What would Obama and McCain's tax plans mean to your wallet?

[obryn]

I stumbled across this article today, and found it very illuminating.

http://freakonomics.blogs.nytimes.com/2008/09/16/competing-tax-plans-two-perspectives/

There's three graphs that I couldn't explain as well as the article does. Here's the big one, though, with the different tax burden expectations, scaled based on how many people are in each income bracket.

There's another one that scales it by percentage of total tax burden. That one more or less shows how irresponsible McCain's tax cuts would turn out, and why economists have said his plan would drive us even further into debt than Obama's would.

Interesting stuff.

-O

[Utrecht]

would do better under McCain.... Admitedly it is not a large amount

[Name Lips]

Better under Obama.

[obryn]

Whether we count my wife and I together or separately, we're about even under both plans.

-O

[Ink Bleeder]

WAY better under Obama. The amount really shocks me. :O

[Utrecht]

WAY better under Obama. The amount really shocks me. :O


Realy? shocks you? I only ask, becasue the percentages being used there are very small to be felt in many budgets.

Lets assume that you make 50k the % difference between the two is 1.7% to Obama = $850 per year - divided by 24 paychecks is $35 per paycheck.

Now, lets use $25,000 - difference there is 3.1% or $775 dollars or $32 per paycheck.

Dont get me wrong, $775 is $775 dollars (stand to make less than that from the McCain plan) and that $35 extra a month wont do many families alot of good - but shocking seems a bit if a stretch to me. (I know, I am being elitist)

[azrael]

honestly, that 32 dollars a pay check is a night out at the movies for a couple every two weeks

having been poor a number of times in my life, it's kind of amazing the differences that 32 dollars every two weeks can make in morale...

and 65 dollars(Yeah, I realize the numbers are off... figure you skipped a cup of coffee one morning:p) can be the difference between a poor, but working class neighborhood, and a BAD neighborhood in my part of the country, which isn't hte most expensive part of the nation, but is damn far from the cheapest...( capital district area of ny, just outside albany if anyone cares)

[AZRogue]

I would do a little better under Obama, which is comforting.

[Name Lips]

For the poor, $35-$40 a week can be the difference between making rent or not. Or, more likely, the difference between their kids getting a new winter coat or having to wear their worn-out, three-sizes-too-small one from two years ago. It can have a huge impact in their lives.

Seriously, if you're only making $365/week before taxes, having an extra $18 a check (5%) after taxes can really add up. Heck, after 20 weeks that adds up to an entire extra week of wages.

For those of you who have never had to live paycheck to paycheck, please consider what that money would mean to poor people. It would mean a hell of a lot.



But on third thought, are people that poor even taxed? Don't they get it all back at income tax time? I've always gotten a return of thousands of dollars because I make so little (the kids help a lot too).

[Singularity]

Anyone with kids and low income would actually do better under McCain's plan. He promises to increase the earned income credit per child to $7K. Since earned income credit is refundable money, that's huge. The way it works is that you get that money in the refundable column, but it is then reduced based on the amount of money you actually make for the year, so if you make a bunch of money and have a bunch of kids, it isn't as good as if you make shit and have a bunch of kids. So NL, if you're voting your wallet, you should vote McCain.

I'm still voting Obama. I could really vote McCain, but the thought of a Palin presidency scares the shit out of me. She would be Bush's third term if she were to take over as pres.

[Ink Bleeder]

Realy? shocks you? I only ask, becasue the percentages being used there are very small to be felt in many budgets.




Yep - shocked. What can I say? I hadn't done the math and figured that any difference would be in fractions of a percent, not 2.7% - that's magnitudes greater than I expected. Hell, I wouldn't have been surprised to learn that I'd pay more under Obama (not that it would have changed my vote).

[FeatsofClay]

I have never gottten less than all my money back at the end of the year. So I imagine no difference.

I want to see the candidates plan that allows me to not have to have taxes taken OUT of my paycheck since I am basically making the gov't a zero interest loan every year. Now THAT would help poor people.

[Name Lips]

I have never gottten less than all my money back at the end of the year. So I imagine no difference.

