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Tue Nov 13, 2012, 10:02 PM

Help Me Compose Response to My Sister-In-Law Regarding Right-Wing Propaganda on Obama Tax Rates She

sent out.

Here's the graphic she emailed under the title "Heres how much your taxes are going up under Obamas new tax code. No one is spared!"



Here's what I've composed so far. Please offer suggestions and fact-check it. Others might want to cut-and-paste what we come up with for their own use:


This is extremely misleading. The graphic identifies "average increases." Average increases in what? I ASSUME they are referring to income taxes after going off the "fiscal cliff," but I don't really know since it doesn't say. Total tax burden? The payroll tax holiday was always meant to be temporary and almost assuredly will not be extended - this is mainly because of Republican opposition. This tax holiday was going to expire no matter who became President.

We simply don't know what Congress and the President are going to do about the fiscal cliff, so, in a sense, there really is no "Obama's new tax code." We can assume that they WILL do SOMETHING. The Jan. 2013 triggers were agreed upon by BOTH parties, as a way to strategize with each other and to push off dealing with it into the future. They will almost assuredly end up pushing some more stuff off into the future again. Obama already allowed the Bush-era tax breaks for the extremely wealthy to be extended before, promised not to do, and is under TWO election mandates to end them.

From ABC News, scenario for the pre-election Obama tax intentions and the worst-case scenario for the "fiscal cliff," (for which BOTH parties are responsible):

Scenario: Obama Wins

In an Obama tax world, 95 percent of families will pay the same amount of income tax as they do now. Their tax rates will stay the same and their deductions will be largely unchanged.

But for the 5 percent of American families who earn more than $241,900 per year, Obama's tax plan means a fairly substantial tax hike.

Individuals earning between $200,000 and $500,000 will pay about $3,300 more in federal income taxes in 2013 than they did this year. Millionaires will pay an additional $184,600 per year, on average, according to an analysis by the nonpartisan Tax Policy Center.

The Details:

Obama's tax plan extends the Bush Tax Cuts for all families earning less than $241,900, but lets the cuts expire for families earning more than that. The tax rate on income between $241,900 and $390,050 will be 36 percent, or 3 percentage points higher in 2013 than it was in 2012. Couples who earn more than $390,050 will pay a 39.6 percent rate on income over that amount. That is 4.6 percentage points higher than their 2012 rate.

The tax on investment income like capital gains and dividends will increase for individuals earning more than $200,000 and families who earn more than $250,000. Instead of a 15 percent tax rate, dividends will be taxed like regular income subject to the 36 percent rate above $241,900 and 39.6 percent rate above $390,050, and the rate on capital gains will increase to 20 percent. The rates will stay at 15 percent on incomes less than $200,000.

Two-thirds of Obama's tax hikes fall solely on millionaires, who will pay higher rates on their income, capital gains and dividends. The president also plans to increase the estate and gift taxes from 35 percent to 45 percent on estates worth more than $3.5 million. Currently, these taxes only apply to estates worth more than $5 million.

Obama would extend tax credits for the working poor, child care, and having children.

On the corporate side, Obama proposes lowering the corporate tax rate from its current 35 percent to 28 percent and eliminate credits and exemptions, such as those for oil and gas companies.

Scenario: U.S. Falls Off the Fiscal Cliff

If Congress fails to act, American taxpayers will be hit with $536 billion in tax increases and automatic spending cuts will strip $1.2 trillion largely from the Defense Department and Medicare.

In this fiscal cliff scenario, the average tax hike would be $3,446. Nearly 90 percent of families would see their taxes go up, with middle class taxes rising roughly $2,000 on average.

According to the Congressional Budget Office, if Congress does not prevent these provisions from expiring -- that is, if America falls off the fiscal cliff -- the country will plunge back into recession, with GDP growth slowing to a mere 0.5 percent.

