Common Sense

Romney took it to the President last night and now comes the morning after, so what happens? The Democrats were devastated after the debate. They really didn’t know what to do. They were late to the spin room, shell shocked and seeking a message. The debate was that overwhelming. This AM they need to regroup. They will have their talking points and it will be like this. Romney misspoke. He didn’t give details. He was too general. They will try and corner Romney on lack of specifics. They are in damage control and the best way to do it is try and turn this back to focus on “Romney’s faults”.

The Republicans will be upbeat. Romney fund raising will have a record day. He lifted the spirit and they believe again. There will polls that report who won. As each comes out the numbers saying Romney won will grow as people become confident enough to say it. The general polls will show over the weekend a tightening and that this is a race again.

The keys to watch are Florida, Virginia, Ohio and Colorado. Florida was showing a slight Obama lead. I suspect the way Romney clearly articulated medicare and Obama’s failure to answer the charge he proposed cuts in it will be big. I would not surprised to see Romney take a slight edge in Florida. In Virginia and Colorado the race was almost dead even. I suspect here that Romney presenting himself so presidential will ease the way for undecided voters to move slightly. Look for Romney here to gain some. Ohio is a different animal. I don’t think this debate moves much there as Romney needs to address the auto industry bailout better.

Bottom line I see a tightening slightly but still an electoral college edge for Obama. However, Romney regained his footing and is moving again. Messaging now and the two additional debates make it possible for him. Next up, Biden versus Ryan. That should be a real slugfest as Biden knows he needs to attack and Ryan is tough and unafraid. Buckle up next Thursday night.

While we have been discussing taxes (Fair Share and Interest Income) the past few days let’s do one more thing prior to the debate. Let’s take a look at the taxes now set to go into effect for 2013 and see if the candidates are asked to address this. We won’t touch healthcare taxes here, only payroll.

First off believe it or not the government reduced the social security tax taken from your paycheck the past two years to 4.2% from 6.2%. It was done to try and get money into people’s hands to spend in the marketplace. Think about the fact that the government decided to cut social security revenue into the system at a time the program is going bankrupt. That is another issue. For now understand that on Jan 1, the rate reverts to 6.2%. What does that mean in real dollars for you

– If you earn $35,000 your tax bill is going up by $700.00

– If you earn $110,000 it is going up by $2,202.00

This is a given so get ready.

Part two is the Bush Tax cuts. Let’s put this in perspective. In 2001 President Bush wanted to spur the economy so they reduced rates. The Democrats fought back and didn’t want the reduction. So the sides agreed on a ten year period for the rates. When the period was up they bickered but President Obama decided to extend it until Jan 1, 2013. Why? Well it was hard to think about raising rates in the economic conditions we were in and Jan 1, 2013 is two months after the election. Pretty simple. Here are the rates scheduled to expired and what you are scheduled to pay.

Tax Brackets (2012 Dollar Amounts)				Marginal Rate
Unmarried Filers		Married Joint Filers
Over	But Not Over	Over	But Not Over	2012	2013
$0	$8,700	$0	$17,400	10%	15%
8,700	35,350	17,400	70,700*	15%	15%
35,350	85,650	70,700*	142,700	25%	28%
85,650	178,650	142,700	217,450	28%	31%
178,650	388,350	217,450	388,350	33%	36%
388,350	…	388,350	…	35%	39.6%

The average increase is 3% for most filers with the highest income bracket going up 4.6%.

Yes this is scheduled in addition to the 2% increase on social security. So the average person faces a 5% increase.

Now follow this argument for a second.

The Democrats say this is fair share and not an increase. That the rates were a 10 year cut only and time is up.

The Republicans say it should have been permanent and that for 12 years people have paid these rates and this is an increase.

That’s not sll. On Januaary 1 the Capital Gains (Bank and Stock interest/dividends) we discussed on Friday is also going up. Here is that table:

Maximum Rates	2012	2013
Long-Term Capital Gain	15%	20%

So we face a 5% Long Term (held one year or longer account or stock) increase.

