Saturday, September 25, 2010

For Richer, (Not) For Poorer

     In 2001 the Bush administration passed an income tax bill which lowered the tax rate for all taxpayers. The lowest tax bracket was decreased from 15% to 10%, and all other brackets were decreased by 3 percentage points except for the highest one, which decreased 4.6 points. In addition, all taxpayers that filed a return for the year 2000 received a rebate ranging from $300 for single filers to $600 for married couples. Capital gains taxes decreased from 10% to 8%. Child care credits were increased, and the exemption for the Alternative Minimum Tax was increased. Additional adjustments were made in 2003. In order to get the bills through Congress, President Bush agreed to let them expire on January 1, 2011.
     Now there is a huge disagreement in Congress – Republicans want to extend the rates, etc. for all taxpayers, and Democrats want to extend them only for families with income of more that $250,000 ($200,000 for single taxpayers). The Republicans are saying that if rates are not extended for everyone, they will not allow them to be extended for anyone.
     In 2009 President Obama got a bill passed which gave $250 to 52 million persons on Social Security, and provided for tax credits of $400 for individuals and $800 for married couples. For 2009 the credit increased takehome pay by an estimated $13 per week and about $7.70 per week for 2010. The credits phased out completely for individuals with taxable income over $100,000 ($200,000 for married couples). As with President Bush's taxes, these credits end on December 31, 2010. Note that all the breaks are for people in the lower and middle income brackets.
     This situation begs the question: If, as the Republicans claim, lower taxes are such a wonderful thing, why is there absolutely no mention of extending President Obama's tax reduction? I can think of five reasons:
  1. Takehome pay for married individuals will decrease by approximately $7.70 per week, and it will appear that President Obama is responsible for the increased taxes.
  2. President Obama's breaks were originally included in that politically extremely incorrect word: stimulus.
  3. There are no breaks included for higher income taxpayers.
  4. Our representatives are in the higher brackets.
  5. Lower and middle income taxpayers do not make big campaign contributions.
         Just who are these people representing?
         Physicists tell us that the only thing we know about nature is what we say about it. Our static construct, language, even the language of mathematics, is no longer adequate to explain today’s physical world.
         Constructs – The Spirit Runs Through It.

         The book or a free download is available in paperback or on Kindle.

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