So I watched the news on all major channels. Here's my take: Obama wanted to extend the tax cuts to EVERYONE making under $250,000 annually. He also wanted to extend unemployment benefits to assist people out of work in extremely difficult times. The Republicans say NO....you have to extend the tax cuts to EVERYONE including the incredibly rich 2% of the population or you don't get the unemployment extension. Of course their spin was to constantly imply that the tax increases would impact everyone and they were out to save American from the greedy Democrats. And so many people are just so ill-informed that they buy that. Education by sound bites. Here is the history of US tax brackets since 1913: Partial History of U.S. Federal Marginal Income Tax Rates Since 1913 Applicable Year Income Brackets Bottom and Top 1913-1915 - 1% 7% 1916 - 2% 15% 1917 - 2% 67% 1918 - 6% 77% 1919-1920 - 4% 73% 1921 - 4% 73% 1922 - 4% 56% 1923 - 3% 56% 1924 - 1.5% 46% 1925-1928 - 1.5% 25% 1929 - 0.375% 24% 1930-1931 - 1.125% 25% 1932-1933 - 4% 63% 1934-1935 - 4% 63% 1936-1939 - 4% 79% 1940 - 4.4% 81.1% 1941 - 10% 81% 1942-1943 - 19% 88% 1944-1945 - 23% 94% 1946-1947 - 19% 86.45% 1948-1949 - 16.6% 82.13% 1950 - 17.4% 84.36% 1951 - 20.4% 91% 1952-1953 - 22.2% 92% 1954-1963 - 20% 91% 1964 - 16% 77% 1965-1967 - 14% 70% 1968 - 14% 75.25% 1969 - 14% 77% 1970 - 14% 71.75% 1971-1981 15 brackets 14% 70% 1982-1986 12 brackets 12% 50% 1987 5 brackets 11% 38.5% 1988-1990 3 brackets 15% 28% 1991-1992 3 brackets 15% 31% 1993-2000 5 brackets 15% 39.6% 2001 5 brackets 15% 39.1% 2002 6 brackets 10% 38.6% 2003-2009 6 brackets 10% 35% (Sorry - I know the margins are screwed up) So the highest tax brackets for the wealthy were during the incredible boom times of the 50's. Over 90%!!!! Kinda shoots down the Republican claims, that low taxes on the rich create jobs. In fact, the rich keep getting richer while they ship your jobs overseas. Here is Obama's Tax plan that the Republican's killed: Income: $35,000 Status: married, two children under age 17 Old taxes: $0 taxes paid; $2,900 received from government New taxes: $0 taxes paid; $4,100 received from government Difference: $1,200 more from the government Income: $50,000 Status: single, no children Old taxes: $6,400 New taxes: $6,000 Difference: $400 less in taxes Income: $125,000 Status: single, no children Old taxes: $21,400 New taxes: $21,400 Difference: $0 Income: $150,000 Status: married, one child under 17, one in college Old taxes: $22,300 New taxes: $15,500 Income: $300,000 Status: married, two children under 17 Old taxes: $59,100 New taxes: $60,200 Difference: $1,100 more in taxes This well-to-do family likely would get hit by the alternative minimum tax, but less so under Obama's budget than under current law. It would still see its taxes rise from an increase in tax rates for those earning above $250,000 and from new limits on itemized deductions and personal exemptions. Income: $500,000 Status: single, no children Old taxes: $121,500 New taxes: $140,700 Difference: $19,200 more in taxes The single and very successful would be hit by a hefty increase. The increased tax rate would cost this person $7,800 more a year. The restoration of limits on itemized deductions and personal exemptions would cost $3,200 extra, and the limit on tax benefits for itemized deductions would total an additional $8,200. Income: $500,000 Status: married, two children under 17 Old taxes: $120,400 New taxes: $131,700 Difference: $11,300 more in taxes The doctors next door and their kids currently would get hit by the alternative minimum tax. The increased tax rates plus limits to itemized deductions and tax benefits would mean this family could avoid the AMT. But its taxes still would go up. Income: $1 million Status: married, two children under 17 Old taxes: $256,900 New taxes: $310,000 Difference: $53,100 more in taxes Only about 1% of married people filing jointly have an income this high, according to the Internal Revenue Service's Statistics of Income division. Someone earning $1 million a year would see a big tax increase under the Obama plan, paying an additional $25,400 from higher tax rates and an estimated $27,700 from the limitations on itemized deductions and personal exemptions. So, now instead, you saddle your children and grandchildren and great-grandchildren with additional 900 billion dollars worth of debt! Tell me again why anyone votes Republican???
