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I used to be proud to be an American

by Tally on July 28, 2011 Bookmark and Share

y u no do right thing?I do not normally discuss politics. I am neither a Democrat nor a Republican. I believe that it is the purpose of a government to provide certain services to its people, but I also believe that the government should be fiscally responsible. Those are not incompatible objectives.

There has always been strife with our politicians. But in the past 12 years, the pot went from being stirred vigorously to being really heated up to being almost ready to boil over.

The current problem first manifested itself during the 2000 Presidential elections. The Swiftboating of Senator Kerry was emblematic of the new way of winning. No need to have a good platform or a good track record. All that was necessary was to smear the other side, to go lower than the other side dared to go. The tactic was even named Swiftboating after the smear campaign against Kerry. Unfortunately, such tactics are successful in our sheeple society.

The 2008 Presidential elections saw the new Tea Party's rise. The Tea Party revitalized the Republican Party, but it also splintered it. The Tea Party has an extremist platform that is more fanatical than realistic. Unfortunately, the 2010 midterm elections saw the Tea Party move into the House, assuring the Republican Party a House majority, but only in number, not in the party platform. The Tea Party also assumed power in many states.

Now we have the politicians piggybacking solutions to the budget deficit to the debt ceiling. These are two issues that need not be joined. Raising the debt ceiling has traditionally been technical legislation with little fanfare. This time, though, we have the Republicans seeking to use the debt ceiling issue as a vehicle to move their agenda. It is backfiring on them.

Cutting expenditures is the wrong thing to do considering the state of the economy. We need to be creating jobs, not cutting expenses and putting more people out of work. The more people that work, the better the economy fares, and the more revenue is generated. Jobs create revenue, but tax cuts for the rich does not create jobs. Tax cuts for the rich just allows the rich to keep more of their money.

The more squabbling that goes on in Washington, the more discouraged I get. The Tea Party fanatics are not willing to negotiate and compromise. They are willing to wreck the country in order to achieve their idealogical goals. I do not like them gambling with country, particularly when they appear to have a loosing hand.

I despair that the 2012 elections will see any improvement. The United States are filled with sheeple. There is no other way I can explain why so many agree with policies against their own interests and against the best interests of the country. Fact, the rich pay less taxes percentage wise than middle class Americans. Why would any sane person think it a good idea to give the rich even more tax cuts? It has been proven that giving the rich tax cuts does not increase the number of jobs in America, nor does it improve the economy.

I am rambling here. I do not have the answers. I can see the problem, and it is the party politics in Washington. Specifically, it is the politics that has split the Republican party. One part has the sole purpose of overthrowing the current Democratic administration. The other part are idealogues who want things their way and are not willing to negotiate. Neither of the two parts are large enough to dominate and they cannot work together. It is a sad time for America.
 

Interesting Links:

  • Bernie Sanders Explains REALITY ...Tax The Rich Bastards NOW!
  • Why Americans Are So Angry
  • Polarized Politics: How Extremists Have Taken America Hostage
     
  • Don't Fall for the GOP Lie: There Is No Budget Crisis -- There's a Job and Growth Crisis
     
  • The Debt Ceiling Impasse: The Myth of Grand Bargains and Win-Win Unicorns
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Comments

#1 Rich Taxes

Submitted by Someone Out There (not verified) on Sun, 08/21/2011 - 9:46pm.

"Fact, the rich pay less taxes percentage wise than middle class Americans."

 

There are only 5 tax brackets in U.S. Tax law. "Rich" people (anyone > ~$370,000/year) pay the highest % tax (35%).

source:

http://www.irs.gov/pub/irs-pdf/p15.pdf

http://en.wikipedia.org/wiki/Tax_bracket#Tax_brackets_in_the_United_States

http://www.moneychimp.com/features/tax_brackets.htm 

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#2 Tax bracket is different than effective tax rate

Submitted by Tally on Sun, 08/21/2011 - 11:09pm.

You are correct, using the standard tax tables, the rich are subject to a higher incremental tax rate for earned (wages) income. But it is important to remember that the tax tables show the tax rate of the last dollar of taxable earned income, not the tax rate on total income and not the total percentage of income paid in taxes. The incremental tax rate does not take into consideration the capital gains tax on unearned (investment) income. The capital gains tax of 15% is much lower than the incremental tax rate for those in the higher tax brackets.

For the vast majority of taxpayers, their taxable income is equal to their gross income, which is equal to their wages. These taxpayers at the lower end of the tax schedules need all their income to live. The rich among us, however, have enough money to meet their normal living expenses, plus they have lots of extra money to participate in tax shelters or to otherwise take advantage of programs to lower their taxable income. And they get to take advantage of the tax break on long term capital gains.

What is important to consider is the percentage of income paid in taxes for each group. That is the percentage discussed in the blog. For example, the top 400 in income in the US averaged about $345 million in income. These taxpayers paid an effective tax of only 16.6% in 2007. They did not pay anywhere near 38%. They get to pay a reduced effective rate because they got a tax break that allows them to pay a lower capital gains tax (15%). Warren Buffett put this in perspective recently.

In contrast, my effective tax rate in 2007 was 18.7%. Add in payroll taxes (SS), and my effective tax rate jumps to 25.4%. I am far from rich. I do not own a jet or a boat nor do I have investments that make capital gains. What was your effective tax rate (total income taxes paid divided by adjusted gross income)?

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