BY THE NUMBERS: 2011 Tax returns - Some Middle Class tax Scenarios (w/t & w/o)

[FrenchieCat]

The important differences to compute, as far as I'm concerned
are the differences between w/t Compromise or w/t Bush taxes expire w/o compromise,
as they are the only options barring a miracle...which I don't foresee.

(Disclaimer: There is always a chance I made an error, as I computed manually,
and used a 2009 tax program (2010 isn't out yet),
as well as an Internet tax table calculator for 2010/2011.
I did check things twice, but I'm used to doing this stuff on computer,
and not accustomed to posting various scenarios all at once on-line. Just saying! :)

Scenario # 1 - single person earning $10,000

Currently w/t Bush tax cuts:
Single person earning $10,000 per year.
Taxable income in 2010 is $650.
Tax @ 10% = $65
Make Work credit is $400
tax liability is REFUND $335


With No deal & Bush tax cuts expired:
Same person earning $10,000 per year.
Taxable income in 2011 is $650.
Tax $ 15% = $97.50
No more Work credit
Tax liability is PAY $97.50


With tax compromise:
Same person earning $10,000 per year.
Taxable income in 2011 is $650.
Tax $ 10% = $65
No more Work credit
add 2% in Payroll tax deduction of $200
Tax liability is REFUND OF $135

Scenario # 2 single person earning $18,000

Currently w/t Bush tax cuts:
Single person earning $18,000 per year.
Taxable income in 2010 is $8,650.
Tax @ 10% = $884
Make Work credit is $400
tax liability is PAY $484


With No deal & Bush tax cuts expired:
Same person earning $18,000 per year.
Taxable income in 2011 is $8,650.
Tax $ 15% = $1,297.50
No more Work credit
Tax liability is PAY $1,297.50


With tax compromise:
Same person earning $18,000 per year.
Taxable income in 2011 is $8,650.
Tax $ 10% = $884
No more Work credit
add 2% in Payroll tax deduction
Tax liability is PAY $524

Scenario # 3 Married Couple w/o chilren earning $25,000

Currently w/t Bush tax cuts:
Married Couple earning $25,000 per year, without children
Taxable income in 2010 is $6,300.
Tax @ 10% = $633
Make Work credit is $800
tax liability is REFUND of $167


With No deal & Bush tax cuts expired:
Same couple earning $25,000 per year.
Taxable income in 2011 is $7,950 (due to change in marriage penalty)
Tax @ 15% = $1,192.50
No more Work credit
Tax liability is PAY $1,192.50


With tax compromise:
Same couple earning $25,000 per year.
Taxable income in 2011 is $6,300.
Tax @ 10% = $663
No more Work credit
add 2% in Payroll tax deduction of $500
Tax liability is PAY $139

Scenario # 4 Married Couple w/t 2 children earning $25,000

Currently w/t Bush tax cuts:
Married Couple earning $25,000 per year, with 2 children
Taxable income in 2010 is $ ZERO.
Tax @ 10% = $ZERO
Child tax credit is $2,000
EIC (earned Inc. Tax Credit) = $4,415
Make Work credit is $800
tax liability is REFUND of $7,215


With No deal & Bush tax cuts expired:
Same couple earning $25,000 per year with 2 children.
Taxable income in 2011 is $550 (due to change in marriage penalty)
Tax @ 15% = $82.50
Child Tax Credit given= $82.50
EIC (earned Inc. Tax Credit) = $3,362
No additional Child Tax Credit given= $ ZER0
No more Work credit
Tax liability is REFUND OF $3,362


With tax compromise:
Same couple earning $25,000 per year, with 2 children
Taxable income in 2011 is $ ZERO.
Tax @ 10% = $ ZERO
No more Work credit
EIC (earned Inc. Tax Credit) = $4,415
Child Tax Credit given= $2,000
add 2% in Payroll tax deduction of $500
Tax liability is REFUND OF $6,915

Scenario # 3 Married Couple w/t 2 children earning $40,000

Currently w/t Bush tax cuts:
Married Couple w/t 2 children earning $40,000 per year.
Taxable income in 2010 is $14,000. (without itemization)
Tax @ 10% = $1,403
Child Tax Credit given= $1,403
Tax Liability = zero
EIC (earned Inc. Tax Credit) = $1,256
Make Work credit is $800
additional child tax credit of $597
tax liability is REFUND of $2,653