First time I've ever heard 1954-1963 called an incredible boom time. Maybe it's that bad US education I got. And how does the keeping of the current tax rate suddenly create an additional 900 Billion dollars in debt.. Oh wait.. that's right we just created all this social spending that wasn't funded so if we don't increase everyone's taxes then we'll have a huge debt. I call that a spending problem, not a tax problem. If I were to go out and spend $100,000 on my credit card and then go to my boss and say if you don't give me a raise you are subjecting my children to a massive debt, where do you think he will tell me to go? Think you need another sound bite to work with.... Jamie
The real answer is somewhere in between, it always is. Most countries out there spend more than they take in. To rectify that governments are going to have to take more in and spend less. Nobody wants to campaign on that, right or left. Because it won't get them re-elected. As an outside observer I would promise to eat my hat if the American government were to decide to shelve new social programs AND let the Bush tax cuts (which were meant to be temporary anyway) run out. I'm sure that my hat doesn't taste too good but I am pretty sure I won't have to go through with the promise.
Lol Awww Jamie, I knew you'd jump all over this You are absolutely right. Spending is ridiculously out of control. Starting with the military. Spending on that equals the total of the next top 27 nations on earth, 26 of which are allies. The US spent 663 billion last year. China is one 6th at 98 billion. Canada spent 20 billion, far more per capita than China. Yeah, overall I would call the 50's "boom times". It was the foundation period of "The American Dream" and some would argue the peak of the Empire. Bushes tax cuts were temporary. The top bracket is still incredibly low by any standards. A lot of people complain about "entitlement" today. It appears no-one is more entitled than the rich. How on earth would a 37% tax bracket hurt Bill Gates? He wouldn't be able to hire as many Indian's to help you with your Windows problems?
I don't think 37% would hurt Bill at all. I am against the us vs them type thing that the Dems seem to live on. They have always tried to pit the haves versus have nots. It's always easy to say how could you not give a starving man a dollar so he can eat. That to me is a cop out. It takes much more courage to say get that man a job so he can afford his own bread. How's that bible verse go? Give a man a fish and you feed him for a day, teach him to fish and you feed him for a lifetime? My father was born in a cold water walkup, for those that don't know that means no hot water on the second floor, and put himself through school, walked on all seven continents, and taught me if I want something go out and work for it. It's the best advice anyone can get. There are things the government should do, like defend it, and shouldn't do, as in hand out food to the third generation of recipients. Funny, and I'm sure lots of people will be shocked, I read the actual Debt Commission presentation and I agree with it in principal. Actual implementation may have some things that I jump up and down about, but that's the fun part. So no one mis-understands, I'm never against providing a helping hand. Just don't move into my basement and show up at the dinner table everyday looking for food without contributing somewhere along the way... And Brewster.. glad not to disappoint... Jamie
I guess I have to laugh when I see someone take one piece of the US tax code and then turn it into an attack piece. Brewster, let me give you a small piece of the US tax system. I am currently in Wisconsin teaching three days of tax seminars to other CPA's. These three 8 hour days are only covering a very small part of the tax system we use. You see there is much, much more to our tax system than just rates. The current tax law, also called the Bush tax cuts, has a whole big bunch of phaseouts. What that means is that not only are the rates higher, but also many deductions that are currently allowed will be eliminated by the change in the law. What that translates into is that we are not talking a mere 3% increase in rates, but rather more like a 10% increase in taxes. Sorry, but that is not a mere pittance. Last year the top 1% of taxpayers paid more in taxes than the bottom 95% of taxpayers. Add to this about 46% of all US households paid NO taxes. Do you see a slight pattern of vote buying here? Guess what happens in a democracy when most of the population is on the government take? I'll answer my own question....that nation ceases to exist because those that take exceed those that produce so those that produce cease to produce. You mention Bill Gates and his employees in India. Hmmm, that one is interesting. The reason I say that is Mr. Gates gets a tax credit, that means his taxes get reduced, by the taxes he pays to India for those employees. That my friend, came long before the current tax law and Mr. Obama has not proposed anything to change that little scenario. Yep Brewster, let's wipe out the US military spending. No more US as the world's cop. Great idea, right? Hmmm, let's see. Who's going to stop North Korea from nuking Seoul? China? Hell no, they