Obama's 'no income taxes on seniors' draws critics

[RamboLiberal]

Source: My Way News/AP

WASHINGTON (AP) - If you're a senior citizen and earn less than $50,000 a year, Barack Obama has a deal for you: a life free of federal income tax.

Sounds appealing, right? Maybe to many seniors. But tax policy experts in Washington are giving it bad reviews. They see it as another subsidy for senior citizens, who already get federal help through Social Security and Medicare and often have economic advantages over other demographic groups.

Seniors typically have paid off their mortgages, many have investments and usually don't pay taxes on their Social Security benefits. The kids are usually grown, so they're not saddled with day care or college costs.

"The odds are the retired folks - they're getting pensions, they're getting Social Security, they have investment assets, they own a house - so ... they're better off than somebody who is 30 or 40 years younger who's trying to buy a house (and) trying to start saving," said Clint Stretch, managing principal of tax policy for Deloitte Tax.



Read more: http://apnews.myway.com/article/20080811/D92GAVIO0.html

[Dr.Phool]

1. And plus they get a discount at the buffet!

[pecwae]

26. Eliminate the Senior discount NOW!

[wurzel]

2. I am not sure that is what he means.

He probably means you can earn up to 50K without having your social security check taxed. But your earnings would still be taxed like anyone elses.

[Alcibiades]

14. No, he means it:

"Honor America’s seniors by eliminating income taxes for those making less than $50,000 per year"

We have not heard more about this because of the liberal media.

[man4allcats]

18. I'm just curious as to what age qualifies one as a senior.

I might be in "the group." The bank owns a whole lot more of my house than I do, and the only "investment" I have waiting for me is a monthly Social Security check if I live long enough to collect it and the rethugs haven't destroyed the program before I die. Personally, I wouldn't mind not having to pay any federal tax. I make less than 50K, and eliminating my tax burden would improve my life style considerably.

[boppers]

3. Lazy bastards, why don't they pull their fair share!

Oh, wait, they already *did* pull their fair share.

I admit, though, that the idea of republicans attacking retired seniors might possibly be the dumbest political move ever... and thus, I hope they do it.

[Cleita]

4. I can do that, but when I can't pay my rent or food because my

medication has gone sky high and I have to pay taxes on top of it, is it all right with those Republicans if I pitch my tent in their backyard?

[boppers]

10. Depends:

Do they get to charge you for the space used by said tent, because otherwise, they might be giving you a "handout" by not attempting to profit off of you at every opportunity?

:eyes:

[Hubert Flottz]

22. Pull yourself up by your bootstraps and pay your taxes so that...

Bush can fly all over the world for free on vacations and so that the pentagon can award a few more no bid contracts to KB&R and any of the GOP's other cronies that really do need government help.

[RayOfHope]

5. They may have had advantages in the past, but why am I seeing so many older people

working at grocery stores and Wal Mart when they should be home enjoying retirement? I dont have enough financial know how to know if this is a good plan or not, but I think the idea in this article that seniors have it pretty good, especially those earning under $50/yr is bullshit, especially with healthcare and oil costs being what they are.

[mucifer]

6. Our dem gov in IL gave free public transportation to ALL senior cititzens

It actually offended lots of people who had the money to pay while our state is broke. I think Obama's tax plan is good as long as it is only for those who make less than 50grand.

[jwirr]

8. As a senior I think you are right. Many of us do not make $50,000

a year but we want to help in this mess not take more. It is our children who will pay if we do. One way we could be helped though is if we could be able to work up to a reasonable amount without having SSI taken away. I make less than $10,000 and when I work they take dollar for dollar out of SSI. My SSA stays the same. This would help poorer senior and I would not mind paying the taxes.

[Oldtimeralso]

21. Our Gov. Rod (D?) didn't say that if you were offended you could still pay the fare did he? N/T

[Igel]

7. Not a good idea.

We're past the point where the bottom 50% of households pay just a few percent of income tax receipts. When the majority of the population pays no income tax, I have a problem: "No taxation without representation" can apply a few different ways, but at some point paying taxes makes you a stakeholder in government and "no representation without taxation" starts becoming a reasonable rallying cry.

[spag68]

12. You do realize don't you

Last I read the stats, there were over 4000 millionaires in the country that don't pay any Federal taxes. Is that ok with you?

