As initially scheduled when they were enacted, the Bush tax reductions expire at the finish of the year. The Obama tax plan would extend for two years the Bush tax cuts for every person except those who make at least $200,000 a year. The GOP contends the rich will curb spending vital to financial growth if their taxes are increased. The president has a talking point of his own. According to Obama, shortage reduction and tax reductions for the affluent don’t mix. Neither shortage reduction or financial stimulus will result from either party’s tax plan, some experts believe. But the debate is suspended for now. Democrats who say they support the Obama tax plan are too afraid to vote on it before the November elections, lest they be crucified at the polls for raising taxes.
A good look at the Obama tax plan
Republicans are looking out for the wealthy constituents who pay for their reelection campaigns. However taking away their Bush tax cuts may not be the hardship being advertised. Some of the details were made evident by Bob Williams writing for the Christian Science Monitor. For one thing, the 28 percent bracket would cover a wider range of income. This was proposed to prevent those making less than $200,000 from getting a higher tax bill. This cuts taxes for even the richest taxpayers by a couple of hundred dollars. Stretching the bracket trickles upward. It creates just a little daylight for individuals who make a little more than $200,000 to escape higher tax rates. Only 1.7 percent of American taxpayers, according to the Tax Policy Center, will see a higher tax rate under the Obama tax plan. Ordinary income has nothing to do with higher taxes for the rich. Williams writes that they’re concerned with income most Americans are unfamiliar with. A boost from 15 to 20 percent in the rate on capital gains and dividends is what the rich are really concerned about. If a Republican stalemate lets the Bush tax cuts expire, the top dividend rate hits 39.6 percent.
Tax reductions: answer, or problem
Tax cuts of any kind aren’t the way to solve the economy’s problems, as outlined by Diane Lim Rogers writing on CNN . Committing to either the Republican or Democratic tax plans, Rogers writes, will result within the government losing revenue for years, keeping Americans from saving and an economy stunted within the long term. Obama has said that rescinding the Bush tax cuts for the wealthy will trim $700 billion from the shortage in a decade. Nevertheless, the cost of stretching the cuts for the rest of the population–$2.2 trillion-more than cancels out any savings. To solve the joblessness problem, Lim Rogers writes that increasing the deficit by financing public projects makes much more sense than simply cutting taxes. She also discounts the temporary nature of the tax cut strategy. A long-term approach is necessary to truly reduce the deficit. If people in politics are so afraid of losing votes to a tax increase now, she figures they can’t be expected to discover their courage later.
CS Monitor
csmonitor.com
CNN
cnn.com
