It appears that the president will be forced to accept the extension of all the current tax rates. The talking-heads and others keep yammering about tax-cuts but, of course, nobody’s receiving a cut. The last tax-cuts took place in 2001 and 2003, representing a lessening of the burden enhanced by former president Clinton and a democratic Congress in 1993. Reversion to the old rates will take place in January unless the Congress acts to extend the current rates, as it seemingly will do.
Obama promised during his campaign that he would see to it that the rates reverted for only the people in the top rate (earning $250,000 or more), thus raising their taxes from 35% to 39.6% of income. Republicans have argued that this will unduly affect small-business operators, who need capital to finance their enterprises and prepare for the future. The fact that the nation is slogging along in deep recession, with an unemployment rate actually close to 20%, is proof that they mean business – or no business. Obama’s constant mantra was that the middle-class (whatever that is) deserved relief (though he promised no cut for them), while the upper class deserved to support the lower classes by paying nearly 40% of their income to government.
Thus, the tax arguments are class-related and, whether by design or not, induce class warfare. In this country, that war is not between the poor and the rich as much as between the so-called middle class and the rich. The differentiation in tax rates does what Obama said during his campaign that the Constitution neglected, i.e., redistribution of the wealth, something that would have gagged the founders. People in the middle class desire a certain life-style that they can’t afford, so through the tax system their life-style is to be subsidized by those who earn more than they, in Obama’s view.
The top tax-rate 1951-63 was more than 90% (everything over $400,000) every year. The guy who earned $1,400,000 in 1953 could expect to pay at least $920,000 in income tax, though, of course, he would figure an adjusted gross income like everyone else. This is the situation many people in this country would like to see now, the better to have life-styles they can’t afford but expect someone else to fund, using the tax system.
Current tax rates per (head of) household (adjusted gross income in dollars): 0% up to 11,950; 15% up to 45,550; 25% up to 117,650; 28% up to 190,550; 33% up to 373,650; 35% over that amount. Median household income in 2008: 52,029, income taxes – 13,007.25 less deductions. The guy who makes a million, if not 27 times as much, will still pay many times as much in taxes for the same protections and services as the head of that median household. That seems unreasonable, but the president wants to make that guy even further subsidize those who intend to live above their means on his dime by taking 39.6% of his income. The guy who makes a million will probably cough up close to 59 times as much as the head of the household earning 45,000. Just crunch the numbers, taking into account all deductions/loopholes (designed by Congress) for all parties. This is the stuff the media rarely if ever mentions.
The top tax-rate was 70% in 1980 (Reagan election) for an AGI of 215,400 and over. By 1988, while the nation prospered and the military was greatly expanded, that rate went down to 28% (29,750 and over). Reagan and the democrat Congress lowered the taxes, while George H.W. Bush and a democrat Congress raised the top rate to 31% in 1991 and Clinton and a democrat Congress raised it again to a whopping 39.6% in 1993. George Bush and a republican Congress cut it back to where it is, while the social engineers (mostly nutcase democrats and fast-asleep republicans) told every head of household he/she could own a house whether or not it was affordable, thus being the absolute and only cause of the recession as the truth set in. To his credit, George Bush tried to fight this as far back as 2003-04.
The whining middle class needs to admit that it intends to make those who honestly and legally acquire wealth subsidize their life-styles, thus putting themselves on the public dole. There’s no such thing as a fair tax though there are ways to make tax collections fairer, but until those in the middle class erase their envy and admit that they are simply trying to cadge everything they can out of those who might work harder, be smarter, take risks, or just get lucky this constant class warfare will continue.
Obama owes organizations like ACORN and the labor unions since they furnished the grunt-work to get him in office. This attempted tax rip-off of the better-off is his payback, but even many in his own party see it as foolish. This is not even to mention that Obama is surrounded by Wall Street types, did nothing to stop them from awarding themselves huge bonuses and is actually their apparatchik.
As it stands, a guy with an AGI of $260,000 has to cough up $91,000 to the government. Under Obama’s plan, he would be liable for nearly $103,000. That’s enough to give anyone pause with respect to investing in a business. Obama appointed a number of tax-cheats to offices in his administration, an indication that gaming the system is in order – like soaking the rich in the name of fairness. Disgusting!