Opinion

The Great Debate

Higher taxes hit working wives

March 5, 2009

 Diana Furchtgott-Roth– Diana Furchtgott-Roth is a senior fellow at the Hudson Institute and former chief economist at the U.S. Department of Labor.  The views expressed are her own. —

Marriage is hard enough without the tax system making it even harder.

Look at Jeanne’s upcoming wedding to Rick.  Rick owns a plumbing firm and has taxable income of $160,000, and Jeanne’s taxable income as a teacher is $50,000.  Unmarried, he is in the 28 percent bracket and she is in the 25 percent bracket.  When they get married, they will be taxed at 33 percent — rising to 36 percent in 2011 if President Obama’s proposed tax hikes take effect.

By raising taxes on upper-income Americans, Congress would worsen our tax system’s marriage penalty on dual-income married couples, and Jeanne and Rick would pay even more tax married than single.

It doesn’t have to be this way.  Men and women could be taxed on their income separately, as is the case in Britain. Since 1990, British married couples have been taxed independently, with deductions and allowances split between them.

It’s a revolutionary idea.  A married woman has her own tax return, with only her income, deductions, and capital gains.  She pays her own tax and has tax refunds returned to her.  If she makes mistakes, she pays her own penalties.

Rather than moving in the direction of Britain to reduce the marriage penalty, the penalty may rise further in 2011.  In President Obama’s new budget for 2010, he outlined plans to allow the top two tax rates to rise from 33 percent to 36 percent and from 35 percent to 39.6 percent in 2011.

Taxes would rise for singles with taxable income over $172,000 and married couples over $209,000.  Even if Jeanne and Rick weren’t immediately affected by higher rates, those rates might well hit them when they earn more.

Unless, of course, Jeanne and Rick decide to have children, and Jeanne left the workforce to care for them.  Say that Jeanne’s taxable income rose to $60,000, so she and Rick had a combined income of $220,000, placing them in President Obama’s new 36 percent bracket.  But with Jeanne at home looking after the children, their federal tax rate would be 28 percent.

Tax systems shouldn’t make it harder for women to work.  The penalty falls most heavily on married women who have invested in education, hoping to shatter glass ceilings and compete with men for managerial jobs, and the Obama plan would exacerbate the penalty.

When mothers take jobs, earnings are reduced by taxes paid at their husbands’ higher rates, in addition to costs for childcare and her transportation. This discourages married women not just from working, but also from striving for promotions, from pursuing upwardly-mobile careers.

Mothers are more affected by the marriage penalty than other women because they are more likely to move out of the labor force to look after newborn children and toddlers, and then to return to work when their children are in school.

Labor Department data show that as average number of earners per household rise, so do income levels.

One characteristic of the highest-earning one-fifth of households is that they have an average of two earners per household.  The middle fifth averages 1.4 earners per household, and the lowest-earning fifth averages half an earner per household—more part-time and unemployed workers, or retirees.  More married working women, more households in the top fifth of the income distribution. (See BLS Consumer Expenditure survey in pdf format.)

For President Obama to announce that he is raising taxes on those at the top end of the scale adversely affects the married working women who voted for him by a substantial majority.  There has to be a better way.

Diana Furchtgott-Roth can be reached at dfr@hudson.org.

Comments
93 comments so far | RSS Comments RSS

Well, shades of Joe the Plumber propaganda! Nothing I’ve seen about Obama’s proposed tax cuts would affect any family making less than $250,000 a year. You obviously have inside information about the finalized details of Obama’s tax plan that ordinary citizens are not privy to. So – according to you – Obama is proposing tax increases instead of tax decreases for those making less than $250,000 a year.

I’ll start putting a little credence in Hudson Institute political shills when they start complaining about the estimated 50,000 wealthy oh so patriotic Americans with secret Swiss bank accounts that are dodging some $100 billion a year in U.S. taxes. Until then, you are not trustworthy enough to get anyone’s attention other than hard core cheats and liars that propagate the fictions.

Posted by Ray | Report as abusive
 

It is time to “Go Galt” on ‘em.

Posted by kelly p | Report as abusive
 

As above poster said, 250k is the cap where families get taxed an extra 3%.

It is also difficult to understand why any parent that earns 160k, who made a lifestyle choice to have a child, would not want at least one partner to spend her or his full time raising that child, if they as a family were living that comfortably. Where is society going if it puts family values second to a bigger paycheck?

