Here's a graph that shows why middle classers should be willing to let all of Bush's tax cuts expire

[mtnsnake]

If all of Bush's tax cuts were allowed to expire, the middle class would only see their rates increased by 3%, and many of us wouldn't see the tax rate increase by a penny.

Single people making between $8500 and $34,550 would not see their taxes increased at all. Their rate would remain at 15%, same as in 2010. Singles making between $34,550 and $83,700 would only see an increase of 3%.

Married couples making between $17,000 and $57,700 would not see their taxes increased either. Married couples making between $57,700 and $139,500 would only see their taxes increased by 3%.

The only thing I don't like, were Bush's cuts to expire for everyone, is that singles making less than $8,501 and married couples making less than $17,001 would see their rates jump by 5%, as opposed to 3% for middle classers.

http://www.smartonmoney.com/bush-tax-cuts-set-to-expire-in-2011-will-you-be-paying-more/

[Clio the Leo]

1. seems pretty clear nt

[karynnj]

2. Your interpretation is wrong - the rates are MARGINAL tax rates

on your TAXABLE INCOME, not, what you make. Think of the tax form - taxable income is after the various deductions are subtracted out.

Everyone pays 10% on the first $8500 of taxable income, then 15% on the next bracket etc, therefore, the difference for those with taxable income will raise not "about 3%", but at the lower level, 50% - from 10% to 15%.

[mtnsnake]

5. I didn't interpret anything. I got the info straight from that graph

As far as your point about taxable income, isn't that obvious to anyone who ever filed a tax form?

[karynnj]

7. You misapplied the information -

The rates are marginal - therefore it is not true that someone making - say - $9000, pays $9000*.15 now and will pay $9000*.15 if they are repealed. That is just wrong.

It is true that your source did not explain how to use the tables well and your interpretation is not inconsistent with what they wrote, but that does not make what you wrote correct.

Here is the first link I found that explains this better than smart money does (or I did) for the 2010 rates - http://taxes.about.com/od/preparingyourtaxes/a/tax-rates_2.htm

[Lochloosa]

3. One thing most don't realize about the single and married couples

at the low levels will get most/all of their taxes back at the end of the year. The standard deduction for a single person is 5,700.00 and married is 11,400.00. So someone making only 8501.00 will pay 15% on just $2801.00, or 420.15 in tax for the year.

[karynnj]

6. True, but compare that to what they pay now

They now pay $280.10. For someone making $8501 a year, $140 is not what they find looking in the couch cushions. You also are ignoring that there were also some credits and deductions that were eliminating.

It is true that NONE of the tax rates are draconian, they are the rates that were in place under Clinton.

Note - if they get most or all their taxes back at the end of the year, they have filled out their withholding form incorrectly.

[RC]

4. Why is what so obvious to most people so non-existent to our government?

We all know why we are in this economic mess in the first place. What is so hard about reversing the situation by letting bu$h's temporary tax cuts expire and stopping our crime spree in Iraq, Afghanistan and elsewhere? Oh, and re-regulating everything bu$h deregulated.

[niceypoo]

8. The CBO says ending ALL Bush tax cuts will balance the budget by 2014

A balanced budget would turn the economy around. It's a no brainer.

[karynnj]

9. It would be great, but it would never get the votes

[ProudDad]

10. Slashing the fucking war budget would do it even sooner... (n/t)

[bornskeptic]

11. No. A married couple with taxable income of $17000 to $57700 would have their taxes increased $850

As half of a married couple in that range who does his own taxes, I know quite well what the effect of the tax cuts expiring would be. For a joint filer, in 2010, the first 17000 is taxed at 10%, which is $1700. If the tax cuts expire, the first $17000 would be taxed at 15%, which is $2550, an increase of $850. That, of course, is in addition to the $800 increase they would see from the expiration of the Making Work Pay credit.

[leftynyc]

12. Not me

I'm one of those who is single and whose taxes will go up 3% if the cuts expire. My company hasn't given out raises in a couple of years but that hasn't stopped my landlord from increasing my rent with a new lease (5-1/2%), my electric bill to rise, my cable bill to rise and my commuting bill to rise. I can't afford to be a purist.