Obama Wants Tiger-Size Tax Bite
When Tiger Woods collected his $1,350,000 check for winning the U.S. Open golf championship this month, his federal and California taxes approximated $586,000. So, Tiger got to keep about $764,000, or 57% of his winnings.It was fortunate for Tiger that his most-recent U.S. Open win occurred in 2008. Under twin tax proposals from Obama to: 1) remove the "cap" from Social Security taxes for individuals earning over $250,000, a plateau Tiger has long since surpassed in 2008, and 2) eliminate the "Bush" tax cuts, thereby raising the top marginal federal income tax rate to 39.6%, Tiger's taxes on his winner's check would have increased to approximately $776,000, a boost of almost $190,000 (see chart above).
Instead of Tiger keeping 57% of his earnings and the government taking 43%, under the twin Obama tax proposals, Tiger's federal and California taxes would have amounted to 57% of his winnings, leaving Tiger with just 43%.
Link.
HT: Ben Cunningham
23 Comments:
Tiger moved to Florida where there is no state income tax. He's not only good at golf, he's pretty smart too.
I'm betting the state of California will claim that he earned the money in California so he must pay taxes on it in California (a little over 9%!)
...At those rates, pretty soon he's going to move to Ireland or Monaco, I'd bet.
Dr.Perry: how much do you make, and how will YOU be affected?
anon 5:36
What difference does it make what Dr. Perry or even you make?
It is criminal and immoral when any government gets more of ANY taxpayer's earnings than the taxpayer does.
It's a little something I call a principle. Principles are not applied selectively.
Bet it won't affect Warren Buffett much, or other people who have already made their money. It will affect me though, and it will affect my spending. That means my spending will create fewer jobs and slow commerce. Not a good idea, just to make the lower earning folks feel better - it hurts them the most in the long run.
Seems like a great advert for the tax plan. Tiger is not short of dough and I doubt he is going to enter fewer tournaments or try less hard based on the tax bill. Thanks for higlighing this
Seems like a great advert for the tax plan. Tiger is not short of dough and I doubt he is going to enter fewer tournaments or try less hard based on the tax bill. Thanks for higlighting this
If you don't make more than 250k, or aren't in the top 1% income bracket, why would you even care?
Like Buffet says, these wealthy individuals aren't going to stop economic activity or investing just because of taxes.
So Dr. Perry, since you are clearly against any tax increases, what, if any, taxation is fair?
Should we just not pay taxes?
Should everything be flat tax?
Should everything be sales tax?
Is there a social obligation of the wealthiest in society to shoulder a higher portion of the tax burden, more than their proportional income?
"If you don't make more than 250k, or aren't in the top 1% income bracket, why would you even care"...
Love your class warfare mentality anon @ 11:47 AM, it speaks volumes about your ability to grasp reality...
Guess Who Really Pays the Taxes
Care to offer why the rich should pay one more penny than you do in taxes?
"Like Buffet says, these wealthy individuals aren't going to stop economic activity or investing just because of taxes"...
Either Buffett is lying or delusional...
When taxes go up the wealth earner takes his/her money somewhere else since garnering more wealth is punishable by excessive taxation by YOUR logic...
"Is there a social obligation of the wealthiest in society to shoulder a higher portion of the tax burden, more than their proportional income?"...
What part of the Constitution mandates that the wealthiest should shoulder paying for the parasites than YOU pay?
Where in the same document does it mandate the federal government should involve itself in education, medicine, retirement, housing, and so on and so forth?
Anon. 12:01,
Why do you assume facts not in evidence? You suggest that Dr. Perry objects to any and all taxes.
He has merely presented an example and calculated the increased taxes under Senator Obama's plan. Isn't that just evaluating the plan using simple mathematics? Isn't he merely introducing a topic to stimulate discussion? What is the difference between evaluating Senator Obama's tax plan and discussing the gas tax holiday proposed by Senator McCain?
Rather than creating zero-sum and straw-man arguments, you could actually present your position and support it with evidence. In other words, you could debate.
