I hadn’t realized that on Obama’s tax calculator, if you say you make more than $250,000 per year, it simply says, “You will probably not get a tax cut under the Obama-Biden plan.”
No kidding. How about leveling with us about the tax increase, pal?
I mention this because in Obama’s MTV interview, he declared the increases to be “chump change.”
Sway: Just out of curiosity, for those that are being taxed that are making more than $250,000 a year, how much difference would it be from how they are being taxed today?
Obama: Well, right now, they are getting taxed at 36 percent. Under Bill Clinton in the 1990s, they were being taxed at 39.6 percent. You are talking about a 3.6 percent difference, and for the average person who is making half a million, a million dollars, now people like you Sway, that’s chump change, that’s nothing. But it could make a big difference for that young person who is trying to figure out whether they can go to college or not, if we could give them more of a break or more scholarships or grants to go to college.
(Sway of MTV responded that he doesn’t make that kind of money.)
Actually, according to this Obama supporter’s chart, a head of household making a half-million would face a tax increase of $3,363; a millionaire would face an increased tax bill of $33,410. That’s not the tax bill, that’s the increase, money that the government is not currently taking out of their pocket. That head of household making $500,000 in 2008 faced a tax bill of $147,609. (Yes, deductions, credits, and adjustments will bring up different figures for different taxpayers.) The millionaire pays an additional $33,410, and that’s on top of a current tax bill of $322,609.
It’s easy to say, “hey, they’re making a half-million to a million, they can afford it.” And indeed, they can, but that’s less money for them to spend, invest, or do whatever with. If you think the government will spend that money better, this looks like a good deal. If you think those who earned the $500,000 or $1 million know how to spend their money best, then this looks like a terrible deal.
The other point is, those of us who are skeptical of Obama’s tax promises are skeptical on two grounds — that he’ll only tax those he claims to tax now (as Biden and Richardson keep dropping the income level in their comments) and that his tax increases won’t be bigger than his current proposals. Will Obama hold the line on a top tax rate of 39.6 percent? Won’t 40 percent or higher look awfully tempting?
UPDATE: A reader points out that Obama has made a rather glaring omission, that he will apply Social Security taxes for those making more than $250,000. This means that the employed will be paying an additional 6.2 percent, and the self-employed will be paying an additional 12.4 percent.
That is not “chump change.”
ANOTHER UPDATE: Yikes. A reader points out an error I should have caught – the current top tax rate is 35 percent, not 36 percent as Obama says. A subtle way of making his tax hike seem smaller?