With No deal & Bush tax cuts expired:
Same couple earning $40,000 per year.
Taxable income in 2011 is $15,550 (due to change in marriage penalty)
Tax @ 15% = $2,332.50
Child Tax Credit given= $1,000
EIC (earned Inc. Tax Credit) = $203
No more Work credit
Tax liability is PAY $1,129.50


With tax compromise:
Same couple earning $40,0000 per year.
Taxable income in 2011 is $14,000.
Tax @ 10% = $1,403
Child Tax Credit given= $1,403
EIC (earned Inc. Tax Credit) = $1,256
No more Work credit
additional child tax credit of $597
add 2% in Payroll tax deduction of $800
Tax liability is REFUND OF $2,653

Please note that it is more difficult to caculate easily a more affluent person's tax scenario, because of all of the variables....but if someone wants to give me one or two, I can see what I can do in making the various computations. Bottomline is that I'm more concerned with the poor and the middle class.

[FrenchieCat]

1. Since these are tangible verifyable facts, I keep them kicked......

because the math don't lie. :hi:

[phleshdef]

2. I'm bookmarking this. Excellent.

[FrenchieCat]

4. I figure since most seem concerned about the material affects

taxes will have on the top 2%,
I'd at least take the time to show
what it means to some of the other 98%.

For them, when the options are made clear,
the options which are available,
which is not everything staying the same,
there is a marked difference.....
especially considering that folks are already struggling.

As a Democrat, I figure I should care more about the effects
of anything on those who have less, as opposed to those who have more.
But of course, that's just me. :shrug:

[DemocratSinceBirth]

3. If What You Say Is True The Working Poor Will Be Reamed If This Bill Fails

It is incumbent upon opponents of this bill to prove what you are saying is not true.

[FrenchieCat]

5. Those folks tend to ignore threads with facts......

Its easier to ignore than to have to do any real work.

I did the math....because I do care.

We shall see.

Perhaps I made a big mistake.....
I'm sure it will be pointed out, if I did.

[DemocratSinceBirth]

7. None Of Your Adversaries Would Take The Time To Find Out.

.

[FrenchieCat]

8. Of course, the Deficit hawks will talk about the deficit and

the future of our children....
and how those children don't need anything now...
only when they grow up, maybe.....

Which is the exact same line used by the Teabaggers
with the little kids with the signs saying
"Keep your hand off our money!"

Of course, when their parents don't have any money
for their school supplies or a trip to the movies....
I guess those kids can that for themselves when they are grown!
And who needs fucking child care anyways! Let them play in the streets! :sarcasm:

[TheKentuckian]

6. If you cared about the poor and "middle class" so much you'd stop stealing from their children

in order to pay off the most well off and giving your policy cover by giving most people a small bribe to give them a piece so they will go along with the theft.

The crucial bit being to get folks and extra ten or twenty a week is a laugh.

BUSH SOLD THIS HAPPY HORSESHIT THE SAME WAY.

If you want relief for the bottom then you have to pay for it from other brackets or create new levels to compensate.

The poor and working class are suffering and have taken the brunt of the quagmire, so where are the effort to give them relief from the current circumstances? Where are the efforts to make sure we build a foundation for regular people to build on?

This deal isn't to help most Americans or even the hardest hit but principally to benefit the top 20% of incomes.

Many of those we are supposedly "helping" will pay increased taxes next year so we can keep the trough open for the pigs. That isn't worrying about the poor and middle. This is looking out for the wealthy and their chosen pets in suburbia.

[DemocratSinceBirth]

9. If This Bill Fails

If this bill fails Paul Ryan said the first bill the new House pass will be a tax bill presumably without the goodies that make the current one palatable.

If you don't think your senator can find five Democrats to vote for said bill there is nothing I can do to disabuse you of that notion.

This isn't a debate about what we want to achieve but what can be achieved.

[FrenchieCat]

10. Like I mentioned.....folks who are running their mouth don't really care

they just want us to think they do.


The Republican promise to make sure Obama fails even if that means we do to...
that was a serious promise...

and we continue to cut Obama off at the knees,
to make it easier for them to hit him over the head.

But at the end of the day, he will survive to live another day,
I'm just not sure those who have the least will be able to brave it.

[TheKentuckian]

34. We supposedly hold the White House and would veto such a stupid measure

and the votes aren't there to override.

We can achieve nothing with no difficulties.

