Wow! This is great. I have to admit that although I fall under a category in which I would benefit more from a McCain tax break, I have to go with Obama. I do feel that our country has fallen into a "rich get richer while the poor get poorer" rut and the very people than need the help the most fall into the categories of those getting it the least.

This got me thinking though. Raw numbers and percentage breakdowns are one thing, but I really wanted to see what we were talking in terms of actual percentage of the population that would benefit (or not) from these tax incentives/hikes. This is not definitive (wikipedia), but interesting to consider nonetheless. Please note, these are household incomes (not individual) so they don't marry up exactly.

0-25K: 28.22%
25-50K: 26.65%
50-75K: 18.27%
75-100K: 10.93%
100-150K:9.8%
150-200K: 3.17%
200-250K: 1.17%
250K+: 1.5%

Theoretically, looking at these numbers, we are talking more than 50% of the population falling into the 50K and below category (potentially more considering this is just household income not individual).

I think it's important to also keep in mind the psychology behind economics and the perceived value behind higher tax cuts for people with lower earnings. More money in the pockets of the majority of consumers naturally leads to greater consumer confidence, which hopefully transcends into better quarterly reporting from the consumer sector, etc, etc, etc.

I am far from an economist and these are just random thoughts all strung together, but seeing the numbers on the screen like this make me worry even more about the direction of our country under a McCain/Palin administration.

ok I am not exactly sure how to read this table and I feel dumb
But is it like this: You find your income on the left hand side and then the two columns show how much you'd pay (+) or get back (-) under each candidate?

geez it is way too early for number crunching like this .. I'm not a number person regardless!

kiki-my understanding is that it reflects the difference in additional monies paid or received in taxes.

Yes, FitZucchero--that's right--with the red numbers being the percent of change from the present.

Look! He'll help add it all up

oh ok! thank you both ... like I said I am not a numbers person!

lol citizen that lil guy is cute!

well - i think that they are both trying to be as aggressive as possible since taxes really are a thing of importance, but i'm not sure how much i'm going to buy into any of these rough estimates right now. seeing as how bush has to install a stimulus this year - i'm not sure how that will affect things for next year. i like the idea that Obama is able to get me more money right now - based on where my HHI is - since i'm stll filing as a single head of household - but i just don't know yet.

i try to educate myself on some of this stuff so i can be more aware of who and what i'm voting for, but i'm still a bit confused.

thanks for laying out the table though - it does make a bit more sense to me than what i was reading since i hadn't made a 'side by side' comparison yet.

Fit, that's an interesting assessment as far as consumer confidence goes, but on the reverse side, if you give people who make more and tend to have more disposable income tax cuts, those people are able to put the money back in to the economy, stimulating the economy, and causing growth and more jobs.

(Is the above chart for individuals only? And does it just take into account income taxes? I think it's important to look at other taxes as well, as most working people in this country (even those in the middle class) have money invested through their retirement funds.)

Well, I definitely benefit more under Obama's plan but he already had my vote.

This is the reason why my parents usually vote Republican. While discussing tax plans with my Dad this weekend, He told me that he pays 150k in income taxes even with Bush's tax plan. Yet he still plans on voting Obama. I guess fiscal conservativeness isn't the most important issue to him this year.

I actually fall in the middle, so the change would be relatively small.

Saying that, because of the HUGE difference Obama would make in how taxes are divided, taking a bit of a burden off the lowest-paid, and shifting it to those making millions each year is enough of a reason for me to vote that way.

To be honest, even if my bracket had been slightly McCain, I would still vote for Obama based on the other brackets.

People making under 19K a year could REALLY use that additional 560 bucks or so, it may only be 50 bucks a month, but that's a couple of grocery bags of food, a couple of tanks of gas, well worth it to people in those brackets. The last thing they need is to be even poorer.

I don't have the same ability to make these amazing graphs as yy, but I also think it would be interesting and add to the conversation to see a graph detailing what people already pay. (I could figure it out based on percent increases/decreases and dollar amounts, but a graph would be so much easier!)

