You are looking at posts that were written in the month of October in the year 2008.
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JimmyC
If he gets elected, please make him read this article….This is the best story covering why HENRY’s aren’t rich and why they are critical to the success of America. I am not a HENRY every year, but when I’m doing my job as a salesman "making my numbers" I am, and I certainly don’t feel "rich" even on those good years. And those are the years I’m providing the sales for my company to employ our accountants, programmers, trainers, support people, etc. If I don’t sell, they get laid off.
From the Article:
"Now that the government needs more revenue for bailouts and stimulus packages, is it fair or efficient to burden the HENRYs with even bigger tax bills? The case in their favor: As the HENRYs go, so goes the struggling economy. Their stats tell the story. For the 2006 tax year, 3.1 million HENRYs accounted for about 10% of all U.S. personal income taxes. That’s almost as much as the 12 million families and individuals who earned between $100,000 and $200,000 (The Tax Policy Center estimates that HENRYs now number five million and will pay 24% of federal income taxes in 2008) How HENRY’s feel about tomorrow is crucial for the sales of new cars, PCs, and toys. According to estimates by the American Affluence Research Center, the HENRYs control as much as 15% of the $9 trillion in U.S. consumer spending."
Some Statistics from the article: 66% of all tax payers are in the low to no income bracket (<50K income) paying just 8% of all taxes; 22% are in the next slot up (50-100k income) paying 18% of all taxes, the next 9% making 100-200K pay 20% of all taxes and the next 2.3% making 200K-500K pay 17% of all taxes. everyone above 500K is already paying the remaining 37% of taxes. Its different when you look at that. These HENRY’s are only 2.3% of the population yet they pay 17% of all taxes!
"The big tax bite and what they consider investments in their kids chew up most of the HENRYs’ incomes, leaving little for ether extravagant living or, in many cases, saving for an affluent retirement. Indeed, the HENRYs consider themselves "well off" and "successful" but nowhere near rich…."Tony Molino, 50, an attorney in Rancho Palos Verdes, Calif., speaks for legions of HENRYs: "I’ve worked 50 to 60 hours my entire life, and I don’t have a lot left over at the end of the month. I’m comfortable, but when Joe Biden talks about sucking it up, getting patriotic, and paying more taxes, I get livid."
"The HENRY’s hold down their housing costs so that they can lavish money on what they consider the ultimate staple, their kids’ education….Tom Hume, 39, a real estate broker from Tacoma who made $275,000 last year, pays so much to put three kids through private school that he’s looking at an extremely modest retirement. At the end of each year Hume tries to put $10,000 into his 401(k), but some years he can’t even save that much. "No one is going to feel sorry for me," says Hume, "but as we get closer to retirement, we see that the amount we can save just won’t make it. There’s no extra money in our lives."
"Small Businesses created two thirds of the 6.4 million new private-sector jobs the U.S. economy added between 2003 and 2007"
What happens when you raise taxes on these small business owners and professionals? Are they going to be happy making less money? They can’t - there is nothing left. They are going to work more and fire the office clerk, the extra hygienist, or the receptionist. Am I going to stop paying for private school, stop contributing to my 401(k) or make my daughter stop ballet lessons? Hell No. Or will I sell my boat, stop eating at fancy restaurants and give up my country club membership - I can’t because I don’t have or do any of those things; its not on the list! So I won’t buy that new dishwasher, I’ll fix it; I won’t pay someone to cut my grass, I’ll cut it and I won’t buy a new car, I’ll buy a used one and drive it as long as I can. How can raising taxes possibly help this economy?
I’m not asking you to vote for McCain - just tell Obama that he doesn’t want to be Herbert Hoover. I’m not asking him to cut taxes on the 0.13% of the population making more then $1.5 million. But leave the heart of our free market alone. This is not the time to suck more money out of the economy this is the time to reward success and let the people who drive it continue to do so.
Obscure Tax Breaks Increase Cost of Financial Rescue - WSJ.com The biggest beneficiary so far is likely to be Wells Fargo. The big San Francisco-based bank recently agreed to buy Wachovia Corp. of Charlotte, N.C., which has been hammered by huge losses on mortgage-related securities and loans. Wells Fargo has said it expects to take $74 billion in write-downs on the Wachovia portfolio.
Its all about getting elected - this won’t stimulate the economy - it will kill productivity. Reminds me of the nice Greek neighbor I met when visiting the family house in Lemnos. He was "on disability" so he worked the land for food and collected his disability check (he was technically a construction worker). It didn’t pay to go back to work even after he got well.
From "Obamas 95% Illusion" - WSJ.com - October 13, 2008 Review & Outlook - Opinion
One of Barack Obama’s most potent campaign claims is that he’ll cut taxes for no less than 95% of "working families." He’s even promising to cut taxes enough that the government’s tax share of GDP will be no more than 18.2% — which is lower than it is today. It’s a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he’s also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut." For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals: - A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple. - A $4,000 tax credit for college tuition. - A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies). - A "savings" tax credit of 50% up to $1,000. - An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support. - A child care credit of 50% up to $6,000 of expenses a year. - A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles. Here’s the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer — a federal check — from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern’s 1972 campaign a "Demogrant." Mr. Obama’s genius is to call it a tax cut. The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation’s Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS. The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is. The political left defends "refundability" on grounds that these payments help to offset the payroll tax. And that was at least plausible when the only major refundable credit was the earned-income tax credit. Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers. It is also true that John McCain proposes a refundable tax credit — his $5,000 to help individuals buy health insurance. We’ve written before that we prefer a tax deduction for individual health care, rather than a credit. But the big difference with Mr. Obama is that Mr. McCain’s proposal replaces the tax subsidy for employer-sponsored health insurance that individuals don’t now receive if they buy on their own. It merely changes the nature of the tax subsidy; it doesn’t create a new one. There’s another catch: Because Mr. Obama’s tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income. Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you’re a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery — among many — of the McCain campaign is why it has allowed Mr. Obama’s 95% illusion to go unanswered.
