- Jul 19, 12, 08:27 AM #1
Bush Tax Cuts Strategy for Democrats?
I heard this bantered about yesterday.
So the tax cuts expire 12.31.12 which means everyone's taxes go up in January IF there is no agreement reached.
Many Ds want to cut taxes for middle class but raise them for the highest earners.
What would happen if the Ds hold strong and let them expire (assuming the Rs do not give in to raising taxes only on the top earners)?
The discussion I heard said that there would be an immediate proposal for new tax rates (lower for everyone except the top earners).
Can the Rs vote against it? Will they be able to say to their constituents (99% of which are not the top earners) "you'll have to pay more taxes while I hold out for tax cuts for the wealthiest of the wealthy?"
That could make interesting political theater.
- Jul 19, 12, 09:15 AM #2
When you kick the can down the road and do not do 'what the American people sent you to do' we end up here.
Kicking the can down the road:
1. Tax laws that 'expire in the future' (i.e. the Bush tax cuts)
2. 'Fixing' the AMT tax that hits families who make less than $150K a year for only a year or 2 (the current 'fix' also expires this year)
3. 'Automatic' budget reductions due to the failed 'super committee'. This will devastate our military if they happen.
The law we need is one that prevents anything from being temporarily patched (AMT), or changes things in the future (Tax rates) or kicks in 'automatic' actions in the future (failed super committee).
Congress shirked its responsibility in all 3 cases above. To get them through the next election. I think it is time to ensure they have no 'next election'.
- Jul 19, 12, 09:23 AM #3
- Join Date
- May 01
It's all about spin. The R's would delay things and tie things up while appearing to work with the Dems, all the time blaming the D's for the increased taxes people would be seeing on their paychecks. Pressure would mount on both to come to an agreement. Whoever had the most $ to get their message out would win. Meanwhile we all lose.
- Jul 19, 12, 09:51 AM #4
The operative word is "Political Theater".
It's a shame that's what it is.
Why is it that the "Bush tax cuts" were demonized as only helping the rich when they were put in, but now we have to keep them for the non-rich because they help so much?
But class warfare and envy is one of the left's best weapons.
How Taxes Would Rise By Income Group
If the Bush-era tax cuts expire at year's end for all
income groups, here's how much Americans with
different annual income would be affected, on average.
Middle-Income Impact, If The Cuts Expire
1/2 = The reduction in the child tax credit.
The child tax credit would drop from $1,000
per child to $500 per child.
50 percent = The tax increase on the first $17,500
of taxable income for families and couples and $8,750
for single individuals. The 10 percent tax bracket
would disappear if the tax cuts are allowed to expire,
meaning the first $59,300 of taxable income for families and
$35,500 for individuals would be taxed at a 15 percent rate.
$1,800 = The average estimated tax increase to be
experienced by people in the middle of the income
distribution (range $33,500 to $59,500).*
95.9 percent = The percentage of middle-income taxpayers
expected to see their taxes go up if the tax cuts expire.*
4 percent = The average percentage decline in after-tax income
for middle-income households if the tax cuts expire.*
*Source: Urban-Brookings Tax Policy Center Microsimulation Model
- Jul 19, 12, 09:57 AM #5
- Jul 19, 12, 10:11 AM #6
Bush tax cuts: $544.3 billion. The package would extend the Bush tax cuts for everyone for two years.
The bulk of that cost -- $463 billion -- is for the extension of cuts for families making less than $250,000, including two years of relief for 2010 and 2011 for the middle class from the Alternative Minimum Tax.
The rest -- $81.5 billion -- is attributable to the extension of cuts that apply to the highest income families.
The cost of extending all the tax cuts over 10 years would have been $3.7 trillion.
Last edited by coldweatherfan; Jul 19, 12 at 10:35 AM.
- Jul 19, 12, 11:06 AM #7
So to a family with an AGI of $100,000 this translates into over $2,000 a year. AGI of $150,000 would be over $3,000. Those are around half a car payment.
So families well under $250,000 will pay a good amount more in taxes upon expiration.
What the Bush Tax Cut Means for You - SmartMoney.com