Posted by Working Mother | Report as abusive
 

Give me a break, Working Mom. So, as a woman, if I have a child, stay at home when he is little, then decide I would like to go back to work (using the college education I earned), I’m going to be taxed as punishment. Glad to see you support ALL women and their desire to be equal (and as accomplished as men.)

Posted by Nicole | Report as abusive
 

First of all, I would like to congratulate Rick and Jeanne on their upcoming nuptials. I wish them a happy future together, one that has plenty of housing starts for Rick’s plumbing business and plenty of resources for Jeanne’s school, both of which in the current economic climate will require taxpayer support. Second of all, I would like to say that I am a working mother who pays taxes just like Rick and Jeanne. Two years ago, it might have played in Peoria to say that this couple should be allowed to keep more of their income. But the reason government policy can ask more of Rick and Jeanne is because….they can afford it! Presumably Jeanne would have a vastly different lifestyle living on her own making $50,000 than she will have when she combines her income with Rick’s. And the government allows her tax rate to go down when she has children because….children are expensive but the government thinks we will need them for our future. You don’t have to be chief economist at the Labor Department to see that people who have more disposable income might be called on to help support people who don’t. Some people might call it a marriage penalty. I call it common sense.

Posted by A responsible taxpayer | Report as abusive
 

Sorry, but as someone with an infant son and a spouse that doesn’t work, I have a hard time seeing the plight of upper-income married women. The three of us live on my salary, which is barely $30,000/year. Am I supposed to feel sorry for these people, because their taxes are going up 3%? Give me a break…If my salary increased eightfold, paying 3% extra in taxes would be the least of my concerns.

Posted by Kyle | Report as abusive
 

The taxable incomes you are referring to must be the adjusted gross incomes which is much less than gross income. You are talking about people with over $220,000 and $70,000 gross income. Please don’t try to confuse the public on this issue. President Obama will not raise taxes on couple making less than a combined $250,000 of gross income a year.

Posted by lee louis | Report as abusive
 

This tax increase is not an assault on women or working mothers or mothers in general. It is a tax increase plain and simple. I’m not saying I agree with it either. What I am saying is that by twisting it into something it is not is not good reporting.

Good job “Working Mother” pointing out that that when the family is very secure financially why it is so horrible to have the second parent stay home to raise the children. This is not possible for so many, it is a shame to see this opportunity wasted on people who don’t care enough about their children.
Oh – and I am a well-educated mother of 2.

Posted by Kristen | Report as abusive
 

I find it hard to feel too much sympathy for a man and woman making over 200K a year. They will not go hungry.

Posted by jimmy | Report as abusive
 

I get a real kick out of reading this right wing crapolla. the rich complaining about having to shoulder some of the burden for making big bucks in this country, to funny. if this keeps up, won’t be able to afford that new Mercedes, huh? wonder what Rick the plumber pays his workers? union? (hell no!) insurance?(hell no!)
geez, maybe some of these idiots should move to England where life is good.

Posted by naz dagg | Report as abusive
 

This story illustrates exactly why the “income tax” is so entirely regressive, and so obviously anti-family.

We are already paying motor fuel taxes, local and State property taxes, and so many more it would take all day to list them all. Many taxes are hidden from the consumer as they are imposed during the production and distribution of goods and/or services.

We are overtaxed and under-served. Enough.

Posted by Richard C. Green | Report as abusive
 

Given most people are doing quite well to pull in a living wage or managing to break six figures, I feel there’s absolutely nothing unreasonable about these alleged tax raises.

Talking about a $250,000 a year cap as if it affects a significant number of people is exactly the kind of disconnect that ensures those pushing tax-break policies will be completely out of touch with their electorate, and is incidentally also the kind of policy that results in wealth concentration at the expense of just about everyone else.

We cannot afford to continue to fly in the face of reality and pursue such socially irresponsible policies.

Posted by Andy | Report as abusive
 

If Ricks employee’s worked as hard as he did, and took the RISK he did in starting his own company, then maybee they could get the benz themselves. But they didn’t. It is his risk that put food on thier table.

Let me know where Gualts Gluch is and i’ll join you!!!

