The Bush Tax Cuts

July 28 2010 by Darrin.

I’ve tried really hard to keep the politics off my blog.  There are enough idiots out there commenting in the “sphere” and I just don’t need to participate in it.  That said, here goes my two cents on something that’s really been bothering me lately.  I’m a politics/news junkie, and what I’m seeing is driving me nuts - yes, even from my trusted source, Fox News.

I don’t understand why the anchors and guests keep saying that “the Bush tax cuts for the rich” will expire December 31st.  These cuts were NOT just for the rich.  If the cuts are allowed to expire, the LOWEST BRACKET at 10% will go up to 15%.  For a person or family making $40K in taxable income, their taxes will go from $4K to $6K.  That’s not a 5% increase (as I heard yesterday), it’s a 50% increase.  On the LOWEST BRACKET!!! (Read this article from Investors Business Daily if this is “news” to you.)

Sure the top bracket goes up too - from 35% to 39.6%, but that’s only an 11.6% increase.   Yes, it’s a lot of actual dollars for those rich folk, BUT the percentage is what you feel - and the lowest income earners WILL feel the most pain where it hurts.

To “the rich” with that 11.6% tax increase, they’ll forgo additional investments and savings, or a new Lexus, or maybe a few spa days - but not the staples of life.

To that family making a taxable $40K, the lost $2k in additional income tax will amount to Christmas, or vacation, or groceries, or IRA/401(k) retirement savings when they really need to be saving it.  It’s really going to hurt them, while the high-earners will simply complain about needing a fresh coat of bottom paint on the yacht. (I’m not knockin’ the wealthy - just putting it in perspective.)

Why doesn’t anyone talk about that?  Maybe it’s because just a few years ago, over half of our high school students failed to correctly answer the following question…  “Is 50% of 10:  a) more than 10, b) less than 10, c) equal to 10, or d) you can’t tell from the question?”

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