Thursday, April 7, 2011

Hunting where the ducks are


Eliminating all of the tax provisions enacted during the Bush administration would yield substantial revenue. But as this chart shows, the biggest sources of revenue would be those affecting the middle class.

10 comments:

PBM said...

Even though more revenue would come from the middle class, there would be more people to pay for it, so they would end up paying less per person. It would still be a hike, but this isn't the best way to look at it.

TJE said...

Average tax increases for middle income families if all Bush tax provisions:

Income Tax Increase

$52K $1K
$89K $2.1K
$138K $4K
$196K $5K

PBM said...

Those seem reasonable to me. Can I get the numbers for high income families?

Patrick_L said...

a) I don't know why we would consider AMT relief or the 28% tax bracket as including "middle-class" households, since people in those groups are almost entirely making six-figure incomes

b) Most Americans, including middle-income households, are paying taxes at the lowest or near-lowest levels in decades.

c) We need deficit reduction quickly- revenue increases are essential to slow and quickly reduce the debt-to-gdp ratio in order to give the U.S. time to get its fiscal house in order.

Patrick_L said...

from Eismeier's article, about Obama's idea to let the Bush tax cuts expire for the highest-income households(using TPC data):

"A household making $1.8 million would pay an additional $53,675, estimates the Tax Policy Center. Those in the top 0.1 percent of all wage earners – roughly 120,000 taxpayers, who make an average of $8.367 million – would pay about $310,140 in additional taxes."

Patrick_L said...

which just shows how regressive the Bush tax cuts were

Patrick_L said...

Also, Ryan's budget has shown that even with drastic spending cuts it takes many years for cuts alone to get our budget into balance. That means that these tax cuts are deficit-financed, which mean they accumulate interest costs that sharply increase their total cost.

The Tax Policy Center looked at taking into account that these tax cuts must eventually be paid for. See here for several estimates: http://www.taxpolicycenter.org/briefing-book/background/bush-tax-cuts/account.cfm

"TPC has estimated changes in tax burdens across income groups under a variety of assumptions about how the tax cuts will eventually be paid for. In all of these hypothetical scenarios, two common conclusions emerge: a majority of households are made worse off by the tax cuts, and the net effect of the tax cuts is a transfer of wealth from lower-income households to wealthier households"

TJE said...

But Mr. L, would you really want to increae the taxes of a couple of public school teachers with two children living in NJ by $5000 a year.

BTW, without the fix, the AMT would affect many millions of middle class taxpayers, especially those from blue states.

http://en.wikipedia.org/wiki/Alternative_Minimum_Tax

Ryan Karerat said...

But Mr. L, would you really want to increae the taxes of a couple of public school teachers with two children living in NJ by $5000 a year.

Wait, NOW public school teachers are sympathetic figures again?!?

TJE said...

Teachers are great Americans.