Warren: Tom, I've been around rich people all my life. And I have seen capital gains taxes close to 40 percent. No one went home at 3 in the afternoon and said, "I've worked enough, and because tax rates are so high, I think I'll-- I'll go to the movies." I mean, people-- people want to maximize their after tax income, and there's two ways to do it. In-- increase their income, or get Congress to lower the tax rates for them. But I have never seen anybody with capital say, "I'm going on strike. I won't invest." I-- I've been managing capital for 50 years for other people. No one left and said, you know, "This-- the taxation system's too tough. I-- I think I'll just stick it all under my mattress." They can't stick under their mattress. They're going to invest their money regardless.
http://www.cnbc.com/id/21553857/site/14081545/page/2/
To add to what juandos said in response to Anonymous 11:47am:
Anonymous said...
If you don't make more than 250k, or aren't in the top 1% income bracket, why would you even care?
Maybe you work for someone that makes more than 250k? Maybe you work for a bunch of people that make more than 250k, and they all will cut back on your services because they are paying more in taxes, and you will go out of business?
Many people that work for "rich" people are pretty poor, and you don't care if you put them out of work. That officially makes you an A-hole.
For example, while I don't quite make 250k a year, if my taxes go up (and they will under St. Obama, just look at his social security tax and ending Bush's cuts proposals), then I will have to cut back on little luxuries - like hiring a cleaning service to clean the house. Maybe will go out to eat less often, hire a baby sitter less often. Maybe I will cut back on premium cable channels, or buy fewer books. I know, poor me. I have worked hard to get where I am, but I know you don't care about me because I am Rich.
BUT, my neighbors will also cut back the same way. This means that some cleaning services (maids to you, probably) will have to lay off employees. POOR employees. Baby sitter is not rich. Think the installers at the cable company are rich? What about the UPS guy that delivers all the crap I order from Amazon? Is he rich? Should he care if there are lay-offs at UPS because fewer rich people are ordering crap from Amazon because they are too lazy and rich to go buy the same crap at Walmart where it is cheaper?
So, did you just not think of this, or are you just stupid?
marko says: "Maybe you work for someone that makes more than 250k? Maybe you work for a bunch of people that make more than 250k, and they all will cut back on your services because they are paying more in taxes, and you will go out of business?"...
Cha! Ching!
There in lies the fallacy of pushing class warfare explained as well as I've ever heard it...
Has anyone else had the chance to read the following WSJ?
Monsieur Obama's Tax Rates
The Tax Foundation came out with the following that you may find worthy of a look at: First Hard Numbers on Obama Tax Plan Show Dramatic Tax Redistribution
Consider looking at this year old posting at the Heritage Foundation: What your taxes go for
Now ask yourselves what part of the Constitution mandates federal interference/support in many of these socialist programs...
> If you don't make more than 250k, or aren't in the top 1% income bracket, why would you even care?
There's this thing you may have heard of. They're called "principles". They apply to everyone, not just me and those I care about. Yes, even to "rich bastards" who inherited everything and didn't do one thing to create the wealth they control.
No, I'm not going to start a revolution over it, but it still hacks my craw, to use an antiquated term, to hear about it.
And who knows -- if I'm lucky, maybe it WILL apply to me at some point.
> What part of the Constitution mandates that the wealthiest should shoulder paying for the parasites than YOU pay?
Actually, the Constitution suggests such things are immoral in its original writing. That's why they had to pass an Amendment which allowed it to be done in the first place.
> But I have never seen anybody with capital say, "I'm going on strike. I won't invest." I-- I've been managing capital for 50 years for other people. No one left and said, you know, "This-- the taxation system's too tough. I-- I think I'll just stick it all under my mattress." They can't stick under their mattress. They're going to invest their money regardless.
Nominally correct, but that does not mean that they will do it HERE. There are always places which are smart enough to lower their taxes to draw in smart investors. That is one reason Ireland's economy is doing exceedingly well, while most of Europe's economy is not doing anywhere near as well. Smart investors MOVE their money to places where it won't be taxed out the ass.
The more wealthy someone is, the more likely it is that they can justify doing such things. Hence, such taxes don't even go after the really Rich Bastards, but only after the middle guy trying to join them -- thus keeping them down with the rest of the plebes.
As far as Tiger Woods, goes, while he may need to pay US taxes on money made here, there is no reason he can't go establish official residence in Ireland and only pay those obnoxious taxes on monies here in the USA, and let the other Open winnings never touch America's shores.
And, once he's paid the price, and taken those monies out of the US Tax system, he likely would never bring them back. Why pay twice?
