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From a financial perspective, I think a tax hike of 3-4% will have less significant of an effect than you would think. Remember, tax rates are bracketed, it isn’t a flat tax (thankfully).
To illustrate:
Let us say someone has a 300k gross income. *gets out spreadsheets to plug numbers in*. Alright, ready.
Assuming Obama still wants to keep the reduced 10% at the very lowest income level, that leaves the changes to the 28% to 25%, 31% to 28%, 36% to 33% and 39.6%.
Let’s look at two scenarios, where Obama lets all the tax brackets revert except the lowest one, or only lets the high tax bracket revert (assuming that is what he means by top 1-2% of wealthy income earners).
Scenario 1 (most of the brackets change, most extreme scenario): $6000 (2% effective increase)
Scneario 2 (only highest bracket changes): $0 (they aren’t in the highest tax bracket even yet)
Not exactly the end of the world.
I would be more concerned with the fact the other candidate wants to spends TRILLIONS on continuing an unprovoked war. I think that sort of stance will cost us more in the end than a 2% effective tax increase (if it even happens, and that would have to be a tax that went all the way down to almost the bottom of the middle class).
Just keeping perspective, magazines that write for money deal in fuzzy numbers, at best. They get money from drumming up fear rather than delivering news and bringing up thought provoking issues.
It’s all about power and pandering. The politicians want the power and therefore they pander to the lowest common denominator, in this case human nature and jealousy. Those without want what those with have. And if I HAVE then obvious it’s my fault that someone else does NOT have.
Which is pure crap but it’s reality. Politicians want to bribe us any way they can and clearly Obama thinks that if he dangles that fruit and blames the “rich” folks for all the “poor” folks problems that he’ll get elected. I think he’s a snake oil salesman. But then again most politicians are.
It’s been proven time and time again that lowering taxes brings in MORE revenue to the government and stimulates the economy. O scares the crap out of me and my paycheck cringes.
IF he gets elected I may just quit my job … we’ll probably end up keeping more money with one income than with two!!! We are NOT rich but we are comfortable. I’d like to be encouraged to work harder and earn more – not beaten down and discouraged from earning and saving.
Oh…that’s a post I want to read – how a one income family can decrease your taxes!
Honestly, I think $250k, even here in the SF bay area makes you pretty much “rich.”
No more than 8% of the households here make more than even $200k ( , , see page 6)
I think people get mixed up by what they see around them — if they live in an affluent neighborhood, so they begin to think of it as “normal” … they see themselves as “merely” middle-class and the super-rich making millions a year as the rich. But even in wealthy Santa Clara County, $250k a year is FOUR times what the median household in this county makes in a year.
@qmc: The second link is from 2003, so I don’t think it’s recent enough. As to 250k being rich in the Bay Area, as you said, 8% of households fall into this category. That’s 1 out of 12 households, and I don’t think that’s a small number. However, Obama’s plan says that only the top 1 or 2% of households will feel a big tax bump. So in the Bay Area it seems that it would not be true. Sure, it is all relative, but in other parts of the country rent isn’t near $2000 a month either.
“unprovoked war” … hilarious
I think you’re mixing up two separate thoughts.
Top 10% of the population IS pretty damn rich, in the country. You’re making what 4 “middle” (median) families make combined. Sure, it’s not the don’t-have-to-work, inherited-all-my-money top 1%, but you’re highly educated, and in the top 10% in income — that makes you upper middle class…. even here.
Re: the age of the report…. well, sorry, but the census doesn’t run more than once a decade. I’m sure some things have changed, but not that much. The 2006 image (whoops, got an extra , on the end of the URL) shows much the same data.
Separately, the second thought. People get paid more where the cost of living is higher as well. For the same job. Pick your favorite non-area-concentrated job (probably a non-technical job) and your favorite salary website.
I’m opposed to soaking the rich (I voted against the last prop that was going to tax solely the Californians who made more than $1million). However, I don’t think the Bush tax cuts were a very good idea (spending more on credit?) and that those should be allowed to expire, effectively increasing the tax rates back. Looking at that 200-357k tax bracket, someone making $250k AGI will pay an extra 4% on $49300, which is $1972, a whole 0.79% increase. If I made that much, I would feel lucky to not need the tax breaks given to those less fortunate.
So yes, it would fall more heavily on the wealthier areas of the country. Just because he never said it would only affect only the top 1-2% of your peer group doesn’t make it him wrong. I’m really sure it’ll hit the hedge fund managers and Woodside residents much closer to 80% of them. $250k/year, even around here can get you a nice house in a good neighborhood with good schools, and you could still send them to private school.
I’m sure neither yours or my parents made enough to be more than upper middle class of the time we were growing up, here, and we both had good schools, good childhoods, and turned out great, right?
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