Game on: Obama v Romney, the 2012 campaign for the office of the POTUS

[Pelado]

H&R Block has a free tax estimator here.

Using the estimator for three different "middle class" incomes ($90,000, $60,000 and $35,000), married filing jointly with two kids (ages 14 & 16), the standard deduction and only the child tax credit, the results are as follows:

$90,000 income
2011 estimated tax - $6,690
Effective tax rate - 7.4%

$60,000 income
2011 estimated tax - $2,190
Effective tax rate - 3.7%

$35,000 income
2011 estimated tax - $0
Effective tax rate - 0%
Plus, because of EIC and child tax credit, this "tax payer" gets a refund of $3,460.

Ma'ake is doing very, very, very well to be paying over 20% federal.

This analysis excludes the employee portion of payroll taxes.

[byu71]

H&R Block has a free tax estimator here.

Using the estimator for three different "middle class" incomes ($90,000, $60,000 and $35,000), married filing jointly with two kids (ages 14 & 16), the standard deduction and only the child tax credit, the results are as follows:

$90,000 income
2011 estimated tax - $6,690
Effective tax rate - 7.4%

$60,000 income
2011 estimated tax - $2,190
Effective tax rate - 3.7%

$35,000 income
2011 estimated tax - $0
Effective tax rate - 0%
Plus, because of EIC and child tax credit, this "tax payer" gets a refund of $3,460.

Ma'ake is doing very, very, very well to be paying over 20% federal.

This morning on Morning Joe they, including Joe, were bemoaning the fact Romney pays a les effective tax rate than the middle class. Are these people stupid, uninformed or just like controversy.

You would think as much as this subject has been talked about the last year, these pundits would get up to date on how the income tax system works.

Also one other thought. Mitt is 65 years old. He has done very well for himself. He has accumulated a lot of assets that get favorable tax treatment, is that a fault? Blame the tax system if you want and I know a lot of democrats will. However, to hear Gingrich go off on it makes me wonder if he too is just stupid, uninformed or figures he can say these things because the liberal press won't call him on it and the majority of the public have no idea what an effective tax rate is.

[byu71]

This analysis excludes the employee portion of payroll taxes.

All of the so called payroll taxes should be taken out of any equation. It is a government forced savings plan. It is not a tax!!

What other tax do you or anyone know of where they will send you out a form telling you what you have paid in and what will be owed you when you hit a certain age.

[Moliere]

This morning on Morning Joe they, including Joe, were bemoaning the fact Romney pays a les effective tax rate than the middle class. Are these people stupid, uninformed or just like controversy.

You would think as much as this subject has been talked about the last year, these pundits would get up to date on how the income tax system works.

Also one other thought. Mitt is 65 years old. He has done very well for himself. He has accumulated a lot of assets that get favorable tax treatment, is that a fault? Blame the tax system if you want and I know a lot of democrats will. However, to hear Gingrich go off on it makes me wonder if he too is just stupid, uninformed or figures he can say these things because the liberal press won't call him on it and the majority of the public have no idea what an effective tax rate is.

Their whole argument is interesting. I do wonder what would happen if the capital gains tax was raised to match the Ordinary Income tax. Would it really curtail investment? Obviously it would, but by how much? Where would rich people put their money now that it's being taxed at a higher rate?

Obviously the Dems approach to all of this will to demonize Romney for making money, which is weird given that Dems support capitalism and Romney did not make his money off of golden parachutes, fraud, or shipping jobs off to China. He made it by investing in American businesses and working his butt off to make these companies efficient to the point that they were worth something to a buyer.

And the revelation that Romney doesn't pay the top tax rate for OI is only a revelation to stupid people or people who couldn't care less.

[Ma'ake]

I checked, I pay between 17-20%, federal. Definitely north of 15%

I'm going to send my tax accountant a nasty gram and let him know that until I pay less than Mitt, and have money in an account in the Cayman Islands, he's on probation.

I could definitely pay less if I documented charitable donations. Actually, most of my charity payments go to individuals, so they can't exactly write me a receipt.

Besides that, I've always wondered - is it really charity if you benefit?

I'm trying to operate more like the Tongans, who have engrained selflessness into their culture. Your status in Tongan culture is closely related to how much money you give away, and how much you end up with yourself.

My "cousin" Taki has repeatedly taken homeless people into his house and let them live in the basement, even though he runs out of money himself and asks me to pay his gas bill in the winter. He's the real deal. Drinks kava like a fish, but that man is going to heaven, without a doubt.

