Please, please, rent the movie "Idiocracy". This is where we are headed if we don't make changes NOW!
As I said before, throwing money at problems is not the answer. It hasn't worked for education, the "war" on drugs, Medicare/Medicaid, Social Security, etc.
It's time we start voting for candidates who aren't "career politicians". We pay for their healthcare and pension plans while some cannot afford to go to the emergency room!
It's time to make the government work for the people again, not for special interests!
"You cannot bring about prosperity by discouraging thrift.
You cannot help small men by tearing down big men.
You cannot strengthen the weak by weakening the strong.
You cannot lift the wage-earner by pulling down the wage-payer.
You cannot help the poor man by destroying the rich.
You cannot keep out of trouble by spending more than your income.
You cannot further the brotherhood of man by inciting class hatred.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away men's initiative and independence.
You cannot help men permanently by doing for them what they could
and should do for themselves."
You do your readers a disservice by not mentioning that the above is only a small, small portion of the impact the candidates will have on our financial lives, and when you look at the bigger picture it looks vastly different than you portray it to be. Obama will do NOTHING to help energy prices, in fact his plans will make things far worse, his overall economic policy will lose us jobs as he taxes businesses into the stone ages. He's a socialist, pure and simple.
Even if only a minority of people make wise decisions with their money, that doesn't mean they should be punished for it. Wouldn't it be more beneficial to the majority if the government fostered and encouraged responsible investments and savings? That way the majority can benefit from intelligent tax policies. How does the majority benefit if they get more money back, but are penalized if they try to invest it or beat inflation? If you think it's wise to promote a culture of immediate spending, then I can't argue with you, but you sound like a person who recognizes the importance and value of saving and investing. So why make it harder for the average person to do so?
I used to have a special savings account for my change. Every morning at work I emptied my change into a change counter. When I had a full tube, I roll them up and when it was worth the trip, I'd walk to the bank and deposit it. The banker laughed when I told her I wanted it to save my change. After paying for 3 trips to Florida in 6 years, she didn't laugh anymore.
Now I take my rolled change when it hits $25 and take it to the bank and get $50 savings bonds for my grandsons. When they're ready for school, it'll be ready for them.
Well, I have to go down to Tampa (I live in Baltimore) for a job interview. I thought I'd see how much Amtrak tickets are....it was cheaper to fly Southwest than to book on Amtrak! So sorry, I had to book the flight, I just cannot afford to travel by rail if it's more expensive than a flight.
The bias of this post along with the shortsightedness of some of the folks leaving comments is shocking! Personally, I don't see any difference between the Republican and Democrat parties anymore. IMO we've "progressed" to the point of having a one-party system. Now, I'm not a McCain supporter, but I do have to say that electing Obama President would put the economy under serious pressure.
The key of this whole discussion is that all of you are assuming that you will have a job. In order to have a job, corporations (gasp--yes, those evil entities that employ most of the people in this country) need to have the money to pay you. They get that money by generating a profit and through folks buying their stocks. Guess what Obama's plan doesn't help in either case.
If you start taking more money from the corporations, you are going to end up with an out-of-control unemployment rate. Just look at what has happened to the economy as a result of raising the minimum wage. What a huge mistake that was. That does nothing to encourage people to better themselves by finding a higher paying job. Instead it encourages complacency and small business cutbacks. I'm heavily involved with a small business on the side and have seen the unfortunate results of this policy.
We don't need more unemployment benefits--we need jobs. Again, that goes back to corporations having the money to hire. We don't need increased capital gains taxes because--we need to encourage saving and investing. We don't need the government to shoulder the colossal burden of nationalized health care--we need people to take care of themselves.
There is so much more to this election than just the personal tax rate. If you want Socialism, move to France. In fact, many Socialist countries are moving more towards Capitalism because they've finally realized that Socialism doesn't work. Did you know that Socialism was tried in this country when it was originally founded? It failed miserably. I wish people would see the big picture.
I think this was a very insightful look at some business practices.
