One News Now reports on a little-publicized issue that will hit the pocketbook of every American: tax increases. Congress will try to hide this, though - in a brazen example of semantic wordplay, they'll say they're not raising taxes at all. Technically, that's true. They'll just allow Bush's 2001 and 2003 tax cuts to expire. If the appropriations bills currently in Congress go through, the American people will end up with a net increase of $100 billion in new spending. What does that mean to you? It means that, on average, each American household will end up paying another $3,026 in taxes every year. Plus, the effects that this increase will have on the economy at large will adversely affect on personal income to the tune of another $502 per year.
Increasing taxes is never good. Your income is yours; you earned it, the government didn't.
Here's how the whole thing works. When taxes are lowered, people have less money taken out of their paychecks. When people have more money, what do they do? They spend it. What does that accomplish? It adds profitability to businesses, allowing them to add jobs, lower costs, expand, invest, or some combination of those. Regardless, it gets pumped back into the economy. This is a cycle that feeds on itself, and the economy roars. According to the Limbaugh Letter (Feb. 2006), the result of Bush's tax cuts led to federal revenues increasing 5.5% in 2004 and 14.5% in 2005. The Heritage Foundation says tax revenues were 18.4% of GDP (gross domestic product) in 2006, which outpaced the 20-, 40-, and 60-year historical averages. Other effects include the federal deficit dropping sharply (almost 26%) through the first five months of 2007, the lowest deficit in four years, and the highest ever one-day individual tax haul. Today, Breitbart.com reports that the federal deficit continues to drop even more than was projected. Clearly, then, the lower the taxes, the better off we all are.
An interesting side note here is the disproportionate amount of taxes paid by the so-called 'rich'. What you really need to understand is that YOU are part of the 'rich'. The bulk of the middle class falls into that category because if you make more than about $50K per year, you're in the upper half. That's right, in 2005, the media household income in the U.S. was $46,326. Based on 2004 tax return data, here's a breakdown of the amount of taxes paid by each segment of American taxpayers:
- the top 1% of wage earners paid 37% of all taxes
- the top 5% of wage earners paid 57% of all taxes
- the top 10% of wage earners paid 68% of all taxes
- the top 50% of wage earners paid 97% of all taxes
- the bottom 50% of wage earners paid only 3% of all taxes
Congratulations, you 'rich' person! Now pay up.
So, when you hear members of Congress talking about tax cuts for the 'rich', there are two factors at play. First, what's the point of increasing taxes on the lower tax bracket? They only pay a tiny percentage of the overall taxes in any given year, so it would be political suicide and it would accomplish nothing. Second, the 'rich' are already paying the lion's share (a whopping 97%!) of taxes, so why shouldn't they be the ones to get the tax break?
Now that we've established who those mysterious rich people are, be aware: essentially every Democrat proposal by essentially every Democrat presidential candidate relies on higher taxes on the 'rich'. Barack Obama wants to raise taxes to fund universal health care. So does John Edwards. Chris Dodd wants new taxes on small businesses. Hillary Clinton has a track record of raising taxes in New York.
When you hear them talk about raising taxes on the 'rich', just remember that almost certainly includes YOU.
I bet you didn't know you were 'rich', did you? Don't worry, you'll be a lot less rich if these tax cuts expire and the Democrats get their way - the government will be happy to take more of your money away from you.
There's my two cents.
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