[joeglow3]

28. Where did you see that at?

I am not saying it is not true. However, as a tax CPA, I have no clue how someone could be a documented millionaire and pay no taxes.

[Igel]

41. No.

But I have the same answer: When there's no threat of having to pay for programs by having your taxes raised, when there's no "buy in" by a voter, but only the promise of benefits, the motivation to balance taxes with social benefits boils down to self-interest versus a sense of fairness. Most people bias the latter to serve the former. It's easy to be generous with other people's money.

This distorts the idea of liberal democracy--perhaps slightly, perhaps greatly. It's fully in keeping with pure democracy, but that's essentially an intolerable system, usually even over the short term.

The difference between making $25k/year or $25 million/year has, at best, trivial relevance to my position.

[hedgehog]

31. You need to see this before you talk about the bottom half not paying taxes:

http://www.lcurve.org/

[Igel]

42. Saw it a while back.

Don't see the relevance. As it is, the top 5%, making far more than half the income (not all earned, and not often the same families from year to year) pay over 40% of the total income tax (although I'm not sure that excludes tax on unearned income).

The only saving grace to the current code is the payroll tax structure--even though most people don't actually ever see the money or feel that it's missing, so I'm not sure it really has the same effect for most people except when they glance at their W-2s.

It's not like with the income tax. Then you feel the amount taken out of your paycheck, or owe more, because you're at least forced to sign the forms and acknowledge that the government spending is also your spending.

It's also a foolish tax system, at least in practice. California's been ripped a couple of times by having their tax code be *too* progressive: It allows them to increase spending in good times as the high earners rake in money and the bottom 67% don't feel any compunction when offered that tax money for on-going mandatorily funded programs, meat-and-potatoes type things. But when there's a downturn, it's usually those in the wealthiest 10% that have the largest drops in income (with anecdotally overwhelming exceptions that do nothing but show that the anecdote-teller's been intellectually overwhelmed). This makes for just about the largest possible drop in tax contributions in a downturn, meaning that the effects of the downturn are felt even more by the state than the middle class, sharing the pain of the wealthiest with the poorest. It's a decision they made, even if they can't seem to learn from their mistakes and *not* have committed, mandatory funding based on volatile tax revenues.

[Deb]

9. Elderly fixed incomes are economically advantageous?

I want to know the real odds on that being true! x(

[Patchuli]

11. I hope those rethugs go for that one!

Yah, attack the seniors ya dumb asses.

Not all seniors own homes and some as the poster above mentions, pay a fortune a month for RXs. My stepmom pays $500 a month just for her prescriptions.

Seniors are retired from making income so why should they pay income tax if they pull in less than $50k? If they have pensions, they earned them. They also earned Social Security and Medicare; why should they be taxed yet again on that money? Their kids may be leaning on them for help and probably can't help their parents much.

I think Obama has a fabulous idea. I think the lack of taxes should be collected from these corporations that skate on paying and on McSame and *'s wealthy 1% that fund these rethugs. I seriously hope McCain bags on Obama for this idea. He'll shoot himself in the foot, yet again.

[Frisbee]

13. A lot of these under $50k seniors...

may have had it fairly good at one time. But since the corporations they spent their entire lives working for have raided their pensions and slashed the health care benefits that were promised to them, so the executives could live like kings at their expense, I doubt many of them are doing anywhere near as well as they had expected they would be. Why not not tax them on their SS checks, and start making the federal employees who don't have to pay into SS, but get to reap the benefits start paying.

[Alcibiades]

15. What about young people?

I like this idea, but I do think that something should be done for the young. It's harder than ever to buy a house, pay for college, and start a family, so much so that a lot of people who would like to so so are unable to do these things while they are still young.

[bluestateguy]

16. I think I prefer the itemized checkoff approach to taxation

Let every taxpayer checkoff boxes on their tax forms to direct where they would like their tax dollars to go (which federal departments and programs, etc.). This would have no effect on how much the taxpayer would pay.

