Tuesday, July 24, 2012

WAPO: What ending the Bush tax cuts for wealthy looks like


President Obama renewed his fight over the Bush tax cuts yesterday. He called on Congress to send him a bill that would let those tax cuts expire for those lucky folks making more than $250,000. As you might imagine, this didn’t go over well with Republicans.
“The president’s announcement that he plans on extending (the tax cuts), just for certain classes of Americans — what he’s really saying is that those that are job-creators and small businesses are going to see a massive tax increase,” presumptive Republican presidential nominee Mitt Romney said, “and that will kill jobs.” He added, “The president’s plan is aimed at small business and job creators. It will kill jobs in this country and hurt the middle class,”
So, that got me to thinking. What would the president’s plan looks like as a pie chart?

As the president said yesterday, letting the Bush tax cuts expire for the wealthy would not impact 98 percent of American wage earners and 97 percent of small-business owners.
“The upper-income cuts return $850 billion over 10 years to the Treasury, simply by reverting to the top rates under Clinton, when the wealthy fared perfectly well, the budget balanced, and growth was much stronger and more broadly shared than in the Bush years,” wrote Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and the former chief economist and economic adviser to Vice President Joe Biden. “The fact that these upper-income increases hit only the top 2% — and that’s considering both households and small businesses — is also important.  They won’t hurt the wobbly recovery, as these folks are not income constrained in the first place.”
Bernstein clearly articulates why I will never understand Republican reticence to help the middle class, despite rhetoric to the contrary. As E. J. Dionne points out, a key statement in Obama’s speech yesterday was, “Let's agree to do what we agree on. Right?”
By   |  03:00 PM ET, 07/10/2012

Tags:  Election 2012

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7/11/2012 1:47 PM EDT
Jonathan, these representatives fear loss of campaign financing and offer their benefactors everything they want--ever increasing tax cuts and smaller government that also decreases the tax bite. I've never seen such pandering to the dollar bill in business or politics as now. I always recall the rich mantra, "he who dies with the most toys, wins!" Toys, as in displays of wealthy. The newly rich are screwing their workers, customers and ultimately themselves by blocking job creation, better wage...See More
7/10/2012 5:27 PM EDT
But how does raising ordinary marginal income rates for the top two tax brackets help the middle class? The author never explains this? I agree with the author that it will likely harm a relatively small percentage of households in 2013. But is this the point of Obama's proposal? If so, it deserves to fail. If the point of the proposal is as part of a comprehensive plan to eliminate the long run structural deficit, then I would support it, but Obama has proposed no such plan with any degree of r...See More
7/10/2012 6:56 PM EDT
Everything is so expensive in America that few people can live a decent life. A peasant farmer in China lives better than most Americans, and millions of us make more than $250K USD. What a joke your economy has become. LOL!!!
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7/10/2012 3:19 PM EDT
As Glen Kessler pointed out:
"The Joint Committee on Taxation has determined that only 3 percent of all “small businesses” would be affected by Obama’s proposal, a point the president noted on Monday. However, that 3 percent does account for 50 percent of the estimated $1 trillion in business income reported in 2011. "
But, your pie chart is still pretty to look at.
7/10/2012 3:25 PM EDT
So I guess that makes them extremely rich small businesses. Kind of like the 0.1% they are.
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