Whoa! This is a useful guide to fight tax ignorance from the right: Roy, a scrupulous recipient of crazy mail from a buddy decided to do a little tax facts research. See his rebuttal to an allegation that Americans are wealthier under the Bush tax-cut system. Roy opens by saying "I guess my right wing buddy just likes to get his mind set straight. I assume that’s why he sends me this crap!"
The blog cited, The Democratic Underground, is a good stopping point for those seeking some blue shade in a red, red world.
forward quote:
The blog cited, The Democratic Underground, is a good stopping point for those seeking some blue shade in a red, red world.
forward quote:
"Based on using the actual tax tables (see link below), here are some examples on what the taxes were/are on various amounts of income for both singles and married couples. So let's see if the Bush tax cuts only helped the rich....
www.taxfoundation.org/publications/show/151.html
Taxes under Clinton 1999 Taxes under Bush 2008
Single making 30K - tax $8,400 Single making 30K - tax $4,500
Single making 50K - tax $14,000 Single making 50K - tax $12,500
Single making 75K - tax $23,250 Single making 75K - tax $18,750
Married making 60K - tax $16,800 Married making 60K- tax $9,000
Married making 75K - tax $21,000 Married making 75K - tax $18,750
Married making 125K - tax $38,750 Married making 125K - tax $31,250
If you want to know just how effective the mainstream media is, it is amazing the number of people who fall into the categories above think Bush is screwing them and Bill Clinton was the greatest President ever. If any democrat is elected, ALL of them say they will repeal the Bush tax cuts and a good portion of the people who fall into the categories above can't wait for it to happen. This is like the movie The Sting with Paul Newman; you scam somebody out of some money and they don't even know what happened. --"
Fed-up Roy replies:
So easy to rebut!
So easy to rebut!
Glad to bust another urban legend piece of propaganda. Curious people with inquiring minds will want to read the rebuttal.
One quick little glance at the ‘so-called’ tax calculation demonstrates that author was either ignorant or intentionally dishonest. I would be interested in any other possible explanation for the terribly erroneous calculations. (Lazy IS NOT an acceptable explanation.)
It was so quite simple to find the following easy to follow, and accurate four point rebuttal by a blogger over at Democratic Underground.
Enjoy - Roy
NOW, CAN YOU HANDLE THE TRUTH??
Inconvenient truth number 1.
Neither Obama or Clinton has advocated repealing tax cuts for people in the tax brackets that the author lists. They both speak of eliminating cuts for taxpayers earning in excess of $250,000 per year. In fact, both candidates speak of expanding tax cuts and/or tax credits for the middle class. Taxes that mainly impact the rich and which Democrats would like to see restored to former levels, or at least higher than current levels, are the capital gains, dividend, and inheritance taxes.
Inconvenient truth number 2.
The numbers he claims to get from the referenced tax tables are not the numbers you actually get if you apply the tax tables to the example incomes. I do the author's first example below. Try it yourself!
Married Filing Jointly 2008 Single 2008
Marginal Tax Brackets
| Tax Rate | Over | But Not Over | Tax Rate | Over | But Not Over |
| 10.0% | $0 | $16,050 | 10.0% | $0 | $8,025 |
| 15.0% | $16,050 | $65,100 | 15.0% | $8,025 | $32,550 |
| 25.0% | $65,100 | $131,450 | 25.0% | $32,550 | $78,850 |
| 28.0% | $131,450 | $200,300 | 28.0% | $78,850 | $164,550 |
Married Filing Jointly 1999
Marginal Tax Brackets
| Tax Rate | Over | But Not Over | Tax Rate | Over | But Not Over |
| 15.0% | $0 | $43,050 | 15.0% | $0 | $25,750 |
| 28.0% | $43,050 | $104,050 | 28.0% | $25,750 | $62,450 |
| 31.0% | $104,050 | $158,550 | 31.0% | $62,450 | $130,250 |
The author's numbers: [The Dishonest or ignorant FOOL was either too ignorant or too dishonest to do the marginal rate calculations as “hay rick” did.
1999 (Clinton) Single making 30K - tax $8,400
2008 (Bush) Single making 30K - tax $4,500 claimed difference: $3,900
Actual numbers from tables:
1999 (Clinton) Single making 30K - tax $5,052
(0.15 x $25,750 = $3,862.50) + (0.28 x $4,250 = $1,190) = $5,052.50
2008 (Bush) Single making 30K - tax $4,099
(0.10 x $8,025 = $802.50) + (0.15 x $21,975 = $3,296.25) = $4,098.75 actual difference: $953
In this case, 76% of the claimed "tax cut" evaporates as soon as you actually do the math.
[I decided to calculate $125,000 Married Filing Jointly –Roy
The author's numbers: 2008 (BUSH) $31295. 1999 ( CLINTON ) $38,750. Claimed difference $7500.
