TW: The Republicans have done a great job demonizing taxes for the wealthy. Obviously demonizing taxation is not the hardest task in the world. Obama not surprisingly is being attacked as a socialist or worse for proposing to return the tax code almost but not quite to where Bill Clinton left it in 2001.
Republicans run against taxes for better or worse, if and when they run against taxes AND propose spending cuts to one or more of the big three US spending programs (defense/homeland security, social security and health care) I would consider other than cynical hacks.
The Obama proposed tax changes are neither radical nor new. They kinda raise marginal tax rates on income over $250K. Kinda because the AMT is also eliminated and folks with incomes in the $250K range are the ones frequently most impacted by AMT.
The "good" news is that folks making $250K plus will only see a $2-5$K increase in taxes on their first $100K of income over $250K. Yet the Republicans are and will squeal like stuck fat pigs. One could give up and say why should Obama bother, but then that would be taking the easy way out just like the Republicans have for a long time.
From Dan Gross at Slate:
"It consists largely (but not exclusively) of returning marginal tax rates to their levels of 2001, before Gerson and the epically incompetent Bush administration of which he was a part got their hands on the reins of power. Obama wants to let marginal rates for families with taxable income (not total income, but taxable income) of more than $250,000 revert from 33 percent to 36 percent, and to let the top rate—currently 35 percent on family income above $357,000—revert to 39 percent. (Here are the current tax tables.) There's also talk of capping—not eliminating, but capping—deductions on charitable giving and mortgage interest.
...Obama's proposals don't mean the government would steal every penny you make above the $250,000 threshold, or that making more than $250,000 would somehow subject all of your income to higher taxes. Rather, you'd pay 36 cents to the government in income taxes on every dollar over the threshold, rather than 33 cents.
...this return to 2001's tax rates was actually part of the Bush tax plan. The Republicans who controlled the White House and the Republicans who controlled the Congress earlier this decade decreed that all the tax cuts they passed would sunset in 2010. They put in this sunset provision to hide the long-term fiscal costs of the cuts. The Bush team and congressional supporters had seven years to manage fiscal affairs in such a way that they would be able to extend the tax cuts in 2010. But they screwed it up. Instead of controlling spending and aligning tax revenues with outlays, the Bush administration and its congressional allies ramped up spending massively—on two wars, on a prescription drug benefit for Medicare, on earmarks, etc. Oh, and along the way, they so miserably mismanaged oversight of Wall Street and the financial sector that it required the passage of a hugely expensive bail
...we know from recent experience that marginal tax rates of 36 percent and 39 percent aren't wealth killers. I was around in the 1990s, when tax rates were at that level, and when capital gains and dividend taxes were significantly higher than they are today."
http://www.slate.com/id/2213029/
No comments:
Post a Comment