The real numbers behind the Democrat/Republican tax plans
- Posted on July 31, 2012
- in 112th congress, 2012 elections, Bush administration, Democrat party, economy, Republican party
- by Jerome
Democrats are calling for a tax increase on individuals making $200,000+ or families making $250,000 called the Bush Tax cuts. Republicans countered with their tax plan of cutting domestic services and extending the Bush tax cuts for one more year for all Americans. The argument sounds good until you look at the numbers.
Instead of relying on pundits telling you what to believe, I’ll show you the numbers so you can decide for yourself as to who has the better plan. These figures are researched by the Tax Policy Center, so they should be unbiased.
Democrat’s tax plan for America
Democrat’s plan is to give tax cuts to 98 percent of the population and raising taxes on 2 percent of the population. These are individuals making $200,000 and families making $250,000 will see their taxes increase. The high-income tax rate increases from 33 percent to 36 percent, and 35 percent to 39.6 percent. This is a 3 percent for individuals and 4.6 percent increase in taxes if you’re a family. Democrats call this a small increase on the rich to try to balance the budget with a balance approach.
The Democrat plan also calls for an increase on the capital gain and dividend’s taxes. The increase would go from 15 percent to 20 percent tax rate. People are complaining about how working people are paying more taxes then an investor. A 5 percent increase will not kill anyone who is making millions via making money off money.
The estate tax would fall from $5 million to $1 million, and the top rate would rise to 55 percent. This would make it harder for upper-class families to pass down their money without being taxed. This is a tricky subject because how do you tax a family for being successful?
Democrats are also calling for extending a few existing taxes. They would like to extend the 2009 expansion tax credits for low-middle income families. Democrats would like to extend the earned income tax credit, child tax credit, and American Opportunity tax credit.
The tricky tax for both parties is the Alternative Minimum Tax. Democrats are calling for a one-year extension to this tax, if the tax isn’t passed for more than two years, taxes on 23 percent of the population will rise. However, if Democrats in Washington do pass the ATM for two of more years, then taxes only go up on 1.4 percent of the population making under $80,000. Democrats are using the ATM to hit the high-income bracket the most.
Republican’s tax plan for America
The Republican tax plan is calling for extending all the Bush tax cuts for one years including the lower rates on investment income. Their argument is a tax increase on anyone during an economic downturn will hurt hiring. This is a logical argument considering the top 2 percent has 40 percent of the overall wealth in this country. They have the power to stop hiring people and impact our economy for the next few years.
Republicans would also like to extend the current estate tax at the $5 million exemption level. This would help the rich stay rich in the long run, but as I mention earlier, how do you tax a families success? This is border line being double taxes but later in life.
As for the top tax rates, Republicans would like to keep the rates at 35 percent. This is different from the Democrats who are calling for the rates to rise to 39.6 percent. Republican know this will not help with the deficit but according to them, a 4.6 percent tax rate will really hurt our economy, although the tax rate in the 90s was 39.6 during our highest economic expansion in America’s history.
The Republican party is calling for the elimination of the 2009 expansion of the low-middle-class income tax. This could damaging for the Republican party, elimination this tax would seen like they want to protect the rich only. This will not go over well for the low-middle class, but this does show when they’re willing to cut.
Finally, Republicans are for extending the alternative minimum tax for the next two years. This is different from the Democrat tax plan as they’re calling for an one year extension. If the Democrats extend the ATM for more two years, then taxes will increase on 1.4 percent of Americans, but Republican’s plan even with the ATM extension will still increase taxes on 15.4 percent of all Americans. The Republican plan would hit people making under $80,000 the hardest.
According to the plans, it looks like both parties are digging in for the 2012 elections. Democrats are protecting the lower-middle class while Republican would appear to be protecting the top 2 percent. What is really shocking is how the Republicans were willing to put this on paper. The 2012 elections will change the direction of this country’s future, only the people will decide what is best for their families. This is why elections matter.