Obama will tax the middle class while pretending to tax only the rich

Discussion in 'Politics' started by Trajan, Apr 18, 2011.

  1. Trajan
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    Trajan conscientia mille testes

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    And he won't be the first to do so. Because, as the article states and Willie Sutton would rejoin- "thats where the money is".

    I clearly remember Clinton getting spanked by even the NY Times for raising taxes in 93 that hit the 'middle class'. We'll see how this works out.


    Where the Tax Money Is

    Obama targets the middle class while pretending to tax only the rich.

    snip-
    Since he's asking, imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%.

    But it's still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit.
    The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that's where the big money is.

    [​IMG]



    snip-
    he top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the "millionaires and billionaires" Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

    snip-
    Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That's five times Mr. Obama's 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.

    This is politically risky, however, so Mr. Obama's game has always been to pretend not to increase taxes for middle class voters while looking for sneaky ways to do it. His first budget in 2009 included a "climate revenues" section from the indirect carbon tax of cap and trade, which of course would be passed down to all consumers. Such Democratic luminaries as Nancy Pelosi have often chattered about a European-style value-added tax, or VAT, which from a liberal perspective has the virtue of applying to every level of production or service and therefore is largely hidden from the people who pay it.

    Now that those two ideas have failed politically, Mr. Obama is turning as he did last week to limiting tax deductions and other "loopholes," such as for mortgage interest payments. We support doing away with these distortions too, and so does Mr. Ryan, but in return for lower tax rates. Mr. Obama just wants the extra money, which he says will reduce the deficit but in practice will merely enable more spending.

    Keep in mind that the most expensive tax deductions, in terms of lost tax revenue, go mainly to the middle class. These include the deductions for state and local tax payments (especially property taxes), mortgage interest, employer-sponsored health insurance, 401(k) contributions and charitable donations. The irony is that even as Mr. Obama says he merely wants the rich to pay a little bit more, his proposals would make the tax code less progressive than it is today.


    more at-

    Review & Outlook: Where the Tax Money Is - WSJ.com
     
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  2. LordBrownTrout
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    LordBrownTrout Gold Member

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    Another hidden tax that will come--inflation.
     
  3. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Trajan nails the Big Government Real Tax Agenda: Push tax increases across the broad working middle class who do not have the mobility of the rich.

    The top rate on The Rich used to apply to incomes in excess of $5M in 2011 dollars. Now, the national debate is around those making over $250K. With high inflation, this level of income will quickly erode in terms of purchasing power so that in a decade or two, it will be middle middle class.
     
  4. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Inflation is a FEATURE of a two phased tax increase agenda:

    - Increase the rates
    - Wait for inflation drive bracket creep to force more people into higher tax burdens

    It worked FABULOUSLY with AMT.
     
  5. uscitizen
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    uscitizen Senior Member

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    Inflation is not a tax, but mostly a result of the corporate world and speculators.

    Of course the question is will wages go up to match inflation.
    They have not been for a decade or so.
     
    Last edited: Apr 18, 2011
  6. LordBrownTrout
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    LordBrownTrout Gold Member

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    It's a shell game. The fed has to recoup those trillions out there to stay solvent. At least that's how it has played out in the past. However, I dont know how it will play out with the current kabuki theatre in office.
     
  7. uscitizen
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    uscitizen Senior Member

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    The old rules do not apply the same now that we are in a global economy and are primarially a consumer based economy.
     
  8. LordBrownTrout
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    LordBrownTrout Gold Member

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    AMT. I'm glad that you brought that up. Man, that sure has been snaring more and more people. And here we were all told that the AMT was for the rich to pay a little more.
     
  9. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    B'loney. The Fed's money supply policies have a significant impact on inflation. The money supply has been increased (QE). Combined with the debt crisis and Obama's horrible handling of national security, the dollar has been damaged as a holding currency. There is a flight to commodities as a hedge against inflation and the weakness of the U.S.

    With 20%+ under and unemployment, the unfavorable demand vs. supply dynamic for labor will not increase wages to keep up with inflation. It's telling that the official federal rate of inflation grossly understates the real impact on middle class consumers. It overweights housing, and makes adjustments for the increased value of technological gadgets. Food and energy hit the poor, working, and middle classes - but the government ignores the real cost of living hit.

    And, the Federal Government will continue to not properly adjust tax brackets so that more and more people will be subject to the higher rates in the event they do improve their incomes.

    Yes - Inflation is part of the tax policy.
     
  10. NYcarbineer
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    NYcarbineer Diamond Member

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    For an interesting picture, juxtapose this conservative complaint with the conservative complaint that 47% of households are paying no income taxes.
     

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