Illinois house approves 2% income tax hike from 3% to 5% (the amount you paid last year will increase by about 67% assuming everything else is the same)
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Permalink Reply by Davo on
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If we were going from the (now) tax of 5%, and increase that by 2% to 7% we would get a rate increase of 39%.
So that 2% maters more when the tax is lower.
Would people care less about this increase of 2% if our taxes were really high?
Either way I still thinks that this sucks.
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Permalink Reply by Michael Perz on
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It doesn't matter which multiplier is used (actually, it does - 67% is the correct one) because people will eventually form their opinions when they either A.) figure out their new deduction using basic math, or B.) take a look at their check stubs. Only an incorrigible partisan would get all wound up about how this is being presented.
It should also be noted that the chocolate ration has been raised, not lowered, to twenty grams per week.
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How much on the dollar are those ration stamps going for?
Michael Perz said:It doesn't matter which multiplier is used (actually, it does - 67% is the correct one) because people will eventually form their opinions when they either A.) figure out their new deduction using basic math, or B.) take a look at their check stubs. Only an incorrigible partisan would get all wound up about how this is being presented.
It should also be noted that the chocolate ration has been raised, not lowered, to twenty grams per week.
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Permalink Reply by S on
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Michael Perz said:
It doesn't matter which multiplier is used (actually, it does - 67% is the correct one) because people will eventually form their opinions when they either A.) figure out their new deduction using basic math, or B.) take a look at their check stubs. Only an incorrigible partisan would get all wound up about how this is being presented.
It should also be noted that the chocolate ration has been raised, not lowered, to twenty grams per week.
Except for that people generally don't figure it out. Polls showed that something like 50% or 60% of the people in the US thought their taxes went up in 2009 and 2010 when it actually went down. I think most people tend to hear things in the news or elsewhere and never brother to do the simplest bit of checking to confirm it.
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Permalink Reply by Dan Korn on
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James:
This is really an argument about semantics, not mathematics. Both ways of presenting the data are mathematically correct, as long as it's clearly specified exactly what the numbers mean.
But my point, which you seem to agree with, is that the way the numbers are presented can confuse and mislead people.
Where we disagree is about which number is more misleading. I maintain that calling it a 66 (or 67) percent increase is more misleading, since people's overall tax burdens are going up by a mere two percent of their salaries. It's the fraction of what people earn that they usually associate with the word "percent" when it comes to taxes, not a fraction of a fraction representing the rate of increase or decrease of that percentage of their income.
You say, "If your income tax load used to be $100 monthly then your new income tax load will be $166.67 for that same period." This is true. Your total taxes, including federal and state, are going up by $66.67. That's two percent of your taxable income of $3333.33. If your federal tax burden increases by $66.67, that's still a two percent increase, whether the federal rate went from 30 percent to 32 percent, or from 10 to 12, or from 90 to 92, or even from zero to 2.
The point is that the actual extra amount of money you have to pay is the same in all these cases where the rate goes up by 2 percent, regardless of the ratio between the new and old rates. That's what matters to people, the amount of money they have to pay overall in taxes, both federal and state, because at the end of the month or the week or whatever, they get a single paycheck with all their taxes collectively withheld.
Again, going back to the extreme example, if the City of Chicago decided to institute a 2 percent income tax, up from zero now, and you calculated that increase as the ratio of the old and new rates, you would divide by zero and get a result of infinity. Would you call it an infinite tax hike? No, that doesn't make any sense because it doesn't represent any meaningful amount of money to people. Neither does the ratio between 3 and 5. It's the difference that matters.
So, you think that it's misleading to tell people it's only 2 percent because that makes it seem lower. But I think it's even more misleading to tell people it's 67 percent because that makes it seem higher, in a way that's less meaningful to the bottom line.
And to everyone who thinks this argument is pointless: Take two polls, and in one, ask people about how they feel about a 2 percent tax increase, and in the other, ask them how they feel about a 67 percent increase, and compare the differences. This is a big part of what politics is about, and the spin doctors on both sides know it. In this case, though, the anti-tax folks seem to have won the spin.
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Permalink Reply by Doug Haynes on
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It is a 2% rate hike and a 66% increase in payment.
It is an important discussion to have because language can be twisted to make the dollars and cents end of it not clear to people.
Tank-Ridin' Ryan said:We're seriously having this debate? Really?
I'm going to give everyone on this forum the benefit of the doubt that they can do elementary school math and can figure out that an increase from 3% to 5% is a difference of 2%, but the rate increased by 66%.
This thread's title really does need to be changed though. It's a 2% hike.
