Obama's 2% Illusion

I am not bashing Obama, simply posting an article about his statements on tax cuts ...

Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.

But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.

Full Article Here

Not looking too good ... thoughts?

[edit on 26-2-2009 by baseball101]

reply to post by baseball101


This article is a wakeup call for all Americans that think their taxes are not going to increase under Obama. Just increasing taxes on people that make 250k or more per year will not nearly be enough to pay for this bloated budget. There is just no way the numbers work out.

Obama knows this, he is misleading everyone. He is telling everyone this 250k number just to get support. I expect he will put together a great speech to the American people about how it is their patriotic duty to pay more taxes.

i blame obama i blame democrats:

if you think you wont be taxesd think agian.

the top richest people :
dont have to live here
dont have to bank here
dont have to work here.

business has been ran off from the us for a long time cause its too expensive to do business here.
same thing for the rich people i know most already are off shore no the rest will follow suit and where does that leave obama on his if i do this i can have this.
any smart person doesnt count money he doesnt have-
any sane person doesnt spend money he doesnt have.

as an amercian we are seriously screwed and until this hit close to home amercia will not wake up and stop being screwed.

reply to post by neo67


all's i can say is ...

i agree ...