Obama's budget: Taxing for fairness or class warfare?

[babylonsister]

Obama's budget: Taxing for fairness or class warfare?
The president calls for more from the richest Americans to ease the load on others, which would reverse a trend that began in Reagan's presidency. Obama says it's the way out of the economic crisis.

By Maura Reynolds
February 28, 2009


Reporting from Washington -- From front to back and on nearly every page, President Obama's new budget plan delivers a stark message: It's time for the rich to lighten the load on the middle class.

In education, healthcare and an array of other proposals, the budget focuses more benefits on middle-class and lower-income Americans and looks to the affluent to help pay for them.

The change is meant to reverse a long-running trend in the opposite direction.

Since President Reagan began an era of tax-cutting in the 1980s, lower-class incomes have stagnated and middle-class incomes have increased only slightly, but the incomes of the richest Americans have skyrocketed, the 134-page budget document points out.

If the country is going to recover from today's economic crisis, Obama argues, that is going to have to change.

"Throughout our history, the United States has grown and prospered when all Americans have shared in the opportunities created by our economy," Obama said in the budget overview. (A more detailed formal budget will be sent to Congress in April.)

Some Republicans denounced the priority shift in Obama's budget as class warfare, and the budget is sure to face several tests as it works its way through Congress. Also, some economists warned that higher taxes on the affluent could reduce their entrepreneurial energy and were unfair because upper-income Americans already pay a large share of the government's total revenue.

Many other economists think history supports Obama's argument that the country's overall prosperity has generally increased when those in the middle did better.

more...

http://www.latimes.com/news/nationworld/nation/la-na-obama-budget28-2009feb28,0,3387309.story

[annabanana]

1. If I hear ONE MORE yodelhead warble "class warfare" about this budget

I swear to God, I will get profoundly unladylike.

95% of the Country has been the VICTIM of class warfare for the last 30 years.

[Doremus]

7. +1 Spot on. nt

[TBF]

10. excellent post & if he can really accomplish this budget

it will be a job well done. except he should also cut military :) but I'll take what I can get... K&R

[TahitiNut]

13. Every household in the "bottom 80%" has been sending $10,000 to the "top 1%" annually ...

... as more and more of the wealth generated by LABOR has been consumed by the insatiable appetites of the "ownership class." It's an appalling slippery slope ... as the chasm between the haves and have-nots in the US has been widening to Banana Republic dimensions over the last 30 years.

[madokie]

24. Just waiting for the word

I may not be much but I'm here to help you in any way, shape or form.

[ck4829]

2. People who call Obama's economic policy "class warfare" need to be 'volunteered' to go to Mars

Blaming the economic crisis on the poor, that's what class warfare really looks like.

[elizfeelinggreat]

3. We should shout this from the rooftops ...

Since President Reagan began an era of tax-cutting in the 1980s, lower-class incomes have stagnated and middle-class incomes have increased only slightly, but the incomes of the richest Americans have skyrocketed, the 134-page budget document points out.

[Veritas_et_Aequitas]

4. Conservative tears. Yum.

To me, the fact that so many conservatives an uber-wealthy are flipping out is a good sign that the budget is sound.

[NC_Nurse]

5. Why the FUCK is everyone so worried about the folks who have BLED US DRY

for 20 years? :wtf:

Are people really that stupid? It's so infuriating to see the Repubs acting like we're killing them to ask them to pay a little more
of THEIR SHARE! When did the top 5% of Americans become so sacred? They used to be taxed at much higher rates before Ron the Don decided to help them steal everyone else's raises and retirement so they could pile more cash up fore themselves. Thee is NO evidence that any of their prosperity "trickled down" at all, the rest of us just built up tons of debt trying to maintain a middle class lifestyle that USED to be the American dream - not the excess that so many people delude themselves they'll be a part of someday.

It just makes me sick. :puke: :puke: :puke: :puke:

[babylonsister]

6. Did you read this? I'm not seeing a lot of sympathy for rich

people in this article.

[NC_Nurse]

8. I skimmed it ; ) Actually, I was referring to the talking heads on the cable news.

My dad has Faux on this morning and I made the mistake of walking through the room just when some a'hole was
whining about how Obama "talks about SHARED sacrifice, but that's not what his plan does....it singles out the wealthy, who are just reguler folks, don'thcha know."


:nopity: :nopity: :nopity:

[FLDCVADem]

12. Although this will be a highly unpopular post...

...I'm not shy, so here goes.

