Super Stupid

Posted on 03/04/2009 at 9:45 am by JumpyPants

ABC News reporter Emily Friedman gets to be in the Super Stupid Hall of Crapola for this report about rich people and the $250,000 threshold.

Joining ABC News is the person who said this:

We are going to try to figure out how to make our income $249,999.00,” she said.

“We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama’s tax plan,” she added.

Whah?! That’s not how it works. Benen and Jameson Foser explain why this is a really idiotic thing to say. In short:

In reality, a family earning $255,000 will pay the higher tax rate only on its last $5,001 in income; the first $249,999 will continue to be taxed at the old rate. So intentionally lowering your income from $255,000 to $249,999 is counter-productive; it will result in a lower after-tax income.

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  • JackDanieL

    dont let math/facts/reality get in the way of a good moment of dooshbaggery

  • JimBeam

    What if you income is $350,000. Where there is a will, there is a way. It’s called a tax shelter. Lets face it, Obama can’t close all the loopholes to tax, or steal however you want to look at it. Don’t underestimate American ingenuity.I think we should change his position to king. Maybe have him unconsitutionally serve three terms!btw, nice word…dooshbaggery

  • gary

    That’s incorrect.If your tax rate is 39.6%, it’s applicable to the full $250,000.01.

  • jmrunning3

    Yea, I need some clarification on this one. I have always been of the understanding that once you move to a higher tax bracket, ALL of your income is taxed in that bracket.Benen and Foser seem to be indicating that only the additional income ABOVE the dollar amount in question is taxed at the higher rate.Bob, can you solicit some additional information on that?

  • http://www.politicalpartypooper.wordpress.com politicalpartypooper

    Actually, it depends on how the code is written. During WW2, a code was written that taxed a substantial amount of income (profit) above a certain percentage of profit if you happened to be making war materials.It doesn’t matter how you get there. The key here isn’t what people actually make. It’s what they report as their AGI. That’s the only figure that matters when taxing INCOME. Currently, there are more than enough loopholes to avoid having to pay ANY extra tax for most wealthy business owners. Highly compensated employees also have loopholes, such as deferred compensation plans. Ask your local congressperson or Senator. I’m sure they’ll know EXACTLY how you get away without paying extra taxes.:o)

  • ceu

    I don’t know how it’s written, but…during the campaign, Obama explained the increase in the way Bob quoted above, that only the amount over $250K would get the higher tax rate. I distinctly remember it, but don’t have time to go looking for a speech/link to support my memory

  • http://annette-justmylittlepieceoftheworld.blogspot.com/ Annette

    That’s how I remember it too… that anything OVER 250,000 would be taxed at the higher rate. under that would be at the normal rate.

  • J

    As if people aren’t constantly trying to find ways to put themselves in lower tax brackets now?

  • jmrunning3

    Thanks for the additional explanations. I too remember him saying that only anything OVER $250,000 would be taxed.

  • SillyRatfacedGit

    As if people aren’t constantly trying to find ways to put themselves in lower tax brackets now?

    I keep saying this too. People hire accountants to achieve the lowest legal tax burden they are entitled to. They always have, and they always will. Trying to claim that this will get worse by raising the tax rate is a blatant canard. People always will look for the lowest tax burden they can legally get away with. They would be stupid not to.

  • Jen

    Fox News is peddling the same tale of woe:

    http://foxforum.blogs.foxnews.com/2009/03/05/diamond_taxes_obama/

    The idea that b/c one earner makes significantly less, but that income puts the family over 250K and means childcare costs will be more than what she/he earns, the smaller earner should give up the job to take care of the kids is just insanity.