Election Infographic: Compare Your Income Tax Burden under Romney & Obama | Hacker News Reader

Election Infographic: Compare Your Income Tax Burden under Romney & Obama

smartasset.com

46 pointsmcarvin63 comments

Infographic is a bit dodgy. Romney's claim is that his partially outlined tax plan is revenue neutral but this thing shows just about everyone paying the same or less. That's just silly.

TPC's comparison which the Obama calculator[1] is based on clearly shows a huge increase in the middle class burden.

[1] http://www.barackobama.com/tax-calculator/

I was wondering how these numbers were possibly calculated given how little the Romney campaign has actually detailed about any of his "plans" including those for taxes. Everything his campaign has talked about seems very ambiguous.

Repeated from below: The key assumption in Obama's infographic is that "Romney eliminates all tax benefits, except those for savings and investment". To the best of our knowledge, Romney has only indicated that he will cut the expanded refundability of the Child-Tax Credit, and the earned income tax credit (EITC) - which our analysis includes. Our analysis is based on the publicly available information on their respective plans. We make no 'assumptions' to fill in gaps.

We note though that the Romney plan does not address how his proposal will be funded and reference the $2.8 Trillion revenue shortfall his plan creates.

He's specifically said the shortfall will be made up with income taxes though. You're giving him a free pass by not building those dollars into the model somehow.

Understood. As there is no reliable way to guess at who would be affected and how (ie what income levels, with dependents / or without) - we believe the most accurate way to portray the plan is with what Romney has stated publicly and the shortfall that he needs to account for (ie $2.8 trillion over 10 years).

Unfortunately the $2.85 trillion shortfall is mentioned near the very end of the infographic and so a significant number of people are never going to see it and will just go "oh, the Romney plan would save me $X" without ever understanding the bigger picture.

Romney should clearly double his claimed tax cuts, will look great. Fuck that, the optimal strategy is clearly 100% tax cuts for everyone. [1]

Also: bunnies for everyone.

[1] Your local Somali-style warlord may confiscate your family, life and property at his discretion however.

the Romney plan does not address how his proposal will be funded and reference the $2.8 Trillion revenue shortfall his plan creates.

When the plan is advertised as "revenue-neutral" yet does not detail how the $2.8 trillion shortfall will be made up, it's ridiculous to give that plan a serious treatment.

It seems highly unfair to compare an ambiguous plan (Romney's) where the only known details are the ones that make the plan look good to a more completely detailed plan (Obama's).

You actually make a huge assumption - that somehow the $2.8 Trillion shortfall is going to be addressed without altering the numbers you are reporting. At least put a prominent error bar on the Romney side of the graphic, showing the potential range of extra taxes that must occur somewhere in the Romney plan.

Interesting. What would be considered "middle-class" in America, about $50,000, would end up paying more under Romney than Obama (assuming married with 2 kids). Not what you'd expect from the party that claims lower taxes are better for the economy. On the other hand, a typical salary for people on this site, $100,000, would pay $1000 less under Romney.

Romney's plan will result in far lower tax revenues, not accounting for indirect effects. It looks like the issue you're citing is a result of a lower dependent deduction allowance of some sort, and it generally means marginally higher taxes under Romney for people with moderate income with respect to the number of dependents they have. This doesn't mean that the plan isn't well suited to promoting low taxes to helping the economy.

Also, that was a quite nicely designed site.

This seems to be inaccurate compared to the version on obama's site. http://www.barackobama.com/tax-calculator/

Does anyone have an explanation for this? Obviously all talk of future tax policy is partially smoke and mirrors, but mine shows a $4K reduction in favor of Obama on Obama's site and a $16K reduction in favor of Romney on Romney's site.

Yes. The key assumption in Obama's infographic is that "Romney eliminates all tax benefits, except those for savings and investment". To the best of our knowledge, Romney has only indicated that he will cut the expanded refundability of the Child-Tax Credit, and the earned income tax credit (EITC) - which our analysis includes. Our analysis is based on the publicly available information on their respective plans. We make no 'assumptions' to fill in gaps.

We note though that the Romney plan does not address how his proposal will be funded and reference the $2.8 Trillion revenue shortfall his plan creates.

The scariest thing about this infographic is that it made me realize that for the majority of people in any election, how it impacts their taxes is their only concern.

I would guess that the soundest strategy for any party in any country would be to lie about lowering taxes by more than what your competitor is lying about lowering taxes.

Can we keep american politics off HN when not related to tech? Flagging.

Our company's mission is to make more of the data you see helpful. This infographic is an expression of that mission. We are apolitical and simply want you to be able to interact with data that is otherwise available in a format that is easier to consume and, if we are successful, just makes sense.

