by Kerry Thomas
October 28, 2008
Barack Obama says he’ll only raise taxes on “the rich,” on
those individuals earning more than $250,000 per year (now already reduced to
$200,000). But this elusive figure
keeps changing. Obama’s
Vice-Presidential running mate, Joe Biden, has further reduced this figure to
$150,000/year; and New Mexico’s democrat Governor Bill Richardson has reduced
it still further to now just $120,000/year.
And it now applies to “working families” instead of individuals.
Whatever the real figure he has in mind, Obama says he isn’t
going to raise taxes dramatically, just raise the tax rates to the tax rates we
all paid during the Clinton administration.
And to do this, Obama will have to do…nothing. Congress will have to do…nothing.
Under the provisions of the “Jobs
and Growth Tax Relief Reconciliation Act of 2003” and the “Economic
Growth and Tax Relief Reconciliation Act of 2001” in 2010 tax rates will
revert back to those in effect prior to the enactment of those tax laws. (The “Bush Tax Cuts” will expire in 2010.)
Let’s compare income tax rates, under the “Bush Tax Cuts” now in effect, and the tax rates in effect in 1999, under the Clinton administration.
|
2008 |
Single |
Married,
Filing Jointly |
||
|
Marginal
Tax Rate |
Tax
Bracket |
Tax
Bracket |
||
|
Over |
But Not
Over |
Over |
But Not
Over |
|
|
10.0% |
$0 |
8,025 |
$0 |
$16,050 |
|
15.0% |
$8,025 |
$32,550 |
$16,050 |
$65,100 |
|
25.0% |
$32,550 |
$78,850 |
$65,100 |
$131,450 |
|
28.0% |
$78,850 |
$164,550 |
$131,450 |
$200,300 |
|
33.0% |
$164,550 |
$357,700 |
$200,300 |
$357,700 |
|
35.0% |
$357,700 |
- |
$357,700 |
- |
|
1999 |
Single |
Married,
Filing Jointly |
||
|
Marginal
Tax Rate |
Tax Bracket |
Tax
Bracket |
||
|
Over |
But Not
Over |
Over |
But Not
Over |
|
|
15.0% |
$0 |
$25,750 |
$0 |
$43,050 |
|
28.0% |
$25,750 |
$62,450 |
$43,050 |
$104,050 |
|
31.0% |
$62,450 |
$130,250 |
$104,050 |
$158,550 |
|
36.0% |
$130,250 |
$283,150 |
$158,550 |
$2283,150 |
|
39.6% |
$283,150 |
- |
$283,150 |
- |
Source http://www.taxfoundation.org/files/federalindividualratehistory-20080107.swf
The taxes we all pay on the first $1 of income were reduced
from 15% to 10%. The top tax rate paid
on the last dollar of income was also reduced, from 39.6% to 35%, and those
rates were only imposed on those earning more than $357,700, an income
threshold higher than the highest Clinton-era tax threshold of $283,100.
Everyone who paid income taxes received a tax rate reduction
under the “Bush Tax Cuts” If you didn’t
pay income taxes, your tax bill remained at $0.
FICA tax rates have remained constant at 7.65% since 1990. Technically, FICA taxes, commonly known as
Social Security, are “Federal Insurance Contribution Act” contributions, paying
disability and retirement payments to those who “contributed” to the fund.
So, once again, by doing nothing, a President Obama and a
Democrat Congress will raise your taxes and will raise everyone else’s
taxes beginning in 2010.
Barack Obama’s promises to the contrary are worth about as
much as any politician’s promises. (You
might recall another Democrat presidential candidate who promised to cut taxes,
only to raise them, retroactively, once he assumed office.)
Those who do not learn from history are doomed to repeat it.
