Archive for October 20th, 2008

Guess: Who Favors Spreading Wealth Around ?

October 20, 2008

Excerpted from Rasmussen Reports, Oct.19, 2008

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Barack Obama told Joe the Plumber, “When you spread the wealth around, it’s good for everybody.”

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44% of voters agree with Obama’s statement — 42% disagree.

69% of Democrats think their candidate is right, but 78% of Republicans disagree.

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A majority of those who earn less than $40,000 a year agree with Obama about spreading the wealth around, while most of those who earn more than that disagree.

Ken’s Note: Approximately 40% of adults pay no income tax or get a refundable credit check; the top 50% of tax filers pay over 97% of all income taxes.  Could it be that those who pay taxes are less inclined towards spreading ?

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Entrepreneurs are strongly opposed.

A slight plurality of government employees agree.

63% of voters under 30 agree with Obama’s statement — 33% disagree. A plurality of those over 30 take the opposite view.

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A plurality of voters (48%) believes that McCain or Joe the Plumber better understand their situation better than Obama does.

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Full article:
http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/democrats_favor_spreading_wealth_around_gop_disagrees

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Attn: Senator Obama … Re: Your Tax Plan’s Marginal Rates

October 20, 2008

I’m now completely convinced that neither Sen. Obama nor anybody else understands what’s in his tax plan — the mathematics — and the implications.

For example, he told Joe the Plumber that his taxes would only go up 3% in order to “spread the wealth”.

Let’s start with the marginal tax rate for folks making more than $250,000.

Obama says that it will go back to what it was under Bill Clinton. OK, in 1999, the top bracket started at $283,150 (for both individuals and marrieds filing jointly) — the rate was 39.6%.

For 2008, the top bracket starts at $357,700 (for both individuals and marrieds filing jointly) — and the marginal tax rate is 35%. Note that it’s 35% — most politicos are running around saying it’s 36% — not true.

So, the top bracket marginal rate increase under Obama’s plan is 4.6 percentage points (from 35% to 39.6%) which is a 13% increase in the marginal rate (4.6% / 35% = 13%).

In 2008, the 2nd highest bracket starts at $200,301 for marrieds — with a marginal rate of 33%. For those folks, the increase is 6.6 percentage points (from 33% to 39.6%) which is a 20% increase in the marginal tax rate.

There’s a big difference between 3% and 13%, and a bigger difference between 3% and 20%. Shouldn’t somebody mention this to both Joe and Barack ?

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Taxes – If 39.5% sounds high …

October 20, 2008

Did you know that once upon a time, the high bracket marginal federal income tax rate was a whooping 90%. 

Add in some state & local taxes, and uber-earners were shelling every piece of marginal income to the government.

My surprises:

(1) the 90% rates hung in for almost 30 years.

(2) it was JFK, not Reagan that made the first cuts

image

Chart extracted from an IBD editorial:
http://www.ibdeditorials.com/IBDArticles.aspx?id=303088374745338

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