How Tax Cuts Affect You

[True Earthling]

I like Obama's plan...

http://www.usatoday.com/news/washington/2010-09-21-taxcuts21_ST_N.htm

Q: Why does Obama want to continue most of the tax cuts?

A: During his presidential campaign, Obama vowed not to raise income taxes on families with annual income below $250,000. His pledge was coupled with his plan to raise taxes on wealthier Americans who benefited the most from the Bush tax cuts. That plan is at the center of today's debate.

"In order to save our children from a future of debt, we will ... end the tax breaks for the wealthiest 2% of Americans," Obama told a joint session of Congress last year. "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime."

Q: Who stands to benefit most if the tax cuts are extended for everyone?

A: The wealthiest would get the largest breaks. Those near the bottom of the income scale would get an average cut of about $70 in 2012. A family of four with taxable income of $1 million would save more than $50,000.

The tax cuts are particularly important to families with children because they double the child tax credit. Married couples also benefit greatly from a more generous standard deduction and favorable tax rates that eliminate the "marriage penalty."

"These are the people with the most at stake," says Clint Stretch of Deloitte Tax.

Q: What will be the impact on the economy?

A: Businesses have been sitting on cash because of uncertainty about future policies. Extending the tax cuts would eliminate some of that uncertainty. Consumers who are just beginning to spend more freely would have reason to continue doing so.

If the cuts are not extended at least temporarily for wealthier people, the economy could slow further, some economists say. "I think it's a gamble to raise taxes on upper-income households in 2011," says Mark Zandi, chief economist at Moody's Analytics.

[leftstreet]

1. You forgot your sarcasm thingy n/t

[RobertSeattle]

2. Can someone please point to a point in time when the economy was not "Uncertain"?

Bullcrap: "Businesses have been sitting on cash because of uncertainty about future policies."

[the redcoat]

3. "Clint Stretch"

is just an awful name for a human being. I've never seen a name so dangerously close to sexual harassment.

[notesdev]

4. Nice "sample taxpayers"

None of the people who really get hosed by the expiration (married couples making less than $50k) are among the samples. I'd wager there are a lot of people who are in that category. And those single head of household numbers... I'd be pissed if I was a single parent making under $30k looking at a 147% tax hike.

The well-off have plenty of money and they don't need more breaks (most breaks are targeted to them already). If taxes increase on the mass of people making less than $250k/year (which is almost everyone), that money is going to come directly out of the economy, and taxing it is going to be a negative sum gain. The last thing the government should be doing, now of all times, is taking more money out of the voter's pocket.