I also don't see this as politically skewed. This is a significant reality that impacts society, I just wish more people would be aware of the real costs to others.
The first thing that came to mind reading this was the policy by Walmart to force their employees to apply for welfare type benefits and purposely keeping wages low enough for them to qualify. In essence the government is subsidizing Walmart.
I do wish more workers were aware of how incentives are dangled in front of them but the details show odds are you will never get them. That is a good thing to dig into when looking at a potential employer. If they tell you about some sort of incentive or bonus program, ask how it is figured and on what statistics. If you find that it is one of those unachievable metrics that tells you quite a bit about how that employer treats people.
Agreed that there are those out there who do max out everything (I'm actually one as well). However, when setting public policy, you have to look at what benefits the majority, while respecting the differing opinions in the minority. If the extra funds are used to say, oh I don't know, maybe add a personal finance class or two for high schoolers, than it benefits everyone, including other investors.
I am embarassed to admit this, but I got duped by one of those water softener salesmen people. I had friends who had bought a system an (apparently) absolutely loved it. We fell for the pitch and stupidly bought one. For the past year, the system has never worked properly, doesn't soften our water, the service people are deliberately kept clueless, the people at the office are rude and inconsiderate...
I know that I made a dumb decision, but does anyone think that I would have any recourse as to getting rid of the system? Heck, at this point, they can keep the money I have already paid them if I can just get the stupid thing out of my house...
Though I will probably vote for Obama, I'm not looking forward to paying more capital gains and dividend taxes.
@Jeff
I don't think Xin is off base. I'm sure there are middle income earners out there who invest in stocks and funds without maxing out their tax protected accounts (probably not the best idea, but I'm sure they're out there). Also, just because the majority of people don't max out their IRA, 401k/403b, etc. doesn't mean that there aren't a significant number who do. I'm sure a good number of Wisebread readers are savers who try to max out their tax-protected investment contributions AND sock a little extra into taxable accounts. Our household is well below the $150K you mention, and we manage to max out our tax protected retirement accounts and invest some extra money into taxable accounts.
1. Obama proposes capping the maximum capital gains rate at 25%, not 28%. (Even 28% wasn't really a "doubling" as the post states.)
2. More importantly, he only proposes raising the capital gains rate on taxpayers in the highest tax bracket. For everyone else, the rate remains the same.
One must ask: what is Obama paying for with these taxes? Will I get any benefit out of it?
Part of what Obama will be paying for is some type of universal health coverage. If that will in anyway cause one to spend less on health care costs, then when doing the calculations, one should offset that cost with the additional gains expected.
Obama will use this money to help fund US infrastructure: roads, bridges, etc. Things that most people use every day and that are in sad state of disrepair in many areas.
I am not sure the total amount of these offsets, but taxes are in no way only a "bad thing". The money will go somewhere within the government: make sure it goes somewhere useful to you.
You are completely off base on this one. For low to middle income workers, savings and investments are generally invested in tax sheltered accounts (401k, IRA, etc). There are no capital gains until you start to remove the money in retirement. When you start removing funds in retirement, they are taxed as income anyway.
I don't know many people in the sub-$150k range who can put away $19,000 a year ($15,000 in 401k, & 4000 in IRA). I know that some people don't have a 401k, but let's face it, most Americans can get out of credit card debt, let alone put away $4000 in an IRA.
Personally, I don't really care about the politics, but your blog entry was factually incorrect.
There is no bank with a free or not coin counting machine in Charlotte County Florida - I've checked. Instead, I get free coin wrappers from my bank, Wachovia, count & roll myself and turn them in for paper money.
I swap rolled quarters for paper money with my son - he needs laundry & bus money. One of my local stores loves to get rolled coins - they often post 'wanted' signs. I, too, keep about $2 in assorted coins in my purse and spend it.
I just can't fiqure out why people think using coins to pay for something is so hard or time consuming. Is it because so many have succumbed to being part of the cashless society that just uses credit/debt cards? I stick to cash except for car gas - don't like to keep that much cash with me.
