House Budget allows for possible increases in tax for those over #31,850 ($63,700 joint)

[papau]

(while both Hillary and Barack voted against extending the Bush tax cuts, the Senate bill, unlike the House, did not reverse all the tax cuts, keeping the 10 percent tax bracket on the first $7,825 of income for individuals, the $1,000 per child tax credit, and estate tax relief.)

http://www.msnbc.msn.com/id/23612342/

Senate rejects some Bush tax cuts
House approves tax increases of $683 billion over next five years
The Associated Press
updated 6:56 p.m. ET, Thurs., March. 13, 2008

WASHINGTON - The Senate on Thursday rejected the idea of renewing many of President Bush's tax cuts as all three major presidential candidates interrupted their campaigns to cast their votes. The House approved a budget blueprint that would raise taxes by $683 billion over the next five years.

The Senate did embrace Bush reductions aimed at low-income workers, married couples and people with children.

The House budget plan would provide generous increases to domestic federal programs but still is designed to bring the government's budget back into the black by letting all of Bush's tax cuts expire at the end of 2010. That plan passed the House on a 212-207 vote with Republicans unanimously opposing it. <snip>

Obama and Clinton both promise to reverse Bush's tax cuts for wealthier taxpayers, but the Democratic budget they'll be voting for would allow income tax rates to go up on individuals making as little as $31,850 and couples earning $63,700 or more.(NOTE -THIS IS RESULT OF 25% BRACKET RETURNING TO A 28% PRE-BUSH BRACKET) <snip>


A Republican alternative that largely mirrored a plan by McCain to permanently extend Bush's tax cuts and eliminate the alternative minimum tax failed. It would have made room for the cuts by making big reductions in popular programs like Medicare, housing, community development and the Medicaid health care program for the poor and disabled. <snip>


URL: http://www.msnbc.msn.com/id/23612342/




note:

The rejected Graham Senate amendment made permanent:

• The current marginal tax rates of 35, 33, 28, and 25 percent. If they are allowed to expire on December 31, 2010 the new rates will be 39.6, 36, 31 and 28 percent.

• Lower rates on capital gains and dividends.

• College tuition deduction

• And would includes the Kyl language on estate tax relief – a $5 million exemption with a 35 percent top rate.

The low income level at which taxes would increase is due to the 25% bracket becoming a 28% bracket.

[MichiganVote]

1. But of course the wealthy are untouched again....such bullshit

[papau]

2. As nothing happens until Bush tax cuts expire in 2010, the is just Dems refusing to extend all of

the tax cuts Bush made for the rich - putting a line in the sand.

We go back to Clinton tax rates once the Bush rates expire except for those above that are explicitly extended.

[MichiganVote]

3. And in the meantime we sit in the mud of a recession. But try to get that throught the thick heads

of those useless things we call politicians.

[spooky3]

4. the sooner we get out of Iraq, the less tax money we have to raise

[Mojorabbit]

5. I don't understand

the 25 percent bracket becoming the 28 percent bracket?
It does not affect me as we never have received a refund. We pay out the wazoo but 28 percent seems high to me for those making 30 grand..

[CookCountyResident]

6. No fooling.

My husband and I file jointly and we're just above the $63,700 mark.

This level of taxation stings greatly and people on this board would consider us "rich"?!

We're barely hanging on right now what with 3 kids in the college-age range (or soon to be). The cost of gas alone for us has doubled in the last couple of years - gas for our cars (which are not guzzlers), and natural gas to heat our home.

[papau]

8. Which makes those Dems in the House "foolish" for giving GOP an 08 issue

[seasat]

7. According to the CBPP those numbers are after deductions so those numbers are adjusted income.

If the person is taking just the standard deduction and personal exemption they won't hit these rates until a higher total income level. Even then they'll only pay that rate on that part of their income that is above the bracket. Here's the Center on Budget and Policy Priorities analysis of it.

Even with the Baucus amendment added to this budget, there would be marginal rate increases on millions of taxpayers. . . . These marginal rate increases would reach taxpayers with incomes as low as $31,850 for singles and $63,700 for married couples.” —- Senator Charles Grassley, Ranking Member of the Senate Finance Committee, during the debate on the Senate budget resolution, March 10, 2008

Senators McConnell and Grassley are referring to the income levels at which taxpayers can begin to benefit from 2001 tax cut’s reduction in the 28 percent tax rate. But in calculating these levels for 2007, they failed to factor in the personal exemption and standard deduction. With those included, the then-28 percent, now-25 percent bracket begins at $40,600 for singles and $81,200 for couples. (To benefit in full from the 25 percent bracket, a single individual needs an income of at least $85,850, and a married couple needs income of at least $146,000. This explains why the Tax Policy Center estimates that some 80 percent of the benefits of reducing the 28 percent rate to 25 percent go to households with incomes above $100,000; see http://www.taxpolicycenter.org/numbers/Content/Excel/T07-0018.xls.)

[papau]

9. True - but the media went with the GOP PR release (as in AP - surprise?)

[seasat]

10. Shame we haven't learned how to deal with the media better.

We should have had teams out there with pie charts showing if you make $40,000 per year the most you will pay more under this plan is this thin little line. There's so much confusion on marginal rates too. Most folks when they hear a 28% tax rate think that they'll have to pay almost a third of their income in income taxes. They don't understand that that rate only applies to the dollars that they earn above a certain level and everything below that level is taxed at the lower rate.

You'd think our party would simply start quoting the effective rate instead of letting the Repubs win the media battle. In reality the average family will see their effective federal tax rate only go up by about 0.2%.