Posted by floridalibertarian | Report as abusive
 

Fine. Lets just all then pay the or 39% income tax and lets make everyone happy. if you make 30k a year you pay 39% and if you make 500K a year you still pay 39%. That should make everyone happy. At least this way you have a clear choice whether you are happy making 30k a year. Then you dont have to worry about why people who make more dont WANT to pay more of their income towards taxes.

Posted by Rozos | Report as abusive
 

It’s cute how the media keeps insisting that allowing Bush’s tax cuts to expire is the same as Obama inventing “new” tax hikes.

Things are going back to how they were under Clinton, when every income bracket did better than the years before, or after.

Helpful graphs here:

http://www.fivethirtyeight.com/2009/02/c linton-economic-record-and-rising.html

Also, you forgot to point out that sharing a house with someone is a whole lot cheaper than living alone.

 

The one thing that seems to be forgotten in this debate about the “richest” Americans is the cost of living. While $250k per couple would make a couple in Annistan Alabama or Altus Okalahoma very ewealthy, that same $250k is not so great in new York City, LA, or even Washington DC. Tax rates should be adjusted based on where the people live. It could be based on the same formula that is used to give federal government employees their cost of living adjustments.

Posted by Cliff | Report as abusive
 

Enough already. A family making $250K is a dream for a majority of us. We’re living in half or a quarter of that, sometimes much less.

I wish I could feel sorry for them, but I am in the process of taking out a 2nd or 3rd job just to keep food on the table. Paying all the necessary taxes and expenses that entails, yes. And no one is crying and whining about me or the taxes I pay.

Posted by xysea | Report as abusive
 

The author has a good understanding of what is happening in the tax system. Congress hasn’t extended the tax acts put into place in 2001 and 2003 to help us get through the effects of the terrorist attacks on the World Trade center. As a result the retired folks that have substantial dividend income are going to see tax increases this year if they have anything to tax. The rest of us will have substantial tax increases in 2011. Unless congress decides to extend the tax acts.
I prepare taxes for a living and I have a good understanding of how additional dollars earned affect taxes. The author is right that in too many cases with the extra cost of transportation, taxes, clothing lunches, child care and the cost of not having time together, sometimes a two earner family negates the extra income earned by one of the spouses.
If the spouses income is taxed by the federal government at the 39% rate, plus 7.65% Medicare and Social Security then you add state tax, in my state it would be about 7% she is already taxed at 53.65% of her income. We haven’t even considered the other costs she would have to be able to work.
No tax system is fair but ours does hit the working spouses very hard.

Posted by Craig Coal | Report as abusive
 

“If Ricks employee’s worked as hard as he did, and took the RISK he did in starting his own company, then maybee they could get the benz themselves. But they didn’t. It is his risk that put food on thier table. ”

hahahaha You make some wild assumptions. Rick’s employees don’t work as hard as he does, eh? Yeah, right. Take your ego somewhere else.

And risk? Rick isn’t assuming any risk, really. He can write it off if his business fails and can go into another career. He probably got a cut rate small business loan, or a loan from family and friends to get going anyway. I think that is called ‘the price of doing business’.

Small businesses are wonderful, and small business owners are great and we appreciate them doing what they do, but lets not deify them or canonize them. All they are doing is making a living, just like anyone else. They are not superhuman, or gods. They are just people – like the ones they employee, who also work hard and have families to support.

Stop making one group out to be ‘the other’ – lazy, irresponsible, etc. It’s just another way to marginalize them, dehumanize them and build yourself up. If you have that much of an esteem issue, I would suggest therapy.

Posted by amouat | Report as abusive
 

what is “fair”?

a family that earns $200K will pay TWICE as much taxes as a family making $100K even if they had the same tax rate! Is that fair? Tack on an additional 3%. Is that “more fair”? If 3% is “more fair” than why not make it 50% more?

maybe everyone should be limited to $30K of income. if they earn more, it should be seized by the government. if they earn less then the government should reimburse them for the difference. is that fair?

Posted by BJ | Report as abusive
 

Everything Obama is doing is what he promised during campaign. I don’t know why some people act so surprised. Because the President actually follows up on campaign promises for a change?

On tax issue, I really don’t know why we can’t just implement flat rate tax. Everyone pays fixed percentage for every dollar they make. It is unfair for anyone to pay more… or less taxes because they make more money or gets married or have children.

