Wednesday, October 22, 2008

Crazy Tracy and Ugly Americanism

I don't even really mean physically ugly, but the exaggerated facial expressions do call to mind a ventriloquist-in-training overworking the doll's face controls:



It's difficult to formulate a response to Crazy Tracy's level of ... I'm struggling for a proper name for it. Mendacity? Delusion? Idiocy? Inanity? Offal? Somehow these words don't do it justice.

And speaking of youtube videos that expose the hideously stupid:



In the spirit of this perfectly good pity party, let's charitably assume that each of the Joe-the-Plumbers profiled here makes over $250,000 per year and is therefore subject to Obama's terrible, horrible, no good, very bad proposed tax increase. Some people speak of the proposal as though Obama will shackle high-earning people in a rat-infested debtor's prison and, say, deny their habeas corpus rights, but the truth is considerably less dramatic, even boring: the proposed increase would take their earnings above $250,000 from today's 35% rate to the 39.6% rate that we saw under Bill Clinton. Agog?

This is from the independent Tax Policy Center's analysis of the two candidates' tax proposals, showing that the very wealthiest will pay somewhat more under Obama's plan. Everyone else will see a net increase in "take home" pay vis-a-vis federal taxes.



Obama's plan calls for somewhat more to be paid by the very wealthiest Americans. Somewhat more. Hmm, where have we heard that phrase before -- "somewhat more"?

4 comments:

Sis B said...

Crazy Tracy is seriously every member of my family.

When I try to describe my mother and her home, just think "Crazy Tracy" and you'll have the picture.

And although I'm voting for Obama and his tax plan makes marginally more sense than McCain's, I think that 40% for anybody is too high. I will never understand why we can't have a flat rate and, oh, I don't know, stay within a budget instead of handing out $700 billion bailouts to corporations or starting wars that last years and years and years with no end in sight.

But maybe that's just me.

Dale said...

Sis, I believe you about the Crazy Tracy people. I definitely know (and am related to) some Crazy Tracys myself. Yikes.

A couple of points on the tax thing -- note that the 39.6% rate applies to every dollar in earnings above the $250k, not to every dollar earned. The income up to $250k is subject to a lower rate. And the 39.6% rate sounds high, but it doesn't sound much higher than 35%, which is the rate on that same income right now.

Nobody wants to give 35-40% of his/her/their income to the federal government. Almost no one does. There are deductions, loopholes, exemptions galore -- that's what accountants do.

The chart doesn't even take into account all the magic that accountants do, but just takes it straight. The reduction in take-home pay for the highest earners is noticeable but not dramatic -- something around 4%. It's not putting them in the poor house. And it's also not the whole story -- if someone is running a growing business and making gobs of money today, he'll still see that income grow. He'll just see a slightly larger bite from taxes. The extra bite from Obama's plan will not take away the incentive because it will take a very tiny sliver of the increased earnings.

Suppose ... Joe makes 300,000 in 2008, has the world's most incompetent tax accountant:

-Joe pays 35% on the 50,000 above 250k = $17,500 in taxes on that 50k. That's today, under Bush's taxes.

-Obama takes over. Passes his tax plan exactly as proposed.

-Joe makes $300,000 again in 2009 (business is flat, no increase) pays now 39.6% on the $50,000 over $250,000 = $19,800. Note that his big scary tax increase is $2,300 on a $300,000 taxable income.

Aimée said...

Am I the only person that does see the merit in “spreading the wealth around”? Maybe you can explain this to me Dale, how come the large majority of American citizens that claim they are Christian, are not in favour of social spending i.e. higher taxes? You would think that programs for children, universal healthcare, subsidized education (I could go on and on) would be inline with their values – helping others have a better quality of life?

Dale said...

Aimee, you're right that it's confusing.

The fact is: we do "spread the wealth around" routinely. Daily. This society would be profoundly altered if we stopped; it might indeed stop being anything properly labeled a society.

Every time a government entity collects taxes and does not give the money back dime for dime to the taxpayers from which it was collected, wealth has been spread. Every single time. The only question is *how* the wealth will be spread, not whether it will be. This is true of McCain's plan and it is true of Obama's.

It's curious that people in this country can get so profoundly confused and confusing about this matter. Ideology, if peddled strongly, does amazing things.