This blog is dedicated to progressive and liberal thought. It also discusses new technology, how technology affects privacy and developments in Russia, China, Eastern Europe and the Middle East. Rightardia fully supports the rights of workers to organize, the feminist movement, and all Americans regardless or ethnicity, sex or gender.It uses humor, satire and parody to expose conservative thought for what it truly is: BS! Rightardia contributes to the DNC, DCCC, DSCC and MoveOn.Org.
Friday, September 17, 2010
While one in seven languish in poverty, tax cuts for millionaires is debated
Politifact checked this statement
Extending current tax rates would "average more than $100,000 a year to millionaires and even billionaires."
--Austan Goolsbee, Sept. 12 on ABC's This Week with Christiane Amanpour
The ruling
Bush-era tax cuts are set to expire at the end of 2010 if Congress doesn't take action, and the debate over extending them has become a big policy issues of the year.
President Barack Obama wants to see the tax cuts made permanent for individuals making less than $200,000 a year and couples who make less than $250,000 a year. Tax rates would go up for people who make more who are in the highest US income tax brackets.
Austan Goolsbee, the president's new chair of the Council of Economic Advisers, defended that position on ABC's This Week. Obama has been "quite clear," he said, "that borrowing $700 billion to extend tax cuts that average more than $100,000 a year to millionaires and even billionaires is the least effective bang for the buck we have."
Politifact decided to check Goolsbee's assertion that if wealthy taxpayers get to keep their tax break, it means an average of "more than $100,000 a year to millionaires and even billionaires."
The White House pointed to data from the Joint Committee on Taxation, a nonpartisan committee with a professional staff of economists, attorneys and accountants who do research on taxes.
The JCT estimated what tax revenues would be if the cuts expire and how many taxpayers would be affected. They found that for those who have an income of $1 million or more, extending the Bush tax cuts would mean the government would not collect $32.7 billion. That amount would apply to about 315,000 taxpayers. Divide lost revenue by the number of filers, and you get $103,809, or just over $100,000, as Goolsbee said.
At the conservative Heritage Foundation, J.D. Foster said he didn't argue with the numbers, but instead took issue with Goolsbee's focus on millionaires. He pointed out that many people who make more than $200,000 or $250,000 are not millionaires and that if the cuts expire, those people will see a tax increase as well.
That's a fair point. The JCT found that for those making between $500,000 and $1 million, the tax cuts were worth an average $17,467. For those who make between $200,000 and $500,000, the lower rates were worth $7,152 per tax filer.
Rightardia should point out that the Heritage Foundation is talking in an income tax vacuum because the Obama administration has already passed tax incentives that will benefit small business people.
Only three per cent of small business would be affected by the repeal of the Bush tax cuts. The definition of a small business is also wobbly depending on what definition you use.
Even the US government has a variety of different ways of looking at small business depending on what government agency a small business person is dealing with.
The Bush tax cuts rewarded the 'have more' base of the Republican party and contributed to 48 per cent of the deficit that the Obama administration inherited.
The reality is that the tax cuts that for high income earners that started when JFK was president and was accelerated during the Regan and Bush presidencies. These tax cuts has put the US on shaky economic grounds. The biggest budget buster has been defense which accounts for about 35 per cent of the deficit.
How can Obama balance the budget? First, he needs to rescind the Bush tax cuts to increase government revenues.
He also needs to get defense spending under control. Until that is done, tinkering with programs like Medicare and Social Security are pointless band aids that will effect millions of americans but have little effect on the burgeoning deficit.
It is clear that programs that extend unemployment benefits and food stamps do more for the economy than bogus tax cuts for the affluent.
Many business people are waking up to the reality that tax cuts are less important than customers. If customers can no longer afford to buy a business products, a businesses revenues will be down and so will the owner's income.
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