[whistle]

17. Seniors also get 49 cent coffee at McDonalds...ya tax the shite out of these geezers

...what the hell they have only paid taxes all of their working lives, stopping taxes now in their senior twilight period means that only death is inevitable :wtf:

[free_radical]

19. Some Stats on Seniors and Poverty

I was doing some research on age and income, and thought the following would be helpful in this thread. The data is from an OECD study comparing the US with eight other countries. The data is from the 1990s, so some changes have occurred, likely worse for the USA.

Ages 65+ Numbers represent % in poverty.

Germany=9.3, Finland=6.0, France 5.4, UK= 12.0, Italy=13.2,

Luxembourg=2.9, Norway=11.1, Sweden=2.8, USA=22.1

The title of the study: "An Age Perspective on Economic Well-Being and Social Protection in Nine OECD Countries"

As you can see, seniors in the USA do quite poorly compared to some other countries.

[tabasco]

37. Interesting and sad. We're not taking care of our weakest citizens.

Welcome to DU.

[free_radical]

45. Thanks for notoicing my first post.

I've lurked here for long while. I use to post a lot in the early days of Kos, under a different name. I grew tired of not seeing any real changes, though.

Criticizing Obama for trying to help people is remarkable. Especially with all the evidence of war on the middle class, including the latest GAO report about the number of corporations not paying taxes! Seems not much changes, so while I may post some data from time to time, participating in blog discussions seems to waste a lot of time.

Thanks again....

[dysfunctional press]

20. i think that disabled people should also qualify for any of these financial "perks" that seniors get

sure, most of them live on a fixed income- but so do the disabled. and the disabled generally haven't had a lifetime to save up for their retirement- for the disabled, social security isn't a "supplement"- it's ALL they've got.

somebody needs to pass a law saying that the disabled qualify for the same things that a senior qualifies for, perk-wise.

just my opinion.

and yes, for the record- i'm disabled. i'm 48 and i've been "officially" disabled for 10 years.

[harmonicon]

23. what world do they live in where most seniors have paid off their mortgages?

My dad will be 70 this week, and no way is his mortgage paid off. My mom will be 65 next year, but she's going to keep working, because my parents need the health insurance she gets from work (better than medicare).

[Tracer]

34. Dunno about "most", but it seems to me ...

... that at age 70, the mortgage ought to be paid off.

Of course, it depends on when the house was bought and for how much and what was the size of the mortgage.

(Speaking as someone (single mom) who carefully budgeted and have a paid-off mortgage)

[harmonicon]

44. well, the house was bought less than 20 years ago

It was a big step up for my parents - each kid got their own bedroom. What sucks is that with the real estate market in the shitter, they can't afford to sell and actually increase their standard of living.

[DeltaLitProf]

24. More from Ron Fournier's AP Washington Bureau

. . . and of course this will filter down through hundreds of regional and local newspapers throughout the country. Low information voters will see it and think it's a news story.

Point this out in your blogs and to your friends, especially if they edit newspapers. The word has to get out that a good friend of Karl Rove's runs AP.

[muriel_volestrangler]

25. Frankly, it sounds a bad idea to me

Cost: about $10 billion a year - from "the idea would give tax cuts averaging about $1,400 to 7 million seniors". Any tax cut has to be thought of in terms of "do we increase taxes elsewhere to make up for it, cut a program, or go further into debt every year to pay for it?"

Badly implemented:

Tax experts across the spectrum also fault the Obama plan's abrupt $50,000 per year threshold. As described by the campaign, seniors making $48,000, for example, would pay no income tax, while someone with income slightly more than $50,000 could pay several thousand dollars in income taxes. Seniors nearing the $50,000 threshold would have an incentive to quit working.

Lawmakers would likely add a phaseout, according to tax experts. "Everyone knows there would never be this $50,000 cliff," said Ben Harris, a senior research associate at Brookings.

So if the proposal is already going to have to be changed to make it workable, he'll look as if he hasn't thought it through properly (beware: the trouble that Gordon Brown is in at the moment in the UK can be traced as much as anything to his fiasco over abolishing the 10% income tax rate. It became clear that he believed his own hype that no-one would lose form his whole package of tax changes, but when independent experts worked things out, about 10% of the population was going to be worse off. Look incompetent on taxes, and your electability goes way down.)