As others have pointed out, your infographic is missing data (Rmoney hasn't released a detailed plan) and the design downplays this fact to hide that the numbers are likely not factual.

That does not seem apolitical.

(I'm not an American, so I am neither republican or democrate)

I initially thought this was just shilling for the Romney campaign until I saw the action button at the bottom.

Our infographic represents the universe of publicly available information, I sincerely do not believe a more factual account of what either candidate has said is possible. The only alternative would be take guesses as to how the candidates intend to augment or complete their plans. Noting that neither approach is perfect, when considering how to approach this problem we considered guessing to be inferior.

I don't see how it could calculate what my tax burden would be based on my income alone. It's not asking me if I'm self employed or if I have dependents.

Consultants like myself have to pay the payroll taxes (SSI, Medicare) for themselves as well as the employer contribution - which this doesn't mention. I suppose it's just looking at income tax?

Who do I vote for if I want to torch the current federal tax system and replace it with a federal sales tax?

Hi, we do actually take into account dependents (towards the top right of the page). Mostly for ease of use, we do make some simplifying assumptions that are noted at the bottom of the page under "methodology". For a more detailed breakdown of your federal, state, local and medicare / social security payments you can try the smartasset decision engine.

It also doesn't ask you if you participate in a 401k, have a mortgage on a primary residence, etc.

Everyone's income taxes are different. And even more than that, deductions, exemptions, and credits make the final income tax very different from simply applying the marginal rates to your salary. It's interesting comparing your actual tax paid last year to the "Current Structure" number-- it's likely significantly less.

This is just income taxes, not Medicare and FICA and Unemployment.

With Ryan on the ticket, the rest are important to look at too.

That's because both candidates won't change Medicare or FICA in any way. Wouldn't be a useful comparison.

Have you read Ryan's budget from last year? He totally wants to change Medicare, and now that he's on the ticket, he may get Romney to do it, especially if they don't look like they stand a chance at a 2016 re-election.

Ryan's budget and then follow on inclusion on this ticket might permanently kill the ability of the Republican party to elect someone to the presidency, if seniors (who vote primarily Republican) cross to the Democratic side of the ticket for their votes to protect their medicare. (Once someone has voted for candidates in both parties, they are considerably more likely to cross over and do so again in future elections).

Unemployment will most certainly be different between them.

Care to lay odds that Ryan will distance himself from his medicare proposal?

I think that's pretty much impossible the news and Congress haven't been able to shut up about "The Ryan Plan"

Ryan already tried to pass his budget in Congress. Why are you assuming that if he leaves Congress to become Vice President his budget will have more of a chance of passing?

Vs a democratic senate and democratic president is VERY different than VS a democratic senate and a republican president or all three republican.

His particular seat is not as valuable as being the brain trust and hit man in the Romney Ryan administration.

I thought I read somewhere that because of the neuroplasticity reduction in the brain as you age, that as people get older they are less accepting of change and trend towards conservatism.

I can't find a good article to back that up with, though, so ymmv.

My own anecdotal evidence is that people believe what their news sources say more than they actually crunch numbers, so because of the polarization of news along political party lines people are going to believe whatever they see or read.

I would gladly pay more tax, it just has to be fair (meaning that people earning more then me also pay more).

Agreed! But unfortunately it seems almost half the country disagrees with that :-(

To me, this has nothing to with with how much anyone else is paying. If I pay 20%, and someone else who makes way more than me pays 15%, I don't care. I would prefer

It's about what we're doing with the taxes. If the government could guarantee that all new revenue generated by tax increases would go directly to knocking down the deficit, I would be all for it. However, this would never happen. If taxes go up, then spending will probably go up, putting us (all taxpayers) further in debt. This is simply unsustainable and unfair to future citizens. I just don't trust the government to do good with more revenue.

How is it not fair? People who make more than $200,000 (about 4% of the country) pay 50% of the income tax collected in this country. 4% pay 50%! The other 96% pay 50%. That seems incredibly slanted towards the lower class to me.

Not in a historical context.

Explain what you mean by that? The first income tax was on the top 1% of income earners and created in 1913. In the 60's and 70's, top tax rates of 60-70% weren't uncommon. The history of the income tax in America has always placed a heavier burden (some may argue much heavier burden) on the high-income earners.

And may I also add that history is just history, and things aren't automatically good or bad because we did them in the past. The country is pretty tolerant towards Wiccans given the historical context of the Salem Witch Trials, but that hardly means that we should re-institute witch burning just because it's the historical context.

Hahaha. Great point. Going to use that the next time someone brings up the Bill of Rights or the founding fathers.

You're just looking at the income tax. You have to look at all taxes.