won't stop the nut cases that run that country now, so why would they stop them later? What about Iran? Want to see them nuke a bunch of infidels? What do you think might be a little bit of a deterrent for those nut jobs? Think maybe the US military may have something to do with their reluctance to nuke London or Paris or Tel Aviv? Most US military spending goes for equipment which is actually made in the US. That means that majority of those dollars actually stay in this country rather than going overseas. As for military pay...well it's an abomination. Most enlisted personnel have to get food stamps and other forms of public assistance because they don't make enough to survive on their pay. I always love it when Canadians or Mexicans or Brits love to comment about US politics and they always seem to love the big spending liberals who are just trying to buy votes and really don't give a damn about anyone but themselves and their world view. They have their lovely liberal ideals that have no practical place in the world, but they can't understand it when people who actually work for a living get upset with someone who wants to give their hard earned money to someone who's too damned lazy to get off their butt and work. The extended unemployment benefits is a real good example of that. How many of those people who can't seem to get a job after almost two years on unemployment benefits are really going to look for work when they can sit on their duffs for another year? Even ultra liberal Denmark finally came to their senses and started to limit unemployment benefits. Brewster, check out the timing of Obama's generous extension of the tax cuts. When do they expire? Oh yeah, right after the 2012 elections when good old Barry has bought himself another four years. Think that little deal is just a coincidence?
Couldn't agree more with the overall sentiment. I think the fish quote is actually an old Chinese proverb. What's missing today is that sense of honor and pride. It just seems plain wrong to me that so few have so much of the wealth. And with that wealth they have power. And with the power the control governments. History is full of lessons about dimishing middle classes and the widening gap between the wealthy and the poor. It doesn't end well. It seems like that's where we are all headed these days. I have a real problem with racking up debt that our kids and their kids, etc. will eventually have to pay. It's true in our country, as well. So my approach would be to stop the stupid spending and pay down the debt as fairly as possible. I doubt you could ever disappoint, Jamie. I appreciate your opinions. Yer a smart guy.
Ouch. I ticked you off, huh? I don't think it's fair to say Canadian's and the rest can't have opinions about American politics. You just expressed your's about North Korea, China and Iran for example. And if you can't have an opinion unless your a citizen then none of us our entitled to an opinion on the Roman Empire or the Ottoman Empire, etc.. You obviously know a heck of a lot more about the U.S. tax system than I do, or probably most American's for that matter. But I do doubt that the 10% you mentioned comes close to the 90+% bracket that the wealthy were paying in the 50's. Actually I think that would probably bring them to around the same rate the wealthy are paying in Germany....the country that is currently carrying out the U.E.. Personally, I don't think the U.S. should be the world cop. Why should you carry the cost and end up the target? Yes, most of the military spending stays home, but can you imagine what else that money could do? America hasn't always been the world cop. You know America got rich supplying arms to the British Empire while we were fighting the first three years of WWII. Same with WWI. America didn't enter that war till the last 200 days. I know it sound arrogant. My point is so does the rhetoric that the rest of us owe our freedom to America. It can be argued that American military presence throught the world exacerbates tensions. That is growing opinion of many of your fellow citizens.[FONT="][/FONT] The United Nations has become a joke. I would rather see all the ethical, moral nations, upholding universal human rights, contribute equal amounts to the cost of a world military force. Each having an equal vote on actions. it would be a heck of an army and one that would not be looked on lightly. I think I heard there was something like two million unemployed that they want to extend benefits for? They can't all be deadbeats. A 50 year old guy who's worked in a mine or the auto industry all his life...now he's out of work and considered unskilled in anything else. Truckers with nothing to haul because no-one is buying anything. Single parents laid off because business has slowed. The company I work for, an electrical manufacturer, laid off a bunch of people and the rest of us were on a four day pay week for most of 2009. What would you have them do? Bundle up their families and trek to California to pick fruit? Anyway, I don't think there is ever one side to any story. Usually three, yours, mine and something in the middle. In this case...there's a lot more. And, for the record, I think you are a smart guy too, with very interesting opinions and insight.
