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Archive for Saturday, February 28, 2009

Typical family would get tax cut under Obama budget

February 28, 2009

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— A typical American family would get a tax cut under President Barack Obama’s budget proposal, and their low-income neighbor would fare even better.

Their wealthier counterparts, however, would face some steep tax increases, starting in 2011.

Families making as much as $50,000 would owe no federal income taxes, as long as they have at least two children, according to an analysis by Deloitte Tax LLP. Others making as much as $150,000 would see big tax cuts, especially if they have children in college.

The budget outline unveiled Thursday continues Obama’s policy of targeting tax cuts for middle- and low-income families. In the presidential campaign, Obama promised tax cuts for the middle class, and he delivered some temporary relief in the economic stimulus package enacted this month.

Most of the tax cuts for individuals in the stimulus package would be made permanent in Obama’s budget proposal. They would be offset by tax increases on businesses and on couples making more than $250,000. Single filers making more than $200,000 would also be hit with a tax increase.

At the other end of the spectrum, millions of Americans who don’t make enough money to pay federal income taxes would receive government payments at tax time through refundable tax credits.

A typical family of four making $50,000 a year would receive a payment of $40, according to the Deloitte analysis. Before the stimulus package was enacted, that same family would have owed $760 in federal income taxes.

A similar family making $35,000 a year would get a payment of $4,100, an increase of $1,200. The median household income was $50,233 in 2007, according to the Census Bureau.

The stimulus package provided most working couples with a new tax credit of up to $800 for 2009 and 2010 — single filers get up to $400. Obama’s budget proposal would make the credit permanent for families making less than $190,000 and individuals making less than $95,000.

An expanded $1,000 child tax credit would be made permanent, as would an expanded $2,500 tax credit for college expenses. Families making up to $160,000 a year would be eligible for the full college credit.

Obama “did what he said he would do in the campaign,” said Clint Stretch, Deloitte’s managing principal of tax policy. “And he had a surprise hit for those on the high end.”

Obama promised during the presidential campaign to eliminate tax cuts for the wealthiest Americans, which was enacted under former President George W. Bush. Obama’s budget proposal would allow them to expire in 2011, increasing the top income tax rate for couples making more than $250,000 from 35 percent to 39.6 percent.

The budget proposal also would enact new limits on itemized tax deductions for those same couples, including deductions for charitable donations, mortgage interest and state and local taxes. The tax increases would be delayed until 2011, when the economy will presumably be improved.

Comments

beatrice 5 years, 1 month ago

Snap: "Another tax cheater in the O'dude's regime"

Since I'm unclear who exactly this "O'dude" is you refer to, is the tax cheat under question here Sarah Palin? http://salon.glenrose.net/default.asp?view=plink&id=9924

Can you imagine a tax cheating VP? Thank goodness, neither could the majority of rational American voters.

Please quit pretending that tax cheats are only from one side of the aisle.

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hawkperchedatriverfront 5 years, 1 month ago

Hey, it's pretty simple. You make $250,000 a year now, next time around you just make $239,500. NO big deal.

The US doesn't have to consider a sales tax, VAT, the city of Lawrence will take any extra money you have.

They are socialists also.

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camper 5 years, 1 month ago

Barry, with all due respect. Business has a great many deductions and bonus depreciation (for equipment investment) that can be taken....if you report schedule C.

My problem with the tax code is that it is way too long, and far too confusing, that not even the author (IRS) can make sense of it. I also think that if you have to pay Capital Gains tax, you should also be able to deduct Capital Losses immediately, rather than having to carry them forward. I think you would agree with me here?

At the end of the day, a graduated increase of 3.6% for those reporting over 250k is small potato's. Even though I think the US should consider a flat tax or sales tax.

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barrypenders 5 years, 1 month ago

Except average, there are no where close to the deductions today as there were then.

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average 5 years, 1 month ago

Obama barely has the Congressional support to raise the top marginal rate back to Clinton's 39.6%.

Reagan, it should be noted, didn't have the balls to push for a top marginal rate below 50% until his last few months in office.

Of course, the top rate was 91% during Truman, Eisenhower, and most of Kennedy's administrations. But, they don't exactly teach that in history class, do they?

Wake me up when Obama gets even halfway to Reagan's tax rates (1981-1986). Actually, better yet, let's re-instate those rates. Call it the "Ronald Wilson Reagan Memorial Tax Compromise" if it would help it get passed.

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Hardcore_Socialist 5 years, 1 month ago

SNAP!

