they will pay on the other side of the ledger: Their retirement benefits will get clipped.

The federal government will get bigger, but not big enough to keep all the promises Washington has made. So the normal age to receive Social Security retirement benefits, already rising in steps to 67 for those born in 1960 or later, will increase further, perhaps to 69. High earners will pay more in and get less back in retirement. Call it a "tax" or call it "means testing"?it's government, and it will make you poorer.

Meanwhile, the need to contain Medicare costs and to cover the uninsured will also result in the better-off paying more, either through taxes, insurance premiums or both. "Whether we call it premiums or whether we call it taxes, it's going to be income related," says John Rother, executive vice president of policy and strategy for the AARP, the 40-million-member old folks' lobby.

[...]

Your taxes are going up, your benefits down. There's nothing to do but save more, spend less and work longer. You're already doing this to put your kids through college. Now you'll be doing it to pay for your own bacon.

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I disagree with the final paragraph. If taxes, both explicit and implicit (through means-testing) rise too high, it may be rational for many people to work less, save less, enjoy their money, and just accept that they will poor in old age.

I think that as the Federal Government becomes primarily a dispenser of handouts to individuals rather than a means of providing public goods such as national defense, "tax evasion" on the part of people who are already paying more than their fair share will no longer be unethical. The argument that the people are taxing themselves through their elected representatives breaks down when a small fraction of the populations is paying the bulk of the taxes, and many voter are not paying any taxes.

Reply to
beliavsky

wrote

I seriously doubt all sober budget analysts from both parties say this. Lower taxes on the lower income also can have the effect of increasing their income and so their spending, pushing up company earnings. Kick in that a more universal health care plan overall may cost everyone less, and things are not as gloomy as this obvioiusly politically biased article suggests.

So one should not count on higher taxes ruining one's personal financial plan.

Reply to
Elle

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