My husband and I are both retired military, with retirement checks coming in every month. We also both have good white color jobs, which together with our military retirements, put us in the $250,000+ a bit category of wage earners, meaning we'll be hit with the decreased deductions and increased taxes in this plan. We live in a Virginia suburb of DC - not in a McMansion, but in a nice 30 year old house in a nice neighborhood. The cost of living is high, but we knew that when we decided to stay here after retiring from the military. Our two kids are in Catholic school, we put away money for retirement, college and emergencies every month. We drive our vehicles until they drop, I shop at the commissary and use coupons, and we look for sales when it comes to big purchases. Dinners out are reserved for special events - birthdays, anniversaries, etc. We support our parish, our children's schools, and our local community monetarily and with volunteer time/effort.

And no, I don't consider us to be filthy rich. We have everything we need and a good bit of what we want, but we have pretty simple wants. When our 18 year old heat pump went out in January, we certainly couldn't just write a check for the $10,000+ it cost to replace it. No, I had to rework our monthly budget and get us on a 12 month payment plan. No emergency savings for a year, plus more to make the monthly payment.

Trust me, I'm not asking for sympathy or crocodile tears over the fact that our taxes are going to go up, however, I vehemently disagree with the notion that I see around DU that just because we've worked hard and done well that we've "(stolen) everyone else's raises and retirement so (we)could pile more cash up fore (ourselves)."

There is no doubt that many of the people that are going to see an increase in their taxes fall in the above category, however, there are also lots of white collar two-income families that work hard for their money that are also going to be adversely affected. I just think it would be nice if it were at least acknowledged that not every family making more than $250,000 stole it from someone else.

***edited for spelling

[hfojvt]

16. there are not lots of white collar two income families in the 250,000+ range

I mean there are 1.7 million households in the over $250,000 range, but that's only 1.5% of all US households. 98.5% of households are making less, including 40.12% making less than $37,500. That's over 45.6 million households.

Plus, is military retirement really taxed like ordinary income? I cannot tell from the instructions of Form 1040. It says it is if it is reported on a 1099, but is it always reported on a 1099?

[FLDCVADem]

18. ...

Yes, military retirement is taxed as ordinary income.

And as I said, I'm not complaining about the additional taxes, although it will impact our college and retirement savings. I just disagree with the notion that the only people being affected are the super wealthy that got their money by way of screwing the rest of the country.

[killbotfactory]

17. You make over ten times more than the people at the poverty line

In one month you make about as much money as two people earning minimum wage do in an entire year. Whether you realize it or not, that is a lot of money.

If you don't think $250,000 a year is rich, try to imagine what it is like for someone making around $10,000 a year, or even double that. Money for emergencies, college, or retirement isn't even an option. When the price of things, or taxes, goes up the people on the poverty line are disproportionately hit, since a larger portion of their income goes towards the price increases. What would you have to give up if your income was reduced to less than $2000 a month?

In the scheme of things you certainly aren't rich enough to be the ones people accuse of stealing from the poor, but realize that if people aren't paid enough to live off of the state has to subsidize them through food stamps, medicare, and the like. Businesses who don't pay their employees a living wage are basically forcing everyone who pays taxes, or volunteers to help their community, subsidize their industries. The meals you can get at your favorite restaurant, or the goods you buy at the store are the result of someone, somewhere along the line, not being paid a decent wage and having the difference generally goes into the owners pocket. Those people, and the shareholders, CEOs, and banks who perpetuate it, are the ones stealing from the poor.

[NC_Nurse]

19. I don't think that everyone who makes over $250,000 has stolen money from

the rest of us. I do however, believe that, like the rest of us, they will need to sacrifice more to help get us out of this mess. The tax increases will not be as large on families like yours as they will be on those who take home millions of dollars a year - not by a long shot. Those are the people who have gained the most from the Bush tax cuts and they are the ones who need to give some back. They got an 8 year free ride while the rest of us struggled.

It sounds like you are doing fine. I'm glad for you. Many people are struggling to keep a roof over their heads and food on the table. A lot of them have worked hard all of their lives too.

From the stats I recall, Obama received the great majority of votes from people in your income bracket while all along promising to raise taxes. I think that speaks to most realizing that they need to help get our country back on track. I'm just tired of the whining on TV about how it's class warfare when the most tax breaks have gone to the highest income groups for decades. Meanwhile the biggest transfer of wealth in history toward the top 1-5% has been happening all along and where is the outrage? It's coming now, but it's been coming for a long time.

[starroute]

22. The figures you offer make no sense to me

You say you are bringing in more than $20,000 a month, but aside from your two kids in Catholic school, the way you describe your spending patterns sounds far more typical of a family living on $3000 to $4000 a month. Going by what I find online, I'd estimate an additional $1500 a month for your kids' schools, plus say a extra two or three thousand a month as the price of living in a nice DC suburb. Even throwing in a few thousand more in saving for college and retirement, I still don't have a clue as to how you could be spending more than $10,000 a month -- which should leave several thousand over, every single month, even after taxes.