Actually, on children, I think families should be taxed more if they have more than 2 kids. Increasing population is root of all problems. Population is increasing at estimated 6.5 million a month. That’s 2.5 people every second and this is including the death. If two people get together and have more than 2 kids, they’re increasing population. Maybe start taxing more from 4th child as 3rd might happen by accident and if you’re wealthy and can afford to pay more tax, by all means have more kids but people certainly shouldn’t get tax breaks for having 8 children they can’t afford.

Posted by Brian Choi | Report as abusive
 

Well said Diana, totally agree with you. Sorry to see those harsh comments in the above postings. I guess people just simply don’t understand. The point is not about how much you are making, it is about whether it is reasonable to tax married couple more than single, which, to be honest, I totally never understand the reason of marriage penalty. Why people should be punished for getting married? That doesn’t make sense to me.

As a working mother myself, I’m feeling exactly as you said in your article. I often question myself whether I should keep working so hard to compete with man for better position. Just as you mentioned, it really doesn’t make too much difference anyway after taxed by the high rate and then minus costs for additional babysitter and my transportation. However, it does cost more to live comfortably for a family than for a single. It takes money to afford one more bedroom, to send my kid to his swimming class…, you know? So? Am I doing anything wrong by walking out of my house and work? Why should I be ‘punished’ by our fed?!

Who said I’m putting family values second to a bigger paycheck? I’m working for my family!!!

Posted by Another working Mom | Report as abusive
 

“geez, maybe some of these idiots should move to England where life is good.”

No, moving to Costa Rica, where life is even better. Free health care, free education, inexpensive taxes, no military, great benefits, long time democracy. They spend their money on their people, with only a fraction of the cost of health care of the good ole USA.

Posted by bill in texas | Report as abusive
 

Ms. Furchtgott-Roth needs to step back for a moment from her ivory tower – take a deep breath – and take a good look around her. Anyone with their eyes “truly” wide open cannot deny how fortunate they are if they’re in the unfortunate predicament of having a double income!

Posted by D. Brooks | Report as abusive
 

Hudson sure must accept what can only be called by anyone that got past 9th grade, as “mostly amusing math”. I HAVE NEVER MET ANTONE in the “upper 5%” not that phony @0% in the lies she posted, that EVRE PAID 39.5% or even 25% on their total income, and if they did as one posted the “prepared taxes” at some mythical 53.66%.. they would probably hire hit man to take out their accountants and lawyers.
\
Kind of amusing story as sure closer to fiction then reality, unless of course a member of Hudson etc. I guess in desperation’s of the well off to remain in their Robber Baron life style, no lie to small, or to big? Got to wonder of IQ that buy into such garbage story?

Posted by Chuck | Report as abusive
 

Cost of living has a lot to do with net household income. Living in an area where “middle-income” comes out to be a $150K salary, and where the weekly salary goes straight into mortage payments, food, daycare, car payments, etc. I have begun to crunch the numbers and think about divorce as the means to starting a savings account for my two boys. Otherwise, I am not sure where else the money will come from. Unless someone can come and buy my house at what I paid for it 3 years ago, I can’t afford to not work (much as I’d like to stay home). Any takers?

Posted by baeger | Report as abusive
 

Oh, no everybody ! She’s an undercover agent working for the regular people ! It’s nothing but a ruse ! This piece is designed to make everyone hate the disconnected rich who whine about losing even ONE PENNY to taxes ! Did ya notice how she expertly impersonates a selfish, uncaring, indifferent reincarnation of Marie-Antoinette ?

Posted by Gregg&Brian | Report as abusive
 

My husband and I are getting punished for not having children, being responsible (mortgage, savings) and working our way up from nothing (no college, no inheritance, no married parents)to something to be proud of. The extra tax will cost us another $800/month. Therfore we won’t be able to give that amount to charities the governemnt doesn’t give money to or spend in the local community/businesses. Stop wasting energy on being so jealous – I once was but moved that energy to move ahead.

Posted by JF | Report as abusive
 

Not only was the this shallow, it showed no direct connection as to why this would directly hurt females in marriage. Men just as easily can make $50k a year while the female counterpart can make the $160k a year. So the arguement remains that this hurts whoever is making less in the relationship. Even then, this shallow arguement is bunked because there will still be an increase in the income of the family. Not only to mention that when you are making over $100k salary, marriage tax is not going to prevent you from getting married.