Obama Change Good!

"And dat is all der peoples needs to know." Baron Von Rashki (70s Pro Wrestler)

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barrypenders 5 years, 1 month ago

Taking money from people that have it can only last so long.

So enjoy your free rubbers, and your $13 while you can.

Try not to make more babies that I have to take care of.

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hawkperchedatriverfront 5 years, 1 month ago

which is it , tax cut or no taxes. I find it hard to believe that Obama is going to allow people making a total of $50,000 and pay no taxes and get money back also.

If that be the case, you better get with SEBELIOUS and she how much she wants, because some that you get back you will have to pass on.

The Lord giveth and the Lord taketh. not to be mean momof3, but don't you mean "families who work and make less than $50,000 a year' as opposed to work less than 50,000 a year,you're not talking about hours are you.

Just someone tell me., If my friends working make a total of $50,000 for the household, two incomes, they are not going to pay and federal tax. They will get back every penny deducted, huh? They wil however, both contribute a total of almost $4,000 to social security.

Now if Obama had 1/2 a brain, he and his advisors would figure all withholding on the gross income after social security withholding were taken out.

NO brains in Washington, just rhetoric.

I cant' wait for the dog to arrive. We can hear about it for a while and how Michelle has the chef prepare for their dog, the same meal that "not_holroyd" gets.

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Hardcore_Socialist 5 years, 1 month ago

it is all part of change. Remember CHANGE!

We are changing from weak liberalism to strong socialism. Certainly there will be weeping and gnashing of teeth as we pry the wealth from a few to give to the elitists of our new cause. This gnashing will cease when their teeth become cracked and worn. They won't have time to complain waiting for our fair and equal dental care plan.

What is a typical American family anyway? Wait and Barak the Wonderful will tell us what it is and how we should support it with our pathetic labor.

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righthanded 5 years, 1 month ago

Where are the jobs that were supposed to be created?

So...you have to have two children or more (not just one) to get this hand out?

Hummmm This is more like redistribute to the baby makers and not the responsible working class

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beatrice 5 years, 1 month ago

Giving tax cuts for the vast majority of Americans while rescinding the remarkably favorable tax breaks previously given to the wealthy -- darn that Obama for keeping his campaign promises!

Any of you unhappy to be getting a tax cut, feel free to send it to someone wealthier than you. I'm sure they wouldn't mind.

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mom_of_three 5 years, 1 month ago

SO from what I am reading, no one on this blog will benefit from Obama's tax plan, so you are all against it?
Hope your situation never changes, and you make less than 40,000 a year as a family, because then you would have to give the tax benefits back....because you opposed it in the first place, right.... Yeah, that's what I thought.
There are many hard working families who work less than 50,000 a year. Don't categorize them into something they are not.

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barrypenders 5 years, 1 month ago

Right bozo

Money just floats around and one has to be lucky to find some.

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hawkperchedatriverfront 5 years, 1 month ago

I told you, a parrot for a pirate on the not so good ship, the White House.

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Tom Shewmon 5 years, 1 month ago

All of a sudden I feel so......wierd. Mr. Obama, why do you hate families that are not "typical". Will I be the one of the first stops for your civilian national security forces?

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just_another_bozo_on_this_bus 5 years, 1 month ago

Why is it that all those who complain about "redistribution" only complain when it's being redistributed from the rich to the poor, (which hasn't really been happening) and never the other way around (which has been what's really happened over the last nearly 30 years of trickle down.)

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Bowhunter99 5 years, 1 month ago

"A family making $35,000 a year would get a payment of $4,100"

so... it's not enough that they don't pay taxes... they have to become a burden to others by receiving money from the government... That's Obama's wealth re-distribution program in a nutshell...

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hawkperchedatriverfront 5 years, 1 month ago

None of the bank loan problems would have happend if the banks held the loans. The banks processed the loans, then sold them, mortgage brokers processed loans and sold them.

If the country were to return to a mortgage system as it was during the 50s where Bank A had so much money to loan on a house, and kept the loan, the loan could be monitored, and problems worked out with the borrower. Insurance companies used to hold mortgages. The payment was made directly to the insurance company.

Go back to the basics of lending.

A local banker once told me, that he would rather make 10 $500 dollar loans, because the borrower will always keep paying on it and the terms can be readjusted. Better than making one $5,000 loan and it goes belly up, like TJ Cinnamons.