Jacking taxes on the rich doesn't make money. It only appeals to the envy of the less wise populace and the greed of politicos.
I note with interest the following passage from the link to the Tax Foundation posted by Juandos:
"Hodge points out that in contrast to much campaign rhetoric about helping low- and middle-income people, Obama's plan redistributes more dollars from the top 1 percent to the rest of the top 20 percent (those earning roughly $93,000 to $192,000 per year) than to any of the lower-earning quintiles of taxpayers."
Thanks, Juandos for the heads up.
Obloodyhell,
That is precisely the point. The U.S. used to account for lion's share of the worlds capital financing. Investors now have innumerable offshore opportunities for investment. Publicly traded companies by their very nature compete to attract and retain capital.
The U.S. is no longer the only game in town. The up-side is greater financial stability for example, the present downturn in the U.S. economy has failed to trigger a global recession unlike the previous U.S. recession. The downside is the increased mobility of global investment capital around the world. Many countries in Europe offer highly skilled workforces and lower tax destinations.
The rules of the game have changed and the policies of the democrats have not. It's still tax & spend in Washington and targetting citizens. To be enforceable, any policy must basically be seen as fair. To tax someone beyond 50% of their income or to tax a person for a benefit such as social security that one does not intend to provide is neither fair nor equitable.
Personal consumption accounts for 71.5% of the GDP. Under Obama's plan, 2.5M out of 100M tax payers will have their taxes go up. The 95% of Americans who do not make more than 250k will all see their taxes decreased.
Both candidates end up with a net cut in taxes, McCain's of course greater than Obama's. McCain gives the biggest benefits to the top 1% and top 0.1% earners.
So if you are in the bottom 4/5ths of the income range, you will get a better benefit under Obama's plan. If you are in the top 1/5, McCain is your man.
For a non-partisan analysis, you might go here.
marko says: "Bet it won't affect Warren Buffett much"...
Allow me to bask in a moment's worth of childish schadenfrued here: Buffett's Berkshire Has Worst First Half Since 1990
July 2 (Bloomberg) -- It must be a bear market because even billionaire Warren Buffett's Berkshire Hathaway Inc. has slumped 20 percent since December.
The decline exceeds the drop of the Standard & Poor's 500 Index and marks the worst first half for the Omaha, Nebraska- based investment and holding company since 1990.
anon @ 6:38 AM says: "For a non-partisan analysis, you might go here."...
Since when were the Brookings Institute and the Urban Institute non-partisan? Did that change sometime in the last week or so?
The Urban Institute and the Brookings Institute both pander to the idea of a living wage and guess what, illegal aliens aren't labled for what they are but are called, "undocumented immigrants"...
For those who think that having illegal aliens is not such a bad thing may I direct your attention to two papers by Dr. Robert Rector of the Heritage Foundation:
Amnesty Will Cost U.S. Taxpayers at Least $2.6 Trillion
SCHIP Bill Increases Illegal Immigrants' Access to Medicaid and Undermines Welfare Reform
"Like Buffet says, these wealthy individuals aren't going to stop economic activity or investing just because of taxes."
Of course they won't stop investing because their taxes are higher. They will, of necessity, though, invest less to maintain their spending -- or spend less to maintain their investing.
Either way, it's money lost to the productive economy.
"And I have seen capital gains taxes close to 40 percent. No one went home at 3 in the afternoon and said, "I've worked enough, and because tax rates are so high, I think I'll-- I'll go to the movies."
Then why do capital investments and tax revenues increase so much when capital gains tax rates are reduced? It's obvious that investors will always want to maximize their income, but maximizing at a 15% rate is something quite different from maximizing at 40%.
"Like Buffet says, these wealthy individuals aren't going to stop economic activity or investing just because of taxes."
But what they invest in will change. As tax rates go up, the effort exerted by tax payers into tax avoidance goes up. And the investments that are good for society are rarely the best investments for tax avoidance. It is hard to hide income from a new factory in Michigan from the IRS, but it is easy to hide one in Beijing from the IRS.
Another example is municiple bonds, which are usually tax free. As the tax rate goes up, the rich will pressure local communities to build more civic projects in order to obtain tax-free income. As a result, as experienced during the great depression, society gets lots of new stadiums and museums, but no new factories and businesses. And, even with the same money invested, the government not only collects less tax revenue but must now raise taxes further to pay wealthy bond holders.
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