I want to see the candidates plan that allows me to not have to have taxes taken OUT of my paycheck since I am basically making the gov't a zero interest loan every year. Now THAT would help poor people.

You can already do this. Just claim change the number of exemptions on your W4. I think it's increasing the exemptions that increases the money you get in each check, and decreases the taxes taken out.

This is risky for people who make decent money because they end up owing money at tax time. But for us poor shmucks it just means more money in our pocket each month, and a smaller return at tax time.

The IRS will not check your w4 for accuracy unless you claim more than 10 exemptions.

[Lady Fury]

You can already do this. Just claim change the number of exemptions on your W4. I think it's increasing the exemptions that increases the money you get in each check, and decreases the taxes taken out.

This is risky for people who make decent money because they end up owing money at tax time. But for us poor shmucks it just means more money in our pocket each month, and a smaller return at tax time.

The IRS will not check your w4 for accuracy unless you claim more than 10 exemptions.

I don't have anything taken out of my paychecks. I claim all the exemptions I can. I still get over $5000 back each year. It's nice but in a way it's not fair that I don't have to pay taxes while others do. I'm not complaining. I did pay lots of taxes before I had kids. In fact I had to pay an extra $5-6k during tax time before kids even after claiming zero on my W4. But that was back in the day when I was pulling in a 6 figure income. I remember it pissing me off because I would have to pay more just because I didn't have kids. I think the tax system is set up not to be fair.

[obryn]

I don't have anything taken out of my paychecks. I claim all the exemptions I can. I still get over $5000 back each year. It's nice but in a way it's not fair that I don't have to pay taxes while others do. I'm not complaining. I did pay lots of taxes before I had kids. In fact I had to pay an extra $5-6k during tax time before kids even after claiming zero on my W4. But that was back in the day when I was pulling in a 6 figure income. I remember it pissing me off because I would have to pay more just because I didn't have kids. I think the tax system is set up not to be fair.
I dunno, I don't think that sounds horrible, to be honest. I mean, your definitions of "fair" and "right" may vary, but here's my thoughts...

(1) It's not a kid's fault to be born into a family that sometimes has trouble making ends meet.

(2) Kids who get good educations in families that have a roof over their heads, who can expect regular meals and some parental supervision, will contribute more to society as adults and are less likely to act criminally.

(3) Poverty and crime are strongly linked. It's beneficial to society (and more cost-effective) to minimize the effects of poverty, since it allows people to live without stealing or other forms of crime.

I guess I'm a pragmatist in this respect. If you really feel that this is unfair, you could always give it back, but I suspect you need/appreciate the extra money for your kids. :)

-O

[Limper]

I'll do better under Mickey and the Milf on basic taxes and given the an ever growing percentage of my income is market derived it becomes more noticable... Obama wants to charge me 33% more taxes on my dividends and gains and that is a serious slowing of my wealth growth.

[Ergeheilalt]

Realy? shocks you? I only ask, becasue the percentages being used there are very small to be felt in many budgets.


35 bucks buys my groceries every week.

[Singularity]

I dunno, I don't think that sounds horrible, to be honest. I mean, your definitions of "fair" and "right" may vary, but here's my thoughts...

(1) It's not a kid's fault to be born into a family that sometimes has trouble making ends meet.

(2) Kids who get good educations in families that have a roof over their heads, who can expect regular meals and some parental supervision, will contribute more to society as adults and are less likely to act criminally.

(3) Poverty and crime are strongly linked. It's beneficial to society (and more cost-effective) to minimize the effects of poverty, since it allows people to live without stealing or other forms of crime.

I guess I'm a pragmatist in this respect. If you really feel that this is unfair, you could always give it back, but I suspect you need/appreciate the extra money for your kids. :)

-O

I totally agree. Minimizing the effects of poverty is the only way the impoverished have to find a way into a better situation.

[Lady Fury]

I dunno, I don't think that sounds horrible, to be honest. I mean, your definitions of "fair" and "right" may vary, but here's my thoughts...

(1) It's not a kid's fault to be born into a family that sometimes has trouble making ends meet.

(2) Kids who get good educations in families that have a roof over their heads, who can expect regular meals and some parental supervision, will contribute more to society as adults and are less likely to act criminally.

