Obama's economic plan of raising taxes

Senator Barack Obama has unveiled his economic plan of raising taxes on the successful. His plan would boost the top marginal rate to well over 55 percent—before the inclusion of state and local taxes—resulting in many individuals seeing their marginal tax rate double. The consequences of this policy would be a return to the bad old days of tax avoidance, with taxpayers disguising personal income as business income or capital gains and the migration of capital from the United States to abroad.

Between now and January 1, 2011 (five short years away),
· Tax rates will rise substantially in each tax bracket, some by 450 basis points.
· Low-income taxpayers will see the 10-percent tax bracket disappear, and they will have to pay taxes at the 15-percent rate.
· Married taxpayers will see the marriage penalty return;
· Taxpayers with children will lose 50 percent of their child tax credits;
· Taxes on dividends will increase beginning on January 1, 2009.
· Taxes on capital gains will increase, also beginning on January 1, 2009; and
· Federal death taxes will come back to life in 2011, after fading down to nothing in 2010.

What makes this tax nightmare scenario particularly scary are the economic benefits that will never be realized if the 2001 and 2003 tax cuts disappear. Businesses are watching now to see if Congress will make permanent the first to expire of the major economic growth components of the 2001 and 2003 tax acts—lower taxes on dividends and capital gains. Failing to make permanent the low tax rates on investment would signal to businesses of all sizes that the other major elements of the Bush tax plan will also be allowed to expire. They would adjust their investment and hiring accordingly.

Among the more prominent elements of his tax proposal, Senator Obama would end the Bush tax cuts and allow the top two tax rates to return to 36 and 39.6 percent. He also would allow personal exemptions and deductions to be phased out for those with income over $250,000. The real kicker, though, is that Senator Obama would end the Social Security payroll tax cap for those over $250,000 in earnings. (The cap is currently set at $102,000.) These individuals will then face a tax rate of 15.65 percent from payroll taxes and the top income tax rate of 39.6 percent for a combined top rate of over 56 percent on each additional dollar earned.
High-income individuals will be forced to pay even more if they live in cities or states with high taxes such as New York City, California, or Maryland. These unlucky people would pay over two-thirds of each new dollar in earnings to the federal government.
Only six of the top 30 industrial nations have a tax rate for all levels of government combined that adds up to more than 55 percent. Obama's tax plan would give us a higher top rate than such high-tax nations as Sweden and Denmark. And these sorts of tax rates slow the economy.

Obama made it crystal clear to Joe the Plumber that he plans a massive redistribution of wealth — taking your wealth!

Oh, just so you know, Obama's plan defines 'rich' anyone making over $90,000 a year, because that's when his FICA tax cap comes off and you start paying an addition 7% of tax on each and every dollary you earn above the cap!

And if you are making just $50,000 a year or more — expect to pay another 4.5% on each and every dollar you earn starting in 2010. That's when the Bush tax cuts expire.

'President Obama' has emphatically states he will expire those cuts for "rich" people like you.

There aren't many who long for a return to the 1970s. Those of us old enough to recall that decade tend to think of gas lines, a hostage crisis and Watergate. President Jimmy Carter never used the word "malaise," but he acted as if America was doomed to decline, and it was his job to make sure it went smoothly.

Obama's crazy plan must be stopped. It will not only cost you money, it will throw the U.S. economy into a depression.

Tax Foundation looking at 2004 groups when it comes to paying taxes
http://www.taxfoundation.org/files/sr151.pdf

Obama Tax plan
http://www.taxfoundation.org/publications/show/23319.html.
While the majority of the redistribution is targeted to taxpayers in the middle three quintiles, a surprising large amount—$40 billion—would flow to taxpayers in the 80th to 95th percentile (those earning roughly $93,000 to $192,000 per year). This is largely due to the extension of the AMT patch


A brief overview of the alternative minimum tax (AMT).

The alternative minimum tax (or AMT) is an extra tax some people have to pay on top of the regular income tax. The original idea behind this tax was to prevent people with very high incomes from using special tax benefits to pay little or no tax. The AMT has increased its reach, however, and now applies to some people who don't have very high income or who don't claim lots of special tax benefits. Proposals to repeal or reform the AMT have languished in Congress for years, but effective action does not appear to be on the horizon. Until Congress acts, almost anyone is a potential target for this tax.

The name comes from the way the tax works. The AMT provides an alternative set of rules for calculating your income tax. In theory these rules determine minimum amount of tax that someone with your income should be required to pay. If you're already paying at least that much because of the "regular" income tax, you don't have to pay AMT. But if your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax.

Q: How do I know if I have to worry about the AMT?

A: Unfortunately, there's no good answer to this common question — which is one of the big problems with the AMT. You can have AMT liability because of one big item on your tax return, or because of a combination of many small items. Some things that can contribute to AMT liability are mundane items that appear on many tax returns, such as a deduction for state income tax or interest on a second mortgage, or even your personal and dependency exemptions.