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So confused. Is the tax rate actually going UP or are the Bush tax breaks just expiring and we are going BACK to the old marginal tax rate that existed till 2000? I know its hard to take away a benefit once its given, but these are financially hard times for the govt. as well.
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What I'm wondering and no one is talking about, is what the actual impact will be, if like most UMC NYC-area taxpayers, you are already paying AMT - you're losing the benefit of most of those deductions already and probably already paying significantly more than your liability under the current regular tax system.
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And income tax goes up to 39.6% (from 35%) for those who file with more than 250K income... this is why Wall St. hates Obama
[ Reply | Options ]lol. Yes Wall Street hates Obama because they've been overpaid for running banks into debt and now might have to pay higher taxes. boo hoo. PS, it's a MARGINAL rate, so cry me a river -- they pay that rate only the money beyond a certain income. You guys are horribly selfish. I don't mind the higher taxes because there's always savings to be had when you have a high income.
[ Reply | Options ]NP: Honestly, I'm more concerned about whether I'll have a job a year from now than about how much taxes I'll end up paying. I think that's the thought process we need to have - less "how will this affect my paycheck" and more "is this the right way to fix this awful sitation we're in right now?
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But its the marginal rate, right? So you only pay the additional on the marginal additional amount. And I'm a Wall St mom (at home today) and not everyone hates Obama. What is he going to do? We had a 6% deficit even before the crisis began. You can't tax your way out of the problem, but it HAS to be part of the solution right? ITs either that, or leave it be and let the dollar devalue/inflation go up, till your marginal worth is a lot less than the 39.6% tax is leaving you with. -OP
[ Reply | Options ]Then why not continue taxing the lower classes too? This plan is essentially just a shift of money, which may not be used wisely by those who receive it. I would be a lot happier paying taxes if I felt they were going to a good cause.
[ Reply | Options ]Lower classes? Where did you grow up. According to most economists, the lower income bracket has a larger propensity to consume. That means if you didn't tax them as much, they would still spend it on necessities. While higher income people will save some of the money and can afford to pay higher taxes. Marginal tax rates have always been around. Are you upset because the lower income does not feel a greater pinch than you do? Or do you not agree that a flat tax rate, say 35%, would be unpleasant for you, but completely choke a poorer person?
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It's not so much that the taxes are being increased, its what you get for them. Most people on this board will end us paying more than 50% in taxes (fed, state, city). Thats comparable to Scandinavian countries where there is a huge safety net (socialized medicine, education including college, retirement benefits) which justifies the taxes. What do we get for forking out so much? I still need to buy insurance, I need to pay for my kids' college, and I will need to save for my own retirement.
[ Reply | Options ]NP: That's the one thing that's bothering me as well - from what I read, the administration doesn't intend to provide any of the benefits that the tax increases will finance to individuals in the higher brackets. I'm happy to finance a better social safety net, but it should be there for everyone.
[ Reply | Options ]I agree. I think that we need a real reformist attitude here with some long term outlook. We are paying 50% taxes to get rid of part of the deficit. If the deficit goes down, then either one of these is true. 1) The taxes would go down or 2) the safety net would be planned that would justify the higher rates. Bush reduced the tax rates while increasing the deficit. I think his admin. was highly populist and short sighted in their policy. Obama is going with his only options now, the real test will be what he does later.
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You are correct. However, the extra taxes WOULD have paid for all of that safety net had Bush and Republicans not driven the US into huge debt by LOWERING your taxes for years. So, unfortunately, all of us need to pay up. We're in the highest tax bracket, too, and it's a MARGINAL rate, so you are only paying higher taxes on money BEYOND a certain income, which means you should be able to afford it.
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