Once at a kava party the mood got kind of serious, and the Tongans were asking me some questions about the palangi world. (Compared to Polynesian society we have a very complex, rules based culture that people use to better their own positions, or ignore and get ruthlessly punished. Tongans frequently get caught in the culture clash, their kids get into trouble, etc)

"Hey Ma'ake - how come a billionaire palangi can drive past a homeless person and not even recognize the man is there?"

I started with a long explanation about how charity is handled partially by the government and there are churches and really generous people out there, even though the same people can be hard nosed in the business world, lay people off, etc.

Then realizing the contradiction between laying people off and being charitable, I paused and said "I don't really have a good answer. Our culture is big and complicated. Homelessness is a big problem. It may not seem like it, but a lot of people do try to help the poor."

The next few cups of kava I asked for them to be "lahi", ie, full. Those guys weren't being dicks, they weren't trying to hoist me up as the perpetrator of bad things that come from out society, but it was sobering experience, in spite of the copious amounts of kava.

[CardiacCoug]

I checked, I pay between 17-20%, federal. Definitely north of 15%

I'm going to send my tax accountant a nasty gram and let him know that until I pay less than Mitt, and have money in an account in the Cayman Islands, he's on probation.

I could definitely pay less if I documented charitable donations. Actually, most of my charity payments go to individuals, so they can't exactly write me a receipt.

Besides that, I've always wondered - is it really charity if you benefit?

You really don't get it if you think writing off a charitable donation turns it into a financial "benefit."

[Pelado]

All of the so called payroll taxes should be taken out of any equation. It is a government forced savings plan. It is not a tax!!

What other tax do you or anyone know of where they will send you out a form telling you what you have paid in and what will be owed you when you hit a certain age.

They aren't sending the forms out anymore - at least not to us young people (relatively speaking). It's not a savings plan, it's a redistribution plan.

[Ma'ake]

My reference for comparing US & Canadian taxation is wikipedia, which is down now with their protest of the SOPA.

At an aggregate level, Canada's taxes are about 38% of GDP, in the US it is about 28% of GDP. The articles I read stated that a rough comparision of US & Canadian taxation reveals that taxes on the poor & middle class in Canada are roughly the same as in the US, but taxes on higher earners are significantly higher in Canada.

Tax rates in Canada are lower than the US for corporations, but a lot of that is because our tax code is incredibly complex. Few companies pay the actual tax rate.

Canadians do not get a deduciton for interest on mortgages. The more highly regulated Canadian financial markets did not get hammered by the financial crisis. (There are big differences in our financial markets and Canada does not serve as the default worldwide hub for finance, granted.)

In terms of US politics, Obama may make the push this year to simplify the tax code, and Republicans may or may not go along. I'd imagine McConnell & Company would like to find ways to oppose anything Obama does, but as his proposal to streamline the Executive branch suggests, it's a political thorny issue for Republicans to oppose... or support.

[Ma'ake]

You really don't get it if you think writing off a charitable donation turns it into a financial "benefit."

Which is more beneficial? Charitable donation with associated tax deductions, or "blind" charitable benefit (with no deduction)? That's my point.

In the case of LDS, you take 10% off the top (net or gross), but part of that is returned via lower taxes. I get no receipt at the end of the year (but I'm not trying to compare donations - I greatly appreciate the work Mormons do.)

[Ma'ake]

Their whole argument is interesting. I do wonder what would happen if the capital gains tax was raised to match the Ordinary Income tax. Would it really curtail investment? Obviously it would, but by how much? Where would rich people put their money now that it's being taxed at a higher rate?

Obviously the Dems approach to all of this will to demonize Romney for making money, which is weird given that Dems support capitalism and Romney did not make his money off of golden parachutes, fraud, or shipping jobs off to China. He made it by investing in American businesses and working his butt off to make these companies efficient to the point that they were worth something to a buyer.

And the revelation that Romney doesn't pay the top tax rate for OI is only a revelation to stupid people or people who couldn't care less.

Where are the rich going to put their money? Offshore? Europe as a market is drying up, China is experiencing a slowdown.

Simplify the tax code, lower the rates, increase the amount the rich are paying. How in the world did the US thrive when tax rates were much higher on the rich? The conventional conservative wisdom is we should have been deeply entrenched in poverty, with the most capable looking for the nearest couch to occupy as they had no incentive to achieve.

As far as tax avoidance / evasion by moving money offshore, I think people who are doing this on a widespread basis should potentially lose their US citizenship. You're either American, or you're not. You can't exploit the benefits of American citizenship and hide your money because you don't like Democrats or think our nation is a horde of losers.

[Surfah]

Where are the rich going to put their money? Offshore? Europe as a market is drying up, China is experiencing a slowdown.

Simplify the tax code, lower the rates, increase the amount the rich are paying. How in the world did the US thrive when tax rates were much higher on the rich? The conventional conservative wisdom is we should have been deeply entrenched in poverty, with the most capable looking for the nearest couch to occupy as they had no incentive to achieve.