(3) Poverty and crime are strongly linked. It's beneficial to society (and more cost-effective) to minimize the effects of poverty, since it allows people to live without stealing or other forms of crime.

I guess I'm a pragmatist in this respect. If you really feel that this is unfair, you could always give it back, but I suspect you need/appreciate the extra money for your kids. :)

-O

You're right I do appreciate the extra money because it does a lot for my kids. It buys clothing (which is very spending for 4 kids who are going through a new wardrobe every 5 months or so.). It also provides a better roof over their heads that they wouldn't have if we didn't get the extra money.

[obryn]

You're right I do appreciate the extra money because it does a lot for my kids. It buys clothing (which is very spending for 4 kids who are going through a new wardrobe every 5 months or so.). It also provides a better roof over their heads that they wouldn't have if we didn't get the extra money.
Exactly. What some might see as unfair, I see as a valuable investment in the public safety and future of the country. :)

-O

[FeatsofClay]

Realy? shocks you? I only ask, becasue the percentages being used there are very small to be felt in many budgets.

Lets assume that you make 50k the % difference between the two is 1.7% to Obama = $850 per year - divided by 24 paychecks is $35 per paycheck.

Now, lets use $25,000 - difference there is 3.1% or $775 dollars or $32 per paycheck.

Dont get me wrong, $775 is $775 dollars (stand to make less than that from the McCain plan) and that $35 extra a month wont do many families alot of good - but shocking seems a bit if a stretch to me. (I know, I am being elitist)


I think we are experiencing very different realities. This is the equivalent of a person making minimum wage getting a 50 cent per hour increase. It is HUGE.

[Utrecht]

It is still only 2-3% - that in my book is not huge- that is cost of living increase.

Obviously it is still better than nothing - and it will certainly help folks who are skirting clost to the line - but if reality, I would hope that folks are living a bit more intelligently than that - and that the $35 a month is used in some productive manner (aka long term savings, college fund, etc.) rather than blown on a movie.

[FeatsofClay]

It is still only 2-3% - that in my book is not huge- that is cost of living increase.

Obviously it is still better than nothing - and it will certainly help folks who are skirting clost to the line - but if reality, I would hope that folks are living a bit more intelligently than that - and that the $35 a month is used in some productive manner (aka long term savings, college fund, etc.) rather than blown on a movie.

Noone I know and associate with gets "Cost of living" increases. It is a foriegn thing reserved for another class of people. My Ex had two degrees and didn't get cost of living increases.

And it isn't just you, bubby. :) I read a couple of weeks ago that "x out of x" (my memory says 2 out of 5) people making over $100k a year are living paycjeck to paycheck. STUNNING to me. I would have over $80 left to play with! :) We could retire in just a few years!

[Limper]

Noone I know and associate with gets "Cost of living" increases. It is a foriegn thing reserved for another class of people. My Ex had two degrees and didn't get cost of living increases.

She did work for a business that was contract based so thats not surprising.:)

And it isn't just you, bubby. :) I read a couple of weeks ago that "x out of x" (my memory says 2 out of 5) people making over $100k a year are living paycjeck to paycheck. STUNNING to me. I would have over $80 left to play with! :) We could retire in just a few years!

Yep thats exactly what I think. Debt management and living below ones means seems to be a lost art.

Maybe it comes down to no one is willing to delay their gratification which leads to folks always being wasteful cause they never take the time to find out what would actually make them happy.

[Name Lips]

It's stunning to me too. I guess no matter how much people make, they tend to live beyond their means.

Right now my mind boggles at the concept of making 50k a year - people who make that much are "rich" to me. But if I got a job making 50k... would I buy a house? A new car (I could go for one of those "green" ones...)? I'd start up my IRA again, maybe a couple other things for my nest egg... In the end, I bet my lifestyle would expand more than I expect.... And what would be left over for day-to-day money? The same $6 I have in my wallet right now?

[Hatter]

I make good money for the area I live in, I don't live paycheck to paycheck. I didn't when I lived below the poverty line either. My only debt is my mortgage.