Posted by Don | Report as abusive
 

I’d like to thank Cliff for his comment regarding the disparity in the cost of living throughout the nation. The posted comments express such disdain for this mythically “rich” person who makes $250K. I can tell you that my husband and I live in an urban area, we work a total of 3 jobs between the 2 of us and we make approx $250K. After paying our monthly student loan payments for our post-graduate degrees, and after slogging our way through our ridiculously high mortgage and property taxes for our 650 sq ft dwelling, we live fairly comfortably. Read: comfortably, NOT extravagantly.

Each of us work at least 60 hours a week, I spend 65% of the year traveling on the road-even weekends, each of us pursued post-graduate degrees (and are paying for them dearly). Trust me, I am NOT complaining. We are definitely blessed, but these blessings have been the result of good planning, focus, a constant struggle to better ourselves, and dogged hard work. I don’t understand why we should be penalized for our efforts to make ourselves financially secure (not “rich”) people? Additionally, I voluntarily make regular financial contributions to charitable organizations that I actually believe can make a difference in people’s lives. How much of that extra 3% that I’ll be FORCED to pay in taxes will ACTUALLY make its way to people in need?!?

Posted by RA | Report as abusive
 

Whoa… hold on folks, there’s sniping from both sides. Look at it objectively: there ARE tax penalties for getting married. Doesn’t matter how “rich” you are or how “rich” others think you are. Why not tax people individually?

Posted by Eddie | Report as abusive
 

To the so called ‘best comment’, try living in California or in New York. A family making $250k (usually need double income to reach that amount) can still barely afford to buy a tiny house or condo. You try that cost of living with what Obama classifies as ‘rich’. Its pennies!

Posted by shannon | Report as abusive
 

Mr. Choi,

It seems we are very close to agreeing here. My suggestion is that we go to a Value Added Tax (VAT) which is a national sales tax. Most of the EU are on it and I think they have worked out a lot of bugs. This would shift the tax burden to those that buy the most. This would also eliminate the individual tax return and would put the reporting burden on the business which is already accustomed to such a procedure.

This would automatically tax those who have more kids since the little rug rats are so expensive.

For those that say this will put a crimp on consumer spending well, of course it will. The last thing we want is another bubble to form and this puts a more caution into the market on the consumer side. And one of my favorite bennies is that there is no big surprise on April 15.

Posted by B.Free | Report as abusive
 

It is not true that President Obama will only raise taxes on those earning under $250,000 per year. He plans to allow the 36% and 39.6% tax brackets to be reinstated, with the current 33% rising to 36% and the current 35% rising to 39.6%. This hurts working wives more than husbands. In addition, all Americans who use products made with energy will pay the new carbon tax, called “cap and trade,” since producers will have no choice but to pass it on to consumers.

Below I have attached the tax bracket table. The 33% bracket now starts at $171,550 of taxable income for singles and $208,850 for married couples.

2009 Tax rate table

Taxable Income ($)

Tax rate for Singles

10% 0 – $8,350

15% $8,350 – $33,950

25% $33,950 – $82,250

28% $82,250 – $171,550

33% $171,550 – $372,950

35% $372,950 and above

Married filing jointly and Surviving Spouses

10% 0 – $16,700

15% $16,700 – $67,900

25% $67,900 – $137,050

28% $137,050 – $208,850

33% $208,850 – $372,950

35% $372,950 and above

Source: IRS Revenue Procedure 2008-66 (http://www.irs.gov/pub/irs-drop/rp-08-6 6.pdf) pages 5-7

Diana

Posted by Diana Furchtgott-Roth | Report as abusive
 

Great idea population control! If you accidentally get pregnant (#3) you have to get an abortion,,,hello CHINA. Also, if you happen to have an original idea and become successful, well forget it, don’t be, it’ll cost you to much money, county, state, federal tax.

Posted by LISA | Report as abusive
 

Either I am naiive, or the author, Ms. Furchtgott-Roth, is misrepresenting a lot of aspects of the US tax code. First, she seems to argue that married couples don’t have the option of filing separately in the USA (um, they do, right?). Second, she confuses gross income with adjusted gross income. Third (and I just learned this), only the income that exceeds a threshold in a tax bracket is taxed. So while your adjusted gross income might creep into a 39.5% zone, only the income ‘in the zone’ is taxed at 39.5%, not your whole income. And fourth, for most US couples, filing jointly does save money because of various tax credits for owning a home, having kids – and filing jointly even lowers the tax rate.

