Monday, October 20, 2008

An Honest Question

I am working on getting all of my apple weekend pictures put together - but in the meantime, I have a political question. I have been thinking a lot about the upcoming election. I have no desire to get into a debate with people, but I honestly don't understand something, and would like someone to explain it to me.

I would like to know why some view Obama's plan as being smart financially? I understand why people can choose to support Obama's social views (I don't agree with them), but I understand the philosophy behind them. What I don't get is why his tax plan makes any sense. Can somebody explain why they believe it does?


I tend to think of my dad a lot during elections. This was true even when he was alive. My dad was quite conservative - but he was open enough to dialogue with others who had very different views from him. My above question has a lot to do with my dad. He was a few tax brackets above Forrest and I and rightfully so. Neither of us went to med school, worked 60+ hours a week, at all hours of the day, and our jobs didn't hold people's lives in our hands. My dad was also one of the most generous people that I have ever met. According to Obama's tax plan, if my dad were still alive, he would be paying 25,000 to 75,000 dollars more in taxes each year. I find that to be absolutely ridiculous. My dad worked harder than anybody I know to get to where he was, and worked harder than anybody I know while he was alive. He already paid over 50% of his income in taxes - why should he pay any more? (he was a small business owner - therefore had to pay both sides of Social Security taxes for himself and employees which tipped him over 50%). When my dad died, my mom had to pay estate taxes. I don't understand those either. My dad paid taxes on everything already - why did my mom have to pay for something that had already been taxed just because my dad died?

Again... I don't want to debate, but desire to have a dialogue with people from opposing views so that I can better understand why Obama is a smart decision financially, so that if he does win in 2 weeks - I can at least say "I get it."


Anonymous said...

Ok. I am not saying that I agree with what I am about to say. And I know that an economic plan is much more comprehensive than my answer may account for. I read an article a few weeks ago about who the wealthy are in America. Basically only 1% of the population makes more than $250,000 a year and only 10% make more than $100,000. I wonder if he is trying to increase tax dollars without affecting 99% of Americans. And theoretically people who make more, won't feel the effects as people make less. Not sure if that answers your question, but maybe it gives you a little insight?? Again, not saying I agree with this idea.

Amy said...

Thanks for commenting Hannah. I can understand the desire to not affect 99% of American's with more taxes. My problem with that is that the top 10% of wage earners already pay 70% of our taxes. I don't think that they should have to increase their burden. Especially when 30% of Americans don't pay taxes. I think I am in support of a flat tax rate. That seems to make the most sense for me. Those at a higher income are going to pay more because they make more, but wouldn't be taxed out the wazoo.

Barb said...

Hmmm. Even if someone is making over 250,000 they are already making a much higher percentage of their income than those who are making 50,000. or less. I don't believe that one should be penalized for working hard and making an income- whatever amount. I believe that our taxes could be significantly less toxic if we eliminated so many of the "government subsidies and programs". If we could get government to be back to its basics of governing and controling our lives - we would be better off. I am in favor of a flat tax rate - then those who were making more would still be paying a lot more than those who's income was less. Hmmm.

Colleen Wachob said...

Erik and I got into this discussion the other day... we were talking about Sean Hannity's proposed tax plan that Ryan was telling us about at Mom's house. I'm all for it. Why has no one promoted a flat tax, back to basics sort of approach, I wonder? From Ryan's book, it totally seemed like a practical, simple solution.

Emily said...

The reason I disagree with a flat tax rate is this:

A person making $250,000 who is taxed 25% still has $187,500 in their pocket after taxes. If you ask me that is a HUGE amount of money.

A person making $25,000 who is taxed the same percentage 25% ends up with only $18,250.

Yes the wealthier person paid WAY more in taxes, but taking away 25% from someone who has less money to begin with has a greater affect on them than it does on people who are making a lot of money.

Colleen Wachob said...

I do grasp the idea of disposable income... that someone with a higher income has a lot more money freed up - while hard-working middle-class families have very little disposable income after meeting their basic day-to-day needs. But I think somehow there has to be a balance. Because if we task the wealthy so much - we take away their ability and freedom to give generously in voluntary ways. Like to supporting missions, or health research, or giving to any number of worthy, needed causes. I dunno... I am glad I am not a politician because I am not intelligent enough to write the perfect tax plan. I did like Sean Hannity's idea of simplifying the deduction process and making the whole thing more basic -- even if we tax rates differ subtly.

Amy said...

Thanks for posting everybody. I understand that those who make more money are better able to "afford" paying larger taxes. My question is: At what amount of money are you no longer able to afford to pay taxes. So at 250,000 you can, but at 25,000 you can't. Can you afford taxes at 50,000? Or 75,000? I don't know that I feel comfortable with the government arbitrarily deciding that at this amount - you don't have to pay taxes, but at this higher amount, you can so you should pay a lot of taxes.

My other problem with Obama's tax plan is that it doesn't encourage growth and stepping up. I am guessing that the person making 250,000 per year either works hard, or worked hard to get there, or both. I am also guessing that most of us would like to eventually make that kind of money. However, Obama is increasing taxes so much, that it makes better financial sense to not allow yourself to make that much. Because at the lower tax bracket your gross is lower, but due to lower taxes your take home is higher than it would be if your gross was above 250,000. Where is the American Dream in that? Do I really want Ephraim's generation to learn to not work hard because you will keep more money if you don't?

Laura said...

I am not sure where I stand on a flat tax rate; the fact of the matter is that if it was a rate of something like 25% than it would be disproportionately higher on lower income individuals as in Emily's example. The reality is however that most flat rates are significantly less, and thus would not be a penalty.

I am never in favor of a plan that increases government programs over American ingenuity. The government is horrendously inefficient and wasteful. Moreover, Obama says that his jobs programs will be funded by pulling out of the Iraq war; that only works in theory. Obama has said that while he favors a troop withdrawal in Iraq, but that he will listen to the commanders in the field. Thus, if the situation changes in Iraq, he may not be able to withdraw troops at the rate he needs to fund his "economic plan." Or perhaps he will placing our national security at risk. Additionally, plans such as Obama's rarely do anything to reduce the national debt which is staggering.