This article is a fair snapshot of the candidates stated policies, but as other comments have pointed out, our nation is bankrupt. We are running record deficits, and most people ignore the fact that the money is borrowed, not just printed up on demand. We have to pay ever-increasing INTEREST on this deficit.
To make matters worse, much of this money is borrowed from the central banks of other nations, who have their own agendas.
The Government Accountability Office (don't laugh, I'm not making this up) has an excellent report called:
The Nation by the Numbers:
A Citizen’s Guide
A Summary of the FY 2007 Financial Report of the U.S. Government
Financial Condition
Look at the green and white areas on the chart on page 3, titled "Current Trends Are Not Sustainable"
The Democrats have been accused of having a Tax and Spend philosophy, and IMHO that is much more rational than the current Republican Borrow and Spend philosophy.
While nice little wars are always fun, we have to recognize that they are a luxury that we CAN NOT AFFORD. We are going to pay for our invasion of Iraq. Our children will pay, their children will pay, and their grandchildren will pay.
This is truly evil to one's self, and to others around one. What good is it to be rich if one has no social life, bad relations with family members, and never has time to enjoy it?
I disagree with your conclusion. From what I've read, Warren Buffett thinks like you. He believes in (and backs up with actions) integrity, fair deals, rewarding people who have helped him, not sheltering taxes and the importance of family and friends.
Maybe that's why he's the richest person in the world instead of someone evil.
I was never able to keep an "emergency" fund that I could keep my hands off of. I tried all sorts of tricks--putting the money far away from me, keeping a change jar, having set limitations on what constituted an "emergency" and nothing worked until I discovered gold dollar coins.
To me, the gold dollar coins (not real gold, of course) are really cool. I picture me having a huge pile of them and running my fingers through them (as if they were gold coins). I like them so much I just HATE to spend them. So every time I go to the bank, I get about $10 in gold coins and add them to my collection. And there they sit. It'd have to be a really really bad emergency for me to spend them. But they're there if I need them! Great post!
You do need to grow some balls when you are haggling, especially overseas. Even if you try, and you have no cojones, basically forget it, sales people will see right through you and deny you a discount, because they know you will buy it regardless.
There's a typo in the toomuchonline.org article that was repeated here. Under Obama's plan, the middle quintile would get a boost of $1042, NOT $1402. I've already contacted toomuchonline.org about this.
Does anyone know a good book that I can find that can provide easy to understand literature about purchasing rental property. My wife and I are interested in buying a rental home this year but really don't even know where to start. The property that we are interested in buying is a new condo with a price of 160,000-200,000. Any guidance from anyone. Thanks so much.
You dope, people are responsible for littering, not the company that makes the products. I wonder what you would say about Hefty and their glad bags if a semi turned over. Wisebread is slipping hard.
I came here expecting an honest analysis of the differences. I was highly disappointed to see a thinly disguised pimping for Obama. I read political blogs for that.
Your credibility took a serious hit with me.
Electing your chosen candidate is not worth compromising your integrity on this blog. And this post is flirting with that.
Make the same type of post about McCain and I will feel the exact same way.
I am so sick of this crap! When did America become a socialist state? This article focuses on the bottom 20 percent that is not getting a bigger tax break under McCain, but do the math and you will lean that the bottom 20 percent doesn't pay the taxes. The top 1 percent of earners pays 30% of the tax burden and it trickles down from there. I’m so Pi$$ed off that people who didn’t pay into the system got a stimulus package. I'm not a big Mc Cain fan, but Obama's plan to reward the unmotivated is just what we need to launch us into an endless recession. Welcome back Carter. When are we going to focus on getting the bottom 20 percent up to the top .01 percent instead of dragging our top down?
Please, please, rent the movie "Idiocracy". This is where we are headed if we don't make changes NOW!
As I said before, throwing money at problems is not the answer. It hasn't worked for education, the "war" on drugs, Medicare/Medicaid, Social Security, etc.