 

Flat Tax, VAT…eliminate income taxes. Such actions would probably put folks such as Diana Furchtgott-Roth, other senior fellows with time on their hands, tax lawyers and accountants out of business, however.

Posted by andrew | Report as abusive
 

@ B. Free
Check your facts
VAT is a disaster
It is not instead of income tax, it is in addition to the income tax. And also,EU citizens have to file their annual tax returns despite having to pay VAT on every product they buy (as far as I can remember its 22% on most goods except food and some other things)
It is not as simple as US sales tax, as the name indicates it is Value Added Tax and its pretty complex and costly in assessment and collection with many loopholes and high potential for fraud.
Trust me I lived for a while in EU and VAT is the last thing you would want to see in the US.

Posted by PwlM | Report as abusive
 

Well LISA, not only are you exaggerating my post, you didn’t even read it. I said one accidental pregnancy should be allowed and start taxing from 4th. And I’m pro choice but does that necessarily mean abortion? No, use birth control. If you have more kids than you can afford to have, then you are irresponsible and should pay for your irresponsibility. If taxing for more children seems too harsh, fine, but don’t give BENEFITS for having more.

Posted by Brian Choi | Report as abusive
 

I find it very callous for folks to tell other folks how they should spend their money such as through a tax system. Our politicians forget that the money they are spending is not their money and they have a responsibility to consider the work that was done to earn the money before they spend in on whatever their whim dictates. Regardless of Mr. Obama’s promises the spending that he and congress are proposing will have the effect of raising everybody’s taxes in some way, either directly or through inflation.
You folks that are condemning the higher income earners for wanting to have more choice in how they spend their money will soon be joining them. When you do I want to hear what a little thing it is to pay an additional 3% of your income to taxes. For those of you that say you don’t know anyone that pays the top income tax rate on all of their income need to look at the fact that in reality the working spouse does the top marginal tax brackets on all of her income.

Posted by Craig Coal | Report as abusive
 

The Jeanne and Rick example is inflamatory. Whenever we talk about the top 1% people really lose track of where that it. There are roughly 300 Million people in the USA. 3 Million people in the top 1%. According to the New York Time in March of 2008 http://www.nytimes.com/2007/03/29/busine ss/29tax.html The top 1% earn in excess of 1,000,000 a year.
If Jeanne and Rick Can’t survive on 210,000 a year their doing something wrong. I’d really wonder how they’d handle living at the poverty line or even at say 80,000 a year.
So step back and consider that 90% of all americans earn less than 100,000 a year. In the same article the NYT calculates that the top 300,000 earners in the USA pulled in nearly as much as the bottom 150 Million. Thats the top 100th of a percent earning the same as the bottom half.
Therefore when they say their gonna tax the top 1% more. Great do it cause it isn’t going to affect the other 99%. THen think about how much you’d have to earn to be in that top 1% NYT says $1.1 million each… Not Me how about you?

Posted by Dale | Report as abusive
 

I was taking closer look at the 2009 tax brackets compared to 2008 brackets and something doesn’t look right with the example Diana used. $160K for Rick and $50K for Jeannie getting married to be $210K would still put them in 33% bracket in 2008. Same as in 2009. And they can (and they should) file separately which will leave Jeannie in 25% bracket and only move Rick up to 33%. Only a marginal increase considering what they’re making together.
And again, they’ll still be in same situation based on 2008 tax bracket so I’m not sure what the author is accusing Obama of.

Posted by Brian Choi | Report as abusive
 

Waa, waa, waa. I am sooooo tired of the richer ones b^thchin’ about having to pay more taxes than they have for the past however many years. Too bad, so sad. Georgie and Darth Cheney are no longer in the White House, so you’ll just have to pony up like the rest of us hard-workin’ Americans have been doing. If you’re looking for sympathy, I can tell you a couple of words you’ll find it in-between, in the dictionary!! Otherwise, go fish!

