June 23, 2008

THERE'S AN EXCELLENT CASE TO BE MADE...:

The case for keeping the Bush tax cuts (DR. MARTIN REGALIA, 6/23/08, Politico)

[A]ny honest discussion on taxes must begin with an honest examination of who pays. For 2005, the most recent year for which information is available, IRS data indicate that taxpayers with an adjusted gross income in the top 25 percent of the population bore 86 percent of the federal income tax burden. If you expand it to the top 50 percent, the number jumps to 97 percent. In other words, the bottom half of the country pays a paltry 3 percent of the country's taxes. This proves, in part, the steep progressivity of the income tax system.

But what about the Bush tax cuts? They only favor the wealthy, right? Again, let’s go to the facts. Since 2000, when President Bush entered office, the share of federal tax liabilities borne by the lowest and middle quintiles has decreased, while the share borne by the highest quintile has increased. In 2000, the lowest quintile bore 1.1 percent of total federal tax liabilities compared with 0.9 percent in 2004, the year that all of the Bush tax cuts were in effect. Thus, the federal tax liability of the lowest quintile dropped 18 percent. However, the highest quintile paid 67.2 percent of these liabilities in 2004, an increase of 1 percent in their liability since 2000, when they paid 66.6 percent. Far from favoring the wealthy, these numbers suggest that the wealthy are bearing more of the tax burden

The Department of the Treasury recently released a paper studying the impact of letting tax relief expire: “A four-person, one-earner family with wage income each year of $40,000 in 2007 dollars would see a tax increase of $2,345; a four-person, one-earner family with wage income each year of $80,000 in 2007 dollars would see a tax increase of $2,000; a three-person, one-earner family with wage income each year of $40,000 in 2007 dollars would see a tax increase of $1,655; and a head of household with two children and wage income each year of $30,000 in 2007 dollars would see a tax increase of $1,615.”

More than 116 million Americans would see their taxes go up. And small businesses that pay their taxes based on individual rates (which is most of them) could see their effective rate rise to more than 44 percent.


...for making the lower classes pay for the government services they demand. Senator Obama ain't making it.

Posted by Orrin Judd at June 23, 2008 6:28 AM

If it really looks like the cap-gains taxes will jump from 5-10% back to their original levels, everyone and their brother will sell their stocks to capture their gains. Prices will fall, accelerating the selloff into a stampede. We will get to see the biggest % drop in the DOW since 1929.

Posted by: Gideon7 at June 23, 2008 12:56 PM
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