Since all of the above is in place and set to take effect on Jan. 1, listen to the debate see if this is addressed and how each side will handle. Then decide. Fair share or too much? Good for the economy or bad? A job creator or job elminator?

YOUE CHOICE, OUR FUTURE

 

IF the tax rate is as we said yesterday then WHY is Romney’s rate 14%?  Here’s the answer. The tax rates I shared yesterday are on earned income, dollars we earn from working.

Once we pay those taxes some of us invest a part of the remaining dollars we have left. When that money (that we have already paid taxes on) earns money in a bank account or with stocks it is taxed again. However the government taxes it at 15% (for assets held one year or longer. Over double that for less than a year).

Mitt Romney had no work or job income last year, all his income was derived from long term investment gains. Thus a 15% tax rate. (It was reduced to 14% by virtue of the fact he had deductions for things like the fact he gave 33% of his earnings to charity).

So when you hear he paid a low rate that is true, but it is not a lower rate than anyone else with interest and dividend income only. You are not getting the whole story.

Thus when you hear people say he and others paid too low a rate think about what they are saying. What they are telling you is that if you saved money and invested you should pay a higher tax on the dollars you already paid tax on. In fact they mentioned 30% (The Buffett rule they discuss).

If you support raising the taxes on your interest and dividends to 30% (your fair share) then it’s clear you should vote Democratic and President Obama.

If you think the 15% rate on long term (over one year) investment earning is fair then vote Republican and Mitt Romney.

YOUR CHOICE, OUR FUTURE

Is 50 cents tax on what your earn and keep fair? Read today’s issue review.

One of the questions that should be asked and addressed next week at the debate is what is fair share? This has been a major issue in the campaign and today we’ll take a quick look at both campaign’s positioning on this.

Let’s start with the President’s side since the Democrats have made “fair share” a major campaign issue. The argument is simply that those that have need to pay more to help others. The President refers to “millionaires and billionaires” and classifieds them as those households with income of $250,000 and above.  The first question you have to decide is if that household income meets your criteria of people who need to pay more.

The Romney campaign position on taxes is that they want to lower rates on every income level. To assure that high income individuals do not gain from this they propose cutting deductions from higher income levels to “assure their contributions do not reduce”. What deductions? That is unclear.

Okay so what is fair share tax levels on people? Here are the current rates:

Tax Bracket	Married Filing Jointly	Single
10% Bracket	$0 – $17,400	$0 – $8,700
15% Bracket	$17,400 – $70,700	$8,700 – $35,350
25% Bracket	$70,700 – $142,700	$35,350 – $85,650
28% Bracket	$142,700 – $217,450	$85,650 – $178,650
33% Bracket	$217,450 – $388,350	$178,650 – $388,350
35% Bracket	Over $388,350	Over $388,350

So a household earning $250,000 is in the 33% federal tax bracket. That means 33 cents of every dollar is paid to the federal government at that level.

Now you must add state taxes. So if you live as an example in California the income tax rate is 9.3%

So before you consider FICA or medicare taxes you can see income taxes are 42 cents on a dollar for “millionaires and billionaires” earning $250,000. Your vote should decide if that is fair or not.

One more thing you should know about who pays taxes is this.

The top 10 percent of income earners paid 71 percent of all federal income taxes though they earned only 43 percent of all income. The bottom 50 percent paid 2 percent of income taxes but earned 13 percent of total income. As we are all aware now almost half of tax filers paid no federal income tax at all.

So here’s my questions:

Is 33 cents federal tax on each dollar fair? (It does raise to 35 cents at $388,000)

Is 43 cents income tax fair when you add state tax like California?

What does each candidate consider fair on your earned income? What do you consider fair?

One last point. No one ever mentions the other taxes you pay on the money you keep. Did you ever see your phone bill tax? Cable bill tax? Federal and state gas tax? Sales tax? When you add all the taxes up on the dollar you earn and what you keep it is over 50 cents. What is fair?