Posted by Rick D | Report as abusive
 

well you said it “affects the married working women who voted for him by a substantial majority”

you got what you voted for… “change”… wouldn’t listen to anyone else, drank the kool-aid, so GET OVER IT and contribute your fair share, now that change you can believe in

Posted by tso | Report as abusive
 

Despite unclear points the author and all commentators make. I can assure people that in the example above tax on a marriade couple will be at least 4400$ more than on 2 singles. And for me it’s a lot of money.
Yes, marriade couples were and are treated not equally.
In 2011 tax will go back to the level of 2000 (Clinton era). And we will be paying 10% more, example: if in 2008 my tax was 10k than in 2011 it will be 12.5k.
Please refere to tax tables on IRS site.

Posted by Incognito | Report as abusive
 

To PwlM

I bow to your first hand experience. I have visited but never lived there. I was thinking more in line with what some of the independent parties have in mind which is more like a national sales tax with stipulations and it would replace the federal income tax. State and local income tax may be another story and I for one would like to see it all go over to a sales tax. Some of the stipulations were that people making under a certain level of income would get a refund of estimated sales taxes and there was talk of taxing services and not taxing sales of used products. Personally, I think every sale should be taxed and refunds given quarterly to those making less than a predetermined level and the refunds should be on a sliding scale.

I mentioned the EU just because they have had the experience and one would hope have worked some bugs out of the system. Maybe not.

Mr. Choi, bravo! I agree. But, I still think going to a “national sales tax” would achieve what you are proposing.

Lisa, what do you think the government is doing now by providing tax deductions for each child? That is called population control. They are attempting to ensure that people have lots of children so that the workforce will be sufficient to maintain an expanding business base. What happens if there are too few, let’s say accountants, for example? Well business must compete for the scarce resource and that increases the cost of labor. What happens if there is an abundance of accountants? They get the pick of the crop (literally) and do not have to pay much for them keeping the cost of labor down. So what kind of population control would you rather have? I like the idea of natural consequences. That is why I like the idea of a national sales tax instead of an income tax. That way if you have more children is just naturally costs more. No breaks. No rebates.

Posted by B.Free | Report as abusive
 

The foundamental problem with the American economy is the current gap between rich and poor, i.e. the huge income discrepancies. People, read a little macroeconomics, check history trends, learn models – the modern American capitalism is based on broad public consumption. This society cannot sustain if nothing is done to reverse the income disparity. And it can be reversed either with steeper taxes or military conflicts, historically. So, you choose which way.

On the top of the nonsense /from a tax standpoint/ article, that couple still can file taxes as separate, i.e. the entire idea of “punishing” with marriage taxes just doesn’t exist. You really should go to Europe and experience marriage tax punishment, American tax system is way more beneficiary to couples, and for sure very beneficiary to people in the high brackets.

If you make over 250 000 annualy, why not use 50 000 for inevitable living expenses, and defer taxes on the rest by investing? The nominal tax might be 39%, but very few if any would pay EFFECTIVELY 39%. Having disposable gross income allows saving in defered tax schemes, as everybody does…

Posted by Ananke | Report as abusive
 

What some of you tend to forget, the people who make $250,000 are usually the small business owners, the base of the US economy. Tax em’ and you will get less and less jobs, the economy will get worse instead of better.
We have been in a lot worse shape. The president closed the banks, and unemployment reached close to 25%. We had NO government help, NO benifits, and NO unemployment payments, and we survived and came out stronger. Government bailouts are NOT the answer. If I go broke in a small business, is the government going to help?? I want my bailout! Wh have change we can do without, but you voted for it! Live with it!

Posted by bill in texas | Report as abusive
 

Quote: “On the top of the nonsense /from a tax standpoint/ article, that couple still can file taxes as separate, i.e. the entire idea of “punishing” with marriage taxes just doesn’t exist. You really should go to Europe and experience marriage tax punishment, American tax system is way more beneficiary to couples, and for sure very beneficiary to people in the high brackets.”

Oh yes it does exist. And you had better not live in a community property state as I do without checking with your accountant.

Posted by bill from texas | Report as abusive
 

Give me a break. I’m tired of all the rich whiny people who can’t afford to pay taxes. If you pulling in over 250,000 a year, you are not going to be hurt by paying extra tax.

If you make 20,000 a year and the government takes 4,000, that’s probably 4,000 a year you can’t spend on food and clothes for your kids.

If you make 200,000 a year and the government takes 50,000, that’s 50,000 you didn’t get to invest.

So who should we tax? The people who have to give up sustenance or the people who have to give up making more money.

Seems like a no-brainer to me.

Posted by James | Report as abusive
 

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