As for the "trickle down" theory espoused for decades as justification for NOT taxing the wealthiest people in the country, I will only add this:

It doesn't work.

I could link links all day that go on about this, its been the cornerstone of conservative justification for that tax perspective since I was a kid in the 80s.

http://www.nytimes.com/2007/04/12/business/12scene.html

"In the United States, trickle-down theory’s insistence that a more progressive tax structure would compromise economic growth has long blocked attempts to provide valued public services. Thus, although every other industrial country provides universal health coverage, trickle-down theorists insist that the wealthiest country on earth cannot afford to do so. Elizabeth Edwards faces her battle with cancer with the full support of the world’s most advanced medical system, yet millions of other Americans face similar battles without even minimal access to that system.

Low- and middle-income families are not the only ones who have been harmed by our inability to provide valued public services. For example, rich and poor alike would benefit from an expansion of the Energy Department’s program to secure stockpiles of nuclear materials that remain poorly guarded in the former Soviet Union. Instead, the Bush administration has cut this program, even as terrorists actively seek to acquire nuclear weaponry.

The rich are where the money is. Many top earners would willingly pay higher taxes for public services that promise high value. Yet trickle-down theory, which is supported neither by theory nor evidence, continues to stand in the way. This theory is ripe for abandonment." -

Robert H. Frank, an economist at the Johnson School of Management at Cornell University, 1997.

er 2007, not 1997!

(Ok I will stop spamming now. )

It has worked in the past. Leading economists are basically split on it.

I'd benefit more under McCain's plan but I'm still voting for Obama.

And I didn't explain it well, I meant to show my support for supply-side economics rather than trickle-down economics.

Why isn't working now? Is there just too much spending?

It's not working now for many reasons. Part of the reason it's not working now is that there is too much spending. Part of the reason (the main reason, in my opinion) is all of the speculative lending; people took mortgages out for more than their homes were worth and charged millions in credit card debt and the housing market went bust, which really has nothing to do with taxation systems.

lilkimbo, give me the data and i'll happily make a graph. i'd like to see that too.

Cool. Thanks! I will have to either figure out the data from these graphs or find it elsewhere. But I will get it to you at some point today.

the main thing these graphs show is that everyday americans would benefit more under Obama's plan. even "everyday americans" making up to $603k/year would not see much of a change in their tax under Obama.

They would directly benefit more under Obama's plan. Whether they would benefit more in the long run is up for debate.

And those up to $161,000 would directly benefit more under McCain. That's a lot of money in some places, not a lot in others.

Oh, and just a quick question. Are the dollar amounts saved indicative of what people in the center of the bracket would save?

it's a 1% difference between mccain and obama at that level. less than $2,000.

well i got the data here:
http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc...

according to the source, the dollar amounts are the change in the average tax bill. to calculate the percentages i showed those dollar amounts as a percent of the base income in each bracket - to show the "impact" of the on one's total income.

OK. I was just curious what the dollar amounts represented.

And I recognize that it's a 1% difference, but it's still not incorrect to say that those people directly benefit more from McCain's plan.

oh and lilkmbo, in comment 23 i think you mean those ABOVE $112k would benefit more under mccain -- everyone making less than $112k gets a larger cut under obama's plan.

I will benefit from Obama's plan.

its confusing because we're looking at a graph where + is bad and - is better!! kinda like when you look at unemployment rates - the lower the increase the better the news.

Right, I meant those in the bracket that goes from $112,000-$161,000. (And those above that, as well, but I was referring specifically to that bracket.)

Right. I understood, but I worded it incorrectly.

See, this is cool! This is how democracy is supposed to work. Give me the facts, not some lame story about a pregnant daughter or a preacher who's angry. Give me stuff I can actually base an opinion on that will affect my life.

Not directed at you CS. Just the entire media culture in general.

the funny thing is, i do this dry, boring stuff for work all day and i'd just LOVE to write something more headline-grabbing once in a while, like the pundits and others are allowed to do. but you're right -- the facts are better, and it also shows that the source that's imparting them trusts the people to understand and make up their OWN minds.

