Not Joe the Plumber, but SAHM
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| Thu, 10-16-2008 - 10:49am |
My Open Letter:
Dear Senator Obama,
I am a stay-at-home mom living in the over $250k tax bracket. I want to ask you why you feel my family is not doing it's part to share the wealth in this country. Our family does well but we also pay taxes at the highest marginal rate. We do not have millions or the kind of lifestyle that would get us access to tax loopholes. We only get deductions for home mortgage interests, state taxes paid and charitable contributions. Last year those three deductions were capped because the government limits the deductions at our income level. In the past we have been stuck in AMT which ensures we do not underpay our fair share of taxes.
Because of our family's income level, our children will not qualify for student loans or other aid. Therefore we must save entirely for their college. We save as much as we can. In recent weeks lost 30% of those savings as well as a decent amount of our retirement savings and the few mutual fund investments we have are under water. The only other asset we have is our family home. We only have one. It would be really tough to sell it in this market, we've lost a large chunk of our equity.
We have never received a stimulus check, yet we do our part to donate to charities we believe in, invest in the market and spend to keep the economy going. And we pay our taxes. There is no question that the opportunities in this great country have allowed us to achieve the American Dream. For that I am grateful.
Your proposals will take an additional 12% out of our annual family budget by increasing the marginal tax rate and increasing payroll taxes. We aren't struggling yet but we will be if your tax proposals pass. We will have to stop or severely limit college savings, with one child only 3.5 years from college and the savings down 30%. Last year we paid enough in Federal Taxes to supply 240 individuals with a Bush stimulus check, similar to the stimulus plan you propose if you are elected (I guess that continuation of the same Bush economic polices is good). I have no doubt that some of what we paid went to wasteful government projects and earmark spending that did not help any struggling families. You say $18 billion in earmarks is not a lot of money to you but 12% of my family budget is a lot to me and my children. I do not begrudge what we already give the government, but I will argue that we are doing our share. I argue we are patriotic and we are neighborly.
We are upper middle class, we are not like your friends, Oprah and Warren Buffet. Our priorities are saving for our retirement, our kids college and paying off our house. We can comfortably do those three things now, though we are worried about the economy like everyone else.
I am a registered Democrat and have always believed in social programs for those who need them. I still believe in them. But I do not understand why when you speak that it sounds as though my family is getting something over on this country. That we aren't doing our part. That we don't pay enough tax. That we don't do enough to lift others up. I say we are doing a lot by not asking anything from the government. I say it is the government that is letting the American people down, not us.
If this economy gets worse my husbands job will be at risk. We could lose our home along with the remainder of our savings. The only good news I see coming from the Democrats is that maybe then we can have the government contribute to our children's college education, we'll get a tax cut and might finally see one of those stimulus checks. Then you'd finally get your chance to lift my family up.
Pennsylvania Mom
http://openlettertobarack.blogspot.com/

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It would only apply to net income over 357K.
Income between $102,000 and $250,000 wouldn't be taxed.
There is no income limit on the 401K deduction. You can still
That was a very nice post Bridget and I agree with much of what you say. I didn't have much growing up, my mom was able to save enough to buy a small home and I always felt we had the American Dream. My mom also never earned as much as I have earned, which is much less than my husband earns. I never felt as a middle class person I was being taken advantage of or that I deserved the government to give me more.
My concern is for the economy as a whole, as well as for my immediate family. If Obama was proposing a phasing in over years of slight increases in the tax that would be easier to stomach. If he had a plan that would not increase the national debt, I'd find that appealing. If he really did have a plan that would cover "everyone" for health insurance, I would be drawn to that. But he has none of those. He proposes a very sharp, steep increase in taxes and a hope and a prayer that middle class families will truly benefit without crippling the economy.
I was able to get loans for college, I would not have been able to go without them and I'm still paying them off. My children will not have that option and I do want them to go to college, even if they aren't all smart enough to get scholarships. I want to keep paying my part-time babysitter who lives in poverty, so she can provide more for her young daughter. I want to keep paying the two music instructors we use for our children, one of which is struggling a lot financially right now. I would rather give them money every week in return for services than give my money to the government so that they might get a $300 Obama stimulus check one time next year. We aren't hoarding our money under the mattress, we spend it and we invest it and that helps our economy much more than welfare for the middle class will, IMHO.
I have been looking at Canada's tax structure lately and reading up on the benefits of both systems. Canada offers many more social services, but they also tax their middle class at about twice the rate we do. From what I have read if I was living in Canada, being in the upper middle class, I'd pay a lot less in taxes than I do now (I don't think they have an AMT, their upper tax rate is lower, I think they have more deductions). So if we want to talk about a socialist government that does work, lets look at Canada and realize the middle class would need to pay more in tax if they want more social services to be available to them. If we really do want to provide the same for all, we are going to have to do much more than just tax the top 5%.
http://openlettertobarack.blogspot.com/
I admit I'm not a tax expert. If that's true than why does Obama keep repeating the federal rate will go up for those earning over $250k? Why would he say that if it's really people making over $300k? It would be to his advantage to say that if it were true.
I thought if you itemized you don't get the standard deduction? We itemize.
By far our biggest deduction was home mortgage interest. But our deductions were capped, added up and then reduced right there on our taxes. I'll have to do more research later and get back to you. We definitely didn't get to take all our deductions, and we were over $250k even after the deductions we did take.
http://openlettertobarack.blogspot.com/
>>>>Income between $102,000 and $250,000 wouldn't be taxed.<<<<
He said if you make between $102k and $250k you won't pay more tax, over $250k you pay tax on all your earnings. I looked for something that said you only pay more on OVER $250k but nothing I read sounded like that was the case.
>>>>The cap on deduction is the AMT. <<<<
No, it's separate. Deductions are limited if you have over a certain AGI, you still get some of the deductions but not the whole amount. AMT is calculating a 27/28% tax rate with NO deductions and you pay the higher of the two calculated tax rates.
http://openlettertobarack.blogspot.com/
That is where the
Incorrect.
http://www.boston.com/news/nation/articles/2008/06/14/candidates_offer_social_security_plans/
Barack Obama, highlighting differences with John McCain on Social Security, declared yesterday that he would shore up the program by imposing payroll taxes on wages above $250,000 a year.Now, the first $102,000 in salary is taxed at 6.2 percent. In specifically setting for the first time where he wants to apply further payroll taxes, Obama's proposal would create a so-called donut hole, because income between $102,000 and $250,000 wouldn't be taxed.
Gotcha like IRAs, Child credit etc, passive losses, but higher income people have many advantages too.
I agree whole heartedly.
"Today, it seems there is a huge portion of the populations who feels no shame at all for asking for every dime they can get off the system just because they exist and think they should have everything anyone else has."
I think that is a sweeping generalization and a poor one.
What's an AMT? I'll let you know if we have that in Canada or not.
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