Obama tax cuts

[BanDit1]

Maybe someone else knows the answer... I have not been able to find it.

Below is a summary of Obama's tax cut proposal from the Wall Street Journal web site:

"The largest piece of the overall tax relief would involve cuts for people who pay income taxes or who claim the earned-income credit. It would serve as a down payment on the "Making Work Pay" proposal Mr. Obama outlined during his election campaign, providing a credit to offset Social Security and Medicare payroll taxes of $500 per individual or $1,000 per family."

What about those of us no longer working, who pay income taxes, but who no longer pay social security or medicare taxes?

Will we get a tax cut also? Does anyone know the answer to this?

 

[Zathras]

1. I would guess not from the nickname of the proposal ('Making Work Pay').
2. Or, if it makes you feel better, you can consider that all of the social security and medicare payroll taxes will be offset

 

[FIRE'd@51]

If I recall correctly, during the campaign Obama said married seniors making less than 50K would pay no income tax, so that could involve a tax cut depending upon whether one's income is primarily ordinary, or from long-term capital gains and qualified dividends (which are currently taxed at 0% for a couple with a gross income of 50K).

The other thing he said is that taxes on any type of income would only go up for those making more than 250K.

 

[dex]

I'm expecting those of us that don't work will get a rebate similar to the last one.

 

[Bikerdude]

Well if history tells us anything we can look back to the $500 rebate for "those that pay taxes" we received earlier in the year. The Seniors who didn't pay any income taxes demanded their $500 and got it. The politicians were falling all over each other to make sure the Seniors got theirs. This one will be no different IMHO.

 

[youbet]

The other thing he said is that taxes on any type of income would only go up for those making more than 250K.

That $250k number is for a married couple filing jointly........

 

[OAG]

I believe since it is for "those that pay income taxes" it will be just like the last one (well, almost). As I understand it the current plan (which changes every few days) is to give you a "credit" against your current year Federal Income Taxes which will allow you to reduce your withholding thereby putting money in your pocket/wallet/purse. The theory being the smaller amount each month will be spent, which (according to some) was not the case with the "lump sums" from the 07 tax rebate. Seems people bank big sums but spend little ones - IMO just BS by WTH - who knows. Actually, I spent the 07 rebate ($1,200 for the two of us) several times. Seems strange, to me, that the 07 rebate was $600/1,200 but this one is "better" but only for $500/1,000 (Must be from the smaller is better school of economics).

Since we are "Seniors" I want the Zero Taxes on $50,000 one. Now that one will help us a lot (about a $7,500 a YEAR reduction in Federal Income Taxes). Just hope it does not include a requirement to drink some toxic, age based, cool aid.

 

[FIRE'd@51]

That $250k number is for a married couple filing jointly........

Is the equivalent number for a single filer 125K? I don't think he has ever made that perfectly clear.

 

[FIRE'd@51]

I believe since it is for "those that pay income taxes" it will be just like the last one (well, almost). As I understand it the current plan (which changes every few days) is to give you a "credit" against your current year Federal Income Taxes which will allow you to reduce your withholding thereby putting money in your pocket/wallet/purse. The theory being the smaller amount each month will be spent, which (according to some) was not the case with the "lump sums" from the 07 tax rebate. Seems people bank big sums but spend little ones - IMO just BS by WTH - who knows. Actually, I spent the 07 rebate ($1,200 for the two of us) several times. Seems strange, to me, that the 07 rebate was $600/1,200 but this one is "better" but only for $500/1,000 (Must be from the smaller is better school of economics).

Since we are "Seniors" I want the Zero Taxes on $50,000 one. Now that one will help us a lot (about a $7,500 a YEAR reduction in Federal Income Taxes). Just hope it does not include a requirement to drink some toxic, age based, cool aid.

Many economists think that smaller permanent tax cuts are more stimulative than one-time rebates, as people tend to spend a greater portion of those.

 

[FIRE'd@51]

Since we are "Seniors" I want the Zero Taxes on $50,000 one. Now that one will help us a lot (about a $7,500 a YEAR reduction in Federal Income Taxes).

Obama was talking about 50K of AGI, not 50K of taxable income.

 

[FinanceDude]

Sorry, I thought the title of the post was an oxymoron, my bad.........

 

[youbet]

Is the equivalent number for a single filer 125K? I don't think he has ever made that perfectly clear.

I researched this during the campaign and, if I remember correctly, the amount for a single was $200k. So, Mr Obama definitely believes in the marriage penalty.

You're right, info on this has been presented with a lot of smoke and mirrors......

 

[Bimmerbill]

I read the headlines about tax cuts and increased spending. I think we should be doing the opposite...

 

[OAG]

Obama was talking about 50K of AGI, not 50K of taxable income.

I would like to see the direct quote regarding that. Anyways, if it is as you say, would it not be a savings of 15% on all above the 10% bracket and 10% in the lowest bracket? Mute point, however, I really do not expect to see anything even close to either. I was engaging in a bit of wishful thinking.

 

[Gardnr]

If I recall correctly, during the campaign Obama said married seniors making less than 50K would pay no income tax, so that could involve a tax cut depending upon whether one's income is primarily ordinary, or from long-term capital gains and qualified dividends (which are currently taxed at 0% for a couple with a gross income of 50K).

The other thing he said is that taxes on any type of income would only go up for those making more than 250K.

I think you're confusing his basic tax proposals during the campaign with the stimulus plan tax cut proposals. I'm not fully up to speed on that plan yet so I can't help the OP. I had the same thoughts/questions come to mind.

I would think that before it's all said and done that we'll see something for retirees who don't have payroll taxes. It's still a ways from being a done deal.