I'm sure people who make more than $200,000 pay all the gift tax as well, as well as all the estate tax, all the yacht harbor fees, and a good portion of all income from the AMT.

You're comparing numbers that can't be reasonably compared. Yes, one is small and one is large, but that's meaningless. To illustrate why, let's make things simple.

Assume a society with two people. One person, Adam, has income of $100 and the other, Beth, has income of $10. Set the tax rate (flat tax here, libertarian wet dream) to be %10.

So, Adam pays $10 and Beth pays $1. Adam is 50% of the population, but pays almost 91% of the taxes! That is literally the comparison you made in your comment, percentage of the population versus percentage of the taxes.

The comparison that would actually mean something would be percentage of the income versus percentage of the taxes. For this, we can get numbers from a variety of places, I grabbed the 2003 income inequality data from Wikipedia. Turns out, that top 4% of the country that you're talking about (at least in 2003) earned 55-60% of the income (the data I used don't allow an exact figure for the 4% number).

Now those numbers are a little closer together, not so likely to cause outrage, wouldn't you say? That group paid 50% of the taxes and earned about 55% of the income.

Let's say you make twice as much as me. Would it be fair to charge you twice as much for a restaurant meal or a gallon of gas or a haircut, just because you make twice as much? Of course not - for any other good or service, your income is irrelevant. So why are payments based on income 'fair' when it comes to government services?

I'm not saying a progressive income tax isn't necessary, but calling it fair is laughable. For once it'd be nice to hear a politician say "we realize that whether your tax rate goes up a few percent or down a few percent, you're still going to be paying a whole lot of money for the same government services a good portion of our nation gets without paying a dime - and we appreciate that."

What you just cited isn't a progressive income tax, it's a flat tax. Twice as much income -> twice as much tax. So we both pay, say 0.01% of our income for the haircut. So are you saying that even a flat tax is unacceptable?

As to your point about people getting government services without paying, the chief reason for that is that if we demanded that everyone pay we'd either end up giving their money back to them or letting them starve in the street. So they just get to keep it, which is easier to administer.

And no, no one owes you a big "thank you so much" for paying taxes. Your "thank you" comes in the form of that big paycheck you got thanks, in part, to the government and the society creating an atmosphere in which success can be rewarded.

It has been pointed out before that if you are truly looking for a libertarian country, you should move to Somalia. How much money do you think you could may there?

Read my comment again, where I said "I'm not saying a progressive income tax isn't necessary..."

How do you get "are you saying that even a flat tax is unacceptable?" out of that, given that I said exactly the opposite?

The issue is entirely with the word 'fair' and the rhetoric around 'fair share'. Progressive income taxes are not remotely fair by any sane definition of the word, whether they're necessary or not.

It's fair because wealthy people cannot exist without a society constructed in such a way that allows them to acquire large amounts of wealth. In the natural state, you can only "own" as much as you can defend. It's society that allows one to accumulate wealth because the burden to protect it is distributed. Simply put, its fair because those government services you speak of disproportionately benefit the wealthy.

Taxing income is just an efficient way of taxing wealth i.e. what's left over after people pay for basic needs.

The top 4-5% have 60%-65% of the wealth yet pay only 50% of the income tax assuming your data is correct (wikipedia says top 5% pay 59% of income taxes). Other taxes(FICA, etc.) are often regressive. The top 5% pays just 44% of all Federal taxes.

This suggests that the tax code favors the wealthy if anything.

http://en.wikipedia.org/wiki/Wealth_inequality_in_the_United...

Of course the richest Americans pay the largest share of the income tax. They are the richest, so they have the most income to tax!

"Fair" in this context is referring to the percentage of your income paid as tax. It is not "fair" is someone richer than myself pays a lower rate than I do. It is of no comfort to me that the dollar amount they pay is higher than me if the rate itself is lower.

Just by itself that fact is useless. If those 4% have 99% of the income, then you can easily argue that that is not fair.

Live on $30k - $2600 a year and tell me that the tax system favors the poor.

Your statement is misleading. If those 4% of the country are paying 50% of taxes because they are taking home 50% of the money made last year, that seems exactly fair!

They aren't. Not even close.

You are either being intellectually dishonest or you suffer from innumeracy.

The richest 5% will always pay more than 5% of the taxes. The only way they wouldn't is if everyone made exactly the same amount of money.

Instead of worrying so much about the group of people who control the majority of the wealth in this country, maybe it would be better to focus on increasing the wealth of the 30% of this country that is near poverty.

it's funny how any narrative about taxes comes down to self-centeredness and selfishness

this is true of tax payers and it's true of governments who want the tax revenue

i for one am happy to pay more taxes if it controls the deficit and means we get good public services

I think it's because (as this kind of tool shows) you can easily quantify the direct effect on your pocket, but the loss to services and the effect of the public deficit is a vague, unknown, and unmeasurable thing. Because there's no way to see how your bus schedule will change due to the tax cuts, people can't relate to it.

