Most of the losses that occurred in the stock market during the last year of the Bush administration have recuperated...it's the "working" American's economy that still suffers.
Stocks on the DOW JONES are up 64% since capital gains taxes were reduced nine years ago in 2003, to one of the lowest tax rates in U.S. history. As Mitt Romney said, he's not going to worry about the rich, they've been doing very well.
But if the Bush tax cuts expire later this year, what would it mean for you?
According to the New York Times, someone earning $25,000 a year ($481 a week) could see $17 less in their paychecks every week by the end of the year if the Bush tax cuts were allowed to expire. The Washington Post calls it “taxmageddon.”
The marriage penalty for joint filers will spring back to life, the value of the child credit will drop from $1,000 to $500, and the rate everyone pays on the first $8,700 of wages will jump from 10 percent to 15 percent - and the Social Security payroll tax will pop back up to 6.2 percent from 4.2 percent. (New York Times: The Expiration of Bush Tax Cuts)
It's being touted as "one of the biggest tax increases in U.S. history", but millionaires and billionaires weren't complaining a decade ago when Bush lowered their capital gains taxes from 20% to 15% (as well as their top marginal rates), making it one of the biggest tax decreases in U.S. history.
For every million dollars CEOs, hedge fund mangers and bankers earned every year for the past 10 years, they paid $50,000 a year less in taxes...a windfall.
But not if the Democrats just tax the super-rich; then most people (99% of all working Americans) won't see their taxes go up.
White House officials say Obama will not sign another full extension of the Bush tax cuts, as he did in December 2010 when the Republicans held unemployment benefits hostage for the tax breaks for the rich. Obama is demanding a partial extension that would preserve the cuts for middle-class taxpayers, but permit rates to rise on household income over $250,000.
The Republicans say they doubt Obama would make good on his veto threat for allowing all of the Bush tax cuts to expire because it would harm middle-class taxpayers (another hostage situation?)
But there's broad support for the Democrats latest tax strategy, which emphasizes higher taxes just for people earning a million dollars a year (not a NET WORTH of a $1 million, but on those whose paychecks are that large every year).
A recent Washington Post-ABC News poll found that 72% of Americans support raising taxes on people with incomes over $1 million a year, in line with Obama’s call for a “Buffett Rule” that would require those people to pay an "effective" tax rate of at least 30%, which is actually lower than the 35% "statutory" tax rate.
Currently, those earning over $1 million a year, usually do so with loopholes such as capital gains and carried interest, and only pays a very low 15% tax rate.
Senator Charles E. Schumer (N.Y.), the #3 Senate Democrat and the man who came up with the idea of raising the income threshold, agrees with most Americans, and said, “Most Americans share our belief that, while the middle class should not pay an increase in taxes, the wealthiest among us should.”
The rich have enjoyed a tax holiday for decades, ever since capital gains were first taxed preferentially going back to 1921. The top 1% was not taxed as earning ordinary wages.
Many Republicans maintain that they would never raise taxes on a group the GOP views as small-business owners and “job creators.” But those people rarely earn over $1 million a year, and like Mitt Romney, are not "job creators". Hedge fund mangers make multiple millions every year, and might only hire a secretary and a go-for guy. (The last I heard, Paris Hilton only had seven "employees".)
If Obama is re-elected and the Democrats hold the Senate, it makes it much more difficult for Republicans to press for a full extension of the Bush Tax Cuts for the rich (so if you don't earn $1 million or more every year, it would be wise to vote for all Democrats.)
Some Republicans would be willing to raise taxes, but only if cuts are made to programs that the elderly, the sick, and the poor need. (Another hostage situation?)
The Republicans created a massive deficit under Bush, and now expects the poor and middle to "put more skin in the game". Social Security, Medicaid and Medicare may come under the budget axe.. The vast corporate military industrial complex may no longer be able to get whatever it wants. Taxes may have to rise from their recent levels, which have been lower, as a share of the economy, than at any point in the last 60 years
But with rising poverty and low-wage part-time jobs for millions of Americans, the Republicans still insist that they "put more skin in the game", rather than just claw back some the excessive wages and bonuses that the CEOs, hedge fund mangers and bankers have been enjoying for the last ten years.
No, after decades of low tax rates and loopholes for the rich and large corporations, we won't pay down the national debt any time soon...but we can at least start with Obama's tax plan for the time being. It took years to dig the hole, and it will take time to fill it back in.
Mitt Romney likes Paul Ryan’s plan, which would cut the top rate to 25%, from 35%. Romney would cut the rate another 20%, while leaving his own capital gains tax rate the same, at the astoundingly low 15%. (Is that the "shared sacrifice"?)
What’s missing from these tax plans is any detail on which any proposed tax loopholes would be eliminated. Corporate lobbyists, like those at the Business Roundtable, offer an especially telling contrast: they urge the government to "reform" the tax code, while continuing to push for loopholes that benefit them -- and generally refuse to name the loopholes they would close. (Isn't that like signing a blank check?)
If Mr. Obama wins re-election, he and his aides say, he will not extend all the Bush tax cuts, as they agreed to do in 2010. Instead they plan to insist on a deficit plan that combines spending cuts with higher taxes for the affluent, who have received the largest tax cuts in recent decades.
The so-called Buffett Rule, a focus of President Obama’s last week, is a model for such a tax system. It does not specify which tax breaks would shrink for households with more than $1 million in income, but rather caps the total value of such tax breaks.
I would also suggest that we end the CAP on Social Security taxes that the very rich are not obligated to pay on 100% of their income (like most of us must), but they never mention this...why????
The baby boomers are retiring, and health care is getting more expensive. The era of super-low taxes and corporate loopholes can't last forever, unless they pay the young nothing for their labor, and then exterminate them when the become elderly. (Soylent Green).