ObamaMania: how much is 1000$ exactly?

[MarkG]

Obama unveils $1000 tax cut, energy efficiency plan

FAIRFAX, Virginia (Reuters) - U.S. President-elect Barack Obama said on Thursday he would offer working families a $1,000 tax cut and improve energy efficiency in millions of American homes in order to create jobs and stimulate the economy.

"To get people spending again, 95 percent of working families will receive a $1,000 tax cut -- the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget," he said in a speech outside Washington.

He said his economic recovery plan would extend jobless aid and healthcare coverage for the unemployed and include proposals to double production of alternative energy in the next three years and improve energy efficiency for millions of homes.

http://uk.reuters.com/article/environmentNews/idUKTRE50759Y20090108

question: how many from that 95% pay more than 1000$ in taxes?

[Asher]

the vast majority?

[Ramo]

Property taxes (in the ballpark of 15-20% of rent), sales taxes (8.25% where I live), and payroll taxes (7.65% of income if you're below the $100k cap) all happen to qualify as taxes...

If, for example, you make ~$13k/year, FICA on that alone is almost a grand.

[Japher]

I probably won't even notice the $1000, that's such chump change. Won't change my spending habits.

[MarkG]

If, for example, you make ~$13k/year, FICA on that alone is almost a grand.

that's a lot. in greece you dont pay anything for income up to 13k euro ($17-18k)

[Dinner]

Honestly they should do that in the US. That would instantly put money in the hands of people who would spend it (poor people) and also give them an incentive to get a job instead of sit on unemployment.

[Asher]

Honestly they should do that in the US. That would instantly put money in the hands of people who would spend it (poor people) and also give them an incentive to get a job instead of sit on unemployment.

I'm shocked they don't. It's how it's done in Canada, too.

Of course, Alberta has the largest (or one of the largest) non-taxable income portions in the country.

[Ben Kenobi]

that's a lot. in greece you dont pay anything for income up to 13k euro ($17-18k)

That's a pretty good deal.

[DarkCloud]

〉〉Honestly they should do that in the US. That would instantly put money in the hands of people who would spend it (poor people) and also give them an incentive to get a job instead of sit on unemployment.〉〉

Haha. Part of the US problem is that the poor people were spending money they didn't have. Banks were lending credit to people who should never have purchased a home.

Obama would do better to cut business taxes and regulations to encourage companies to headquarter research and development labs in the United　Ｓｔａｔｅｓ．

All that tax cut will do is go to
a: savings for people who actually save who are getting $($(ed by the lower classes spendthrift ways.
b: pay down debt for some people mired in debt who are smart enough to realize that now is the time to practice sustainable living.
OR
c: get spent by people who drag themselves DEEPER into debt. Socialist governments and Compassionate-Conservative governments will always bail people out .

[KrazyHorse]

http://uk.reuters.com/article/enviro...50759Y20090108

question: how many from that 95% pay more than 1000$ in taxes?

Most?

My wife and I are somewhere near the 95th percentile range, and we pay ~13000$ in US federal income taxes a year.

In order to pay 1000$ in federal income taxes, a married couple would have to earn 28000$ a year. A married couple with two children would have to earn 35000$ a year.

For families in the US, 28000$ per annum is the 27th percentile. 35000$ per annum is the 34th percentile

[KrazyHorse]

This is solely income taxes. FICA taxes are not included. Also, it should be noted that most economists agree that employees bear almost the entire burden of both sides of the FICA tax (employee and employer contributions). This is a flat tax on the first ~100000$ at a rate of ~15%

[snoopy369]

that's a lot. in greece you dont pay anything for income up to 13k euro ($17-18k)

You don't have any payroll taxes? FICA is a payroll tax, not an income tax; we're about at the same point (I forget the exact amount, it's between $14k and $18k I think) where you pay no income taxes on income. As KH notes, you have to make over $28k as a couple (or a bit more than half as an individual, I believe) to pay significant taxes.

[snoopy369]

This is solely income taxes. FICA taxes are not included. Also, it should be noted that most economists agree that employees bear almost the entire burden of both sides of the FICA tax (employee and employer contributions). This is a flat tax on the first ~100000$ at a rate of ~15%

So if they eliminated FICA taxes entirely, my salary would go up by the entire employer contribution amount??

I wonder whether that is more true at the lower wage levels than at the mid to higher , or the other way around. For example, a retail store is going to pay say $6.50 an hour no matter what (affected by minimum wage, basically, in this state) but it will limit hours based on what it can afford; in a good climate it might spend as many hours as it can reasonably use (and thus FICA isn't affecting employees significantly), but in a bad climate it will reduce hours drastically, based on the cost to the company being higher than the return investment, meaning FICA is being passed to the employee basically in the form of reduced hours.

Or the other way around, for all I know (but, from my retail background, I believe it is more likely the former - in a good climate they do not focus on hours significantly).

[KrazyHorse]

So if they eliminated FICA taxes entirely, my salary would go up by the entire employer contribution amount??

No. This is a statement about equilibrium wage, not what would happen in the transition period (which in the labour market can be fairly long).

[KrazyHorse]

EDIT: WTF. This version of vb sucks. I posted the previous, then I reloaded and my post had disappeared. Now it's back again.