Taxes empower governments to undertake grandiose things like wars and large scale programs, and to avoid taking responsibility for past spending mistakes.

Consider how dishonest and corrupt our politicians are, and how apathetic and disempowered our electorate is... Most Americans pay very little in taxes and receive more in government services than they pay in taxes. These are the Americans who support the wars and the massive grandiose programs.

The small percentage of Americans who actually pay taxes are accused of being greedy, etc... all so that we can have wars and spending without accountability.

The entire system is set up to help powerful interests stay in power and to reduce voter empowerment. It's absurd that for something like healthcare so many people feel empowered by trusting a Federal/Corporate program to control the market. Maximum empowerment would result from things being handled at the local level, so that results and approaches could be compared across cities, states, etc.

Doing "most" things at local level is actually as much of a problem as a solution. There are definitely cases where it helps, but there are plenty where it doesn't:

Consider local school boards, etc. Finland is the current darling of education reformers who cheerfully cite all kinds of features of the Finnish school system while ignoring the fact that it's _centrally controlled_.

Similarly, the world has tried lots of different healthcare systems and the one thing that seems to have been discovered is that having lots of different healthcare systems is a Bad Idea (don't do single payer AND private AND pay as you go ... pick one dammit).

Then there's the 50,000 or so different law enforcement agencies in the US -- with overlapping jurisdictions, powers, responsibilities, and so forth.

9/11 occurred, in part, because the FBI didn't share information efficiently with the CIA, and the "solution" was to create several new organizations (Homeland Security, TSA, Office of Information Awareness, etc. etc.)

Local governance isn't a silver bullet any more than central control. Horses for courses.

I think the things you're mentioning are generally all good things. Why? Because without different approaches there is not really any way to use the scientific method to improve upon things.

Suppose we're baking a pie. With your preferred approach, the Federal government bakes one pie. Ingredients are added according to the corrupt interest of all the legislators, and eventually the pie is finished and served to everyone.

Since the pie was such a massive Federal undertaking, supporters of the Government's approach are expected to blindly support the chosen recipe, claiming it's delicious and perfect as-is. Detractors, having also spent much political capital, are inclined to criticize every aspect of the pie, even the good parts.

If on the other hand each state were baking a pie, we'd have 50 different recipes to explore. Maybe one state gets the crust just right, another the filling, and three others manage to increase the average portion size, etc.

Now we have 50 different experiments that nobody has spent a lifetime of political capital building, which can all be improved. If one state serves its citizens lousy pie, they'll talk to their friends in other states and start demanding more from their elected officials.

Notice how George W. Bush sold the war in Iraq. The US had to act fast, and had to make a big commitment to the cause, without worrying about evidence to the contrary. Notice how nearly everyone was "with us or against us", leaving no room for debate or reasoning. The same kind of grand approach must be used to do anything at the Federal level. By necessity it becomes 80% propaganda, smoke, and mirrors.

Things like local school boards must cater to the people they serve. You can look at the thousands of different school boards and see something that appears messy in comparison to George W. Bush's oversimplified sales pitch for the Iraq war or Obama's oversimplified pitch for Federal health care, but you might consider looking at it more optimistically. School board members are directly accountable to the people who elect them.

Is this the plan that cuts 90% of budget from everything except for defense by 2050? http://www.theatlantic.com/business/archive/2012/03/the-wors...

Slick design, I like the fixed headers and sidebars.

Many thanks from the design team.

Very different numbers than a similar calculator the Obama campaign emailed me a month ago or so. Go figure.

It's unclear to me how this was calculated. But the Obama campaign estimates were based on some assumptions: 1) That Romney's ultimate budget would not increase the deficit 2) That the base tax rate would not be raised under Romney 3) Finding the necessary cuts to tax deductions* to satisfy the previous two conditions. (basically, estimating the tax changes necessary to satisfy all campaign promises made by Romney).

So it's unclear to me if the data being presented on this website is only comparing how the base rate would change without considering how the overall rate would change when including the various deductions.

Secondly, another reason for this difference, is that the Obama campaign usually talks about the middle class (married family with income ~$50,000) while the default settings for this website are for a single person making $100,000 (i.e. typical young professional in computer science).

*I don't know if this is the right word, but if you are married with children, or bought a home within a certain time frame you would normally get a small refund or deduction to your tax rate for having met these criteria. So cuts would be made to the various refunds/deductions, ultimately increasing your overall rate.

This one doesn't factor in the Romney's contradicting claim that his plan will be revenue-neutral. The Obama calculator does.

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