Looks Like Trouble for the 'Other' 95%
Posted By Bobby Eberle On August 4, 2009 at 7:24 am
Posted By Bobby Eberle On August 4, 2009 at 7:24 am
Don't worry, your taxes won't go up. That's what Barack Obama has said over and over again. Wait... actually, he was just saying that about the 95% percent of Americans who are not "at the top." Apparently, he had always planned to extract even more out of the people who purchase the most goods, hire the most people, and already pay the most taxes.
But, what we are now learning is what we all believed was coming. Actually, I can't say "all," because so many people seem to have thought that Obama could cure the country's ills with the wave of a wand or the use of magic money. Well, this is real life... where massive government intervention into the private lives of Americans comes with a price. And it's a price we'll all be paying.
First, a quick look at taxes and who really pays. Late last week, the IRS released a report on the distribution of income taxes. The Heritage Foundation has a great article on it.
In 2007, the top 1 percent of taxpayers "paid over 40 percent of all federal income taxes." In contrast, the bottom 95 percent of taxpayers paid just over 39 percent of income taxes. As noted in the story, "The top 1 percent, those earning over $410,000, consists of 1.4 million taxpayers, while the bottom 95 percent contains 134 million."
Now for a little bit of historical perspective. Liberals love to say that the Bush tax cuts were only for the rich. They fail to mention that ALL tax rates were cut... with the biggest percentage cuts coming from the lower income brackets. As The Heritage Foundation points out:
In 2000, before the 2001 and 2003 tax cuts that some claim disproportionately benefited the rich, the top 1 percent paid less than 38 percent of income taxes, while the bottom 95 paid almost 44 percent. Since the tax cuts, the top 1 percent’s share increased over 2 percentage points while the bottom 95 percent’s share decreased 5 percentage points. Those that argue the tax cuts solely benefited the rich are mistaken.
Obama wants to raise taxes on those making over $250,000 per year. In essence, he wants to let the Bush tax cuts expire on the top two income tax brackets. The top rate would go from 35% to over 39%. It should outrage all Americans that there are some who are paying over a third of their income to the government, but that outrage doesn't exist because 1) too many politicians play the class warfare game, and 2) so many people EXPECT something for nothing. They feel it is right for someone else to pay their way.
Then, don't forget the health care plan. If enacted, an additional 6 percent "surtax" would be added, thus making the top rate close to 45%. I don't care how much a person makes, NO ONE should pay that much to the government.
In contrast, the bottom 40% of taxpayers pays no income taxes on average. In fact, they get money from the tax code well above anything they paid in because of refundable credits. And President Obama’s Make Work Pay credit, passed as part of the stimulus, will increase the money redistributed to these non-taxpayers.
The author makes a great point, saying, "It’s a dangerous situation when a majority of voters can get services and benefits from the government for no cost, because there is no incentive for them to limit the growth of government."
However, all of this "growth of government" will eventually hit the wall, and the so-called 95 percent of Americans who are safe will see that they are the next targets. Obama's statement was already false when you consider his programs such as Cap and Trade are essentially a tax on all Americans. Now, his team is being more direct.
As noted in a story by the Associated Press, "Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers both sidestepped questions on Obama's intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Summers said Obama's proposed health care overhaul needs funding from somewhere."
"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."
This is absolutely ridiculous! They want to raise taxes on everybody because they spent so much money trying to get America out of a recession, when, during the last recession, cutting taxes did the trick just fine. So, not only is the American public being strapped with a monumental amount of debt for future generations to repay, we will all be doing it with higher taxes.
The American people are seeing the effects of Obama's "hope and change" agenda. He is transforming America into a country many of us don't even recognize. Perhaps if Obama's plans start hitting EVERYONE in the pocketbook, they will start to pay attention. Until then, many will simply sit back and let the "other guy" pay.