[Limper]

It's stunning to me too. I guess no matter how much people make, they tend to live beyond their means.

Right now my mind boggles at the concept of making 50k a year - people who make that much are "rich" to me. But if I got a job making 50k... would I buy a house? A new car (I could go for one of those "green" ones...)? I'd start up my IRA again, maybe a couple other things for my nest egg... In the end, I bet my lifestyle would expand more than I expect.... And what would be left over for day-to-day money? The same $6 I have in my wallet right now?


I spent a good 12 years very poor and the habits of that time carried forward for me... so you might surprise yourself.

[Singularity]

It's stunning to me too. I guess no matter how much people make, they tend to live beyond their means.

Right now my mind boggles at the concept of making 50k a year - people who make that much are "rich" to me. But if I got a job making 50k... would I buy a house? A new car (I could go for one of those "green" ones...)? I'd start up my IRA again, maybe a couple other things for my nest egg... In the end, I bet my lifestyle would expand more than I expect.... And what would be left over for day-to-day money? The same $6 I have in my wallet right now?

When we were making in the neighborhood of 80 - 90K per year, 50 t0 60 percent of what we brought home was going out to pay on debt. Between new cars, credit cards, and bank loans, we weren't living very far above the standard of the lower middle class. Many lessons were learned and the next time we have a shot at income in that range, the money will be managed far more wisely. Of course with four kids, a lot of the money that was going to debt back then will go towards things like daycare.

[Utrecht]

Noone I know and associate with gets "Cost of living" increases. It is a foriegn thing reserved for another class of people. My Ex had two degrees and didn't get cost of living increases.


COLA tend to be government/unionized type jobs - most stiffs are forced to rely on merit increases/new jobs to get an increase


And it isn't just you, bubby. :) I read a couple of weeks ago that "x out of x" (my memory says 2 out of 5) people making over $100k a year are living paycjeck to paycheck. STUNNING to me. I would have over $80 left to play with! :) We could retire in just a few years!

I am not surprised at all - considering the percieved need to keep up with the Jones' - after all how many Hummers/Escalades ($40-60k cars) do you see in those neighborhoods?

Blows me away - Like many on this board, I live well below my means - I worked for Nortel during the dot-com burt - and say 46 out of 50 of my coworkers laid off - that scared the shit out of me and now my wife and I put over 30% of our pre-tax income into longterm savings vehicles.

[Singularity]

COLA tend to be government/unionized type jobs - most stiffs are forced to rely on merit increases/new jobs to get an increase

This may be true but its annoying as hell. When I was younger and working for near minimum wage, I found it easier to skip from job to job to obtain relatively small raises. I'd have employers asking me why I was leaving and I told them up front that it was because I didn't want to wait around for two years to make the same money as what the new job was offering. Then I'd be labeled as a job skipper. It was fucking annoying.

[Utrecht]

This may be true but its annoying as hell. When I was younger and working for near minimum wage, I found it easier to skip from job to job to obtain relatively small raises. I'd have employers asking me why I was leaving and I told them up front that it was because I didn't want to wait around for two years to make the same money as what the new job was offering. Then I'd be labeled as a job skipper. It was fucking annoying.


yep - which is a biiiig reason I make sure the people I want to keep around are well compensated - keep them happy, they never look around.

Further, it was job skipping that lead to a nearly 100% increase in my income - I was fat, dumb and happy at my first job until they gave me no raise and decided to look around and found out what I was really worth....

[The Theocrat of Poon-Tang]

I will do slightly better with McCain under federal tax burden. And seeing as raising taxes on the rich seems historically a sure way to decrease the amount of money in the government's coffers, I'd say any plan that involves a punitive tax increase is destined to fail.

But also, like Limper and millions of other middle class (i.e. NOT RICH) Americans, I have investments that are going to be taxed to shit by Barack Hussein Obama.

[Brynja]

I would based on the graph - and then the hope the candidates follow through- do better under Obama

[Singularity]

Barack Hussein Obama.

Oh god, not this shit again. Nobody denies that Obama's father was from Kenya, but if he's a Muslim, I'm a fundamentalist Christian. It's nice to see the real Stannis has returned. :lol: