Hi, Received this from a good friend of mine today who received it from his CPA. He has put some real numbers into a comparison. I will let you review and decide. As he points out he uses the tax rates of the last year of the Clinton administration as a projection for 2009 (Bush cuts no longer in place. He describes the comparison very well, iMHO>>>>>
Take care, Chuck PS - I'm just the messenger ::>) But, I do agree this results are rather staggering! > > August 20, 2008 > > The Democratic convention is next week. The Republican convention > is the following week. Don't forget to wear your wading boots > these next two weeks as I am sure it will get very deep. > > Taxes & Politics > > There are all sorts of belief systems in place for both parties. > One primary political position of the Democrats is they want to > repeal the Bush tax cuts. Their position is these tax cuts have > been described as only benefiting the rich. > > So what are we really talking about? Repeal of the tax cuts > experienced in the last few years would bring the income tax system > back into the tax regime during the Clinton Presidency. > > So that raised the question of a comparison of tax liabilities. > Would the lower income people benefit by reverting back to the > "good old days?" Would it slam all those "evil rich" people into > paying more to the federal government? What about the large middle > class? Would they be winners or losers in this deal? > > The Comparison > > So here is what I did. I created four income levels. The lowest > was $30,000 of wages, the second at $75,000, level 3 at $200,000 > and the highest at $500,000. I added some interest and deductions > that fall within their respective income levels. High income > people tend to have more interest, dividends and capital gains than > lower income folks. > > The next part of this comparative puzzle is filing status. I ran > three - Single, Head of Household and Married Filing Jointly. > > The third step was to prepare a tax return using the 2008 tax laws > with the tax cuts still in place. Our comparison assumes the tax > cuts are repealed and the old law becomes effective once again. I > used the Year 2000 tax software which was the last year of the > Clinton tax law to calculate the estimated 2009 tax bill. This is > not a perfect result but it would be close. > > The Results > > Let's look at the results for a $500,000 taxpayer. They fall into > that "evil rich" category and so they should be getting whacked the > most. > > > Single $500,000 > 2008 Tax Liability $141,099 > 2009 Tax Liability (est) $172,130 > Change $31,031 > Percentage Increase 21.99% > > Head of Household $500,000 > 2008 Tax Liability $137,095 > 2009 Tax Liability (est) $169,433 > Change $32,338 > Percentage Increase 23.59% > > Married - Joint $500,000 > 2008 Tax Liability $133,000 > 2009 Tax Liability (est) $167,127 > Change $34,127 > Percentage Increase 25.66% > > As you can see from the above figures, someone in the $500,000 > range could plan on kicking in an extra $31,000 or more per year to > the tax man. Increases range from 20-25%. One reason for this is > the jump in the top marginal tax rate from 35% to at least 39.6%. > How would you feel right now with $31,000 less in your pocket > thanks to your friends in the US Congress? > > > Single $200,000 > 2008 Tax Liability $45,788 > 2009 Tax Liability (est) $54,790 > Change $9,002 > Percentage Increase 19.66% > > Head of Household $200,000 > 2008 Tax Liability $45,788 > 2009 Tax Liability (est) $51,327 > Change $5,539 > Percentage Increase 12.10% > > Married- Joint $200,000 > 2008 Tax Liability $40,425 > 2009 Tax Liability (est) $47,046 > Change $6,621 > Percentage Increase 16.38% > > Of course, those folks in the $200,000 range should probably kick > in a lot more as they are obviously too rich for their own good but > certainly not as evil as those $500k guys. BUT WAIT A MINUTE! > Both the percentage increases and the true dollar increases are not > that high. Why is this? One factor is the highest tax rates do > not affect these guys. A head of household taxpayer pays just > 1/6th of the increase that the $500k taxpayer does. > > > > > Single $75,000 > 2008 Tax Liability $11,019 > 2009 Tax Liability (est) $13,531 > Change $2,512 > Percentage Increase 22.80% > > Head of Household $75,000 > 2008 Tax Liability $8,113 > 2009 Tax Liability (est) $11,340 > Change $3,227 > Percentage Increase 39.78% > > Married- Joint $75,000 > 2008 Tax Liability $4,023 > 2009 Tax Liability (est) $7,891 > Change $3,868 > Percentage Increase 96.15% > > For the $75,000 income level, what stands out is not the amount of > additional taxes but the percentage increases. It literally > doubles the income tax for married people. So much for encouraging > family values! Another factor to remember is that an extra 3 or 4 > thousand out of pocket is a big hit for them. > > > > > Single $30,000 > 2008 Tax Liability $2,764 > 2009 Tax Liability (est) $3,431 > Change $667 > Percentage Increase 24.13% > > Head of Household $30,000 > 2008 Tax Liability $685 > 2009 Tax Liability (est) $2,204 > Change $1,519 > Percentage Increase 221.75% > > Married- Joint $30,000 > 2008 Tax Liability $(1,485) > 2009 Tax Liability (est) $729 > Change $2,214 > Percentage Increase N/M% > For those in the lower brackets, the percentage increase in income > taxes is staggering. MFJ status moves from a refund to owing a > chunk. The increase in tax is equivalent to almost one full > month's earnings. Stop and think about how you would do if you had > to get along with a full month's of wages given to the tax man. > > It is all relative. You will hear the politicians of both parties > "spinning" tax and economic issues until everyone is dizzy. Focus > on the hard numbers and look at how they will or will not affect you. > > One of the points of this analysis was to show you real numbers > versus political spin and fixed beliefs. Between the politicians > and the media, there is little truth out there. > > I personally think that tax rates will increase no matter who wins > the November elections. What should you do? Start looking now at > things like year end tax planning, tax savings investments and > getting by on less. It won't be fun, but you will do better if you > are prepared for bad things and they don't occur than the opposite. > > > > >  _______________________________________ http://www.okiebenz.com For new parts see official list sponsor: http://www.buymbparts.com/ For used parts email [EMAIL PROTECTED] To Unsubscribe or change delivery options go to: http://okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