It's time we start voting for candidates who aren't "career politicians". We pay for their healthcare and pension plans while some cannot afford to go to the emergency room!
It's time to make the government work for the people again, not for special interests!
But what do I know, I'm just one person...
"You cannot bring about prosperity by discouraging thrift.
You cannot help small men by tearing down big men.
You cannot strengthen the weak by weakening the strong.
You cannot lift the wage-earner by pulling down the wage-payer.
You cannot help the poor man by destroying the rich.
You cannot keep out of trouble by spending more than your income.
You cannot further the brotherhood of man by inciting class hatred.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away men's initiative and independence.
You cannot help men permanently by doing for them what they could
and should do for themselves."
You do your readers a disservice by not mentioning that the above is only a small, small portion of the impact the candidates will have on our financial lives, and when you look at the bigger picture it looks vastly different than you portray it to be. Obama will do NOTHING to help energy prices, in fact his plans will make things far worse, his overall economic policy will lose us jobs as he taxes businesses into the stone ages. He's a socialist, pure and simple.
@ Jeff
Even if only a minority of people make wise decisions with their money, that doesn't mean they should be punished for it. Wouldn't it be more beneficial to the majority if the government fostered and encouraged responsible investments and savings? That way the majority can benefit from intelligent tax policies. How does the majority benefit if they get more money back, but are penalized if they try to invest it or beat inflation? If you think it's wise to promote a culture of immediate spending, then I can't argue with you, but you sound like a person who recognizes the importance and value of saving and investing. So why make it harder for the average person to do so?
I used to have a special savings account for my change. Every morning at work I emptied my change into a change counter. When I had a full tube, I roll them up and when it was worth the trip, I'd walk to the bank and deposit it. The banker laughed when I told her I wanted it to save my change. After paying for 3 trips to Florida in 6 years, she didn't laugh anymore.
Now I take my rolled change when it hits $25 and take it to the bank and get $50 savings bonds for my grandsons. When they're ready for school, it'll be ready for them.
Well, I have to go down to Tampa (I live in Baltimore) for a job interview. I thought I'd see how much Amtrak tickets are....it was cheaper to fly Southwest than to book on Amtrak! So sorry, I had to book the flight, I just cannot afford to travel by rail if it's more expensive than a flight.
The bias of this post along with the shortsightedness of some of the folks leaving comments is shocking! Personally, I don't see any difference between the Republican and Democrat parties anymore. IMO we've "progressed" to the point of having a one-party system. Now, I'm not a McCain supporter, but I do have to say that electing Obama President would put the economy under serious pressure.
The key of this whole discussion is that all of you are assuming that you will have a job. In order to have a job, corporations (gasp--yes, those evil entities that employ most of the people in this country) need to have the money to pay you. They get that money by generating a profit and through folks buying their stocks. Guess what Obama's plan doesn't help in either case.
If you start taking more money from the corporations, you are going to end up with an out-of-control unemployment rate. Just look at what has happened to the economy as a result of raising the minimum wage. What a huge mistake that was. That does nothing to encourage people to better themselves by finding a higher paying job. Instead it encourages complacency and small business cutbacks. I'm heavily involved with a small business on the side and have seen the unfortunate results of this policy.
We don't need more unemployment benefits--we need jobs. Again, that goes back to corporations having the money to hire. We don't need increased capital gains taxes because--we need to encourage saving and investing. We don't need the government to shoulder the colossal burden of nationalized health care--we need people to take care of themselves.
There is so much more to this election than just the personal tax rate. If you want Socialism, move to France. In fact, many Socialist countries are moving more towards Capitalism because they've finally realized that Socialism doesn't work. Did you know that Socialism was tried in this country when it was originally founded? It failed miserably. I wish people would see the big picture.
Long live Capitalism!
I think this was a very insightful look at some business practices.
I also don't see this as politically skewed. This is a significant reality that impacts society, I just wish more people would be aware of the real costs to others.