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beatrice 5 years, 1 month ago

Mikey, you are absolutely correct! Many of the loans never should have been approved in the first place -- this is why we need regulation on the banking industry. It is the greed of the financiers who gave away loans to people they knew would never be able to afford them, then packaged the loans and sold them to investment groups. De-regulization as stressed by the likes of Ronald Reagan, George Bush, and John McCain during his (fortunately) failed campaign led to the mess we are in.

Or are you claiming that the banking industry leaders are all a bunch of liberals, because if you are you are one crazy young bastard!

In the meantime, if we don't attempt to stop the downward spiral of housing values, it will have a devestating effect on all of us. I agree that it is a bad situation, but to ignore it would make it worse for all, and we can't afford that.

Finally, don't you remember McCain talking in the debates about his plan to buy up mortgages? He wasn't talkng about using Cindy's money, so quit pretending that the GOP wouldn't have tried something similar had they made it back into office -- although the attentiion likely would be more on protecting the banks than the citizens.

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hawkperchedatriverfront 5 years, 1 month ago

Hmmm a bit misleading. $50,000 would "owe' no taxes. But how much is being kept?

The good thing aobut this is, Warren Buffet has to pay more and he supported Obama. I bet Warren is just thrilled.

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madmike 5 years, 1 month ago

Yeah Grammaddy, I do want to hoard MY money. I make me damn house payments, car payments and insurance payments. I work hard to make the money I have. I DI object to giving my hard-earned savings to people that took ARM mortgages, bought houses they never could afford anyway or were granted loans by Fannie or Freddy Mac when they shouldn't have ever been approved for them. YOU can give wour money to anyone you damn will please, but if you htink that I am not going to fight for my family and our right to keep our savings in order to "re-distribute' my wealth, you are one crazy old bitch!

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camper 5 years, 1 month ago

But, I really think a flat tax might just be the fairest solution. And I do believe it would be best to keep it as low as possible but still cover our collective needs for service.

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camper 5 years, 1 month ago

I don't see it as a redistribution of wealth. I see it as a redistribution of paying the tax bill. For example, if Joe the Plumber made 300k instead of 250k, his extra federal taxes (on a graduated scale) would be approximately $3,000. If I were making that much money, it would not deter me one bit. And as a wise man said (my father) paying taxes right now is a good problem to have....ie many businesses are losing money.

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Godot 5 years, 1 month ago

You are right Monkeyhawk. Except that the $25 per week to the unemployed is a real increase; the $13 per week for workers is an accounting trick. Withholding is being reduced, not the tax rate.

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Godot 5 years, 1 month ago

The typical family will get a welfare check. The typical family does not pay income taxes.

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monkeyhawk 5 years, 1 month ago

"No Godot and Madmike want to hoard all the money for themselves"

You need to insert "their" in place of "all the".

I understand that those on unemployment are receiving an increase in their benefits that amounts to almost double the increase that those who are actually employed are going to get.

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just_another_bozo_on_this_bus 5 years, 1 month ago

"Yeah 13 bucks a paycheck, and in return you agree to go into the debt in the amount of 20,000 dollars."

That debt is going to happen regardless of what Congress and the President do-- courtesy of the deficit spending by the last administration to finance tax cuts for the wealthy (so they could speculate in Wall Street pyramid schemes) and its imperial military adventures.

Too bad the friends of Bush already socked away their $billions in ill-gotten gains, and have no intentions of giving any of it back. The rest of us will just have to muddle through as best we can (and the stimulus bills are just part of that.)

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Chris Ogle 5 years, 1 month ago

Typical family: Divorced, 1.6 kids. jobless... and broke.

Come on big O.... we need a job.

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Godot 5 years, 1 month ago

That 13 bucks is taxable. Just thought you should know.

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ArumerZwarteHoop 5 years, 1 month ago

Yeah 13 bucks a paycheck, and in return you agree to go into the debt in the amount of 20,000 dollars.

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grammaddy 5 years, 1 month ago

No Godot and Madmike want to hoard all the money for themselves. We all know that the less- fortunate made their own mess.

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womanwarrior 5 years, 1 month ago

So, Godot, you don't believe in tax cuts?

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AjiDeGallina 5 years, 1 month ago

it is an opinion that most families will get tax cuts?

It sounds like a fact to me.

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madmike 5 years, 1 month ago

Another fine opinionated piece from the ASSociated Press, almost as much in love with Obama as NBC

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Godot 5 years, 1 month ago

Under the Obama wealth redistribution plan, it does not make sense for anyone to work hard, or to own anything. Just plod along in mediocrity and let the Big O take care of you.

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