What the??? Ok The part I have bolded I have to call you on. Political or philosophical differences aside us Canucks don't live in a lollipop happy land. Now practical ideas... What? Can't wrap my head around that one so much. But then again I live in Alberta and come from Saskatchewan, the #1 and #2 most healthy business climates in Canada and probably North America at that rate. We do have more robust social programs, and as a price we pay more in taxes as a percentage than most Americans do. The benefit is things like our pension plan (not nearly enough to live on realistically), health care system, unemployment insurance etc which are there when we need them. Sure there are people who take advantage of our welfare system but on balance I think we have a system that works well for us and it's not fair to paint those who for whatever reason 'don't get off their butts and work'. I have known many people who have differing levels of disabilities, health problems who can't or are forced to stay at home on welfare because they may be caring for a child for example that they couldn't afford to pay daycare for if they sucked it up and got a minimum wage job. A couple of days after Christmas I am supposed to go to a drilling camp outside of Fort McMurray, Alberta to begin working 12 hour shifts for the majority of the next 3 months. I like the vast majority of my coworkers have the benefit of knowing that should there be an incident where someone is injured we won't have treatment withheld while the insurance company decides what they are willing to pay for. I find that a comfort in case I mess up my back etc. To sum up, our "lovely liberal ideas" as you so eloquently state have a very strong practical place in our world. But that's the system we have in Canada, more robust in some areas and yes more costly. No one wants to pay more for services, I know I could use a few more bucks in my pocket, but I consider what I contribute in terms of taxes to be more of an investment than feeling burdened. After all, someday I might find myself on the receiving end of many of the programs I help to fund.
I guess I should have followed Jamie's lead on this one and as he once stated "never respond to an emotional post when you are on the road and dead tired." When he did that and when I did the same I came off sounding one helluva of lot heavier than I meant to sound. I certainly did not mean to say that if you don't live in the States that you are not entitled to an opinion, but I'll be damned if I didn't come off that way. As close as we are to Canada I'm very much aware that your country and ours are joined at the wallet and at the heart so I really didn't intend to take a shot at the home of Tim Horton's.:icon_smile: To clarify my point, the US tax system is incredibly complex and evolving. The mention of the tax rates of 90% in the 50's is really a distortion because there were many more deductions against that income allowed in the 50's. Even things like cigarette taxes were deductible back then, so you can see that hardly anyone ever paid a 90% tax rate. Whenever any tax rate exceeds 50% you reach a system where it is better to spend money on something deductible than to save it or accumulate it. That is not a healthy position. As for the American military, there are probably more bases overseas that could be eliminated and should be eliminated. That could achieve some pretty good savings. I'm not enthralled with the US being the world's cop and seeing the funeral processions on TV every other night, but I often wonder if there had been a world cop 70 years ago if WWII would not have occurred. The problem we have in the US is that those that take are beginning to exceed those that produce and that is a very scary position. That includes social security which has grown to be a totally out of control entitlement program. I agree that we have to have safety systems in place for those who cannot take care of themselves. The difficulty I have is that we are creating a system that greatly rewards those who won't produce and penalizes those that do produce. When you are up on a rig in Fort McMurray freezing your butt off in what is a very difficult and even dangerous job, I'm sure it doesn't warm the cockles of your heart to know that there are a whole bunch of people who could be working but won't because the system rewards them for not working. I would definitely raise taxes and I think that the current system doesn't make sense. If we want the US to continue we need to raise taxes and cut programs. I don't agree with either party and I would love to see someone with the pure guts to get up on a podium and not sugar coat anything and just tell the people the free ride is over for both low taxes and massive giveaways.
