Comments on: Barack Obama is Increasing Your Paycheck

By: gt

gt — Fri, 02 Jan 2009 16:45:21 +0000

again, you have misquoted. for couples, it starts phasing out at 150k, not 100k.

By: thomas

thomas — Thu, 01 Jan 2009 19:08:26 +0000

3 words – Fair Tax Act. It’s time for everyone to start actually bringing home the money they earn (gross income) and stop letting government essentially push corporations to overseas employers.

By: Flexo

Flexo — Thu, 01 Jan 2009 17:20:39 +0000

Rox: According to the proposal, the change in the withholding rate corresponds to a new tax credit (rather than a change in the marginal tax rates). All other things being equal, people won’t end up owing more.

By: rox

rox — Thu, 01 Jan 2009 17:01:17 +0000

I am also curious as to whether or not this move would be coupled with a reduction in marginal tax rate. I mean if they lower the withholding rate without lowering the marginal tax rate it just means that more people will end up owing when they file their 2009 tax returns. Currently if not enough is withheld one can be subject to interest and penalties – what would happen if a taxpayer hasn’t paid enough to cover their tax liability (or more accurately their safe harbor amount) because of a change in withholding rates? Would they still be subject to penalties and interest even though the fact enough wasn’t withheld was due to a change beyond their control?

A change in the withholding rate without a corresponding change in the marginal tax rate is like charging your taxes to a credit card – you’ll still owe the same principal but because you didn’t pay in full on time you’ll owe interest. All it does is buy the taxpayer some time and that time will come at a price.

By: Flexo

Flexo — Wed, 31 Dec 2008 18:17:12 +0000

weakonomist: This proposal is a form of a tax break… theoretically, it would be a tax credit paid back to workers as an advance through less payroll tax withdrawn from paychecks, leaving more money in the hands of consumers on a weekly or biweekly basis (whatever the case may be). They have been talking about a reduction of marginal tax rates as well, so I’m wondering if this new proposal would be in conjunction or in addition to that. But this is just a proposal by Obama’s team, it’s still up to Congress to put it into law.

By: the weakonomist

the weakonomist — Wed, 31 Dec 2008 17:32:28 +0000

Why not just do a tax break? Lower % = more money in my pocket.

The last stimulus was a joke. Please stay out of it Obama. I don’t want the history books to remember you as the cause for hyperinflation.

By: Lamar

Lamar — Wed, 31 Dec 2008 16:28:59 +0000

also realize that if you continue to have health care coverage in 2009, that constitutes a raise, as health insurance costs continue to rise. it’s also true that if you can hold on to your job, you’ll actually make out great in a deflationary environment. the drop in gas prices has equaled an economic stimulus. and maybe some of us can soon afford a european vacation again.

the best corporations and small businesses will be able to cope with the expiration of tax cuts, and will retain their best employees. the rest will be part of the necessary creative destruction process.

By: Juggler314

Juggler314 — Wed, 31 Dec 2008 14:39:55 +0000

Forget taxing the rich…I wish all the tax cuts would affect the middle class everyone always refers to, those making under 250K, every time there’s a tax proposal it starts phasing out at 75K…sucks for those in that middle class, but not middle class demographic.

By: kitty

kitty — Wed, 31 Dec 2008 14:20:38 +0000

The big problem is where this money come from. “taxing the rich” sounds very popular, unless one things about who signs one’s paycheck. Taxing large corporations and businesses earning over 250K – exactly the businesses that employ people – increases businesses operating expenses and leaving less money for our salaries. When earnings of so-called “rich” companies go down, it’s not the salary of a CEO earning millions that goes down – it’s the number of jobs.

Yes, I am sure payroll credit of $500 or $1000 is a great help when one loses a job netting a whole lot more money.

This is a typical redistribution and it couldn’t come in a worst time for the economy.

BTW – nope, I am not earning more than 250K (or 200K). But my employer is one of these large rich corporations. And I am scared as hell of what will happen with my job under Obama.

By: poor boomer

poor boomer — Wed, 31 Dec 2008 13:47:39 +0000

Pink Floyd was right.

“But if you ask for a rise/it’s no surprise/that hey’re giving none away”