math here:
Raising the 10% bracket to 15% represents what percentage of increase? Hint: The correct answer is NOT 5%.
Raising the 20% bracket to 25% represents what percentage of increase? Hint: The correct answer, again, is NOT 5%.
Finally, raising the 35% bracket to 39% represents what percentage of increase: Hint: The correct answer is NOT 4%.
Extra credit question: People in which tax bracket will see the largest percentage of increase in their taxes?
Extra extra credit question: People in which tax bracket will see the smallest percentage of increase in their taxes?
To those moving from the 35% to the 39% tax bracket...that’s roughly an 11% increase in taxes.
From 20% to 25%...that’s a full-blown 25% increase in taxes.
To those moving from the 10% bracket to 15%, their taxes will be increased by a whopping 50%.
So the low-income people get their taxes raised even more when seen as a percentage. And the rich folks lose a higher magnitude of money, but the percentage compared to what they already make is lower.
as long as it’s putting it to the 1%, it’s all good.
OBTW, well done and stolen for my FaceBook.
Maybe the lawyers & accountants can help me on this, but as I understand it the "Bush tax cuts" expire in toto on Jan 1 2013. Not parts of the law but the whole thing, marriage penalty , 10% tax bracket, everything. Once that happens, won't congress then have to draft another bill keeping only those parts that "favor the middle class"?
What are the odds that a new tax cut bill will pass congress and be signed by the President in time for everyone's taxes to remain the same?
If I'm missing something here please enlighten me. Thanks in advance.
For completeness, there are two ways to answer this (as you know). It is important to understand the precise distinction between the two (which is very often confused):
You cannot use the two interchangeably.
I don’t need a drawn out explanation to tell me that the “Bush tax cuts” were good for me. I’m not “rich”, although we all are aware that “rich” is a relative word. I was used to writing a check to the IRS every year for around $2,000. It was intentional on my part, not wanting the government to have any of my money unnecessarily during the year.
The very first year of the cuts, I got a $2,000 refund. My math says that’s a $4,000 difference and like I said, I’m not rich. After that first year, I adjusted my withholding accordingly.
A few years later, I got another shock. I had acquired two children, I was their legal guardian. I hadn’t given a single thought to the tax implications of that and was shocked when I got a $6,500 refund the first year that I claimed them, there were other extenuating circumstances that year and I tried to adjust my withholding accordingly but still got close to $5,000 the next year, I’ve finally got it close to my goal of coming out even but when the “cuts” expire, I’ll have to re figure.
I know for a fact that the cuts have saved me a pile of money over the years and allow me to reiterate - I’m not “rich”.
I’m all for these tax increases, given the fact that old people would rather see this country collapse than lose one precious cent of ‘their’ Social Security that they already, collectively, spent.
These taxes are mainly on MIDDLE CLASS and they will bring in revenue, unlike taxes on ‘the rich’. The Middle (and lower) classes simply don’t have the means to avoid them.
I have kids, and DO NOT want to leave them with a country that is bankrupt, and that is EXACTLY where we are taking it today and we are only a few years away. So, if old people are unwilling to support SERIOUS REFORM of Social Security and Medicare (as in means-tested, and other concepts to minimize its cost) and young people won’t step up, then I would rather pay the taxes now than leave my kids a country in worse shape than Mexico.
In many cases, the Bush tax cuts don’t help so much. The AMT kicks in.
Every liberal I have talked to actually believes that Bush only gave tax cuts to “the rich”. They are astounded when I show them that all tax brackets were cut. I hope all liberals read this article.
As much as I’d like to see these tax cuts end (see my post above), mark my words: There is NO WAY that these tax cuts, in their entirety, will not be extended, just as they were extended last time.
The Republicans will give President Obama an all-or-nothing deal, and the president will take it. This will happen before the election, as people will SCREAMING about the tax increases that are about to hit them, and Romney will be daring the president to not extend them.
He will. Because if he didn’t (i.e., he allowed the tax increases to go into effect), there’s a good chance that this country would NOT go bankrupt, and he does not want to have that legacy.