James Baum said:No, I am not saying everyone is ignorant and stupid -I am saying that your statement is catagorically wrong and that by sticking to it makes you look ignorant and stupid.
The tax has gone up 66%. The rate has gone up 2 points but the tax has gone up by 66% from where it was before.
Your "point" is just a talking point of the spin-doctors who are trying to make this massive tax increase sound less onerous than it really is. Saying that the taxes only went up 2% is mathematically disingenuous -or ignorant. Take your pick.
Dan Korn said:
Thanks James, that's really helpful. What were you saying earlier about the "you are all ignorant & stupid" argument?
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Permalink Reply by Tank-Ridin' Ryan on
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My mistake Doug. Reading through what I wrote again, it is misleading - unintentionally.
notoriousDUG said:
It is a 2% rate hike and a 66% increase in payment.
It is an important discussion to have because language can be twisted to make the dollars and cents end of it not clear to people.
Tank-Ridin' Ryan said:We're seriously having this debate? Really?
I'm going to give everyone on this forum the benefit of the doubt that they can do elementary school math and can figure out that an increase from 3% to 5% is a difference of 2%, but the rate increased by 66%.
This thread's title really does need to be changed though. It's a 2% hike.
James Baum said:No, I am not saying everyone is ignorant and stupid -I am saying that your statement is catagorically wrong and that by sticking to it makes you look ignorant and stupid.
The tax has gone up 66%. The rate has gone up 2 points but the tax has gone up by 66% from where it was before.
Your "point" is just a talking point of the spin-doctors who are trying to make this massive tax increase sound less onerous than it really is. Saying that the taxes only went up 2% is mathematically disingenuous -or ignorant. Take your pick.
Dan Korn said:
Thanks James, that's really helpful. What were you saying earlier about the "you are all ignorant & stupid" argument?
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Permalink Reply by Duppie on
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Oh no!, we're moving away from the perfect thread title again: The statement "the amount you paid last year will increase by 67%" is presumptuous. This assumes that this year you will have the same income/adjustments as last year. I doubt that is true for the majority of tax-filers. It certainly has never been true for me in the last 14 years
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Permalink Reply by Far'arned Retrogrumpalunkus #63 on
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The amount you WOULD have paid THIS year had the tax burden not gone up 66.6666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666%
Duppie said:Oh no!, we're moving away from the perfect thread title again: The statement "the amount you paid last year will increase by 67%" is presumptuous. This assumes that this year you will have the same income/adjustments as last year. I doubt that is true for the majority of tax-filers. It certainly has never been true for me in the last 14 years
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Here's another reason why the 67 percent number is misleading: Let's say that the legislature eventually votes to restore the 3 percent rate. I imagine the headline in Crain's Chicago Business might read, "House approves 40% cut in state income tax." And people might wonder, why did it only go down by 40 percent when it went up by 67 percent? There may even be calls to cut it by 67 percent, to undo the 67 percent increase. But it would be exactly where it was before, at 3 percent, because it went up by 2 percent and then back down by the same 2 percent, not because it went up by 67 percent and down by 40 percent. Those larger numbers, percentages of percentages, only confuse people.
This kind of spin has long been used by anti-tax crusaders, often intentionally, to confuse people into thinking that tax increases are bigger than corresponding tax decreases. Again, it's lies, damned lies, and statistics.
Duppie: The statement "the amount you paid last year will increase by 67%" is presumptuous, but not because income and adjustments change from year to year. It's misleading, if not flat out wrong, because the amount you have to pay in taxes overall, the bottom line taken out of your paycheck for taxes, is only different by 2 percent of your income, and only by about maybe 7 percent of the total amount of income taxes you pay. As an example, let's say I previously paid $30,000 in total income taxes, which is 30 percent of a $100K salary. With this 2 percent rate increase, I'll be paying $32,000, or 32 percent, in taxes. That's 6.7 percent more of the total amount of taxes I have to pay, not 67 percent more. So it's a bit more accurate to say, "The amount you paid last year would have increased by 6.7 percent." Although the specific percentage of increase in tax paid can't be calculated in a general way for everyone, because everyone pays a different percentage of federal taxes, even though the state has a flat income tax (which is regressive, but that's another story).
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Permalink Reply by h' Zerocats on
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"Leroy Jenkins!!"
James Baum said:The amount you WOULD have paid THIS year had the tax burden not gone up 66.6666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666%
Duppie said:Oh no!, we're moving away from the perfect thread title again: The statement "the amount you paid last year will increase by 67%" is presumptuous. This assumes that this year you will have the same income/adjustments as last year. I doubt that is true for the majority of tax-filers. It certainly has never been true for me in the last 14 years
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