The first thing that came to mind reading this was the policy by Walmart to force their employees to apply for welfare type benefits and purposely keeping wages low enough for them to qualify. In essence the government is subsidizing Walmart.
I do wish more workers were aware of how incentives are dangled in front of them but the details show odds are you will never get them. That is a good thing to dig into when looking at a potential employer. If they tell you about some sort of incentive or bonus program, ask how it is figured and on what statistics. If you find that it is one of those unachievable metrics that tells you quite a bit about how that employer treats people.
Johnny,
Agreed that there are those out there who do max out everything (I'm actually one as well). However, when setting public policy, you have to look at what benefits the majority, while respecting the differing opinions in the minority. If the extra funds are used to say, oh I don't know, maybe add a personal finance class or two for high schoolers, than it benefits everyone, including other investors.
I am embarassed to admit this, but I got duped by one of those water softener salesmen people. I had friends who had bought a system an (apparently) absolutely loved it. We fell for the pitch and stupidly bought one. For the past year, the system has never worked properly, doesn't soften our water, the service people are deliberately kept clueless, the people at the office are rude and inconsiderate...
I know that I made a dumb decision, but does anyone think that I would have any recourse as to getting rid of the system? Heck, at this point, they can keep the money I have already paid them if I can just get the stupid thing out of my house...
Though I will probably vote for Obama, I'm not looking forward to paying more capital gains and dividend taxes.
@Jeff
I don't think Xin is off base. I'm sure there are middle income earners out there who invest in stocks and funds without maxing out their tax protected accounts (probably not the best idea, but I'm sure they're out there). Also, just because the majority of people don't max out their IRA, 401k/403b, etc. doesn't mean that there aren't a significant number who do. I'm sure a good number of Wisebread readers are savers who try to max out their tax-protected investment contributions AND sock a little extra into taxable accounts. Our household is well below the $150K you mention, and we manage to max out our tax protected retirement accounts and invest some extra money into taxable accounts.
Two major inaccuracies in this post:
1. Obama proposes capping the maximum capital gains rate at 25%, not 28%. (Even 28% wasn't really a "doubling" as the post states.)
2. More importantly, he only proposes raising the capital gains rate on taxpayers in the highest tax bracket. For everyone else, the rate remains the same.
See pp. 8-9 in the report your post links to.
One can't just look at the tax itself.
One must ask: what is Obama paying for with these taxes? Will I get any benefit out of it?
Part of what Obama will be paying for is some type of universal health coverage. If that will in anyway cause one to spend less on health care costs, then when doing the calculations, one should offset that cost with the additional gains expected.
Obama will use this money to help fund US infrastructure: roads, bridges, etc. Things that most people use every day and that are in sad state of disrepair in many areas.
I am not sure the total amount of these offsets, but taxes are in no way only a "bad thing". The money will go somewhere within the government: make sure it goes somewhere useful to you.
Xin,
You are completely off base on this one. For low to middle income workers, savings and investments are generally invested in tax sheltered accounts (401k, IRA, etc). There are no capital gains until you start to remove the money in retirement. When you start removing funds in retirement, they are taxed as income anyway.
I don't know many people in the sub-$150k range who can put away $19,000 a year ($15,000 in 401k, & 4000 in IRA). I know that some people don't have a 401k, but let's face it, most Americans can get out of credit card debt, let alone put away $4000 in an IRA.
Personally, I don't really care about the politics, but your blog entry was factually incorrect.
There is no bank with a free or not coin counting machine in Charlotte County Florida - I've checked. Instead, I get free coin wrappers from my bank, Wachovia, count & roll myself and turn them in for paper money.
I swap rolled quarters for paper money with my son - he needs laundry & bus money. One of my local stores loves to get rolled coins - they often post 'wanted' signs. I, too, keep about $2 in assorted coins in my purse and spend it.