[DemocratSinceBirth]

37. The Republicans Are Praying He Reneges On His Pledge Not To Raise Taxes On The Middle Class

That and 10% unemployment and they can start measuring the curtains in the White House.

[TheKentuckian]

44. That is a different issue. We were discussing POSSIBLE not preferred for politics

[FrenchieCat]

11. So far 141 views, and barely anyone giving a shit about

somebody else's childcare!


See, that's why I know that this issue ain't about anything BUT revenge.

That's ok...cause I'll will be posting these facts everyfucking where some
poser tries to act like they truly give a shit.....

[Ozymanithrax]

12. This is a very good argument.

I appreciate this, Frenchiecat.

[FrenchieCat]

14. Thanks!

That's why I did the math.....
it took about 45 minutes or so,
but hey, at least the numbers are what they are.....
and I do think that we need to elevate the argument
as to the effects on a struggling family's childcare,
or repairs needed on an old car to get to work, etc.....

I understand plainly the material argument.....
but what about what Democrats are supposed to stand for?
Where does that go? Gets shelved till it's more convenient?

we would certainly be taking money out of people's pockets,
and for what? So that we can say the Rich got a downgrade?
They still will have their nannies and their new cars,
so they just aren't gonna be affected in the same way.

[Ozymanithrax]

16. There is a very ugly anti-wealth current in this debate...

As a classic liberal, that bothers me. In a nation that guarantees individual rights, some people will accrue wealth. I've moved back and forth, but have tried to look at the bill and see whether there is more good than bad or more bad than good. I supported the Health Care bill because there was more good about it than bad. This has been a bit tougher, though your argument is neat and concrete showing that failing to pass the bill will have negative consequences for the poor and the middle class.

[FrenchieCat]

19. We are having a material argument within the Democratic party,

and not one that included empathy.

Notice that the UI is not even mentioned as a plus any longer....
cause in reality, a lot of folks only care when it is convenient.

But yes, folks you are talking about care more about anti-wealth...
or some might call it retribution.

Personally, I think it is an excuse to be pissed so more.....
I'm starting to believe that is our preferred emotional state
as a country.

[elleng]

26. I often see 'anti-wealth' posts at DU,

with no apparent recognition, as you suggest, of 'indivudual rights,' as in 'life, liberty, and the pursuit of happiness.'

[Phx_Dem]

13. Very helpful, Frenchie. n/t

:-)

[FrenchieCat]

15. Only to those who will dare look......

and aren't cowards in debating the issue on Democratic terms,
instead of Republican ones.

[golfguru]

17. You are trying to be logical, but the opposition is all emotional

Instinctive hate of the top 2% is stronger than the empathy for the other 98%
for many.

[FrenchieCat]

18. That makes them poseurs then......

That's not good.

[Hello_Kitty]

28. Logical? Are you kidding. Most of her comments are overwrought lugubrious handwringing.

"DEAR GOD WHAT ABOUT TEH CHIYLLLDRRUUUUUN!!!"

The tax cuts aren't going to expire so it's nothing but fake melodrama.

[FrenchieCat]

32. Fake melodrama when I say it.....

but pure goodness gospel when you do.

Glad you ain't the judge in my case! :rofl:

[kentuck]

20. Thirty pieces of silver...

Thirty pieces of gold.

[FrenchieCat]

21. Daycare and car repairs......

If one has neither, pretty soon, they are out on the streets.

[boppers]

22. Something I find incredibly telling....

You didn't crunch the numbers for $100,000, $200,000, or $10,000,000 of income.

You know, REAL Americans.

:sarcasm:

[FrenchieCat]

23. Yep....I didn't.....

They'll still find money for daycare and auto repairs
and other basics!

:hi:

[boppers]

24. Daycare? DAYCARE?

What kind of savage would subject their children to anything less than a live-in nanny?

I swear, some people are just plain cruel and heartless.

[FrenchieCat]

25. Well, yeah, BUT.....

A sad story.... my step-daughter runs a daycare, and the state funding is drying up,
and she's had to ask a family with 3 children to leave, because they were 6 months behind,
and that was simply too long, considering that she's just scraping by already.
It broke her heart to do it, but she couldn't do more than she had.....
as with the care of children, the state requirements of keeping a certain number
caregiver per child ratio was simply too costly. :(

[Hello_Kitty]

33. Do you know what causes funding to those programs to dry up?

Tax cuts.

[FrenchieCat]

35. In the state of california, it's been much more than tax cuts that got us in the hole.....

The funds that dried up were state funds.

