Quote:Despite all the “socialist” rhetoric, Obama returned to the Clinton rates of 39.6% (on ordinary income) and 20% (on capital gains) ONLY for the top 1%. Ideally, we should have at least returned to the Clinton rates for the top 2% — with the 33% rate returning to the 36% rate.
And that, you righty knuckleheads, is where the budget deficit reduction has come from. Please tell me that your hearts bleed for the top 1%.
Facts are stubborn things, with a decided 'liberal bias' LMAO!
Some mood music to soothe you though your brush with...reality!
https://www.youtube.com/watch?v=k4q2JWjNVVE
Quote:Look How Obama Raised Taxes... Or Not! Tax Rates Explained (In One Chart)
By ConnectTheDotsUSA
Sunday Apr 12, 2015 · 3:44 PM CDT
2015/04/12 · 15:44
Americans scream and yell about tax rates, but most don’t have a clue how our “marginal” tax rates work, much less how to calculate their “effective” tax rate. So in honor of tax season, here’s a quick primer on our progressive federal income tax system.
NOT a liberal construct, but actual tax rates
The middle “yellow” section of this chart shows the ordinary income tax brackets passed under Bush in 2003 and extended until the end of 2012 by Obama. The bracket dollar amounts are adjusted for inflation each year so I show 2014 dollars here. In the right blue column, you’ll see the current Obama rates that began in 2013.
Despite all the “socialist” rhetoric, Obama returned to the Clinton rates of 39.6% (on ordinary income) and 20% (on capital gains) ONLY for the top 1%. Ideally, we should have at least returned to the Clinton rates for the top 2% — with the 33% rate returning to the 36% rate.
The important thing to remember is that no matter how much total income a household has, the taxable income that falls in each bracket is taxed at the same rate for everyone. So, for example, even Oprah pays only 10% on her first $9,075 of taxable income, 15% on the amount between $9,076 and 36,900, and so forth. And if she married Stedman, they’d use the brackets on the left for married couples.
Let’s do an example. (Thank you to Brainwrap’s Daily Kos classic diary for inspiring this example:
http://www.dailykos.com/... )
Suppose Suzy, a single person, has $89,351 of taxable ordinary income (after all deductions), she would owe:
10% on the first $9,075 = $907.50 plus
15% on the $27,825 between $9,076 and $36,900 = $4,173.75 plus
25% on the $52,450 between $36,901 and $89,350 = $13,112.50 plus 28% on that last $1 between $89,351 and $186,350 = $0.28
= Grand total of $18,194.03
Notice that the last dollar does NOT push all Suzy’s income into the 28% bracket, which would mean her tax would be 28% of $89,351 = 25,018.28 — almost $7,000 more than her actual tax.
This is a fundamental misunderstanding most folks have about our federal tax system. Even though they are not paying it, Americans mistakenly believe their tax rate is way higher than it actually is.
Suzy’s blended rate is actually closer to 20%. And that’s not even counting all her deductions from total income, which we’ll address in another post.
Rest assured, even Turbo-tax will calculate it correctly for you with the press of a button. Here’s how TurboTax explains our example: For single income between $89,351 and $186,350, the tax is $18,193.75 plus 28% of the amount over $89,350.
In short, the progressively in the tax code — the seven marginal brackets — make the tax code a bit more fair, but hardly more complicated. No, what makes the tax code infinitely complicated are all those deductions… What counts as “taxable income”?
For some historical context, you can see the Clinton rates in the blue column on the left. Notice how Bush slashed almost every bracket by 3 to 5 percentage points, which led to lost tax revenue of $2.5 Trillion dollars over the first 10 years and a projected $3.7 Trillion over the next decade. No wonder the deficit and debt ballooned!
The super-rich are fixated on the top bracket because that’s where most of their income falls. And Wall Streeters like Mitt Romney really care about the special capital gains rate that gives preferential tax treatment to income made off money over income made from sweat — now 20% for Mitt.
The rest of us should really only concern ourselves with the lower brackets because, while our last dollars may tip into the 25% or the 28% brackets, most of our income falls in the lower 10% and 15% brackets.
Also note that the special capital gains rate never applies to income from 401k or traditional IRA retirement accounts — where most regular folks have any investments.
That money will be taxed in the ordinary income brackets as it’s withdrawn in retirement. And the gain on ROTH IRAs is never taxed because ROTHs are funded with after-tax money. No, the capital gains rate far and away is a perk for the plutocrats.
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