A tax increase doesn’t necessarily mean that the government is becoming less efficient. Sometimes it simply means that the government is borrowing less money to provide the same services at the same cost. The Bush tax cuts were never matched by spending cuts, thus their reversal should not be matched by spending increases.

The comparison should not be between 2010 and 2011; the comparison should be between 2011 under current law and 2011 after Obama’s proposed changes. Obama is proposing a tax cut to partially offset the tax increases Bush signed years ago. The Republicans are proposing a tax cut to completely offset those tax increases. Neither is proposing spending cuts to offset the revenue loss.

You’re a great finance writer… the best in my opnion. But I will say again that it is not your writing that draws in most of your readers… it’s your willingness to get your hands dirty and crunch some numbers that seperates you from the pack.

Crunch some numbers on what you wrote… “Take Chait’s example of someone earning $300,000: they might pay a higher tax rate on the last $50,000 of their income, but they will also pay a lower tax rate on the first $250,000. As a result, their overall tax bill will go down, rather than up.”

So lets test that… $50,000 of income is taxed at a 4% higher rate… so that’s a very modest $2000 tax increase for someone making 300,000.

The issue I have is that this is NOT going to be offset by the lower tax rate on earnings below $250,000 when compared to current 2009 tax law.

The $2,000 increase is exactly that… it’s a tax increase and that is the net number for someone making $300,000.

Put another way, Obama is NOT proposing a tax break for someone making exactly $250,000… he is proposing that current law be extended and that they be taxed exactly the same in 2011 as they are in 2010. How you can call that a tax break is beyond me.

I for one would like to see higher sin taxes, higer gas taxes, and perhaps even a tax on consumption… start with a national sales tax on all non food items at 5%. Force all funds to flow into 401k style individual accounts via an expansion of the earned income credit.

Keep up the great writing

So the rate could be 100% and Warren Buffett, Bill Gates and Page & Brin won’t pay any appreciable amount of additional tax. These guys can borrow against their holdings (at 3% interest rates) indefinitely without paying any tax. In fact, Larry Ellison famously borrowed $1 billion against his Oracle stock.

The only way to level the playing field and tax the economic income of investors on a par with wage earners is to impose a mark-to-market tax on the publicly-traded securities of the super wealthy (say $5 million or more of investable assets).

For more on this see http://www.cadwalader.com/assets/article  /120505MillerTaxNotes.pdf and http://govinfo.library.unt.edu/taxreform panel/meetings/docs/miller_052005.ppt

http://www.nytimes.com/roomfordebate/201 0/09/27/tax-cuts-the-trickle-down-argume nt

It isn’t rocket science! Of course you can also use a service or a program, but do it yourself as well to get a better understanding of your taxes and what your deductibles are and at least understand what progressive taxes mean to you each year and understand the steps to take to reduce it when you can.

In other words, know what taxable income means and know what yours is.
http://blogs.reuters.com/felix-salmon/20 10/09/20/the-whining-rich/

Todd Henderson would have saved himself a lot of headaches…

The debate shouldn’t even be aboout who is “rich”, but rather who can afford to pay more than others. A 3% increase in taxes is more easily absorbed on incomes above $250K than it is on those below that threshold.