Details:

On Dec. 31, the Bush Tax cuts are set to expire, raising taxes by between 4 percent and 6 percent on nearly every taxpayer. The lowest tax rate, which applies to families earning less than $17,800, will jump from 10 percent to 15 percent and the highest tax bracket, for households earning more than $397,000, will rise from 35 percent to 39.6 percent.

Tax credits that largely benefit low and middle income workers, such as the child tax credit and deductions for the working poor, will also expire.

Coupled with the tax hikes are steep and sudden spending cuts to the tune of $1.2 trillion next year. The Defense Department would bear the brunt of those cuts, losing $55 billion in funding for 2013.

Medicare would also take a big hit with the federal government cutting payments to Medicare providers by 2 percent in order to save $11 billion.


Those, of course, are just the PLANS, not what is actually going to happen.

Here's some other information:

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/08/cbo-letting-upper-income-tax-cuts-expire-would-barely-hurt-economy/

CBO: Letting upper-income tax cuts expire would barely hurt economy
Posted by Dylan Matthews on November 8, 2012 at 4:44 pm

The Congressional Budget Office warned again in a report released Thursday that the U.S. economy could get slammed back into recession, with unemployment hitting 9.1 percent by the end of next year, if President Obama and Congress don’t act to avert the fiscal cliff.
But there were other interesting nuggets in the report, as well. In particular, the CBO gave its most detailed look at how the expiration of the Bush-era tax cuts would affect the economy. Apparently, it would do little harm, the numbers show. Here’s the key graph:

The above shows how big each policy is as a share of the total impact of the cliff. Some policies are more important on the budget side than the GDP side. Letting the high-income Bush tax cuts lapse, for example, generates $42 billion in 2013 but hardly hurts GDP at all. By contrast, the defense cuts amount to $24 billion but hurts growth by 0.4 percent — quadruple the high-income cuts’ impact.


Again, from the CBO:

http://www.washingtonpost.com/business/economy/in-2009-americans-paid-lowest-tax-rates-in-30-years-to-federal-government/2012/07/10/gJQAWc5bbW_story.html

In 2009, Americans paid lowest tax rates in 30 years to federal government
By Lori Montgomery, Published: July 10

Americans paid the lowest tax rates in 30 years to the federal government in 2009, in part because of tax cuts President Obama sought to combat the Great Recession, congressional budget analysts said Tuesday.

A sharp decline in income — especially among the wealthiest Americans, who pay the highest tax rates — also played a role, according to the report by the nonpartisan Congressional Budget Office. Household income fell 12 percent on average from 2007 to 2009, with income among the top 1 percent of earners decreasing by more than a third.

Still, at the very moment anti-tax protesters were emerging as the most powerful force in American politics, handing Republicans landslide control of the U.S. House, the data show that people were sending the smallest portion of their income to the federal government since 1979.

The tax burden — which includes all forms of federal levies, including income, payroll and corporate taxes — lightened for households across the board, thanks in part to Obama’s signature “Making Work Pay” tax credit and other tax cuts passed as part of the 2009 economic stimulus package, the CBO said.

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Reply Help Me Compose Response to My Sister-In-Law Regarding Right-Wing Propaganda on Obama Tax Rates She (Original post)
Hissyspit Nov 2012 OP
gollygee Nov 2012 #1
Hissyspit Nov 2012 #2
imanamerican63 Nov 2012 #3

Response to Hissyspit (Original post)

Tue Nov 13, 2012, 10:05 PM

1. I would hold onto it

and then send it back to her in a couple of years after her taxes haven't gone up and ask her if she remembers sending it.

Did someone just make those numbers up out of thin air? Where did they come from?

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Response to gollygee (Reply #1)

Tue Nov 13, 2012, 10:07 PM

2. Well, yeah. That's the first thing.

I also like the "No One Is Spared!"

So, she's saying tax burden shared by all is a bad thing?

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Response to Hissyspit (Original post)

Tue Nov 13, 2012, 10:12 PM

3. Tell her, the same they have been telling US!

That you are right, but left and she is wrong totally! Good luck, whatever you do to get her to see it your way, but the right/left way!

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