Wednesday, 17 October 2012 08:00

So He Won. What Did He Win?

After a convincing and unprecedented win in the first debate by Romney, we all knew that Obama would have to make up a lot of ground in the second debate.  We saw a taste in the Vice-Presidential debate between Joe Biden and Paul Ryan.  Personally, I thought Obama would use Joe's performance to recalibrate his own in order to achieve the right level of excitement without going over the top.  I guess that didn't happen...

Obama came out on the attack and Romney rose to match him.  It was an ugly affair, but I don't think Romney had much of a choice but to match Obama's rhetoric and pace.  Of course, all of that is commentary on style, but then again perhaps that's the only reason some folks thought Obama won.

So, what exactly did Obama win?  The CBS News poll shows that 37% of respondents thought Obama won the debate overall, 30% thought Romney won, and 33% hailed it a tie.  It's within the margin of error, but let's give it to Obama.  A 7-point victory still pales in comparison to the 24-point victory Romney garnered in the same poll for the first debate.  It's doubtful even on face value that the 2nd debate will halt or turn around the momentum Romney is enjoying at the moment.

If you look at the "crosstabs" of the poll, you'll find even more devastating news for Obama.  While he barely edged out Romney among people who thought he "won" the debate, it's a completely different story when you go issue-by-issue.  When looking at the other questions within the poll, we find that while folks may have thought Obama won the debate (style), they gave Romney the nod when it came to issues (substance).  Romney won huge points over Obama on the Economy, besting him by over 30 points (65%-34%)! Romney logged similar wins among debate-watchers for Taxes (51-44), the Deficit (59-36), Leadership (49-46), and even Obama's signature territory - Healthcare (49-46).

I would credit him if I could find the article again, but one commenter suggested the result of this poll was like one team scoring all the points, but the other team winning because they looked good in their uniforms.  The Democrats are all out metaphorically carrying Obama through the streets on their shoulders celebrating a "big win".  However, the folks out there aren't going to vote for someone based on how they did in a debate, but where they stand on the issues.  An old phrase echoes in my ears - "It's the economy, stupid!"

Published in Blog
Tuesday, 25 September 2012 12:00

Tax Brackets vs. Effective Tax Rates

The democrats have been successful at focusing the mainstream media on Romney's taxes. They've also been successful at either lying or at least deceiving voters when they talk about middle class citizens paying more taxes than Romney. It is true that Romney's income generally falls in a lower tax bracket, but in reality most middle class Americans pay a lower effective tax rate than Romney.

Let's sort out just how our tax system works. Capital gains (money you make on investments) is generally taxed at a rate of 15%. Ordinary Income (the money you earn from working) is taxed at different levels with brackets from 10% to 35%. The press keeps alleging that Romney pays less taxes than most middle class folks because his income is virtually all from capital gains.

I'll focus on that 15% mark so we keep our comparisons "apples-to-apples". To keep things simple, I've eliminated all the calculations, but you can find many online calculators to check my numbers - like the one here

Your effective tax rate would be 15% if all of your income was all salary and you had nothing other than the standard deduction as follows:

  • $62,500 - Single - 25% tax bracket (Ranks in the top 38% of US total household income)
  • $125,000 - Married, filing jointly, no children - 25% tax bracket (Top 16%)
  • $143,500 - Married, filing jointly, 2 children 28% tax bracket (Top 12%)

If your income is all from salary, you give 10% of your income to charity, and have $3,000 in mortgage interest that you deduct, your effective tax rate would be 15% with the following gross income levels:

  • $74,000 - Single - 25% tax bracket (Top 30%)
  • $139,000 - Married, filing jointly, no children - 25% tax bracket (Top 13%)
  • $162,500 - Married, filing jointly, 2 children - 28% tax bracket (Top 9%)

At the above numbers, your income would be taxed at the exact same 15% whether your income was either 100% salary or 100% capital gains.

As you can see, a rewarding income could be earned without exceeding an effective tax rate of 15% and still filing one of the simplest income tax return forms. For comparison, the median houshold income in 2010 was $49,445.

So, the press is misleading voters in saying that Romney pays a lower rate than most of us. He pays about what the mid-section of America pays, but as a broader point, how many Americans put almost $2 million into the government coffers last year? Not many, that's for sure. Romney certainly paid for government services that go to a lot of folks not paying any taxes at all.


Tax Bracket: Based on gross income, this represents the rate at which you would be taxed on your Taxable Income.
Taxable Income: This is the amount your tax rate would be applied to and is calculated by subtracting any deductible items from your gross income.
Effective Tax Rate: This represents the actual amount of taxes you paid as compared to your gross income.

Bracket Breakdown

 Bracket  Married, Filing Jointly  Single
10% $0 – $17,400 $0 – $8,700
15% $17,400 – $70,700 $8,700 – $35,350
25% $70,700 – $142,700 $35,350 – $85,650
28% $142,700 – $217,450 $85,650 – $178,650
33% $217,450 – $388,350 $178,650 – $388,350
35% Over $388,350 Over $388,350
Published in Blog
Monday, 24 September 2012 18:00

How Can That Many People Be So Wrong?

So I was looking at Real Clear Politics online and saw that Obama is currently leading Romney in their poll average 48.6% to 44.9%.  They show Obama leading in 11 out of 12 of the top battleground states by a margin of 1% to 8.9%.  Intrade has Obama with a 71.6% chance of being re-elected.

Today is September 24.  There are 43 days until the election.  We have just been through a busy news cycle over the last couple of weeks in which a U.S. Ambassador was killed in Libya under circumstances that point to ineptitude by the administration.  While Romney made a statement about 47% of the country not likely to vote for him, Obama called the death of our Ambassador and the surrounding unrest "bumps in the road".

Unemployment remains over 8% and his inauguration day remains the record for lowest unemployment during Obama's reign.  There has been no appreciable rebound in the economy for the average American, and our debt has increased astronomically and sits at over $16 Trillion.  Welfare rolls have doubled under Obama with Food Stamps approaching similar numbers.  The dollar is declining, median income has declined every successive year in his regime, and we're facing the largest tax increase in the history of the world come January.  Even though our law requires it, there has not been even one budget since Obama took office.

Obama's campaign has recycled the promises and rhetoric from the '08 campaign and he even made the statement that he couldn't change Washington from the inside.  In essence, his campaign statements have amounted to, "it could have been worse".

So, why would Americans be at a point right now where they prefer Obama to continue being our President by a margin of almost 4%?  Perhaps the question is, "do they really?"  Knowing what we do about the accomplishments (or lack of) of this administration how is it conceivable that a majority of Americans in any poll could favor Obama over nearly any other candidate?  Perhaps it is because the polling is skewed.  As blatantly portrayed in the image above, most of the main stream media no longer hides their love of Obama.  Most of the pollsters are lefties.  If you're the one creating the poll, you have certain leeway to skew it to your ideology without most people catching on.

Rasmussen, who is regarded as the most accurate pollster, has the race much closer.  When you get into the cross tabs, you'll find that more people polled say that they'll definitely vote for Romney than those who will definitely vote for Obama.  At this stage in the 1980 campaign between Reagan and Carter, the pollsters had Carter ahead of Reagan by 4-8 percentage points.

Perhaps the polls are a result of wishful thinking by the left, or perhaps they're moderately accurate.  We hope (and there are plenty of indicators to back it up) that the polling is simply padded for Obama.  After all, how could the people we live and work with be so willingly ignorant?  But, if the numbers are even close, how can that many people be so wrong?

Published in Blog
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