[Hello_Kitty]

36. CA's problem has it roots in Prop 13.

It destroyed the funding base of cities and towns and the requirement for 2/3 majority to raise revenue has hamstrung the state.

[FrenchieCat]

38. I agree......

[JamesA1102]

27. Thanks so much for doing this.nt

[FrenchieCat]

29. Thanks!

for the excuse to kick this! Love it! :rofl:

[mikekohr]

30. Thank You For This Resource, I hope the lower income levels are adjusted

[FrenchieCat]

31. Me Too!

But certainly when comparing the real options
(as the tax cuts as they are is not),
"The Deal" is certainly a giant improvement
over expiration.

[Pisces]

Thank you Frenchicat for posting real information that we can process.

I appreciate your threads and feel your frustration.

[Pisces]

39. Thank you Frenchicat for posting real information that we can process.

I appreciate your threads and feel your frustration.

[FrenchieCat]

41. Hi Pisces, and yeah......frustrated some...but hey, we can only keep on keeping on!

:hi:

[hay rick]

40. Make it easy on yourself.

The Tax Foundation has come up with a calculator that calculates tax burdens (the name of the .org- does that tell you anything?) for various scenarios, including Bush cuts expire, Compromise plan, Democratic plan, and Republican congressional plan.

Link here: http://www.mytaxburden.org/

The Bush tax cuts expire scenario could more accurately be described as the blackmailers-act-with-impunity scenario. The Republican congressional plan is the plan the Republicans introduced in September and includes maintaining the child tax credit, preventing the return of the marriage penalty, and adjusting the AMT. One link here: http://www.theatlantic.com/business/archive/2010/09/this-is-what-the-republican-tax-plan-looks-like/62996/

Throwing all the things back into the tax code that the Republicans were willing to ditch in September makes for a significant increase in taxes. Likewise, the temporary payroll tax holiday makes for a significant cut. I am in favor of the cut, but I am opposed to the means by which it is proposed to deliver the money- as a reduction of the employee's share of FICA. Two really obvious points:

1. The Republicans will surely call restoring the full contribution a "tax hike" one year from now. The Democrats will be tempted to go along with a "temporary" extension of the holiday to avoid further political damage and to provide continuing stimulus to a still damaged economy. In short order, this dynamic will lead to the insolvency and benefit-cutting "reform" of Social Security. Those who claim to be concerned with the welfare of the poor, the disadvantaged, the disabled, and the elderly should be ready to throw away this poison apple no matter how sweet it might appear to be. Social Security is easily our most important and effective anti-poverty program.

2. The same amount of money (about $120 billion) can be distributed as a tax credit or as a rebate NOT TIED TO SOCIAL SECURITY. In fact, half of the cost of the payroll tax holiday in the compromise proposal is offset by not renewing Obama's Making Work Pay tax credit.

[whosinpower]

42. Your borrowing money from the chinese -

To pay for tax cuts.

If you blindly think for one moment, that the republicans will be silent on the deficit issue come 2011 - you are beyond hope.

America has two wars to pay for. Like it or not - that bill WILL come due. Kicking it down the road to your children and grandchildren is grossly irresponsible.

While it is nice to myopically think - what is in it for me....Moody's is already warning that the tax cuts may lead to America's rating to go down. The US dollar is already weakening, given the recent quantitative easing. American real estate is continueing to show signs of collapse.

What am I saying....I am saying that tax cuts will not fix the problems facing the American economy, and main street. It will not create jobs. It will not stabilize the real estate market. And the only demand that it might increase will provide jobs overseas - not here. America needs to increase it's GDP; it needs to decrease its trade deficit. It needs to produce and export more products. It needs to put the unemployed back on the line working and being productive and paying taxes.

When you look at all those wonderful tax refunds - and realize you may spend them on a....flat screen tv, that is manufactured in China and shipped over here, your refund money stimulates whose job exactly? The multinationals who have their manufacturing plants across the pond, the container shipping companies, and the poor sales rep who probably works on commission. The vast majority of that money goes straight to the coffers of the multinationals who profit more from cheap labour. So, if they see demand going up - they will just increase production there. There is a REASON why there is growing disparity between the wealthy and middle and lower classes. Tax cuts just speed it along its way, and the American economy is left struggling with high unemployment, low paying service sector jobs and a very few elites sitting on Wall Street.

[Change Happens]

43. Well done!