My neighbor, B, is a progressive republican and a tax partner in a large CPA firm. We had a conversation…
“Obama needs to go”, said B.
Why? He’s doing pretty well considering the mess he inherited!
“Because all he wants to do is raise taxes! If we don’t get control [of congress and senate] my taxes will go up by almost 20%. I already pay almost half my income in taxes: income, property, FICA and the rest”
What? How do you get a 20% increase?
“FICA – is capped at about 100k. As a partner, I pay FICA at 15%. Lose that cap and my taxes go up immediately by 15%. The top rate of income tax is set to climb to 39%, which is an extra 3%. And there are a bunch of others, too”
No — that’s just wrong. Even assuming that happens… an example, if you earned $200k your effective FICA rate would be 7.5% on that $200k, right? So even without a cap, your effective FICA rate will never be greater than 15%. If you earn $200k, that means an increase of 7.5%, not 15%!
“OK! But that wouldn’t be a 7.5% increase if I earned 300k or 400k or 500k. It would be much greater than 7.5%”
B, Sure it would, but if you earn $500k and can’t absorb that kind of increase I’d advise you to start looking for a new tax accountant! LOL
“Well ok! But do you think it’s fair that 60% of the people in this country don’t pay any taxes?”
Where did you get that number? Do you think it’s right that the US has such a large population of poor people they fall under the threshold for federal taxes?
“Most of those people aren’t poor!”
But all of them pay taxes. You included property taxes in your 50%. I assume you included sales taxes, 7% for most everything here in GA? Then those people who pay nothing are paying way more in effective taxes than you – for food and energy and shelter
“So OK — but where’s my incentive for working harder, and producing more? Right now about half my income is going out in taxes. If Obama gets his way it’ll be closer to 60 or 70%, and maybe even higher.”
So what should the administration do? We have a decade of debt resulting from two useless wars, spiraling health care costs that costs real money in terms of lost productivity, and a crumbling infrastructure that no-one wants to pay for! What services would you cut to avoid balancing the budget
“I never agreed with the wars. Obama said he would get us out of Iraq in 16 months. We’re still there”
So, the counsel of the military on the ground shouldn’t hold any sway? B, you know that just because we define a strategy, the actual plan and outcome often bear little relation to it other than direction. I think it was dumb of Obama to campaign on a hard number – especially with senior military advisors making such great careers out of these wars. McChrystal & Petreus wouldn’t let him commit to anything that would make their management look bad – such as making too rapid an exit.
“That’s just stupid! You think the CinC can’t just fire a general who doesn’t do what he wants? He got rid of McChrystal fast enough when he was quoted in playboy [rolling stone]”
Actually, no. Maybe if you are the kind of authoritarian asshole who shoots from the hip and just tells other people what to do… but Obama is too damn conciliatory. He needs consensus – he’s not going to buck “the experts”, unless they do something really dumb. We do have an exit strategy, at least — although it ‘s too damn slow for my liking
…
At this point our conversation was interrupted for cake. Always a good reason to stop talking politics.
I was very interested, however. My friend is progressive on pretty much most social issues, but with a major blindspot regarding taxes. He also seems to have swallowed the kool-aid in capsule form regarding Obama the Anti-Christ.
I had a couple of insights from this.
- Facts don’t matter, even to smart people who live and breathe facts every day! (60% of people don’t pay taxes, is a much stronger right-wing meme than the underlying facts: that 40% of the population are officially poor, and 80% earn less in real terms than they did a decade ago)
- Obama is an emotional issue – Republican leaders hate him for reaching out, so they must demonize him even more. Unfortunately if you spend your life immersed in the right-wing echo-chamber (as B, at a large CPA firm does) the limbic brain gets triggered much more frequently, and Obama is now simply synonymous with bad (progressives followed a similar policy wrt Bush2, but without a media lapdog [Faux Noise] their message was never quite so viscerally successful)
- Not all republicans are mouth-breathing wingnuts… but they are all willing to use those wingnuts to gain control of government.
- Next time someone tells me how much they’re paying in taxes – just send them to this conversation.
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