Tuesday, September 20, 2011

Obama and taxing the rich

According to President Obama the rich need to pay their fair share.

According to USA Today,
This year, households making more than $1 million will pay an average 29.1% of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.
Households making between $50,000 and $75,000 will pay an average of 15% of their income in federal taxes.
Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7%.
So in other words, for all his rhetoric, Obama either appears to be ignorant of the facts or he is engaging in class warfare lies.

I was listening to talk radio earlier this week when a caller who claimed to be an immigrant to the U.S. (apparently from the former U.S.S.R.) said first the government took more and more of the wealth of the "rich" by taxation. Then they took their property by force of law.

7 comments:

professor ed said...

Somebody needs to clue our clueless President in. The "rich" did not get that way, or stay that way, by trying to find how many taxes they can pay. Does Obama not understand that if ones wealth is threatened, one will move it out of this country, or make some other arrangement. Also, does our apparently naive President not realize that the "rich" are many times the ones responsible for giving jobs to the rest of us! If, for example, Donald Trump is threatened with loss of money, he may react by closing a casino. This would cause a lot of folk to lose their jobs. Often I wish/pray our President would seek advice from business men and women, instead of academics who gain their insight(s) from books!

Phil said...

So, a former classmate of mine (and good friend who USED to be very conservative minded but turned to the "dark side" after some so called "higher theological education" at a "Christian" seminary that teaches that it is okay to ordain homosexuals and happens to be a branch of a more "traditional" denomination that stemmed out of the Reformation and might happen to be named for the man that spurred that Reformation [who had psychotic disorders and burned jews]) posted on his Facebook, "When Glen Beck says that some people are taxed around 60% of their income it is a flat out lie." Well, I did some research on this matter (because I work one of those government jobs that the Democrats seem to think need to be paid more and be given more but it allows me lot of time to study why Democrats are idiots). My next post is what I told him.

Phil said...

Tax computation:
Annual Wage: $100,000
Assumption: Married, filing jointly
Line 1: Federal Income Tax
computed based on this table: http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
A. Using Schedule Y-1 from the IRS webpage detailing the tax brackets for Tax Year 2010, calculate the taxes owed for an income of $100,000, married and filing jointly. The tax burden for that person is $9,362.50 plus %25 of anything over $68,000.
B. Take annual wages and subtract $68,000 to determine difference:
100,000-68,000 = 32,000

C. Take the difference from Line 1B and multiply by %25 or .25:
32,000 x .25 = 8,000
D. Add the product of line 1C to $9,362.50:
9,362.50 + 8,000 = 17,362.50

E. The sum of line 1D is your federal income tax burden:
$17,362.50
Line 2: New York State Income Tax
Computed based on this table: http://www.tax.ny.gov/pdf/2006/wt/nys_with_tax_tables_106.pdf
A. Using the table on Page 18 of the PDF document from the NY State tax website, calculating the state tax owed for an income of $100,000, married and filing jointly. The tax burden for that person is $6,532 plus %8.14 of anything over $100,000.
B. Take annual wages and subtract $100,000 to determine the difference:
100,000 – 100,000 = 0
C. Take the difference of line 2B and multiply by %8.14 or .0814:
0 x .0814 = 0
D. Add the product of line 2C to $6,532:
0 + 6,532 = 6,532
E. The sum of line 2D is your NY state income tax burden:
$6,532
Line 3: New York City Income Tax
Computed based on this table: http://www.tax.ny.gov/pdf/2010/inc/nyc_tax_rate_150_201.pdf
A. Using the table on page 1 of the PDF document for the NY City tax website, calculate the city tax owed for an income of $100,000, married and filing jointly. The tax burden for that person is $3,071 plus %3.648 of anything over $90,000.
B. Take your annual wage and subtract $90,000 to determine the difference:
100,000 – 90,000 = 10,000
C. Take the difference of line 3B and multiply it by %3.648 or .03648:
10,000 x .03648 = 364.80
D. Add the product of line 3C to $3,071:
364.80 + 3,071 = 3,435.80
E. The sum of line 3D is your tax burden:
$3,435.80
Line 4: FICA & SECA
Computation based on the information found at: http://www.ssa.gov/oact/ProgData/taxRates.html
A: Using the information provided by the SSA website, calculate the FICA & SECA tax owed for an income of $100,000, married and filing jointly. The tax burden for that person is %4.2, assuming that the person is an employee and not self-employed or an employer.
B. Take your annual wage and multiply it by %4.2 or .042:
100,000 x .042 = 4,200
C. The product of line 4B is your FICA and SECA tax burden:
$4,200
Line 5: Total tax burden and percentage of income:
A. Using the figures provided in lines 1 – 4, calculate the total tax burden and what percent of income that is.
B. Add the totals of lines 1E, 2E, 3E, and 4E:
17,362.50 + 6,532 + 3,435.80 + 4,200 = 31,550.30
C. Divide the sum of line 5B by 100,000:
31,550.30 / 100,000 = 31.5503
D. The sum of 5B is the total tax burden and the product of 5C is your percentage:
$31,550.30 at %31.5503

