On Obama's tax Plan

Paying taxes is a suckers' game for many. Too often, big money is being spent on tax avoidance schemes, which in turn distort behavior. Apparently, some individuals cannot think of what it takes to run modern states, while corporations have become states within states.

Our presidential hopefuls make all kinds of tax-related promises that are either unrealistic or incompletely specified. Even if McCain were to win, he could only raise taxes. Obama has come out as favoring tax-increases for those families making more than $250,000/year. Since Obama appears to have better chances to win, I will quote a couple of tax-related comments pertaining to his tax plan:
1) I'm a Democrat and an Obama supporter -- a volunteer, in fact. I am also a salaried professional, married to Joe the construction manager. Together, we earn about $250,000 a year, after deductions, and therefore will be paying higher taxes under Obama's tax plan. This even though we live in the NYC metro area, where the cost of living is 2.5 times the national average. That means that our income has the purchasing power of $100,000 in Podunk. We ain't starving, but neither are we Mr. & Mrs. Richie the Hedge Fund Manager.

My point is that Obama's plan will in fact impact the urban, professional middle class. Most of us are voting for him, but let's be honest; we are paying high taxes already here in Westchester County, plus high energy costs, plus high health care costs, and the extra $3,000 or so per year that Obama's plan will cost a family in my income bracket will not come easily.

I wish that Obama would include a "cost of living" adjustment in his tax plan, so that middle-class professionals in big cities wouldn't take a hit. On the other hand, if I have to sacrifice so that Richie finally pays his share, then I'll bite the bullet.

— KT, Chappaqua, NY

2) My husband and I have worked hard over the course of our careers. Now that we are in our late 50s, we are mature in our professions and in our earning capacities. After many years of post-graduate education, we each attained the credentials necessary for our respective professions, and we have each subsequently put in countless hours (and immeasurable passion) to serve, in his case, patients, and, in my case, clients. We net more than $250,000 annually. Although we are now worried about the value of our investments, we are still looking forward to a comfortable retirement in the next decade.

While we don't particularly enjoy paying taxes, we do enjoy being citizens of the United States. We do expect to contribute to the education, infrastructure, public health, social welfare, safety, and culture of the country we live in. We do want to do our part to insure its future. So, while we may sigh when we write checks to the IRS, we also take some satisfaction in the belief that we are integral to the success of our country. Moreover, because we can afford to pay a larger share of our income than others can, we expect to do so.

Regardless of our professional success, however, we still are limited in our income potential by our relying principally on reimbursement for our labor. There are many others in the over $250,000/year category with incomes much greater than ours. There are many whose earnings come from their investments or their executive positions enabling them to partake of large shares of corporate earnings. Fairness requires that these individuals pay even greater amounts/percentages of their income than those of us who are essentially high-earning workers do. The tax rate needs to continue to slide upward, for top incomes go way, way, way above $250,000 annually. Those corporate executives who take millions in cash, bonuses, and stocks do not even breathe the same air as my husband and I. Their tax rate has to be greater than ours. In the tax realm, that's all I ask of Obama when he takes over the reins of this country, which he will do, and not a moment too soon.

— Shelley, Santa Barbara

1 comment:

Mitch Clogg said...

President Ronald Reagan dropped the tax rates on the very richest of us from 70 percent to 28 percent. He raised working people's taxes for Social Security and Medicare, but not enough to offset the breaks he gave the rich. A law first written to tax the very wealthy (the "Alternative Minimum Tax") was changed to tax the middle class. Reagan's policies produced a net loss in federal revenues. To cover new budget deficits, the nation was compelled to borrow heavily at home and abroad, raising the national debt from $700 billion to $3 trillion. The United States went from being the world's biggest creditor to the world's most in-debt nation. Reagan called this new debt the "greatest disappointment" of his presidency. Now the country has an insanely rich elite class that benefits from a long string of quietly passed tax revisions and holds most of the country's wealth. Services to the poor evaporate, while earnings of middle- and upper-middle-class households are transferred to those same super-rich. If this sounds like the ravings of a lunatic, I wish it were. Unfortunately, not a word of it is in dispute. At least some of the measures required of an honest and diligent government are as clear as the nose on your face: restore the progressive tax code; require those who possess more than everybody else to pay more taxes. This is self-evident, but unless you're a person who benefits fantastically from today's rigged system, you probably don't find "taxes" to be an interesting subject. That's too bad. The current system, in its ruinous favoritism, is dragging down the country and the world. The failure to keep watch on our financial institutions, also promised and delivered by Reagan as "reducing government regulation of the economy" or, in the plain talk he did so well, "getting government off our backs," has given us the catastrophe we are now sinking in, while the band plays "Everything Is Looking Up."

Mitch Clogg
Mendocino, California

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