If you want o see something really scary, take a look at the
tax rates in affect during the Jimmy Carter administration,:
|
1979 |
Single |
Married,
Filing Jointly |
|||
|
Marginal
Tax Rate |
Tax Bracket |
Marginal
Tax Rate |
Tax
Bracket |
||
|
Over |
But Not
Over |
Over |
But Not
Over |
||
|
0.0% |
$0 |
$2,300 |
0.0% |
$0 |
$3,400 |
|
14.0% |
$2,300 |
$3,400 |
14.0% |
$3,400 |
$5,500 |
|
16.0% |
$3,400 |
$4,400 |
16.0% |
$5,500 |
$7,600 |
|
18.0% |
$4,400 |
$6,500 |
18.0% |
$7,600 |
$11,900 |
|
19.0% |
$6.500 |
$8,500 |
- |
- |
- |
|
21.0% |
$8,500 |
$10,800 |
21.0% |
$11,900 |
$16,000 |
|
24.0% |
$10,800 |
$12,900 |
24.0% |
$16,000 |
$20,200 |
|
26.0% |
$12,900 |
$15,000 |
28.0% |
$20,200 |
$24,600 |
|
30.0% |
$15,000 |
$18,200 |
32.0% |
$24,600 |
$29,900 |
|
34.0% |
$18,200 |
$23,500 |
37.0% |
$29,900 |
$35,200 |
|
39.0% |
$23,500 |
$28,800 |
43.0% |
$35,200 |
$45,800 |
|
44.0% |
$28,800 |
$34,100 |
49.0% |
$45,800 |
$60,000 |
|
49.0% |
$34,100 |
$41,500 |
54.0% |
$60,000 |
$85,600 |
|
55.0% |
$41,500 |
$55,300 |
59.0% |
$85,600 |
$109,400 |
|
63.0% |
$55,300 |
$81,800 |
64.0% |
$109,400 |
$162,400 |
|
68.0% |
$81,800 |
$108,300 |
68.0% |
$162,400 |
$215,400 |
|
70.0% |
$108,300 |
- |
70.0% |
$215,400 |
- |
And the tax rates in effect in 1962 (try to imagine paying a
top marginal tax rate of 91%):
|
1962 |
Single |
Married,
Filing Jointly |
||
|
Marginal Tax Rate |
Tax Bracket |
Tax
Bracket |
||
|
Over |
But Not
Over |
Over |
But Not
Over |
|
|
20.0% |
$0 |
$2,000 |
$0 |
$4,000 |
|
22.0% |
$2,000 |
$4,000 |
$4,000 |
$8,000 |
|
26.0% |
$4,000 |
$6,000 |
$8,000 |
$12,000 |
|
30.0% |
$6,000 |
$8,000 |
$12,000 |
$16,000 |
|
34.0% |
$8,000 |
$10,000 |
$16,000 |
$20,000 |
|
38.0% |
$10,000 |
$12,000 |
$20,000 |
$24,000 |
|
43.0% |
$12,000 |
$14,000 |
$24,000 |
$28,000 |
|
47.0% |
$14,000 |
$16,000 |
$28,000 |
$32,000 |
|
50.0% |
$16,000 |
$18,000 |
$32,000 |
$36,000 |
|
53.0% |
$18,000 |
$20,000 |
$36,000 |
$40,000 |
|
56.0% |
$20,000 |
$22,000 |
$40,000 |
$44,000 |
|
59.0% |
$22,000 |
$26,000 |
$44,000 |
$52,000 |
|
62.0% |
$26,000 |
$32,000 |
$52,000 |
$64,000 |
|
65.0% |
$32,000 |
$38,000 |
$64,000 |
$76,000 |
|
69.0% |
$38,000 |
$44,000 |
$76,000 |
$88,000 |
|
72.0% |
$44,000 |
$50,000 |
$88,000 |
$100,000 |
|
75.0% |
$50,000 |
$60,000 |
$100,000 |
$120,000 |
|
78.0% |
$60,000 |
$70,000 |
$120,000 |
$140,000 |
|
81.0% |
$70,000 |
$80,000 |
$140,000 |
$160,000 |
|
84.0% |
$80,000 |
$90,000 |
$160,000 |
$180,000 |
|
87.0% |
$90,000 |
$100,000 |
$180,000 |
$200,000 |
|
89.0% |
$100,000 |
$150,000 |
$200,000 |
$300,000 |
|
90.0% |
$150,000 |
$200,000 |
$300,000 |
$400,000 |
|
91.0% |
$200,000 |
- |
$400,000 |
- |
Imagine a married couple earning $32,000/year paying 50% of
their income in taxes. A couple making
$100,00/year would pay 75% of that in federal taxes.
Those who do not learn from history are doomed to repeat it.