YOUR CHOICE, OUR FUTURE

With one week to the first debate the election has taken a turn. The past month has not been kind to Mitt Romney. The Obama campaign has pounced on every opportunity and positioned Romney as for the rich, a man who cares little about others and unqualified to lead on foreign affairs. Their relentless attack both in message and ads have hurt Romney badly, especially in the swing states. They have also influenced the main stream media stories to the point where Romney gets nothing but negatives on their newscasts and shows. When you combine their normal tendency to support liberal candidates with the feed and message from the Obama camp, they have put Romney on the defensive. He did himself little good with his inarticulate 47% comment that was a private conversation released to the press. Add to the inability of his campaign to make an issue of President Obama’s gaffes and you have a major problem.

Why isn’t the tape of President Obama saying he favored “redistribution” getting more play? Why isn’t the President saying the situation in the middle east is a “bump in the road” bigger? Why isn’t the words of our U.N. ambassador, the President and his entire staff that the movie trailer caused the unrest in the middle east a bigger issue?  We had a terrorist attack on September 11th that killed our ambassador, two Navy Seals, and another American. The President of Libya said it was a pre planned terrorist attack and yet this administration won’t say it. Why?

A bigger why is this. Why is Romney’s misstatements getting hours of coverage and the President’s none? It’s a combination of campaign organization and a biased media. 

Yesterday we discussed the $16 Trillion debt being reached and what that meant to our children and Grandchildren. It certainly received some news play and let’s hope over the next 60 days this get addressed. We cannot continue adding $5 Trillion in debt the next fours as we have the past and we cannot continue paying $230 billion in interest each year.

Let’s discuss an issue that will have great play tonight at the Democratic convention. Sandra Fluke will be a feature speaker. Sandra is a 31 year old attorney and came to national attention this year when she testified before the House on the importance of insurance and others covering birth control for students. (Let’s put aside she was at Georgetown, a Catholic University). If you remember she was emphatic about the costs and the need for someone to pay the bill.

To make this short today here’s the question for you:
If you agree that we should be paying for contraceptives for her and others then vote Obama and the Democrats

If you think individuals are responsible for their own actions and birth control vote Romney and the Republicans.

This election is that simple. If you think the government is responsible for individuals and their costs you are a liberal and should vote Democratic. If you believe in individual responsibility vote Republican.

Today the U.S. debt will reach $16 Trillion dollars. So what does this $16 trillion mean?
In 2011 the interest we paid on the debt was $230 billion dollars. That’s $230 billion of our taxes that did nothing but pay interest. The money we are borrowing is a debt passed to our children and grandchildren.

Has this always been the case?
Twelve years ago, before the election of George Bush, the debt stood at $5.6 trillion. That’s 232 years of our history.

Eight years later when when President Obama took office, the debt was almost $10 trillion. As it passes $16 Trillion today it is fact that one third of the total debt of the U.S. has been incurred under Barack Obama. Each day, the debt grows by roughly $3.5 billion, or about $2 million per minute.

President Obama said this in the 2008 election campagin: “The problem is that the way Bush has done it in the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion from the first 42 presidents. No. 43 added $4 trillion by his lonesome. So we now have over $9 trillion of debt that we are going to have to pay back. $30,000 for every man woman and child. That’s irresponsible, that’s unpatriotic,” he said.

Here are Senator Obama’s thoughts on the debt limit in 2006, when he voted against increasing the ceiling:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

In 2007 and in 2008, when the Senate voted to increase the limit by $850 billion and $800 billion respectively, Obama did not vote

Your Choice and Question
If you think adding more to the debt and continuing this path doesn’t matter then Vote Obama and the Democrats.

If you think Bush and Obama have failed on the debt and passing on this on to the kids is wrong vote for change with Romney and Ryan.

YOUR CHOICE, OUR FUTURE

To assist with your decision in the upcoming election we are offering some common sense analysis so you can make an informed decision and maybe influence others.