Reid and Pelosi's no-tax-cut-now gamble

[Monkeyleg]

Reid and Pelosi adjourned sessions in their houses today, and won't reconvene until after the elections. The adjournment was over the objections of 39 Democrats in the house and 2 in the senate, all of whom fear they're going to flame out on November 2nd.

This strikes me as playing a serious game of chicken. Both Reid and Pelosi are betting that the public isn't aware of that tax rates may go through the roof next year if the Bush tax cuts aren't renewed. They're both assuming that, if the Republicans bring up the issue in campaigns--which they're 100% certain to do--Democrat candidates can simply say that they'll address the tax issues after the election.

In essence they're going to be asking the public to trust them with their votes on November 2nd in exchange for their word after that date. That's a pretty rash assumption, given the behavior of congress (especially this congress) and the public's disgust with the whole lot of them.

I'm thinking that the Republicans, after bashing Democrats during the campaigns, won't be pushing the renewal of the tax cuts very hard this year. If nothing happens, and the tax cuts expire, they'll be able to use the public's outrage when dealing with Obama.

That's just my guess. It will be interesting to see how the two parties play with our future earnings.

[AmbulanceDriver]

See, I think that they should vote to renew *all* of the Bush era tax cuts.  Obama DOES NOT want to renew the "rich people's" tax cuts.  His idea is to renew only the cuts for the "middle class".  Never mind that by increasing the taxes on those 'evil rich people' he'll be increasing taxes on a LOT of small business owners.  Then hope that he vetoes them. 

Then sit back and watch the fireworks............

[French G.]

I hope they are all allowed to expire. The worse, the sooner, the better. See you at the street riots.

[RoadKingLarry]

See you at the street riots.

Except that the "type" of people most likely to riot are not the ones wha are going to get tax raped.

[MicroBalrog]

Except that the "type" of people most likely to riot are not the ones wha are going to get tax raped.

35% is being tax raped now?

[41magsnub]

35% is being tax raped now?

It is by American standards, not yet (fully) being a socialist utopia plus all the other taxes in top of the income tax.

gas taxes
excise taxes
etc

[Jamisjockey]

35% is being tax raped now?

You're only looking at the income tax rate. We're already paying taxes all the way through the system. 

[Ben]

I would trust neither Democrats nor Republicans with a "post election" promise. A lot of people will though.

[MicroBalrog]

You're only looking at the income tax rate. We're already paying taxes all the way through the system. 

Explain to me how a 38.2%% top bracket tax is somehow inhumanly oppressive as compared to a 35% tax in the same bracket?

It's not that I think that tax hikes are GOOD, you understand.

[Jamisjockey]

Explain to me how a 38.2%% top bracket tax is somehow inhumanly oppressive as compared to a 35% tax in the same bracket?

It's not that I think that tax hikes are GOOD, you understand.

Ok:
35% of 250,000 is $87,500.  (Take home pay, $162,500)
38.5% of 250,000 is $96,250.  (Take home pay, $153,750)
For a difference of $8750

My health insurance is $495 a month.  $5940  a year.  That tax increase is more than my health insurance for the year.  Not to mention any perscriptions, copays, and other expenses. 
If I were in that tax bracket, something would have to give somewhere.  I'd stop using some service or buying some good.  That is oppressive to the entire system.
Many of the people in that tax bracket live in expensive places.  $153,750 doesn't go nearly as far in Washington DC, New York, Boston or LA as it does in say, Texas.   

[RoadKingLarry]

Explain to me how a 38.2%% top bracket tax is somehow inhumanly oppressive as compared to a 35% tax in the same bracket?

It's not that I think that tax hikes are GOOD, you understand.

The income tax is just a part of the tax burden. Add in Social Security, medicare, state taxes where applied, city taxes in some places just for payroll deductions. Add in property taxes, sales and use taxes and you start to get the picture.

[Waitone]

Tax cuts will be extended after the election in exchange for favorable action on any one or combination of unfulfilled democrat agenda items such as Cap 'n Trade, Card Check, post office bailout, illegal immigrant amnesty, etc.  Actually democrats have a pretty good hand to play.

