An email was drawn to my attention today by a friend whose political leanings are different than mine but is smart enough to not take things at face value. He and I had been discussing taxes over the weekend and he forwarded me an email that made several claims about McCain and Obama's tax plans.
It would be wrong to say that I was shocked. I have long since become desensitized to the ability of people to lie, cheat and steal through the anonymity of the internet. But I am also quite aware of how many people take it for granted that their friends and neighbors know what they are talking about. I'm guilty of it myself at times.
The email:
You can verify a lot of this here:
http://money.cnn.com/news/specials/election/2008/index.html
Of course, you may have noted that Obama’s position appears to be ‘changing’, so you will have to pay attention to see what his latest approach is at buying votes.
INTERESTING DATA JUST RECEIVED ON TAXES
Please spread the word.
This is something you should be aware of so you don't get blind sided. This is
really going to catch a lot of families off guard. It should make you worry.
Proposed changes in taxes after 2008 General election:
CAPITAL GAINS TAX
MCCAIN
0% on home sales up to $500,000 per home (couples). McCain does not propose any change in existing home sales income tax.
OBAMA
28% on profit from ALL home sales
How does this affect you? If you sell your home and make a profit, you will pay 28% of your gain on taxes. If you are heading toward retirement and would like to down-size your home or move into a retirement community, 28% of the money you make from your home will go to taxes. This proposal will adversely affect the elderly who are counting on the income from their homes as part of their retirement income.
DIVIDEND TAX
MCCAIN 15% (no change)
OBAMA 39.6%
How will this affect you? If you have any money invested in stock market, IRA, mutual funds, college funds, life insurance, retirement accounts, or anything that pays or reinvests dividends, you will now be paying nearly 40% of the money earned on taxes if Obama becomes president. The experts predict that 'Higher tax rates on dividends and capital gains would crash the stock market, yet do absolutely nothing to cut the deficit.'
INCOME TAX
MCCAIN (no changes)
Single making 30K - tax $4,500
Single making 50K - tax $12,500
Single making 75K - tax $18,750
Married making 60K- tax $9,000
Married making 75K - tax $18,750
Married making 125K - tax $31,250
OBAMA (reversion to pre-Bush tax cuts)
Single making 30K - tax $8,400
Single making 50K - tax $14,000
Single making 75K - tax $23,250
Married making 60K - tax $16,800
Married making 75K - tax $21,000
Married making 125K - tax $38,750
Under Obama, your taxes will more than double!
How does this affect you? No explanation needed. This is pretty straight
forward.
INHERITANCE TAX
MCCAIN 0% (No change, Bush repealed this tax)
OBAMA Restore the inheritance tax
How does this affect you? Many families have lost businesses, farms, ranches, and homes that have been in their families for generations because they could not afford the inheritance tax. Those willing their assets to loved ones will only lose them to these taxes.
NEW TAXES BEING PROPOSED BY OBAMA
New government taxes proposed on homes that are more than 2400 square feet.
New gasoline taxes (as if gas weren't high enough already)
New taxes on natural resources consumption (heating gas, water, electricity)
New taxes on retirement accounts, and last but not least....
New taxes to pay for socialized medicine so we can receive the same level of medical care as other third-world countries!
MY first response? Who is so stupid as to send an email that includes a web address that basically refutes most of what they say in their email? The answer, of course, is called "hiding in plain view." By including the web-link, they assume that you will take their words at face value without following the link first. I encourage all of you to follow the link. It most certainly does NOT verify their findings.
My response to my friend?
****, your answer is right in the link. However, just to pull a few things out...
1) Home Sales: There is absolutely no documentation anywhere I can find to support that Obama has a plan in place to tax home sales in any way other than their current taxation. Not on that link or on the official websites for ether candidate or on Money.com, The Wall Street Journal, CNN.Money or even on some of the clearly republican-slanted blogs.
The only possible thing I see is on capital gains. But Obama's main adviser on that matter is Warren Buffet, who is by far the most credible source working with either campaign when it comes to finances. Buffet has said that his advice is to place Capital Gains between 24% and 26%, because he feels that is enough to increase government revenues without discouraging people from realizing their gains due to the tax ramifications. However, the exemptions surrounding capital gains taxes will remain unchanged. In other words, the threshold for becoming subject to CG on a real estate sale would remain at 250K. In other words, if you clear a 260K profit, you pay CG on 10K unless you reinvest in a new home within three years. If you clear less than 250K, it is not taxable. That is per individual, not couple. That is where the claim about 500K comes.
John Moores, on the other hand, just sold his Del Mar property. He paid 3.45 million in 2002 and sold for 35 million. Yep, he would be paying.
1) Dividend Tax: True with one problem. The Obama plan cited is only for what the SEC defines as "High Income Investors". So, if have less than 601,000.00 in stocks and bonds, you would not be affected. Also, this is part of CG again, meaning that you would have to SELL more than 601,000 in order to trigger it.
The Income tax breakdown in that email has ABSOLUTELY no relation to ANYTHING I can find online. Here is a table from Fortune Magazine based on their analysis of the two candidates tax plans, as quoted on the CNN.Money website and with the source given as "The Tax Policy Center", an independent research group.
BREAKING DOWN THE NUMBERS
Here's how the average tax bill could change in 2009 if either John McCain's or Barack Obama's tax proposals were fully in place.
MCCAIN OBAMA
Income Avg. tax bill Avg. tax bill
Over $2.9M -$269,364 +$701,885
$603K and up -$45,361 +$115,974
$227K-$603K -$7,871 +$12
$161K-$227K -$4,380 -$2,789
$112K-$161K -$2,614 -$2,204
$66K-$112K -$1,009 -$1,290
$38K-$66K -$319 -$1,042
$19K-$38K -$113 -$892
Under $19K -$19 -$567
Please bear in mind that Fortune magazines target market is the aforementioned "High Income Investors". In other words, this table was put together to show that Obama's plan would be a NEGATIVE for their target audience.
You and I would see a reduction under either plan (1,009 under McCain, 1,290 under Obama).
I would like to note that while I formerly worked in finance, I am not a tax professional and make no claim to any expertise on tax matters. I am not in the business of giving advice on your taxes.
Finally, something I did not include in my response to my friend, but needs saying... those last few "talking points."
NEW TAXES BEING PROPOSED BY OBAMA
New government taxes proposed on homes that are more than 2400 square feet.
New gasoline taxes (as if gas weren't high enough already)
New taxes on natural resources consumption (heating gas, water, electricity)
New taxes on retirement accounts, and last but not least....
New taxes to pay for socialized medicine so we can receive the same level of medical care as other third-world countries!
I can find absolutely ZERO reputable sources to support ANY of these claims... unless you want to call Obama's plan to tax the oil companies on their higher profits "new gasoline taxes" or "new taxes on natural resource consumption."
The last one is the most ridiculous of them all. Number one, no new taxes have been proposed to support health care reform. Number two, since when are the UK, Canada and most of Scandinavia considered "third world" countries?
PLEASE! IF you get an email like this, treat it the way it should be treated. The same as the one about deadly African spiders lurking in your toilet or how Microsoft will pay you ten cents for each time you forward this.