[trof]

27. If all had gone as planned/forecast, we'd be fine. It didn't.

I retired nine years ago.
I crunched the numbers for months beforehand.
Savings (IRA, 401-K), pension, when Social Security would kick in for me and, 3 years later, for Miz t.
Free medical, dental, and prescription drug insurance thanks to being a union member all my working years.
Added up all our monthly bills (yes, we still have a mortgage), and even applied a 'fudge factor' for inevitable increases over the years.
It looked like a 'GO'.

We wouldn't be wintering in the Bahamas, or skiing at Vail (like when had we, ever?), but all in all it looked like we could live a fairly comfortable life.

All went pretty smoothly for the first few years and then...
1. My former employer (TWA) went belly up.
My pension plan was taken over by the government's Pension Benefit Guarantee Corporation along with several other big pension plans.
My monthly check was reduced by about 25%.
The PBGC is currently billions of dollars in the red.

2. American Airlines took over what was left of TWA, including obligations to TWA's retirees.
The next year American announced that my free medical plan would now cost me $50 a month, EACH for me and Miz t.
Similar charges for dental and drug plans phased in a little later.
The next year it went to $70.
Now it's $150.

3. Hurricane Ivan hit us. We incurred a lot of out-of-pocket expenses for the clean up. It costs some significant cash to have 20 huge downed oak trees cut up and hauled off.
Can't get insurance for that.
It takes truckloads of dirt to fill the holes left when all the stumps had been pulled.
Can't get insurance for that.
It's also expensive to replace a 30 foot section of asphalt driveway that was ripped up by the roots of the adjacent downed trees.
Can't get insurance for that.

And all that cash had to come from my IRA.
Which of course hugely increased my 'income' for that year and kicked us into a higher tax bracket. And greatly reduced the income producing funds in the IRA. Talk about your vicious circles.

4. And then gas hit $4 a gallon.
Give me an effing break. Please?
Of course all goods which depend on gas/oil for transportation (which is basically everything) went way up too.

So that's the series of unanticipated events that brought us from a reasonably 'comfortable' retired couple who had very conservatively (you should pardon the expression;-)) planned for their retirement, to coupon clipping, grocery 'special' shopping, penny-pinchers who don't even take the car out of the driveway for days on end.

Yeah, I'd sure appreciate a tax break.

[snooper2]

29. Clint Stretch donated $2300 to Obama..

:) FYI...didn't know who the guy was so did a couple lookups :)

[Orsino]

30. "...who already get federal help..."

The "tax policy experts" (Brookings Institute mentioned prominently) haven't been paying attention, or they'd know that seniors aren't doing well under $50k/year.

Yes, it's another subsidy. Subsidizing the needy is a good thing.

[guitar man]

32. sounds good to me

maybe needs a little tweaking here and there. As far as haow to pay for it, I say we hit these deadbeats up to cover the cost:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3435028

[sofa king]

33. "Federal help through Social Security and Medicare."

Yeah, because it's not like they paid for those things every damned two weeks for four decades.

I wonder if Obama's plan incorporates the harsh reality of "senior" starting at 58-59, when corporations now jettison employees in order to avoid paying them full retirement benefits.

[anitar1]

35. Seniors will be sucked dry, just as everyone else is. If you think

'retirement' is something to look forward to, think again. You will still be liable for city, county state and some federal taxes. while your income shrinks as prices and taxes rise. I cannot spend one dollar with out thinking about it and seldom have enough to get through the month. If I were able bodied, I would sure be working and I am in 70's. But I work hard to stay out of the depression pit and try to keep as active as possible.

[Ian David]

36. If they're only making $50,000 per year, then those oher govt benefits probably aren't enough. n/t

[marshall]

38. What age is considered senior?

At my local stores they start giving senior discounts at age fifty.

[cobalt1999]

39. Good campaign promise as old people vote in high numbers.

Bad idea to implement.

[Sanctified]

40. I support this, what better way of saying...

thanks to our Elders than giving them a break in their retirement years. The idea that we need to grab what ever money we can from people who worked their whole lives makes me sick to my stomach. Anyone who thinks it's ok to tax the elderly but it's not ok to tax a Corporation has some serious issues.

[dsc]

43. I admit I have problems with this

A couple of two who aren't seniors would be paying several thousand a year in taxes on 50k while a couple of seniors pay none, that seems unfair.