Taxes

Romney’s Lack Of A True Tax Plan

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I write this just hours before the second Presidential Debate. As I write this, Romney is pulling slightly a head of President Obama in the polls. Given the plus/minus ratio, President Obama has not only lost his lead, he is effectively tied with Mitt Romney. This is without Romney releasing more than two years of his taxes, with Paul Ryan still dazed by his debate loss to Vice President Biden and without the Romney/Ryan team releasing a full and complete tax plan.

The latter of these is my greatest concern. You can’t cut $5 trillion out of Federal revenues without cutting the Federal budget severely. Period.

Romney/Ryan aren’t stating what will be cut. They aren’t detailing what loopholes they’re going to close. Will they take away the mortgage deduction? Early in his campaign, Romney said he would for families earning more than $250,000 but that didn’t go over well, so his team backed off as quickly as they mentioned it.

The only spending cut Romney actually promotes is the $444 million spent each year on public television. That’s less than a percent of our spending – big savings there. But, he’s talking about cutting $5 trillion in taxes. To leave the deficit as is, $5 trillion will have to cut from our spending and what should be cut?

You can’t cut defense. In addition to the welfare of our country, there are economic issues to consider. We spend less in defense, defense companies lay off employees and unemployment rises.

What about infrastructure? That has to be ruled out. Our nation’s roads, bridges and other structures are in the worse shape. We have been neglecting the majority of our infrastructure (exception is Wisconsin).

There are other programs. Romney wants to eliminate the Department of Education, that would be a huge savings and a very bad idea. We need to educate our nation’s youth, not throw them aside like yesterday’s news.

I’m just throwing ideas out here, because Romney/Ryan certainly never give us any.

Be warned: the great state of Wisconsin elected Scott Walker after he promised to lower taxes and create 450,000 jobs in his first four years. So, far, Walker has cut some taxes (mine haven’t dropped any), cut Education spending in the state and the unemployment rate – after a slight drop – is 7.5%. This isn’t the highest it has been under Scott Walker, but it is back on the rise.

In New Jersey, where Christie reigns, their unemployment is 9.9% – higher than the Nation’s. If the economy is what you care about, then Romney’s policies are not what you want. They aren’t working on the state level (cut taxes, cut spending ) and they won’t work on the national level.

To Cut Taxes or To NOT Cut Taxes

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I happen to be against continuing the payroll tax cut. I don’t think it is wise to extend it for another year. I’ve said that I didn’t like the idea of it.

That said, I saw an article that stated along with the tax cut, there would be a tax raise on those making more than a million dollars. This raise would be used to offset the financial effects of the tax cut.  If there is going to be a way to make up the money Social Security loses, I would be willing to rethink my opposition to the payroll tax cut.

Since then, I’ve heard that the raise is now off the table.  Now, I’m back to my original opposition.

This makes me one of what the right calls the elite. See, I can think for myself and weigh all of the options.  The right doesn’t like people who can think for themselves.

They, also, don’t like the Americ

an

Worker. The GOO is against this tax cut.

Is that a fact?

Yes, it is.

Tax cuts / breaks for those earning more than $250,000 per year. You beach! Those people work hard for their money.

Tax cuts for the little guys. Not on you

r

life – the American worker is nothing more than a lazy bum looking for a handout.

Make sure you remember how the GOO is too busy making nice with the CEOs, who are jacking up their stock profits, while running away with their double digit raises, to care about what happens to the American worker.

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Herman Cain’s Tax Plan

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When it comes to taxes and being told what’s going to cost me more money and what’s going to save me money, I generally don’t believe the Press, or the person touting the plan.  What I do believe is taking what I pay in taxes now and comparing that to the new plan.

This is what I did when comparing the “savings” Paul Ryan’s plan touted.  This is what I have done with Herman Cain’s plan.

Now, there is something I’d like to add.  Mr. Cain has not made public a lot of details about his plan.  It is possible that I am making incorrect assumptions.  I am listing the assumptions that I have made before the comparison – if anyone knows for a fact that the Cain plan doesn’t do any one of these, please leave a comment and I will make adjustments.

  • No deductions: personal exemption, neither Medical nor the Standard Deduction.
  • Taxes on everything: food, gas, clothing and bills such as electric and cable.
  • Even though when I purchase my next home or car – and only if Cain’s plan passes – I would pay a 9% sales tax on the home or car, I did not include this in my car payments, nor in my mortgage payments.  I made the assumption that the 9% tax would not be retroactive.  Therefore; in my total spending, I did not include my mortgage nor car payments.

I picked last month for my spending.  I figured September is a typical month for me.  Some months I might spend more and some months, I spend less.  For comparison purposes, I included Paul Ryan’s plan in my chart.