For that matter, given that the advice I've gotten is to always have the equivalent of six months of basic living expenses easily available in a savings or money market account, I don't understand why you were not able to write out a check for a heat pump that cost approximately two weeks of your income.

There is just something very strange about your figures.

On the other hand, since you say you're making just $250,000 + a bit, it doesn't sound like the additional taxes of about 3% which would hit that "bit" will run to over $500 or so a year. So no, I'm not about to offer any sympathy either to you or to any other "white collar two-income families that work hard for their money." Heck, my health insurance increase this year alone is likely to come to at least as much, and I'm far less able to afford it than you are.

[FLDCVADem]

25. Before taxes...

...yes, it's over $20,000/month gross, but nowhere near that in take home. State income tax, federal income tax, Social Security/Medicare taxes, 401(k), health & dental insurance - no, it certainly isn't near $20,000/month. Your call on the Catholic schools is right on the money - $1,000 for high school, $530 for middle school per month. There are also commuting costs, although those are less than many people have in the DC metro area, as we're only about 20 miles from where we work. What we save in gas costs by being closer is is more than made up for in the size of the mortgage we had to get to be closer. But mortgage interest is deductible whereas commuting costs aren't, and time with the family beats time spent in traffic, so that was a choice we made. Add in a house bought at the peak of the housing bubble (not much choice there, I was leaving the military and had to move out of base housing), and no, I don't have an extra $10,000 lying around the house to buy a heat pump.

But I digress - as I said before, I don't have a big issue with the tax increase. I do however have a big issue with the notion that anyone making $250,000 is filthy rich and that they must have stolen it from someone else in order to get it.

[lostnfound]

23. I'd assume it is MARGINAL income over $250K on which taxes will increase

If people under $250K aren't going to have higher taxes, I would expect that people making $275K (for example) aren't going to be dramatically worse off or anything. They would probably be a little worse off -- for example, if MARGINAL tax rates in that range went up from 35% to 50%, that would be an extra 15% x $25K = $3,750...which would effectively be an increase of perhaps 1.5% on the whole income. This is just my own logic and actual results will surely vary depending on phaseout of deductions etc.

Not every family making $250K stole it. Your country and your neighbors on the other side of the tracks will eventually appreciate it.

I expect that my household also won't be doing better under the new tax structure, but I'm sure that both you and I are looking forward to a less unequal society where poverty isn't growing like kudzu about to strangle the middle and working classes, even if it costs us a few bucks to achieve it.

Further, IMHO, the more-equal society will drive a more robust economy and eventually asset values etc may be improved, whereas the downward spiral that the GOP had left us with created damage of 30% - 50% on accumulated wealth, not just a few percent on income. (Of course, this reason pales in comparison to the value of our kids growing up in a society where there aren't OTHER kids living in cars or in cardboard boxes or having a future destiny possibly limited to being Walmart greeters. I want my son to know what America is like when it has a robust, thriving middle class.)

[gratuitous]

14. The only folks I've seen offering sympathy . . .

The only folks I've seen offering sympathy are fellow do-nothing zillionaires on the teevee. Meredith Viera offering tea and sympathy to Mary Matalin and her Clutch Cargo face this past week on the Toady Show was just plain nauseating. And lost in all of these crocodile tears are the plain facts: If you make $250,000 a year (not a pittance by any measure), you won't pay a dime more in taxes. If you make $1 million a year, you'll pay an additional $22,500. Horrors! The overrich actually having to pay to support the society that provides them the means to make $1 million a year.

[NC_Nurse]

20. Exactly.

Amen. You'd think people were being forced to pay 5 times that. Please.

[Generic Other]

9. pitchfork and torch weather

"we all know which way the wind blows..." -B. Dylan

[scarletwoman]

11. Hell yes, it's class warfare, & our side is FINALLY fighting back after 30 years of being warred ON.

Class War -- join up and fight back! :patriot:

sw

[ThomWV]

15. Easy progressive tax system: Marginal rate=your income percentile relative to the nation

Rank income percentiles beginning at the current poverty rate (because no one below the poverty rate should ever pay a dime in income tax) through $100,000,000 and then charge an equal marginal rate. If you are in the 82nd percentile of earners, then your marginal tax rate tops out at 82%, if you are a lower earner, say in the bottom 3rd percentile, then your tax rate is 3%. Cap the top percentile by law and have that law expire every 2 years so it is constantly coming up to be revised up or down as conditions demand.

[damntexdem]

21. There's a difference?

Fairness is turning the tide in the ongoing class warfare.