I just can't fiqure out why people think using coins to pay for something is so hard or time consuming. Is it because so many have succumbed to being part of the cashless society that just uses credit/debt cards? I stick to cash except for car gas - don't like to keep that much cash with me.
This article is a fair snapshot of the candidates stated policies, but as other comments have pointed out, our nation is bankrupt. We are running record deficits, and most people ignore the fact that the money is borrowed, not just printed up on demand. We have to pay ever-increasing INTEREST on this deficit.
To make matters worse, much of this money is borrowed from the central banks of other nations, who have their own agendas.
The Government Accountability Office (don't laugh, I'm not making this up) has an excellent report called:
The Nation by the Numbers:
A Citizen’s Guide
A Summary of the FY 2007 Financial Report of the U.S. Government
Financial Condition
http://www.gao.gov/financial/fy2007/guide.pdf
Look at the green and white areas on the chart on page 3, titled "Current Trends Are Not Sustainable"
The Democrats have been accused of having a Tax and Spend philosophy, and IMHO that is much more rational than the current Republican Borrow and Spend philosophy.
While nice little wars are always fun, we have to recognize that they are a luxury that we CAN NOT AFFORD. We are going to pay for our invasion of Iraq. Our children will pay, their children will pay, and their grandchildren will pay.
I fully support Barack Obama for President.
This is truly evil to one's self, and to others around one. What good is it to be rich if one has no social life, bad relations with family members, and never has time to enjoy it?
I disagree with your conclusion. From what I've read, Warren Buffett thinks like you. He believes in (and backs up with actions) integrity, fair deals, rewarding people who have helped him, not sheltering taxes and the importance of family and friends.
Maybe that's why he's the richest person in the world instead of someone evil.
I was never able to keep an "emergency" fund that I could keep my hands off of. I tried all sorts of tricks--putting the money far away from me, keeping a change jar, having set limitations on what constituted an "emergency" and nothing worked until I discovered gold dollar coins.
To me, the gold dollar coins (not real gold, of course) are really cool. I picture me having a huge pile of them and running my fingers through them (as if they were gold coins). I like them so much I just HATE to spend them. So every time I go to the bank, I get about $10 in gold coins and add them to my collection. And there they sit. It'd have to be a really really bad emergency for me to spend them. But they're there if I need them! Great post!
You do need to grow some balls when you are haggling, especially overseas. Even if you try, and you have no cojones, basically forget it, sales people will see right through you and deny you a discount, because they know you will buy it regardless.
There's a typo in the toomuchonline.org article that was repeated here. Under Obama's plan, the middle quintile would get a boost of $1042, NOT $1402. I've already contacted toomuchonline.org about this.
Does anyone know a good book that I can find that can provide easy to understand literature about purchasing rental property. My wife and I are interested in buying a rental home this year but really don't even know where to start. The property that we are interested in buying is a new condo with a price of 160,000-200,000. Any guidance from anyone. Thanks so much.
You dope, people are responsible for littering, not the company that makes the products. I wonder what you would say about Hefty and their glad bags if a semi turned over. Wisebread is slipping hard.
I came here expecting an honest analysis of the differences. I was highly disappointed to see a thinly disguised pimping for Obama. I read political blogs for that.
Your credibility took a serious hit with me.
Electing your chosen candidate is not worth compromising your integrity on this blog. And this post is flirting with that.
Make the same type of post about McCain and I will feel the exact same way.
Sign me,
Disgusted Tonight
I am so sick of this crap! When did America become a socialist state? This article focuses on the bottom 20 percent that is not getting a bigger tax break under McCain, but do the math and you will lean that the bottom 20 percent doesn't pay the taxes. The top 1 percent of earners pays 30% of the tax burden and it trickles down from there. I’m so Pi$$ed off that people who didn’t pay into the system got a stimulus package. I'm not a big Mc Cain fan, but Obama's plan to reward the unmotivated is just what we need to launch us into an endless recession. Welcome back Carter. When are we going to focus on getting the bottom 20 percent up to the top .01 percent instead of dragging our top down?