 

Current

Ryan’s Plan

Cain’s Plan

Salary

$5,416.67

$5,416.67

$5,416.67

Insurance Deduction

$253.44

$0.00

$0.00

Personal Exemption

$291.67

$316.67

$0.00

Standard Deduction

$483.33

$1,041.67

$0.00

Taxable Income

$4,388.23

$4,058.33

$5,416.67

Federal Income Tax

$784.18

$1,014.58

$487.50

National Sales Tax

$0.00

$0.00

$399.09

Total Tax

$784.18

$1,014.58

$886.59

%

17.87%

25.00%

9.00%

This is based on one month’s salary and all the spending for the household.  In the month of September between bills (cable, electric, cell phone, etc.), food, household items and misc. items (books, software), I spent $4,434.30.

As you can see, I currently pay – each month – $787.18 in Federal Income Tax (after deductions, which really aren’t taken out until the end of the year, but I wanted this to be a fair comparison – apples to apples).  Under the Cain Plan, I will only have $487.50 taken out of my paycheck for Federal Taxes.  That’s a savings of $299.68.  That sounds pretty good.

But, wait – there’s more…

Once the addition of the sales tax on $4,434.30 of goods and services is paid, my federal tax bill is raised by $399.09 – almost $100 more than the initial savings.  This brings my total taxes under Herman Cain’s plan up to $886.59!  Clearly, the Cain Plan is not a winner for me.

Let’s deal with the critics on this.  I’m sure some people are saying, “Just spend less.”  Hmmm, nice idea, but then what’s the point?  If, in order to save taxes, I slow down my spending, then for what am I working?  What’s my motivation for earning more money?  What do I get and how does the economy get rolling along if I cut my spending in half?

Let’s say I only spend the essentials – cut out the extras, like eating out or my passion for books – what happens then?

Well, I would save $52.80 in taxes each month.  And, sure, I could sock the extra money away in savings, but who wants to live like that?  I don’t drive up to Brookfield every single day to not enjoy the money I spend.  I sock away savings and money for retirement, but then I enjoy life.

And, how will I pay for that next car?  Sure, I could use my savings, but when the average car price is around $20,000 an extra 9.0% in sales tax is really going to make a huge difference.  That adds – without any other taxes or licensing fees – and extra $1,800 to the price of my new car.

Perhaps, Cain’s plan won’t take food or, maybe, cars will be exempt.  Wouldn’t that be subsidizing certain industries and isn’t that one of the ways we ended up in this mess in the first place?

Here’s what I recommend – don’t take my word on whether or not you like the Cain Plan.  Do the math for yourself.  Figure out exactly how much more or how much less you’ll pay in taxes.  Come to your own conclusion.  That’s what we should really be doing anyway.  Checking out the plans and weighing our options.

Happy Calculating!

A Little Tax Tidbit

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Average Federal Tax Rates By Household Type

Take a good look at this chart – it is from a CBO Report – I am conducting research into a few tax myths and I came across it in a report.  I wanted to pass it on and share it because it proves my points.  Those of us who are childless on the ones that the tax burden falls mostly heavily on.  And, yet, the Republican – written by Paul Ryan – Roadmap for America wants to raise our taxes even higher.

Who do they think truly keep the economy going?  It isn’t the rich.  They aren’t hiring anyone.  It’s us DINKS (Double-Income, No Kids).  Our taxes and our spending make the economy go round.  And, the Republicans want to tax us even more!

GOP: Hard at work for the Rich, don’t care much for the middle class.

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Normally, I don’t post the same article here as I do on the front page, but I didn’t want this one to be overlooked. The Republicans are working hard to raise our taxes, while cutting the taxes of the rich and corporations.
According to Huffington Post, the Republican Party is all for raising taxes on you and me.  Actually, I didn’t need to read the article to know that, they’ve been saying it all along.  Paul Ryan – who is unfortunately, my representative in Congress – called the other night with one of them recorded messages.  He stated, “I work for you.”  Really?  Because your roadmap for America plan makes it seem like you’re only working for the rich.

Pay attention, here’s where I’m going to do math.

Current Ryan’s Plan
Salary $1,250.00 $1,250.00
Medical $63.36 $63.36
Taxable Income $1,186.64 $1,250.00
Federal Income Tax $212.04 $312.50
% 17.87% 25.00%

Under Paul Ryan’s plan, health insurance would no longer be pre-taxed. Under his plan, any single making more that $50,000 per year would pay 25% in Federal Income tax. The tax rate for corporate America? 8%.

So, basically, Ryan and his Republican cronies will be financing this country on the backs of the single people.  A family of four can earn $39,000 without paying one penny in taxes, while us single people will only be able to earn $16,000 without paying taxes.  That means that I will end up paying more in taxes – a lot more.  Under Ryan’s plan, I will pay $12,250.00 in taxes.  Under our current tax structure (and using the standard deduction and personal excemption), I only pay $9,917.85.  That’s a difference of $2,332.15.

Anyone who is single, shouldn’t vote Republican.  It’ll cost you in the long run.

Danny Appleseed

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Mark Fiore’s latest Dogboy and Mr. Dan video.  If I could draw, I would do something like this.  He is right on the money regarding what is happening right now in our country.

Enjoy!