Now the bad news: we’re all going to pay through the nose if the liberals’ favorite whipping boy – “Bush tax-cuts for the rich”(TM) – are allowed to expire at the end of the year, which will happen automatically unless Congress extends them. The Heritage Foundation explains:
We are on the precipice of the largest tax increase in United States history. On January 1, 2011, the 2001/2003 tax relief will expire. All Americans who earn income will see their taxes go up as a result (even those who work but don’t pay any federal income taxes) unless Congress acts soon to prevent this massive tax hike.
Heritage uses a hypothetical married couple with two children under 17 and $45,000 in income with $2500 in state and local tax deductions and $2500 in real property taxes. Definitely not *rich* in the usual sense of the word, wouldn’t you agree? Yet if the Bush tax cuts are allowed to expire, that hypothetical couple’s income tax would go from roughly $6500 to $9500. Yikes! Heritage also includes a calculator application that allows you to plug in your numbers and see how the tax hike will affect your particular family.
President Obama has proposed a mixture of new and old tax cuts that would keep the tax burden roughly the same (and even lower for year 1 only), but Congress hasn’t acted on that proposal. I seem to remember that the president pledged no tax increases for those making less that $250,000, so I’m waiting to see what happens to the Bush tax cuts between now and January.
But the next time you hear the phrase “Bush tax cuts for the rich” I want you to turn to the person next to you and say: “Hey, they’re talking about ME!”
UPDATE: I haven’t double-checked this, but a commenter notes that for Heritage’s hypothetical calculation to work, BOTH spouses must be earning $45,000 in income for a combined income total of $90,000.
Related posts:
- American families need relief; Extending tax breaks is one answer
- Obama, Congress to Let Bush Tax Cuts Expire; Families Face ‘Tax Tsunami’
- President’s Budget Proposal May Be Costly for Families
- Tax Day Turning Into Pay Day
- Happy “Cost of Government” Day?
July 29, 2010 at 9:27 am, DaveM said:
Bruce:
Repeating what I said elsewhere, the $45,000 in income is for each spouse. The total family income must be $90,000 for their calculations to work.
July 29, 2010 at 11:52 am, Bruce Hausknecht said:
Thanks for the correction. I’ve made a note of it in the post.
July 29, 2010 at 8:25 pm, Marilyn said:
What happens to the single elderly person who is now deducting medical costs, mortgage with interest payments, and charitabale deductions?
July 29, 2010 at 8:29 pm, Marilyn said:
Leave the taxes alone. There will be no taxes paid by those on UNmployment that President Obama has incresed again.
July 31, 2010 at 11:15 am, Ex-GOP Voter said:
It is unfortunate that the Bush administration was so reckless to pass all of these without spending cuts to go along with it. In regards to the budget, what they did was the exact same thing as raising spending with no tax change.
According to the popular logic out there, if the deficit is a top concern, I think that a smart President would have to let at least some of these expire.
I mean, Reagan upped taxes to adjust his cuts.
August 02, 2010 at 6:30 am, What Really Matters said:
What Obama said was that he wanted to find a way to keep the Bush tax cuts for the middle class but let the tax cust lapse on those making over $250k. It’s not suprising that the Heritage F would try to skew the debate by publishing misleading statistics (45k when they really mean 90k income).
It’s not taxes that matter. It’s the quality of life, the amount of disposable income you have, job security,s avings and a host of other metrics that really matter. I would gladly pay higher taxes if it meant less unemployment (more job security), less government deficit (which means less borrowing so lower interest rates, lower mortage payments and higher business expansion), better roads, better schools and less crime. Let’s acknowledge the need for government in some areas while limitiing the role of the federal government, and work to make government better and more effective instead of always making it the problem? Remember, Clinton raised taxes and the economy soared and the budeget was balanced.