patrick.net

Yeah, but the Dems still got it passed. They haven't been looking very effective lately, and it's good to see them rallying behind something worthwhile.

Small victory, but it shows the Republicans are completely out of touch with what's going on out here...

Ok, so 1 out of 3 ain't bad.

But Obama has clearly given the homosexual pressure groups what they wanted: ending "don't ask don't tell."

What was so terrible about that policy? It seemed sensible to keep one's private activities private in a military context.

Ruki,

You are an idiot. Quit trying to pretend you know something.

Are there any polls showing what percent of Americans want this bill to pass? I would guess at least 85% if they really understood it...but what do I know .

To further illustrate my point made above. I recently lived in Canada for several years. What astonished me is that in the current America, I am considered by most to be a 'radical lefty liberal'. When I moved to 'Conservative' Canada, led by Conservative Stephen Harper, I was by most objective standards considered moderate right wing all the while not having changed my opinion on anything.

In other words, far left wing in the US = moderate right wing in Canada. Moderate Republican in the US = Off the rails right wing anarchist in Canada.

Perhaps the rest of the world really has a lot of faith in the US government? They can say all they want about the decline of America... where do they go during a risk-off run?

Romney's Plan:

1. Lower tax RATES for everyone by 20%.
2. Eliminate the estate tax
3. Zero out investment income for anyone earning less than 200k.
4. Be Revenue neutral by eliminating loopholes and deductions.

Lets go one by one.

1. Everyone benefits, but as Republicans so often like to mention, the wealthy benefit more because they pay more in taxes. After all, 47% of Americans pay no income taxes at all!

2. The exclusion for a married couple is $10 million. $5 million each. As such, only estates more than 5/10 million would benefit. This is roughly .5% of estates. So, the top .5% benefit.

3. Obviously only benefits those making less than 200k, though it remains to be seen if the FIRST 200k of investment income is excluded. As an example, someone making $201k would pay investment taxes on their full investment income while someone making 199k wouldn't? Probably not - I see the 200k as an exemption so this benefits everyone with investment income. Again, since on only the wealthy approach and exceed 200k in income, they benefit most. (Only upon reaching 200k in income does one maximize the benefit)

4. Here's where it gets sticky. If this is going to be revenue neutral, where does the money come from? This is classic "expand the base" logic. The ABC article states there are not enough credits and loopholes for the wealthy to make up for the benefit they will see from the reduction in rates, but I haven't done that analysis so I can't stay the same. It is important to note, however, that if what the ABC article says is true, then taxes on everyone else below 200k MUST go up in order for Romney's plan to be revenue neutral. This is simple arithmetic. If c = total revenue and it is constant, x = taxes collected by those making more than 200k and y = taxes collected from those making less than 200k, then x+y = c. For this to hold and x decreases, y must increase by the same amount.

So lets do a little math. Lets just say Romeny figures out that the $500 child tax credit is one on the chopping block. The current phase out for this starts are $100k, and is maxed out at 20k per child. So if you have two children, you have no credit at 110k + 2*20k = 150k. Obviously unless you have 5 or more children, this is not affecting you. So this is in effect a tax INCREASE on the middle class and lower class.

Lets look at the mortgage interest deduction. Lets assume that regardless of income somone will pay no more than 20% of their taxable income in mortgage interest. So for someone making 50k, they pay 10k in interest. 50k is in the 15% bracket for a married couple. Net effect on taxes is as follows

Current:
.1 * 17400 = $1740
.15 * (40000-17400) = $3390, Total Taxes = 5130.

Romney:
.08 * 17400 = $1392.
.12 * (50000-17400) = $3912, total taxes = 5304.

Difference = $174 higher taxes. (.3% higher average tax rate)

Now for a rich guy making $1 million.

Current:
.1 * 17400 = 1740
.15 * (70700-17400) = 7995
.25 * (142700 - 70700) = 18000
.28 * (217450-142700) = 20930
.33* (388350-217450) = 56397
.35 * (1000000-50000-388350) = 196577.5, total taxes = 301639.5.

Romney:
.08 * 17400 = 1392
.12 * (70700-17400) =
.22 * (142700 - 70700) = 14400
.224 * (217450-142700) = 16744
.264* (388350-217450) = 45118
.28 * (1000000-388350) = 171262, total taxes = 255659.6

Net decrease in taxes = $46000, decrease in tax rate of roughly 4.6%!

Of course, you must note that under current tax law, only interest on the first 1 million in debt is deductable. So I used 50k interest deduction in the current calculation...

All of this is just to say for it to be revenue neutral, more taxes must be collected from somewhere, and if the plan for this is to eliminate deductions, credits, and loopholes, that is coming out of the middle and lower class.