I covered this story yesterday as well in my blog/poll. http://teamsugar.com/user/dreamsugar/polls/1962082

I like the graph I see here -- Thanks YY -- I benefit under the Obama plan but I was voting for him before this.

Thanks again

This is excellent, and, I agree, much more worthwhile as part of the decision-making process than a bunch of stories about a pregnant daughter and crazy reverends.

Incidentally, I would personally benefit much more under Obama.

Oh, and for the vast majority of Americans (those not making high six figure salaries and up), this pretty much puts an end to the "Obama will raise your taxes! Obama will raise your taxes!" line of attack, I think.

However, it's still not false to say that Obama will raise taxes.

No, but this will show how those tax increases break down by income, which I think is lost in 30-second ads.

yup, jude you're right. ahhh, the power of FACTS. it's just intoxicating, isn't it?

yup, jude you're right. ahhh, the power of FACTS. it's just intoxicating, isn't it? Smiling

--
I'm buzzed just thinking about it

Thanks for this, yesteryear!

Great post, FitZ!

Rabid, I also agree that "trickle down" doesn't work. It has been in place under Bush, and clearly it hasn't worked.

And there are more things other than taxes that are affecting our economy...but a lot of it rests in the hands of Republican fiscal theory put into action. It was Republican lead legislation that deregulated the energy industry that allowed speculators to enter the energy market (authored by Phil Gramm), and the banking deregulation legislation (lobbied for by Phil Gramm when he left the Senate to lobby on behalf of UBS).

The housing crisis wasn't caused by PEOPLE getting mortgages that were too big for them...the housing crisis was caused by the legislation that allowed the banks to bundle and misrepresent the risk they were taking by handing out these loans. The stock market is based on known risk...when you keep incredibly stupid loan decisions off the books, it leads to bubbles and collapse. The banks would never have handed out such risky loans if they had to share with the financial market and their stock holders what they were doing.

Fannie and Freddie have always been government backed and they failed big time. It's silly to blame the entire housing crisis on deregulation. And supply-side worked under Reagan. It doesn't make sense to say it hasn't worked under Bush because our tax system doesn't exist in a vacuum. Even if one were to subscribe to your belief that deregulation is the cause of the current economic problems in our country, that belief in no way speaks to the success or failure of supply-side economics.

Trickle down doesn't work because companies want to keep their profits for the big wigs. They NEVER trickle it down. Oh wait you mean those Quarter ($.25) raises I use to get.

Supply-side economics is not about companies directly giving raises to employees.

Correct me if I'm wrong but didn't supply side economics lead to the crash of '87? I'm not trying to be a punk here, but I always thought Reagan's economic policies caused that. Also, and this is also my opinion, I think there's a pattern between deregulation and some terrible, national crisis. For instance, we deregulated the savings and loans and then we had the savings and loan crisis. We deregulated media ownership and now we have 98% of all media owned by a handful of companies and a continual fight to keep the internet free. We had the deregulation of how energy companies operate and then we had Enron. This last one is just, in my opinion, the latest of the consequences of deregulation.

Actually, supply-side economics had very little to do with the crash of '87. It was caused mostly by Program Trading. (I think that's the correct term.) Computer programs were selling stocks even as the value fell and it caused the crash. It's hard for me to properly explain.

And I agree to some extent about deregulation. However, I don't think that any one thing can be blamed on one factor. I also don't think that the answer is giving the government the level of regulative power that a lot of Democrats have proposed.

Wasn't there a ression after Regan?

And my idea my seem silly to you, but I had a conversation about this with several accountants who are at the top of their game, and they didn't seem to think it was silly. Not that i don't value or respect your opinion, but these people are IMO financial experts and they were in agreement about the amount of damage that the banking deregulation did.

Okay. I had heard about that computer thingy. I think they fixed that now.

I think this is one of those "party line" differences. I like government oversight on stuff because I think the natural tendency of most people is greed. Probably somewhere in the middle is the best.

For I am Consensus Builder!