Actual numbers from 1999 table: (.15 x 43,050 = 6457.50 + .28 x 61,000 = 17,080 + .31 x $20,950. = 6494.50 TOTAL: $30032.00
Actual numbers from 2008 table: (.10 x 16,050 – 1605.00 + .15 x 49050 = 7357.50 + .28 x 59,900 = 16,772 00 TOTAL: $25,734.50 Actual difference: $4297.50
In this case, 43% of the claimed "tax cut" evaporates as soon as you actually do the math.
Inconvenient truth number 3.
Inflation breeds bracket creep. This phenomenon is simultaneously creating the Alternative Minimum Tax predicament. The author neglects to adjust incomes for inflation in his examples, thereby avoiding the effects of bracket creep. Let's correct that "oversight" for him. Here's an inflation calculator- http://www.westegg.com/inflation /
The calculator only goes up to 2007, so I will use 1998-2007 as a proxy for my example. The calculator says I need approximately $38,619.94 to maintain purchasing power equivalent to $30,000 in 1999. Going back to the tax tables, the tax on this equivalent income is $5,998. The Bush "tax cut" is now actually a tax increase. In fairness, the increase is in inflation-debased dollars and is offset by increased income. However, whatever is left of the "middle class" part of the Bush tax cuts is looking pretty trivial by now.
If only the story ended there.
Inconvenient truth number 4.
Deficit spending. Is a tax cut really a tax cut if it is accompanied by borrowing that exceeds the amount of the tax cut several times over? The borrowed money will have to be repaid with interest in the future, either by current tax payers or their descendants. Of course, it is impossible to know how much of the deficit will be repaid by current taxpayers and when. The total amounts, however, are well known. The total federal budget data for the chart below is taken from the non-partisan Congressional Budget Office. Draw your own conclusions. All figures are in billions.
Year Income Tax Receipts On-Budget Deficit* Total Deficit
2000 Clinton 1,004.5 86.4 (surplus) 236.2 (surplus)
2001 Bush 994.3 -32.4 128.2 (surplus)
2002 858.3 -317.4 -157.8
2003 793.7 -538.4 -377.6
2004 809.0 -568.0 -412.7
2005 927.2 -493.6 -318.3
2006 1,043.9 -434.5 -248.2
2007 1,163.5 -344.3 -162.8
*The on-budget deficit excludes the Social Security "surplus" which is borrowed by the Treasury to pay current expenses. That money is owed to retirees in the future. If it is not repaid in full, the Bush tax cuts will also turn out to be benefit cuts.
Inconvenient truth number 3.
Inflation breeds bracket creep. This phenomenon is simultaneously creating the Alternative Minimum Tax predicament. The author neglects to adjust incomes for inflation in his examples, thereby avoiding the effects of bracket creep. Let's correct that "oversight" for him. Here's an inflation calculator- http://www.westegg.com/inflatio
The calculator only goes up to 2007, so I will use 1998-2007 as a proxy for my example. The calculator says I need approximately $38,619.94 to maintain purchasing power equivalent to $30,000 in 1999. Going back to the tax tables, the tax on this equivalent income is $5,998. The Bush "tax cut" is now actually a tax increase. In fairness, the increase is in inflation-debased dollars and is offset by increased income. However, whatever is left of the "middle class" part of the Bush tax cuts is looking pretty trivial by now.
If only the story ended there.
Inconvenient truth number 4.
Deficit spending. Is a tax cut really a tax cut if it is accompanied by borrowing that exceeds the amount of the tax cut several times over? The borrowed money will have to be repaid with interest in the future, either by current tax payers or their descendants. Of course, it is impossible to know how much of the deficit will be repaid by current taxpayers and when. The total amounts, however, are well known. The total federal budget data for the chart below is taken from the non-partisan Congressional Budget Office. Draw your own conclusions. All figures are in billions.
Year Income Tax Receipts On-Budget Deficit* Total Deficit
2000 Clinton 1,004.5 86.4 (surplus) 236.2 (surplus)
2001 Bush 994.3 -32.4 128.2 (surplus)
2002 858.3 -317.4 -157.8
2003 793.7 -538.4 -377.6
2004 809.0 -568.0 -412.7
2005 927.2 -493.6 -318.3
2006 1,043.9 -434.5 -248.2
2007 1,163.5 -344.3 -162.8
*The on-budget deficit excludes the Social Security "surplus" which is borrowed by the Treasury to pay current expenses. That money is owed to retirees in the future. If it is not repaid in full, the Bush tax cuts will also turn out to be benefit cuts.
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1 comments:
This e-mail has gotten so much play on the blogosphere, the Tax Foundation's own blog has even refuted the incorrect use of the data.
http://www.taxfoundation.org/blog/show/22958.html
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