03.12.2011
What Tax Cut?
original article written by Net Advisor™
It seems that there are some in the media who still insist that everyone got a tax cut this year and suddenly have all this extra money to spend.
“WASHINGTON (AP) — Americans are using extra money from their tax cuts to buy new cars, clothing, sporting goods and electronics.
The reduction in Social Security taxes helped lift retail sales for the eighth straight month in February and by the largest amount since the fall.”
— Source: Associated Press (PDF)
Did you see a reduction in your paycheck due to the amount of taxes taken out from December to January, or by February? If you have a job and if the employer didn’t reduce the pay the answer is likely no. And the reason is simple. There was no tax cut.
What is misleading is the fact that tax rates have stayed the same for the last nearly 11 years, since June 7, 2001. This effort expanded in 2003 with the Jobs and Growth Tax Relief Reconciliation Act of 2003, together more popular term, “The Bush Tax Cuts.”
In 2010, President Obama wanted to eliminate the “Bush Tax Cuts” which helped get the U.S. economy out of the last recession.
President Obama wanted the Bush Tax Cuts to expire by the end of 2010. The result of allowing the Bush Tax Cuts to expire would have INCREASED TAXES by $1 Trillion+ (Sources: ABC News, Fox News, New York Post). Many have said that the Bush Tax Cuts was for the wealthiest American’s. The facts are that would simply be a false statement.
Once again, here is what the Bush tax cuts did – for everyone:
- “a new 10% bracket was created for single filers with taxable income up to $6,000, joint filers up to $12,000, and heads of households up to $10,000.
- the 15% bracket’s lower threshold was indexed to the new 10% bracket
- the 28% bracket would be lowered to 25% by 2006.
- the 31% bracket would be lowered to 28% by 2006
- the 36% bracket would be lowered to 33% by 2006
- the 38.6% bracket would be lowered to 35% by 2006″
— Sources: Wikipedia and U.S. GPO Public Law 107-16
Thus, if you earned ANY money, you got a tax cut.
People with lowest incomes were in a 15% tax bracket since 1992 under President Clinton. Under the “Bush Tax Cuts” low income households qualified for a new lower 10% tax bracket – a 33% tax decrease! (Math: 15% -10% = 5%; then 5% divided by 15% = 33.33% decrease!)
So as much as there are some who did not favor President Bush, but like it or not Bush lowered everyone’s taxes. Despite the above tax table stating the facts, President Obama and others on the other hand continue to be under the incorrect impression that the Bush Tax Cuts are ‘for the wealthy.’ We’ll, the wealthy includes everyone, and yes they too got a tax cut. But the tax burden shifted to the wealthy under President Bush.
The reason why President Obama wanted to end the Bush Tax Cuts was to help pay for a fraction of his lavish multi-trillion-dollar spending that did nothing for working Americans but increase the unemployment rate since Obama took office. If enacted, Obama’s Spending and Deficit programs could actually do more harm to the economy than it will do good.
“Obama administration’s planned budget, the gross national debt will reach 123% of GDP by 2020. Greece’s Debt to GDP ratio stands at 133%… (in 2010).”
— (Source: Heritage.org), 05-14-2010
Voters Disenfranchised
In a September 2010 poll, voters have became increasingly disenfranchised with Obama Administration’s handling of the economy. Quote:
Among the findings:
- Independents express overwhelming disappointment with the direction of the country and by a 2-to-1 margin hold an unfavorable opinion of President Obama and his job performance;
- The public’s disappointment with President Obama goes beyond the faltering economy, with many of them deeply concerned about his specific policies and the way he has governed, particularly his perceived failure to change the way Washington works;
- Independents continue to look more like Republicans than Democrats, most notably on government spending;
- Swing voters view President Obama as further to the left of Democrats in Congress on issues related to the proper role of the federal government;
- Support among Independents is highest for candidates who oppose stimulus spending and government bailouts, favor tax cuts to grow the economy, prioritize reducing the federal deficit, and believe “drastic change” is needed to redress a federal government that has gotten “out of control.”
— Source: US News & World Report
The polls that suggested that voters have been disenfranchised with the Obama Administration proved correct. Voters then sent a message in November 2010 about the Obama Administration’s handling of the economy. As a result, the President decided not increase taxes even on the “wealthy” and keep the same Bush Tax Cuts in place for another two more years under what is called – take a deep breath, The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The “tax relief” part of the new law was not a new tax cut, it was simply a two-year extension of the Bush 2001 & 2003 Tax Cuts that already applied to everyone.
Yet, despite all the facts laid out and which can be independently verified, we still have some media that incorrectly reports that we all got a tax cut.
So next time we hear that Obama gave us a tax cut last year, just take another look at the pay check. It will be about the same as it was last year, assuming there wasn’t a raise or pay cut.
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