[TechMan]

I would trust neither Democrats nor Republicans with a "post election" promise. A lot of people will though.

Unfortunately the lowest common denominator of the American public is what they count on.

[Nitrogen]

Ok:
35% of 250,000 is $87,500.  (Take home pay, $162,500)
38.5% of 250,000 is $96,250.  (Take home pay, $153,750)
For a difference of $8750

My health insurance is $495 a month.  $5940  a year.  That tax increase is more than my health insurance for the year.  Not to mention any perscriptions, copays, and other expenses. 
If I were in that tax bracket, something would have to give somewhere.  I'd stop using some service or buying some good.  That is oppressive to the entire system.
Many of the people in that tax bracket live in expensive places.  $153,750 doesn't go nearly as far in Washington DC, New York, Boston or LA as it does in say, Texas.   

Perhaps you need a refresher course on how income taxes work in America?
marginal tax rate != average tax rate.

http://www.bankrate.com/finance/taxes/2010-tax-bracket-rates.aspx
http://www.dinkytown.net/java/TaxMargin.html

you are not going to be taxed at 35% or 38.5% on all of your income.
If tax rates on income between $209,251 - $373,650 go up for married filers, you'd only pay increased taxes on only $41,000 of those dollars.



Assuming you're married, your average tax rate would be 21% for 2010 on $250,000 (before any deductions of course)
Your total taxes owed would be closer to $54,110 than it would be $87,500.
You'd have to be making around $10m/yr to have your average tax rate be 35%.

[ronnyreagan]

(explains how taxes work)

There is a frighteningly large number of people who don't understand this.

[Ron]

Is there a source that describes what an average percentage of a persons livelihood goes towards all the miscellaneous taxes imposed upon us?

I would be very surprised if the average "middle class" family pays less than 30-40% of their gross income toward the combined tax burden of all government bodies.

 

[seeker_two]

I would trust neither Democrats nor Republicans with a "post election" promise. A lot of people will though.

+1^{1,000,000,000}......

Past performance is the best predictor....which, IMHO, means they ALL should be purged...in a Stalin-esque manner...

[RevDisk]

35% is being tax raped now?

Yes, it is.

But, after Jan 1, my effective dividend tax rate is going to be over 60%.

[Ben]

Yes, it is.

But, after Jan 1, my effective dividend tax rate is going to be over 60%.

Yes, thank you for mentioning that. Not everyone who is subject to capital gains taxes is a fat cat being driven around in a limo. Some of us are workin' stiffs trying to get ahead so we don't have to collect welfare when Social Security takes a dump.

[Monkeyleg]

Ben, because of your violation of the Politics forum "Hitlery, McStain..." rule, I've changed your avatar as punishment.

[Ben]

Hey, won't be the first time "Hitler" "Ben" and "Moderator" have all shown up together. 

[Perd Hapley]

It's about time you mods started showing your true colors!     Now I'm going out on the back porch to scream insulting nicknames of politicians.  Let's see how long it takes for the APSS moderators to show up and disappear me.

[Zardozimo Oprah Bannedalas]

+1^{1,000,000,000}......

That is still 1.

[TommyGunn]

Perhaps you need a refresher course on how income taxes work in America?
marginal tax rate != average tax rate.

http://www.bankrate.com/finance/taxes/2010-tax-bracket-rates.aspx
http://www.dinkytown.net/java/TaxMargin.html
you are not going to be taxed at 35% or 38.5% on all of your income.
If tax rates on income between $209,251 - $373,650 go up for married filers, you'd only pay increased taxes on only $41,000 of those dollars.
Assuming you're married, your average tax rate would be 21% for 2010 on $250,000 (before any deductions of course)
Your total taxes owed would be closer to $54,110 than it would be $87,500.
You'd have to be making around $10m/yr to have your average tax rate be 35%.

All of this cr@p only really does is to convince me that we need to TRASH the U.S. Tax Code completly and enact the "Fair Tax" or some other system that doesn't require a Cray Supercomputer to figure out!!!  

[seeker_two]

That is still 1.

Well...aren't you just the smarty-pants of the math world.....