Obama has successfully waged a class warfare campaign, telling us over and over that all our fiscal problems will get solved if only “we ask those who have done well to pay a little more,” or, “each of us pays our fair share,” or some variant on these.
And this forces the GOP into seeming to defend the rich, at the expense of the rest of us, protecting the “Bush tax cuts,” or any variation on these that the MSM and the Dems use to demonize us with, to propound on any given day.
Obama has never been forced, or even asked, to tell us exactly how much is, in fact, ENOUGH; what’s the “fair” in the “fair share?” For that’s the beauty of a moving target…for Obama, it can constantly be scaled upwards
Maybe it’s time for the GOP to go back to basics, to educate, or rather, re-educate the American people. For when it comes to taxes, the basics of our tax system, they are, for the most part, in fact, naive, if not downright stupid. A few simple observations will make that apparent.
1. Tens of millions of Americans pay nothing in income taxes. They have no skin in the game. They simply don’t care if taxes get raised on others.
2. Ever notice how thrilled someone is when they find out they find out they’re getting a tax refund? Hey, dumbass, what you did was you loaned the government money at zero interest for a year. They don’t intuitively get it.in fact, they think that they somehow got something over on the government. Forget all about those thousands of dollars that were withheld every payday.
3. Ask most any person making less than $100,000 a year what they make, and they can tell you to the penny what their NET pay check ( take home amount) is every payday. Ask them what their GROSS pay is..most have, at best, an idea.
4. Our tax system is progressive. We have tax brackets. The MORE you make, the higher the rate you pay. The overwhelming majority of Americans DO NOT intuitively understand this. If you use tax software, your income tax due just pops up on the screen .If you use an outside preparer..a tax service, or a CPA..they present you with your finished return, and if you get a refund, you’re thrilled..you thank the preparer for somehow magically “getting you something back” and you happily pay the bill. If you do your own return, after you calculate your net taxable income, you go to the charts..find the number in the little box, move your finger across, and voila!. Nobody I know uses the tax table that shows the tax bracket percentage.
Let’s take a real world example. Let’s take a married couple living in NY. And let’s make them both government union employees. One’s a teacher, the other’s a nurse. For simplicity’s sake, let’s assume they each make $60,000. Now a $120k gross income to many across the country seems alot..heck..these people are rich. Problem is, in NYC, it lets you get by. They have two kids, and a mortgage ( assume the median NYC values for house and mortage ).
Here’s their rough projected 2012 tax return ( again, for simplicity’s sake, I’m using round numbers..)
Itemized deductions……..35,000 (mortgage interest, state, city, and local taxes, charity)
Net taxable income………70,000
Federal income tax rate……..25%
And because they’re lucky to live in NY, or Mass, or California, or any other blue state utopia, we can figure about another 10% for state and local income taxes. Welcome to a combined 35% tax rate.
So that little bit of interest income on your savings…which is now earning LESS than 1% in the bank, well, 1/3 of it goes away as taxes.. And if you bought some stock, and were lucky enough to sell it for a few thousand in profits, well, they want to tax your now-capital gains at the same rate…i.e. the government wants about a third.
And hey, you know those COLAs and STEP-RATE increases in your union contracts?..well, let’s say that you get $2000 this year..lucky you.
In addition to the 35% that will go in income taxes, you also have those pesky social security taxes, FICA, FUTA, the whole alphabet. Figure about another 10% across the top.
Thus, on your $2000 INCREASE in wages, you’re lucky if you get to see $1100. If you get paid weekly, that’s about $20/week increase in your take home pay.
And Obama wants more….after all, he tells you that you’re not paying enough..it ain’t fair.
Somehow, we have to find a way to convey, to explain to people how rapacious government already is, and how it is a detriment to their innate ability to get ahead financially.
And they want more…we’re supposed to feel good about paying MORE in taxes.
There has to be a way to make these people understand.
I think that part of the reason may be the fact that people are struggling financially, even making what we would think of as decent wages. See, our couple above, they know that they’re earning $120,000, but they have nowhere near that amount to spent, because of the ever increasing cost of government, and that’s why so many people get into financial difficulty.
Let’s do a quick and dirty cash flow analysis for our hypothetical couple. ( Again, using rounded numbers)
Less fixed expenses:
Federal, state, and city income taxes………….15,000
Mortgage payment…………………………….30,000 ( (P&I on a $300k [email protected]%, R/E taxes, insurance premiums
Net disposable income: 62,000 or $5,000/month
Yes, that seems like a lot..and it is, there are many who live on far less TOTAL INCOME, but let’s just do a rough monthly budget:
Food ( family of 4)………………$1000
Automobile………………………$1000 ( one car: monthly payment $300, gas, insurance, maintenance)
Utilities………………………. $500( phone, cable, internet, cell phones, electric, fuel oil)
And we haven’t begun to talk about any, or more, of the following: clothes, personal grooming, any purchases (i.e computer, TV, furniture), saving for the kids’ college, a vacation, vet bills, maintenance on the home, presents ( Christmas, birthdays) a vacation, and on and on, and on, and on…..the list is endless.
And remember, because we’ve chosen to make our couple BOTH government employees, they pay NOTHING for their retirement AND MEDICAL. For the average family in exactly the same circumstances, except being employed in the private sector, they could find themselves with anywhere from $5,000-$20,000 MORE in annual expenses, depending on what benefits they were given, and what they needed to provide for the family.
That’s why a great many families are struggling today. And most importantly, tens of millions of these people, in these same circumstances, the same financial condition, VOTED FOR OBAMA AND THE DEMOCRATS. THEY VOTED FOR LETTING THE GOVERNMENT TAKE MORE FROM THEM.
THEY SIMPLY DON’T GET IT!!!
It’s a very winnable, if not compelling argument. We have to find the way to successfully make it to people, in dollars and cents terms they can grasp.
It is our path to victory, to winning elections.