Sunday, October 05, 2008

The Obama Tax Plan

Let's try to understand what the Democratic tax plan really means but cutting through the double talk that most of the electorate cannot understand.

"Middle class families will see their taxes cut – and no family making less than $250,000 will see their taxes increase."
The key phrase to interpret here is "no family." This means that single individuals and perhaps those married couples without children will see a tax increase.

"Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s."
The key phrase here is "tax rates." It doesn't state that these "families" will not pay more taxes, only that their tax rate will be rolled back (increased) to the pre-Bush tax cuts. This is a tax increase but you can see the slick words that can make people believe there will not be a tax increase for these families.

"Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility."
This is a classical socialist mantra - that the money you earn belongs to the government. That any tax reduction is really the government giving you money. The real truth is that the money you earn belongs to you. Keeping more of it after taxes is not a benefit that the government bestows on you.

"In fact, dividend rates would be 39 percent lower than what President Bush proposed in his 2001 tax cut. "
This is double talk for dividend rates will go up.

"...his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000."
In this sentence, "changes" means increase. People making over $250,000 are the most likely to reinvest in businesses that will create jobs. Obama is saying that we don't need that job creation stuff.

"Fairness" is a phrase that socialist use that means those with more should pay more. Here are some statistics from the IRS on individual tax returns from 2006:
Those with adjust gross incomes of $200,000 or more pay 53.2% of personal income taxes.
Yet these people represent only 4.4% of all tax returns filed. Yes indeed, 53.2% of the taxes are paid by only 4.4% of people.
The average tax rate for those same people is 25.9% of AGI. The average tax rate for those earing less than $200,000 is 11.8%. Yes, indeed, the Obama middle class has a tax rate is less than half of the upper class.
I don't quite understand where the fairness is in all this. Isn't that enough "fairness?" I guess I just don't understand the definition of fairness.

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