Phil said...

Same scenario but single; and without all the extra fluff:

Fed: 21,709.25
NYS: 6,532.00
NYC: 3,548
FICA: 4,200
Total: $35,989.25 at %35.9893
Same Scenario, only self-employed:
Fed: 21,709.25
NYS: 6,532.00
NYC: 3,548
FICA: 10,400
Total: $42,189.25 at %42.1893
Same scenario, only the salary is $200,000 per annum:
Fed: 52,116.75
NYS: 14,279.00
NYC: 6,332.00
FICA: 20,800
Total: $93,527.75 at %46.7678
Same scenario, only a salary of $500,000 (this bumps us up to the highest tax bracket all around, but it is the lowest salary to meet that criteria).
Fed: 152,843.25
NYS: 36,329
NYC: 18,122
FICA: 52,000
Total: $259294.25 at %51.8589
Now let’s jump to $1,000,000
Fed: $327,643.75
NYS: 73,329
NYC: 37,408
FICA: 104,000
Total: $542,380.75 at %54.2380

The total tax rate is 55% and does not include the outrageous property taxes nor does it include the several other taxes that businesses are assessed. Now, this ends up only applying to some people, but Glen Beck only said "some people." Whether it is right or wrong is another debate. But as far as Glen Beck being a "liar", your witness.

Phil said...

He did not respond... funny how a little math puts things in perspective isn't it? Here's another computation I just did concerning our national deficit that you might like (again, on work time because I have one of those Union jobs that are just "vital" to the Middle Class that defend "fair" treatment at work)

Phil said...

2010 Revenues: $4.2 trillion
2010 Expenditures: $5.5 trillion
2010 Deficit: $1.3 trillion
Percent over: 31%
Monthly rate for deficit: $108 Billion
Monthly rate for Revenues: $350 Billion
Monthly rate for expenditures: $458 Billion
Revenues for a $10/hour household:
Annual: $20,800
Monthly: $1,733
If someone with a $10/hour job spent like the government, they would spend:
Annually: $27,248
at a deficit of: $6,448/annum
or
Monthly: $2270
at a deficit of: $537/month
Assuming the person making $10/hour spends exactly $27,248/year; not a penny over (again, NOT spending in deficit) and assuming:
Interest rate: 5%
Term of loan: 30 years
Property Tax: 1.25% value of property
Insurance rate of: 0.5% value of property
A person with good credit could purchase an $83,500 home which would give a monthly payment of:
$535.23
just to MATCH the deficit that the US currently has. Following Democrat logic, we should now throw on top of THAT even MORE “charity” donations, in the name of “social justice” of course.
So… to follow Democrat logic… anyone making $10/hour should go out and purchase an $83,500 home and just GIVE it to a homeless person in the name of “social justice”. If that person making $10/hour refuses to do so, he or she is selfish and not taking care of the poor like he or she should be.
After a 30 year mortgage, that would put the person in debt $193,440 which does NOT include the interest payments on that debt.

If you include 5% compound interest for that thirty years starting with a NO deficit and adding $535 monthly you end up with a total debt of...

wait for it!!! WAIT FOR IT!!!

$445,258 total debt after 30 years for someone making $10/hour (now, realizing that the $10/hour will likely increase over time, it is kind of moot under the assumption that the person spends each year exactly what he or she makes)..

Phil said...

I would like to add that I used $10/hour simply for the sake of giving us a real world reference point that we can relate to. How many of us can relate to making 1 million a year? I doubt anyone reading this blog can.