Thursday, October 23, 2008

Relative Expenses

Relative spending.

Someone sent me an interesting article by Gary Kambia from Salon in my email this morning. It was a bit long in getting to it's point, but it's point is pretty telling. Bob the Banker, alleged author of the piece is outraged because he makes $280,000/year and will be a victim of Obama's socialism. He then goes on to break down the cost to him. This is STUNNING in how insignificant it is. By the way... according to the article, the source of these numbers is an interview with Gerald Prante, an ecnomist at the nonpartisan Tax Foundation. Here's an excerpt from the article.

The numbers don't lie. So here they are.*

So, as I said, I make $280,000 annually after business expenses. I'm married and filing jointly. Under Obama, my itemized deductions would actually increase slightly — I'd get $49,420 in itemized deductions, while under McCain I'd get $48,975. But my personal exemptions would increase slightly under McCain — he'd give me $6,911, whereas I'd only get $6,132 from Obama.

That leaves my taxable income at $213, 766 under Obama, $213,433 under McCain. Now we have to factor in the bracket cutoff, which for 2009 is $208,850. Anything below that figure for married couples filing jointly is taxed at the fourth tier, 28 percent. Any income above it, until you get up to near $400,000, is taxed at the fifth tier. And this is where the raving income-redistribution scheme of Barack Robespierre Obama kicks in.

As you can see, my taxable income is about $5,000 higher than the cutoff. McCain is going to tax that $5,000 at the current rate, which is 33 percent. But Obama's crazed plan calls for raising that rate to — get ready for it — 35 percent.

And here's what this means. Under McCain, my total tax bill would be $48,254. Under Obama, it would be $48,511.

That's a difference of $257. I'll say it again: Two hundred and fifty-seven dollars.

That's not two hundred and fifty-seven dollars I, or America, can afford.

So the right is outraged that someone earning $280,000 might have to cough up an extra $257.00/year... and the rest of us will pay less. Amazing.

On another front...

If we want to look at some of the financial inconsistencies in this country, here's another one that impacts lots of people. I hope that if/when Senator Obama wins, some of these numbers will come under review also. Most of you know that I'm disabled and get a very small SSD allowance. Out of that money, I pay $93 and change each month towards Medicare Part B. And I'm profoundly grateful to have SSD and to get Medicare. I'm luckier than most people in this country. My poverty is pretty genteel. But I got curious about the rates though because my stipend - about $14,000/year is low enough that initially the government waived the $93 fee. Then they decided last year that I get $8 too much each month and re-instated the $93 fee. As I said, I'm grateful to get the insurance so I'm not complaining really. But in the course of a conversation with someone I looked up the rate breakdown. These are the figures for last year. I find the way the fees breakdown across the economic horizon nothing short of insane.

Math is not my strong suit (to put it mildly), but by my calculations, those at the 80,000 end of the equation in my $93.50 category are paying less than 2% of their income towards Medicare versus my 8%. The low end of the $80-100,000 category pays 1.5% of their yearly income and the upper end pays about 1.25%. Moving to level three, the bottom level folks pay 1.5% and the upper level folks pay 1%... Level 4, the bottom rung pays about 1.15% of their total income and the top end pay less than 1% (.085 or some such thing). Those at the bottom of the top range pay under 1% (.097% approximately). For someone with $500,000 in annual income the percentage is about .004%...

In this system, someone making $200,000 - or even $750,000 pays only $814 more/year for insurance than someone with a yearly income of $14,000. Doesn't that seem a little nuts? Surely we can come up with more categories and a somewhat more balanced fee system than this.

So those are just some random money thoughts for the day.


Dianne said...

was that guy serious or was it satire?

it's so hard to tell these days ;)

Raven said...

dianne - It's from Salon - it's satire. If you read the whole article, I think it's more clear.

Carletta said...

As always Raven, thanks for the perspective!

Dr.John said...

Most of what the government does is nuts. Politicians always promise to reform it but it just seems to get worse. I hope for your sake real change is coming.

Raven said...

thanks, carletta

dr. john - I hope for all of our sakes, not just mine. I'm relatively lucky.