As far as tax avoidance / evasion by moving money offshore, I think people who are doing this on a widespread basis should potentially lose their US citizenship. You're either American, or you're not. You can't exploit the benefits of American citizenship and hide your money because you don't like Democrats or think our nation is a horde of losers.

Aren't some of the benefits of American citizenship being able to hide your money, not liking Democrats and thinking that our nation is a horde of losers?

[CardiacCoug]

Which is more beneficial? Charitable donation with associated tax deductions, or "blind" charitable benefit (with no deduction)? That's my point.

So the way it works in my mind is that if you gave a fast offering instead you could give away 17-20% more money than you give away now at the same cost to you. Which is more beneficial? That's my point.

[Ma'ake]

So the way it works in my mind is that if you gave a fast offering instead you could give away 17-20% more money than you give away now at the same cost to you. Which is more beneficial? That's my point.

My accountant would say claiming the deduction is more beneficial. The Tongan way would be to let the money go, expect no quid-pro-quo. Pure charity.

But really, what in the world do you eat? Caviar?

[beefytee]

My reference for comparing US & Canadian taxation is wikipedia, which is down now with their protest of the SOPA.

Here's are the rates for Canada

http://www.cra-arc.gc.ca/tx/ndvdls/f...g.html#federal

The top rate is 29% for any income over $132,406.

For the US

http://www.forbes.com/sites/moneybui...irs-tax-rates/

The top rate is 35% for any income over 388,350.

At an aggregate level, Canada's taxes are about 38% of GDP, in the US it is about 28% of GDP. The articles I read stated that a rough comparision of US & Canadian taxation reveals that taxes on the poor & middle class in Canada are roughly the same as in the US, but taxes on higher earners are significantly higher in Canada.

Tax rates in Canada are lower than the US for corporations, but a lot of that is because our tax code is incredibly complex. Few companies pay the actual tax rate.

Canadians do not get a deduciton for interest on mortgages. The more highly regulated Canadian financial markets did not get hammered by the financial crisis. (There are big differences in our financial markets and Canada does not serve as the default worldwide hub for finance, granted.)

I put the disclaimer in that I had no idea about effective tax rates. I still think the middle class carries a big share of the tax bill in Canada precisely because there is not mortgage deduction. It is something that the middle class benefit greatly from here in the US including myself.

You'll get no argument from me that the mortgage deduction is dumb and that the tax code should be simpler. The Canadian housing market is doing just fine without it. Certainly much stronger than in the US.

The real kicker for Canadians is the Capital Gains tax rate of 50%.

In terms of US politics, Obama may make the push this year to simplify the tax code, and Republicans may or may not go along. I'd imagine McConnell & Company would like to find ways to oppose anything Obama does, but as his proposal to streamline the Executive branch suggests, it's a political thorny issue for Republicans to oppose... or support.

I admit I haven't been listening to the politicians speak much, but what I've heard is lots of talk about a flatter fairer tax on the republican side.

I think both groups would do well to simplify the tax code, but of course you are going to piss off at least one special interest groups with every deduction that you remove.

[Ma'ake]

Aren't some of the benefits of American citizenship being able to hide your money, not liking Democrats and thinking that our nation is a horde of losers?

Simplify it, make it "fair". And to prove I'm not a liberal demogogue, I think the withholdings should be adjusted so that darn near *everyone* needs to write a check on April 15, even if it's some modest amount. It's unhealthy for a large chunk of our society to get a refund or skip out on paying while others are paying. (I'm not talking about the rich here.)

We need a lot more cohesion and common interests in our society. Right now there are too many people who live in entirely different worlds, effectively separate nations on the same soil. Mitt's remarks about his speaking fees reveal the magnitude of the disconnect. For him it really is a small amount, it was a slipup that he revealed what he was thinking.

One of my sons' friends is from a family that has done very well. The house in Bountiful is about 15,000 square feet, maybe it's more like 20,000. It's massive, it looks like a giant fortress. Before their construction empire collapsed and all those people lost their jobs, they had similar sized houses in Las Vegas and San Diego, at least.

Anyway, the mother usually has her son's friends help with Christmas decorations, including nineteen (19) christmas trees, located at different places in the abode.

In spite of the company's bankrupcy, this year it was the 19 christmas trees again, with a generous offering to the teenagers who help out. One of the other moms said "How can all those folks lose their jobs, but they still have that mansion? Didn't they go bankrupt?"

Like the tax code, it's about how to game the system, how to be smarter than everyone else. The underlying reality is for Democrats to complain about.

Except the corrosive effect on society at large is not good.